Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Nomad Foods Limited
(Exact Name of Registrant as Specified in Its Charter)
British Virgin Islands | 2000 | Not Applicable | ||
(State or Other Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Nemours Chambers
Road Town, Tortola, British Virgin Islands
(284) 852-7900
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrants Principal Executive Offices)
Elian Fiduciary Services (BVI) Limited
Nemours Chambers
Road Town, Tortola, British Virgin Islands
(284) 852-7900
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Copy to:
Donn A. Beloff, Esq.
Flora R. Perez, Esq.
Greenberg Traurig, P.A.
401 East Las Olas Boulevard, Suite 2000
Fort Lauderdale, FL 33301
Phone: (954) 765-0500/Fax: (954) 765-1477
Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ¨
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to Be Registered |
Amount to Be Registered (1)(2) |
Proposed Maximum Offering Price Per Share (3) |
Proposed Maximum Aggregate Offering Price |
Amount of Registration Fee |
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Ordinary shares, no par value |
134,028,980 |
$12.18 | $1,632,472,976 | $164,390.03 | ||||
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(1) | Represents the maximum number of ordinary shares that may be offered for resale by selling shareholders pursuant to the prospectus contained herein. Pursuant to Rule 416 under the Securities Act of 1933, as amended, this Registration Statement also covers any additional ordinary shares that may be offered or issued in connection with any stock split, stock dividend or similar transaction. |
(2) | The shares to be registered include (i) 132,403,980 outstanding ordinary shares, (ii) 1,500,000 ordinary shares issuable upon the conversion of the registrants preferred shares, and (iii) 125,000 ordinary shares issuable upon the exercise of the registrants outstanding options. |
(3) | With regard to the securities included hereby, the offering price and registration fee are estimated pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based upon the average high and low prices for the ordinary shares of Nomad Foods Limited, as reported by the London Stock Exchange, on November 19, 2015. |
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. The selling shareholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Subject to Completion, dated November 23, 2015
PRELIMINARY PROSPECTUS
134,028,980 Ordinary Shares
Nomad Foods Limited
This prospectus relates to the resale of up to 134,028,980 of our ordinary shares, which may be offered for sale from time to time by the selling shareholders named in this prospectus. The ordinary shares covered by this prospectus (the Shares) were issued by us to the selling shareholders in public and private offerings and in connection with our acquisition of Iglo Foods Holdings Limited, as more fully described in this prospectus.
The selling shareholders may from time to time sell, transfer or otherwise dispose of any or all of their Shares in a number of different ways and at varying prices. See Plan of Distribution beginning on page 101 of this prospectus for more information.
Our ordinary shares are currently traded on the London Stock Exchange (the LSE) under the symbol NHL. On [●], 2015, the closing price for our ordinary shares on the LSE was $[●] per ordinary share. We expect to apply to list our ordinary shares on the New York Stock Exchange (the NYSE) under the symbol NAH contemporaneously with this offering. We intend to cancel the listing of our ordinary shares on the LSE immediately following the listing of our ordinary shares on the NYSE.
We may amend or supplement this prospectus from time to time by filing amendments or supplements as required.
You should read this entire prospectus and any amendments or supplements carefully before you make your investment decision.
Investing in our ordinary shares involves risks. See Risk Factors beginning on page [11] of this prospectus.
Neither the Securities and Exchange Commission (the SEC) nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Prospectus dated , 2015.
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Nomad Managements Discussion and Analysis of Financial Condition and Results of Operations |
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Iglo Managements Discussion and Analysis of Financial Condition and Results of Operations |
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F-1 |
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You should rely only on the information contained in this prospectus, any amendment or supplement to this prospectus or any free writing prospectus prepared by or on our behalf. Neither we, nor the selling shareholders, have authorized any other person to provide you with different or additional information. Neither we, nor the selling shareholders, take responsibility for, nor can we provide assurance as to the reliability of, any other information that others may provide. The selling shareholders are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus or such other date stated in this prospectus, and our business, financial condition, results of operations and/or prospects may have changed since those dates.
Except as otherwise set forth in this prospectus, neither we nor the selling shareholders have taken any action to permit a public offering of these securities outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of these securities and the distribution of this prospectus outside the United States.
TERMS USED IN THIS PROSPECTUS
Unless the context otherwise requires, in this prospectus, the term(s) (1) we, us, our, Company, Nomad and our business refer to Nomad Foods Limited (formerly known as Nomad Holdings Limited) and Iglo Foods Holdings Limited (Iglo) and its consolidated subsidiaries, (2) Nomad Holdings refers solely to Nomad Foods Limited, (3) Iglo and the Iglo Group refer solely to Iglo and its consolidated subsidiaries and (4) Findus and the Findus Group refers to Findus Sverige AB (and its consolidated subsidiaries) which we purchased on November 2, 2015, as more fully described below. All references in this prospectus to the Predecessor refer to Iglo for all periods prior to its acquisition by Nomad Holdings on June 1, 2015 (the Iglo Acquisition) and all references to the Successor refer to the Company for all periods after the Iglo Acquisition.
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
In this prospectus, references to Euro and are to the single currency adopted by participating member states of the European Union relating to Economic and Monetary Union, references to $, US$ and U.S. Dollars are to the lawful currency of the United States of America, and references to Pound Sterling, Sterling and £ are to the lawful currency of the United Kingdom.
Historical Financial Information
Following the Iglo Acquisition, Iglo is considered to be our Predecessor under applicable SEC rules and regulations.
The historical financial information presented in this prospectus includes:
| audited financial statements of Nomad Holdings for the period from inception to March 31, 2015 and as of March 31, 2015 (the Successor 2015 Period); |
| unaudited condensed consolidated interim financial statements of the Company as of and for the six months ended September 30, 2015 (the Successor 2015 Interim Period) and September 30, 2014 (the Successor 2014 Interim Period); |
| audited consolidated financial statements of the Iglo Group as of and for the year ended December 31, 2014 (the Predecessor 2014 Period), December 31, 2013 (the Predecessor 2013 Period) and December 31, 2012 (the Predecessor 2012 Period); |
| unaudited condensed consolidated interim financial statements of the Iglo Group as of and for the three months ended March 31, 2015 (the Predecessor 2015 Three-Month Period); |
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| unaudited condensed consolidated interim financial statements of the Iglo Group for the two months ended May 31, 2015 (the Predecessor 2015 Two-Month Period) and the five months ended May 31, 2015 (the Predecessor 2015 Five-Month Period); |
| audited consolidated carve-out financial statements of Findus as of and for the twelve months ended September 30, 2014 (the Findus 2014 Period), September 30, 2013 (the Findus 2013 Period), as of and for the nine months ended September 30, 2012 (the Findus 2012 Period) and as of December 31, 2011; and |
| unaudited condensed consolidated carve-out financial statements of Findus as of and for the nine months ended June 27, 2015. |
The historical financial information for the Company, Nomad Holdings and the Iglo Group has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS IASB) and as endorsed by the European Union (together IFRS) which can differ in certain significant respects from U.S. GAAP. The historical information for the Findus Group has been prepared in accordance with IFRS IASB.
On August 13, 2015, we entered into an option agreement (the Option Agreement and the transactions contemplated thereby, are referred to herein as the Findus Acquisition) with Liongem Sweden 1 AB (the Findus Seller) pursuant to which, on November 2, 2015, we acquired the Findus Group which comprises the continental European businesses of Lion/Gem Luxemborg 3 S.a.r.l. (the Findus Parent) in Sweden, Norway, Finland, Denmark, France, Spain and Belgium relating to the Findus , Lutosa and La Cocinera brands for approximately £500 million. The Findus Acquisition is considered significant under applicable SEC rules and regulations. Any financial information for Findus included in this prospectus is derived from carve-out financial statements prepared by the Findus Seller and included in this prospectus based on the historical results of operations, cash flows, assets and liabilities of the business acquired by us and that is now part of our consolidated group. We believe that the assumptions and estimates used in preparation of the Findus Group carve-out financial statements are reasonable. However, any Findus financial information presented herein does not necessarily reflect what Findus financial position, results of operations or cash flows would have been if Findus had operated as a separate entity during the periods presented. As a result, historical financial information is not necessarily indicative of Findus future results of operations, financial position or cash flows.
Unless otherwise noted, all financial information for the Company and Iglo provided in this prospectus is denominated in Euros.
Non-IFRS Financial Measures
In this prospectus, we present certain supplemental financial measures that are not recognized by IFRS. These financial measures are unaudited and have not been prepared in accordance with IFRS, SEC requirements or the accounting standards of any other jurisdiction. The non-IFRS financial measures used in this prospectus are Adjusted EBITDA, Adjusted EBITDA margin and free cash flow. For additional information on why we present non-IFRS financial measures, the limitations associated with using non-IFRS financial measures and reconciliations of our non-IFRS financial measures to the most comparable applicable IFRS measure, see Prospectus SummarySummary Consolidated Financial Information and Nomad Managements Discussion and Analysis of Financial Condition and Results of Operations.
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Unaudited Pro Forma Financial Information
Following the Iglo Acquisition, which was consummated on June 1, 2015, Iglo is considered to be our Predecessor under applicable SEC rules and regulations. In addition, the Findus Acquisition, which we completed on November 2, 2015, is considered significant under applicable SEC rules and regulations. As a result, we have included in this prospectus unaudited pro forma financial information based on the historical financial statements of Nomad Holdings, Iglo and Findus, combined and adjusted to give effect to the Iglo Acquisition and the Findus Acquisition as if they each had occurred as of January 1, 2014 for purposes of the Statement of Operations and as of September 30, 2015 for the Statement of Financial Position. The unaudited pro forma combined consolidated financial information has been prepared in accordance with the basis of preparation described in Unaudited Pro Forma Financial InformationNotes to Unaudited Pro Forma Condensed Combined Financial Information.
INDUSTRY AND MARKET DATA
We obtained the industry, market and competitive position data throughout this prospectus from our own internal estimates and research as well as from industry and general publications and research, surveys and studies conducted by third parties, including reports by AC Nielsen, Euromonitor, Eurostat, IPSOS ASI, IRI, IGD, Kantar Worldpanel and Rainmaker. Industry surveys and publications generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of the information contained in industry publications is not guaranteed. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third-party sources. While we believe our internal company research is reliable and the definitions of our market and industry are appropriate, neither this research nor these definitions have been verified by any independent source. Further, while we believe the market opportunity information included in this prospectus is generally reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate and our future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Risk Factors. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us. See Cautionary Note Regarding Forward-Looking Statements.
Market share data presented throughout this prospectus are measured by retail sales value.
TRADEMARKS
We operate under a number of trademarks, including, among others, Iglo , Birds Eye and Findus (only in Italy and San Marino), all of which are registered under applicable intellectual property laws. This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent possible under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus constitute forward-looking statements that do not directly or exclusively relate to historical facts. You should not place undue reliance on such statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy. These statements often include words such as may, will, should, believe, expect, anticipate, intend, plan, estimate or similar expressions. Forward-looking statements included in this prospectus include statements regarding:
| our intent to profitably grow our business through our strategic initiatives; |
| our intent to seek additional acquisition opportunities in food products and our expectation regarding competition for acquisitions; |
| our beliefs regarding our competitive strengths and ability to successfully compete in the markets in which we participate; |
| our expectations concerning consumer demand for our products, our future growth opportunities, market share and sales channels; |
| our future operating and financial performance; |
| the anticipated benefits of the Iglo Acquisition and Findus Acquisition; |
| our belief that we have sufficient spare capacity to accommodate future growth in our main product categories and to accommodate the seasonal nature of some of our products; |
| our intent to rely on some of the available foreign private issuer exemptions to the NYSE corporate governance rules; |
| our intent to become centrally managed and controlled in the United Kingdom following listing on NYSE; |
| the reasonableness of the assumptions and estimates used in the preparation of the Findus carve-out financial statements; |
| the accuracy of our estimates and key judgments regarding certain tax matters and accounting valuations; and |
| our belief regarding our ability to comply with environmental, health and other applicable regulatory matters. |
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The forward-looking statements contained in this prospectus are based on assumptions that we have made in light of our managements experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances. As you read and consider this prospectus, you should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in these forward-looking statements. These factors include but are not limited to:
| the anticipated benefits from the Iglo Acquisition and Findus Acquisition may take longer to realize and may cost more to achieve than expected; |
| the loss of any of our executive officers or members of our senior management team or other key employees; |
| the loss of any of our major customers or a decrease in demand for our products; |
| our ability to effectively compete in our markets; |
| changes in consumer preferences and our failure to anticipate and respond to such changes or to successfully develop and renovate products; |
| our ability to protect our brand names and trademarks; |
| economic conditions that may affect our future performance including exchange rate fluctuations; |
| fluctuations in the availability of food ingredients and packaging materials that we use in our products; |
| disruptions in our information technology systems, supply network, manufacturing and distribution facilities or our workforce or the workforce of our suppliers; |
| increases in operating costs, including labor costs, and our ability to manage our cost structure; |
| the incurrence of liabilities not covered by our insurance; |
| the loss of our foreign private issuer status; |
| the effects of reputational damage from unsafe or poor quality food products, particularly if such issues involve products we manufactured or distributed; |
| our failure to comply with, and liabilities related to, environmental, health and safety laws and regulations; and |
| changes in applicable laws or regulations. |
These and other factors are more fully discussed in the Risk Factors section and elsewhere in this prospectus. These risks could cause actual results to differ materially from those implied by forward-looking statements in this prospectus.
All information contained in this prospectus is materially accurate and complete as of the date of this prospectus. You should keep in mind, however, that any forward-looking statement made by us in this prospectus, or elsewhere, speaks only as of the date on which we make it. New risks and uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect us. We do not undertake any obligation to update or revise any forward-looking statements after the date of this prospectus, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks and uncertainties, you should keep in mind that any event described in a forward-looking statement made in this prospectus or elsewhere might not occur.
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This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our ordinary shares. Before making an investment decision, you should read this entire prospectus carefully, especially Risk Factors, Nomad Managements Discussion and Analysis of Financial Condition and Results of Operation, Iglo Managements Discussion and Analysis of Financial Condition and Results of Operation, our and Iglos consolidated financial statements, Findus consolidated carve-out financial statements and each of their respective related notes appearing at the end of this prospectus. Some of the statements in this prospectus constitute forward-looking statements that involve risks and uncertainties. See Cautionary Note Regarding Forward-Looking Statements for more information.
Our Company
We are the leading manufacturer and distributor of branded frozen foods in Western Europe based on net sales value. Our products are sold primarily through large grocery retailers under the brand Birds Eye in the United Kingdom and Ireland, Iglo in Germany and Continental Europe, and Findus in Italy and San Marino. In 2014, we had a 25% average market share for our main product lines in the United Kingdom, Germany and Italy. Our brands are household names with long histories and local heritage in their respective markets. According to independent market research conducted in 2014 by IPSOS ASI, spontaneous brand awareness (which refers to whether a consumer identifies a particular brand without prompting), for our products was 87%, 78% and 93% in the United Kingdom, Germany and Italy, respectively.
For the year ended December 31, 2014, we had revenue of 1.5 billion, operating profit of 222.9 million, a loss for the period of 109.1 million, and Adjusted EBITDA and Adjusted EBITDA margin of 306.2 million and 20.4%, respectively. Over the same period, we generated cash flows from operations of 267.4 million and free cash flow of 275.4 million. See Summary Consolidated Financial Information for our definition of Adjusted EBITDA, Adjusted EBITDA margin and free cash flow, which are non-IFRS metrics, and reconciliations to the most comparable IFRS metrics.
We were incorporated with limited liability under the laws of the British Virgin Islands on April 1, 2014 under the name Nomad Holdings Limited. Nomad was formed to undertake an acquisition of a target company or business. We completed our initial public offering in the United Kingdom on April 15, 2014, raising net proceeds of $500 million (the 2014 Offering), and were listed on the LSE.
On June 1, 2015, we consummated our initial acquisition by purchasing Iglo Foods Holdings Limited, a leading frozen food company in Europe, for 2.6 billion, and subsequently changed our name to Nomad Foods Limited. On August 13, 2015, we entered into an Option Agreement with the Findus Seller pursuant to which, on November 2, 2015, we purchased the Findus Group which comprises the continental European businesses of the Findus Parent in Sweden, Norway, Finland, Denmark, France, Spain and Belgium relating to the Findus , Lutosa , and La Cocinera brands, for approximately £500 million. Findus is a leading frozen food business in continental Europe with approximately 1,500 employees and revenues for the fiscal year ended September 30, 2014 of £520 million. We believe the Findus Acquisition will enable us to move forward with a well-known, unified Findus brand, and together with the strong Iglo platform, will further our efforts to drive innovation, introduce new meal options, and conduct marketing initiatives aimed at bringing more consumers across Europe to the frozen foods aisles. In addition, we believe the geographic footprint of the operations included in the Findus Acquisition will complement and extend our footprint throughout Europe.
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Our Strategy
We intend to grow our business profitably and create shareholder value through the following strategic initiatives:
Build an integrated group of best-in-class food companies and brands within existing and related food categories and expand our geographic footprint through strategic acquisitions.
Our goal is to transform our company into an integrated best-in-class, global manufacturer, marketer and distributor of food products, within and outside of the frozen food category and the broader food sector. We believe there are significant growth opportunities in the European and North American markets and that the Iglo Acquisition and the Findus Acquisition provide a strong platform on which to grow our business and expand and enhance our market share in the food industry in key geographic markets.
Leverage our acquisition expertise, strong management team and access to capital to identify and evaluate attractive growth opportunities.
Our founders, Martin E. Franklin and Noam Gottesman (the Founders), and our CEO, Stéfan Descheemaeker, have significant experience and expertise, and have been highly successful, in identifying, acquiring and integrating value-added businesses. We believe that this expertise, our access to capital and the deep industry knowledge of our management team will position us to acquire related and complimentary food businesses that can enhance our market position, create synergies and fully leverage our existing marketing, manufacturing and supply chain capabilities, which we believe will allow us to deliver sustained profitable growth and maximize shareholder value.
Aligning our business with consumer preferences.
Our goal is to create and acquire food businesses and brands that strongly align with consumer needs and preferences, that have the highest growth and margin potential and that leverage our existing portfolio of brands. For example, in order to fully leverage the value of our Findus brand, which we currently own in Italy, we acquired the Findus , Lutosa , and La Cocinera brands in their respective markets. We believe the Findus Acquisition will allow us to consolidate and expand this well-known and highly regarded brand and to maximize the returns on our portfolio of products.
Enhancing product innovation.
We place a strong emphasis on innovation. We operate one central Innovation and Growth Board which ensures that all innovations address well established market needs and margin targets. The key pillars of our innovation strategy are to develop large platforms which can be scaled across our markets to meet consumer needs across all meal occasions. Recent examples of this are the Inspirations platform, which is intended to offer evening meals with wide ranging appeal that can be eaten every day, and the SteamFresh platform, which is intended to offer easily prepared meals using steaming quality to enhance the natural taste, such as Rice Fusions and Vegetable Fusions varieties of products.
Our Competitive Strengths
We believe the following competitive strengths differentiate us from our competitors and contribute to our ongoing success.
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Market leader with solid European platform and strong acquisition opportunities
As the leading branded frozen food producer in Western Europe based on net sales value, we benefit from economies of scale and have developed a strong platform for our products throughout Europe. We believe our strong existing platforms facilitate our expansion within a large addressable market and provide a broad set of potential acquisition targets in various food categories and geographic markets.
Experienced management team and Board with a proven track record
Our management team has extensive experience in the food industry and other fast moving consumer goods markets. Our management team is complimented by an experienced Board of Directors, which includes several individuals with a proven track record of successfully acquiring and managing consumer businesses.
Effective brand equity strategy to leverage and expand well-known brands
Our brands are household names with long histories and local heritage in their respective markets. We have centralized our marketing efforts to ensure that we fully leverage the goodwill of our existing brands, that our brand positioning strategy aligns with consumer preferences and that we create high-impact marketing programs that build brand awareness and loyalty.
Commitment to innovation and research and development
We have increased our investment in market research to ensure that the products we launch or acquire address well established or on-trend market needs. In order to ensure the development and acquisition of products that fit this criteria, we have implemented a structured process through which we take new products from idea generation, through concept screening, concept/products laboratories and early volume sizing, to final validation.
Recent Developments
We own the exclusive right to use the Findus brand in Italy and San Marino. On August 13, 2015, we entered into an Option Agreement with the Findus Seller pursuant to which, on November 2, 2015, we acquired the Findus Group for approximately £500 million (subject to customary post-closing adjustments), consisting of £415 million in cash and 8,378,380 ordinary shares (the Findus Consideration Shares).
The £415 million cash portion of the Findus purchase price was funded through a combination of cash on hand and 285 million of a new 325 million senior term loan under our existing Senior Facilities Agreement. The Findus Seller will be restricted from transferring any of the Findus Consideration Shares within one year following closing and will be restricted from transferring 50% of the Findus Consideration Shares within two years of closing.
On November 2, 2015, as part of the funding of the Findus Acquisition, we incurred 325 million of new senior term loan debt under our existing Senior Facilities Agreement 285 million of which was used to fund the Findus Acquisition and the remainder of which was used for general corporate purposes. The new term loan bears interest at EURIBOR plus a margin ranging from 4.0% per annum to 4.25% per annum, matures on June 30, 2020, is secured by certain of our and our subsidiaries assets and ranks pari passu with our existing senior secured indebtedness.
On July 14, 2015, we completed an offering in which we raised approximately $320 million through the issuance of 15,445,346 ordinary shares (the July 2015 Offering) at a per share price of $20.75 per ordinary share. The number of ordinary shares issued in the July 2015 Offering represented, in aggregate, approximately 9.99% of our issued ordinary share capital immediately prior to such offering.
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Summary Risk Factors
Investing in our ordinary shares entails a high degree of risk as more fully described in the Risk Factors section of this prospectus. You should carefully consider such risks before deciding to invest in our ordinary shares. These risks include, among others:
| intense competition in our industry and our ability to compete successfully; |
| our failure to anticipate and timely respond to changes in consumer preferences or to successfully develop and renovate products; |
| our inability to obtain quality raw materials at acceptable prices or to pass on price increases from rising raw material costs; |
| our dependence on a limited number of large food retailers which reduces our bargaining position and subjects us to their risks and demands; |
| our lack of long-term contractual relationships with our customers; |
| reputational damage from unsafe or poor quality frozen food products, particularly if such issues involve products we manufactured or distributed; |
| our dependence on third-party suppliers; |
| the cost or liability associated with compliance with a significant number of laws and regulations in many jurisdictions; |
| potential disruption of our supply chain caused by factors beyond our control such as extreme weather, fire or other natural disasters; |
| larger than expected fluctuations or sustained changes in exchange rates or macroeconomic conditions in the jurisdictions in which we operate; and |
| the more limited disclosure required of foreign private issuers and the fewer protections afforded shareholders under the laws of the British Virgin Islands. |
Corporate and Other Information
Our principal executive offices are located at Nemours Chambers, Road Town, Tortola, British Virgin Islands, our telephone number is (284) 852-7900 and our fax number is (284) 494-9390. We maintain a website at www.nomadfoods.com . We do not incorporate the information contained on, or accessible through, our website into this prospectus, and you should not consider it a part of this prospectus.
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Summary Terms of the Offering
The summary below describes the principal terms of this offering. The Description of Share Capital section of this prospectus contains a more detailed description of the ordinary shares.
Shares offered for Resale by Selling Shareholders |
134,028,980 ordinary shares |
Ordinary shares outstanding |
178,431,496 ordinary shares (as of November 20, 2015) |
Use of Proceeds |
The selling shareholders will receive all of the proceeds from the sale of any Shares sold by them pursuant to this prospectus. We will not receive any proceeds from these sales. See Use of Proceeds in this prospectus. |
Voting Rights |
Holders of our ordinary shares are entitled to one vote per ordinary share at all shareholder meetings. Our outstanding preferred shares issued to our Founders (the Founder Preferred Shares) vote together with the holders of ordinary shares on all matters to be voted on by shareholders generally and are entitled to one vote per Founder Preferred Share. See Description of Share CapitalOrdinary Shares and Description of Share CapitalFounder Preferred Shares. |
Dividend Policy |
Although we may pay dividends on our ordinary shares at such times and in such amounts (if any) as the board determines appropriate, we do not expect to pay any dividends or other distributions on our ordinary shares in the foreseeable future and the terms of our debt instruments may limit our ability to do so. The declaration and payment of future dividends to holders of our ordinary shares will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, earnings, legal requirements, restrictions in our debt agreements and other factors deemed relevant by our board of directors. |
The Founder Preferred Shares are entitled to receive an annual stock dividend based on the market price of our ordinary shares if such market price exceeds certain trading price minimums and to participate in any dividends declared on the ordinary shares. For a description of the dividend rights of the Founder Preferred Shares, see Description of Share CapitalFounder Preferred Shares.
Market for our Ordinary Shares |
Our ordinary shares are currently traded on the LSE under the symbol NHL. We expect to apply to list our ordinary shares on the NYSE contemporaneously with this offering. We intend to cancel the listing of our ordinary shares on the LSE immediately following the listing of our ordinary shares on the NYSE. |
Risk Factors |
Investing in our ordinary shares involves substantial risks. See Risk Factors for a description of certain of the risks you should consider before investing in our ordinary shares. |
The number of ordinary shares outstanding excludes (1) [] ordinary shares issuable under currently outstanding equity awards issued under the Nomad Long-Term 2015 Incentive Plan (LTIP), (2) 1,500,000 ordinary shares issuable upon the conversion of the Founder Preferred Shares, and (3) 125,000 ordinary shares issuable upon the exercise of outstanding options previously issued to certain of our current and former directors. See Directors, Management and Corporate GovernanceCompensation of Executive Officers and Directors.
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With respect to the Founder Preferred Shares Annual Dividend Amount (as defined herein), based on the 531.5 million Founder Preferred Shares Dividend reserve included in the financial statements for the Successor 2015 Interim Period and using the market price of our ordinary shares as of September 30, 2015, the aggregate number of ordinary shares issuable over the seven years pursuant to the Founder Preferred Annual Dividend Amount would have been 37.8 million and the pro forma ordinary shares outstanding as of November 20, 2015 would have been approximately 216,231,496 (including the 8.4 million Findus Consideration Shares issued in connection with the Findus Acquisition).
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Summary Consolidated Financial Information
The following tables present summary consolidated historical financial data as of the dates and for each of the periods indicated.
The summary consolidated historical data for the Successor 2015 Period and as of March 31, 2015 has been derived from our audited consolidated financial statements included in this prospectus. The summary consolidated historical data for the Successor 2015 Interim Period and as of September 30, 2015 has been derived from our unaudited condensed consolidated interim financial statements included in this prospectus.
The summary consolidated historical data for our Predecessor for each of the Predecessor 2014 Period, the Predecessor 2013 Period and the Predecessor 2012 Period and as of December 31, 2014, December 31, 2013 and December 31, 2012 has been derived from the audited consolidated financial statements of our Predecessor included in this prospectus.
The summary condensed consolidated interim historical data for the Predecessor 2015 Three-Month Period and as of March 31, 2015 has been derived from its unaudited condensed consolidated interim financial statements included in this prospectus. The summary condensed consolidated historical data for the Predecessor 2015 Two-Month Period and as of May 31, 2015 has been derived from the unaudited condensed consolidated financial statements for the Predecessor included in this prospectus.
The unaudited summary condensed consolidated interim historical financial data for the Successor 2015 Interim Period, Predecessor 2015 Three-Month Period and Predecessor 2015 Two-Month Period contain all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial information set forth in those statements.
All of the summary financial information included in the following tables is prepared in accordance with IFRS and denominated in Euros.
The summary consolidated historical financial data included below is not necessarily indicative of future results and should be read in conjunction with Nomad Managements Discussion and Analysis of Financial Condition and Results of Operation, Iglo Managements Discussion and Analysis of Financial Condition and Results of Operations, as well as our and Iglos consolidated financial statements and notes thereto contained in this prospectus.
All operations are continuing and neither the Successor nor the Predecessor declared or paid dividends in the periods presented.
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Predecessor | Successor | Predecessor | Successor | |||||||||||||||||||||||||||||||
Prepared in accordance with IFRS ( in millions except share data) |
Year ended December 31, |
Year
ended March 31, |
Three
months ended March 31, |
Two
months ended May 31, |
Six
months
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2012 | 2013 | 2014 | 2015 | 2015 | 2015 | 2015 (1) | ||||||||||||||||||||||||||||
Statement of operations data: |
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Revenue |
1,572.7 | 1,505.8 | 1,500.9 | | 397.5 | 242.8 | 418.3 | |||||||||||||||||||||||||||
Cost of sales |
(1,028.9 | ) | (1,001.8 | ) | (970.9 | ) | | (258.5 | ) | (159.4 | ) | (311.0 | ) | |||||||||||||||||||||
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Gross profit |
543.8 | 504.0 | 530.0 | | 139.0 | 83.4 | 107.3 | |||||||||||||||||||||||||||
Other operating expenses |
(222.4 | ) | (231.8 | ) | (254.2 | ) | (0.7 | ) | (62.8 | ) | (46.7 | ) | (66.3 | ) | ||||||||||||||||||||
Founder Preferred Shares Annual Dividend Amount and Warrant redemption |
| | | (166.2 | ) | | | (348.6 | ) | |||||||||||||||||||||||||
Exceptional items |
(53.6 | ) | (83.8 | ) | (52.9 | ) | (0.7 | ) | (20.6 | ) | (63.7 | ) | (37.8 | ) | ||||||||||||||||||||
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Operating profit/(loss) |
267.8 | 188.4 | 222.9 | (167.6 | ) | 55.6 | (27.0 | ) | (345.4 | ) | ||||||||||||||||||||||||
Net finance (costs)/income |
(302.4 | ) | (227.6 | ) | (290.2 | ) | 0.1 | (69.3 | ) | (46.4 | ) | (39.6 | ) | |||||||||||||||||||||
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Loss before tax |
(34.6 | ) | (39.2 | ) | (67.3 | ) | (167.5 | ) | (13.7 | ) | (73.4 | ) | (385.0 | ) | ||||||||||||||||||||
Taxation |
(43.5 | ) | (2.0 | ) | (41.8 | ) | | 7.5 | (48.4 | ) | (5.3 | ) | ||||||||||||||||||||||
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Loss for the period |
(78.1 | ) | (41.2 | ) | (109.1 | ) | (167.5 | ) | (6.2 | ) | (121.8 | ) | (390.3 | ) | ||||||||||||||||||||
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Weighted average shares used in computing basic and diluted loss per share (2) |
n/p | n/p | n/p | 50,025,000 | n/p | n/p | 130,512,120 | |||||||||||||||||||||||||||
Net loss per share applicable to ordinary shareholdersbasic and diluted |
n/p | n/p | n/p | (3.35 | ) | n/p | n/p | (2.99 | ) | |||||||||||||||||||||||||
Balance Sheet Data: |
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Total assets |
3,497.3 | 3,461.2 | 3,543.4 | 447.4 | 3,788.0 | n/p | 4,121.7 | |||||||||||||||||||||||||||
Total equity |
(506.5 | ) | (550.4 | ) | (657.5 | ) | 274.9 | (643.7 | ) | n/p | 1,714.6 | |||||||||||||||||||||||
Cash Flow Data: |
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Net cash from/(used in) operating activities |
255.1 | 237.3 | 267.4 | (0.5 | ) | 69.4 | 9.3 | (9.3 | ) | |||||||||||||||||||||||||
Net cash used in investing activities |
(27.4 | ) | (28.3 | ) | (26.3 | ) | (295.6 | ) | (2.7 | ) | (3.6 | ) | (518.6 | ) | ||||||||||||||||||||
Net cash (used in)/provided by financing activities |
(255.6 | ) | (106.7 | ) | (344.2 | ) | 353.5 | (19.6 | ) | (9.8 | ) | 778.8 | ||||||||||||||||||||||
Cash and cash equivalents at end of the period |
215.6 | 317.1 | 219.2 | 126.8 | 269.7 | 268.4 | 381.5 | |||||||||||||||||||||||||||
Other Operational and Financial Data: |
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Gross margin (3) |
34.6 | % | 33.5 | % | 35.3 | % | | 35.0 | % | 34.3 | % | 25.7 | % | |||||||||||||||||||||
Adjusted EBITDA (4) |
350.2 | 300.1 | 306.2 | (0.7 | ) | 83.2 | 42.2 | 77.8 | ||||||||||||||||||||||||||
Adjusted EBITDA margin (5) |
22.3 | % | 19.9 | % | 20.4 | % | | 20.9 | % | 17.4 | % | 18.6 | % | |||||||||||||||||||||
Net working capital (6) |
(5.6 | ) | (25.1 | ) | (35.4 | ) | | (23.2 | ) | n/p | (3.6 | ) | ||||||||||||||||||||||
Free cash flow (7) |
305.9 | 290.4 | 275.4 | n/p | 71.2 | 24.7 | 60.5 | |||||||||||||||||||||||||||
Capital expenditures (8) |
(27.4 | ) | (28.3 | ) | (26.3 | ) | | (2.7 | ) | (3.6 | ) | (7.9 | ) |
n/p = not presented
(1) | Includes the results of the Predecessor from June 1, 2015, the date we acquired the Predecessor. |
(2) | With respect to the Founder Preferred Shares Annual Dividend Amount, based on the 531.5 million Founder Preferred Shares Dividend reserve included in the financial statements for the Successor 2015 Interim Period and using the market price of our ordinary shares as of September 30, 2015, the aggregate number of ordinary shares issuable over the seven years pursuant to the Founder Preferred Annual Dividend Amount would have been 37.8 million. Assuming the Findus Acquisition was consummated as of September 30, 2015, our ordinary shares outstanding would have increased by 8.4 million ordinary shares as a result of the issuance of the Findus Consideration Shares. |
(3) | Gross margin represents gross profit as a percentage of revenue. |
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(4) | Adjusted EBITDA represents net loss for the period before taxation, net financing costs, depreciation, amortization, exceptional items, changes in Founder Preferred Shares Annual Dividend Amount and Warrant redemption. For a description of exceptional items, see the reconciliation of Adjusted EBITDA to (loss)/profit for the relevant period below. |
Management believes that Adjusted EBITDA is a useful indicator of our ability to incur and service our indebtedness and in assessing the underlying performance of our business and can assist securities analysts, investors and other parties to perform their own evaluation. Accordingly, the information has been disclosed in this prospectus to permit a more complete and comprehensive analysis of our operating performance. Adjusted EBITDA and similar measures are used by different companies for different purposes and are often calculated in ways that reflect the individual needs and circumstances of those companies. You should exercise caution in comparing our Adjusted EBITDA with similarly titled measures of other companies. Adjusted EBITDA is not a measure of liquidity or performance calculated in accordance with IFRS and should be viewed as a supplement to, not a substitute for, our results of operations presented in accordance with IFRS.
The following table reconciles Adjusted EBITDA to (loss)/profit for the relevant periods as follows:
Predecessor | Successor | Predecessor | Successor | |||||||||||||||||||||||||||||||
Prepared in accordance with IFRS ( in millions) |
Year ended
December 31, |
Year ended
March 31, |
Three
months ended March 31, |
Two
months ended May 31, |
Six months
ended September 30, |
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2012 | 2013 | 2014 | 2015 | 2015 | 2015 | 2015 (1) | ||||||||||||||||||||||||||||
(Loss)/profit for the period |
(78.1 | ) | (41.2 | ) | (109.1 | ) | (167.5 | ) | (6.2 | ) | (121.8 | ) | (390.3 | ) | ||||||||||||||||||||
Taxation |
43.5 | 2.0 | 41.8 | | (7.5 | ) | 48.4 | 5.3 | ||||||||||||||||||||||||||
Net finance costs |
302.4 | 227.6 | 290.2 | (0.1 | ) | 69.3 | 46.4 | 39.6 | ||||||||||||||||||||||||||
Depreciation and amortization |
28.8 | 27.9 | 30.4 | | 7.0 | 5.5 | 10.8 | |||||||||||||||||||||||||||
Net purchaseprice adjustmentinventory step up |
| | | | | | 26.0 | |||||||||||||||||||||||||||
Change in Founder Preferred Shares Annual Dividend Amount and Warrant redemption |
| | | 166.2 | | | 348.6 | |||||||||||||||||||||||||||
Exceptional items: |
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Net investigation of strategic opportunities and other costs |
14.8 | 11.2 | 17.4 | | (0.2 | ) | 1.5 | 2.7 | ||||||||||||||||||||||||||
Costs related to long-term management incentive plans |
17.9 | 13.8 | 16.7 | | 20.1 | 2.8 | 1.5 | |||||||||||||||||||||||||||
Other restructuring costs |
3.1 | 10.5 | 11.6 | | | | 3.6 | |||||||||||||||||||||||||||
Cisterna fire net costs |
| | 5.5 | | 0.7 | 0.6 | 0.6 | |||||||||||||||||||||||||||
Cost related to transactions |
17.8 | 20.9 | 1.7 | 0.7 | | 3.8 | 29.4 | |||||||||||||||||||||||||||
Adjustment to carrying value of intangible assets |
| 27.4 | | | | 55.0 | | |||||||||||||||||||||||||||
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Adjusted EBITDA |
350.2 | 300.1 | 306.2 | (0.7 | ) | 83.2 | 42.2 | 77.8 | ||||||||||||||||||||||||||
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(5) | Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenue for the relevant period. |
(6) | Net working capital represents the sum of inventories, trade and other receivables less trade and other payables as shown in the relevant Statement of Financial Position. |
(7) | Free cash flow represents cash generated from operations before tax and exceptional items less capital expenditures as defined below. We believe free cash flow provides an important alternative measure with which to assess our underlying cash flow on a constant basis. Our calculation of this measure may be different from the calculations used by other companies and therefore comparability may be limited. Free cash flow is a non-IFRS measure and you should not consider it as an alternative to operating cash flow. |
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The following table reconciles free cash flow to cash flow from operations.
Predecessor | Successor | Predecessor | Successor | |||||||||||||||||||||||||||||||
Prepared in accordance with IFRS ( in millions) |
Year ended
December 31, |
Year ended
March 31, |
Three
months ended March 31, |
Two
months ended May 31, |
Six months
ended September 30, |
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2012 | 2013 | 2014 | 2015 | 2015 | 2015 | 2015 (1) | ||||||||||||||||||||||||||||
Cash flows generated from operations before tax and exceptional items |
333.3 | 318.7 | 301.7 | n/p | 73.9 | 28.3 | 68.4 | |||||||||||||||||||||||||||
Capital expenditures |
(27.4 | ) | (28.3 | ) | (26.3 | ) | n/p | (2.7 | ) | (3.6 | ) | (7.9 | ) | |||||||||||||||||||||
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Free cash flow |
305.9 | 290.4 | 275.4 | n/p | 71.2 | 24.7 | 60.5 |
(8) | Capital expenditures represents the purchase of property, plant and equipment and the purchase of intangible assets excluding business combinations as shown in the relevant consolidated Statements of Cash Flows. |
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An investment in our ordinary shares carries a significant degree of risk. You should carefully consider the following risks and other information in this prospectus, including our consolidated financial statements and related notes included elsewhere in this prospectus, before you decide to purchase our ordinary shares. Additional risks and uncertainties of which we are not presently aware or that we currently deem immaterial could also affect our business operations and financial condition. If any of these risks actually occur, our business, financial condition, results of operations or prospects could be materially affected. As a result, the trading price of our ordinary shares could decline and you could lose part or all of your investment.
Risks Related to Our Business and Industry
We operate in a highly competitive market and our failure to compete effectively could adversely affect our results of operations.
The market for frozen food is highly competitive. Our competitors include retailers who promote private label products and well-established branded producers that operate on both a national and an international basis across single or multiple frozen food categories. We also face competition more generally from chilled food, distributors and retailers of fresh products, baked goods and ready-made meals. Our competitors generally compete with us on the basis of price, actual or perceived quality of products, brand recognition, consumer loyalty, product variety, new product development and improvements to existing products. We may not successfully compete with our existing competitors and new competitors may enter the market. Over the last few years, the discounter channel has been growing at a faster rate than the traditional retailer channel. Discounters are supermarket retailers which offer food and grocery products at discounted prices and which typically focus on non-branded rather than branded products. The increase in discounter sales may adversely affect the sales of our branded products.
In addition, we cannot predict the pricing or promotional actions of our competitors or their effect on consumer perceptions or the success of our own advertising and promotional efforts. Our competitors have developed and launched products targeted to compete directly with our products. Our retail customers, most of which promote their own private label products, control the shelf space allocations within their stores. As a result, they may allocate more shelf space to private label products or to our branded competitors products in accordance with their respective promotional strategies. Decreases in shelf space allocated to our products, increases in competitor promotional activity, aggressive marketing strategies by competitors or other factors may require us to reduce our prices or invest greater amounts in advertising and promotion of our products to ensure our products remain competitive.
Furthermore, some of our competitors may have substantially greater financial, marketing and other resources than we have. This creates competitive pressures that could cause us to lose market share or require us to lower prices, increase advertising expenditures or increase the use of discounting or promotional campaigns. These competitive factors may also restrict our ability to increase prices, including in response to commodity and other cost increases. If we are unable to continue to respond effectively to these and other competitive pressures, our customers may reduce orders of our products, may insist on prices that erode our margins or may allocate less shelf space and fewer displays for our products. These or other developments could materially and adversely affect our sales volumes and margins and result in a decrease in our operating results, which could have a material adverse effect on our business, financial condition and results of operations.
Sales of our products are subject to changing consumer preferences; if we do not correctly anticipate such changes, our sales and profitability may decline.
There are a number of trends in consumer preferences which have an impact on us and the frozen food industry as a whole. These include, among others, preferences for convenient, natural, better value, healthy and
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sustainable products. Concerns as to the health impacts and nutritional value of certain foods may increasingly result in food producers being encouraged or required to produce products with reduced levels of salt, sugar and fat and to eliminate trans-fatty acids and certain other ingredients. Consumer preferences are also shaped by concern over the environmental impact of products. The success of our business depends on both the continued appeal of our products and, given the varied backgrounds and tastes of our customer base, our ability to offer a sufficient range of products to satisfy a broad spectrum of preferences. Any shift in consumer preferences in the United Kingdom, Germany, Italy or any other material market in which we operate could have a material adverse effect on our business. Consumer tastes are also susceptible to change. Our competitiveness therefore depends on our ability to predict and quickly adapt to consumer trends, exploiting profitable opportunities for product development without alienating our existing consumer base or focusing excessive resources or attention on unprofitable or short-lived trends. If we are unable to respond on a timely and appropriate basis to changes in demand or consumer preferences, our sales volumes and margins could be adversely affected.
Our future results and competitive position are dependent on the successful development of new products and improvement of existing products, which is subject to a number of difficulties and uncertainties.
Our future results and ability to maintain or improve our competitive position depend on our capacity to anticipate changes in our key markets and to identify, develop, manufacture, market and sell new or improved products in these changing markets successfully. We aim to introduce new products and re-launch and extend existing product lines on a timely basis in order to counteract obsolescence and decreases in sales of existing products as well as to increase overall sales of our products. In addition, we seek to leverage the success of certain of our products in one market by rolling out local versions of such products in other markets. The launch and success of new or modified products are inherently uncertain, especially as to the products appeal to consumers, and there can be no assurance as to our continuing ability to develop and launch successful new products or variations of existing products. The failure to launch a product successfully can give rise to inventory write-offs and other costs and can affect consumer perception of our other products. Market factors and the need to develop and provide modified or alternative products may also increase costs. In addition, launching new or modified products can result in cannibalization of sales of our existing products if consumers purchase the new product in place of our existing products. If we are unsuccessful in developing new products in response to changing consumer demands or preferences in an efficient and economical manner, or if our competitors respond more effectively than we do, demand for our products may decrease, which could materially and adversely affect our business, financial condition and results of operations.
We are exposed to economic and other trends that could adversely impact our operations in the United Kingdom, Germany, Italy and other markets.
We conduct operations in our key markets of the United Kingdom, Germany and Italy, from which 81% of our revenue was generated during the year ended December 31, 2014. We are particularly influenced by economic developments and changes in consumer habits in those countries.
The European food retail industry as a whole has been affected by the recent economic downturn, tighter credit conditions and slow or declining growth. The geographic markets in which we compete have been affected by negative macroeconomic trends which have affected consumer confidence. This can result in consumers purchasing cheaper private label products instead of equivalent branded products. Such macroeconomic trends could, among other things, negatively impact global demand for branded and premium food products, which could result in a reduction of sales or pressure on margins of our branded products or cause an increasing transfer to lower priced product categories. For example, in 2013, we recorded an impairment charge with respect to our Belgian operation because of the impact of the then-current economic circumstances in the Belgian frozen food market, where market conditions have been challenging for an extended period of time, and in Italy, we experienced particularly weak economic conditions, which caused customers to purchase more private label goods, which negatively impacted both our net sales and gross margin.
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Our inability to source raw materials or other inputs of an acceptable type or quality, could adversely affect our results of operations.
We use significant quantities of food ingredients and packaging materials and are therefore vulnerable to fluctuations in the availability and price of food ingredients, packaging materials, energy costs and other supplies. In particular, raw materials such as fish, livestock and crops have historically represented a significant portion of our cost of sales, and accordingly, adverse changes in raw material prices can impact our results of operations.
Specifically, the availability and the price of fish, vegetables and other agricultural commodities, including poultry and meat, can be volatile. We are also affected by the availability of quality raw materials, most notably fish, which can be impacted by the fishing and agricultural policies of the European Union including national or international quotas that can limit volume of raw materials. General economic conditions, unanticipated demand, problems in manufacturing or distribution, natural disasters, weather conditions during the growing and harvesting seasons, plant, fish and livestock diseases and local, national or international quarantines can also adversely affect availability and prices of commodities in the long and short term.
While we attempt to negotiate fixed prices for certain materials with our suppliers for periods ranging from one month to a full year, we cannot guarantee that our strategy will be successful in managing input costs if prices increase for extended periods of time. Moreover, there is no market for hedging against price volatility for certain raw materials and accordingly such materials are bought at the spot rate in the market.
Our ability to avoid the adverse effects of a pronounced, sustained price increase in raw materials is limited. Any increases in prices or scarcity of ingredients or packaging materials required for our products could increase our costs and disrupt our operations. If the availability of any of our inputs is constrained for any reason, we may not be able to obtain sufficient supplies or supplies of a suitable quality on favorable terms or at all. Such shortages could materially adversely affect our market share, business, financial condition and results of operations.
Our inability to pass on price increases for materials or other inputs to our customers could adversely affect our results of operations.
Our ability to pass through increases in the prices of raw materials to our customers depends, among others, on prevailing competitive conditions and pricing methods in the markets in which we operate, and we may not be able to pass through such price increases to our customers. Even if we are able to pass through increases in prices, there is typically a time lag between cost increases impacting our business and implementation of product price increases during which time our gross margin may be negatively impacted. Recovery of cost inflation can also lead to disparities in retailers shelf-prices between different brands which can result in a competitive disadvantage and volume decline. During our negotiations to increase our prices to recover cost increases, customers may take actions which exacerbate the impact of such cost increases, for example by ceasing to offer our products or deferring orders until negotiations have ended. Our inability to pass through price increases in raw materials and preserve our profit margins in the future could materially adversely affect our business, financial condition and results of operations.
We rely on sales to a limited number of large food retailers and should they perform poorly or give higher priority to private label or other brands or products or if the concentration and buying power of these large retailers increase, our business could be adversely affected.
Our customers include supermarkets and large chain food retailers in the United Kingdom, Germany and Italy. In the United Kingdom and Germany, the food retail segments are highly concentrated. In recent years, the major multiple retailers in those countries have increased their share of the grocery market and price competition between those retailers has intensified. This price competition has led the major multiple retailers to seek lower prices from their suppliers, including us. The strength of the major multiple retailers bargaining position gives them significant leverage over their suppliers in negotiating pricing, product specification and the level of
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supplier participation in promotional campaigns and offers, which can reduce our margins. Our top five customers in the United Kingdom and Germany accounted for 79.2% and 91.4%, respectively, of our revenue in those markets for 2014. In Italy, our top six customers accounted for 40.2% of our 2014 revenue in that market. This percentage may increase with further consolidation among the major multiple retailers or if our customers grow disproportionately in relation to their competitors, thus increasing their relative negotiating power and allowing them to force a negative shift in our trade terms. Our results of operations could also be adversely affected if these retailers suffer a significant deterioration in sales performance, if we are required to reduce our prices or increase our promotional spending activity as a consequence of an increase in the strength of the major multiple retailers bargaining position, if we are unable to collect accounts receivable from our major customers, if we lose business from a major retail customer or if our relationship with a major customer deteriorates.
Our retail customers also offer private label products that compete directly with our products for retail shelf space and consumer purchases. Private label products typically have higher margins for retailers than other branded products. Accordingly, there is a risk that our customers may give higher priority to private label products or the branded products of our competitors, which would adversely affect sales of our products. Our major multiple retail customers are also expanding into non-food product lines in their stores, thereby exerting pressure on shelf space for other categories such as food products. We may be unable to adequately respond to these trends and, as a result, the volume of our sales may decrease or we may need to lower the prices of our products, either of which could adversely affect our business, financial condition and results of operations.
We do not have long-term contractual agreements with our key customers, which exposes us to increased risks with respect to such customers.
As is typical in the food industry, sales to our key customers, the large United Kingdom, German and Italian major multiple retailers, are made on a daily demand basis. We generally do not have long-term contractual commitments to supply such customers and must renegotiate supply and pricing terms of our products on a regular basis. Customarily, trade terms are renegotiated annually; however, ad-hoc changes are often made on an informal basis, such as by email, to reflect discounts and promotional arrangements. Amounts paid are subject to end of period reconciliations to reflect these informal arrangements. In some cases, our customers have claimed reimbursement for informal discount arrangements going back multiple periods. In addition, we do not have written contractual arrangements with a number of our other customers. Most of our customer relationships or arrangements could be terminated or renegotiated at any time and, in some cases, without reasonable notice.
Our customers may not be creditworthy.
Our business is subject to the risks of nonpayment and nonperformance by our customers. We manage our exposure to credit risk through credit analysis and monitoring procedures, and sometimes use letters of credit, prepayments and guarantees. However, these procedures and policies cannot fully eliminate customer credit risk, and to the extent our policies and procedures prove to be inadequate, it could negatively affect our financial condition and results of operations. In addition, some of our customers may be highly leveraged and subject to their own operating and regulatory risks and, even if our credit review and analysis mechanisms work properly, we may experience financial losses in our dealings with such parties. We do not maintain credit insurance to insure against customer credit risk. If our customers fail to fulfill their contractual obligations, it may have an adverse effect on our business, financial condition and results of operation.
Failure to protect our brand names and trademarks could materially affect our business.
Our principal brand names and trademarks (such as Birds Eye, Iglo and Findus) are key assets of our business and our success depends upon our ability to protect our intellectual property rights. We rely upon trademark laws to establish and protect our intellectual property rights, but cannot be certain that the actions we have taken or will take in the future will be adequate to prevent violation of our proprietary rights. Litigation may be necessary to enforce our trademark or proprietary rights or to defend us against claimed infringement of the rights of third parties. In addition, the Findus brand, which we use in Italy, is used by other producers in several
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European markets outside Italy with different logos than ours, and the Birds Eye brand, which we use in the United Kingdom, is used by other producers in the United States and Australia. Even though the brands have different logos, adverse publicity from such other markets may negatively impact the perception of our brands in our respective markets. Adverse publicity, legal action or other factors could lead to substantial erosion in the value of our brands, which could lead to decreased consumer demand and could have a material adverse effect on our business, financial condition and results of operations.
Health concerns or adverse developments with respect to the safety or quality of products of the food industry in general or our own products specifically may damage our reputation, increase our costs of operations and decrease demand for our products.
Food safety and the publics perception that our products are safe and healthy are essential to our image and business. We sell food products for human consumption, which subjects us to safety risks such as product contamination, spoilage, misbranding or product tampering. Product contamination, including the presence of a foreign object, substance, chemical or other agent or residue or the introduction of a genetically modified organism, could require product withdrawals or recalls or the destruction of inventory, and could result in negative publicity, temporary plant closures and substantial costs of compliance or remediation. For example, while it did not significantly impact our business, many food companies had to deal with the reputational impact of the industry-wide horsemeat contamination issue that arose across most European food markets in January 2013. In addition, food producers, including us, have been targeted by extortion attempts that threatened to contaminate products displayed in supermarkets. Such attempts can result in the temporary removal of products from shelf displays as a precautionary measure and result in lost revenue. We may also be impacted by publicity concerning any assertion that our products caused illness or injury. In addition, we could be subject to claims or lawsuits relating to an actual or alleged illness stemming from product contamination or any other incidents that compromise the safety and quality of our products. Any significant lawsuit or widespread product recall or other events leading to the loss of consumer confidence in the safety and quality of our products could damage our brand, reputation and image and negatively impact our sales, profitability and prospects for growth. In addition, product recalls are difficult to foresee and prepare for and, in the event we are required to recall one or more of our products, such recall may result in loss of sales due to unavailability of our products and may take up a significant amount of our managements time and attention. We maintain systems designed to monitor food safety risks and require our suppliers to do so as well. However, we cannot guarantee that our efforts will be successful or that such risks will not materialize. In addition, although we attempt, through contractual relationships and regular inspections, to control the risk of contamination caused by third parties in relation to the several manufacturing and distribution processes we outsource, we cannot guarantee that our efforts will be successful or that contamination of our products by third parties will not materialize.
We are also subject to further risks affecting the food industry generally, including risks posed by widespread contamination and evolving nutritional and health-related concerns. Regulatory authorities may limit the supply of certain types of food products in response to public health concerns and consumers may perceive certain products to be unsafe or unhealthy. For example, due to avian flu, we or our suppliers could be required to find alternative supplies or ingredients that may or may not be available at commercially reasonable prices and within the required time. In addition, governmental regulations may require us to identify replacement products to offer to our customers or, alternatively, to discontinue certain offerings or limit the range of products we offer. We may be unable to find substitutes that are as appealing to our customer base, or such substitutes may not be widely available or may be available only at increased costs. Such substitutions or limitations could also reduce demand for our products.
We could also be subject to claims or lawsuits relating to an actual or alleged illness or injury or death stemming from the consumption of a misbranded, altered, contaminated or spoiled product, which could negatively affect our business. Awards of damages, settlement amounts and fees and expenses resulting from such claims and the public relations implications of any such claims could have an adverse effect on our business. The availability and price of insurance to cover claims for damages are subject to market forces that we
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do not control, and such insurance may not cover all the costs of such claims and would not cover damage to our reputation. Even if product liability claims against us are not successful or fully pursued, these claims could be costly and time consuming, increase our insurance premiums and divert our managements time and resources towards defending them rather than operating our business. In addition, any adverse publicity concerning such claims, even if unfounded, could cause customers to lose confidence in the safety and quality of our products and damage our reputation and brand image.
We are exposed to local business and tax risks in many different countries.
We operate in various countries in Europe, predominantly in the United Kingdom, Germany and Italy. As a result, our business is subject to risks resulting from differing legal, political, social and regulatory requirements, economic conditions and unforeseeable developments in these markets, all or any of which could result in disruption of our activities. These risks include, among others, political instability, differing economic cycles and adverse economic conditions, unexpected changes in regulatory environments, currency exchange rate fluctuations, inability to collect payments or seek recourse under or comply with ambiguous or vague commercial or other laws, changes in distribution and supply channels, foreign exchange controls and restrictions on repatriation of funds, and difficulties in attracting and retaining qualified management and employees. Our overall success in the markets in which we operate depends, to a considerable extent, on our ability to effectively manage differing legal, political, social and regulatory requirements, economic conditions and unforeseeable developments. We cannot guarantee that we will succeed in developing and implementing policies and strategies which will be effective in each location where we do business.
We currently have limited operations in Russia and certain other Central and Eastern European countries which may be subject to a higher degree of political and economic risk and additional risks such as significant uncertainties regarding the interpretation, application and enforceability of laws and regulations and the enforceability of contract and intellectual property rights.
We must comply with complex and evolving tax regulations in the various jurisdictions in which we operate, which subjects us to international tax compliance risks. Some tax jurisdictions in which we operate have complex and subjective rules regarding income tax, value-added tax, sales or excise tax and transfer tax. From time to time, our foreign subsidiaries are subject to tax audits and may be required to pay additional taxes, interest or penalties should the taxing authority assert different interpretations, or different allocations or valuations of our services which could be material and could reduce our income and cash flow from our international subsidiaries. We currently have several pending tax assessments and audits in various jurisdictions including Germany. The agreement by which we acquired the Iglo Group provides for a post-closing adjustment to the purchase price for these German tax matters which we believe is sufficient to address those specific tax matters.
Our business is dependent on third-party suppliers and changes or difficulties in our relationships with our suppliers may harm our business and financial results.
We outsource some of our business functions to third-party suppliers, such as the processing of certain vegetables and other products, the manufacturing of packaging materials and distribution of our products. Our suppliers may fail to meet timelines or contractual obligations or provide us with sufficient products, which may adversely affect our business. Certain of our contracts with key suppliers, such as for the raw materials we use in our products, are short term, can be terminated by the supplier upon giving notice within a certain period and restrict us from using other suppliers. Also, a number of our supply contracts, including for fish and vegetables, may be terminated by the supplier upon a change in our ownership. Failure to appropriately structure or adequately manage our agreements with third parties may adversely affect our supply of products. We are also subject to credit risk with respect to our third-party suppliers. If any such suppliers become insolvent, an appointed trustee could potentially ignore the service contracts we have in place with such party, resulting in increased charges or the termination of the service contracts. We may not be able to replace a service provider
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within a reasonable period of time, on as favorable terms or without disruption to our operations. Any adverse changes to our relationships with third-party suppliers could have a material adverse effect on our image, brand and reputation, as well as on our business, financial condition and results of operations.
In addition, to the extent that our creditworthiness is impaired, or general economic conditions decline, certain of our key suppliers may demand onerous payment terms that could materially adversely affect our working capital position, or such suppliers may refuse to continue to supply to us. A number of our key suppliers have taken out trade credit insurance on our ability to pay them. To the extent that such trade credit insurance becomes unobtainable or more expensive due to market conditions, we may face adverse changes to payment terms by our key suppliers or they may refuse to continue to supply us.
The price of energy we consume in the manufacture, storage and distribution of our products is subject to volatile market conditions.
The price of electricity and other energy resources required in the manufacture, storage and distribution of our products is subject to volatile market conditions. These market conditions are often affected by political and economic factors beyond our control, including, for instance, the energy policies of the countries in which we operate. For example, the German governments decision to phase out nuclear power generation by 2022 could cause electricity prices and price volatility in Germany to increase. Any sustained increases in energy costs could have an adverse effect on the attractiveness of frozen food products for our customers and consumers and could affect our competitive position if our competitors energy costs do not increase at the same rate as ours. In addition, disruptions in the supply of energy resources could temporarily impair our ability to manufacture products for our customers. Such disruptions may also occur as a result of the loss of energy supply contracts or the inability to enter into new energy supply contracts on commercially attractive terms. Furthermore, natural catastrophes or similar events could affect the electricity grid. Any such disruptions, or increases in energy costs as a result of the aforementioned factors or otherwise, could have a material adverse effect on our business, financial condition and results of operations.
Increased distribution costs or disruption of transportation services could adversely affect our business and financial results.
Distribution costs have historically fluctuated significantly over time, particularly in connection with oil prices, and increases in such costs could result in reduced profits. In addition, certain factors affecting distribution costs are controlled by our third party carriers. To the extent that the market price for fuel or freight or the number or availability of carriers fluctuates, our distribution costs could be affected. In addition, temporary or long-term disruption of transportation services due to weather-related problems, strikes, lockouts or other events could impair our ability to supply products affordably and in a timely manner or at all. Failure to deliver our perishable food products promptly could also result in inventory spoilage. These factors could impact our commercial reputation and result in our customers reducing their orders or ceasing to order our products. Any increases in the cost of transportation, and any disruption in transportation, could have a material adverse effect on our business, financial condition and results of operations. We require the use of refrigerated vehicles to ship our products and such distribution costs represent an important element of our cost structure. We are dependent on third parties for almost all of our transportation requirements. In Italy, our distribution network is shared with Unilevers ice cream business, which provides us with an advantage over smaller market participants. Our arrangement with Unilever is governed by a distribution agreement which expires on December 31, 2018.
Any disruptions in our information technology systems could harm our business and reduce our profitability.
We rely on our information technology systems for communication among our suppliers, manufacturing plants, distribution functions, headquarters and customers. Our performance depends on the availability of accurate and timely data and other information from key software applications to aid day-to-day business and decision-making processes. We may be adversely affected if our controls designed to manage information technology operational risks fail to contain such risks. If we do not allocate and effectively manage the resources
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necessary to build and sustain the proper technology infrastructure and to maintain the related automated and manual control processes, we could be subject to adverse effects including billing and collection errors, business disruptions, in particular concerning our manufacturing and logistics functions, and security breaches. Any disruption caused by failings in our information technology infrastructure equipment or of communication networks, could delay or otherwise impact our day-to-day business and decision-making processes and negatively impact our performance. In addition, we are reliant on third parties to service parts of our IT infrastructure. Failure on their part to provide good and timely service may have an adverse impact on our information technology network. Furthermore, we do not control the facilities or operations of our suppliers. An interruption of operations at any of their or our facilities or any failure by them to deliver on their contractual commitments may have an adverse effect on our business, financial condition and results of operations.
Our supply network and manufacturing and distribution facilities could be disrupted by factors beyond our control such as extreme weather, fire and other natural disasters.
Severe weather conditions and natural disasters, such as storms, floods, droughts, frosts, earthquakes or pestilence, may affect the supply of the raw materials that we use for the manufacturing of our products. For example, changing climate may cause flooding and drought in crop growing areas or changes in sea temperatures affecting marine biomass, fishing catch rates and overall fishing conditions. In addition, drought or floods may affect the feed supply for red meat and poultry, which in turn may affect the quality and availability of protein sources for our products. Competing food producers can be affected differently by weather conditions and natural disasters depending on the location of their supply sources. If our supplies of raw materials are reduced, we may not be able to find adequate supplemental supply sources, if at all, on favorable terms, which could have a material adverse effect on our business, financial condition and results of operation.
In addition, our manufacturing facilities may be subject to damage. For example, our Lowestoft and Bremerhaven manufacturing facilities are situated in regions which have historically been prone to flooding. Extensive damage to any of our four major manufacturing facilities, whether as a result of floods, fire or other natural disasters, could, to the extent that lost production could not be compensated for by unaffected facilities, severely affect our ability to conduct our business operations and, as a result, adversely affect our business, financial condition and results of operations.
Furthermore, as we lease parts of our Lowestoft and Bremerhaven sites, the use of these properties is subject to certain terms and conditions, the breach of which could affect our ability to continue use of these properties which in turn may disrupt our operations and may materially adversely affect our results of operations.
Significant disruption in our workforce or the workforce of our suppliers could adversely affect our business, financial condition and results of operations.
As of September 30, 2015, we employed approximately 2,800 employees, of which approximately 1,170 were located in Germany, 960 in the United Kingdom, and 470 in Italy. Approximately 60% of our employees work in our manufacturing operations. We have in the past, and may in the future, experience labor disputes and work stoppages at one or more of our manufacturing sites due to localized strikes or strikes in the larger retail food industry sector. In mid-2013, at our Cisterna, Italy facility, we experienced a three-week strike following two years of restructuring which had seen a reduction in the workforce by almost 200 employees in three successive phases. The strike temporarily adversely affected the efficiency of the operations at that manufacturing plant. We have also been involved in negotiations on collective bargaining agreements. A labor stoppage or other interruption at one of our four manufacturing sites would impact our ability to supply our customers and could have a pronounced effect on our operations. Future labor disturbance or work stoppage at any of our or our suppliers facilities in Germany, the United Kingdom, Italy or elsewhere may have an adverse effect on such facilitys operations and, potentially, on our business, financial condition and results of operations.
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Higher labor costs could adversely affect our business and financial results.
We compete with other producers for good and dependable employees. The supply of such employees is limited and competition to hire and retain them may result in higher labor costs. Furthermore, a substantial majority of our employees are subject to national minimum wage requirements. If legislation is enacted in these countries that has the effect of raising the national minimum wage requirements, requires additional mandatory employee benefits or affects our ability to hire or dismiss employees, we could face substantially higher labor costs. High labor costs could adversely affect our profitability if we are not able to pass them on to our customers.
We are dependent upon key executives and highly qualified managers and we cannot assure their retention.
Our success depends, in part, upon the continued services of key members of our management. Our executives and managers knowledge of the market, our business and our company represents a key strength of our business, which cannot be easily replicated. The success of our business strategy and our future growth also depend on our ability to attract, train, retain and motivate skilled managerial, sales, administration, development and operating personnel.
There can be no assurance that our existing personnel will be adequate or qualified to carry out our strategy, or that we will be able to hire or retain experienced, qualified employees to carry out our strategy. The loss of one or more of our key management or operating personnel, or the failure to attract and retain additional key personnel, could have a material adverse effect on our business, financial condition and results of operations.
Costs or liabilities relating to compliance with applicable directives, regulations and laws could have a material adverse effect on our business, financial condition and results of operations.
As a producer of food products for human consumption, we are subject to extensive regulation in the United Kingdom, Germany, Italy and other countries in which we operate, as well as the European Union, that governs production, composition, manufacturing, storage, transport, advertising, packaging, health, quality, labeling, safety and distribution standards. In addition, national regulations that have implemented European directives applicable to frozen products establish highly technical requirements regarding labeling, manufacturing, transportation and storage of frozen food products. For example, regulations of the European Parliament and Council published in October 2011 changed rules relating to the presentation of nutritional information on packaging and other rules on labeling. Local governmental authorities also set out health and safety related conditions and restrictions. Any failure to comply with applicable laws and regulations could subject us to civil remedies, including fines, injunctions, product recalls or asset seizures, as well as potential criminal sanctions, any of which could have a material adverse effect on our business, financial condition and results of operations.
In addition, our facilities and our suppliers facilities are subject to licensing, reporting requirements and official quality controls by numerous governmental authorities. These governmental authorities include European, national and local health, environmental, labor relations, sanitation, building, zoning, and fire and safety departments. Difficulties in obtaining or failure to obtain the necessary licenses or approval could delay or prevent the development, expansion or operation of a given production or warehouse facility. Any changes in those regulations may require us to implement new quality controls and possibly invest in new equipment, which could delay the development of new products and increase our operating costs.
All of our products must comply with strict national and international hygiene regulations. Our facilities and our suppliers facilities are subject to regular inspection by authorities for compliance with hygiene regulations applicable to the sale, storage and manufacturing of foodstuffs and the traceability of genetically modified organisms, meats and other raw materials. Additionally, in certain jurisdictions, food business operators, including those in the food storage, processing and distribution sectors, are required to trace all food, animal feed, and food-producing animals under their control using registration systems that track the source of the products through the supply chain. Despite the precautions we undertake, should any non-compliance with such
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regulations be discovered during an inspection or otherwise, authorities may temporarily shut down any of our facilities and levy a fine for such non-compliance, which could have a material adverse effect on our business, financial condition and results of operations.
We could incur material costs to address violations of, or liabilities under, health, safety and environmental regulations.
Our facilities and operations are subject to numerous health, safety and environmental regulations, including local and national laws, and European directives and regulations governing, among other things, water supply and use, water discharges, air emissions, chemical safety, solid and hazardous waste management and disposal, clean-up of contamination, energy use, noise pollution, and workplace health and safety. Health, safety and environmental legislation in Europe and elsewhere have generally become more comprehensive and restrictive and more rigid over time and enforcement has become more stringent. Failure to comply with applicable requirements, or the terms of required permits, can result in penalties or fines, clean-up costs, third party property damage and personal injury claims, which could have a material adverse effect on our brand, business, financial condition and results of operations. In addition, if health, safety and environmental laws and regulations in the United Kingdom, Germany, Italy and the other countries in which we operate or from which we source raw materials and ingredients become more stringent in the future, the extent and timing of investments required to maintain compliance may exceed our budgets or estimates and may limit the availability of funding for other investments.
Furthermore, under some environmental laws, we could be liable for costs incurred in investigating or remediating contamination at properties we own or occupy, even if the contamination was caused by a party unrelated to us or was not caused by us, and even if the activity which caused the contamination was legal at the time it occurred. The discovery of previously unknown contamination, or the imposition of new or more burdensome obligations to investigate or remediate contamination at our properties or at third-party sites, could result in substantial unanticipated costs which could have a material adverse effect on our business, financial condition and results of operations.
In certain jurisdictions, we are also subject to legislation designed to significantly reduce industrial energy use, carbon dioxide emissions and the emission of ozone depleting compounds more generally. If we fail to meet applicable standards for energy use reduction or are unable to decrease, and in some cases eliminate, certain emissions within the applicable period required by relevant laws and regulations, we could be subject to significant penalties or fines and temporary or long-term disruptions to production at our facilities, all of which could have a material adverse effect on our business, financial condition and results of operations.
A failure in our cold chain could lead to unsafe food conditions and increased costs.
Cold chain requirements setting out the temperatures at which our ingredients and products are stored are established both by statute and by us to help guarantee the safety of our food products. Our cold chain is maintained from the moment the ingredients arrive at, or are frozen by, our suppliers, through our manufacturing and transportation of products and ultimately to the time of sale in retail stores. These standards ensure the quality, freshness and safety of our products. A failure in the cold chain could lead to food contamination, risks to the health of consumers, fines and damage to our brands and reputation, each of which could have an adverse effect on our business, financial condition and results of operations.
Due to the seasonality of our business, our revenue and working capital levels may vary quarter to quarter.
Our sales and working capital levels have historically been affected to a limited extent by seasonality. In general, sales volumes for frozen food are slightly higher in cold or winter months, partly because there are fewer fresh alternatives available for vegetables and because our retailers typically allocate more freezer space to the ice cream segment in summer or hotter months. In addition, variable production costs, including costs for seasonal staff, and working capital requirements associated with the keeping of inventories, vary depending on
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the harvesting and buying periods of seasonal raw materials, in particular vegetable crops. For example, stock (and therefore net working capital) levels typically peak in August to September just after the pea harvest. If seasonal fluctuations are greater than anticipated, our business, financial condition and results of operations could be adversely affected.
We have indebtedness which may reduce our capability to withstand adverse developments or business conditions.
We have indebtedness and may continue to incur additional debt in the future to fund operations, growth or acquisitions. This leverage exposes us to risk in the event of downturns in our businesses (whether through competitive pressures or otherwise), in our industries or in the economy generally.
In addition, a significant part of our indebtedness includes provisions with respect to maintaining and complying with certain financial and operational covenants. Our ability to comply with these covenants may be affected by events beyond our control. A breach of one or more of these covenants could result in an event of default and may give rise to an acceleration of the debt. In the longer term, such breach of covenants could have a material adverse effect on our operations and cash flows.
We are exposed to exchange rate risks and such rates may adversely affect our results of operations.
We are exposed to exchange rate risk. Our reporting currency is the Euro and yet a significant proportion of our sales and EBITDA are in Pound Sterling through our United Kingdom based business. We are exposed to foreign exchange impacts as we convert the Pound Sterling results of our United Kingdom business into our reporting currency of Euro. We denominate part of our debt in Pound Sterling to act as a natural hedge for our United Kingdom business. We are also exposed to exchange rate risk due to the fact that a significant portion of our raw material purchases, mainly fish, are denominated in U.S. Dollars. Similarly, our Findus business in Italy, which sells products in Euros, purchases peas in Swedish Krona. We buy forward short term foreign exchange contracts to cover the value of all U.S. Dollar/Euro, Pound Sterling/Euro and Swedish Krona/Euro contractual commitments and some forecasted commitments. However, such hedging arrangements may not fully protect us against currency fluctuations. Fluctuations and sustained changes in the U.S. Dollar/Euro, Pound Sterling/Euro or Swedish Krona/Euro exchange rates may materially adversely affect our business, financial condition and results of operations.
Changes to our payment terms with both customers and suppliers may materially adversely affect our operating cash flows.
We may experience significant pressure from both our competitors and our key suppliers to reduce the number of days of our accounts payable. At the same time, we may experience pressure from our customers to extend the number of days before paying our accounts receivable. Any failure to manage our accounts payable and accounts receivable may have a material adverse effect on our business, financial condition and results of operations.
Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.
Generally accepted accounting principles and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, including but not limited to revenue recognition, estimating valuation allowances and accrued liabilities (including allowances for returns, doubtful accounts and obsolete and damaged inventory), accounting for income taxes, valuation of long-lived and intangible assets and goodwill, stock-based compensation and loss contingencies, are highly complex and involve many subjective assumptions, estimates and judgments by our management. Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments by our management could significantly change our reported or expected financial performance, and could have a material adverse effect on our business.
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We may incur liabilities that are not covered by insurance.
While we seek to maintain appropriate levels of insurance, not all claims are insurable and we may experience major incidents of a nature that are not covered by insurance. Our insurance policies cover, among other things, employee-related accidents and injuries, property damage and liability deriving from our activities. In particular, our Lowestoft and Bremerhaven manufacturing facilities are situated in regions that have historically been affected by flooding. We may not be able to obtain flood insurance on reasonable terms or at all with respect to those facilities. We maintain an amount of insurance protection that we believe is adequate, but there can be no assurance that such insurance will continue to be available on acceptable terms or that our insurance coverage will be sufficient or effective under all circumstances and against all liabilities to which we may be subject. We could, for example, be subject to substantial claims for damages upon the occurrence of several events within one calendar year. In addition, our insurance costs may increase over time in response to any negative development in our claims history or due to material price increases in the insurance market in general.
Risks Related to Our Structure and Acquisition Strategy
We may not be able to consummate future acquisitions or successfully integrate acquisitions into our business, which could result in unanticipated expenses and losses.
Our strategy is largely based on our ability to grow through acquisitions of further businesses to build an integrated group. Consummating acquisitions of related businesses, or our failure to integrate such businesses successfully into our existing businesses, could result in unanticipated expenses and losses. Furthermore, we may not be able to realize any of the anticipated benefits from acquisitions, including the Findus Acquisition.
We anticipate that any future acquisitions we may pursue as part of our business strategy may be partially financed through additional debt or equity. If new debt is added to current debt levels, or if we incur other liabilities, including contingent liabilities, in connection with an acquisition, the debt or liabilities could impose additional constraints and requirements on our business and operations, which could materially adversely affect our financial condition and results of operation. In addition, to the extent our ordinary shares are used for all or a portion of the consideration to be paid for future acquisitions, dilution may be experienced by existing shareholders.
In connection with our completed and future acquisitions, the process of integrating acquired operations into our existing group operations, including the Findus Acquisition, may result in unforeseen operating difficulties and may require significant financial resources that would otherwise be available for the ongoing development or expansion of existing operations. Some of the risks associated with acquisitions include:
| unexpected losses of key employees or customers of the acquired company; |
| conforming the acquired companys standards, processes, procedures and controls with our operations; |
| coordinating new product and process development; |
| hiring additional management and other critical personnel; |
| negotiating with labor unions; and |
| increasing the scope, geographic diversity and complexity of our current operations. |
In addition, we may encounter unforeseen obstacles or costs in the integration of businesses that we may acquire, including in connection with the Iglo Acquisition or the Findus Acquisition. In addition, general economic and market conditions or other factors outside of our control could make our operating strategies difficult or impossible to implement. Any failure to implement these operational improvements successfully and/or the failure of these operational improvements to deliver the anticipated benefits could have a material adverse effect on our results of operations and financial condition.
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We may be subject to antitrust regulations with respect to future acquisition opportunities.
Many jurisdictions in which we operate have antitrust regulations which involve governmental filings for certain acquisitions, impose waiting periods and require approvals by government regulators. Governmental authorities may seek to challenge potential acquisitions or impose conditions, terms, obligations or restrictions that may delay completion of the acquisition or materially reduce the anticipated benefits (financial or otherwise). Our inability to consummate potential future acquisitions or to receive the full benefits of such acquisitions because of antitrust regulations could limit our ability to execute on our acquisition strategy which could have a material adverse effect on our financial condition and results of operations.
We may face significant competition for acquisition opportunities.
There may be significant competition in some or all of the acquisition opportunities that we may explore. Such competition may for example come from strategic buyers, sovereign wealth funds, special purpose acquisition companies and public and private investment funds, many of which are well established and have extensive experience in identifying and completing acquisitions. A number of these competitors may possess greater technical, financial, human and other resources than us. We cannot assure investors that we will be successful against such competition. Such competition may cause us to be unsuccessful in executing any acquisition or may result in a successful acquisition being made at a significantly higher price than would otherwise have been the case.
Any due diligence by us in connection with potential future acquisition may not reveal all relevant considerations or liabilities of the target business, which could have a material adverse effect on our financial condition or results of operations.
We intend to conduct such due diligence as we deem reasonably practicable and appropriate based on the facts and circumstances applicable to any potential acquisition. The objective of the due diligence process will be to identify material issues which may affect the decision to proceed with any one particular acquisition target or the consideration payable for an acquisition. We also intend to use information revealed during the due diligence process to formulate our business and operational planning for, and our valuation of, any target company or business. While conducting due diligence and assessing a potential acquisition, we may rely on publicly available information, if any, information provided by the relevant target company to the extent such company is willing or able to provide such information and, in some circumstances, third party investigations.
There can be no assurance that the due diligence undertaken with respect to an acquisition, including the Iglo Acquisition and the Findus Acquisition, will reveal all relevant facts that may be necessary to evaluate such acquisition including the determination of the price we may pay for an acquisition target or to formulate a business strategy. Furthermore, the information provided during due diligence may be incomplete, inadequate or inaccurate. As part of the due diligence process, we will also make subjective judgments regarding the results of operations, financial condition and prospects of a potential target. For example, the due diligence we conducted in connection with the Iglo Acquisition may not have been complete, adequate or accurate and may not have uncovered all material issues and liabilities to which we are now subject. Given that none of the representations and warranties included in the Iglo Acquisition agreement survived the closing of the transaction, except for representations and warranties with respect to ownership of equity and authority to enter into the agreement and consummate the transaction, we will have limited recourse against the seller of the Iglo Group and as a consequence may not be able to recover any loss suffered as a result of entering into the transaction. If the due diligence investigation fails to correctly identify material issues and liabilities that may be present in a target company or business, or if we consider such material risks to be commercially acceptable relative to the opportunity, and we proceed with an acquisition, we may subsequently incur substantial impairment charges or other losses.
In addition, following an acquisition, including the Iglo Acquisition and the Findus Acquisition, we may be subject to significant, previously undisclosed liabilities of the acquired business that were not identified during
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due diligence and which could contribute to poor operational performance, undermine any attempt to restructure the acquired company or business in line with our business plan and have a material adverse effect on our financial condition and results of operations.
We are a holding company whose principal source of operating cash is the income received from our subsidiaries.
We are dependent on the income generated by our subsidiaries in order to make distributions and dividends on the ordinary shares. The amount of distributions and dividends, if any, which may be paid to us from any operating subsidiary will depend on many factors, including such subsidiarys results of operations and financial condition, limits on dividends under applicable law, its constitutional documents, documents governing any indebtedness, and other factors which may be outside our control. For example, Iglos debt facility contains certain negative operating covenants, including covenants restricting Iglos ability to declare or pay any distributions or dividends within the Iglo Group and/or to us. If our operating subsidiaries do not generate sufficient cash flow, we may be unable to make distributions and dividends on the ordinary shares.
The Founders and/or the Founder Entities may in the future enter into related party transactions with us, which may give rise to conflicts of interest between us and some or all of the Founders and/or the Directors.
Our Founders and/or one or more of their affiliates may in the future enter into agreements with us that are not currently under contemplation. While we will not enter into any related party transaction without the approval of our Audit Committee, it is possible that the entering into of such an agreement might raise conflicts of interest between us and some or all of the Founders and/or the directors.
Risks Related to this Offering and our Ordinary Shares
We have various equity instruments outstanding that would require us to issue additional ordinary shares. Therefore, you may experience significant dilution of your ownership interests and the future issuance of additional ordinary shares, or the anticipation of such issuances, could have an adverse effect on our share price.
We currently have various equity instruments outstanding that would require us to issue additional ordinary shares for no or a fixed amount of additional consideration. Specifically, as of [●], 2015, we had outstanding the following:
| 1,500,000 Founder Preferred Shares held by Mariposa Acquisition II, LLC and TOMS Acquisition I LLC (collectively, the Founder Entities), which are controlled by the Founders. The Founder Preferred Shares will automatically convert into ordinary shares on a one for one basis (subject to adjustment in accordance with our Memorandum and Articles of Association) on the last day of the seventh full financial year following completion of the Iglo Acquisition and some or all of them may be converted following written request from the holder; |
| 125,000 options held by certain current and former of our Directors which are exercisable to purchase ordinary shares, on a one-for-one basis, at any time at the option of the holder; and |
| [] equity awards issued under the LTIP, which may be converted into ordinary shares subject to meeting certain performance conditions. |
We also have [●] ordinary shares currently available for issuance under our LTIP.
In addition, because the average price per ordinary share was at least $11.50 for ten consecutive trading days following our admission on the London Stock Exchange, the holders of the Founder Preferred Shares are entitled to receive an Annual Dividend Amount (as defined herein), payable in ordinary shares or cash, at our sole option (which we intend to settle in ordinary shares). The precise number of ordinary shares that may be required to be issued by us pursuant to the terms of the Founder Preferred Shares cannot be ascertained at the date of this
24
prospectus. The issuance of ordinary shares pursuant to the terms of the Founder Preferred Shares will reduce (by the applicable proportion) the percentage shareholdings of those shareholders holding ordinary shares prior to such issuance which may reduce your net return on your investment in our ordinary shares. See Description of Share CapitalFounder Preferred Shares.
There has been no prior public market for our ordinary shares in the United States, and an active, liquid and orderly trading market for our ordinary shares may not develop or be maintained in the United States, which could limit your ability to sell our ordinary shares.
There has been no public market for our ordinary shares in the United States. Although we have applied to list our ordinary shares on the NYSE, an active U.S. public market for our ordinary shares may not develop or be sustained after this offering. If an active market does not develop, you may experience difficulty selling the ordinary shares that you purchase in this offering.
Our ordinary share price may be volatile after the offering and, as a result, you could lose a significant portion or all of your investment.
The market price of the ordinary shares on the NYSE may fluctuate after listing as a result of several factors, including the following:
| variations in our quarterly operating results; |
| volatility in our industry, the industries of our customers and suppliers and the global securities markets; |
| risks relating to our business and industry, including those discussed above; |
| strategic actions by us or our competitors; |
| reputational damage from unsafe or poor quality food products; |
| actual or expected changes in our growth rates or our competitors growth rates; |
| investor perception of us, the industry in which we operate, the investment opportunity associated with the ordinary shares and our future performance; |
| addition or departure of our executive officers; |
| changes in financial estimates or publication of research reports by analysts regarding our ordinary shares, other comparable companies or our industry generally; |
| trading volume of our ordinary shares; |
| future sales of our ordinary shares by us or our shareholders; |
| domestic and international economic, legal and regulatory factors unrelated to our performance; or |
| the release or expiration of lock-up or other transfer restrictions on our outstanding ordinary shares. |
Furthermore, the stock markets often experience significant price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions or interest rate changes may cause the market price of ordinary shares to decline.
25
If securities or industry analysts do not publish or cease publishing research reports about us, if they adversely change their recommendations regarding our ordinary shares or if our operating results do not meet their expectations, the price of our ordinary shares could decline.
The trading market for our ordinary shares will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. Securities and industry analysts currently publish limited research on us. If there is limited or no securities or industry analyst coverage of our company, the market price and trading volume of our ordinary shares would likely be negatively impacted. Moreover, if any of the analysts who may cover us downgrade our ordinary shares, provide more favorable relative recommendations about our competitors or if our operating results or prospects do not meet their expectations, the market price of our ordinary shares could decline. If any of the analysts who may cover us were to cease coverage or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline.
As a foreign private issuer, we are subject to different U.S. securities laws and NYSE governance standards than domestic U.S. issuers. This may afford less protection to holders of our ordinary shares, and you may not receive corporate and company information and disclosure that you are accustomed to receiving or in a manner in which you are accustomed to receiving it.
As a foreign private issuer, the rules governing the information that we disclose differ from those governing U.S. corporations pursuant to the Exchange Act. Although we intend to report quarterly financial results and report certain material events, we are not required to file quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significant events within four days of their occurrence and our quarterly or current reports may contain less information than required for domestic issuers. In addition, we are exempt from the SECs proxy rules, and proxy statements that we distribute will not be subject to review by the SEC. Our exemption from Section 16 rules regarding sales of ordinary shares by insiders means that you will have less data in this regard than shareholders of U.S. companies that are subject to the Exchange Act. As a result, you may not have all the data that you are accustomed to having when making investment decisions with respect to U.S. public companies.
As a foreign private issuer, we will be exempt from complying with certain corporate governance requirements of the NYSE applicable to a U.S. issuer, including the requirement that a majority of our board of directors consist of independent directors. As the corporate governance standards applicable to us are different than those applicable to domestic U.S. issuers, you may not have the same protections afforded under U.S. law and the NYSE rules as shareholders of companies that do not have such exemptions. See Directors, Management and Corporate GovernanceForeign Private Issuer Exemption.
We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
We could cease to be a foreign private issuer if a majority of our outstanding voting securities are directly or indirectly held of record by U.S. residents and we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly higher than costs we incur as a foreign private issuer, which could have a material adverse effect on our business and financial results.
We will incur increased costs as a result of becoming a public company in the United States.
As a public company in the United States, we will incur significant legal, accounting, insurance and other expenses that we have not incurred as a public company in the United Kingdom, including costs associated with U.S. public company reporting requirements. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act of 2002 and the Dodd Frank Wall Street Reform and Consumer Protection Act and related rules implemented by the SEC and the NYSE.
26
As the rights of shareholders under British Virgin Islands law differ from those under United States law, you may have fewer protections as a shareholder.
Our corporate affairs are governed by our Memorandum and Articles of Association, the BVI Business Companies Act, 2004 (as amended, the BVI Act) and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions by minority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the common law of the British Virgin Islands and by the BVI Act. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the British Virgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law. As a result of the foregoing, holders of our ordinary shares may have more difficulty in protecting their interests through actions against our management, directors or major shareholders than they would as shareholders of a U.S. company. See Description of Share CapitalComparison of Shareholders Rights.
The laws of the British Virgin Islands provide limited protection for minority shareholders, so minority shareholders will have limited or no recourse if they are dissatisfied with the conduct of our affairs.
Under the laws of the British Virgin Islands, there is limited statutory law for the protection of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies (as summarized under Description of Share CapitalShareholders Rights under British Virgin Islands Law Generally and Description of Share CapitalComparison of Shareholders Rights). The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents of the company and are entitled to have the affairs of the company conducted in accordance with the BVI Act and the memorandum and articles of association of the company. As such, if those who control the company have persistently disregarded the requirements of the BVI Act or the provisions of the companys memorandum and articles of association, then the courts will likely grant relief. Generally, the areas in which the courts will intervene are the following: (i) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (ii) acts that constitute fraud on the minority where the wrongdoers control the company; (iii) acts that infringe on the personal rights of the shareholders, such as the right to vote; and (iv) acts where the company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded minority shareholders under the laws of many states in the United States.
To the extent allowed by law, the rights and obligations among or between us, any of our current or former directors, officers and employees and any current or former shareholder will be governed exclusively by the laws of the British Virgin Islands and subject to the jurisdiction of the British Virgin Islands courts, unless those rights or obligations do not relate to or arise out of their capacities as such. Although there is doubt as to whether United States courts would enforce these provisions in an action brought in the United States under United States securities laws, these provisions could make judgments obtained outside of the British Virgin Islands more difficult to enforce against our assets in the British Virgin Islands or jurisdictions that would apply British Virgin Islands law.
British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of one avenue to protect their interests.
British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any such an action may be brought, and the procedures and defenses that may be available in respect of any such action, may result in the rights of shareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they
27
believe that corporate wrongdoing has occurred. The British Virgin Islands courts are also unlikely to recognize or enforce judgments of courts in the United States based on certain liability provisions of United States securities law or to impose liabilities, in original actions brought in the British Virgin Islands, based on certain liability provisions of the United States securities laws that are penal in nature. There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands will generally recognize and enforce the non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. This means that even if shareholders were to sue us successfully, they may not be able to recover anything to make up for the losses suffered.
Dividend payments on our ordinary shares are not expected.
We do not currently intend to pay dividends on our ordinary shares. We intend only to pay such dividends at such times, if any, and in such amounts, if any, as the board determines appropriate and in accordance with applicable law, and then only if we receive dividends on shares held by us in our operating subsidiaries. Therefore, we cannot give any assurance that we will be able to pay or will pay dividends going forward or as to the amount of such dividends, if any.
Shareholders may experience a dilution of their percentage ownership if we make non-pre-emptive offers of ordinary shares in the future.
We have opted-out of statutory pre-emptive rights pursuant to the terms of our Memorandum and Articles of Association. No pre-emption rights therefore exist in respect of future issuance of ordinary shares whether or not for cash. Should we decide to offer additional ordinary shares on a non-pre-emptive basis in the future, this could dilute the interests of shareholders and/or have an adverse effect on the market price of the ordinary shares.
Risks Related to Taxation
Changes in tax law and practice may reduce any net returns for shareholders.
The tax treatment of the Company, our shareholders and any subsidiary of ours (including Iglo and its subsidiaries), any special purpose vehicle that we may establish and any other company which we may acquire are all subject to changes in tax laws or practices in the British Virgin Islands, the United Kingdom, the U.S. and any other relevant jurisdiction. Any change may reduce the value of your investment in our ordinary shares.
Failure to maintain our tax status may negatively affect our financial and operating results and shareholders.
We are incorporated in the British Virgin Islands but, as noted below under Tax Considerations, we are not subject to any income, withholding or capital gains taxes in the British Virgin Islands.
If we were to be considered to be resident in or to carry on a trade or business within the United States for U.S. taxation purposes or in any other country in which we are not currently treated as having a taxable presence, we could be subject to U.S. income tax or taxes in such other country on all or a portion of our profits, as the case may be, which may negatively affect our financial and operating results.
Becoming resident in the United Kingdom for taxation purposes may have an adverse impact upon our financial position.
In connection with this offering, we are seeking to list our ordinary shares on the New York Stock Exchange. Our board currently intends that, at or about the same time as such listing, we will become centrally managed and controlled in the United Kingdom and will therefore become resident in the United Kingdom for U.K. taxation purposes.
28
If we become resident in the United Kingdom for U.K. tax purposes, we will become subject to U.K. taxation on our income and gains, except where an exemption applies (it is likely that dividend income will generally be exempt from U.K. corporation tax on income). We may be treated as a dual resident company for U.K. tax purposes. As a result, our right to claim certain reliefs from U.K. tax may be restricted, and changes in law or practice in the United Kingdom could result in the imposition of further restrictions on our right to claim U.K. tax reliefs.
In addition, if we were to become centrally managed and controlled in the United Kingdom for U.K. tax purposes, U.K. stamp duty reserve tax will be payable in respect of any agreement to transfer depositary interests in respect of ordinary shares, generally at the rate of 0.5 percent of the consideration for the transfer.
Taxation of returns from assets located outside the British Virgin Islands may reduce any net return to shareholders.
Iglo and its subsidiaries are subject to taxes in a number of jurisdictions. The Iglo Acquisition has therefore increased the number of jurisdictions in which we have, directly or indirectly, an economic exposure to local taxes and to changes in tax laws or practices.
To the extent that any other company or business which we acquire is established outside the British Virgin Islands, it is possible that any return we receive from such company or business may be reduced by irrecoverable withholding or other local taxes and this may reduce the value of your investment in our ordinary shares.
We may become resident in or reincorporate in another jurisdiction in connection with any future acquisition and such a change may result in taxes imposed on shareholders.
We may become resident in or reincorporate in another jurisdiction. Such a transaction may require a shareholder to recognize taxable income in the jurisdiction in which the shareholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not anticipate making any cash distributions to shareholders to pay such taxes. Shareholders may be subject to withholding taxes or other taxes with respect to their ownership of ordinary shares after any such reincorporation.
There can be no assurance that we will be able to make returns for shareholders in a tax-efficient manner.
We intend to structure our holding of Iglo, Findus and any other acquisition in a fiscally efficient manner. We have made certain assumptions regarding taxation. However, if these assumptions are not correct, taxes may be imposed with respect to our assets, or we may be subject to tax on our income, profits, gains or distributions (either on a liquidation and dissolution or otherwise) in a particular jurisdiction or jurisdictions in excess of taxes that were anticipated. This could alter the post-tax returns for shareholders (or shareholders in certain jurisdictions). The level of return for shareholders may also be adversely affected. Any change in laws or tax authority practices could also adversely affect any post-tax returns of capital to shareholders or payments of dividends. In addition, we may incur costs in taking steps to mitigate any such adverse effect on the post-tax returns for shareholders.
If any dividend is declared in the future and paid in a foreign currency, U.S. holders may be taxed on a larger amount in U.S. Dollars than the U.S. Dollar amount actually received.
U.S. holders will be taxed on the U.S. Dollar value of dividends at the time they are received, even if they are not converted to U.S. Dollars or are converted at a time when the U.S. Dollar value of the dividends has fallen. The U.S. Dollar value of the payments made in the foreign currency will be determined for tax purposes at the spot rate of the foreign currency to the U.S. Dollar on the date the dividend distribution is deemed included in such U.S. holders income, regardless of whether or when the payment is in fact converted into U.S. Dollars.
29
We may be a passive foreign investment company for U.S. federal income tax purposes and adverse tax consequences could apply to U.S. investors.
The U.S. federal income tax treatment of U.S. holders will differ depending on whether or not the Company is considered a passive foreign investment company (PFIC).
In general, we will be considered a PFIC for any taxable year in which: (i) 75 percent or more of our gross income consists of passive income; or (ii) 50 percent or more of the average quarterly market value of our assets in that year are assets that produce, or are held for the production of, passive income (including cash). For purposes of the above calculations, if we, directly or indirectly, own at least 25 percent by value of the stock of another corporation, then we generally would be treated as if we held our proportionate share of the assets of such other corporation and received directly our proportionate share of the income of such other corporation. Passive income generally includes, among other things, dividends, interest, rents, royalties, certain gains from the sale of stock and securities, and certain other investment income.
We do not believe that we will be a PFIC for the current year. However, we can provide no assurance that we will not be a PFIC for any subsequent year.
For further discussion of our classification as a passive foreign investment company, see Tax ConsiderationsU.S. Federal Income TaxationPassive Foreign Investment Company (PFIC) Considerations.
30
We will not receive any proceeds from the sale of any Shares by the selling shareholders.
The selling shareholders will receive all of the net proceeds from the sale of any Shares offered by them under this prospectus. The selling shareholders will pay any underwriting discounts and commissions and expenses incurred by the selling shareholders for brokerage, accounting, tax, legal services or any other expenses incurred by the selling shareholders in disposing of these Shares. We will bear all other costs, fees and expenses incurred in effecting the registration of the Shares covered by this prospectus.
31
We have not declared or paid any dividends on our ordinary shares since our inception on April 1, 2014, and have no current plans to pay dividends on our ordinary shares. The declaration and payment of future dividends to holders of our ordinary shares will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, earnings, legal requirements, restrictions in our debt agreements and other factors deemed relevant by our board of directors. In addition, as a holding company, our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their respective jurisdictions of organization, agreements of our subsidiaries or covenants under future indebtedness that we or they may incur. See Risk FactorsRisks Related to this Offering and our Ordinary SharesDividend payments on our ordinary shares are not expected, and for a discussion of taxation of any dividends, see Tax Considerations.
The Founder Preferred Shares are entitled to receive an annual stock dividend based on the market price of our ordinary shares if such market price exceeds certain trading price minimums and to participate in any dividends on the ordinary shares. For a description of the dividend rights of the Founder Preferred Shares, see Description of Share CapitalFounder Preferred Shares.
MARKET PRICE OF ORDINARY SHARES
Our ordinary shares are currently listed for trading on the LSE in U.S. Dollars under the symbol NHL. Our ordinary shares began trading on the LSE on April 15, 2014 and were traded until April 20, 2015 when trading was halted through June 22, 2015 due to the announcement of the then-pending Iglo Acquisition. The following table sets forth the high and low reported sale prices of our ordinary shares as reported on the LSE for the periods indicated:
High | Low | |||||||
Annual |
||||||||
(April 15, 2014 March 31, 2015) |
$ | 11.72 | $ | 9.75 | ||||
Quarterly |
||||||||
2015 |
||||||||
Second Quarter (July 1, 2015 September 30, 2015) |
$ | 22.25 | $ | 15.75 | ||||
First Quarter (April 1, 2015 June 30, 2010) |
$ | 22.02 | $ | 11.60 | ||||
2014 |
||||||||
Fourth Quarter (Jan. 1, 2015 March 31, 2015) |
$ | 11.40 | $ | 9.75 | ||||
Third Quarter (Oct. 1, 2014 Dec. 31, 2014) |
$ | 11.70 | $ | 11.00 | ||||
Second Quarter (July 1, 2014 Sept. 30, 2014) |
$ | 11.72 | $ | 10.25 | ||||
First Quarter (April 15, 2014 June 30, 2014) |
$ | 11.00 | $ | 10.15 | ||||
Most Recent Six Months |
||||||||
2015 |
||||||||
October |
$ | 17.16 | $ | 14.00 | ||||
September |
$ | 20.25 | $ | 15.75 | ||||
August |
$ | 21.85 | $ | 19.81 | ||||
July |
$ | 21.70 | $ | 20.50 | ||||
June |
$ | 22.02 | $ | 21.40 | ||||
May (1) |
| |
(1) | Trading in our ordinary shares was suspended on the LSE from April 20, 2015 through June 22, 2015 due to the announcement of the then-pending Iglo Acquisition. |
As of September 30, 2015, ordinary shares, representing % of our outstanding ordinary shares, were held by United States record holders.
32
The following table sets forth our total capitalization as of September 30, 2015. Our capitalization is presented:
| on an actual basis; and |
| as adjusted for the Findus Acquisition, as if consummated. |
For the purposes of the Findus Acquisition adjustments amounts set forth in the table below, we have used where appropriate, exchange rates at November 2, 2015 of $1: 1.0960 and £1: 1.3956.
You should read the following table in conjunction with Selected Consolidated Financial Information, Nomad Managements Discussion and Analysis of Financial Condition and Results of Operations, Unaudited Pro Forma Financial Information and the consolidated financial statements and the related notes included elsewhere in this prospectus.
( in millions) | Actual |
Findus
Acquisition Adjustments |
As
Adjusted |
|||||||||
Senior debt and other loans (1) |
681.6 | 325.0 | 1,006.6 | |||||||||
Senior Secured Notes due 2020 |
500.0 | | 500.0 | |||||||||
|
|
|
|
|
|
|||||||
Total debt (2) |
1,181.6 | 325.0 | 1,506.6 | |||||||||
|
|
|
|
|
|
|||||||
Equity (3) : |
||||||||||||
Capital reserve (1)(3) |
1,651.4 | 108.9 | 1,760.3 | |||||||||
Founder Preferred Shares Dividend reserve |
531.5 | | 531.5 | |||||||||
Other reserves (4) |
77.4 | | 77.4 | |||||||||
Accumulated deficit |
(545.7 | ) | | (545.7 | ) | |||||||
|
|
|
|
|
|
|||||||
Total equity |
1,714.6 | 108.9 | 1,823.5 | |||||||||
|
|
|
|
|
|
|||||||
Total capitalization (5) |
2,896.2 | 433.9 | 3,330.1 | |||||||||
|
|
|
|
|
|
(1) | The total consideration paid in relation to the Findus Acquisition was approximately £500 million. To fund the £415.0 million consideration paid in cash, we utilized approximately 294.2 million of net cash on hand and 285.0 million of our 325.0 million drawing on our Senior debt. The remainder of this drawing will be used for general corporate purposes. We also issued 8,378,380 ordinary shares to the Findus Seller at closing. The Findus Group was acquired free of cash and assumed borrowings. As adjusted excludes debt issuance costs of 8.3 million in relation to the 325.0 million drawing on our Senior debt. |
(2) | Actual excludes debt issuance costs of 14.8 million at September 30, 2015. |
(3) | Does not include 125,000 ordinary shares issuable upon the exercise of outstanding options previously issued to certain of our current and former directors or any shares to settle in equity the Founder Preferred Shares Annual Dividend Amount. With respect to the Founder Preferred Shares Annual Dividend Amount, based on the 531.5 million Founder Preferred Shares Dividend reserve included in the financial statements for the Successor 2015 Interim Period and using the market price of our ordinary shares as of September 30, 2015, the aggregate number of ordinary shares issuable over the seven years pursuant to the Founder Preferred Annual Dividend Amount would have been 37.8 million. |
(4) | Other reserves are comprised of merger reserves, translation reserves and cash flow hedging reserves. |
(5) | Total capitalization is total debt and total equity. |
33
Our reporting currency is the Euro. Fluctuations in the exchange rate between the Euro and the U.S. Dollar will affect the U.S. Dollar amounts received by owners of our ordinary shares on conversion of dividends, if any, paid in Euro on the ordinary shares and will affect the U.S. Dollar price of our ordinary shares on the NYSE. The following table sets forth, for the periods and dates indicated, the period end, average, high and low exchange rates in U.S. Dollars per 1.00.
Average | ||||||
Six months ended September 30, 2015 |
$ | 1.1119 | ||||
Year ended December 31, 2014 |
$ | 1.2098 | ||||
Year ended December 31, 2013 |
$ | 1.3743 | ||||
Year ended December 31, 2012 |
$ | 1.3193 | ||||
Year ended December 31, 2011 |
$ | 1.2961 | ||||
Year ended December 31, 2010 |
$ | 1.3384 |
High | Low | |||||||
October 2015 |
$ | 1.1474 | $ | 1.0923 | ||||
September 2015 |
$ | 1.1435 | $ | 1.1120 | ||||
August 2015 |
$ | 1.1192 | $ | 1.0881 | ||||
July 2015 |
$ | 1.1162 | $ | 1.0825 | ||||
June 2015 |
$ | 1.1359 | $ | 1.0927 | ||||
May 2015 |
$ | 1.1451 | $ | 1.0873 |
Our inclusion of these exchange rates and other exchange rates specified elsewhere in this prospectus should not be construed as representations that the Euro amounts actually represent such U.S. Dollar amounts or could have been or could be converted into U.S. Dollars at any particular rate, if at all. The Euro foreign exchange reference rate used in this prospectus is the current noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York. On [●], 2015, this rate was $[●] per 1.00. These exchange rates may differ from the exchange rate in effect on and as of the date of this prospectus.
34
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following tables present selected consolidated historical financial data as of the dates and for each of the periods indicated.
The selected consolidated historical data for the Successor 2015 Period and as of March 31, 2015 has been derived from our audited consolidated financial statements included in this prospectus. The selected consolidated historical data for the Successor 2015 Interim Period and as of September 30, 2015 and September 30, 2014 has been derived from our unaudited condensed consolidated interim financial statements included in this prospectus.
The selected consolidated historical data for our Predecessor for each of the Predecessor 2014 Period, the Predecessor 2013 Period and the Predecessor 2012 Period, and as of December 31, 2014, December 31, 2013 and December 31, 2012 has been derived from the audited consolidated financial statements of our Predecessor included in this prospectus.
The selected consolidated historical data for our Predecessor as of and for each of the two years ended December 31, 2011 and 2010 has been derived from our Predecessors books and records.
The selected consolidated historical data for the Predecessor 2015 Stub Period and as of May 31, 2015 and June 30, 2014 has been derived from our unaudited condensed consolidated interim financial statements included in this prospectus.
The selected consolidated historical financial data for the Successor 2015 Interim Period, Successor 2014 Interim Period and Predecessor 2015 Five-Month Period contain all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial information set forth in those statements.
All of the selected financial information of the Predecessor and the Successor included in the following tables, is prepared in IFRS and denominated in Euros.
The selected historical consolidated financial data included below is not necessarily indicative of future results and should be read in conjunction with Nomad Managements Discussion and Analysis of Financial Condition and Results of Operations and Iglo Managements Discussion and Analysis of Financial Condition and Results of Operations, as well as our and Iglos consolidated financial statements and notes thereto contained in this prospectus.
All operations are continuing and neither the Successor nor the Predecessor declared or paid dividends in the periods presented.
35
Successor
Prepared in accordance with IFRS ( in millions except share data) |
As of and for
the year ended March 31, 2015 |
For the six
months ended September 30, 2014 |
As of and
for the six months ended September 30, 2015 |
|||||||||
Statement of Income data: |
||||||||||||
Revenue |
| | 418.3 | |||||||||
Cost of sales |
| | (311.0 | ) | ||||||||
|
|
|
|
|
|
|||||||
Gross profit |
| | 107.3 | |||||||||
Other operating expenses |
(0.7 | ) | (0.2 | ) | (66.3 | ) | ||||||
Founder Preferred Shares Annual Dividend Amount and Warrant redemption |
(166.2 | ) | (22.8 | ) | (348.6 | ) | ||||||
Exceptional items |
(0.7 | ) | (0.2 | ) | (37.8 | ) | ||||||
|
|
|
|
|
|
|||||||
Operating loss |
(167.6 | ) | (23.2 | ) | (345.4 | ) | ||||||
Net finance (costs)/income |
0.1 | 0.1 | (39.6 | ) | ||||||||
|
|
|
|
|
|
|||||||
Loss before tax |
(167.5 | ) | (23.1 | ) | (385.0 | ) | ||||||
Taxation |
| | (5.3 | ) | ||||||||
Loss for the period |
(167.5 | ) | (23.1 | ) | (390.3 | ) | ||||||
|
|
|
|
|
|
|||||||
Weighted average shares used in computing basic and diluted loss per share |
50,025,000 | 46,209,891 | 130,512,120 | |||||||||
Net loss per share applicable to ordinary shareholdersbasic and diluted |
(3.35 | ) | (0.50 | ) | (2.99 | ) | ||||||
Balance Sheet data: |
||||||||||||
Total assets |
447.4 | n/p | 4,121.7 | |||||||||
Total equity |
274.9 | n/p | 1,714.6 | |||||||||
Share capital |
| n/p | |
n/p = not presented
36
Predecessor
Prepared in accordance with IFRS ( in millions) |
As of and for the year
ended December 31 |
For the six
months ended June 30 |
For the
five months ended May 31 |
|||||||||||||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | 2014 | 2015 | ||||||||||||||||||||||
Statement of Income data: |
||||||||||||||||||||||||||||
Revenue |
1,221.9 | 1,566.3 | 1,572.7 | 1,505.8 | 1,500.9 | 761.2 | 640.3 | |||||||||||||||||||||
Cost of sales |
(827.6 | ) | (1,028.2 | ) | (1,028.9 | ) | (1,001.8 | ) | (970.9 | ) | (496.7 | ) | (417.9 | ) | ||||||||||||||
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Gross profit |
394.3 | 538.1 | 543.8 | 504.0 | 530.0 | 264.5 | 222.4 | |||||||||||||||||||||
Other operating expenses |
(186.5 | ) | (244.8 | ) | (222.4 | ) | (231.8 | ) | (254.2 | ) | (134.3 | ) | (109.5 | ) | ||||||||||||||
Exceptional items. |
(24.4 | ) | (46.4 | ) | (53.6 | ) | (83.8 | ) | (52.9 | ) | (11.4 | ) | (84.3 | ) | ||||||||||||||
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Operating profit |
183.4 | 246.9 | 267.8 | 188.4 | 222.9 | 118.8 | 28.6 | |||||||||||||||||||||
Net finance costs |
(253.4 | ) | (322.9 | ) | (302.4 | ) | (227.6 | ) | (290.2 | ) | (134.0 | ) | (115.7 | ) | ||||||||||||||
Loss before tax |
(70.0 | ) | (76.0 | ) | (34.6 | ) | (39.2 | ) | (67.3 | ) | (15.2 | ) | (87.1 | ) | ||||||||||||||
Taxation |
(2.2 | ) | (6.1 | ) | (43.5 | ) | (2.0 | ) | (41.8 | ) | (25.3 | ) | (40.9 | ) | ||||||||||||||
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Loss for the period |
(72.2 | ) | (82.1 | ) | (78.1 | ) | (41.2 | ) | (109.1 | ) | (40.5 | ) | (128.0 | ) | ||||||||||||||
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Balance Sheet data: |
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Total assets |
3,542.4 | 3,627.1 | 3,497.3 | 3,461.2 | 3,543.4 | n/p | n/p | |||||||||||||||||||||
Total deficit |
(355.2 | ) | (413.1 | ) | (506.5 | ) | (550.4 | ) | (657.5 | ) | n/p | n/p | ||||||||||||||||
Share capital |
7.0 | 7.0 | 0.1 | 0.1 | 0.1 | n/p | n/p |
n/p = not presented
37
NOMAD MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of our financial condition and results of operations for the six months ended September 30, 2015 and 2014 and the twelve months ended March 31, 2015. We were formed on April 1, 2014 and had no operations until we acquired Iglo on June 1, 2015. Because we did not own Iglo during the twelve months ended March 31, 2015 or during the six months ended September 30, 2014 these results may not be indicative of the results that we would expect to recognize for future periods.
Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the Risk Factors section of this prospectus, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. This discussion should be read in conjunction with Prospectus SummarySummary Consolidated Financial Information, Selected Consolidated Financial Information, Iglo Managements Discussion and Analysis of Financial Condition and Results of Operations and our and Iglos consolidated historical financial statements included elsewhere in this prospectus.
The following financial information has been extracted from the audited financial statements of the Successor as of and for the year ended March 31, 2015 and the unaudited condensed consolidated financial statements of the Successor as of and for the six months ended September 30, 2015.
The historical financial information for the Company has been prepared in accordance with IFRS. In May 2015, the Company changed its fiscal year end to December 31.
Overview
We were incorporated with limited liability under the laws of the British Virgin Islands under the BVI Companies Act on April 1, 2014 under the name Nomad Holdings Limited. We were formed to undertake an acquisition of a target company or business. We completed the 2014 Offering on April 15, 2014 raising net proceeds of approximately $500 million through the sale of ordinary shares in the United Kingdom (the 2014 Offering), and were listed on the LSE under the symbol NHL. In connection with the 2014 Offering, we issued 48,500,000 ordinary shares and 1,500,000 Founder Preferred Shares, at a price of $10.00 per ordinary share and Founder Preferred Share. Purchasers in the 2014 Offering also received one warrant (the Warrants) to purchase ordinary shares for every ordinary share purchased in the 2014 Offering. The Warrants were exercisable on the basis of three warrants per ordinary share at an exercise price of $11.50 per whole ordinary share. After the Iglo Acquisition, we changed our name to Nomad Foods Limited.
Financings and Acquisitions
In May 2015, we issued 75,666,669 of our ordinary shares in a private placement at a price of $10.50 per ordinary share (the May 2015 Offering). In April 2015, we amended the Warrants to accelerate the expiration date to the closing of the Iglo Acquisition (subject to certain limited exceptions) and, in order to incentivize the Warrant holders to exercise their Warrants prior to the new expiration date, we reduced the exercise price of the Warrants from $11.50 to $10.50 per whole ordinary share for all Warrants exercised before the new expiration date. Between May and June 2015, we issued an aggregate of 16,673,307 ordinary shares pursuant to the exercise of the Warrants. There are no Warrants currently outstanding.
On June 1, 2015, we consummated our initial acquisition by purchasing Iglo Foods Holdings Limited, a leading frozen food manufacturer and distributor in Europe. We paid an aggregate purchase price of 2.6 billion, including assumed debt of 1.2 billion and the issuance of 13,743,094 ordinary shares (the Iglo Seller Shares) to the seller, a private equity fund advised by Permira Advisers LLP. We financed the Iglo Acquisition through a combination of available cash from the 2014 Offering, the May 2015 Offering and the early exercise of Warrants.
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In the July 2015 Offering, we issued 15,445,346 ordinary shares at a price of $20.75 per ordinary share. The number of ordinary shares issued in the July 2015 Offering represented, in aggregate, approximately 9.99% of our issued ordinary share capital immediately prior to the offering.
On August 13, 2015, we entered into an Option Agreement with the Findus Seller pursuant to which, on November 2, 2015, we acquired the Findus Group for approximately £500 million (subject to customary post-closing adjustments), consisting of £415 million in cash and 8,378,380 Findus Consideration Shares. Through the Findus Acquisition, we have acquired the continental European businesses of the Findus Parent in Sweden, Norway, Finland, Denmark, France, Spain and Belgium relating to the Findus , Lutosa , and La Cocinera brands. Findus is a leading frozen food manufacturer in continental Europe. The operations acquired include approximately 1,500 employees and six manufacturing facilities in Norway, Sweden, France and Spain. Findus revenues for the fiscal year ended September 30, 2014 were £520 million.
The £415 million cash portion of the Findus purchase price was funded through a combination of cash on hand and 285 million of a new 325 million senior term loan under our existing Senior Facilities Agreement. Additionally, the Findus Seller was issued the Findus Consideration Shares at closing. The Findus Seller will be restricted from transferring any of the Findus Consideration Shares within one year following closing and will be restricted from transferring 50% of the Findus Consideration Shares within two years of closing.
We intend to seek to acquire further businesses to build an integrated group of best-in-class companies and brands within existing, as well as new, related food categories.
Accounting for the Iglo Acquisition
Effective from the date of the Iglo Acquisition, we will reflect the Iglo Acquisition in our consolidated financial statements prepared in accordance with IFRS. The Iglo Acquisition will be accounted for in our consolidated financial statements using the purchase method as required by IFRS 3 Business Combinations. The net assets of the Iglo Group will be adjusted to fair value as of June 1, 2015, the date when control of the Iglo Group passed to us. The excess of the costs of acquisition over the fair value of the assets and liabilities of the Iglo Group will be recorded as goodwill. We are currently assessing the purchase price allocation and such fair values are preliminary.
Description of Key Line Items and Certain Key Performance Indicators
Set forth below is a brief description of key items from our unaudited condensed consolidated statements of income for the six months ended September 30, 2015. For additional information, see Note 1 to our unaudited condensed consolidated interim financial statements for this period.
Revenue. Revenue is comprised of sales of goods after deduction of discounts and sales taxes. It does not include sales between Nomad subsidiaries. Discounts given by us include rebates, price reductions and incentives given to customers, promotional couponing and trade communication costs. At each end date of a reporting period, any discount incurred, but not yet invoiced, is estimated and accrued. Revenue is recognized when the risks and rewards of the underlying products have been transferred to the customer. This is usually upon either the dispatch of a shipment or the delivery of goods to the customer but is dependent upon contractual terms that have been agreed with a customer. Sales discounts incurred but not yet invoiced are established based on managements best estimate at the end of the reporting period.
Other Operating Expenses. Other operating expenses are comprised of advertising and promotions, exchange movements and indirect costs. Indirect costs include staff costs, selling and marketing expenses, administration expenses, research and development expenses, amortization of software, amortization of brands and other expenses.
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Charges related to Founder Preferred Shares Annual Dividend Amount. The charges relate to the Founder Preferred Shares Annual Dividend Amount by which the holders of Founder Preferred Shares are entitled to receive dividends, subject to certain performance conditions. Before June 1, 2015, the Founder Preferred Shares Annual Dividend Amount was fair valued periodically. We expect to settle any Founder Preferred Shares Annual Dividend Amount with equity and, therefore, the liability has been classified as an equity reserve as of June 1, 2015 and no further revaluations are expected.
Charges relating to Warrant redemption. The charges relate to the redemption rights of any outstanding Warrants which were fair valued at each balance sheet date with any changes in fair value charged to the income statement. There are no Warrants currently outstanding.
Exceptional items. The separate reporting of exceptional items which are presented as exceptional within the relevant income statement category helps provide an indication of our underlying business performance. Exceptional items have been identified and adjusted by virtue of their size, nature or incidence. In determining whether an event or transaction is exceptional, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence.
Finance Income. Finance income is comprised of interest income and net foreign exchange gains on translations of financial assets and liabilities held in currencies other than the Companys functional currency.
Finance Costs. Finance costs are comprised of interest expenses, net interest on net defined pension plan obligations, amortization of borrowing costs, net foreign exchange costs on translations of financial assets and liabilities held in currencies other than the Companys functional currency and financing costs incurred as a result of amendments of debt terms.
Taxation. Taxation is comprised of current tax expenses and deferred tax movements.
We also utilize certain additional key performance indicators, as described below. We believe these measures provide an important alternative measure with which to assess our underlying trading performance on a constant basis. Our calculation of Adjusted EBITDA and Adjusted EBITDA margin may be different from the calculations used by other companies and therefore comparability may be limited. Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS measures and you should not consider them an alternative or substitute to operating profit or operating margin as a measure of operating performance.
Gross Margin. Gross margin is gross profit as a percentage of revenue.
Adjusted EBITDA. Adjusted EBITDA is net (loss)/profit for the period before taxation, net financing costs, depreciation, amortization, exceptional items, charges relating to the Founder Preferred Shares Annual Dividend Amount, charges relating to Warrant redemption and other similar items. We believe that Adjusted EBITDA is a useful indicator of our ability to incur and service our indebtedness and in assessing the underlying performance of our business and can assist securities analysts, investors and other parties to perform their own evaluation. Accordingly, the information has been disclosed in this prospectus to permit a more complete and comprehensive analysis of our operating performance. Adjusted EBITDA and similar measures are used by different companies for different purposes and are often calculated in ways that reflect the individual needs and circumstances of these companies. You should exercise caution in comparing our Adjusted EBITDA with similarly titled measures of other companies. Adjusted EBITDA is not a measure of liquidity or performance calculated in accordance with IFRS and should be viewed as a supplement to, not a substitute for, our results of operations presented in accordance with IFRS.
Adjusted EBITDA Margin. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of revenue.
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Trends and Challenges
We are subject to the following key industry trends and challenges which have impacted, and may continue to impact, our business, operations and financial performance:
| Consumer Preferences . Consumer preferences drive demand for our products. There are a number of trends in consumer preferences which are having an impact on us and the frozen food industry as a whole. These include preferences for convenient, natural, better value, healthy and sustainable products. Our results of operation depend in large part on the continued appeal of our products and, given the varied backgrounds and tastes of our customer base, our ability to offer a sufficient range of products to satisfy a broad spectrum of preferences. In order to address consumer needs and ensure the continued success of our products, we aim to introduce new products and re-launch and extend existing product lines on a timely basis. We believe the increased focus on healthy and natural products is an opportunity for us. We recently launched our SteamFresh platform, which is intended to offer easily prepared meals using steaming quality to enhance the natural taste of the product, and expect to continue to focus on creating products that address consumer demands. |
| Economic Conditions . During a weak macroeconomic environment, such as that experienced in recent years in certain of our markets, consumer buying patterns shift as consumers look for value alternatives. This has caused an increase in the percentage of products sold on promotion, a shift from traditional retail grocery to discounter channels and greater purchases of more economical, private label products. When our sales volumes decline, we are less able to pass along higher production costs. As a result, we are continuously focused on reducing costs through improved productivity and efficiency. |
| Competition . In addition to the competition we face from traditional, well-established branded frozen food manufacturers, over the last few years we have seen increased competition from the discounter channel. Discounters are supermarket retailers which offer food and grocery products at discounted prices and which typically focus on non-branded rather than branded products. The discounter channel has been growing at a faster rate than the traditional retailer channels over the last several years. To address this growing trend, we intend to pursue selected, profitable opportunities to increase our presence with the discounter channel. With the growth of the discounter channel, in an effort to compete, our traditional retail customers have increased their offering of their own private label products. Because these customers control the shelf space allocations within their stores, they may allocate more shelf space to their private label products in accordance with their respective promotional strategies. To address decreases in shelf space allocated to our products, we may reduce our prices, either directly or through increased promotional activity, or invest greater amounts in advertising our products to ensure our products remain competitive. |
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Results of Operations
Year ended
March 31, |
Six months ended
September 30 |
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( in millions) | 2015 | 2014 | 2015 | |||||||||
Revenue |
| | 418.3 | |||||||||
Cost of sales |
| | (311.0 | ) | ||||||||
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Gross profit |
| | 107.3 | |||||||||
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Other operating expenses |
(0.7 | ) | (.2 | ) | (66.3 | ) | ||||||
Charge related to Founder Preferred Shares Annual Dividend Amount |
(165.8 | ) | (22.4 | ) | (349.0 | ) | ||||||
(Charge)/credit relating to Warrant redemption |
(0.4 | ) | (0.4 | ) | 0.4 | |||||||
Exceptional items |
(0.7 | ) | (.2 | ) | (37.8 | ) | ||||||
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Operating loss |
(167.6 | ) | (23.2 | ) | (345.4 | ) | ||||||
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Finance income |
0.1 | .1 | 1.5 | |||||||||
Finance costs |
| | (41.1 | ) | ||||||||
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Net financing costs |
0.1 | .1 | (39.6 | ) | ||||||||
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Loss before tax |
(167.5 | ) | (23.1 | ) | (385.0 | ) | ||||||
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Taxation |
| | (5.3 | ) | ||||||||
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Loss for the period |
(167.5 | ) | (23.1 | ) | (390.3 | ) | ||||||
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Six Months Ended September 30, 2015 and 2014
Revenue for the six months ended September 30, 2015 was 418.3 million representing four months of operations of the Iglo Group from June 2015 through September 2015. Prior to the Iglo Acquisition, Nomad had no operations. Cost of sales was 311.0 million for the six months ended September 30, 2015. Gross profit for the six months ended September 30, 2015 was 107.3 million and gross margin was 25.7%. The results for the six months ended September 30, 2015 also reflect a one-time 26.0 million fair value adjustment relating to a step-up in inventory values as part of the Iglo Acquisition.
Other operating expenses increased to 66.3 million for the six months ended September 30, 2015 in comparison to nil in the six months ended September 30, 2014. The increase of 66.1 million primarily relates to four months of Iglo operating expenses.
Charges related to the Founder Preferred Shares Annual Dividend Amount increased to 349.0 million for the six months ended September 30, 2015 in comparison to 22.4 million in the six months ended September 30, 2014. The charge relates to the Founder Preferred Shares Annual Dividend Amount which was fair valued as of June 1, 2015. We expect to settle any Founder Preferred Shares Annual Dividend Amount with equity and therefore the liability has been reclassified as an equity reserve as of June 1, 2015 and no further revaluations are expected.
Exceptional items of 37.8 million in the six months ended September 30, 2015 relate to the transaction-related costs incurred by Nomad in connection with the Iglo Acquisition and the Findus Acquisition of 29.4 million, other restructuring costs of 3.6 million, an investigation of strategic opportunities and other items of 2.7 million, costs related to management incentive plans of 1.5 million and net costs related to the Cisterna fire of 0.6 million.
Net finance costs of 39.6 million in the six months ended September 30, 2015 relate to 27.8 million of interest payable on debt assumed as part of the Iglo Acquisition and 13.4 million resulting from the translation of Sterling-denominated financial assets and liabilities into Euros offset by interest income of 1.5 million.
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Taxation costs of 5.3 million were charged in the six months ended September 30, 2015 relating to four months of Iglo operations.
Liquidity and Capital Resources
Overview
We believe that cash flow from operating activities, available cash and cash equivalents and our access to our revolving credit facility will be sufficient to fund our liquidity requirements for at least the next 12 months. At September 30, 2015, we had 457.3 million of total liquidity, comprising 381.5 million in cash, net of bank overdrafts, and 75.8 million of available borrowings under our revolving credit facility. We also expect to continue to raise cash through equity and debt offerings when it is advisable to do so. Our principal liquidity requirements have been, and we expect will be, for working capital and general corporate purposes, including capital expenditures and debt service, as well as to identify and effect strategic acquisitions. Capital expenditures are expected to be approximately 30 million in 2015, 6.3 million of which was spent by Iglo prior to the Iglo Acquisition.
Prior to the Iglo Acquisition, our sources of cash were primarily the net proceeds of the 2014 Offering, the net proceeds from the May 2015 Offering and cash proceeds from the early exercise of the Warrants. We used this cash to fund on-going costs and expenses, the costs and expenses incurred in connection with seeking to identify and effect our initial acquisition, and to fund the Iglo Acquisition.
Debt
Senior Facilities Agreement . In connection with the Iglo Acquisition, Iglos Senior Facilities Agreement (SFA) was amended and restated effective as of June 1, 2015. Commitments and participations of the lenders that opted not to exchange their existing commitment participations, or were otherwise in excess of agreed allocations for the existing, consenting lenders, which totaled 490 million, were prepaid and cancelled in full at the closing of the Iglo Acquisition. In connection with the Findus Acquisition, the SFA was further amended and restated to add a new 325 million senior term loan tranche and to make certain conforming amendments.
The SFA currently consists of (i) a 363.3 million term loan facility (Facility C1), (ii) a £235 million term loan facility (Facility C2), (iii) a 325 million term loan facility (Facility C3) and (iv) an 80.0 million revolving credit facility of which up to 10.0 million can be used for the issuance of letters of credit. As of September 30, 2015, we had approximately 681.6 million of indebtedness outstanding under our term loan facilities and no amounts outstanding under our revolving credit facility, other than 4.2 million in stand-by letters of credit. As of November 20, 2015 we had approximately 1,024.3 million of indebtedness outstanding under our term loan facilities.
The term loans under the SFA mature on June 30, 2020 and bear interest at rates per annum equal to LIBOR or, in relation to any loan in Euro, EURIBOR, plus certain applicable margins. The applicable margins in relation to the term loans under the SFA are subject to adjustment (up or down as appropriate) in accordance with the margin adjustment mechanism based on the ratio of Consolidated Total Net Debt to Consolidated EBITDA (each as defined in the SFA) for the relevant period of 12 months and is 3.50% per annum in respect of the Facility C1 term loan and is 4.00% per annum in respect of the Facility C2 and Facility C3 term loans. Interest on the term loans is payable at the end of each interest period which, at the option of the borrower, may be one, two, three or six months or any other period agreed with the facility agent.
The revolving credit facility matures on December 31, 2019 and bears interest at a rate per annum equal to LIBOR or, in relation to any loan in Euro, EURIBOR, plus the applicable margin. The applicable margin is subject to adjustment (up or down as appropriate) in accordance with the margin adjustment mechanism based on
43
the ratio of Consolidated Total Net Debt to Consolidated EBITDA (each as defined in the SFA) for the relevant period of 12 months and range from 3.75% per annum to 4.25% per annum. Interest on the revolving credit facility is payable at the end of each interest period which, at the option of the borrower, may be one, two, three or six months or any other period agreed with the facility agent.
The SFA contains certain customary negative operating covenants (certain of which are not applicable depending on the ratio of Consolidated Total Net Debt to Consolidated EBITDA) and other customary provisions relating to events of default, including non-payment of principal, interest or fees, misrepresentations, breach of covenants, creditor process, cross default to other indebtedness of the borrowers and its subsidiaries in excess of 20.0 million, cessation of business, and material adverse change.
Floating Rate Senior Secured Notes due 2020. Iglo has outstanding 500,000,000 of Floating Rate Senior Secured Notes due 2020 (the Notes) issued pursuant to an indenture dated July 17, 2014 (the Indenture) entered into between certain Iglo subsidiaries, the trustee for the noteholders and certain other parties. The Notes are currently admitted to the Official List of the Luxembourg Stock Exchange and for trading on the Euro MTF Market.
The Indenture contains customary covenants including limitations on indebtedness, restricted payments, liens, restrictions on distributions, sales of assets and subsidiary stock, affiliate transactions, activities of the Issuer and compliance requirements with respect to additional guarantees, reporting, additional intercreditor agreements, payment of notes, withholding taxes, change of control, compliance certificate, payments for consent and listing requirements.
Interest on the Notes accrues at a rate per annum, reset quarterly, equal to three-month EURIBOR plus 4.50%, as determined by the calculation agent and is payable quarterly in arrears.
The Notes are redeemable at our option in whole or in part, from time to time, upon not less than 10 days nor more than 60 days prior notice, (x) prior to July 17, 2016 at a redemption price equal to 101% of principal amount being redeemed plus accrued and unpaid interest to the redemption date and (y) on or after July 17, 2016 at a redemption price equal to 100% of principal amount being redeemed plus accrued and unpaid interest to the redemption date.
Cash Flows
The following table summarizes net cash flows with respect to Nomads operating, investing and financing activities for the periods indicated:
Year ended
March 31 |
Six months ended
September 30 |
|||||||||||
( in millions) | 2015 | 2014 | 2015 | |||||||||
Net cash used in operating activities |
(0.5 | ) | (0.3 | ) | (9.3 | ) | ||||||
Net cash used in investing activities |
(295.6 | ) | (166.6 | ) | (518.6 | ) | ||||||
Net cash provided by financing activities |
353.5 | 353.3 | 778.8 | |||||||||
Net increase/(decrease) in cash and cash equivalents |
126.8 | 186.4 | 250.9 | |||||||||
Cash and cash equivalents at end of the period |
126.8 | 204.0 | 381.5 |
Net Cash from Operating Activities
Net cash used in operating activities was 9.3 million for the six months ended September 30, 2015, up from 0.3 million for the six months ended September 30, 2014. The 9.0 million increase was primarily due to four months of Iglo operations.
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Net cash used in operating activities of 0.5 million for the year ended March 31, 2015, primarily related to ongoing costs and expenses prior to the Iglo Acquisition.
Net Cash Used in Investing Activities
Net cash used in investing activities was 518.6 million for the six months ended September 30, 2015, up from 166.6 million for the six months ended September 30, 2014. The 352.0 million increase was primarily due to the Iglo Acquisition of 689.0 million and offset by redemption of portfolio investments of 178.3 million.
Net cash used in investing activities was 295.6 million for the year ended March 31, 2015, relating to investment of our cash prior to the Iglo Acquisition.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was 778.8 million for the six months ended September 30, 2015, up from 353.3 million for the six months ended September 30, 2014. The net cash provided by financing activities was primarily due to proceeds from the sale of shares in the May and July 2015 Offerings of 1,303.7 million offset by a repayment of loan principal of 490.0 million.
Net cash provided by financing activities was 353.5 million for the year ended March 31, 2015, primarily resulting from the issuance of ordinary shares in the 2014 Offering.
Capital Expenditures
Our capital expenditures consist primarily of expenditures for factory capacity expansion and maintenance, cost savings projects, information systems, innovation, regulatory compliance and other items and are generally recurring in nature. We had no capital expenditures for the year ended March 31, 2015 as we had no operations until the Iglo Acquisition. Capital expenditures for the six months ended September 30, 2015 were 7.9 million which represented four months of Iglo capital expenditures. For a historical discussion of Iglos capital expenditures, see Iglo Management Discussion and Analysis of Financial Condition and Results of OperationsCapital Expenditures
We expect capital expenditures to be approximately 30 million for the year ended December 31, 2015, 6.3 million of which was spent by Iglo prior to the Iglo Acquisition.
Contractual Obligations
The following table summarizes our estimated material contractual cash obligations and commercial commitments as of September 30, 2015, and the future periods in which such obligations are expected to be settled in cash:
Cash payments due by period | ||||||||||||||||||||
( in millions) |
Total | Less than 1 year | 1-3 years | 3-5 years | After 5 years | |||||||||||||||
Senior debt and other loans |
681.6 | | | 681.6 | | |||||||||||||||
Senior debt and other loansinterest (1) |
150.9 | 28.7 | 60.0 | 62.2 | | |||||||||||||||
Senior Secured Notes due 2020principal |
500.0 | | | 500.0 | | |||||||||||||||
Senior Secured Notes due 2020interest |
116.1 | 22.8 | 46.1 | 47.2 | | |||||||||||||||
Operating leases |
20.7 | 4.8 | 7.0 | 3.8 | 5.1 | |||||||||||||||
Purchase commitments (2) |
4.6 | 4.6 | | | | |||||||||||||||
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Total (3) |
1,473.9 | 60.9 | 113.1 | 1,294.8 | 5.1 | |||||||||||||||
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(1) | Represents estimates of future interest payable, which will depend upon the timing of cash flows as well as fluctuations in the applicable interest rates. |
(2) | Represents capital expenditures which we have committed to make but which are not yet payable. |
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(3) | Retirement benefit obligations of 110.6 million are not presented above as the timing of the settlement of these obligations is uncertain. |
Nomad had no material contractual cash obligations or other commercial commitments in the ordinary course as of March 31, 2015.
Pension Plans
We maintain defined benefit pension plans in Germany, Italy and Austria as well as various contributions plans in other countries. The defined benefit pension plans are partially funded in Germany and Austria and unfunded in Italy. All defined benefit pension plans are closed to new entrants and there is no current requirement to fund the deficit in either Germany or Italy. We also maintain various defined contribution pension plans in other countries, the largest of which is in the United Kingdom.
See Iglo Managements Discussion and Analysis of Financial Condition and Results of OperationsPension Plans for a summary of the pension plans and related costs for the years ended December 31, 2014, 2013 and 2012.
Off-Balance Sheet Arrangements
We did not have any material off-balance sheet arrangements during the reported periods.
Quantitative and Qualitative Disclosures about Market Risk
For our Quantitative and Qualitative Disclosures about Market Risk, see Note 14 to our financial statements for the year ended December 31, 2014 which appear elsewhere in this prospectus.
In addition, for the Quantitative and Qualitative Disclosures about Market Risk relating to the Iglo Group, see Note 22 to our consolidated financial statements of the Predecessor for the years ended December 31, 2014, 2013 and 2012, which appear elsewhere in this prospectus.
Principal Accounting Policies, Critical Accounting Estimates and Key Judgments
A description of our principal accounting policies, critical accounting estimates and key judgments is set out in Note 3 to our unaudited consolidated interim financial statements for the six months ended September 30, 2015 and Note 3 to our financial statements for the year ended March 31, 2015 which appear elsewhere in this prospectus.
In addition, in relation to a description of our principal accounting policies, critical accounting estimates and key judgments in respect of the Iglo Group, please see Note 2 to our consolidated financial statements of the Predecessor for the years ended December 31, 2014, 2013 and 2012, which appear elsewhere in this prospectus.
46
IGLO MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of Iglo Groups financial condition and results of operations for the years ended December 31, 2014, 2013 and 2012 and for the five months ended May 31, 2015 and the six months ended June 30, 2014. This discussion should be read in conjunction with Prospectus SummarySummary Consolidated Financial Information, Selected Consolidated Financial Information, Nomad Managements Discussion and Analysis of Financial Condition and Results of Operations and our and Iglos consolidated historical financial statements included elsewhere in this prospectus. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including but not limited to those described in the Risk Factors section of this prospectus. Actual results may differ materially from those contained in any forward-looking statements. You should read Cautionary Note Regarding Forward-Looking Statements and Risk Factors.
The following financial information has been extracted from the audited consolidated financial statements of the Predecessor as of and for the years ended December 31, 2014, December 31, 2013 and December 31, 2012 and the unaudited condensed consolidated financial statements of the Predecessor for the two and five months ended May 31, 2015.
The historical financial information for Iglo has been prepared in accordance with IFRS.
Overview
Iglo operates in the European frozen food market, selling its products primarily to large grocery retailers either directly or through distribution arrangements primarily in the United Kingdom, Germany and Italy.
The Iglo Groups key markets collectively represented approximately 55% of the total Western European frozen food market (in terms of retail sale value) and generated 79% of the Iglo Groups revenue in 2014. The Iglo Group also sells its products in Austria, Belgium, France, Greece, Hungary, Ireland, Portugal, Russia, Switzerland, and the Netherlands.
The brands under which the Iglo Group sells its products are Birds Eye in the United Kingdom and Ireland, Iglo in Germany and Continental Europe, and Findus in Italy and San Marino.
Sales of the Iglo Groups branded products accounted for 97.6% of its revenue in 2014, of which 80.7% came from its fish, vegetables and poultry categories.
The Iglo Group operates four manufacturing plants, one in the United Kingdom, two in Germany and one in Italy, and five primary distribution centers in its key markets and nine in total. The Iglo Group manufactures most of its products but outsources certain manufacturing processes, such as the processing of certain vegetables as well as most complete meal products. In addition, the Iglo Groups packaging and distribution functions are largely outsourced.
Description of Key Line Items and Certain Key Performance Indicators
For a description of key line items and certain key performance indicators, see Nomad Managements Discussion and Analysis of Financial Condition and Results of OperationsDescription of Key Line Items and Certain Key Performance Indicators . For additional information, see Note 1 to Iglos annual consolidated historical financial statements which appear in this prospectus.
Currency
The Iglo Groups consolidated financial statements have been presented in Euro, which is its functional currency. Unless specifically stated otherwise herein, transactions in foreign currencies have been translated at the foreign exchange rate at the date of the relevant transaction.
47
Changes in foreign currency rates have a translation impact on the Iglo Groups reported operating results. A significant portion of the Iglo Groups operations have functional currencies other than Euro (principally Pound Sterling). In preparing its financial statements, translations in currencies other than the Iglo Groups functional currency are recognized at the rates of exchange prevailing at the dates of transaction. Accordingly, the Iglo Groups results for each of the periods presented below have been impacted by fluctuations in foreign exchange rates. Where material, the Iglo Groups results, excluding the currency impacts, have been provided. Results presented excluding currency impacts are not presented in accordance with IFRS. Non-IFRS financial measures are intended to supplement the applicable IFRS disclosures and should not be viewed as a replacement of IFRS results. We believe excluding the impact of changes in exchange rates allows for better comparability of results between periods and provides an additional and meaningful assessment of the performance of the business.
Results of Operations
The table below presents the Iglo Groups results of operations for the periods indicated:
Year ended December 31 |
Six months
ended June 30 |
Five months
ended May 31 |
||||||||||||||||||
( in millions) | 2012 | 2013 | 2014 | 2014 | 2015 | |||||||||||||||
Revenue |
1,572.7 | 1,505.8 | 1,500.9 | 761.2 | 640.3 | |||||||||||||||
Cost of sales |
(1,028.9 | ) | (1,001.8 | ) | (970.9 | ) | (496.7 | ) | (417.9 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross profit |
543.8 | 504.0 | 530.0 | 264.5 | 222.4 | |||||||||||||||
Other operating expenses (1) |
(276.0 | ) | (315.6 | ) | (307.1 | ) | (145.7 | ) | (193.8 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating profit |
267.8 | 188.4 | 222.9 | 118.8 | 28.6 | |||||||||||||||
Finance income |
4.6 | 12.4 | 6.8 | 3.4 | 2.0 | |||||||||||||||
Finance costs |
(307.0 | ) | (240.0 | ) | (297.0 | ) | (137.4 | ) | (117.7 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net financing costs |
(302.4 | ) | (227.6 | ) | (290.2 | ) | (134.0 | ) | (115.7 | ) | ||||||||||
|
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|
|
|
|
|
|
|
|
|||||||||||
Loss before tax |
(34.6 | ) | (39.2 | ) | (67.3 | ) | (15.2 | ) | (87.1 | ) | ||||||||||
Taxation |
(43.5 | ) | (2.0 | ) | (41.8 | ) | (25.3 | ) | (40.9 | ) | ||||||||||
|
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|
|
|
|
|
|
|
|
|||||||||||
Loss for the period |
(78.1 | ) | (41.2 | ) | (109.1 | ) | (40.5 | ) | (128.0 | ) | ||||||||||
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|
|
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|
|
(1) | Other operating expenses are shown including exceptional items, such as impairments of brand and goodwill, other restructuring costs and costs in relation to the investigation of strategic opportunities, all of which the Iglo Group considers to be of a non-recurring nature. |
The table below presents certain additional other key performance indicators:
Year ended December 31 |
Six months
ended June 30 |
Five months
ended May 31 |
||||||||||||||||||
( in millions, except percentages) | 2012 | 2013 | 2014 | 2014 | 2015 | |||||||||||||||
Gross margin (1) |
34.6 | % | 33.5 | % | 35.3 | % | 34.7 | % | 34.7 | % | ||||||||||
Adjusted EBITDA (2) |
350.2 | 300.1 | 306.2 | 144.6 | 125.4 | |||||||||||||||
Adjusted EBITDA margin (3) |
22.3 | % | 19.9 | % | 20.4 | % | 19.0 | % | 19.6 | % |
(1) | Gross Margin. Gross margin represents gross profit as a percentage of revenue for the relevant period. |
(2) | Adjusted EBITDA. Adjusted EBITDA represents net (loss)/profit for the period before taxation, net financing costs, depreciation, amortization and exceptional items. The Iglo Group believes that Adjusted EBITDA is a useful indicator of the Iglo Groups ability to incur and service its indebtedness and in assessing the underlying performance of its business and can assist securities analysts, investors and other parties to perform their own evaluation. Accordingly, the information has been disclosed in this prospectus to permit a more complete and comprehensive analysis of the Iglo Groups operating performance. |
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(3) | Adjusted EBITDA Margin. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenue for the relevant period. |
The following table reconciles Adjusted EBITDA to net loss for the relevant period as follows:
Year ended December 31 |
Six months
ended June 30 |
Five months
ended May 31 |
||||||||||||||||||
( in millions) | 2012 | 2013 | 2014 | 2014 | 2015 | |||||||||||||||
Loss for the period |
(78.1 | ) | (41.2 | ) | (109.1 | ) | (40.5 | ) | (128.0 | ) | ||||||||||
Taxation |
43.5 | 2.0 | 41.8 | 25.3 | 40.9 | |||||||||||||||
Net finance costs |
302.4 | 227.6 | 290.2 | 134.0 | 115.7 | |||||||||||||||
Depreciation and amortization |
28.8 | 27.9 | 30.4 | 14.4 | 12.5 | |||||||||||||||
Exceptional items: |
||||||||||||||||||||
Net investigation of strategic opportunities and other costs |
14.8 | 11.2 | 17.4 | 3.2 | 1.3 | |||||||||||||||
Costs related to long-term management incentive plans |
17.9 | 13.8 | 16.7 | 7.1 | 22.9 | |||||||||||||||
Other restructuring costs |
3.1 | 10.5 | 11.6 | 1.1 | | |||||||||||||||
Cisterna fire net costs |
| | 5.5 | | 1.3 | |||||||||||||||
Cost related to transactions |
17.8 | 20.9 | 1.7 | | 3.8 | |||||||||||||||
Adjustment to carrying value of intangible assets |
| 27.4 | | | 55.0 | |||||||||||||||
Adjusted EBITDA |
350.2 | 300.1 | 306.2 | 144.6 | 125.4 |
Six Months Ended June 30, 2014 and the Five Months Ended May 31, 2015
Revenue
The Iglo Groups revenue decreased by 120.9 million to 640.3 million for the five months ended May 31, 2015 from 761.2 million for the six months ended June 30, 2014. Excluding the additional month of operations in 2014, the decrease in revenue was 14.2 million. Our exit from Romania, Slovakia and Turkey in 2015 and the one additional day in 2014 accounted for 8.8 million of the decline. We believe, based on external market data, that a significant portion of the remaining decrease was driven by continued growth in the discounter channel and an increase in private label offerings by traditional retailers. Furthermore, reduced promotional slots in Italy due to longer-than-expected annual negotiations with key customers impacted revenue by approximately 10.1 million. Those impacts were partially offset by a foreign exchange translational benefit from our U.K. business as a result of the stronger Sterling-to-Euro exchange rate and increased revenue in the Netherlands and Portugal. Excluding the foreign exchange translational benefit and the additional month in 2014, revenue would have decreased 5.9% or 39.3 million.
Gross profit
Gross Profit decreased by 42.1 million to 222.4 million for the five months ended May 31, 2015 from 264.5 million for the six months ended June 30, 2014. The additional month in 2014 accounted for 38.3 million of the decline. Excluding the additional month in 2014, the decrease was driven by lower revenue. Gross margin was 34.7% for the five months ended May 31, 2015 and the six months ended June 30, 2014 as higher promotional investments were offset by the introduction of new margin accretive products and supply chain improvements.
Other Operating Expenses
Other operating expenses increased by 48.1 million to 193.8 million for the five months ended May 31, 2015 from 145.7 million for the six months ended June 30, 2014. Excluding the additional month in 2014, other operating expenses increased 72.3 million primarily due to an increase in exceptional items of 76.8 million.
49
Costs for advertising and promotions decreased by 15.5 million to 49.3 million for the five months ended May 31, 2015 from 64.8 million for the six months ended June 30, 2014. The additional month in 2014 accounted for 9.2 million of the decline. Excluding the additional month in 2014, the decrease was primarily due to the non-recurrence of costs associated with the development of the new marketing strategy in 2014 and advertising cost savings and efficiencies.
Indirect expenses decreased by 9.3 million to 60.2 million for the five months ended May 31, 2015 from 69.5 million for the six months ended June 30, 2014. Excluding the additional month in 2014, indirect expenses increased by 1.8 million, primarily due to a foreign exchange translational impact from Sterling-based costs in our U.K. business as a result of the stronger Sterling-to-Euro exchange rate.
Exceptional items increased by 72.9 million to 84.3 million for the five months ended May 31, 2015 from 11.4 million for the six months ended June 30, 2014. Excluding the additional month in 2014, exceptional items increased by 76.8 million primarily due to a one-time 55.0 million carrying value adjustment of our intangible assets in Italy and a 22.9 million charge related to the acceleration of awards under the Iglo Long-Term Incentive Plans upon the closing of the Iglo Acquisition.
Finance Income and Finance Costs
Net finance costs decreased by 18.3 million to 115.7 million for the five months ended May 31, 2015 from 134.0 million for the six months ended June 30, 2014. Excluding the additional month in 2014, net financing costs increased 9.2 million primarily due to foreign exchange translational losses on our financial assets and liabilities principally as a result of the stronger Sterling-to-Euro exchange rate, partially offset by lower net interest costs of 6.0 million due to the refinancing in July 2014.
Taxation
Tax expenses increased by 15.6 million to 40.9 million for the five months ended May 31, 2015 from 25.3 million for the six months ended June 30, 2014. Excluding the additional month in 2014, tax expense increased 19.8 million. The increase in the tax charge was largely attributable to a one-time adjustment to current tax of 11.3 million and to a deferred tax debit of 9.1 million following a fair value review conducted as a result of the Iglo Acquisition. Based on an effective tax rate methodology, the current tax charge for the five months ended May 31, 2015 was 20.5 million.
Key Performance Indicators
Adjusted EBITDA decreased by 19.2 million to 125.4 million for the five months ended May 31, 2015 from 144.6 million for the six months ended June 30, 2014. Excluding the additional month in 2014, Adjusted EBITDA increased by 1.2 million driven by a reduction in advertising and promotional expense which was partially offset by the revenue declines. Adjusted EBITDA was also impacted by a foreign exchange translational benefit of 6.1 million from our Sterling-denominated U.K. business as a result of the stronger Sterling-to-Euro exchange rate. Adjusted EBITDA margin increased to 19.6% for the five months ended May 31, 2015, from 19.0% for the six month ended June 30, 2014 primarily driven by a reduction in advertising and promotional expense.
Years Ended December 31, 2013 and 2014
Revenue
The Iglo Groups revenue decreased by 4.9 million, or 0.3%, to 1,500.9 million for the year ended December 31, 2014, from 1,505.8 million for the year ended December 31, 2013. We believe, based on external market data, that the decrease in revenue was primarily due to growth in the discounter channel across UK, Italy and Germany as well as lower promotional levels particularly in Germany during annual customer negotiations which impacted revenue by 9 million. Furthermore there were on-going negotiations during the year with a medium sized retailer in the United Kingdom resulting in limited distributions and promotions until the last
50
quarter of 2014 which led to a 17 million decrease in revenue. The decrease in revenue was primarily offset by a foreign exchange translational benefit in our U.K. business and revenue growth in our Italy business following implementation of a new product strategy and increased advertising. Excluding the currency impact, revenue decreased by 2.0% or 31.8 million.
Gross Profit
Gross profit increased by 26.0 million, or 5.2%, to 530.0 million for the year ended December 31, 2014 from 504.0 million for the year ended December 31, 2013. Gross margin increased to 35.3% for the year ended December 31, 2014, from 33.5% for the year ended December 31, 2013 primarily as a result of the introduction of new margin accretive products, product mix improvements and cost controls which offset the revenue decline. Gross profit benefitted from a foreign currency translational benefit from our U.K. business as a result of the stronger Sterling-to-Euro exchange rates which resulted in a 3.3%, or 17.0 million, increase in gross profit.
Other Operating Expenses
Other operating expenses decreased by 8.5 million, or 2.7%, to 307.1 million for the year ended December 31, 2014, from 315.6 million for the year ended December 31, 2013. The decrease was primarily due to significantly lower exceptional items partially offset by increases in advertising and promotion and indirect costs. Other operating expenses as a percentage of revenue decreased to 20.5% in 2014 from 21.0% in 2013.
The Iglo Groups costs for advertising and promotions increased by 12.1 million, or 12.0%, to 113.1 million for the year ended December 31, 2014 from 101.0 million for the year ended December 31, 2013. The increase was primarily due to development of a new advertising campaign and packaging re-launch coupled with increased media spend in Italy, Germany and the United Kingdom.
Indirect costs increased by 10.4 million, or 8.0%, to 141.1 million for the year ended December 31, 2014 from 130.7 million for the year ended 31 December 2013. The increase was primarily due to investment in marketing capability along with R&D capacity and higher bonus costs.
Exceptional items decreased by 30.9 million, or 36.9%, to 52.9 million for the year ended December 31, 2014, from 83.8 million for the year ended December 31, 2013. The decrease was primarily the result of the higher level of exceptional items in 2013 from developing and implementing the Better Meals Together strategy as well as a registration tax payment in Italy relating to the acquisition of Findus Italy.
Finance Income and Finance Costs
Net financing costs increased by 62.6 million, or 27.5%, to 290.2 million for the year ended December 31, 2014 from 227.6 million for the year ended December 31, 2013. The increase in net financing costs was primarily due to a one-time charge of 37.9 million in connection with re-financing of Iglos debt in July 2014, which related primarily to the write-off of deferred borrowing costs from a previous re-financing. The remaining increase was primarily driven by foreign exchange translational losses on our financial assets and liabilities principally as a result of the stronger Sterling-to-Euro exchange rate.
Taxation
Tax expenses increased by 39.8 million to 41.8 million for the year ended December 31, 2014, from 2.0 million for the year ended December 31, 2013. This charge is split between a current tax expense of 27.5 million and a net deferred tax charge of 14.3 million, compared to a current tax expense of 16.6 million and a net deferred tax credit of 14.6 million for the prior year. The increase in current tax expense was primarily due to an increase in taxable profits. The variance in the deferred tax charge was primarily attributable to a change in deferred tax rates from 23% to 20% as well as a credit in 2013, which resulted from an adjustment to the calculation of deferred tax on intangibles, while a charge was recognized in 2014.
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Other Key Performance Indicators
Adjusted EBITDA increased by 6.1 million, or 2.0%, to 306.2 million for the year ended December 31, 2014, from 300.1 million for the year ended December 31, 2013. Adjusted EBITDA margin increased to 20.4% for the year ended December 31, 2014, from 19.9% for the year ended December 31, 2013 as a result of higher gross margins. The increase in Adjusted EBITDA was primarily due to a foreign currency translational benefit from our U.K. business as a result of a stronger Sterling-to-Euro exchange rate. Excluding currency impacts, Adjusted EBITDA remained relatively flat.
Years Ended December 31, 2012 and 2013
Revenue
The Iglo Groups revenue decreased by 66.9 million, or 4.3%, to 1,505.8 million for the year ended December 31, 2013 from 1,572.7 million for the year ended December 31, 2012. The decline in overall revenue was primarily due to the particularly challenging macro-economic environment in Italy, a decline of sales in the ready meals category in several markets which impacted revenue by approximately 25 million, aggressive promotional activity from a branded U.K. competitor and the impact of a weaker Sterling-to-Euro exchange rate. Excluding the currency impact, revenue decreased by 2.8%, or 45 million.
Gross Profit
Gross profit decreased by 39.8 million, or 7.3%, to 504.0 million for the year ended December 31, 2013, from 543.8 million for the year ended December 31, 2012 primarily due to revenue declines. Gross margin decreased to 33.5% for the year ended December 31, 2013 from 34.6% for the year ended December 31, 2012 primarily as a result of higher levels of trade promotional spend. Excluding currency impacts, gross profit decreased by 5.7%, or 31.8 million.
Other Operating Expenses
Other operating expenses increased by 39.6 million, or 14.3%, to 315.6 million for the year ended December 31, 2013 from 276.0 million for the year ended December 31, 2012. The increase was primarily due to an increase in exceptional items and an increase in advertising expenses and promotions. Other operating expenses as a percentage of revenue increased to 21.0% in 2013 from 17.5% in 2012.
Advertising and promotions increased by 11.5 million, or 12.8%, to 101.0 million for the year ended December 31, 2013, from 89.5 million for the year ended December 31, 2012. The increase was primarily due to a significant increase in the Iglo Groups media presence in Germany and an increase in market research to support the launch of certain new initiatives and product innovation.
Indirect costs decreased by 2.2 million, or 1.7%, to 130.7 million for the year ended December 31, 2013 from 132.9 million for the year ended December 31, 2012. The decrease was primarily due to a lower level of bonus payout in 2013 and costs relating to the transition of the Iglo Groups information technology systems incurred in 2012.
Exceptional items increased by 30.2 million, or 56.3%, to 83.8 million for the year ended December 31, 2013 from 53.6 million for the year ended December 31, 2012. The increase was primarily due to (i) an impairment charge of 27.4 million being recorded with respect to the goodwill of the Belgium operation as a result of a continuation of the challenging market conditions and the significant impact of the industry-wide horsemeat contamination issue in Belgium, (ii) the payment of a 20.9 million registration tax related to the acquisition of Findus Italy, (iii) restructuring costs of 10.5 million principally with respect to the Iglo Groups Italian factory and (iv) costs of 25.0 million in connection with the implementation of the Iglo Groups new Better Meals Together strategy, including management incentive schemes.
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Finance Income and Finance Costs
Net financing costs decreased by 74.8 million, or 24.7%, to 227.6 million for the year ended December 31, 2013 from 302.4 million for the year ended December 31, 2012. The decrease in net financing costs was primarily due to a reduction in the interest payable on the Iglo Groups shareholder loan notes. As part of the refinancing in November 2012, the shareholder loan notes were also replaced in part by bank loans bearing a lower rate of interest, which contributed to the reduction in financing costs.
Taxation
Tax expenses decreased by 41.5 million to 2.0 million for the year ended December 31, 2013 from 43.5 million for the year ended December 31, 2012. The 2013 charge of 2.0 million is comprised of 16.6 million current expense offset by a net deferred tax credit of 14.6 million. The 2012 charge of 43.5 million is comprised of tax expense of 42.0 million plus a net deferred tax charge of 1.5 million related to 2011. The decrease in current tax expense was primarily due to the recognition of a provision for tax uncertainties in 2012 as well as a decrease in the amount of non-deductible interest charged in 2013 on the Iglo Groups shareholder loan notes. The variance in the deferred tax amount was primarily attributable to an adjustment to the calculation of the deferred tax liability on intangibles as well as the impact of the change in deferred tax rates in the United Kingdom.
Other Key Performance Indicators
Adjusted EBITDA decreased by 50.1 million, or 14.3%, to 300.1 million for the year ended December 31, 2013 from 350.2 million for the year ended December 31, 2012. Adjusted EBITDA margin decreased to 19.9% for the year ended December 31, 2013 from 22.3% for the year ended December 31, 2012. The decrease was primarily due to lower revenues and an increase in advertising and promotional costs.
Liquidity
The Iglo Groups primary sources of liquidity for the periods reported were cash flow from operations and financing activities. Cash flows from financing activities have in the past included, among other things, borrowings under credit facilities, high yield notes and shareholder loan notes. The Iglo Groups liquidity requirements arise primarily from the need to meet debt service requirements, to fund capital expenditures, to meet working capital requirements and to fund pension and tax obligations.
Cash flows generated from operating activities, together with cash flows generated from financing activities, have historically been sufficient to meet the Iglo Groups liquidity needs.
Cash Flows
The following table summarizes net cash flows with respect to the Iglo Groups operating, investing and financing activities for the periods indicated:
Year ended
December 31 |
Six months
ended June 30 |
Five months
ended May 31 |
||||||||||||||||||
( in millions) |
2012 | 2013 | 2014 | 2014 | 2015 | |||||||||||||||
Net cash from operating activities |
255.1 | 237.3 | 267.4 | 137.2 | 78.7 | |||||||||||||||
Net cash used in investing activities |
(27.4 | ) | (28.3 | ) | (26.3 | ) | (6.0 | ) | (6.3 | ) | ||||||||||
Net cash used in financing activities |
(255.6 | ) | (106.7 | ) | (344.2 | ) | (182.2 | ) | (29.4 | ) | ||||||||||
Net (decrease)/increase in cash and cash equivalents |
(27.9 | ) | 102.3 | (103.1 | ) | (51.0 | ) | 43.0 | ||||||||||||
Cash and cash equivalents at end of the period |
215.6 | 317.1 | 219.2 | 268.1 | 268.4 |
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Net Cash from Operating Activities
Net cash from operating activities decreased by 58.5 million, or 42.6%, to 78.7 million for the five months ended May 31, 2015 from 137.2 million for the six months ended June 30, 2014. The additional month in 2014 accounted for 29.9 million of the decrease. Excluding the impact of the additional month in 2014, the decrease was primarily due to higher tax and exceptional items.
Net cash from operating activities increased by 30.1 million, or 12.7%, to 267.4 million for the year ended December 31, 2014, from 237.3 million for the year ended December 31, 2013. The increase was primarily due to lower tax and exceptional items.
Net cash from operating activities decreased by 17.8 million, or 7.0%, to 237.3 million for the year ended December 31, 2013 from 255.1 million for the year ended December 31, 2012. The decrease was primarily due to the impact of the payment of certain exceptional amounts, including registration tax related to the acquisition of Findus Italy. The impact of lower profitability was largely offset by a net working capital inflow driven by lower inventory levels than in the prior year.
Net Cash used in Investing Activities
Net cash used in investing activities increased by 0.3 million, or 5.0%, to 6.3 million for the five months ended May 31, 2015 from 6.0 million for the six months ended June 30, 2014. Excluding the impact of the additional month in 2014, the increase was 1.4 million which was caused by the phasing of capital expenditures over the two periods.
Net cash used in investing activities decreased by 2.0 million, or 7.1%, to 26.3 million for the year ended December 31, 2014 from 28.3 million for the year ended December 31, 2013. The decrease was primarily due to phasing of capital expenditures over the two years.
Net cash used in investing activities increased by 0.9 million, or 3.3%, to 28.3 million for the year ended December 31, 2013 from 27.4 million for the year ended December 31, 2012. The increase was primarily due to increased capital expenditure with respect to upgrading and increasing capacity and improving quality across the Iglo Groups production facilities, as well as investing in new computer hardware and software.
Net Cash used in Financing Activities
Net cash used in financing activities decreased by 152.8 million, or 83.9%, to 29.4 million for the five months ended May 31, 2015 from 182.2 million for the six months ended June 30, 2015. The additional month in 2014 accounted for 7.8 million of the decline. Excluding the impact of the additional month in 2014, the decrease was attributable to the repayment of 129.2 million of senior debt which was an excess cash payment in line with the former debt package as well as lower interest payments following the reduction in loan principal in July 2014.
Net cash used in financing activities increased by 237.5 million, or 222.6%, to 344.2 million for the year ended December 31, 2014 from 106.7 million for the year ended December 31, 2013. The increase was primarily attributable to the repayment of senior debt by 236.9 million, 129.2 million of which was an excess cash payment in line with the former debt package covenants and 107.7 million of which was a net repayment as part of the new finance agreement.
Net cash used in financing activities decreased by 148.9 million, or 58.3%, to 106.7 million for the year ended December 31, 2013 from 255.6 million for the year ended December 31, 2012. The decrease was primarily attributable to the refinancing transactions that took place in November 2012, whereby 250.0 million of new senior debt was drawn down and used, together with cash from the business, to repay 311.7 million of the Iglo Groups shareholder loan notes and 75.4 million of senior debt. As a result of the increased level of third party debt following the November 2012 refinancing and the purchase of interest rate caps, the cash outflow for interest for the year ended December 31, 2013 increased to 105.9 million, compared to 94.4 million for the prior year.
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Capital Expenditures
The Iglo Groups capital expenditures consist primarily of expenditures for factory capacity expansion and maintenance, cost savings projects, information systems, innovation, regulatory compliance and other items. Most of the Iglo Groups capital expenditures are recurring in nature. The Iglo Groups capital expenditure averaged 1.8% of revenue from 2012 to 2014. The following table sets forth the Iglo Groups capital expenditures for the periods indicated, including as a percentage of revenue:
Year ended
December 31 |
Six months
ended June 30 |
Five months
ended May 31 |
||||||||||||||||||||||
( in millions, except percentages) (unaudited) |
2011 | 2012 | 2013 | 2014 | 2014 | 2015 | ||||||||||||||||||
Capital expenditures |
26.5 | 27.4 | 28.3 | 26.3 | 6.0 | 6.3 | ||||||||||||||||||
Capital expenditures as a percentage of revenue |
1.7 | % | 1.7 | % | 1.9 | % | 1.8 | % | 0.8 | % | 1.0 | % |
Contractual Obligations
The following table summarizes our estimated material contractual cash obligations and other commercial commitments as of December 31, 2014, and the future periods in which such obligations are expected to be settled in cash:
Cash payments due by period | ||||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | After 5 years | ||||||||||||||||
( in millions) |
||||||||||||||||||||
Loan notes (1) |
1,278.8 | | | | 1,278.8 | |||||||||||||||
Loan notesinterest (1) |
1,112.9 | | | | 1,112.9 | |||||||||||||||
Senior debt and other loans |
1,133.6 | | | | 1,133.6 | |||||||||||||||
Senior debt and other loansinterest (2) |
295.8 | 53.8 | 107.7 | 107.5 | 26.8 | |||||||||||||||
Senior Secured Notes due 2020 |
500.0 | | | | 500.0 | |||||||||||||||
Senior Secured Notes due 2020interest (2) |
127.8 | 23.2 | 46.5 | 46.5 | 11.6 | |||||||||||||||
Operating leases |
23.5 | 5.0 | 8.0 | 3.9 | 6.6 | |||||||||||||||
Purchase commitments (3) |
5.1 | 5.1 | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total (4) |
4,477.5 | 87.1 | 162.2 | 157.9 | 4,070.3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Loan notes were acquired by Nomad Foods Limited on June 1, 2015 and have a fixed rate of interest. Interest on the loan notes is not paid in cash but is added to the principal. |
(2) | Represents estimates of future interest payable, which will depend upon the timing of cash flows as well as fluctuations in the applicable interest rates. |
(3) | Represents capital expenditures which we have committed to make but which are not yet payable. |
(4) | Retirement benefit obligations of 124.2 million are not presented above as the timing of the settlement of these obligations is uncertain. |
Pension Plans
We maintain defined benefit pension plans in Germany, Italy and Austria as well as various contributions plans in other countries. The defined benefit pension plans are partially funded in Germany and Austria and unfunded in Italy. All defined benefit pension plans are closed to new entrants and there is no current requirement to fund the deficit in either Germany or Italy. We also maintain various defined contribution pension plans in other countries, the largest of which is in the United Kingdom with Company contributions of 2.5 million in 2014. In most countries, long term service awards are in operation. For accounting purposes, as of December 31, 2014 (based on the assumptions used), the deficit for the defined benefit plans equaled 124.2 million.
55
Most of our pension deficit relates to Germany, where the most significant pension plan is the UVO defined benefit plan. For accounting purposes, the UVO defined benefit plan had liabilities of 184.2 million as of December 31, 2014, and is partially funded by deferred annuity contracts with two pensionskassen (similar to insurance companies). The market value of these assets, as of December 31, 2014, equaled 74.9 million. Notwithstanding that there is no requirement to fund the deficit in Germany, we are committed to cover the difference between the UVO benefit promise and the annuities provided by the pensionskassen . The UVO benefit promise generally increases in line with the lower of price or salary inflation, while the deferred annuities depend on investment returns. As a result, better than expected investment returns lead to discretionary increases on pensionskassen annuities, which can be offset against future increases in the Iglo Groups pension payments. Worse than expected investment returns may lead to larger requirements to top-up pensions payments.
For the years ended December 31, 2014, 2013 and 2012 pension costs related to defined benefit, defined contribution and long-term benefit plans equaled 10.2 million, 10.0 million and 9.1 million respectively. This includes all costs related to the pension schemes and other long-term benefits plans as well as associated interest costs.
Off-Balance Sheet Arrangements
The Iglo Group did not have any material off-balance sheet arrangements during the reported periods.
Quantitative and Qualitative Disclosures about Market Risk
For the Quantitative and Qualitative Disclosures about Market Risk for the Iglo Group, see Note 22 to Iglos audited consolidated historical financial statements for the twelve months ended December 31, 2014 which appear elsewhere in this prospectus.
Principal Accounting Policies, Critical Accounting Estimates and Key Judgments
A description of the Iglo Groups principal accounting policies, critical accounting estimates and key judgments is set out in Note 2 to Iglos audited consolidated historical financial statements for the years ended December 31, 2014, 2013 and 2012 which appear elsewhere in this prospectus.
56
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On June 1, 2015, Nomad completed the acquisition of the Iglo Group for approximately 2.6 billion. The acquisition of the Iglo Group was funded through a combination of (i) cash on hand, (ii) the Iglo Seller Shares, (iii) proceeds from the May 2015 Offering and (iv) proceeds from the early exercise of Warrants. The transaction included the assumption of approximately 1.2 billion of Iglo Groups existing indebtedness after the amendment of certain terms of the Iglo Groups senior debt facilities in connection with the acquisition of the Iglo Group (the Iglo Acquisition).
On November 2, 2015, we acquired the Findus Group for approximately £500 million (subject to customary post-closing adjustments), consisting of £415 million in cash and 8,378,380 ordinary shares.
The following unaudited pro forma condensed combined financial information (the Pro Formas) is based on the historical financial statements of Nomad, the historical consolidated financial statements of Iglo and the historical consolidated carve-out financial statements of Findus, as described below, and has been prepared to reflect the Iglo Acquisition and the changes to the financing structure associated with the Iglo Acquisition and the Findus Acquisition and the financing of the Findus Acquisition.
Nomad has changed its fiscal year end from March 31 to December 31 upon the closing of the Iglo Acquisition. The unaudited pro forma condensed combined statements of operations (the pro forma statements of income) for the year ended December 31, 2014 includes Nomads results for the year ended March 31, 2015, Iglos results for the year ended December 31, 2014 and Findus results for the year ended September 30, 2014 and assumes that the Iglo Acquisition and the Findus Acquisition completed on January 1, 2014.
The unaudited pro forma statement of operations for the nine-month period ended September 30, 2015 includes Nomads results for the nine-months ended September 30, 2015, Iglos results for the five-months ended May 31, 2015 and Findus results for the nine-month period ended June 27, 2015 and assumes that the Iglo Acquisition and the Findus Acquisition were completed on January 1, 2014.
The unaudited pro forma condensed combined statement of financial position as of September 30, 2015 assumes the Findus Acquisition completed on September 30, 2015.
The Findus Acquisition has been funded through a combination of cash on hand, including a portion of the proceeds from the July 2015 Offering, equity issued to the Findus Seller and borrowings on our senior facilities. These adjustments reflect our best estimates based upon the information available to date and are preliminary and subject to change once more detailed information is obtained.
The Iglo Acquisition has been accounted for as a business combination using the acquisition method of accounting in conformity with IFRS. Under this method, the assets acquired and liabilities assumed have been recorded based on preliminary estimates of fair value. Additionally it is expected that the Findus Acquisition will also be accounted for as a business combination using the acquisition method of accounting. For pro forma purposes, the fair value of Findus tangible and identifiable intangible assets acquired and liabilities assumed are based on a preliminary estimate of fair value as of September 30, 2015. Any excess of the purchase price over the fair value of identified assets acquired and liabilities assumed will be recognized as goodwill.
The pro forma adjustments are based upon the best available information and certain assumptions that we believe to be reasonable. There can be no assurance that the final allocation of the purchase price and the fair values will not materially differ from the preliminary amounts reflected in the Pro Formas.
Adjustments included in the Pro Formas are based on items that are factually supportable and directly attributable to the Iglo Acquisition and Findus Acquisition. The unaudited pro forma condensed combined
57
financial information is presented for informational purposes only and is not necessarily indicative of the combined financial position or results of operations that would have been realized had the Iglo Acquisition and Findus Acquisition occurred as of the dates indicated, nor is it meant to be indicative of any anticipated combined financial position or future results of operations that the enlarged group will experience after the completion of these acquisitions. The Pro Formas do not reflect the cost of any integration activities or benefits from the Iglo Acquisition and Findus Acquisition including potential synergies that may be derived in future periods.
Nomads historical financial statements and Iglos historical consolidated financial statements were prepared in accordance with IFRS. Findus historical consolidated carve-out financial statements were prepared in accordance with IFRS IASB.
The Pro Formas should be read in conjunction with:
| Nomads audited consolidated financial statements and related notes as of and for the year ended March 31, 2015 as well as Nomad Managements Discussion and Analysis of Financial Condition and Results of Operations , included elsewhere in this prospectus; |
| Nomads unaudited condensed consolidated interim financial statements and related notes as of and for the six months ended September 30, 2015, as well as Nomad Managements Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this prospectus; |
| Iglos audited consolidated financial statements and related notes as of and for the year ended December 31, 2014, as well as Iglo Managements Discussion and Analysis of Financial Condition and Results of Operations , included elsewhere in this prospectus; |
| Iglos unaudited condensed consolidated interim financial statements and related notes for the two and five months ended May 31, 2015, as well as Iglo Managements Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this prospectus; |
| Findus audited consolidated carve-out financial statements included elsewhere in this prospectus; and |
| Findus unaudited condensed consolidated carve-out interim financial statements as of and for the nine months ended June 27, 2015. |
58
NOMAD FOODS LIMITED
UNAUDITED PRO FORMA STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2014
Prepared in accordance with IFRS
|
Year ended
March 31, 2015 Nomad |
Year ended
December 31, 2014 Iglo |
Year ended
September 30, 2014 Findus (2) |
Adjustments | Pro Forma | Notes (4) | ||||||||||||||||
Revenue |
| 1,500.9 | 634.0 | | 2,134.9 | |||||||||||||||||
Cost of sales |
| (970.9 | ) | (487.2 | ) | (1.2 | ) | (1,459.3 | ) | D | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
| 530.0 | 146.8 | (1.2 | ) | 675.6 | ||||||||||||||||
Other operating expenses |
(0.7 | ) | (254.2 | ) | (93.6 | ) | | (348.5 | ) | |||||||||||||
Founder Preferred Shares Annual Dividend Amount & Warrant redemption |
(166.2 | ) | | | | (166.2 | ) | |||||||||||||||
Exceptional items |
(0.7 | ) | (52.9 | ) | (9.0 | ) | 0.7 | (61.9 | ) | A | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating profit/(loss) |
(167.6 | ) | 222.9 | 44.2 | (0.5 | ) | 99.0 | |||||||||||||||
Finance income |
0.1 | 6.8 | 9.4 | | 16.3 | |||||||||||||||||
Finance costs |
| (297.0 | ) | (30.5 | ) | 158.1 | (169.4 | ) | B, C, E | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net financing costs |
0.1 | (290.2 | ) | (21.1 | ) | 158.1 | (153.1 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(Loss)/profit before tax |
(167.5 | ) | (67.3 | ) | 23.1 | 157.6 | (54.1 | ) | ||||||||||||||
Taxation |
| (41.8 | ) | (4.9 | ) | (12.9 | ) | (59.6 | ) | G | ||||||||||||
(Loss)/profit for the year |
(167.5 | ) | (109.1 | ) | 18.2 | 144.7 | (113.7 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Weighted average number of ordinary shares |
50,025,000 | 73,848,726 | F | |||||||||||||||||||
Net Loss per share |
(3.35 | ) | (1.54 | ) |
The accompanying notes are an integral part of these unaudited pro forma financial statements.
59
NOMAD FOODS LIMITED
UNAUDITED PRO FORMA STATEMENT OF INCOME
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2015
Prepared in accordance with IFRS
|
Six
months ended September 30, 2015 Nomad |
Three
months ended March 31, 2015 Nomad (1) |
Five
months ended May 31, 2015 Iglo |
Nine months
ended June 27, 2015 Findus (2) |
Adjustments | Pro Forma | Notes (4) | |||||||||||||||||||
Revenue |
418.3 | | 640.3 | 464.0 | | 1,522.6 | ||||||||||||||||||||
Cost of sales |
(311.0 | ) | | (417.9 | ) | (358.9 | ) | 25.5 | (1,062.3 | ) | D | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Gross profit |
107.3 | | 222.4 | 105.1 | 25.5 | 460.3 | ||||||||||||||||||||
Other operating expenses |
(66.3 | ) | | (109.5 | ) | (71.1 | ) | | (246.9 | ) | ||||||||||||||||
Founder Preferred Shares Annual Dividend Amount & Warrant redemption Amount |
(348.6 | ) | (143.8 | ) | | | | (492.4 | ) | |||||||||||||||||
Exceptional items |
(37.8 | ) | (0.6 | ) | (84.3 | ) | (1.1 | ) | 29.4 | (94.4 | ) | A | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating profit/(loss) |
(345.4 | ) | (144.4 | ) | 28.6 | 32.9 | 54.9 | (373.4 | ) | |||||||||||||||||
Finance income |
1.5 | | 2.0 | 5.3 | | 8.8 | ||||||||||||||||||||
Finance costs |
(41.1 | ) | | (117.7 | ) | (22.9 | ) | 73.2 | (108.5 | ) | B, C, E | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net financing costs |
(39.6 | ) | | (115.7 | ) | (17.6 | ) | 73.2 | (99.7 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
(Loss)/profit before tax |
(385.0 | ) | (144.4 | ) | (87.1 | ) | 15.3 | 128.1 | (473.1 | ) | ||||||||||||||||
Taxation |
(5.3 | ) | | (40.9 | ) | (4.2 | ) | (4.5 | ) | (54.9 | ) | G | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
(Loss)/profit for the year |
(390.3 | ) | (144.4 | ) | (128.0 | ) | 11.1 | 123.6 | (528.0 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Weighted average number of ordinary shares |
130,512,120 | 138,890,500 | E | |||||||||||||||||||||||
Net Loss per share |
(2.99 | ) | (3.80 | ) |
The accompanying notes are an integral part of these unaudited pro forma financial statements.
60
NOMAD FOODS LIMITED UNAUDITED PRO FORMA STATEMENT OF FINANCIAL POSITION AS OF SEPTEMBER 30, 2015
As of
September 30, 2015 Nomad |
As of
June 27, 2015 Findus (2) |
Adjustments |
Pro
Forma |
Notes (4) | ||||||||||||||
Non-current assets |
||||||||||||||||||
Goodwill |
1,353.7 | 398.3 | 200.4 | 1,952.4 | E | |||||||||||||
Intangible assets |
1,323.8 | 17.3 | (17.3 | ) | 1,323.8 | |||||||||||||
Property, plant and equipment |
260.3 | 118.0 | | 378.3 | ||||||||||||||
Deferred tax assets |
48.8 | 15.2 | | 64.0 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total non-current assets |
2,986.6 | 548.8 | 183.1 | 3,718.5 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Current assets |
||||||||||||||||||
Cash and cash equivalents |
842.6 | 178.1 | (440.6 | ) | 580.1 | E | ||||||||||||
Inventories |
256.5 | 90.9 | | 347.4 | ||||||||||||||
Trade and other receivables |
34.0 | 108.0 | | 142.0 | ||||||||||||||
Tax receivable |
| 1.4 | | 1.4 | ||||||||||||||
Biological assets |
| 3.3 | | 3.3 | ||||||||||||||
Derivative financial instruments |
2.0 | 0.4 | | 2.4 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total current assets |
1,135.1 | 382.1 | (440.6 | ) | 1,076.6 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
4,121.7 | 930.9 | (257.5 | ) | 4,795.1 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Current liabilities |
||||||||||||||||||
Bank overdrafts and other borrowings |
458.0 | 0.6 | 62.7 | 521.3 | E | |||||||||||||
Trade and other payables |
294.1 | 169.3 | | 463.4 | ||||||||||||||
Derivative financial instruments |
4.7 | 1.0 | | 5.7 | ||||||||||||||
Tax payable |
18.4 | 5.1 | | 23.5 | ||||||||||||||
Related party payables |
| 205.5 | (205.5 | ) | | E | ||||||||||||
Provisions |
29.3 | 1.7 | | 31.0 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total current liabilities |
804.5 | 383.2 | (142.8 | ) | 1,044.9 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Non-current liabilities |
||||||||||||||||||
Loans and borrowings |
1,169.9 | 23.7 | 229.7 | 1,423.3 | E | |||||||||||||
Employee benefits |
110.6 | 62.6 | | 173.2 | ||||||||||||||
Deferred tax liabilities |
322.1 | 4.7 | | 326.8 | ||||||||||||||
Trade and other payables |
| 2.0 | | 2.0 | ||||||||||||||
Provisions |
| 1.4 | | 1.4 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total non-current liabilities |
1,602.6 | 94.4 | 229.7 | 1,926.7 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
2,407.1 | 477.6 | 86.9 | 2,971.6 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net assets |
1,714.6 | 453.3 | (344.4 | ) | 1,823.5 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Deficit attributable to equity holders |
||||||||||||||||||
Share capital |
| | | | ||||||||||||||
Capital reserve |
1,651.4 | | 108.9 | 1,760.3 | E | |||||||||||||
Founder Preferred Shares Dividend reserve |
531.5 | | | 531.5 | ||||||||||||||
Translation reserve |
76.6 | | | 76.6 | ||||||||||||||
Cash flow hedging reserve |
(0.1 | ) | | | (0.1 | ) | ||||||||||||
Merger reserve |
0.9 | | | 0.9 | ||||||||||||||
Accumulated deficit or net investment |
(545.7 | ) | 453.3 | (453.3 | ) | (545.7 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total shareholders equity |
1,714.6 | 453.3 | (344.4 | ) | 1,823.5 | |||||||||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited pro forma financial statements.
61
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Basis of Presentation
The unaudited pro forma condensed combined financial information set forth herein is based upon the historical financial statements of Nomad, Iglo and Findus and has been prepared to illustrate the effects of the Iglo Acquisition and the Findus Acquisition, in accordance with IFRS, as if they had occurred on January 1, 2014 in respect of the pro forma statements of income. In respect of the pro forma statement of financial position, the Findus Acquisition has been reflected as if it had occurred on September 30, 2015.
The historical financial statements of Nomad and Iglo have been prepared in accordance with IFRS.
1. | Basis of PresentationNomad |
The unaudited information in relation to the three months ended March 31, 2015 has been extracted from the unaudited accounting records of the Company. It should be noted that the loss of 144.4 million of Nomad for the three months ended March 31, 2015 is also included in the year ended March 31, 2015 which is included in the pro forma statement of income for the year ended December 31, 2014. There was no revenue for this period.
2. | Basis of presentationFindus |
Findus historical consolidated carve-out financial statements were prepared in accordance with IFRS IASB and presented in Pounds Sterling.
Nomad has used the following historical exchange rates to translate Findus financial statements and to calculate certain adjustments to the pro forma financial statements from Pounds Sterling to Euros.
Average |
Closing |
|||
Year ended September 30, 2014 |
£1:1.2201 | n/a | ||
Nine months ended June 30, 2015 |
£1:1.3250 | n/a | ||
As of June 30, 2015 |
n/a | £1:1.4165 |
These exchange rates may differ from future exchange rates which would have an impact on the pro formas and would also impact purchase accounting upon consummation of the Findus Acquisition. As an example, utilizing the daily closing rate of £1:1.3980 at November 2, 2015, the day of completion of the Findus Acquisition, would increase the translated amount of net earnings attributable for the year ended September 30, 2014, the net earnings attributable for the nine months ended June 27, 2015 and reduce the total assets as of June 30, 2015 by 2.7 million, 0.6 million and 12.1 million respectively.
62
The following table presents the results of operations of Findus translated into Euros at the applicable rate:
Year ended September 30, 2014
Findus |
Nine months ended June 27, 2015
Findus |
|||||||||||||||
£ in million | in million | £ in million | in million | |||||||||||||
Revenue |
519.6 | 634.0 | 350.2 | 464.0 | ||||||||||||
Cost of sales |
(399.3 | ) | (487.2 | ) | (270.9 | ) | (358.9 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
120.3 | 146.8 | 79.3 | 105.1 | ||||||||||||
Other operating expenses (i) |
(80.7 | ) | (93.6 | ) | (54.4 | ) | (71.1 | ) | ||||||||
Impairment (i) |
(3.4 | ) | | | | |||||||||||
Exceptional items (i) . |
| (9.0 | ) | | (1.1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating profit/(loss) |
36.2 | 44.2 | 24.9 | 32.9 | ||||||||||||
Finance income |
7.7 | 9.4 | 4.0 | 5.3 | ||||||||||||
Finance costs |
(25.0 | ) | (30.5 | ) | (17.3 | ) | (22.9 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net financing costs |
(17.3 | ) | (21.1 | ) | (13.3 | ) | (17.6 | ) | ||||||||
Profit before tax |
18.9 | 23.1 | 11.6 | 15.3 | ||||||||||||
Taxation |
(4.0 | ) | (4.9 | ) | (3.2 | ) | (4.2 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Profit for the year |
14.9 | 18.2 | 8.4 | 11.1 |
(i) | Impairments of £3.4 million, manufacturing rationalization of £1.6 million and £2.4 million of restructuring costs would be classified as exceptional items in the year ended September 30, 2014 in accordance with the accounting policies of Nomad and therefore these have been reclassified from Impairments or Other operating expenses to Exceptional items. In the nine months ended June 27, 2015 £5.4 million of restructuring costs, £1.3 million in relation to an emissions permit penalty notification in Sweden and £1.3 million of manufacturing rationalization expenses were incurred, offset by £7.2 million gain on bargain purchase of La Cocinera frozen food business have been reclassified from Other operating expenses to Exceptional items. |
63
The following table presents the statement of financial position of Findus translated into Euros at the June 30, 2015 closing rate of £1:1.4165;
As of June 27, 2015 | ||||||||
£ in million | in million | |||||||
Non-current assets |
||||||||
Goodwill |
281.2 | 398.3 | ||||||
Intangible assets |
12.2 | 17.3 | ||||||
Property, plant and equipment |
83.3 | 118.0 | ||||||
Deferred tax assets |
10.7 | 15.2 | ||||||
|
|
|
|
|||||
Total non-current assets |
387.4 | 548.8 | ||||||
|
|
|
|
|||||
Current assets |
||||||||
Cash and cash equivalents |
125.8 | 178.1 | ||||||
Inventories |
64.2 | 90.9 | ||||||
Trade and other receivables |
76.2 | 108.0 | ||||||
Tax receivable |
1.0 | 1.4 | ||||||
Biological assets |
2.3 | 3.3 | ||||||
Derivative financial instruments |
0.3 | 0.4 | ||||||
|
|
|
|
|||||
Total current assets |
269.8 | 382.1 | ||||||
|
|
|
|
|||||
Total assets |
657.2 | 930.9 | ||||||
|
|
|
|
|||||
Current liabilities |
||||||||
Trade and other payables |
119.5 | 169.3 | ||||||
Tax payable |
3.6 | 5.1 | ||||||
Loans and borrowings |
0.4 | 0.6 | ||||||
Derivative financial instruments |
0.7 | 1.0 | ||||||
Provisions |
1.2 | 1.7 | ||||||
Related party payable |
145.1 | 205.5 | ||||||
|
|
|
|
|||||
Total current liabilities |
270.5 | 383.2 | ||||||
|
|
|
|
|||||
Non-current liabilities |
||||||||
Loans and borrowings |
16.7 | 23.7 | ||||||
Employee benefits |
44.2 | 62.6 | ||||||
Deferred tax liabilities |
3.3 | 4.7 | ||||||
Trade and other payables |
1.4 | 2.0 | ||||||
Provisions |
1.0 | 1.4 | ||||||
|
|
|
|
|||||
Total non-current liabilities |
66.6 | 94.4 | ||||||
|
|
|
|
|||||
Total liabilities |
337.1 | 477.6 | ||||||
|
|
|
|
|||||
Net parent investment |
320.1 | 453.3 | ||||||
|
|
|
|
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3. | Significant non-recurring items included in the historical financial statements |
| NomadMovement in fair value of Founder Preferred Shares During the year ended March 31, 2015 and the nine months ended September 30, 2015, 166.2 million and 492.4 million, respectively, was expensed as a result of movement in the fair value of the Founder Preferred Shares Annual Dividend Amounts and Warrant redemption. Such expenses are non-recurring and are not directly attributable to the Iglo Acquisition and therefore no adjustment has been made for this expense. |
Year ended
December 31, 2014 |
||||
( in millions) | ||||
Exceptional items: |
||||
Transaction related costs |
29.4 | |||
Costs related to long-term management incentive plans |
1.5 | |||
Investigation of strategic opportunities and other costs |
2.7 | |||
Cisterna fire net costs |
0.6 | |||
Other restructuring costs |
4.2 |
| Iglo Iglo Group exceptional items are non-recurring and are as follows: |
Year ended
December 31, 2014 |
Five months
ended May 31, 2015 |
|||||||
( in millions) | ||||||||
Exceptional items: |
||||||||
Net investigation of strategic opportunities and other costs |
17.4 | 1.3 | ||||||
Costs related to long-term management incentive plans |
16.7 | 22.9 | ||||||
Other restructuring costs |
11.6 | | ||||||
Cisterna fire net costs |
5.5 | 1.3 | ||||||
Cost related to transactions |
1.7 | 3.8 | (i) | |||||
Adjustment to carrying value of intangible assets |
| 55.0 |
(i) | 0.7 million of the acquisition related costs in the five months ended May 31, 2015 relate to the Iglo Acquisition and therefore have been adjusted in the Pro Forma Statement of Income. |
| Findus In the year ended September 30, 2014, impairments of £3.4 million (4.1 million) manufacturing rationalization of £1.6 million (2.0 million) and £2.4 million (2.9 million) of restructuring costs are non-recurring. In the nine months ended June 27, 2015, £5.4 million (7.2 million) of restructuring costs, £1.3 million (1.7 million) in relation to an emissions permit penalty notification in Sweden, £1.3 million (1.7 million) of manufacturing rationalization and £7.2 million (9.5 million) gain on bargain purchase of La Cocinera frozen food business are non-recurring. |
4. | Pro Forma Adjustments |
A) | Transaction costs in relation to the Iglo Acquisition Nomad recorded exceptional costs of 0.7 million and 29.4 million in the year ended March 31, 2015 and the nine months ended September 30, 2015, respectively, for professional services and other costs incurred in connection with the Iglo and Findus Acquisitions. As these expenses are non-recurring and directly attributable to the Iglo and Findus Acquisitions, they have been excluded from the pro forma statement of income. |
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B) | Settlement of the Iglo Groups shareholder loans payable to the previous owner 1,084.0 million of the Iglo Groups shareholder loan notes were repaid as part of the Iglo Acquisition. The adjustment reflects the reduction in finance costs of 134.3 million and 67.6 million in the year ended March 31, 2015 and the nine months ended September 30, 2015, respectively, relating to the repayment of these shareholder loan notes. |
C) | Repayment of the Iglo Groups senior debt In connection with the Iglo Acquisition and the amendment of certain terms of Iglos senior debt, 490.0 million of the Iglo Groups senior debt was repaid on June 1, 2015. Estimated costs associated with the amendment of 5.4 million have been capitalized. The adjustment reflects the reduced interest expense in relation to the repayment offset by increased amortization of debt issuance costs which will have a continuing impact on the Company. This adjustment reduces finance costs by 36.8 million and 15.4 million in the year ended March 31, 2015 and the nine months ended September 30, 2015, respectively. |
D) | Preliminary allocation of the Iglo Acquisition purchase consideration The Iglo Acquisition has been accounted for as a business combination using the acquisition method of accounting in conformity with IFRS. Under this method, the assets acquired and liabilities assumed have been recorded based on preliminary estimates of fair value. In accordance with IFRS, the Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The estimation of the fair value of Iglos assets acquired and liabilities assumed are preliminary as of September 30, 2015. |
The estimated pro forma adjustments as a result of recording assets acquired and liabilities assumed at their respective fair values in accordance with IFRS are preliminary. The final valuation of acquired assets and liabilities assumed will be determined at a later date and is dependent on a number of factors, including the final evaluation of the fair value of Iglos tangible and identifiable intangible assets acquired and liabilities assumed. The final valuation of assets acquired and liabilities assumed may be materially different than the value of assets acquired and liabilities assumed resulting from estimated pro forma adjustments.
The fair values of our brands are reflected in our statement of financial position at September 30, 2015 and have been considered to have indefinite lives, with the exception of one brand with a fair value of 1.0 million which has a finite life of ten years. The amortization of the definite life intangible is not reflected in the pro forma statements of income as the impact was determined to be immaterial.
The estimated increase in fair value and weighted-average estimated useful life of identifiable tangible assets are estimated as follows, with the associated increased depreciation:
Year ended
December 31, 2014 |
Five months
ended May 31, 2015 |
|||||||||
Estimated increase in fair value of Property, plant and equipment |
12 million | |||||||||
Weighted-average estimated useful life |
10 years | |||||||||
Imputed additional depreciation charge |
| 1.2 million | | 0.5 million |
The estimated inventory step up of 26.0 million is the difference between the acquired inventories at cost increased to its estimated selling price, less the cost of disposal and a reasonable profit allowance for the selling effort (the inventory step-up). The inventory step-up was recognized into cost of sales based on normal inventory turns of one month; therefore in the nine months ended September 30, 2015 it has resulted in increased cost of sales expense of 26.0 million. As this is a non-recurring expense which is directly attributable to the Iglo Acquisition, this has been adjusted from cost of sales in the nine months ended September 30, 2015 pro forma statement of operations.
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The adjustment to cost of sales in the year ended December 31, 2014 reflects the imputed additional depreciation charge of 1.2 million, and in the nine months ended September 30, 2015, the adjustment reflects the imputed additional depreciation charge of 0.5 million, offset by the removal of the non-recurring inventory step up adjustment of 26.0 million.
E) | Findus Acquisition Financing of the Findus Acquisition and Purchase Price Allocation |
Nomad entered into an Option Agreement to acquire the Findus Group for £415.0 million in cash and 8,378,380 of our ordinary shares. The Findus Acquisition closed on November 2, 2015 when the closing rate was £1:1.3956 and the share price was $14.25. This equates to a purchase consideration of approximately 688.2 million.
The Findus cash consideration was funded as follows:
£ in millions | in millions |
Interest expense
in millions |
||||||||||
Cash consideration (i) |
415.0 | 579.2 | ||||||||||
Cash consideration assumed to be paid out of cash and cash equivalents (ii) |
294.2 | |||||||||||
Borrowings on Senior debt (iii) |
285.0 | |||||||||||
Assumed interest rate (iv) |
4.0 | % | ||||||||||
Annual interest charge |
13.0 | |||||||||||
Interest charge for nine months |
9.8 |
(i) | Cash consideration of £415.0 million translated at the closing rate as at November 2, 2015. |
(ii) | Cash and cash equivalents at September 30, 2015 was 381.5 million, net of overdrafts. |
(iii) | Assumes a draw down on the existing Senior debt of 325.0 million, of which 285.0 million will be used to fund the acquisition including 8.3 million of issuance costs. The senior debt is payable over five years and therefore 63.3 million is classified as current borrowings. |
(iv) | To calculate the above interest expense, Nomad has utilized applicable rates as of September 30, 2015 which may differ from the rates in place when actually utilizing the facilities. A .125% change to the interest rate would result in a change in interest expense of approximately 0.4 million and 0.3 million for the year ended December 31, 2014 and the nine months ended September 30, 2015, respectively. |
In addition the Company issued the Findus Consideration Shares, which involves the issuance of 8,378,380 ordinary shares at $14.25, representing an increase in capital reserves of 108.9 million at the closing exchange rate on November 2, 2015.
In note F) below, the weighted average number of shares has been adjusted for the Findus Consideration Shares, assuming they were issued as at January 1, 2014.
The Findus Acquisition will be accounted for as a business combination using the acquisition method of accounting. Therefore the assets acquired and liabilities assumed are recorded based on preliminary estimates in fair value. The actual fair values will be determined upon the consummation of the Findus Acquisition and may vary from those estimates. All amounts in Pound Sterling have been translated at the June 30, 2015 closing rate of £1:1.4165. The Company is still assessing the purchase price allocation and for the purposes of these pro formas, the Company has assumed that book value approximates fair value.
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The estimated purchase consideration, estimated fair values and residual goodwill are as follows:
(in millions, except share and share price amounts) | £ in millions | in millions | ||||||||||
Total Nomad ordinary shares issued to Findus Seller |
8,378,380 | |||||||||||
Nomads closing ordinary share price on November 2, 2015 |
$ | 14.25 | ||||||||||
Total value of Nomad ordinary shares issued |
78.1 | 108.9 | ||||||||||
Total cash consideration |
415.0 | 579.2 | ||||||||||
|
|
|
|
|||||||||
Total purchase consideration |
493.1 | 688.1 | ||||||||||
Allocation of purchase consideration net of cash acquired |
||||||||||||
Net book value of assets acquired |
320.1 | 453.3 | ||||||||||
Less historical Findus goodwill and intangible assets |
(293.4 | ) | (415.6 | ) | ||||||||
Less historical Findus cash |
(125.8 | ) | (178.1 | ) | ||||||||
Less historical Findus borrowings not acquired, net (i) |
17.1 | 24.3 | ||||||||||
Less historical related party payables not acquired, net (i) |
145.1 | 205.5 | ||||||||||
|
|
|
|
|||||||||
Adjusted net book value of assets acquired |
63.1 | 89.4 | ||||||||||
|
|
|||||||||||
Goodwill |
598.7 | |||||||||||
|
|
|||||||||||
Findus historical goodwill |
(398.3 | ) | ||||||||||
|
|
|||||||||||
Adjustment to goodwill |
200.4 | |||||||||||
|
|
(i) | Historical Findus borrowings and related party payables not acquired represent current borrowings of £0.4 million (0.6 million), non-current borrowings of £16.7 million (23.7 million) and related party payables of £145.1 million (205.5 million). |
F) | Weighted average number of shares used in our Earnings per share calculation The Findus Consideration Shares, which involves the issuance of 8,378,380 ordinary shares at $14.25, will increase the Companys weighted average number of shares, assuming they were issued as at January 1, 2014. |
In addition, assuming we settled the total Founder Preferred Shares Annual Dividend Amount in equity, as of September 30, 2015, our weighted average ordinary shares would increase by approximately 37.8 million shares.
After giving effect to these items, our pro forma ordinary shares outstanding would be as follows:
(in millions) | ||||
Ordinary shares outstanding September 30, 2015 |
170.1 | |||
Ordinary shares to be issued in Findus Acquisition |
8.4 | |||
Pro Forma ordinary shares issued in relation to Founder Preferred Share Dividend Amount |
37.8 | |||
|
|
|||
216.3 | ||||
|
|
G) | Taxation The tax effect of the adjustments are calculated at the Companys effective UK tax rate of 21.5% as adjusted for non-deductible interest and disallowable costs associated with the Iglo Acquisition. |
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Further notes:
1. | Cost of sales for the nine months ended September 30, 2015 are reduced by 25.5 million and are adjusted to remove the inventory step up of 26.0 million and offset by increased depreciation of 0.5 million. |
2. | Interest costs for the year ended December 31, 2014 are reduced by 158.1 million and are adjusted to remove interest of 134.3 million in relation to shareholder loan notes repaid as part of the Iglo Acquisition (Note B) and 36.8 million in relation to repayment of senior debt as part of the Iglo Acquisition (Note C) and increased interest expense of 13.0 million in relation to new debt drawn in relation to the Findus Acquisition (Note E). |
Interest costs for the nine months ended September 30, 2015 are reduced by 73.2 million and are adjusted for remove interest of 67.6 million in relation to shareholder loan notes repaid as part of the Iglo Acquisition (Note B) and 15.4 million in relation to repayment of senior debt as part of the Iglo Acquisition (Note C) and increase interest expense of 9.8 million in relation to new debt drawn in relation to the Findus Acquisition (note E).
3. | Cash and cash equivalents as of September 30, 2015 is reduced by 440.6 million and are adjusted (as disclosed in Note E) for the proceeds from our assumed borrowings on senior debt, net of issuance costs of 8.3 million, of 316.7 million less cash consideration of 579.2 million in relation to the Findus Acquisition and adjustment for the Findus cash not acquired of 178.1 million. |
4. | Non-current borrowings as of September 30, 2015 is increased by 229.7 million to reflect (as disclosed in Note E) the non-current portion of senior debt drawn to fund the Findus Acquisition, net of debt issuance costs, of 253.4 million less 23.7 million of Findus debt not acquired. |
5. | Current borrowings as of September 30, 2015 is increased by 62.7 million to reflect (as disclosed in Note E) the current portion of senior debt drawn to fund the Findus Acquisition, net of debt issuance costs, of 63.3 million less 0.6 million of Findus debt not acquired. |
6. | Capital and reserves as of September 30, 2015 increased by 108.9 million to reflect (as disclosed in Note E) the issuance of the Findus Consideration Shares. |
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Certain information set forth in this section has been derived from external sources, including reports by AC Nielsen, Euromonitor, Eurostat, IPSOS ASI, IRI, IGD, Kantar Worldpanel and Rainmaker. Industry surveys and publications generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of the information contained in industry publications is not guaranteed. We have not independently verified the information.
The forward looking statements in this section are not guarantees of future performance, and actual events and circumstances could differ materially from current expectations. Numerous factors could cause or contribute to such differences. See Risk Factors and Cautionary Note Regarding Forward-Looking Statements. Market share data presented in this section are measured by retail sales value.
Frozen Food Market
We operate in the frozen food market selling our products primarily to large grocery retailers in the United Kingdom, Germany and Italy. Our products are also sold in Austria, Belgium, France, Greece, Ireland, Portugal, The Netherlands, Russia, Switzerland, Hungary and a number of Central and Eastern European countries. We specialize in the manufacture of frozen food products predominantly in the fish, vegetable and poultry categories.
The frozen food market is served by a number of national and international producers within single or multiple product categories. We face competition at a category level from both branded and private label frozen food products. Due to the distinct nature of the frozen food business, entry into the frozen food market in general, and the branded segment in particular, requires specialized manufacturing, logistics and distribution functions, and more importantly the cost of building brand health, brand awareness and consumer trust.
Consumers increasingly prefer products that allow them to prepare meals quickly and with confidence, and expect products to be healthy and a good value. In addition consumers are increasingly focused on reducing food waste. Frozen food products can have all of these characteristics. They are easy to prepare, they reduce the need for artificial preservatives, they are often better value for their money than chilled alternatives and they reduce waste due to the long shelf life, and ease of portionability.
We define frozen food as any type of food that has been frozen, excluding ice cream. The total frozen food market in Western Europe is estimated to have generated approximately 28 billion in retail sales value for the year ended December 31, 2014. As set out in the figure below, our key markets accounted for approximately 55% of the total Western European frozen food market measured by retail sales value in 2014.
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Western European Frozen Food Market Size by Country (2014)
Source: Euromonitor data.
(1) | Market value at retail sales value at current prices converted to Euros at fixed 2014 exchange rates. |
Over the last five years, notwithstanding the negative macro-economic environment, based on Euromonitor statistics, sales of frozen food in Western Europe have still exhibited average annual growth of 1.5%. In addition, the amount of space that frozen food as a category has within the grocery retail environment is relatively stable due to the fixed amount of freezer space at the retailer that is not exposed to reductions in shelf space in favor of other categories or formats, as can be the case in shelf stable parts of the retailer.
Western European Frozen Food Market (Size by Retail Sales Value and Growth) by Category
Source: Euromonitor.
(1) | Excludes ice cream. |
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Market Trends
The following trends in consumer preferences affect and will continue to affect the frozen food market:
Speed and Ease of Preparation
The time available for home meal preparation has been reduced due to increasingly busy lifestyles, longer working hours, and increased numbers of households where the primary caregiver also works outside the house. Frozen food addresses the need for speed and ease of food preparation by being readily available when needed and easy to keep. It also has a comparatively long shelf life, thereby minimizing shopping frequency.
Natural Products
Freezing is a natural preservative, reducing the need for artificial additives and preservatives. Natural ingredients, as well as trust and transparency with respect to ingredients, are becoming increasingly relevant to modern consumers, as evidenced by the popularity of labels such as natural, free range, organic and additive free. Freezing processes enable nutrients and vitamins to be locked in prior to transportation, providing nutritional delivery on a par with, or better than, fresh or chilled food products.
Sustainability
Growing concerns around security of food supply, as well as a major focus on the environmental impact of food production, have led consumers to increase their demands for sustainably sourced and produced food.
Health and Wellness
Consumers are increasingly focused on health and wellness, and increasingly desire a balanced and nutritious diet. Our largest product categories (by sales) are generally recognized as good for you categories and are an integral part of a healthy balanced diet. For example, fish is high in Omega 3 and low in fat, calories and cholesterol. Vegetables provide essential vitamins for a healthy diet, as is evidenced by programs initiated by various governmental organizations across the EU encouraging vegetable consumption. Poultry is rich in protein, a good source of vitamin B3, and lower in saturated fats than beef and pork.
Minimizing Waste
Frozen food minimizes waste at all points in the supply chain. For instance, retailers can keep frozen food on their shelves for relatively long periods, which helps optimize their supply requirements and prevents the waste of food not immediately sold, which is a challenge in fresh and chilled categories. In addition, consumers can easily portion frozen food and keep food stored that they do not immediately require, which results in less food waste.
Product Innovation
Innovation is key to success in the branded frozen food market. Producers must continually introduce product innovations. These may include the introduction of completely new products, roll outs of existing products in new markets, re-launches of existing product ranges or extensions to existing product lines. Innovations enable branded frozen food producers to introduce higher value and higher margin product mixes, and also to maintain an ongoing level of newness in the category. In addition, continuous innovation is important to stay ahead of private label competition, which generally competes on price and less on product novelty, and to offset pressures from trade terms and raw material price inflation.
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Advertising and Promotion
Advertising and promotions (A&P) is a key factor in selling branded consumer goods and is used to increase consumer awareness of the benefits of the product category, to continually refresh awareness of established brands and support product innovation. While A&P spend in the frozen food business helps differentiate branded products from private label offerings, retailers encourage A&P by branded producers as it tends to increase overall sales and drive traffic in the frozen food aisles of supermarkets. The principal medium for advertising in the frozen food industry is television. However, over time, it has become increasingly important to advertise across various forms of digital media as well.
Category Captaincy
The concept of category captaincy is becoming more established in the frozen foods category. The category captain, typically a leading branded supplier, has regular, close contact with the retailer and is expected to invest in the strategic development of a category in cooperation with the retailer. The category captain benefits from its increased influence with the retailer, which frequently translates into an increased share of shelf space and more favorable positioning of the category captains products relative to the competition. The retailer benefits because the category captain can increase sales volume and profitability of that category for the retailer.
Online Channel
The online grocery retail channel is growing faster than traditional grocery retail formats across developed markets. Consumers with increasingly busy lifestyles are choosing the online grocery channel as a more convenient and faster way of purchasing their food products, and are also increasingly using the internet for meal ideas. Frozen foods particularly benefit from the online channel as the advantages to the consumer of outsourcing transportation of frozen food to the retailer are greater than in other categories, and also because some of the barriers to purchasing in-store (e.g. colder aisles) are removed for the consumer online.
Key Markets
United Kingdom Frozen Food Market
The United Kingdom is the second largest frozen food market in Western Europe, estimated at 21% of the total Western European frozen food market measured by retail sales value for 2014. Overall, sales of frozen food in the United Kingdom have grown on average 1.7% per year over the last five years. This level of growth is marginally higher than the overall Western European frozen food market.
German Frozen Food Market
Germany is the largest frozen food market in Western Europe, estimated at 24% of the total Western European frozen food market. From 2008 to 2014, the frozen food market in Germany grew on average 1.2% per year. The retail grocery market in Germany is characterized by the strength of the discount channel which had a frozen market share of 49% in 2014.
Italian Frozen Food Market
Italy is the fourth largest frozen food market in Western Europe, estimated at 11% of the total Western European frozen food market. From 2008 to 2014, the frozen food market in Italy grew on average 1.9% per year. From 2011 to 2014, the Italian frozen food market still exhibited positive growth of 1.9% per year, despite strong macroeconomic headwinds and a period of austerity in the Italian economy.
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Competition
The frozen food market in Western Europe is highly fragmented, with the top ten branded participants accounting for approximately one-third of the total frozen food market, based on Euromonitor. In addition, it is mainly served by single market or single category market participants. Global food producers have a smaller presence in the frozen food segment in Western Europe than in other food categories, which we believe creates the opportunity for further consolidation of the segment. We face competition at a category level from both branded and private label frozen food products as well as more generally from restaurants, takeaways, chilled food and other types of products and formats. Our main branded competitors include the Findus Group (which offers frozen food products under the Findus brand in France, Scandinavia and several other countries, and under the Youngs brand in the United Kingdom, as well as a sizeable private label business providing frozen and chilled food products), Dr. Oetker, Nestlé and McCain.
Western European Frozen Food Market Share (based on retail sales value 2014)
Source: Euromonitor.
We have leading market shares across our key markets and in several other markets across Europe.
In 2014, the market share of private label products in our main categories equaled 54%, 63% and 32% in the United Kingdom, Germany and Italy, respectively, while the market share of our products in our main categories equaled 29%, 19% and 31% in the United Kingdom, Germany and Italy, respectively. The mix of private label and generally higher margin branded products can be affected by general economic conditions, the size of the discount retail channel, the level of promotional activity in connection with branded products, the quality of innovation by branded producers and the effectiveness of consumer advertising strategies.
On a category level in Western Europe, we maintain a market leadership position among the branded frozen food producers within our main product categories. The majority of our competitors are focused either on one market, one product category or one distribution channel. Based on the AC Neilsen and IRI data, for the year ended December 31, 2014, we had an average market share of approximately 25% by retail sales value in our key markets with respect to our main product categories.
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Our Company
We are the leading manufacturer and distributor of branded frozen foods in Western Europe based on net sales value. Our products are sold primarily through large grocery retailers under the brand Birds Eye in the United Kingdom and Ireland, Iglo in Germany and Continental Europe and Findus in Italy and San Marino. In 2014, we had a 25% average market share for our main product lines in the United Kingdom, Germany and Italy. Our brands are household names with long history and local heritage in their respective markets. According to independent market research conducted in 2014 by IPSOS ASI, spontaneous brand awareness for our products was 87%, 78% and 93% in the United Kingdom, Germany and Italy, respectively.
We were incorporated with limited liability under the laws of the British Virgin Islands on April 1, 2014 under the name Nomad Holdings Limited. Nomad was formed to undertake an acquisition of a target company or business. We completed our initial public offering in the United Kingdom on April 15, 2014, raising net proceeds of approximately $500 million and were listed on the LSE.
On June 1, 2015, we consummated our initial acquisition by purchasing Iglo Foods Holdings Limited, a leading frozen food company in Europe for 2.6 billion, and subsequently changed our name to Nomad Foods Limited.
The Iglo Group traces its roots back to the 1920s when Clarence Birdseye patented the Birds Eye Plate Froster for freezing fish. After the acquisition of the Birds Eye patents by General Foods in the 1930s, the Birds Eye brand was launched. In the 1940s, Unilever acquired the rights to the Birds Eye brand throughout the world, except for the United States, and in the 1950s Birds Eye became 100% Unilever owned. The Iglo brand was launched in Belgium in 1956 and was introduced by Unilever in Germany in 1961. In the 1960s, Unilever acquired the Findus brand in Italy and San Marino. In 2006, the Permira Funds acquired the Birds Eye and Iglo brands and frozen foods businesses from Unilever, which, at the time, retained the Italian frozen food business under the Findus brand. Following the buyout, the Iglo Group refocused its business on its main product categories, initiated improvements in its supply chain and implemented cost savings. In October 2010, the Iglo Group acquired C.S.I. Compagnia Surgelati Italiana S.p.A., the owner of the Findus brand in Italy and San Marino, from Unilever.
On August 13, 2015, we entered into an Option Agreement pursuant to which, on November 2, 2015, we purchased the Findus Group which comprises the continental European businesses of the Findus Parent in Sweden, Norway, Finland, Denmark, France, Spain and Belgium relating to the Findus , Lutosa and La Cocinera brands for approximately £500 million. Findus is a leading frozen food company in continental Europe with approximately 1,500 employees and revenues for the fiscal year ended September 30, 2014 of approximately £520 million. We believe this transaction will enable us to move forward with a well-known, unified Findus brand, and together with the strong Iglo platform, will further our efforts to drive innovation, introduce new meal options, and conduct marketing initiatives aimed at bringing more consumers across Europe to the frozen foods aisles. In addition, the geographic footprint of the operations included in the Findus Acquisition complements and extends our footprint throughout Europe.
Our Strategy
We intend to grow our business profitably and create shareholder value through the following strategic initiatives:
Build an integrated group of best-in-class food companies and brands within existing and related food categories and expand our geographic footprint through strategic acquisitions.
Our goal is to transform our company into an integrated best-in-class, global manufacturer, marketer and distributor of food products, within and outside of the frozen food category and the broader food sector. We
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believe there are significant growth opportunities in the European and North American markets and that the Iglo Acquisition and the Findus Acquisition provide a strong platform on which to grow our business and expand and enhance our market share in the food industry in key geographic markets.
Leverage our acquisition expertise, strong management team and access to capital to identify and evaluate attractive growth opportunities.
Our Founders and CEO have significant experience and expertise, and have been highly successful, in identifying, acquiring and integrating value-added businesses. We believe that this expertise, our access to capital and the deep industry knowledge of our management team will position us to acquire related and complimentary food businesses that can enhance our market position, create synergies and fully leverage our existing marketing, manufacturing and supply chain capabilities, which we believe will allow us to deliver sustained profitable growth and maximize shareholder value.
Aligning our business with consumer preferences.
Our goal is to create and acquire food businesses and brands that strongly align with consumer needs and preferences, that have high growth and margin potential and that leverage our existing portfolio of brands. For example, in order to fully leverage the value of our Findus brand, which we currently own in Italy, we acquired the Findus , Lutosa and La Cocinera brands in their respective markets. We believe the Findus Acquisition will allow us to consolidate and expand this well-known and highly regarded brand and to maximize the returns on our portfolio of products.
Enhancing product innovation.
We place a strong emphasis on innovation. We operate one central Innovation and Growth Board which ensures that all innovations address well established market needs and margin targets. The key pillars of our innovation strategy are to develop large platforms which can be scaled across our markets to meet consumer needs across all meal occasions. Recent examples of this are the Inspirations platform, which is intended to offer evening meals with wide ranging appeal that can be eaten every day, and the SteamFresh platform, which is intended to offer easily prepared meals using steaming quality to enhance the natural taste, such as Rice Fusions and Vegetable Fusions varieties of products.
Our Competitive Strengths
We believe the following competitive strengths differentiate us from our competitors and contribute to our ongoing success.
Market leader with solid European platform and strong acquisition opportunities
As the leading branded frozen food producer in Western Europe based on net sales value, we benefit from economies of scale and have developed a strong platform for our products throughout Europe. We believe our strong existing platforms facilitate our expansion within a large addressable market and provide a broad set of potential acquisition targets in various food categories and geographic markets.
Experienced management team and Board with a proven track record
Our management team has extensive experience in the food industry and other fast moving consumer goods markets. Our management team is complimented by an experienced Board of Directors, which includes several individuals with a proven track record of successfully acquiring and managing consumer businesses.
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Effective brand equity strategy to leverage and expand well-known brands
Our brands are household names with long histories and local heritage in their respective markets. We have centralized our marketing efforts to ensure that we fully leverage the goodwill of our existing brands, that our brand positioning strategy aligns with consumer preferences and that we create high-impact marketing programs that build brand awareness and loyalty.
Commitment to innovation and research and development
We have increased our investment in market research to ensure that the products we launch or acquire address well established or on-trend market needs. In order to ensure the development and acquisition of products that fit this criteria, we have implemented a structured process through which we take new products from idea generation, through concept screening, concept/products laboratories and early volume sizing, to final validation.
Our Business
We are the leading branded frozen food producer in Western Europe in terms of net sales value. Our key markets collectively represented approximately 55% of the total Western European frozen food market (in terms of retail sale value) and were the source of 81% of our revenue in 2014. We have leading market share in the fish, vegetables and poultry industry market segments (our largest categories by net sales) in our key markets (except with respect to poultry in Germany and Italy) and in several other markets across Europe. We also sell our products in Austria, Belgium, The Netherlands, France, Greece, Hungary, Ireland, Portugal, Russia, Slovenia and Switzerland.
Sales of our branded products accounted for 97.6% of our revenue in 2014, of which 80.7% came from our fish, vegetables and poultry categories. Our brands are household names with long histories and local heritage in their respective markets. Our master brand strategy focuses on continued flow of innovation and consistent advertising formats across the products and markets in which we operate, with consistent brand positioning, identity, logo, packaging and selling lines.
We have an efficient and centralized supply chain which is closely aligned with our geographic footprint, allowing us to optimize our supply arrangements and reduce distribution costs. We operate four manufacturing plants, one in the United Kingdom, two in Germany and one in Italy, and five primary distribution centers in our key markets and nine in total. We manufacture most of our products but outsource certain manufacturing processes, such as the processing of certain vegetables as well as most complete meal products. In addition, our packaging and distribution functions are largely outsourced.
Our Brands
Birds Eye
Our Birds Eye branded products are marketed in the United Kingdom and Ireland and include a diverse range of products such as frozen fish, shrimp, vegetables, prepared vegetables, chicken, red meats, rice, pies, potato products, meals and desserts. Our Birds Eye products generated 539.2 million of revenue for the year ended December 31, 2014.
Iglo
Our Iglo branded products are marketed primarily in Germany and other continental European countries and are comprised of a large variety of products such as fish, poultry, vegetables (mainly peas and spinach), red meat, pasta and ready meals. Our Iglo products generated 517.1 million of revenue for the year ended December 31, 2014.
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Findus
Our Findus brand offers a variety of products geared towards the Italian market, including frozen fish, vegetables, poultry, meals, pasta, potato, shell fish, shrimp, red meat and pizza products. Our Findus products generated 428.3 million in revenue for the year ended December 31, 2014.
Pursuant to our master brand strategy, we advertise our Birds Eye, Iglo and Findus brands with a consistent logo, package design and advertising strategy and we advertise only one of the Birds Eye, Iglo or Findus brands in each country where we market our products. In certain cases, we sell our products under a descriptive name, such as Field Fresh or Sofficini. However, in each case, the Birds Eye, Iglo or Findus brand are kept clearly visible in line with our master brand strategy.
According to independent market research by IPSOS ASI in 2014, each of our brands enjoys 87%, 78% and 93% spontaneous brand awareness in the United Kingdom, Germany and Italy, respectively, and a number one position relative to other frozen food brands in terms of consumer awareness in those markets. In addition, our products are highly recommended by consumers in our key markets, as evidenced by their rankings of first (in the United Kingdom and Germany) and second (in Italy) in brand health relative to other frozen food brands according to an IPSOS ASI market research report.
Customers
Our customers are typically supermarkets and large food retail chains supplying food products directly to consumers. Each key market in which we operate has its own distinct retail landscape.
In the United Kingdom, the food retail industry is highly concentrated and, accordingly, large supermarket chains such as Tesco, Asda, Sainsburys and Morrisons are our largest customers. Our top five customers in the United Kingdom accounted for 79.2% of our revenue in that market for the year ended December 31, 2014.
Our customers in Germany include the countrys leading hypermarket and supermarket operators, such as EDEKA, REWE, Metro and Kaufland, and discount retail outlets such as Lidl. Our top five customers in Germany accounted for 91.4% of our revenue in that market for the year ended December 31, 2014.
In Italy, our largest customers include retailers such as Coop, Conad, Carrefour and Esselunga. Given the fragmented nature of the Italian retail landscape, our top six customers in Italy accounted for 40.2% of revenue in that market for the year ended December 31, 2014.
The majority of our sales are to traditional retailers and we expect this channel to remain our most significant channel for the foreseeable future. We partner with traditional retailers when we identify commercial or marketing opportunities that can be of interest for both businesses. We continue to review the presence and impact of the discounter channel in each of our key geographic markets and will pursue selected, profitable opportunities to increase our presence in the discounter channel.
We are also increasing our investment in online sales (sales made through retailers online platforms) including appointing a head of digital sales. We believe that the online sales channel provides an opportunity to help grow our share of food purchases, since frozen consistently ranks highly in terms of indices monitoring groceries bought online (including by a factor of 117% in the United Kingdom). In the United Kingdom, our online sales channel has been delivering double digit growth since 2011.
The United Kingdom has the highest online penetration of the grocery market in Europe and as a result, we have selected it as our pilot market for our new online sales strategy. Frozen food typically commands a higher share of United Kingdom grocery sales online than it does in the physical store due to consumers trust in the frozen delivery chain of retailers and the removal of certain barriers to purchase (e.g. cold aisle). As part of our pilot initiative, we are experimenting with a variety of ways of engaging with consumers, including online
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promotions, adverts and meal planners. In 2014, approximately 6% of our expenditure on media was allocated to support digital marketing; in the United Kingdom, this accounted for 15% of our media spend. Our sales through online channels in the United Kingdom for the three months ended June 30, 2015 were 13% higher than over the same period in the prior year.
Sales, Marketing and Pricing
We maintain sales teams in each of our key markets and all other markets in which our products are sold with the exception of the Central and Eastern Europe markets where we operate via a distribution model. Our sales force is resourced to provide good store coverage. We are the category captain for several leading supermarkets in each of our main product categories and have developed innovative presentations of our frozen food products and in-store marketing concepts with supermarkets in the United Kingdom, Germany and Italy in order to increase traffic and sales. Most recently, we are developing our Perfect Store concept which focuses on improving a consumers in-store environment through presentation, layout and signage.
Our brand equity strategy aims to further increase brand awareness by focusing on consistent advertising formats across the products and markets in which we operate, with consistent brand positioning, identity, logo, packaging and selling lines. In this connection, we have appointed one global agency for communications and media and have increased our digital presence. We also introduced a new logo and packaging design language in 2014 and are shifting the way we advertise our products to focus more on how our products create enjoyable meal times. For the three years ended December 31, 2014, we spent approximately 310 million on advertising and promotion.
Product Innovation
We place a strong emphasis on product innovation. We have increased our investment in market research to ensure that the products we launch address well established market needs. In addition, we have sought to implement a structured stage gate process through which we take new products from idea generation, through concept screening, concept/products laboratories and early volume sizing, to final validation.
We operate one central Innovation & Growth Board which is responsible for reviewing and approving innovations across the Company. Our research and development team is also centralized, allowing us to leverage our research and development investment across our markets, thus maximizing our ability to generate successful innovations efficiently.
We are focused on developing a small number of large innovation platforms, rather than many small innovations. Large platforms can be supported with sales and marketing more efficiently than many small innovations, and can be rolled out efficiently across our markets. A recent example of this is our Inspirations platform, which was designed to offer enjoyable meal times with wide ranging appeal that can be eaten every day. The platform was launched in the United Kingdom in 2014, with new fish (Fish Chargrills) and chicken (chicken filled with sauce) products. Going forward, we intend to roll a number of existing products into this platform, such as Bake to Perfection fish and our Fish Fusions range of products. We launched another of our large innovation platforms, SteamFresh, in the last quarter of 2014, which offers easily prepared meals using steaming quality to enhance the natural taste, and included changes to the Rice Fusions and Vegetable Fusions products as well as the introduction of new pasta variants. We plan to progressively roll these platforms out across other group markets with minimal additional development costs.
As part of our strategy review in 2013 we undertook a consumer study focusing on behaviors in purchasing and preparing food. This study highlighted four criteria on which consumers make meal choices: speed of preparation, confidence in preparation, ease of availability and taste. During 2013, we realigned our research and development function to reflect the way consumers purchase food, by meal occasion rather than by ingredient. By focusing on innovation that provides great tasting, nutritious and responsibly sourced food across different meal occasions, we intend to grow our share of overall food consumption in Europe.
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Strict criteria are applied throughout the development process to ensure that the new platforms meet our margin hurdle rates. For example, we have strict testing benchmarks which all innovations must meet before proceeding to further stages of product development.
Manufacturing
We own and operate four large scale manufacturing facilities which are located in Lowestoft (United Kingdom), Bremerhaven (Germany), Reken (Germany) and Cisterna (Italy). These facilities produce approximately 400 kilotonnes of frozen product per year, representing over 80% of the total volumes of our sales. The manufacturing facilities are located near the major markets we serve, providing for a balance between manufacturing and logistics costs and customer service. Our manufacturing facilities are focused on in house manufacturing of our main product categories and emphasize quality and efficiency through scale. We have invested in new automated lines, such as fish fingers, poultry and spinach lines and because our plants are well invested and maintained, our capital expenditure requirements have been low.
Although capacity differs per product line and facility, we estimate that we have sufficient spare capacity available to accommodate future growth in our main product categories and as necessary to accommodate the seasonal nature of some of our products, particularly vegetables. As part of our right sizing the business initiative we closed our plant in Hull (United Kingdom) in 2007 to reduce overcapacity, outsourced our United Kingdom pea processing, and transferred manufacturing of certain icon products, such as fish fingers, to our Bremerhaven and Lowestoft facilities. Other activities, such as the production of ready meals in the United Kingdom and Austria and manufacturing of packaging materials, are outsourced to local third parties.
Procurement
Our procurement functions are structured around primes (materials used in manufacturing which form a part of the end product, such as fish, vegetables, meat, other ingredients and packaging), non-production items (items purchased and services used to design, market and distribute the product, such as logistics, operations, including maintenance, sales and marketing) and co-pack (finished products bought from third parties, such as most vegetables other than peas and spinach).
We have an efficient and centralized supply chain which is closely aligned with our geographic footprint, allowing us to optimize our supply arrangements and reduce distribution costs. We operate a centralized procurement function, with all procurement of primes and the majority of non-production items and co-pack procurement activities centralized to maximize scale efficiencies. During the year ended December 31, 2014, we spent 1.0 billion on procurement (excluding company movements), with approximately 53% of this spend related to expenditure on primes.
We operate a global sourcing platform. Fish is sourced mainly from the United States, Russia and China, vegetables are sourced predominantly from Europe and poultry is sourced largely from South America (but also from Thailand and Eastern Europe). We have contracts in place with pea and spinach growers and third party pea processors in regions close to the location of pea growers. In addition, we utilize various co-pack suppliers for vegetables other than peas and spinach. The contract terms we enter into with various suppliers differ extensively with respect to length and provisions. Some of our contracts can be terminated by the supplier giving notice within a certain period and some contracts restrict us from using other suppliers. In addition, a number of our supply contacts, including for fish and vegetables, may be terminated by the supplier upon a change in our ownership.
We aim to maintain an appropriately diverse supplier base to safeguard the security of our supply of raw materials as well as enhance the quality and sustainability of such materials, while also delivering competitive pricing. Our top ten suppliers of our raw materials and packaging account for approximately 40% of our total spend on raw materials, with the remaining 60% being provided by almost 600 vendors.
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We segregate vendors into strategic and tactical categories based on criteria such as bargaining power or opportunistic procurement. On that basis, we have identified a number of strategic suppliers with whom we maintain close relationships, particularly in relation to main product categories for which security of supply is critical. Raw materials are mostly directly shipped to our manufacturing facilities in the United Kingdom, Germany and Italy.
We limit our exposure to price increases of raw materials by contractually securing prices for periods ranging from one month to a full year. Prices of raw materials that are harvested annually are generally fixed for a full year. Prices for certain other products, such as fish, dairy products and potatoes, are fixed for several months in line with industry practice.
Logistics
Our distribution network is made up of our manufacturing facilities, warehouses, local distribution centers and third party providers of services (such as transport). We outsource the majority of our distribution processes to third parties. For the year ended December 31, 2014 distribution costs were 58.3 million. Our distribution network is well consolidated and aligned with our manufacturing footprint in the United Kingdom, Germany and Italy, with the majority of the sales volumes in each of these key markets being produced locally. From our manufacturing plants, our products are sent to regional distribution centers to be further distributed to local markets. Our primary distribution centers are used to consolidate both local production and imported products to be sold locally. These sites include Wisbech in the United Kingdom, Reken in Germany and Vitulazio, Latina and Parma in Italy.
We have more complex distribution arrangements in Italy than in other markets due to the fragmented nature of our Italian customer base, which includes approximately 32,000 small retail outlets serviced through a point to point van based delivery model with short lead times. Our distribution centers in Italy store finished products and distribute products directly to customers and nine secondary depots which are primarily used to supply the retail outlets. Due to the complexity of our Italian customer base, the Findus Italy distribution chain is shared with Unilevers ice cream business, which has a seasonality that is complementary to ours, and provides certain cost synergies. Our arrangement with Unilever is governed by a distribution agreement entered into with Unilever as part of the acquisition of Findus Italy in 2010. Either party may terminate the agreement at any time without penalty with 24 months notice. The agreement was renegotiated in 2014 and expires on December 31, 2018. Approximately 2% of our Italian customer base is located in remote regions in which we use other logistics networks. As a consequence of the route to market, distribution costs in Italy are significantly higher than in the United Kingdom and Germany.
Seasonality
Our sales and working capital levels have historically been affected to a limited extent by seasonality. In general, sales volumes for frozen food are slightly higher in cold or winter months, partly because there are fewer fresh alternatives available for vegetables and because our retailers typically allocate more freezer space to the ice cream segment in summer or hotter months. In addition, variable production costs, including costs for seasonal staff, and working capital requirements associated with the keeping of inventories, vary depending on the harvesting and buying periods of seasonal raw materials, in particular vegetable crops. For example, stock levels typically peak in August to September just after the pea harvest, and as a result, we require more working capital during those months.
Corporate Social Responsibility
We operate a Corporate Social Responsibility program which is an important part of our brand positioning. It captures our commitment and vision of the role that we must play in bringing food to our consumers while tackling fundamental challenges in our environment and society. There are 3 primary focus areas:
| Reduction of food waste. Frozen food can offer a more sustainable food choice because it can cut food spoilage and food waste due to the inherent portion control that is derived from an extended shelf-life. |
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| Healthier meal choices. Our product innovations will help consumers make healthier meal choices. |
| Responsible sourcing. Our food products will be responsibly sourced and prepared. |
Fisheries
We have continued a long-term leadership position to pioneer the certification of global sustainable fisheries. Our Sustainable Fisheries Development Policy requires us to use the worlds most robust independent sustainable fisheries verification process, the Marine Stewardship Council standard.
It is our policy to only source farmed seafood from responsibly managed farms which operate to independent third party standards such as the Global Aquaculture Alliance (GAA), GlobalGAP and Aquaculture Stewardship Council standards.
Agriculture & Vegetables
Together with over 480 growers, we currently manage approximately 12,000 hectares of land and our standards match or go beyond those required by most agricultural assurance schemes.
Our peas and spinach operations are independently audited and meet ISO 14001 (environmental management standard), and LEAF for the United Kingdom and GlobalGAP (Good Agricultural Practice) respectively.
Our Agricultural Code of Practice requires us to produce crops with high yield and nutritional quality, while keeping resource demands as low as possible, thus minimizing adverse effects on soil fertility, water, air quality and biodiversity.
Poultry
All of our poultry is responsibly sourced from suppliers that have a vertically-integrated supply chain, enabling us to operate a Poultry Code of Practice under closely monitored conditions which covers feed, animal medicines usage, welfare, social standards, waste, and water and energy management.
Property and Plant
The following table sets forth information on the main properties used by us in our business:
Facility |
Purpose |
Production capacity |
Freehold/
Leasehold |
|||
Lowestoft |
Poultry and meat manufacturing | 121kT volume per year | Mixed | |||
Bremerhaven |
Fish manufacturing | 95kT volume per year | Leasehold | |||
Reken |
Distribution/vegetable manufacturing | 83kT volume per year | Freehold | |||
Cisterna |
Mixed manufacturing | 87kT volume per year | Freehold |
We also own the site of our former manufacturing facility at Hull (the United Kingdom).
Information Technology
Our IT systems are of key importance to our business and in particular to our general operations and logistics functions and associated management reporting. A single SAP tool is the primary business software to support all our operations and management reporting across 10 countries and our four plants.
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Since 2012, we have invested significantly in our IT capability with approximately 7 million spent on major projects including a global PC refresh program and supporting infrastructure, improved financial and promotions management and reporting and United Kingdom harvest capability. We have also made other investments in infrastructure and enterprise business applications.
The ability to integrate potential new businesses quickly with little or no adverse business impact, while maintaining the low cost of ownership, is a fundamental requirement of our IT strategy. The design of our IT landscape allowed us to successfully integrate the acquired Findus Italy business in less than one year. Additionally, we utilize an outsourced infrastructure service provider, maintaining best in class IT cost alongside improved capability to scale in line with business developments.
Intellectual Property
Maintaining adequate brand protection is of significant importance to our business as we rely on our brands to implement our master brand strategy. We have a substantial trademark portfolio with nearly 1,000 trademarks across all of our markets. The majority of our trademarks are owned by Iglo Foods Group Limited. The Findus trademarks in Italy are owned by a wholly owned subsidiary, C.S.I. Compagnia Surgelati Italiana S.p.A. The Iglo Groups intellectual property is managed centrally within the Iglo Group, and we work closely with a third party agency in respect of filings, renewals, recordings and the prosecution and enforcement of intellectual property matters internationally.
We own national trademarks for our Birds Eye brand in the United Kingdom, Ireland, other parts of Europe outside the European Union, parts of the Middle East, Asia and Africa. For historic reasons, the Birds Eye trademark is owned by third parties in North America and Australia.
We own a Community Trademark for our Iglo brand in the European Union and national trademarks in other parts of Europe outside the European Union, Australasia, Israel, Saudi Arabia, parts of Asia, the United States, South America and Africa. We have trademark applications pending for the Iglo brand in, among others, Canada, India and Brazil. We only own the Findus trademark rights for Italy and San Marino. The Findus trademark is owned by third parties in other countries, in particular the United Kingdom, France, Scandinavia and Switzerland.
Material Contracts
Each material contract to which the Company has been a party for the preceding two years, other than those entered into in the ordinary course of business, is listed as an exhibit to the registration statement to which this prospectus is a part and is summarized elsewhere herein.
Employees
As of September 30, 2015, we had approximately 2,800 employees, with such workers being supplemented with temporary staff during peak periods. Approximately 60% of our employees work in our manufacturing operations, with the remaining employees involved in sales, marketing, finance, administration, procurement, logistics, product development, IT and other areas. As of June 30, 2015, we had approximately 960 employees in the United Kingdom, approximately 1,170 employees in Germany, and approximately 470 employees in Italy. Following are the number of employees by region for the last three years:
Employees |
2014 | 2013 | 2012 | |||
United Kingdom |
860 | 825 | 807 | |||
Germany |
1,264 | 1,359 | 1,359 | |||
Italy |
458 | 467 | 598 | |||
Total |
2,694 | 2,751 | 2,974 |
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Labor Relations
A substantial number of our employees are members of trade unions in the United Kingdom, Germany or Italy. In total, approximately 51% of our employees are members of a trade union. In the United Kingdom we have relationships with the trade unions Unite and GMB. In Germany, our trade union relationships are with NGG, and in Italy our trade union relationships are with FLAI CGIL, FAI CISL, UILA UIL and UGL. Our plants are all governed by collective agreements with the respective unions. Our relationships with the trade unions are currently stable.
Pensions
We operate 12 different pension schemes across our various countries of operation, and all but four are defined contribution schemes. We operate defined benefit pension plans in Germany, Italy and Austria which are all closed to new entrants, as well as various defined contribution plans in other countries, the largest of which is in the United Kingdom to which we contributed 2.5 million in 2014. In Germany and Italy, long term service awards are in operation and various other countries provide other employee benefits.
Significant Subsidiaries
The following table provides a list of all of our significant subsidiaries.
Name |
Country of Incorporation |
Proportion of
ownership interests |
||
Iglo Foods Holding Limited |
England | 100% | ||
Iglo Foods Holdco Limited |
England | 100% | ||
Iglo Foods Finco Limited |
England | 100% | ||
Iglo Foods Midco Limited |
England | 100% | ||
Iglo Foods Group Limited |
England | 100% | ||
Iglo Holding GmbH |
Germany | 100% | ||
Liberator Germany Newco GmbH |
Germany | 100% | ||
Frozen Fish International GmbH |
Germany | 100% | ||
Iglo GmbH |
Germany | 100% | ||
Iglo Services GmbH |
Germany | 100% | ||
Birds Eye Limited |
England | 100% | ||
Iglo Foods Bondco plc |
England | 100% | ||
C.S.I. Compagnia Surgelati Italiana S.p.A. |
Italy | 100% | ||
Iglo Austria GmbH |
Austria | 100% | ||
Iglo France S.A.S. |
France | 100% | ||
Iglo Belgium S.A. |
Belgium | 100% | ||
Iglo Netherland B.V. |
Netherlands | 100% | ||
Iglo Portugal |
Portugal | 100% | ||
Birds Eye Ireland Limited |
Republic of Ireland | 100% | ||
Limited Liability Company Iglo |
Russia | 100% | ||
Iglo Foods Finance Limited |
England | 100% | ||
Findus Sverige Holdings AB |
Sweden | 100% | ||
Findus Sverige AB |
Sweden | 100% | ||
Findus Holding France SAS |
France | 100% | ||
Findus France SAS |
France | 100% | ||
Foodvest International AB |
Sweden | 100% | ||
Lion/Gem Norway 1 AS |
Norway | 100% | ||
Findus Norge Holdings AS |
Norway | 100% | ||
Findus Norge AS |
Norway | 100% |
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Regulatory Matters
Our activities are subject to laws and regulations regarding food safety, the environment and occupational health and safety.
Food Safety Regulation
As a manufacturer of foods intended for human consumption, we are subject to extensive legislation and regulation both from the European Union and the EU Member States in which we operate. These regulations govern the composition, manufacture, storage, handling, packaging, labeling, marketing and safety of our products. These regulations generally impose on food business operators an obligation to ensure that the operations under their control satisfy the relevant food law requirements and impose a mandatory traceability requirement along the food chain. The tracing information must be kept for a period of five years and upon request, must be made available to the relevant authorities.
In addition, we are subject to specific food hygiene legislation that establishes rules and procedures governing the hygiene of food products. This legislation sets forth specific rules governing the proper hygiene for food products of animal origin and sets forth microbiological criteria for food products. In addition there are a number of other specific EU requirements relating to specific matters such as contaminants, packaging materials and additives.
We are also subject to a broad range of European Directives and Regulations regarding the manufacture and sale of frozen foods for human consumption. These directives and regulations define technical standards of production, transport and storage of frozen foods intended for human consumption and require us to assure internal quality control at each stage of the cold chain and to implement any standards, as established by public authorities.
Listed below are the various internal due diligence procedures we have established to ensure continuous compliance with all relevant regulatory and food safety standards:
| implementing food hygiene principles across all production sites in accordance with food hygiene regulations; |
| annual external auditing of our production sites conducted by independent compliance companies applying the British Retail Consortium Global Standard for Food Safety Issue 5 (Issue 6 from January 2012) or its European equivalent, the International Food Standard, and ensuring that our suppliers are also certified to these standards; |
| ensuring that our Groups Quality Management Systems comply with ISO 9001 and are externally audited; |
| conducting internal audits (including unannounced audits) covering all production sites as part of our internal audit program; |
| maintaining a risk based microbiological and contaminant screening program, including screening for allergens, that covers raw materials and finished products; and |
| holding monthly regulatory updates which are open to our manufacturing plant technical managers and research and development team and quarterly policy board meetings to update and review outstanding issues. |
Food Labeling Regulation
Pre-packaged food products must comply with provisions on labeling, which are harmonized throughout the European Union. Pre-packaged food products must also comply with provisions on nutrition labeling, which are
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also harmonized throughout the European Union. Nutrition labeling was optional but became mandatory if a nutrition or health claim appeared on the label or vitamins and/or minerals were added to the product in significant amounts. Under the Food Information for Consumers Regulation nutrition labeling is mandatory unless exempted (there is a transition period until 2016 when this requirement is fully applicable) although all of our pre-packaged food is already compliant.
In addition to general and nutrition requirements, pre-packaged food products must bear a lot mark declaration via a manufacturing or packaging lot reference, which is also a harmonized system throughout the European Union. The lot reference allows consumers and businesses to trace the product in the event of a product withdrawal or recall.
There are also specific labeling requirements for certain ingredients we use in our products.
Environmental Law
The European Union has issued numerous directives relating to environmental protection, including those aimed at improving the quality of water, addressing air and noise pollution, assuring the safety of chemicals and setting standards for waste disposal and clean-up of contamination. European Directives are given effect by specific regulations in Member States and applicable regulations have been implemented in each of the countries in which we conduct our manufacturing activities. Accordingly, our facilities must obtain permits for certain operations and must comply with requirements relating to, among others, water supply and use, water discharges and air emissions, solid and hazardous waste storage, management and disposal of waste, clean-up of contamination and noise pollution.
We are also subject to legislation designed to reduce energy usage and carbon dioxide emissions and also restrictions on the use of ozone depleting substances such as hydrochlorofluorocarbons (HCFCs). HCFCs are used in refrigeration systems and their use will be phased out as part of our normal maintenance, repair and replacement activities and we do not expect a need for significant incremental capital expenditures for this purpose.
Compliance with environmental laws and regulations is managed at the facility level. Our manufacturing facilities all have a detailed environmental management system which are externally audited on an annual basis for compliance with ISO 14001.
In addition, under some environmental laws and regulations, we could be responsible for contamination we may have caused and investigating or remediating contamination at properties we own or occupy, even if the contamination was caused by a prior owner or other third party or was not due to our fault, and even if the activity which resulted in the contamination was legal at the time it occurred.
Occupational Health and Safety
We have a legal responsibility to protect the health and safety of our employees, customers and members of the public, all of whom may be affected by our activities. In general, we are required to provide a safe workplace; control risks to health (and where applicable, eliminate such risks); ensure that our plants and machinery are safe and that work safety systems and guidelines are both established and adhered to; ensure that dangerous articles and substances are transported, stored and used safely; provide adequate welfare facilities; provide workers the information, instruction, training and supervision necessary to preserve their health and safety; and consult with workers on health and safety matters.
The European Framework Directive on Safety and Health at Work (89/391 EEC) guarantees minimum safety and health requirements throughout Europe. Member States are permitted to maintain or establish more stringent measures and a wide variety of European Union directives have become national law in some jurisdictions. As such, the legislative requirements for workplace safety and health vary across our business.
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We have established a Health and Safety Management System modeled on the international Occupational Health & Safety management system specification OHSAS 18001. Our manufacturing facilities in the United Kingdom, Italy and Germany have achieved full accreditation to OHSAS 18001.
Insurance
We maintain comprehensive insurance coverage, where appropriate, with respect to liability of our directors and officers, property damage, business interruption, cold storage facilities, public liability, products liability, product recall, damage to vehicles, personal accident and travel. We undertake periodic risk reviews to assess whether our insurance is in line with our business risks and whether the developments in insurance policies are reflective of the changes in our business.
Legal Proceedings
We are not currently subject to any legal proceedings, and to the best of our knowledge, no such proceeding is threatened, the results of which would have a material impact on our properties, results of operation, or financial condition. Nor, to the best of our knowledge, are any of our officers or directors involved in any legal proceedings in which we are an adverse party.
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DIRECTORS, MANAGEMENT AND CORPORATE GOVERNANCE
Executive Officers and Directors
The following table lists each of our executive officers and directors and their respective ages and positions as of the date of this prospectus. Unless otherwise indicated, the address of each person named in the table below is c/o Nomad Foods Limited, Nemours Chambers Road Town, Tortola, British Virgin Islands.
Name |
Age |
Position |
||||
Stéfan Descheemaeker |
55 | Chief Executive Officer and Director | ||||
Paul Kenyon |
51 | Chief Financial Officer and Director | ||||
Tania Howarth |
53 | Chief Operating Officer | ||||
Martin E. Franklin |
51 | Co-Chairman | ||||
Noam Gottesman |
54 | Co-Chairman | ||||
Alun Cathcart |
72 | Director | ||||
John Coyle |
49 | Director | ||||
Elio Leoni Sceti |
49 | Director | ||||
James E. Lillie |
54 | Director | ||||
Lord Myners of Truro CBE |
67 | Lead Independent Director | ||||
Brian Welch |
29 | Director |
Each of Lord Myners and Messrs. Cathcart, Gottesman and Franklin were appointed as Directors on April 4, 2014. Each of Messrs. Coyle, Welch, Lillie and Leoni Sceti were appointed as directors effective June 1, 2015.
Set forth below is a brief biography of each of our executive officers and directors.
Stéfan Descheemaeker was appointed as the Chief Executive Officer of the Company and of Iglo on June 1, 2015. He was previously at Delhaize Group SA, the international food retailer, where he was Chief Financial Officer between 2008 and 2011 before becoming Chief Executive Officer of its European division until October 2013. Since leaving Delhaize Group SA, Mr. Descheemaeker has taken on board positions with Telenet Group Holdings N.V. and Group Psychologies, served as an industry advisor to Bain Capital and been a professor at the Université Libre de Bruxelles. Between 1996 and 2008, Mr. Descheemaeker was at Interbrew (now Anheuser-Busch Inbev) where he was Head of Strategy & External Growth responsible for managing M&A and strategy, during the time of the merger of Interbrew and AmBev in 2004, and prior to that he held operational management roles as Zone President in the U.S., Central and Eastern Europe, and Western Europe. Mr. Descheemaeker started his career with Cobepa, at that time the Benelux investment company of BNP-Paribas. Mr. Descheemaeker currently serves as a Director on the Board of Anheuser-Busch InBev, a position he has held since 2008.
Paul Kenyon was appointed as Chief Financial Officer of the Company on June 1, 2015, having previously served as Chief Financial Officer of Iglo since June 2012. Mr. Kenyon joined the Iglo Group from AstraZeneca PLC where his most recent role was CFO for AstraZenecas Global Commercial business. Prior to that, Mr. Kenyon spent three years as Senior Vice President, Group Finance and for a period held the role of Chairman of AstraTech, AstraZenecas medical technology subsidiary, concluding with its successful disposal. Mr. Kenyons prior career includes a broad range of senior finance roles at Allied Domecq PLC as well as experience gained at Mars, Incorporated and Courtaulds PLC. Mr. Kenyon is a Fellow of the Chartered Institute of Management Accountants.
Tania Howart h was appointed Chief Operating Officer of Iglo in January 2010. Ms. Howarth joined Iglo in April 2007 and successfully led the separation from Unilever and the creation of a standalone integrated SAP platform. She has held senior positions at prestigious branded goods companies including Coca-Cola, where she served as the Chief Information Officer for Europe, the Middle East and Africa, PepsiCo where she served as Chief Information Officer for the Walkers Snackfood business, Sun Microsystems ICI and PricewaterhouseCoopers.
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Martin E. Franklin is the founder and Executive Chairman of Jarden Corporation, a broad based consumer products company (Jarden). Mr. Franklin was appointed to Jardens board of directors in June 2001 and served as Jardens chairman and chief executive officer from September 2001 until June 2011, at which time he began service as executive chairman. Prior to joining Jarden Corporation, Mr. Franklin served as chairman and a director of Bollé, Inc. from 1997 to 2000, chairman of Lumen Technologies from 1996 to 1998, and as chairman and chief executive officer of its predecessor, Benson Eyecare Corporation from 1992 to 1996. Mr. Franklin served on the board of directors of Platform Specialty Products Corporation (PSPC) from April 2013 until its business combination with MacDermid, Incorporated in October 2013, and continues to serve as the chairman of the combined entity. Mr Franklin also served on the board of directors of Justice Holdings Ltd (JHL) from February 2011 until its business combination with Burger King Worldwide, Inc. in June 2012. He served on the board of Burger King Worldwide, Inc. following the business combination from 2012 until its transaction with Tim Hortons, Inc. and the creation of Restaurant Brands International Inc. (Restaurant Brands) in December 2014. Mr. Franklin is currently serving on the board of Restaurant Brands. Mr. Franklin also served on the board of directors of Liberty Acquisition Holdings Corp. (LAHC) from June 2007 until its business combination with Grupo Prisa in November 2010, and served on the board of directors of Grupo Prisa from November 2010 to December 2013. Mr. Franklin also served on the board of Liberty Acquisition Holdings International Company (LAHIC) from January 2008 until its acquisition of Phoenix Group Holdings (formerly known as Pearl Group) in September 2009 and Freedom Acquisition Holdings, Inc. (Freedom), from June 2006 until its acquisition of GLG Partners L.P. (GLG) in November 2007 and continued to serve on the board of directors of GLG until GLG was acquired by the Man Group plc in October 2010. Mr. Franklin also served on the board of directors of Kenneth Cole Productions, Inc. from July 2005 to December 2011 and serves as a director and trustee of a number of private companies and charitable institutions.
Noam Gottesman is the founder and Managing Partner of TOMS Capital LLC, which he founded in 2012. Mr. Gottesman was the co-founder of GLG Partners Inc. and its predecessor entities where he served in various chief executive capacities until January 2012. Mr. Gottesman served as GLGs chief executive officer from September 2000 until September 2005, and then as its co-chief executive officer from September 2005 until January 2012. Mr. Gottesman was also chairman of the board of GLG following its merger with Freedom and prior to its acquisition by Man Group plc. Mr. Gottesman co-founded GLG as a division of Lehman Brothers International (Europe) in 1995 where he was a Managing Director. Prior to 1995, Mr. Gottesman was an executive director of Goldman Sachs International, where he managed global equity portfolios in the private client group.
Alun Cathcart is currently serving as a non-executive director of Avis Budget Group, a worldwide car rental company. He previously held the position of chairman of Avis Europe plc, serving Europe, Asia, Africa and the Middle East from May 2004 until October 2011, having served as a member of the board since 1997. Mr. Cathcart joined Avis Europe in 1980 and served as chief executive from 1983 to 1999, as well as interim chief executive from November 2003 to March 2004. Before joining Avis Europe, Mr. Cathcart spent 14 years in executive positions in the transportation industry. Mr. Cathcart is also currently chairman of Palletways Group Limited. He has also held chairman roles at the Selfridges Group, the Rank Group plc, National Express Group plc, Innovate Services Limited, EMAP plc and Andrew Page Holdings Ltd. Mr. Cathcart recently served as a non-executive director of PSPC from April 2013 until its business combination with MacDermid, Inc. in October 2013 and as a non-executive director of JHL until its business combination with Burger King Worldwide, Inc. in June 2012.
John Coyle is a Partner and Head of Permira North America. Prior to joining Permira in July 2008, Mr. Coyle served as a Managing Director and Global Head of the Financial Sponsor Group at JPMorgan Securities Inc., where he was responsible for originating and executing transactions for private equity firms in North America, Europe and Asia Pacific. He was also a member of JPMorgans Investment Bank Management Committee and Private Equity Principal Investments Committee. Mr. Coyle joined JPMorgan in 1988 and held a variety of investment banking positions during his tenure. In 1998, Mr. Coyle moved to London to found JPMorgans sponsor coverage effort and ultimately build the pre-eminent sponsor franchise in Europe. Mr. Coyle returned to New York in 2005 to head the Global Group, which is a leading provider of financial services to the private equity industry.
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Elio Leoni Sceti was the Chief Executive Officer of Iglo between May 2013 and June 2015. He has over 20 years of experience in the fast moving consumer goods industry and its media sectors. Prior to joining the Iglo Group, Mr. Leoni Sceti served as CEO of EMI Music until 2010 where he led the transformation from a traditional record label into a growing consumer led music company. Prior to EMI, Mr. Leoni Sceti had an international career in marketing and held senior leadership roles at Procter & Gamble and Reckitt Benckiser Plc. Mr. Leoni Sceti is also chairman of Beamly and an independent director at Anheuser-Bush Inbev.
James E. Lillie is Jardens Chief Executive Officer. He joined Jarden in 2003 as Chief Operating Officer and was named President in 2004 and CEO in June 2011. He brings diverse business and leadership experience across a range of industries and functions enabling him to build both the strategies and operational structures required to sustain reliable growth. From 2000 to 2003, Mr. Lillie served as Executive Vice President of Operations at Moore Corporation, Limited. From 1999 to 2000, he served as Executive Vice President of Operations at Walter Industries, Inc., a Kohlberg, Kravis, Roberts & Company (KKR) portfolio company. From 1990 to 1999, Mr. Lillie held a succession of senior level management positions across a variety of disciplines including human resources, manufacturing, finance and operations at World Color, Inc., another KKR portfolio company. Mr. Lillie serves on the board of the US-China Business Council (USBC), a private, nonpartisan, nonprofit organization of American companies that do business in China. The USBCs mission is to expand the US-China commercial relationship to the benefit of its membership and, more broadly, the US economy.
Lord Myners is chair of Court and Council of the London School of Economics and Political Sciences. He served as the Financial Services Secretary in Her Majestys Treasury, the United Kingdoms finance ministry, from October 2008 to May 2010. Prior to his service at the Treasury, Lord Myners served as chairman or a member of the board of several organizations, including as chairman of Guardian Media Group from 2000 to 2008, director of GLG Partners Inc. from 2007 to 2008, Director of Land Securities Group plc from 2006 to 2008 (chairman from 2007 to 2008), chairman of Marks & Spencer plc from 2004 to 2006, and chairman of Aspen Insurance Holdings Ltd from 2002 to 2007. Lord Myners served as chairman of PSPC from April 2013 until its business combination with MacDermid, Incorporated in October 2013. He also served as the chairman of JHL, a special purpose acquisition company, from February 2011 until its business combination with Burger King Worldwide, Inc. in June 2012. From 1986 to 2001, he served as a director of Gartmore Investment Management Limited. He has also served in an advisory capacity to the United Kingdom Treasury and the United Kingdom Department of Trade & Industry, with particular focus on corporate governance practices. Other positions held by Lord Myners have included chairman of the Trustees of Tate, chairman of the Low Pay Commission, a member of the Court of the Bank of England, a member of the Investment Board of GIC, Singapores sovereign wealth fund. Lord Myners is currently serving as a non-executive director of OJSC Megafon, Ecofin Water & Power Opportunities plc and RIT Capital Partners plc, the non-executive chairman of Autonomous Research LLP and as chairman and a partner of Cevian Capital LLP. Lord Myners is a graduate, with honors, from University of London and has a honorary doctorate from the University of Exeter. He is a Visiting Fellow at Nuffield College, Oxford and an Executive Fellow at London Business School.
Brian Welch is a Partner in Pershing Square Capital Management L.P., an investment adviser with over $18 billion of assets under management. Pershing Square is a concentrated, research-intensive, fundamental value investment firm based in New York City. Mr. Welch joined Pershing Square in September 2011, and is responsible for identifying, analyzing and monitoring current and prospective investment opportunities across a variety of industries. Before joining Pershing Square, Mr. Welch was a private equity analyst at The Blackstone Group from 2008 to 2011.
Foreign Private Issuer Exemption
As a foreign private issuer, as defined by the SEC, we will be permitted to follow certain corporate governance practices of our home country, the British Virgin Islands, instead of those otherwise required under the NYSE for domestic issuers. While we voluntarily follow most NYSE corporate governance rules, we intend to take advantage of the following limited exemptions:
|
Unlike NYSE corporate governance rules, under BVI law, there is no requirement that our board of directors consist of a majority of independent directors and our independent directors are not required |
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to hold executive sessions. Accordingly, only five out of our ten board members are independent based on NYSE independence standards. Also, while our boards non-management directors will meet regularly in executive session without management, our board does not intend to hold an executive session of only independent directors at least once a year as called for by the NYSE. |
| The NYSE rules applicable to domestic issuers require disclosure within four business days of any determination to grant a waiver of the code of business conduct and ethics to directors and officers. Although we will require board approval of any such waiver, we may choose not to disclose the waiver in the manner set forth in the NYSE rules, as permitted by the foreign private issuer exemption. |
| We are exempt from the rules and regulations under the Exchange Act and NYSE related to the furnishing and content of proxy statements. Therefore, we intend to hold annual shareholder meetings in accordance with the corporate governance practices of the British Virgin Islands and our Memorandum and Articles of Association. Similarly, with respect to matters on which shareholders will have a right to vote, we intend to comply with corporate governance practices of the British Virgin Islands and the voting requirements under the NYSE rules applicable to foreign private issuers. |
Board Composition and Election of Directors
Our board of directors currently consists of ten members. Our Memorandum and Articles of Association provides that our board of directors must be composed of at least one director. The number of directors is determined from time to time by resolution of our board of directors. Messrs. Gottesman and Franklin serve as Co-Chairmen of our board of directors. The Co-Chairmen have primary responsibility for providing leadership and guidance to our board and for managing the affairs of our board. Lord Myners is our lead independent director.
Pursuant to our Memorandum and Articles of Association, our directors are appointed at the annual meeting of shareholders for a one year term, with each director serving until the annual meeting of shareholders following their election. In addition, for so long as an initial holder of Founder Preferred Shares holds 20% or more of the Founder Preferred Shares in issue, such holder is entitled to nominate, and the directors are required to appoint, a person as director. For additional information regarding our board of directors, see Description of Share CapitalBoard of Directors.
Director Independence
Our board undertook a review of director independence, which included a review of each directors responses to questionnaires asking about any relationships with us. This review is designed to identify and evaluate any transactions or relationships between a director or any member of his immediate family and us or members of our senior management. Based on this review, our board of directors has affirmatively determined that each of Messrs. Cathcart, Coyle, Lillie, Myners and Welch meet the independence requirements of the NYSEs corporate governance listing standards.
Because Mr. Gottesman and Mr. Franklin are affiliated with entities that receive advisory fees from us, they are not independent under NYSE governance standards. Mr. Leoni Sceti was, between May 2013 and June 2015, the Chief Executive Officer of Iglo. As a result, Mr. Leoni Sceti is also not independent. In addition, Mr. Descheemaeker and Mr. Kenyon are executive officers of the Company and therefore are not independent.
Committees of the Board of Directors
Our board of directors has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.
Audit Committee
Our Audit Committee consists of three directors: Messrs. Cathcart and Lillie and Lord Myners, and Mr. Lillie serves as its chairman. Our board of directors has determined that each of these directors satisfies the
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enhanced independence requirements for audit committee members required by Rule 10A-3 under the Exchange Act, and is financially literate as that phrase is used in the additional audit committee requirements of the NYSE rules. In addition, our board of directors has determined that Mr. Lillie qualifies as an audit committee financial expert under the rules of the SEC and has financial management expertise as required by the NYSE rules relating to audit committees.
Our Audit Committee is responsible for, among other things, assisting the board of directors in its oversight of the integrity of our financial statements, of our compliance with legal and regulatory requirements, and of the independence, qualifications and performance of our independent auditors. In addition, it focuses on compliance with accounting policies and ensuring that an effective system of internal and external audit and financial controls is maintained, and oversees our policies and procedures with respect to risk assessment and risk management. Our Audit Committee will meet at least quarterly with management and the independent auditors and report on such meetings to the board of directors. The responsibilities of our Audit Committee as set forth in its charter include oversight of the following: external audit, financial reporting, public disclosure, internal controls, risk management and compliance and whistleblowing.
Compensation Committee
Our Compensation Committee consists of three directors: Messrs. Cathcart, Lillie and Welch, and Mr. Cathcart serves as its chairman. Our board of directors has determined that each of these directors meets the heightened independence requirements of compensation committee members under SEC rules.
Our Compensation Committee is responsible for determining the compensation of our executive officers. The responsibilities of our Compensation Committee as set forth in its charter include the following: assisting the board in evaluating potential candidates for executive positions, determining the compensation of our chief executive officer, making recommendations to the board with respect to the compensation of other executive officers, reviewing our incentive compensation and other equity-based plans, and reviewing, on a periodic basis, director compensation.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee (the N&CG Committee) consists of three directors: Messrs. Coyle and Welch and Lord Myners, and Lord Myners serves as its chairman.
Our N&CG Committee is responsible for considering and making recommendations to the board of directors in respect of appointments to the board. The responsibility of our N&CG Committee as set forth in its Charter include the following: recommending directors to the board to serve as members of each committee, developing and recommending a set of corporate governance principles applicable to our company and overseeing board evaluations. It is also responsible for regularly reviewing the structure, size and composition of the board and making recommendations to the board with regard to any changes it deems necessary.
Code of Business Conduct and Ethics
We have adopted a code of ethics that applies to our Chief Executive Officer, Chief Financial Officer and all other employees. The code includes a code of ethics for Senior Financial Officers as required by NYSE rules.
Compensation of Executive Officers and Directors
For the fiscal year ended March 31, 2015, Nomad Holdings did not have operations or employees and, accordingly, no compensation or benefits were paid to officers. As such, this section sets forth for the year ended December 31, 2014: (i) the compensation and benefits provided to Iglos executive officers, (ii) a brief description of the bonus programs in which Iglos executive officers participated, and (iii) the total amounts set aside for pension, retirement and similar benefits for Iglos executive officers. This section also describes the
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Nomad Long Term 2015 Incentive Plan (LTIP) including a summary of the material terms of the LTIP, a description of current executive employment agreements and equity awards granted thereunder, and a description of our director compensation program.
Executive Compensation
Executive Officer Compensation and Benefits for the year ended December 31, 2014
For the year ended December 31, 2014, Iglos executive officers received total compensation, including base salary, cash and equity bonus, and certain perquisites, equal to 8,457,414 million in the aggregate.
Pension, Retirement and Similar Benefits
Our executive officers who participate in our money purchase pension plans do so on generally the same terms as our other employees. The aggregate amount of the employer contributions to this plan for Iglos executive officers during the year ended December 31, 2014 was 7,376.
Employment Agreements
Chief Executive Officer. Stéfan Descheemaeker was appointed as the Chief Executive Officer of the Company and Iglo and as a Director of the Company effective on June 1, 2015. He entered into his Service Agreement with us on June 17, 2015. Under the agreement, Mr. Descheemaeker will receive an annual salary of £700,000 that will be reviewed, but not necessarily increased, on an annual basis (the first review to take place in 2017). Mr. Descheemaeker is entitled to receive the following benefits under the terms of his agreement:
(a) | an annual contribution of £70,000, paid either to a pension plan or to Mr. Descheemaeker directly (as he so directs); |
(b) | eligibility for performance-related discretionary cash bonuses (up to 100% of salary), subject to the achievement of financial and other performance targets as we may decide; |
(c) | an award of 2,000,000 ordinary shares in the Company, 50% of which will vest on the Company exceeding an agreed EBITDA target and 50% of which will vest subject to the Companys shares achieving a specified target price. Both tranches of shares are also subject to further vesting conditions relating to Mr. Descheemaekers tenure as Chief Executive Officer; and |
(d) | an annual car allowance of £14,400, death in service benefit (three times salary), permanent health insurance (£500,000) and family medical insurance. |
We have the right to place Mr. Descheemaeker on paid leave for up to six months of his 12 month notice period. Mr. Descheemaeker is subject to confidentiality provisions and to non-competition and non-solicitation restrictive covenants for a period of between six and 12 months after the termination of his employment, subject to an off-set for paid leave.
Chief Financial Officer. Paul Kenyon is the Chief Financial Officer of the Company and Iglo and was appointed as a Director of the Company on June 1, 2015. Under the terms of his Services Agreement, Mr. Kenyons receives an annual salary of £415,000 that will be reviewed, but not necessarily increased, in April of each year. Mr. Kenyon receives the following benefits under the terms of his agreement:
(a) | an annual cash allowance of 10% of pensionable pay in lieu of pension contributions; |
(b) | eligibility for performance-related discretionary bonus (up to 300% of salary); |
(c) | entitlement to participate in the LTIP; and |
(d) | a monthly car allowance of £1,100, life assurance (three times salary), BUPA health insurance and accommodation allowance. |
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We have the right to place Mr. Kenyon on paid leave for all or any part of his six month notice period. Mr. Kenyon is subject to confidentiality provisions and to noncompetition and non-solicitation restrictive covenants for a period of six months after the termination of his employment, subject to an off-set for paid leave.
Nomad Foods 2015 Long Term Incentive Plan (LTIP)
Eligibility
The LTIP is discretionary and will enable the Compensation Committee to make grants (Awards) to any director or employee of the Company, although the current intention of the Committee is that Awards be granted only to directors and senior management.
Awards
Under the LTIP, the Committee or Board may grant Awards in the form of rights over ordinary shares. Where an Award vests, the participant will receive ordinary shares free and clear of any restrictions, other than those imposed by applicable securities laws.
Performance conditions
The vesting of Awards will be subject to conditions determined by the Committee. The current policy of the Committee is for vesting to be both time-based and related to the financial performance of the Company. Generally, the vesting period (i.e. the period over which performance is to be measured) will be between three and five years, and the ordinary shares subject to the Award will vest subject to the participant remaining an employee of the Company at the vesting date and any performance targets relating to the Award having been fulfilled.
Permitted dilution
No Award may be granted on any date if, as a result, the total number of ordinary shares issued or remaining issuable pursuant to Awards or options granted in the previous ten years under the LTIP or any other employees share plan operated by the Company would exceed 10% of the issued ordinary share capital of the Company on that date.
Awards may at the discretion of the Committee be satisfied out of new issue shares, treasury shares or shares provided out of an employee trust. Ordinary shares issued will rank pari passu with ordinary shares in issue at that time, save in relation to rights arising by reference to a record date before the date of issue. Participants will not be entitled to votes or dividends on the ordinary shares subject to Awards until such Awards vest.
Early vesting
Unless otherwise determined by the Committee, if a participant ceases to be employed by the Company due to death, disability, or otherwise as a good leaver, as determined by the Committee Awards will vest to the extent performance targets (adapted, if necessary, at the discretion of the Committee, to take into account the shortened vesting period) have been achieved and subject to the Committees discretion to waive the performance targets in whole or in part. If a participant ceases employment for any other reason their Award(s) will lapse to the extent unvested at the date of cessation.
Change of Control
Unless otherwise determined by the Committee, in the event of a Change of Control or winding up of the Company (including by reason of an offer or scheme of arrangement), Awards will vest in accordance with the performance targets applied up the date of the Change of Control, subject to the Committees discretion to waive such targets in whole or in part.
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Variation in share capital
The Committee may make such adjustments to Awards as it considers appropriate to preserve their value in the event of any variation in the ordinary share capital of the Company or to take account of any demerger or special dividend paid (or similar event which materially affects the market price of ordinary shares).
Amendments
The Committee may amend the LTIP as it considers appropriate, subject to the written consent of participants to changes to their disadvantage to existing Awards. Shareholder approval is required to increase the permitted dilution limits.
General
Benefits under the LTIP will not be pensionable. Awards are not transferable except to the participants personal representatives on death.
Director Compensation
Currently, Lord Myners, and Messrs. Cathcart, Lillie and Leoni Sceti receive $50,000 per year together with an annual restricted stock grant equal to $100,000 of ordinary shares valued at the date of issue, which vest on the earlier of the date of the following years annual meeting of shareholders or 13 months from the issuance date. For those Directors who are members of board committees, each member will receive an additional $2,000 per year. The chairman of the audit committee, currently James E. Lillie, will be paid $10,000 per year and the chairmen of the Compensation and N&CG Committees, currently Alun Cathcart and Lord Myners respectively, will be paid $7,500 per year. Messrs. Gottesman, Franklin and Lillie will not receive a fee in relation to their appointment as Directors.
Director fees are payable quarterly in arrears. In addition, all of the Directors are entitled to be reimbursed by us for travel, hotel and other expenses incurred by them in the course of their directors duties.
Prior to the Iglo Acquisition, Messrs. Cathcart and Myners were entitled to receive $50,000 per year. In addition, the Directors received five-year options to purchase ordinary shares at an exercise price of $11.50 per ordinary share as follows: 50,000 for Lord Myners and 37,500 to Mr. Cathcart.
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The following table and accompanying footnotes show information regarding the beneficial ownership of our ordinary shares by:
| each person known by us to beneficially own 5% or more of our outstanding ordinary shares; |
| each named executive officer; |
| each of our directors; and |
| all executive officers and directors as a group. |
The percentage of ordinary shares beneficially owned is based on 178,431,496 ordinary shares issued and outstanding on November 20, 2015. Unless otherwise indicated, the address of each person named in the table below is c/o Nomad Foods Limited, Nemours Chambers Road Town, Tortola, British Virgin Islands. Beneficial ownership for the purposes of this table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days.
Name of Beneficial Owner: |
Ordinary Shares Beneficially
Owned |
|||||||
Number | Percentage | |||||||
5% Shareholders: |
||||||||
Pershing Square Capital Management L.P. 888 Seventh Avenue, 42nd Floor New York, NY 10019 |
33,333,334 | (1) | 18.7 | |||||
Wellington Management Group LLP 280 Congress Street Boston, MA 02210 |
17,103,443 | (1) | 9.6 | |||||
Birds Eye Iglo Limited Partnership Inc Trafalgar Court, Les Banques St. Peter Port, Guernsey GY1 2JA |
13,743,094 | (1) | 7.7 | |||||
Corvex Master Fund LP 712 Fifth Avenue, 23rd Floor New York, NY 10019 |
13,707,143 | (1) | 7.7 | |||||
Third Point LLC 390 Park Avenue New York, NY 10022
|
10,250,000 | (1) | 5.7 | |||||
Director and Executive Officers: |
||||||||
Stéfan Descheemaeker |
2,380,953 | (2) | 1.3 | |||||
Paul Kenyon |
37,060 | * | ||||||
Tania Howarth |
38,956 | * | ||||||
Martin E. Franklin |
3,880,953 | (3) | 2.2 | |||||
Noam Gottesman |
3,880,953 | (4) | 2.2 | |||||
Alun Cathcart |
47,500 | (5) | * | |||||
John Coyle |
| (6) | * | |||||
Elio Leoni Sceti |
205,812 | (7) | * | |||||
James E. Lillie |
| (8) | * | |||||
Lord Myners of Truro CBE |
63,333 | (9) | * | |||||
Brian Welch |
| (10) | * | |||||
Directors and Executive Officers as a Group (10 persons) |
10,496,564 | 5.8 |
* | Represents beneficial ownership of less than one percent of ordinary shares outstanding. |
(1) | Based on information furnished by the shareholder as of November 13, 2015. |
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(2) | Represents an indirect interest held by Olidipoli Sprl, a company owned by Mr. Descheemaeker. Excludes 2,000,000 ordinary shares issuable under currently outstanding equity awards issued under the LTIP, 50% of which will vest on the Company exceeding an agreed EBITDA target and 50% of which will vest subject to the Companys shares achieving a specified target price, in each case, subject to further vesting conditions relating to Mr. Descheemaekers tenure as Chief Executive Officer. |
(3) | Includes (i) 3,130,953 ordinary shares and (ii) 750,000 Founder Preferred Shares which are convertible at any time at the option of the holder into ordinary shares on a one-for-one basis. Represents an indirect interest held by Mariposa Acquisition II, LLC. Mr. Franklin holds sole voting and investment power over such shares. Mr. Franklin owns or controls, directly or indirectly, 69% of Mariposa Acquisition II, LLC. Mr. Franklin disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. |
(4) | Includes (i) 3,130,953 ordinary shares of which 1,250,000 are held by TOMS Acquisition I LLC and 1,880,953 are held by TOMS Capital Investments LLC and (ii) 750,000 Founder Preferred Shares which are convertible at any time at the option of the holder into ordinary shares on a one-for-one basis and all of which are held by TOMS Acquisition I LLC. Mr. Gottesman is the managing member and majority owner of TOMS Acquisition I LLC and TOMS Capital Investments LLC and may be considered to have beneficial ownership of TOMS Acquisition I LLCs and TOMS Capital Investments LLCs interests in the Company. Mr. Gottesman owns or controls, directly or indirectly, 76% of TOMS Acquisition I LLC and 100% of TOMS Capital Investments LLC. Mr. Gottesman disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. |
(5) | Includes 37,500 ordinary shares granted pursuant to a five-year option that expires on June 2, 2020 at a purchase price of $11.50 per share. |
(6) | Mr. Coyle of Permira Advisers LLC, holds indirect economic interests in Birds Eye Iglo Limited Partnership Inc which holds ordinary shares in the Company. |
(7) | Represents an indirect interest held by Nation of 6 Limited, a company which is beneficially owned by Mr. Leoni Sceti and his family. |
(8) | Excludes a pecuniary interest in (i) 234,821 ordinary shares and (ii) 56,250 Founder Preferred Shares (which are convertible at any time at the option of the holder into ordinary shares on a one-for-one basis) held indirectly by Mariposa Acquisition II, LLC. |
(9) | Includes 50,000 ordinary shares granted pursuant to a five-year option that expires on June 2, 2020 at a purchase price of $11.50 per share. |
(10) | Excludes 33,333,334 ordinary shares held by Pershing Square, as investment manager of funds affiliated with Pershing Square. |
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Promissory Notes
In conjunction with the formation of the Company, in consideration for each of the Founder Entities advancing us $100,000, we issued an unsecured promissory note for a principal amount of $100,000 to each of the Founder Entities. The loans did not bear interest and were re-paid in full on May 14, 2014.
Founder Preferred Shares
On inception, we issued one Founder Preferred Share to each of the Founder Entities. On April 15, 2014, in connection with our initial public offering, we issued an additional aggregate of 1,499,998 shares of Founder Preferred Shares equally to the Founder Entities for $10.00 per share. The Founder Preferred Shares were intended to incentivize the Founders to achieve Nomads objectives. In addition to providing long term capital, the Founder Preferred Shares are structured to provide a dividend based on the future appreciation of the market value of the ordinary shares thus aligning the interests of the Founders with those of the holders of ordinary shares on a long term basis. The Founder Preferred Shares are also intended to encourage the Founders to grow Nomad following the Iglo Acquisition and to maximize value for holders of ordinary shares.
Advisory Services Agreements
On June 15, 2015, the Company entered into an Advisory Services Agreement with Mariposa Capital, LLC, an affiliate of Mr. Franklin, and TOMS Capital LLC, an affiliate of Mr. Gottesman. Pursuant to the terms of the Advisory Services Agreement, Mariposa Capital, LLC and TOMS Capital LLC provide high-level strategic advice and guidance to the Company. Under the terms of the Advisory Services Agreement, Mariposa Capital, LLC and TOMS Capital LLC will be entitled to receive an aggregate annual fee equal to $2.0 million, payable in quarterly installments. This agreement will expire on June 1, 2016 and will be automatically renewed for successive one-year terms unless any party notifies the other parties in writing of its intention not to renew the agreement no later than 90 days prior to the expiration of the term. The agreement may only be terminated by the Company upon a vote of a majority of its directors. In the event that the agreement is terminated by the Company, the effective date of the termination will be six months following the expiration of the initial term or a renewal term, as the case may be.
Private Placement and Warrant Exercises
In May 2015, each of our Founder Entities (or affiliates thereof) and Stéfan Descheemaeker, our Chief Executive Officer, purchased ordinary shares in the May 2015 Offering. Mariposa Acquisition II, LLC purchased 1,880,953 of our ordinary shares, TOMS Capital Investments LLC purchased 1,880,953 of our ordinary shares and Stéfan Descheemaeker purchased 2,380,953 of our ordinary shares, in each case at a purchase price of $10.50 per share (the same price paid by unaffiliated investors). In connection with the May 2015 Offering, we issued 500,000 ordinary shares to each of the Founder Entities upon exercise of the Warrants issued to them in the 2014 Offering at an exercise price of $10.00 per ordinary share issued.
Related Party Transactions Procedures
The Audit Committee Charter provides that the Audit Committee shall review all related party transactions, as defined under Item 404 of Regulation S-K under the Securities Act of 1933, as amended. Following such review, the Audit Committee determines whether such transaction should be approved based on the terms of the transaction, the business purpose for the transaction and whether the transaction is in the best interest of the Company and its shareholders.
No member of the Audit Committee shall participate in any review, consideration or approval of any related party transaction with respect to which such member or any of his or her immediate family members is the related party.
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This prospectus covers the public resale of the Shares owned by the selling shareholders named below. Such selling shareholders may from time to time offer and sell pursuant to this prospectus any or all of the Shares owned by them. The selling shareholders, however, make no representations that the Shares will be offered for sale. The table below presents information regarding the selling shareholders and the Shares that each such selling shareholder may offer and sell from time to time under this prospectus.
The following table sets forth:
| the name of each selling shareholder; |
| the number of ordinary shares beneficially owned by each selling shareholder prior to the sale of the Shares covered by this prospectus; |
| the number of Shares that may be offered by each selling shareholder pursuant to this prospectus; |
| the number of ordinary shares to be beneficially owned by each selling shareholder following the sale of any Shares covered by this prospectus; and |
| the percentage of our issued and outstanding ordinary shares to be owned by each selling shareholder before and after the sale of the Shares covered by this prospectus (based on 178,431,496 ordinary shares issued and outstanding as of November 20, 2015). |
Generally, the Shares being registered by the selling shareholders represent ordinary shares issued (i) in the 2014 Offering to U.S. Persons, (ii) in the May 2015 Offering, (iii) in the July 2015 Offering or (iv) in connection with the Iglo Acquisition and the Findus Acquisition. Ordinary shares issued to non-U.S. Persons in the 2014 Offering and ordinary shares purchased by the selling shareholders on the London Stock Exchange are not restricted securities, are freely tradeable under the Securities Act and do not require registration hereunder.
All information with respect to ownership of our ordinary shares of the selling shareholders has been furnished by or on behalf of the selling shareholders and, unless otherwise indicated, is as of November 13, 2015. We believe, based on information supplied by the selling shareholders, that except as may otherwise be indicated in the footnotes to the table below, the selling shareholders have sole voting and dispositive power with respect to the ordinary shares reported as beneficially owned by them. Because the selling shareholder identified in the table may sell some or all of the Shares owned by them which are included in this prospectus, and because, except as set forth herein, there are currently no agreements, arrangements or understandings with respect to the sale of any of the Shares, no estimate can be given as to the number of Shares available for resale hereby that will be held by the selling shareholders upon termination of this offering. In addition, the selling shareholders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, the ordinary shares they hold in transactions exempt from the registration requirements of the Securities Act after the date on which they provided the information set forth on the table below. We have, therefore, assumed for the purposes of the following table, that the selling shareholders will sell all of the Shares owned beneficially by them that are covered by this prospectus, but will not sell any other ordinary shares that they presently own. Unless otherwise indicated in the footnotes, shares in the table refer to our ordinary shares.
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Name of Selling Shareholder |
Number of
Shares Beneficially Owned Prior to this Offering |
Percent of
Outstanding Shares Beneficially Owned Before Sale of Shares |
Number of
Shares Available Pursuant to this Prospectus |
Number of
Shares Beneficially Owned After Sale of Shares |
Percent of
Outstanding Shares Beneficially Owned After Sale of Shares |
|||||||||||||||
Alejandro San Miguel (1) |
47,620 | * | 47,620 | | * | |||||||||||||||
Amos Weltsch |
22,474 | * | 22,474 | | * | |||||||||||||||
Alun Cathcart (2)(3) |
47,500 | * | 47,500 | | * | |||||||||||||||
Alyeska Master Fund, LP (4) |
1,268,309 | * | 1,268,309 | | * | |||||||||||||||
Alyeska Master Fund 2, LP (5) |
862,447 | * | 862,447 | | * | |||||||||||||||
Anupkumar Patel (1) |
47,620 | * | 47,620 | | * | |||||||||||||||
Arrowgrass Master Fund Ltd (6) |
1,117,592 | * | 1,094,131 | 23,461 | * | |||||||||||||||
Benjamin Pass (1) |
66,667 | * | 66,667 | | * | |||||||||||||||
Berggruen Holdings North America Ltd. (7) |
3,809,524 | 2.1 | 3,809,524 | | * | |||||||||||||||
Berggruen Investments, Ltd. (8) |
952,381 | * | 952,381 | | * | |||||||||||||||
Birds Eye Iglo Limited Partnership Inc (9) |
13,743,094 | 7.7 | 13,743,094 | | * | |||||||||||||||
BlackRock, Inc. (10)(11) |
4,370,217 | 2.4 | 4,370,217 | | * | |||||||||||||||
Entities Affiliated with BTG Pactual Asset Management US, LLC |
||||||||||||||||||||
BTG Pactual Global Emerging Markets and Macro Master Fund LP** (12) |
89,000 | * | 89,000 | | * | |||||||||||||||
Queen Street Fund, Ltd.** (12) |
11,000 | * | 11,000 | | * | |||||||||||||||
Citadel Equity Fund Ltd.** (13) |
6,124,296 | 3.4 | 6,124,296 | | * | |||||||||||||||
Corvex Master Fund LP (14) |
13,707,143 | 7.7 | 13,707,143 | | * | |||||||||||||||
D.E. Shaw Valence Portfolios, L.L.C.** (15) |
95,099 | * | 95,099 | | * | |||||||||||||||
Dynamo Global Master Fundo de Investimento em Ações - Investimento no Exterior (16) |
105,928 | * | 98,452 | 7,476 | * | |||||||||||||||
Dynamo Master Fund (16) |
455,372 | * | 401,548 | 53,824 | * | |||||||||||||||
Fifth Street Station LLC (17) |
557,269 | * | 557,269 | | * | |||||||||||||||
Global Long Short ERISA Master Ireland Ltd. (18) |
25,757 | * | 25,757 | | * | |||||||||||||||
Global Long Short Partners Master LP (19) |
574,243 | * | 574,243 | | * | |||||||||||||||
Guy Yamen (2) |
47,500 | * | 47,500 | | * | |||||||||||||||
Hatteras Event Driven Fund **(20) |
81,670 | * | 81,670 | | * | |||||||||||||||
Highbridge International LLC (21) |
1,979,844 | 1.1 | 1,979,844 | | * | |||||||||||||||
Incline Global Management LLC (22) |
1,563,098 | * | 1,563,098 | | * | |||||||||||||||
Interfund Equity USA, a sub-fund of Interfund SICAV (23) |
1,010,000 | * | 1,010,000 | | * | |||||||||||||||
JFI-SPAC, LLC (24) |
82,449 | * | 82,449 | | * | |||||||||||||||
Entities Affiliated with Janus Capital Management LLC |
||||||||||||||||||||
Janus Capital Funds Plc on behalf of its sub-fund Janus Europe Fund (25) |
66,924 | * | 66,924 | | * | |||||||||||||||
Janus Investment Fund on behalf of its series Janus Triton Fund (26) |
1,128,344 | * | 1,128,344 | | * | |||||||||||||||
Oklahoma State University Foundation (27) |
4,732 | * | 4,732 | | * | |||||||||||||||
Entities Affiliated with Kingdon Capital Management, L.L.C. |
||||||||||||||||||||
Kingdon Associates (28) |
607,385 | * | 607,385 | | * | |||||||||||||||
Kingdon Family Partnership, L.P. (28) |
134,299 | * | 134,299 | | * | |||||||||||||||
M. Kingdon Offshore Master Fund L.P. (28) |
937,066 | * | 937,066 | | * | |||||||||||||||
LaM Financial Holdings, Ltd. LLLP (29) |
133,333 | * | 133,333 | | * | |||||||||||||||
Entities Affiliated with Levin Capital Strategies, LP |
||||||||||||||||||||
Levcap Alternative Fund, LP** (30) |
125,312 | * | 106,266 | 19,046 | * |
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Name of Selling Shareholder |
Number of
Shares Beneficially Owned Prior to this Offering |
Percent of
Outstanding Shares Beneficially Owned Before Sale of Shares |
Number of
Shares Available Pursuant to this Prospectus |
Number of
Shares Beneficially Owned After Sale of Shares |
Percent of
Outstanding Shares Beneficially Owned After Sale of Shares |
|||||||||||||||
Levin Capital Trilogy Master Fund, Ltd.** (31) |
230,445 | * | 219,500 | 10,945 | * | |||||||||||||||
Neuberger Berman Absolute Return Multi Manager Fund** (30) |
1,322,763 | * | 1,145,114 | 177,649 | * | |||||||||||||||
Neuberger Berman Absolute Return Multi Strategy UCITS Fund** (30) |
348,037 | * | 109,214 | 238,823 | * | |||||||||||||||
Neuberger Berman AMT Absolute Return Multi Manager Fund** (30) |
9,823 | * | 2,213 | 7,610 | * | |||||||||||||||
Ulysses Offshore Fund, Ltd. (30) |
52,073 | * | 48,896 | 3,177 | * | |||||||||||||||
Ulysses Partners, LP (30) |
209,681 | * | 196,904 | 12,777 | * | |||||||||||||||
Entities Affiliated with LionEye Capital Management LLC |
||||||||||||||||||||
Lioneye Master Fund Ltd. (32) |
2,508,542 | 1.4 | 791,405 | 1,717,137 | * | |||||||||||||||
Lioneye Onshore Fund LP (32) |
176,074 | * | 86,238 | 89,836 | * | |||||||||||||||
LMAP Omega Limited (32) |
442,666 | * | 136,915 | 305,751 | * | |||||||||||||||
GFS MAP Trust Lioneye (32) |
157,638 | * | 80,365 | 77,273 | * | |||||||||||||||
Highmark Long/Short Equity 7 (32) |
219,178 | * | 181,266 | 37,912 | * | |||||||||||||||
Liongem Sweden 1 AB (33) |
8,378,380 | 4.7 | 8,378,380 | | * | |||||||||||||||
Lord Myners of Truro CBE (34) |
63,333 | * | 63,333 | | * | |||||||||||||||
Mariposa Acquisition II, LLC (35) |
3,880,953 | 2.2 | 3,880,953 | | * | |||||||||||||||
MMF Moore ET Investments, LP (36) |
50,000 | * | 50,000 | | * | |||||||||||||||
Moore Equity Strategies, LP (36) |
300,000 | * | 300,000 | | * | |||||||||||||||
Michael Fascitelli |
28,572 | * | 28,572 | | * | |||||||||||||||
Olidipoli Sprl (37) |
2,380,953 | 1.3 | 2,380,953 | | * | |||||||||||||||
Pacific Grove Master Fund L.P. (38) |
633,408 | * | 554,125 | 79,283 | * | |||||||||||||||
Pershing Square Funds (39) |
33,333,334 | 18.7 | 33,333,334 | | * | |||||||||||||||
Pope Trading, LLC (40) |
505,677 | * | 505,677 | | ||||||||||||||||
Plymouth Lane Partners (Master), LP (41) |
532,500 | * | 532,500 | | * | |||||||||||||||
Scoggin Capital Management II LLC (42) |
600,000 | * | 532,040 | 67,960 | * | |||||||||||||||
Scoggin International Fund Ltd. (42) |
506,000 | * | 462,000 | 44,000 | * | |||||||||||||||
Scott Sublett (1) |
19,048 | * | 19,048 | | * | |||||||||||||||
Seneca Capital, LP (43) |
890,969 | * | 890,969 | | * | |||||||||||||||
Seneca Capital International Master Fund, LP (43) |
305,590 | * | 305,590 | | * | |||||||||||||||
Sheffield International Partners Master, Ltd. (44) |
2,244,178 | 1.3 | 150,000 | 2,094,178 | 1.2 | |||||||||||||||
Starboard Partners Fund LP** (45) |
75,000 | * | 75,000 | | * | |||||||||||||||
STK Capital Investment Fund SPC for the Account of Global Equities SP (46) |
122,602 | * | 5,000 | | * | |||||||||||||||
Third Point LLC (47) |
10,250,000 | 5.7 | 10,250,000 | | * | |||||||||||||||
TOMS Acquisition I LLC (48) (49) |
2,000,000 | 1.1 | 2,000,000 | | * | |||||||||||||||
TOMS Capital Investments LLC (49) |
1,880,953 | 1.1 | 1,880,953 | | * | |||||||||||||||
Tourbillon Global Master Fund, Ltd (50) |
924,293 | * | 841,547 | 82,746 | * | |||||||||||||||
Entities Affiliated with Twin Capital Management LLC |
||||||||||||||||||||
Twin Master Fund, Ltd. (51) |
53,211 | * | 53,211 | | * | |||||||||||||||
HFR ED Twin Securities Master Trust (52) |
5,985 | * | 5,985 | | * | |||||||||||||||
Lyxor/Twin Offshore Fund Limited (53) |
8,656 | * | 8,656 | | * | |||||||||||||||
P Twin Ltd. (54) |
35,630 | * | 35,630 | | * |
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Name of Selling Shareholder |
Number of
Shares Beneficially Owned Prior to this Offering |
Percent of
Outstanding Shares Beneficially Owned Before Sale of Shares |
Number of
Shares Available Pursuant to this Prospectus |
Number of
Shares Beneficially Owned After Sale of Shares |
Percent of
Outstanding Shares Beneficially Owned After Sale of Shares |
|||||||||||||||
Entities Affiliated with Wellington Management Company LLP |
||||||||||||||||||||
Barclays Bank UK Retirement Fund (Nominee name: KANE KANE & CO.)** (55) |
17,025 | * | 17,025 | | * | |||||||||||||||
Harbor Capital Group Trust for Defined Benefit Plans** (55) |
19,407 | * | 19,407 | | * | |||||||||||||||
Harbor Mid Cap Growth Fund (Nominee name: Local Shores & Co.)** (55) |
198,396 | * | 198,396 | | * | |||||||||||||||
Hartford Global Capital Appreciation Fund (Nominee name: Italianturtle & Co.)** (55) |
112,400 | * | 112,400 | | * | |||||||||||||||
The Hartford Growth Opportunities Fund (Nominee name: Italiansilver & Co.)** (55) |
4,259,025 | 2.4 | 4,259,025 | | * | |||||||||||||||
Hartford Growth Opportunities HLS Fund (Nominee name: Italiandinghy & Co.)** (55) |
761,465 | * | 761,465 | | * | |||||||||||||||
Mid Cap Stock Fund (Nominee name: Snailreef & Co.)** (55) |
293,511 | * | 293,511 | | * | |||||||||||||||
Mid Cap Stock Trust (Nominee name: Tunaship & Co.)** (55) |
128,230 | * | 128,230 | | * | |||||||||||||||
Retirement Income Plan for Employees of Armstrong World Industries, Inc. (Nominee name: CUDD & CO.)** (55) |
25,773 | * | 25,773 | | * | |||||||||||||||
Russell Global Equity Fund (Nominee name: Mac & Co.)** (55) |
72,227 | * | 72,227 | | * | |||||||||||||||
Russell Global Equity Pool (Nominee name: Mac & Co.)** (55) |
29,669 | * | 29,669 | | * | |||||||||||||||
Russell Institutional Funds, LLC - Russell Multi-Asset Core Plus Fund (Nominee name: Mac & Co.)** (55) |
67,033 | * | 67,033 | | * | |||||||||||||||
Russell Investment Company - Russell Global Equity Fund (Nominee name: Watchglass & Co.)** (55) |
46,867 | * | 46,867 | | * | |||||||||||||||
Russell Trust Company Russell World Equity Fund (Nominee name: Admiralthunder & Co.)** (55) |
28,381 | * | 28,381 | | * | |||||||||||||||
Wellington Trust Company, National Association Multiple Collective Investment Funds Trust II, Global Equities Portfolio (Nominee name: Finwell & Co.)** (55) |
49,385 | * | 49,385 | | * | |||||||||||||||
Wijdan Ltd. (56) |
1,499,999 | * | 1,499,999 | | * |
* | Denotes less than 1% of shares outstanding. |
** | Denotes a selling shareholder that is affiliated with a broker-dealer. The selling shareholder has certified that it purchased the Shares in the ordinary course of business and that, at the time of the purchase of the Shares, it had no agreements or understandings, directly or indirectly, with any person to distribute the Shares. |
(1) | The address of the selling shareholder is c/o Toms Capital LLC, 450 W. 14th Street, 13th Floor, New York, NY 10014. |
102
(2) | Includes 37,500 ordinary shares granted pursuant to a five-year option that expires on June 2, 2020 at a purchase price of $11.50 per share. |
(3) | The address of the selling shareholder is c/o Nomad Foods Limited, Nemours Chambers, Road Town, Tortola, British Virgin Islands. |
(4) | The selling shareholder is a private fund controlled by its general partner, Alyeska Investment Group, LLC (the General Partner), which has appointed Alyeska Investment Group, L.P. (the Investment Manager) to act as its investment manager. Anand Parekh, the managing member of the General Partner and the sole member of the Board of Directors of the general partner of the Investment Manager, is the natural person with ultimate voting or investment control over the Shares held by the selling shareholder. The address of the selling shareholder is c/o Alyeska Investment Group, L.P., 77 West Wacker Drive, 7th Floor, Chicago, IL 60601. |
(5) | The selling shareholder is a private fund controlled by its general partner, Alyeska Fund 2 GP, LLC (the General Partner), which has appointed Alyeska Investment Group, L.P. (the Investment Manager) to act as its investment manager. Anand Parekh, the managing member of the sole member of the General Partner and the sole member of the Board of Directors of the Investment Manager, is the natural person with ultimate voting or investment control over the Shares held by the selling shareholder. The address of the selling shareholder is c/o Alyeska Investment Group, L.P., 77 West Wacker Drive, 7th Floor, Chicago, IL 60601. |
(6 ) | Voting and management control over the Shares is shared by Arrowgrass Capital Partners (US) LP, as the investment manager to Arrowgrass Master Fund Ltd, and Arrowgrass Capital Services (US) Inc. as the general partner of Arrowgrass Capital Partners (US) LP. The address of the selling shareholder is c/o Arrowgrass Capital Partners (US) LP, 1330 Avenue of the Americas, 32nd Floor, New York, NY 10019. |
(7) | The selling shareholder is a direct subsidiary of Berggruen Holdings Ltd (BHL). All of the shares of BHL are owned by the Nicolas Berggruen Charitable Trust. The trustee of the Nicolas Berggruen Charitable Trust is Maitland Trustees Limited, a BVI corporation holding a Class II Trust License issued under the BVI Banks and Trust Companies Act, acting as an institutional trustee in the ordinary course of business with full control of BHL. The directors of Maitland Trustees Limited are J.B. Mills, E.W. Wilkinson, A.H. Markham and B.I. Childs. The address of the selling shareholder is c/o Berggruen Holdings Inc., 250 West 55th Street, Suite 13D, New York, NY 10019. |
(8) | The person with voting or investment control over the Shares held by Berggruen Investments Limited (BIL), the selling shareholder, is the director of BIL, namely Solon Director Limited, a Bahamas corporation with the sole purpose of acting as corporate trustee. The directors of Solon Director Limited are C.C. Bird, B.I. Childs, J.B. Mills, and M.E. Solomon. All of the shares of BIL are owned by the NB Trust. The trustee of the NB Trust is Maitland Trustees (IOM) Limited, an Isle of Man corporation, acting as an institutional trustee in the ordinary course of business with full control of BIL. The directors of Maitland Trustees (IOM) Limited are C.C. Bird, K.I. Brown and A.H. Markham. The address of the selling shareholder is c/o Berggruen Holdings Inc., 250 West 55th Street, Suite 13D, New York, NY 10019. |
(9) | The selling shareholder, Birds Eye Iglo Limited Partnership Inc (BEILP), acts through its general partner, Liberator GP Limited (Liberator), which is held or controlled by the Permira Funds (as defined below) as follows: (i) 24.88% held by Permira Europe III L.P.1 (P III 1), whose general partner is Permira Europe III G.P. L.P. (Permira III GP); (ii) 71.80% by Permira Europe III L.P.2 (P III 2), whose general partner is Permira III GP; (iii) 0.94% by Permira Europe III GmbH & Co K.G. (P III GmBH and, together with P III 1 and P III 2, the Permira Funds), whose managing partner is Permira III GP. Permira III GP may be deemed to have investment powers and beneficial ownership with respect to Permira Funds interests in Liberator and Liberators interests in BEILP, in each case, by virtue of Permira III GP being general partner or managing partner, as applicable of both P III 1, P III 2 and P III GmBH and by virtue of co-investment arrangements between the entities comprising the Permira Funds, but disclaims beneficial ownership of such interests. |
Permira III GP is managed by its general partner, Permira Europe III G.P. Limited (P III Limited). P III Limited in its capacity as general partner of P III GP and in its capacity as such may be deemed to have investment powers and beneficial ownership of the Permira Funds interests in Liberator and Liberators interests in BEILP, but disclaims beneficial ownership of such interests. P III Limited is owned by Permira Holdings Limited (Permira Holdings). Due to its ownership of P III Limited, Permira Holdings may be
103
deemed to have investment powers and beneficial ownership of the Permira Funds interests in Liberator and Liberators interests in BEILP, but disclaims beneficial ownership of such interests.
Tom Lister, Kurt Björklund, Benoit Vauchy, Ulrich Gasse, Paul Cutts, Nigel Carey and Vic Holmes are directors of Permira Holdings, the parent company of P III Limited, and, as such, may be deemed to have beneficial ownership of the Permira Funds interests in Liberator and Liberators interests in BEILP. Each of the directors disclaims beneficial ownership of such interests. The address of the selling shareholder, acting through its general partner, Liberator, and its managing partner, Liberator Managing Partner Limited, is Trafalgar Court, St Peter Port, Guernsey.
(10) | The registered holders of 4,010,398 of the referenced shares are BlackRock US Opportunities Fund, BlackRock Global Funds - US Small & MidCap Opportunities Fund, BlackRock US Opportunities Portfolio, a series of BlackRock Funds, Lincoln Investment Advisors Corporation, BlackRock Global Opportunities Equity Trust, BlackRock International Growth and Income Trust, BlackRock International Opportunities Portfolio, BlackRock Global Opportunities Portfolio, BlackRock Global Opportunities V.I. Fund, Global Multi-cap Equity Fund B, International Multi-cap Equity Fund, Dominion Resources International Opportunities Portfolio, BlackRock Global Funds - Global Opportunities, and BlackRock Global Equity Fund - Higher Performance Portfolio. BlackRock, Inc. is the ultimate parent holding company of the investment adviser entities which manage the aforementioned funds. On behalf of such investment adviser entities, Ian Jamieson, as a managing director of such entities, has voting and investment power over 4,010,398 of the referenced shares. Ian Jamieson expressly disclaims beneficial ownership of all such shares. The address of the funds, the investment adviser entities and Ian Jamieson is 55 East 52nd Street, New York, NY 10055. |
(11) | The registered holders of 359,819 of the referenced shares are Global SmallCap Portfolio of Managed Account Series, BlackRock Global SmallCap Fund, Inc., BlackRock Global Small Cap Fund and BlackRock Global Funds - Global Small Cap Fund. BlackRock, Inc. is the ultimate parent holding company of the investment adviser entities which manage the aforementioned funds. On behalf of such investment adviser entities, John Coyle (who is not our director) and Murali Balaraman, as managing directors of such entities, have voting and investment power over 359,819 of the referenced shares. John Coyle and Murali Balaraman expressly disclaim beneficial ownership of all such shares. The address of the funds, the investment adviser entities and John Coyle and Murali Balaraman is 1 University Square Drive, Princeton, NJ 08540-6455. |
(12) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Michael Kuchmek. The address of the selling shareholder is c/o BTG Pactual Asset Management US, LLC, 601 Lexington Avenue, 57 th Floor, New York, NY 10022. |
(13) | Pursuant to a portfolio management agreement, Citadel Advisors LLC, an investment advisor registered under the Investment Advisor Act of 1940 (CAL), holds the voting and dispositive power with respect to the Shares held by Citadel Equity Fund Ltd. Citadel Advisors Holdings III LP (CAH3) is the sole member of CAL. Citadel GP LLC (formerly known as Citadel Investment Group II, L.L.C.) (CIG2) is the general partner of CAH3. Kenneth Griffin (Griffin) is the President and Chief Executive Officer of and sole member of CIG2. CIG2 and Griffin may be deemed to be the beneficial owners of the Shares through their control of CAL and/or certain other affiliated entities. The address of the selling shareholder is c/o Citadel LLC, 131 South Dearborn Street, Chicago, IL 60618. |
(14) | Corvex Master Fund LP (the Fund) is a Cayman Islands limited partnership, the general partner of which is controlled by Keith Meister. Corvex Management LP, a Delaware limited partnership (Corvex Management) whose general partner is controlled by Mr. Meister, serves as investment adviser to the Fund. Corvex Management and Mr. Meister may be deemed to beneficially own the Shares held by the Fund. The address of the selling shareholder is c/o Corvex Management LP, 667 Madison Avenue, New York, NY 10065. |
(15) | D. E. Shaw Valence Portfolios, L.L.C. may, at the time of the Companys Registration Statement, directly hold up to 95,099 of the Companys ordinary shares (the ordinary shares of the Company owned by D. E. Shaw Valence Portfolios, L.L.C., the Subject Shares). D. E. Shaw Valence Portfolios, L.L.C. will have the power to vote or direct the vote of (and the power to dispose or direct the disposition of) the Subject Shares. |
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D. E. Shaw & Co., L.P. (DESCO LP), as the managing member and investment adviser of D. E. Shaw Valence Portfolios, L.L.C., may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Subject Shares. Anne Dinning, Julius Gaudio, Maximilian Stone, and Eric Wepsic, or their designees, exercise voting and investment control over the Subject Shares on DESCO LPs behalf. D. E. Shaw & Co., Inc. (DESCO Inc.), as general partner of DESCO LP, may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Subject Shares. Neither DESCO LP nor DESCO Inc. owns any shares of the Company directly, and each such entity disclaims beneficial ownership of the Subject Shares.
David E. Shaw does not own any shares of the Company directly. By virtue of David E. Shaws position as President and sole shareholder of DESCO Inc., which is the general partner of DESCO LP, David E. Shaw may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Subject Shares and, therefore, David E. Shaw may be deemed to be the beneficial owner of the Subject Shares. David E. Shaw disclaims beneficial ownership of the Subject Shares.
The address of D. E. Shaw Valence Portfolios, L.L.C. is 1166 Avenue of the Arts, Ninth Floor, New York, NY 10036, United States.
(16) | The investment manager of the selling shareholder is Dynamo Internacional Gestāo de Recursos Ltda (Dynamo Internacional Gestāo). Pedro Damasceno and Luiz Orenstein, the members/partners of Dynamo Internacional Gestāo, are the natural persons with ultimate voting or investment control over the Shares. The address of the selling shareholder is Av. Ataulfo De Paiva, 1235, 6th Floor, Rio de Janeiro RJ, Brazil 22440-034. |
(17) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Paul G. Allen. The address of the selling shareholder is 505 5 th Avenue South, Suite 900, Seattle, WA 98104. |
(18) | Global Long Short ERISA Master Ireland Ltd. (GLSP ERISA) is an Irish private limited company that is managed by GS Investment Strategies, LLC (GS Investment Strategies), whose portfolio management team has investment discretion with respect to the Shares held by GLSP ERISA. The address of the selling shareholder is c/o GS Investment Strategies, LLC, 200 West Street, New York, NY 10282. |
(19) | Global Long Short Partners Master LP (GLSP Master) is a Cayman Islands exempted limited partnership that is managed by GS Investment Strategies, LLC (GS Investment Strategies), whose portfolio management team has investment discretion with respect to the Shares held by GLSP Master. The address of the selling shareholder is c/o GS Investment Strategies, LLC, 200 West Street, New York, NY 10282. |
(20) | The address of the selling shareholder is 6601 Six Forks Road, Suite 340, Raleigh, NC 27615. |
(21) | Highbridge Capital Management, LLC, a Delaware limited liability company , serves as trading manager to the selling shareholder. The address of the selling shareholder is c/o Highbridge Capital Management, LLC, 40 West 57 th Street, 32 nd Floor, New York, NY 10019. |
(22) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Jeff Lignelli. The address of the selling shareholder is 40 West 57 th Street, 14 th Floor, New York, NY 10019. |
(23) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is John Gisondi. The address of the selling shareholder is c/o GLG LLC, 452 Fifth Avenue, 27 th Floor, New York, NY 10018. |
(24) | Reflects shares held by the selling shareholder as of November 18, 2015. The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is J. Robert Small. The address of the selling shareholder is 152 W. 57 th Street, 56 th Floor, New York, NY 10019. |
(25) | The selling shareholder is advised by Janus Capital International Limited, an investment adviser that is indirectly owned by Janus Capital Management LLC, the selling shareholders sub-investment adviser. The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is the portfolio manager, Wahid Chammas. The address of the selling shareholder is c/o Janus Capital Management LLC, 151 Detroit Street, Denver, CO 80206. |
(26) |
The selling shareholder is advised by Janus Capital Management LLC, the selling shareholders sub-investment adviser. The natural person with ultimate voting or investment control over the Shares held |
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by the selling shareholder is the portfolio manager, Jonathan Coleman. The address of the selling shareholder is c/o Janus Capital Management LLC, 151 Detroit Street, Denver, CO 80206. |
(27) | The Oklahoma State University Fund is advised by Janus Capital Management LLC. The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is the portfolio manager, Wahid Chammas. The address of the selling shareholder is c/o Janus Capital Management LLC, 151 Detroit Street, Denver, CO 80206. |
(28) | Kingdon Capital Management, L.L.C., a Delaware limited liability company (Kingdon Capital Management), serves as investment manager to the selling shareholder. In such capacity, Kingdon Capital Management may be deemed to have voting and discretionary power over the Shares held by the selling shareholder. Mark Kingdon, the managing member of Kingdon Capital Management, is the natural person with ultimate voting or investment control over the Shares held by the selling shareholder. The address of the selling shareholder is c/o Kingdon Capital Management, LLC, 152 West 57 th Street, 50 th Floor, New York, NY 10019. |
(29) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Richard Brown. The address of the selling shareholder is 4350 S. Monaco Street, Denver, CO 80237. |
(30) | The natural persons with ultimate voting or investment control over the Shares held by the selling shareholder are Sam Hendel and John A. Levin. The address of the selling shareholder is c/o Levin Capital Strategies, LP, 595 Madison Ave, 17th Floor, New York, NY 10022. |
(31) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is John A. Levin. The address of the selling shareholder is c/o Levin Capital Strategies, LP, 595 Madison Ave, 17th Floor, New York, NY 10022. |
(32) | LionEye Capital Management LLC (LionEye Capital Management) serves as investment manager and has investment discretion with respect to the Shares held by the selling shareholder. The natural persons with ultimate voting or investment control over the Shares held by the selling shareholder are Stephen Raneri and Arthur Rosen, each a managing member of LionEye Capital Management. The address of LionEye Capital Management is 152 West 57th Street, 10th Floor, New York, NY 10019. |
(33) | Sanjay K. Morey and William John Showalter, as the board of directors of Liongem Sweden 1 AB, have control over the day to day affairs and management of the selling shareholder. The address of the selling shareholder is c/o Youngs Seafood International Holdings Limited, 77 Kingsway, London, WC2B 6SR. |
(34) | Includes 50,000 ordinary shares granted pursuant to a five-year option that expires on June 2, 2020 at a purchase price of $11.50 per share. The address of the selling shareholder is c/o Nomad Foods Limited, Nemours Chambers, Road Town, Tortola, British Virgin Islands. |
(35) | Includes (i) 3,130,953 ordinary shares and (ii) 750,000 ordinary shares underlying Founder Preferred Shares. The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Martin E. Franklin. Mr. Franklin disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The address of the selling shareholder is 5200 Blue Lagoon Drive, Suite 855, Miami, FL 33126. |
(36) | Moore Capital Management, LP (Moore Capital Management) is the investment manager with investment discretion over the Shares held by the selling shareholder. The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Louis M. Bacon. The address of the selling shareholder is c/o Moore Capital Management, LP, 11 Times Square, New York, NY 10036. |
(37) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Stefan Descheemaeker. The address of the selling shareholder is 33, Avenue de Foestracts, Brussels, Belgium 1180. |
(38) | Pacific Grove Capital LP (PGC) is a registered investment adviser and is the investment adviser of the selling shareholder. The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Robert James Mendola, Jr., the controlling owner and portfolio manager of PGC. The address of the selling shareholder is 580 California Street, Suite 1925, San Francisco, CA 94104. |
(39) |
Pershing Square, as the investment adviser to Pershing Square, L.P., a Delaware limited partnership (PSLP), Pershing Square II, L.P., a Delaware limited partnership (PSII), Pershing Square International, Ltd., a Cayman Islands exempted company (PSINTL), and Pershing Square Holdings, Ltd., a limited |
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liability company incorporated in Guernsey (PSH and together with PSLP, PSII and PSINTL, the Pershing Square Funds), may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the shares held by the the Pershing Square Funds. As the general partner of Pershing Square, PS Management GP, LLC, a Delaware limited liability company (PS Management), may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the shares held by the Pershing Square Funds. By virtue of William A. Ackmans position as the Chief Executive Officer of Pershing Square and managing member of PS Management, William A. Ackman may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the shares held by the Pershing Square Funds. The address of the Pershing Square Funds is c/o Pershing Square Capital Management, L.P., 888 Seventh Avenue, New York, NY 10019. |
(40) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Laurence Benedict. The address of the selling shareholder is 7284 West Palmetto Park Road, Boca Raton, FL 33496. |
(41) | Reflects shares held by the selling shareholder as of November 18, 2015. The Shares held by Plymouth Lane Partners (Master), LP (Plymouth Lane) may also be deemed to be beneficially owned by (a) Plymouth Lane General Partner, LLC (Plymouth Lane GP), the general partner of the Fund, (b) Plymouth Lane Capital Management, LLC (Plymouth Lane CM), the investment manager of the Fund, and (c) Jonathan Salinas, the managing member of Plymouth Lane CM and Plymouth Lane GP. Each of Plymouth Lane, Plymouth Lane GP, Plymouth Lane CM and Jonathan Salinas disclaims beneficial ownership of the Shares except to the extent of their pecuniary interest therein. The address of the selling shareholder is 717 Fifth Avenue, 11th Floor, Suite C, New York, NY 10022. |
(42) | The investment manager of the selling shareholder is Scoggin LLC. Craig Effron and Curtis Schenker are the managing members of Scoggin LLC. The address of the selling shareholder is c/o Scoggin LLC, 660 Madison Avenue, 20th Floor, New York, NY 10065. |
(43) | Douglas A. Hirsch may be deemed to beneficially own the securities held by the selling shareholder and disclaims beneficial ownership of such securities except to the extent of his pecuniary interests therein. The address of the selling shareholder is c/o Seneca Capital Investments, L.P., 900 Third Avenue, 22nd Floor, New York, NY 10022. |
(44) | Sheffield Asset Management, L.L.C. (Sheffield Asset Management) serves as investment manager of the selling shareholder. The natural persons with ultimate voting or investment control over the Shares held by the selling shareholder are Brian J. Feltzin and Craig C. Albert. The address of the selling shareholder is 900 N. Michigan Avenue, Suite 2000, Chicago, IL 60611. |
(45) | Each of Jeffrey Smith, Mark Mitchell and Peter Feld are principals of Starboard Value A LP and Starboard Value LP. Starboard Value A LP is the general partner of Starboard Partners Fund LP and Starboard Value LP is the investment manager of Starboard Partners Fund LP. The address of the selling shareholder is 777 Third Avenue, 18th Floor, New York, NY 10017. |
(46) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Daniel Henric Grozdea. The address of the selling shareholder is 89 Nexus Way, Camana Bay, Grand Cayman, Cayman Islands. |
(47) | Includes ordinary shares that Third Point LLC may be deemed to beneficially own by virtue of its position as investment manager of Third Point Offshore Master Fund LP, Third Point Ultra Master Fund LP, Third Point Partners LP, Third Point Partners Qualified LP, Third Point Reinsurance (USA) Ltd, and as trading advisor to Lyxor/Third Point Fund Limited. The address of the selling shareholder is 390 Park Avenue, Floor 18, New York, NY 10022. |
(48) | Includes 750,000 ordinary shares underlying Founder Preferred Shares. |
(49) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Noam Gottesman. Mr. Gottesman disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The address of the selling shareholder is c/o Toms Capital LLC, 450 W. 14th Street, 13th Floor, New York, NY 10014. |
(50) |
Tourbillon Capital Partners, L.P. (Tourbillon), as the Investment Manager of Tourbillon Global Master Fund (Global Master Fund), and Jason H. Karp, as the Chief Executive Officer of Tourbillon, may be |
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deemed to beneficially own the securities held for the account of Global Master Fund. The address of the selling shareholder is 444 Madison Avenue, 26th Floor, New York, NY 10022. |
(51) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is David J. Simon. The address of the selling shareholder is c/o Twin Capital Management LLC, 250 West 55th Street, New York, NY 10019. |
(52) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is John M. Klimek. The address of the selling shareholder is 65 Front Street, Hamilton, HM12, Bermuda. |
(53) | The natural person with ultimate voting or investment control over the Shares held by the selling shareholder is Mr. Patrick DA. The address of the selling shareholder is A8 Esplanade, St Helier. |
(54) | The natural persons with ultimate voting or investment control over the Shares held by the selling shareholder are Deborah Watson, Dion Thompson and Bernard Kemp. The address of the selling shareholder is c/o Twin Capital Management, 250 West 55th Street, New York, NY 10019. |
(55) | Wellington Management Company, LLP (Wellington) is an investment adviser registered under the 1940 Act. Wellington serves as an investment adviser to the selling shareholder and, in such capacity, may be deemed to share beneficial ownership over the shares held by such selling shareholder. The address of Wellington is 280 Congress Street, Boston, MA 02210. |
(56) | The address of the selling shareholder is c/o Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, British Virgin Islands. |
Beneficial ownership for the purposes of this table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Except as disclosed in the footnotes to this table, we believe that the shareholder identified in the table below possesses sole voting and investment power over all the ordinary shares shown as beneficially owned by the shareholder.
Except for being holders of our securities listed in the table above, none of the selling shareholders has had any position, office or other material relationship with us since our inception in April 2014, except for (i) Mariposa Acquisition II, LLC and TOMS Acquisition I LLC and TOMS Capital Investments LLC as described in Certain Relationships and Related Party Transactions, (ii) Pershing Square Capital Management L.P., of which our director, Brian Welch is a Partner, (iii) Birds Eye Iglo Limited Partnership Inc., an affiliate of Permira Advisors LLP, of which our director John Coyle is a Partner, and (iv) Olidipoli Sprl, a company owned by our CEO and director Stéfan Descheemaeker.
The selling shareholders and intermediaries through whom such securities are sold may be deemed underwriters within the meaning of the Securities Act with respect to the Shares offered by this prospectus, and any profits realized or commissions received may be deemed underwriting compensation.
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Additional selling shareholders not named in this prospectus will not be able to use this prospectus for resales until they are named in the table above by prospectus supplement or post-effective amendment. Transferees, successors and donees of identified selling shareholders will not be able to use this prospectus for resales until they are named in the table above by prospectus supplement or post-effective amendment. If required, we will add transferees, successors and donees by prospectus supplement in instances where the transferee, successor or donee has acquired its Shares from holders named in this prospectus after the effective date of this prospectus.
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The selling shareholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling Shares or interests in Shares received after the date of this prospectus from a selling shareholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of the Shares on any stock exchange, market or trading facility on which the Shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.
The selling shareholders may use any one or more of the following methods when disposing of Shares:
| ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| block trades in which the broker-dealer will attempt to sell the Shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; |
| purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| an exchange distribution in accordance with the rules of the applicable exchange; |
| privately negotiated transactions; |
| short sales effected after the date the registration statement of which this prospectus is a part is declared effective by the SEC; |
| through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
| broker-dealers may agree with the selling shareholders to sell a specified number of such Shares at a stipulated price per share; |
| a combination of any such methods of sale; and |
| any other method permitted by applicable law. |
The selling shareholders may, from time to time, pledge or grant a security interest in some or all of the Shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the Shares, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer the Shares in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
In connection with the sale of their Shares or interests therein, the selling shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of such Shares in the course of hedging the positions they assume. The selling shareholders may also sell Shares short and deliver these securities to close out their short positions, or loan or pledge the Shares to broker-dealers that in turn may sell these securities. The selling shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of the Shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds to the selling shareholders from the sale of the Shares offered by them will be the purchase price of such Shares less discounts or commissions, if any. Each of the selling shareholders reserves the
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right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of ordinary shares to be made directly or through agents. We will not receive any of the proceeds from the resale of the Shares.
Beginning on November 23, 2016, the selling shareholders also may resell all or a portion of their Shares in open market transactions in reliance upon Rule 144 under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule.
The selling shareholders and any underwriters, broker-dealers or agents that participate in the sale of the Shares therein may be underwriters within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the Shares may be underwriting discounts and commissions under the Securities Act. Selling shareholders who are underwriters within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.
To the extent required, the Shares to be sold, the names of the selling shareholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if applicable, the Shares may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the Shares may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.
We have advised the selling shareholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Shares in the market and to the activities of the selling shareholders and their affiliates. In addition, to the extent applicable, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling shareholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling shareholders may indemnify any broker-dealer that participates in transactions involving the sale of the Shares against certain liabilities, including liabilities arising under the Securities Act.
We have agreed to indemnify the selling shareholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this prospectus.
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General
We are a company organized under the laws of the British Virgin Islands with limited liability. We are registered at the Registry of Corporate Affairs of the British Virgin Islands under number 1818482, and our affairs are governed by the provisions of our Memorandum and Articles of Association (Memorandum and Articles) and by the provisions of applicable British Virgin Islands law.
Our Memorandum and Articles authorize the issuance of an unlimited number of shares, no par value, which may be ordinary shares or Founder Preferred Shares. As of November 20, 2015, 178,431,496 ordinary shares and 1,500,000 Founder Preferred Shares were issued and outstanding.
Under our Memorandum and Articles, subject to the BVI Companies Act (the BVI Act) and any other applicable legislation, our purpose is to carry on or undertake any business or activity, do any act or enter into any transaction and have full rights, powers and privileges for these purposes. For the purposes of Section 9(4) of the BVI Act, there are no limitations on the business that we may conduct.
The following is a summary of the material provisions of our ordinary and Founder Preferred Shares and our Memorandum and Articles.
Defined Terms
In the following summary of the material provisions of our ordinary and Founder Preferred Shares and our Memorandum and Articles, the following words shall bear the following meanings, if not inconsistent with the subject or context:
Acquisition means an initial acquisition by the Company or by any subsidiary thereof (which may be in the form of a merger, capital stock exchange, asset acquisition, stock purchase, scheme of arrangement, reorganization or similar business combination) of an interest in an operating company or business and which for purposes of this prospectus, means, the Iglo Acquisition;
Admission means the initial admission of the ordinary shares to the standard listing segment of the Official List maintained by the UKLA and to trading on the London Stock Exchanges main market for listed securities, which occurred on April 15, 2014;
Annual Dividend Amount means: A x B where:
A = an amount equal to 20% of the increase (if any) in the value of an ordinary share. Such increase shall be calculated as being the difference between (i) the Dividend Price for that Dividend Year and (ii) (a) if no Annual Dividend Amount has previously been paid, a price of US$10.00 per ordinary share, or (b) if an Annual Dividend Amount has previously been paid, the highest Dividend Price for any prior Dividend Year, provided that in each case such amount is subject to such adjustment either as the directors in their absolute discretion determine to be fair and reasonable in the event of a consolidation or sub-division of the ordinary shares in issue after the date of Admission or otherwise as determined in accordance with Article 5.4 of our Memorandum and Articles; and
B = the Preferred Share Dividend Equivalent;
Average Price means for any security, as of any date (or relevant period, as applicable): (i) in respect of ordinary shares or any other security, the volume weighted average price for such security on the London Stock Exchange as reported by Bloomberg through its Volume at Price functions; (ii) if the London Stock Exchange is not the principal securities exchange or trading market for that security, the volume weighted average price of
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that security on the principal securities exchange or trading market on which that security is listed or traded as reported by Bloomberg through its Volume at Price functions; (iii) if the foregoing do not apply, the last closing trade price of that security in the over-the-counter market on the electronic bulletin board for that security as reported by Bloomberg; or (iv) if no last closing trade price is reported for that security by Bloomberg, the last closing ask price of that security as reported by Bloomberg. If the Average Price cannot be calculated for that security on that date on any of the foregoing bases, the Average Price of that security on such date shall be the fair market value as mutually determined by the Company and the holders of the majority of outstanding Founder Preferred Shares (acting reasonably);
Bloomberg means Bloomberg Financial Markets;
Dividend Determination Period means the last ten consecutive Trading Days of a Dividend Year;
Dividend Price means the Average Price per ordinary share for the Dividend Determination Period in the relevant Dividend Year;
Dividend Year means the period commencing on the date of Admission and ending on the last day of the Companys first financial year, and thereafter each financial year of the Company;
paid up in relation to shares means fully paid or credited as fully paid, but excludes partly paid shares;
Payment Date means a day no later than ten Trading Days after the last day of the relevant Dividend Year, except in respect of any Annual Dividend Amount becoming due on the Trading Day immediately prior to the date of commencement of the Companys liquidation, in which case the Payment Date shall be such Trading Day, and except in respect of any Annual Dividend Amount becoming due on account of an automatic conversion immediately upon a Change of Control pursuant to Article 5.1(a) of the Articles of Association, in which case the Payment Date shall be the Trading Day immediately after such event;
Preferred Share Dividend Equivalent means 140,220,619 ordinary shares, being such number of ordinary shares outstanding immediately following the Iglo Acquisition but excluding any ordinary shares issued to shareholders or other beneficial owners of a company or business acquired pursuant to or in connection with the Iglo Acquisition (which total number is subject to such adjustment either as the directors in their absolute discretion determine to be fair and reasonable in the event of a consolidation or sub-division of the ordinary shares in issue after the date of admission to the LSE or otherwise as determined in accordance with Article 5.4 of the Memorandum and Articles relating to the treatment of stock splits, stock dividends and similar events); and
Trading Day means any day on which the London Stock Exchanges main market (or such other applicable securities exchange or quotation system) is open for business and on which the ordinary shares may be dealt in (other than a day on which the London Stock Exchanges main market (or such other applicable securities exchange or quotation system) is scheduled to or does close prior to its regular weekday closing time).
Ordinary Shares
The following summarizes the rights of holders of our ordinary shares:
| each holder of our ordinary shares is entitled to one vote per ordinary share on all matters to be voted on by shareholders generally; |
| subject to the rights of the holders of the Founder Preferred Shares, the holders of our ordinary shares are entitled to share ratably in dividends and other distributions as may be declared from time to time by our board of directors out of funds legally available for that purpose, if any; and |
|
subject to the BVI Act, upon our liquidation, dissolution or winding up, the holders of our ordinary shares, along with holders of our Founder Preferred Shares, will be entitled to the distribution of the |
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remaining assets pro rata to the number of fully paid up shares held by each holder relative to the total number of issued and fully paid up ordinary shares as if such fully paid up Founder Preferred Shares had been converted into ordinary shares immediately prior to the winding up. |
Founder Preferred Shares
The following summarizes the rights of holders of our Founder Preferred Shares:
| each holder of Founder Preferred Shares is entitled to one vote per Founder Preferred Share on all matters to be voted on by shareholders generally and to vote together with the holders of ordinary shares; |
| the holders of our Founder Preferred Shares are entitled to the following dividend rights: (i) once the Average Price per ordinary share for any ten consecutive Trading Days following our admission on the London Stock Exchange is at least $11.50 (which condition has been satisfied), the holders will be entitled to receive an Annual Dividend Amount, payable in ordinary shares or cash, at our sole option (which we intend to settle in ordinary shares); each Annual Dividend Amount shall be paid on the relevant Payment Date (which, if paid in ordinary shares, is expected to be the Trading Day immediately following the last day of the relevant Dividend Year) and shall be divided between the holders pro rata to the number of Founder Preferred Shares held by them on the such Payment Date; and (ii) the holders of Founder Preferred Shares are entitled to receive dividends and other distributions as may be declared from time to time by our board of directors with respect to the ordinary shares; such dividends shall be distributed among the holders of Founder Preferred Shares pro rata to the number of ordinary shares held by the holders of Founder Preferred Shares, as if for such purpose the Founder Preferred Shares had been converted into ordinary shares immediately prior to such distribution plus an amount equal to 20% of the dividend which would be distributable on such number of ordinary shares equal to the Preferred Share Dividend Equivalent; |
| the holders of our Founder Preferred Shares are entitled to the following conversion rights: (i) the Founder Preferred Shares will automatically convert into ordinary shares on a one-for-one basis (subject to adjustment in accordance with our Memorandum and Articles) in the event of a change of control (unless the independent directors unanimously determine otherwise) or on the last day of the seventh full financial year of the Company following completion of the Acquisition (or if any such date is not a Trading Day, the first Trading Day immediately following such date); in the event of any such automatic conversion, the Annual Dividend Amount shall be payable for such shortened Dividend Year on the Trading Day immediately prior to such conversion; (ii) a holder of Founder Preferred Shares may require some or all of his Founder Preferred Shares to be converted into an equal number of ordinary shares (subject to adjustment in accordance with our Memorandum and Articles) by notice in writing to the Company, and in such circumstances the Founder Preferred Shares that were subject to such request shall be converted into ordinary shares five Trading Days after receipt by the Company of the written notice; in the event of a conversion at the request of the holder, no Annual Dividend Amount shall be payable in respect of those Founder Preferred Shares for the Dividend Year in which the date of conversion occurs; and |
| subject to the BVI Act, upon our liquidation, dissolution or winding up, an Annual Dividend Amount shall be payable in respect of a shortened Dividend Year which shall end on the Trading Day immediately prior to the date of commencement of such liquidation, dissolution or winding up; following which, the holders of our Founder Preferred Shares, along with holders of our ordinary shares, will be entitled to the distribution of the remaining assets pro rata to the number of fully paid up shares held by each holder relative to the total number of issued and fully paid up ordinary shares as if such fully paid up Founder Preferred Shares had been converted into ordinary shares immediately prior to the winding up. |
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Indemnification Matters
Our Memorandum and Articles provide that we may indemnify any person who is or was a director or who is or was, at our request, serving as a director of, or in any other capacity is or was acting for, another entity, against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. A person may be indemnified only if he or she acted honestly and in good faith with a view to our best interests and, in the case of criminal proceedings, had no reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director or officer acted honestly and in good faith with a view to our best interests and as to whether the director or officer had no reasonable cause to believe that his or her conduct was unlawful, is in the absence of fraud sufficient for the purpose of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement, conviction or the entry of no plea does not, by itself, create a presumption that a director or officer did not act honestly and in good faith and with a view to our best interests or that the director or officer had reasonable cause to believe that his or her conduct was unlawful.
In addition, we have agreed with our directors, subject to the BVI Act, to indemnify them against a number of liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer.
We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers and incurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liability as provided in our Memorandum and Articles.
Shareholders Meetings and Consents
The following summarizes certain relevant provisions of British Virgin Islands laws and our Memorandum and Articles in relation to our shareholders meetings:
| we are required to hold the first annual meeting of shareholders within 18 months following the date of the Iglo Acquisition; |
| not more than 15 months shall elapse between the date of one annual meeting and the date of the next, unless such period is extended, or such requirement is waived, by a resolution of the shareholders; |
| the board of directors may convene meetings of shareholders at such times and in such manner and places within or outside the British Virgin Islands as the board considers necessary or desirable; |
| upon the written request of shareholders entitled to exercise 30% or more of the voting rights in respect of a matter for which a meeting is requested, the directors are required to convene a meeting of shareholders; |
| when convening a meeting, the board of directors must give not less than ten days notice of a meeting of shareholders to: (i) those shareholders who are entitled to vote at the meeting; and (ii) the other directors; |
| a meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding at least 90% of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting, and for this purpose the presence of a shareholder at the meeting shall constitute waiver in relation to all the shares that such shareholder holds; |
| a shareholder may be represented at a meeting of shareholders by a proxy who may speak and vote on behalf of the shareholder; |
| a meeting of shareholders is duly constituted if, at the commencement of the meeting, there are present in person or by proxy one shareholder entitled to vote on resolutions of shareholders to be considered at the meeting (a quorum); |
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| a resolution of shareholders is valid only if approved at a duly convened and constituted meeting of shareholders by the affirmative vote of a majority of the votes of the shares entitled to vote thereon that were present at the meeting and were voted or consented to in writing by a majority of the votes of shares entitled to vote thereon. |
We expect that the first annual meeting of our shareholders will be held in 2016.
Board of Directors
The management of our Company is vested in a board of directors. Our Memorandum and Articles provide that our board of directors must be composed of at least one member. Subject to the BVI Act and our Memorandum and Articles, our directors may be appointed by resolution of shareholders or by the board of directors, without the approval of shareholders, for such term as the shareholders or directors, as applicable, determine. In the case of a vacancy in the office of a director because of death, retirement, resignation, dismissal, removal or otherwise, the remaining directors may appoint a successor and fill such vacancy. In addition, for so long as an initial holder of Founder Preferred Shares holds 20% or more of the Founder Preferred Shares in issue, such holder is entitled to nominate, and the directors are required to appoint, a person as director. If such holder notifies the Company to remove any director nominated by him or her, the other directors shall remove such director, and the holder will have the right to nominate a director to fill the resulting vacancy. In the event an initial holder ceases to be a holder of Founder Preferred Shares or holds less than 20% of the Founder Preferred Shares in issue, such initial holder will no longer be entitled to nominate a person as a director, and the holders of a majority of the Founder Preferred Shares in issue will be entitled to exercise that initial holders former rights to appoint a director instead. Directors are not required to be shareholders.
Our board of directors consists of ten members. Two members of the board present or represented at a board meeting constitutes a quorum, except where otherwise decided by the directors or where there is a sole director, in which case the quorum shall be one. Actions at a meeting are adopted by a majority vote. Our board of directors may also take action by means of a written consent signed by a majority of directors.
Our board of directors is vested with the power to borrow or raise money and secure any debt or binding obligations on the Company. The board may delegate the daily management of our business, as well as the power to represent us in our day to day business, to individual directors, agents or committees (with the power to sub-delegate) as it deems fit. The board may determine the conditions of appointment and dismissal as well as the remuneration and powers of any persons or committees so appointed. The board may also determine the purpose, powers and authorities as well as the procedures and such other rules as may be applicable to committees it creates.
Disclosure Requirements
Our Memorandum and Articles provide that we may, by notice in writing, require any person to whom we know or have reasonable cause to believe to have been interested in our shares at any time during the three years preceding such notice, to confirm whether or not that is the case and to give such further information as may be required by our Memorandum and Articles. If a shareholder is in default of supplying us with the information required within the prescribed period, our directors, in their absolute discretion, may serve a direction notice on the shareholder which may direct that, in respect of the shares in which default has occurred, the shareholder shall not be entitled to attend or vote in meetings of shareholders. Additionally, if the shares in which the default has occurred represent at least .25% of the number of the class concerned, the direction notice may direct that dividends on such shares be retained by the Company and that no transfer of the shares shall be registered until the default is rectified.
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Registration Rights
On June 1, 2015, we entered into the Registration Rights Agreement with Birds Eye Iglo Limited Partnership Inc, Mariposa Acquisition II, LLC, TOMS Acquisition I LLC, TOMS Capital Investments LLC and with funds managed by Pershing Square (the Holders) pursuant to which we agreed to (i) file with the SEC as soon as reasonably practicable following the occurrence of a U.S. Registration Obligation Date (as defined below), a resale registration statement providing for the resale from time to time by the Holders of ordinary shares held by them, (ii) use our commercially reasonable efforts to cause the SEC to declare such registration statement effective as soon as practicable after the filing thereof and (iii) use our commercially reasonable efforts to cause such registration statement to remain continuously effective until the Termination Date (as defined below).
The U.S. Registration Obligation Date is defined as the earlier of (i) the date that we become obligated to register an offering of any of our securities with the SEC under the Securities Act or the Exchange Act (as the case may be), other than pursuant to the Registration Rights Agreement and (ii) the date that we become subject to the reporting requirements of the Exchange Act.
Following the U.S. Registration Obligation Date, any Holder who owns more than 5% of the outstanding ordinary shares may demand that we cooperate in an underwritten offering of the ordinary shares of such Holder that are subject to the Registration Rights Agreement.
Subject to certain conditions, the Company may suspend sales of shares under an effective registration statement for a limited period of time.
Our obligations with respect to a particular Holder shall terminate at the earlier of (a) such time as all of the Holders ordinary shares have been sold, (b) such time as all of the Holders ordinary shares have been sold, transferred or otherwise disposed of pursuant to Rule 144 without any volume or manner of sale restrictions and (c) such time as such Holder is not an affiliate of ours and holds ordinary shares which constitute 2% or less of the outstanding ordinary shares (the Termination Date).
We have agreed to bear most of the costs associated with fulfillment of our obligations under the Registration Rights Agreement and to provide a general indemnity (subject to certain limited exceptions) against the liability of any Holder that may arise from sales made pursuant to the terms of the Registration Rights Agreement.
In connection with the Findus Acquisition, we have agreed to register the Findus Consideration Shares as soon as practicable following the closing of the Findus Acquisition. The Findus Consideration Shares are being registered for resale pursuant hereto.
Comparison of Shareholder Rights
We were incorporated under, and are governed by, the laws of the British Virgin Islands. The following discussion summarizes material differences between the rights of holders of ordinary shares and the rights of shareholders of a typical corporation incorporated under the laws of the State of Delaware.
Directors Fiduciary Duties
Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a
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director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties, shall act honestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the position of the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose and shall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum and articles of association of the company.
Amendment of Governing Documents
Under Delaware corporate law, with very limited exceptions, a vote of the shareholders of a corporation is required to amend the certificate of incorporation. In addition, Delaware corporate law provides that shareholders have the right to amend the corporations bylaws, but the certificate of incorporation may confer such right on the directors of the corporation.
Our directors may, at any time (including after the Acquisition), without shareholder consent, amend our Memorandum and Articles where the directors determine, in their absolute discretion (acting in good faith), by a resolution of directors, that such changes are necessary or desirable in connection with or resulting from the Acquisition or in connection with admission to listing on the NYSE.
Written Consent
Under Delaware corporate law, a written consent of the directors must be unanimous to take effect. Under British Virgin Islands law and our Memorandum and Articles, only a majority of the directors are required to sign a written consent.
Under Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting of shareholders of a corporation may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that would be necessary to take that action at a meeting at which all shareholders entitled to vote were present and voted. Our Memorandum and Articles provides that any shareholder action permitted to be taken at a shareholder meeting may also be taken by written consent of a majority of the votes of shares entitled to vote thereon. If any shareholder resolution is adopted otherwise than by the unanimous written consent of all shareholders, a copy of such resolution shall be sent to all shareholders not consenting to such resolution.
Shareholder Proposals
Under Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our Memorandum
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and Articles provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of the voting rights in respect of the matter for which the meeting is requested.
Sale of Assets
Under Delaware corporate law, a vote of the shareholders is required to approve a sale of assets only when all or substantially all assets are being sold to a person other than a subsidiary of the Company. Under British Virgin Islands law generally, shareholder approval is required when more than 50% of a companys total assets by value are being disposed of or sold to any person if not made in the usual or regular course of the business carried out by the company.
Redemption of Shares
Under Delaware corporate law, any stock may be made subject to redemption by the corporation at its option, at the option of the holders of that stock or upon the happening of a specified event, provided shares with full voting power remain outstanding. The stock may be made redeemable for cash, property or rights, as specified in the certificate of incorporation or in the resolution of the board of directors providing for the issue of the stock. As permitted by British Virgin Islands law and our Memorandum and Articles, shares may be repurchased, redeemed or otherwise acquired by us. However, the consent of the shareholder whose shares are to be repurchased, redeemed or otherwise acquired must be obtained, except as specified in the terms of the applicable class or series of shares.
Squeeze-Out Merger
Under Delaware General Corporation Law § 253, in a process known as a short form merger, a corporation that owns at least 90% of the outstanding shares of each class of stock of another corporation may either merge the other corporation into itself and assume all of its obligations or merge itself into the other corporation by executing, acknowledging and filing with the Delaware Secretary of State a certificate of such ownership and merger setting forth a copy of the resolution of its board of directors authorizing such merger. If the parent corporation is a Delaware corporation that is not the surviving corporation, the merger also must be approved by a majority of the outstanding stock of the parent corporation. If the parent corporation does not own all of the stock of the subsidiary corporation immediately prior to the merger, the minority shareholders of the subsidiary corporation party to the merger may have appraisal rights as set forth in § 262 of the Delaware General Corporation Law.
Under the BVI Act, subject to any limitations in a companys memorandum and articles of association, members holding 90% of the votes of the outstanding shares entitled to vote, and members holding 90% of the votes of the outstanding shares of each class of shares entitled to vote, may give a written instruction to the company directing the company to redeem the shares held by the remaining members. In our Memorandum and Articles, we have opted out of the BVI Acts squeeze out provisions.
Variation of Rights of Shares
Under Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of that class, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law and our Memorandum and Articles, we may vary the rights attached to any class with the written consent of at least 50% of the holders of each class of shares affected or by a resolution passed by at least 50% of the votes cast by eligible holders of the issued shares of the affected class at a separate meeting of the holders of that class. However, notwithstanding the foregoing, the directors may make such variation to the rights of any class of shares that they, in their absolute discretion (acting in good faith) determine to be necessary or desirable in connection with or resulting from the Acquisition (including at any time after the Acquisition has been made) including in connection with admission to listing on the NYSE.
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Election of Directors
Under Delaware corporate law, unless otherwise specified in the certificate of incorporation or bylaws of a corporation, directors are elected by a plurality of the votes of the shares entitled to vote on the election of directors. Subject to the BVI Act and pursuant to our Memorandum and Articles, directors shall be appointed at any time, and from time to time, by our directors, without the approval of shareholders, either to fill a vacancy or as an additional director. The shareholders may, by a majority vote, appoint any person as a director. In addition, for so long as an initial holder of Founder Preferred Shares holds 20% or more of the Founder Preferred Shares in issue, such holder is entitled to nominate, and the directors are required to appoint, a person as director. If such holder notifies the Company to remove any director nominated by him or her, the other directors shall remove such director, and the holder will have the right to nominate a director to fill the resulting vacancy. In the event an initial holder ceases to be a holder of Founder Preferred Shares or holds less than 20% of the Founder Preferred Shares in issue, such initial holder will no longer be entitled to nominate a person as a director, and the holders of a majority of the Founder Preferred Shares in issue will be entitled to exercise that initial holders former rights to appoint a director instead.
Removal of Directors
Under Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Our Memorandum and Articles provide that a director may be removed at any time if: (i) he resigns by written notice to the Company; (ii) he is requested to resign by written notice of all of the other directors; (iii) he ceases to be a director by virtue of any provision of law or becomes prohibited by law from or is disqualified from being a director; (iv) he becomes bankrupt or makes any arrangement or composition with his creditors generally or otherwise has any judgment executed on any of his assets; (v) he becomes of unsound mind or incapable; (vi) he is absent from meetings of directors for a consecutive period of 12 months and the other directors resolve that his office shall be vacated; (vii) he dies; or (viii) a resolution of shareholders is approved by a majority of the shares entitled to vote on such matter passed at a meeting of shareholders called for the purposes of removing the director or for purposes including the removal of the director or a written special resolution of shareholders is passed by at least 75% of the votes of shares entitled to vote thereon.
Mergers
Under Delaware corporate law, one or more constituent corporations may merge into and become part of another constituent corporation in a process known as a merger. A Delaware corporation may merge with a foreign corporation as long as the law of the foreign jurisdiction permits such a merger. To effect a merger under Delaware General Corporation Law § 251, an agreement of merger must be properly adopted and the agreement of merger or a certificate of merger must be filed with the Delaware Secretary of State. In order to be properly adopted, the agreement of merger must be adopted by the board of directors of each constituent corporation by a resolution or unanimous written consent. In addition, the agreement of merger generally must be approved at a meeting of shareholders of each constituent corporation by a majority of the outstanding stock of the corporation entitled to vote, unless the certificate of incorporation provides for a supermajority vote. In general, the surviving corporation assumes all of the assets and liabilities of the disappearing corporation or corporations as a result of the merger.
Under the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two or more constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a new company. In order to merge or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation, which must be authorized by a resolution of shareholders. One or more companies may also merge or consolidate with one or more companies incorporated under the laws of jurisdictions outside the British Virgin Islands if the merger or consolidation is permitted by the laws of the jurisdictions in which the companies
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incorporated outside the British Virgin Islands are incorporated. In respect of such a merger or consolidation, a British Virgin Islands company is required to comply with the provisions of the BVI Act, and a company incorporated outside the British Virgin Islands is required to comply with the laws of its jurisdiction of incorporation.
Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation contains any provision that, if proposed as an amendment to the memorandum and articles of association, would entitle them to vote as a class or series on the proposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote at the meeting or consent to the written resolution to approve the plan of merger or consolidation.
Inspection of Books and Records
Under Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporations stock ledger, list of shareholders and other books and records. Under British Virgin Islands law, members of the general public, on payment of a nominal fee, can obtain copies of the public records of a company available at the office of the British Virgin Islands Registrar of Corporate Affairs, including the companys certificate of incorporation, its memorandum and articles of association (with any amendments), records of license fees paid to date, any articles of dissolution, any articles of merger and a register of charges if the company has elected to file such a register.
A shareholder of a company is entitled, on giving written notice to the company, to inspect:
(a) | the memorandum and articles of association; |
(b) | the register of members; |
(c) | the register of directors; and |
(d) | the minutes of meetings and resolutions of shareholders and of those classes of shares of which he is a shareholder. |
In addition, a shareholder may make copies of or take extracts from the documents and records referred to in (a) through (d) above. However, subject to the memorandum and articles of association of the company, the directors may, if they are satisfied that it would be contrary to the companys interests to allow a shareholder to inspect any document, or part of any document, specified in (b), (c) or (d) above, refuse to permit the shareholder to inspect the document or limit the inspection of the document, including limiting the making of copies or the taking of extracts from the records. Where a company fails or refuses to permit a shareholder to inspect a document or permits a shareholder to inspect a document subject to limitations, that shareholder may apply to the court for an order that he should be permitted to inspect the document or to inspect the document without limitation.
Where a company keeps a copy of the register of members or the register of directors at the office of its registered agent, it is required to notify the registered agent of any changes to the originals of such registers, in writing, within 15 days of any change; and to provide the registered agent with a written record of the physical address of the place or places at which the original register of members or the original register of directors is kept. Where the place at which the original register of members or the original register of directors is changed, the company is required to provide the registered agent with the physical address of the new location of the records within 14 days of the change of location.
A company is also required to keep at the office of its registered agent or at such other place or places, within or outside the British Virgin Islands, as the directors determine the minutes of meetings and resolutions of shareholders and of classes of shareholders, and the minutes of meetings and resolutions of directors and
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committees of directors. If such records are kept at a place other than at the office of the companys registered agent, the company is required to provide the registered agent with a written record of the physical address of the place or places at which the records are kept and to notify the registered agent, within 14 days, of the physical address of any new location where such records may be kept. The Companys registered agent in the British Virgin Islands is: Elian Fiduciary Services (BVI) Limited, Nemours Chambers, Road Town, Tortola, British Virgin Islands.
Conflict of Interest
Under Delaware corporate law, a contract between a corporation and a director or officer, or between a corporation and any other organization in which a director or officer has a financial interest, is not void as long as (i) the material facts as to the directors or officers relationship or interest are disclosed or known and (ii) either a majority of the disinterested directors authorizes the contract in good faith or the shareholders vote in good faith to approve the contract. Nor will any such contract be void if it is fair to the corporation when it is authorized, approved or ratified by the board of directors, a committee or the shareholders.
The BVI Act provides that a director shall, forthwith after becoming aware that he is interested in a transaction entered into or to be entered into by the company, disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction entered into by the director or the company, so long as the directors interest was disclosed to the board prior to the companys entry into the transaction or was not required to be disclosed because the transaction is between the company and the director himself and is otherwise in the ordinary course of business and on usual terms and conditions. As permitted by British Virgin Islands law and our Memorandum and Articles, a director interested in a particular transaction may vote on it, attend meetings at which it is considered and sign documents on our behalf that relate to the transaction. In addition, if our directors have other fiduciary obligations, including to other companies on whose board of directors they presently sit and to other companies whose board of directors they may join in the future, to the extent that they identify business opportunities that may be suitable for us or other companies on whose board of directors they may sit, our directors are permitted to honor those pre-existing fiduciary obligations ahead of their obligations to us. Accordingly, they may refrain from presenting certain opportunities to us that come to their attention in the performance of their duties as directors of such other entities unless the other companies have declined to accept such opportunities or clearly lack the resources to take advantage of such opportunities
Transactions with Interested Shareholders
Delaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by that statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an interested shareholder for three years following the date that the person becomes an interested shareholder. An interested shareholder generally is a person or group that owns or owned 15% or more of the companys outstanding voting stock within the past three years. This statute has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the company in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which the shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction that resulted in the person becoming an interested shareholder.
British Virgin Islands law has no comparable provision. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, it does provide that these transactions must be entered into in the bona fide best interests of the company and not with the effect of constituting a fraud on the minority shareholders.
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Independent Directors
There are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.
Cumulative Voting
Under Delaware corporate law, cumulative voting for elections of directors is not permitted unless the companys certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholders voting power with respect to electing such director. There are no prohibitions on cumulative voting under the laws of the British Virgin Islands, but our Memorandum and Articles do not provide for cumulative voting.
Shareholders Rights under British Virgin Islands Law Generally
The BVI Act provides for certain remedies that may be available to shareholders. Where a company incorporated under the BVI Act or any of its directors engages in, or proposes to engage in, conduct that contravenes the BVI Act or the companys memorandum and articles of association, British Virgin Islands courts can issue a restraining or compliance order. However, shareholders cannot also bring derivative, personal and representative actions under certain circumstances. The traditional English basis for shareholders remedies has also been incorporated into the BVI Act: where a shareholder of a company considers that the affairs of the company have been, are being or are likely to be conducted in a manner likely to be oppressive, unfairly discriminating or unfairly prejudicial to him, he may apply to the court for an order based on such conduct. In addition, any shareholder of a company may apply to the courts for the appointment of a liquidator of the company and the court may appoint a liquidator of the company if it is of the opinion that it is just and equitable to do so.
The BVI Act also provides that any shareholder of a company is entitled to payment of the fair value of his shares upon dissenting from any of the following: (i) a merger, if the company is a constituent company, unless the company is the surviving company and the shareholder continues to hold the same or similar shares; (ii) a consolidation, if the company is a constituent company; (iii) any sale, transfer, lease, exchange or other disposition of more than 50% in value of the assets or business of the company if not made in the usual or regular course of the business carried on by the company but not including (a) a disposition pursuant to an order of the court having jurisdiction in the matter, (b) a disposition for money on terms requiring all or substantially all net proceeds to be distributed to the shareholders in accordance with their respective interest within one year after the date of disposition, or (c) a transfer pursuant to the power of the directors to transfer assets for the protection thereof; (iv) a redemption of 10% or fewer of the issued shares of the company required by the holders of 90% or more of the shares of the company pursuant to the terms of the BVI Act; and (v) an arrangement, if permitted by the court.
Generally any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the British Virgin Islands or their individual rights as shareholders as established by a companys memorandum and articles of association.
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SHARES ELIGIBLE FOR FUTURE SALE
We cannot make any prediction as to the effect, if any, that sales of ordinary shares or the availability of ordinary shares for sale will have on the market price of our ordinary shares. The market price of our ordinary shares could decline because of the sale of a large number of ordinary shares or the perception that such sales could occur. These factors could also make it more difficult to raise funds through future offerings of ordinary shares.
Sale of Restricted Shares
Upon the consummation of this offering, [●] the ordinary shares will be freely tradable without restriction under the Securities Act, except that any ordinary shares purchased by our affiliates, as that term is defined in Rule 144 under the Securities Act, may generally only be sold in compliance with the limitations of Rule 144 described below. As defined in Rule 144, an affiliate of an issuer is a person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the issuer. Approximately of our ordinary shares outstanding following the consummation of this offering will be deemed restricted securities as that term is defined under Rule 144 (or ordinary shares if the underwriters exercise their over-allotment option in full). Restricted securities may be sold in the public market only if they qualify for an exemption from registration under Rule 144 under the Securities Act, which rule is summarized below, or any other applicable exemption under the Securities Act.
Rule 144
The availability of Rule 144 will vary depending on whether restricted securities are held by an affiliate or a non-affiliate. In general, beginning on November 23, 2016, an affiliate who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months would be entitled to sell within any three-month period a number of shares that does not exceed the greater of one percent of the then outstanding ordinary shares or the average weekly trading volume of our ordinary shares reported through the NYSE during the four calendar weeks preceding such sale under Rule 144. Sales under Rule 144 are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about our Company. The volume limitations, manner of sale and notice provisions described above will not apply to sales by non-affiliates. For purposes of Rule 144, a non-affiliate is any person or entity who is not our affiliate at the time of sale and has not been our affiliate during the preceding three months. In general, under Rule 144 under the Securities Act as currently in effect, beginning on November 23, 2016, a person (or persons whose ordinary shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the meaning of Rule 144 for a least six months (including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those ordinary shares, subject only to the availability of current public information about us. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those ordinary shares without regard to the provisions of Rule 144.
Lock Up
In connection with the 2014 Offering, pursuant to the Placing Agreement entered into in connection with our initial public offering, each of Mr. Franklin, Mr. Gottesman, Lord Myners, Mr. Cathcart and the Founder Entities agreed that they would not, without the prior written consent of the Placing Agents, offer, sell, contract to sell, pledge or otherwise dispose of any of our ordinary shares which they hold directly or indirectly (or acquire pursuant to the terms of the Founder Preferred Shares or any options) or any Founder Preferred Shares they hold, for a period commencing on April 10, 2014, the date of the Placing Agreement and ending May 31, 2016, 365 days after consummation of the Iglo Acquisition. The restrictions on the ability of such Directors and the Founder Entities to transfer their ordinary shares or Founder Preferred Shares, as the case may be, are subject
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to certain usual and customary exceptions including gifts; transfers for estate planning purposes; transfers of any ordinary shares acquired in an open market transaction; transfers to satisfy certain tax liabilities in connection with, or as a result of transactions related to, completion of the Iglo Acquisition or the receipt of stock dividends.
In connection with the Iglo Acquisition, we issued the Iglo Seller Shares pursuant to the terms of the Iglo Acquisition Agreement. The Iglo Seller Shares (less the ordinary shares transferred to the Managers as described below), are subject to a six month lock-up ending on December 1, 2015. A portion of these shares were permitted to be, and were, subsequently transferred to certain members of Iglo management (including Mr. Kenyon, Ms. Howarth and Mr. Leoni Sceti) (the Managers), subject to such Managers agreement that, subject to certain customary exemptions, they will not, and that they will procure that their connected persons will not, dispose of any Iglo Seller Shares held by them until after December 1, 2015.
Options/Equity Awards
We intend to file a registration statement under the Securities Act to register 17,005,341 ordinary shares reserved for issuance under the LTIP and 125,000 ordinary shares issuable upon the exercise of outstanding options previously issued to certain of our current and former directors. As of [●], 2015, there were a total of [●] ordinary shares issuable under currently outstanding executive equity awards issued under the LTIP. Ordinary shares issuable under our equity awards to employees and directors after the effective date of the applicable registration statement will be eligible for resale in the public market without restriction, subject to Rule 144 limitations applicable to affiliates.
Registration Rights
The Registration Rights Agreement grants Birds Eye Iglo Limited Partnership Inc, Mariposa Acquisition II, LLC, TOMS Acquisition I LLC, TOMS Capital Investments LLC and certain funds managed by Pershing Square registration rights with respect to our ordinary shares owned by them. For more information, see Description of Share CapitalRegistration Rights.
We granted registration rights to the Findus Seller pursuant to the Findus Acquisition as described in Description of Share CapitalRegistration Rights.
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U.S. Federal Income Taxation
General
The following discussion is a summary of certain U.S. federal income tax issues relevant to the acquisition, holding and disposition of the ordinary shares. Additional tax issues may exist that are not addressed in this discussion and that could affect the U.S. federal income tax treatment of the acquisition, holding and disposition of the ordinary shares.
This discussion does not address U.S. state, local or non-U.S. income tax consequences. The discussion applies, unless indicated otherwise, only to holders of ordinary shares who acquire the ordinary shares as capital assets. It does not address special classes of holders that may be subject to different treatment under the Internal Revenue Code of 1986, as amended (the Code), such as:
| certain financial institutions; |
| insurance companies; |
| dealers and traders in securities; |
| persons holding ordinary shares as part of a hedge, straddle, conversion or other integrated transaction; |
| partnerships or other entities classified as partnerships for U.S. federal income tax purposes; |
| persons liable for the alternative minimum tax; |
| tax-exempt organizations; |
| certain U.S. expatriates; |
| persons holding ordinary shares that own or are deemed to own 10 percent or more (by vote or value) of the Companys voting stock; or |
| non-U.S. Holders that do not use the U.S. Dollar as their functional currency. |
This section is based on the Code, its legislative history, existing and proposed regulations, published rulings by the Internal Revenue Service (IRS) and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis. Holders of ordinary shares should consult their own tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of acquiring, holding and disposing of ordinary shares in their particular circumstances.
As used herein, a U.S. Holder is a beneficial owner of ordinary shares that is, for U.S. federal income tax purposes: (i) an individual who is a citizen or resident of the United States; (ii) a corporation or other entity taxable as a corporation, created or organized in or under the laws of the United States or any political subdivision thereof; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (within the meaning of the Code) have the authority to control all substantial decisions of the trust, or (2) it has a valid election in effect under applicable Treasury regulations to be treated as a United States person.
This discussion is based upon certain understandings and assumptions with respect to the business, assets and shareholders, including that the Company is not, does not expect to become, nor at any time has been, a controlled foreign corporation as defined in Section 957 of the Code (a CFC). The Company believes that it is not and has never been a CFC, and does not expect to become a CFC. In the event that one or more of such understandings and assumptions proves to be inaccurate, the following discussion may not apply and material adverse U.S. federal income tax consequences may result to U.S. Holders.
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Passive Foreign Investment Company (PFIC) Considerations
The U.S. federal income tax treatment of U.S. Holders will differ depending on whether or not the Company is considered a passive foreign investment company (PFIC) for U.S. federal income tax purposes.
In general, the Company will be considered a PFIC for any taxable year in which: (i) 75 percent or more of its gross income consists of passive income; or (ii) 50 percent or more of the average quarterly market value of its assets in that year are assets (including cash) that produce, or are held for the production of, passive income. For purposes of the above calculations, if the Company, directly or indirectly, owns at least 25 percent by value of the stock of another corporation, then the Company generally would be treated as if it held its proportionate share of the assets of such other corporation and received directly its proportionate share of the income of such other corporation. Passive income generally includes, among other things, dividends, interest, rents, royalties, certain gains from the sale of stock and securities, and certain other investment income.
The Company believes that it is not a PFIC in the current year and is not likely to be a PFIC in future years. However, there is no assurance that the Company will not be a PFIC in future years. If the Company is a PFIC for any taxable year during which a U.S. Holder holds (or, in the case of a lower-tier PFIC, is deemed to hold) its ordinary shares, such U.S. Holder will be subject to significant adverse U.S. federal income tax rules. U.S. Holders should consult their tax advisors on the federal income tax consequences of the Company being treated as a PFIC.
Tax Consequences for U.S. Holders if the Company is not a PFIC
Dividends
In general, subject to the PFIC rules discussed above, a distribution on an ordinary share will constitute a dividend for U.S. federal income tax purposes to the extent that it is made from the Companys current or accumulated earnings and profits as determined under U.S. federal income tax principles. If a distribution exceeds the Companys current and accumulated earnings and profits, it will be treated as a non-taxable reduction of basis to the extent of the U.S. Holders tax basis in the ordinary share on which it is paid, and to the extent it exceeds that basis it will be treated as capital gain. For purposes of this discussion, the term dividend means a distribution that constitutes a dividend for U.S. federal income tax purposes.
The gross amount of any dividend on an ordinary share (which will include the amount of any foreign taxes withheld) generally will be subject to U.S. federal income tax as foreign source dividend income, and will not be eligible for the corporate dividends received deduction. The amount of a dividend paid in foreign currency will be its value in U.S. Dollars based on the prevailing spot market exchange rate in effect on the day the U.S. Holder receives the dividend. A U.S. Holder will have a tax basis in any distributed foreign currency equal to its U.S. Dollar amount on the date of receipt, and any gain or loss realized on a subsequent conversion or other disposition of foreign currency generally will be treated as U.S. source ordinary income or loss. If dividends paid in foreign currency are converted into U.S. Dollars on the date they are received by a U.S. Holder, the U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend income.
Subject to certain exceptions for short-term and hedged positions, a dividend that a non-corporate holder receives on an ordinary share will be subject to a maximum federal income tax rate of 20 percent if the dividend is a qualified dividend. A dividend on an ordinary share will be a qualified dividend if (i) either (a) the ordinary shares are readily tradable on an established market in the United States or (b) the Company is eligible for the benefits of a comprehensive income tax treaty with the United States that the Secretary of the Treasury determines is satisfactory for purposes of these rules and that includes an exchange of information program, and (ii) the Company was not, in the year prior to the year the dividend was paid, and is not, in the year the dividend is paid, a PFIC. Following listing on the New York Stock Exchange, the ordinary shares should be treated as readily tradable on an established securities market in the United States. Even if dividends on the ordinary shares
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would otherwise be eligible for qualified dividend treatment, in order to qualify for the reduced qualified dividend tax rates, a non-corporate holder must hold the ordinary share on which a dividend is paid for more than 60 days during the 120-day period beginning 60 days before the ex-dividend date, disregarding for this purpose any period during which the non-corporate holder has an option to sell, is under a contractual obligation to sell or has made (and not closed) a short sale of substantially identical stock or securities, is the grantor of an option to buy substantially identical stock or securities or, pursuant to Treasury regulations, has diminished its risk of loss by holding one or more other positions with respect to substantially similar or related property. In addition, to qualify for the reduced qualified dividend tax rates, the non-corporate holder must not be obligated to make related payments with respect to positions in substantially similar or related property. Payments in lieu of dividends from short sales or other similar transactions will not qualify for the reduced qualified dividend tax rates.
A non-corporate holder that receives an extraordinary dividend eligible for the reduced qualified dividend rates must treat any loss on the sale of the stock as a long-term capital loss to the extent of the dividend. For purposes of determining the amount of a non-corporate holders deductible investment interest expense, a dividend is treated as investment income only if the non-corporate holder elects to treat the dividend as not eligible for the reduced qualified dividend tax rates. Special limitations on foreign tax credits with respect to dividends subject to the reduced qualified dividend tax rates apply to reflect the reduced rates of tax.
The U.S. Treasury has announced its intention to promulgate rules pursuant to which non-corporate holders of stock of non-U.S. corporations, and intermediaries through whom the stock is held, will be permitted to rely on certifications from issuers to establish that dividends are treated as qualified dividends. Because those procedures have not yet been issued, it is not clear whether the Company will be able to comply with them.
Non-corporate holders of ordinary shares are urged to consult their own tax advisers regarding the availability of the reduced qualified dividend tax rates with respect to dividends received on the ordinary shares in light of their own particular circumstances.
Capital Gains
Subject to the PFIC rules discussed above, on a sale or other taxable disposition of an ordinary share, a U.S. Holder will recognize capital gain or loss in an amount equal to the difference between the U.S. Holders adjusted basis in the ordinary share and the amount realized on the sale or other disposition, each determined in U.S. Dollars. Such capital gain or loss will be long-term capital gain or loss if at the time of the sale or other taxable disposition the ordinary share has been held for more than one year. In general, any adjusted net capital gain of an individual is subject to a maximum federal income tax rate of 20 percent. Capital gains recognized by corporate U.S. holders generally are subject to U.S. federal income tax at the same rate as ordinary income. The deductibility of capital losses is subject to limitations.
Any gain a U.S. Holder recognizes generally will be U.S. source income for U.S. foreign tax credit purposes, and, subject to certain exceptions, any loss will generally be a U.S. source loss. If a non-U.S. income tax is paid on a sale or other disposition of an ordinary share, the amount realized will include the gross amount of the proceeds of that sale or disposition before deduction of the non-U.S. tax. The generally applicable limitations under U.S. federal income tax law on crediting foreign income taxes may preclude a U.S. Holder from obtaining a foreign tax credit for any non-U.S. tax paid on a sale or other disposition of an ordinary share. The rules relating to the determination of the foreign tax credit are complex, and U.S. holders are urged to consult with their own tax advisers regarding the application of such rules. Alternatively, any non-U.S. income tax paid on the sale or other disposition of an ordinary share may be taken as a deduction against taxable income, provided the U.S. Holder takes a deduction and not a credit for all foreign income taxes paid or accrued in the same taxable year.
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Dividends received and capital gains from the sale or other taxable disposition of the ordinary shares recognized by certain non-corporate U.S. Holders with respect to ordinary shares will be includable in computing net investment income of such U.S. Holder for purposes of the 3.8 percent Medicare Contribution Tax.
Tax Consequences for Non-U.S. Holders of Ordinary Shares
Dividends
A non-U.S. Holder generally will not be subject to U.S. federal income tax or withholding on dividends received from the Company with respect to ordinary shares, other than in certain specific circumstances where such income is deemed effectively connected with the conduct by the non-U.S. Holder of a trade or business in the United States. If a non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to those dividends, that income is generally subject to U.S. federal income tax only if it is attributable to a permanent establishment maintained by the non-U.S. Holder in the United States. A non-U.S. Holder that is subject to U.S. federal income tax on dividend income under the foregoing exception generally will be taxed with respect to such dividend income on a net basis in the same manner as a U.S. Holder unless otherwise provided in an applicable income tax treaty; a non-U.S. Holder that is a corporation for U.S. federal income tax purposes may also be subject to a branch profits tax with respect to such item at a rate of 30 percent (or at a reduced rate under an applicable income tax treaty).
Sale, Exchange or Other Taxable Disposition of Ordinary Shares
A non-U.S. Holder generally will not be subject to U.S. federal income tax or withholding with respect to any gain recognized on a sale, exchange or other taxable disposition of ordinary shares unless:
| Certain circumstances exist under which the gain is treated as effectively connected with the conduct by the non-U.S. Holder of a trade or business in the United States, and, if certain tax treaties apply, is attributable to a permanent establishment maintained by the non-U.S. Holder in the United States; or |
| the non-U.S. Holder is an individual and is present in the United States for 183 or more days in the taxable year of the sale, exchange or other taxable disposition, and meets certain other requirements. |
If the first exception applies, the non-U.S. Holder generally will be subject to U.S. federal income tax with respect to such item on a net basis in the same manner as a U.S. Holder unless otherwise provided in an applicable income tax treaty; a non-U.S. Holder that is a corporation for U.S. federal income tax purposes may also be subject to a branch profits tax with respect to such item at a rate of 30 percent (or at a reduced rate under an applicable income tax treaty). If the second exception applies, the non-U.S. Holder generally will be subject to U.S. federal income tax at a rate of 30 percent (or at a reduced rate under an applicable income tax treaty) on the amount by which such non-U.S. Holders capital gains allocable to U.S. sources exceed capital losses allocable to U.S. sources during the taxable year of disposition of the ordinary shares.
Information Reporting and Backup Withholding
Under U.S. federal income tax laws, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation (including IRS Forms 926). Persons who are required to file these information returns and fail to do so may be subject to substantial penalties. Pursuant to Section 1298(f) of the Code, for any year in which the Company is a PFIC, each U.S. Holder will be required to file an information statement, Form 8621, regarding such U.S. Holders ownership interest in the Company. U.S. Holders of ordinary shares should consult with their own tax advisers regarding the requirements of filing information returns.
Furthermore, certain U.S. Holders who are individuals and to the extent provided in future regulations, certain entities, will be required to report information with respect to such U.S. Holders investment in foreign
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financial assets on IRS Form 8938. An interest in the Company constitutes a foreign financial asset for these purposes. Persons who are required to report foreign financial assets and fail to do so may be subject to substantial penalties. Potential shareholders are urged to consult with their own tax advisers regarding the foreign financial asset reporting obligations and their application to an investment in ordinary shares.
Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting and to backup withholding unless the U.S. Holder is a corporation or other exempt recipient or, in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holders U.S. federal income tax liability and may entitle such U.S. Holder to a refund, provided that the required information is furnished to the IRS.
The Foreign Account Tax Compliance Act (FATCA) imposes withholding at a 30 percent rate on payments of interest and dividends and gross proceeds from the disposition of any asset that produces interest or dividends, if such payment is sourced in the United States, to (i) a foreign financial institution unless such foreign financial institution agrees to verify, report and disclose its U.S. accountholders and meet certain other specified requirements or (ii) a non-financial foreign entity that is treated as the beneficial owner of the payment unless such entity certifies that an exception applies or that it does not have any substantial U.S. owners (generally owners of more than 10 percent of the interests in the entity) or provides the name, address and taxpayer identification number of each substantial U.S. owner and such entity meets certain other specified requirements. Under FATCA, beginning in 2017, a new U.S. federal income tax withholding regime applies to pass-through payments made to certain non-U.S. persons. Broadly, pass-through payments include two categories of payments; payments of U.S. source interest, dividends and other specified types of fixed or determinable annual or periodic gains and profits and payments by non-U.S. entities to the extent deemed attributable to U.S. assets. In addition, gross proceeds from the sale of property that can give rise to U.S. source interest and dividends are also subject to withholding as a pass-through payment. If the Company has income sourced in the United States, it will be required to comply with FATCA to avoid withholding taxes.
Non-U.S. Holders generally are not subject to information reporting or backup withholding with respect to dividends paid on ordinary shares, or the proceeds from the sale, exchange or other disposition of ordinary shares, provided that each such non-U.S. Holder certifies as to its foreign status on the applicable duly executed IRS Form W-8 or otherwise establishes an exemption.
This summary is for general information only and it is not intended to be, nor should it be construed to be, tax or legal advice to any prospective shareholder. Further, this summary is not intended to constitute a complete analysis of all U.S. federal income tax consequences relating to holders of their acquisition, ownership and disposition of the ordinary shares. Accordingly, prospective holders of ordinary shares should consult their own tax advisers about the U.S. federal, state, local and non-U.S. tax consequences of the acquisition, ownership and disposition of the ordinary shares.
British Virgin Islands Taxation
The Company
We are not subject to any income, withholding or capital gains taxes in the British Virgin Islands. No capital or stamp duties are levied in the British Virgin Islands on the issue, transfer or redemption of ordinary shares.
Shareholders
Shareholders who are not tax resident in the British Virgin Islands will not be subject to any income, withholding or capital gains taxes in the British Virgin Islands, with respect to the ordinary shares of the Company owned by them and dividends received on such ordinary shares, nor will they be subject to any estate or inheritance taxes in the British Virgin Islands.
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United Kingdom Taxation
General
The following is a general summary of material U.K. tax considerations relating to the ownership and disposal of our ordinary shares. The comments set out below are based on current United Kingdom tax law as of the date of this summary, which is subject to change, possibly with retrospective effect. This summary does not constitute legal or tax advice and applies only to shareholders holding our ordinary shares or depositary interests in respect of our ordinary shares as an investment and who are the beneficial owners thereof, whose ordinary shares and/or depositary interests are not held through an individual savings account or a self-invested personal pension and who have not acquired their or another persons ordinary shares and/or depositary interests by reason of their or another persons employment. These comments may not apply to certain classes of persons, including dealers in securities, insurance companies and collective investment schemes.
This summary is for general information only and is not intended to be, nor should it be considered to be, legal or tax advice to any particular investor. It does not address all of the tax considerations that may be relevant to specific investors in light of their particular circumstances or to investors subject to special treatment under U.K. tax law. Potential investors should consult their own tax advisers concerning the overall tax consequences of acquiring, holding and disposing of our ordinary shares in their particular circumstances.
The Company
As previously stated, we have applied to list our ordinary shares on the NYSE. At or about the time following such listing, we intend to become centrally managed and controlled in the United Kingdom and will therefore become resident in the United Kingdom for U.K. taxation purposes.
If we become resident in the United Kingdom for U.K. tax purposes, we will become subject to U.K. taxation on our income and gains, except where an exemption applies. Dividend income will generally be exempt from U.K. corporation tax on income if certain conditions are met.
We may be treated as a dual resident company for U.K. tax purposes. As a result, our right to claim certain reliefs from U.K. tax may be restricted, and changes in law or practice in the United Kingdom could result in the imposition of further restrictions on our right to claim U.K. tax reliefs.
Shareholders
Sale, Exchange or Other Taxable Disposition of Ordinary Shares
Subject to their individual circumstances, shareholders who are resident in the United Kingdom for U.K. taxation purposes will potentially be liable to U.K. taxation, as further explained below, on any gains which accrue to them on a sale or other disposition of their ordinary shares which constitutes a disposal for U.K. taxation purposes.
A shareholder who is not resident in the United Kingdom for U.K. tax purposes will not generally be subject to U.K. tax on chargeable gains on a disposal of ordinary shares unless such a shareholder carries on a trade, profession or vocation in the United Kingdom through a branch or agency or, in the case of a corporate shareholder, a permanent establishment. For shareholders in such circumstances, a gain on a disposal of our ordinary shares may be subject to UK taxation.
An individual shareholder who acquires ordinary shares while U.K. resident, who temporarily ceases to be U.K. resident or becomes resident in a territory outside the United Kingdom for the purposes of double taxation relief arrangements, and who disposes of our ordinary shares during that period of temporary non-U.K. residence, may on his or her return to the United Kingdom be liable to U.K. capital gains tax on any chargeable gain realized on that disposal.
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For an individual shareholder within the charge to capital gains tax, a disposal of ordinary shares may give rise to a chargeable gain or allowable loss for the purposes of U.K. capital gains tax. The rate of capital gains tax is 18% for individuals who are subject to income tax at the basic rate and 28% to the extent that an individual shareholders chargeable gains, when aggregated with his or her income chargeable to income tax, exceeds the basic rate band for income tax purposes. However, an individual shareholder is entitled to realize £11,100 of gains (the annual exempt amount) in each tax year without being liable to tax.
For a shareholder within the charge to U.K. corporation tax, a disposal (or deemed disposal) of ordinary shares may give rise to a chargeable gain or allowable loss for the purposes of U.K. corporation tax. Corporation tax is charged on chargeable gains at the rate applicable to that company, subject to any available exemption or relief. Indexation allowance may reduce the amount of chargeable gain that is subject to corporation tax (but may not give rise to or increase an allowable loss).
Offshore funds
Shareholders who are resident in the United Kingdom for U.K. taxation purposes, or who carry on a trade in the United Kingdom through a branch, agency or permanent establishment with which their investment in us is connected, should note that the Taxation (International and Other Provisions) Act 2010 and the Offshore Funds (Tax) Regulations 2009 contain provisions (the offshore fund rules) which apply in relation to shareholdings and certain other interests in an entity which is an offshore fund for the purposes of those provisions.
So long as we are not resident in the United Kingdom for U.K. tax purposes, the offshore fund rules may apply in relation to ordinary shares held by such shareholders. The offshore fund rules will not apply in relation to any taxable periods for which we are resident in the United Kingdom for U.K. tax purposes.
Under the offshore fund rules, any gain accruing to a person upon the sale or other disposal of an interest in an offshore fund can, in certain circumstances, be chargeable to U.K. tax as income, rather than as a capital gain. Please note that certain specific conditions regarding the nature of a shareholding need to be met in order for the offshore fund rules to apply, and certain exemptions from the charge to tax on income gains may apply.
A shareholding in an offshore fund which is substantially invested in debt instruments may in some circumstances be treated as a holding in debt rather than in shares. Broadly this would mean that any income returns would be treated as interest rather than dividends. In addition, for any shareholder within the charge to U.K. corporation tax, the shareholding would be treated as a deemed loan relationship and all returns on it would be taxed on a fair value basis.
The offshore fund rules are complex and shareholders should consult their own independent professional advisers.
Dividends on Ordinary Shares
No U.K. tax will be withheld or deducted at source from dividends paid by us on our ordinary shares.
Shareholders who are resident in the United Kingdom for tax purposes may, subject to their individual circumstances, be liable to U.K. income tax or, as the case may be, U.K. corporation tax on dividends paid to them by us.
An individual shareholder who is within the charge to U.K. income tax and who receives a cash dividend from us may be entitled to a tax credit equal to one-ninth of the amount of the cash dividend received, which tax credit will be equivalent to 10% of the aggregate of the dividend received and the tax credit (the gross dividend). Such an individual shareholder will be subject to income tax on the gross dividend.
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An individual shareholder who is subject to U.K. income tax at a rate or rates not exceeding the basic rate will be liable to tax on the gross dividend at the rate of 10%, so that the tax credit will satisfy the income tax liability of such a shareholder in full. Where the tax credit exceeds the shareholders tax liability, the shareholder cannot claim repayment of the tax credit from H.M. Revenue and Customs.
An individual shareholder who is subject to U.K. income tax at the higher rate will be liable to income tax on the gross dividend at the rate of 32.5% to the extent that such sum, when treated as the top slice of that shareholders income, exceeds the threshold for higher rate income tax. After setting the 10% tax credit against part of the shareholders liability, a higher rate tax payer will therefore be liable to account for tax equal to 22.5% of the gross dividend (or 25% of the net cash dividend), to the extent that the gross dividend exceeds the threshold for the higher rate.
An individual shareholder who is subject to U.K. income tax at the additional rate will be liable to income tax on the gross dividend at the rate of 37.5% of the gross dividend, but will be able to set the UK tax credit off against part of this liability. The effect of this set-off of the UK tax credit is that such a shareholder will be liable to account for additional tax equal to 27.5% of the gross dividend (or approximately 30.6% of the net cash dividend) to the extent that the gross dividend exceeds the threshold for the additional rate.
The UK Government announced on July 8, 2015, that it proposes to reform the U.K. income tax treatment of dividends effective April 6, 2016. It is proposed that shareholders will no longer be entitled to the tax credit referred to above in respect of dividends paid on or after April 6, 2016. Instead, the UK Government proposes to introduce an annual dividend tax allowance of £5,000 per tax year. If and to the extent that an individual shareholder who is subject to U.K. income tax receives dividends in each tax year which, in aggregate, do not exceed that allowance, the individual will not be liable to U.K. income tax on those dividends. If and to the extent that an individual shareholder who is subject to U.K. income tax receives dividends in each tax year which, in aggregate, exceed that allowance, the individual will be subject to U.K. income tax on those dividends at the rate of 7.5% (in the case of basic rate taxpayers), 32.5% (in the case of higher rate taxpayers) and 38.1% (in the case of additional rate taxpayers), and the individual will not be entitled to any tax credit in respect of those dividends.
Shareholders who are within the charge to U.K. corporation tax (and who are not small companies) will generally be exempt from corporation tax on dividends they receive from us, provided the dividends fall within an exempt class and certain conditions are met.
Shareholders within the charge to U.K. corporation tax who are small companies (as that term is defined in section 931S of the Corporation Tax Act 2009) will be liable to corporation tax on any dividends paid to them by us, while we remain resident outside the United Kingdom, because we will not be resident in a qualifying territory for the purposes of the legislation in Part 9A of the Corporation Tax Act 2009. However, if we become resident in the United Kingdom for U.K. tax purposes, such investors may be exempt from U.K. corporation tax on any dividends they receive from us after that time.
Certain other provisions of U.K. tax legislation
(i) Section 13 Taxation of Chargeable Gains Act 1992Deemed Gains
The attention of any shareholder who is resident in the United Kingdom for U.K. tax purposes is drawn to the provisions of section 13 of the Taxation of Chargeable Gains Act 1992. This provision may be relevant so long as we remain resident outside the United Kingdom for U.K. tax purposes and would be a close company if we were resident in the United Kingdom. Under this provision, shareholders could (depending on individual circumstances) be liable to U.K. taxation of capital gains on their pro rata share of any capital gain accruing to us (or, in certain circumstances, to a subsidiary or investee company of ours). If we become resident in the United Kingdom for U.K. tax purposes, the provision may continue to be relevant in relation to capital gains accruing to non-U.K. resident subsidiaries or investee companies of ours. Shareholders should consult their own independent professional advisers as to their U.K. tax position.
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(ii) Controlled Foreign Companies ProvisionsDeemed Income of Corporates
If we were at any time to be controlled, for U.K. tax purposes, by persons (of any type) resident in the United Kingdom for U.K. tax purposes, the controlled foreign companies provisions in Part 9A of Taxation (International and Other Provisions) Act 2010 could apply to shareholders within the charge to U.K. corporation tax in relation to their shareholdings. Under these provisions, part of any chargeable profits accruing to us so long as we remain resident outside the United Kingdom for U.K. tax purposes, or in certain circumstances to any non-U.K. resident subsidiary or investee company of ours, may be attributed to such a shareholder and may in certain circumstances be chargeable to U.K. corporation tax in the hands of the shareholder. The Controlled Foreign Companies provisions are complex, and shareholders should consult their own independent professional advisers.
(iii) Chapter 2 of Part 13 of the Income Tax Act 2007Deemed Income of Individuals
The attention of shareholders who are individuals resident in the United Kingdom for tax purposes is drawn to the provisions set out in Chapter 2 of Part 13 of the U.K. Income Tax Act 2007 (Transfer of assets abroad), which may render those individuals liable to U.K. income tax in respect of undistributed income (but not capital gains) of ours. However, those provisions should not be relevant in any taxable periods for which we are resident in the United Kingdom for U.K. tax purposes.
(iv) Transactions in securities
The attention of shareholders (whether companies or individuals) within the scope of U.K. taxation is drawn to the provisions set out in, respectively, Part 15 of the Corporation Tax Act 2010 and Chapter 1 of Part 13 of the Income Tax Act 2007, which give powers to H.M. Revenue and Customs to raise tax assessments so as to cancel tax advantages derived from certain prescribed transactions in securities.
Stamp duty/stamp duty reserve tax
(i) Issue of Ordinary Shares or Depositary Interests in respect of Ordinary Shares
No U.K. stamp duty or stamp duty reserve tax will be payable on the issue of ordinary shares or depositary interests in respect of ordinary shares, subject to the comments in (iv) below.
(ii) Transfers of Ordinary Shares
U.K. stamp duty will in principle be payable on any instrument of transfer of our ordinary shares that is executed in the United Kingdom or that relates to any property situated, or to any matter or thing done or to be done, in the United Kingdom. An exemption from stamp duty is available on an instrument transferring ordinary shares where the amount or value of the consideration is £1,000 or less and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions in respect of which the aggregate amount or value of the consideration exceeds £1,000. Shareholders should be aware that, even where an instrument of transfer is in principle subject to stamp duty, stamp duty is not required to be paid unless it is necessary to rely on the instrument for legal purposes, for example to register a change of ownership or in litigation in a U.K. court. An instrument of transfer need not be stamped in order for the British Virgin Islands register of ordinary shares to be updated, and the register is conclusive proof of legal ownership.
Provided that the ordinary shares are not registered in any register maintained in the United Kingdom by or on behalf of us and are not paired with any shares issued by a U.K. incorporated company, any agreement to transfer ordinary shares will not be subject to U.K. stamp duty reserve tax.
We currently do not intend that any register of our ordinary shares will be maintained in the United Kingdom.
134
(iii) Transfers of Depositary Interests in respect of Ordinary Shares
So long as our central management and control is not exercised in the United Kingdom, the shares are not maintained on a share register kept in the United Kingdom and our ordinary shares are listed on a recognized stock exchange, no U.K. stamp duty reserve tax should be payable on the transfer of depositary interests in respect of ordinary shares through CREST.
However, if we become centrally managed and controlled in the United Kingdom or our share register is moved to the United Kingdom, agreements to transfer depositary interests in respect of ordinary shares entered into at or after that time will be subject to U.K. stamp duty reserve tax, generally at the rate of 0.5% of the consideration for the transfer. The transferee will generally be liable to bear the cost of such stamp duty reserve tax, which will be payable regardless of whether the agreement to transfer is executed or held in the United Kingdom and whether the our share register is held in the United Kingdom.
(iv) Ordinary Shares held through clearance services or depositary receipt arrangements
Where ordinary shares are transferred or issued to, or to a nominee or agent for, a person whose business is or includes the provision of clearance services or issuing depositary receipts (but not including CREST), U.K. stamp duty or stamp duty reserve tax may be payable at a rate of 1.5% (rounded up if necessary, in the case of stamp duty, to the nearest multiple of £5) of the amount or value of the consideration payable for (or, in certain circumstances, the value of) the ordinary shares. This liability for stamp duty or stamp duty reserve tax will be payable by the clearance service or depositary receipt operator or its nominee, as the case may be, but in practice participants in the clearance service or depositary receipt scheme will generally be required to reimburse them for such cost.
Following litigation, H.M. Revenue and Customs has confirmed that it will no longer seek to apply the above 1.5% stamp duty or stamp duty reserve tax charge on the issue of shares into a clearance service or depositary receipt system established in a European Union Member State on the basis that the charge is not compatible with EU law. However, their view is that the 1.5% charge will still apply on the transfer of shares into such a clearance service or depositary receipts system where the transfer is not an integral part of the issue of share capital. This view is currently being challenged in further litigation. Accordingly, shareholders should consult their own independent professional advisers before incurring or reimbursing the costs of such a 1.5% stamp duty or stamp duty reserve tax charge.
135
EXPENSES RELATED TO THE OFFERING
We estimate the fees and expenses to be incurred by us in connection with the resale of the ordinary shares in this offering, other than underwriting discounts and commissions, to be as follows:
SEC registration fees |
$ | |||
Transfer agents fees |
||||
Legal fees and expenses |
||||
Accounting fees and expenses |
||||
Printing expenses |
||||
Miscellaneous expenses |
||||
|
|
|||
Total |
$ | |||
|
|
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES
We are incorporated and currently existing under the laws of the British Virgin Islands. In addition, certain of our directors and officers reside outside of the United States and most of the assets of our non-U.S. subsidiaries are located outside of the United States. As a result, it may be difficult for investors to effect service of process on us or those persons in the United States or to enforce in the United States judgments obtained in United States courts against us or those persons based on the civil liability or other provisions of the United States securities laws or other laws.
In addition, uncertainty exists as to whether the courts of the British Virgin Islands would:
| recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liabilities provisions of the securities laws of the United States or any state in the United States; or |
| entertain original actions brought in the British Virgin Islands against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. |
We have been advised by Ogier, Tortola, British Virgin Islands, that the United States and the British Virgin Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments of United States courts in civil and commercial matters and that a final judgment for the payment of money rendered by any general or state court in the United States based on civil liability, whether or not predicated solely upon the United States securities laws, would not be automatically enforceable in the British Virgin Islands. We have also been advised by Ogier that any final and conclusive monetary judgment for a definite sum obtained against us in United States courts would be treated by the courts of the British Virgin Islands as a cause of action in itself and sued upon as a debt at common law so that no retrial of the issues would be necessary, provided that:
| the British Virgin Islands courts had jurisdiction over the matter and we either submitted to such jurisdiction or were resident or carrying on business within such jurisdiction and were duly served with process; |
| the judgment given by the courts was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations; |
| the judgment was not procured by fraud; |
| recognition or enforcement of the judgment in the British Virgin Islands would not be contrary to public policy; and |
| the proceedings pursuant to which judgment was obtained were not contrary to natural justice. |
136
Whether these requirements are met in respect of a judgment based upon the civil liability provisions of the United States securities laws, including whether the award of monetary damages under such laws would constitute a penalty, is an issue for the British Virgin Islands court making such decision.
The validity of the ordinary shares offered by this prospectus and certain legal matters as to British Virgin Islands law will be passed upon for us by Ogier, Tortola, British Virgin Islands. The Company has been advised on U.S. securities matters by Greenberg Traurig, P.A.
EXPERTSPREDECESSOR AND SUCCESSOR
The financial statements of Nomad Foods Limited as of March 31, 2015 and for the year ended March 31, 2015, included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Iglo Foods Holdings Limited as of December 31, 2014, 2013 and 2012 and for each of the three years in the period ended December 31, 2014 included in this prospectus have been so included in reliance on the report of Pricewaterhouse Coopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The consolidated carve-out financial statements for Findus Sverige AB as of and for the twelve months ended September 30, 2014 and September 30, 2013, as of and for the nine months ended September 30, 2012 and as of December 31, 2011, included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.
The current address of PricewaterhouseCoopers LLP is 1 Embankment Place, London, United Kingdom WC2N 6RH.
We have filed with the SEC a registration statement on Form F-1 under the Securities Act with respect to the ordinary shares offered under this prospectus. For the purposes of this section, the term registration statement means the original registration statement and any and all amendments including the schedules and exhibits to the original registration statement or any amendment. This prospectus does not contain all of the information set forth in the registration statement we filed. For further information regarding us and the ordinary shares offered in this prospectus, you may desire to review the full registration statement, including the exhibits. The registration statement, including its exhibits and schedules, may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling 1-202-551-8909. Copies of such materials are also available by mail from the Public Reference Branch of the SEC at 100 F Street, N.E., Washington, D.C. 20549 at prescribed rates. In addition, the SEC maintains a website ( http://www.sec.gov ) from which interested persons can electronically access the registration statement, including the exhibits and schedules to the registration statement.
Immediately upon completion of this offering, we will become subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders, and Section 16 short-swing profit reporting for our officers and directors and for holders of more than 10% of our ordinary shares.
137
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
Page | ||||
Findus Sverige AB |
||||
Audited Consolidated Carve-out Financial Statements of Findus as of December 31, 2011 and September 30, 2012, 2013, and 2014, and for the nine-month period ended September 30, 2012 and the years ended September 30, 2013 and 2014 |
||||
F-118 | ||||
F-120 | ||||
F-121 | ||||
Consolidated Carve-Out Statements of Changes in Net Parent Investment |
F-122 | |||
F-123 | ||||
F-124 | ||||
F-125 | ||||
Unaudited Consolidated Carve-out Financial Statements of Findus as of and for the nine months ended June 27, 2015 |
||||
F-172 | ||||
Condensed Consolidated Carve-out Statements of Comprehensive Income |
F-173 | |||
Condensed Consolidated Carve-out Statements of Changes in Net Parent Investment |
F-174 | |||
Condensed Consolidated Carve out Statements of Financial Position |
F-175 | |||
F-176 | ||||
Notes to the Unaudited Condensed Consolidated Carve-out Financial Statements |
F-177 |
F-2
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Nomad Foods Limited (formerly Nomad Holdings Limited)
In our opinion, the accompanying statement of financial position and the related statements of comprehensive income, of cash flows and of changes in equity present fairly, in all material respects, the financial position of Nomad Foods Limited (formerly Nomad Holdings Limited) at 31 March 2015, and the results of its operations and its cash flows for the year ended 31 March 2015 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
London, United Kingdom
September 8, 2015
F-3
Nomad Foods Limited Statement of Financial Position
As of March 31, 2015
Note | March 31, 2015 | |||||||
m | ||||||||
Current assets |
||||||||
Cash and cash equivalents |
2.5 | 126.8 | ||||||
Portfolio investments |
320.6 | |||||||
|
|
|||||||
Total assets |
447.4 | |||||||
|
|
|||||||
Current liabilities |
||||||||
Payables and accrued expenses |
0.7 | |||||||
Founder Preferred Shares Annual Dividend Amount |
7,11 | 38.2 | ||||||
|
|
|||||||
Total current liabilities |
38.9 | |||||||
|
|
|||||||
Non-current liabilities |
||||||||
Founder Preferred Shares Annual Dividend Amount |
7,11 | 133.1 | ||||||
Warrant redemption liability |
7,12 | 0.5 | ||||||
|
|
|||||||
Total non-current liabilities |
133.6 | |||||||
|
|
|||||||
Total liabilities |
172.5 | |||||||
|
|
|||||||
(Deficit)/equity attributable to equity holders |
||||||||
Capital reserve |
9 | 353.5 | ||||||
Share-based payment reserve |
| |||||||
Translation reserve |
88.9 | |||||||
Accumulated deficit |
(167.5 | ) | ||||||
|
|
|||||||
Total equity |
274.9 | |||||||
|
|
|||||||
Total liabilities and equity |
447.4 | |||||||
|
|
The accompanying notes are an integral part of these financial statements.
F-4
Nomad Foods Limited Statement of Comprehensive Income
For the Period from April 1, 2014 to March 31, 2015
Note |
For the period
from April 1, 2014 to March 31, 2015 |
|||||||
m except per share
data |
||||||||
Income/(loss) |
||||||||
Administration costs |
4 | (0.7 | ) | |||||
Exceptional items |
(0.7 | ) | ||||||
Charge related to Founder Preferred Shares Annual Dividend Amount |
11 | (165.8 | ) | |||||
Charge related to Warrant redemption liability |
12 | (0.4 | ) | |||||
|
|
|||||||
Operating loss |
(167.6 | ) | ||||||
|
|
|||||||
Finance Income |
||||||||
Realised and unrealised gain on current portfolio investments |
0.1 | |||||||
Interest income |
| |||||||
|
|
|||||||
Loss for the period |
(167.5 | ) | ||||||
|
|
|||||||
Basic and diluted loss per share |
(3.35 | ) | ||||||
Comprehensive income/(loss): |
||||||||
Net loss for the period |
(167.5 | ) | ||||||
Other comprehensive income after tax: |
||||||||
Foreign currency gain |
88.9 | |||||||
|
|
|||||||
Other comprehensive income for the period, net of tax |
88.9 | |||||||
|
|
|||||||
Total comprehensive loss for the period |
(78.6 | ) | ||||||
|
|
The accompanying notes are an integral part of these financial statements.
F-5
Nomad Foods Limited Statement of Changes of Equity
For the Period from April 1, 2014 to March 31, 2015
Note |
Capital
reserve |
Translation
Reserve |
Retained
Earnings |
Total | ||||||||||||||||
m | m | m | m | |||||||||||||||||
Balance as of April 1, 2014 |
| | | | ||||||||||||||||
Issue of Founder Preferred Shares |
9 | 10.6 | | | 10.6 | |||||||||||||||
Issue of Ordinary Shares |
9 | 350.9 | | | 350.9 | |||||||||||||||
Cost of Admission |
9 | (8.0 | ) | | | (8.0 | ) | |||||||||||||
Loss and total comprehensive loss for the period |
| 88.9 | (167.5 | ) | (78.6 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of March 31, 2015 |
353.5 | 88.9 | (167.5 | ) | 274.9 |
The accompanying notes are an integral part of these financial statements.
F-6
Nomad Foods Limited Statement of Cash Flows
For the Period from April 1, 2014 to March 31, 2015
Note |
For the period from
April 1, 2014 to March 31, 2015 |
|||||||
m | ||||||||
Operating activities: |
||||||||
Net loss |
(167.5 | ) | ||||||
Reconciliation of net loss to net cash used in operating activities: |
||||||||
Non-cash charge related to Founder Preferred Shares Annual Dividend Amount |
7 | 165.8 | ||||||
Non-cash charge related to warrant redemption liability |
0.4 | |||||||
Non-cash Chairman and Independent Non-Executive Director fees |
0.2 | |||||||
Unrealised gain on portfolio investments |
(0.1 | ) | ||||||
Increase in cash resulting from changes in liabilities: |
||||||||
Accounts payable and accrued expenses |
0.7 | |||||||
|
|
|||||||
Net cash used in operating activities |
(0.5 | ) | ||||||
|
|
|||||||
Investing activities: |
||||||||
Purchase of portfolio investments |
(478.8 | ) | ||||||
Redemption of portfolio investments |
183.2 | |||||||
|
|
|||||||
Net cash used in investing activities |
(295.6 | ) | ||||||
|
|
|||||||
Financing activities: |
||||||||
Proceeds from issuance of Founder Preferred Shares |
9 | 10.6 | ||||||
Proceeds from issuance of Ordinary Shares, net of offering cost |
9 | 350.9 | ||||||
Costs of admission |
9 | (8.0 | ) | |||||
Loans from Founder Entities for incorporation |
0.1 | |||||||
Repayment of loans to Founder Entities |
(0.1 | ) | ||||||
|
|
|||||||
Net cash provided by financing activities |
353.5 | |||||||
Effect of exchange rate fluctuations |
69.4 | |||||||
|
|
|||||||
Net increase in cash and cash equivalents |
126.8 | |||||||
|
|
|||||||
Cash and cash equivalents at beginning of period |
| |||||||
Cash and cash equivalents at end of period |
126.8 | |||||||
|
|
The accompanying notes are an integral part of these financial statements.
F-7
Nomad Foods Limited Notes to the Financial Statements
1) | General information |
Nomad Foods Limited (Nomad, formerly Nomad Holdings Limited) was incorporated in the British Virgin Islands on April 1, 2014. These financial statements cover the date from our incorporation to March 31, 2015. The address of Nomads registered office is Nemours Chambers, Road Town, Tortola, British Virgin Islands.
These financial statements were approved for issuance by the Board of Directors (the Directors) on September 4, 2015.
2) | Principal accounting policies |
The principal accounting policies applied in the financial statements are set out below.
2.1) | Basis of preparation |
These historical financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union (IFRS), and those parts of the BVI Business Companies Act applicable under IFRS. As Nomad was incorporated on April 1, 2014, there is no comparative information.
The Directors have, at the time of approving the financial statements, a reasonable expectation that Nomad has adequate resources to continue in operational existence for the foreseeable future given the cash funds available and the current forecast cash outflows. Thus, Nomad continues to adopt the going concern basis of accounting in preparing the financial statements.
Nomads functional currency is the U.S. Dollar ($). The financial statements and notes thereto are presented in Euro (), which is Nomads reporting currency and are rounded to the nearest 0.1 million, except when otherwise indicated.
The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Companys accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.
2.2) | New accounting standards |
This is the first set of audited financial statements prepared by Nomad since Nomads Ordinary Shares were admitted to the Official List by way of a Standard Listing, and to trading on the London Stock Exchanges main market for listed securities on April 15, 2014. Nomad adopted all applicable standards and applicable interpretations published by the IASB and as endorsed by the European Union for the period ended March 31, 2015. Nomad did not adopt any standard or interpretation published by the IASB and endorsed by the European Union for which the mandatory application date is on or after April 1, 2015.
Based on Nomads existing activity, there are no new interpretations, amendments or full standards that have been issued but not effective or adopted for the financial period ended March 31, 2015 that will have a material impact on Nomad.
2.3) | Segmental reporting |
IFRS 8 requires Nomad to disclose information about its operating segments and the geographic areas in which it operates. It requires identification of operating segments on the basis of internal reports that are regularly reviewed by the entitys chief operating decision maker in order to allocate resources to the segment and assess its performance. As no operating activities are carried out in Nomad, no operating segments can be identified and therefore no segmental information has been presented.
F-8
Nomad Foods Limited Notes to the Financial Statements
2.4) | Foreign currency translation |
As noted above, Nomads functional currency is the U.S. Dollar. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Nomad income statement.
The Companys financial statements are translated into the reporting currency (i.e., Euros). Assets and liabilities are translated at the year-end exchange rate, income and expenses are translated at average exchange rates during the year, and equity components (excluding current year movements, which are translated at the average rates) are translated at historical rates. Net unrealized exchange adjustments arising on the translation of the financial statements are reported within Accumulated other comprehensive income in equity.
2.5) | Financial instruments |
Financial assets
Nomad classifies its financial assets based on the nature and purpose for which the financial instrument was acquired. Management determines the classification of its financial instruments at initial recognition and the classification is re-evaluated at every reporting date. Nomad currently holds the following financial instruments.
Cash and cash equivalents
Cash and short-term securities comprise cash on hand, deposits held at call with banks, and other short-term highly liquid investments. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, generally have an original maturity of 3 months or less and are subject to an insignificant risk of adverse changes in value.
Portfolio investments
From time to time, Nomad invests in short-term highly liquid investments that are readily convertible into known amounts of cash and have a maturity of more than 3 months and less than one year.
Financial liabilities
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less otherwise they are presented as non-current liabilities. Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Details of the liability arising from Founder Preferred Shares dividend rights are disclosed in note 2.7.
Nomad derecognises financial liabilities when, and only when, Nomads obligations are discharged, transferred, cancelled or expired.
2.6) | Share-based payments |
Where Nomad engages in share based payment transactions in respect of services received from certain of its employees, these are accounted for as equity settled share based payments in accordance with IFRS 2.
The fair value of the grant of the options issued to our non executive directors, Lord Myners, Alun Cathcart and Guy Yamen, (as more fully described in Note 9) (the Initial Options) is recognised as an expense.
F-9
Nomad Foods Limited Notes to the Financial Statements
The total amount to be expensed is determined by reference to the fair value of the awards granted:
| including any market performance condition; |
| excluding the impact of any service and non-market performance vesting conditions; and |
| including the impact of any non-vesting conditions. |
Non-market vesting conditions are included in assumptions about the number of awards that are expected to vest. The total expense is recognised in the income statements with a corresponding credit to equity over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of awards that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.
2.7) | Equity bifurcation and Founder Preferred Shares Annual Dividend Amounts |
Nomad issued Founder Preferred Shares to both TOMS Acquisition I, LLC and Mariposa Acquisition II, LLC (collectively the Founder Entities) in connection with its initial public offering in April 2014. Holders of the Founder Preferred Shares are entitled to receive annual dividend amounts subject to certain performance conditions (the Founder Preferred Shares Annual Dividend Amount). The instrument and its component parts were analysed under IFRS 2. Nomad has classified the Founder Preferred Shares Annual Dividend Amount as a liability as these may be settled in cash at the discretion of the Company. The liability is recognised at their fair value to represent the benefit provided to the Founder Entities.
The fair value of the liability was valued using a Monte Carlo simulation. As the Founder Preferred Shares were issued to affiliates of certain of the non-executive directors of Nomad, the fair value of the Founder Preferred Shares Annual Dividend Amount given to the holders was recorded as an expense under IFRS 2. There are no further service conditions attached and the expense was recognised immediately as an employee expense.
Subsequent to its initial recognition when issued, the liability will be adjusted for changes in fair market value. Changes in value will be recorded in the income statement.
In addition to the Founder Preferred Shares Annual Dividend Amount, the Founder Preferred Shares give the holder the same entitlements as a holder of Ordinary Shares. As the cash consideration received for this equity entitlement was the same price as the IPO, this part of the transaction is outside the scope of IFRS 2 and classified as equity in accordance with IAS 32.
2.8) | Finance income |
Finance income is accounted for on an accrual basis using the effective interest method and represents income from cash and cash equivalent assets and portfolio investments.
2.9) | Exceptional items |
The separate reporting of exceptional items which are presented as exceptional within the relevant income statement category, helps provide an indication of the Groups underlying business performance. Exceptional items have been identified and adjusted by virtue of their size, nature or incidence. In determining whether an event or transaction is exceptional, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence. Exceptional items comprise legal fees in relation to the acquisition of Iglo Group.
F-10
Nomad Foods Limited Notes to the Financial Statements
3) | Critical accounting judgments and key sources of estimation uncertainty |
The preparation of the financial statements requires the use of certain critical estimates. It also requires management to exercise judgment in the process of applying Nomads accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed below:
Management has also considered, at the grant date, the probability of an acquisition being completed, and potential range of values for the Founder Preferred Shares as well as associated dividend rights, based on the circumstances at the grant date. Overall it has been concluded that the fair value of the Founder Preferred Shares and respective dividend rights (calculated using a Monte Carlo simulation) is charged to the income statement with a corresponding credit to equity and liabilities. A summary of the terms of the Founder Preferred Shares and their associated dividend rights are set out in Notes 9 and 11.
4) | Administrative expenses and exceptional items |
The administrative expenses and exceptional items for the period are as follows:
2015 | ||||
m | ||||
Chairman and Independent Non-Executive Director fee |
0.2 | |||
Share-based compensation (i) |
| |||
Other operating expenses |
0.5 | |||
|
|
|||
Total administrative expenses |
0.7 | |||
Acquisition related costs (ii) |
0.7 | |||
|
|
|||
Total exceptional items |
0.7 | |||
|
|
(i) | Share-based compensation includes the Independent Non-Executive Directors share option charge of approximately 31,000. |
(ii) | Primarily relates to legal fees incurred in respect of the acquisition of Iglo Group as described further in note 15. |
5) | Auditor remuneration |
During the period, Nomad obtained the following services from the auditors:
2015 | ||||
m | ||||
Audit services |
0.1 | |||
Audit related assurance services (i) |
| |||
Other services (ii) |
0.1 | |||
|
|
|||
Total |
0.2 | |||
|
|
(i) | Audit related assurance services include the fees paid for review of the Nomads Interim Management Report for the period from incorporation to December 31, 2014. |
(ii) | Other assurance services include the fees paid for the services as Reporting Accountant for Nomads initial public offering in April 2014. |
6) | Taxation |
Nomad is not subject to income tax or corporation tax in the British Virgin Islands.
F-11
Nomad Foods Limited Notes to the Financial Statements
7) | Fair value |
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, Nomad uses various methods including market, income and cost approaches. Based on these approaches, Nomad utilises certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs may be readily observable, market corroborated, or generally unobservable inputs. Nomad utilises valuation techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques Nomad is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
Level 1Quoted prices for identical assets and liabilities traded in active exchange markets, such as the New York Stock Exchange.
Level 2Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. Level 2 also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data.
Level 3Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for nonbinding single dealer quotes not corroborated by observable market data.
Where market information is not available to support internal valuations, reviews of third party valuations are performed.
While Nomad believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
The following is a description of the valuation methodologies used for instruments measured at fair value:
Founder Preferred Shares Annual Dividend Amount
Nomad utilises a Monte Carlo simulation to derive the estimated fair value of the Founder Preferred Shares Annual Dividend Amount. Key inputs into the model include probability of an acquisition, market value of Ordinary Shares, expected volatility, and a risk-free interest rate.
The following table presents Nomads liabilities that are measured at fair value at March 31, 2015.
Level 3 | ||||
m | ||||
Founder Preferred Shares Annual Dividend Amount |
171.3 |
There were no transfers between Levels during the period.
F-12
Nomad Foods Limited Notes to the Financial Statements
The following table presents Nomads fair value measurements using significant unobservable inputs (Level 3):
Founder
Preferred Shares Annual Dividend Amount |
||||
m | ||||
Opening balance at April 1, 2014 |
| |||
Change recognised in the income statement |
171.3 | |||
|
|
|||
Closing balance at December 31, 2014 |
171.3 |
8) | Earnings per share |
2015 | ||||
Net loss attributable to shareholders (m) |
(167.5 | ) | ||
Weighted average Ordinary Shares and Founder Preferred Shares |
50,025,000 | |||
Loss per share (s) |
(3.35 | ) |
Basic loss is calculated by dividing the loss attributable to shareholders of Nomad of 167.5 million by the weighted average number of Ordinary Shares of 48,525,000 and Founder Preferred Shares of 1,500,000.
Diluted earnings per share equals basic earnings per share at March 31, 2015 as the exercise of the Initial Options and Warrants would not be dilutive, given the losses arising.
Additional ordinary shares have been issued as a result of the Iglo Acquisition of Iglo Foods Holdings Limited and its subsidiaries (the Iglo Group) , details of which are set out in note 15.
9) Capital reserve
2015 | ||||
m | ||||
Authorised: |
||||
Unlimited number of Ordinary Shares with nil nominal value issued at $10 per share |
N/A | |||
Unlimited number of Founder Preferred Shares with nil nominal value issued at $10 per share |
N/A | |||
Issued and fully paid: |
||||
48,525,000 Ordinary Shares with nil nominal value issued at $10 per share* |
350.9 | |||
1,500,000 Founder Preferred Shares with nil nominal value issued at $10 per share* |
10.6 | |||
|
|
|||
Total share capital |
361.5 | |||
|
|
* | Each ordinary share and Founder Preferred Share was issued together with one warrant (see below) |
Of the total cash received for the Founder Preferred Shares, 0.3 million was allocated to the liability component arising at the date of issue and 10.6 million allocated to equity.
Ordinary Shares
No Ordinary Shares were issued upon incorporation. Nomads issued Ordinary Share capital consists of 48,525,000 Ordinary Shares on April 11, 2014 (48,500,000 Ordinary Shares were issued in the initial public offering and 25,000 were issued to Lord Myners, Alun Cathcart and Guy Yamen at the time of the initial public
F-13
Nomad Foods Limited Notes to the Financial Statements
offering). There are no Ordinary Shares held in Treasury, therefore the total number of Ordinary Shares with voting rights in Nomad is 48,525,000 (no par value). Ordinary Shares confer upon the holder the following:
1. | the right to receive an equal share (with the holders of Founder Preferred Shares) in the distribution of the surplus assets of Nomad on its liquidation as are attributable to holders of Ordinary Shares in accordance with Nomads Memorandum and Articles of Association; |
2. | subject to the right of the Founder Preferred Shares to receive any Founder Preferred Shares Annual Dividend Amount from time to time, the right, together with the Founder Preferred Shares, to receive such portion of all amounts available for distribution and from time to time distributed by way of dividend or otherwise at such time as the Directors shall determine; and |
3. | in respect of each such ordinary share the right to receive notice of, attend and vote as a Member at any meeting of Members. |
Founder Preferred Shares
Two (2) Founder Preferred Shares were issued on incorporation. Nomads issued Founder Preferred Share capital consists of 1,500,000 Founder Preferred Shares (1,499,998 Founder Preferred Shares were issued to the Founders Entities in conjunction with the Initial Public Offering). There are no Founder Preferred Shares held in Treasury. Founder Preferred Shares confer upon the holder the following:
1. | the right to one vote per Founder Preferred Share on all matters to be voted on by shareholders generally and vote together with the holders of ordinary shares; |
2. | commencing on January 1, 2015 and for each financial year thereafter: |
a. | once the average price per ordinary share for any ten consecutive trading days is at least $11.50 (which condition has been satisfied), the right to receive a Founder Preferred Shares Annual Dividend Amount (as more fully described below), payable in Ordinary Shares or cash, at the Companys sole option; and |
b. | the right to receive dividends and other distributions as may be declared from time to time by the Companys board of directors with respect to the Ordinary Shares (such dividends to be distributed among the holders of Founder Preferred Shares, as if for such purpose the Founder Preferred Shares had been converted into Ordinary Shares immediately prior to such distribution) plus an amount equal to 20% of the dividend which would be distributable on such number of Ordinary Shares equal to the Preferred Share Dividend Equivalent (as defined below); |
3. | in addition to amounts payable pursuant to clause 2 above, the right, together with the holders of Ordinary Shares, to receive such portion of all amounts available for distribution and from time to time distributed by way of dividend or otherwise at such time as determined by the Directors; |
4. | the right to an equal share (with the holders of Ordinary Shares on a share for share basis) in the distribution of the surplus assets of Nomad on its liquidation as are attributable to the Founder Preferred Shares; and |
5. | the ability to convert into Ordinary Shares on a 1-for-1 basis (mandatorily upon a Change of Control or the seventh full financial year after an acquisition). |
The Founder Preferred Shares Annual Dividend Amount is structured to provide a dividend based on the future appreciation of the market value of the Ordinary Shares thus aligning the interests of the Founders with those of the investors on a long term basis. In the first year in which the Founder Preferred Shares Annual Dividend Amount becomes payable, such dividend will be equal in value to 20% of the increase in the market value of one Ordinary Share, being the difference between $10.00 and the average closing price of the last ten trading days of Nomads financial year (the Dividend Price), multiplied by the Preferred Share Dividend Equivalent.
F-14
Nomad Foods Limited Notes to the Financial Statements
Preferred Share Dividend Equivalent means 140,220,619 Ordinary Shares, which is the number of Ordinary Shares outstanding immediately following the Iglo Acquisition but excluding any Ordinary Shares issued to shareholders or other beneficial owners of a company or business acquired pursuant to or in connection with the Iglo Acquisition (subject to adjustment in accordance with the Memorandum and Articles). For any subsequent financial year in which the Founder Preferred Shares Annual Dividend Amount becomes payable (i.e. if the Dividend Price during such subsequent year is greater than the highest Dividend Price in any preceding year in which a dividend was paid in respect of the Founder Preferred Shares), the Founder Preferred Shares Annual Dividend Amount will be 20% of the increase in the Dividend Price over the highest prior Dividend Price in any preceding year multiplied by Preferred Share Dividend Equivalent.
The amounts used for the purposes of calculating the Founder Preferred Shares Annual Dividend Amount and the relevant numbers of Ordinary Shares are subject to such adjustments for share splits, share dividends and certain other recapitalisation events as the Directors in their absolute discretion determine to be fair and reasonable in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of admission to trading or otherwise as determined in accordance with Nomads Memorandum and Articles of Association.
Warrants
On April 11, 2014, in conjunction with its initial public offering, Nomad issued an aggregate 50,000,000 Warrants to purchasers of both its Ordinary and Founder Preferred Shares. In addition, 25,000 Warrants were issued to the Lord Myners, Alun Cathcart and Guy Yamen as part of their appointment as directors. Each Warrant entitled its holder to subscribe for one-third of an ordinary share upon exercise (subject to any prior adjustment in accordance with the terms and conditions set out in the Warrant Instrument). Warrant holders are required therefore (subject to any prior adjustment) to hold and validly exercise three Warrants and pay $11.50 per Ordinary Share in order to receive one Ordinary Share.
The Warrants are also subject to mandatory redemption at $0.01 per Warrant if at any time the volume-weighted average price per ordinary share equals or exceeds $18.00 (subject to any prior adjustment in accordance with the terms and conditions set out in the Warrant Instrument) for a period of ten consecutive trading days. During the year ended March 31, 2015, 0.40 million was charged for redemption of Warrants.
In connection with the acquisition of Iglo Group, Nomad has reduced the exercise price of the Warrants from $11.50 to $10.50 per whole Ordinary Share. Further, on May 6, 2015, Nomad obtained the consent of over 75% of the holders of outstanding Warrants to an amendment to the terms of the Warrants in order to provide that the subscription period for the Warrants, which previously would have expired on the third anniversary of Nomads consummation of its first acquisition, would instead expire on the consummation of the Iglo Acquisition (except in certain limited circumstances, in which case, such holder will be permitted to exercise his, her or its Warrants until the date that is 30 days following the date of readmission to trading on the London Stock Exchange in June 2015). The Warrant Amendment was thereby effective on May 6, 2015.
As of June 17, 2015, there are 1,073,462 Warrants issued and outstanding.
Share-based compensation
Share-based compensation consists of expense associated with the issuance of Initial Options in exchange for services during the year.
F-15
Nomad Foods Limited Notes to the Financial Statements
Cost of admission
Cost of admission includes the share issuance expenses on initial public offering. The details of these costs are as follows:
2015 | ||||
m | ||||
Advisory fees |
0.3 | |||
Legal fees |
0.6 | |||
Placement fees |
7.1 | |||
|
|
|||
Total |
8.0 | |||
|
|
10) | Share-based compensation |
Nomad issued the Initial Options, which are described in Note 9.
Such securities and awards have been accounted for in accordance with IFRS 2Share Based Payment. On April 11, 2014, Lord Myners, Alun Cathcart and Guy Yamen were granted options to purchase a maximum of 125,000 Ordinary Shares at an exercise price of $11.50 per ordinary share (subject to such adjustment to the number of Ordinary Shares and/or the exercise price as the Directors consider appropriate in accordance with the terms of the Initial Option Deeds in respect of an issue of Ordinary Shares by way of a dividend or distribution to holders of Ordinary Shares, a subdivision or consolidation or any other variation to the share capital of Nomad, as determined by the Directors). The awards will be exercisable during the five year period commencing on the trading day immediately following the date Nomad completes an acquisition.
Nomad has calculated the cost of the Initial Options based upon their fair value and taking into account the vesting period and using the Black-Scholes methodology. The valuation of the Initial Options has been based on the following assumptions: market value of Ordinary Shares at the grant date of $10.00, an exercise price of $11.50, 1 year expected time to acquisition with a probability of acquisition of 61%, volatility of 17.03% and a risk free interest rate of 0.84%. Based on the preceding assumptions, the total value for the Initial Options is 0.06 million.
There are no expected forfeitures at grant date.
The expense is recognised over an estimated 2-year period ended on April 1, 2016.
11) | Founder Preferred Shares Annual Dividend Amount |
Nomad has issued Founder Preferred Shares to its Founder Entities. A summary of the key terms of the Founder Preferred Shares is set out in Note 9.
The Founder Preferred Shares are deemed to have vested immediately as no service conditions related to their issuance are attached to them. The payment of the Founder Preferred Shares Annual Dividend Amount is not at the discretion of Nomad or subject to acquisition but are mandatory after January 1, 2015 subject to the share price conditions being met. Nomad has the option to settle its obligations under the terms of the Founder Preferred Shares by issuing shares or the equivalent in cash. The Annual Dividend Amounts were valued and recognised as a liability under IFRS 2.
F-16
Nomad Foods Limited Notes to the Financial Statements
Key assumption inputs to the models are presented below:
April 11, 2014 | March 31, 2015 | |||||||
Number of dividend shares |
50,025,000 | 135,747,619 | ||||||
Market value of Ordinary Shares at grant date |
$ | 10.00 | $ | 11.25 | ||||
Vesting period |
Immediate | Immediate | ||||||
Valuation model |
Monte Carlo | Monte Carlo | ||||||
Expected time to Acquisition |
1 year | 0.17 years | ||||||
Acquisition probability |
61 | % | 99 | % | ||||
Volatility: pre-Acquisition |
12.19 | % | 12.19 | % | ||||
Volatility: post-Acquisition |
20.15 | % | 20.40/24.30 | % | ||||
Risk-free interest rate |
2.64 | % | 1.71 | % |
On March 30, 2015, Nomad issued a Letter of Intent to acquire Iglo Group (see note 15 Subsequent events). Accordingly, the model reflects the fair value of the Founder Preferred Shares Annual Dividend Amount based on the probability-weighted average fair values under multiple scenarios as at March 31, 2015 including:
1) | Successful acquisition of Iglo Group; |
2) | Successful acquisition of another company in the event that acquisition of Iglo Group is not completed; or |
3) | Liquidation of the Company if there is no acquisition. |
Under scenario 1, the post-acquisition volatility assumption for the outcome in which Iglo Group is acquired was estimated using the median of a number of comparable companies chosen for their similarity to Iglo Group in industry, size and financial leverage.
Under scenario 2, as any potential alternative acquisition company is still unknown, the future post-acquisition volatility in that scenario has been calculated based on the MSCI World Small Cap Index which has companies of comparable size to Nomads and provides for likely acquisition target across a broad range of industries and geographies.
The total liability of 171.3 million at March 31, 2015 includes 38.2 million which has been classified as a current liability based on the fair value of the liability expected to be payable within one year of the balance sheet date. The total charge in the year related to the liability was reduced by the allocation of 0.3 million from the total cash received on issue of the Founder Preferred Shares (see note 9).
Sensitivity analysis
If the acquisition of Iglo Group was not completed, assuming other assumptions being held constant, the valuation of the Founder Preferred Shares Annual Dividend Amount as at March 31, 2015 would have decreased to 27.3 million.
Should the number of dividend shares go up or down by 1%, assuming other assumptions being held constant, the valuation of the Founder Preferred Shares Annual Dividend Amount as at March 31, 2015 would increase or decrease by 1.7 million, respectively.
12) | Warrant redemption liability |
As a contingent obligation to redeem for cash, a separate liability of 0.4m (0.01 per Warrant) was recognised.
F-17
Nomad Foods Limited Notes to the Financial Statements
13) | Related party transactions |
In conjunction with the inception of the company, Nomad, in consideration for each of the Founder Entities advancing Nomad 0.07 million, issued an unsecured promissory note for a principal amount of 0.07 million to each of the Founder Entities. The terms of the loans were that there should be no interest accrued on the principal amount and that the loans should be repaid within 60 days following admission. On May 14, 2014, the loans were repaid in full and the terms of the promissory notes were therefore satisfied.
During the period, Nomad issued Founder Preferred Shares which are intended to incentivise the Founders to achieve Nomads objectives. The Performance Condition will be satisfied under such circumstances as described in Note 9 or in the event of a change of control as defined in the articles of the Company.
Prior to Admission, certain costs associated with the marketing, placing and listing of shares were incurred and paid by the Founders and recharged to Nomad at cost. Within the total costs associated with the Admission, amounting to 8.0 million; 9,000 represented recharges from related parties. All balances had been re-paid at 31 March 2015. In addition, certain costs related to the Founder Directors travel expenses of 1,000 were reimbursed.
Mariposa Capital II, LLC and TOMS Acquisition I LLC perform certain administrative, investment and accounting services on behalf of Nomad. The total fees for these services from inception to March 31, 2015 were 0.2 million.
Advisory Services Agreements
On 15 June 2015, the Company entered into an Advisory Services Agreement with Mariposa Capital, LLC, an affiliate of Mr. Franklin, and TOMS Capital LLC, an affiliate of Mr. Gottesman. Pursuant to the terms of the Advisory Services Agreement, Mariposa Capital, LLC and TOMS Capital LLC provide high-level strategic advice and guidance to the Company. Under the terms of the Advisory Services Agreement, Mariposa Capital, LLC and TOMS Capital LLC will be entitled to receive an aggregate annual fee equal to $2.0 million, payable in quarterly installments. This agreement will expire on June 1, 2016 and will be automatically renewed for successive one-year terms unless any party notifies the other parties in writing of its intention not to renew the agreement no later than 90 days prior to the expiration of the term. The agreement may only be terminated by the Company upon a vote of a majority of its directors. In the event that the agreement is terminated by the Company, the effective date of the termination will be six months following the expiration of the initial term or a renewal term, as the case may be.
14) | Financial risk management |
Nomads policies with regard to financial risk management are clearly defined and consistently applied. They are a fundamental part of Nomads long term strategy covering areas such as foreign exchange risk, interest rate risk, credit risk, liquidity risk and capital management.
Financial risk management is under the direct supervision of the Board of Directors which follows policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative and non-derivative financial instruments and investment of excess liquidity. Nomad does not intend to acquire or issue derivative financial instruments for trading or speculative purposes and has yet to enter into a derivative transaction.
Currency risk
The majority of the Companys financial cash flows prior to the Transaction were denominated in United States Dollars. During the period from April 1, 2014 through March 31, 2015, the Company did not carry out any significant transactions in currencies outside the above. Foreign exchange risk arises from recognised monetary assets and liabilities. Accordingly, the Company has not hedged systematically its foreign exchange risk.
F-18
Nomad Foods Limited Notes to the Financial Statements
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Nomad is exposed to credit risk from its financing activities, including deposits with banks and financial institutions. Credit risk from balances with banks and financial institutions is managed by the Board. Investment of surplus funds is entered into with high credit quality financial institutions and in U.S treasury bills.
Liquidity risk
Nomad monitors liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom. Such forecasting takes into consideration Nomads debt financing plans (when applicable), compliance with internal balance sheet ratio targets and external regulatory or legal requirements if appropriate.
Nomads existing financial liabilities of 171.3 million consist of contingent payments associated with Founder Preferred share dividend rights which will be payable in Ordinary Shares or cash at the sole option of the Company.
Cash flow interest rate risk
Nomad has no long term borrowings and as such is not currently exposed to interest rate risk. To mitigate the risk of default by one or more of its counterparties, Nomad currently holds its assets in instruments available from the U.S denominated money markets and/or at commercial banks that are at least AA rated or better at the time of deposit. As of March 31, 2015, 428.5 million was held in U.S. treasury bills meeting the terms of the U.S denominated money markets. Nomad anticipates that it will continue to hold the bulk of its assets in U.S. treasury bills until an acquisition is consummated. The Board regularly monitors interest rates offered by, and the credit ratings of, current and potential counterparties, to ensure that Nomad remains in compliance with its stated investment policy for its cash balances. Nomad does not currently use financial instruments to hedge its interest rate exposure.
Capital risk management
Nomads objectives when managing capital (currently consisting of share capital and share premium) are to safeguard Nomads ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, Nomad may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.
15) | Subsequent events |
On April 20, 2015 Nomad entered into a definitive agreement to acquire the Iglo Group.
In May 2015, the Company issued 75,666,669 of our Ordinary Shares in a private placement to certain institutional investors at a price of $10.50 per ordinary share. In addition, between May and June 2015, the Company issued an aggregate of 16,673,307 Ordinary Shares pursuant to the exercise of certain warrants at an exercise price of 10.50 per Ordinary Share.
In May 2015, the Company changed its fiscal year end to December 31.
On June 1, 2015 Nomad completed its acquisition of the Iglo Group for approximately 2.6 billion. Upon closing, Nomad changed its name to Nomad Foods Limited and readmitted its Ordinary Shares to the London Stock Exchange in June 2015.
F-19
Nomad Foods Limited Notes to the Financial Statements
The Iglo Acquisition was funded through a combination of Nomads cash on hand, equity and proceeds from a private placement of approximately 729.8 million at 9.6 ($10.50) per Ordinary Share (75.7 million ordinary shares), proceeds of approximately 154.3 million from the early exercise 48.1 million of Nomads existing warrants at reduced price of 9.6 ($10.50) per whole Ordinary Share (16.0 million Ordinary Shares), as well as the assumption of approximately 1.2 billion of the Iglo Groups existing debt. The seller of the Iglo Group re-invested a portion of their proceeds into 133.5 million of equity (13.7 million Ordinary Shares) at closing. Each of the Founder Entities (either directly or through an affiliate) subscribed for 1.9 million Ordinary Shares and exercised all of their outstanding warrants (1.5 million warrants each) in conjunction with the transaction. The Companys transaction costs were approximately 25.1 million including costs to amend Iglo Groups senior debt in conjunction with the transaction.
On July 14, 2015 the Company announced the completion of a private placement of a total of 15,445,346 new Ordinary Shares of no par value raising proceeds of approximately $320 million before expenses. The shares were issued at a price of US$20.75 per share. The proceeds are intended for general purposes including potential future acquisitions.
On August 13, 2015 the Company announced that it has entered into an option agreement with Liongem Sweden 1 AB (Findus Seller) under which the Company or one of its subsidiaries shall be obliged at the option of the Findus Seller to acquire Findus Sverige AB and its subsidiaries (Findus or the Findus Group) for approximately £500 million. Through this transaction the Company will acquire the continental European businesses of Findus in Sweden, Norway, Finland, Denmark, France, Spain and Belgium with respect to the Findus , Lutosa , and La Cocinera brands.
F-20
Nomad Foods LimitedUnaudited Condensed Consolidated Interim Statements of Financial Position
As of 30 September 2015 and 31 March 2015
Note |
31 March
2015 |
30 September
2015 |
||||||||||
m | m | |||||||||||
Non-current assets |
||||||||||||
Intangible assets |
7 | | 2,677.5 | |||||||||
Property, plant and equipment |
8 | | 260.3 | |||||||||
Deferred tax assets |
| 48.8 | ||||||||||
|
|
|
|
|||||||||
Total non-current assets |
| 2,986.6 | ||||||||||
|
|
|
|
|||||||||
Current assets |
||||||||||||
Cash and cash equivalents |
126.8 | 842.6 | ||||||||||
Inventories |
| 256.5 | ||||||||||
Short-term securities |
320.6 | | ||||||||||
Trade and other receivables |
| 34.0 | ||||||||||
Derivative financial instruments |
| 2.0 | ||||||||||
|
|
|
|
|||||||||
Total current assets |
447.4 | 1,135.1 | ||||||||||
|
|
|
|
|||||||||
Total assets |
447.4 | 4,121.7 | ||||||||||
|
|
|
|
|||||||||
Current liabilities |
||||||||||||
Bank overdrafts |
| 461.1 | ||||||||||
Trade and other payables |
0.7 | 294.1 | ||||||||||
Loans and borrowings |
9 | | (3.1 | ) | ||||||||
Founder Preferred Shares Annual Dividend Amount |
10 | 38.2 | | |||||||||
Derivative financial instruments |
| 4.7 | ||||||||||
Tax payable |
| 18.4 | ||||||||||
Provisions |
11 | | 29.3 | |||||||||
|
|
|
|
|||||||||
Total current liabilities |
38.9 | 804.5 | ||||||||||
|
|
|
|
|||||||||
Non-current liabilities |
||||||||||||
Loans and borrowings |
9 | | 1,169.9 | |||||||||
Founder Preferred Shares Annual Dividend Amount |
10 | 133.1 | | |||||||||
Warrant redemption liability |
0.5 | | ||||||||||
Employee benefits |
12 | | 110.6 | |||||||||
Deferred tax liabilities |
| 322.1 | ||||||||||
|
|
|
|
|||||||||
Total non-current liabilities |
133.6 | 1,602.6 | ||||||||||
|
|
|
|
|||||||||
Total liabilities |
172.5 | 2,407.1 | ||||||||||
|
|
|
|
|||||||||
Equity |
||||||||||||
Capital reserve |
13 | 353.5 | 1,651.4 | |||||||||
Founder Preferred Shares Dividend reserve |
10 | | 531.5 | |||||||||
Merger reserve |
| 0.9 | ||||||||||
Translation reserve |
88.9 | 76.6 | ||||||||||
Cash flow hedging reserve |
| (0.1 | ) | |||||||||
Accumulated deficit |
(167.5 | ) | (545.7 | ) | ||||||||
|
|
|
|
|||||||||
Total equity |
274.9 | 1,714.6 | ||||||||||
|
|
|
|
|||||||||
Total liabilities and equity |
447.4 | 4,121.7 | ||||||||||
|
|
|
|
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements.
F-21
Nomad Foods LimitedUnaudited Condensed Consolidated Interim Statements of Income
For the six months ended 30 September 2015 and 30 September 2014
For the six months ended | ||||||||||||
Note |
30 September
2014 |
30 September
2015 |
||||||||||
m | m | |||||||||||
Revenue |
| 418.3 | ||||||||||
Cost of sales |
| (311.0 | ) | |||||||||
|
|
|
|
|||||||||
Gross profit |
| 107.3 | ||||||||||
Other operating expenses |
(0.2 | ) | (66.3 | ) | ||||||||
Charge related to Founders Preferred Shares Annual Dividend Amount |
10 | (22.4 | ) | (349.0 | ) | |||||||
(Charge)/Release relating to Warrant redemption liability |
(0.4 | ) | 0.4 | |||||||||
Exceptional items |
14 | (0.2 | ) | (37.8 | ) | |||||||
|
|
|
|
|||||||||
Operating loss |
(23.2 | ) | (345.4 | ) | ||||||||
Finance income |
15 | 0.1 | 1.5 | |||||||||
Finance costs |
15 | | (41.1 | ) | ||||||||
|
|
|
|
|||||||||
Net financing income/(costs) |
0.1 | (39.6 | ) | |||||||||
Loss before tax |
(23.1 | ) | (385.0 | ) | ||||||||
|
|
|
|
|||||||||
Taxation |
16 | | (5.3 | ) | ||||||||
|
|
|
|
|||||||||
Loss for the period attributable to Parent Company |
(23.1 | ) | (390.3 | ) | ||||||||
|
|
|
|
|||||||||
Earnings per share |
||||||||||||
|
|
|
|
|||||||||
Basic and diluted loss per share |
17 | (0.50 | ) | (2.99 | ) | |||||||
|
|
|
|
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements.
F-22
Nomad Foods LimitedUnaudited Condensed Consolidated Interim Statements of Comprehensive Income
For the six months ended 30 September 2015 and 30 September 2014
For the six months ended | ||||||||||||
Note |
30 September
2014 |
30 September
2015 |
||||||||||
m | m | |||||||||||
Loss for the period |
(23.1 | ) | (390.3 | ) | ||||||||
Other comprehensive income: |
||||||||||||
Actuarial gains on defined benefit pension plans |
12 | | 17.4 | |||||||||
Taxation charge on measurement of defined benefit pension plans |
| (5.3 | ) | |||||||||
|
|
|
|
|||||||||
Items not reclassified to the Statement of Income |
| 12.1 | ||||||||||
Gain/(loss) on investment in foreign subsidiary, net of hedge |
| (10.6 | ) | |||||||||
Gain on translation due to change of presentational currency |
29.8 | (1.7 | ) | |||||||||
Effective portion of changes in fair value of cash flow hedges |
| (2.6 | ) | |||||||||
Taxation credit relating to components of other comprehensive income |
| 2.5 | ||||||||||
|
|
|
|
|||||||||
Items that may be subsequently reclassified to the Statement of Income |
29.8 | (12.4 | ) | |||||||||
Other comprehensive income/(loss) for the period, net of tax |
29.8 | (0.3 | ) | |||||||||
|
|
|
|
|||||||||
Total comprehensive income/(loss) for the period attributable to owners of the Parent Company |
6.7 | (390.6 | ) | |||||||||
|
|
|
|
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements.
F-23
Nomad Foods LimitedUnaudited Condensed Consolidated Interim Statements of Changes in Equity
For the six months ended 30 September 2015
Notes |
Capital
reserve |
Founders
Preferred Shares reserve |
Merger
reserve |
Translation
reserve |
Cash flow
hedge reserve |
Accumulated
deficit |
Total | |||||||||||||||||||||||||
m | m | m | m | m | m | m | ||||||||||||||||||||||||||
Balance as of 1 April 2014 |
| | | | | | | |||||||||||||||||||||||||
Issue of Ordinary Shares |
350.7 | | | | | | 350.7 | |||||||||||||||||||||||||
Issue of Founder Preferred Shares |
10.6 | | | | | | 10.6 | |||||||||||||||||||||||||
Cost of admission |
(8.0 | ) | | | | | | (8.0 | ) | |||||||||||||||||||||||
Loss and total comprehensive loss for the period |
| | | 29.8 | | (23.1 | ) | 6.7 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance as of 30 September 2014 |
353.3 | | | 29.8 | (23.1 | ) | 360.0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance as of 31 March 2015 |
353.5 | | | 88.9 | | (167.5 | ) | 274.9 | ||||||||||||||||||||||||
Issuance of Ordinary Shares |
1,303.7 | | | | | | 1,303.7 | |||||||||||||||||||||||||
Cost of admission |
(5.8 | ) | | | | | | (5.8 | ) | |||||||||||||||||||||||
Founder Preferred Shares Annual Dividend Amount |
10 | | 531.5 | | | | | 531.5 | ||||||||||||||||||||||||
Merger reserve |
| | 0.9 | | | | 0.9 | |||||||||||||||||||||||||
Loss and total comprehensive loss for the period |
| | | (12.3 | ) | (0.1 | ) | (378.2 | ) | (390.6 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance as of 30 September 2015 |
1,651.4 | 531.5 | 0.9 | 76.6 | (0.1 | ) | (545.7 | ) | 1,714.6 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements.
F-24
Nomad Foods LimitedUnaudited Condensed Consolidated Interim Statements of Cash Flows
For the six months ended 30 September 2015 and 30 September 2014
For the six months ended | ||||||||||||
Note |
30 September
2014 |
30 September
2015 |
||||||||||
m | m | |||||||||||
Cash flows from operating activities |
||||||||||||
Net loss |
(23.1 | ) | (390.3 | ) | ||||||||
Reconciliation of net loss to net cash used in operating activities: |
||||||||||||
Exceptional items |
14 | 0.2 | 37.8 | |||||||||
Non-cash charge related to Founder Preferred Shares Annual Dividend Amount |
22.4 | 349.0 | ||||||||||
Non-cash (gain)/charge related to Warrant redemption liability |
0.4 | (0.4 | ) | |||||||||
Non-cash fair value purchase price adjustment of inventory |
| 26.0 | ||||||||||
Depreciation and amortisation |
7, 8 | | 10.8 | |||||||||
Finance costs |
15 | | 41.1 | |||||||||
Finance income |
15 | (0.1 | ) | (1.5 | ) | |||||||
Taxation |
| 5.3 | ||||||||||
|
|
|
|
|||||||||
Operating cash flow before changes in working capital and provisions |
(0.2 | ) | 77.8 | |||||||||
Increase in inventories |
| (53.7 | ) | |||||||||
Decrease in trade and other receivables |
| 32.4 | ||||||||||
Increase in trade and other payables |
0.1 | 12.5 | ||||||||||
Increase in employee benefits & other provisions |
| (0.6 | ) | |||||||||
|
|
|
|
|||||||||
Cash generated from operations |
(0.1 | ) | 68.4 | |||||||||
Cash flows relating to exceptional items |
(0.2 | ) | (73.4 | ) | ||||||||
Tax paid |
| (4.3 | ) | |||||||||
|
|
|
|
|||||||||
Net cash used in operating activities |
(0.3 | ) | (9.3 | ) | ||||||||
|
|
|
|
|||||||||
Cash flows from investing activities: |
||||||||||||
Purchase of Iglo, net of cash acquired |
| (689.0 | ) | |||||||||
Purchase of portfolio investments |
(166.6 | ) | | |||||||||
Redemption of portfolio investments |
| 178.3 | ||||||||||
Purchase of property, plant and equipment |
8 | | (7.7 | ) | ||||||||
Purchase of intangibles |
| (0.2 | ) | |||||||||
|
|
|
|
|||||||||
Net cash used in investing activities |
(166.6 | ) | (518.6 | ) | ||||||||
|
|
|
|
|||||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from issuance of Founder Preferred Shares |
10.6 | | ||||||||||
Proceeds from issuance of Ordinary Shares |
13 | 350.7 | 1,303.7 | |||||||||
Costs of admission |
(8.0 | ) | (5.8 | ) | ||||||||
Loans from Founder Entities for incorporation |
0.1 | | ||||||||||
Repayment of loans to Founder Entities |
(0.1 | ) | | |||||||||
Repayment of loan principal |
9 | | (490.0 | ) | ||||||||
Payment of financing fees |
| (5.4 | ) | |||||||||
Interest paid |
| (24.4 | ) | |||||||||
Interest received |
| 0.7 | ||||||||||
|
|
|
|
|||||||||
Net cash provided by financing activities |
353.3 | 778.8 | ||||||||||
|
|
|
|
|||||||||
Net increase in cash and cash equivalents |
186.4 | 250.9 | ||||||||||
Cash and cash equivalents at beginning of period |
| 126.8 | ||||||||||
Effect of exchange rate fluctuations |
17.6 | 3.8 | ||||||||||
|
|
|
|
|||||||||
Cash and cash equivalents at end of period |
204.0 | 381.5 | ||||||||||
|
|
|
|
Cash and cash equivalents comprise cash at bank of 842.6m less bank overdrafts of 461.1m (2014: cash at bank of 204.0m, bank overdrafts nil).
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements.
F-25
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
1. | General information |
Nomad Foods Limited (the Company or Nomad) is registered in the British Virgin Islands. The address of Nomads registered office is Nemours Chambers, Road Town, Tortola, British Virgin Islands. On 1 June 2015, the Company acquired the entire share capital of Iglo Foods Holdings Limited (the Iglo Group) a company domiciled and incorporated in the United Kingdom.
2. | Basis of preparation |
These unaudited condensed consolidated interim financial statements for the six months ended 30 September 2015 have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting , as issued by the IASB. They do not include all the information required for a complete set of IFRS financial statements. The financial information consolidates the Company and the subsidiaries it controls (together referred to as the Nomad Group) and includes selected notes to explain events and transactions that are significant to an understanding of the changes in Nomads financial position and performance since the last annual consolidated financial statements. Therefore the unaudited condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2015, which have been prepared in accordance with International Financial Reporting Standards as issued by the IASB and as adopted by the European Union (IFRS).
These condensed consolidated interim financial statements were authorised for issue by the Companys Board of Directors on 13 November 2015.
There are no new accounting standards which have a material impact on this financial information.
The Companys financial statements and notes were previously presented in U.S. Dollars, which was its presentation and functional currency. Upon the acquisition of the Iglo Group on 1 June 2015, Nomad adopted the Euro () as its functional currency and reporting currency because this is the functional and presentation currency of the Iglo Group, which comprises all of Nomads operations post-acquisition. The exchange rate at the date of the change in functional currency was one Euro to 1.115 U.S. Dollars. All financial information has been rounded to the nearest 0.1 million, except where otherwise indicated.
On 28 May 2015 the Company changed its year end reporting date from 31 March to 31 December. This change has no impact on the financial statements and notes included herein.
3. | Accounting policies |
The accounting policies adopted are consistent with those of the previous financial period. The following additional accounting policies were adopted as a result of the acquisition of the Iglo Group:
3.1 | Business Combination |
The Nomad Group uses the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interest issued by the Nomad Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred.
3.2 | Consolidation |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.
F-26
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
3.3 | Foreign currency translation |
Management uses judgement to determine the functional currency that represents the economic effects of the underlying transactions, events and conditions. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Income.
For the purposes of presenting consolidated financial statements, the assets and liabilities of foreign operations are translated at period-end exchange rates, income and expenses are translated at average exchange rates during the period, and equity components (excluding current year movements, which are translated at the average rates) are translated at historical rates. Net unrealised exchange adjustments arising on the translation of the financial statements are reported in the translation reserve line item along with related qualifying hedges.
3.4 | Segment reporting |
The Chief Operating Decision Maker (CODM) has been determined to be the Chief Executive Officer as he is primarily responsible for the allocation of resources to the segments and the assessment of performance of the segments.
Following the acquisition of Iglo Group, Nomads operations are organised into one operating unit, Frozen, which comprises all the brands, as well as the factories, private label business units and certain corporate overheads.
The CODM uses revenue and earnings before interest, taxation, depreciation and amortisation, exceptional items and charges related to Founder Preferred Shares Annual Dividend Amount and warranty redemption (Adjusted EBITDA) as the key measure of the segments results.
Segment reporting as reported to the CODM is included within note 6.
3.5 | Intangible Assets |
Intangible assets acquired separately are recorded at cost. With the exception of goodwill, as discussed below, intangible assets acquired as part of a business combination are recorded under the purchase method of accounting at their estimated fair values at the date of acquisition.
i) | Goodwill |
Goodwill represents amounts arising on acquisition of subsidiaries and associates. Goodwill is the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired.
Goodwill is stated at cost less any accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment.
ii) | Computer software |
Capitalised software costs include the cost of acquired computer software licences and costs that are directly associated with the design, construction and testing of such software where this relates to a major business system.
F-27
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
Costs associated with identifying, sourcing, evaluating or maintaining computer software are recognised as an expense as incurred.
The assets are stated at cost less accumulated amortisation and impairment losses.
Software costs are amortised by equal annual installments over their estimated useful economic life of five to seven years once the software is capable of being brought into use.
iii) | Brands |
Based on the market position of the brands, the significant levels of investment in advertising and promoting the brands, and the fact that they have been established for over 50 years, management considers that the Birds Eye, Iglo and Findus brands should be considered to have indefinite lives. Therefore these brands are not amortised but instead held at historical cost less provision for any impairment.
3.6 | Property, plant and equipment |
i) | Owned assets |
Property, plant and equipment acquired in a business combination is recorded at fair value at the acquisition date . Otherwise, property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
ii) | Leased assets |
Leases in which the Nomad Group assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. Where land and buildings are held under finance leases the accounting treatment of the land is considered separately from that of the buildings. Leased assets acquired by way of finance lease are stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses.
All other leases are classified as operating leases.
iii) | Depreciation |
Depreciation is charged on a straight line basis. Depreciation is charged over the estimated useful lives of each part of an item of property, plant and equipment once the item is brought into use. Land is not depreciated. The estimated useful lives are as follows:
Useful Life | ||
Building |
40 years | |
Plant and equipment |
5 to 14 years | |
Computer equipment |
3 to 5 years |
The assets residual values and useful lives are reviewed on a frequent basis.
3.7 | Inventories |
Inventories are stated at the lower of fair value (for inventory acquired in a business combination), or cost, and net realisable value (NRV). NRV is determined by estimating selling prices in the applicable market location and related costs of disposal in the ordinary course of business.
F-28
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
Cost is based on the weighted average principle and includes expenditures incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.
Inventories are reduced by an allowance for slow moving, obsolete and defective inventories, based on the review of on-hand inventories and historical and forecasted usage.
3.8 | Financial instruments |
i) | Trade receivables |
Trade receivables are measured at fair value upon initial recognition (including trade receivables in a business combination), and are subsequently measured at amortised cost using the effective interest method, less any impairment. Since trade receivables are due within one year, this equates to initial carrying value less any impairment.
Appropriate allowances for estimated irrecoverable amounts are recognised in the Statement of Income when there is objective evidence that the asset is impaired.
Trade receivables are presented net of customer rebate balances.
ii) | Loans and borrowings |
a. Valuation
Interest bearing borrowings are recognised initially at fair value less attributable transaction costs.
Subsequent to initial recognition, interest bearing loans and borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the Statement of Income over the expected period of the borrowings on a straight line basis.
Loans assumed in a business combination are recorded at fair value on the acquisition date.
b. Capitalisation of borrowing costs
Costs incurred in securing borrowings are carried at cost and amortised over the expected life of the loan.
iii) | Derivative and hedge accounting |
Derivative financial instruments are recognised at fair value. When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge accounting, all changes in its fair value are recognised immediately in the Statement of Income. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged.
The fair value of interest rate caps represents the time value plus the intrinsic value at the financial year end date.
The fair value of forward exchange contracts is their quoted market price at the financial year end date, being the present value of the quoted forward price.
a. Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or a highly probable forecast transaction, the effective part of any gain or loss on the derivative financial instrument is recognised directly in the cash flow hedging reserve. Any ineffective portion of the hedge is recognised immediately in the Statement of Income.
F-29
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of the hedge relationship but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and is recognised when the transaction occurs. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss recognised in equity is recognised in the Statement of Income immediately.
b. Net investment hedges
Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a net investment in a foreign operation are recognised in Other Comprehensive Income to the extent that the hedge is effective, and are presented in the translation reserve within equity. To the extent that the hedge is ineffective, such differences are recognised immediately in the Statement of Income. When the hedged net investment is disposed of, the relevant amount in the translation reserve is transferred to the Statement of Income as part of the gain or loss on disposal.
3.9 | Provisions |
Provisions are recognised when the Nomad Group has a legal or constructive present obligation as a result of a past event, and it is probable that the Nomad Group will be required to settle that obligation. Provisions are measured at managements best estimate of the expenditure required to settle the obligation at the financial year end date, and are discounted to present value where the effect is material.
3.10 | Revenue |
Revenue comprises sales of goods after deduction of discounts and sales taxes. It does not include sales between companies within the Nomad Group. Discounts given by the Nomad Group include rebates, price reductions and incentives given to customers, promotional couponing and trade communication costs. At each financial year end date any discount incurred but not yet invoiced is estimated and accrued.
Revenue is recognised when the risks and rewards of the underlying products have been transferred to the customer. The timing of the transfer of risks and rewards varies depending on the individual terms of the sales agreement, usually being on receipt of goods by the customer.
3.11 | Expenses |
i) | Operating lease payments |
Payments made under operating leases are recognised in the Statement of Income on a straight line basis over the term of the lease. Lease incentives received are recognised on a straight line basis in the Statement of Income as an integral part of the total lease expense.
ii) | Borrowing costs |
Unless capitalised as part of the cost of borrowing (see note 9), borrowing costs are recognised in the Statement of Income in the period in which they are incurred.
iii) | Exceptional items |
The separate reporting of non-recurring exceptional items helps provide an indication of the Nomad Groups underlying business performance. This is a non-IFRS measure. Exceptional items are comprised of transaction, integration and acquisition costs relating to new acquisitions; restructuring
F-30
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
costs; impairments or reversal of impairments of intangible assets; operational restructuring; investigation of strategic opportunities; costs relating to certain management incentive plans; and other significant items that are non-recurring in nature.
iv) | Research and development |
Expenditures on research activities are recognised in the Statement of Income as an expense as incurred.
3.12 | Employee benefits |
i) | Defined contribution plans |
Obligations for contributions to defined contribution pension plans are recognised as an expense in the Statements of Income as incurred. Prepaid contributions are recognised as an asset to the extent that a cash refund or reduction in the future payments is available.
ii) | Defined benefit plans |
The Nomad Groups net obligation in respect of defined benefit pension plans and other post-employment benefits is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods. That net obligation is discounted to determine its present value. The calculation is performed by a qualified actuary using the projected unit credit method. All actuarial gains and losses are recognised in the period in which they occur through the statement of recognised income and expense. Past service cost is recognized immediately.
iii) | Other management incentive schemes |
If schemes fall outside the scope of IFRS 2, since they are not related to the price or value of equity instruments, but do fall within the scope of IAS 19 Employee Benefits, an annual charge is taken over the service period based on an estimate of the amount of future benefit employees will earn in return for their service.
3.13 | Impairment of non-current assets |
The carrying amounts of the Nomad Groups assets are reviewed annually to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated. Impairment losses are recognised in the Statement of Income in the period in which they arise.
For goodwill and assets that have an indefinite useful life, an impairment review is performed at least annually.
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the net carrying amount may not be recoverable.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
i) | Calculation of recoverable amount |
Recoverable amount is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows of the business are discounted to their present value using a
F-31
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
ii) | Allocation of impairment losses |
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units, then to any related indefinite life intangible assets, and then to reduce the carrying amount of the other assets in the unit on a pro rata basis. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
3.14 | Interest income |
Interest income is recognised in the Statement of Income in the period in which it is earned.
3.15 | Taxation |
The Company is not subject to income tax or corporation tax in the British Virgin Islands. However, the Companys operating subsidiaries are subject to income tax within their own jurisdictions.
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the consolidated statements of operations except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax payable is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the financial year end date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities recognised for financial reporting purposes and the amounts used for taxation purposes on an undiscounted basis. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; and differences relating to investments in subsidiaries, to the extent that the Company can control the reversal, and they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the amount expected to be recovered based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the financial year end date.
3.16 | Share-based payments |
Where the Nomad Group engages in share based payment transactions in respect of services received from certain of its employees, directors and consultants, these are accounted for as equity settled share based payments in accordance with IFRS 2.
The fair value of the grant of the options issued was recognised as an expense by reference to the fair value of the awards granted.
Non-market vesting conditions are included in assumptions about the number of awards that are expected to vest. The total expense is recognised in the Statement of Income with a corresponding credit to equity over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of awards that are
F-32
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Statement of Income, with a corresponding adjustment to equity.
3.17 | Founder Preferred Shares |
Nomad issued Founder Preferred Shares to both TOMS Acquisition I, LLC and Mariposa Acquisition II, LLC (collectively the Founder Entities) in connection with its initial public offering in April 2014. Holders of the Founder Preferred Shares are entitled to receive annual dividend amounts subject to certain performance conditions (the Founder Preferred Shares Annual Dividend Amount). The instrument and its component parts were analysed under IFRS 2.
In addition to the right to receive the Founder Preferred Shares Annual Dividend Amount, the Founder Preferred Shares give the holder the same entitlements as a holder of Ordinary Shares. As the cash consideration received for this equity entitlement was the same price as the Companys initial public offering in April 2014, the Founder Preferred Share reserve amount is outside the scope of IFRS 2 and is classified as equity in accordance with IAS 32.
Prior to the acquisition of the Iglo Group on 1 June 2015, Nomad classified the Founder Preferred Shares Annual Dividend Amount as a liability at fair value, calculated using a Monte Carlo simulation. As the Founder Preferred Shares were issued to affiliates of certain of the non-executive directors of Nomad, the fair value of the Founder Preferred Shares Annual Dividend Amount given to the holders was recorded as an expense. There are no further service conditions attached and the expense was recognised immediately. Subsequent to its initial recognition when issued, the liability was adjusted for changes in fair value. Changes in value were recorded in the income statement through 1 June 2015.
Upon completion of the acquisition of the Iglo Group on 1 June 2015, the Company intended that the Founder Preferred Shares Annual Dividend Amount would be equity settled. Accordingly, the Founder Preferred Shares Annual Dividend Amount as of 1 June 2015 of 531.5 million (the Founder Preferred Shares Dividend reserve) was classified as equity and no further revaluations will be required or recorded.
Should a Founder Preferred Share Annual Dividend Amount become due and payable (subject to the performance conditions detailed in note 10), the market value of any dividend paid will be deducted from the Founder Preferred Shares Dividend reserve, with any excess deducted from retained earnings.
4. | Accounting estimates |
The preparation of financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing the condensed consolidated interim financial statements, the key sources of estimation uncertainty for the interim period ended 30 September 2015 were as follows:
4.1 | Valuation of Founder Preferred Shares |
The Founder Preferred Shares Annual Dividend Amounts were valued and recognised as a liability under IFRS 2. The fair value of the liability at each balance sheet date was valued using a Monte Carlo simulation and any difference in fair value was recorded as an expense from 1 April 2014 through 1 June 2015.
The payment of the Founder Preferred Shares Annual Dividend Amount is mandatory after 1 January 2015 if certain performance conditions are met. Nomad, at its discretion, may settle the Founder Preferred Shares Annual Dividend Amount by issuing shares or by cash payment but intends to equity settle.
F-33
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
4.2 | Fair value of derivative financial instruments |
The Nomad Group holds derivative financial instruments as of 30 September 2015. Management has estimated the fair value of these instruments by using valuations based on discounted cash flow calculations.
4.3 | Employee benefit obligation |
Actuarial valuations of the assumed defined benefit pensions are performed by qualified actuaries. The Nomad Groups principal assumptions around the actuarial valuations are disclosed in Note 12.
4.4 | Discounts |
Discounts given by the Nomad Group include rebates, price reductions and incentives given to customers, promotional couponing and trade communication costs. At each quarter end date any discount incurred but not yet invoiced is estimated, based on historical trends and rebate contracts with customers, and accrued.
4.5 | Income tax |
The income tax expense and the provision for income taxes for the period to 30 September 2015 for the Nomad Group have been determined based on an estimate of the weighted average annual income tax rate expected to apply for the full financial period. Where tax exposures can be quantified, an accrual is made based on best estimates and managements judgements. Given the inherent uncertainties in assessing the outcomes of these exposures (which can sometimes be binary in nature), the Nomad Group could in future periods experience adjustments to these accruals.
5. | Acquisition |
On 1 June 2015, Nomad completed its acquisition of the Iglo Group for approximately 2.6 billion.
In the four months between 1 June 2015 and 30 September 2015, the Iglo Group contributed total revenue of 418.3 million and loss before tax of 0.9 million to the Companys results. If the acquisition had occurred on 1 April 2015, management estimates that consolidated revenue would have been 661.1 million (2014: 704.1 million for the 6 months ended 30 September 2014, as if the acquisition had occurred on 1 April 2014), and consolidated loss before tax for the period would have been 379.1 million (2014: 35.2 million loss). In determining these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 April 2015.
The transaction was funded through a combination of Nomads cash on hand, equity and proceeds from a private placement in April 2015 of approximately 729.8 million at 9.60 ($10.50) per Ordinary Share (75.7 million Ordinary Shares), proceeds of approximately 154.3 million from the early exercise of 48.1 million of Nomads existing warrants at reduced price of 9.60 ($10.50) per whole Ordinary Share (16.0 million Ordinary Shares), as well as the assumption of approximately 1.2 billion of the Iglo Groups existing debt. The seller of the Iglo Group re-invested a portion of their proceeds into 133.5 million of equity (13.7 million Ordinary Shares) at closing. Each of the Founder Entities (either directly or through an affiliate) subscribed for 1.9 million Ordinary Shares and exercised all of their outstanding warrants (1.5 million warrants each) in conjunction with the transaction. The Companys transaction costs were approximately 23.8 million including costs to amend Iglo Groups senior debt in conjunction with the transaction.
As described in Note 20, on 2 November 2015, the Company completed its acquisition of Findus Sverige AB and its subsidiaries (the Findus Groups Continental European business), for approximately £500 million. The cash portion of the purchase price was funded from a combination of cash on hand and the issuance of a 325 million tranche of senior debt under Nomad Foods credit facility. The remainder of the consideration was funded via the issuance of 8,378,380 Ordinary Shares.
F-34
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
Acquisition-related costs
The Group incurred acquisition related costs of 30.5 million on legal fees, due diligence costs, and fees in relation to the amendment of the Iglo Groups senior debt. 25.1 million of these costs have been included in exceptional items (see Note 14). The remainder relates to capitalized debt fees.
Identifiable assets acquired and liabilities assumed
The following table summarises the provisional recognised amounts of assets acquired and liabilities assumed at the date of acquisition (1 June 2015). The purchase price adjustments are not finalised as of the date of approving these condensed consolidated interim financial statements.
m | ||||
Intangible assets (excluding goodwill) |
1,337.4 | |||
Property, plant and equipment |
265.2 | |||
Inventories |
233.0 | |||
Trading debtors |
67.9 | |||
Pre-paid debt fees |
15.9 | |||
Derivative financial instruments |
7.7 | |||
Cash and cash equivalents |
727.7 | |||
Bank overdrafts |
(626.1 | ) | ||
Borrowings |
(1,186.6 | ) | ||
Trading creditors |
(281.0 | ) | ||
Retirement benefits |
(127.3 | ) | ||
Provisions |
(77.9 | ) | ||
Taxation |
(18.9 | ) | ||
Net deferred tax liability |
(270.0 | ) | ||
|
|
|||
Total identifiable net assets acquired |
67.0 | |||
|
|
Fair values measured on a provisional basis
The following values have been determined on a provisional basis:
| The fair value of the Iglo Groups intangible assets (brands and software) has been measured provisionally pending completion of an independent valuation. |
| The fair value of the Iglo Groups property, plant and equipment. |
| The Iglo Groups deferred tax asset/liability. |
Fair values are measured on a provisional basis. If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition identifies adjustments to the above amounts, or any additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised.
Goodwill
Goodwill arising from the acquisition has been recognised as follows:
Note | m | |||||||
Consideration transferred |
1,420.7 | |||||||
Fair value of identifiable net assets |
(67.0 | ) | ||||||
|
|
|||||||
7 | 1,353.7 | |||||||
|
|
F-35
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
The goodwill recognized is attributable mainly to the growth prospects for the business expected organically and through strategic acquisitions and the assembled workforce.
6. | Segment reporting |
Management considers that all revenue and products sold relates to one category and segment: frozen foods.
Segment Adjusted EBITDA
For the six months ended | ||||||||||||
Note |
30 September
2014 |
30 September
2015 |
||||||||||
m | m | |||||||||||
Frozen Adjusted EBITDA |
| 90.6 | ||||||||||
|
|
|
|
|||||||||
Unallocated corporate costs |
| (12.8 | ) | |||||||||
|
|
|
|
|||||||||
Adjusted EBITDA |
| 77.8 | ||||||||||
Net purchase-price adjustmentinventory step up |
(0.2 | ) | (26.0 | ) | ||||||||
Charge related to Founder Preferred Shares Annual Dividend Amount |
(22.4 | ) | (349.0 | ) | ||||||||
Charge relating to warranty redemption |
(0.4 | ) | 0.4 | |||||||||
Exceptional items |
14 | (0.2 | ) | (37.8 | ) | |||||||
Net finance costs |
15 | 0.1 | (39.6 | ) | ||||||||
Depreciation |
8 | | (10.3 | ) | ||||||||
Amortisation |
7 | | (0.5 | ) | ||||||||
|
|
|
|
|||||||||
Loss before tax |
(23.1 | ) | (385.0 | ) | ||||||||
|
|
|
|
No information on segment assets or liabilities is presented to the CODM.
Geographical information
External revenue by geography
For the six months ended | ||||||||
30 September
2014 |
30 September
2015 |
|||||||
m | m | |||||||
United Kingdom |
| 164.3 | ||||||
Italy |
| 102.1 | ||||||
Germany |
| 75.7 | ||||||
Rest of Europe |
| 76.2 | ||||||
|
|
|
|
|||||
Total external revenue by geography |
| 418.3 | ||||||
|
|
|
|
F-36
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
7. | Intangible assets |
Goodwill | Brands |
Computer
software |
Total | |||||||||||||
m | m | m | m | |||||||||||||
Net book value as of 1 April 2015 |
| | | | ||||||||||||
Acquisition |
1,353.7 | 1,333.9 | 3.5 | 2,691.1 | ||||||||||||
Additions |
| | 0.2 | 0.2 | ||||||||||||
Amortisation charge for the period |
| | (0.5 | ) | (0.5 | ) | ||||||||||
Effect of movements in foreign exchange |
| (13.5 | ) | 0.2 | (13.3 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value as of 30 September 2015 |
1,353.7 | 1,320.4 | 3.4 | 2,677.5 | ||||||||||||
|
|
|
|
|
|
|
|
The Company did not hold any intangible assets prior to the acquisition of the Iglo Group.
8. | Property, plant and equipment |
Property, plant
and equipment |
||||
m | ||||
Net book value as of 1 April 2015 |
| |||
Acquisition |
265.2 | |||
Additions |
7.7 | |||
Depreciation charge for the period |
(10.3 | ) | ||
Effect of movements in foreign exchange |
(2.3 | ) | ||
|
|
|||
Net book value as of 30 September 2015 |
260.3 | |||
|
|
The Company did not hold any property, plant or equipment prior to the acquisition of the Iglo Group.
9. | Loans and borrowings |
30 September
2014 |
30 September
2015 |
|||||||
m | m | |||||||
Current liabilities |
||||||||
Deferred borrowing costs to be amortised within 1 year |
| (3.1 | ) | |||||
|
|
|
|
|||||
Total current liabilities |
| (3.1 | ) | |||||
|
|
|
|
|||||
Non-current liabilities |
||||||||
Senior debt and other loans |
| 681.6 | ||||||
2020 floating rate senior secured notes |
| 500.0 | ||||||
Less capitalised borrowing costs to be amortised in 2 - 5 years |
| (11.7 | ) | |||||
|
|
|
|
|||||
Total due after more than one year |
| 1,169.9 | ||||||
|
|
|
|
|||||
Total loans and borrowings |
| 1,166.8 | ||||||
|
|
|
|
The interest rate on the loans and the floating rate senior secured notes are re-priced within one year to the relevant Euribor or Libor rate.
F-37
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
Recent events
Concurrent with the acquisition of the Iglo Group on 1 June 2015 by the Company, the Iglo Group amended its Senior Facilities Agreement and repaid 490.0 million of gross debt. This amendment is expected to deliver lower interest costs due to the reduction in gross debt and a reduction of 0.25% in the interest rates applied. The acquired debt continues to be repayable on 30 June 2020.
This was viewed as a modification of existing debt, therefore eligible transaction costs of 5.4 million were capitalised as part of the amendment of debt and will be amortised over the remaining life of the debt.
The Company acquired an 80.0 million multicurrency revolving credit facility. This facility is available until 31 December 2019. As of 30 September 2015 4.2 million has been utilised for letters of credit, overdrafts, customer bonds and bank guarantees against the revolving credit facility.
On 2 November 2015, as part of funding the acquisition of the Findus Groups Continental European business, the Group incurred new Senior debt of 325.0 million under its Senior financing facility. This Senior C3 EUR debt is repayable on 30 June 2020, with a margin of EURIBOR plus 400bps and is secured against certain assets of the group, with equal ranking to existing Senior and bond debt. The Group expects to incur 8.3 million of associated transaction fees which will be capitalised and amortised across the repayment period.
10. | Founder Preferred Shares Annual Dividend Amount |
The Founder Preferred Shares Annual Dividend Amount is structured to provide a dividend based on the future appreciation of the market value of the Ordinary Shares, thus aligning the interests of the Founders with those of the investors on a long term basis. Commencing with 2015, the Founder Preferred Share Annual Dividend Amount becomes payable once the Companys volume weighted average Ordinary Share price is above $11.50 for the last 10 trading days of the Companys financial year. The Founder Preferred Shares Annual Dividend Amount in the first year it is payable will be equal to 20% of the increase in the market price of our Ordinary Shares compared to the initial public offering price of $10.00 multiplied by 140,220,619 (the Preferred Share Dividend Equivalent). In subsequent years, the Preferred Shares Annual Dividend amount will be calculated as 20% of the increase in market value of our Ordinary Shares compared to the highest price previously used in calculating the Founder Preferred Share Annual Dividend Amounts multiplied by the Preferred Share Dividend Equivalent. The Founder Preferred Shares Annual Dividend Amount is paid for so long as the Founder Preferred Shares remain outstanding. The Founder Preferred Shares automatically convert on the last day of the seventh full financial year following completion of the acquisition of the Iglo Group or upon a change of control, unless in the case of a change of control, the independent Directors determine otherwise.
The Preferred Share Dividend Equivalent is equal to the number of Ordinary Shares outstanding immediately following the Iglo Acquisition, but excluding the 13.7 million Ordinary Shares issued to the seller of the Iglo Group.
F-38
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
The amounts used for the purposes of calculating the Founder Preferred Shares Annual Dividend Amount and the relevant numbers of Ordinary Shares are subject to such adjustments for share splits, share dividends and certain other recapitalisation events as the Directors in their absolute discretion determine to be fair and reasonable in the event of a consolidation or sub-division of the Ordinary Shares in issue, as determined in accordance with Nomads Memorandum and Articles of Association.
Founder
Preferred Shares Annual Dividend Amount |
||||
m | ||||
Balance as of 1 April 2014 |
| |||
Charge recognised in the income statement |
165.8 | |||
Foreign exchange impact |
5.5 | |||
|
|
|||
Balance as of 31 March 2015 |
171.3 | |||
Charge recognised in the income statement |
349.0 | |||
Foreign exchange impact |
11.2 | |||
Classified within equity (note 4.1) |
(531.5 | ) | ||
|
|
|||
Balance as of 30 September 2015 |
| |||
|
|
Assuming the Founder Preferred Shares Dividend reserve of 531.5 million (which represents the fair value of the Founder Preferred Share Annual Dividend Amount as of 1 June 2015) was settled in Ordinary Shares as of 30 September 2015, the company would have issued 37.8 million additional Ordinary Shares.
11. | Provisions |
Provisions | ||||
m | ||||
Balance as of 1 April 2015 |
||||
Acquisition |
77.9 | |||
Additions during the period |
5.9 | |||
Amounts released in period |
(0.6 | ) | ||
Utilisation of provision |
(53.9 | ) | ||
|
|
|||
Balance as of 30 September 2015 |
29.3 | |||
|
|
The utilization during the period consisted primarily of the payout of certain management incentive schemes of the Iglo Group following its acquisition by the Company.
Of the total provision balance at 30 September 2015, 13.2 million (2014: nil) relates to committed plans for certain operational restructuring activities which are due to be completed within the next 18 months. The amounts have been provided based on information available on the likely expenditure required to complete the committed plans. The remainder relates to ordinary course, indirect tax and legal matters.
The Company did not have any provisions prior to the acquisition of the Iglo Group.
F-39
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
12. | Employee benefits |
The Iglo Group operates defined benefit pension plans in Germany, Italy and Austria as well as various contribution plans in other countries. The defined benefit pension plans are partially funded in Germany and Austria and unfunded in Italy. In addition, an unfunded post-retirement medical plan is operated in Austria. In Germany and Italy long term service awards are in operation and various other countries provide other employee benefits. There were no changes in the nature of any schemes in the period to 30 September 2015.
Employee
Benefits |
||||
m | ||||
Balance as of 1 April 2015 |
||||
Acquired funded retirement |
127.3 | |||
Actuarial gain on pension scheme valuations |
(17.4 | ) | ||
Service cost |
0.3 | |||
Net interest expense |
0.9 | |||
Contributions by employer |
(0.5 | ) | ||
|
|
|||
Balance as of 30 September 2015 |
110.6 | |||
|
|
The principal assumptions used by qualified actuaries in determining the valuations as of 30 September 2015 were as follows:
Defined benefit retirement
plans |
Post-employment
medical benefits and other benefits |
|||||||||||||||||||
Germany | Austria | Italy | Germany | Austria | ||||||||||||||||
Discount rate |
2.4 | % | 2.5 | % | 1.7 | % | 1.4 | % | 2.5 | % | ||||||||||
Inflation rate |
2.0 | % | | 1.8 | % | 2.0 | % | | ||||||||||||
Rate of increase in salaries |
2.7 | % | 3.0 | % | 3.0 | % | 2.7 | % | 3.0 | % | ||||||||||
Rate of increase in pension payment |
1-2 | % | 1.7 | % | | | | |||||||||||||
Long-term medical cost of inflation |
| | | | 2.0 | % |
The Company did not have any defined benefit pension plans prior to the acquisition of the Iglo Group.
13. | Capital reserve |
Shares | ||||||||||||||||
31 March
2015 |
30 September
2015 |
31 March
2015 |
30 September
2015 |
|||||||||||||
m | m | |||||||||||||||
Issued and fully paid: |
||||||||||||||||
Ordinary Shares |
48,525,000 | 170,053,416 | 350.9 | 1,654.6 | ||||||||||||
Founder Preferred Shares |
1,500,000 | 1,500,000 | 10.6 | 10.6 | ||||||||||||
|
|
|
|
|||||||||||||
Total share capital |
361.5 | 1,665.2 | ||||||||||||||
Cost of admission |
(8.0 | ) | (13.8 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Total capital reserve |
353.5 | 1,651.4 | ||||||||||||||
|
|
|
|
Ordinary Shares
The Company issued 121.5 million Ordinary Shares between 1 April 2015 and 30 September 2015. Of these, 13.7 million were issued as a result of the acquisition of the Iglo Group on 1 June 2015, 75.7 million were issued
F-40
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
through a private placement on 26 May 2015 and a further 15.4 million were issued through a subsequent private placement on 8 July 2015. 16.7 million were issued from the early exercise of warrants.
On 2 November 2015, Nomad issued 8.4 million shares as partial consideration for the acquisition of Findus Sverige AB. See Note 20 for further information.
Warrants
On 6 May 2015, the Company obtained the consent of over 75% of the holders of outstanding Warrants to an amendment to the terms of the Warrants in order to provide that the subscription period for the Warrants, which previously would have expired on the third anniversary of the Companys consummation of its first acquisition, would instead expire on the consummation of the Iglo Group acquisition (except in certain limited circumstances, in which case, such holder will be permitted to exercise his, her or its Warrants until the date that is 30 days following the date of Readmission). The Warrant Amendment was thereby effective on 6 May 2015. As of 30 September 2015, all warrants have either been exercised or cancelled.
14. | Exceptional items |
For the six months ended | ||||||||
30 September
2014 |
30 September
2015 |
|||||||
m | m | |||||||
Transaction related costs |
0.2 | 29.4 | ||||||
Costs related to management incentive plans |
| 1.5 | ||||||
Investigation of strategic opportunities and other items |
| 2.7 | ||||||
Cisterna fire net costs |
| 0.6 | ||||||
Other restructuring costs |
| 3.6 | ||||||
|
|
|
|
|||||
Total exceptional items |
0.2 | 37.8 | ||||||
|
|
|
|
The tax impact on the exceptional items at 30 September 2015 amounts to 5.1 million (2014: nil).
Included in the statement of Condensed Consolidated Interim Statements of Cash Flows is 73.4m of cash outflows relating to exceptional items. This includes the cash flows related to the above items and the cash impact of the settlement of provisions acquired with the Iglo Group, most notably in respect of the payout of certain management incentive schemes. Please refer to Note 11 for further details.
F-41
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
15. | Finance income and costs |
For the six months ended | ||||||||
30 September
2014 |
30 September
2015 |
|||||||
m | m | |||||||
Finance Income |
||||||||
Interest income |
| 1.5 | ||||||
Net foreign exchange arising on retranslation of financial assets and liabilities |
0.1 | | ||||||
|
|
|
|
|||||
Total finance income |
0.1 | 1.5 | ||||||
|
|
|
|
|||||
Interest expense |
| (27.8 | ) | |||||
Interest on defined benefit pension plan obligation |
| (0.9 | ) | |||||
Amortisation of borrowing costs |
| 1.0 | ||||||
Net foreign exchange arising on retranslation of financial assets and liabilities |
| (13.4 | ) | |||||
|
|
|
|
|||||
Total finance costs |
| (41.1 | ) | |||||
|
|
|
|
|||||
Net finance costs |
0.1 | (39.6 | ) | |||||
|
|
|
|
16. | Taxation |
Income tax expense of 5.3 million (2014: nil) for the six month period to 30 September 2015 is recognised based on managements estimate of the weighted average annual income tax rate expected for the full financial period.
The Companys subsidiaries, which are subject to tax, operate in many different jurisdictions and, in some of these, certain tax matters are under discussion with local tax authorities. These discussions are often complex and can take many years to resolve. Accruals for tax contingencies require management to make estimates and judgements with respect to the ultimate outcome of a tax audit, and actual results could vary from these estimates. Where tax exposures can be quantified, a provision is made based on best estimates and managements judgements. Given the inherent uncertainties in assessing the outcomes of these exposures (which can sometimes be binary in nature), the Group could in future periods experience adjustments to this provision.
Management believes that the Groups position on all open matters including those in current discussion with local tax authorities is robust and that the Group is appropriately provided.
Applicable to the Nomad Groups subsidiaries subject to UK tax, through the enactment of the Finance Act 2013 in the UK and subsequent amendments, the standard rate of corporation tax in the UK was 20% for 30 September 2015. This rate is reflected in these financial statements. A further reduction of corporation tax in the UK to 19% from 1 April 2017 and 18% from 1 April 2020 has been announced but has not yet been substantively enacted. As such, this change has not been reflected in these financial statements.
Earnings per share
Six months ended | ||||||||
30 September
2014 |
30 September
2015 |
|||||||
Loss attributable to shareholders (m) |
| (23.1 | ) | | (390.3 | ) | ||
Weighted average Ordinary Shares and Founder Preferred Shares |
46,209,891 | 130,512,120 | ||||||
Basic loss per share |
| (0.50 | ) | | (2.99 | ) |
F-42
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
Basic loss per share is calculated by dividing the loss attributable to the shareholders of the Company of 390.3 million by the weighted average number of Ordinary Shares of 129,012,120 and Founder Preferred Shares of 1,500,000.
There were no dilutive shares as at 30 September 2015. For the six months ended 30 September 2014, the exercise of the Initial Options and Warrants would not be dilutive, given the losses arising.
The Ordinary Shares that could be issued to settle the Founder Preferred Shares Annual Dividend Amount and warrants outstanding are potentially dilutive.
17. | Contingent liabilities |
The Iglo Group is currently in discussions with tax authorities and a third party in one of its markets regarding the treatment of the 2006 acquisition of the Iglo Group by the previous owners. The Company has an indemnity in respect of this tax issue. A related tax indemnification asset of 7.9m has been recognised as at 30 September 2015.
18. | Related parties |
Mariposa Capital, LLC and TOMS Capital LLC perform advisory services on behalf of the Company. The total fees for these services for the six months ended 30 September 2014 and 2015 were 81,668 and 636,778, respectively. As at 30 September 2015, an amount of 357,047 was outstanding (30 September 2014: nil).
Key management personnel comprise the Directors of Nomad. On acquisition of the Iglo Group on 1 June 2015, a new Board of Directors was assembled. In light of this, key management compensation is disclosed below, for information purposes only, for the period ending 30 September. This disclosure will continue to be addressed in the Annual Report thereafter:
Six months ended | ||||||||||
30 September
2014 |
30 September
2015 |
|||||||||
| | |||||||||
Short term employee benefits |
| 739,087 | ||||||||
Post-employment benefits |
| 42,967 | ||||||||
Non-executive Director fees |
92,738 | 73,137 | ||||||||
|
|
|
|
|
||||||
Total |
92,738 | 885,191 | ||||||||
|
|
|
|
|
In 2014, the non-executive Directors elected that their fees payable to them for their first year of appointment were paid as a lump sum and used to subscribe for Ordinary Shares at a price of $10.00 per share.
Lord Myners, Alun Cathcart, James E. Lillie and Elio Leoni Sceti will be entitled to an annual restricted stock grant equal to $100,000 of Ordinary Shares valued at the date of issue, which will vest on the earlier of the date of the following years annual general meeting or 13 months from the issuance date.
A number of the Directors or their related parties hold positions in other companies that result in them having control or significant influence over these companies. As part of the 26 May 2015 private placing of shares, the following related entities purchased Ordinary Shares in Nomad:
| Pershing Square Capital Management LP33,333,334 Ordinary Shares; |
| Olidipoli Sprl2,380,953 Ordinary Shares; |
F-43
Nomad Foods LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Statements
| Mariposa Acquisition II, LLC1,880,953 Ordinary Shares; and |
| TOMS Capital Investments LLC1,880,953 Ordinary Shares. |
19. | Subsequent events |
On 2 November 2015, the Company completed its acquisition of Findus Sverige AB and its subsidiaries (the Findus Groups Continental European business) for approximately £500 million. The acquired business includes operations across continental Europe with leading market positions in France, Sweden and Spain along with the intellectual and commercialization rights to the Findus, Lutosa (until 2020) and La Cocinera brands in their respective markets. The Findus Groups Continental European business has approximately 1,500 employees and 6 manufacturing locations. The cash portion of the purchase price was funded from a combination of cash on hand and the issuance of a 325 million tranche of senior debt under Nomad Foods credit facility. The remainder of the consideration was funded via the issuance of 8,378,380 Ordinary Shares. Following this issuance, the Companys total number of Ordinary Shares in issue is 178,431,796 of which none are held in treasury.
The Company is in the process of finalising the acquisition accounting of the Findus Groups Continental European business.
As described in Note 9, on 2 November 2015, the Group amended its Senior financing facility through taking out new Senior debt of 325 million.
F-44
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Nomad Foods Limited (formerly Nomad Holdings Limited)
In our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of income, of comprehensive loss, of changes in equity and of cash flows present fairly, in all material respects, the financial position of Iglo Foods Holdings Limited and its subsidiaries at December 31, 2014, December 31, 2013 and December 31, 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
London, United Kingdom
September 8, 2015
F-45
Iglo Foods Holdings Limited Consolidated Statements of Financial Position
As of the three years ended December 31, 2014
2012 | 2013 | 2014 | ||||||||||||
Note | m | m | m | |||||||||||
Non-current assets |
||||||||||||||
Intangible assets |
4 | 2,217.8 | 2,174.0 | 2,216.4 | ||||||||||
Property, plant and equipment |
3 | 250.6 | 252.1 | 254.9 | ||||||||||
Deferred tax assets |
6 | 65.0 | 65.1 | 73.3 | ||||||||||
|
|
|
|
|
|
|||||||||
Total non-current assets |
2,533.4 | 2,491.2 | 2,544.6 | |||||||||||
|
|
|
|
|
|
|||||||||
Current assets |
||||||||||||||
Inventories |
7 | 242.6 | 221.8 | 229.1 | ||||||||||
Trade and other receivables |
8 | 65.3 | 57.6 | 49.4 | ||||||||||
Tax receivable |
| 1.5 | | |||||||||||
Deferred borrowing costs |
10 | 11.6 | | 2.1 | ||||||||||
Derivative financial instruments |
23 | 0.3 | 0.6 | 11.2 | ||||||||||
Cash and cash equivalents |
9 | 644.1 | 688.5 | 707.0 | ||||||||||
|
|
|
|
|
|
|||||||||
Total current assets |
963.9 | 970.0 | 998.8 | |||||||||||
|
|
|
|
|
|
|||||||||
Total assets |
3,497.3 | 3,461.2 | 3,543.4 | |||||||||||
|
|
|
|
|
|
|||||||||
Current liabilities |
||||||||||||||
Bank overdrafts |
9 | 428.5 | 371.4 | 487.8 | ||||||||||
Trade and other payables |
11 | 313.5 | 304.5 | 313.9 | ||||||||||
Derivative financial instruments |
23 | 2.4 | 7.3 | 1.8 | ||||||||||
Tax payable |
11.8 | | 8.8 | |||||||||||
Loans and borrowings |
10 | | 117.2 | | ||||||||||
Provisions |
13 | 20.4 | 26.6 | 55.2 | ||||||||||
|
|
|
|
|
|
|||||||||
Total current liabilities |
776.6 | 827.0 | 867.5 | |||||||||||
|
|
|
|
|
|
|||||||||
Non-current liabilities |
||||||||||||||
Loans and borrowings |
10 | 2,842.9 | 2,822.2 | 2,903.1 | ||||||||||
Employee benefits |
12 | 75.2 | 70.9 | 124.2 | ||||||||||
Deferred tax liabilities |
6 | 309.1 | 291.5 | 306.1 | ||||||||||
|
|
|
|
|
|
|||||||||
Total non-current liabilities |
3,227.2 | 3,184.6 | 3,333.4 | |||||||||||
|
|
|
|
|
|
|||||||||
Total liabilities |
4,003.8 | 4,011.6 | 4,200.9 | |||||||||||
|
|
|
|
|
|
|||||||||
Net liabilities |
(506.5 | ) | (550.4 | ) | (657.5 | ) | ||||||||
|
|
|
|
|
|
|||||||||
Deficit attributable to equity holders |
||||||||||||||
Share capital |
14 | 0.1 | 0.1 | 0.1 | ||||||||||
Capital reserve |
14 | | 1.9 | 3.6 | ||||||||||
Translation reserve |
(38.3 | ) | (43.6 | ) | (16.0 | ) | ||||||||
Cash flow hedging reserve |
(2.1 | ) | (4.6 | ) | 4.9 | |||||||||
Accumulated deficit |
(466.2 | ) | (504.2 | ) | (650.1 | ) | ||||||||
|
|
|
|
|
|
|||||||||
Total deficit |
(506.5 | ) | (550.4 | ) | (657.5 | ) | ||||||||
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-46
Iglo Foods Holdings Limited Consolidated Statements of Income
for the three years ended December 31, 2014
2012 | 2013 | 2014 | ||||||||||||||
Note | m | m | m | |||||||||||||
Revenue |
28 | 1,572.7 | 1,505.8 | 1,500.9 | ||||||||||||
Cost of sales |
(1,028.9 | ) | (1,001.8 | ) | (970.9 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Gross profit |
543.8 | 504.0 | 530.0 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Other operating expenses |
(222.4 | ) | (231.8 | ) | (254.2 | ) | ||||||||||
Exceptional items. |
16 | (53.6 | ) | (83.8 | ) | (52.9 | ) | |||||||||
|
|
|
|
|
|
|||||||||||
Operating profit |
15 | 267.8 | 188.4 | 222.9 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Finance income |
19 | 4.6 | 12.4 | 6.8 | ||||||||||||
Finance costs |
19 | (307.0 | ) | (240.0 | ) | (297.0 | ) | |||||||||
|
|
|
|
|
|
|||||||||||
Net finance costs |
(302.4 | ) | (227.6 | ) | (290.2 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Loss before tax |
(34.6 | ) | (39.2 | ) | (67.3 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Taxation |
20 | (43.5 | ) | (2.0 | ) | (41.8 | ) | |||||||||
|
|
|
|
|
|
|||||||||||
Loss for the year |
(78.1 | ) | (41.2 | ) | (109.1 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Attributable to: |
||||||||||||||||
Owners of the Parent Company |
(78.1 | ) | (41.2 | ) | (109.1 | ) | ||||||||||
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-47
Iglo Foods Holdings Limited Consolidated Statements of Comprehensive Income
for the three years ended December 31, 2014
2012 | 2013 | 2014 | ||||||||||||||
Note | m | m | m | |||||||||||||
Loss for the year |
(78.1 | ) | (41.2 | ) | (109.1 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Other comprehensive income/(loss): |
||||||||||||||||
Actuarial (losses)/gains on defined benefit pension plans |
12 | (24.4 | ) | 4.8 | (52.0 | ) | ||||||||||
Taxation credit/(charge) on remeasurement of defined benefit pension plans |
20 | 7.3 | (1.6 | ) | 15.2 | |||||||||||
|
|
|
|
|
|
|||||||||||
Items not reclassified to the Income Statement |
(17.1 | ) | 3.2 | (36.8 | ) | |||||||||||
Gain/(loss) on hedge of net investment in foreign subsidiary |
8.0 | (7.8 | ) | 27.6 | ||||||||||||
Effective portion of changes in fair value of cash flow hedges |
14 | (8.8 | ) | (3.3 | ) | 13.2 | ||||||||||
Taxation credit/(charge) relating to components of other comprehensive income |
20 | 2.6 | 3.3 | (3.7 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||
Items that may be subsequently reclassified to the Income Statement |
1.8 | (7.8 | ) | 37.1 | ||||||||||||
Other comprehensive (loss)/income for the year, net of tax |
(15.3 | ) | (4.6 | ) | 0.3 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total comprehensive loss for the year |
(93.4 | ) | (45.8 | ) | (108.8 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Attributable to: |
||||||||||||||||
Owners of the Parent Company |
(93.4 | ) | (45.8 | ) | (108.8 | ) | ||||||||||
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-48
Iglo Foods Holdings Limited Consolidated Statements of Changes in Equity
for the three years ended December 31, 2014
Share
capital |
Capital
reserve |
Transla-
tion reserve |
Cash
flow hedging reserve |
Accumu-
lated deficit |
Total
deficit |
|||||||||||||||||||||||
Note | m | m | m | m | m | m | ||||||||||||||||||||||
Balance at January 1, 2012 |
7.0 | (46.3 | ) | 4.0 | (377.8 | ) | (413.1 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Loss for the year |
| | | | (78.1 | ) | (78.1 | ) | ||||||||||||||||||||
Other comprehensive income/(loss) for the year |
| | 8.0 | (6.1 | ) | (17.2 | ) | (15.3 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total comprehensive loss for the year |
| | 8.0 | (6.1 | ) | (95.3 | ) | (93.4 | ) | |||||||||||||||||||
Share reduction |
(6.9 | ) | | | | 6.9 | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total transactions with owners, recognised directly in equity |
(6.9 | ) | | | | 6.9 | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2012 |
0.1 | | (38.3 | ) | (2.1 | ) | (466.2 | ) | (506.5 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Loss for the year |
| | | | (41.2 | ) | (41.2 | ) | ||||||||||||||||||||
Other comprehensive (loss)/income for the year |
| | (5.3 | ) | (2.5 | ) | 3.2 | (4.6 | ) | |||||||||||||||||||
Total comprehensive loss for the year |
| | (5.3 | ) | (2.5 | ) | (38.0 | ) | (45.8 | ) | ||||||||||||||||||
Issuance of new share capital |
| 0.8 | | | | 0.8 | ||||||||||||||||||||||
Share based payment charge |
| 1.1 | | | | 1.1 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total transactions with owners, recognised directly in equity |
| 1.9 | | | | 1.9 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2013 |
0.1 | 1.9 | (43.6 | ) | (4.6 | ) | (504.2 | ) | (550.4 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Loss for the year |
| | | | (109.1 | ) | (109.1 | ) | ||||||||||||||||||||
Other comprehensive income/(loss) for the year |
| | 27.6 | 9.5 | (36.8 | ) | 0.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total comprehensive income/(loss) for the year |
| | 27.6 | 9.5 | (145.9 | ) | (108.8 | ) | ||||||||||||||||||||
Share based payment charge |
| 1.7 | | | | 1.7 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total transactions with owners, recognised directly in equity |
| 1.7 | | | | 1.7 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2014 |
14 | 0.1 | 3.6 | (16.0 | ) | 4.9 | (650.1 | ) | (657.5 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-49
Iglo Foods Holdings Limited Consolidated Statements of Cash Flows
for the three years ended December 31, 2014
2012 | 2013 | 2014 | ||||||||||||||
Note | m | m | m | |||||||||||||
Cash generated from operations before tax and exceptional items |
21 | 333.3 | 318.7 | 301.7 | ||||||||||||
Cash flows relating to exceptional items |
(44.5 | ) | (51.3 | ) | (17.2 | ) | ||||||||||
Tax paid |
(33.7 | ) | (30.1 | ) | (17.1 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net cash flows from operating activities |
255.1 | 237.3 | 267.4 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Cash flows from investing activities |
||||||||||||||||
Purchase of property, plant and equipment |
3 | (27.4 | ) | (26.5 | ) | (24.3 | ) | |||||||||
Purchase of intangibles |
4 | | (1.8 | ) | (2.0 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net cash used in investing activities |
(27.4 | ) | (28.3 | ) | (26.3 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Cash flows from financing activities |
||||||||||||||||
Proceeds from new loans and notes |
250.0 | 0.4 | 1,624.1 | |||||||||||||
Repayment of loan principal |
(387.1 | ) | | (1,861.0 | ) | |||||||||||
Payment of financing fees |
(28.7 | ) | (7.0 | ) | (15.9 | ) | ||||||||||
Payment for interest rate cap premiums |
| (1.5 | ) | (3.0 | ) | |||||||||||
Interest paid |
(94.4 | ) | (105.9 | ) | (95.2 | ) | ||||||||||
Interest received |
4.6 | 7.3 | 6.8 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Net cash used in financing activities |
(255.6 | ) | (106.7 | ) | (344.2 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net (decrease)/increase in cash and cash equivalents |
(27.9 | ) | 102.3 | (103.1 | ) | |||||||||||
Cash and cash equivalents at beginning of year |
9 | 242.5 | 215.6 | 317.1 | ||||||||||||
Exchange rate gains/(losses) on cash and cash equivalents |
1.0 | (0.8 | ) | 5.2 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents at end of year |
9 | 215.6 | 317.1 | 219.2 | ||||||||||||
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-50
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
1) | Accounting policies and basis of preparation |
Iglo Foods Holdings Limited (Iglo) is domiciled in the United Kingdom and incorporated in the United Kingdom under the Companies Act 2006. Iglo and its subsidiaries (together the Iglo Group) consolidated financial statements have been prepared in accordance International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (IFRSs) and IFRS Interpretations as applicable to companies reporting under IFRS. On April 20, 2015 Nomad Holdings Limited entered into a definitive agreement to acquire the Iglo Group (the Iglo Acquisition). The Iglo Acquisition closed on June 1, 2015 and Nomad Holdings Limited changed its name to Nomad Foods Limited. Iglo Foods Holdings Limited is a direct subsidiary of Nomad Foods Limited which is listed on the standard segment of the London Stock Exchange. Iglo is considered the Predecessor of Nomad Foods Limited as prior to the Iglo Acquisition, Nomad Foods Limited had no operations.
The consolidated financial statements were approved by the Board of Directors of Nomad Foods Limited on September 4, 2015.
Iglo is a frozen food producer operating in Western Europe, selling its products primarily to large grocery retailers either directly or through distribution arrangement in the United Kingdom, Germany and Italy. The brands under which Iglo sell its products are Birds Eye in the United Kingdom and Ireland, Iglo in Germany and Continental Europe and Findus in Italy and San Marino.
The accounting policies set out below have, unless otherwise stated, been applied consistently.
Judgements made by the Directors in the application of these accounting policies that have a significant effect on the financial statements, and key sources of estimation uncertainty which have a significant risk of causing a material adjustment in the next year are discussed in Note 2.
a) | Measurement convention |
The financial statements are prepared on the historical cost basis with the exception of derivative financial instruments, which are stated at fair value.
b) | Basis of consolidation |
The Iglo Group financial statements consolidate Iglo and its subsidiaries. Intercompany balances and profits or losses on intra-group transactions are eliminated. Accounting policies are applied consistently across the Iglo Group.
Subsidiaries are all entities (including structured entities) over which the Iglo Group has control. The Iglo Group controls an entity when the Iglo Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Iglo Group. They are deconsolidated from the date that control ceases.
The Iglo Group uses the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interest issued by the Iglo Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition related costs are expensed as incurred.
Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from amendments to any contingent consideration arrangements.
F-51
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
c) | Foreign currency |
The consolidated financial statements are presented in Euros, which is Iglos functional currency and the presentation currency of the Iglo Group. All financial statements have been rounded to the nearest 0.1 million.
i) | Foreign currency transactions |
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rate ruling at the financial year end. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the dates the fair value was determined.
ii) | Assets and liabilities of foreign operations |
For the purposes of presenting consolidated financial statements, the assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated at foreign exchange rates ruling at the financial year end date of £1:1.28 (2013: £1:1.20; 2012: £1:1.23). The revenues and expenses of foreign operations are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions.
Foreign exchange gains and losses that relate to these assets and liabilities are presented in the income statement within finance income or costs, except where hedge accounting applies.
iii) | Net investment in foreign operations |
Exchange differences arising from the translation of foreign operations, and of related qualifying hedges are taken directly to the translation reserve within equity. They are released into the income statement upon disposal of the related foreign operation.
d) | Property, plant and equipment |
i) | Owned assets |
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
ii) | Leased assets |
Leases in which the Iglo Group assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases.
All of our leases are classified as operating leases as none of them meets the definition of a finance lease.
iii) | Depreciation |
Depreciation is charged to the Income Statement on a straight line basis over the shorter of the lease term and the estimated useful lives of each part of an item of property, plant and equipment once the item is brought into use. Land is not depreciated. The estimated useful lives are as follows:
| Buildings 40 years |
| Plant and equipment 5 to 14 years |
| Computer equipment 3 to 5 years |
F-52
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
The assets residual values and useful lives are reviewed on a frequent basis.
e) | Goodwill |
Goodwill represents amounts arising on acquisition of subsidiaries. Goodwill is the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired.
Goodwill is stated at cost less any accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units and is not amortized but is tested annually for impairment.
f) | Other intangible assets |
Intangible assets acquired separately are recorded at cost and those acquired as part of a business combination are recorded at fair value as at the date of acquisition.
i) | Computer software |
Capitalized software costs include the cost of acquired computer software licenses and costs that are directly associated with the design, construction and testing of such software where this relates to a major business system.
Costs associated with identifying, sourcing, evaluating or maintaining computer software are recognized as an expense as incurred.
The assets are stated at cost less accumulated amortization and impairment losses.
Software costs are amortized by equal annual installments over their estimated useful economic life of five to seven years once the software is capable of being brought into use.
ii) | Brands |
Based on the market position of the brands, the significant levels of investment in advertising and promoting the brands, and the fact that they have been established for over 50 years, the Directors consider that the Birds Eye, Iglo and Findus brands should be considered to have indefinite lives. Therefore these brands are not amortized but instead held at historical cost less provision for any impairment.
The Directors considered that one of the brands acquired as part of the acquisitions of Findus Italy, 4Salti in Padella, does not have an indefinite life. This brand is being amortized over 10 years.
g) | Impairment of non-current assets |
The carrying amounts of the Iglo Groups assets are reviewed annually to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated. Impairment losses are recognized in the Income Statement in the period in which they arise.
For goodwill and assets that have an indefinite useful life an impairment review is performed at least annually.
Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the net carrying amount may not be recoverable.
An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
i) | Calculation of recoverable amount |
Recoverable amount is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows of the business are discounted to their present value
F-53
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
ii) | Allocation of impairment losses |
Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units then to reduce the carrying amount of the other assets in the unit on a pro rata basis. A cash generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
iii) | Reversals of impairment |
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
h) | Inventories |
Inventories are stated at the lower of cost and net realizable value.
Cost is based on the weighted average principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.
Provision is made for slow moving, obsolete and defective inventories.
i) | Employee benefits |
i) | Defined contribution plans |
Obligations for contributions to defined contribution pension plans are recognized as an expense in the Income Statement as incurred. Prepaid contributions are recognized as an asset to the extent that a cash refund or reduction in the future payments is available.
ii) | Defined benefit plans |
The Iglo Groups net obligation in respect of defined benefit pension plans and other post-employment benefits is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods. That net obligation is discounted to determine its present value.
The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The calculation is performed by an independent qualified actuary using the projected unit credit method.
The current service cost of the defined benefit plan, recognized in the income statement in employee benefit expense, except where included in the cost of an asset, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes curtailments and settlements.
F-54
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the income statement.
Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise amortized on a straight line basis over the average period until the benefits become vested.
iii) | Share based payment schemes |
Schemes fall within the provisions of IFRS 2 Share Based Payments and represent equity settled share based payments.
A charge is taken to the Income Statement for the difference between the fair value of the shares at grant date and the amount subscribed, spread over the vesting period.
Since the interests granted are in the ultimate controlling party, Birds Eye Iglo Limited Partnership, Inc (the Permira Partnership), and the Iglo Group has no obligation to settle the share-based payment transaction, the grant of equity instruments to the employees of the Iglo Group is treated as a capital contribution by the Permira Partnership. See note 29 Events after the balance sheet date.
At the end of each reporting period, the Iglo Group revises its estimates of the number of interests that are expected to vest based on the non-market vesting conditions. It recognizes the impact of the revision to original estimates, if any, in the Income Statement, with a corresponding adjustment to equity.
iv) | Other management incentive schemes |
If schemes fall outside the scope of IFRS 2, since they are not related to the price or value of equity instruments, but do fall within the scope of IAS 19 Employee Benefits, an annual charge is taken over the service period based on an estimate of the amount of future benefit employees will earn in return for their service.
j) | Provisions |
Provisions are recognized when the Iglo Group has a legal or constructive present obligation as a result of a past event, and it is probable that the Iglo Group will be required to settle that obligation. Provisions are measured at the Directors best estimate of the expenditure required to settle the obligation at the financial year end date, and are discounted to present value where the effect is material.
k) | Financial instruments |
Financial assets and liabilities are recognized in the Iglo Groups Statement of Financial Position when the Iglo Group becomes a party to the contractual provisions of the instrument.
i) | Trade receivables |
Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortized cost using the effective interest method, less any impairment. Since trade receivables are due within one year, this equates to initial carrying value less any impairment.
Appropriate allowances for estimated irrecoverable amounts are recognized in Income Statement when there is objective evidence that the asset is impaired.
F-55
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Trade receivables are presented net of customer rebate balances.
ii) | Cash and cash equivalents |
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Iglo Groups cash management are included as a component of cash and cash equivalents for the purpose of the Statement of Cash Flows only.
iii) | Loans and borrowings |
a. | Valuation |
Interest bearing borrowings are recognized initially at fair value less attributable transaction costs.
Subsequent to initial recognition, interest bearing loans and borrowings are stated at amortized cost with any difference between cost and redemption value being recognized in the Income Statement over the expected period of the borrowings on a straight line basis.
b. | Capitalization of transaction costs |
Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs.
To the extent there is no evidence that it is probable that some or all of the facility will be drawn down the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facility to which it relates.
iv) | Trade payables |
Trade payables are measured at initial recognition at fair value, and are subsequently measured at amortized cost using the effective interest method. Since trade payables are largely due within one year, this equates to initial carrying value.
v) | Derivative financial instruments and hedge accounting |
Derivative financial instruments are recognized at fair value. When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge accounting, all changes in its fair value are recognized immediately in the Income Statement. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged.
The fair value of interest rate caps represents the time value plus the intrinsic value at the financial year end date.
The fair value of forward exchange contracts is their quoted market price at the financial year end date, being the present value of the quoted forward price.
a. | Cash flow hedges |
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognized asset or liability, or a highly probable forecast transaction, the effective part of any gain or loss on the derivative financial instrument is recognized directly in the cash flow hedging reserve. Any ineffective portion of the hedge is recognized immediately in the Income Statement.
When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of the hedge relationship but the hedged forecast transaction is still expected to
F-56
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
occur, the cumulative gain or loss at that point remains in equity and is recognized when the transaction occurs. If the hedged transaction is no longer expected to take place, the cumulative unrealized gain or loss recognized in equity is recognized in the Income Statement immediately.
b. | Net investment hedges |
Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a net investment in a foreign operation are recognized in Other Comprehensive Income to the extent that the hedge is effective, and are presented in the translation reserve within equity. To the extent that the hedge is ineffective, such differences are recognized in the Income Statement. When the hedged net investment is disposed of, the relevant amount in the translation reserve is transferred to the Income Statement as part of the gain or loss on disposal.
l) | Revenue |
Revenue comprises sales of goods after deduction of discounts and sales taxes. It does not include sales between Iglo Group companies. Discounts given by the Iglo Group include rebates, price reductions and incentives given to customers, promotional couponing and trade communication costs. At each financial year end date any discount incurred but not yet invoiced is estimated and accrued.
Revenue is recognized when the risks and rewards of the underlying products have been transferred to the customer. The timing of the transfer of risks and rewards varies depending on the individual terms of the sales agreement, usually being on receipt of goods by the customer.
m) | Interest income |
Interest income is recognized in the Income Statement in the period in which it is earned.
n) | Expenses |
i) | Operating lease payments |
Payments made under operating leases are recognized in the Income Statement on a straight line basis over the term of the lease. Lease incentives received are recognized on a straight line basis in the Income Statement as an integral part of the total lease expense.
ii) | Borrowing costs |
Unless capitalized as part of the cost of borrowing (see Note 1 (k)(iii)), borrowing costs are recognized in the Income Statement in the period in which they are incurred.
iii) | Exceptional items |
The separate reporting of exceptional items which are presented as exceptional within the relevant income statement category, helps provide an indication of the Iglo Groups underlying business performance. Exceptional items have been identified and adjusted by virtue of their size, nature or incidence. In determining whether an event or transaction is specific, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence. Exceptional items comprise restructuring costs, impairments or reversal of impairments of intangible assets, operational restructuring, integration and acquisition costs relating to new acquisitions, investigation of strategic opportunities, costs relating to certain management incentive plans and other significant items (see Note 16).
iv) | Research and development |
Expenditure on research activities is recognized in the Income Statement as an expense as incurred.
F-57
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
o) | Taxation |
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognized in the Income Statement except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the financial year end date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts used for taxation purposes on an undiscounted basis. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the financial year end date.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.
p) | Segment reporting |
The Chief Operating Decision Maker (CODM) has been determined to be the Executive Committee of Iglo as they are primarily responsible for the allocation of resources to the segments and the assessment of performance of the segments.
The Iglo Groups operations are primarily organized into brands (Birds Eye in the United Kingdom & Ireland, Iglo in Germany and Continental Europe and Findus in Italy and San Marino) with each brand headed by a managing director. Other business units, comprising factories, private label and corporate overheads, make up the rest of the Iglo Groups operations included in the information presented to the CODM. The primary organization and management of business activities into brands has been used to identify and determine the Iglo Groups operating segments as reported to the CODM.
The CODM uses revenue and earnings before taxation, depreciation, amortization, exceptional items and net financing costs (Adjusted EBITDA) as the key measure of the segments results. Revenue is presented to the CODM using budgeted currency exchange rates as shown in Note 28. Adjusted EBITDA is presented to the CODM at actual exchange rates.
The segmental reporting is shown in Note 28.
q) | IFRSs not yet adopted |
At the date of authorization of these financial statements, the following Standards and Interpretations, which have not been applied in the financial statements, were in issue but not yet effective:
| IFRS 9 Financial instruments addresses the classification, measurement and recognition of financial assets and financial liabilities and replaces IAS 39. IFRS 9 will become effective for the accounting periods starting on January 1, 2018. |
| IFRS 15 Revenue from contracts with customers will become effective for accounting periods starting on January 1, 2018. |
The Directors anticipate that the adoption in future periods of these Standards and Interpretations where they are relevant to the Iglo Group will have no material impact on the financial statements of the Iglo Group, although this assessment is ongoing.
F-58
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
2) | Accounting estimates |
The key sources of estimation uncertainty at the financial year end date are discussed below:
a) | Discounts |
Discounts given by the Iglo Group include rebates, price reductions and incentives given to customers, promotional couponing and trade communication costs. Each customer has a unique agreement that is governed by a combination of observable and unobservable performance conditions.
At each financial year end date any discount incurred but not yet invoiced is estimated, based on historical trends and rebate contracts with customers, and accrued as trade terms.
b) | Carrying value of goodwill and brands |
Determining whether goodwill and brands are impaired requires an estimation of the value in use of the cash generating units to which goodwill and brands have been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from each cash generating unit and a suitable discount rate in order to calculate present value. Details of impairment reviews are provided in note 4.
c) | Employee benefit obligation |
A significant number of estimates are required to calculate the fair value of the retirement benefit obligation at year end.
Note 12 contain details of these assumptions, and the calculation is performed by qualified actuaries.
d) | Income tax |
Where tax exposures can be quantified, an accrual is made based on best estimates and managements judgments. Given the inherent uncertainties in assessing the outcomes of these exposures (which can sometimes be binary in nature), Iglo Group could in future periods experience adjustments to these accruals.
e) | Fair value of derivative financial instruments |
Note 23(c) includes details of the fair value of the derivative instruments that the Iglo Group holds at December 31, 2014, 2013 and 2012.
Management has estimated the fair value of these instruments by using valuations based on discounted cash flow calculations.
f) | Share based payments |
At the end of each reporting period, the Iglo Group revises its estimates of the number of interests that are expected to vest based on the non-market vesting conditions.
Note 17 contain details of these assumptions and of the valuation model used.
F-59
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
3) | Property, plant and equipment |
Land and
buildings m |
Plant and
equipment m |
Computer
equipment m |
Total
m |
|||||||||||||
Cost |
||||||||||||||||
Balance at January 1, 2012 |
128.4 | 225.1 | 10.5 | 364.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Additions |
2.7 | 24.6 | 0.1 | 27.4 | ||||||||||||
Disposals |
| (0.9 | ) | | (0.9 | ) | ||||||||||
Effect of movements in foreign exchange |
1.0 | 1.8 | | 2.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2012 |
132.1 | 250.6 | 10.6 | 393.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Additions |
1.7 | 22.5 | 2.3 | 26.5 | ||||||||||||
Disposals |
| (15.3 | ) | | (15.3 | ) | ||||||||||
Effect of movements in foreign exchange |
(0.7 | ) | (1.6 | ) | | (2.3 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2013 |
133.1 | 256.2 | 12.9 | 402.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Additions |
1.4 | 22.6 | 0.3 | 24.3 | ||||||||||||
Disposals |
| (20.8 | ) | | (20.8 | ) | ||||||||||
Effect of movements in foreign exchange |
2.3 | 5.8 | | 8.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2014 |
136.8 | 263.8 | 13.2 | 413.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Accumulated depreciation and impairment |
||||||||||||||||
Balance at January 1, 2012 |
21.0 | 89.1 | 6.8 | 116.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Depreciation charge for the period |
4.5 | 17.3 | 2.7 | 24.5 | ||||||||||||
Disposals |
| (0.9 | ) | | (0.9 | ) | ||||||||||
Impairment |
| 1.3 | | 1.3 | ||||||||||||
Effect of movements in foreign exchange |
0.2 | 0.7 | | 0.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2012 |
25.7 | 107.5 | 9.5 | 142.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Depreciation charge for the year |
4.7 | 18.2 | 0.4 | 23.3 | ||||||||||||
Disposals |
| (15.2 | ) | | (15.2 | ) | ||||||||||
Effect of movements in foreign exchange |
| (0.7 | ) | | (0.7 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2013 |
30.4 | 109.8 | 9.9 | 150.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Depreciation charge for the year |
4.6 | 19.6 | 0.6 | 24.8 | ||||||||||||
Disposals |
| (20.6 | ) | | (20.6 | ) | ||||||||||
Impairment |
0.7 | 0.8 | | 1.5 | ||||||||||||
Effect of movements in foreign exchange |
0.4 | 2.7 | | 3.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2014 |
36.1 | 112.3 | 10.5 | 158.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value January 1, 2012 |
107.4 | 136.0 | 3.7 | 247.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value December 31, 2012 |
106.4 | 143.1 | 1.1 | 250.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value December 31, 2013 |
102.7 | 146.4 | 3.0 | 252.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value December 31, 2014 |
100.7 | 151.5 | 2.7 | 254.9 | ||||||||||||
|
|
|
|
|
|
|
|
Security
Borrowings have been provided by a syndicate of third party lenders, (the Syndicate). The Syndicate together with holders of the bond issue have security over the assets of the guarantor group. The guarantor group consists of those companies which individually have more than 5% of consolidated gross assets or EBITDA of the Iglo Group and in total comprise more than 80% of consolidated gross assets or EBITDA at any testing date.
F-60
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
4) | Intangible assets |
Goodwill
m |
Brands
m |
Computer
software m |
Total
m |
|||||||||||||
Cost |
||||||||||||||||
Balance at January 1, 2012 |
925.1 | 1,318.9 | 19.9 | 2,263.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Additions |
| | | | ||||||||||||
Effect of movements in foreign exchange |
6.4 | 11.3 | 0.1 | 17.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2012 |
931.5 | 1,330.2 | 20.0 | 2,281.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Additions |
| | 1.8 | 1.8 | ||||||||||||
Effect of movements in foreign exchange |
(4.9 | ) | (8.8 | ) | | (13.7 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2013 |
926.6 | 1,321.4 | 21.8 | 2,269.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Additions |
| | 2.0 | 2.0 | ||||||||||||
Effect of movements in foreign exchange |
16.7 | 29.3 | | 46.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2014 |
943.3 | 1,350.7 | 23.8 | 2,317.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Accumulated amortization and impairment |
||||||||||||||||
Balance at January 1, 2012 |
26.5 | 24.4 | 8.6 | 59.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Amortization for the year |
| 1.1 | 3.3 | 4.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2012 |
26.5 | 25.5 | 11.9 | 63.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Amortization for the year |
| 1.1 | 3.4 | 4.5 | ||||||||||||
Impairment |
27.4 | | | 27.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2013 |
53.9 | 26.6 | 15.3 | 95.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Amortization for the year |
| 1.1 | 4.5 | 5.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2014 |
53.9 | 27.7 | 19.8 | 101.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value at January 1, 2012 |
898.6 | 1,294.5 | 11.3 | 2,204.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value December 31, 2012 |
905.0 | 1,304.7 | 8.1 | 2,217.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value December 31, 2013 |
872.7 | 1,294.8 | 6.5 | 2,174.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value December 31, 2014 |
889.4 | 1,323.0 | 4.0 | 2,216.4 | ||||||||||||
|
|
|
|
|
|
|
|
Amortization of 5.6 million (2013: 4.5 million; 2012: 4.4 million) is included in other operating expenses in the Income Statement.
As a result of the impairment review in 2013, management decided to fully provide for the value of goodwill of the Belgium business, based on the calculation of the value in use of this cash generating unit.
F-61
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Goodwill and brand values have been allocated to cash generating units or groups of cash generating units as follows:
Goodwill | Brand | |||||||||||||||||||||||
2012
m |
2013
m |
2014
m |
2012
m |
2013
m |
2014
m |
|||||||||||||||||||
United Kingdom and Ireland |
263.3 | 258.4 | 275.1 | 470.1 | 461.3 | 490.6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Birds Eye |
263.3 | 258.4 | 275.1 | 470.1 | 461.3 | 490.6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Germany |
159.9 | 159.9 | 159.9 | 210.0 | 210.0 | 210.0 | ||||||||||||||||||
Austria |
63.9 | 63.9 | 63.9 | 100.0 | 100.0 | 100.0 | ||||||||||||||||||
Other countries |
48.8 | 21.4 | 21.4 | 102.0 | 102.0 | 102.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Iglo |
272.6 | 245.2 | 245.2 | 412.0 | 412.0 | 412.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Italy |
369.1 | 369.1 | 369.1 | 422.6 | 421.5 | 420.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Findus |
369.1 | 369.1 | 369.1 | 422.6 | 421.5 | 420.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
905.0 | 872.7 | 889.4 | 1,304.7 | 1,294.8 | 1,323.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The Iglo Groups goodwill and brand values have been allocated based on the enterprise value at acquisition of each cash generating unit (CGU). As required by IAS 36 Impairment of Assets, an annual review of the carrying amount of the goodwill and the indefinite life brands is carried out to identify whether there is any impairment to these carrying values. This is done by means of comparison of the carrying values to the value in use of each CGU. Value in use is calculated as the net present value of the projected risk-adjusted cash flows of each CGU.
Key assumptions
The values for the key assumptions were arrived at by taking into consideration detailed historical information and comparison to external sources where appropriate, such as market rates for discount factors.
| Budgeted cash flows: the calculation of value in use has been based on the cash flows forecast in the 2015 budget and applying assumptions for the subsequent two years. These plans have been prepared and approved by management, and incorporate past performance, historical growth rates and projections of developments in key markets. Beyond this, a cash flow growth rate of 0.5% p.a. has been assumed for each territory, this being a reasonable estimate of future growth in the territories in which the Iglo Group operate. |
| Sales: projected sales are built up with reference to markets and product platforms. They incorporate past performance, historical growth rates and projections of developments in key markets. |
| EBITDA Margin: projected margins reflect historical performance. |
| Discount rate: a pre-tax discount rate of between 7.4% and 10.0% (2013: 8.2% and 10.7%; 2012: 7.1% and 9.9%) was applied to the cash flows depending on the risk attributed to businesses in each territory. |
| Long-term growth rates: as required by IAS 36, growth rates for the period after the detailed forecasts are based on past performance. The growth rate used in the testing was 0.5% (2013: 0.5%; 2012: 0.5%). These rates do not reflect the long-term assumptions used by the Iglo Group for investment planning. |
In 2013 as a result of the impairment review, management decided to fully provide for the value of goodwill of the Belgium business, based on the calculation of the value in use of this cash generating unit. The circumstances leading to the recognition of the impairment loss are discussed in Note 5. The pre-tax discount rate applied in 2013 was 10.7%, compared to 2012 rate of 8.2%.
F-62
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Sensitivity to changes in assumptions
No impairment is indicated in 2014 as the recoverable amount calculated based on value in use exceeded carrying value by in excess of 100 million. A reasonably possible change to the discount rate assumption made by management in assessing the recoverable amount of the Italian CGUs would result in the carrying amount exceeding its recoverable amount, resulting in an impairment to the Iglo Groups goodwill balance.
A rise in pre-tax discount rate to 10.9% from 9.7% would remove the remaining headroom.
5) | Investments |
The Iglo Group structure is as follows:
Activity |
Country of
incorporation |
Class of
shares held |
Ownership
2014, 2013 and 2012 |
|||||
Direct investments |
||||||||
Iglo Foods Holdco Limited |
Holding | England | Ordinary | 100% | ||||
Indirect investments |
||||||||
Iglo Foods Finco Limited |
Holding | England | Ordinary | 100% | ||||
Iglo Foods Midco Limited |
Management/
Finance |
England | Ordinary | 100% | ||||
Iglo Foods Group Limited |
Trading | England | Ordinary | 100% | ||||
Iglo Holding GmbH |
Holding | Germany | Ordinary | 100% | ||||
Liberator Germany Newco GmbH |
Property | Germany | Ordinary | 100% | ||||
Frozen Fish International GmbH |
Trading | Germany | Ordinary | 100% | ||||
Frozen Food Trading GmbH |
Non-trading | Germany | Ordinary | 100% | ||||
Iglo GmbH |
Trading | Germany | Ordinary | 100% | ||||
Iglo Services GmbH |
Non-trading | Germany | Ordinary | 100% | ||||
Birds Eye Ipco Limited |
Non-trading | England | Ordinary | 100% | ||||
Birds Eye Limited |
Trading | England | Ordinary | 100% | ||||
Birds Eye Foods Limited |
Non-trading | England | Ordinary | 100% | ||||
Iglo Foods Bondco plc (incorporated 19 June 2014) |
Finance | England | Ordinary | 100% | ||||
Iglo Foods Shortco plc (incorporated 12 June 2014) |
Non-trading | England | Ordinary | 100% | ||||
C.S.I. Compagnia Surgelati Italiana S.R.L |
Trading | Italy | Ordinary | 100% | ||||
Iglo Austria Holdings GmbH |
Holding | Austria | Ordinary | 100% | ||||
Iglo Austria GmbH |
Trading | Austria | Ordinary | 100% | ||||
Iglo France S.A.S. |
Trading | France | Ordinary | 100% | ||||
Iglo Belgium S.A. |
Trading | Belgium | Ordinary | 100% | ||||
Iglo Netherland B.V. |
Trading | Netherlands | Ordinary | 100% | ||||
Iglo Portugal |
Trading | Portugal | Ordinary | 100% | ||||
Birds Eye Ireland Limited |
Trading |
Republic of
Ireland |
Ordinary | 100% | ||||
Iglo Dondurulmus Gida Hizmetleri Limited Sirketi |
Trading | Turkey | Ordinary | 100% | ||||
Limited Liability Company Iglo |
Trading | Russia | Ordinary | 100% | ||||
Iglo Foods Finance Limited |
Finance | England | Ordinary | 100% |
F-63
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
6) | Deferred tax assets and liabilities |
Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets
2012 m |
Liabilities
2012 m |
Total
2012 m |
Assets
2013 m |
Liabilities
2013 m |
Total
2013 m |
Assets
2014 m |
Liabilities
2014 m |
Total
2014 m |
||||||||||||||||||||||||||||
Property, plant and equipment |
5.3 | (23.0 | ) | (17.7 | ) | 6.1 | (20.0 | ) | (13.9 | ) | 8.2 | (16.2 | ) | (8.0 | ) | |||||||||||||||||||||
Intangible assets |
2.8 | (281.1 | ) | (278.3 | ) | 2.0 | (265.2 | ) | (263.2 | ) | 2.0 | (280.1 | ) | (278.1 | ) | |||||||||||||||||||||
Employee benefits |
9.3 | | 9.3 | 7.9 | | 7.9 | 23.7 | | 23.7 | |||||||||||||||||||||||||||
Tax value of loss carry forwards |
39.4 | | 39.4 | 40.7 | | 40.7 | 31.8 | | 31.8 | |||||||||||||||||||||||||||
Derivative financial instruments |
1.1 | | 1.1 | 1.7 | | 1.7 | 1.4 | (3.4 | ) | (2.0 | ) | |||||||||||||||||||||||||
Other |
7.1 | (5.0 | ) | 2.1 | 6.7 | (6.3 | ) | 0.4 | 6.2 | (6.4 | ) | (0.2 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Tax assets/(liabilities) |
65.0 | (309.1 | ) | (244.1 | ) | 65.1 | (291.5 | ) | (226.4 | ) | 73.3 | (306.1 | ) | (232.8 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax assets are recognized for tax loss carry-forwards to the extent that the realization of the related tax benefit through future taxable profits is probable. The losses arise as a result of both trading and non-trading losses in Iglo Group entities and are expected to be utilized within five years or less.
Deferred tax assets that the Iglo Group has not recognized in the financial statements amount to 16.4 million (2013: 13.5 million; 2012: 11.0 million). These deferred tax assets have not been recognized as the likelihood of recovery is uncertain.
The aggregate deferred tax relating to items that have been charged directly to equity is 10.0 million (2013: 1.0 million credit; 2012: 2.8 million credit).
Movement in deferred tax during the year:
2012 |
Opening
balance 1 January 2012 m |
Movement
in foreign exchange on opening balance m |
Recognized
in Income Statement m |
Recognized
in equity m |
31 December
2012 m |
|||||||||||||||
Property, plant and equipment |
(24.9 | ) | (0.1 | ) | 7.3 | | (17.7 | ) | ||||||||||||
Intangible assets |
(276.1 | ) | (1.6 | ) | (0.6 | ) | | (278.3 | ) | |||||||||||
Employee benefits |
3.1 | | (1.1 | ) | 7.3 | 9.3 | ||||||||||||||
Tax value of loss carry forwards |
44.0 | 0.1 | (4.7 | ) | | 39.4 | ||||||||||||||
Derivative financial instruments |
(0.8 | ) | | (0.7 | ) | 2.6 | 1.1 | |||||||||||||
Other |
4.4 | (0.6 | ) | (1.7 | ) | | 2.1 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deferred tax |
(250.3 | ) | (2.2 | ) | (1.5 | ) | 9.9 | (244.1 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
F-64
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
2013 |
Opening
balance January 1, 2013 m |
Movement
in foreign exchange on opening balance m |
Recognized
in Income Statement m |
Recognized
in equity m |
December 31,
2013 m |
|||||||||||||||
Property, plant and equipment |
(17.7 | ) | | 3.8 | | (13.9 | ) | |||||||||||||
Intangible assets |
(278.3 | ) | 1.4 | 13.7 | | (263.2 | ) | |||||||||||||
Employee benefits |
9.3 | | 0.2 | (1.6 | ) | 7.9 | ||||||||||||||
Tax value of loss carry forwards |
39.4 | | (1.2 | ) | 2.5 | 40.7 | ||||||||||||||
Derivative financial instruments |
1.1 | | (0.2 | ) | 0.8 | 1.7 | ||||||||||||||
Other |
2.1 | | (1.7 | ) | | 0.4 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deferred tax |
(244.1 | ) | 1.4 | 14.6 | 1.7 | (226.4 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
2014 |
Opening
balance January 1, 2014 m |
Movement
in foreign exchange on opening balance m |
Recognized
in Income Statement m |
Recognized
in equity m |
December 31,
2014 m |
|||||||||||||||
Property, plant and equipment |
(13.9 | ) | | 5.9 | | (8.0 | ) | |||||||||||||
Intangible assets |
(263.2 | ) | (3.5 | ) | (11.4 | ) | | (278.1 | ) | |||||||||||
Employee benefits |
7.9 | | 0.6 | 15.2 | 23.7 | |||||||||||||||
Tax value of loss carry forwards |
40.7 | 0.1 | (9.0 | ) | | 31.8 | ||||||||||||||
Derivative financial instruments |
1.7 | (0.2 | ) | 0.2 | (3.7 | ) | (2.0 | ) | ||||||||||||
Other |
0.4 | | (0.6 | ) | | (0.2 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deferred tax |
(226.4 | ) | (3.6 | ) | (14.3 | ) | 11.5 | (232.8 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
7) | Inventories |
2012
m |
2013
m |
2014
m |
||||||||||
Raw materials and consumables |
64.7 | 52.7 | 45.6 | |||||||||
Work in progress |
33.8 | 33.9 | 39.1 | |||||||||
Finished goods and goods for resale |
144.1 | 135.2 | 144.4 | |||||||||
|
|
|
|
|
|
|||||||
Total inventories |
242.6 | 221.8 | 229.1 | |||||||||
|
|
|
|
|
|
During the year 5.9 million (2013: 4.0 million; 2012: 4.0 million) was charged to the Income Statement for the write down of inventories. This excludes a 4.8 million write down of stock damaged in the Cisterna fire which has been included within exceptional items.
During the year 890.7 million (2013: 919.5 million; 2012: 950.7 million) of inventories was recognized as an expense within cost of goods sold.
8) | Trade and other receivables |
2012
m |
2013
m |
2014
m |
||||||||||
Trade receivables |
41.8 | 34.8 | 34.9 | |||||||||
Prepayments and accrued income |
1.4 | 1.4 | 1.8 | |||||||||
Other receivables |
22.1 | 21.4 | 12.7 | |||||||||
|
|
|
|
|
|
|||||||
Total trade and other receivables |
65.3 | 57.6 | 49.4 | |||||||||
|
|
|
|
|
|
F-65
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Trade receivables, prepayments and other receivables are expected to be recovered in less than 12 months. Other receivables include VAT receivable.
The ageing of trade receivables is detailed below:
2012 |
Gross
m |
Impaired
m |
Net
m |
|||||||||
Not past due |
142.7 | | 142.7 | |||||||||
Past due less than 1 month |
31.9 | | 31.9 | |||||||||
Past due 1 to 3 months |
8.0 | | 8.0 | |||||||||
Past due 3 to 6 months |
0.1 | | 0.1 | |||||||||
Past due more than 6 months |
3.1 | (1.2 | ) | 1.9 | ||||||||
Sub-total |
185.8 | (1.2 | ) | 184.6 | ||||||||
|
|
|
|
|
|
|||||||
Reduction in trade-terms* |
(142.8 | ) | ||||||||||
|
|
|||||||||||
Total trade receivables |
41.8 | |||||||||||
|
|
2013 |
Gross
m |
Impaired
m |
Net
m |
|||||||||
Not past due |
137.9 | | 137.9 | |||||||||
Past due less than 1 month |
39.4 | | 39.4 | |||||||||
Past due 1 to 3 months |
7.0 | | 7.0 | |||||||||
Past due 3 to 6 months |
0.2 | | 0.2 | |||||||||
Past due more than 6 months |
0.2 | | 0.2 | |||||||||
Sub-total |
184.7 | | 184.7 | |||||||||
|
|
|
|
|
|
|||||||
Reduction in trade-terms* |
(149.9 | ) | ||||||||||
|
|
|||||||||||
Total trade receivables |
34.8 | |||||||||||
|
|
2014 |
Gross
m |
Impaired
m |
Net
m |
|||||||||
Not past due |
142.9 | | 142.9 | |||||||||
Past due less than 1 month |
29.4 | | 29.4 | |||||||||
Past due 1 to 3 months |
1.9 | (0.4 | ) | 1.5 | ||||||||
Past due 3 to 6 months |
0.5 | (0.4 | ) | 0.1 | ||||||||
Past due more than 6 months |
2.6 | (2.6 | ) | | ||||||||
Sub-total |
177.3 | (3.4 | ) | 173.9 | ||||||||
|
|
|
|
|
|
|||||||
Reduction in trade-terms* |
(139.0 | ) | ||||||||||
|
|
|||||||||||
Total trade receivables |
34.9 | |||||||||||
|
|
* | Refer to Note 2a). |
All impaired trade receivables have been provided to the extent that they are believed not to be recoverable.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable. The Iglo Group does not hold any collateral as security.
F-66
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
9) | Cash and cash equivalents/Bank overdrafts |
2012
m |
2013
m |
2014
m |
||||||||||
Cash and cash equivalents |
644.1 | 688.5 | 707.0 | |||||||||
Bank overdrafts |
(428.5 | ) | (371.4 | ) | (487.8 | ) | ||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents per Statement of Cash Flows |
215.6 | 317.1 | 219.2 | |||||||||
|
|
|
|
|
|
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Iglo Groups cash management are included as a component of cash and cash equivalents for the purpose of the Statement of Cash Flows only.
The Iglo Group uses a notional cash pooling system where funds are considered on a net basis and grouped together as cash and cash equivalents. Whilst accounting standards require that these balances are shown gross, the net cash balance is available to be utilized by the Iglo Group.
10) | Loans and borrowings |
The repayment profile of the syndicated and other loans held by the Iglo Group is as follows:
2012
m |
2013
m |
2014
m |
||||||||||
Current (assets)/liabilities |
||||||||||||
Syndicated and other loans |
| 130.0 | | |||||||||
Less deferred borrowing costs to be amortized within 1 year |
(11.6 | ) | (12.8 | ) | (2.1 | ) | ||||||
|
|
|
|
|
|
|||||||
Total due in less than one year |
(11.6 | ) | 117.2 | (2.1 | ) | |||||||
|
|
|
|
|
|
|||||||
Non-current liabilities |
||||||||||||
Syndicated and other loans |
2,876.4 | 2,850.4 | 2,412.4 | |||||||||
2020 floating rate senior secured notes |
| | 500.0 | |||||||||
Less deferred borrowing costs to be amortized in 2-5 yrs |
(33.5 | ) | (28.2 | ) | (8.3 | ) | ||||||
Less deferred borrowing costs to be amortized in more than 5 yrs |
| | (1.0 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total due after more than one year |
2,842.9 | 2,822.2 | 2,903.1 | |||||||||
|
|
|
|
|
|
|||||||
Total borrowings |
2,831.3 | 2,939.4 | 2,901.0 | |||||||||
|
|
|
|
|
|
A more detailed analysis of the repayment profile of the loans is included in Note 22.
F-67
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
The table below shows details of individual loans:
2012
m |
2013
m |
2014
m |
||||||||||
Current (assets)/liabilities-syndicated and other loans |
||||||||||||
Senior B EUR |
| 49.1 | | |||||||||
Senior B GBP |
| 22.3 | | |||||||||
Senior I EUR |
| 58.6 | | |||||||||
Less deferred borrowing costs to be amortized within 1 year |
(11.6 | ) | (12.8 | ) | (2.1 | ) | ||||||
|
|
|
|
|
|
|||||||
Total current loans and borrowings |
(11.6 | ) | 117.2 | (2.1 | ) | |||||||
|
|
|
|
|
|
|||||||
Non-current liabilities-syndicated and other loans |
||||||||||||
2020 floating rate senior secured notes |
| | 500.0 | |||||||||
Senior B1 EUR |
49.1 | | 620.0 | |||||||||
Senior B2 GBP |
22.7 | | 513.5 | |||||||||
Senior C EUR |
31.7 | 31.7 | | |||||||||
Senior D EUR |
23.3 | 23.3 | | |||||||||
Senior C GBP |
22.7 | 22.3 | | |||||||||
Senior E GBP |
7.6 | 7.3 | | |||||||||
Senior F EUR |
811.1 | 811.1 | | |||||||||
Senior G GBP |
599.5 | 587.6 | | |||||||||
Senior I EUR |
276.7 | 218.0 | | |||||||||
German government loan |
0.2 | 0.1 | 0.1 | |||||||||
Class A loan notes EUR |
104.2 | 116.0 | 129.1 | |||||||||
Class B loan notes EUR |
750.0 | 834.7 | 929.1 | |||||||||
Class C loan notes EUR |
0.9 | 1.1 | 1.2 | |||||||||
Class G loan notes EUR |
176.7 | 196.7 | 218.9 | |||||||||
Class K loan notes EUR |
| 0.5 | 0.5 | |||||||||
Less deferred borrowing costs to be amortized in 25 years |
(33.5 | ) | (28.2 | ) | (8.3 | ) | ||||||
Less deferred borrowing costs to be amortized in more than 5 yrs |
| (1.0 | ) | |||||||||
|
|
|
|
|
|
|||||||
Total non-current loans and borrowings |
2,842.9 | 2,822.2 | 2,903.1 | |||||||||
|
|
|
|
|
|
|||||||
Total borrowings |
2,831.3 | 2,939.4 | 2,901.0 | |||||||||
|
|
|
|
|
|
|||||||
Borrowings under the syndicated loan facility and floating rate notes |
1,799.3 | 1,790.3 | 1,622.1 | |||||||||
|
|
|
|
|
|
Interest on the loan notes is not paid in cash but is added to the principal of the draw down amounts. From January 1, 2013, the interest rate on these loan notes has been 11% (2012: either 15% or 17% as detailed in Note 27).
The interest rate on all other loans and the floating rate senior secured notes are re-priced within one year to the relevant Euribor or Libor rate.
In 2012 the Syndicate of banks holding the Iglo Groups debt consented to an amendment of the Iglo Groups debt facility. This allowed the Iglo Group to extend the repayment date of 88% of the Iglo Groups debt to 2017 and 2018 through new tranches of Senior debt, draw down of a new tranche of Senior debt, and repay a portion of the Iglo Groups shareholder loan notes.
Further, on July 17, 2014, the Iglo Group completed a refinancing of its Senior debt with a syndicate of banks. All Senior debt as at the balance sheet date was repaid and replaced with new Senior Euro debt of 620 million and Senior GBP debt of £400 million which are repayable on June 30, 2020. In addition to this, 500 million has been raised through the issuance of a floating rate bond issue on the Luxembourg Stock Exchange, with a repayment date of June 15, 2020. Both the new Senior debt and the bond issue are secured with equal ranking against certain assets of the Iglo Group.
F-68
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Eligible transaction costs of 12.5 million have been capitalized as part of the refinancing and will be amortized over the life of the debt. As a consequence of the refinancing, deferred transaction costs relating to the old senior debt of 34.5 million have been written off through financing costs in the year.
In addition to this, the existing multicurrency revolving credit facility was replaced with a new 80.0 million facility. This facility is available until December 31, 2019. As at December 31, 2014 4.0 million has been utilized for letters of credit, overdrafts, customer bonds and bank guarantees against the revolving credit facility.
The Syndicate have security over the assets of the guarantor group. The guarantor group consists of those companies which individually have more than 5% of consolidated gross assets or EBITDA of the Iglo Group and in total comprise more than 80% of consolidated gross assets or EBITDA at any testing date.
11) | Trade and other payables |
2012
m |
2013
m |
2014
m |
||||||||||
Trade payables |
263.5 | 246.2 | 244.8 | |||||||||
Accruals and deferred income |
35.6 | 41.3 | 49.4 | |||||||||
Social security and other taxes |
9.0 | 8.7 | 13.7 | |||||||||
Other payables |
2.9 | 1.8 | 1.2 | |||||||||
Financial payables |
2.5 | 6.5 | 4.8 | |||||||||
|
|
|
|
|
|
|||||||
Total trade and other payables |
313.5 | 304.5 | 313.9 | |||||||||
|
|
|
|
|
|
12) | Employee benefits |
The Iglo Group operates defined benefit pension plans in Germany, Italy and Austria as well as various defined contribution plans in other countries. The defined benefit pension plans are partially funded in Germany and Austria and unfunded in Italy. In addition, an unfunded post-retirement medical plan is operated in Austria. In Germany and Italy long term service awards are in operation and various other countries provide other employee benefits.
2012
m |
2013
m |
2014
m |
||||||||||
Total employee benefits-Germany |
66.3 | 62.1 | 114.8 | |||||||||
Total employee benefits-Italy |
6.0 | 5.4 | 5.7 | |||||||||
Total employee benefits-Austria |
2.3 | 2.9 | 3.1 | |||||||||
|
|
|
|
|
|
|||||||
Sub-total |
74.6 | 70.4 | 123.6 | |||||||||
|
|
|
|
|
|
|||||||
Total net employee benefits-other countries |
0.6 | 0.5 | 0.6 | |||||||||
|
|
|
|
|
|
|||||||
Total net employee benefits |
75.2 | 70.9 | 124.2 | |||||||||
|
|
|
|
|
|
The present value of defined benefit obligations and fair value of plan assets have increased from the prior year. The increase in the obligation is caused by the reduction in the discount rates, principally in Germany, as a result of a decrease in the market yields on high quality corporate bonds.
The obligation of 0.6 million (2013: 0.5 million; 2012: 0.6 million) in respect of other countries is the aggregate of a large number of different types of minor schemes, each one not being considered material. Consequently detailed disclosure of these schemes is not provided.
F-69
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
The amount included in the Statement of Financial Position arising from the Iglo Groups obligations in respect of its defined benefit retirement plans and post-employment benefits is as follows:
2012 |
Defined benefit
retirement plans m |
Post-
employment medical benefits and other benefits m |
Total
m |
|||||||||
Preset value of unfunded defined benefit obligations |
7.0 | 5.3 | 12.3 | |||||||||
Present value of funded defined benefit obligations |
138.6 | | 138.6 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal present value of defined benefit obligations |
145.6 | 5.3 | 150.9 | |||||||||
|
|
|
|
|
|
|||||||
Fair value of plan assets |
(76.4 | ) | | (76.4 | ) | |||||||
|
|
|
|
|
|
|||||||
Net defined benefit obligation |
69.2 | 5.3 | 74.5 | |||||||||
|
|
|
|
|
|
|||||||
Amount not recognized due to asset ceiling |
0.1 | | 0.1 | |||||||||
|
|
|
|
|
|
|||||||
Recognized liability for defined benefit obligations |
69.3 | 5.3 | 74.6 | |||||||||
|
|
|
|
|
|
2013 |
Defined benefit
retirement plans m |
Post-
employment medical benefits and other benefits m |
Total
m |
|||||||||
Present value of unfunded defined benefit obligations |
6.8 | 5.8 | 12.6 | |||||||||
Present value of funded defined benefit obligations |
132.4 | | 132.4 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal present value of defined benefit obligations |
139.2 | 5.8 | 145.0 | |||||||||
|
|
|
|
|
|
|||||||
Fair value of plan assets |
(74.6 | ) | | (74.6 | ) | |||||||
|
|
|
|
|
|
|||||||
Recognized liability for net defined benefit obligations |
64.6 | 5.8 | 70.4 | |||||||||
|
|
|
|
|
|
2014 |
Defined benefit
retirement plans m |
Post-
employment medical benefits and other benefits m |
Total
m |
|||||||||
Present value of unfunded defined benefit obligations |
5.3 | 6.3 | 11.6 | |||||||||
Present value of funded defined benefit obligations |
189.9 | | 189.9 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal present value of defined benefit obligations |
195.2 | 6.3 | 201.5 | |||||||||
|
|
|
|
|
|
|||||||
Fair value of plan assets |
(77.9 | ) | | (77.9 | ) | |||||||
|
|
|
|
|
|
|||||||
Recognized liability for net defined benefit obligations |
117.3 | 6.3 | 123.6 | |||||||||
|
|
|
|
|
|
F-70
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Movements in recognized liability for net defined benefit obligations:
Defined benefit
retirement plans |
Post-employment
medical benefits and other benefits |
Total | ||||||||||||||||||||||||||||||||||
2012
m |
2013
m |
2014
m |
2012
m |
2013
m |
2014
m |
2012
m |
2013
m |
2014
m |
||||||||||||||||||||||||||||
Opening balance January 1, |
46.1 | 69.2 | 64.6 | 4.6 | 5.3 | 5.8 | 50.7 | 74.5 | 70.4 | |||||||||||||||||||||||||||
Current service cost |
1.6 | 2.8 | 2.6 | 0.6 | 0.4 | 0.3 | 2.2 | 3.2 | 2.9 | |||||||||||||||||||||||||||
Interest cost |
2.3 | 2.4 | 2.5 | 0.1 | 0.1 | 0.2 | 2.4 | 2.5 | 2.7 | |||||||||||||||||||||||||||
Actuarial losses/(gains) |
24.5 | (4.8 | ) | 52.0 | | | | 24.5 | (4.8 | ) | 52.0 | |||||||||||||||||||||||||
Contributions to plan |
(0.6 | ) | (1.2 | ) | (1.1 | ) | | | 0.1 | (0.6 | ) | (1.2 | ) | (1.0 | ) | |||||||||||||||||||||
Benefits paid |
(4.7 | ) | (3.8 | ) | (3.3 | ) | | | (0.1 | ) | (4.7 | ) | (3.8 | ) | (3.4 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
As at December 31, |
69.2 | 64.6 | 117.3 | 5.3 | 5.8 | 6.3 | 74.5 | 70.4 | 123.6 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Amount not recognized due to asset ceiling |
0.1 | | | | | | 0.1 | | | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Recognized liability for defined benefit obligations |
69.3 | 64.6 | 117.3 | 5.3 | 5.8 | 6.3 | 74.6 | 70.4 | 123.6 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements in present value of defined benefit obligations:
Defined benefit
retirement plans |
Post-employment
medical benefits and other benefits |
Total | ||||||||||||||||||||||||||||||||||
2012
m |
2013
m |
2014
m |
2012
m |
2013
m |
2014
m |
2012
m |
2013
m |
2014
m |
||||||||||||||||||||||||||||
Opening balance January 1, |
116.9 | 145.6 | 139.2 | 4.6 | 5.3 | 5.8 | 121.5 | 150.9 | 145.0 | |||||||||||||||||||||||||||
Current service cost |
1.6 | 2.8 | 2.6 | 0.6 | 0.4 | 0.3 | 2.2 | 3.2 | 2.9 | |||||||||||||||||||||||||||
Interest cost |
5.6 | 5.3 | 5.3 | 0.1 | 0.1 | 0.2 | 5.7 | 5.4 | 5.5 | |||||||||||||||||||||||||||
Actuarial losses/(gains) |
28.2 | (8.1 | ) | 53.9 | | | | 28.2 | (8.1 | ) | 53.9 | |||||||||||||||||||||||||
Contributions by members |
0.5 | | | | | 0.1 | 0.5 | | 0.1 | |||||||||||||||||||||||||||
Benefits paid |
(7.2 | ) | (6.4 | ) | (5.8 | ) | | | (0.1 | ) | (7.2 | ) | (6.4 | ) | (5.9 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
As at December 31, |
145.6 | 139.2 | 195.2 | 5.3 | 5.8 | 6.3 | 150.9 | 145.0 | 201.5 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements in fair value of plan assets of defined benefit retirement plans:
2012
m |
2013
m |
2014
m |
||||||||||
Opening balance January 1, |
70.8 | 76.4 | 74.6 | |||||||||
Return on assets |
3.3 | 2.9 | 2.8 | |||||||||
Actuarial gains/(losses) |
3.7 | (3.3 | ) | 1.9 | ||||||||
Contributions by employer |
0.6 | 0.6 | 0.6 | |||||||||
Contributions by members |
0.5 | 0.6 | 0.5 | |||||||||
Benefits paid |
(2.5 | ) | (2.6 | ) | (2.5 | ) | ||||||
|
|
|
|
|
|
|||||||
At 31 December |
76.4 | 74.6 | 77.9 | |||||||||
|
|
|
|
|
|
F-71
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Expense recognized in the Consolidated Income Statement:
Defined benefit
retirement plans |
Post-employment
medical benefits and other benefits |
Total | ||||||||||||||||||||||||||||||||||
2012
m |
2013
m |
2014
m |
2012
m |
2013
m |
2014
m |
2012
m |
2013
m |
2014
m |
||||||||||||||||||||||||||||
Current service cost |
1.6 | 2.8 | 2.6 | 0.6 | 0.4 | 0.3 | 2.2 | 3.2 | 2.9 | |||||||||||||||||||||||||||
Interest on defined benefit pension plan obligation |
2.3 | 2.4 | 2.5 | 0.1 | 0.1 | 0.2 | 2.4 | 2.5 | 2.7 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total |
3.9 | 5.2 | 5.1 | 0.7 | 0.5 | 0.5 | 4.6 | 5.7 | 5.6 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current service cost is disclosed in cost of sales and interest on net defined benefit obligation is disclosed in net financing costs.
Amount recognized in the Consolidated Statement of Comprehensive Income:
2012
m |
2013
m |
2014
m |
||||||||||
Actuarial gains/(losses) on defined benefit obligation |
(28.1 | ) | 8.1 | (53.9 | ) | |||||||
Actuarial gains/(losses) on plan assets |
3.7 | (3.3 | ) | 1.9 | ||||||||
Reversal of effect of limit on amount recognized as asset in prior year |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total |
(24.4 | ) | 4.8 | (52.0 | ) | |||||||
|
|
|
|
|
|
2012
m |
2013
m |
2014
m |
||||||||||
Cumulative amount of actuarial losses recognized in Statement of Comprehensive Income |
(7.8 | ) | (3.0 | ) | (55.0 | ) |
The fair value of plan assets, all at quoted prices are as follows:
2012
m |
2013
m |
2014
m |
||||||||||
Equities |
5.1 | 2.8 | 6.9 | |||||||||
Debt instruments |
59.1 | 61.2 | 60.3 | |||||||||
Property |
8.6 | 9.4 | 9.1 | |||||||||
Other |
3.6 | 1.2 | 1.6 | |||||||||
|
|
|
|
|
|
|||||||
Total |
76.4 | 74.6 | 77.9 | |||||||||
|
|
|
|
|
|
Principal actuarial assumptions at the year-end were as follows:
Defined benefit retirement plans |
Post-employment
medical benefits and other benefits |
|||||||||||||||||||
2012 |
Germany | Austria | Italy | Germany | Austria | |||||||||||||||
Discount rate |
3.6 | % | 3.8 | % | 3.3 | % | 3.6 | % | 3.8 | % | ||||||||||
Inflation rate |
2.0 | % | | 2.0 | % | 2.0 | % | | ||||||||||||
Rate of increase in salaries |
2.7 | % | 3.0 | % | 4.0 | % | 2.7 | % | 3.0 | % | ||||||||||
Rate of increase for pensions in payment |
2.0 | % | 1.8 | % | | | | |||||||||||||
Long term medical cost of inflation |
| | | | 4.5 | % |
F-72
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Defined benefit retirement plans |
Post-employment
medical benefits and other benefits |
|||||||||||||||||||
2013 |
Germany | Austria | Italy | Germany | Austria | |||||||||||||||
Discount rate |
3.9 | % | 3.8 | % | 3.2 | % | 2.8 | % | 3.8 | % | ||||||||||
Inflation rate |
2.0 | % | | 2.0 | % | 2.0 | % | | ||||||||||||
Rate of increase in salaries |
2.7 | % | 3.0 | % | 3.0 | % | 2.7 | % | 3.0 | % | ||||||||||
Rate of increase for pensions in payment |
2.0 | % | 1.8 | % | | | | |||||||||||||
Long term medical cost of inflation |
| | | | 4.5 | % |
Defined benefit retirement plans |
Post-employment
medical benefits and other benefits |
|||||||||||||||||||
2014 |
Germany | Austria | Italy | Germany | Austria | |||||||||||||||
Discount rate |
2.0 | % | 2.5 | % | 1.7 | % | 1.4 | % | 2.5 | % | ||||||||||
Inflation rate |
2.0 | % | | 1.8 | % | 2.0 | % | | ||||||||||||
Rate of increase in salaries |
2.7 | % | 3.0 | % | 3.0 | % | 2.7 | % | 3.0 | % | ||||||||||
Rate of increase for pensions in payment |
1%/2 | % | 1.7 | % | | | | |||||||||||||
Long term medical cost of inflation |
| | | | 2.0 | % |
In valuing the liabilities of the pension fund at December 31, 2014, mortality assumptions have been made as indicated below. The assumptions relating to longevity underlying the pension liabilities at the financial year end date are based on standard actuarial mortality tables and include an allowance for future improvements in longevity. The assumptions are based on the following mortality tables:
| Germany: Richttafeln 2005 |
| Austria: AVO 2008 |
| Italy: RG48 |
These three references are to the specific standard rates of mortality that are published and widely used in each country for the use of actuarial assessment of pension liabilities and take account of local current and future average life expectancy.
These tables translate into an average life expectancy in years for a pensioner retiring at age 65:
2012 |
Germany | Austria | Italy | |||||||||
Retiring at the end of the year: |
||||||||||||
-Male |
19 | 20 | 17 | |||||||||
-Female |
23 | 24 | 21 | |||||||||
Retiring 20 years after the end of the year: |
||||||||||||
-Male |
22 | 23 | 17 | |||||||||
-Female |
26 | 26 | 21 |
2013 |
Germany | Austria | Italy | |||||||||
Retiring at the end of the year: |
||||||||||||
-Male |
19 | 20 | 17 | |||||||||
-Female |
23 | 24 | 21 | |||||||||
Retiring 20 years after the end of the year: |
||||||||||||
-Male |
22 | 23 | 17 | |||||||||
-Female |
26 | 26 | 21 |
F-73
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
2014 |
Germany | Austria | Italy | |||||||||
Retiring at the end of the year: |
||||||||||||
-Male |
19 | 20 | 17 | |||||||||
-Female |
23 | 24 | 21 | |||||||||
Retiring 20 years after the end of the year: |
||||||||||||
-Male |
22 | 23 | 17 | |||||||||
-Female |
26 | 26 | 21 |
The five year history of experience adjustments for the defined benefit retirement plans is as follows:
2010
m |
2011
m |
2012
m |
2013
m |
2014
m |
||||||||||||||||
Present value of defined benefit obligations |
119.8 | 116.9 | 145.6 | 139.2 | 195.2 | |||||||||||||||
Fair value of plan assets |
(69.4 | ) | (70.8 | ) | (76.4 | ) | (74.6 | ) | (77.9 | ) | ||||||||||
Asset ceiling |
0.2 | 0.2 | 0.1 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Recognized liability in the scheme |
50.6 | 46.3 | 69.3 | 64.6 | 117.3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Experience adjustments on scheme liabilities |
3.1 | (0.1 | ) | 22.9 | (1.8 | ) | (0.7 | ) | ||||||||||||
Experience adjustments on scheme assets |
3.1 | (0.2 | ) | 3.7 | (3.2 | ) | 1.6 |
Post-employment medical benefits- sensitivity analysis
The effect of a 1% movement in the assumed medical cost trend rate is not significant.
Defined benefit obligation- sensitivity analysis
The effect of a 1% movement in the discount rate is as follows:
Increase | Decrease | |||||||
2014 |
m | m | ||||||
Effect on the post-employment benefit obligation |
(34.7 | ) | 40.3 |
Defined contribution plans
The Iglo Group operates a number of defined contribution pension plans. The total expense relating to these plans in the current year was 4.6 million (2013: 4.3 million; 2012: 4.5 million).
13) | Provisions |
Management
incentive plan |
Restructuring | Other | Total | |||||||||||||
m | m | m | m | |||||||||||||
Balance at January 1, 2012 |
| 2.4 | 9.2 | 11.6 | ||||||||||||
Additional provision in the year |
0.2 | 15.9 | 1.3 | 17.4 | ||||||||||||
Utilisation of provision |
| (7.1 | ) | (1.5 | ) | (8.6 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2012 |
0.2 | 11.2 | 9.0 | 20.4 | ||||||||||||
Additional provision in the year |
11.4 | 5.2 | 2.6 | 19.2 | ||||||||||||
Utilization of provision |
| (11.1 | ) | (1.9 | ) | (13.0 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2013 |
11.6 | 5.3 | 9.7 | 26.6 | ||||||||||||
Additional provision in the year |
18.6 | 12.8 | 4.3 | 35.7 | ||||||||||||
Utilization of provision |
| (5.6 | ) | (1.5 | ) | (7.1 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2014 |
30.2 | 12.5 | 12.5 | 55.2 | ||||||||||||
|
|
|
|
|
|
|
|
F-74
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Management incentive plan
See note 17b) for detail on the management incentive plan.
Restructuring
The 12.5 million provision as at December 31, 2014 relates to committed plans for certain operational restructuring activities which are due to be completed within the next 12 months. The amounts have been provided based on information available on the likely expenditure required to complete the committed plans.
Other
6.5 million (2013: 7.2 million; 2012: 8.1 million) relates to our Italian operations for potential obligations under Italian law for three principal items: a legal case involving disputed overtime entitlement, obligations potentially payable to agents of Iglo and a provision for the scrapping of freezer cabinets. A further 3.9 million has been provided for in the year in relation to tax matters from previous accounting years.
14) | Share capital and reserves |
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
Share capital |
0.1 | 0.1 | 0.1 | |||||||||
Capital reserve |
| 1.9 | 3.6 |
In May 2013, the Board of Directors approved the issuance of 500,000 Class I shares and 500,000 Class J ordinary shares. The Class J ordinary shares rank pari passu with existing ordinary shares. Holders of the Class I interests are entitled to a return if performance criteria are met.
Details of class of shares:
Class of share
|
Number of shares |
Nominal value
per share |
Share capital value |
Share premium in
capital reserve |
||||||||||||
Ordinary GBP |
1 | £ | 1.00 | | 1 | | ||||||||||
Ordinary E interests |
6,000,000 | | 0.01 | | 60,000 | | ||||||||||
Ordinary H interests |
16,755 | | 1.00 | | 16,755 | | ||||||||||
Ordinary I interests |
500,000 | | 0.05 | | 25,000 | | 64,050 | |||||||||
Ordinary J interests |
500,000 | | 0.05 | | 25,000 | | 731,923 |
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of Iglo.
The Iglo Group has the following reserves:
Capital reserve
The Iglo Group and Iglo capital reserve balance comprise of 0.8 million share premium on Class I and J shares issued in the year. The remaining 2.8 million in Iglo Group relates to the share based payment charge, see note 17 for detail.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations, as well as from the translation of liabilities that hedge Iglos net investment in a foreign subsidiary.
F-75
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Cash flow hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.
The table below shows the movement in the cash flow hedging reserve during the year, including the gains or losses arising on the revaluation of hedging instruments during the year and the amount reclassified from other comprehensive income to the income statement in the year.
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
(Losses)/gains arising during the year |
(6.6 | ) | (6.3 | ) | 15.9 | |||||||
Less: Reclassification adjustments for (losses)/gains included in profit or loss |
(2.2 | ) | 3.0 | (2.7 | ) | |||||||
|
|
|
|
|
|
|||||||
Total |
(8.8 | ) | (3.3 | ) | 13.2 | |||||||
|
|
|
|
|
|
15) | Operating profit |
Operating profit is stated after charging:
Operating profit
2012 | 2013 | 2014 | ||||||||||||
Note | m | m | m | |||||||||||
Staff costs |
17 | 191.3 | 175.5 | 180.2 | ||||||||||
Depreciation of property, plant and equipment |
3 | 24.5 | 23.3 | 24.8 | ||||||||||
Impairment of property, plant and equipment |
3 | 1.3 | | 1.5 | ||||||||||
Impairment of goodwill |
4 | | 27.4 | | ||||||||||
Amortization of software and brands |
4 | 4.4 | 4.5 | 5.6 | ||||||||||
Operating lease charges |
7.6 | 7.7 | 7.5 | |||||||||||
Exchange losses |
(4.5 | ) | 0.5 | 6.6 | ||||||||||
Research & development |
12.4 | 13.2 | 15.7 |
Auditors remuneration
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
Fees payable to companys auditor and its associates for the audit of the parent company and consolidated financial statements |
0.4 | 0.4 | 0.4 | |||||||||
Fees payable to the companys auditor and its associates for other services: |
||||||||||||
-The audit of companys subsidiaries |
0.5 | 0.5 | 0.5 | |||||||||
-Other services relating to taxation |
0.2 | 0.5 | 1.6 | |||||||||
-Services relating to corporate finance |
1.6 | 0.1 | 0.1 | |||||||||
-All other services |
0.8 | | 0.3 | |||||||||
|
|
|
|
|
|
|||||||
3.5 | 1.5 | 2.9 | ||||||||||
|
|
|
|
|
|
F-76
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
16) | Exceptional items |
Exceptional items are made up as follows:
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
Net investigation of strategic opportunities and other costs (1) |
14.8 | 11.2 | 17.4 | |||||||||
Costs related to long-term management incentive plans (2) |
17.9 | 13.8 | 16.7 | |||||||||
Other restructuring costs (3) |
3.1 | 10.5 | 11.6 | |||||||||
Cisterna fire net costs (4) |
| | 5.5 | |||||||||
Costs related to acquisitions and integration of CSI (5) |
17.8 | 20.9 | 1.7 | |||||||||
Impairment of goodwill (6) |
| 27.4 | | |||||||||
|
|
|
|
|
|
|||||||
Total exceptional items |
53.6 | 83.8 | 52.9 | |||||||||
|
|
|
|
|
|
(1) | In 2014, the Iglo Group has incurred charges of 17.4 million in relation to a strategic review of the Iglo Groups operations and other items. This includes costs incurred as a result of the decision to cease marketing its products in Romania, Slovakia and Turkey on November 27, 2014, amounts in relation to tax matters from previous accounting periods and costs related to the implementation of the Better Meals Together strategy. |
In 2013, 11.2 million was incurred in relation to costs arising from the development and implementation of the Better Meals Together Strategy which launched in 2013.
In 2012, the 14.8 million charge relates to the sale process undertaken in that year as well as the refinancing of the group that was completed in November 2012.
(2) | Management participate in certain incentive schemes for which the Iglo Group incurred charges of 16.7 million in 2014 (2013: 13.8 million; 2012: 17.9 million). The majority of the costs have been accrued during 2014 and 2013, but are not due for payment until the associated performance conditions are met. The sale of the Iglo Group to Nomad Foods Limited on June 1, 2015 as detailed in Note 29 was a triggering event under the main incentive schemes following which the majority of management incentive schemes provisions were paid. |
As part of the refinancing in November 2012, a portion of Investor Loan Notes were repaid and a bonus was paid to management.
(3) | In 2014 the Iglo Group has incurred restructuring costs of 11.6 million in the year, principally in our German factories. |
In 2013 the Iglo Group has incurred restructuring costs principally in the Italian factory.
In 2012 the Iglo Group has incurred restructuring costs in its German factories. Restructuring has been implemented as part of a strategy to create further operational efficiencies.
(4) | 5.5 million has been charged in relation to a fire in August 2014 in the Iglo Groups Italian production facility which produces Findus branded stock for sale in Italy. The charge includes the cost of stock damaged by the fire, the impairment of property as well as ongoing incremental costs incurred as a result of the disruption to operations. The Iglo Group has insurance policies in place covering the stock, property and loss of earnings for which claims are currently in process. The proceeds of these claims cannot be recognized until the recoverable amount is judged to be virtually certain. As at December 31, 2014, losses of 8.7 million have been incurred which has been offset by receipts from the insurers of 3.2 million. |
(5) | In 2014, 1.7 million has been incurred (2013: 20.9 million; 2012: 17.8 million) principally due to a further payment of registration tax related to the acquisition of CSI (Findus Italy). The 2014 and 2013 charges principally relate to the payment of registration tax related to the acquisition. The Iglo Group is appealing the rulings and has elected to pay the assessed taxes in order to avoid incurring penalties and interest. The 2012 costs principally relate to IT costs and the restructuring of factory operations. |
F-77
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
(6) | In 2013 an impairment charge of 27.4m was recognized, which represents a full write down of the goodwill of the Belgium operation. The impact on goodwill is shown on Note 4. |
The tax impact on the exceptional items amounts to 7.8 million (2013: 10.4 million; 2012: 10.1 million).
17) | Staff numbers and costs |
The average number of persons employed by the Iglo Group (including Directors) during the year, analyzed by category, was as follows:
2012 | 2013 | 2014 | ||||||||||
Number of employees | ||||||||||||
Production |
1,799 | 1,712 | 1,645 | |||||||||
Administration, distribution & sales |
1,062 | 1,097 | 1,101 | |||||||||
|
|
|
|
|
|
|||||||
Total number of employees |
2,861 | 2,809 | 2,746 |
The aggregate payroll costs of these persons were as follows:
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
Wages and salaries |
157.0 | 143.2 | 148.3 | |||||||||
Social security costs |
28.2 | 25.4 | 24.9 | |||||||||
Other pension costs |
6.1 | 6.9 | 7.0 | |||||||||
|
|
|
|
|
|
|||||||
Total payroll costs |
191.3 | 175.5 | 180.2 | |||||||||
|
|
|
|
|
|
a) | Share based payments |
In current and prior years, certain employees of the Iglo Group have been offered the opportunity to participate in one of several share schemes through which they could subscribe for shares of the Permira Partnership, the ultimate controlling party of the Iglo Group. See note 29 Events after the balance sheet date.
These schemes fall within the provisions of IFRS 2 Share Based Payments and represent equity settled share based payments. A charge should be taken to the Income Statement for the difference between the fair value of the shares at grant date and the amount subscribed, spread over the period until the employees have unconditional access to the benefits of share ownership. The value of the charge is adjusted to reflect expected levels of awards vesting.
The charge for share-based payments in respect of these plans is 1.7 million (2013: 1.1 million; 2012: nil). The plans are equity settled.
2013 Plans
The plan introduced in 2013 provides for the grant of certain classes of interests in the Permira Partnership to key employees, including Executive Management.
The Remuneration Committee has responsibility for agreeing any awards under the plan.
Number |
Weighted Average
Fair Value |
|||||||
Interests awarded |
636,070 | | 11.09 |
F-78
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
The fair value of these interests was estimated at the date of grant using a Monte Carlo simulation option pricing model incorporated expected volatility and risk-free interest rates. No dividends are expected to be paid, so are not incorporated into the model.
The employee is not free to sell the shares until a sale, asset sale or listing of the Iglo Group.
2007 to 2010 Plans
Employees paid par value for the shares acquired. Using a number of external measures, par value has been calculated as equating to fair value and therefore there is no charge to the Income Statement in relation to these shares.
During 2012 these schemes were annulled.
b) | Management incentive schemes |
Management participate in certain incentive schemes. 18.6 million (2013: 11.4 million; 2012: 17.9 million) was charged to the Income Statement during the year for these incentive schemes and associated costs. There is uncertainty around the date the schemes will mature and the amount payable at that time. An estimate has been made and a charge booked to the Income Statement accordingly.
18) | Directors emoluments |
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
Emoluments |
11.9 | 6.2 | 6.4 | |||||||||
Iglo contributions to money purchase pension plans |
0.1 | 0.1 | 0.2 | |||||||||
Share-based payment |
| 0.6 | 1.0 | |||||||||
Long-term incentive scheme |
| 5.7 | 10.3 | |||||||||
Compensation for loss of office |
| 3.6 | | |||||||||
|
|
|
|
|
|
|||||||
Total Directors emoluments |
12.0 | 16.2 | 17.9 | |||||||||
|
|
|
|
|
|
There were 8 directors in respect of whose qualifying services shares were received under long term incentive schemes, including the highest paid director. In 2013 the long-term incentive scheme amount has been updated to include associated interest costs accrued in the year of 1.5 million.
Number of Directors | ||||||||||||
2012 | 2013 | 2014 | ||||||||||
Retirement benefits are accruing to the following number of directors under: |
||||||||||||
Money purchase schemes |
4 | 4 | 5 |
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
Remuneration of highest paid director: |
||||||||||||
Emoluments |
4.4 | 0.6 | 1.5 | |||||||||
Long-term incentive scheme |
| 3.4 | 5.2 | |||||||||
Share-based payment |
| 0.2 | 0.4 | |||||||||
|
|
|
|
|
|
|||||||
Total |
4.4 | 4.2 | 7.1 | |||||||||
|
|
|
|
|
|
F-79
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
19) | Finance income and costs |
2012 | 2013 | 2014 | ||||||||||||||
Note | m | m | m | |||||||||||||
Interest income |
4.6 | 7.4 | 6.8 | |||||||||||||
Net foreign exchange gains on retranslation of financial assets and liabilities |
| 5.0 | | |||||||||||||
|
|
|
|
|
|
|||||||||||
Finance income |
4.6 | 12.4 | 6.8 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Capitalized interest |
10 | (192.4 | ) | (119.1 | ) | (133.4 | ) | |||||||||
Cash pay interest expense |
(95.5 | ) | (106.6 | ) | (99.9 | ) | ||||||||||
Net pension interest costs |
12 | (2.4 | ) | (2.5 | ) | (2.7 | ) | |||||||||
Amortization of borrowing costs |
(7.1 | ) | (11.8 | ) | (7.5 | ) | ||||||||||
Net foreign exchange losses on retranslation of financial assets and liabilities |
(6.2 | ) | | (15.6 | ) | |||||||||||
Financing costs incurred in amendment of terms of debt* |
(3.4 | ) | | (37.9 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||
Finance costs |
(307.0 | ) | (240.0 | ) | (297.0 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net finance costs |
(302.4 | ) | (227.6 | ) | (290.2 | ) | ||||||||||
|
|
|
|
|
|
* | A one-off charge of 37.9 million was incurred as a consequence of the refinancing in July 2014. Of this, deferred transaction costs of 34.5 million relating to the previous senior debt were written off. |
20) | Taxation |
2012 | 2013 | 2014 | ||||||||||||||
Note | m | m | m | |||||||||||||
Current tax expense |
||||||||||||||||
Current tax on profits for the year |
39.8 | 16.2 | 29.6 | |||||||||||||
Adjustments in respect of prior years |
2.2 | 0.4 | (2.1 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||
42.0 | 16.6 | 27.5 | ||||||||||||||
Deferred tax expense |
||||||||||||||||
Origination and reversal of temporary differences |
12.1 | | 12.8 | |||||||||||||
Impact of change in tax rates |
(10.6 | ) | (14.6 | ) | 1.5 | |||||||||||
|
|
|
|
|
|
|||||||||||
6 | 1.5 | (14.6 | ) | 14.3 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Total tax expense |
43.5 | 2.0 | 41.8 | |||||||||||||
|
|
|
|
|
|
Reconciliation of effective tax rate:
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
Loss before tax |
(34.6 | ) | (39.2 | ) | (67.3 | ) | ||||||
|
|
|
|
|
|
|||||||
Tax credit at the standard UK corporation tax rate 21.5% (2013: 23.2%; 2012: 24.5%) |
(8.5 | ) | (9.1 | ) | (14.4 | ) | ||||||
Difference in tax rates |
6.7 | 4.7 | 7.9 | |||||||||
Non tax deductible interest |
33.7 | 14.4 | 25.4 | |||||||||
Other income and expenses not taxable or deductible |
8.0 | 3.9 | 5.3 | |||||||||
Unrecognized tax assets |
2.4 | 3.0 | 3.0 | |||||||||
Provisions for uncertainties |
11.8 | (1.1 | ) | 1.8 | ||||||||
Impact of change in deferred tax rates |
(10.6 | ) | (14.6 | ) | 1.5 | |||||||
Prior year adjustment* |
| 0.8 | 11.3 | |||||||||
|
|
|
|
|
|
|||||||
Total tax expense |
43.5 | 2.0 | 41.8 | |||||||||
|
|
|
|
|
|
F-80
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
* | Prior year adjustment in 2014 relates to matters under discussion with local tax authorities regarding the deductibility of certain expenses. |
The weighted average effective tax rate was 62.1% (2013: 5.1%; 2012 125.7%). The increase is principally caused by changes in the estimates of provisions in respect of matters under discussion with tax authorities and the impact of the reduction in the UK tax rate in 2013.
The Iglo Group operates in many different jurisdictions and, in some of these, certain matters are under discussion with local tax authorities. These discussions are often complex and can take many years to resolve. Accruals for tax contingencies require management to make estimates and judgments with respect to the ultimate outcome of a tax audit, and actual results could vary from these estimates. Where tax exposures can be quantified, a provision is made based on best estimates and managements judgments. Given the inherent uncertainties in assessing the outcomes of these exposures (which can sometimes be binary in nature), the Iglo Group could, in future years, experience adjustments to this provision.
Management believes that the Iglo Groups position on all open matters including those in current discussion with local tax authorities is robust and that the Iglo Group is appropriately provided.
Through the enactment of the Finance Act 2013 the standard rate of corporation tax in the UK changed from 23% to 21% with effect from April 1, 2014, and by a further 1% to 20% from April 1, 2015. As the reductions to 21% and 20% were enacted on July 17, 2013 these rates are reflected in this financial statements.
The tax (charge)/credit relating to components of other comprehensive income is as follows:
Before
tax |
Tax
(charge)/ credit |
After tax | ||||||||||||||
2012 |
Note | m | m | m | ||||||||||||
Remeasurements of post-employment benefit liabilities |
24.4 | (7.3 | ) | 17.1 | ||||||||||||
Net investment hedge |
(8.0 | ) | | (8.0 | ) | |||||||||||
Cash flow hedges |
8.8 | (2.6 | ) | 6.2 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Other comprehensive income/(loss) |
25.2 | (9.9 | ) | 15.3 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Current tax |
| |||||||||||||||
Deferred tax |
6 | (9.9 | ) | |||||||||||||
|
|
|
|
|
|
|||||||||||
(9.9 | ) | |||||||||||||||
|
|
|
|
|
|
Before
tax |
Tax
(charge)/ credit |
After tax | ||||||||||||||
2013 |
Note | m | m | m | ||||||||||||
Remeasurements of post-employment benefit liabilities |
(4.8 | ) | 1.6 | (3.2 | ) | |||||||||||
Net investment hedge |
7.8 | (2.5 | ) | 5.3 | ||||||||||||
Cash flow hedges |
3.3 | (0.8 | ) | 2.5 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Other comprehensive income/(loss) |
6.3 | (1.7 | ) | 4.6 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Current tax |
| |||||||||||||||
Deferred tax |
6 | (1.7 | ) | |||||||||||||
|
|
|
|
|
|
|||||||||||
(1.7 | ) | |||||||||||||||
|
|
|
|
|
|
F-81
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Before
tax |
Tax
(charge)/ credit |
After tax | ||||||||||||||
2014 |
Note | m | m | m | ||||||||||||
Remeasurements of post-employment benefit liabilities |
52.0 | (15.2 | ) | 36.8 | ||||||||||||
Net investment hedge |
(27.6 | ) | | (27.6 | ) | |||||||||||
Cash flow hedges |
(13.2 | ) | 3.7 | (9.5 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||
Other comprehensive income/(loss) |
11.2 | (11.5 | ) | (0.3 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||
Current tax |
| |||||||||||||||
Deferred tax |
6 | (11.5 | ) | |||||||||||||
|
|
|
|
|
|
|||||||||||
(11.5 | ) | |||||||||||||||
|
|
|
|
|
|
21) | Cash flows from operating activities |
2012 | 2013 | 2014 | ||||||||||||||
Note | m | m | m | |||||||||||||
Cash flows from operating activities |
||||||||||||||||
Loss for the year |
(78.1 | ) | (41.2 | ) | (109.1 | ) | ||||||||||
Adjustments for: |
||||||||||||||||
Exceptional items |
16 | 53.6 | 83.8 | 52.9 | ||||||||||||
Depreciation charge |
3 | 24.5 | 23.3 | 24.8 | ||||||||||||
Amortization |
4 | 4.4 | 4.5 | 5.6 | ||||||||||||
Loss on disposal of property, plant and equipment |
| 0.1 | 0.2 | |||||||||||||
Finance costs |
19 | 310.3 | 240.0 | 297.0 | ||||||||||||
Finance income |
19 | (7.9 | ) | (12.4 | ) | (6.8 | ) | |||||||||
Taxation |
20 | 43.5 | 2.0 | 41.8 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Operating cash flow before changes in working capital, provisions and exceptional items |
350.3 | 300.1 | 306.4 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Decrease in inventories |
(2.2 | ) | 20.0 | 1.9 | ||||||||||||
Decrease/(increase) in trade and other receivables |
(5.8 | ) | (0.7 | ) | 10.7 | |||||||||||
(Decrease)/increase in trade and other payables |
(5.5 | ) | 1.1 | (13.0 | ) | |||||||||||
Decrease in employee benefit and other provisions |
(3.5 | ) | (1.8 | ) | (4.3 | ) | ||||||||||
Cash generated from operations before tax and exceptional items |
333.3 | 318.7 | 301.7 | |||||||||||||
|
|
|
|
|
|
22) | Financial risk management |
a) | Overall risk management policy |
The Iglo Groups activities expose it to a variety of financial risks, including currency risk, interest rate risk, credit risk and liquidity risk.
The Iglo Groups overall risk management programme focuses on minimizing potential adverse effects on the Iglo Groups financial performance. The Iglo Group uses derivative financial instruments to hedge certain risk exposures.
Risk management is led by senior management and is mainly carried out by a central treasury department which identifies, evaluates and hedges financial risks in close cooperation with the Iglo Groups operating units.
F-82
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
b) | Market risk (including currency risk and interest rate risk) |
In managing market risks, the Iglo Group aims to minimize the impact of short term fluctuations on the Iglo Groups earnings. Over the longer term, however, permanent changes in foreign exchange rates and interest rates will have an impact on consolidated earnings.
Currency risk |
Foreign currency risk on assets and liabilities in currencies other than functional currency |
|
Description | The Iglo Group is exposed to foreign exchange risk arising from the translation of assets and liabilities denominated in currencies other than the Euro. This affects particularly Iglos Pound Sterling loans and overdraft balances. | |
The Pound Sterling value of these liabilities is retranslated at closing exchange rates into Euro for inclusion in the financial statements. Fluctuations in the value of these liabilities are caused by variation in the closing GBP-EUR exchange rate. | ||
Mitigation & Impact on Statement of Financial Position / Equity / Income Statement | 100% of the Iglo Groups Pound Sterling loans are designated as hedges against the Iglo Groups investment in its subsidiaries in the UK. As at December 31, 2014, this represented 51% of the net assets of the UK businesses (2013: 67%; 2012 68%). | |
The impact of the net investment hedge is taken directly to equity via the foreign currency translation reserve. The amount taken to this reserve which arose on the retranslation of the Sterling loans was a loss of 39.5 million (2013: gain of 13.0 million; 2012: loss of 17.3 million). There was no ineffectiveness in the net investment hedge in either 2014, 2013 or 2012. | ||
The fair value of the Pound Sterling denominated loans at December 31, 2014 is 497.0 million (2013: 639.5 million; 2012: 652.5 million) (at closing financial year end rates). | ||
Sensitivity analysis | During 2014, the Euro weakened by 6.9% against the Pound Sterling. | |
For each 1% that the Euro strengthens or weakens, assuming all other variables remain constant, the impact on the Pound Sterling loans would be a credit or debit to the Iglo Groups equity of 5.1 million, and on the Sterling overdraft balances would be a credit or debit to the Iglo Groups Income Statement of 1.9 million. | ||
In addition, the impact on the related interest charge would be to decrease or increase the charge by 0.3 million for each 1% change in the exchange rate. | ||
Currency risk |
Foreign currency risk on purchases |
|
Description | The Iglo Group is exposed to foreign exchange risk where a business unit makes purchases in a currency other than the Euro. | |
For the Iglo Group, the most significant of these exposures is the purchase of fish inventories in US dollars, the purchase of goods and services in Euros by the UK business and purchases of goods in Swedish Krona by the Italian business. | ||
Mitigation & Impact on Statement of Financial Position / Equity / Income Statement |
The Iglo Groups policy is to reduce this risk by using foreign exchange forward contracts which are designated as cash flow hedges. | |
These contracts all have a maturity of less than one year. | ||
The fair value of the US dollar forward contracts at December 31, 2014 is an asset of 11.1 million (2013: 5.4 million liability; 2012: 2.1 million liability). All forecast transactions are still expected to occur. |
F-83
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
As at December 31, 2014, 77% of forecast future dollar payments for the next twelve months were hedged (2013: 82%: 2012: 68%). | ||
The fair value of the Swedish Krona forward contracts at December 31, 2014 is a liability of 0.1 million (2013: 0.1 million; 2012: 0.3 million). All forecast transactions are still expected to occur. | ||
As at December 31, 2014, 43% of anticipated future Swedish Krona payments for the next twelve months were hedged (2013: 45%; 2012: 42%). | ||
The fair value of the Euro forward contracts in subsidiaries with a Sterling functional currency at December 31, 2014 is a liability of 1.7 million (2013: 1.8 million; 2012: 0.3 million). | ||
As at December 31, 2014, 63% of anticipated future Euro net payments by the UK business for the next twelve months were hedged (2013: 81%; 2012 43%). | ||
Sensitivity analysis | During 2014, the Euro weakened by 6.9% against Sterling, and weakened by 11.8% against the US dollar and strengthened by 5.1% against the Swedish Krona. | |
For each 1% that the Euro strengthens or weakens against Sterling, assuming all other variables remain constant, the impact relating to these purchases would be to increase or decrease the Iglo Groups loss before tax by approximately 0.7 million (2013: 1.0 million; 2012: 1.3 million) for the year ended December 31, 2014, excluding the impact of any forward contracts. | ||
For each 1% that the Euro strengthens or weakens against the US dollar, assuming all other variables remain constant, the impact would be to increase or decrease the Iglo Groups loss before tax by approximately 1.8 million (2013: 1.8 million; 2012: 2.1 million) for the year ended December 31, 2014, excluding the impact of any forward contracts. | ||
For each 1% that the Euro strengthens or weakens against Swedish Krona, assuming all other variables remain constant, the impact relating to these purchases would be to increase or decrease the Iglo Groups loss before tax by approximately 0.2 million (2013: 0.3 million; 2012: 0.2 million) for the year ended December 31, 2014, excluding the impact of any forward contracts. | ||
Interest rate risk |
||
Description | The Iglo Group has significant levels of floating rate borrowings and is therefore exposed to the impact of interest rate fluctuations. | |
Mitigation & Impact on Equity / Income Statement | The Iglo Groups policy on interest rate risk is designed to limit the Iglo Groups exposure to fluctuating interest rates. The Iglo Group designates interest rate caps which limit the maximum interest rate, as cash flow hedges. | |
Interest rate caps hedge 95% (2013: 75%: 2012 52%) of the Iglo Groups Sterling debt during 2015 and 71% (2013: 71%; 2012: 70%) of the Iglo Groups Euro debt during 2015. | ||
The interest expense in the Income Statement is shown including the effect of the interest rate caps. It is intended to hold these instruments until maturity so that although the fair value of the instruments will fluctuate over the course of their life due to changes in market rates, the instruments will have nil value on expiry. |
F-84
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
During 2014 nil (2013: nil; 2012: nil) was taken to equity relating to the change in fair value of these instruments and nil (2013: 0.8 million; 2012: 0.3 million) was recycled to the Income Statement. | ||
Sensitivity analysis | In 2014, LIBOR rates were consistent with 2013 and EURIBOR rates decreased by 0.2 percentage points. | |
It is estimated that an increase or decrease of one percentage point in the interest rate charge on borrowings would correspondingly decrease or increase the Iglo Groups loss before tax for the year ended December 31, 2014 by approximately 16.3 million. |
c) | Credit risk |
Description |
Credit risk arises on cash and cash equivalents and derivative financial instruments with banks and financial institutions, as well as on credit exposures to customers. See note 8 for analysis of the trade receivables balance and note 9 for analysis of the cash and cash equivalents balance. | |
Mitigation |
The Iglo Group limits counterparty exposures by monitoring each counterparty carefully and where possible, setting credit limits by reference to published ratings. The Iglo Group limits its exposure to individual financial institutions by spreading forward foreign exchange contracts and surplus cash deposits between several institutions. | |
The credit quality of customers is assessed taking into account their financial position, past experience and other factors. Credit limits are set for customers and regularly monitored. The Iglo Group aims to ensure that the maximum exposure to one financial institution does not exceed 75.0 million and that the long term credit rating does not fall below Low Double A. |
d) | Liquidity risk |
Description |
The Iglo Group is exposed to the risk that it is unable to meet its commitments as they fall due. The Iglo Group has financial conditions imposed by its lenders which it must achieve in order to maintain its current level of borrowings. A single net debt covenant is carried out quarterly and at the end of each financial year. There have been no breaches of the covenants throughout the year. | |
Mitigation |
The Iglo Group ensures that it has sufficient cash and available funding through regular cash flow and covenant forecasting. In addition, the Iglo Group has access to a revolving credit facility of 80m, expiring in December 2019. This is available to finance working capital requirements and for general corporate purposes. Currently 4.0 million is utilized for letters of credit, overdrafts, customer bonds and bank guarantees. |
Maturity analysis
The tables below show a maturity analysis of contractual undiscounted cash flows, showing items at the earliest date on which the Iglo Group could be required to pay the liability:
2012 |
2013
m |
2014
m |
2015
m |
2016
m |
2017
m |
Over
5 years m |
Total
m |
|||||||||||||||||||||
Borrowings-principal |
| 71.8 | 54.4 | 30.8 | 1,410.7 | 1,308.7 | 2,876.4 | |||||||||||||||||||||
Borrowings-interest |
96.4 | 96.0 | 93.1 | 90.2 | 76.9 | 2,685.8 | 3,138.4 | |||||||||||||||||||||
Forward contracts |
164.6 | | | | | | 164.6 | |||||||||||||||||||||
Trade payables |
263.5 | | | | | | 263.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
524.5 | 167.8 | 147.5 | 121.0 | 1,487.6 | 3,994.5 | 6,442.9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-85
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
2013 |
2014
m |
2015
m |
2016
m |
2017
m |
2018
m |
Over
5 years m |
Total
m |
|||||||||||||||||||||
Borrowings-principal |
130.0 | 54.0 | 30.7 | 1,398.7 | 218.0 | 1,149.0 | 2,980.4 | |||||||||||||||||||||
Borrowings-interest |
92.7 | 89.8 | 86.9 | 73.7 | 1.0 | 1,242.2 | 1,586.3 | |||||||||||||||||||||
Forward contracts |
244.8 | | | | | | 244.8 | |||||||||||||||||||||
Trade payables |
246.2 | | | | | | 246.2 | |||||||||||||||||||||
Other current liabilities |
58.3 | | | | | | 58.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
772.0 | 143.8 | 117.6 | 1,472.4 | 219.0 | 2,391.2 | 5,116.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
2015
m |
2016
m |
2017
m |
2018
m |
2019
m |
Over
5 years m |
Total
m |
|||||||||||||||||||||
Borrowings-principal |
| | | | | 2,912.4 | 2,912.4 | |||||||||||||||||||||
Borrowings-interest |
77.0 | 77.2 | 77.0 | 77.0 | 77.0 | 1,151.3 | 1,536.5 | |||||||||||||||||||||
Forward contracts |
173.1 | | | | | | 173.1 | |||||||||||||||||||||
Trade payables |
244.8 | | | | | | 244.8 | |||||||||||||||||||||
Other current liabilities |
69.1 | | | | | | 69.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
564.0 | 77.2 | 77.0 | 77.0 | 77.0 | 4,063.7 | 4,935.9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23) | Financial instruments |
a) | Categories of financial instruments |
The following table shows the carrying amount of each Statement of Financial Position class split into the relevant category of financial instrument as defined in IAS 39 Financial Instruments: Recognition & Measurement.
2012 |
Loans and
receivables m |
Derivatives
used for hedging (see (c)) m |
Financial
liabilities at amortized cost m |
Total
m |
||||||||||||
Assets |
||||||||||||||||
Trade receivables |
41.8 | | | 41.8 | ||||||||||||
Derivative financial instruments |
| 0.3 | | 0.3 | ||||||||||||
Cash and cash equivalents |
644.1 | | | 644.1 | ||||||||||||
Liabilities |
||||||||||||||||
Bank overdraft |
| | (428.5 | ) | (428.5 | ) | ||||||||||
Trade payables |
| | (263.5 | ) | (263.5 | ) | ||||||||||
Derivative financial instruments |
| (2.4 | ) | | (2.4 | ) | ||||||||||
Loans and borrowings |
| | (2,876.4 | ) | (2,876.4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
685.9 | (2.1 | ) | (3,568.4 | ) | (2,884.6 | ) | |||||||||
|
|
|
|
|
|
|
|
F-86
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
2013 |
Loans and
receivable m |
Derivatives
used for hedging (see (c)) m |
Financial
liabilities at amortized cost m |
Total
m |
||||||||||||
Assets |
||||||||||||||||
Trade receivables |
34.8 | | | 34.8 | ||||||||||||
Derivative financial instruments |
| 0.6 | | 0.6 | ||||||||||||
Cash and cash equivalents |
688.5 | | | 688.5 | ||||||||||||
Liabilities |
||||||||||||||||
Bank overdraft |
| | (371.4 | ) | (371.4 | ) | ||||||||||
Trade payables |
| | (246.2 | ) | (246.2 | ) | ||||||||||
Derivative financial instruments |
| (7.3 | ) | | (7.3 | ) | ||||||||||
Loans and borrowings |
| | (2,980.4 | ) | (2,980.4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
723.3 | (6.7 | ) | (3,598.0 | ) | (2,881.4 | ) | |||||||||
|
|
|
|
|
|
|
|
2014 |
Loans and
receivables m |
Derivatives
used for hedging (see (c)) m |
Financial
liabilities at amortized cost m |
Total
m |
||||||||||||
Assets |
||||||||||||||||
Trade receivables |
34.9 | | | 34.9 | ||||||||||||
Derivative financial instruments |
| 11.2 | | 11.2 | ||||||||||||
Cash and cash equivalents |
707.0 | | | 707.0 | ||||||||||||
Liabilities |
||||||||||||||||
Bank overdraft |
| | (487.8 | ) | (487.8 | ) | ||||||||||
Trade payables |
| | (244.8 | ) | (244.8 | ) | ||||||||||
Derivative financial instruments |
| (1.8 | ) | | (1.8 | ) | ||||||||||
Loans and borrowings |
| | (2,912.4 | ) | (2,912.4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
741.9 | 9.4 | (3,645.0 | ) | (2,893.7 | ) | ||||||||||
|
|
|
|
|
|
|
|
Trade receivables are the only financial assets that are offset on the Statement of Financial Position. See note 8 for split between gross receivables and trade terms.
b) | Fair values |
The following summarizes the methods and assumptions of estimating the fair values of financial instruments held by the Iglo Group.
| Derivative financial instruments |
Derivative financial instruments are held at fair value. There is no difference between carrying value and fair value. The financial instruments are not traded in an active market, and so the fair value of these instruments is determined from the implied forward rate. The valuation technique utilized by the Iglo Group maximize the use of observable market data where it is available. All significant inputs required to fair value the instrument are observable. These are classified as level 2 instruments as defined in IFRS 13 Fair value measurement.
| Trade and other payables/receivables |
The notional amount of trade and other payables/receivables are deemed to be carried at fair value, short term, and settled in cash.
F-87
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
| Cash and cash equivalents/overdrafts |
The carrying value of cash is deemed to equal fair value.
| Interest bearing loans and liabilities |
The fair value of senior loans and senior secured notes is determined by reference to price quotations in the active market in which they are traded. The loan notes are not actively traded, and therefore fair values have been calculated using a discounted cash flow calculation.
Fair value | Carrying value | |||||||||||||||||||||||
2012
m |
2013
m |
2014
m |
2012
m |
2013
m |
2014
m |
|||||||||||||||||||
Senior loans |
1,844.4 | 1,831.3 | 1,104.1 | 1,031.8 | 1,831.4 | 1,133.6 | ||||||||||||||||||
2020 floating rate senior secured notes |
| | 484.5 | | | 500.0 | ||||||||||||||||||
Loan notes |
826.7 | 965.8 | 1,211.4 | 1,844.6 | 1,149.0 | 1,278.8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total interest bearing loans |
2,671.1 | 2,797.1 | 2,800.0 | 2,876.4 | 2,980.4 | 2,912.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
c) | Derivatives |
The notional principal amounts of the outstanding forward foreign exchange contracts at 31 December 2014 were 173.1 million (2013: 208.6 million; 2012: 125.6 million).
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
Interest rate caps |
| 0.6 | 0.1 | |||||||||
SEK Forward foreign exchange contracts |
0.3 | | | |||||||||
USD Forward foreign exchange contracts |
| | 11.1 | |||||||||
|
|
|
|
|
|
|||||||
Total assets |
0.3 | 0.6 | 11.2 | |||||||||
|
|
|
|
|
|
|||||||
GBP Forward foreign exchange contracts |
(0.3 | ) | (1.8 | ) | (1.7 | ) | ||||||
USD Forward foreign exchange contracts |
(2.1 | ) | (5.4 | ) | | |||||||
SEK Forward foreign exchange contracts |
| (0.1 | ) | (0.1 | ) | |||||||
|
|
|
|
|
|
|||||||
Total liabilities |
(2.4 | ) | (7.3 | ) | (1.8 | ) | ||||||
|
|
|
|
|
|
|||||||
Total |
(2.1 | ) | (6.7 | ) | 9.4 | |||||||
|
|
|
|
|
|
Offsetting of derivatives
Derivative contracts are held under ISDA agreements with financial institutions. An ISDA is an enforceable master netting agreement that permits the Iglo Group to settle net in the event of default.
Gross value of
financial assets available for offsetting |
Gross value of
financial liabilities available for offsetting |
Net amount available
for offsetting |
||||||||||
2012 |
m | m | m | |||||||||
Derivatives-assets |
0.2 | | 0.2 | |||||||||
|
|
|
|
|
|
Gross value of
financial liabilities available for offsetting |
Gross value of
financial assets available for offsetting |
Net amount available
for offsetting |
||||||||||
2012 |
m | m | m | |||||||||
Derivatives-liabilities |
(2.5 | ) | 0.2 | (2.3 | ) | |||||||
|
|
|
|
|
|
F-88
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Gross value of
financial assets available for offsetting |
Gross value of
financial liabilities available for offsetting |
Net amount available
for offsetting |
||||||||||
2013 |
m | m | m | |||||||||
Derivatives-assets |
0.6 | | 0.6 | |||||||||
|
|
|
|
|
|
Gross value of
financial liabilities available for offsetting |
Gross value of
financial assets available for offsetting |
Net amount available
for offsetting |
||||||||||
2013 |
m | m | m | |||||||||
Derivatives-liabilities |
(7.3 | ) | | (7.3 | ) | |||||||
|
|
|
|
|
|
Gross value of
financial assets available for offsetting |
Gross value of
financial liabilities available for offsetting |
Net amount available
for offsetting |
||||||||||
2014 |
m | m | m | |||||||||
Derivatives-assets |
10.2 | (0.8 | ) | 9.4 | ||||||||
|
|
|
|
|
|
Gross value of
financial liabilities available for offsetting |
Gross value of
financial assets available for offsetting |
Net amount available
for offsetting |
||||||||||
2014 |
m | m | m | |||||||||
Derivatives-liabilities |
(0.8 | ) | 0.8 | | ||||||||
|
|
|
|
|
|
24) | Operating leases |
Non-cancellable operating lease rentals relate to total future aggregate minimum lease payments and are payable as follows:
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
Less than one year |
5.3 | 4.9 | 5.0 | |||||||||
Between one and five years |
14.3 | 11.1 | 11.9 | |||||||||
More than five years |
3.7 | 3.4 | 6.6 | |||||||||
|
|
|
|
|
|
|||||||
Total |
23.3 | 19.4 | 23.5 | |||||||||
|
|
|
|
|
|
For the year ended December 31, 2014 non-cancellable minimum lease payments are split 8.1 million payable in 1-3 years and 3.8 million in 3-5 years.
Non-cancellable operating leases relate to equipment, motor vehicles and land and buildings.
25) | Capital commitments |
The Iglo Group has capital commitments amounting to 5.1 million at December 31, 2014 (2013: 0.7 million; 2012: 3.7 million).
26) | Contingent liabilities |
The Iglo Group is currently in discussions with the tax authorities in one of its markets regarding the treatment of the acquisition of the Iglo Group in 2006 by the previous owners. Under the original sale and purchase agreement the Iglo Group has an indemnity in respect of this tax issue.
F-89
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
27) | Related parties |
Birds Eye Iglo Limited Partnership Inc
The Iglo Group is controlled by the Permira Partnership which owns 100% of the share capital.
In 2006, Iglo Foods Holdco Limited, a subsidiary of Iglo, issued 17% fixed rate subordinated unsecured Class A, B and C Loan Notes of 1 each to the Permira Partnership in connection with the original acquisition by the Permira Partnership. From January 1, 2013, the interest rate on these shareholder loan notes was reduced to 11%.
In 2010, as part of the funding for the acquisition of CSI, Iglo Foods Holdco Limited issued 15% fixed rate subordinated unsecured 167.4m of Class G Loan Notes of 1 each to the Permira Partnership. From January 1, 2013, the interest rate on these shareholder loan notes was reduced to 11%.
During 2013, Iglo Foods Holdco Limited, a subsidiary of Iglo, issued 11% fixed rate subordinated unsecured Class K Loan Notes of 1 each to the Permira Partnership.
The amounts outstanding at December 31, 2014, 2013 and 2012 on these loan notes including capitalized interest are disclosed in note 10.
See note 29 Events after the balance sheet date.
Permira Funds
The Iglo Group is backed by a private equity fund managed by Permira Advisers LLC. A Shareholder Agreement was entered into on November 3, 2006, whereby Iglo Foods Holdings Limited or one of its subsidiaries is obliged to pay an annual monitoring fee of 1 million. For the years ended December 31, 2014, 2013 and 2012, the entity designated to receive the annual monitoring fee is Permira Advisers LLP.
Key Management
All significant management decision making authority is vested solely with individuals who were also Directors of Iglo. Therefore key management was deemed to be only the Directors of Iglo. Their remuneration has been disclosed in Note 18.
Cheryl Potter of Permira Advisers LLP held indirect economic interests in the loan notes and the equity of the Iglo Group through the Permira Partnership.
All Directors of Iglo, with the exception of Cheryl Potter and Tara Alhadeff, held equity interests in the Permira Partnership during the year and as at December 31, 2014, either directly or through a trust structure.
During the year to December 31, 2014 and as at December 31, 2014, Erhard Schoewel and Daniel Pagnoni held interests in the loan notes held by the Permira Partnership.
F-90
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Loan notes to related parties
The following transactions have occurred through the Partnership, between the Iglo Group and related parties, in relation to loan notes.
Management |
Permira
Funds |
|||||||
m | m | |||||||
Balance at January 1, 2012 |
5.8 | 1,141.1 | ||||||
|
|
|
|
|||||
Payments made |
(1.6 | ) | (309.0 | ) | ||||
Interest accrued |
1.0 | 190.7 | ||||||
|
|
|
|
|||||
Balance at December 31, 2012 |
5.2 | 1,022.8 | ||||||
Replacement of directors |
(0.9 | ) | | |||||
New loan notes issued |
0.5 | | ||||||
Interest accrued |
0.5 | 115.6 | ||||||
|
|
|
|
|||||
Balance at December 31, 2013 |
5.3 | 1,138.4 | ||||||
Interest accrued |
0.5 | 128.7 | ||||||
|
|
|
|
|||||
Balance at December 31, 2014 |
5.8 | 1,267.1 | ||||||
|
|
|
|
28) | Segment reporting |
Following the acquisition by Nomad Foods Limited, the CODM of the enlarged group considers there to be one reporting and operating segment, being Frozen Food. The segment presentation below reflects how the business was managed prior to the acquisition and in the periods presented.
Segment external revenue
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
Birds Eye (at budgeted currency) |
574.5 | 566.1 | 540.0 | |||||||||
Iglo |
542.4 | 537.0 | 521.9 | |||||||||
Findus Italy |
451.2 | 419.6 | 428.2 | |||||||||
Other |
33.8 | 34.2 | 35.1 | |||||||||
Total segment revenue |
1,601.9 | 1,556.9 | 1,525.2 | |||||||||
Foreign exchange impact of Birds Eye revenue |
(29.2 | ) | (51.1 | ) | (24.3 | ) | ||||||
|
|
|
|
|
|
|||||||
Total external revenue |
1,572.7 | 1,505.8 | 1,500.9 | |||||||||
Birds Eye (at actual currency) |
545.3 | 515.0 | 515.7 | |||||||||
|
|
|
|
|
|
* | Birds Eyes results have been translated using a management budget rate of 1.30 to GBP £1 as used by management for budgeting and forecasting process for 2015. |
The CODM is not provided with information about inter-segment revenues.
F-91
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
Segment Adjusted EBITDA
2012 | 2013 | 2014 | ||||||||||||
Note | m | m | m | |||||||||||
Birds Eye |
130.1 | 131.6 | 126.4 | |||||||||||
Iglo |
116.7 | 98.6 | 108.7 | |||||||||||
Findus Italy |
114.8 | 95.4 | 101.4 | |||||||||||
Other |
(11.4 | ) | (25.5 | ) | (30.3 | ) | ||||||||
|
|
|
|
|
|
|||||||||
Total segment Adjusted EBITDA |
350.2 | 300.1 | 306.2 | |||||||||||
Exceptional items |
16 | (53.6 | ) | (83.8 | ) | (52.9 | ) | |||||||
Depreciation |
3 | (24.4 | ) | (23.4 | ) | (24.8 | ) | |||||||
Amortization |
4 | (4.4 | ) | (4.5 | ) | (5.6 | ) | |||||||
|
|
|
|
|
|
|||||||||
Operating profit |
267.8 | 188.4 | 222.9 | |||||||||||
Net financing costs |
(302.4 | ) | (227.6 | ) | (290.2 | ) | ||||||||
|
|
|
|
|
|
|||||||||
Loss before tax |
(34.6 | ) | (39.2 | ) | (67.3 | ) | ||||||||
|
|
|
|
|
|
No information on segment assets or liabilities is presented to the CODM.
Product information
Management considers the products it sells belong to one category, being frozen foods.
Geographical information
External revenue by geography
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
United Kingdom |
525.8 | 496.7 | 492.5 | |||||||||
Italy |
451.2 | 419.6 | 428.3 | |||||||||
Germany |
311.5 | 313.1 | 298.0 | |||||||||
Rest of Europe |
284.2 | 276.4 | 282.1 | |||||||||
|
|
|
|
|
|
|||||||
Total external revenue by geography |
1,572.7 | 1,505.8 | 1,500.9 | |||||||||
|
|
|
|
|
|
Non-current assets by geography
2012 | 2013 | 2014 | ||||||||||
m | m | m | ||||||||||
United Kingdom |
763.1 | 730.0 | 780.6 | |||||||||
Italy |
861.3 | 858.1 | 854.3 | |||||||||
Germany |
476.1 | 465.2 | 464.6 | |||||||||
Rest of Europe |
367.9 | 372.8 | 371.8 | |||||||||
|
|
|
|
|
|
|||||||
Total non-current assets by geography |
2,468.4 | 2,426.1 | 2,471.3 | |||||||||
|
|
|
|
|
|
Non-current assets exclude deferred tax assets.
29) | Events after the balance sheet date |
On April 20, 2015, Nomad Foods Limited entered into a definitive agreement to acquire the Iglo Group for 2.6 billion, subject to customary closing conditions. Nomad Foods Limited is registered in the British Virgin Islands which upon completion would become the ultimate controlling party of the Iglo Group.
F-92
Iglo Foods Holdings Limited Notes to the Consolidated Financial Statements
On June 1, 2015 the entire issued share capital of Iglo was acquired by Nomad Foods Limited (the Transaction). The ultimate controlling party prior to the Transaction was the Permira Partnership, a partnership registered in Guernsey.
On June 1, 2015, as part of the Iglo Acquisition, the Iglo Group completed an amendment and restatement to the terms of its Senior Facilities Agreement. As part of this amendment and restatement, the Iglo Group has prepaid approximately 490 million of gross debt utilizing a combination of cash from existing resources and a new portion of consideration from Nomad Foods Limited which was on-lent and contributed down to Iglo Foods Midco Limited. This amendment is expected to deliver lower interest costs due to the reduction in both gross debt and interest rates.
F-93
Iglo Foods Holdings LimitedUnaudited Condensed Consolidated Interim Statements of Financial Position as of March 31, 2015
Note |
December 31,
2014 m |
March 31,
2015 m |
||||||||
Non-current assets |
||||||||||
Intangible assets |
5 | 2,216.4 | 2,262.1 | |||||||
Property, plant and equipment |
6 | 254.9 | 256.2 | |||||||
Deferred tax assets |
73.3 | 100.0 | ||||||||
|
|
|
|
|||||||
2,544.6 | 2,618.3 | |||||||||
|
|
|
|
|||||||
Current assets |
||||||||||
Inventories |
229.1 | 208.4 | ||||||||
Trade and other receivables |
49.4 | 67.7 | ||||||||
Deferred borrowing costs |
7 | 2.1 | 2.1 | |||||||
Derivative financial instruments |
11.2 | 16.5 | ||||||||
Cash and cash equivalents |
707.0 | 875.0 | ||||||||
|
|
|
|
|||||||
998.8 | 1,169.7 | |||||||||
|
|
|
|
|||||||
Total assets |
3,543.4 | 3,788.0 | ||||||||
|
|
|
|
|||||||
Current liabilities |
||||||||||
Bank overdrafts |
487.8 | 605.3 | ||||||||
Trade and other payables |
313.9 | 299.3 | ||||||||
Derivative financial instruments |
1.8 | 3.3 | ||||||||
Tax payable |
8.8 | 17.3 | ||||||||
Loans and borrowings |
7 | | | |||||||
Provisions |
8 | 55.2 | 75.5 | |||||||
|
|
|
|
|||||||
867.5 | 1,000.7 | |||||||||
|
|
|
|
|||||||
Non-current liabilities |
||||||||||
Loans and borrowings |
7 | 2,903.1 | 2,971.6 | |||||||
Employee benefits |
9 | 124.2 | 145.8 | |||||||
Deferred tax liabilities |
306.1 | 313.6 | ||||||||
|
|
|
|
|||||||
3,333.4 | 3,431.0 | |||||||||
|
|
|
|
|||||||
Total liabilities |
4,200.9 | 4,431.7 | ||||||||
|
|
|
|
|||||||
Net liabilities |
(657.5 | ) | (643.7 | ) | ||||||
|
|
|
|
|||||||
Deficit attributable to equity holders |
||||||||||
Share capital |
0.1 | 0.1 | ||||||||
Capital reserve |
3.6 | 3.9 | ||||||||
Translation reserve |
(16.0 | ) | 14.6 | |||||||
Cash flow hedging reserve |
4.9 | 8.7 | ||||||||
Accumulated deficit |
(650.1 | ) | (671.0 | ) | ||||||
|
|
|
|
|||||||
Total deficit |
(657.5 | ) | (643.7 | ) | ||||||
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
F-94
Iglo Foods Holdings LimitedUnaudited Condensed Consolidated Interim Statements of Income
for the three months ended March 31, 2015
3 months ended | ||||||||||
Note |
March 31,
2014 m |
March 31,
2015 m |
||||||||
Revenue |
401.7 | 397.5 | ||||||||
Cost of sales |
(265.1 | ) | (258.5 | ) | ||||||
|
|
|
|
|||||||
Gross profit |
136.6 | 139.0 | ||||||||
|
|
|
|
|||||||
Other operating expenses |
(69.8 | ) | (62.8 | ) | ||||||
Exceptional items |
10 | (3.7 | ) | (20.6 | ) | |||||
|
|
|
|
|||||||
Operating profit |
63.1 | 55.6 | ||||||||
|
|
|
|
|||||||
Finance income |
11 | 0.5 | 0.4 | |||||||
Finance costs |
11 | (60.6 | ) | (69.7 | ) | |||||
|
|
|
|
|||||||
Net finance costs |
(60.1 | ) | (69.3 | ) | ||||||
|
|
|
|
|||||||
Profit/(loss) before tax |
3.0 | (13.7 | ) | |||||||
|
|
|
|
|||||||
Taxation |
12 | (17.3 | ) | 7.5 | ||||||
|
|
|
|
|||||||
Loss for the period |
(14.3 | ) | (6.2 | ) | ||||||
|
|
|
|
|||||||
Attributable to: |
||||||||||
Owners of the Parent Company |
(14.3 | ) | (6.2 | ) | ||||||
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
F-95
Iglo Foods Holdings LimitedUnaudited Condensed Consolidated Interim Statements of Comprehensive Income for the three months ended March 31, 2015
3 months ended | ||||||||||
Note |
March 31,
2014 m |
March 31,
2015 m |
||||||||
Loss for the period |
(14.3 | ) | (6.2 | ) | ||||||
|
|
|
|
|||||||
Other comprehensive income/(loss): |
||||||||||
Actuarial losses on defined benefit pension plans |
9 | (9.1 | ) | (21.3 | ) | |||||
Taxation credit on measurement of defined benefit pension plans |
2.7 | 6.6 | ||||||||
|
|
|
|
|||||||
Items not reclassified to the Income Statement |
(6.4 | ) | (14.7 | ) | ||||||
(Loss)/gain on hedge of net investment in foreign subsidiary |
(0.1 | ) | 30.6 | |||||||
Effective portion of changes in fair value of cash flow hedges |
(1.1 | ) | 5.9 | |||||||
Taxation credit/(charge) relating to components of other comprehensive income |
0.2 | (2.1 | ) | |||||||
|
|
|
|
|||||||
Items that may be subsequently reclassified to the Income Statement |
(1.0 | ) | 34.4 | |||||||
|
|
|
|
|||||||
Other comprehensive (loss)/income for the period, net of tax |
(7.4 | ) | 19.7 | |||||||
|
|
|
|
|||||||
Total comprehensive (loss)/income for the period |
(21.7 | ) | 13.5 | |||||||
|
|
|
|
|||||||
Attributable to: |
||||||||||
Owners of the Parent Company |
(21.7 | ) | 13.5 | |||||||
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
F-96
Iglo Foods Holdings Limited Unaudited Condensed Consolidated Interim Statements of Changes in Equity for the three months ended March 31, 2015
Share
capital m |
Capital
reserve m |
Translation
reserve m |
Cash flow
hedge reserve m |
Accumulated
deficit m |
Total
deficit m |
|||||||||||||||||||
Balance at January 1, 2015 |
0.1 | 3.6 | (16.0 | ) | 4.9 | (650.1 | ) | (657.5 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss for the period |
| | | | (6.2 | ) | (6.2 | ) | ||||||||||||||||
Other comprehensive income/(loss) for the period |
| | 30.6 | 3.8 | (14.7 | ) | 19.7 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income/(loss) for the period |
| | 30.6 | 3.8 | (20.9 | ) | 13.5 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Share based payment charge |
| 0.3 | | | | 0.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total transactions with owners, recognized directly in equity |
| 0.3 | | | | 0.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at March 31, 2015 |
0.1 | 3.9 | 14.6 | 8.7 | (671.0 | ) | (643.7 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at January 1, 2014 |
0.1 | 1.9 | (43.6 | ) | (4.6 | ) | (504.2 | ) | (550.4 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss for the period |
| | | | (14.3 | ) | (14.3 | ) | ||||||||||||||||
Other comprehensive (loss)/ income for the period |
| | (5.1 | ) | (5.7 | ) | 3.4 | (7.4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive loss for the period |
| | (5.1 | ) | (5.7 | ) | (10.9 | ) | (21.7 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at March 31, 2014 |
0.1 | 1.9 | (48.7 | ) | (10.3 | ) | (515.1 | ) | (572.1 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
F-97
Iglo Foods Holdings LimitedUnaudited Condensed Consolidated Interim Statements of Cash Flows
for the three months ended March 31, 2015
Note |
March 31,
2014 m |
March 31,
2015 m |
||||||||
Cash flows from operating activities |
||||||||||
Loss for the period |
(14.3 | ) | (6.2 | ) | ||||||
Adjustments for: |
||||||||||
Exceptional items |
10 | 3.7 | 20.6 | |||||||
Depreciation and amortization |
5, 6 | 7.1 | 7.0 | |||||||
Loss on disposal of property, plant and equipment |
6 | | 0.1 | |||||||
Finance costs |
11 | 60.6 | 69.7 | |||||||
Finance income |
11 | (0.5 | ) | (0.4 | ) | |||||
Taxation |
12 | 17.3 | (7.5 | ) | ||||||
|
|
|
|
|||||||
Operating cash flow before changes in working capital and provisions |
73.9 | 83.3 | ||||||||
|
|
|
|
|||||||
Decrease in inventories |
27.5 | 25.5 | ||||||||
Increase in trade and other receivables |
(41.0 | ) | (16.4 | ) | ||||||
Decrease in trade and other payables |
(27.5 | ) | (17.3 | ) | ||||||
Decrease in employee benefits & other provisions |
(0.4 | ) | (1.2 | ) | ||||||
|
|
|
|
|||||||
Cash generated from operations before tax and exceptional items |
32.5 | 73.9 | ||||||||
|
|
|
|
|||||||
Cash flows relating to exceptional items |
(5.3 | ) | (2.5 | ) | ||||||
Tax paid |
(2.8 | ) | (2.0 | ) | ||||||
|
|
|
|
|||||||
Net cash from operating activities |
24.4 | 69.4 | ||||||||
|
|
|
|
|||||||
Cash flows from investing activities |
||||||||||
Purchase of property, plant and equipment |
6 | (2.5 | ) | (2.6 | ) | |||||
Purchase of intangibles |
5 | | (0.1 | ) | ||||||
|
|
|
|
|||||||
Net cash used in investing activities |
(2.5 | ) | (2.7 | ) | ||||||
|
|
|
|
|||||||
Cash flows from financing activities |
||||||||||
Payment of financing fees |
(0.5 | ) | | |||||||
Payment for interest rate cap premiums |
(3.0 | ) | | |||||||
Interest paid |
(25.4 | ) | (20.0 | ) | ||||||
Interest received |
0.5 | 0.4 | ||||||||
|
|
|
|
|||||||
Net cash used in financing activities |
(28.4 | ) | (19.6 | ) | ||||||
|
|
|
|
|||||||
Net decrease/(increase) in cash and cash equivalents |
(6.5 | ) | 47.1 | |||||||
Cash and cash equivalents at 1 January |
317.1 | 219.2 | ||||||||
Effect of exchange rate fluctuations |
0.6 | 3.4 | ||||||||
|
|
|
|
|||||||
Cash and cash equivalents at end of period |
311.2 | 269.7 | ||||||||
|
|
|
|
|||||||
Cash and cash equivalents per above: |
||||||||||
Cash and cash equivalents per statement of financial position |
726.7 | 875.0 | ||||||||
Bank overdrafts |
(415.5 | ) | (605.3 | ) | ||||||
|
|
|
|
|||||||
311.2 | 269.7 | |||||||||
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
F-98
Iglo Foods Holdings LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Information
1. | General information |
Iglo Foods Holdings Limited (Iglo) is a company domiciled in the United Kingdom and incorporated in the United Kingdom under the Companies Act 2006.
These unaudited condensed consolidated interim financial statements were approved for issuance by the Board of Directors on September 4, 2015.
2. | Basis of preparation |
These unaudited condensed consolidated interim financial statements for the three months ended March 31, has been prepared in accordance with IAS 34, Interim financial reporting , as adopted by the European Union. These financial statements consolidate the Iglo and the subsidiaries it controls (together referred to as the Iglo Group). These unaudited condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the period ended December 31, 2014, which have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (IFRSs) and IFRS Interpretations as applicable to companies reporting under IFRS. On April 20, 2015 Nomad Foods Limited entered into a definitive agreement to acquire Iglo Group. This acquisition closed on June 1, 2015.
There are no new accounting standards which have a material impact on these unaudited condensed consolidated interim financial statements.
3. | Going concern |
The Directors have made an assessment, and have satisfied themselves of the Iglo Groups ability to continue as a going concern based on current cash flow projections and current financing.
The Directors have a reasonable expectation that the Iglo Group has adequate resources to continue in operational existence for at least twelve months from the date of this report. Thus they continue to adopt the going concern basis of accounting in preparing the unaudited condensed consolidated interim financial statements.
4. | Accounting policies |
The accounting policies adopted are consistent with those of the previous financial period, except taxes on income which are accrued using the estimated underlying tax rate that is expected to apply for the period as adjusted for material non-underlying items arising in the interim periods.
Accounting estimates
The preparation of financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
F-99
Iglo Foods Holdings LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Information
The significant judgments made by management in applying the Iglo Groups accounting policies and the key sources of estimation uncertainty were the same as those applied in the consolidated financial statements for the year ended December 31, 2014. In preparing the unaudited condensed consolidated interim financial statements, the key sources of estimation uncertainty for the interim period ended March 31, 2015 were:
a) Carrying value of goodwill and brands
Determining whether goodwill and brands are impaired requires an estimation of the value in use of the cash generating units to which goodwill and brands have been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from each cash generating unit and a suitable discount rate in order to calculate present value. A detailed impairment review is performed annually. In line with IAS 34 Interim Financial Reporting, management have reviewed the assets for indicators of significant impairment since the end of the most recent financial period. A detailed review is only performed where such indicators are identified.
b) Fair value of derivative financial instruments
The Iglo Group holds derivative financial instruments at March 31, 2015 and December 31, 2014.
Management has estimated the fair value of these instruments by using valuations based on discounted cash flow calculations.
c) Employee benefit obligation
Actuarial valuations of the defined benefit pensions are performed by qualified actuaries for the Iglo Groups year end close on December 31. The principal assumptions applied for the valuation at March 31, 2015 were the same as those applied at December 31, 2014, except for the German plans which are the most significant in terms of plan assets and liabilities in the Iglo Group. The German plans assets were updated to reflect market values at March 31, 2015 and the discount rate applied to the German defined benefits obligations decreased from 2.0% to 1.45%. In the comparative period, the German plans assets were also updated for movements since December 31, 2013 to reflect market values at March 31, 2014 and the discount rate applied to the German defined benefits obligations at this time decreased from 3.9% to 3.5%. The net movement in the defined benefit obligation for the period ended March 31, 2015 is presented in Note 9.
d) Share based payments
At the end of each reporting period, the Iglo Group revises its estimates of the number of interests that are expected to vest based on the non-market vesting conditions.
e) Discounts
Discounts given by the Iglo Group include rebates, price reductions and incentives given to customers, promotional couponing and trade communication costs. At each quarter end date any discount incurred but not yet invoiced is estimated, based on historical trends and rebate contracts with customers, and accrued.
f) Income tax
The income tax expense and the provision for income taxes for the three month period to March 31, 2015 and March 31, 2014 have been determined based on an estimate of the weighted average annual income tax rate expected to apply for the full financial period.
Where tax exposures can be quantified, an accrual is made based on best estimates and managements judgments. Given the inherent uncertainties in assessing the outcomes of these exposures (which can sometimes be binary in nature), Iglo Group could in future periods experience adjustments to these accruals.
F-100
Iglo Foods Holdings LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Information
5. | Intangible assets |
Goodwill
m |
Brands
m |
Computer
software m |
Total
m |
|||||||||||||
Net book value at January 1, 2015 |
889.4 | 1,323.0 | 4.0 | 2,216.4 | ||||||||||||
Additions |
| | 0.1 | 0.1 | ||||||||||||
Amortization charge for the period |
| (0.3 | ) | (0.4 | ) | (0.7 | ) | |||||||||
Effect of movements in foreign exchange |
16.7 | 29.6 | | 46.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value at March 31, 2015 |
906.1 | 1,352.3 | 3.7 | 2,262.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value at January 1, 2014 |
872.7 | 1,294.8 | 6.5 | 2,174.0 | ||||||||||||
Amortization charge for the period |
| (0.3 | ) | (0.9 | ) | (1.2 | ) | |||||||||
Effect of movements in foreign exchange |
1.6 | 3.2 | | 4.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value at March 31, 2014 |
874.3 | 1,297.7 | 5.6 | 2,177.6 | ||||||||||||
|
|
|
|
|
|
|
|
6. | Property, plant and equipment |
m | ||||
Net book value at January 1, 2015 |
254.9 | |||
Additions |
2.6 | |||
Disposals |
(0.1 | ) | ||
Depreciation charge for the period |
(6.3 | ) | ||
Effect of movements in foreign exchange |
5.1 | |||
|
|
|||
Net book value at March 31, 2015 |
256.2 | |||
|
|
|||
Net book value at January 1, 2014 |
252.1 | |||
Additions |
2.5 | |||
Depreciation charge for the period |
(5.9 | ) | ||
Effect of movements in foreign exchange |
0.6 | |||
|
|
|||
Net book value at March 31, 2014 |
249.3 | |||
|
|
7. | Loans and borrowings |
March 31,
2014 m |
March 31,
2015 m |
|||||||
Current (assets)/liabilities |
||||||||
Senior debt and other loans |
130.0 | | ||||||
Less capitalized transaction costs to be amortized within 1 year |
(12.9 | ) | (2.1 | ) | ||||
|
|
|
|
|||||
Total due in less than one year |
117.1 | (2.1 | ) | |||||
|
|
|
|
|||||
Non-current liabilities |
||||||||
Loan notes |
1,180.1 | 1,313.5 | ||||||
Senior debt and other loans |
1,706.0 | 1,166.9 | ||||||
2020 floating rate senior secured notes |
| 500.0 | ||||||
Less capitalized transaction costs to be amortized in 25 years |
(24.8 | ) | (8.4 | ) | ||||
Less capitalized transaction costs to be amortized in more than 5 years |
| (0.4 | ) | |||||
|
|
|
|
|||||
Total due after more than one year |
2,861.3 | 2,971.6 | ||||||
|
|
|
|
|||||
Total loans and borrowings |
2,978.4 | 2,969.5 | ||||||
|
|
|
|
F-101
Iglo Foods Holdings LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Information
The loan notes have a fixed interest rate of 11% until maturity in 2020. Interest on the loan notes is not paid in cash but is added to the principal of the draw down amounts.
The interest rate on all other loans and the floating rate senior secured notes are re-priced within one year to the relevant Euribor or Libor rate.
On April 20, 2015, Nomad Foods Limited entered into a definitive agreement to acquire the Iglo Group, subject to customary closing conditions. Nomad Foods Limited is registered in the British Virgin Islands which upon completion would become the ultimate controlling party of the Iglo Group. As part of the ongoing completion process, Nomad Foods Limited and the Iglo Group are requesting certain amendments to the Senior Facilities Agreement, majority lender consent for which has now been received. It is also proposed to repay around 490 million of gross debt utilizing a combination of cash from existing resources and new equity funding from Nomad Foods Limited. These events are expected to deliver lower interest costs due to the reduction in both gross debt and interest rates.
Bank refinancing and issuance of corporate bonds
On July 17, 2014, the Iglo Group completed a refinancing of its Senior debt with a syndicate of banks. All Senior debt as at the balance sheet date was repaid and replaced with new Senior Euro debt of 620 million and Senior GBP debt of £400 million which are repayable on June 30, 2020. In addition to this, 500 million has been raised through the issuance of a floating rate bond issue on the Luxembourg Stock Exchange, with a repayment date of June 15, 2020. Both the new Senior debt and the bond issue are secured with equal ranking against certain assets of the Iglo Group.
Eligible transaction costs of 12.5 million have been capitalized as part of the refinancing and will be amortized over the life of the debt.
In addition to this, the existing multicurrency revolving credit facility was replaced with a new 80.0 million facility. This facility is available until December 31, 2019. As at March 31, 2015 4.3 million has been utilized for letters of credit, overdrafts, customer bonds and bank guarantees against the revolving credit facility.
The Syndicate members have security over the assets of the guarantor group. The guarantor group consists of those companies which individually have more than 5% of consolidated gross assets or EBITDA of the Iglo Group and in total comprise more than 80% of consolidated gross assets or EBITDA at any testing date.
8. | Provisions |
m | ||||
Balance at January 1, 2015 |
55.2 | |||
Additional provision in the period |
22.2 | |||
Utilization of provision |
(1.9 | ) | ||
|
|
|||
Balance at March 31, 2015 |
75.5 | |||
|
|
Of the total provision balance at March 31, 2015, 51.8 million (December 2014: 15.5 million) relates to certain incentive schemes that management participate in. 21.6 million (December 2014: 3.9 million) has been charged to the Income Statement during the period relating to these incentive schemes and associated costs. Management expect that this provision will be utilized in 2015.
10.9 million (December 2014: 3.5 million) relates to committed plans for certain operational restructuring activities which are due to be completed within the next 12 months. The amounts have been provided based on information available on the likely expenditure required to complete the committed plans.
F-102
Iglo Foods Holdings LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Information
7.2 million (December 2014: 7.2 million) relates to our Italian operations for potential obligations under Italian law for three principal items: a legal case involving disputed overtime entitlement, obligations potentially payable to agents of Iglo and a provision for the scrapping of freezer cabinets.
3.9 million relates to tax matters from previous accounting years.
9. | Employee benefits |
The Iglo Group operates defined benefit pension plans in Germany, Italy and Austria as well as various contribution plans in other countries. The defined benefit pension plans are partially funded in Germany and Austria and unfunded in Italy. In addition, an unfunded post-retirement medical plan is operated in Austria. In Germany and Italy long term service awards are in operation and various other countries provide other employee benefits. There were no changes in the nature of any schemes in the period to March 31, 2015.
m | ||||
Net retirement benefit obligation-January 1, 2015 |
124.2 | |||
Service cost |
1.0 | |||
Net interest expense |
0.6 | |||
Contributions by employer |
(1.3 | ) | ||
Actuarial loss on pension scheme valuations |
21.3 | |||
|
|
|||
Net retirement benefit obligation-March 31, 2015 |
145.8 | |||
|
|
|||
Net retirement benefit obligation-January 1, 2014 |
70.9 | |||
Service cost |
0.7 | |||
Net interest expense |
0.6 | |||
Contributions by employer |
(1.0 | ) | ||
Actuarial loss on pension scheme valuations |
9.1 | |||
|
|
|||
Net retirement benefit obligation-March 31, 2014 |
80.3 | |||
|
|
The principal assumptions applied for the valuation at March 31, 2015 were the same as those applied at December 31, 2014, except for the German plans which are the most significant in terms of plan assets and liabilities in the Iglo Group. The German plans assets were updated to reflect market values at March 31, 2015 and the discount rate applied to the German defined benefits obligations decreased from 2.0% to 1.45%. In the comparative period, the German plans assets were also updated for movements since December 31, 2013 to reflect market values at March 31, 2014 and the discount rate applied to the German defined benefits obligations at this time decreased from 3.9% to 3.5%.
10. | Exceptional items |
Exceptional items are made up as follows:
3 months ended 31 March | ||||||||
2014
m |
2015
m |
|||||||
Costs related to long-term management incentive plans |
3.1 | 20.1 | ||||||
Cisterna fire net costs |
| 0.7 | ||||||
Net investigation of strategic opportunities and other costs |
| (0.2 | ) | |||||
Other restructuring costs |
0.6 | | ||||||
|
|
|
|
|||||
Total exceptional items |
3.7 | 20.6 | ||||||
|
|
|
|
F-103
Iglo Foods Holdings LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Information
The Iglo Group incurred charges of 20.1 million (2014: 3.1 million) related to management incentive schemes. The majority of these costs have been accrued during the period, but are not due for payment until the associated performance conditions are met. On April 20, 2015, Nomad Foods Limited entered into a definitive agreement to acquire the Iglo Group, subject to customary closing conditions. The completion of the sale would be considered as a triggering event under the schemes, following which management expect that the provision will be used for cash payments in 2015. As a result of this announcement, management have accelerated the vesting period over which these costs are being accrued.
0.7 million has been charged for ongoing incremental operational costs incurred as a result of a fire in August 2014 in the Iglo Groups Italian production facility which produces Findus branded stock for sale in Italy. The Iglo Group has insurance policies in place covering the stock, property and loss of earnings for which claims are currently in process. The proceeds of these claims cannot be recognized until the recoverable amount is judged to be virtually certain.
A credit of 0.2 million has been recognized in Q1 2015 primarily relating to the ongoing costs incurred as a result of the Iglo Groups decision to cease marketing its products in Romania, Slovakia and Turkey. The costs for the quarter are 0.3 million which has been offset by income of 0.5 million from assets previously deemed to be irrecoverable.
The tax impact on the exceptional items amounts to 4.0 million (2014: nil).
11. | Finance income and costs |
3 months ended | ||||||||
March 31,
2014 m |
March 31,
2015 m |
|||||||
Interest income |
0.5 | 0.4 | ||||||
|
|
|
|
|||||
Finance income |
0.5 | 0.4 | ||||||
|
|
|
|
|||||
Capitalized interest |
(31.1 | ) | (36.5 | ) | ||||
Cash pay interest expense |
(24.5 | ) | (20.0 | ) | ||||
Interest on defined benefit pension plan obligation |
(0.6 | ) | (0.6 | ) | ||||
Amortization of borrowing costs |
(3.3 | ) | (0.5 | ) | ||||
Net foreign exchange arising on retranslation of financial assets and liabilities |
(1.1 | ) | (12.1 | ) | ||||
|
|
|
|
|||||
Finance costs |
(60.6 | ) | (69.7 | ) | ||||
|
|
|
|
|||||
Net finance costs |
(60.1 | ) | (69.3 | ) | ||||
|
|
|
|
12. | Taxation |
Income tax expense for the 3 month period to March 31, 2015 and March 31, 2014 is recognized based on managements estimate of the weighted average annual income tax rate expected for the full financial period.
The Iglo Group recognized a tax credit of 7.5 million in Q1 2015 (2014: charge of 17.3 million). The year on year movement is mainly due to deferred tax adjustments where, in Q1 2014, the charge included 7.8 million for the impairment of deferred tax assets. This was as a result of matters under discussion with local tax authorities which concluded in Q1 2015, following which it was assessed that the impairment should be reversed in full, leading to a 7.8 million credit in Q1 2015. In addition, previously unrecognized deferred tax assets were deemed to be recoverable which led to an additional tax credit of 8.3 million.
F-104
Iglo Foods Holdings LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Information
The Iglo Group operates in many different jurisdictions and, in some of these, certain matters are under discussion with local tax authorities. These discussions are often complex and can take many years to resolve. Accruals for tax contingencies require management to make estimates and judgments with respect to the ultimate outcome of a tax audit, and actual results could vary from these estimates. Where tax exposures can be quantified, a provision is made based on best estimates and managements judgments. Given the inherent uncertainties in assessing the outcomes of these exposures (which can sometimes be binary in nature), we could in future periods experience adjustments to this provision.
Management believes that the Iglo Groups position on all open matters including those in current discussion with local tax authorities is robust and that the Iglo Group is appropriately provided.
Through the enactment of the Finance Act 2013 the standard rate of corporation tax in the UK changed to 21% with effect from April 1, 2014, and reduced by a further 1% to 20% from April 1, 2015. These rates are reflected in these unaudited condensed consolidated interim financial statements.
13. | Contingent liabilities |
The Iglo Group is currently in discussions with the tax authorities in one of its markets regarding the treatment of the acquisition of the Iglo Group in 2006 by the previous owners. Under the original sale and purchase agreement the Iglo Group has an indemnity in respect of this tax issue.
14. | Related parties |
The Iglo Group is controlled by the Permira Partnership which owns 100% of the share capital of the Company.
In 2006, Iglo Foods Holdco Limited, a subsidiary of Iglo, issued 17% fixed rate subordinated unsecured Class A, B and C Loan Notes of 1 each to the Partnership. From January 1, 2013, the interest rate on these shareholder loan notes was reduced to 11%.
In 2010, as part of the funding for the acquisition of CSI, Iglo Foods Holdco Limited issued 15% fixed rate subordinated unsecured Class G Loan Notes of 1 each to the Permira Partnership. From January 1, 2013, the interest rate on these shareholder loan notes was reduced to 11%.
In 2013, Iglo Foods Holdco Limited, a subsidiary of the Company, issued 11% fixed rate subordinated unsecured Class K Loan Notes of 1 each to the Permira Partnership.
15. | Segment reporting |
The Chief Operating Decision Maker (CODM) has been determined to be the Executive Committee as they are primarily responsible for the allocation of resources to the segments and the assessment of performance of the segments.
The Iglo Groups operations are primarily organized into brands ( Birds Eye in the United Kingdom & Ireland, Iglo in Germany and Continental Europe and Findus in Italy and San Marino) with each brand headed by a managing director. Other business units, comprising factories, private label and corporate overheads, make up the rest of the Iglo Groups operations included in the information presented to the CODM. The primary organization and management of business activities into brands has been used to identify and determine the Iglo Groups operating segments as reported to the CODM.
F-105
Iglo Foods Holdings LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Information
The CODM uses revenue and earnings before taxation, depreciation, amortization, exceptional items and net financing costs (Adjusted EBITDA) as the key measure of the segments results. Revenue is presented to the CODM using budgeted currency exchange rates as shown below. Adjusted EBITDA is presented to the CODM at actual exchange rates.
3 months ended March, 31 | ||||||||
Segment external revenue |
2014
m |
2015
m |
||||||
Birds Eye (at budgeted currency) |
135.5 | 129.2 | ||||||
Iglo |
144.9 | 143.1 | ||||||
Findus Italy |
121.2 | 113.2 | ||||||
Other |
9.3 | 8.1 | ||||||
|
|
|
|
|||||
Total segment revenue |
410.9 | 393.6 | ||||||
Foreign exchange impact of Birds Eye revenue |
(9.2 | ) | 3.9 | |||||
|
|
|
|
|||||
Total external revenue |
401.7 | 397.5 | ||||||
|
|
|
|
|||||
Birds Eye (at actual currency)* |
126.3 | 133.1 | ||||||
|
|
|
|
* | Birds Eyes results have been translated by using a management budget rate of 1.30 to £1. |
The CODM is not provided with information about inter-segment revenues.
3 months ended March, 31 | ||||||||||||
Segment Adjusted EBITDA |
Note |
2014
m |
2015
m |
|||||||||
Birds Eye |
29.9 | 32.6 | ||||||||||
Iglo |
28.7 | 35.1 | ||||||||||
Findus Italy |
26.9 | 30.5 | ||||||||||
Other |
(11.6 | ) | (15.0 | ) | ||||||||
|
|
|
|
|||||||||
Total segment Adjusted EBITDA |
73.9 | 83.2 | ||||||||||
|
|
|
|
|||||||||
Exceptional items |
10 | (3.7 | ) | (20.6 | ) | |||||||
Depreciation |
6 | (5.9 | ) | (6.3 | ) | |||||||
Amortization |
5 | (1.2 | ) | (0.7 | ) | |||||||
|
|
|
|
|||||||||
Operating profit |
63.1 | 55.6 | ||||||||||
Net Financing costs |
11 | (60.1 | ) | (69.3 | ) | |||||||
|
|
|
|
|||||||||
Profit/(loss) before tax |
3.0 | (13.7 | ) | |||||||||
|
|
|
|
No information on segment assets or liabilities is presented to the CODM.
Products information
Management considers the products it sells belong to one category, being frozen foods.
Geographical information
3 months ended
March, 31 |
||||||||
External revenue by geography |
2014
m |
2015
m |
||||||
United Kingdom |
121.4 | 127.2 | ||||||
Germany |
82.9 | 82.0 | ||||||
Italy |
121.2 | 113.2 | ||||||
Rest of Europe |
76.2 | 75.1 | ||||||
|
|
|
|
|||||
Total external revenue by geography |
401.7 | 397.5 | ||||||
|
|
|
|
F-106
Iglo Foods Holdings LimitedNotes to the Unaudited Condensed Consolidated Interim Financial Information
Non-current assets by geography |
December 31,
2014 m |
March 31,
2015 m |
||||||
United Kingdom |
780.6 | 850.8 | ||||||
Germany |
464.6 | 474.5 | ||||||
Italy |
854.3 | 853.0 | ||||||
Rest of Europe |
371.8 | 340.0 | ||||||
|
|
|
|
|||||
Total non-current assets by geography |
2,471.3 | 2,518.3 | ||||||
|
|
|
|
Non-current assets exclude deferred tax assets.
16. | Post balance sheet events |
On April 20, 2015, Nomad Foods Limited entered into a definitive agreement to acquire the Iglo Group for 2.6 billion, subject to customary closing conditions. Nomad Foods Limited is registered in the British Virgin Islands which upon completion would become the ultimate controlling party of the Iglo Group.
On June 1, 2015 the entire issued share capital of Iglo was acquired by Nomad Foods Limited (the Transaction). The ultimate controlling party prior to the Transaction was the Permira Partnership, a partnership registered in Guernsey.
On June 1, 2015, as part of Nomad Foods Limiteds acquisition of the Iglo Group, the Iglo Group completed an amendment and restatement to the terms of its Senior Facilities Agreement. As part of this amendment and restatement, the Iglo Group has prepaid approximately 490 million of gross debt utilizing a combination of cash from existing resources and a portion of consideration from Nomad Foods Limited which was on-lent and contributed down to Iglo Foods Midco Limited. This amendment is expected to deliver lower interest costs due to the reduction in both gross debt and interest rates.
F-107
Iglo Foods Holdings LimitedUnaudited Condensed Consolidated Interim Income Statement
for the two and five months ended May 31, 2015 and the three and six months ended June 30, 2014
3 months
ended June 30, 2014 |
2 months
ended May 31, 2015 |
6 months
ended June 30, 2014 |
5 months
ended May 31, 2015 |
|||||||||||||||||
Note | m | m | m | m | ||||||||||||||||
Revenue |
359.5 | 242.8 | 761.2 | 640.3 | ||||||||||||||||
Cost of sales |
(231.6 | ) | (159.4 | ) | (496.7 | ) | (417.9 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
127.9 | 83.4 | 264.5 | 222.4 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Other operating expenses |
(64.5 | ) | (46.7 | ) | (134.3 | ) | (109.5 | ) | ||||||||||||
Exceptional items |
5 | (7.7 | ) | (63.7 | ) | (11.4 | ) | (84.3 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Operating profit/(loss) |
55.7 | (27.0 | ) | 118.8 | 28.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Finance income |
6 | 2.9 | 1.6 | 3.4 | 2.0 | |||||||||||||||
Finance costs |
6 | (76.8 | ) | (48.0 | ) | (137.4 | ) | (117.7 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net finance costs |
(73.9 | ) | (46.4 | ) | (134.0 | ) | (115.7 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss before tax |
(18.2 | ) | (73.4 | ) | (15.2 | ) | (87.1 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Taxation |
7 | (8.0 | ) | (48.4 | ) | (25.3 | ) | (40.9 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss for the period |
(26.2 | ) | (121.8 | ) | (40.5 | ) | (128.0 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Attributable to: |
||||||||||||||||||||
Owners of the Parent Company |
(26.2 | ) | (121.8 | ) | (40.5 | ) | (128.0 | ) | ||||||||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated stub financial statements.
F-108
Iglo Foods Holdings LimitedUnaudited Condensed Consolidated Interim Statement of Comprehensive Income for the two and five months ended May 31, 2015 and the three and six months ended June 30, 2014
3 months
ended June 30, 2014 m |
2 months
ended May 31, 2015 m |
6 months
ended June 30, 2014 m |
5 months
ended May 31, 2015 m |
|||||||||||||
Loss for the period |
(26.2 | ) | (121.8 | ) | (40.5 | ) | (128.0 | ) | ||||||||
Other comprehensive income/(loss): |
||||||||||||||||
Actuarial gains/(losses) on defined benefit pension plans |
| 18.8 | (9.1 | ) | (2.5 | ) | ||||||||||
Taxation (charge)/credit on measurement of defined benefit pension plans |
| (5.9 | ) | 2.7 | 0.7 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Items not reclassified to the Income Statement |
| 12.9 | (6.4 | ) | (1.8 | ) | ||||||||||
Gain on hedge of net investment in foreign subsidiary |
11.6 | 14.1 | 11.5 | 44.7 | ||||||||||||
Effective portion of changes in fair value of cash flow hedges |
7.6 | (5.9 | ) | 6.5 | | |||||||||||
Taxation (charge)/credit relating to components of other comprehensive income |
(5.3 | ) | 2.1 | (5.1 | ) | | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Items that may be subsequently reclassified to the Income Statement |
13.9 | 10.3 | 12.9 | 44.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income for the period, net of tax |
13.9 | 23.2 | 6.5 | 42.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive loss for the period |
(12.3 | ) | (98.6 | ) | (34.0 | ) | (85.1 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Attributable to: |
||||||||||||||||
Owners of the Parent Company |
(12.3 | ) | (98.6 | ) | (34.0 | ) | (85.1 | ) | ||||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated stub financial statements.
F-109
Iglo Foods Holdings LimitedUnaudited Condensed Consolidated Interim Statement of Changes in Equity for the five months ended May 31, 2015 and six months ended June 30, 2014
Share
capital m |
Capital
reserve m |
Translation
reserve m |
Cash flow
hedge reserve m |
Accumulated
deficit m |
Total
deficit m |
|||||||||||||||||||
Balance at January 1, 2015 |
0.1 | 3.6 | (16.0 | ) | 4.9 | (650.1 | ) | (657.5 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss for the period |
| | | | (128.0 | ) | (128.0 | ) | ||||||||||||||||
Other comprehensive income/(loss) for the period |
| | 44.7 | | (1.8 | ) | 42.9 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income/(loss) for the period |
| | 44.7 | | (129.8 | ) | (85.1 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Capital contribution |
| 253.2 | | | | 253.2 | ||||||||||||||||||
Share based payment charge |
| 3.2 | | | | 3.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total transactions with owners, recognized directly in equity |
| 256.4 | | | | 256.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at May 31, 2015 |
0.1 | 260.0 | 28.7 | 4.9 | (779.9 | ) | (486.2 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at January 1, 2014 |
0.1 | 1.9 | (43.6 | ) | (4.6 | ) | (504.2 | ) | (550.4 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss for the period |
| | | | (40.5 | ) | (40.5 | ) | ||||||||||||||||
Other comprehensive income/(loss) for the period |
| | 15.1 | (3.2 | ) | (5.4 | ) | 6.5 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income/(loss) for the period |
| | 15.1 | (3.2 | ) | (45.9 | ) | (34.0 | ) | |||||||||||||||
Share based payment charge |
| 0.8 | | | | 0.8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total transactions with owners, recognized directly in equity |
| 0.8 | | | | 0.8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2014 |
0.1 | 2.7 | (28.5 | ) | (7.8 | ) | (550.1 | ) | (583.6 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated stub financial statements.
F-110
Iglo Foods Holdings LimitedUnaudited Condensed Consolidated Interim Statements of Cash Flows
for the two and five months ended May 31, 2015 and the three and six months ended June 30, 2014
Note |
3 months
ended June 30, 2014 m |
2 months
ended May 31, 2015 m |
6 months
ended June 30, 2014 m |
5 months
ended May 31, 2015 m |
||||||||||||||||
Cash flows from operating activities |
||||||||||||||||||||
Loss for the period |
(26.2 | ) | (121.8 | ) | (40.5 | ) | (128.0 | ) | ||||||||||||
Adjustments for: |
||||||||||||||||||||
Exceptional items |
5 | 7.7 | 63.7 | 11.4 | 84.3 | |||||||||||||||
Depreciation and amortization |
7.3 | 5.5 | 14.4 | 12.5 | ||||||||||||||||
Finance costs |
6 | 76.8 | 48.0 | 137.4 | 117.7 | |||||||||||||||
Finance income |
6 | (2.9 | ) | (1.6 | ) | (3.4 | ) | (2.0 | ) | |||||||||||
Taxation |
7 | 8.0 | 48.4 | 25.3 | 40.9 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Operating cash flow before changes in working capital and provisions |
70.7 | 42.2 | 144.6 | 125.4 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Decrease in inventories |
5.9 | 2.8 | 33.4 | 28.3 | ||||||||||||||||
Decrease/(increase) in trade and other receivables |
39.9 | 7.9 | (1.1 | ) | (8.5 | ) | ||||||||||||||
Increase/(decrease) in trade and other payables |
3.9 | (23.8 | ) | (23.6 | ) | (41.0 | ) | |||||||||||||
Decrease in employee benefits and other provisions |
(0.4 | ) | (0.8 | ) | (0.8 | ) | (2.0 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Cash generated from operations before tax and exceptional items |
120.0 | 28.3 | 152.5 | 102.2 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Cash flows relating to exceptional items |
(3.6 | ) | (3.7 | ) | (8.9 | ) | (6.2 | ) | ||||||||||||
Tax paid |
(3.6 | ) | (15.3 | ) | (6.4 | ) | (17.3 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net cash from operating activities |
112.8 | 9.3 | 137.2 | 78.7 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Cash flows from investing activities |
||||||||||||||||||||
Purchase of property, plant and equipment |
(3.1 | ) | (3.4 | ) | (5.6 | ) | (6.0 | ) | ||||||||||||
Purchase of intangibles |
(0.4 | ) | (0.2 | ) | (0.4 | ) | (0.3 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net cash used in investing activities |
(3.5 | ) | (3.6 | ) | (6.0 | ) | (6.3 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Cash flows from financing activities |
||||||||||||||||||||
Repayment of loan principal |
(129.2 | ) | | (129.2 | ) | | ||||||||||||||
Payment of financing fees |
| | (0.5 | ) | | |||||||||||||||
Payment for interest rate cap premiums |
| | (3.0 | ) | | |||||||||||||||
Interest paid |
(27.5 | ) | (11.4 | ) | (52.9 | ) | (31.4 | ) | ||||||||||||
Interest received |
2.9 | 1.6 | 3.4 | 2.0 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net cash used in financing activities |
(153.8 | ) | (9.8 | ) | (182.2 | ) | (29.4 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net (decrease)/increase in cash and cash equivalents |
(44.5 | ) | (4.1 | ) | (51.0 | ) | 43.0 | |||||||||||||
Cash and cash equivalents at April 1 or January 1 |
311.2 | 269.7 | 317.1 | 219.2 | ||||||||||||||||
Effect of exchange rate fluctuations |
1.4 | 2.8 | 2.0 | 6.2 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Cash and cash equivalents at end of period |
268.1 | 268.4 | 268.1 | 268.4 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Cash and cash equivalents per above: |
||||||||||||||||||||
Cash and cash equivalents at period end |
809.0 | 894.5 | 809.0 | 894.5 | ||||||||||||||||
Bank overdrafts |
(540.9 | ) | (626.1 | ) | (540.9 | ) | (626.1 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
268.1 | 268.4 | 268.1 | 268.4 | |||||||||||||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated stub financial statements.
F-111
Iglo Foods Holdings Limited Notes to the Unaudited Condensed Consolidated Interim Financial Information
1. | General information |
Iglo Foods Holdings Limited (Iglo) is a company domiciled in the United Kingdom and incorporated in the United Kingdom under the Companies Act 2006.
These unaudited condensed consolidated interim financial statements were approved for issuance by the Board of Directors on September 4, 2015.
2. | Basis of preparation |
These unaudited condensed consolidated interim financial statements consolidate Iglo and the subsidiaries it controls (together referred to as the Iglo Group).
On June 1, 2015 Nomad Foods Limited acquired the Iglo Group. These unaudited condensed consolidated interim financial statements for the two and five months ended May 31, 2015 are presented to provide continuous information of the predecessors pre-acquisition results up to the date of acquisition of the Iglo Group by Nomad Foods Limited.
These unaudited condensed consolidated stub financial statements should be read in conjunction with the annual financial statements for the period ended December 31, 2014, which have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (IFRSs) and IFRS Interpretations as applicable to companies reporting under IFRS. These unaudited condensed consolidated stub financial statements have been prepared to present selected primary financial statements for the two and five months ended May 31, 2015, and selected corresponding footnotes.
There are no new accounting standards which have a material impact on these unaudited condensed consolidated interim financial statements.
3. | Going concern |
The Directors have made an assessment and have satisfied themselves of the Iglo Groups ability to continue as a going concern based on current cash flow projections and current financing.
The Directors have a reasonable expectation that the Iglo Group has adequate resources to continue in operational existence for at least twelve months from the date of this report. Thus they continue to adopt the going concern basis of accounting in preparing the unaudited condensed consolidated stub financial statements.
4. | Accounting policies |
The accounting policies adopted are consistent with those as of December 31, 2014, the previous financial period, except taxes on income which are accrued using the estimated underlying tax rate that is expected to apply for the period as adjusted for material non-underlying items arising in the interim periods.
Accounting estimates
The preparation of financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
F-112
Iglo Foods Holdings Limited Notes to the Unaudited Condensed Consolidated Interim Financial Information
The significant judgments made by management in applying the Iglo Groups accounting policies and the key sources of estimation uncertainty were the same as those applied in the consolidated financial statements for the year ended December 31, 2014. In preparing the unaudited condensed consolidated stub financial statements, the key sources of estimation uncertainty for the interim period ended May 31, 2015 were:
a) Carrying value of goodwill and brands
Determining whether goodwill and brands are impaired requires an estimation of the value in use of the cash generating units to which goodwill and brands have been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from each cash generating unit and a suitable discount rate in order to calculate present value. A detailed impairment review is performed annually. In line with IAS 34 Interim Financial Reporting, management have reviewed the assets for indicators of significant impairment since the end of the most recent financial period. A detailed review is only performed where such indicators are identified. The outcome of this review is detailed in Note 5.
b) Fair value of derivative financial instruments
The Iglo Group holds derivative financial instruments at May 31, 2015 and December 31, 2014.
Management has estimated the fair value of these instruments by using valuations based on discounted cash flow calculations.
c) Employee benefit obligation
Actuarial valuations of the defined benefit pensions are performed by qualified actuaries for the Iglo Groups year end close on December 31. The principal assumptions applied for the valuation at May 31, 2015 were the same as those applied at December 31, 2014, except for the German plans which are the most significant in terms of plan assets and liabilities in the Iglo Group.
d) Share based payments
The grant-date fair value of equity-settled share based payment awards granted to employees is recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.
e) Discounts
Discounts given by the Iglo Group include rebates, price reductions and incentives given to customers, promotional couponing and trade communication costs. At each quarter end date any discount incurred but not yet invoiced is estimated, based on historical trends and rebate contracts with customers, and accrued.
f) Income tax
The income tax expense and the provision for income taxes for the two and five months periods ended May 31, 2015 and three and six months periods ended June 30, 2014 have been determined based on an estimate of the weighted average annual income tax rate expected to apply for the full financial period.
Where tax exposures can be quantified, an accrual is made based on best estimates and managements judgments. Given the inherent uncertainties in assessing the outcomes of these exposures (which can sometimes be binary in nature), Iglo Group could in future periods experience adjustments to these accruals.
F-113
Iglo Foods Holdings Limited Notes to the Unaudited Condensed Consolidated Interim Financial Information
g) Capital contribution
As a pre-requisite to the sale and prior to May 31, 2015, Birds Eye Iglo Limited Partnership Inc (the Permira Partnership) completed a debt for equity swap of 253.2 million of the outstanding 11% subordinated unsecured Loan Notes principal and accrued interest.
5. | Exceptional items |
Exceptional items are made up as follows:
3 months
ended June 30, 2014 m |
2 months
ended May 31, 2015 m |
6 months
ended June 30, 2014 m |
5 months
ended May 31, 2015 m |
|||||||||||||
Adjustment to carrying value of intangible assets (1) |
| 55.0 | | 55.0 | ||||||||||||
Cost related to long-term management incentive plans (2) |
4.0 | 2.8 | 7.1 | 22.9 | ||||||||||||
Cisterna fire net costs (3) |
| 0.6 | | 1.3 | ||||||||||||
Net investigation of strategic opportunities and other costs (4) |
3.2 | 1.5 | 3.2 | 1.3 | ||||||||||||
Other restructuring costs (5) |
0.5 | | 1.1 | | ||||||||||||
Costs related to transactions (6) |
| 3.8 | | 3.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total exceptional items |
7.7 | 63.7 | 11.4 | 84.3 | ||||||||||||
|
|
|
|
|
|
|
|
(1) | A fair value exercise has been performed as part of the sale of the Iglo Group to Nomad Foods Limited on June 1, 2015. While this exercise has not indicated that the overall value of the business is impaired, it has indicated that the recoverable amount of the Italian intangible assets are lower than the values previously carried in the Iglo Groups accounts. The Iglo Group has therefore adjusted the carrying values, and an impairment charge of 55.0 million was recognized in the two and five months ended May 31, 2015. |
(2) | For the two and five months ended May 31, 2015 the Group incurred charges of 2.8 million and 22.9 million, respectively, (three and six months June 30, 2014: 4.0 million and 7.1 million) related to long-term management incentive schemes. |
On June 1, 2015 the Iglo Group was sold to Nomad Foods Limited. The completion of the sale was a triggering event under the cash settled schemes. The charge of 19.7 million represents an acceleration of the charge to align the cumulative charges recognized to the amount that was paid in June 2015. In addition, as a result of the terms of the sale, vesting of the equity settled share based payment scheme was accelerated. The non cash charge of 3.2 million reflects the vesting of non-forfeited interests in this scheme. There were no associated exercises made in relation to the scheme due to the fact that market performance conditions were not met.
(3) | For the two and five months ended May 31, 2015 the Iglo Group incurred charges of 0.6 million and 1.3 million, respectively, for ongoing incremental operational costs incurred as a result of a fire in August 2014 in the Iglo Groups Italian production facility which produces Findus branded inventory for sale in Italy. The Iglo Group has insurance policies in place covering the stock, property and loss of earnings for which claims are currently in process. The proceeds of these claims cannot be recognized until the recoverable amount is judged to be virtually certain. |
(4) | For the two and five months ended May 31, 2015 the Iglo Group incurred charges of 1.5 million and 1.3 million, respectively, (three and six months June 30, 2014: 3.2 million) in relation to the ongoing strategic review of the Groups operations. |
(5) | Restructuring expenses primarily relate to the restructuring in Germany in 2014. |
(6) | For the two and five months ended May 31, 2015 the Iglo Group incurred a charge of 3.8 million in relation to acquisition and sale transactions. |
F-114
Iglo Foods Holdings Limited Notes to the Unaudited Condensed Consolidated Interim Financial Information
6. | Finance income and costs |
3 months
ended June 30, 2014 m |
2 months
ended May 31, 2015 m |
6 months
ended June 30, 2014 m |
5 months
ended May 31, 2015 m |
|||||||||||||
Interest income |
2.9 | 1.6 | 3.4 | 2.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Finance income |
2.9 | 1.6 | 3.4 | 2.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Capitalized interest |
(33.1 | ) | (23.7 | ) | (64.2 | ) | (60.2 | ) | ||||||||
Cash pay interest expense |
(27.9 | ) | (15.4 | ) | (52.4 | ) | (35.4 | ) | ||||||||
Interest on defined benefit pension plan obligation |
(0.6 | ) | (0.1 | ) | (1.2 | ) | (0.7 | ) | ||||||||
Amortization of borrowing costs |
(3.2 | ) | (0.4 | ) | (6.5 | ) | (0.9 | ) | ||||||||
Net foreign exchange arising on retranslation of financial assets and liabilities |
(8.6 | ) | (8.4 | ) | (9.7 | ) | (20.5 | ) | ||||||||
Finance costs incurred in amendment of debt |
(3.4 | ) | | (3.4 | ) | | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Finance costs |
(76.8 | ) | (48.0 | ) | (137.4 | ) | (117.7 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net finance costs |
(73.9 | ) | (46.4 | ) | (134.0 | ) | (115.7 | ) | ||||||||
|
|
|
|
|
|
|
|
7. | Taxation |
Income tax expense for the periods presented above is recognized based on managements estimate of the weighted average annual income tax rate expected for the full financial period.
The Iglo Group operates in many different jurisdictions and, in some of these, certain matters are under discussion with local tax authorities. These discussions are often complex and can take many years to resolve. Accruals for tax contingencies require management to make estimates and judgments with respect to the ultimate outcome of a tax audit, and actual results could vary from these estimates. Where tax exposures can be quantified, a provision is made based on best estimates and managements judgments. Given the inherent uncertainties in assessing the outcomes of these exposures (which can sometimes be binary in nature), we could in future periods experience adjustments to this provision.
Management believes that the Iglo Groups position on all open matters including those in current discussion with local tax authorities is robust and that the Iglo Group is appropriately provided.
Through the enactment of the Finance Act 2013 the standard rate of corporation tax in the UK changed to 21% with effect from April 1, 2014, and reduced by a further 1% to 20% from April 1, 2015. These rates are reflected in these unaudited condensed consolidated interim financial statements. A further reduction of corporation tax in the UK to 19% from April 1, 2017 and 18% from April 1, 2020 has been announced but has not yet been substantively enacted. As such, this change has not been reflected in this financial information.
8. | Contingent liabilities |
The Iglo Group is currently in discussions with the tax authorities in one of its markets regarding the treatment of the 2006 acquisition of the Iglo Group. Under the original Sale and Purchase Agreement the Iglo Group has an indemnity in respect of this tax issue.
9. | Segment reporting |
The Chief Operating Decision Maker (CODM) has been determined to be the Executive Committee as they are primarily responsible for the allocation of resources to the segments and the assessment of performance of the segments.
F-115
Iglo Foods Holdings Limited Notes to the Unaudited Condensed Consolidated Interim Financial Information
The Iglo Groups operations are primarily organized into brands (Birds Eye-the UK & Ireland, Iglo-Continental Europe; Findus-Italy) with each brand headed by a managing director. Other business units, comprising factories, private label and corporate overheads, make up the rest of the Iglo Groups operations included in the information presented to the CODM. The primary organization and management of business activities into brands has been used to identify and determine the Iglo Groups operating segments as reported to the CODM.
The CODM uses revenue and earnings before taxation, depreciation, amortization, exceptional items and net financing costs (Adjusted EBITDA) as the key measure of the segments results. Revenue is presented to the CODM using budgeted currency exchange rates as shown below. Adjusted EBITDA is presented to the CODM at actual exchange rates.
3 months
ended June 30, 2014 m |
2 months
ended May 31, 2015 m |
6 months
ended June 30, 2014 m |
5 months
ended May 31, 2015 m |
|||||||||||||
Segment external revenue |
||||||||||||||||
Birds Eye (at budgeted currency) |
142.6 | 95.8 | 278.1 | 225.0 | ||||||||||||
Iglo |
121.0 | 79.4 | 265.9 | 222.5 | ||||||||||||
Findus Italy |
95.7 | 56.5 | 216.9 | 169.7 | ||||||||||||
Other |
8.2 | 5.2 | 17.5 | 13.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total segment revenue |
367.5 | 236.9 | 778.4 | 630.5 | ||||||||||||
Foreign exchange impact of Birds Eye revenue |
(8.0 | ) | 5.9 | (17.2 | ) | 9.8 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total external revenue |
359.5 | 242.8 | 761.2 | 640.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Birds Eye (at actual currency) * |
134.6 | 101.7 | 260.9 | 234.8 | ||||||||||||
|
|
|
|
|
|
|
|
* | Birds Eyes results have been translated by using a management budget rate of 1.30 to £1. |
The CODM is not provided with information about inter-segment revenues.
Note |
3 months
ended June 30, 2014 m |
2 months
ended May 31, 2015 m |
6 months
ended June 30, 2014 m |
5 months
ended May 31, 2015 m |
||||||||||||||||
Segment Adjusted EBITDA |
||||||||||||||||||||
Birds Eye |
33.1 | 25.4 | 63.0 | 58.0 | ||||||||||||||||
Iglo |
21.1 | 15.5 | 49.8 | 50.6 | ||||||||||||||||
Findus Italy |
23.8 | 12.3 | 50.7 | 42.8 | ||||||||||||||||
Other |
(7.3 | ) | (11.0 | ) | (18.9 | ) | (26.0 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total segment Adjusted EBITDA |
70.7 | 42.2 | 144.6 | 125.4 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Exceptional items |
5 | (7.7 | ) | (63.7 | ) | (11.4 | ) | (84.3 | ) | |||||||||||
Depreciation |
(6.1 | ) | (5.0 | ) | (12.0 | ) | (11.3 | ) | ||||||||||||
Amortization |
(1.2 | ) | (0.5 | ) | (2.4 | ) | (1.2 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Operating profit/(loss) |
55.7 | (27.0 | ) | 118.8 | 28.6 | |||||||||||||||
Net financing costs |
(73.9 | ) | (46.4 | ) | (134.0 | ) | (115.7 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss before tax |
(18.2 | ) | (73.4 | ) | (15.2 | ) | (87.1 | ) | ||||||||||||
|
|
|
|
|
|
|
|
No information on segment assets or liabilities is presented to the CODM.
F-116
Iglo Foods Holdings Limited Notes to the Unaudited Condensed Consolidated Interim Financial Information
Products information
Management considers the products it sells belong to one category, being frozen foods.
10. | Post balance sheet events |
On June 1, 2015 the entire issued share capital of Iglo was acquired by Nomad Foods Limited (the Transaction). The ultimate controlling party prior to the Transaction was the Permira Partnership, a partnership registered in Guernsey.
On June 1, 2015, as part of Nomad Foods Limiteds acquisition of the Iglo Group, the Iglo Group completed an amendment and restatement to the terms of its Senior Facilities Agreement. As part of this amendment and restatement, the Iglo Group prepaid approximately 490 million of gross debt utilizing a combination of cash from existing resources and a portion of consideration from Nomad Foods Limited which was on-lent and contributed down to Iglo Foods Midco Limited. This amendment is expected to deliver lower interest costs due to the reduction in both gross debt and interest rates.
F-117
Company registered no: 556006-4361
Independent Auditors Report
To the members of the Board of Findus Sverige AB
We have audited the accompanying consolidated carve-out financial statements of Findus Sverige AB and its subsidiaries, which comprise the consolidated carve-out statement of financial position as of 30 September 2014, 2013, 2012 and 31 December 2011 and the related consolidated carve-out statements of income, comprehensive income, cash flows, and changes in net parent investment for each of the years ended 30 September 2014 and 2013 and for the nine-month period ended 30 September 2012.
Managements Responsibility for the Consolidated Carve-out Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated carve-out financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated carve-out financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on the consolidated carve-out financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated carve-out financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated carve-out financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated carve-out financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Companys preparation and fair presentation of the consolidated carve-out financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated carve-out financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated carve-out financial statements referred to above present fairly, in all material respects, the financial position of Findus Sverige AB and its subsidiaries at 30 September 2014, 2013, 2012 and 31 December 2011, and the consolidated carve-out results of their operations and their cash flows for the years
F-118
ended 30 September 2014 and 2013 and for the nine-month period ended 30 September 2012 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
/s/ PricewaterhouseCoopers LLP
Hull, United Kingdom
8 September 2015
F-119
Consolidated Carve-out Income Statements
for the periods ended September 30, 2012, 2013 and 2014
9 month
period ended September 30, |
Year ended September 30, | |||||||||||||
Note |
2012
£m |
2013
£m |
2014
£m |
|||||||||||
Revenue |
406.8 | 558.8 | 519.6 | |||||||||||
Cost of sales |
6 | (311.1 | ) | (427.5 | ) | (399.3 | ) | |||||||
|
|
|
|
|
|
|||||||||
Gross profit |
95.7 | 131.3 | 120.3 | |||||||||||
Impairment |
6,12 | (146.1 | ) | (2.0 | ) | (3.4 | ) | |||||||
Other operating expenses |
6 | (76.0 | ) | (99.6 | ) | (80.7 | ) | |||||||
|
|
|
|
|
|
|||||||||
Operating (loss) / profit |
(126.4 | ) | 29.7 | 36.2 | ||||||||||
|
|
|
|
|
|
|||||||||
Finance income |
9 | 9.4 | 9.7 | 7.7 | ||||||||||
Finance costs |
9 | (8.7 | ) | (14.5 | ) | (25.0 | ) | |||||||
|
|
|
|
|
|
|||||||||
Net financing income / (cost) |
0.7 | (4.8 | ) | (17.3 | ) | |||||||||
|
|
|
|
|
|
|||||||||
(Loss) / profit before taxation |
(125.7 | ) | 24.9 | 18.9 | ||||||||||
|
|
|
|
|
|
|||||||||
Taxation |
10 | (8.1 | ) | (7.9 | ) | (4.0 | ) | |||||||
|
|
|
|
|
|
|||||||||
(Loss) / profit for the period |
(133.8 | ) | 17.0 | 14.9 | ||||||||||
|
|
|
|
|
|
|||||||||
Attributable to: |
||||||||||||||
|
|
|
|
|
|
|||||||||
Owners of the Parent Company |
(133.8 | ) | 17.0 | 14.9 | ||||||||||
|
|
|
|
|
|
The accompanying Notes 1 to 28 are an integral part of these consolidated carve-out financial statements.
F-120
Consolidated Carve-out Statements of Comprehensive Income
for the periods ended September 30, 2012, 2013 and 2014
9 month
period ended September 30, |
Year ended September 30, | |||||||||||||||
Note |
2012
£m |
2013
£m |
2014
£m |
|||||||||||||
(Loss) / profit for the period |
(133.8 | ) | 17.0 | 14.9 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Other comprehensive income/(loss): |
||||||||||||||||
Actuarial gains / (losses) on defined benefit pension plans |
19 | 4.2 | 2.9 | (5.5 | ) | |||||||||||
Taxation (expense) / credit on remeasurement of defined benefit pension plans |
10 | (1.1 | ) | (0.8 | ) | 1.2 | ||||||||||
|
|
|
|
|
|
|||||||||||
Items not reclassified to profit or loss |
3.1 | 2.1 | (4.3 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||
Currency translation differences |
(3.7 | ) | (10.1 | ) | (22.5 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Items that may be subsequently reclassified to profit or loss |
(3.7 | ) | (10.1 | ) | (22.5 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Other comprehensive loss for the period, net of tax |
(0.6 | ) | (8.0 | ) | (26.8 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Total comprehensive (loss) / income for the period |
(134.4 | ) | 9.0 | (11.9 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||
Attributable to: |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Owners of the Parent Company |
(134.4 | ) | 9.0 | (11.9 | ) | |||||||||||
|
|
|
|
|
|
The accompanying Notes 1 to 28 are an integral part of these consolidated carve-out financial statements.
F-121
Consolidated Carve-out Statements of Changes in Net Parent Investment for the periods ended September 30, 2012, 2013 and 2014
Total
£m |
||||
Balance at December 31, 2011 |
506.3 | |||
|
|
|||
Loss for the period |
(133.8 | ) | ||
Other comprehensive income for the period |
3.1 | |||
Translation differences |
(3.7 | ) | ||
|
|
|||
Total comprehensive loss for the period |
(134.4 | ) | ||
Net transfers to Parent |
(20.3 | ) | ||
|
|
|||
Balance at September 30, 2012 |
351.6 | |||
|
|
|||
Profit for the period |
17.0 | |||
Other comprehensive income for the period |
2.1 | |||
Translation differences |
(10.1 | ) | ||
|
|
|||
Total comprehensive income for the period |
9.0 | |||
Net transfers from Parent |
11.6 | |||
|
|
|||
Balance at September 30, 2013 |
372.2 | |||
|
|
|||
Profit for the period |
14.9 | |||
Other comprehensive loss for the period |
(4.3 | ) | ||
Translation differences |
(22.5 | ) | ||
|
|
|||
Total comprehensive loss for the period |
(11.9 | ) | ||
Net transfers to Parent |
(14.1 | ) | ||
|
|
|||
Balance at September 30, 2014 |
346.2 | |||
|
|
The accompanying Notes 1 to 28 are an integral part of these consolidated carve-out financial statements.
F-122
Consolidated Carve-out Statements of Financial Position
as of December 31, 2011, September 30, 2012, 2013 and 2014
December 31, | September 30, | |||||||||||||||||||
Note |
2011
£m |
2012
£m |
2013
£m |
2014
£m |
||||||||||||||||
Non-current assets |
||||||||||||||||||||
Intangible assets |
12 | 512.8 | 362.1 | 357.7 | 328.7 | |||||||||||||||
Property, plant and equipment |
11 | 75.7 | 79.0 | 85.3 | 79.5 | |||||||||||||||
Deferred tax assets |
13 | 15.0 | 13.9 | 12.6 | 11.9 | |||||||||||||||
Receivable from Related Party |
26 | 22.7 | 19.1 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total non-current assets |
626.2 | 474.1 | 455.6 | 420.1 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Current assets |
||||||||||||||||||||
Inventories |
14 | 80.7 | 91.2 | 83.1 | 68.3 | |||||||||||||||
Trade and other receivables |
15 | 89.1 | 91.3 | 87.0 | 84.9 | |||||||||||||||
Income tax receivable |
1.9 | 3.2 | 4.6 | 4.0 | ||||||||||||||||
Cash and cash equivalents |
16 | 183.7 | 173.7 | 114.8 | 131.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current assets |
355.4 | 359.4 | 289.5 | 289.0 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
981.6 | 833.5 | 745.1 | 709.1 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Non-current liabilities |
||||||||||||||||||||
Loans and borrowings |
17 | 42.4 | 3.0 | 18.6 | 18.0 | |||||||||||||||
Employee benefits |
19 | 56.5 | 52.9 | 50.9 | 49.1 | |||||||||||||||
Deferred tax liabilities |
13 | 2.9 | 3.1 | 2.9 | 5.6 | |||||||||||||||
Provisions |
20 | 0.6 | 0.6 | 0.7 | 0.7 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total non-current liabilities |
102.4 | 59.6 | 73.1 | 73.4 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Current liabilities |
||||||||||||||||||||
Trade and other payables |
18 | 156.2 | 137.2 | 148.4 | 137.9 | |||||||||||||||
Payable to Related Party |
26 | 211.1 | 263.2 | 147.4 | 146.9 | |||||||||||||||
Income tax payable |
4.9 | 1.7 | 2.1 | 3.0 | ||||||||||||||||
Loans and borrowings |
17 | 0.1 | 19.5 | 0.4 | 0.5 | |||||||||||||||
Provisions |
20 | 0.6 | 0.7 | 1.5 | 1.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current liabilities |
372.9 | 422.3 | 299.8 | 289.5 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
475.3 | 481.9 | 372.9 | 362.9 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net assets |
506.3 | 351.6 | 372.2 | 346.2 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net Parent Investment |
||||||||||||||||||||
Net Parent Investment |
506.3 | 351.6 | 372.2 | 346.2 | ||||||||||||||||
|
|
|
|
|
|
|
|
The accompanying Notes 1 to 28 are an integral part of these consolidated carve-out financial statements.
F-123
Consolidated Carve-out Statements of Cash Flows
for the periods ended September 30, 2012, 2013 and 2014
9 month
period ended September 30, |
Year ended September 30, | |||||||||||||||
Note |
2012
£m |
2013
£m |
2014
£m |
|||||||||||||
Cash flows from operating activities |
||||||||||||||||
Cash generated from operations |
21 | 2.2 | 59.4 | 44.5 | ||||||||||||
Income tax paid |
(10.7 | ) | (1.4 | ) | (0.4 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net cash (used in) / generated from operating activities |
(8.5 | ) | 58.0 | 44.1 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Cash flows from investing activities |
||||||||||||||||
Purchase of property, plant and equipment |
11 | (11.7 | ) | (18.2 | ) | (15.3 | ) | |||||||||
Purchase of intangible assets |
12 | | | (4.3 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||
Net cash used in investing activities |
(11.7 | ) | (18.2 | ) | (19.6 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Cash flows from financing activities |
||||||||||||||||
Repayment of senior debt |
(19.1 | ) | (18.8 | ) | | |||||||||||
Bond proceeds |
| 16.8 | | |||||||||||||
Proceeds from loans from Related Parties |
67.1 | 75.6 | 37.2 | |||||||||||||
Repayment of loan from Related Parties |
| (10.2 | ) | (21.6 | ) | |||||||||||
Dividends paid |
| (62.0 | ) | | ||||||||||||
Other group transactions |
(33.2 | ) | (94.0 | ) | (8.3 | ) | ||||||||||
Interest paid |
(4.2 | ) | (2.3 | ) | (4.9 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net cash from / (used in) financing activities |
10.6 | (94.9 | ) | 2.4 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Net (decrease) / increase in cash and cash equivalents |
(9.6 | ) | (55.1 | ) | 26.9 | |||||||||||
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents at beginning of period |
16 | 183.7 | 173.7 | 114.8 | ||||||||||||
Exchange rate losses on cash and cash equivalents |
(0.4 | ) | (3.8 | ) | (9.9 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents at end of period |
16 | 173.7 | 114.8 | 131.8 | ||||||||||||
|
|
|
|
|
|
The accompanying Notes 1 to 28 are an integral part of these consolidated carve-out financial statements.
F-124
Notes to the Consolidated Carve-out Financial Statements
1. | Company information |
Lion/Gem Luxembourg 3 S.a.r.l (the ParentCo) is a Luxembourg company incorporated under the laws of Luxembourg having its registered office at 6, rue Eugène Ruppert, L-2453 Luxembourg. ParentCo and its subsidiaries (the Findus Group) are active in the food manufacturing industry. ParentCo is the parent company of Findus in the Nordics, Youngs Seafood Limited in the UK (the UK business) and Findus in Southern Europe. A wholly-owned subsidiary of ParentCo, Findus Sverige AB (FSAB) is a Swedish company incorporated under the laws of Sweden having its registered office at Billesholmsvägen 4, 267 81 Bjuv, Sweden. FSAB and its subsidiaries (the Overseas Group or FSAB Group) are the leading frozen food business in Sweden, Norway and Finland in the Nordic region, and a leading frozen food business in France with activities also in Spain and Belgium.
The ultimate controlling entity of the Overseas Group is Marlin 1 Limited.
In 2012, the Findus Group changed its financial year end from December 31, to September 30, and presented consolidated annual accounts for the nine months to September 30, 2012. Consequently, the amounts presented in these consolidated carve-out financial statements are not entirely comparable.
Nomad Foods Limited (Nomad or the Buyer) is the holding company for the Iglo Group (Iglo), a leading frozen food producer in Europe with operations in 10 countries and a specific focus on markets in the United Kingdom, Germany and Italy. On August 13, 2015, Nomad announced that it entered into an option agreement to acquire the FSAB Group for £500 million from Lion Gem Sweden 1 AB, the parent company of FSAB. The deal is structured to be a legal entity purchase of FSAB, giving it control over all the assets, liabilities, Intellectual Property (IP), operations and employees within the Overseas Group. The Findus Group excluding the Overseas Group business is referred to below as the Residual Findus Group.
2. | Accounting policies and basis of preparation |
Basis of presentation
The consolidated carve-out financial statements were approved for issue by the Chief Financial Officer of the Findus Group, who has authority on behalf of the Board of Directors of FSAB, on August 28, 2015.
These consolidated carve-out financial statements have been prepared on a standalone basis and are derived from ParentCos consolidated financial statements and accounting records. The consolidated carve-out financial statements reflect the Overseas Groups financial position, results of operations, changes in net parent investment and cash flows in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and IFRS Interpretations Committee (IFRS IC), collectively IFRS. The Overseas Groups consolidated carve-out financial statements have been prepared on a carve-out basis and the results do not necessarily reflect what the results of operations, financial position, or cash flows would have been had the Overseas Group been a separate entity or the future results of the Overseas Group as it will exist upon completion of the transaction.
The consolidated carve-out financial statements of the Overseas Group include expenses which were recharged from the Residual Findus Group under management services agreements for certain functions, including general corporate expenses related to corporate strategy, procurement, group finance, Information Technology (IT), Human Resources (HR), legal and supply chain. These recharges have been made on the basis of direct usage when identifiable, with the remainder allocated on the basis of headcount, revenue or a measure of Earnings before exceptional items, interest, tax, depreciation and amortisation (Adjusted EBITDA). In 2014, £4.4 million
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(2013: £2.9 million; 2012: £2.5 million) have been recharged to the Overseas Group and presented within Other operating expenses. Management believes the expense allocation methodology and results are reasonable for all periods presented. However, these allocations may not be indicative of the actual expenses that would have been incurred by an independent company or of the costs to be incurred in the future.
The Overseas Group generates brand royalty fees from transactions with the Residual Findus Group, as disclosed in Note 26.
All intercompany transactions and accounts within the Overseas Group have been eliminated in these consolidated carve-out financial statements. Transactions between the Overseas Group and the Residual Findus Group have not been eliminated in these consolidated carve-out financial statements. Transactions that have taken place with the Residual Findus Group are regarded as transactions with related parties and as such have been disclosed in accordance with IAS 24, Related Party Disclosures, in Note 26.
These consolidated carve-out financial statements include an income tax calculation on a stand-alone basis as if the business was completely separate from the Findus Group and was filing separate income tax returns at the Overseas Group level.
The Residual Findus Group has a central treasury department which enters into derivative contracts as instructed by the various Overseas Group operating companies to manage their foreign exchange risks relating to their raw materials acquisitions. These derivative contracts, as requested by the local operating companies, are often bundled together to manage the foreign exchange risks across the entire group. As the contracts are bundled and entered into centrally, the Overseas Group does not have the ability to specifically identify those derivative contracts that are or are not directly attributable to the Overseas Group. As a result the Overseas Groups consolidated carve-out financial statements do not include the derivative assets/liabilities or gains/losses resulting from those contracts.
As these consolidated carve-out financial statements have been prepared on a consolidated carve-out basis, it is not meaningful to show share capital or provide an analysis of reserves. Therefore, amounts which effectively reflect the carrying value of investments of the Residual Findus Group in the consolidated Overseas Group are disclosed as Net parent investment. The amounts reflected in Net transfer to/from parent in the consolidated carve-out statement of changes in net parent investment refer to net (loss)/income and other comprehensive (loss)/income for the period for the Overseas Group in addition to transactions between the ParentCo and the Overseas Group. In addition, as the financial statements are presented on a carve-out basis, earnings per share as required by IAS 33, Earnings per Share, have not been presented.
The Overseas Groups transition date to IFRS and its interpretations as issued by the IASB is January 1, 2012. The principles and requirements for first time adoption of IFRS are set out in IFRS 1, First-time adoption of IFRS. An explanation of how the transition to IFRS has affected the reported consolidated carve-out financial statements of the Overseas Group is provided in Note 3.
The accounting policies set out below have, unless otherwise stated, been applied consistently.
IFRSs applicable to the consolidated carve-out financial statements of the Overseas Group for the year ended September 30, 2014, have been applied.
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The following accounting standards are effective for accounting periods beginning after October 1, 2013 and have not yet been adopted by the Overseas Group:
i) | IFRS 9 Financial Instruments. The standard addresses the classification, measurement and recognition of financial assets and liabilities. The standard is effective for accounting periods beginning on or after January 1, 2018 and earlier adoption is permitted. The Overseas Group has yet to assess the full impact of IFRS 9. |
ii) | IFRS 15 Revenue from Contracts with Customers. The standard addresses revenue recognition and establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entitys contracts with customers. The standard is effective for accounting periods beginning on or after January 1, 2018 and earlier adoption is permitted. The Overseas Group is currently assessing the impact of IFRS 15. |
There are no other IFRSs or IFRS IC interpretations that are not yet effective that would be expected to have a material impact on the Overseas Group.
Judgements made by management in the application of these accounting policies that have a significant effect on the consolidated carve-out financial statements, and key sources of estimation uncertainty which have a significant risk of causing a material adjustment in the next year, are discussed in Note 4.
a) | Measurement convention |
The consolidated carve-out financial statements are prepared on a going concern basis and on the historical cost basis.
b) | Consolidation method |
The full consolidation method is applied to all consolidated entities. Under this method, all the assets, liabilities, revenues, expenses and cash flows of the consolidated entities are included in the consolidated carve-out financial statements after the appropriate adjustments and eliminations of inter-group transactions.
Subsidiaries are all entities (including structured entities) over which the Overseas Group has control. The Overseas Group controls an entity when the Overseas Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Overseas Group. They are deconsolidated from the date that control ceases.
The Overseas Group uses the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interest issued by the Overseas Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition related costs are expensed as incurred.
c) | Foreign currency |
The functional currency of FSAB is the Swedish Krona (SEK). The consolidated carve-out financial statements are presented in Sterling (GBP), which is the Overseas Groups presentation currency. Items included in the financial statements of each of the Overseas Groups entities are measured using the
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currency of the primary economic environment in which each entity operates (the functional currency). All financial statements have been rounded to the nearest £0.1 million.
i) | Foreign currency transactions |
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rate ruling at the financial period end. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates prevailing at the dates the fair value was determined.
ii) | Assets and liabilities of foreign operations |
For the purposes of presenting the consolidated carve-out financial statements, the assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated at foreign exchange rates ruling at the financial period end date.
The principal period end exchange rates against sterling used in these consolidated carve-out financial statements are as follows:
2011 | 2012 | 2013 | 2014 | |||||||||||||
Swedish Krona (SEK) |
10.6508 | 10.5695 | 10.3580 | 11.7584 | ||||||||||||
Norwegian Krone (NOK) |
9.2850 | 9.2328 | 9.7191 | 10.4406 | ||||||||||||
Euro (EUR) |
1.1936 | 1.2535 | 1.1974 | 1.2861 |
The revenues and expenses of foreign operations are translated at an average rate for the period where this rate approximates the foreign exchange rates ruling at the dates of the transactions.
Foreign exchange gains and losses that relate to the process described above are presented in other comprehensive income.
iii) | Net investment in foreign operations |
Exchange differences arising from the translation of foreign operations are taken directly to net parent investment. They are released into the income statement upon disposal of the related foreign operation.
d) | Property, plant and equipment |
i) | Owned assets |
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
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ii) | Leased assets |
Leases in which the Overseas Group assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. Where land and buildings are held under finance leases, the accounting treatment of the land is considered separately from that of the buildings. Leased assets acquired by way of finance lease are stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses.
All other leases are classified as operating leases.
iii) | Depreciation |
Depreciation is charged to the income statement on a straight line basis over the shorter of the lease term (if applicable) and the estimated useful lives of each part of an item of property, plant and equipment once the item is brought into use. Land is not depreciated. The estimated useful lives are as follows:
| Buildings: 10 to 50 years |
| Plant and machinery 3 to 15 years |
The assets residual values and useful lives are reviewed on an annual basis.
e) | Goodwill |
Goodwill represents amounts arising on the acquisition of subsidiaries and associates. Goodwill is the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous interest in the acquiree over the fair value of the net identifiable assets acquired. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary group acquired, in the case of a bargain purchase, the difference is recognised directly in the income statement.
Goodwill is stated at cost less any accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity disposed of.
Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment.
f) | Other intangible assets |
Intangible assets acquired separately are recorded at cost and those acquired as part of a business combination are recorded at fair value as at the date of acquisition.
i) | Brands |
Based on the market position of the Findus brand, the significant levels of investment in advertising and promoting the brand and the fact that it has been established for over 50 years, the Findus brand is considered to have an indefinite useful life. Therefore this brand is not amortised but instead held at historical cost and tested annually for impairment.
The other acquired brands (in Spain and Belgium) are capitalised and amortised on a straight-line basis over their useful economic life of 7 to 10 years.
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ii) | Development costs |
The Overseas Group research and development projects mainly relate to new product development. Research costs are expensed as incurred. Development costs are expensed as incurred except those recognised as intangible assets when the following can be demonstrated:
| The technical feasibility of completing the intangible asset so that it will be available for use or sale; |
| The intention to complete the intangible asset and use or sell it; |
| The ability to use the intangible asset or to sell it; |
| The probability for the intangible asset to generate future economic benefits for the Overseas Group; |
| The availability of adequate technical and financial resources to complete the development and to use or sell the intangible asset; and |
| The reliable measurement of the expenditure attributable to the intangible asset during its development. |
These development costs are amortised on a straight-line basis over their projected useful economic life.
g) | Impairment of non-current assets |
The carrying amounts of the Overseas Groups assets are reviewed annually in November, using the period-end carrying value of assets, to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset or cash-generating unit is estimated and compared to its carrying amount. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement in the period in which they arise.
For goodwill and assets that have an indefinite useful life an impairment review is performed at least annually or more frequently if events or changes in circumstances indicate a potential impairment.
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the net carrying amount may not be recoverable.
i) | Calculation of recoverable amount |
Recoverable amount is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows of the business are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
ii) | Allocation of impairment losses |
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units then to reduce the carrying amount of the other assets in the unit on a pro rata basis. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash
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inflows from other assets or groups of assets. Cash-generating units correspond to each of the countries included in the Overseas Group.
iii) | Reversals of impairment |
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
h) | Inventories |
Inventories are stated at the lower of cost and net realisable value.
Cost is based on the first in, first out principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.
Provision is made for slow moving, obsolete and defective inventories.
i) | Biological assets |
Biological assets are measured at fair value less cost to sell. Costs to sell include the incremental selling costs, including auctioneers fees, commission paid to brokers and dealers and estimated costs of transport to the market but excludes finance costs and income taxes.
As part of agricultural activity, the Overseas Group mainly produces peas. Pea plantations do not meet the definition of bearer plants under IAS 41, Agriculture (as they do not bear produce for more than one period), and are therefore presented and accounted for as biological assets until the point of harvest. Harvested peas are transferred to Inventories at fair value less costs to sell when harvested. Changes in fair value of peas are recognised in the income statement within cost of sales. Farming costs such as labour costs, planting, weeding, irrigation, fertiliser, and harvesting are capitalised as incurred.
Peas are usually planted in April/May and harvested in August/September. Therefore, peas are presented as part of Inventories rather than Biological assets for the purposes of the annual consolidated carve-out financial statements.
j) | Employee benefits |
i) | Short-term obligations |
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
ii) | Defined benefit plans |
The Overseas Groups net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods. That net obligation is discounted to determine its present value.
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The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of any plan assets.
The calculation is performed by an independent qualified actuary using the projected unit credit method.
The current service cost of the defined benefit plan, recognised in the income statement in staff costs, except where included in the cost of an asset, reflects the increase in the defined benefit obligation resulting from employee service in the current year and the benefit changes.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to net parent investment in other comprehensive income in the period in which they arise.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in finance costs in the income statement.
Past service costs are immediately recognised in profit and loss.
k) | Provisions |
Provisions are recognised when the Overseas Group has a legal or constructive present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle that obligation, and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
l) | Financial instruments |
Financial assets and liabilities are recognised in the Overseas Groups Statement of Financial Position when those assets and liabilities are directly attributable to the Overseas Group.
i) | Classification, recognition and measurement |
The Overseas Group classifies its financial assets in the receivables category. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
Regular purchases and sales of financial assets are recognised on the trade-date the date on which the Overseas Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the investments
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have expired or have been transferred and the Overseas Group has transferred substantially all risks and rewards of ownership.
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Overseas Groups receivables comprise trade and other receivables and cash and cash equivalents in the balance sheet. Receivables are subsequently carried at amortised cost using the effective interest method.
a. | Trade receivables |
Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest method, less any impairment.
Since trade receivables are due within one year, this equates to initial carrying value less any impairment.
Appropriate allowances for estimated irrecoverable amounts are recognised in the income statement when there is objective evidence that the asset is impaired.
Trade receivables are presented net of customer rebate balances.
b. | Cash and cash equivalents |
Cash and cash equivalents comprise cash balances, call deposits, and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Overseas Groups cash management are included as a component of cash and cash equivalents.
The Overseas Group is part of a cash pool (which also includes entities within the Residual Findus Group) where funds are considered on a net basis and grouped together as cash and cash equivalents. The total cash balance is available to be utilised by the Overseas Group and is presented as cash and cash equivalents in the consolidated carve-out statement of financial position.
ii) | Impairment of financial assets |
The Overseas Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For the Receivables category, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future
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credit losses that have not been incurred) discounted at the financial assets original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Overseas Group may measure impairment on the basis of an instruments fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtors credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated income statement.
iii) | Loans and borrowings |
a. | Valuation |
Interest bearing borrowings are recognised initially at fair value less attributable transaction costs.
Subsequent to initial recognition, interest bearing loans and borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the expected period of the borrowings on a straight line basis.
b. | Capitalisation of transaction costs |
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs.
To the extent there is no evidence that it is probable that some or all of the facility will be drawn down the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
iv) | Trade payables |
Trade payables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest method. Since trade payables are largely due within one year, this equates to initial carrying value.
m) | Revenue |
Revenue comprises sales of goods after deduction of discounts and sales taxes. Sales between companies in the Overseas Group have been appropriately eliminated in the consolidated carve-out financial statements. Discounts given by the Overseas Group include rebates, price reductions and incentives to customers, promotional couponing and trade communication costs. At each financial period end date, any discount incurred but not yet invoiced is estimated and accrued.
Revenue is recognised when the risks and rewards of the underlying products have been transferred to the customer. The timing of the transfer of risks and rewards varies depending on the individual terms of the sales agreement, usually being on receipt of goods by the customer.
n) | Interest income |
Interest income is recognised in the income statement in the period in which it is earned.
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o) | Expenses |
i) | Operating lease payments |
Payments made under operating leases are recognised in the income statement on a straight line basis over the term of the lease. Lease incentives received are recognised on a straight line basis in the income statement as an integral part of the total lease expense.
ii) | Borrowing costs |
General and specific borrowing costs that are directly attributable to the acquisition, constructions or production of a qualifying asset, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Other borrowing costs are expensed in the period in which they are incurred.
iii) | Exceptional items |
The separate reporting of exceptional items which are presented as exceptional within the relevant income statement category, helps provide an indication of the Overseas Groups underlying business performance. Exceptional items are non-recurring transactions that have been identified by virtue of their size, nature or incidence. In determining whether an event or transaction is exceptional, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence. Exceptional items may comprise profits or losses on the sale or termination of an operation, restructuring costs, operational restructuring, integration and acquisition costs relating to new acquisitions, investigation of strategic opportunities, costs relating to certain management incentive plans and other significant items that are non-recurring in nature (see Note 7).
iv) | Research and development |
Research expenditure is recognised in the income statement in the period incurred. Development costs are expensed as incurred except those recognised as intangible assets, as described under Development costs above.
v) | Advertising costs |
Advertising costs are recognised in the income statement in the periods incurred.
p) | Taxation |
These consolidated carve-out financial statements include an income tax calculation on a stand-alone basis as if the business was completely separate from the Findus Group and was filing separate income tax returns at the Overseas Group level.
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in other comprehensive income, in which case it is recognised in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the financial period end date, and any adjustment to tax payable in respect of previous years.
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Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities recognised for financial reporting purposes and the amounts used for taxation purposes on an undiscounted basis. The following temporary differences are not provided for: the initial recognition of goodwill and the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the financial period end date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
q) Segment reporting
The Chief Operating Decision Maker (CODM) is represented by the Group executive team, being composed of the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) of the Findus Group as they are primarily responsible for the allocation of resources to the segments and the assessment of performance of the segments.
The Overseas Groups operations are primarily organised into countries, which have their own executive team including a CEO and a CFO. The primary organisation and management of business activities into countries has been used to identify and determine the Overseas Groups operating segments as reported to the CODM. For the purpose of the presentation of these financial statements, the identified reportable segments are Sweden, Norway, France, Other and Central/Unallocated. The primary activities included within Other are Spain, Belgium, Finland and Denmark.
The CODM uses Revenue and a measure of Earnings Before exceptional items, Interest, Taxation, Depreciation and Amortisation (Adjusted EBITDA) as the key measures of the segments results.
The segment reporting information is disclosed in Note 5.
3. | Transition to IFRS |
The Overseas Group has historically prepared financial information under Luxembourg GAAP as part of the consolidated financial statements of the Findus Group but never on a stand-alone basis. As a result no reconciliation between Luxembourg GAAP and IFRS is required or presented in these consolidated carve-out financial statements.
These are the Overseas Groups first consolidated carve-out financial statements prepared in accordance with IFRS as well as the first financial statements presented on a stand-alone basis.
The accounting policies set out in Note 2 have been applied in preparing the consolidated carve-out financial statements for the year ended September 30, 2014, the comparative information presented in these consolidated carve-out financial statements for the year ended September 30, 2013 and the nine months ended September 30, 2012 and in the preparation of an opening IFRS balance sheet at December 31, 2011 (the Overseas Groups date of transition).
3.1 Initial elections upon adoption
Set out below are the applicable IFRS 1 exemptions and exceptions applied in the first-time adoption of IFRS.
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3.1.1 IFRS 1 exemption options
3.1.1.1. Exemption for business combinations
IFRS 1 provides the option to apply IFRS 3, Business combinations, prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Overseas Group elected to apply IFRS 3 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.
3.1.1.2. Exemption for cumulative translation differences
IFRS 1 permits cumulative translation gains and losses to be reset to zero at the transition date. This provides relief from determining cumulative currency translation differences in accordance with IAS 21, The effects of changes in foreign exchange rates, from the date a subsidiary or equity method investee was formed or acquired. The Overseas Group elected to reset all cumulative translation gains and losses to zero in the opening net parent investment at the date of transition to IFRS.
3.1.1.3 Fair value measurement of financial assets or financial liabilities at initial recognition
IAS 39 Financial Instruments: Recognition and Measurement requires entities to measure their day one profits on initial recognition of financial instruments based on valuation techniques that only use observable market data or current market transactions in the same instrument. A first-time adopter may apply these requirements prospectively to transactions entered into after financial years beginning on or after date of transition to IFRS. The Overseas Group elected to apply this exemption and therefore will not review any day one profits on initial recognition of financial instruments which occurred before the date of transition to IFRS.
3.1.1.4 Leases
IFRIC 4 Determining whether an arrangement contains a lease requires arrangements to be examined to determine whether they contain a lease. There is an exemption in IFRS 1 permitting this to be done based on facts and circumstances at the date of transition to IFRS. The Overseas Group elected to apply this exemption and examined contracts to determine whether its contracts contain a lease, based on facts and circumstances at the date of transition to IFRS.
3.1.1.5 Decommissioning liabilities
A decommissioning liability can be measured at the date of transition to IFRS in accordance with IAS 37, Provisions, contingent liabilities and contingent assets. The first-time adopter then discounts the liability back to when it first arose and adds that amount to the related fixed asset. The asset is depreciated with the appropriate additional amount up to the date of transition to IFRS. The Overseas Group elected to apply this exemption and consequently recognised a decommissioning liability related to the cost of restoring the land on which its factory is built in Boulogne-Sur-Mer (France), see Note 20.
3.1.1.6 Other voluntary exemptions
The remaining voluntary exemptions do not apply to the Overseas Group:
| Share-based payment (IFRS 2) as there were no share-based payment transactions that vested prior to the date of transition to IFRS. |
| Insurance contracts (IFRS 4), as this is not relevant to the Overseas Groups operations. |
F-137
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
| Assets and liabilities of subsidiaries, associates and joint ventures, as only the Overseas Groups consolidated carve-out financial statements have been prepared in accordance with IFRS. |
| Compound financial instruments, because the Overseas Group does not have these types of financial instruments as at the date of transition to IFRS. |
| Financial assets or intangible assets accounted for under IFRIC 12, Service concession arrangements, as the Overseas Group has not entered into agreements within the scope of IFRIC 12. |
| Borrowing costs (IAS 23), as there were no qualifying assets as at the date of transition to IFRS. |
| Extinguishing financial liabilities with equity instruments and transfers of assets from customers, as they were not applicable to the Overseas Group. |
3.1.2 IFRS 1 mandatory exceptions
Set out below is the applicable mandatory exception in IFRS 1 applied in the preparation of the first IFRS consolidated carve-out financial statements of the Overseas Group.
3.1.2.1 Exception for estimates
IFRS estimates as at December 31, 2011 are consistent with the estimates as at the same date made in conformity with Luxembourg GAAP.
3.1.2.2 Other mandatory exceptions
The other mandatory exceptions of IFRS 1 have not been applied as these are not relevant to the Overseas Group:
| Hedge accounting; |
| Classification of financial assets and liabilities; |
| Derecognition of financial assets and financial liabilities; and |
| Non-controlling interests. |
4. | Accounting estimates |
The key sources of estimation uncertainty at the financial period end date are discussed below:
a) Discounts
Discounts given by the Overseas Group include rebates, price reductions and incentives given to customers, promotional couponing and trade communication costs. Each customer has a unique agreement that is governed by a combination of observable and unobservable performance conditions.
At each financial period end date, any discount incurred but not yet invoiced is estimated, based on historical trends and rebate contracts with customers, and accrued.
b) Carrying value of goodwill and intangible assets with indefinite useful life
Determining whether goodwill and intangible assets with indefinite useful life are impaired requires an estimation of the value in use of the intangible assets with indefinite useful life and of the cash generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from each intangible asset with indefinite useful life and cash generating unit and a suitable discount rate in order to calculate present value. Details of impairment reviews are provided in Note 12.
F-138
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
c) Employee benefit obligation
A significant number of estimates are required to calculate the fair value of the defined benefit plan obligation at the financial period end.
Note 19 contain details of these assumptions, and the calculation is performed by qualified actuaries.
d) Income tax
Where tax exposures can be quantified, an accrual is made based on best estimates and managements judgements. Given the inherent uncertainties in assessing the outcomes of these exposures (which can sometimes be binary in nature), the Overseas Group could in future periods experience adjustments to these accruals.
5. | Segment reporting |
Description of segments and principal activities
The Overseas Group products consist of frozen fish and seafood and ready-to-eat-meals (RTEM) in the consumer retail market. In Norway, Sweden and Finland the main market is the frozen food consumer retail market (excluding the ice cream market). In France and Spain, the markets are the frozen food and value-added vegetable consumer market.
The Overseas Groups executive team examines the groups performance from a geographic perspective and has identified three reportable segments of its business:
| Sweden: Frozen fish and seafood, vegetables and RTEM, as well as the growing and sale of peas. |
| Norway: Frozen fish and seafood, vegetables and RTEM, as well as the growing and sale of peas and other vegetables. |
| France: Frozen fish and seafood and value added vegetable products. |
All other operating segments (Finland, Denmark, Spain and Belgium) are not reportable segments, as they do not meet the quantitative thresholds to be reported separately. The results of these operations are included in the Other line item. The Overseas Groups executive team primarily uses Revenue and a measure of Earnings before exceptional items, interest, tax, depreciation and amortisation (Adjusted EBITDA, see below) to assess the performance of the operating segments.
Adjusted EBITDA
Adjusted EBITDA excludes the effects of significant items of income and expenditure which may have an impact on the quality of earnings such as restructuring costs, legal expenses, and impairments when the impairment is the result of an isolated, non-recurring event.
Interest income and finance cost are not allocated to segments, as this type of activity is driven by the central treasury function, which manages the cash position of the Findus Group as a whole.
F-139
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Segment Adjusted EBITDA
9 month
period ended September 30, |
Year ended
September 30, |
|||||||||||||||
Note |
2012
£m |
2013
£m |
2014
£m |
|||||||||||||
Sweden |
18.5 | 24.3 | 21.7 | |||||||||||||
Norway |
13.2 | 19.2 | 17.4 | |||||||||||||
France |
6.2 | 14.5 | 14.2 | |||||||||||||
Other |
0.3 | 1.1 | 3.7 | |||||||||||||
Central / Unallocated |
(1.4 | ) | (1.5 | ) | (1.7 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Total segment Adjusted EBITDA |
36.8 | 57.6 | 55.3 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Exceptional Items |
7 | (8.6 | ) | (12.7 | ) | (4.0 | ) | |||||||||
Depreciation of property, plant and equipment |
11 | (7.6 | ) | (12.0 | ) | (10.5 | ) | |||||||||
Amortisation / Impairment of intangible assets |
12 | (147.0 | ) | (3.2 | ) | (4.6 | ) | |||||||||
|
|
|
|
|
|
|||||||||||
Operating (loss) / profit |
(126.4 | ) | 29.7 | 36.2 | ||||||||||||
Net financing income / (costs) |
9 | 0.7 | (4.8 | ) | (17.3 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
(Loss) / profit before tax |
(125.7 | ) | 24.9 | 18.9 | ||||||||||||
|
|
|
|
|
|
Segment revenue
For the 9 months ended September 30, 2012 |
Total segment
revenue £m |
Inter-segment
revenue £m |
Total
segment external revenue £m |
|||||||||
Sweden |
187.5 | (30.9 | ) | 156.6 | ||||||||
Norway |
105.9 | (0.4 | ) | 105.5 | ||||||||
France |
92.7 | (10.0 | ) | 82.7 | ||||||||
Other |
75.9 | (13.9 | ) | 62.0 | ||||||||
|
|
|
|
|
|
|||||||
Total segment revenue |
462.0 | (55.2 | ) | 406.8 | ||||||||
|
|
|
|
|
|
For the year ended September 30, 2013 |
Total segment
revenue £m |
Inter-segment
revenue £m |
Total
segment external revenue £m |
|||||||||
Sweden |
261.3 | (36.8 | ) | 224.5 | ||||||||
Norway |
144.0 | (0.3 | ) | 143.7 | ||||||||
France |
126.4 | (14.0 | ) | 112.4 | ||||||||
Other |
82.6 | (4.4 | ) | 78.2 | ||||||||
|
|
|
|
|
|
|||||||
Total segment revenue |
614.3 | (55.5 | ) | 558.8 | ||||||||
|
|
|
|
|
|
F-140
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
For the year ended September 30, 2014 |
Total segment
revenue £m |
Inter-segment
revenue £m |
Total
segment external revenue £m |
|||||||||
Sweden |
238.0 | (32.6 | ) | 205.4 | ||||||||
Norway |
123.8 | (0.3 | ) | 123.5 | ||||||||
France |
126.1 | (12.0 | ) | 114.1 | ||||||||
Other |
77.0 | (0.4 | ) | 76.6 | ||||||||
|
|
|
|
|
|
|||||||
Total segment revenue |
564.9 | (45.3 | ) | 519.6 | ||||||||
|
|
|
|
|
|
The CODM is not provided with information about inter-segment revenues. No information on segment assets or liabilities is presented to the CODM.
Product information
Management considers the products it sells to belong primarily to the frozen foods product group.
Geographical information
External revenue is analysed below by geographical destination
9 month
period ended September 30, |
Year ended
September 30, |
|||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||
Sweden |
149.9 | 191.5 | 182.4 | |||||||||
Norway |
115.2 | 122.5 | 128.3 | |||||||||
France |
87.1 | 124.3 | 118.8 | |||||||||
Spain |
30.4 | 39.1 | 37.0 | |||||||||
Finland |
12.8 | 49.3 | 34.9 | |||||||||
Italy |
9.2 | 25.4 | 17.9 | |||||||||
Other |
2.2 | 6.7 | 0.3 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue by geography |
406.8 | 558.8 | 519.6 | |||||||||
|
|
|
|
|
|
Revenues of approximately £132.2 million (2013: £146.3 million; 2012: £111.9 million) are derived from two external customers. These revenues are attributable to the Sweden and Norway operating segments.
Non-current assets by geography
December 31, | September 30, | |||||||||||||||
2011
£m |
2012
£m |
2013
£m |
2014
£m |
|||||||||||||
Sweden |
326.7 | 187.3 | 167.9 | 150.9 | ||||||||||||
Norway |
172.3 | 173.6 | 166.2 | 153.2 | ||||||||||||
France |
94.7 | 89.1 | 96.2 | 93.3 | ||||||||||||
Other |
32.5 | 24.1 | 25.3 | 22.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total non-current assets by geography |
626.2 | 474.1 | 455.6 | 420.1 | ||||||||||||
|
|
|
|
|
|
|
|
F-141
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
6. | Expenses |
Operating (loss) / profit is stated after charging/(crediting):
9 month
period ended September 30, |
Year ended
September 30, |
|||||||||||||||
Note |
2012
£m |
2013
£m |
2014
£m |
|||||||||||||
Staff costs |
8 | 65.2 | 91.3 | 88.6 | ||||||||||||
Changes in inventories of finished goods and work in progress |
0.6 | (0.4 | ) | 4.4 | ||||||||||||
Raw material and consumables used |
240.8 | 335.3 | 298.0 | |||||||||||||
Depreciation of property, plant and equipment |
11 | 7.6 | 12.0 | 10.5 | ||||||||||||
Selling, general and administrative expenses |
16.9 | 21.0 | 20.6 | |||||||||||||
Impairment of intangible assets |
12 | 146.1 | 2.0 | 3.4 | ||||||||||||
Amortisation of intangible assets |
12 | 0.9 | 1.2 | 1.2 | ||||||||||||
Transportation expenses |
8.2 | 11.5 | 13.3 | |||||||||||||
Advertising costs |
17.0 | 22.6 | 19.8 | |||||||||||||
Operating lease payments |
10.5 | 15.1 | 13.7 | |||||||||||||
Research & development |
1.1 | 2.9 | 3.1 | |||||||||||||
Exceptional items |
7 | 8.6 | 12.7 | 4.0 | ||||||||||||
Other operating income |
(0.1 | ) | | (0.4 | ) | |||||||||||
Other expenses |
9.8 | 1.9 | 3.2 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Net expenses |
533.2 | 529.1 | 483.4 | |||||||||||||
|
|
|
|
|
|
7. | Exceptional items |
Exceptional items are made up as follows:
9 month
period ended September 30, |
Year ended
September 30, |
|||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||
Refinancing |
0.8 | | | |||||||||
Manufacturing rationalisation |
| 5.6 | 1.6 | |||||||||
Restructuring costs |
7.8 | 7.1 | 2.4 | |||||||||
|
|
|
|
|
|
|||||||
Total exceptional items |
8.6 | 12.7 | 4.0 | |||||||||
|
|
|
|
|
|
In the nine-month period to September 30, 2012, Exceptional items mainly involved the restructuring of operations in Sweden and exited operations in the Czech Republic, Slovakia and Hungary, all with their associated costs and write-offs. The Overseas Group also incurred refinancing costs in relation with the Findus Group restructuring discussed in Note 17.
In the year to September 30, 2013, Exceptional items involved continued restructuring of operations in Sweden, as well as Norway, France and Spain. In addition, the Overseas Group suffered the costs of a product recall and associated costs related to a product mis-labelling issue involving horsemeat, which impacted the whole industry. The Overseas Group also ceased production in their Thailand factory and bore the costs of closing the factory.
In the year to September 30, 2014, the Overseas Group incurred non-recurring costs relating to manufacturing rationalisation, restructuring of operations in Sweden and the costs of other business restructuring.
F-142
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
8. | Staff numbers and costs |
The average number of persons employed by the Overseas Group (including Directors) during the periods covered by these consolidated carve-out financial statements, analysed by category, was as follows:
9 month
period ended September 30, |
Year ended September 30, |
|||||||||||
2012
No. of employees |
2013
No. of employees |
2014
No. of employees |
||||||||||
Production |
1,244 | 1,004 | 975 | |||||||||
Administration, distribution & sales |
668 | 615 | 598 | |||||||||
|
|
|
|
|
|
|||||||
Total average number of employees |
1,912 | 1,619 | 1,573 | |||||||||
|
|
|
|
|
|
The aggregate staff costs of these persons were as follows:
9 month
period ended September 30, |
Year ended
September 30, |
|||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||
Wages and salaries |
45.5 | 66.1 | 64.2 | |||||||||
Social security costs |
16.1 | 22.1 | 21.5 | |||||||||
Other pension costs |
3.6 | 3.1 | 2.9 | |||||||||
|
|
|
|
|
|
|||||||
Total staff costs |
65.2 | 91.3 | 88.6 | |||||||||
|
|
|
|
|
|
Contributions payable in respect of defined contribution pension schemes and recognised as an expense in 2014 in the table above were £2.0 million (2013: £1.5 million; 2012: £2.3 million).
9. | Finance income and costs |
9 month
period ended September 30, |
Year ended
September 30, |
|||||||||||||||
Note |
2012
£m |
2013
£m |
2014
£m |
|||||||||||||
Other interest income |
5.0 | 9.7 | 7.7 | |||||||||||||
Foreign exchange gains |
4.4 | | | |||||||||||||
|
|
|
|
|
|
|||||||||||
Finance income |
9.4 | 9.7 | 7.7 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Interest payable on bank loans, borrowings and overdrafts |
(7.0 | ) | (5.0 | ) | (12.4 | ) | ||||||||||
Pension finance expense |
19 | (1.5 | ) | (2.0 | ) | (1.8 | ) | |||||||||
Foreign exchange losses |
| (7.2 | ) | (10.6 | ) | |||||||||||
Unwinding of discount |
(0.2 | ) | (0.3 | ) | (0.2 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Finance costs |
(8.7 | ) | (14.5 | ) | (25.0 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net finance income / (costs) |
0.7 | (4.8 | ) | (17.3 | ) | |||||||||||
|
|
|
|
|
|
F-143
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
10. | Taxation |
9 month
period ended September 30, |
Year ended
September 30, |
|||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||
Current tax expense / (income) |
||||||||||||
Current tax on profits for the year |
8.9 | 8.4 | 2.3 | |||||||||
Adjustments in respect of prior years |
(0.9 | ) | (0.3 | ) | 0.2 | |||||||
|
|
|
|
|
|
|||||||
8.0 | 8.1 | 2.5 | ||||||||||
Deferred tax expense / (income) |
||||||||||||
Origination and reversal of temporary differences |
0.1 | (0.2 | ) | 1.5 | ||||||||
|
|
|
|
|
|
|||||||
Total tax expense |
8.1 | 7.9 | 4.0 | |||||||||
|
|
|
|
|
|
Reconciliation of effective tax rate:
9 month
period ended September 30, |
Year ended September 30, | |||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||
(Loss) / profit before taxation |
(125.7 | ) | 24.9 | 18.9 | ||||||||
Tax (credit) / charge at the standard Overseas Group corporation tax rate 22.0% (2013: 26.3%; 2012: 26.3%) |
(33.0 | ) | 6.5 | 4.2 | ||||||||
|
|
|
|
|
|
|||||||
Difference in tax rates related to overseas jurisdictions |
(0.3 | ) | | 0.3 | ||||||||
Impairment of intangible assets |
38.4 | 0.5 | 0.7 | |||||||||
Unrecognised tax assets |
6.8 | 1.7 | (0.1 | ) | ||||||||
Change in applicable tax rates |
| 1.9 | | |||||||||
Other income and expenses not taxable or not deductible |
(2.9 | ) | (1.8 | ) | (0.8 | ) | ||||||
Prior year adjustment |
(0.9 | ) | (0.9 | ) | (0.3 | ) | ||||||
|
|
|
|
|
|
|||||||
Total tax expense |
8.1 | 7.9 | 4.0 | |||||||||
|
|
|
|
|
|
The applicable tax rate for the Overseas Group for the current period (which is the applicable tax rate of FSAB) is lower than the prior periods due to changes in the Swedish corporation tax rate which decreased from 26.3% to 22.0% for fiscal periods beginning on or after January 1, 2013.
The weighted average effective tax rate in 2014 is 21% (2013: 32%; 2012: (6)%).
In 2013, the higher effective tax rate is mainly caused by the remeasurement of the deferred tax balances due to the change in the applicable tax rate in Sweden. In 2012, the higher effective tax rate is principally caused by the impairment of intangible assets.
The Overseas Group operates in many different jurisdictions and, in some of these, certain matters are under discussion with local tax authorities. These discussions are often complex and can take many years to resolve. Accruals for uncertain tax position require management to make estimates and judgments with respect to the ultimate outcome of a tax audit, and actual results could vary from these estimates. Where tax exposures can be quantified, a provision is made based on best estimates and managements judgements.
F-144
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Management believes that the Overseas Groups position on all open matters where a tax benefit has been booked (including those in current discussion with local tax authorities) is defensible and the probability of an adverse outcome is considered unlikely.
The tax (charge)/credit relating to components of other comprehensive income is as follows:
For the 9 month period ended September 30, 2012 |
Before
tax £m |
Tax
(charge) £m |
After
tax £m |
|||||||||
Remeasurements of post-employment benefit liabilities |
4.2 | (1.1 | ) | 3.1 | ||||||||
Currency translation differences |
(3.7 | ) | | (3.7 | ) | |||||||
|
|
|
|
|
|
|||||||
Other comprehensive income / (loss) |
0.5 | (1.1 | ) | (0.6 | ) | |||||||
|
|
|
|
|
|
For the year ended September 30, 2013 |
Before
tax £m |
Tax
(charge) £m |
After
tax £m |
|||||||||
Remeasurements of post-employment benefit liabilities |
2.9 | (0.8 | ) | 2.1 | ||||||||
Currency translation differences |
(10.1 | ) | | (10.1 | ) | |||||||
|
|
|
|
|
|
|||||||
Other comprehensive (loss) / income |
(7.2 | ) | (0.8 | ) | (8.0 | ) | ||||||
|
|
|
|
|
|
For the year ended September 30, 2014 |
Before
tax £m |
Tax
credit £m |
After
tax £m |
|||||||||
Remeasurements of post-employment benefit liabilities |
(5.5 | ) | 1.2 | (4.3 | ) | |||||||
Currency translation differences |
(22.5 | ) | | (22.5 | ) | |||||||
|
|
|
|
|
|
|||||||
Other comprehensive (loss) / income |
(28.0 | ) | 1.2 | (26.8 | ) | |||||||
|
|
|
|
|
|
F-145
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
11. | Property, plant and equipment |
Land and
buildings £m |
Plant and
machinery £m |
Total
£m |
||||||||||
Cost |
||||||||||||
Balance at December 31, 2011 |
23.7 | 82.3 | 106.0 | |||||||||
|
|
|
|
|
|
|||||||
Additions |
0.7 | 11.0 | 11.7 | |||||||||
Disposals |
(0.5 | ) | (2.8 | ) | (3.3 | ) | ||||||
Effect of movements in foreign exchange |
(0.1 | ) | 0.4 | 0.3 | ||||||||
|
|
|
|
|
|
|||||||
Balance at September 30, 2012 |
23.8 | 90.9 | 114.7 | |||||||||
|
|
|
|
|
|
|||||||
Additions |
| 18.2 | 18.2 | |||||||||
Disposals |
| (4.4 | ) | (4.4 | ) | |||||||
Effect of movements in foreign exchange |
0.7 | 2.5 | 3.2 | |||||||||
|
|
|
|
|
|
|||||||
Balance at September 30, 2013 |
24.5 | 107.2 | 131.7 | |||||||||
|
|
|
|
|
|
|||||||
Additions |
0.4 | 14.9 | 15.3 | |||||||||
Disposals |
(2.0 | ) | (4.6 | ) | (6.6 | ) | ||||||
Effect of movements in foreign exchange |
(2.2 | ) | (11.0 | ) | (13.2 | ) | ||||||
|
|
|
|
|
|
|||||||
Balance at September 30, 2014 |
20.7 | 106.5 | 127.2 | |||||||||
|
|
|
|
|
|
|||||||
Accumulated depreciation and impairment |
||||||||||||
Balance at December 31, 2011 |
(5.2 | ) | (25.1 | ) | (30.3 | ) | ||||||
|
|
|
|
|
|
|||||||
Depreciation charge for the period |
(0.5 | ) | (7.1 | ) | (7.6 | ) | ||||||
Disposals |
0.3 | 2.3 | 2.6 | |||||||||
Effect of movements in foreign exchange |
| (0.4 | ) | (0.4 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at September 30, 2012 |
(5.4 | ) | (30.3 | ) | (35.7 | ) | ||||||
|
|
|
|
|
|
|||||||
Depreciation charge for the year |
(1.3 | ) | (10.7 | ) | (12.0 | ) | ||||||
Disposals |
| 4.3 | 4.3 | |||||||||
Effect of movements in foreign exchange |
(0.4 | ) | (2.6 | ) | (3.0 | ) | ||||||
|
|
|
|
|
|
|||||||
Balance at September 30, 2013 |
(7.1 | ) | (39.3 | ) | (46.4 | ) | ||||||
|
|
|
|
|
|
|||||||
Depreciation charge for the year |
(1.2 | ) | (9.3 | ) | (10.5 | ) | ||||||
Disposals |
1.0 | 3.9 | 4.9 | |||||||||
Effect of movements in foreign exchange |
0.7 | 3.6 | 4.3 | |||||||||
|
|
|
|
|
|
|||||||
Balance at September 30, 2014 |
(6.6 | ) | (41.1 | ) | (47.7 | ) | ||||||
|
|
|
|
|
|
|||||||
Net book value December 31, 2011 |
18.5 | 57.2 | 75.7 | |||||||||
|
|
|
|
|
|
|||||||
Net book value September 30, 2012 |
18.4 | 60.6 | 79.0 | |||||||||
|
|
|
|
|
|
|||||||
Net book value September 30, 2013 |
17.4 | 67.9 | 85.3 | |||||||||
|
|
|
|
|
|
|||||||
Net book value September 30, 2014 |
14.1 | 65.4 | 79.5 | |||||||||
|
|
|
|
|
|
The Overseas Group had no capitalised borrowing costs during any period.
Land and buildings and plant and machinery in Sweden and Norway amounting to £47.5 million and £11.1 million respectively (2013: £52.5 million and £13.6 million respectively) are pledged as security for the Senior Secured Notes bond issue of July 2013 in the Findus Group detailed in Note 17.
F-146
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Leased assets
Plant and machinery includes the following amounts where the Overseas Group is a lessee under a finance lease:
Year ended
December 31, 2011 £m |
9 month
period ended September 30, 2012 £m |
Year ended September 30, | ||||||||||||||
Leasehold equipment |
2013
£m |
2014
£m |
||||||||||||||
Cost |
1.4 | 3.3 | 3.3 | 3.6 | ||||||||||||
Accumulated depreciation |
(0.3 | ) | (0.6 | ) | (1.0 | ) | (1.3 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value |
1.1 | 2.7 | 2.3 | 2.3 | ||||||||||||
|
|
|
|
|
|
|
|
12. | Intangible assets |
Goodwill
£m |
Brands
£m |
Development
costs £m |
Total
£m |
|||||||||||||
Cost |
||||||||||||||||
Balance at December 31, 2011 |
720.0 | 22.1 | 1.5 | 743.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Effect of movements in foreign exchange |
(2.8 | ) | (0.7 | ) | | (3.5 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2012 |
717.2 | 21.4 | 1.5 | 740.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Effect of movements in foreign exchange |
(2.1 | ) | 0.3 | | (1.8 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2013 |
715.1 | 21.7 | 1.5 | 738.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Additions |
| 1.5 | 2.8 | 4.3 | ||||||||||||
Effect of movements in foreign exchange |
(64.8 | ) | (0.4 | ) | | (65.2 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2014 |
650.3 | 22.8 | 4.3 | 677.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Accumulated amortisation and impairment |
||||||||||||||||
Balance at December 31, 2011 |
(222.7 | ) | (8.1 | ) | | (230.8 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Amortisation for the year |
| (0.4 | ) | (0.5 | ) | (0.9 | ) | |||||||||
Impairment |
(146.1 | ) | | | (146.1 | ) | ||||||||||
Effect of movements in foreign exchange |
(0.2 | ) | | | (0.2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2012 |
(369.0 | ) | (8.5 | ) | (0.5 | ) | (378.0 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Amortisation for the year |
| (0.6 | ) | (0.6 | ) | (1.2 | ) | |||||||||
Impairment |
| (2.0 | ) | | (2.0 | ) | ||||||||||
Effect of movements in foreign exchange |
0.6 | | | 0.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2013 |
(368.4 | ) | (11.1 | ) | (1.1 | ) | (380.6 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Amortisation for the year |
| (0.7 | ) | (0.5 | ) | (1.2 | ) | |||||||||
Impairment |
| (3.4 | ) | | (3.4 | ) | ||||||||||
Effect of movements in foreign exchange |
36.4 | 0.1 | | 36.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2014 |
(332.0 | ) | (15.1 | ) | (1.6 | ) | (348.7 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value December 31, 2011 |
497.3 | 14.0 | 1.5 | 512.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value September 30, 2012 |
348.2 | 12.9 | 1.0 | 362.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value September 30, 2013 |
346.7 | 10.6 | 0.4 | 357.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value September 30, 2014 |
318.3 | 7.7 | 2.7 | 328.7 | ||||||||||||
|
|
|
|
|
|
|
|
F-147
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Certain brands in Sweden amounting to £2.3 million (2013: £5.7 million) are pledged as security for the Senior Secured Notes bond issue of July 2013 in the Findus Group detailed in Note 17.
Amortisation of £1.2 million (2013: £1.2 million; 2012: £0.9 million) is included in Other operating expenses in the income statement.
Goodwill has been allocated to cash generating units as follows:
December 31, | September 30, | |||||||||||||||
2011
£m |
2012
£m |
2013
£m |
2014
£m |
|||||||||||||
Sweden |
222.1 | 87.5 | 89.2 | 78.6 | ||||||||||||
Norway |
159.8 | 160.6 | 152.6 | 142.1 | ||||||||||||
France |
87.0 | 79.1 | 82.9 | 77.1 | ||||||||||||
Other |
28.4 | 21.0 | 22.0 | 20.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
497.3 | 348.2 | 346.7 | 318.3 | ||||||||||||
|
|
|
|
|
|
|
|
The Overseas Groups goodwill has been allocated based on the enterprise value at acquisition of each cash generating unit (CGU). As required by IAS 36 Impairment of Assets, an annual review of the carrying amount of the goodwill and the indefinite life brand is carried out in November of each year (using the period-end carrying values of goodwill and indefinite life brand) to identify whether there is any impairment to these carrying values. This is done by means of comparison of the carrying values to the value in use of each CGU or indefinite life asset. Value in use is calculated as the net present value of the projected risk-adjusted cash flows of each CGU or indefinite life asset.
Key assumptions for goodwill
The values for the key assumptions were arrived at by taking into consideration detailed historical information and comparison to external sources where appropriate, such as market rates for discount factors.
Budgeted cash flows |
The calculation of value in use has been based on the cash flows forecast in the 2015 budget and applying assumptions for the subsequent year. These plans have been prepared and approved by management, and incorporate past performance, historical growth rates and projections of developments in key markets. Beyond this, a cash flow growth rate of between 1.5% p.a. and 1.8% p.a. has been assumed for each territory, this being a reasonable estimate of future growth in the territories in which the Overseas Group operates. | |
Sales |
Projected sales are built up with reference to markets and product platforms. They incorporate past performance, historical growth rates and projections of developments in key markets. | |
EBITDA Margin |
Projected margins reflect historical performance and expectations for the future. | |
Discount rate |
A pre-tax discount rate was applied to the cash flows depending on the risk attributed to businesses in each territory. | |
Long-term growth rate | As required by IAS 36, growth rates for the period after the detailed forecasts are based on reasonable and supportable assumptions that represent managements best estimate of the range of economic conditions that will exist over the remaining useful life of the asset. These rates do not reflect the long-term assumptions used by the Overseas Group for investment planning. |
F-148
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
The parameters used for the determination of recoverable amount of the main consolidated business are set forth below:
As at September 30, 2014 |
Sweden | Norway | France | |||||||||
Basis of recoverable amount |
Value in use | Value in use | Value in use | |||||||||
Period covered by the internal plan |
2 years | 2 years | 2 years | |||||||||
Pre-tax discount rate |
7.1 | % | 6.8 | % | 8.8 | % | ||||||
Long-term growth rate |
1.5 | % | 1.8 | % | 1.8 | % |
As at September 30, 2013 |
Sweden | Norway | France | |||||||||
Basis of recoverable amount |
Value in use | Value in use | Value in use | |||||||||
Period covered by the internal plan |
2 years | 2 years | 2 years | |||||||||
Pre-tax discount rate |
7.1 | % | 6.8 | % | 8.8 | % | ||||||
Long-term growth rate |
1.5 | % | 1.8 | % | 1.8 | % |
As at September 30, 2012 |
Sweden | Norway | France | |||||||||
Basis of recoverable amount |
Value in use | Value in use | Value in use | |||||||||
Period covered by the internal plan |
2 years | 2 years | 2 years | |||||||||
Pre-tax discount rate |
7.1 | % | 7.5 | % | 8.8 | % | ||||||
Long-term growth rate |
1.5 | % | 1.8 | % | 1.9 | % |
As at December 31, 2011 |
Sweden | Norway | France | |||||||||
Basis of recoverable amount |
Value in use | Value in use | Value in use | |||||||||
Period covered by the internal plan |
2 years | 2 years | 2 years | |||||||||
Pre-tax discount rate |
7.5 | % | 8.0 | % | 8.1 | % | ||||||
Long-term growth rate |
2.3 | % | 2.1 | % | 1.9 | % |
The carrying amount of goodwill of the other CGUs of the Overseas Group is not significant in comparison to the total carrying amount of goodwill.
No impairment of goodwill has been recorded in 2014 and 2013 as the recoverable amount calculated based on value in use exceeded carrying value for each of the CGUs.
In 2012, as a result of an impairment review, the impairment charge of £136.1 million of the goodwill in Sweden (included in the Sweden reportable segment) reflected a significant decline in trading performance against the previous business plan. The carrying value of the CGU (long-term assets and working capital) was brought down to its value in use of £145 million. As part of the same impairment test, an additional goodwill impairment charge of £10.0 million has been recognised in France and Finland (included in the France and Other reportable segments, respectively), reflecting significant decline in trading performance against the previous business plans.
Sensitivity to changes in assumptions for goodwill
In Sweden, there is headroom of £130 million between the recoverable value and the carrying value of the CGU. A sensitivity analysis has been performed in order to review the impact of changes in key assumptions. For example, a 3% decrease in gross margin, with all other assumptions held constant, or a 20% decrease in sales, with all other assumptions held constant, did not identify any impairment. Similarly, zero growth after the initial two year period, with all other assumptions held constant or a 2% increase in discount rate, did not identify any impairment.
F-149
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
In Norway, there is headroom of £93 million between the recoverable value and the carrying value of the CGU. A sensitivity analysis has been performed in order to review the impact of changes in key assumptions. For example, a 3% decrease in gross margin, with all other assumptions held constant, or a 20% decrease in sales, with all other assumptions held constant, did not identify any impairment. Similarly, zero growth after the initial two year period, with all other assumptions held constant or a 2% increase in discount rate, did not identify any impairment.
In France, there is headroom of £39 million between the recoverable value and the carrying value of the CGU. A sensitivity analysis has been performed in order to review the impact of changes in key assumptions. For example, a 3% decrease in gross margin, with all other assumptions held constant, or a 20% decrease in sales, with all other assumptions held constant, did not identify any impairment. Similarly, zero growth after the initial two year period, with all other assumptions held constant or a 2% increase in discount rate, did not identify any impairment.
Key assumptions for the Findus brand
The parameters used for the determination of recoverable amount of the Findus brand are set forth below:
As at September 30, 2014 |
Findus brand | |||
Basis of recoverable amount |
Value in use | |||
Period covered by the internal plan |
2 years | |||
Pre-tax discount rate |
7.1 | % | ||
Long-term growth rate |
0 | % |
As at September 30, 2013 |
Findus brand | |||
Basis of recoverable amount |
Value in use | |||
Period covered by the internal plan |
2 years | |||
Pre-tax discount rate |
7.1 | % | ||
Long-term growth rate |
0 | % |
As at September 30, 2012 |
Findus brand | |||
Basis of recoverable amount |
Value in use | |||
Period covered by the internal plan |
2 years | |||
Pre-tax discount rate |
7.4 | % | ||
Long-term growth rate |
0 | % |
As at December 31, 2011 |
Findus brand | |||
Basis of recoverable amount |
Value in use | |||
Period covered by the internal plan |
2 years | |||
Pre-tax discount rate |
10.3 | % | ||
Long-term growth rate |
1.9 | % |
In 2014, the impairment charge of £3.4 million (2013: £2.0 million) of the Findus brand (included in the Sweden reportable segment) reflected a significant decline in expected sales against the previous business plan. The carrying value of the brand was brought down to its value in use of £2.3 million (2013: £5.7 million).
No impairment of the Findus brand has been recorded in 2012.
F-150
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Sensitivity to changes in assumptions for the Findus Brand
For the year ended September 30, 2014, the value in use calculation for the Findus Brand showed no headroom, and therefore applying an increase of 0.5% to the discount rate would identify a further impairment of £0.3 million.
13. | Deferred tax assets and liabilities |
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
As of December 31, 2011 | As of September 30, 2012 | |||||||||||||||||||||||
Assets | Liabilities | Total | Assets | Liabilities | Total | |||||||||||||||||||
£m | £m | £m | £m | £m | £m | |||||||||||||||||||
Property, plant and equipment |
| (0.8 | ) | (0.8 | ) | | (1.0 | ) | (1.0 | ) | ||||||||||||||
Intangible assets |
| (0.8 | ) | (0.8 | ) | | (0.8 | ) | (0.8 | ) | ||||||||||||||
Employee benefits |
15.0 | | 15.0 | 13.9 | | 13.9 | ||||||||||||||||||
Other |
| (1.3 | ) | (1.3 | ) | | (1.3 | ) | (1.3 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Tax assets/(liabilities) |
15.0 | (2.9 | ) | 12.1 | 13.9 | (3.1 | ) | 10.8 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2013 | As of September 30, 2014 | |||||||||||||||||||||||
Assets | Liabilities | Total | Assets | Liabilities | Total | |||||||||||||||||||
£m | £m | £m | £m | £m | £m | |||||||||||||||||||
Property, plant and equipment |
| (0.9 | ) | (0.9 | ) | | (2.5 | ) | (2.5 | ) | ||||||||||||||
Intangible assets |
| (0.8 | ) | (0.8 | ) | | (0.8 | ) | (0.8 | ) | ||||||||||||||
Employee benefits |
12.6 | | 12.6 | 11.9 | | 11.9 | ||||||||||||||||||
Other |
| (1.2 | ) | (1.2 | ) | | (2.3 | ) | (2.3 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Tax assets/(liabilities) |
12.6 | (2.9 | ) | 9.7 | 11.9 | (5.6 | ) | 6.3 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
No deferred tax assets are recognised for tax loss carry-forwards as the probability of the realisation of any related tax benefit through future taxable profits is not yet considered probable. The losses arise as a result of both trading and non-trading losses in the Overseas Group entities. Deferred tax assets that the Overseas Group has not recognised in the financial statements, comprised of tax loss carry-forwards, amount to £7.7 million (2013: £7.5 million; 2012: £6.1 million).
The aggregate deferred tax relating to items that have been charged directly to net parent investment is £1.3 million (2013: £1.0 million; 2012: £1.2 million charge).
F-151
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Movements in deferred tax during the periods were as follows:
For the 9 month period ended September 30, 2012 |
Opening
balance December 31, 2011 £m |
Movement
in foreign exchange on opening balance £m |
Recognised
in income statement £m |
Recognised
in net parent investment £m |
September 30,
2012 £m |
|||||||||||||||
Property, plant and equipment |
(0.8 | ) | | (0.2 | ) | | (1.0 | ) | ||||||||||||
Intangible assets |
(0.8 | ) | | | | (0.8 | ) | |||||||||||||
Employee benefits |
15.0 | | 0.1 | (1.2 | ) | 13.9 | ||||||||||||||
Other |
(1.3 | ) | | | | (1.3 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Deferred tax |
12.1 | | (0.1 | ) | (1.2 | ) | 10.8 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
For the year ended September 30, 2013 |
Opening
balance October 1, 2012 £m |
Movement
in foreign exchange on opening balance £m |
Recognised
in income statement £m |
Recognised
in net parent investment £m |
September 30,
2013 £m |
|||||||||||||||
Property, plant and equipment |
(1.0 | ) | (0.3 | ) | 0.4 | | (0.9 | ) | ||||||||||||
Intangible assets |
(0.8 | ) | | | | (0.8 | ) | |||||||||||||
Employee benefits |
13.9 | | (0.3 | ) | (1.0 | ) | 12.6 | |||||||||||||
Other |
(1.3 | ) | | 0.1 | | (1.2 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Deferred tax |
10.8 | (0.3 | ) | 0.2 | (1.0 | ) | 9.7 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
For the year ended September 30, 2014 |
Opening
balance October 1, 2013 £m |
Movement
in foreign exchange on opening balance £m |
Recognised
in income statement £m |
Recognised
in net parent investment £m |
September 30,
2014 £m |
|||||||||||||||
Property, plant and equipment |
(0.9 | ) | (0.6 | ) | (1.0 | ) | | (2.5 | ) | |||||||||||
Intangible assets |
(0.8 | ) | | | | (0.8 | ) | |||||||||||||
Employee benefits |
12.6 | | (0.6 | ) | (0.1 | ) | 11.9 | |||||||||||||
Other |
(1.2 | ) | | 0.1 | (1.2 | ) | (2.3 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Deferred tax |
9.7 | (0.6 | ) | (1.5 | ) | (1.3 | ) | 6.3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
14. | Inventories |
As of
December 31, 2011 £m |
As of September 30, | |||||||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||||||
Raw materials and consumables |
15.8 | 21.3 | 22.5 | 14.2 | ||||||||||||
Work in progress |
22.0 | 27.7 | 22.9 | 21.2 | ||||||||||||
Finished goods and goods for resale |
42.9 | 42.2 | 37.7 | 32.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total inventories |
80.7 | 91.2 | 83.1 | 68.3 | ||||||||||||
|
|
|
|
|
|
|
|
During the year, £0.8 million (2013: £0.7 million; 2012: £1.1 million) was charged to the income statement for the write down of inventories.
F-152
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
During the year, £281.8 million (2013: £313.1 million; 2012: £233.6 million) of inventories was recognised as an expense within cost of goods sold.
15. | Trade and other receivables |
As of
December 31, |
As of September 30, | |||||||||||||||
2011 | 2012 | 2013 | 2014 | |||||||||||||
£m | £m | £m | £m | |||||||||||||
Trade receivables |
76.7 | 79.8 | 77.2 | 74.9 | ||||||||||||
Less: provision for impairment of trade receivables |
(0.2 | ) | (0.3 | ) | (0.2 | ) | (0.1 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Trade receivablesnet |
76.5 | 79.5 | 77.0 | 74.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Prepayments and accrued income |
3.1 | 2.5 | 2.0 | 2.9 | ||||||||||||
Amounts due from related parties |
1.3 | 1.0 | 1.5 | 0.1 | ||||||||||||
Other receivables |
8.2 | 8.3 | 6.5 | 7.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total trade and other receivables |
89.1 | 91.3 | 87.0 | 84.9 | ||||||||||||
|
|
|
|
|
|
|
|
Trade receivables, prepayments and other receivables are expected to be recovered in less than 12 months.
The ageing of trade receivables is detailed below:
Gross | Impaired | Net | ||||||||||
As at December 31, 2011 |
£m | £m | £m | |||||||||
Not past due |
73.3 | | 73.3 | |||||||||
Past due less than 1 month |
2.5 | | 2.5 | |||||||||
Past due 1 to 3 months |
0.2 | | 0.2 | |||||||||
Past due 3 to 6 months |
0.1 | | 0.1 | |||||||||
Past due more than 6 months |
0.6 | (0.2 | ) | 0.4 | ||||||||
|
|
|
|
|
|
|||||||
Sub-total |
76.7 | (0.2 | ) | 76.5 | ||||||||
|
|
|
|
|
|
|||||||
Total trade receivables |
76.5 | |||||||||||
|
|
Gross | Impaired | Net | ||||||||||
As at September 30, 2012 |
£m | £m | £m | |||||||||
Not past due |
74.9 | | 74.9 | |||||||||
Past due less than 1 month |
3.2 | | 3.2 | |||||||||
Past due 1 to 3 months |
0.1 | | 0.1 | |||||||||
Past due 3 to 6 months |
0.4 | | 0.4 | |||||||||
Past due more than 6 months |
1.2 | (0.3 | ) | 0.9 | ||||||||
|
|
|
|
|
|
|||||||
Sub-total |
79.8 | (0.3 | ) | 79.5 | ||||||||
|
|
|
|
|
|
|||||||
Total trade receivables |
79.5 | |||||||||||
|
|
F-153
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Gross | Impaired | Net | ||||||||||
As at September 30, 2013 |
£m | £m | £m | |||||||||
Not past due |
75.2 | | 75.2 | |||||||||
Past due less than 1 month |
1.6 | | 1.6 | |||||||||
Past due 1 to 3 months |
0.2 | | 0.2 | |||||||||
Past due 3 to 6 months |
0.1 | (0.1 | ) | 0.0 | ||||||||
Past due more than 6 months |
0.1 | (0.1 | ) | 0.0 | ||||||||
|
|
|
|
|
|
|||||||
Sub-total |
77.2 | (0.2 | ) | 77.0 | ||||||||
|
|
|
|
|
|
|||||||
Total trade receivables |
77.0 | |||||||||||
|
|
Gross | Impaired | Net | ||||||||||
As at September 30, 2014 |
£m | £m | £m | |||||||||
Not past due |
70.7 | | 70.7 | |||||||||
Past due less than 1 month |
3.6 | | 3.6 | |||||||||
Past due 1 to 3 months |
0.2 | | 0.2 | |||||||||
Past due 3 to 6 months |
0.1 | | 0.1 | |||||||||
Past due more than 6 months |
0.3 | (0.1 | ) | 0.2 | ||||||||
|
|
|
|
|
|
|||||||
Sub-total |
74.9 | (0.1 | ) | 74.8 | ||||||||
|
|
|
|
|
|
|||||||
Total trade receivables |
74.8 | |||||||||||
|
|
As of September 30, 2014, trade receivables of £0.1 million (2013: £0.2 million; 2012: £0.3 million) were impaired. These impaired receivables were fully provided for in each period. The impaired receivables mainly relate to circumstances where a balance was disputed or where a debtor was experiencing financial difficulties. All impaired trade receivables have been provided to the extent that they are believed not to be recoverable.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable, which approximates its carrying value. The Overseas Group does not hold any collateral as security.
16. | Cash and cash equivalents |
Cash and cash equivalents are comprised as follows:
As of
December 31, |
As of September 30, | |||||||||||||||
2011 | 2012 | 2013 | 2014 | |||||||||||||
£m | £m | £m | £m | |||||||||||||
Cash balances and call deposits |
183.7 | 167.7 | 97.3 | 100.8 | ||||||||||||
Short-term bank deposits |
| 6.0 | 17.5 | 31.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents |
183.7 | 173.7 | 114.8 | 131.8 | ||||||||||||
|
|
|
|
|
|
|
|
The Overseas Group is part of a cash pool (which also includes entities within the Residual Findus Group) where funds are considered on a net basis and grouped together as cash and cash equivalents.
F-154
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
17. | Loans and borrowings |
The loans and borrowings due by the Overseas Group are as follows:
As of
December 31, 2011 £m |
As of September 30,
|
|||||||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||||||
Current liabilities |
||||||||||||||||
Bank loansSenior Secured |
| 19.6 | | | ||||||||||||
Finance leases |
0.1 | 0.4 | 0.4 | 0.5 | ||||||||||||
Less deferred borrowing costs to be amortised in 2-5 years |
| (0.5 | ) | | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total due in less than one year |
0.1 | 19.5 | 0.4 | 0.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-current liabilities |
||||||||||||||||
Bank loansSenior Secured |
42.2 | | | | ||||||||||||
Loans due to Related Partiesback to back with bond issue |
| | 16.1 | 15.8 | ||||||||||||
Finance leases |
1.2 | 3.0 | 2.5 | 2.2 | ||||||||||||
Less deferred borrowing costs to be amortised in 2-5 years |
(1.0 | ) | | | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total due after more than one year |
42.4 | 3.0 | 18.6 | 18.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total borrowings |
42.5 | 22.5 | 19.0 | 18.5 | ||||||||||||
|
|
|
|
|
|
|
|
A more detailed analysis of the repayment profile of the loans and borrowings is included in Note 22.
The Senior Secured bank loans in the Overseas Group in 2011 and 2012 were part of the original financing at the time of the last change of private equity ownership in 2008. The loans were secured by pledges of assets and shares in certain of the companies of the Findus Group and carried interest at rates between 5% and 6%. These loans were initially reduced as part of a Findus Group restructuring in September 2012, and finally paid off by a loan from a Related Party following the bond issue of Senior Secured Notes in the Residual Findus Group in July 2013.
The Loans due to Related Partiesback to back with bond issue were made out of the proceeds of the bond issue in the Residual Findus Group in July 2013. The loans were made in GBP and SEK, have a repayment date of July 2018 and carry interest at rates of 9.5% and 9.125%.
Finance leases comprise leases of equipment for substantially the whole of their useful lives. The leases are on typical arms-length commercial terms with interest rates based on base rates plus a margin.
The Overseas Group participates in the super senior Revolving Credit Facility of the Findus Group, although there are no fixed allocations of the facility between the Overseas Group and the Residual Findus Group. This can be utilised by way of loans, letters of credit or other ancillary facilities. The facility is secured on a senior basis by the same assets as the Senior Secured Notes of the Findus Group, and the assets of certain operating entities within the Overseas Group are included in the guarantee group, see Note 27. At September 30, 2014, the total revolving credit facilities amounted to £60 million, of which £11 million was utilised, including the utilisation of £10 million in respect of guarantees and letters of credit issued.
F-155
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
18. | Trade and other payables |
As of
December 31, 2011 £m |
As of September 30,
|
|||||||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||||||
Trade payables |
93.4 | 78.7 | 75.2 | 74.1 | ||||||||||||
Amounts due to related parties |
2.6 | 2.5 | 2.5 | 0.8 | ||||||||||||
Accruals |
33.7 | 33.0 | 48.4 | 47.7 | ||||||||||||
Social security and other taxes |
10.5 | 7.4 | 7.3 | 6.3 | ||||||||||||
Other payables |
16.0 | 15.6 | 15.0 | 9.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total trade and other payables |
156.2 | 137.2 | 148.4 | 137.9 | ||||||||||||
|
|
|
|
|
|
|
|
19. | Defined benefit plans |
The Overseas Group operates defined benefit pension plans in Sweden, Norway and France as well as various defined contribution plans. The defined benefit pension plans are partially funded in Norway and unfunded in Sweden and France as is the norm in these countries.
As of
December 31, 2011 £m |
As of September 30,
|
|||||||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||||||
Net defined benefit obligationSweden |
45.9 | 47.0 | 45.3 | 46.7 | ||||||||||||
Net defined benefit obligationNorway |
8.7 | 4.1 | 3.5 | 0.3 | ||||||||||||
Net defined benefit obligationFrance |
1.9 | 1.8 | 2.1 | 2.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net defined benefit obligation |
56.5 | 52.9 | 50.9 | 49.1 | ||||||||||||
|
|
|
|
|
|
|
|
The present value of the defined benefit obligation in Norway has decreased during the periods presented as the Overseas Group offered employees in Norway the opportunity to receive a settlement, which has been taken up by the majority of employees.
The amount included in the Statement of Financial Position arising from the Overseas Groups obligations in respect of its defined benefit retirement plans is as follows:
As of
December 31, 2011 £m |
As of September 30,
|
|||||||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||||||
Present value of unfunded defined benefit obligations |
48.9 | 49.5 | 47.9 | 49.1 | ||||||||||||
Present value of funded defined benefit obligations |
23.5 | 19.6 | 12.2 | 0.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal present value of defined benefit obligations |
72.4 | 69.1 | 60.1 | 49.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair value of plan assets |
(15.9 | ) | (16.2 | ) | (9.2 | ) | (0.8 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Recognised liability for defined benefit obligations |
56.5 | 52.9 | 50.9 | 49.1 | ||||||||||||
|
|
|
|
|
|
|
|
F-156
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Movements in recognised liability for net defined benefit obligations are as follows:
9 month period
ended September 30, 2012 £m |
Year ended September 30,
|
|||||||||||
2013
£m |
2014
£m |
|||||||||||
Opening balance |
(56.5 | ) | (52.9 | ) | (50.9 | ) | ||||||
Foreign exchange (losses) / gains |
(0.4 | ) | (0.7 | ) | 6.1 | |||||||
Current service cost |
(1.3 | ) | (1.6 | ) | (0.9 | ) | ||||||
Interest cost |
(1.5 | ) | (2.0 | ) | (1.8 | ) | ||||||
Actuarial gains / (losses) |
4.2 | 2.9 | (5.5 | ) | ||||||||
Contributions by employer |
1.2 | 1.2 | 0.1 | |||||||||
Benefit payments |
1.4 | 1.9 | 1.7 | |||||||||
Curtailment gain |
| 0.3 | 2.1 | |||||||||
|
|
|
|
|
|
|||||||
As at September 30, |
(52.9 | ) | (50.9 | ) | (49.1 | ) | ||||||
|
|
|
|
|
|
|||||||
Recognised liability for defined benefit obligations |
(52.9 | ) | (50.9 | ) | (49.1 | ) | ||||||
|
|
|
|
|
|
Movements in present value of defined benefit obligations are as follows:
9 month period
ended September 30, 2012 £m |
Year ended September 30,
|
|||||||||||
2013
£m |
2014
£m |
|||||||||||
Opening balance |
(72.4 | ) | (69.1 | ) | (60.1 | ) | ||||||
Foreign exchange (losses) / gains |
(0.2 | ) | (0.2 | ) | 6.0 | |||||||
Current service cost |
(1.3 | ) | (1.6 | ) | (0.9 | ) | ||||||
Interest cost |
(1.7 | ) | (2.3 | ) | (1.9 | ) | ||||||
Actuarial gains / (losses) |
4.7 | 4.3 | (5.9 | ) | ||||||||
Benefit payments |
1.8 | 2.5 | 1.8 | |||||||||
Curtailment gain |
| 0.3 | 2.1 | |||||||||
Settlements |
| 6.0 | 9.0 | |||||||||
|
|
|
|
|
|
|||||||
As at September 30, |
(69.1 | ) | (60.1 | ) | (49.9 | ) | ||||||
|
|
|
|
|
|
Movements in fair value of plan assets of defined benefit retirement plans are as follows:
9 month period
ended September 30, 2012 £m |
Year ended September 30,
|
|||||||||||
2013
£m |
2014
£m |
|||||||||||
Opening balance |
15.9 | 16.2 | 9.2 | |||||||||
Foreign exchange (losses) / gains |
(0.2 | ) | (0.5 | ) | 0.1 | |||||||
Return on assets |
0.2 | 0.3 | 0.1 | |||||||||
Actuarial (losses) / gains |
(0.5 | ) | (1.4 | ) | 0.4 | |||||||
Contributions by employer |
1.2 | 1.2 | 0.1 | |||||||||
Benefit payments |
(0.4 | ) | (0.6 | ) | (0.1 | ) | ||||||
Settlements |
| (6.0 | ) | (9.0 | ) | |||||||
|
|
|
|
|
|
|||||||
As at September 30, |
16.2 | 9.2 | 0.8 | |||||||||
|
|
|
|
|
|
F-157
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Expenses recognised in respect of the defined benefit plan in the income statement are as follows:
9 month period
ended September 30, 2012 £m |
Year ended September 30,
|
|||||||||||
2013
£m |
2014
£m |
|||||||||||
Current service cost |
(1.3 | ) | (1.6 | ) | (0.9 | ) | ||||||
Settlement and curtailments |
| 0.3 | 2.1 | |||||||||
Interest on defined benefit pension plan obligation |
(1.5 | ) | (2.0 | ) | (1.8 | ) | ||||||
|
|
|
|
|
|
|||||||
Total |
(2.8 | ) | (3.3 | ) | (0.6 | ) | ||||||
|
|
|
|
|
|
Current service cost is disclosed in cost of sales and interest on net defined benefit obligation is disclosed in net financing costs.
Amounts recognised in the consolidated carve-out statement of comprehensive income are as follows:
9 month period
ended September 30, 2012 £m |
Year ended September 30,
|
|||||||||||
2013
£m |
2014
£m |
|||||||||||
Actuarial gains/(losses) on defined benefit obligation |
4.7 | 4.3 | (5.9 | ) | ||||||||
Actuarial (losses)/gains on plan assets |
(0.5 | ) | (1.4 | ) | 0.4 | |||||||
|
|
|
|
|
|
|||||||
Total |
4.2 | 2.9 | (5.5 | ) | ||||||||
|
|
|
|
|
|
The fair value of plan assets, all at quoted prices excluding property, are as follows:
Year ended
December 31, 2011 £m |
9 month period
ended September 30, 2012 £m |
Year ended September 30,
|
||||||||||||||
2013
£m |
2014
£m |
|||||||||||||||
Equities |
2.4 | 2.2 | 0.8 | | ||||||||||||
Bonds |
8.9 | 10.0 | 6.6 | | ||||||||||||
Property |
2.8 | 2.4 | 1.0 | | ||||||||||||
Other |
1.8 | 1.6 | 0.8 | 0.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
15.9 | 16.2 | 9.2 | 0.8 | ||||||||||||
|
|
|
|
|
|
|
|
Principal actuarial assumptions for the Sweden and Norway schemes were as follows:
As at December 31, 2011 |
Sweden | Norway | ||||||
Discount rate |
3.6 | % | 4.0 | % | ||||
Inflation rate |
2.5 | % | 2.2 | % | ||||
Rate of increase in salaries |
3.0 | % | 3.3 | % | ||||
Rate of increase for pensions in payment |
3.0 | % | 2.0 | % |
As at September 30, 2012 |
Sweden | Norway | ||||||
Discount rate |
3.6 | % | 2.2 | % | ||||
Inflation rate |
2.5 | % | 2.2 | % | ||||
Rate of increase in salaries |
3.0 | % | 3.3 | % | ||||
Rate of increase for pensions in payment |
3.0 | % | 2.0 | % |
F-158
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
As at September 30, 2013 |
Sweden | Norway | ||||||
Discount rate |
4.0 | % | 3.3 | % | ||||
Inflation rate |
2.0 | % | 2.2 | % | ||||
Rate of increase in salaries |
3.0 | % | 3.8 | % | ||||
Rate of increase for pensions in payment |
3.0 | % | 2.0 | % |
As at September 30, 2014 |
Sweden | Norway | ||||||
Discount rate |
3.3 | % | 2.7 | % | ||||
Inflation rate |
2.0 | % | 2.2 | % | ||||
Rate of increase in salaries |
3.0 | % | 3.3 | % | ||||
Rate of increase for pensions in payment |
3.0 | % | 2.0 | % |
In valuing the liabilities of the pension fund at September 30, 2014, mortality assumptions have been made as indicated below. The assumptions relating to longevity underlying the pension liabilities at the financial period end date are based on actuarial advice in accordance with published statistics and experience in each territory and include an allowance for future improvements in longevity.
These assumptions translate into an average life expectancy in years for a pensioner retiring at age 65:
As at December 31, 2011 |
Sweden | Norway | ||||||
Retiring at the end of the year: |
||||||||
Male |
20.7 | 20.7 | ||||||
Female |
23.9 | 23.9 | ||||||
Retiring 20 years after the end of the year: |
||||||||
Male |
21.7 | 23.0 | ||||||
Female |
23.6 | 26.3 |
As at September 30, 2012 |
Sweden | Norway | ||||||
Retiring at the end of the year: |
||||||||
Male |
20.7 | 20.7 | ||||||
Female |
23.9 | 23.9 | ||||||
Retiring 20 years after the end of the year: |
||||||||
Male |
21.7 | 23.0 | ||||||
Female |
23.6 | 26.3 |
As at September 30, 2013 |
Sweden | Norway | ||||||
Retiring at the end of the year: |
||||||||
Male |
20.7 | 20.7 | ||||||
Female |
23.9 | 23.9 | ||||||
Retiring 20 years after the end of the year: |
||||||||
Male |
21.7 | 23.0 | ||||||
Female |
23.6 | 26.3 |
F-159
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
As at September 30, 2014 |
Sweden | Norway | ||||||
Retiring at the end of the year: |
||||||||
Male |
20.7 | 20.7 | ||||||
Female |
23.9 | 23.9 | ||||||
Retiring 20 years after the end of the year: |
||||||||
Male |
21.7 | 23.0 | ||||||
Female |
23.6 | 26.3 |
Defined benefit obligationsensitivity analysis
The effect of a 0.5% movement in the interest rates of the following variables gives rise to the following percentage movements of the defined benefit obligation as at September 30, 2014 as follows:
Variables |
Change in the
assumptions % |
Increase in
assumptions % |
Decrease in
assumptions % |
|||||||||
Discount rate |
0.5 | (7.9 | ) | 9.0 | ||||||||
Salary increase |
0.5 | 2.4 | (2.0 | ) | ||||||||
Inflation |
0.5 | 7.5 | (6.7 | ) |
Expected contributions and unfunded benefit payments to defined benefit pension plans for the year ending September 30, 2015 are £1.6 million.
20. | Provisions |
Restructuring
£m |
Asset
Retirement Obligation £m |
Other
£m |
Total
£m |
|||||||||||||
Balance at December 31, 2011 |
0.3 | 0.6 | 0.3 | 1.2 | ||||||||||||
Charged/(credited) to the income statement: |
||||||||||||||||
Additional provisions |
0.5 | | 0.1 | 0.6 | ||||||||||||
Unwinding of discount |
| | | | ||||||||||||
Utilisation of provision |
(0.4 | ) | | (0.1 | ) | (0.5 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2012 |
0.4 | 0.6 | 0.3 | 1.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Charged/(credited) to the income statement: |
||||||||||||||||
Additional provisions |
1.2 | | 0.1 | 1.3 | ||||||||||||
Unwinding of discount |
| 0.1 | | 0.1 | ||||||||||||
Utilisation of provision |
(0.5 | ) | | (0.1 | ) | (0.6 | ) | |||||||||
Exchange differences |
| | 0.1 | 0.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2013 |
1.1 | 0.7 | 0.4 | 2.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Charged/(credited) to the income statement: |
||||||||||||||||
Additional provisions |
0.6 | | 0.2 | 0.8 | ||||||||||||
Unwinding of discount |
| | | | ||||||||||||
Utilisation of provision |
(1.1 | ) | | | (1.1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2014 |
0.6 | 0.7 | 0.6 | 1.9 | ||||||||||||
|
|
|
|
|
|
|
|
F-160
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Analysis of total provisions:
December 31,
2011 £m |
September 30,
2012 £m |
2013
£m |
September 30,
2014 £m |
|||||||||||||
Current |
0.6 | 0.7 | 1.5 | 1.2 | ||||||||||||
Non-current |
0.6 | 0.6 | 0.7 | 0.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
1.2 | 1.3 | 2.2 | 1.9 | ||||||||||||
|
|
|
|
|
|
|
|
Restructuring
The Overseas Group provides for future restructuring costs for people who are leaving the business and where compromise agreements have been finalised. Normally the future cash payments are phased.
Asset Retirement Obligation
The Overseas Group has an obligation to restore the land on which the French manufacturing facility is situated upon expiration of the lease in 2023.
Other
The Other provision includes claims brought against the Overseas Group by employees and various risks and claims brought against the Overseas Group by its customers in respect of products supplied.
21. | Cash flows from operating activities |
Note |
9 month period
ended September 30, |
Year ended September 30, |
||||||||||||||
2012
£m |
2013
£m |
2014
£m |
||||||||||||||
Cash flows from operating activities |
||||||||||||||||
(Loss) / profit for the year |
(133.8 | ) | 17.0 | 14.9 | ||||||||||||
Adjustments for: |
||||||||||||||||
Depreciation of property, plant and equipment |
11 | 7.6 | 12.0 | 10.5 | ||||||||||||
Impairment of intangible assets |
12 | 146.1 | 2.0 | 3.4 | ||||||||||||
Amortisation of intangible assets |
12 | 0.9 | 1.2 | 1.2 | ||||||||||||
Loss on disposal of property, plant and equipment |
11 | 0.7 | 0.1 | 1.7 | ||||||||||||
Finance (income) / costs |
9 | (0.7 | ) | 4.8 | 17.3 | |||||||||||
Taxation expense |
10 | 8.1 | 7.9 | 4.0 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Operating cash flow before changes in working capital and provisions |
28.9 | 45.0 | 53.0 | |||||||||||||
|
|
|
|
|
|
|||||||||||
(Increase) / decrease in inventories |
14 | (10.5 | ) | 8.1 | 14.8 | |||||||||||
(Increase) / decrease in trade and other receivables |
15 | (2.2 | ) | 4.3 | 2.1 | |||||||||||
(Decrease) / increase in trade and other payables |
18 | (19.0 | ) | 11.2 | (10.5 | ) | ||||||||||
Increase / (decrease) in employee benefits and other provisions |
(2.4 | ) | (2.2 | ) | (2.1 | ) | ||||||||||
Foreign exchange losses / (gains) on operating activities |
7.4 | (7.0 | ) | (12.8 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||
Cash generated from operations |
2.2 | 59.4 | 44.5 | |||||||||||||
|
|
|
|
|
|
F-161
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
22. | Financial risk management |
a) | Overall risk management policy |
The Overseas Groups activities expose it to a variety of financial risks, including currency risk, interest rate risk, credit risk and liquidity risk.
The Overseas Groups overall risk management programme focuses on minimising potential adverse effects on the Overseas Groups financial performance. As explained in Note 2, the Residual Findus Group has a central treasury department which enters into derivative contracts as instructed by the various Overseas Group operating companies to manage their currency risks.
Risk management is led by senior management and is mainly carried out by a central treasury department of the Findus Group which identifies, evaluates and hedges financial risks in close cooperation with the Overseas Groups operating units.
The Findus Groups principal objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide return for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Overseas Groups capital management policy is considered to be the same as the Findus Groups. For the Findus Group, capital is monitored on the basis of net debt and equity.
b) | Market risk (including currency risk and interest rate risk) |
In managing market risks, the Overseas Group aims to minimise the impact of short term fluctuations on the Overseas Groups earnings. Over the longer term, however, permanent changes in foreign exchange rates and interest rates will have an impact on consolidated carve-out earnings.
Currency risk |
Foreign currency risk on financial assets and liabilities in
currencies other than
|
|
Description | The Overseas Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to USD, GBP and EUR. Within the Overseas Group foreign exchange risk arises from assets and liabilities held in currencies which are not the functional currency of the particular entity. | |
Mitigation & Impact on Statement of Financial Position / Net Parent Investment / Income Statement | The Overseas Group does not actively manage this foreign currency risk. | |
Sensitivity analysis | A 5% movement in foreign exchange rates across all currencies simultaneously in the same direction would have a 0.11% impact on Net Assets. |
The entities within the Overseas Group hold the following balances in currencies that are not their functional currency:
September 30, 2014 | ||||||||||||
EUR
£m |
USD
£m |
GBP
£m |
||||||||||
Trade receivables |
2.9 | 0.2 | | |||||||||
Bank loans |
| | (10.1 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total |
2.9 | 0.2 | (10.1 | ) | ||||||||
|
|
|
|
|
|
F-162
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Currency risk |
Foreign currency risk on purchases |
|
Description | A large portion of the Overseas Groups purchases of materials are made in USD and EUR. Whilst the Overseas Group has a strong record of recovering the impact of cost increases through a combination of increased selling prices and cost reductions, there is a risk of a delay in restoring margins on a timely basis. | |
Mitigation & Impact on Statement of Financial Position / Net Parent Investment / Income Statement | A portion of the purchases in EUR are hedged by the EUR cash generated in the Overseas Group. Forward currency purchase contracts are placed in the market by Findus Treasury Limited, at the instruction of the companies of the Overseas Group. The ultimate proceeds from the contracts are passed by Findus Treasury Limited to the Overseas Group Companies when they mature. | |
Sensitivity analysis | A 5% movement in foreign exchange rates across all currencies simultaneously would have a £5.4 million impact on Cost of Sales in the absence of forward cover. |
Interest rate risk |
||
Description | The Overseas Group is exposed to interest rate risk through its Related Party and 3 rd party debt. | |
Mitigation & Impact on Net Parent Investment / Income Statement | The Overseas Group does not actively manage its interest rate exposure. In September 2012 and July 2013 the Overseas Group repaid the Senior facilities. The Related Party debt and back to back bond debt are at a fixed rate of interest, and consequently no longer exposed to interest rate risk. | |
Sensitivity analysis | Not applicable as the Overseas Group does not have floating rate loans or borrowings. |
c) | Credit risk |
Description | Of the Overseas Group revenue, 75.1% is made to retail customers. In all markets, there is a significant concentration of the retail grocery market and the retail customers have significant power. | |
Mitigation & Impact on Net Parent Investment / Income Statement | The Overseas Group does not actively manage its customer credit risk except by exercising typical credit control and vetting procedures. |
F-163
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
d) | Liquidity risk |
Description | The Overseas Group liquidity risk exposure arises from its inability to meet its commitments as they fall due. The majority of the Overseas Group commitments relates to Related Party debt, which does not have any covenants. | |
Mitigation | The Overseas Group ensures that it has sufficient cash and available funding through regular cash flow forecasting. The Overseas Group also has access to the £60 million Super Senior Revolving Credit Facility that is available to the Findus Group as a whole, which is undrawn but at 30 September 2014 was utilised to the extent of £11 million to support trade credit insurance and supplier credit lines. |
Maturity analysis
The tables below show a maturity analysis of contractual undiscounted cash flows, showing items at the earliest date on which the Overseas Group could be required to pay the liability:
As of December 31, 2011 |
2012
£m |
2013
£m |
2014
£m |
2015
£m |
2016
£m |
Over
5 years £m |
Total
£m |
|||||||||||||||||||||
Borrowingsprincipal |
| 42.2 | | | | | 42.2 | |||||||||||||||||||||
Borrowingsinterest |
1.2 | 0.8 | | | | | 2.0 | |||||||||||||||||||||
Finance leases |
0.5 | 0.5 | 0.3 | | | | 1.3 | |||||||||||||||||||||
Trade payables |
93.4 | | | | | | 93.4 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
95.1 | 43.5 | 0.3 | | | | 138.9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2012 |
2013
£m |
2014
£m |
2015
£m |
2016
£m |
2017
£m |
Over
5 years £m |
Total
£m |
|||||||||||||||||||||
Borrowingsprincipal |
19.6 | | | | | | 19.6 | |||||||||||||||||||||
Borrowingsinterest |
0.8 | | | | | | 0.8 | |||||||||||||||||||||
Finance leases |
0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.9 | 3.4 | |||||||||||||||||||||
Trade payables |
78.7 | | | | | | 78.7 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
99.6 | 0.5 | 0.5 | 0.5 | 0.5 | 0.9 | 102.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2013 |
2014
£m |
2015
£m |
2016
£m |
2017
£m |
2018
£m |
Over
5 years £m |
Total
£m |
|||||||||||||||||||||
Borrowingsprincipal |
| | | | 15.8 | | 15.8 | |||||||||||||||||||||
Borrowingsinterest |
1.6 | 1.6 | 1.6 | 1.6 | 1.6 | | 8.0 | |||||||||||||||||||||
Finance leases |
0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.4 | 2.9 | |||||||||||||||||||||
Trade payables |
75.2 | | | | | | 75.2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
77.3 | 2.1 | 2.1 | 2.1 | 17.9 | 0.4 | 101.9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-164
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
As of September 30, 2014 |
2015
£m |
2016
£m |
2017
£m |
2018
£m |
2019
£m |
Over
5 years £m |
Total
£m |
|||||||||||||||||||||
Borrowingsprincipal |
| | | 15.4 | | | 15.4 | |||||||||||||||||||||
Borrowingsinterest |
1.6 | 1.6 | 1.6 | 1.6 | | | 6.4 | |||||||||||||||||||||
Finance leases |
0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.2 | 2.7 | |||||||||||||||||||||
Trade payable s |
74.1 | | | | | | 74.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
76.2 | 2.1 | 2.1 | 17.5 | 0.5 | 0.2 | 98.6 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maturity information on Payable to Related Party is discussed in Note 26.
23. | Financial instruments |
a) | Categories of financial instruments |
As of December 31, 2011 |
Loans and
receivables £m |
Financial liabilities
at amortised cost £m |
Total
£m |
|||||||||
Assets as per balance sheet |
||||||||||||
Trade receivables |
76.5 | | 76.5 | |||||||||
Receivable from Related Party |
22.7 | | 22.7 | |||||||||
Cash and cash equivalents |
183.7 | | 183.7 | |||||||||
Liabilities as per balance sheet |
||||||||||||
Trade payables |
| (93.4 | ) | (93.4 | ) | |||||||
Payable to Related Party |
| (211.1 | ) | (211.1 | ) | |||||||
Loans and borrowings |
| (42.5 | ) | (42.5 | ) | |||||||
|
|
|
|
|
|
|||||||
Total |
282.9 | (347.0 | ) | (64.1 | ) | |||||||
|
|
|
|
|
|
As of September 30, 2012 |
Loans and
receivables £m |
Financial liabilities
at amortised cost £m |
Total
£m |
|||||||||
Assets as per balance sheet |
||||||||||||
Trade receivables |
79.5 | | 79.5 | |||||||||
Receivable from Related Party |
19.1 | | 19.1 | |||||||||
Cash and cash equivalents |
173.7 | | 173.7 | |||||||||
Liabilities as per balance sheet |
||||||||||||
Trade payables |
| (78.7 | ) | (78.7 | ) | |||||||
Payable to Related Party |
| (263.2 | ) | (263.2 | ) | |||||||
Loans and borrowings |
| (22.5 | ) | (22.5 | ) | |||||||
|
|
|
|
|
|
|||||||
Total |
272.3 | (364.4 | ) | (92.1 | ) | |||||||
|
|
|
|
|
|
F-165
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
As of September 30, 2013 |
Loans and
receivables £m |
Financial liabilities
at amortised cost £m |
Total
£m |
|||||||||
Assets as per balance sheet |
||||||||||||
Trade receivables |
77.0 | | 77.0 | |||||||||
Cash and cash equivalents |
114.8 | | 114.8 | |||||||||
Liabilities as per balance sheet |
||||||||||||
Trade payables |
| (75.2 | ) | (75.2 | ) | |||||||
Payable to Related Party |
| (147.4 | ) | (147.4 | ) | |||||||
Loans and borrowings |
| (19.0 | ) | (19.0 | ) | |||||||
|
|
|
|
|
|
|||||||
Total |
191.8 | (241.6 | ) | (49.8 | ) | |||||||
|
|
|
|
|
|
As of September 30, 2014 |
Loans and
receivables £m |
Financial liabilities
at amortised cost £m |
Total
£m |
|||||||||
Assets as per balance sheet |
||||||||||||
Trade receivables |
74.8 | | 74.8 | |||||||||
Cash and cash equivalents |
131.8 | | 131.8 | |||||||||
Liabilities as per balance sheet |
||||||||||||
Trade payables |
| (74.1 | ) | (74.1 | ) | |||||||
Payable to Related Party |
| (146.9 | ) | (146.9 | ) | |||||||
Loans and borrowings |
| (18.5 | ) | (18.5 | ) | |||||||
|
|
|
|
|
|
|||||||
Total |
206.6 | (239.5 | ) | (32.9 | ) | |||||||
|
|
|
|
|
|
b) | Credit quality of financial assets |
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates.
Trade receivables
The substantial majority of customers of the Overseas Group are large, well-established food retailers for whom there is a longstanding relationship with the Overseas Group. The history of impairment of trade receivables is low with the period end impairment amounting to 0.02% of total revenue (2013: 0.04%; 2012: 0.07%).
Cash at bank and short-term bank deposits
Year ended
December 31, |
9 month
period ended September 30, |
Year ended September 30, | ||||||||||||||
2011
£m |
2012
£m |
2013
£m |
2014
£m |
|||||||||||||
Cash at bank and short-term bank deposits |
||||||||||||||||
AA - |
150.3 | 149.7 | 92.4 | 110.7 | ||||||||||||
A |
33.4 | 24.0 | 22.4 | 21.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cash & cash equivalents |
183.7 | 173.7 | 114.8 | 131.8 | ||||||||||||
|
|
|
|
|
|
|
|
F-166
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
c) | Fair values |
The following summarises the methods and assumptions of estimating the fair values of financial instruments held by the Overseas Group.
| Trade and other payables/receivables |
The notional amount of trade and other payables/receivables are deemed to be carried at fair value, short term, and settled in cash.
| Cash and cash equivalents/overdrafts |
The carrying value of cash is deemed to equal fair value.
| Interest bearing loans and liabilities |
Fair value | ||||||||||||||||
As of
December 31, |
As of September 30, | |||||||||||||||
2011 | 2012 | 2013 | 2014 | |||||||||||||
£m | £m | £m | £m | |||||||||||||
Bank loan |
43.0 | 20.4 | | | ||||||||||||
Senior Secured Notes |
| | 16.1 | 15.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest bearing loans |
43.0 | 20.4 | 16.1 | 15.8 | ||||||||||||
|
|
|
|
|
|
|
|
Carrying value | ||||||||||||||||
As of
December 31, |
As of September 30, | |||||||||||||||
2011 | 2012 | 2013 | 2014 | |||||||||||||
£m | £m | £m | £m | |||||||||||||
Bank loan |
43.0 | 20.4 | | | ||||||||||||
Senior Secured Notes |
| | 16.1 | 15.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest bearing loans |
43.0 | 20.4 | 16.1 | 15.8 | ||||||||||||
|
|
|
|
|
|
|
|
24. | Operating leases |
Non-cancellable operating lease rentals relate to total future aggregate minimum lease payments and are payable as follows:
2012 | 2013 | 2014 | ||||||||||
£m | £m | £m | ||||||||||
Less than one year |
4.9 | 4.7 | 4.3 | |||||||||
Between one and five years |
11.1 | 10.8 | 10.5 | |||||||||
More than five years |
6.8 | 5.3 | 4.2 | |||||||||
|
|
|
|
|
|
|||||||
Total |
22.8 | 20.8 | 19.0 | |||||||||
|
|
|
|
|
|
Non-cancellable operating leases mainly relate to equipment, motor vehicles and land and buildings.
25. | Capital commitments |
The Overseas Group has no capital commitments at September 30, 2014 (2013: Nil; 2012: £0.8 million).
F-167
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
26. | Related parties |
The Findus Group has historically been controlled by an investor group including Lion Capital LLP, Highbridge Capital and Sankaty Mezzanine Capital LLC.
Related party transactions
The Overseas Group may sell or buy goods and enter into other transactions with the Residual Findus Group in the normal course of business. The main transactions between the Overseas Group and the Residual Findus Group for the years ended September 30, 2014 and 2013 and 9 months ended September 30, 2012 are as follows:
September 30,
2012 |
September 30,
2013 |
September 30,
2014 |
||||||||||
£m | £m | £m | ||||||||||
Revenue |
| | | |||||||||
Brand royalty fees |
0.6 | 0.3 | 0.2 | |||||||||
|
|
|
|
|
|
|||||||
Income |
0.6 | 0.3 | 0.2 | |||||||||
|
|
|
|
|
|
|||||||
Cost of sales |
(3.7 | ) | (6.3 | ) | (5.1 | ) | ||||||
Corporate cost allocations |
(2.5 | ) | (2.9 | ) | (4.4 | ) | ||||||
|
|
|
|
|
|
|||||||
Expenses |
(6.2 | ) | (9.2 | ) | (9.5 | ) | ||||||
|
|
|
|
|
|
|||||||
Finance income / (costs) |
2.2 | 2.6 | (3.2 | ) | ||||||||
|
|
|
|
|
|
Related party trade accounts payable and receivable
Related party trade accounts payable and receivable are governed by agreements between the Overseas group and Residual Findus Group, charge interest where relevant and require settlement. These balances have been included in the trade accounts payable and receivable line items in the consolidated carve-out statement of financial position.
Accounts payable | Accounts receivable | |||||||
£m | £m | |||||||
Balance at December 31, 2011 |
2.6 | 1.3 | ||||||
Balance at September 30, 2012 |
2.5 | 1.0 | ||||||
Balance at September 30, 2013 |
2.5 | 1.5 | ||||||
Balance at September 30, 2014 |
0.8 | 0.1 |
The Findus Group debt guarantee
Certain companies within the Overseas Group are acting as guarantors of the Senior Secured Notes 2018 issued by Findus Loanco Sarl, a subsidiary in the Residual Findus Group. These companies include FSAB and those of its subsidiaries that are indicated in Note 27 to these accounts. The security given by the guarantor companies includes security interests in or over the following:
(i) | all issued capital stock of each of the guarantors other than Findus Espana SLU; |
(ii) | fixed and floating charges over bank accounts of the guarantors incorporated or having accounts in France and Sweden; |
(iii) | inventory, machinery and plant, real estate and trade receivables (factoring) of Findus Norge AS; |
(iv) | intellectual property rights and trademarks granted by the guarantors incorporated in Sweden; |
F-168
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
(v) | real property of the Guarantors incorporated in Sweden; |
(vi) | business mortgage certificates issued by Frionor Sverige AB; and business mortgage certificates issued by Findus Sverige AB (in the case of Findus Sverige AB, such security interest in the business mortgage certificate is second-priority); |
(vii) | certain intra-group loans to the guarantors incorporated in Sweden. |
In addition, the Revolving Credit Facility of the Findus Group in which the Overseas Group participates (see Note 17) is secured by security interests in certain assets of Findus Espana, SLU including its accounts receivables and bank accounts and by a promissory mortgage over the IP rights and trademarks (subject to financial assistance limitations) owned by Findus Espana, SLU.
Key management compensation
Key management for the Overseas Group includes members of the board of directors of FSAB, the Group CEO and CFO of Findus Group, and the CEOs of the businesses in Sweden (and in 2012 and 2013 also Nordic Region), Norway and France/Southern Europe Region. The compensation paid or payable to key management for employee services is shown below.
9 month
period ended September 30, |
Year ended September 30, | |||||||||||
2012 | 2013 | 2014 | ||||||||||
£m | £m | £m | ||||||||||
Salaries and other short-term employee benefits |
1.2 | 1.7 | 2.7 | |||||||||
Termination benefits |
| 0.9 | 0.1 | |||||||||
Contributions to money purchase pension plans |
| | 0.2 | |||||||||
|
|
|
|
|
|
|||||||
Total key management compensation |
1.2 | 2.6 | 3.0 | |||||||||
|
|
|
|
|
|
Receivable from Related Party
December 31,
2011 |
September 30,
2012 |
September 30,
2013 |
September 30,
2014 |
|||||||||||||
£m | £m | £m | £m | |||||||||||||
Receivable from Related Party |
22.7 | 19.1 | | | ||||||||||||
|
|
|
|
|
|
|
|
The Receivable due from a Related Party comprised a balance due from Lion Gem Luxembourg 3 S.a.r.l, the ParentCo, arising for historical funding of mezzanine debt interest by FSAB. This loan was partially repaid as part of the refinancing by Findus Group in the period to September 30, 2012 and the remaining balance repaid in the period to September 30, 2013.
Borrowings
December 31,
2011 |
September 30,
2012 |
September 30,
2013 |
September 30,
2014 |
|||||||||||||
£m | £m | £m | £m | |||||||||||||
Loans due to Related Partiesback to back with bond issue |
| | 16.1 | 15.8 | ||||||||||||
|
|
|
|
|
|
|
|
F-169
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
Payable to Related Party
December 31,
2011 |
September 30,
2012 |
September 30,
2013 |
September 30,
2014 |
|||||||||||||
£m | £m | £m | £m | |||||||||||||
Loans |
22.3 | 107.7 | 147.4 | 146.9 | ||||||||||||
Dividends |
62.6 | 62.4 | | | ||||||||||||
Other group transactions |
126.3 | 93.1 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Payable to Related Party |
211.1 | 263.2 | 147.4 | 146.9 | ||||||||||||
|
|
|
|
|
|
|
|
Loans comprise long term loans from Liongem Sweden 1 AB, Findus Treasury Limited and other entities, which are all within the Residual Findus Group in Sweden and the UK. The breakdown of the carrying amount as of September 30, 2014 and the main terms are disclosed below:
Loan issuer |
Currency | Carrying value in £m | Interest rate | |||||||||
Liongem Sweden 1 AB |
EUR | 88.7 | 15.05 | % | ||||||||
Findus Treasury Limited |
SEK | 57.2 | 9.2 | % | ||||||||
Others |
GBP | 1.0 | Various | |||||||||
|
|
|
|
|
|
|||||||
Loans |
146.9 | |||||||||||
|
|
All these loans are repayable on demand.
In the period ended September 30, 2014, dividends, declared in prior periods, and other group transactions totalling £8.3 million (2013: £156.0 million; 2012: £33.2 million) were paid to the Residual Findus Group.
27. | Overseas Group subsidiaries |
The direct and indirect subsidiaries of FSAB are as follows:
Activity |
Country of
incorporation |
Class of
shares held |
Ownership
2014, 2013, 2012 and 2011 |
|||||||||||||
Direct investments |
||||||||||||||||
Findus Belgium BVBA |
Trading | Belgium | Ordinary | 100 | % | |||||||||||
Findus Danmark AS |
Trading | Denmark | Ordinary | 100 | % | |||||||||||
Findus Management & Services Ltd |
Non-trading | England | Ordinary | 100 | % | |||||||||||
Findus Finland OY |
Trading | Finland | Ordinary | 100 | % | |||||||||||
Findus Holdings France SAS (1) |
Holding | France | Ordinary | 100 | % | |||||||||||
Findus Espana SLU |
Trading | Spain | Ordinary | 100 | % | |||||||||||
Frionor Sverige AB (1) |
Trading | Sweden | Ordinary | 100 | % | |||||||||||
Foodvest International AB (1) |
Holding | Sweden | Ordinary | 100 | % | |||||||||||
Sudnif S.A. |
Non-trading | Switzerland | Ordinary | 100 | % | |||||||||||
Findus Deutschland GmbH |
Non-trading | Germany | Ordinary | 100 | % | |||||||||||
Indirect investments |
||||||||||||||||
Findus France SAS (1) |
Trading | France | Ordinary | 100 | % | |||||||||||
Findus Services SAS |
Non-trading | France | Ordinary | 100 | % | |||||||||||
Lion/Gem Norway 1 AS (1) |
Holding | Norway | Ordinary | 100 | % | |||||||||||
Findus Norge Holdings AS (1) |
Holding | Norway | Ordinary | 100 | % | |||||||||||
Findus Norge AS (1) |
Trading | Norway | Ordinary | 100 | % | |||||||||||
Findus Thailand Ltd |
Non-trading | Thailand | Ordinary | 100 | % |
(1) | guarantors of the Senior Secured Notes 2018 discussed in Note 26 |
F-170
Findus Sverige AB
Notes to the Consolidated Carve-out Financial Statements (continued)
28. | Events after the balance sheet date |
On December 23, 2014, the Overseas Group entered into an agreement to acquire the La Cocinera frozen food business in Spain, with an annual revenue of approximately EUR 30.0 million (£21.8 million). The consideration, which is for deferred for 5 years, comprises an undiscounted potential amount of up to EUR 9.2 million (£6.7 million), with an outcome that is linked to the performance of the business over the first 5 years from completion. Completion occurred on April 1, 2015. As of the date of authorisation for issue of these consolidated carve-out financial statements, the Overseas Group has not completed the initial accounting for a business combination and consequently the following could not be calculated:
| The fair value of the consideration to be paid; |
| The fair value of the assets and liabilities to be acquired; and |
| The amount of goodwill arising from the transaction. |
On August 13, 2015, Lion Gem Sweden 1 AB, the parent company of FSAB, entered into an option agreement for Nomad to acquire the Overseas Group for £500.0 million. The transaction, which is subject to works council consultations in France and other customary closing conditions, is expected to close in the fourth calendar quarter of 2015.
F-171
Findus Sverige AB
Condensed Consolidated Carve-out Statements of Income
for the nine months ended 27 June 2015 and 28 June 2014
Nine months ended | ||||||||||||
Note |
27 June 2015
Unaudited £m |
28 June 2014
Unaudited £m |
||||||||||
Revenue |
4 | 350.0 | 387.0 | |||||||||
Cost of sales |
(270.9 | ) | (297.6 | ) | ||||||||
|
|
|
|
|||||||||
Gross profit |
79.1 | 89.4 | ||||||||||
Other operating expenses |
(54.4 | ) | (63.2 | ) | ||||||||
|
|
|
|
|||||||||
Operating profit |
24.7 | 26.2 | ||||||||||
|
|
|
|
|||||||||
Finance income |
6 | 4.0 | 3.9 | |||||||||
Finance costs |
6 | (17.3 | ) | (19.3 | ) | |||||||
|
|
|
|
|||||||||
Net financing cost |
(13.3 | ) | (15.4 | ) | ||||||||
|
|
|
|
|||||||||
Profit before taxation |
11.4 | 10.8 | ||||||||||
|
|
|
|
|||||||||
Taxation |
(3.2 | ) | (2.3 | ) | ||||||||
|
|
|
|
|||||||||
Profit for the period |
8.2 | 8.5 | ||||||||||
|
|
|
|
|||||||||
Attributable to: |
||||||||||||
Owners of the Parent Company |
8.2 | 8.5 | ||||||||||
|
|
|
|
The accompanying Notes 1 to 16 are an integral part of these condensed consolidated carve-out interim financial statements.
F-172
Findus Sverige AB
Condensed Consolidated Carve-out Statements of Comprehensive Income
for the nine months ended 27 June 2015 and 28 June 2014
Nine months ended | ||||||||
27 June 2015
Unaudited £m |
28 June 2014
Unaudited £m |
|||||||
Profit for the period |
8.2 | 8.5 | ||||||
|
|
|
|
|||||
Other comprehensive income / (loss): |
||||||||
Actuarial gains / (losses) on defined benefit pension plans |
0.7 | (3.4 | ) | |||||
Taxation (charge) / credit on remeasurement of defined benefit pension plans |
(0.1 | ) | 0.7 | |||||
|
|
|
|
|||||
Items not reclassified to profit or loss |
0.6 | (2.7 | ) | |||||
|
|
|
|
|||||
Currency translation differences |
(45.3 | ) | (15.0 | ) | ||||
|
|
|
|
|||||
Items that may be subsequently reclassified to profit or loss |
(45.3 | ) | (15.0 | ) | ||||
|
|
|
|
|||||
Other comprehensive loss for the period, net of tax |
(44.7 | ) | (17.7 | ) | ||||
|
|
|
|
|||||
Total comprehensive loss for the period |
(36.5 | ) | (9.2 | ) | ||||
|
|
|
|
|||||
Attributable to: |
||||||||
Owners of the Parent Company |
(36.5 | ) | (9.2 | ) | ||||
|
|
|
|
The accompanying Notes 1 to 16 are an integral part of these condensed consolidated carve-out interim financial statements.
F-173
Findus Sverige AB
Condensed Consolidated Carve-out Statements of Changes in Net Parent Investment for the nine months ended 27 June 2015 and 28 June 2014
Total
£m |
||||
Balance at 30 September 2014 (audited) |
346.2 | |||
|
|
|||
Profit for the period |
8.2 | |||
Other comprehensive income for the period |
0.6 | |||
Translation differences |
(45.3 | ) | ||
|
|
|||
Total comprehensive loss for the period |
(36.5 | ) | ||
Net transfers from Parent |
10.4 | |||
|
|
|||
Balance at 27 June 2015 (unaudited) |
320.1 | |||
|
|
|||
Balance at 30 September 2013 (audited) |
372.2 | |||
|
|
|||
Profit for the period |
8.5 | |||
Other comprehensive loss for the period |
(2.7 | ) | ||
Translation differences |
(15.0 | ) | ||
|
|
|||
Total comprehensive loss for the period |
(9.2 | ) | ||
Net transfers to Parent |
(14.6 | ) | ||
|
|
|||
Balance at 28 June 2014 (unaudited) |
348.4 | |||
|
|
The accompanying Notes 1 to 16 are an integral part of these condensed consolidated carve-out interim financial statements.
F-174
Findus Sverige AB
Condensed Consolidated Carve-out Statements of Financial Position
as of 27 June 2015 and 30 September 2014
Note |
27 June 2015
Unaudited £m |
30 September 2014
Audited £m |
||||||||||
Non-current assets |
||||||||||||
Intangible assets |
9 | 293.4 | 328.7 | |||||||||
Property, plant and equipment |
8 | 83.3 | 79.5 | |||||||||
Deferred tax assets |
10.7 | 11.9 | ||||||||||
|
|
|
|
|||||||||
Total non-current assets |
387.4 | 420.1 | ||||||||||
|
|
|
|
|||||||||
Current assets |
||||||||||||
Inventories |
64.2 | 68.3 | ||||||||||
Biological assets |
10 | 2.3 | | |||||||||
Trade and other receivables |
76.2 | 84.9 | ||||||||||
Income tax receivable |
1.0 | 4.0 | ||||||||||
Derivative financial instruments |
13 | 0.3 | | |||||||||
Cash and cash equivalents |
125.8 | 131.8 | ||||||||||
|
|
|
|
|||||||||
Total current assets |
269.8 | 289.0 | ||||||||||
|
|
|
|
|||||||||
Total assets |
657.2 | 709.1 | ||||||||||
|
|
|
|
|||||||||
Non-current liabilities |
||||||||||||
Loans and borrowings |
11 | 16.7 | 18.0 | |||||||||
Employee benefits |
12 | 44.2 | 49.1 | |||||||||
Deferred tax liabilities |
3.3 | 5.6 | ||||||||||
Trade and other payables |
15 | 1.4 | | |||||||||
Provisions |
1.0 | 0.7 | ||||||||||
|
|
|
|
|||||||||
Total non-current liabilities |
66.6 | 73.4 | ||||||||||
|
|
|
|
|||||||||
Current liabilities |
||||||||||||
Trade and other payables |
119.5 | 137.9 | ||||||||||
Payable to Related Party |
14 | 145.1 | 146.9 | |||||||||
Income tax payable |
3.6 | 3.0 | ||||||||||
Loans and borrowings |
11 | 0.4 | 0.5 | |||||||||
Derivative financial instruments |
13 | 0.7 | | |||||||||
Provisions |
1.2 | 1.2 | ||||||||||
|
|
|
|
|||||||||
Total current liabilities |
270.5 | 289.5 | ||||||||||
|
|
|
|
|||||||||
Total liabilities |
337.1 | 362.9 | ||||||||||
|
|
|
|
|||||||||
Net assets |
320.1 | 346.2 | ||||||||||
|
|
|
|
|||||||||
Net Parent Investment |
||||||||||||
Net Parent Investment |
320.1 | 346.2 | ||||||||||
|
|
|
|
The accompanying Notes 1 to 16 are an integral part of these condensed consolidated carve-out interim financial statements.
F-175
Findus Sverige AB
Condensed Consolidated Carve-out Statements of Cash Flows
for the nine months ended 27 June 2015 and 28 June 2014
Nine months ended | ||||||||||||
Note |
27 June 2015
Unaudited £m |
28 June 2014
Unaudited £m |
||||||||||
Cash generated from operating activities |
||||||||||||
Cash generated from operations |
27.4 | 29.9 | ||||||||||
Income tax paid |
(1.2 | ) | (0.8 | ) | ||||||||
|
|
|
|
|||||||||
Net cash generated from operating activities |
26.2 | 29.1 | ||||||||||
|
|
|
|
|||||||||
Cash flows from investing activities |
||||||||||||
Purchase of property, plant and equipment |
(12.9 | ) | (10.4 | ) | ||||||||
Purchase of intangible assets |
(0.5 | ) | (2.0 | ) | ||||||||
|
|
|
|
|||||||||
Net cash used in investing activities |
(13.4 | ) | (12.4 | ) | ||||||||
|
|
|
|
|||||||||
Cash flows from financing activities |
||||||||||||
Repayment of loans from Related Parties |
| (2.5 | ) | |||||||||
Proceeds from loans to Related Parties |
| 2.0 | ||||||||||
Interest paid |
(4.2 | ) | (4.3 | ) | ||||||||
Interest received |
4.0 | 3.9 | ||||||||||
|
|
|
|
|||||||||
Net cash used in financing activities |
(0.2 | ) | (0.9 | ) | ||||||||
|
|
|
|
|||||||||
Net increase in cash and cash equivalents |
12.6 | 15.8 | ||||||||||
Cash and cash equivalents at beginning of period |
131.8 | 114.8 | ||||||||||
Exchange rate losses on cash and cash equivalents |
(18.6 | ) | (8.5 | ) | ||||||||
|
|
|
|
|||||||||
Cash and cash equivalents at end of period |
125.8 | 122.1 | ||||||||||
|
|
|
|
|||||||||
Non-cash investing activities |
||||||||||||
Acquisition of La Cocinera frozen food business |
15 | (0.3 | ) | | ||||||||
|
|
|
|
The accompanying Notes 1 to 16 are an integral part of these condensed consolidated carve-out interim financial statements.
F-176
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements
1. | Company information |
Lion/Gem Luxembourg 3 S.a.r.l (the ParentCo) is a Luxembourg company incorporated under the laws of Luxembourg having its registered office at 6, rue Eugène Ruppert, L-2453 Luxembourg. ParentCo and its subsidiaries (the Findus Group) are active in the food manufacturing industry. ParentCo is the parent company of Findus in the Nordics, Youngs Seafood Limited in the UK (the UK business) and Findus in Southern Europe. A wholly-owned subsidiary of ParentCo, Findus Sverige AB (FSAB) is a Swedish company incorporated under the laws of Sweden having its registered office at Billesholmsvägen 4, 267 81 Bjuv, Sweden. FSAB and its subsidiaries (the Overseas Group or FSAB Group) are the leading frozen food business in Sweden, Norway and Finland in the Nordic region, and a leading frozen food business in France with activities also in Spain and Belgium.
The ultimate controlling entity of the Overseas Group is Marlin 1 Limited.
Nomad Foods Limited (Nomad or the Buyer) is the holding company for the Iglo Group (Iglo), a leading frozen food producer in Europe with operations in 10 countries and a specific focus on markets in the United Kingdom, Germany and Italy. On 13 August 2015, Nomad announced that it entered into an option agreement to acquire the FSAB Group for approximately £500 million from Lion Gem Sweden 1 AB, the parent company of FSAB. The deal is structured to be a legal entity purchase of FSAB, giving it control over all the assets, liabilities, Intellectual Property (IP), operations and employees within the Overseas Group. The Findus Group excluding the Overseas Group business is referred to below as the Residual Findus Group.
2. | Basis of preparation and accounting policies |
Basis of preparation
The condensed consolidated carve-out interim financial statements were approved for issue by the Chief Financial Officer of the Findus Group, who has authority on behalf of the Board of Directors of FSAB, on 23 September 2015.
These condensed consolidated carve-out interim financial statements have been prepared on a standalone basis and are derived from ParentCos consolidated financial statements and accounting records. The condensed consolidated carve-out interim financial statements reflect the Overseas Groups financial position, results of operations, changes in net parent investment and cash flows prepared in accordance with IAS 34 Interim Financial Reporting. They should be read in conjunction with the Overseas Groups audited consolidated carve-out financial statements for the year ended 30 September 2014 which were prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and IFRS Interpretations Committee (IFRS IC) interpretations, collectively IFRS. The Overseas Groups condensed consolidated carve-out interim financial statements have been prepared on a carve-out basis and the results do not necessarily reflect what the results of operations, financial position, or cash flows would have been had the Overseas Group been a separate entity or future results in respect of the Overseas Group as it will exist upon completion of the transaction.
The condensed consolidated carve-out interim financial statements of the Overseas Group include expenses which were recharged from the Residual Findus Group under management services agreements for certain functions, including general corporate expenses related to corporate strategy, procurement, group finance, Information Technology (IT), Human Resources (HR), legal and supply chain. These recharges have been made on the basis of direct usage when identifiable, with the remainder allocated on the basis of headcount, revenue or a measure of Earnings before exceptional items, interest, tax, depreciation and amortisation (Adjusted EBITDA). In the nine-month period ended 27 June 2015, £3.3 million (2014: £3.3 million) has been recharged to
F-177
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
the Overseas Group and presented within Other operating expenses in the statement of income. Management believes the expense allocation methodology and results are reasonable and consistently applied for the periods presented. However, these allocations may not be indicative of the actual expenses that would have been incurred by an independent company or of the costs to be incurred in the future.
The Overseas Group generates brand royalty fees from transactions with the Residual Findus Group, as disclosed in Note 14.
The Residual Findus Group has a central treasury department which enters into derivatives contracts as instructed by the various Overseas Group operating companies to manage their foreign exchange risks relating to their raw materials acquisitions. Prior to and for the fiscal year ended 30 September 2014, these derivative contracts, as requested by the local operating companies, were often bundled together to manage the foreign exchange risks across the Findus Group. As the contracts were bundled and entered into centrally, the Overseas Group did not have the ability to specifically identify those derivative contracts that were or were not directly attributable to the Overseas Group. As a result the Overseas Groups consolidated carve-out financial statements for the year ended 30 September 2014 did not include the derivative assets/liabilities or gains/losses resulting from those contracts.
From 1 October 2014, the Residual Findus Group started entering into and tracking the derivatives contracts separately for each request from the Overseas Group operating companies. As a result the Overseas Group is able to specifically identify those derivative contracts that are or are not directly attributable to the Overseas Group. The Overseas Groups consolidated carve-out financial statements include the derivative assets/liabilities and gains/losses resulting from those contracts for the nine months ended 27 June 2015, see Note 13.
The condensed consolidated carve-out interim financial statements have been reviewed not audited.
Accounting policies
The accounting policies adopted are consistent with those of the consolidated carve-out financial statements of the Overseas Group for the year ended 30 September 2014, except for the following:
a) | Taxation |
Taxes on income in the interim period are accrued using the effective tax rate estimated for the full financial year.
b) | Financial instruments |
i) | Financial assets at fair value through profit or loss |
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.
Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the statement of income. Gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss category are presented in the statement of income within Other operating expenses in the period in which they arise.
F-178
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
ii) | Derivative financial instruments |
Derivative financial instruments are recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge accounting, all changes in its fair value are recognised immediately in the statement of income. The Overseas Group does not apply hedge accounting.
The principal exchange rates against sterling (GBP) used in these condensed consolidated carve-out interim financial statements are as follows:
Swedish Krona
(SEK) |
Norwegian Krone
(NOK) |
Euro
(EUR) |
||||||||||
Closing as at 30 September 2013 |
10.3580 | 9.7191 | 1.1974 | |||||||||
Average nine months ended 28 June 2014 |
10.7661 | 9.9785 | 1.2072 | |||||||||
Closing as at 28 June 2014 |
11.5067 | 10.4343 | 1.2505 | |||||||||
Closing as at 30 September 2014 |
11.7584 | 10.4406 | 1.2861 | |||||||||
Average nine months ended 27 June 2015 |
12.3568 | 11.4060 | 1.3250 | |||||||||
Closing as at 27 June 2015 |
13.0049 | 12.2727 | 1.4055 |
There are no new accounting standards which have a material impact on these condensed consolidated carve-out interim financial statements.
The Overseas Group does not experience any significant seasonal or cyclical variation in its financial performance during the year.
3. | Accounting estimates |
The key sources of estimation uncertainty in these condensed consolidated carve-out interim financial statements are the same as those applied in the consolidated carve-out financial statements of the Overseas Group for the year ended 30 September 2014, except for the following.
a) | Employee benefit obligation |
A significant number of estimates are required to calculate the fair value of the retirement benefit obligation at year end. Amongst them, there has been a decrease in the discount rate used in the calculation of the defined benefit obligation in Sweden, from 3.25% as of 30 September 2014 to 2.8% as of 27 June 2015.
b) | Income tax |
The income tax expense and the provision for income taxes for the nine-month periods to 27 June 2015 and 28 June 2014 have been determined based on an estimate of the likely effective tax rate for the full financial year, see Note 7.
c) | Biological assets |
Estimates and judgements in determining the fair value of biological assets relate to determining plantation yields, the unprocessed harvested product prices and the discount rates. These estimates and judgements are disclosed in Note 10.
F-179
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
4. | Segment reporting |
There have been no changes in the basis of segmentation or in the basis of measurement of segment profit or loss.
Adjusted EBITDA
Adjusted earnings before exceptional items, interest, tax, depreciation and amortisation (Adjusted EBITDA) excludes the effects of significant items of income and expenditure which may have an impact on the quality of earnings such as restructuring costs, legal expenses, and impairments when the impairment is the result of an isolated, non-recurring event.
Interest income and finance cost are not allocated to segments, as this type of activity is driven by the central treasury function, which manages the cash position of the Findus Group as a whole.
Segment Adjusted EBITDA
Nine months ended | ||||||||||||
Note |
27 June 2015
Unaudited £m |
28 June 2014
Unaudited £m |
||||||||||
Sweden |
12.2 | 14.0 | ||||||||||
Norway |
8.8 | 13.0 | ||||||||||
France |
10.5 | 10.2 | ||||||||||
Other |
3.8 | 3.2 | ||||||||||
Central / Unallocated |
(0.9 | ) | (1.0 | ) | ||||||||
|
|
|
|
|||||||||
Total segment Adjusted EBITDA |
34.4 | 39.4 | ||||||||||
|
|
|
|
|||||||||
Exceptional items |
5 | (0.8 | ) | (3.0 | ) | |||||||
Depreciation of property, plant and equipment |
8 | (7.9 | ) | (9.2 | ) | |||||||
Amortisation / Impairment of intangible assets |
9 | (1.0 | ) | (1.0 | ) | |||||||
|
|
|
|
|||||||||
Operating profit |
24.7 | 26.2 | ||||||||||
Net financing costs |
6 | (13.3 | ) | (15.4 | ) | |||||||
|
|
|
|
|||||||||
Profit before taxation |
11.4 | 10.8 | ||||||||||
|
|
|
|
Segment revenue
For the nine months ended 27 June 2015 (unaudited) |
Total segment
revenue £m |
Inter-segment
revenue £m |
Total
segment external revenue £m |
|||||||||
Sweden |
149.3 | (21.9 | ) | 127.4 | ||||||||
Norway |
75.4 | (0.2 | ) | 75.2 | ||||||||
France |
92.9 | (8.2 | ) | 84.7 | ||||||||
Other |
62.8 | (0.1 | ) | 62.7 | ||||||||
|
|
|
|
|
|
|||||||
Total segment revenue |
380.4 | (30.4 | ) | 350.0 | ||||||||
|
|
|
|
|
|
F-180
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
For the nine months ended 28 June 2014 (unaudited) |
Total segment
revenue £m |
Inter-segment
revenue £m |
Total
segment external revenue £m |
|||||||||
Sweden |
171.5 | (23.9 | ) | 147.6 | ||||||||
Norway |
94.1 | (0.2 | ) | 93.9 | ||||||||
France |
97.0 | (9.4 | ) | 87.6 | ||||||||
Other |
58.0 | (0.1 | ) | 57.9 | ||||||||
|
|
|
|
|
|
|||||||
Total segment revenue |
420.6 | (33.6 | ) | 387.0 | ||||||||
|
|
|
|
|
|
The CODM is not provided with information about inter-segment revenues.
No information on segment assets or liabilities is presented to the CODM.
Revenues of approximately £83.7 million (2014: £98.2 million) are derived from two external customers. These revenues are attributable to the Sweden and Norway operating segments.
Non-current assets by geography
27 June
2015 Unaudited £m |
30 September
2014 Audited £m |
|||||||
Sweden |
141.9 | 150.9 | ||||||
Norway |
130.0 | 153.2 | ||||||
France |
90.1 | 93.3 | ||||||
Other |
25.4 | 22.7 | ||||||
|
|
|
|
|||||
Total non-current assets by geography |
387.4 | 420.1 | ||||||
|
|
|
|
5. | Exceptional items |
Exceptional items are made up as follows:
Nine months ended | ||||||||
27 June 2015
Unaudited £m |
28 June 2014
Unaudited £m |
|||||||
Restructuring costs |
(5.4 | ) | (1.8 | ) | ||||
Manufacturing rationalisation |
(1.3 | ) | (1.2 | ) | ||||
Emissions permit penalty |
(1.3 | ) | | |||||
Gain on bargain purchase |
7.2 | | ||||||
|
|
|
|
|||||
Exceptional items |
(0.8 | ) | (3.0 | ) | ||||
|
|
|
|
In the nine-month period to 27 June 2015 and the nine-month period to 28 June 2014, Exceptional items included manufacturing rationalisation and further restructuring of operations in Sweden, France and other countries.
In the nine-month period to 27 June 2015, the Overseas Group recognised a loss related to an emissions permit penalty in Sweden and recorded a gain on the bargain purchase of La Cocinera frozen food business for £8.4 million, partially offset by acquisition costs incurred for £1.2 million (see Note 15).
F-181
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
6. | Finance income and costs |
Nine months ended | ||||||||
27 June 2015
Unaudited £m |
28 June 2014
Unaudited £m |
|||||||
Other interest income |
4.0 | 3.9 | ||||||
|
|
|
|
|||||
Finance income |
4.0 | 3.9 | ||||||
|
|
|
|
|||||
Interest payable on bank loans, borrowings and overdrafts |
(8.2 | ) | (9.1 | ) | ||||
Pension finance expense (Note 12) |
(1.1 | ) | (1.3 | ) | ||||
Foreign exchange losses |
(8.0 | ) | (8.9 | ) | ||||
|
|
|
|
|||||
Finance costs |
(17.3 | ) | (19.3 | ) | ||||
|
|
|
|
|||||
Net financing costs |
(13.3 | ) | (15.4 | ) | ||||
|
|
|
|
7. | Taxation |
Income tax expense for the nine-month periods to 27 June 2015 and 28 June 2014 is recognised based on an estimate of the likely effective tax rate for the full financial year. The estimated average annual tax rate used for the year to 30 September 2015 is 28% (2014: 21%).
8. | Property, plant and equipment |
Land and
buildings £m |
Plant and
machinery £m |
Total
£m |
||||||||||
Net book value at 30 September 2014 (audited) |
14.1 | 65.4 | 79.5 | |||||||||
|
|
|
|
|
|
|||||||
Additions |
0.5 | 12.7 | 13.2 | |||||||||
Assets acquired through business combination (Note 15) |
| 4.7 | 4.7 | |||||||||
Depreciation charge for the period |
(0.8 | ) | (7.1 | ) | (7.9 | ) | ||||||
Effect of movements in foreign exchange |
(1.5 | ) | (4.7 | ) | (6.2 | ) | ||||||
|
|
|
|
|
|
|||||||
Net book value at 27 June 2015 (unaudited) |
12.3 | 71.0 | 83.3 | |||||||||
|
|
|
|
|
|
9. | Intangible assets |
Goodwill
£m |
Brands
£m |
Development
costs £m |
Total
£m |
|||||||||||||
Net book value at 30 September 2014 (audited) |
318.3 | 7.7 | 2.7 | 328.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Additions |
| | 0.5 | 0.5 | ||||||||||||
Assets acquired through business combination (Note 15) |
| 2.6 | | 2.6 | ||||||||||||
Amortisation for the period |
| (0.6 | ) | (0.4 | ) | (1.0 | ) | |||||||||
Effect of movements in foreign exchange |
(37.1 | ) | (0.3 | ) | | (37.4 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net book value at 27 June 2015 (unaudited) |
281.2 | 9.4 | 2.8 | 293.4 | ||||||||||||
|
|
|
|
|
|
|
|
The gross amount of goodwill as at 27 June 2015 is £575.9 million (30 September 2014: £650.3 million) and the accumulated impairment losses are £294.7 million (30 September 2014: £332.0 million).
F-182
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
10. | Biological assets |
£m | ||||
Net book value at 30 September 2014 (audited) |
| |||
Increase due to purchases |
1.7 | |||
Changes in fair value due to biological transformation |
0.6 | |||
|
|
|||
Net book value at 27 June 2015 (unaudited) |
2.3 | |||
|
|
In the nine-month period ended 27 June 2015, a gain of £0.6 million (2014: £0.6 million) relating to changes in fair value due to biological transformation was recognised in Other operating expenses in the statement of income.
27 June 2015
Unaudited £m |
||||
Pea plantations at fair value less cost to sale |
2.1 | |||
Other biological assets |
0.2 | |||
|
|
|||
Total biological assets |
2.3 | |||
|
|
As at 27 June 2015, the Overseas Group had 8,400 hectares of peas (30 September 2014: nil).
During the nine-month period to 27 June 2015, the Overseas Group has not harvested any peas (28 June 2014: 4,230 hectares harvested). Peas are generally harvested in August or September.
Harvested peas are transferred to inventory at fair value when harvested.
The Level 3 fair value of the pea plantations at 27 June 2015 is £2.1 million (30 September 2014: nil).
The fair value of the pea plantations is determined using a discounted cash flow model based on the expected yield, the market price of crude harvested peas and after allowing for harvesting costs and other costs yet to be incurred in getting peas to maturity. The following unobservable inputs were used to measure the Overseas Groups pea plantations:
Valuation technique |
Unobservable inputs |
Range of unobservable
inputs |
Relationship of unobservable
inputs to fair value |
|||
Discounted cash flows |
Peas yieldtonnes per hectare |
8.87 tonnes per
hectare |
The higher the peas
yield, the higher the fair value |
|||
Harvested peas price | £290 per tonne |
The higher the
market price, the higher the fair value |
||||
Discount rate | 9.0% |
The higher the
discount rate, the lower the fair value |
F-183
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
11. | Loans and borrowings |
The loans and borrowings due by the Overseas Group are as follows:
27 June 2015
Unaudited £m |
30 September 2014
Audited £m |
|||||||
Current liabilities |
||||||||
Finance leases |
0.4 | 0.5 | ||||||
|
|
|
|
|||||
Total due in less than one year |
0.4 | 0.5 | ||||||
|
|
|
|
|||||
Non-current liabilities |
||||||||
Loans due to Related Partiesback to back with bond issue (Note 14) |
15.3 | 15.8 | ||||||
Finance leases |
1.4 | 2.2 | ||||||
|
|
|
|
|||||
Total due after more than one year |
16.7 | 18.0 | ||||||
|
|
|
|
|||||
Total borrowings |
17.1 | 18.5 | ||||||
|
|
|
|
12. | Defined benefit plans |
The Overseas Group operates defined benefit pension plans in Sweden, Norway and France as well as various defined contribution plans. The defined benefit pension plans are partially funded in Norway and unfunded in Sweden and France as is the norm in these countries.
The amount included in the Statement of Financial Position arising from the Overseas Groups obligations in respect of its defined benefit retirement plans is as follows:
27 June 2015
Unaudited £m |
30 September 2014
Audited £m |
|||||||
Present value of unfunded defined benefit obligations |
44.2 | 49.1 | ||||||
Present value of funded defined benefit obligations |
| 0.8 | ||||||
|
|
|
|
|||||
Subtotal present value of defined benefit obligations |
44.2 | 49.9 | ||||||
|
|
|
|
|||||
Fair value of plan assets |
| (0.8 | ) | |||||
|
|
|
|
|||||
Recognised liability for defined benefit obligations |
44.2 | 49.1 | ||||||
|
|
|
|
Expenses recognised in respect of the defined benefit plans in the statement of income are as follows:
Nine months ended | ||||||||
27 June 2015
Unaudited £m |
28 June 2014
Unaudited £m |
|||||||
Current service cost |
(0.6 | ) | (0.7 | ) | ||||
Settlement and Curtailments |
| 2.1 | ||||||
Interest on defined benefit pension plan obligation |
(1.1 | ) | (1.3 | ) | ||||
|
|
|
|
|||||
Total |
(1.7 | ) | 0.1 | |||||
|
|
|
|
F-184
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
13. | Financial risk management |
Overseas Group financial risk factors
The Overseas Groups activities expose it to a variety of financial risks, including currency risk, interest rate risk, credit risk and liquidity risk.
The condensed consolidated carve-out interim financial statements do not include all financial risk management information and disclosures and they should be read in conjunction with the consolidated carve-out financial statements of the Overseas Group for the year ended 30 September 2014.
There have been no changes in any risk management policies since the year ended 30 September 2014.
Fair value estimations
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
- | Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; |
- | Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); |
- | Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). |
The following table presents the Overseas Groups financial assets and liabilities that are measured at fair value:
As at 27 June 2015 (unaudited) |
Level 1
£m |
Level 2
£m |
Level 3
£m |
Total
£m |
||||||||||||
Biological assets |
| | 2.3 | 2.3 | ||||||||||||
Trading derivatives |
| 0.3 | | 0.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
| 0.3 | 2.3 | 2.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Trading derivatives |
| (0.7 | ) | | (0.7 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
| (0.7 | ) | | (0.7 | ) | ||||||||||
|
|
|
|
|
|
|
|
(a) | Financial instruments in Level 1 |
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arms length basis. The quoted market price used for financial assets held by the Overseas Group is the current bid price.
(b) | Financial instruments in Level 2 |
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
F-185
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
Financial instruments included in Level 2 comprise currency forward contracts. The fair value of these derivative instruments is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value.
For trading derivatives at fair value through profit or loss, a charge of £0.4 million (2014: nil) was included within Other operating expenses in the statement of income.
(c) | Financial instruments in Level 3 |
Biological assets fair value disclosure is included in Note 10.
The carrying value of the other financial instruments is a reasonable approximation of their fair value.
14. | Related parties |
Related party transactions
The main transactions between the Overseas Group and the Residual Findus Group for the nine-month periods ended 27 June 2015 and 28 June 2014 are as follows:
Nine months ended | ||||||||
27 June 2015
Unaudited £m |
28 June 2014
Unaudited £m |
|||||||
Brand royalty fees |
0.1 | 0.1 | ||||||
|
|
|
|
|||||
Income |
0.1 | 0.1 | ||||||
|
|
|
|
|||||
Cost of sales |
(3.1 | ) | (4.3 | ) | ||||
Management service charges |
(3.3 | ) | (3.3 | ) | ||||
|
|
|
|
|||||
Expenses |
(6.4 | ) | (7.6 | ) | ||||
|
|
|
|
|||||
Finance costs |
(3.8 | ) | (0.9 | ) | ||||
|
|
|
|
Related party trade accounts payable and receivable
Related party trade accounts payable and receivable have been included in the trade accounts payable and receivable line items in the statement of financial position.
Accounts payable
£m |
Accounts receivable
£m |
|||||||
Balance at 27 June 2015 (unaudited) |
1.3 | 0.1 | ||||||
Balance at 30 September 2014 (audited) |
0.8 | 0.1 | ||||||
|
|
|
|
Borrowings
27 June 2015
Unaudited £m |
30 September 2014
Audited £m |
|||||||
Loans due to Related Partiesback to back with bond issue (Note 11) |
15.3 | 15.8 | ||||||
|
|
|
|
F-186
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
Payable to Related Party
27 June 2015
Unaudited £m |
30 September 2014
Audited £m |
|||||||
Loans |
145.1 | 146.9 | ||||||
|
|
|
|
|||||
Payable to Related Party |
145.1 | 146.9 | ||||||
|
|
|
|
There has been no change in the terms of the Loans from Related Party since 30 September 2014.
15. | Business combination |
Acquisition of La Cocinera frozen food business
On 23 December 2014, the Overseas Group entered into an agreement to acquire the La Cocinera frozen food business in Spain, with annual revenue of approximately EUR 30.0 million (£23.0 million) in 2014. Completion occurred on 1 April 2015.
As a result of the acquisition the Overseas Group is expected to increase its presence in the Spanish market.
Management have provisionally calculated the fair value of the consideration payable for the La Cocinera business and the fair value of assets acquired and liabilities assumed at the acquisition date for the purpose of these interim financial statements. These calculations are not final and indicate a gain on a bargain purchase. Management are still engaging with third party valuers to assess the identification of the acquirees identifiable assets and liabilities and review the measurement of: i) all of the identified assets and liabilities and ii) the consideration. Hence these provisional figures may be subject to adjustment in the Overseas Groups audited consolidated carve-out financial statements for the year ended 30 September 2015. The following table summarises managements provisional calculations.
Consideration at 1 April 2015 |
£m | |||
Consideration |
||||
Contingent consideration payable |
1.4 | |||
Contingent consideration receivable |
(1.1 | ) | ||
|
|
|||
Total consideration |
0.3 | |||
|
|
|||
Recognised amounts of identifiable assets acquired and liabilities assumed |
||||
Provisional fair value |
||||
Plant and machinery |
4.7 | |||
Brand name |
2.6 | |||
Inventory |
2.0 | |||
Deferred tax liability |
(0.6 | ) | ||
|
|
|||
Fair value of assets and liabilities assumed |
8.7 | |||
|
|
|||
Gain on bargain purchase |
(8.4 | ) | ||
|
|
|||
Total |
0.3 | |||
|
|
The entire consideration payable agreed between the Overseas Group and the seller will only be paid if specified future events occur or conditions are met. The potential undiscounted amount of all future payments that the group could be required to make under this arrangement is between £nil and £5.6 million, and the amount
F-187
Findus Sverige AB
Notes to the Condensed Consolidated Carve-out Interim Financial Statements (continued)
payable depends on the business reaching certain production volumes and certain fixed cost of overheads per kilogram over a specific period of time. Any amounts payable under the above are deferred for 5 years from the acquisition date. The fair value of the contingent consideration payable of £1.4 million was estimated by use of a discounted cash flow model taking into consideration probability weighted outcomes of various reasonably possible scenarios. The fair value estimate is based on a discount rate of 9.5%.
The business acquired does not include an IT system necessary to operate the La Cocinera business. The contingent consideration receivable disclosed above is the entitlement of the Overseas Group to receive reimbursement from the seller, for up to a maximum undiscounted amount of £1.1 million, for potential future expenditure to be incurred by the Overseas Group in establishing a standalone IT system. The potential future contingent consideration receivable is between £nil and £1.1 million, and depends on the actual expenditures of the Overseas Group to establish the IT system. This amount has not been discounted and has been classified as current since it is expected to be collected within the year.
The process of fair valuing the purchase consideration to be paid and the net assets that were acquired in the purchase of the La Cocinera business from Nestlé on 1 April 2015 has given rise to a gain on a bargain purchase of £8.4 million which has been recognised within Other operating expenses in the statement of income. The acquisition of the business was conducted on an arms-length basis between two independent parties, and the price reflects the values attributed to the business by the two parties. The operations of the business acquired have in the past suffered from a lack of volumes and some inefficiencies, which put a question to the seller over its long term viability. Management plans to rectify the economics of the factory by making rationalisations and increasing volumes, but the outcome of this is not certain. Management considers that the gain on a bargain purchase arising reflects potential future losses associated with risks as to the future success of the business operations. These potential future losses do not meet the definition of a liability under IFRS and so cannot be recognised or reflected in the purchase accounting.
Acquisition related costs of £1.2 million have been recognised in Other operating expenses in the statement of income in the period ended 27 June 2015.
The revenue contributed in the statement of income by the La Cocinera business since 1 April 2015 was £nil, as all revenue from the La Cocinera business is inter-company. Adjusted EBITDA contributed was £(1.1) million. Had the La Cocinera business been consolidated from 1 October 2014, the statement of income would show pro-forma revenue of £362.2 million and Adjusted EBITDA of £33.9 million.
16. | Events after the balance sheet date |
On 13 August 2015, Lion Gem Sweden 1 AB, the parent company of FSAB, entered into an option agreement for Nomad to acquire the Overseas Group for approximately £500.0 million. The transaction, which is subject to works council consultations in France and other customary closing conditions, is expected to close in the fourth calendar quarter of 2015.
F-188
134,028,980 Ordinary Shares
PROSPECTUS
, 2015
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 6. Indemnification of Directors and Officers
Our Memorandum and Articles of Association provides that we shall indemnify any of our directors, officers or anyone serving at our request as a director of another entity against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings or suits. If such person provides an undertaking to repay expense advances under certain circumstances, we shall pay any expenses, including legal fees, incurred by any such person in defending any legal, administrative or investigative proceedings in advance of the final disposition of the proceedings. If a person to be indemnified has been successful in defense of any proceedings referred to above, such person is entitled to be indemnified against all expenses, including legal fees, and against all judgments and fines reasonably incurred by such person in connection with the proceedings. We are required to indemnify a director or officer only if he or she acted honestly and in good faith with a view to our best interests and, in the case of criminal proceedings, the director or officer had no reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director or officer acted honestly and in good faith with a view to our best interests and as to whether the director or officer had no reasonable cause to believe that his or her conduct was unlawful, is in the absence of fraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement, conviction or the entry of no plea does not, by itself, create a presumption that a director or officer did not act honestly and in good faith and with a view to our best interests or that the director or officer had reasonable cause to believe that his or her conduct was unlawful.
We have entered into Letter of Appointments with our directors pursuant to which we agreed to indemnify them against a number of liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director.
We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers and incurred by the directors or officers in that capacity.
Item 7. Recent Sales of Unregistered Securities
On April 1, 2014, we issued two Founder Preferred Shares, one to Toms Acquisition I LLC and one to Mariposa Acquisition II, LLC (collectively, the Founders Entities) at a price of $10.00 per share. We issued these shares in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act.
On April 15, 2014, we completed an underwritten public offering of 48,500,000 of our ordinary shares in the United Kingdom, at a price of $10.00 per share led by Barclays Bank plc and Citigroup Global Markets Limited and exempt from registration in the United States under Section 4(a)(2) and outside the United States under Regulation S under the Securities Act. The aggregate offering amount was $485,000,000 and the aggregate underwriting discount was 1.5% of the aggregate offering price. Purchasers in the April 2014 offering also received warrants (the Warrants) to subscribe for our ordinary shares on the basis of one warrant per ordinary share were also issued to purchasers in the April 2014 offering. The Warrants were exercisable on the basis of three warrants per ordinary share at an exercise price of $11.50 (which was subsequently reduced to $10.50) per whole ordinary share.
In connection with the April 2014 offering, we issued (i) 1,499,998 Founder Preferred Shares to the Founder Entities for $10.00 per ordinary share in reliance on the exemption(s) from registration provided by Section 4(a)(2) of the Securities Act and (ii) 25,000 ordinary shares to our independent directors for $10.00 per ordinary share in reliance on the exemption(s) from registration provided by Regulation S under the Securities Act.
II-1
In May 2015, we issued 75,666,669 of our ordinary shares in a private placement to certain institutional investors at a price of $10.50 per ordinary share in reliance on the exemption(s) from registration provided by Section 4(a)(2) of the Securities Act.
Between May and June 2015, we issued an aggregate of 16,673,307 ordinary shares pursuant to the exercise of the Warrants. We relied on the exemption(s) from registration provided by Section 4(a)(2) of the Securities Act. There are no Warrants currently outstanding.
On June 1, 2015, we issued 13,743,094 ordinary shares to Birds Eye Iglo Limited Partnership Inc in connection with the Iglo Acquisition. We relied on the exemption(s) from registration provided by Section 4(a)(2) of the Securities Act.
On July 14, 2015, we completed an underwritten offering of 15,445,346 ordinary shares at a per share price of $20.75 per ordinary share led by UBS Limited, Barclays Bank PLC and Credit Suisse Securities (Europe) Limited and exempt from registration in the United States under Section 4(a)(2) and outside the United States under Regulation S under the Securities Act. The aggregate offering amount was $320,000,000 and the aggregate underwriting discount was 1.5%.
On November [●], 2015, we issued [●] ordinary shares to certain of our senior management employees (excluding our executive officers) pursuant to our 2015 Employee Share Purchase Plan at a purchase price of $[●] per ordinary share. We relied on the exemption from registration provided by Rule 701 of the Securities Act.
II-2
Item 8. Exhibits and Financial Statement Schedules
(a) | Exhibits |
Exhibit
|
Exhibit Description |
Filed Herewith |
To be
Filed
|
|||||||
2.1 | Share Purchase Agreement, dated as of April 20, 2015, between Nomad Holdings Limited and Birds Eye Iglo Limited Partnership Inc. | X | ||||||||
2.2 |
Share Sale and Purchase Agreement, dated as of October 29, 2015, among Liongem Sweden 1 AB, Iglo Foods Group Limited and Nomad Foods Limited |
X | ||||||||
3.1 | Amended and Restated Memorandum and Articles of Association | X | ||||||||
4.1 | Registration Rights Agreement dated as of June 1, 2015 among Nomad Holdings Limited, Birds Eye Iglo Limited Partnership Inc, Mariposa Acquisition II, LLC, TOMS Acquisition I LLC, TOMS Capital Investments LLC and funds managed by Pershing Square. | X | ||||||||
4.2 | Indenture dated as of July 17, 2014 among Deutsche Trustee Company Limited, Deutsche Bank AG, London Branch, Deutsch Bank Luxembourg S.A., and Credit Suisse AG, London Branch and certain Iglo entities named therein. | X | ||||||||
5.1 | Opinion of Ogier | X | ||||||||
10.1 | Amendment and Restatement Agreement, dated October 23, 2015, Relating to a Senior Facilities Agreement dated as of July 3, 2014, as amended and restated pursuant to an Amendment and Restatement Agreement dated May 6, 2015, among Iglo Foods Midco Limited, Credit Suisse AG, London Branch, Barclays Bank PLC and UBS Limited. | X | ||||||||
10.2 | Nomad Foods Limited Long-Term 2015 Incentive Plan | X | ||||||||
10.3 | Services Agreement between Nomad Foods Limited and Stéfan Descheemaeker | X | ||||||||
10.4 | Contract of Employment, dated as of September 4, 2015, between Nomad Foods Limited and Paul Kenyon |
|
X
|
|
||||||
10.5 | Advisory Services Agreement, dated as of June 15, 2015, among Nomad Foods Limited, Mariposa Capital, LLC and TOMS Capital LLC | X | ||||||||
10.6 | Placing Agreement, dated as of April 10, 2014, among Nomad Holdings Limited, the Directors thereof, Toms Acquisition I LLC, Mariposa Acquisition II, LLC, Barclays Bank PLC and Citigroup Global Markets Limited. | X | ||||||||
21.1 | List of Significant Subsidiaries | X | ||||||||
23.1 | Consent of PricewaterhouseCoopers LLP (Predecessor) | X | ||||||||
23.2 | Consent of PricewaterhouseCoopers LLP (Successor) | X | ||||||||
23.3 | Consent of PricewaterhouseCoopers LLP (Findus) | X | ||||||||
23.4 | Consent of Ogier | X | ||||||||
24 | Power of attorney (included on signature page) | X |
| Management contract or compensatory plan or arrangement |
II-3
(b) | Financial Statement Schedules |
Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.
Item 9. Undertakings
The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) | That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the United Kingdom on November 23, 2015
NOMAD FOODS LIMITED | ||
By: |
/s/ Stéfan Descheemacker |
|
Name: | Stéfan Descheemacker | |
Title: | Chief Executive Officer |
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below hereby constitutes and appoints each of Stéfan Descheemacker and Paul Kenyon, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for him or her and in his or her name, place and stead, in any and all capacities, to execute any or all amendments including any post-effective amendments and supplements to this Registration Statement, and any additional Registration Statement filed pursuant to Rule 462(b), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature |
Title |
Date |
||
/s/ Stéfan Descheemacker Stéfan Descheemacker |
(Principal Executive Officer and Director) |
November 23, 2015 |
||
/s/ Paul Kenyon Paul Kenyon |
(Principal Financial Officer and Principal Accounting Officer and Director) |
November 23, 2015 |
||
/s/ Martin E. Franklin Martin E. Franklin |
Director | November 23, 2015 | ||
/s/ Noam Gottesman Noam Gottesman |
Director | November 23, 2015 | ||
/s/ Lord Myners of Truro CBE Lord Myners of Truro CBE |
Director | November 23, 2015 | ||
/s/ Alun Cathcart Alun Cathcart |
Director | November 23, 2015 | ||
/s/ John Coyle John Coyle |
Director | November 23, 2015 |
II-5
Signature |
Title |
Date |
||
/s/ Brian Welch Brian Welch |
Director | November 23, 2015 | ||
/s/ James E. Lillie James E. Lillie |
Director | November 23, 2015 | ||
/s/ Elio Leoni Sceti Elio Leoni Sceti |
Director | November 23, 2015 |
II-6
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, as amended, this Registration Statement on Form F-1 has been signed on behalf of the Registrant by the undersigned, solely in its capacity as the duly authorized representatives of the Registrant in the United States, on November 23, 2015.
By: |
/s/ Desiree DeStefano |
|
Name: Desiree DeStefano |
II-7
Exhibit 2.1
EXECUTION VERSION
SHARE PURCHASE AGREEMENT
between
BIRDS EYE IGLO LIMITED PARTNERSHIP INC
and
NOMAD HOLDINGS LIMITED
Dated
April 20, 2015
TABLE OF CONTENTS
Page | ||||||
Article I | ||||||
DEFINITIONS | ||||||
Section 1.1 |
Definitions |
1 | ||||
Section 1.2 |
Interpretation |
13 | ||||
Section 1.3 |
Schedules and Exhibits |
15 | ||||
Article II | ||||||
SALE AND PURCHASE | ||||||
Section 2.1 |
Purchase and Sale |
15 | ||||
Section 2.2 |
Waiver of Pre-emption Rights |
15 | ||||
Article III | ||||||
PURCHASE, SALE AND REDEMPTION TRANSACTIONS | ||||||
Section 3.1 |
Total Consideration |
15 | ||||
Section 3.2 |
Closing Total Consideration |
15 | ||||
Section 3.3 |
Closing Payments |
16 | ||||
Section 3.4 |
Tax Withholding |
16 | ||||
Article IV | ||||||
CLOSING AND POST-CLOSING ADJUSTMENTS | ||||||
Section 4.1 |
Closing |
16 | ||||
Section 4.2 |
Seller Actions and Deliverables at the Closing |
16 | ||||
Section 4.3 |
Purchaser Deliverables at the Closing |
17 | ||||
Section 4.4 |
Post-Closing Adjustment |
18 | ||||
Section 4.5 |
Interest |
20 | ||||
Article V | ||||||
REPRESENTATIONS AND WARRANTIES OF SELLER | ||||||
Section 5.1 |
Authority; Enforceability |
20 | ||||
Section 5.2 |
Non-Contravention; Consents |
21 | ||||
Section 5.3 |
The Shares and the Loan Notes |
21 | ||||
Section 5.4 |
Organization; Subsidiaries |
22 | ||||
Section 5.5 |
Financial Statements |
23 | ||||
Section 5.6 |
Financial Statement Preparation; Undisclosed Liabilities |
24 | ||||
Section 5.7 |
Position Since Reference Date |
24 | ||||
Section 5.8 |
Compliance with Applicable Laws; Authorizations |
24 | ||||
Section 5.9 |
Insurance |
25 | ||||
Section 5.10 |
Contracts |
25 |
i
Section 5.11 |
Enforceability of Material Contracts; Defaults under Material Contracts |
26 | ||||
Section 5.12 |
Litigation |
27 | ||||
Section 5.13 |
Intellectual Property |
27 | ||||
Section 5.14 |
Real Property |
28 | ||||
Section 5.15 |
Leased Property |
29 | ||||
Section 5.16 |
Personal Property |
29 | ||||
Section 5.17 |
Employment Matters |
29 | ||||
Section 5.18 |
Labor Matters |
30 | ||||
Section 5.19 |
Benefits Plans |
30 | ||||
Section 5.20 |
Taxes |
31 | ||||
Section 5.21 |
Brokers and Finders |
32 | ||||
Section 5.22 |
Environmental Matters |
33 | ||||
Section 5.23 |
Suppliers and Customers |
33 | ||||
Section 5.24 |
Related Party Transactions |
33 | ||||
Section 5.25 |
FCPA Matters |
34 | ||||
Section 5.26 |
Import/Export Compliance |
34 | ||||
Section 5.27 |
Food Safety Compliance |
36 | ||||
Section 5.28 |
Investment Intent; Risk; Ownership of Nomad Ordinary Shares |
36 | ||||
Section 5.29 |
Information in the Prospectus |
37 | ||||
Section 5.30 |
No Further Representations |
37 | ||||
Article VI | ||||||
REPRESENTATIONS AND WARRANTIES OF PURCHASER | ||||||
Section 6.1 |
Authority; Enforceability |
37 | ||||
Section 6.2 |
Non-contravention; Consents |
38 | ||||
Section 6.3 |
Organization |
38 | ||||
Section 6.4 |
Litigation |
38 | ||||
Section 6.5 |
Capitalization |
39 | ||||
Section 6.6 |
Financial Capacity; Equity Financing Agreements |
40 | ||||
Section 6.7 |
No Vote Required |
41 | ||||
Section 6.8 |
Solvency |
41 | ||||
Section 6.9 |
Representations by the Purchaser as to the Aggregate Stock Consideration |
41 | ||||
Section 6.10 |
Registration Rights |
42 | ||||
Section 6.11 |
Investigation |
42 | ||||
Section 6.12 |
Disclaimer Regarding Projections |
42 | ||||
Section 6.13 |
Prospectus |
42 | ||||
Section 6.14 |
FCA Reports and Financial Statements |
43 | ||||
Section 6.15 |
Special Purpose Acquisition Company |
43 | ||||
Section 6.16 |
Affiliate Transactions |
43 | ||||
Section 6.17 |
Taxes |
43 | ||||
Section 6.18 |
Brokers and Finders |
44 | ||||
Section 6.19 |
No Further Representations |
44 |
ii
Article VII | ||||||
COVENANTS | ||||||
Section 7.1 |
Conduct of the Business of the Target Companies |
44 | ||||
Section 7.2 |
Further Assurances |
46 | ||||
Section 7.3 |
Filings; Reasonable Cooperation |
46 | ||||
Section 7.4 |
Solicitation |
48 | ||||
Section 7.5 |
Confidentiality |
48 | ||||
Section 7.6 |
Notice of Developments |
48 | ||||
Section 7.7 |
Employees and Employee Benefits |
48 | ||||
Section 7.8 |
Access to Properties, Books and Records |
50 | ||||
Section 7.9 |
Directors and Officers |
50 | ||||
Section 7.10 |
No Control of the Companys Business |
50 | ||||
Section 7.11 |
Purchaser Interim Covenants |
50 | ||||
Section 7.12 |
Financing |
52 | ||||
Section 7.13 |
Seller Maintenance |
54 | ||||
Section 7.14 |
Termination of Related Party Agreements |
54 | ||||
Section 7.15 |
Director and Officer Indemnification |
54 | ||||
Section 7.16 |
Seller Structuring Transactions |
54 | ||||
Section 7.17 |
Restriction on Transfer |
55 | ||||
Section 7.18 |
Transaction Expenses |
55 | ||||
Section 7.19 |
London Stock Exchange Listing |
55 | ||||
Section 7.20 |
CREST |
57 | ||||
Section 7.21 |
Resolutions and filings for deposit of New Nomad Ordinary Shares into CREST |
57 | ||||
Section 7.22 |
New Nomad Ordinary Shares |
57 | ||||
Section 7.23 |
Shareholder Vote |
57 | ||||
Section 7.24 |
Treatment of Warrants |
58 | ||||
Section 7.25 |
Repayment of Specified Indebtedness |
58 | ||||
Section 7.26 |
Delivery of Financial Statements |
59 | ||||
Section 7.27 |
Purchaser Dedicated Funds |
59 | ||||
Section 7.28 |
Other Matters |
60 | ||||
Article VIII | ||||||
CONDITIONS TO CLOSING | ||||||
Section 8.1 |
Mutual Conditions |
60 | ||||
Section 8.2 |
Conditions of the Purchaser |
60 | ||||
Section 8.3 |
Conditions of the Seller |
61 | ||||
Section 8.4 |
Waiver of Conditions |
62 | ||||
Section 8.5 |
Notification |
62 | ||||
Section 8.6 |
Frustration of Closing Conditions |
62 | ||||
Article IX | ||||||
TERMINATION | ||||||
Section 9.1 |
Termination |
62 | ||||
Section 9.2 |
Effect of Termination |
63 |
iii
Article X | ||||||
SURVIVAL | ||||||
Section 10.1 |
Survival |
63 | ||||
Article XI | ||||||
MISCELLANEOUS | ||||||
Section 11.1 |
Announcements |
64 | ||||
Section 11.2 |
Assignment |
64 | ||||
Section 11.3 |
Specific Performance |
64 | ||||
Section 11.4 |
Costs and Expenses; Taxes |
65 | ||||
Section 11.5 |
Notices |
65 | ||||
Section 11.6 |
Entire Agreement |
67 | ||||
Section 11.7 |
Waivers |
67 | ||||
Section 11.8 |
Counterparts |
67 | ||||
Section 11.9 |
Amendments |
67 | ||||
Section 11.10 |
Severability |
68 | ||||
Section 11.11 |
Third Party Beneficiaries |
68 | ||||
Section 11.12 |
Governing Law |
68 | ||||
Section 11.13 |
Dispute Resolution |
68 | ||||
Section 11.14 |
Privilege; Counsel |
69 |
Schedules
Schedule A | Net Tax Amount Methodologies | |
Schedule B | Adjustment Methodologies | |
Schedule C | Benchmark Time | |
Schedule 7.28 | Other Matters |
Disclosure Letter
Purchaser Disclosure Letter
Exhibits
Exhibit A | Debt Commitment Letter | |
Exhibit B | Form of Registration Rights Agreement | |
Exhibit C | Lock-up Termination Events |
iv
INDEX OF DEFINED TERMS
Page |
||
Accounting Principles |
Section 1.1(a) | |
Admission |
Section 1.1(b) | |
Admission and Disclosure Standards |
Section 1.1(c) | |
Affiliate |
Section 1.1(d) | |
Affiliate Agreement |
Section 6.16 | |
Aggregate Stock Consideration |
Section 1.1(e) | |
Agreement |
Preamble | |
Amendment Request |
Section 7.12(b) | |
Audited Financial Statements |
Section 5.5 | |
Authorization |
Section 1.1(f) | |
Benchmark Time |
Section 1.1(g) | |
Benefit Plans |
Section 5.19(a) | |
Business Day |
Section 1.1(h) | |
Business IP |
Section 1.1(i) | |
BVI Companies Act |
Section 1.1(j) | |
Cash |
Section 1.1(k) | |
Cash Closing Consideration |
Section 3.3 | |
Cash Overage |
Section 1.1(l) | |
Cash Target |
Section 1.1(l) | |
Cash Underage |
Section 1.1(n) | |
Class H Shares |
Section 1.1(l) | |
Class I Shares |
Section 1.1(q) | |
Class J Shares |
Section 1.1(r) | |
Closing |
Section 1.1(p) | |
Closing Date |
Section 4.1 | |
Closing Total Consideration |
Section 3.2 | |
Closing Total Consideration Statement |
Section 3.2 | |
Company |
Recitals | |
Company Facility |
Section 1.1(s) | |
Company Indemnitees |
Section 7.15 | |
Company Material Adverse Effect |
Section 1.1(t) | |
Company Ordinary Shares |
Section 1.1(u) | |
Confidentiality Agreement |
Section 1.1(v) | |
Continuing Employees |
Section 7.7(a) | |
Copyrights |
Section 1.1(w) | |
CREST |
Section 1.1(x) | |
CrestCo |
Section 1.1(y) | |
Debt Commitment Letter |
Section 1.1(z) | |
Debt Financing |
Section 6.6 | |
Dedicated Funds Bank |
Section 7.27 | |
Default Interest |
Section 1.1(z) | |
Depository |
Section 1.1(bb) | |
Depository Interests |
Section 1.1(cc) |
v
Disclosure and Transparency Rules |
Section 1.1(dd) | |
Disclosure Letter |
Section 1.1(ee) | |
Encumber |
Section 1.1(ff) | |
Encumbrance |
Section 1.1(ff) | |
Environment |
Section 1.1(gg) | |
Environmental Law |
Section 1.1(gg) | |
Equity Co-Investors |
Section 1.1(ii) | |
Equity Financing |
Section 6.6 | |
Equity Financing Agreements |
Section 1.1(ii) | |
Escrow Agent |
Section 1.1(kk) | |
Escrow Agreement |
Section 1.1(ll) | |
Estimated Cash |
Section 1.1(nn) | |
Estimated Indebtedness |
Section 1.1(kk) | |
Estimated Net Tax Amount |
Section 1.1(oo) | |
Estimated Net Working Capital |
Section 1.1(oo) | |
Estimated Transaction Expenses |
Section 1.1(qq) | |
EU Customs |
Section 5.26(a) | |
European Economic Area |
Section 1.1(rr) | |
European Union |
Section 1.1(ss) | |
Existing Lender Consent |
Section 1.1(ii) | |
Factoring Obligations |
Section 1.1(uu) | |
FCA |
Section 1.1(vv) | |
FCA Handbook |
Section 1.1(ww) | |
FCPA |
Section 5.25 | |
Final Closing Statement |
Section 4.4(b) | |
Final Overage |
Section 4.4(c) | |
Final Total Consideration |
Section 4.4(b) | |
Final Underage |
Section 4.4(d) | |
Financial Statements |
Section 5.5 | |
Financing |
Section 6.6 | |
First Quarter 2015 Financial Statements |
Section 7.26(a) | |
Food Safety Laws |
Section 1.1(xx) | |
Food Safety Matters |
Section 1.1(yy) | |
Founders |
Section 1.1(zz) | |
FSMA |
Section 1.1(aaa) | |
Fundamental Representations |
Section 1.1(bbb) | |
Governing Documents |
Section 5.2(b) | |
Governmental Antitrust Authority |
Section 7.3(a) | |
Governmental Authority |
Section 1.1(ccc) | |
Governmental Order |
Section 1.1(ddd) | |
HACCP |
Section 5.27(a) | |
IFRS |
Section 1.1(eee) | |
Indebtedness |
Section 1.1(fff) | |
Intellectual Property Rights |
Section 1.1(ggg) | |
IPO Prospectus |
Section 1.1(hhh) | |
Knowledge of the Purchaser |
Section 1.1(iii) |
vi
Knowledge of the Seller |
Section 1.1(jjj) | |
Law |
Section 1.1(kkk) | |
Lenders |
Section 1.1(z) | |
Liability |
Section 1.1(lll) | |
LIBOR |
Section 1.1(mmm) | |
Licensed IP |
Section 1.1(mmm) | |
Listing Rules |
Section 1.1(ooo) | |
Loan Notes |
Section 1.1(ppp) | |
Lock-Up Acknowledgement |
Section 7.17(b) | |
London Stock Exchange |
Section 1.1(qqq) | |
Major Customers |
Section 5.23 | |
Major Suppliers |
Section 5.23 | |
Material Contracts |
Section 5.10 | |
Midco |
3 | |
Money Laundering Laws |
Section 5.25(b) | |
Most Recent Financial Statements |
Section 5.5 | |
Net Tax Amount |
Section 1.1(rrr) | |
Net Tax Asset |
Section 1.1(sss) | |
Net Tax Reserve |
Section 1.1(ttt) | |
Net Working Capital |
Section 1.1(rrr) | |
Net Working Capital Overage |
Section 1.1(vvv) | |
Net Working Capital Underage |
Section 1.1(vvv) | |
New Company Plans |
Section 7.7(b) | |
New Nomad Ordinary Shares |
Section 1.1(xxx) | |
Nomad |
Preamble | |
Nomad Board |
Section 1.1(yyy) | |
Nomad Founder Preferred Shares |
Section 1.1(zzz) | |
Nomad Issued Shares |
Section 6.5(a) | |
Nomad Ordinary Shares |
Section 1.1(aaaa) | |
Nomad Warrants |
Section 1.1(bbbb) | |
Non-Controlled Minority Investments |
Section 5.4(h) | |
NYSE |
Section 1.1(cccc) | |
Official List |
Section 1.1(dddd) | |
Ordinary Course of Business |
Section 7.1 | |
Outside Date |
Section 9.1(a) | |
Owned IP |
Section 1.1(eeee) | |
Parcel |
Section 5.14 | |
Patents |
Section 1.1(ffff) | |
Pension Liabilities |
Section 1.1(gggg) | |
Permitted Encumbrances |
Section 1.1(hhhh) | |
Person |
Section 1.1(iiii) | |
Post-Closing Statement |
Section 4.4(a) | |
Preliminary Cash |
Section 4.4(b) | |
Preliminary Indebtedness |
Section 4.4(a) | |
Preliminary Net Tax Amount |
Section 4.4(a) | |
Preliminary Net Working Capital |
Section 4.4(a) |
vii
Preliminary Total Consideration Amount |
Section 4.4(a) | |
Preliminary Transaction Expenses |
Section 4.4(a) | |
Proposed Transaction |
Section 1.1(jjjj) | |
Prospectus |
Section 1.1(kkkk) | |
Prospectus Directive |
Section 1.1(llll) | |
Prospectus Rules |
Section 1.1(mmmm) | |
Purchased Loan Note Amount |
Section 3.2 | |
Purchased Loan Notes |
Section 3.2 | |
Purchaser |
Preamble | |
Purchaser Dedicated Funds |
Section 7.27 | |
Purchaser Disclosure Letter |
Section 1.1(nnnn) | |
Purchaser FCA Reports |
Section 6.14(a) | |
Purchaser Fundamental Representations |
Section 1.1(oooo) | |
Purchaser Voting Debt |
Section 6.5(b) | |
Real Property Lease |
Section 5.15 | |
Reference Date |
Section 5.5 | |
Registered Intellectual Property |
Section 1.1(pppp) | |
Registrar |
Section 1.1(qqqq) | |
Registration Rights Agreement |
Section 1.1(rrrr) | |
Related Party |
Section 5.24 | |
Representatives |
Section 1.1(ssss) | |
Restricted Period |
Section 7.27 | |
Review Period |
Section 4.4(b) | |
Sanctions |
Section 5.26(c) | |
Sarbanes-Oxley Act |
Section 1.1(tttt) | |
Second Quarter 2015 Financial Statements |
Section 7.26(b) | |
Securities Act |
Section 1.1(uuuu) | |
Securities Laws |
Section 1.1(vvvv) | |
Seller |
Preamble | |
Senior Management Team |
Section 1.1(wwww) | |
Settlement Accountant |
Section 4.4(b) | |
Shares |
Section 1.1(xxxx) | |
Shares Consideration |
Section 3.1 | |
Skadden |
Section 11.14 | |
Software |
Section 1.1(yyyy) | |
Solvent |
Section 6.8 | |
Specified Indebtedness |
Section 1.1(zzzz) | |
Statement of Objections |
Section 4.4(b) | |
Subsidiaries |
Section 1.1(zzzz) | |
Subsidiary |
Section 1.1(zzzz) | |
Systems |
Section 5.13(d) | |
Target Companies |
Section 1.1(bbbbb) | |
Target Company |
Section 1.1(bbbbb) | |
Target Net Working Capital |
Section 1.1(ccccc) | |
Tax |
Section 1.1(ddddd) | |
Tax Authority |
Section 1.1(eeeee) |
viii
Tax Liability |
Section 1.1(fffff) | |
Tax Return |
Section 1.1(ggggg) | |
Taxation |
Section 1.1(ddddd) | |
Total Consideration |
Section 3.1 | |
Trade Secrets |
Section 1.1(hhhhh) | |
Trademarks |
Section 1.1(iiiii) | |
Transaction Documents |
Section 1.1(jjjjj) | |
Transaction Expenses |
Section 1.1(kkkkk) | |
Transfer |
Section 7.17(a) | |
Transition Period |
Section 7.7(a) | |
U.S. |
Section 1.1(lllll) | |
United States |
Section 1.1(lllll) | |
US Tax Code |
Section 1.1(mmmmm) | |
Warrant Amendment Commitment Parties |
Section 6.5(e) | |
Warrant Amendment Commitments |
Section 6.5(e) | |
Warrant Consent Solicitation |
Section 7.24 | |
Warrant Exercise Commitment Parties |
Section 6.5(e) | |
Warrant Exercise Commitments |
Section 6.5(e) |
ix
SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT, dated as of April 20, 2015 (this Agreement ), is between Birds Eye Iglo Limited Partnership Inc, a limited partnership with separate legal personality established under the Limited Partnerships (Guernsey) Law, 1995, as amended, with registration number 740 and having its registered offices at Trafalgar Court, St Peter Port, Guernsey (acting through its general partner, Liberator GP Limited, and its managing partner, Liberator Managing Partner Limited) (the Seller ), and Nomad Holdings Limited, a corporation incorporated in the British Virgin Islands in accordance with the laws of the British Virgin Islands with number 1818482 (the Purchaser or Nomad ).
WHEREAS, Nomad was organized and raised capital for the stated purpose of acquiring a controlling interest in one or more operating businesses through a merger, capital stock exchange, share purchase, asset acquisition, reorganization or similar transaction;
WHEREAS, the Seller is the sole legal and beneficial owner of all of the Shares of Iglo Foods Holding Limited, a company incorporated in England and Wales (registered number 05879473) whose registered office is at 5 New Square, Bedfont Lakes Business Park, Feltham, Middlesex, TW14 8HA, (the Company ); and
WHEREAS, the Purchaser desires to purchase, and the Seller desires to sell to the Purchaser, the Shares, free of any Encumbrance and with all rights attached thereto.
NOW, THEREFORE, in consideration of the premises, and the mutual representations, warranties, covenants and agreements herein set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
Article I
DEFINITIONS
Section 1.1 Definitions . Capitalized terms used in this Agreement shall have the meanings set forth in this Agreement. The following terms, when used in this Agreement, shall have the following meanings:
(a) Accounting Principles shall mean IFRS, consistently applied in accordance with the past practice of the Target Companies;
(b) Admission shall mean admission of the Nomad Ordinary Shares to the standard listing segment of the Official List and to trading on the London Stock Exchanges main market for listed securities becoming effective in accordance with, respectively, the Listing Rules and the Admission and Disclosure Standards;
(c) Admission and Disclosure Standards shall mean the requirements contained in the edition of the Admission and Disclosure Standards of the London Stock Exchange that is most current at the date of this Agreement, containing, amongst other things, the admission requirements to be met by companies seeking admission to trading on the London Stock Exchanges main market for listed securities, as amended from time to time;
(d) Affiliate shall mean, in relation to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, and control (including the terms controlled by and under common control with), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise; provided , that in the case of the Company, the term Affiliate shall not include portfolio companies of the Persons that control the Seller or any of their respective controlled Affiliates;
(e) Aggregate Stock Consideration shall mean 13,743,094 New Nomad Ordinary Shares;
(f) Authorization shall mean any authorization, approval, clearance, consent, certificate, license, permit or franchise of or from any Governmental Authority or pursuant to any Law;
(g) Benchmark Time shall have the meaning set forth on Schedule C ;
(h) Business Day shall mean a day, other than a Saturday or Sunday or public holiday in England or Guernsey, on which, in any such case, banks are open in England or Guernsey for general commercial business;
(i) Business IP shall mean the Owned IP and the Licensed IP;
(j) BVI Companies Act shall mean the BVI Business Companies Act, 2004 (as amended);
(k) Cash shall mean for the Target Companies on a consolidated basis an amount equal to, without duplication, the cash, bank deposits, cash equivalents and short term marketable investments of the Target Companies, determined in accordance with the Accounting Principles used in the Audited Financial Statements. For the purposes of this Agreement, any determination of Cash (including for determining Estimated Cash, Preliminary Cash and Final Cash) shall be made such that there shall be no credit for any Cash in excess of 50,000,000;
(l) Cash Overage shall mean the amount, if any, by which (i) Cash as of the Benchmark Time is greater than (ii) the Cash Target, provided, that, the Cash Overage may not exceed 17,000,000;
(m) Cash Target shall mean 33,000,000;
(n) Cash Underage shall mean the amount, if any, by which (i) Cash as of the Benchmark Time is less than (ii) the Cash Target;
2
(o) Class H Shares shall mean 16,755 class H shares with a nominal value of EUR1.00 each in the capital of the Company;
(p) Class I Shares shall mean 500,000 class I shares with a nominal value of EUR0.05 each in the capital of the Company;
(q) Class J Shares shall mean 500,000 class J shares with a nominal value of EUR0.05 each in the capital of the Company;
(r) Closing shall mean completion of the sale and purchase of the Shares in accordance with the provisions of this Agreement;
(s) Company Facility shall mean the Senior Facilities Agreement, dated July 3, 2014, for Iglo Foods Midco Limited ( Midco ) with Deutsche Bank AG, London Branch as left lead bank and Deutsche Bank AG, London Branch, Credit Suisse AG, London Branch, as global co-ordinators and Deutsche Bank AG, London Branch, Credit Suisse AG, London Branch, Nomura International plc, as mandated lead arrangers and bookrunners, with Credit Suisse AG, London Branch, acting as Agent, and Credit Suisse AG, London Branch, acting as Security Agent;
(t) Company Material Adverse Effect shall mean any fact, circumstance, occurrence, change or event that has a material adverse effect on the business, results of operations or financial condition of the Target Companies, taken as a whole, other than any fact, circumstance, occurrence, change or event resulting from, relating to or arising out of: (i) changes in general economic conditions in any of the markets, industries or geographical areas in which any of the Target Companies operate (except to the extent that such changes materially and disproportionately have a greater adverse impact on the Target Companies, taken as a whole, as compared to the adverse impact such changes have on other Persons operating in the same industries as the Target Companies operate); (ii) any change in the financial, credit, banking, currency or capital markets in general (whether in the European Union or any other country in which any of the Target Companies operate) or changes in currency exchange rates or interest rates or currency fluctuations; (iii) political conditions generally in the European Union or any other country (or any subdivision thereof) in which any of the Target Companies operate, (iv) acts of God or other calamities, pandemics, national or international political or social conditions, including the engagement by any country in hostilities, whether commenced before or after the date of this Agreement, and whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack; (v) changes in Law or in IFRS or other accounting requirements or principles imposed upon the Target Companies, including, in each case, the interpretations thereof; (vi) any actions taken, or failures to take action, as contemplated or permitted by this Agreement or to which the Purchaser has consented in writing; (vii) any failure by the Target Companies to achieve any earnings projection, financial projection or other forecast (it being understood that this clause (vii) shall not exclude the facts or circumstances giving rise to such failure to the extent such facts or circumstances would otherwise constitute a Company Material Adverse Effect); or (viii) the announcement or pendency of the sale or potential sale of the Company, or the announcement or the taking of any action contemplated by this Agreement, including by reason of the identity of the Purchaser or any plans or intentions of the Purchaser with respect to the conduct of the businesses of any of the Target Companies, including any impact thereof on relationships, contractual or otherwise, with customers, suppliers and/or employees;
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(u) Company Ordinary Shares shall mean 6,000,000 ordinary shares with a nominal value of EUR0.01 each and one ordinary share with a nominal value of GBP0.01, in each case, in the capital of the Company and any Company Ordinary Shares issued in accordance with this Agreement;
(v) Confidentiality Agreement shall mean the Confidentiality Agreement, dated February 27, 2015, between the Company and the Purchaser;
(w) Copyrights shall mean copyrights, whether registered or unregistered, and pending applications to register the same, renewals and extensions in connection any such registrations;
(x) CREST shall mean the paperless settlement system administered by CrestCo;
(y) CrestCo shall mean Euroclear UK & Ireland Limited;
(z) Debt Commitment Letter shall mean the Debt Commitment Letter, dated as of the date of this Agreement (together with the related redacted fee letter, the form of Backstop Facilities Agreement and Condition Precedent Satisfaction Letter, dated as of the date of this Agreement from the Original Lenders (as defined in the Company Facility) and the Mandated Lead Arrangers (as defined in the Debt Commitment Letter) to Midco and the Purchaser attached thereto (and defined therein)), by and among the Purchaser and Barclay Bank plc, Credit Suisse AG, London Branch and UBS Limited (the Lenders ), pursuant to which the Lenders have committed to underwrite commitments in an aggregate amount of the Total Commitments (as such term is defined in the Backstop Facilities Agreement) to be applied substantially concurrently with the Closing of the transactions contemplated by this Agreement, a copy of which is attached hereto as Exhibit A;
(aa) Default Interest shall mean LIBOR plus 400 basis points per annum;
(bb) Depositary shall mean Computershare Investor Services PLC;
(cc) Depositary Interests shall mean dematerialized depositary interests in respect of the New Nomad Ordinary Shares issued or to be issued by the Depositary;
(dd) Disclosure and Transparency Rules shall mean the disclosure rules and transparency rules produced by the FCA and forming part of the FCA Handbook of rules and guidance, as from time to time amended;
(ee) Disclosure Letter shall mean the disclosure letter from the Seller to the Purchaser delivered concurrently with the signing of this Agreement;
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(ff) Encumbrance shall mean any mortgage, lien, hypothecation, pledge, charge, right of pre-emption, right of first refusal, right to vote, grant of proxy, encumbrance or any other security interest or rights, claims or interests of third parties or any agreement to create any of the foregoing, and Encumber shall have a meaning correlative thereto;
(gg) Environment shall mean all or any of the following media, namely air (including air inside buildings and other natural and man-made structures above or below ground), water, land (including natural and man-made structures) and all living organisms (including humans);
(hh) Environmental Law any European Union, national, federal, state or local law concerning the pollution or protection of the Environment;
(ii) Equity Co-Investors shall mean those parties to the Equity Financing Agreements, other than Nomad and the Founders;
(jj) Equity Financing Agreements shall mean the Subscription, Commitment and Consent Agreements, accepted by the Purchaser as of the date of this Agreement, each agreement in the form that was provided to the Seller prior to the execution of this Agreement, by and among the Purchaser, the Founders and the Equity Co-Investors, pursuant to which Nomad has agreed to issue Nomad Ordinary Shares in the amounts set forth therein to certain parties thereto immediately prior to the Closing of the transactions contemplated by this Agreement;
(kk) Escrow Agent shall mean J.P. Morgan;
(ll) Escrow Agreement shall mean the Escrow Agreement to be entered into on the Closing Date on the terms contemplated by Schedule 7.28 ;
(mm) Estimated Cash shall mean the Sellers estimate of Cash as of the Benchmark Time;
(nn) Estimated Indebtedness shall mean the Sellers estimate of Indebtedness as of the Benchmark Time;
(oo) Estimated Net Tax Amount shall mean the Sellers estimate of the Net Tax Amount as of the Benchmark Time;
(pp) Estimated Net Working Capital shall mean the Sellers estimate of Net Working Capital as of the Benchmark Time;
(qq) Estimated Transaction Expenses shall mean the Sellers estimate of Transaction Expenses;
(rr) European Economic Area means the European Union, Iceland, Liechtenstein and Norway and European Economic Area member state shall be construed accordingly;
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(ss) European Union means the economic and political union of a number of European countries as enshrined by the Treaty on European Union 1992, as amended;
(tt) Existing Lender Consent shall mean the consent and waiver of the lending parties holding sixty six and two/thirds per cent of the Total Commitments (as defined in the Company Facility) the form of which is attached to the Debt Commitment Letter and the draft Amendment and Restatement Agreement as defined therein, dated as of the date hereof;
(uu) Factoring Obligations shall mean any factoring, receivables or securitization arrangements or facilities entered into by any Target Company pursuant to which accounts receivables of any such Target Company are pledged as security, transferred or sold for advances made under such arrangement or facility on a recourse or non-recourse basis, including pledges of accounts receivables owed to any Target Company by its customers as security for advances to such customers by third party lenders;
(vv) FCA shall mean the Financial Conduct Authority in its capacity as competent authority under the FSMA;
(ww) FCA Handbook shall mean the handbook of the FCA;
(xx) Food Safety Laws means all applicable Laws concerning Food Safety Matters;
(yy) Food Safety Matters means any matters concerning food safety, including food hygiene, food handling, food labeling, food packaging, food preparation, food production and food storage.
(zz) Founders shall mean TOMS Acquisition I LLC and Mariposa Acquisition II, LLC;
(aaa) FSMA shall mean the Financial Services and Markets Act 2000, as amended from time to time;
(bbb) Fundamental Representations shall mean the representations and warranties set forth in Section 5.1 , Section 5.3 , Section 5.4(a) and Section 5.21 ;
(ccc) Governmental Authority shall mean any supra-national, national, state, municipal or local government (including any subdivision, court of competent jurisdiction, regulatory or administrative agency or commission or other authority thereof), stock exchange or self-regulatory organization exercising any regulatory, taxing, importing or any other governmental authority, including the European Union;
(ddd) Governmental Order shall mean any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority;
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(eee) IFRS shall mean the International Financial Reporting Standards, and the interpretations thereto, as adopted by the International Accounting Standards Board;
(fff) Indebtedness shall mean for the Target Companies on a consolidated basis an amount equal to, without duplication, (a) indebtedness for borrowed money of the Target Companies, including indebtedness evidenced by any note, bond, debenture, mortgage or other debt instrument or debt security, (b) net obligations of the Target Companies in respect of interest rate swaps, hedges or similar arrangements, including any swaps, hedges or similar arrangements related to foreign exchange; provided , that, to the extent the settlement of all such obligations result in a net gain to the Target Companies, such net gain shall reduce Indebtedness, (c) obligations of the Target Companies under capitalized leases, (d) any deferred purchase price liabilities of the Target Companies related to past acquisitions, whether or not represented by a note, earn-out or contingent purchase payment or otherwise, (e) obligations of the Target Companies under or in connection with off balance sheet financing arrangements, (f) all obligations of the type referred to in the foregoing clauses of this definition of other Persons for the payment of which any Target Company is responsible or liable, as obligor, guarantor, surety or otherwise, including any guarantee of such obligations, and (g) any accrued interest, fees, penalties, prepayment penalties resulting from the consummation of the Proposed Transaction or other expenses for obligations of the kind referred to in clause (a) above; it being understood that in no event shall Indebtedness include (1) undrawn amounts under existing letters of credit, lines of credit and revolving credit facilities, (2) indebtedness incurred under any Factoring Obligations, (3) indebtedness incurred by any Target Company that is owed to another Target Company, (4) trade credit provided to customers in the Ordinary Course of Business, (5) any ongoing royalty payments arising in the Ordinary Course of Business, (6) Taxes, (7) Pension Liabilities, (8) any amounts payable in connection with any Purchased Loan Notes, including the Purchased Loan Note Amount or (9) indebtedness incurred in the Ordinary Course of Business related to any surety bonds (including any performance bonds); provided , that, in no event will the definition of Indebtedness include any amounts that are deducted from the Total Consideration as Transaction Expenses, that are taken into account in the calculation Net Tax Amount (or Net Tax Reserve) or that are included as current liabilities in the determination of Net Working Capital; provided , further , that Indebtedness shall be calculated at par value without giving effect to any original issue discount;
(ggg) Intellectual Property Rights shall mean all Patents, Trademarks, Copyrights, Trade Secrets, mask works, utility models and industrial designs and applications therefor;
(hhh) IPO Prospectus shall mean the Prospectus dated April 11, 2014 relating to the initial placing of Nomad Ordinary Shares and Nomad Warrants;
(iii) Knowledge of the Purchaser shall mean the actual knowledge of the individuals set forth on Schedule 1.1(iii) of the Purchaser Disclosure Letter after due and reasonable inquiry;
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(jjj) Knowledge of the Seller shall mean the actual knowledge of the individuals set forth on Schedule 1.1(jjj) of the Disclosure Letter after due and reasonable inquiry;
(kkk) Law shall mean any law, code, statute, requirement, rule or regulation, and any Governmental Order;
(lll) Liability shall mean any direct or indirect liability, Indebtedness, claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, known or unknown, contingent or otherwise;
(mmm) LIBOR shall mean shall mean (a) the offered rate of a three-month tenor which appears on the relevant page on the Reuters screen; or (b) if no offered rate appears on the relevant page of the Reuters screen or there is no relevant page on the Reuters screen, the comparable rate as quoted by Barclays or any successor to such bank;
(nnn) Licensed IP shall mean the Intellectual Property Rights licensed to the Target Companies;
(ooo) Listing Rules shall mean the Listing Rules issued and maintained by the FCA under Part VI of FSMA;
(ppp) Loan Notes shall mean, together, those loan notes listed on Schedule 1.1(ppp) of the Disclosure Letter;
(qqq) London Stock Exchange shall mean London Stock Exchange plc;
(rrr) Net Tax Amount shall be the Net tax amount calculated in accordance with the procedures, methodologies and formula set forth on Schedule A ;
(sss) Net Tax Asset shall mean the value of the Net Tax Amount (if such amount is positive);
(ttt) Net Tax Reserve shall mean the absolute value of the Net Tax Amount (if such amount is negative);
(uuu) Net Working Capital is defined in and shall be calculated in accordance with the procedures, methodologies and formula set forth on Schedule B ;
(vvv) Net Working Capital Overage shall mean the amount, if any, by which (i) the Net Working Capital as of the Benchmark Time is greater than (ii) the Target Net Working Capital;
(www) Net Working Capital Underage shall mean the amount, if any, by which (i) the Net Working Capital as of the Benchmark Time is less than (ii) the Target Net Working Capital;
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(xxx) New Nomad Ordinary Shares shall mean the Nomad Ordinary Shares to be issued to the Seller pursuant to this Agreement;
(yyy) Nomad Board shall mean the Board of Directors of Nomad;
(zzz) Nomad Founder Preferred Shares shall mean the entire issued preferred share capital of Nomad, comprised of preferred shares of no par value;
(aaaa) Nomad Ordinary Shares shall mean the entire issued ordinary share capital of Nomad (including the New Nomad Ordinary Shares), comprised of ordinary shares of no par value;
(bbbb) Nomad Warrants shall mean the warrants issued, conditional on Admission, pursuant to a resolution of the Nomad Board passed on April 9, 2014, and an instrument executed by the Purchaser on April 10, 2014;
(cccc) NYSE shall mean the New York Stock Exchange;
(dddd) Official List shall mean the official list maintained by the FCA;
(eeee) Owned IP shall mean the Intellectual Property Rights owned by the Target Companies;
(ffff) Patents shall mean patents and applications therefor and all provisional applications, divisionals, reissues, re-examinations, extensions, continuations and continuations-in-part thereof;
(gggg) Pension Liabilities shall mean any and all Liabilities relating to pension plans or retirement plans or post-service lump sum plans or similar post-employment retirement plans or long-term employment benefit plans or medical benefit plans offered to current or former employees, officers or directors of any Target Company as included in the Audited Financial Statements, including as set forth in Schedule 1.1(gggg) of the Disclosure Letter;
(hhhh) Permitted Encumbrances shall mean (i) those Encumbrances set forth on Schedule 1.1(hhhh) of the Disclosure Letter; (ii) mechanics, carriers, workmens, repairmens or other like Encumbrances arising or incurred in the Ordinary Course of Business for amounts not yet delinquent; (iii) Encumbrances arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the Ordinary Course of Business for amounts not yet delinquent and liens for Taxes that are not due and payable or that may thereafter be paid without penalty or that are being contested in good faith by appropriate proceedings; (iv) all rights reserved to or vested in any Governmental Authority to control or regulate any asset or property in any manner and all Laws applicable to assets or properties; (v) other imperfections of title or Encumbrances, if any, that do not, individually or in the aggregate, materially impair the continued use and operation of the Target Companies assets in the conduct of its business as presently conducted;
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(vi) easements, covenants, rights-of-way and other similar restrictions of record; (vii) any conditions that would be shown by a current, accurate survey or physical inspection of any real property made prior to Closing; (viii) licenses to Intellectual Property Rights; and (ix) (A) zoning, building and other similar restrictions, (B) Encumbrances that have been placed by any developer, landlord or other third party on property over which the Target Companies have easement rights and (C) unrecorded easements, covenants, rights-of-way and other similar restrictions, none of which items set forth in this clause (ix), in the aggregate, materially impair the continued use and operation of real property used in the conduct of the business of the Target Companies as presently conducted;
(iiii) Person shall mean any individual, firm, corporation (wherever incorporated), partnership, limited liability company, joint venture, trust, association, organization, Governmental Authority, works council or employee representative body (whether or not having separate legal personality) or any other entity;
(jjjj) Proposed Transaction shall mean the transactions contemplated by this Agreement and the Transaction Documents;
(kkkk) Prospectus shall mean the prospectus to be prepared by Nomad in connection with the Admission to be approved by the FCA in accordance with the Listing Rules and as required by the Prospectus Rules;
(llll) Prospectus Directive shall mean Directive 2003/71/EC (and any amendments thereto, including Directive 2010/73/EU, to the extent implemented in the relevant member state), and includes any relevant implementing measure in each European Economic Area member state that has implemented Directive 2003/71/EC;
(mmmm) Prospectus Rules shall mean the rules referred to as such and expressed to relate to transferable securities in Section 73A(4) of FSMA;
(nnnn) Purchaser Disclosure Letter shall mean the disclosure letter from the Purchaser to the Seller delivered concurrently with the signing of this Agreement;
(oooo) Purchaser Fundamental Representations shall mean the representations and warranties set forth in Section 6.1 (Authority; Enforceability), Section 6.3 (Organization), Section 6.5 (Capitalization), Section 6.7 (No Vote Required), Section 6.8 (Solvency), Section 6.9 (Representations by the Purchaser as to the Aggregate Stock Consideration), Section 6.10 (Registration Rights), Section 6.15 (Special Purpose Acquisition Company) and Section 6.18 (Brokers and Finders);
(pppp) Registered Intellectual Property shall mean all: (i) Patents, (ii) registered Trademarks, and applications to register Trademarks, (iii) registered Copyrights registrations, and applications to register Copyrights, (iv) internet domain names and (v) any other intellectual property that is the subject of an application, certificate, filing, registration or other document issued by, filed with, or recorded by, any state, government or other public legal authority at any time;
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(qqqq) Registrar shall mean Computershare Investor Services (BVI) Limited or any other registrar appointed by Nomad from time to time;
(rrrr) Registration Rights Agreement shall mean the Registration Rights Agreement among the Seller, Pershing Square Capital, Mariposa Acquisition II, LLC, TOMS Acquisition I LLC (and certain Affiliates thereof) and the Purchaser and to be dated as of the Closing Date, substantially in the form attached hereto as Exhibit B ;
(ssss) Representatives shall mean, in relation to a Person, its respective Affiliates and the directors, officers, employees, agents, advisers, accountants and consultants of that Person and/or of its respective Affiliates;
(tttt) Sarbanes-Oxley Act shall mean the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder, or any successor statute, rules or regulations thereto;
(uuuu) Securities Act shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;
(vvvv) Securities Laws shall mean the Securities Act, the Exchange Act, the Sarbanes-Oxley Act, the Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940, as amended, the Trust Indenture Act of 1939, as amended, and the Prospectus Directive, and the rules and regulations of any Governmental Authority promulgated thereunder;
(wwww) Senior Management Team shall mean Mr. Elio Leoni Sceti, Mr. Paul Kenyon, Ms. Tania Howarth, Mr. Luca Miggiano, Mr. Andy Weston Webb, Mr. Achim Eichenlaub and Mr. Daniel Pagnoni;
(xxxx) Shares means the Company Ordinary Shares, the Class H, Class I and Class J Shares and any shares of the Company or any of its Subsidiaries issued to the Seller in connection with the transactions described on Schedule 7.16 of the Disclosure Letter;
(yyyy) Software shall mean computer software programs in any form, including source code, executable code or object code formats;
(zzzz) Specified Indebtedness shall mean any Indebtedness outstanding under the Company Facility, but solely to the extent the Existing Lender Consent is not obtained prior to the date is the third (3 rd ) Business Day prior to the anticipated Closing Date;
(aaaaa) Subsidiary and, collectively the Subsidiaries , of a Person shall mean any corporation or other legal entity of which such Person (either alone or through or together with any other Subsidiary or Subsidiaries) is the general partner or of which at least a majority of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or others performing similar functions of such corporation or other legal entity is directly or indirectly owned or controlled by such Person (either alone or through or together with any other Subsidiary or Subsidiaries);
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(bbbbb) Target Companies shall mean the Company and all of its Subsidiaries, and Target Company shall mean any of them;
(ccccc) Target Net Working Capital shall mean negative 2,770,000;
(ddddd) Tax or Taxation , shall mean any (i) national, state, provincial, municipal and local income, gross receipts, franchise, estimated, alternative minimum, add on minimum, sales, use, transfer, goods or services, registration, value added, excise, natural resources, severance, stamp, occupation, premium, windfall profit, environmental, customs, duties, levies, profits, real property, personal property, capital stock, social security (or similar), employment, unemployment, disability, payroll, license, employee or other withholding, or other tax, of any kind whatsoever, including any interest, penalties or additions to tax or additional amounts in respect of the foregoing, whether or not disputed, (ii) liability for the payment of any amounts of the type described in the foregoing clause (i) arising as a result of being (or ceasing to be) a member of any combined, consolidated, affiliated, unitary, or other similar group (or being included (or required to be included) in any Tax Return relating thereto) and (iii) liability for the payment of any amounts of the type described in the foregoing clause (i) as a result of any express or implied obligation to indemnify or otherwise assume or succeed to the Tax liability of any other Person other than pursuant to an agreement entered into in the Ordinary Course of Business, the principal purpose of which is not related to Taxes;
(eeeee) Tax Authority shall mean any taxing or other Governmental Authority competent to impose any Tax liability, or assess or collect any Tax;
(fffff) Tax Liability shall mean a liability of any Target Company to make or suffer an actual payment of Tax (or an amount in respect of Tax);
(ggggg) Tax Return shall mean any return (including any informational return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of compliance with any legal requirement relating to any Tax;
(hhhhh) Trade Secrets shall mean all trade secrets, and other confidential know-how, technical, scientific, research and development or business information that is not generally known to, and not readily ascertainable through proper means by, the public and other Persons who might obtain economic value from its disclosure or use, including confidential formulas, designs, devices, technology, inventions, methods, process and compositions, whether or not patentable;
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(iiiii) Trademarks shall mean trademarks, trade dress, service marks, trade names, domain names, whether registered or unregistered, and pending applications to register the same, including all renewals thereof and all goodwill associated therewith;
(jjjjj) Transaction Documents shall mean the Registration Rights Agreement and the other documents and agreements contemplated hereby and thereby;
(kkkkk) Transaction Expenses shall mean, in each case, solely to the extent not paid prior to or at the Closing by the Seller or the Target Companies, without duplication, the sum of (i) all amounts that are payable by any Target Company to (x) counsel to the Target Companies or the Seller and (y) all other transaction advisors engaged by the Target Companies or the Seller, including financial advisors, investment bankers, brokers, accountants and data room administrators, in connection with this Agreement and the Proposed Transaction, in the case of each of clauses (x) and (y) for services rendered through the Closing Date, (ii) all amounts (including any shareholder loan bonus amounts, any top up bonus payments, any amounts payable under any management incentive or bonus plans and the employer portion of related payroll and other similar employer withholding taxes) that are payable by any of the Target Companies to directors, officers, consultants or employees of any Target Company (including any members of the Senior Management Team and former directors, officers, consultants or employees) as a result of the execution of this Agreement or the consummation of the Proposed Transaction, (iii) all amounts that are payable to the Seller or Affiliates of the Seller (following the Closing) by any Target Company as a result of the execution of this Agreement or the consummation of the Proposed Transaction, and (iv) all amounts that are payable by any of the Target Companies pursuant to the schemes and arrangements set forth on Schedule 1.1(kkkkk) of the Disclosure Letter, and (v) all amounts that are payable (including any irrecoverable value added tax) to (xx) Hogan Lovells International LLP and Taylor Wessing LLP as counsel to members of the Senior Management Team and (yy) all other transaction advisors engaged by the Senior Management Team, including Wyvern Partners, in connection with this Agreement and the Proposed Transaction, in the case of each of clauses (xx) and (yy) for services rendered through the Closing Date; provided , that, Transaction Expenses shall not include any amounts (v) incurred or payable by the Seller or any Target Company under Section 7.12 , (w) deducted from the Total Consideration as Indebtedness, (x) included as current liabilities in the calculation of Net Working Capital, (y) that are taken into account in the calculation Net Tax Amount (or Net Tax Reserve) or (z) any fees or expenses incurred by the Purchaser in connection with the Proposed Transaction whether or not billed or accrued (including any fees and expenses of legal counsel, financial advisors, investment bankers, brokers and accountants of the Purchaser);
(lllll) U.S. or United States shall mean the United States of America; and
(mmmmm) US Tax Code shall mean the United States Internal Revenue Code of 1986, as amended.
Section 1.2 Interpretation . In this Agreement, unless the context otherwise requires, headings do not affect the interpretation of this Agreement. References to any United
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States legal term or concept shall, in respect of any jurisdiction other than the United States, be construed as references to the term or concept which most nearly corresponds to it in that jurisdiction. References to dollars, U.S. $ or $ are references to the lawful currency of the United States of America, to GBP or £ are references to pounds sterling, the legal currency of the United Kingdom and to Euros, EUR or are references to the lawful currency of the European Union. Any phrase introduced by the terms including or include or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms. The words hereof, hereby and herein and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. With respect to the determination of any period of time, unless otherwise set forth herein, from means from and including and to means to but excluding and if the last day of such period is a non-Business Day, the period in question shall end at the close of the next succeeding Business Day. The terms day and days refer to calendar day(s) and the terms year and years refer to calendar year(s). For purposes of this Agreement, only those documents and agreements which have been posted to the virtual data room entitled KOI as of the date of this Agreement shall be deemed to have been delivered, provided, furnished or made available (or any phrase of similar import) to the Purchaser by the Seller. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. In the event a subject matter is addressed in more than one representation and warranty, the Purchaser or the Seller, as the case may be, will be entitled to rely only on the most specific representation and warranty addressing such matter. Disclosure of any matter in any Section or Schedule of the Disclosure Letter or the Purchaser Disclosure Letter shall be deemed to be disclosure of such matter with respect to any other schedules, sections or subsections of the Disclosure Letter or the Purchaser Disclosure Letter, respectively, to which such matter is specifically cross referenced or to which such matter relates to the extent it is reasonably apparent from the text of such disclosure that such disclosure applies to the relevant representation or warranty of such other Section. The specification of any dollar amount or the inclusion of any item in the representations and warranties contained in this Agreement, the Disclosure Letter, the Purchaser Disclosure Letter, Exhibits or Schedules attached hereto is not intended to imply that the amounts, or higher or lower amounts, or the items so included, or other items, are or are not required to be disclosed (including, without limitation, whether such amounts or items are required to be disclosed as material or threatened) or are within or outside of the Ordinary Course of Business, and no party will use the fact of the setting of the amounts or the fact of the inclusion of any item in this Agreement, the Disclosure Letter, the Purchaser Disclosure Letter, Exhibits or Schedules in any dispute or controversy between the parties as to whether any obligation, item or matter not described or included in this Agreement, the Disclosure Letter, the Purchaser Disclosure Letter, Exhibits or Schedules is or is not required to be disclosed (including whether the amount or items are required to be disclosed as material or threatened) or is within or outside of the Ordinary Course of Business for purposes of this Agreement. The information contained in this Agreement, the Disclosure Letter, the Purchaser Disclosure Letter, Exhibits and Schedules hereto is disclosed solely for purposes of this Agreement, and no information contained herein or therein will be deemed to be an admission by any party hereto to any third party of any matter whatsoever (including, without limitation, any violation of Law or breach of contract). Capitalized terms used in any Exhibit or Schedule hereto but not defined therein shall have the meaning given to such term in this Agreement. No
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party, nor its respective counsel, shall be deemed the drafter of this Agreement for purposes of constructing the provisions hereof, and all provisions of this Agreement shall be construed according to their fair meaning and not strictly for or against any party, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of its authorship of any provision of this Agreement.
Section 1.3 Schedules and Exhibits . The Schedules, Disclosure Letter, Purchaser Disclosure Letter and Exhibits comprise schedules and exhibits to this Agreement and form part of this Agreement.
Article II
SALE AND PURCHASE
Section 2.1 Purchase and Sale . Upon the terms and subject to the conditions of this Agreement, the Purchaser shall purchase the Shares and the Purchased Loan Notes from the Seller, and the Seller shall sell the Shares and the Purchased Loan Notes to the Purchaser, free and clear of all Encumbrances and with all rights attached thereto.
Section 2.2 Waiver of Pre-emption Rights . On and subject to the Closing, the Seller irrevocably waives all rights over, or in connection with, any of the Shares including any right of pre-emption or other restriction on transfer in respect of the Shares or any of them conferred on the Seller under the articles of association of the Company or otherwise and shall, before the Closing, procure the irrevocable and unconditional waiver of any such right or restriction conferred on any other person who is not a party to this Agreement.
Article III
PURCHASE, SALE AND REDEMPTION TRANSACTIONS
Section 3.1 Total Consideration . The total consideration for the purchase of the Shares shall be 1,000 (the Shares Consideration ) and the consideration for the Purchased Loan Notes shall be an amount equal to, without duplication: (i) 2,600,000,000, (ii) plus the Net Working Capital Overage as of the Benchmark Time (if any), (iii) minus the Net Working Capital Underage (if any) as of the Benchmark Time, (iv) plus the Cash Overage as of the Benchmark Time (if any), (iii) minus the Cash Underage (if any) as of the Benchmark Time, (iv) minus Indebtedness as of the Benchmark Time, (v) minus Transaction Expenses, (vi) minus the Net Tax Reserve (if any) as of the Benchmark Time, (vii) plus the Net Tax Asset (if any) as of the Benchmark Time, and (viii) minus the Shares Consideration (the amount calculated pursuant to the foregoing clauses (i) through (viii), together with the Shares Consideration, the Total Consideration ).
Section 3.2 Closing Total Consideration . On or before the date that is five (5) Business Days prior to the anticipated Closing Date, the Seller shall prepare and deliver to the Purchaser a statement, certified by the Companys Chief Financial Officer (the Closing Total Consideration Statement ), setting forth the Sellers good faith estimate of (a) the Estimated Net Working Capital, (b) the Estimated Indebtedness, (c) the Estimated Transaction Expenses, (d) the Estimated Net Tax Amount, (e) the Estimated Cash and (f) the resulting calculation of the Total Consideration as of the Closing Date (such calculation, the Closing Total
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Consideration ), together with reasonable supporting detail. The Closing Total Consideration Statement will be prepared in accordance with the principles and procedures set forth on Schedule B . The Closing Total Consideration Statement shall also set forth the Sellers determination, which shall be binding upon the parties, of the principal amount of loan notes of the Company to be purchased by the Purchaser pursuant to Section 2.1 (the Purchased Loan Note Amount and such loan notes, the Purchased Loan Notes ), together with corresponding account direction for the settlement thereof by the Aggregate Stock Consideration and the Cash Closing Consideration, as applicable.
Section 3.3 Closing Payments . The initial portion of the Closing Total Consideration shall be paid by the Purchaser at Closing by (a) delivery of cash in an amount equal to the Closing Total Consideration, minus 133,500,000 (such amount, the Cash Closing Consideration ) by wire transfer of immediately available funds and (b) issuance of the Aggregate Stock Consideration in accordance with Section 4.3(d) and Section 4.3(e) , in each case, allocated as set forth in the account direction set forth in the Closing Total Consideration Statement.
Section 3.4 Tax Withholding . The Purchaser shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to the Seller (or any other party) such amount as it is required to deduct and withhold with respect to the making of such payment under any provision of Tax law, provided that the Purchaser shall have (i) given the Seller written notice to that effect (setting out in reasonable detail the requirement of Tax law giving rise to the Purchasers obligation to deduct or withhold) as soon as practicable and, in any event, at least ten (10) Business Days prior to Closing and (ii) taken into account all reasonable representations made by the Seller to the Purchaser prior to Closing in determining whether or not a deduction or withholding is required.
Article IV
CLOSING AND POST-CLOSING ADJUSTMENTS
Section 4.1 Closing . The Closing of the Proposed Transaction shall take place by electronic exchange of documents and signatures on the first (1 st ) Business Day immediately following the first (1 st ) Benchmark Time to occur after the date on which each of the conditions set forth in Article VIII shall have been satisfied or, if permissible, waived (other than those conditions that by their nature are to be satisfied at the Closing (but subject to the satisfaction or waiver of those conditions)), or at such other date and time as the Purchaser and the Seller may mutually agree in writing. The date on which the Closing occurs is herein referred to as the Closing Date .
Section 4.2 Seller Actions and Deliverables at the Closing . At the Closing, the Seller shall:
(a) deliver a duly executed transfer by the registered holder of the Shares in favor of the Purchaser together with the share certificates representing the Shares (or, if any share certificate is found to be missing, an express indemnity in respect of such share certificate, in a form satisfactory to the Purchaser);
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(b) deliver a duly executed irrevocable power of attorney from the Seller in favor of the Purchaser generally to exercise all rights in relation to the Shares and in particular to enable the Purchaser to attend and vote at general meetings of the Company pending registration of the Purchaser as the holder of the Shares in the register of members of the Company;
(c) deliver to the Purchaser loan note certificates for the Loan Notes (or, if any loan note certificates is found to be missing, an express indemnity in respect of such loan note certificate, in a form satisfactory to the Purchaser), together with a waiver of notice of redemption under the instruments constituting the Loan Notes;
(d) deliver to the Purchaser letters of resignation from the non-executive directors of the Company set forth on Schedule 4.2(d)(i) of the Disclosure Letter in the form set forth on Schedule 4.2(d)(ii) of the Disclosure Letter duly executed and effective as of the Closing releasing the Target Companies from all claims and rights of action whatsoever which they may have, whether in respect of breach of contract, compensation for loss of office, unfair dismissal, wrongful dismissal, redundancy, any loan or other indebtedness or on any other account whatsoever;
(e) deliver to the Purchaser the Registration Rights Agreement executed by the Seller;
(f) deliver to the Purchaser the Escrow Agreement executed by the Seller;
(g) to the extent not in the possession of the Company or the Target Companies, deliver to the Purchaser all common seals, certificates of incorporation, certificates of incorporation on change of name, register of allotment, transfers, members and directors and minute books (properly written up to the time immediately prior to the Closing), together with all blank share certificates and any other statutory books required to be kept by the relevant Target Companies; and
(h) deliver to the Purchaser a certificate of an executive officer of the Seller pursuant to Section 8.2(d) .
Section 4.3 Purchaser Deliverables at the Closing . At the Closing, the Purchaser shall:
(a) pay, by wire transfer of immediately available funds, the Cash Closing Consideration to accounts designated by the Seller in writing to the Purchaser in accordance with Article III ;
(b) pay on behalf of the Company (and thereby procuring that the Company pays), by wire transfer of immediately available funds, an amount sufficient to pay the amount of Transaction Expenses estimated by the Seller on the Closing Total Consideration Statement to each applicable Person identified by the Seller and to the accounts specified by the Seller;
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(c) to the extent required by Section 7.25 , pay, by wire transfer of immediately available funds, an amount sufficient to pay on behalf of the Company (and thereby procuring that the Company pays) the amounts specified in the payoff letters delivered pursuant to Section 7.25 to each applicable holder of Specified Indebtedness identified therein to the account or accounts specified therein;
(d) deliver to the Seller a number of Nomad Ordinary Shares equal to the Aggregate Stock Consideration minus the Escrow Amount (as defined in Schedule 7.28 ) in accordance with Article III free and clear of all Encumbrances other than restrictions on transfer provided for by applicable federal and state securities laws and under this Agreement and the Escrow Agreement;
(e) deliver the Escrow Amount to the Escrow Agent free and clear of all Encumbrances other than restrictions on transfer provided for by applicable federal and state securities laws and under this Agreement and the Escrow Agreement;
(f) deliver to the Seller the Registration Rights Agreement executed by the Purchaser;
(g) deliver to the Seller the Escrow Agreement executed by the Purchaser and the Escrow Agent;
(h) deliver to the Seller a certificate of an executive officer of the Purchaser pursuant to Section 8.3(d) ; and
(i) deliver to the Seller a certificate of an executive officer of the Purchaser in the form of the certificate set forth on Schedule 4.3(i) of the Disclosure Letter.
Section 4.4 Post-Closing Adjustment .
(a) As promptly as practicable following the Closing and in no event later than sixty (60) days following the Closing Date, the Purchaser shall prepare and deliver a statement (the Post-Closing Statement ), setting forth the Purchasers good faith calculation of (i) Net Working Capital as of the Benchmark Time (the Preliminary Net Working Capital ), (ii) Indebtedness as of the Benchmark Time (the Preliminary Indebtedness ), (iii) Transaction Expenses (the Preliminary Transaction Expenses ), (iv) Cash as of the Benchmark Time (the Preliminary Cash ), (v) the Net Tax Amount as of the Benchmark Time (the Preliminary Net Tax Amount ), and (vi) the resulting calculation of the Total Consideration (such calculation the Preliminary Total Consideration Amount ), together with full and complete supporting detail and documentation. The Post-Closing Statement shall be accompanied by a certificate of the Chief Financial Officer of the Purchaser stating that the Post-Closing Statement has been prepared in accordance with the principles and procedures set forth on Schedule B .
(b) Upon receipt of the Post-Closing Statement, the Seller shall have thirty (30) days (the Review Period ) to review such Post-Closing Statement and related computations of the Preliminary Net Working Capital, the Preliminary Indebtedness, the
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Preliminary Transaction Expenses, the Preliminary Cash, the Preliminary Net Tax Amount and the resulting Preliminary Total Consideration Amount. In connection with the review of the Post-Closing Statement, the Purchaser shall give, and shall cause the Company and its and the Companys Affiliates and Representatives to give, to the Seller and its Representatives reasonable access to the books, records and other materials of the Company and the personnel of, and work papers prepared by or for, the Purchaser or the Company or their respective accountants and Representatives, including, without limitation, to such historical financial information relating to the Company as the Seller or its Representatives may reasonably request, in each case, in order to permit the timely and complete review of the Post-Closing Statement in accordance with this Section 4.4(b) . If the Seller has accepted such Post-Closing Statement in writing or has not given written notice to the Purchaser setting forth any objection of the Seller to such Post-Closing Statement (a Statement of Objections ) prior to the expiration of the Review Period, then such Post-Closing Statement shall be final and binding upon the parties, and shall be deemed the Final Closing Statement. In the event that the Seller delivers a Statement of Objections during the Review Period, the Purchaser and the Seller shall negotiate in good faith to resolve any such objection on Net Working Capital, Indebtedness, Transaction Expenses, Net Tax Amount or Cash, as the case may be, within thirty (30) days following the receipt by the Purchaser of the Statement of Objections. If the parties are unable to reach an agreement as to such amounts and adjustments within such thirty (30) day period, then either party may submit such matter to Deloitte LLP, or, if such accounting firm is unable or unwilling to serve in such role, another independent accounting firm reasonably acceptable to the Purchaser and the Seller (in either case, such accountant, the Settlement Accountant ) ( provided , that, if the Purchaser and the Seller cannot agree on an accountant within forty (40) days of receipt by a party of a Statement of Objections, then the International Centre for Dispute Resolution shall appoint the Settlement Accountant), for resolution of the remaining disputed matters. The Settlement Accountant shall only consider those items on the Statement of Objections. The Settlement Accountants determination shall take into account the definitions of Net Working Capital, Cash, Indebtedness, Transaction Expenses and Net Tax Amount contained herein. The Seller and the Purchaser shall use their commercially reasonable efforts to cause the Settlement Accountant to resolve all disagreements as soon as practicable and in any event within twenty (20) days after the submission of any dispute to the Settlement Accountant. The Settlement Accountants determination shall be based solely on the presentations to be made by the Purchaser and the Seller which are in accordance with the terms and procedures set forth in this Agreement (i.e., not on the basis of an independent review) and the Settlement Accountant may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The resolution of the dispute by the Settlement Accountant shall be final, binding and non-appealable on the parties hereto. The costs and expenses of the Settlement Accountant shall be borne by the Seller and the Purchaser in proportion to the difference between the Settlement Accountants determination of the net value of Net Working Capital, Indebtedness, Cash, Transaction Expenses, Net Tax Amount and the net value claimed by the Purchaser and the Seller. For example, if it is the Purchasers position that the total net adjustment owed is 300, the Sellers position that the total net adjustment owed is 100 and the Settlement Accountants finding that the total net adjustment owed is 150, then the Purchaser shall pay 75% (300-150 / 300-100) of such fees and expenses and the Seller shall pay 25% (150-100 / 300-100) of such fees and expenses. The Post-Closing Statement as
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agreed to by the parties or as determined by the Settlement Accountant is referred to herein as the Final Closing Statement and the (i) the Net Working Capital set forth on such Final Closing Statement shall be deemed the final Net Working Capital, (ii) the Indebtedness set forth on such Final Closing Statement shall be deemed the final Indebtedness, (iii) the Transaction Expenses set forth on such Final Closing Statement shall be deemed the final Transaction Expenses, (iv) the Net Tax Amount set forth on such Final Closing Statement shall be deemed the final Net Tax Amount, (v) the Cash set forth on such Final Closing Statement shall be deemed the Final Cash, and (vi) the Total Consideration set forth on such Final Closing Statement shall be deemed the final Total Consideration (the Final Total Consideration ).
(c) In the event that the Final Total Consideration is greater than the Closing Total Consideration (such excess, the Final Overage ), the Purchaser shall deposit, or cause to be deposited, within five (5) Business Days of the determination of the Final Overage and the Final Closing Statement, with the Seller, by wire transfer of immediately available funds, an amount equal to such Final Overage.
(d) In the event that the Closing Total Consideration is greater than the Final Total Consideration (such excess, the Final Underage ), the Seller shall deposit, or cause to be deposited, within five (5) Business Days of the determination of the Final Underage and the Final Closing Statement, with the Purchaser, by wire transfer of immediately available funds, an amount equal to such Final Underage.
(e) The parties hereto agree that any adjustment as determined pursuant to this Section 4.4 shall be treated as an adjustment to Cash Closing Consideration, except as otherwise required by Law.
Section 4.5 Interest . If any amount due for payment in accordance with this Agreement is not paid on the due date for payment, the Person in default shall pay the Default Interest on such amount from but excluding the due date to and including the date of actual payment calculated on a daily basis.
Article V
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Disclosure Letter, the Seller represents and warrants to the Purchaser as follows:
Section 5.1 Authority; Enforceability .
(a) The Seller has the requisite power and authority to execute this Agreement and the Transaction Documents to which the Seller is a party, perform its obligations hereunder and thereunder and to consummate the Proposed Transaction. The execution, delivery and performance by the Seller of this Agreement and the Transaction Documents to which the Seller is a party and the consummation of the Proposed Transaction have been duly and validly authorized by all necessary corporate action on the part of the Seller and such authorization has not been subsequently modified or rescinded.
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(b) This Agreement has been, and upon their execution and delivery the Transaction Documents shall have been, duly and validly executed and delivered by the Seller and constitutes, and upon their execution the Transaction Documents shall constitute, assuming due authorization, execution and delivery of this Agreement and the applicable Transaction Documents by the Purchaser, a valid and binding legal obligation of the Seller, enforceable against the Seller in accordance with the terms hereof and thereof, in each case, subject to applicable bankruptcy, insolvency, en désastre , reorganization, moratorium and similar Laws affecting creditors right and remedies generally.
Section 5.2 Non-Contravention; Consents .
(a) The execution and delivery of this Agreement and the Transaction Documents by the Seller does not, and the performance of this Agreement and the Transaction Documents by the Seller will not, require any consent, approval, authorization or permit of, or filing with, or notification to, any Governmental Authority, except (i) under any applicable antitrust, competition, investment or similar Laws, (ii) for such other consents, approvals, Authorizations, filings or notifications, the failure of which to make or obtain, would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, and (iii) those required by reasons of the regulatory status or operations of the Purchaser.
(b) The execution and delivery of this Agreement and the Transaction Documents by the Seller does not, and the consummation of the Proposed Transaction will not, (i) conflict with or violate any provision of the Sellers or any Subsidiarys memorandum and articles of association or incorporation, bylaws, operating agreement, partnership agreement or other equivalent constitutional documents (collectively, Governing Documents ), (ii) assuming all filings and notifications under any applicable antitrust, competition, investment or similar Laws have been made and any waiting periods thereunder have terminated or expired, conflict with or violate any Authorizations held by the Target Companies or any applicable Laws or Governmental Orders or (iii) result in a breach of, constitute a default under (or create an event which, with or without notice or lapse of time or both, would constitute a default under), result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel any Material Contract, except, in the case of (ii) or (iii), as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section 5.3 The Shares and the Loan Notes .
(a) The Seller is legal and beneficial owner of the Shares and the Loan Notes.
(b) The Seller owns the Shares and the Loan Notes free and clear of all Encumbrances other than Encumbrances created or caused by the Purchaser. There is no agreement or arrangement or obligation to create or give any Encumbrance over or affecting the Shares or the Loan Notes and no claim has been made by any person to be entitled to any such Encumbrance. As of the date of this Agreement and at the Closing Date, the Seller has and will hold legal and beneficial title to the Shares and the Loan Notes, free and clear of all
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Encumbrances other than Encumbrances created or caused by the Purchaser, and upon (i) delivery of the stock transfer form and entry into the register of members of the Company and (ii) delivery of the certificates representing the Purchased Loan Notes and entry into the register of loan notes of Iglo Foods Holdco Limited, in each case, against payment therefor pursuant to the terms of this Agreement, the Purchaser will receive full legal and beneficial ownership thereof, free and clear of all Encumbrances other than Encumbrances created or caused by the Purchaser.
(c) The Shares constitute the whole of the allotted and issued share capital of the Company. The Shares have been validly allotted and issued. The Shares are fully paid or credited as fully paid and all rights and interests of every kind existing in respect of the Shares are valid and enforceable.
(d) There are no outstanding warrants, grants, options, rights, agreements, convertible or exchangeable securities or other commitments or obligations pursuant to which the Seller or the Company is or may become obligated to allot, issue, sell, transfer, purchase, return or redeem any shares or other securities of the Company. There is no outstanding or authorized appreciation, phantom interest, profit participation or similar rights with respect to the Company. There are no voting trusts, proxies or other agreements or undertakings with respect to the voting of the issued share capital of the Company.
Section 5.4 Organization; Subsidiaries .
(a) The Seller is duly established and validly existing under the Laws of its jurisdiction of incorporation and has all necessary power and authority to conduct its business in the manner in which it is currently being conducted. The Company is duly incorporated and validly existing under the Laws of its jurisdiction of incorporation and has all necessary power and authority to conduct its business in the manner in which it is currently being conducted. Each of the Seller and the Company is duly qualified or otherwise authorized to do business in each of the jurisdictions in which such entity is required to be so qualified or otherwise authorized, except to the extent that the failure to be so qualified or otherwise authorized would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. The Company is not the subject of any administration, administrative receivership, insolvency, dissolution, liquidation, receivership, reorganization or similar proceeding and, to the Knowledge of the Seller, no such proceedings are pending.
(b) Schedule 5.4(b) of the Disclosure Letter contains a true and complete list, as of the date of this Agreement, of all of the Subsidiaries of the Company.
(c) Each of the Subsidiaries: (i) is duly incorporated and validly existing under the Laws of its jurisdiction of incorporation, except where failure to be so duly incorporated or validly existing would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect; (ii) has all necessary power to conduct its business in the manner in which it is being conducted as of the date of this Agreement, except where the absence of such power to conduct its business would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect; and (iii) is duly qualified or otherwise authorized to do business in each of the jurisdictions in which such
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entity is required to be so qualified or otherwise authorized, except to the extent that the failure to be so qualified or otherwise authorized would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(d) All of the outstanding issued share capital, shares or membership interests, other equity rights, interests or other securities of each Subsidiary, are duly and validly issued and outstanding, fully paid and non-assessable and are legally and beneficially owned, directly or indirectly, by the Company, free and clear of all Encumbrances, except for (i) applicable transfer restrictions pursuant to applicable Laws, (ii) Permitted Encumbrances and (iii) those Encumbrances that will be released on or prior to the Closing Date.
(e) There are no outstanding warrants, grants, options, rights, agreements, convertible or exchangeable securities or other commitments or obligations pursuant to which the Seller, the Company or any Subsidiary is or may become obligated to allot, issue, sell, transfer, purchase, return or redeem any shares or other securities of any Subsidiary. There is no outstanding or authorized appreciation, phantom interest, profit participation or similar rights with respect to any Subsidiary. There are no voting trusts, proxies or other agreements or undertakings with respect to the voting of the issued share capital of any Subsidiary.
(f) No Subsidiary is the subject of any administration, administrative receivership, insolvency, bankruptcy, dissolution, liquidation, receivership, examinership, reorganization or similar proceeding and, to the Knowledge of the Seller, no such proceedings are pending.
(g) The Company has made available to the Purchaser true and complete copies of the Governing Documents of each Subsidiary as in effect as of the date of this Agreement.
(h) Schedule 5.4(h) of the Disclosure Letter contains a true and complete list, as of the date of this Agreement, of all of the Persons (other than the Subsidiaries) in which the Company owns, directly or indirectly, any issued share capital, shares, membership interests, other equity rights, interests or other securities or derivatives thereof (such Persons, the Non-Controlled Minority Investments ). Such issued share capital, shares, membership interests, other equity rights, interests or other securities or derivatives thereof of the Non-Controlled Minority Investments are legally or beneficially owned by the Company or such Subsidiaries as identified on Schedule 5.4(h) of the Disclosure Letter. The Company or one or more of its Subsidiaries has full legal and beneficial ownership of such issued share capital, shares, membership interests, other equity rights, interests or other securities or derivatives thereof, free and clear of all Encumbrances, except for (i) applicable transfer restrictions pursuant to applicable Laws or the Governing Documents of such Non-Controlled Minority Investment, (ii) Permitted Encumbrances or (iii) those Encumbrances that will be released on or prior to the Closing Date.
Section 5.5 Financial Statements . Schedule 5.5 of the Disclosure Letter sets forth true and correct copies of the following financial information (the Financial
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Statements ): the audited consolidated balance sheet, income statement, statement of comprehensive income, statement of changes in equity, statement of financial position and statement of cash flows, as of and for the fiscal years ended December 31, 2013 and December 31, 2014 (December 31, 2014, the Reference Date ) for the Target Companies (including, in each case, any related notes) (the Audited Financial Statements and the Audited Financial Statement for December 31, 2014, the Most Recent Financial Statements ).
Section 5.6 Financial Statement Preparation; Undisclosed Liabilities .
(a) The Financial Statements have been prepared from the books, records and accounts of the Target Companies referenced therein and in accordance with the Accounting Principles as in effect for the periods covered thereby and present fairly in all material respects the financial condition of the Target Companies referenced therein as of such dates and the results of operations of the Target Companies referenced therein for such periods.
(b) None of the Target Companies has any Liabilities that would be required by IFRS to be reflected on a consolidated balance sheet other than Liabilities (i) that are reflected in the Most Recent Financial Statements, (ii) were incurred in the Ordinary Course of Business since the Reference Date, (iii) have arisen under any Material Contract set forth on the Disclosure Letter or permitted hereunder, (iv) are required to be included as a Transaction Expense or (v) that would not reasonably be expected to be material to the Target Companies, taken as a whole.
(c) There has not been a Specified Change of Control Event as defined in the Indenture, dated as of July 17, 2014, relating to the Iglo Foods Bondco PLC Floating Rate Senior Secured Notes Due 2020.
Section 5.7 Position Since Reference Date . Since the Reference Date and through the date of this Agreement, except in connection with the Proposed Transaction, (i) the Target Companies have not conducted their respective business in any material respect not in the Ordinary Course of Business and (ii) the Target Companies have not suffered any change in the business, operations or financial position, taken as a whole, which changes, individually or in the aggregate, have had or would reasonably be expected to have a Company Material Adverse Effect.
Section 5.8 Compliance with Applicable Laws; Authorizations .
(a) Each Target Company is, and has been since December 31, 2012, in compliance with all applicable Laws and Governmental Orders, except for such instances of non-compliance which would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Since December 31, 2012, neither the Seller nor any Target Company has received any written notice of any material inquiry, investigation, violation or alleged violation of any applicable Law or Governmental Order that would, in any such case, be material to the Target Companies, taken as a whole.
(b) The Target Companies own, hold, possess or lawfully use in the operation of their business all Authorizations which are necessary to conduct their business
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in all material respects as currently conducted. Such Authorizations are valid and in full force and effect. The business of the Target Companies is not being conducted in violation or default of such Authorizations. Since December 31, 2012, neither the Seller nor any Target Company has received any written notification from any Governmental Authority threatening to revoke any such Authorization, except as would not be material to the Target Companies, taken as a whole.
Section 5.9 Insurance . The Company maintains insurance policies which, in all material respects, are against risks of a character and in such amounts as would reasonably be expected to be customary for companies of a similar size operating in the same or similar industry and are sufficient to comply with applicable Law. Each material insurance policy of the Company is in full force and effect as of the date of this Agreement, all premiums payable to date have been paid and, to the Knowledge of the Seller, there are no circumstances which would reasonably be expected to lead to the insurers avoiding any material liability under them. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (a) the applicable insured parties have complied with the provisions of the applicable material insurance policies of the Company, and (b) since December 31, 2012, neither the Seller nor any Target Company has received any written notice regarding (i) the cancellation or invalidation of any of the existing material insurance policies of the Company or (ii) any refusal of coverage under or any rejection of any material claim under, any such material insurance policies of the Company.
Section 5.10 Contracts . Schedule 5.10 of the Disclosure Letter lists, as of the date of this Agreement, all of the following contracts and agreements (other than purchase orders entered into in the Ordinary Course of Business) to which each of the Target Companies is a party and which have not been entirely fulfilled or performed (collectively, Material Contracts ):
(a) any agreement that by its terms requires the payment by or on behalf of any Target Company in excess of 4,500,000 per annum, or the delivery by any Target Company of goods or services with a fair market value in excess of 4,500,000 per annum or provides for any Target Company to receive payments in excess of 4,500,000 per annum, in each case other than any such agreement which can be terminated at will on less than 90 days notice;
(b) any agreement that (i) requires any Target Company to purchase any material portion of any product or service from a third party that would be material to the Target Companies, taken as a whole or (ii) requires that any Target Company deal exclusively with a third party in connection with the sale or purchase of any product or service if such products or services have a purchase price of more than 4,500,000 individually or in the aggregate, in each case other than any such agreement which can be terminated at will on less than 90 days notice;
(c) any contract that relates to an acquisition or divestiture of material businesses or assets (whether by merger, sale of securities, sale of assets or otherwise) that contains covenants, indemnities or other contractual obligations that could impose a Liability that is material to the Target Companies, taken as a whole;
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(d) any agreement under which any Target Company has any outstanding Indebtedness of the type described in clause (a) of the definition thereof in excess of 4,500,000;
(e) any agreement with any employee, officer, director or consultant, in each case, providing for a termination, change of control, retention or similar payment;
(f) any bonds or agreements of guarantee in which any Target Company acts as a surety or guarantor with respect to any obligation (fixed or contingent) of another Person (other than another Target Company) in excess of 4,500,000;
(g) any partnership or joint venture agreements that are either (i) material to the operations of the Target Companies, taken as a whole or (ii) could require any payment or contribution in excess of 4,500,000;
(h) any agreement limiting or restraining in any material respect any Target Company or any successor thereto from soliciting customers or engaging or competing in any manner, in any location or in any business;
(i) any agreement providing for the license of or settlement with respect to material Business IP (other than commercially available Software and hardware);
(j) any agreement providing that a Target Company indemnify any Person (other than another Target Company) in an amount that would be material to the Target Companies, taken as a whole, other than any such agreement entered into in the Ordinary Course of Business;
(k) any agreement relating to interest rate or commodity swaps, interest rate caps, interest rate collar, or interest rate insurance arrangements, involving derivative, swap, foreign exchange option or similar commodity price hedging arrangements, or that are otherwise similarly designed to alter the risks arising from fluctuations in interest rates, currency values or commodity prices of any Target Company; or
(l) any agreement that grants to any Person any right of first offer or right of first refusal to purchase, lease, sublease, use, possess or occupy all or a substantial portion of the material assets of the Target Companies, taken as a whole.
Section 5.11 Enforceability of Material Contracts; Defaults under Material Contracts . The Seller has made available to the Purchaser a true, correct and complete (other than redactions of pricing or competitively sensitive information) copy of each written Material Contract in effect as of the date of this Agreement and, if oral, a written description of the material terms of such oral Material Contract. As of the date of this Agreement, each of the Material Contracts is in full force and effect and there exists no default under any such Material Contracts by the Target Companies or, to the Knowledge of the Seller, any other party to such Material Contracts or any event which will create a default thereunder by the Target Companies, that would be material to the Target Companies, taken as a whole. As of the date of this
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Agreement, there exists no actual or, to the Knowledge of the Seller, threatened termination, cancellation, or material limitation of, or any material amendment, material modification or material change to any Material Contract.
Section 5.12 Litigation . As of the date of this Agreement, there is no action, claim, suit, arbitration or proceeding or, to the Knowledge of the Seller, investigation pending before any Governmental Authority against any of the Target Companies or, to the Knowledge of the Seller, threatened in writing, that, in each case, (a) involves a claim in excess of 750,000, (b) challenges or seeks to prevent, enjoin or otherwise delay the Proposed Transaction, (c) involves a claim for an unspecified amount which would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect or (d) seeks injunctive relief that is reasonably likely to be granted and would be material to the Target Companies, taken as a whole. Since December 31, 2012, no Target Company has been subject to any material Governmental Order, and to the Knowledge of the Seller, there are no such material Governmental Orders threatened to be imposed.
Section 5.13 Intellectual Property .
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the Target Companies own, in each case free from Encumbrances other than Permitted Encumbrances, or have a valid license to or other right to use, all of the Business IP; provided that the foregoing is not a representation or warranty with respect to infringement, misappropriation or other violation of Intellectual Property Rights (which is addressed below in this Section 5.13 ). No action, claim, suit, arbitration or proceeding is, as of the date of this Agreement, pending or, to the Knowledge of the Seller, threatened that challenges the legality, validity, enforceability, use, or ownership of any material item of Business IP in any material respect. Except as listed on Schedule 5.13(a) of the Disclosure Letter, to the Knowledge of the Seller, all of the Target Companies material Registered Intellectual Property is valid and enforceable. No current and former employees of the Target Companies, or with respect to material Business IP no independent contractors of the Target Companies, have any ownership interest in or right to any Business IP or any Business IP owned by the Seller or any of the Target Companies that prevents the use of such Intellectual Property Rights in the business of the Target Companies. To the Knowledge of the Seller, as of the date of this Agreement, (i) no operations of any Target Company or any product manufactured or distributed by any Target Company, as conducted or manufactured during the past three (3) years has infringed, violated or misappropriated the Intellectual Property Rights of any Person in any material respect and (ii) no Person is infringing, violating or misappropriating any Owned IP. The representations and warranties set forth in this Section 5.13 are the sole and exclusive representations and warranties of the Seller with respect to infringement, misappropriation or other violation of Intellectual Property Rights. As of the date of this Agreement, except as set forth in Schedule 5.13(a) of the Disclosure Letter, there are no pending, or to the Knowledge of the Seller, threatened, actions, suits or proceedings against the Seller or the Target Companies alleging that the conduct of the business of the Target Companies infringes or otherwise misappropriates the Intellectual Property Rights of any third party, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
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(b) Schedule 5.13(b) of the Disclosure Letter contains a list, as of the date of this Agreement, of (i) all Registered Intellectual Property and (ii) certain Software owned by the Target Companies.
(c) The Target Companies have, during the past three (3) years, complied, and are presently in compliance, in all material respects, with all applicable Laws relating to data breach notification, data privacy, data security, and/or protection of personal information. As of the date of this Agreement, and except as would not be material to the Target Companies, taken as a whole, the business of the Target Companies has not experienced any incident in which personal information or other sensitive data was stolen or improperly accessed including any unauthorized access or breach of security with respect to personal information or other sensitive data.
(d) The computer systems, including the Software, hardware, networks and interfaces, (collectively, Systems ) used in the conduct of the business of the Target Companies are sufficient for the needs of the business of the Target Companies as presently conducted as of the date of this Agreement, including as to capacity and ability to process current and anticipated peak volumes. In the twelve months prior to the date of this Agreement, there have been no bugs in, or failures, breakdowns, or continued substandard performance of any such Systems which has caused the substantial disruption or interruption in or to the use of such Systems by the Target Companies in a manner material to the Target Companies, taken as a whole. To the Knowledge of the Seller, the Target Companies have commercially reasonable disaster recovery plans, procedures and facilities with respect to the Systems used in the conduct of business of the Target Companies.
Section 5.14 Real Property . Schedule 5.14 of the Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of all material real property owned by the Target Companies (and the address of such real property) and the name of the applicable owner thereof. With respect to each such parcel of owned real property (a Parcel ) listed on Schedule 5.14 of the Disclosure Letter:
(a) the entity owning such Parcel holds valid fee title to such Parcel free and clear of all Encumbrances other than Permitted Encumbrances;
(b) there are no subleases, licenses, concessions or other written agreements (including without limitation outstanding options or rights of first refusal) granting to any party the right of use or occupancy of any portion of any material Parcel or rights to purchase any material Parcel or any portion thereof or interest therein;
(c) there are no parties (other than the Target Companies) in possession of any Parcel, other than tenants under any leases who are in possession of space to which they are entitled;
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(d) to the Knowledge of the Seller, each material structure on any Parcel is in sufficient repair and operating condition for the conduct of the business of the Target Companies in all material respects as currently conducted; and
(e) neither the Seller nor any Target Company has received written notice of any current or threatened condemnation, appropriation, eminent domain or similar proceedings relating to any portion of any Parcel, except as would not be material to the Target Companies, taken as a whole.
Section 5.15 Leased Property . Schedule 5.15 of the Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of all real property used by the Target Companies pursuant to leases, subleases, licenses and/or any other types of occupancy agreements, that are material to the Target Companies, taken as a whole and as currently operated (any such lease, license or other occupancy agreement, individually, a Real Property Lease ). The applicable Target Company has a valid and enforceable leasehold interest under each of the Real Property Leases, and, to the Knowledge of the Seller, no Target Company has received any written notice of any default or event, which, with notice or lapse of time, or both, would constitute a default by a Target Company under any of the Real Property Leases, except such defaults that are not material to the Target Companies, taken as a whole. Neither the Seller nor any Target Company has received written notice of any current or threatened condemnation, appropriation, eminent domain or similar proceedings relating to any portion of any real property that is material to the operations of the Target Companies, taken as a whole, pursuant to a Real Property Lease. The Seller has made available to the Purchaser true and complete copies, in all material respects, of the Real Property Leases as in effect as of the date of this Agreement, together with all material amendments, modifications or supplements, if any, thereto, including any transfers, assignments or subleases thereof to which a Target Company is a party.
Section 5.16 Personal Property . Each of the Target Companies (a) owns, leases or licenses from third parties all material tangible assets (excluding for the avoidance of doubt any real estate) required to conduct its and their respective businesses in all material respects as presently conducted, (b) has good and valid title to all such tangible assets owned by it or them, free and clear of all Encumbrances except for Permitted Encumbrances, and (c) upon consummation of the Proposed Transaction, assuming the accuracy of the Purchasers representations set forth in Article VI , will be entitled to continue to use all such tangible assets which are currently employed by it or them in the conduct of their respective businesses in all material respects as presently conducted. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, all such tangible assets, taken as a whole, are in good working condition, ordinary wear and tear excepted.
Section 5.17 Employment Matters . Schedule 5.17 of the Disclosure Letter lists, as of the date of this Agreement, all of the following:
(a) all employees, consultants, officers, secondees and directors of any Target Company with an annual base salary or base consultancy fee per annum in excess of 500,000 or equivalent local currency;
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(b) particulars of any person who has accepted an offer of employment made by the Target Company (with an annual base salary or base consultancy fee per annum in excess of 500,000 or equivalent local currency) but whose employment has not yet started and of any outstanding offer made by the Target Company to any person whose annual base salary or base consultancy fee per annum would exceed 500,000 (or equivalent local currency); and
(c) any material (i) share incentive scheme, (ii) share option scheme or profit sharing, (iii) bonus, (iv) severance or redundancy scheme or (v) other incentive scheme applicable to any of the current or former directors or employees of any Target Company under which any Target Company has an obligation.
Section 5.18 Labor Matters .
(a) To the Knowledge of the Seller, as of the date of this Agreement, no Target Company is involved in any labor or trade disputes that involves a claim in excess of 1,000,000 with any trade union, association of trade unions, works council, European works council or body representing the employees of any Target Company or any material number or category of its employees, and to the Knowledge of the Seller, no such dispute is pending or threatened. Each collective bargaining agreement or recognition agreement with any labor union, works council or any other similar organization or employee representative forum have been listed in the Disclosure Letter other than collective labor agreements which are applicable industry-wide.
(b) No member of the Senior Management Team has given, or has been given, notice of termination of his employment. The consummation of the Proposed Transactions will not entitle any member of the Senior Management Team to any payment or benefit, or to the acceleration of any payment or benefit, pursuant to any contract of employment between such member of the Senior Management Team and one or more of the Target Companies. To the Knowledge of the Seller, no member of the Senior Management Team has within a period of five years before the date of this Agreement been found guilty, been formally cautioned or otherwise been formally charged in respect of any criminal proceedings relating to the business of the relevant Target Company.
(c) No Target Company has made any loan or advance, or provided any financial assistance, in each case in an amount in excess of 150,000 to any employee or past or prospective employee of the relevant Target Company, which is outstanding.
Section 5.19 Benefits Plans .
(a) With the exception of any benefit arrangements operated by Governmental Authorities to which the Target Companies are required to contribute under public laws, statutes or regulations, Schedule 5.19(a) of the Disclosure Letter sets forth a list, as of the date of this Agreement, of any material benefit arrangements maintained by the Target Companies including any deferred compensation agreements, executive compensation plans, bonus plans, profit-sharing plans, pension plans, severance pay, redundancy or retirement plans, share option plans, employee share purchase plans, private life insurance plans or hospitalization insurance plans (the Benefit Plans ).
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(b) The Benefit Plans have been operated in all material respects in compliance with their terms and with all applicable Laws. There are no actions (other than routine claims for benefits) pending or, to the Knowledge of the Seller, threatened against any Target Company or any Benefit Plan or its assets, or arising out of any of the Benefit Plans which would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. No Benefit Plan is under audit or investigation by a Governmental Authority and, to the Knowledge of the Seller, no such audit or investigation is threatened.
(c) All contributions and premiums due from any Target Company with respect to any Benefit Plan have been timely made in all material respects. All material reports, returns and similar documents required to be filed on behalf of any Benefit Plan with any Governmental Authority or distributed to any plan participant have been duly and timely filed or distributed in all material respects.
(d) Each Benefit Plan required to be registered has been registered and has been maintained in good standing with applicable Governmental Authorities.
Section 5.20 Taxes .
(a) Each of the Target Companies has duly and timely filed or caused to be filed (taking into account any valid extensions) all material Tax Returns required to be filed by them. No Target Company is currently the beneficiary of any extension of time within which to file any material Tax Return other than extensions of time to file Tax Returns obtained in the Ordinary Course of Business consistent with past practice. All material Taxes due and owing by each Target Company (whether or not shown on any Tax Return) have been timely paid or, where payment is not yet due, each Target Company has made an adequate provision for such Taxes in that Target Companys financial statements (in accordance with the applicable Accounting Principles).
(b) Each Target Company has withheld and paid each material Tax required to have been withheld and paid (in connection with amounts paid or owing to any employee, independent contractor, creditor, customer, stockholder or other party), and materially complied with all information reporting and backup withholding provisions of applicable Law.
(c) There are no Encumbrances for material Taxes upon the assets of any Target Company other than for current Taxes not yet due and payable or for Taxes that are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with applicable Accounting Principles has been made in the Companys Financial Statements.
(d) Except as set forth in Schedule 5.20(d) of the Disclosure Letter, no deficiency for any material amount of Taxes which has been proposed, asserted or assessed in writing by any Tax Authority against any Target Company remains unpaid unless being
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contested in good faith by appropriate proceedings. There are no waivers or extensions of any statute of limitations currently in effect with respect to any material amount of Taxes of any Target Company. Except as set forth in Schedule 5.20(d) of the Disclosure Letter, there are no audits, suits, proceedings, investigations, claims, examinations or other administrative or judicial proceedings ongoing or pending with respect to any material Taxes of (or owed by) any Target Company.
(e) No claim (which remains unresolved) has been made in writing by any Tax Authority in a jurisdiction where any Target Company does not file Tax Returns that such Target Company is subject to Tax in that jurisdiction.
(f) No Target Company has requested or is the subject of or bound by any private letter ruling, technical advice memorandum or similar ruling or memorandum with any taxing authority with respect to any material Taxes, nor is any such request outstanding.
(g) Each Target Company has in its possession or control such records, invoices and other information in relation to Tax as is required by applicable Law.
(h) No Target Company has (i) at any time in the last three years been a member of an affiliated, consolidated, combined, unitary or similar group filing a consolidated Tax Return (other than a group of which it is a current member), (ii) at any time in the last three years been a party to any Tax sharing, indemnification or allocation agreement, including any arrangement to surrender or transfer, or provide consideration for the surrender or transfer, of any Tax reliefs (other than with another member of a group of which that Target Company is a current member and other than contracts entered into in the Ordinary Course of Business, the principal subject matter of which is not Taxes), or (iii) any statutory Liability, or other Liability arising by operation of Law, for Taxes primarily payable by another Person (other than another Target Company) or primarily attributable to the income, profits, gains, assets or activities of another Person.
(i) To the Knowledge of the Seller, each Target Company is in compliance in all material respects with all applicable transfer pricing laws.
(j) No Target Company is a United States person within the meaning of the US Tax Code.
(k) The representations and warranties set forth in this Section 5.20 are the sole and exclusive representations and warranties of the Seller with respect to Tax matters.
Section 5.21 Brokers and Finders . No Target Company has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finders fees in connection with the Proposed Transaction.
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Section 5.22 Environmental Matters .
(a) Except as would not be material to the Target Companies, taken as a whole, (i) the Target Companies have obtained each Authorization required by Environmental Laws for their respective businesses as currently conducted, (ii) the Target Companies have complied in all material respects with the terms and conditions on which any Authorization required by Environmental Laws has been given to it and (iii) the Target Companies have complied in all material respects with any notification or claim made within the three (3) years ending on the date of this Agreement by any relevant Governmental Authority in respect of any breach of Environmental Laws.
(b) To the Knowledge of the Seller, the Target Companies are not under investigation or inquiry by any Governmental Authority in relation to any breach of Environmental Law or the failure to comply with the terms and conditions of any Authorization required by Environmental Law.
(c) The representations and warranties set forth in this Section 5.22 are the sole and exclusive representations and warranties of the Seller with respect to environmental matters.
Section 5.23 Suppliers and Customers . Schedule 5.23 of the Disclosure Letter sets forth a list, as of the date of this Agreement, of (i) the ten (10) largest suppliers (by dollar amount) to the Target Companies, taken as a whole, since January 1, 2014 (each a Major Supplier ) and (ii) the ten (10) customers with the highest dollar amount of purchases or services from the Target Companies, taken as a whole, between January 1, 2014 and December 31, 2014 (each a Major Customer ). No Major Supplier or Major Customer has since January 1, 2014 materially decreased or limited, or to the Knowledge of the Seller, threatened to materially decrease or limit, its provision or receipt of services to or from any of the Target Companies. No termination, cancellation or material limitation of, or any material modification or change in, the business relationships (including product pricing and payment terms) of any Target Company has occurred or, to the Knowledge of the Seller, is threatened with any Major Supplier or Major Customer.
Section 5.24 Related Party Transactions . Except (x) for the Benefit Plans and employment relationships entered into and compensation paid in the Ordinary Course of Business or (y) as listed on Schedule 5.24 of the Disclosure Letter, as of the date of this Agreement, none of the Seller, any Affiliate of the Seller (other than any Target Company) or any officer, director or other management employees of any Target Company (each, a Related Party ) (a) has any direct or indirect ownership, participation, royalty or other interest in, or is an officer, director, employee of, consultant to or contractor for any Person that does business with, or has any contractual arrangement with, any Target Company (except with respect to any interest in less than 5% of the shares of any corporation whose shares are publicly traded and with respect to intercompany arrangements between any of the Target Companies) or (b) is a party to an agreement with a Target Company.
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Section 5.25 FCPA Matters .
(a) To the Knowledge of the Seller, since January 1, 2012, no Target Company (including any of their respective officers, directors, agents or employees) has, directly or indirectly taken any action which would cause it to be in violation of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations thereunder or any similar anti-corruption or anti-bribery Law applicable to the Target Companies in any jurisdiction other than the United States including the United Kingdom Bribery Act 2010 (in each case, as in effect at the time of such action) (collectively, the FCPA ) or, in violation of the FCPA (i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made, offered or authorized any unlawful payment to foreign or domestic government officials or employees, whether directly or indirectly or (iii) made, offered or authorized any unlawful bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment, whether directly or indirectly.
(b) To the Knowledge of the Seller, since January 1, 2012, the operations of each Target Company are, and have been, conducted in compliance with all anti-money laundering laws, rules and regulations to which the relevant Target Company is subject (collectively Money Laundering Laws ) and no investigation, action, suit or proceeding before any Governmental Authority involving any Target Company with respect to Money Laundering Laws is pending, and so far as the Seller is aware, no such actions, suits or proceedings are threatened.
Section 5.26 Import/Export Compliance .
(a) Import Compliance . To the Knowledge of the Seller, the business of the Target Companies has been in the past five (5) years in compliance with all applicable import and customs Laws, including, but not limited to, the laws and regulations administered by the customs authorities of the member states of the European Union and agencies of the European Commission ( EU Customs ), except for such instances of non-compliance which would not be material to the Target Companies, taken as a whole. Except as would not be material to the Target Companies, taken as a whole, neither the Seller, the Target Companies, nor any products that are imported in connection with the business of the Target Companies, have been in the five (5) years preceding the date of this Agreement, subject to any penalties (civil, administrative or criminal), claims for liquidated damages, or notices of redelivery issued by EU Customs, or to any detentions, seizures or forfeitures by EU Customs, and neither the Seller, nor the Target Companies have made any prior disclosures to EU Customs of any violation of import or customs laws during such period. To the Knowledge of the Seller, the Target Companies have not been at any time in the past five (5) years, and are not currently, subject to any investigation or enforcement action by EU Customs. Except as would not be material to the Target Companies, taken as a whole, all import duties, taxes due at import, fees and other charges owed to EU Customs in connection with the business of the Target Companies have been paid, and none of the products imported in connection with the business of the Target Companies are subject to any antidumping or anti-subsidy duty, countervailing duty or other penalty.
(b) Export Compliance . To the Knowledge of the Seller, the Target Companies are, and have been during the past five (5) years, in compliance with the applicable provisions of the European Union and the export, customs and trade Laws and
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regulations of the member states of the European Union, including but not limited to Regulation (EC) 2913/92, Regulation (EC) no. 428/2009, the European Union economic sanctions regulations as administered by European Union agencies or agencies of the member states of the European Union, as amended, and restrictions against dealings with certain prohibited, debarred, denied or specially designated entities or individuals under regulations, orders, and decrees of European Union agencies or agencies of the European Union member states, and the export Laws of the other countries where it conducts business, except for such instances of non-compliance which would not be material to the Target Companies, taken as a whole. Neither the Company nor any of the Target Companies has received in the past five (5) years any written notice from any Governmental Authority alleging noncompliance with respect to any applicable export, customs or trade Laws.
(c) Sanctions .
(i) No Target Company nor any of its directors, officers, employees, agents, affiliates or representatives is a Person that is or is owned or controlled by a Person that is:
(1) to the Knowledge of the Seller, included on a list of sanctioned persons or entities designated pursuant to sanctions administered or enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of Commerce, the European Union, the United Kingdom or any other European Economic Area member state or other relevant sanctions authority (collectively, Sanctions ), or
(2) located, organized or resident in a country or territory that is itself subject to comprehensive Sanctions (including without limitation, Cuba, Iran, Sudan and Syria).
(ii) To the Knowledge of the Seller, no Target Company has engaged in or is now engaged in, any dealings or transactions with any Person that at the time of the dealing or transaction is or was included on a list of sanctioned persons or entities designated pursuant to Sanctions or organized or resident in a country or territory that is itself subject to comprehensive Sanctions (including without limitation, Cuba, Iran, Sudan and Syria).
(iii) To the Knowledge of the Seller, no Target Company is lending or has lent, is contributing or has contributed or otherwise is making or has made available any monies to fund any activities of any business with any Person that, at the time of such funding, is or was included on a list of sanctioned persons or entities designated pursuant to Sanctions, or is or was organized or resident in a country or territory that is itself subject to comprehensive Sanctions (including without limitation, Cuba, Iran, Sudan and Syria).
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Section 5.27 Food Safety Compliance.
(a) The Target Companies have in place a Hazard Analysis and Critical Control Point ( HACCP ) system which controls all operations undertaken by them, together with documented quality control management systems. The Target Companies are in material compliance with all applicable Food Safety Laws governing HACCP.
(b) To the Knowledge of the Seller, the Target Companies have in place systems designed to trace or recall those products which are not in material compliance with all applicable Food Safety Laws.
(c) To the Knowledge of the Seller, the Target Companies have in place systems designed to identify and control the use of seasonings containing allergenic materials.
(d) All final products produced by the Target Companies are subject to metal detection using equipment fitted with an alarmed machine rejection mechanism.
(e) To the Knowledge of the Seller, testing of the final products produced by the Target Companies is carried out using a rolling program for microbiological contaminants using accredited testing laboratories.
(f) To the Knowledge of the Seller, the Target Companies have in place systems designed to ensure that they are kept informed of legislation, scientific and technical development and industry codes of practice, in each case, in relation to food safety, and they have at all times complied with them.
(g) The Target Companies are, and since January 1, 2012 have been, in compliance in all material respects with all applicable Food Safety Laws and to the Knowledge of the Seller, there are no facts or circumstances which would constitute a breach of any applicable Food Safety Laws by the Target Companies.
Section 5.28 Investment Intent; Risk; Ownership of Nomad Ordinary Shares .
(a) The Seller is acquiring the New Nomad Ordinary Shares for its own account, for investment purposes only, and not with a view toward, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the New Nomad Ordinary Shares in violation of the United States federal Securities Laws.
(b) The Seller qualifies as an accredited investor, as such term is defined in Rule 501(a) promulgated pursuant to the Securities Act.
(c) The Seller understands that the New Nomad Ordinary Shares to be acquired by it pursuant to this Agreement have not been registered under the Securities Act. The Seller acknowledges that such securities may not be transferred, sold, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any other provision of applicable United States state Securities Laws or pursuant to an applicable exemption therefrom.
(d) The Seller is an informed and sophisticated participant in the transactions contemplated hereby and has sufficient knowledge and experience to evaluate the technical, commercial, financial, legal and other risks associated with the acquisition by the Seller of the New Nomad Ordinary Shares on the terms hereunder. The Seller understands that the acquisition of the New Nomad Ordinary Shares to be acquired by it pursuant to the terms of this Agreement involves substantial risk. The Seller can bear the economic risk of its investment (which may be for an indefinite period).
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Section 5.29 Information in the Prospectus . The information supplied or to be supplied by the Company relating to the Target Companies and their respective stockholders, members, control Persons and Representatives for inclusion in the Prospectus or any supplements thereto shall not at (a) the time the information is provided or (b) the Closing, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading.
Section 5.30 No Further Representations . Notwithstanding anything contained in this Article V or any other provision of this Agreement, it is the explicit intent of each party hereto that the Seller is not making any representation or warranty whatsoever, express or implied, except those representations and warranties set forth in this Article V , and in entering into this Agreement and acquiring the Shares from the Seller, the Purchaser expressly acknowledges and agrees that it is not relying on any statement, representation or warranty made by or on behalf of the Seller or its Affiliates, including, but not limited to, those which may be contained in any confidential information memorandum or similar materials containing information regarding the Target Companies or any of their businesses or in any materials made available to the Purchaser during the course of its due diligence investigation of the Target Companies, other than those representations and warranties set forth in this Article V .
Article VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in (i) the Purchaser Disclosure Letter, (ii) the IPO Prospectus or (iii) any announcement made by or on behalf of the Purchaser to a regulatory information service since the date of publication of the IPO Prospectus, in each case, other than any forward-looking disclosures, risk factors, cautionary statements or similar disclosures therein, the Purchaser represents and warrants to the Seller, as follows:
Section 6.1 Authority; Enforceability .
(a) The Purchaser has the requisite organizational power and authority to execute and deliver this Agreement and the Transaction Documents to which the Purchaser is a party, to perform its obligations hereunder and thereunder and to consummate the Proposed Transaction. The execution, delivery and performance by the Purchaser of this Agreement and the Transaction Documents to which the Purchaser is a party and the consummation of the Proposed Transaction has been duly and validly authorized by all necessary corporate action on the part of the Purchaser and such authorization has not been subsequently modified or rescinded.
(b) This Agreement has been, and upon their execution and delivery the Transaction Documents shall have been, duly executed and delivered by the Purchaser and constitutes, and upon their execution the Transaction Documents shall constitute, assuming due authorization, execution and delivery of this Agreement and the applicable Transaction Documents by the Seller, a valid and binding legal obligation of the Purchaser, enforceable against the Purchaser in accordance with the terms hereof and thereof, in each case, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors right and remedies generally.
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Section 6.2 Non-contravention; Consents .
(a) The execution and delivery of this Agreement and the Transaction Documents by the Purchaser does not, and the performance of this Agreement and the Transaction Documents by the Purchaser will not, require any consent, approval or Authorization of, or filing with, or notification to, any Governmental Authority, except (i) under any applicable antitrust, competition, investment or similar Laws, (ii) for such other consents, approvals, Authorizations, filings or notifications, the failure of which to make or obtain, would not, individually or in the aggregate, materially impair or delay either the Purchaser from consummating the Proposed Transaction and (iii) as may be required by the FSMA, the Listing Rules, the Prospectus Rules, the Disclosure and Transparency Rules or in connection with Admission.
(b) The execution and delivery of this Agreement and the Transaction Documents by the Purchaser does not, and consummation of the Proposed Transaction will not, (i) conflict with or violate any provision of the Governing Documents of the Purchaser, (ii) assuming all filings and notifications under any applicable antitrust, competition, investment or similar Laws have been made and any waiting periods thereunder have terminated or expired, conflict with or violate any Authorizations held by the Purchaser or any applicable Laws or Governmental Orders applicable to the Purchaser or (iii) result in a breach of, constitute a default under (or create an event which, with or without notice or lapse of time or both, would constitute a default under), result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel any agreement or contract to which the Purchaser is a party, except, in the case of (ii) or (iii), as would not, individually or in the aggregate, materially impair or delay the Purchaser from consummating the Proposed Transaction.
Section 6.3 Organization . The Purchaser is a corporation, duly incorporated and validly existing under the Laws of its jurisdiction of incorporation.
Section 6.4 Litigation . As of the date of this Agreement, there is no litigation, arbitration, or administrative proceeding pending, or to the Knowledge of the Purchaser, threatened in writing, against the Purchaser that seeks to, and the Purchaser is not subject to any judgments, decrees, injunctions or orders of any Governmental Authority which, individually or in the aggregate, would reasonably be expected to enjoin, rescind or materially delay the ability of the Purchaser to effect the Closing or otherwise prevent the Purchaser from performing in all material respects its obligations hereunder.
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Section 6.5 Capitalization .
(a) The maximum number of shares the Purchaser is authorized to issue consists of an unlimited number of Nomad Ordinary Shares and an unlimited number of Nomad Founder Preferred Shares. The issued and outstanding shares of the Purchaser consists of 48,525,000 Nomad Ordinary Shares (the Nomad Issued Shares ). As of the Closing of the transactions contemplated by the Agreement, after taking into account the issuance of the Aggregate Stock Consideration and the Nomad Ordinary Shares issuable pursuant to the Equity Financing Agreements, there will be approximately 151,562,132 Nomad Ordinary Shares issued and outstanding. The Nomad Ordinary Shares issuable pursuant to the Equity Financing Agreements shall be issued at $10.50 per share. All of the Nomad Issued Shares have been duly authorized and validly issued and are fully paid and nonassessable and are not subject to preemptive rights (except as set forth in the Governing Documents of the Purchaser). As of the date hereof, there are 50,025,000 Nomad Warrants issued and outstanding exercisable for up to 16,675,000 Nomad Ordinary Shares. True, complete and correct copies of all warrant agreements evidencing the Nomad Warrants have been made available to the Seller. As of the date of this Agreement, there are no other authorized or outstanding equity interests of the Purchaser, and there are no other authorized and outstanding equity interests of the Purchaser convertible into or exchangeable for any other equity interests of the Purchaser. There are no stockholder agreements, voting trusts or proxies or other agreements or understandings in effect with respect to the voting of the Nomad Ordinary Shares, in each case, to which the Purchaser or any of its Subsidiaries is a party.
(b) There are no bonds, debentures, notes or other Indebtedness of the Purchaser having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Nomad Ordinary Shares or Nomad Founder Preferred Shares, as applicable, may vote ( Purchaser Voting Debt ).
(c) Except for the Equity Financing, the Nomad Warrants and as described on Schedule 6.5(c) of the Purchaser Disclosure Letter, and except for any obligations pursuant to this Agreement or any other Transaction Documents, there are no securities (including convertible and/or exchangeable securities), options warrants, calls, rights, commitments, agreements, arrangements, contracts or undertakings of any kind to which Purchaser is a party or by which it is bound (i) obligating Purchaser to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause to be repurchased, redeemed or otherwise acquired, any Nomad Ordinary Shares, Nomad Founder Preferred Shares or Purchaser Voting Debt, or any security convertible or exchangeable for any Purchaser Voting Debt or equity securities of the Purchaser, (ii) obligating any such party to issue, grant, extend or enter into, as applicable, any such security, option, warrant, call, right, commitment, agreement, arrangement, contract or undertaking or (iii) that give any Person the right to receive any economic interest of a nature accruing to the holders of Nomad Ordinary Shares or Nomad Founder Preferred Shares and the Purchaser has not granted any share appreciation rights or any other contractual rights the value of which is derived from the financial performance of any such party or the value of any Nomad Ordinary Shares or Nomad Founder Preferred Shares.
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(d) To the Knowledge of the Purchaser, each of the Warrant Exercise Commitments, is in full force and effect and is a valid and binding obligation of each party thereto, enforceable against each such party in accordance with its terms, subject to bankruptcy, insolvency and other Laws of general applicability relating to or affecting creditors rights and to general equity principles. The terms of the Proposed Transaction set forth in this Agreement and the other Transaction Documents are not materially different than the terms disclosed to the Warrant Exercise Commitment Parties by the Purchaser.
(e) As of the date hereof, the Purchaser has received commitments from (i) each of the Persons set forth on Schedule 6.5(e)(i) of the Purchaser Disclosure Letter ( Warrant Exercise Commitment Parties ) to exercise all Nomad Warrants held by it prior to the consummation of the Transaction ( Warrant Exercise Commitments ) and (ii) each of the Persons set forth on Schedule 6.5(e)(ii) of the Purchaser Disclosure Letter ( Warrant Amendment Commitment Parties ) to consent to the amendment of the Nomad Warrants as described in Section 7.24 hereof ( Warrant Amendment Commitments ).
Section 6.6 Financial Capacity; Equity Financing Agreements . The Purchaser has delivered to the Seller true and complete copies of (i) the executed Equity Financing Agreements, pursuant to which, upon the terms and subject to the conditions set forth therein, each of the Founders and the Equity Co-Investors have agreed to invest the cash amount set forth therein (the Equity Financing ) and (ii) the executed Debt Commitment Letter from Barclay Bank plc, Credit Suisse AG, London Branch and UBS Limited to provide debt financing in the aggregate amount set forth therein and subject to the terms and conditions set forth therein (the Debt Financing and together with the Equity Financing, the Financing ). Except as permitted in accordance with the terms of this Agreement, as of the date of this Agreement, neither the Equity Financing Agreements nor the Debt Commitment Letter has been amended or modified, no such amendment or modification is contemplated, and the respective commitments contained in such letter has not been withdrawn or rescinded in any respect. The Purchaser has fully paid any and all commitment fees or other fees in connection with the Financing that are payable on or prior to the date of this Agreement and, as of the date of this Agreement, each of the Equity Financing Agreements and Debt Commitment Letter is in full force and effect and is the valid, binding and enforceable obligations of the Purchaser and, to the Knowledge of the Purchaser, the other parties thereto, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors rights and remedies generally. There are no conditions precedent or other contingencies related to the funding of the full amount (or a portion) of the Financing, other than as set forth in or expressly contemplated by either the Equity Financing Agreements or the Debt Commitment Letter, as applicable. Assuming the Financing is funded in accordance with the Equity Financing Agreements and the Debt Commitment Letter, and performance by the Seller of its obligations under this Agreement, the net proceeds contemplated by the Equity Financing Agreements and the Debt Commitment Letter, together with the Purchasers cash on hand and the amount of the Aggregate Stock Consideration, will, in the aggregate, be sufficient for the Purchaser and the Company to pay all of the amounts required to be provided by the Purchaser for the consummation of the Proposed
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Transaction, including any amounts payable in connection with the adjustments contemplated by Section 4.4 , and pay all related fees and expenses required to be paid as of the date of the consummation of such transaction, including the funds to be provided by (or on behalf of) the Purchaser to the Company to enable the Company to fund the repayment of the Loan Notes and the Specified Indebtedness, if applicable, and the satisfaction of amounts payable in respect of the Transaction Expenses. As of the date of this Agreement, there are no side letters or other agreements, contracts or arrangements relating to either of the Equity Financing Agreements or the Debt Commitment Letter that could affect the availability of the Financing contemplated by either of the Equity Financing Agreements or the Debt Commitment Letter. As of the date of this Agreement, assuming the accuracy of the representations and warranties set forth in Article V to the extent necessary to satisfy the condition in Section 8.2(a) and performance by the Seller of its obligations under this Agreement, (i) no event has occurred which, with or without notice, lapse of time or both, would constitute a default on the part of the Purchaser under the Equity Financing Agreements or the Debt Commitment Letter and (ii) the Purchaser does not have any reason to believe that any of the conditions to the Financing will not be satisfied or that the Financing will not be available to the Purchaser on the date of the Closing.
Section 6.7 No Vote Required . No vote of the holders of any class or series of capital stock of the Purchaser is necessary to approve this Agreement or to consummate the Proposed Transaction.
Section 6.8 Solvency . The Purchaser is not entering into this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Company or any other Target Company. Immediately following the Closing after giving effect to the transactions contemplated under this Agreement and the Transaction Documents, the Purchaser will be Solvent. As used herein, Solvent means with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of Liabilities, including, contingent Liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable Liability of such Person on its debts as they become absolute and matured, and (c) such Person has not incurred, and does not intend to incur, debts or Liabilities beyond such Persons ability to pay such debts and Liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Persons property would constitute an unreasonably small capital. The amount of contingent Liabilities at any time shall be computed under this Section 6.8 as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured Liability.
Section 6.9 Representations by the Purchaser as to the Aggregate Stock Consideration .
(a) Upon consummation of the Proposed Transaction and the issuance of the Aggregate Stock Consideration in connection therewith, the New Nomad Ordinary Shares representing the Aggregate Stock Consideration will be duly authorized by all necessary corporate action on the part of the Purchaser, validly issued, fully paid and non-assessable, free and clear of all Encumbrances, other than restrictions on transfer provided for by applicable federal and state securities laws and Encumbrances imposed by the Registration Rights Agreement.
(b) Assuming the accuracy of the representations and warranties of the Seller set forth in Article V , the New Nomad Ordinary Shares representing the Aggregate Stock Consideration issued pursuant to the terms of this Agreement will be issued in accordance with all applicable Securities Laws.
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Section 6.10 Registration Rights . As of the date this Agreement, other than as set forth on Schedule 6.10 of the Purchaser Disclosure Letter or pursuant to the Registration Rights Agreement, no Person has the right, contractual or otherwise, to cause the Purchaser to register under the Securities Act any Nomad Ordinary Shares or any other capital stock of the Purchaser, or to include any such shares in any registration statement of the Purchaser. True and complete copies of the agreements set forth on Schedule 6.10 of the Purchaser Disclosure Letter have been made available to the Seller.
Section 6.11 Investigation . The Purchaser hereby acknowledges and agrees that the Seller does not make any representations or warranties to the Purchaser, express or implied, other than those representations set forth in Article V .
Section 6.12 Disclaimer Regarding Projections . In connection with the Purchasers investigation of the Target Companies, the Purchaser has received from the Seller and its Affiliates and their respective Representatives and agents certain projections and other forecasts, including, without limitation, projected financial statements, cash flow items, certain business plan information and other data related to the Target Companies. The Purchaser acknowledges that (a) there are uncertainties inherent in attempting to make such projections, forecasts and plans, (b) the Purchaser is familiar with such uncertainties and is taking full responsibility for making its own evaluation of the adequacy and accuracy of all projections, forecasts and plans so furnished to it and (c) the Purchaser shall have no claim against anyone with respect to any of the foregoing.
Section 6.13 Prospectus .
(a) The Prospectus and any supplement thereto will not as of its respective date, or the Closing, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that no representation is made herein with respect to any information supplied or to be supplied by the Seller or the Company for inclusion in the Prospectus or such supplement.
(b) The Prospectus when published will contain, all particulars and information required by, and will comply with, as appropriate, the BVI Companies Act, FSMA, the Listing Rules, the Prospectus Rules, the Disclosure and Transparency Rules, the Admission and Disclosure Standards and all other applicable Laws and regulations, and will contain the information necessary to enable investors to make an informed assessment of the matters specified in Section 87A(2) of FSMA in relation to Nomad and the rights attached to the Nomad Ordinary Shares.
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Section 6.14 FCA Reports and Financial Statements .
(a) The Purchaser has filed all forms, reports, schedules, statements and other documents required to be filed by the Purchaser with the FCA pursuant to the Listing Rules and the Disclosure and Transparency Rules since the date the Nomad Ordinary Shares were admitted to the Official List and began trading on the London Stock Exchanges market for listed securities (collectively, the Purchaser FCA Reports ). The Purchaser FCA Reports (i) were and, in the case of Purchaser FCA Reports filed after the date hereof, will be, prepared in accordance with the applicable requirements of the FCA, FSMA, the Listing Rules and the Disclosure and Transparency Rules and (ii) did not at the time they were filed, and in the case of such forms, reports and documents filed by the Purchaser with the FCA after the date of this Agreement, will not as of the time they are filed, contain any untrue statement of a material fact or omit to state a material fact required to be stated in such Purchaser FCA Reports or necessary in order to make the statements in such Purchaser FCA Reports, in light of the circumstances under which they were and will be made, not misleading. To the Knowledge of the Purchaser, as of the date hereof, none of the Purchaser FCA Reports is the subject of ongoing review or outstanding investigation by the FCA.
(b) The Purchaser is in compliance with the Listing Rules and the Disclosure and Transparency Rules.
Section 6.15 Special Purpose Acquisition Company . The Purchaser was formed to undertake an acquisition of a target company or business. Except as listed on Schedule 6.15 of the Purchaser Disclosure Letter, the Purchaser has no, and since its inception has not had any (a) contracts, liabilities, debts or other obligations of any nature (whether accrued, absolute, contingent, liquidated or unliquidated, unasserted or otherwise, and including entering any binding or non-binding letter of intent or similar arrangement with any other Person) except those incurred in connection with this Agreement and the other Transaction Documents to which it is a party or (b) operations or principal activities. The Purchaser does not have any Subsidiaries. As of the date of this Agreement, the Purchaser has no assets other than as set forth in the Purchaser FCA Reports or as expressly contemplated this Agreement.
Section 6.16 Affiliate Transactions . Except as listed on Schedule 6.16 of the Purchaser Disclosure Letter, since the date of formation of the Purchaser, none of the Purchaser, any Affiliate of the Purchaser or any officer, director or other management employees of the Purchaser (a) has any direct or indirect ownership, participation, royalty or other interest in, or is an officer, director, employee of, consultant to or contractor for any Person that does business with, or has any contractual arrangement with, Purchaser (except with respect to any interest in less than 5% of the shares of any corporation whose shares are publicly traded and with respect to intercompany arrangements between any of the Purchaser) or (b) is a party to an agreement with the Purchaser (such agreement an Affiliate Agreement ).
Section 6.17 Taxes . The Purchaser is not and has never been incorporated or resident for Tax purposes in any country other than the British Virgin Islands and does not have, and has never had, a permanent establishment outside the British Virgin Islands.
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Section 6.18 Brokers and Finders . Neither the Purchaser nor any of the Purchasers Subsidiaries has employed any broker or finder or incurred any Liability for any brokerage fees, commissions or finders fees in connection with the Proposed Transaction for which the Seller is or could become liable.
Section 6.19 No Further Representations . Notwithstanding anything contained in this Article VI or any other provision of this Agreement, it is the explicit intent of each party hereto that the Purchaser is not making any representation or warranty whatsoever, express or implied, except those representations and warranties set forth in this Article VI , and in entering into this Agreement and distributing the New Nomad Ordinary Shares representing the Aggregate Stock Consideration to the Seller, the Seller expressly acknowledges and agrees that it is not relying on any statement, representation or warranty, including, but not limited to, those which may be contained in any confidential information memorandum or similar materials containing information regarding the Purchaser or its businesses or in any materials made available to the Seller during the course of its due diligence investigation of the Purchaser, other than those representations and warranties set forth in this Article VI .
Article VII
COVENANTS
Section 7.1 Conduct of the Business of the Target Companies . From the date of this Agreement until the Closing Date, except as (i) otherwise contemplated by this Agreement, (ii) as required by applicable Law, (iii) consented to in writing by the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed) or (iv) set forth on Schedule 7.1 of the Disclosure Letter, the Seller shall cause the Target Companies to (A) operate their respective businesses in the ordinary course of business, consistent with past practices and procedures ( Ordinary Course of Business ) and (B) without the prior written consent of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed), not do any of the following:
(a) sell, transfer, lease, sublease or otherwise dispose of any properties or assets (including intangible assets and equity interests) other than immaterial assets or properties in the Ordinary Course of Business;
(b) (A) commence any claim other than in the Ordinary Course of Business or (B) compromise, settle or grant any release of any claim relating to any pending litigation or arbitration where the amount involved exceeds 4,500,000 or involves a material restriction upon the operations of any Target Company;
(c) (A) amend or otherwise modify (including by entering into a new Material Contract with such party or otherwise) any of its Material Contracts other than in the Ordinary Course of Business or as would not be materially less favorable than the existing Material Contract, (B) terminate (other than allowing expiration according to its scheduled term, including by failing to renew) any Material Contract, (C) other than in the Ordinary Course of Business, enter into any agreement that, if existing on the date of this Agreement, would be a Material Contract or (D) enter into any agreement with a Related Party;
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(d) amend any of the Governing Documents of any Target Company in a manner adverse to the Purchaser in any material respect;
(e) grant to any employee any material increase in compensation or benefits, except (A) for normal salary increases following performance reviews and payment of any performance-based incentives upon the achievement of performance goals with respect to plans in effect immediately prior to the date of this Agreement, (B) in connection with any newly hired employees and in connection with any promotions, (C) as may be required under existing Benefit Plans, (D) as may be required by applicable Law or contemplated by this Agreement, (E) as may be required by any employment agreement in effect as of the date of this Agreement, (F) as may be required by any collective bargaining agreement, national collective bargaining agreement or similar arrangement with a union, trade union or works council set forth in Schedule 5.18 of the Disclosure Letter, (G) for increases in base salaries that are determined by management of the Company in relation to market benchmarks, and which are, in the judgment of management, reasonably necessary for the Target Company to retain key employees or (H) for transaction or retention bonus arrangements so long as any payments thereunder are treated as Transaction Expenses;
(f) other than in the Ordinary Course of Business, repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock or any other equity of any Target Company, or declare or pay any dividend or make any other distribution in respect of any Target Company, other than dividends paid by any Target Company to the Company or any other Target Company;
(g) increase or reduce their respective share capital, or allot and issue, grant or sell any stock, other equity interests, options, rights or warrants in any Target Company;
(h) adjust, split, combine or reclassify any capital stock or other equity of any Target Company;
(i) purchase any securities or make any material investment, either by purchase of stock of securities, contributions to capital, asset transfers, or purchase of any assets, in any Person (other than another Target Company), or otherwise acquire direct or indirect control over any Person (other than another Target Company);
(j) other than in the Ordinary Course of Business, permit any of the Target Companies assets or equity interests to become subjected to any material Encumbrance other than (x) those Encumbrances existing prior to the date of this Agreement which would be removed at or prior to Closing or (y) Permitted Encumbrances;
(k) change or amend any material Tax elections or Tax Returns filed on or prior to the date of this Agreement, except in each case, in the Ordinary Course of Business or as required by applicable Law;
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(l) make any material change to any Tax or accounting method or system of internal accounting control, except as may be appropriate to conform to changes in IFRS, Tax Laws or regulatory accounting requirements or settle or compromise any Tax liability for an amount in excess of 3,500,000;
(m) incur, assume or guarantee any Indebtedness, except for borrowings under the Companys existing credit facilities in the Ordinary Course of Business;
(n) authorize or commit to making any new capital expenditures not contemplated under the capital expenditures budget for fiscal year 2015 previously provided to the Purchaser;
(o) subject any Target Company to any bankruptcy, receivership, insolvency or similar proceeding;
(p) other than in the Ordinary Course of Business or as otherwise permitted in accordance with any other subsection of this Section 7.1 , make any loans, advances or capital contributions to, or investments in, any Person; or
(q) authorize any of, or commit or agree to take any of, the foregoing actions.
Section 7.2 Further Assurances .
(a) Each party hereto shall use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, and execute and deliver, or shall cause to be executed and delivered, such documents and other instruments as may be reasonably requested by another party hereto that is required, to consummate the Proposed Transaction.
(b) Following the Closing, at the written request of the Purchaser, the Seller shall (and shall use commercially reasonable efforts to procure that any other necessary parties will), as soon as practicable following the Sellers receipt of the Purchasers written request, execute such documents, and take such other actions as may be reasonably required in connection with the assuring to or vesting in the Purchaser (including its nominee or nominees) the legal and/or beneficial ownership of the Shares.
Section 7.3 Filings; Reasonable Cooperation .
(a) Each of the Seller and the Purchaser agrees to use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary under applicable antitrust Laws and regulations to consummate and make effective the Proposed Transaction, which actions shall include furnishing all information and documents required by applicable Law in connection with approvals of or filings with any Governmental Authority with regulatory jurisdiction over enforcement of any applicable antitrust Laws ( Governmental Antitrust Authority ), including (i) filing, or causing to be filed, as promptly as practicable following the execution and delivery of this
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Agreement and (ii) using commercially reasonable efforts to obtain as promptly as practicable the termination of any waiting period under any applicable antitrust laws (as listed on Schedule 8.1(a) of the Disclosure Letter). Notwithstanding anything to the contrary contained in this Agreement, each of the Seller and the Purchaser agree that no later than the fifteenth (15 th ) Business Day following the date of this Agreement, any required notification forms will be filed with the appropriate Governmental Antitrust Authority set forth on Schedule 7.3(a) of the Disclosure Letter in accordance with local merger control Laws.
(b) In connection with, and without limiting, the efforts referenced in Section 7.3(a) , each of the Seller and the Purchaser shall (i) furnish to the other such necessary information and reasonable assistance as the other may request in connection with its preparation of any filing or submission that is necessary under any antitrust merger control Laws and (ii) permit the other party to review any filing or submission prior to forwarding to any Governmental Antitrust Authority and accept any reasonable comments made by that other party. The Seller and the Purchaser shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from any Governmental Antitrust Authorities or, in connection with any proceeding by a private party, any other Person, and shall comply as promptly as practicable with any such inquiry or request. Each of the Seller and the Purchaser agree not to participate in any substantive meeting or discussion, either in person or by telephone, with any Governmental Antitrust Authority or, in connection with any proceeding by a private party, any other Person, in connection with the Proposed Transaction, unless it consults with the respective other party in advance and, to the extent not prohibited by such Governmental Authority, gives the respective other party the opportunity to attend and participate. The Purchaser shall be responsible for the payment of all filing fees or other disbursements to the applicable Governmental Authorities in connection with obtaining any approvals or making the notifications or filings required for the purposes of satisfying the conditions set forth in Article VIII (including, without limitation, document translation fees or third party expert fees but not including the costs of each partys own legal advisors).
(c) In the event that any administrative or judicial action or proceeding is instituted (or threatened to be instituted) by any Governmental Antitrust Authority or private party challenging the Proposed Transaction, each of the Seller and the Purchaser shall cooperate in all respects with each other and use its respective commercially reasonable efforts to vigorously contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Proposed Transaction; provided , however , that no party shall make any offer, acceptance or counter-offer to, or otherwise engage in discussions with, any Governmental Antitrust Authority with respect to any proposed settlement, consent decree, commitment or remedy, or, in the event of litigation, discovery, admissibility of evidence, timing or scheduling, except as specifically requested or agreed to by the other parties, which agreement shall not be unreasonably withheld, delayed or conditioned. Each party shall use its commercially reasonable efforts to provide full and effective support to the other parties in all material respects in all such negotiations and discussions to the extent reasonably requested by any such other party.
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Section 7.4 Solicitation . The Seller agrees that following the date of this Agreement, neither the Seller, nor any of the Target Companies, nor any of their respective directors, officers, Affiliates or Representatives will directly or indirectly, solicit, initiate, consider, facilitate, encourage or accept, or furnish to any other Person any information with respect to, any other proposals from any Person relating to any acquisition or purchase of all or any of the capital stock of any of the Target Companies or all or a material portion of the assets of any Target Company (other than the sale of inventory in the Ordinary Course of Business). The Seller shall, and shall cause the Target Companies to, immediately cease and cause to be terminated all existing discussions, conversations, negotiations and other communications with any Person conducted heretofore with respect to any of the foregoing.
Section 7.5 Confidentiality . The parties hereto acknowledge and agree that following the date of this Agreement, regardless of whether this Agreement is terminated, the Confidentiality Agreement shall remain in full force and effect in accordance with its terms.
Section 7.6 Notice of Developments .
(a) During the period commencing on the date of this Agreement and terminating upon the earlier to occur of the Closing or the termination of this Agreement, the Seller shall give the Purchaser prompt written notice of any material development that would make the satisfaction of any of the conditions set forth in Section 8.1 or Section 8.2 on the Closing Date impossible or reasonably unlikely; provided , that, the failure of the Seller to comply with this Section 7.6(a) shall not be given any effect for purposes of determining whether the conditions set forth in Section 8.1 or Section 8.2 have been satisfied or subjecting the Seller to liability for breach following termination of this Agreement.
(b) During the period commencing on the date of this Agreement and terminating upon the earlier to occur of the Closing or the termination of this Agreement, the Purchaser shall give prompt written notice to the Seller of any material development that would (i) make the satisfaction of any of the conditions set forth in Section 8.1 or Section 8.3 on the Closing Date impossible or reasonably unlikely or (ii) be reasonably expected to result in a breach of the Equity Financing Agreements or would otherwise be reasonably expected to delay or prevent the consummation of the Proposed Transaction; provided , that, the failure of the Purchaser to comply with this Section 7.6(b) shall not be given any effect for purposes of determining whether the conditions set forth in Section 8.1 or Section 8.3 have been satisfied or subjecting the Purchaser to liability for breach following termination of this Agreement.
Section 7.7 Employees and Employee Benefits .
(a) From the Closing until June 30, 2016 (the Transition Period ), the Purchaser or an Affiliate shall provide to those employees of the Target Companies as of immediately prior to the Closing who continue as employees of the Purchaser or its Affiliates after the Closing Date (the Continuing Employees ) compensation and benefits and terms and conditions of employment that are, in the aggregate, no less favorable to those such Continuing Employees were receiving under Target Companies Benefit Plans and terms and conditions of employment immediately prior to the Closing. In addition, during such Transition Period, the Purchaser shall provide Continuing Employees with substantially the
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same severance and redundancy benefits such Continuing Employees were receiving under Target Companies Benefit Plans immediately prior to the Closing. Nothing herein shall be deemed to be a guarantee of employment for any employee of the Target Companies or, other than as provided in any applicable employment agreement or other contract, to restrict the right of the Purchaser to terminate the employment of any such employee. The terms and conditions of employment for the employees of the Target Companies as of the Closing who are represented by a union and who continue with the Target Companies shall be governed by the applicable collective bargaining agreement.
(b) With respect to any employee benefit plan in which any Continuing Employee first becomes eligible to participate at or after the Closing (the New Company Plans ), the Purchaser or an applicable Affiliate shall use commercially reasonable efforts to: (i) waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements to the extent such pre-existing conditions, exclusions and waiting periods were waived or otherwise satisfied under a corresponding Benefit Plan of a Target Company immediately prior to the Closing Date or would have been so waived or satisfied but for such Benefit Plans termination pursuant to Section 7.7(c) , (ii) cause any annual deductibles, coinsurance or maximum annual out-of-pocket payments made by such Continuing Employees during the applicable plan year in which such Continuing Employee first participates in the applicable New Company Plan to reduce the amount of any annual deductibles, coinsurance and maximum annual out-of-pocket payments under the New Company Plans to the extent taken account under the corresponding Benefit Plan of a Target Company in respect of the same plan year or would have been so taken into account but for such Benefit Plans termination pursuant to Section 7.7(c) ; and (iii) recognize service credited by the Target Companies prior to the Closing for purposes of eligibility to participate and vesting credit (but not benefit accrual under any defined benefit pension plan) and, for purposes of severance and paid time off only, for purposes of determining the amount or level of benefit, in any New Company Plan in which such employees may be eligible to participate after the Closing; 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.
(c) Except as expressly provided herein, nothing contained in this Agreement, whether express or implied, shall (i) be treated as an amendment or other modification of any Benefit Plan, (ii) limit the right of the Purchaser to amend, terminate or otherwise modify any Benefit Plan following the Closing or (iii) confer upon any Person whether or not a party to this Agreement any right to employment, any right to compensation or benefits, or any other right of any kind or nature whatsoever.
(d) Notwithstanding anything to the contrary in this Agreement, the Target Companies, in their sole discretion, shall be permitted to (i) prior to the Closing, pay out bonuses for any completed fiscal year to their employees in the Ordinary Course of Business, and (ii) on the Closing, pay to each eligible employee a pro rata bonus in respect of the Companys then current fiscal year through the Closing based on the Target Companies determination, in good faith (and in consultation with the Purchaser), of the amounts earned, based on actual performance through the Closing.
(e) The Purchaser intends to establish a share incentive plan (or plans) with Nomad Ordinary Shares with effect from Closing in which the members of the Senior Management Team and other selected employees of the Purchaser and its Subsidiaries (including the Target Companies) will be eligible to participate. Prior to finalizing the terms of such plans before Closing, the Company shall allow a reasonable period of time to consult properly with the members of the Senior Management Team on the terms of the same and shall take into account the results of such consultation.
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Section 7.8 Access to Properties, Books and Records . From the date of this Agreement until the earlier of termination of this Agreement or the Closing, the Seller shall give the Purchaser reasonable access, upon reasonable notice during normal business hours to all properties, books, records and key management personnel of or pertaining to the Target Companies; provided , however , that the foregoing will not: (i) materially interfere with the day-to-day operations of the Target Companies, (ii) require the Seller or the Target Companies to provide access or to disclose information where such access or disclosure would contravene any Law, confidentiality obligation under any contract or result in the waiver of any attorney-client privilege or (iii) include any sampling or testing for or regarding any environmental matters without the Sellers prior written consent. Any information disclosed will be subject to the provisions of the Confidentiality Agreement. In the event of a conflict or inconsistency between the terms of this Agreement and the Confidentiality Agreement, the terms of this Agreement will govern. The parties acknowledge and agree that the Company may designate any competitively sensitive information made available to the Purchaser under this Agreement as outside counsel only and such information shall be given only to the outside counsel of the Purchaser and may not be shared with the Purchaser or any of its Subsidiaries or any of their respective Representatives (other than such outside counsel).
Section 7.9 Directors and Officers . To the extent requested by the Purchaser at least fifteen (15) days prior to the Closing, the Seller shall, or as appropriate shall cause the Target Companies to, request that the directors and officers of the Target Companies execute a letter of resignation in the form set forth in Schedule 7.9 of the Disclosure Letter.
Section 7.10 No Control of the Companys Business . Nothing contained in this Agreement is intended to give the Purchaser, directly or indirectly, the right to control or direct the Companys or any other Target Companys operations prior to the Closing. Prior to the Closing, the Company shall, and the Seller shall cause the Company to, exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its, and the Target Companies, operations.
Section 7.11 Purchaser Interim Covenants . From the date of this Agreement until the Closing Date, except as (i) otherwise contemplated in this Agreement or (ii) set forth on Schedule 7.11 of the Purchaser Disclosure Letter, the Purchaser shall (x) provide the Seller with prompt written notice of any litigation initiated by or against any shareholder of the Purchaser, of which the Purchaser has notice, and which relates to the Proposed Transaction or the ability of the Purchaser to proceed to Closing and (y) without the prior written consent of the Seller (which shall not be unreasonably withheld, delayed or conditioned), not do any of the following:
(a) acquire or agree to acquire by merging or consolidating with, or purchasing a substantial portion of the assets of or equity in, or by any other manner, any business of any Person or other business organization or division thereof, or otherwise acquire any assets;
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(b) declare, set aside or pay any dividend or other distribution payable in cash, capital stock, property or otherwise with respect to any of its equity interests; split, combine or reclassify any of its equity interests; or combine or reclassify any of its equity interests;
(c) amend, alter or repeal any of its Governing Documents (whether through merger, consolidation or otherwise);
(d) (i) create, issue, deliver, pledge or sell, or propose or authorize the creation, issuance, delivery, pledge or sale of, or grant any options or other awards with respect to any Nomad Ordinary Shares, Nomad Founder Preferred Shares, Purchaser Voting Debt or any other of its securities, or make any other agreements with respect to, any of its shares, shares of capital stock, other equity or any other securities or (ii) adopt or implement any stockholder or member rights plan;
(e) (i) create any Subsidiary or (ii) take any other action that cause Section 6.15 to be untrue following such action;
(f) declare, set aside or pay any dividend or make any other distribution (whether in cash, stock or other assets) or payment with respect to any shares, shares of capital stock, any equity or other securities (or set any record date therefor);
(g) as applicable, split, combine, divide, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its capital stock or other equity, or any of its other securities;
(h) increase in any manner the compensation or benefits payable or to become payable to any of its current or former directors, officers, employees, consultants, or independent contractors, or increase any amounts payable to any such Person;
(i) lease, license, exchange or swap, mortgage (including securitizations), or otherwise dispose of (whether by way of merger, consolidation, sale of shares or other capital stock or assets, or otherwise) any of its assets or adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(j) incur or assume any Indebtedness, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, or make or acquire any loans, advances or capital contributions to, or investments in, any other Person (including advances to employees) or enter into any keep well or other agreement to maintain the financial condition of another entity;
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(k) enter into or amend, terminate or extend any material contract, or waive, release, assign or fail to enforce any material rights or claims under any material contract;
(l) make or commit to make any capital expenditures;
(m) initiate, compromise or settle any litigation or arbitration proceedings involving payments by the Purchaser in excess of 500,000 per litigation or arbitration, or 1,000,000 in the aggregate, provided that, the Purchaser shall not compromise or settle any litigation or arbitration proceedings which compromise or settlement involves a material conduct remedy or injunctive or similar relief or has a material restrictive impact on the Purchasers business;
(n) grant to any other Person the right, contractual or otherwise, to cause the Purchaser to register under the Securities Act any capital stock of the Purchaser with registration rights that interfere with, supersede, limit or take priority over, the registration rights of the Purchaser pursuant to the Registration Rights Agreement; or
(o) take or agree in writing or otherwise to take any of the actions precluded by the foregoing provisions of this Section 7.11 or authorize, publicly recommend, publicly propose or publicly announce an intention to do any of the foregoing.
Section 7.12 Financing .
(a) The Purchaser shall procure and have available, as of the Closing, funds sufficient to pay all of the cash amounts required to be provided by the Purchaser for the consummation of the Proposed Transaction, including any amounts payable in connection with the adjustments contemplated by Section 4.4 , and all related fees and expenses required to be paid as of the date of the consummation of such transaction, including the funds to be provided by (or on behalf of) the Purchaser to the Company to enable the Company to fund the repayment of the Specified Indebtedness and the satisfaction of the amounts payable in respect of the Transaction Expenses. In furtherance and not in limitation to the foregoing:
(i) Without the Sellers prior written consent, the Purchaser shall not permit any amendment, supplement, replacement or modification to be made to, or any waiver of any provision under (A) the Equity Financing Agreements or the Warrant Exercise Commitments or (B) the Debt Commitment Letter, the Amendment and Restatement Agreement, the Condition Precedent Satisfaction Letter or the Existing Lender Consent; provided , that the Purchaser shall be permitted to amend the documents in clause (B) to the extent such amendments do not reduce the amount of the Debt Financing and could not reasonably be expected to adversely affect the prompt consummation of the Financing following the satisfaction or waiver of the conditions to Closing set forth in Section 8.1 and Section 8.2 (including any amendment, approval, supplement, replacement, modification or waiver which alters the certain funds basis of the financing contemplated in the Debt Financing).
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(ii) If the conditions in Section 8.1 and Section 8.2 have been satisfied or, if permissible, waived, the Purchaser shall cause the Financing to be consummated concurrently with the Closing.
(iii) The Purchaser shall not, nor shall it permit any of its Affiliates to, without the prior written consent of the Seller, take any action or enter into any transaction that could reasonably be expected to adversely affect the prompt consummation of the Financing following the satisfaction or waiver of the conditions to Closing set forth in Section 8.1 and Section 8.2 .
(b) No later than the fourth (4 th ) Business Day following the date of this Agreement, the Purchaser shall commence the process, and shall use reasonable commercial efforts, to obtain, as promptly as practicable, and in any event prior to the Closing, the Existing Lender Consent under the Company Facility in order to allow such Company Facility, and all amounts outstanding thereunder, to remain outstanding following the consummation of the Proposed Transactions. The Seller shall cause the Company to provide reasonable assistance as reasonably requested by the Purchaser and to deliver to the agent of the Company Facility no later than three (3) Business Days following the date of this Agreement an amendment request duly signed by the Company as contemplated in the Debt Commitment Letter (the Amendment Request ); provided , that none of the Purchaser, the Seller nor any of their respective Affiliates, including the Company or any of its Subsidiaries, shall be required to agree to pay any consent or similar fees to obtain the Existing Lender Consent, except in the case of the Company if such fees are payable only at the Closing and are not treated as Transaction Expenses. The Purchaser shall keep the Seller informed on a reasonably current basis and in reasonable detail of the status of its efforts to obtain the Existing Lender Consent and provide to the Seller copies of all substantially final drafts and executed definitive documentation related to the process to obtain the Existing Lender Consent. The Purchaser shall indemnify and hold harmless the Seller and the Target Companies from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with the arrangement of the Existing Lender Consent and any information (other than historical financial information relating to the Target Companies and other than information furnished by or on behalf of the Target Companies) used in connection therewith, in each case except to the extent such losses, damages, claims, costs or expenses arise from the Sellers, any Target Companys or their respective Representatives gross negligence, bad faith, willful misconduct or material breach of the provisions of this Agreement, as finally determined by a court of competent jurisdiction.
(c) Notwithstanding anything to the contrary in this Agreement, in no event shall (i) the Seller be liable for any breach or failure to perform its obligations under Section 7.12(b) (other than a failure to deliver the Amendment Request pursuant to Section 7.12(b) ), including any failure to obtain the Existing Lender Consent, or (ii) the Purchaser be relieved of its obligations to fund the Debt Financing at the Closing if the Existing Lender Consent is not obtained; provided , however , that, in the event the Existing Lender Consent is obtained prior to the Closing, the Purchaser shall not be obligated to consummate the Debt Financing.
(d) In the event that the consent of the Existing Majority Lenders (and for this purpose consent has the meaning set forth in the Debt Commitment Letter) has not been received by the Consent and Amendment Longstop Date (as such term is defined in the Debt Commitment Letter) Purchaser shall deliver to Seller a copy of the Backstop Facilities Agreement executed by the Finance Parties (as defined therein) within one (1) Business Day of the Consent and Amendment Longstop Date. In the event that the consent of the Existing Majority Lenders (and for this purpose consent has the meaning set forth in the Debt Commitment Letter) is received, Purchaser shall deliver to Seller a copy of the executed Amendment and Restatement Agreement within two (2) Business Days of such consent being obtained.
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Section 7.13 Seller Maintenance . The Seller shall not, prior to the delivery of the Final Overage or Final Underage, as the case may be, in accordance with Section 4.4 , adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Seller.
Section 7.14 Termination of Related Party Agreements . The Seller shall cause all contracts between any Related Party (other than any Target Company), on the one hand, and the Target Companies, on the other hand, that are set forth on Schedule 7.14 of the Disclosure Letter to be settled or terminated prior to the Closing.
Section 7.15 Director and Officer Indemnification . If the Closing occurs, the Purchaser and the Target Companies agree that all rights to indemnification and all limitations on liability existing in favor of any director or officer of the Target Companies, in each case that is an individual (collectively, the Company Indemnitees ), as provided in the Governing Documents of any Target Company shall survive the consummation of the Proposed Transaction and continue in full force and effect for a period of six (6) years and be honored by the Target Companies after the Closing during such period. The Purchaser shall procure that the Target Companies shall maintain, for a period of six (6) years beginning from the Closing Date, reasonable and customary policies of directors and officers liability insurance; provided, that, in no event shall any amounts associated therewith be treated as Transaction Expenses. The obligations of the Target Companies under this Section 7.15 shall not be terminated or modified in such a manner as to adversely affect any Company Indemnitee to whom this Section 7.15 applies without the consent of such affected Company Indemnitee (it being expressly agreed that the Company Indemnitees to whom this Section 7.15 applies shall be third party beneficiaries of this Section 7.15 ). If the Closing occurs, the Target Companies shall pay all expenses to any Company Indemnitee incurred in successfully enforcing the indemnity or other obligations provided for in this Section 7.15 .
Section 7.16 Seller Structuring Transactions . Prior to the Closing, the Seller (a) may affect the transactions set forth on Schedule 7.16 of the Disclosure Letter and (b) shall cause Birds Eye Iglo Equity Investment Plan Limited to no longer be a direct or indirect Subsidiary of the Company. If the Seller effects such transactions, it shall use reasonable efforts to procure that PricewaterhouseCoopers LLP shall promptly (and in any event before Closing) deliver to the Company and Iglo Foods Holdco Limited a report confirming that, as at the date on which such transactions are effected, the analysis and conclusions in the report by PricewaterhouseCoopers LLP entitled Project Koi Exit Structure dated 19 April 2015 (a copy of which is included in Schedule 7.16 of the Disclosure Letter) apply in relation to the transactions as so effected.
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Section 7.17 Restriction on Transfer .
(a) Except with respect to the transactions contemplated by Schedule 5.28 of the Disclosure Letter, Schedule 7.17 of the Disclosure Letter and Schedule 7.28 hereof, and subject to paragraph (b) and paragraph (c) below, the Seller shall not, directly or indirectly (i) sell, assign, transfer (including by operation of Law), incur any Encumbrances, dispose of or otherwise transfer or Encumber (each, a Transfer ) any New Nomad Ordinary Shares, (ii) deposit any of the New Nomad Ordinary Shares into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect thereto that is inconsistent with this Section 7.17 or (iii) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect Transfer or other disposition of any New Nomad Ordinary Shares or the economic interests thereunder.
(b) Notwithstanding the foregoing paragraph (a), the Seller may Transfer the New Nomad Ordinary Shares to any of its Affiliates; provided , however , that (i) such Transfer in not in violation of any Securities Laws and the respective transferee shall, as a condition to such Transfer, agree in writing to be bound by the terms and conditions of this Section 7.17 as if it were subject to such restrictions on Transfer (the Lock-Up Acknowledgement ) and (ii) if any such transferee shall cease to be an Affiliate of the Seller during the period from the Closing Date until the date that is six (6) months following the Closing Date, such transferee shall be obligated to Transfer any such New Nomad Ordinary Shares it received pursuant to this Section 7.17 back to the Seller prior to the action or transaction that causes such transferee to no longer be an Affiliate of the Seller (and the Lock-Up Acknowledgement shall obligate such transferee to do the same).
(c) Nothing in this Section 7.17 shall prohibit the Transfer of the New Nomad Ordinary Shares following the date that is six (6) months following the Closing Date; provided, however, that such period shall expire if the Purchaser engages in any of the activities set forth on Exhibit C .
Section 7.18 Transaction Expenses . Following the determination of the Final Total Consideration (a) the Seller shall have no liability with respect to Transaction Expenses other than with respect to any amounts payable pursuant to Section 4.4 and (b) the Purchaser shall indemnify and hold the Seller harmless in respect of all Transaction Expenses reflected on the Final Closing Statement.
Section 7.19 London Stock Exchange Listing .
(a) Nomad confirms that it will prepare, and take responsibility for, the Prospectus and that it will submit the Prospectus to the FCA for approval and apply to the FCA and the London Stock Exchange for Admission as promptly as practicable following the date hereof. Nomad undertakes that, following approval of the Prospectus by the FCA, Nomad shall publish the Prospectus as required by the Listing Rules and the Prospectus Rules and otherwise as required by Law. Nomad undertakes to execute or cause to be executed all such
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documents, provide or cause to be provided all such information, and do or cause to be done all such things as may reasonably be required by or necessary to comply with the requirements of the FCA, the London Stock Exchange, FSMA and all other applicable legislation and regulation, in each case in connection with such applications.
(b) The Company shall, and prior to Closing the Seller shall cause the Company to, give all such assistance and provide all such information as Nomad may reasonably require for preparation of the Prospectus and approval by the FCA of the Prospectus and making the application for Admission; or as may reasonably be required by, or necessary to comply with the requirements of the FCA, the London Stock Exchange, FSMA or any other applicable Law or regulation for the purposes of, or in connection with, Nomads application for approval of the Prospectus and Admission.
(c) Nomad shall comply with all applicable Laws and regulations, including, but not limited to, FSMA, the Prospectus Rules, the Listing Rules, the BVI Companies Act and the Securities Act, so as to permit the issue of the New Nomad Ordinary Shares to the Seller as contemplated in this Agreement. If at any time after the Prospectus has been lodged with the FCA for approval and prior to its approval: (i) any event occurs or condition exists as a result of which it is necessary to amend or supplement the Prospectus in order that the Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading; or (ii) there arises or is noted any matter referred to in Section 87G of FSMA of which Nomad is, or becomes, aware prior to Admission and which requires Nomad to deal with such change or matter in accordance with Section 87G of FSMA, the Prospectus Rules and/or the Listing Rules; or (iii) it is necessary at any such time to amend or supplement the Prospectus in order to comply with the requirements of FSMA, the Prospectus Rules and/or the Listing Rules, or other appropriate law or regulation, as the case may be, Nomad shall:
(x) | prepare an amendment or supplement as may be necessary in order to make the Prospectus comply with such requirements; and |
(y) | file with the FCA or other applicable authority any supplementary prospectus or other document which is required to be so filed and publish such prospectus or other document as may be required by the Prospectus Rules or by other applicable law. |
(d) The parties acknowledge and agree that neither Admission nor the similar admission of the Nomad Ordinary Shares to be issued pursuant to the Equity Financing Agreements shall be a condition to the Closing or the consummation of the Financing.
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Section 7.20 CREST .
(a) As promptly as practicable following the date hereof, the Purchaser shall:
(i) procure that the Depositary apply to CrestCo for the New Nomad Ordinary Shares to be admitted into CREST as participating securities by way of Depositary Interests;
(ii) take all reasonable steps necessary for the New Nomad Ordinary Shares by way of Depositary Interests to become participating securities in CREST from the Closing Date; and
(iii) provide the Registrar with all necessary Authorizations, information and instructions to enable the Registrar to perform its duties in accordance with and as contemplated by this Agreement.
(b) From and after the Closing Date, the Purchaser shall ensure that the Nomad Ordinary Shares are not registered in a register kept in the United Kingdom by or on behalf of Nomad.
Section 7.21 Resolutions and filings for deposit of New Nomad Ordinary Shares into CREST .
Nomad undertakes to procure that on or before the Closing Date:
(a) all necessary approvals are provided by Nomad to enable Nomad to give effect to its obligations under this Agreement;
(b) all necessary resolutions are passed to authorize the issue or transfer of the New Nomad Ordinary Shares to the Depositary or its nominee and the issue of the Depositary Interests by the Depositary;
(c) all necessary filings are made, and all other steps are taken, to facilitate the issue of the New Nomad Ordinary Shares to the Depositary or its nominee and the issue and transfer of the Depositary Interests through CREST; and
(d) the Registrar takes all necessary steps and gives all necessary instructions to CrestCo to allow the Depositary Interests to be issued as at and from the Closing Date.
Section 7.22 New Nomad Ordinary Shares . The Purchaser shall ensure that, as promptly as practicable following the date of this Agreement, the Nomad Board (or a duly authorized committee thereof) passes appropriate resolutions and takes all other necessary steps to allot the New Nomad Ordinary Shares fully paid up on the Closing Date to the Depositary or its nominated custodian as registered holder (acting as nominee for the Seller) and for the Depositary to issue the Depositary Interests representing such New Nomad Ordinary Shares to the Seller or to such other Person or Persons as may be directed by the Seller and for the Depositary Interests to be credited by the Depositary to the CREST stock account of the Seller or such other Person or Persons.
Section 7.23 Shareholder Vote . From and after the date of this Agreement, the Purchaser shall not subject this Agreement or the Proposed Transaction or the other transactions
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contemplated by this Agreement and the other Transaction Documents or any other transaction, including the admission of New Nomad Ordinary Shares for trading on the NYSE and the cancellation of the listing of the Nomad Ordinary Shares on the Official List and from trading on the London Stock Exchange, to any vote, consent or approval of the direct or indirect holders of capital stock of the Purchaser.
Section 7.24 Treatment of Warrants . As promptly as practicable after the date of this Agreement and in any event prior to the Closing, the Purchaser shall (i) reduce the exercise price of the Nomad Warrants (which are exercisable in multiples of three) to $10.50 per whole Nomad Ordinary Share and (ii) launch a consent solicitation to amend the Nomad Warrants resulting in any such Nomad Warrants which are not exercised prior to the consummation of the Proposed Transaction to expire upon the consummation of the Proposed Transaction (except to the extent that a holder of Nomad Warrants certifies to Nomad that he, she or it is not a QIB (as defined in the Warrant Instrument), an Accredited Investor (as defined in the Warrant Instrument) or a Qualified Investor (as defined in the Warrant Instrument), in which case, such holder will be permitted to exercise his, her or its Nomad Warrants until the date that is 30 days following the date on which the Nomad Ordinary Shares are readmitted to trading on the London Stock Exchange following the consummation of the Proposed Transaction) (the Warrant Consent Solicitation ).
Section 7.25 Repayment of Specified Indebtedness . In the event the Existing Lender Consent is not obtained:
(a) Seller shall, at the Purchasers request, use its commercially reasonable efforts to cause the Company to cooperate with the Purchaser in seeking the delivery, or causing to be delivered, prior to the Closing, payoff letters in form and substance reasonably satisfactory to the Purchaser from each lender, creditor, noteholder or other counterparty to which the Specified Indebtedness is owing, in each case (i) that sets forth the amount to be paid on or prior to the Closing Date, together with wire transfer instructions and (ii) evidencing that the payment of such amount would result in the full repayment, satisfaction, release, and discharge of all current and future obligations of the Target Companies (and, in the case of hedging, swap or similar agreements, the complete unwind and settlement of such arrangements) in respect of such item and of all current and future Encumbrances relating to such item; and
(b) at the Closing, immediately after the transfer of the Shares, the Purchaser shall provide the Company with an amount equal to the Specified Indebtedness and the Purchaser shall cause the Company or its designee immediately thereafter (at the Closing) to pay, by wire transfer of immediately available funds, the amounts specified in the payoff letters delivered pursuant to this Section 7.25 to each applicable holder of Specified Indebtedness identified therein to the account or accounts specified therein;
provided , that, in no event shall (i) the Seller be liable for any breach or failure to perform its obligations under this Section 7.25 , including any failure to obtain the Existing Lender Consent or (ii) the Purchaser be relieved of its obligations to fund the Debt Financing at the Closing if the Existing Lender Consent is not obtained.
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Section 7.26 Delivery of Financial Statements .
(a) If the Closing has not occurred prior to May 1, 2015, the Seller shall use commercially reasonable efforts to cause to be prepared and delivered to the Purchaser on or prior to May 1, 2015, the unaudited consolidated balance sheet, income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows as of and for the three (3) months ended March 31, 2015 (the First Quarter 2015 Financial Statements ) for the Target Companies; provided , that the failure of the Seller to deliver the First Quarter 2015 Financial Statement shall not be a breach of this Agreement.
(b) If the Closing has not occurred prior to August 15, 2015, the Seller shall use commercially reasonable efforts to cause to be prepared and delivered to the Purchaser on or prior to August 24, 2015, the unaudited consolidated balance sheet, income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows as of and for the three (3) months ended June 30, 2015 (the Second Quarter 2015 Financial Statements ) for the Target Companies; provided , that the failure of the Seller to deliver the Second Quarter 2015 Financial Statement shall not be a breach of this Agreement.
(c) If required to be delivered pursuant to Section 7.26(a) and Section 7.26(b) above, the representations and warranties of the Seller in Section 5.6(a) and Section 5.6(b) shall be made mutatis mutandis with respect to the First Quarter 2015 Financial Statements and the Second Quarter 2015 Financial Statements (as applicable) as if they were the Most Recent Financial Statements.
Section 7.27 Purchaser Dedicated Funds . The Purchaser shall make available to the Seller copies of the documentation evidencing that, as of the date hereof, an amount of cash and cash equivalents at least equal to $485,000,000 (such amount, plus any additional amounts deposited in the Dedicated Funds Banks, collectively, the Purchaser Dedicated Funds ) are held in United States dollars in the accounts listed on Schedule 7.27 of the Purchaser Disclosure Letter maintained by Credit Suisse Securities USA, LLC (New York, New York), UBS AG (Zurich, Switzerland) and Citibank, N.A. (Guernsey) (each, a Dedicated Funds Bank ). Upon the consummation of each of the Warrant Exchange and the Equity Financing, as applicable, the Purchaser shall deposit, or cause to be deposited, all proceeds of such Warrant Exchange and the Equity Financing, as applicable, in one of the accounts listed on Schedule 7.27 of the Purchaser Disclosure Letter to be held as Purchaser Dedicated Funds and shall provide documentation evidencing the deposit no later than one (1) Business Day after any such deposit. From and after the date hereof and until the earlier of the Closing or five (5) Business Days following the termination of this Agreement (the Restricted Period ), neither Purchaser nor any of its Affiliates shall directly or indirectly Encumber, release or use (or directly or indirectly cause the Encumbrance, release or use or promise the release or use) any Purchaser Dedicated Funds except in connection with this Agreement and the transactions contemplated hereby. The Purchaser hereby acknowledges that the Seller has specifically relied on such Persons obligations under this Section 7.27 . During the Restricted Period, except as set forth on Schedule 7.27 of the Purchaser Disclosure Letter, without the prior written consent of the Seller, neither the Purchaser nor any of its Affiliates shall amend, modify or waive, in whole or in part, any of the provisions of any contract between the Purchaser or any of its Affiliates, on the one
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hand, and the Dedicated Funds Bank, on the other hand, in effect as of the date hereof which relates in any manner to any portion of the Purchaser Dedicated Funds or the Proposed Transactions.
Section 7.28 Other Matters . The parties hereto agree to the matters set forth on Schedule 7.28 .
Article VIII
CONDITIONS TO CLOSING
Section 8.1 Mutual Conditions . The respective obligations of each of the parties are subject to satisfaction or waiver (in whole or in part, to the extent permitted by Law), at or prior to the Closing Date, of each of the following conditions:
(a) all consents, approvals and authorizations of the Governmental Antitrust Authorities in the jurisdictions set forth on Schedule 8.1(a) of the Disclosure Letter shall have been obtained; and
(b) at the Closing Date, (i) there being in effect no preliminary or permanent injunction or other order issued by any Governmental Authority of competent jurisdiction, and (ii) no action shall have been commenced by a Governmental Antitrust Authority, in the case of either of clauses (i) or (ii) which restrains, prohibits or otherwise makes illegal the consummation of the Proposed Transaction.
Section 8.2 Conditions of the Purchaser . The obligations of the Purchaser to consummate the Closing shall be further subject to the satisfaction or waiver (in whole or in part, to the extent permitted by Law) at or prior to the Closing, of each of the following conditions:
(a) the Fundamental Representations shall be true and correct in all respects as of the Closing Date as though made on and as of such date, except as contemplated by this Agreement (unless any such representation or warranty is made only as of a specific date, in which event such representation or warranty shall be true and correct in all respects only as of such specific date);
(b) the other representations and warranties of the Seller (disregarding all qualifications and exceptions contained therein regarding materiality or a Company Material Adverse Effect) shall be true and correct as of the Closing Date as though made on and as of such date, except, in the case of this Section 8.2(b) , as contemplated by this Agreement or where the failure of any such representation or warranty to be so true and correct would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect (unless any such representation or warranty is made only as of a specific date, in which event such representation or warranty shall be true and correct only as of such specific date, except as contemplated by this Agreement or where the failure of any such representation or warranty to be so true and correct would not reasonably be expected to have a Company Material Adverse Effect);
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(c) the Seller shall have performed in all material respects the obligations, and complied in all material respects with the agreements and covenants, required to be performed by or complied with by it under this Agreement at or prior to the Closing Date;
(d) the Purchaser shall have received a certificate of an executive officer of the Seller, certifying that the conditions set forth in Section 8.2(a) , Section 8.2(b) , Section 8.2(c) and Section 8.2(e) have been satisfied with respect to the Seller;
(e) no fact, circumstance, occurrence, change or event shall have occurred after the date of this Agreement and be continuing as of the Closing Date which, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect; provided , that, any failure to obtain the Existing Lender Consent shall not constitute a Company Material Adverse Effect; and
(f) the Seller shall have delivered, or caused to be delivered, all of the items required by Section 4.2 .
Section 8.3 Conditions of the Seller . The obligations of the Seller to consummate the Closing contemplated shall be further subject to the satisfaction or waiver (in whole or in part, to the extent permitted by Law) at or prior to the Closing of the following conditions:
(a) the Purchaser Fundamental Representations shall be true and correct in all respects as of the Closing Date as though made on and as of such date, except as contemplated by this Agreement (unless any such representation or warranty is made only as of a specific date, in which event such representation or warranty shall be true and correct in all respects only as of such specific date);
(b) the other representations and warranties of the Purchaser set forth in this Agreement shall be true and correct in all material respects as of the Closing Date as though made on and as of such date, except as contemplated by this Agreement or where the failure of any such representation and warranty to be so true would not, individually or in the aggregate, reasonably be expected to prevent the Purchaser from consummating the Proposed Transaction or performing its obligations under this Agreement (unless any such representation or warranty is made only as of a specific date, in which event such representation or warranty shall be true and correct only as of such specific date, except as contemplated by this Agreement or where the failure of such representations and warranties to be so true and correct would not prevent the Purchaser from consummating the Proposed Transaction or performing its obligations under this Agreement);
(c) the Purchaser shall have performed in all material respects the obligations, and complied in all material respects with the agreements and covenants, required to be performed by or complied with by it under this Agreement at or prior to the Closing Date;
(d) the Seller shall have received a certificate of an executive officer of the Purchaser, certifying that the conditions set forth in Section 8.3(a) , Section 8.3(b) and Section 8.3(c) have been satisfied; and
(e) the Purchaser shall have delivered, or caused to be delivered, all of the items required by Section 4.3 .
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Section 8.4 Waiver of Conditions . The conditions set forth in Section 8.1 may only be waived by written notice from the party waiving such condition. The conditions set forth in Section 8.2 may only be waived by written notice from the Purchaser. The conditions set forth in Section 8.3 may only be waived by written notice from the Seller.
Section 8.5 Notification . The Seller and the Purchaser shall each notify the other promptly upon becoming aware that any of the conditions set forth in Section 8.1 , Section 8.2 or Section 8.3 have been fulfilled.
Section 8.6 Frustration of Closing Conditions . None of the Seller or the Purchaser may rely, either as a basis for not consummating the Proposed Transaction or terminating this Agreement and abandoning the Proposed Transaction, on the failure of any condition set forth in Section 8.1 , Section 8.2 or Section 8.3 , as the case may be, to be satisfied if such failure was caused by such partys material breach of any provision of this Agreement or failure to use its commercially reasonable efforts to consummate the Proposed Transaction.
Article IX
TERMINATION
Section 9.1 Termination . This Agreement may be terminated at any time prior to the Closing;
(a) by either the Seller or the Purchaser if the Closing has not occurred by November 1, 2015 (the Outside Date ); provided , further , that the right to terminate this Agreement under this Section 9.1(a) will not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or has resulted in, the failure of the Closing to occur by this date;
(b) by either the Seller or the Purchaser in the event that any Governmental Authority has enacted, issued, enforced or entered into any statute, rule, regulation, injunction or other order (which the parties hereto will use commercially reasonable efforts to lift), restraining, enjoining or otherwise prohibiting the Proposed Transaction that will have become final and non-appealable;
(c) by the Purchaser if the Seller shall have breached in any material respect any of its representations and warranties, covenants or agreements contained in this Agreement, which breach (i) cannot be cured by the Outside Date and (ii) would result in any of the conditions in Section 8.2 not being satisfied by the Outside Date;
(d) by the Seller if the Purchaser shall have breached in any material respect any of its representations and warranties, covenants or agreements contained in this Agreement, which breach (i) cannot be cured by the Outside Date and (ii) which would result in any of the conditions in Section 8.3 not being satisfied by the Outside Date;
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(e) by the Seller if (i) all conditions in Section 8.1 and Section 8.2 have been satisfied or waived (if permissible) in accordance with the terms of this Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but each of which is capable of being satisfied at the date of termination) as of the date of Closing; (ii) the Seller has irrevocably confirmed by written notice to the Purchaser that it is ready, willing and able to consummate the Closing and (iii) the Purchaser fails to consummate the Closing on the date which the Closing would occur in accordance with Section 4.1 following the delivery of the notice from the Seller described in this Section 9.1(e)(ii) ; and
(f) by the mutual written consent of the Seller and the Purchaser.
The party desiring to terminate this Agreement pursuant to clause (a) (e) of this Section 9.1 shall give written notice of such termination to the other party in accordance with Section 11.5 , specifying the provision hereof pursuant to which such termination is affected.
Section 9.2 Effect of Termination . In the event of termination of this Agreement under Section 9.1 by written notice to the other parties, this Agreement will become void and there will be no liability on the part of any party to this Agreement except that (a) nothing in this Agreement will relieve (x) any party to this Agreement from liability for any willful or intentional material breach by such party of the terms and provisions of this Agreement or (y) the Purchaser of any liability or damage to the Seller or the Company resulting from a failure by the Purchaser to consummate the Proposed Transaction if (i) all conditions in Section 8.1 and Section 8.2 have been satisfied or waived (if permissible) in accordance with the terms of this Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but each of which is capable of being satisfied at the date of termination) as of the date on which the Closing would occur in accordance with Section 4.1 ; (ii) the Seller has irrevocably confirmed by written notice to the Purchaser that it is ready, willing and able to consummate the Closing and (iii) the Purchaser fails to consummate the Closing when otherwise obligated to do so in accordance with Section 4.1 and (b) Article XI and the agreements of the Purchaser and the Seller contained in Section 9.2 and the Confidentiality Agreement shall survive termination of the Agreement.
Article X
SURVIVAL
Section 10.1 Survival . The representations and warranties contained in this Agreement or in any other agreement, certificate or other document extended in connection herewith shall terminate and not survive the Closing (except for the representations in Sections 5.1 , 5.3(a) , 5.3(b) , 5.3(c) , 6.1 , 6.3 , 6.9(a) and 6.9(b) , which shall survive until the fourth (4 th ) anniversary of the Closing). The covenants and agreements contained in this Agreement and to be performed at or prior to the Closing shall not survive the Closing; the covenants and agreements contained herein to be performed or complied with after the Closing shall survive the Closing in accordance with their respective terms.
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Article XI
MISCELLANEOUS
Section 11.1 Announcements .
(a) The parties hereto will consult with each other before issuing press releases or otherwise making any public statements or communicating with the employees of the Target Companies with respect to this Agreement or the Proposed Transaction and the parties hereto shall not issue any such press release or public statement without the prior approval of the other party (which approval will not be unreasonably withheld or delayed); provided, that no party shall be required to obtain consent pursuant to this Section 11.1(a) to the extent any proposed release or statement is substantially equivalent to information that has previously been made public without breach of the obligations under this Section 11.1(a) .
(b) The restriction in Section 11.1(a) shall not apply (i) to communications by the Seller or its shareholder to its limited partners or other investors, (ii) to the extent the public announcement is required by Law or any Governmental Authority; provided , however , that in the case of clause (b)(ii) hereof the party making the announcement shall use its commercially reasonable efforts to consult with the other party in advance as to its form, content and timing or (iii) to disclosures otherwise expressly permitted hereunder.
Section 11.2 Assignment . This Agreement and the rights and obligations hereunder may not be assigned unless (a) such assignment is consented to in writing by both the Purchaser and the Seller, (b) the Purchaser assigns its rights, in whole or in part, to a direct or indirect wholly owned Affiliate of the Purchaser, but in the case of clause (b), no such assignment will relieve the Purchaser of its obligations under this Agreement, including the obligation to pay the Total Consideration by means of delivery of the New Nomad Ordinary Shares representing the Aggregate Stock Consideration and cash funds as set forth herein or (c) the Seller assigns its rights, in whole or in part, to a direct or indirect wholly owned Affiliate of the Seller, but in the case of clause (c), no such assignment will relieve the Seller of its obligations under this Agreement. This Agreement and all the provisions hereof shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.
Section 11.3 Specific Performance . The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunder, including its failure to take all actions as are necessary on its part to consummate the Proposed Transaction will cause irreparable injury to the other parties, for which damages, even if available, will not be an adequate remedy. Accordingly, each party hereby consents to the granting of injunctive relief by any court of competent jurisdiction to prevent breaches of this Agreement, to enforce specifically the terms and provisions hereof and to compel performance of such partys obligations (including the taking of such actions as are required of such party to consummate the Proposed Transaction), this being in addition to any other remedy to which any party is entitled under this Agreement. The parties further agrees to waive any requirement for the securing or posting of any bond in connection with any such remedy, and that such remedy shall be in addition to any other remedy to which a party is entitled at law or in equity.
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Section 11.4 Costs and Expenses; Taxes .
(a) Subject to this Section 11.4 and except as otherwise provided in this Agreement, the Seller, on the one hand, and the Purchaser, on the other hand, shall each be responsible for their own costs, charges and other expenses incurred in connection with the Proposed Transaction.
(b) The Purchaser shall be responsible for the preparation and filing of Tax Returns (including any documentation) with respect to all transfer, documentation, sales, use, stamp, registration, and similar Taxes (including any real property transfer or similar Tax) incurred or which may be payable in connection with this Agreement or any transaction contemplated hereby. The Purchaser and the Seller shall be responsible for one-half of any and all such Taxes, with the Sellers half being treated as Transaction Expenses (whether or not any such Tax was actually accrued as of the Benchmark Time).
(c) Any refunds of Taxes plus any interest received with respect thereto from the applicable Tax Authorities for any period shall be for the benefit of the Purchaser. In the event that a Tax Authority determines a deficiency in any Tax, the Purchaser shall have authority to determine whether to dispute such deficiency determination and to control the prosecution or settlement of such dispute.
(d) Notwithstanding anything to the contrary contained this Agreement, Schedule 7.28 shall provide the sole and exclusive remedy of the Purchaser in respect of the matters set forth therein, and nothing in this Section 11.4 or any other provision of this Agreement other than Schedule 7.28 shall give rise to any obligation of Seller in respect of the matters set forth therein.
Section 11.5 Notices . All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally to the recipient or when sent to the recipient by facsimile (receipt confirmed) or email, one (1) Business Day after the date when sent to the recipient by reputable overnight express courier services (charges prepaid) or three (3) Business Days after the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid; provided , that, any notice received at the addressees location on any Business Day after 5:30 p.m. (addressees local time) shall be deemed to have been received by 9:00 a.m. (addressees local time) on the next Business Day. Such notices, demands and other communications will be sent to the Purchaser and the Seller at the addresses indicated below:
If to the Seller, to:
Birds Eye Iglo Limited Partnership Inc,
acting through its general partner, Liberator GP Limited,
and its managing partner, Liberator Managing Partner Limited
Trafalgar Court,
St Peter Port, Guernsey
Fax: | +44 1481 711 052 | |
+44 1481 745 075 | ||
Email: | [omitted] | |
[omitted] | ||
Attention: | Nigel Carey | |
Kees Jaeger |
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Copy to (which shall not constitute notice):
Permira Advisors LLP
80 Pall Mall,
London SW1Y 5ES, United Kingdom
Fax: +44 207 9303185 | ||
Email: | [omitted] | |
Attention: | Paul Armstrong |
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Fax: 212-735-2000 | ||
Email: | [omitted] | |
[omitted] | ||
Attention: | Allison R. Schneirov | |
Jon A. Hlafter |
If to the Purchaser, to:
Nomad Holdings Limited
Regency Court
Glategny Esplanade
St. Peter Port
Guernsey GY1 3RH
Fax: +(44) 1481 716 868
Email: [omitted]
Attention: Company Administrator
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Copy to (which shall not constitute notice):
Mariposa Acquisition II, LLC
5200 Blue Lagoon Drive
Suite 855
Miami, FL 33126
Fax: (305) 675-0653
Email: [omitted]
Attention: Martin Franklin
Greenberg Traurig, P.A.,
401 East Las Olas Boulevard
Suite 2000
Fort Lauderdale, FL 33301
Fax: (954) 765-1477
Email: [omitted]
Attention: Donn Beloff
The address at which any party hereto is to receive notice may be changed from time to time by such party by giving notice of the new address to all other parties hereto. Any notice or communication given by telecopy or email shall be promptly confirmed by delivery of a copy of such notice or communication by hand or overnight delivery service.
Section 11.6 Entire Agreement . This Agreement (including all Exhibits and Schedules referred to herein or delivered under this Agreement) and the Confidentiality Agreement set forth the entire agreement among the parties in respect of the sale and purchase of the Shares and supersedes any prior agreement (whether oral or written) relating to the Proposed Transaction among the parties or any of their respective Affiliates. No party or any of its Affiliates shall have any claim or remedy in respect of any statement, representation, warranty or undertaking, made by or on behalf of the other party or any of its Affiliates in relation to the Proposed Transaction which is not expressly set forth in this Agreement.
Section 11.7 Waivers. No failure or delay by a party in exercising any right or remedy provided by Law or under this Agreement shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any further exercise of it or the exercise of any other remedy.
Section 11.8 Counterparts. This Agreement may be executed in any number of separate counterparts (including by means of facsimile or portable document format (.pdf)), each of which is an original but all of which taken together shall constitute one and the same instrument.
Section 11.9 Amendments. No amendment to this Agreement shall be valid unless it is in writing and duly executed by the Purchaser and the Seller.
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Section 11.10 Severability . Each of the provisions of this Agreement is severable, If any such provision is held to be or becomes invalid or unenforceable in any respect under the Law of any jurisdiction, it shall have no effect in that respect and the parties shall use commercially reasonable efforts to replace it in that respect with a valid and enforceable substitute provision the effect of which is as close to its intended effect as possible.
Section 11.11 Third Party Beneficiaries . Except as set forth in Section 7.15 or Section 11.14 , a Person who is not a party to this Agreement shall have no right to enforce any of its terms and this Agreement is not intended to give any Person other than the parties hereto and their permitted assigns any rights hereunder.
Section 11.12 Governing Law . THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED IN ANY WAY TO THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, THE PROPOSED TRANSACTION AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER OR RELATED IN ANY WAY TO THE FOREGOING, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAW OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE. THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT (A) THE REQUIREMENTS OF 6 DEL. C. § 2708 ARE SATISFIED BY THE PROVISIONS OF THIS AGREEMENT AND THAT SUCH STATUTE MANDATES THE APPLICATION OF DELAWARE LAW TO THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, THE PROPOSED TRANSACTION AND THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER, (B) THE PARTIES HAVE A REASONABLE BASIS FOR THE APPLICATION OF DELAWARE LAW TO THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, THE PROPOSED TRANSACTION AND THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER, (C) NO OTHER JURISDICTION HAS A MATERIALLY GREATER INTEREST IN THE FOREGOING, AND (D) THE APPLICATION OF DELAWARE LAW WOULD NOT BE CONTRARY TO THE FUNDAMENTAL POLICY OF ANY OTHER JURISDICTION THAT, ABSENT THE PARTIES CHOICE OF DELAWARE LAW HEREUNDER, WOULD HAVE AN INTEREST IN THE FOREGOING.
Section 11.13 Dispute Resolution . EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE GENERAL JURISDICTION OF THE DELAWARE COURT OF THE CHANCERY AND ANY STATE APPELLATE COURT THEREFROM WITHIN THE STATE OF DELAWARE (OR, ONLY IF THE DELAWARE COURT OF CHANCERY DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF DELAWARE) FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY AND AGREES THAT ALL
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CLAIMS IN RESPECT OF THE SUIT, ACTION OR OTHER PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH PARTY AGREES TO COMMENCE ANY SUCH SUIT, ACTION OR OTHER PROCEEDING IN THE DELAWARE COURT OF THE CHANCERY (OR, ONLY IF THE DELAWARE COURT OF CHANCERY DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF DELAWARE). EACH PARTY WAIVES ANY DEFENSE OF IMPROPER VENUE OR INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT AND WAIVES ANY BOND, SURETY, OR OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER PARTY WITH RESPECT THERETO. ANY PARTY MAY MAKE SERVICE ON ANY OTHER PARTY BY SENDING OR DELIVERING A COPY OF THE PROCESS TO THE PARTY TO BE SERVED AT THE ADDRESS AND IN THE MANNER PROVIDED FOR THE GIVING OF NOTICES IN SECTION 11.5 . NOTHING IN THIS SECTION 11.13 , HOWEVER, SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AT EQUITY. EACH PARTY AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING SO BROUGHT SHALL BE CONCLUSIVE AND MAY BE ENFORCED BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW OR AT EQUITY.
EACH OF THE PARTIES HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE DEBT FINANCING, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER (INCLUDING ANY SUIT, ACTION, CLAIM OR OTHER PROCEEDING AGAINST OR INVOLVING ANY FINANCING SOURCE, INCLUDING THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS, EACH OF WHICH IS HEREBY INTENDED TO BE AN EXPRESS THIRD PARTY BENEFICIARY OF THIS SECTION 11.13 ) OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EACH OF THE PARTIES (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT SUCH OTHER PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
This Section 11.13 shall not apply to any dispute under Article IV that is required to be decided by the Settlement Accountant.
Section 11.14 Privilege; Counsel . Skadden, Arps, Slate, Meagher & Flom LLP ( Skadden ) has been engaged by the Seller to represent it in connection with the Proposed Transaction. The Purchaser (on its behalf and on behalf of its Affiliates) hereby (a) agrees that, in the event that a dispute arises after the Closing between the Purchaser and/or any of its Affiliates, on the one hand, and the Seller, on the other hand, Skadden may represent the Seller in such dispute even though the interests of the Seller may be directly adverse to the Purchaser, the Company or any of their respective Affiliates and even though Skadden may have
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represented the Company in a matter substantially related to such dispute, or may be handling ongoing matters for the Purchaser or the Company and (b) waive any conflict in connection therewith. The Purchaser (on its behalf and on behalf of its Affiliates) further agrees that, notwithstanding anything in this Agreement to the contrary, as to all communications among Skadden, the Company, the Companys Subsidiaries and/or the Seller (including any of their respective directors, officers or employees) that relate in any way to this Agreement or the transactions contemplated hereby, including the Proposed Transaction, the attorney-client privilege and the expectation of client confidence belongs to the Seller and shall be controlled by the Seller and shall not pass to or be claimed by the Purchaser, the Company or any of their respective Affiliates. The Purchaser (on its behalf and on behalf of its Affiliates) further understands and agrees that the parties have each undertaken commercially reasonable efforts to prevent the disclosure of confidential or attorney-client privileged information. Notwithstanding those efforts, the Purchaser (on its behalf and on behalf of its Affiliates) further understands and agrees that the consummation of the Proposed Transaction may result in the inadvertent disclosure of information that may be confidential and/or subject to a claim of privilege. The Purchaser (on its behalf and on behalf of its Affiliates) further understands and agrees that any disclosure of information that may be confidential and/or subject to a claim of privilege will not prejudice or otherwise constitute a waiver of any claim of privilege. The Purchaser (on its behalf and on behalf of its Affiliates) agrees to use commercially reasonable efforts to return promptly any inadvertently disclosed information to the appropriate Person upon becoming aware of its existence. Notwithstanding the foregoing, in the event that a dispute arises between the Purchaser, the Company or any of their respective Affiliates and a third party other than a party to this Agreement after the Closing, the Company may assert the attorney-client privilege to prevent disclosure of confidential communications by Skadden to such third party; provided , however , that the Company may not waive such privilege without the prior written consent of the Seller. Skadden shall be a third party beneficiary for purposes of this Section 11.14 .
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
SELLER: | ||||
BIRDS EYE IGLO LIMITED PARTNERSHIP INC (acting through its general partner, LIBERATOR GP LIMITED, and its managing partner, LIBERATOR MANAGING PARTNER LIMITED) | ||||
By: |
|
|||
Name: | Nigel Carey | |||
Title: | Director | |||
PURCHASER: | ||||
NOMAD HOLDINGS LIMITED | ||||
By: |
|
|||
Name: | ||||
Title: |
[Signature Page to Share Purchase Agreement]
PURCHASER: | ||||
NOMAD HOLDINGS LIMITED | ||||
By: |
|
|||
Name: | Martin E. Franklin | |||
Title: | Director |
[Signature Page to Share Purchase Agreement]
Exhibit 2.2
DATED 29 OCTOBER 2015
LIONGEM SWEDEN 1 AB
AND
IGLO FOODS GROUP LIMITED
AND
NOMAD FOODS LIMITED
SHARE SALE AND PURCHASE AGREEMENT
Relating to 100% of the issued share capital of FINDUS SVERIGE AB
GREENBERG TRAURIG MAHER LLP
7 TH F LOOR
200 G RAY S I NN R OAD
L ONDON WC1X 8HF
TABLE OF CONTENTS
1. | DEFINITIONS AND INTERPRETATION | 1 | ||||
2. | AGREEMENT TO SELL AND PURCHASE | 25 | ||||
3. | PURCHASE PRICE | 25 | ||||
4. | ESCROW ACCOUNT | 29 | ||||
5. | CONDITIONS | 35 | ||||
6. | CONDUCT PENDING COMPLETION | 37 | ||||
7. | COMPLETION | 40 | ||||
8. | WARRANTIES | 42 | ||||
9. | THE BUYERS REMEDIES | 45 | ||||
10. | SELLERS AND BUYERS COVENANT | 46 | ||||
11. | RESTRICTIONS ON BUSINESS ACTIVITIES | 47 | ||||
12. | GUARANTEE | 51 | ||||
13. | POST COMPLETION MATTERS | 53 | ||||
14. | ENVIRONMENT | 55 | ||||
15. | BUSINESS ASSETS | 55 | ||||
16. | ACCESS, BOOKS AND RECORDS | 56 | ||||
17. | CONFIDENTIALITY | 57 | ||||
18. | FURTHER ASSURANCE | 60 | ||||
19. | COSTS AND PAYMENTS | 60 | ||||
20. | CURRENCY CONVERSION | 61 | ||||
21. | INTEREST | 61 | ||||
22. | ENTIRE AGREEMENT | 62 | ||||
23. | INVALIDITY | 64 | ||||
24. | AMENDMENTS, WAIVERS AND RIGHTS | 64 | ||||
25. | ASSIGNMENT | 65 | ||||
26. | THIRD PARTY RIGHTS | 66 | ||||
27. | NOTICES | 67 | ||||
28. | COUNTERPARTS | 69 | ||||
29. | GOVERNING LAW AND JURISDICTION | 69 | ||||
30. | AGENT FOR SERVICE OF PROCESS | 70 | ||||
SCHEDULE 1 KEY INFORMATION |
72 | |||||
SCHEDULE 2 COMPLETION ACCOUNTS |
90 | |||||
SCHEDULE 3 CONDITIONS |
101 | |||||
SCHEDULE 4 CONDUCT BETWEEN EXCHANGE AND COMPLETION |
102 | |||||
SCHEDULE 5 COMPLETION ARRANGEMENTS |
108 |
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SCHEDULE 6 WARRANTIES |
111 | |||
SCHEDULE 7 LIMITATIONS ON THE SELLERS LIABILITY |
134 | |||
SCHEDULE 8 PENSIONS |
139 | |||
SCHEDULE 9 ENVIRONMENTAL MATTERS |
140 | |||
SCHEDULE 10 INTELLECTUAL PROPERTY |
146 | |||
SCHEDULE 11 FREEHOLD AND LEASEHOLD PROPERTIES |
147 | |||
SCHEDULE 12 [SCHEDULE NOT USED] |
156 | |||
SCHEDULE 13 CONSENT CONTRACTS |
157 | |||
SCHEDULE 14 TRANSITIONAL SERVICES |
158 | |||
SCHEDULE 15 CONTINUING COMMERCIAL AGREEMENTS |
163 |
ii
THIS AGREEMENT is dated 29 October, 2015 and made between:
(1) | LIONGEM SWEDEN 1 AB , a company incorporated in Sweden with registered number 556753-4549 and having its registered office at Billesholmsvägen 4, 267 40 Bjuv, Sweden (the Seller ); and |
(2) | IGLO FOODS GROUP LIMITED , a company incorporated in England & Wales with registered number 05879466 and having its registered office at 5 New Square, Bedfont Lakes Business Park, Feltham, Middlesex TW14 8HA (the Buyer ); and |
(3) | NOMAD FOODS LIMITED , a company incorporated in the British Virgin Islands with registered number 1818482 and having its registered office at Nemours Chambers, Road Town, Tortola, British Virgin Islands (the Guarantor ). |
INTRODUCTION
(A) | Findus Sverige AB (the Company ) is a private company limited by shares incorporated in Sweden on 26 August 1905 with registered number 556006-4361. Further details of the Company are set out in schedule 1, part 1. |
(B) | The companies set out in schedule 1, part 2 are subsidiary undertakings of the Company. |
(C) | The Seller has agreed to sell all of the issued shares in the capital of the Company to the Buyer for the consideration and upon the terms set out in this Agreement. |
(D) | The Guarantor has agreed to guarantee the obligations of the Buyer under this Agreement on the terms set out in this Agreement. |
IT IS AGREED that :
1. | DEFINITIONS AND INTERPRETATION |
1.1 | Defined terms |
In this Agreement and the Introduction:
Accounting Policies means the accounting policies set out in schedule 2, part 1, paragraph 2;
Accounts means the audited financial statements of each member of the Group for each of the three consecutive accounting reference periods the last of which ends on the Accounts Date, each of which financial statements comprise a balance sheet, profit and loss account or income statement as the case may be, cash flow statement, notes, auditors and directors reports;
Accounts Date means 30 September 2014, save with respect to the Subsidiaries incorporated in France, Germany and Thailand for whom it means 31 December 2014;
Actual Cash means the Cash as at the Effective Time, as set out in the Completion Accounts;
Actual Indebtedness means the Indebtedness as at the Effective Time, as set out in the Completion Accounts;
Actual Intra Group Payables means the Intra Group Payables as at the Effective Time, as set out in the Completion Accounts;
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Actual Intra Group Receivables means the Intra Group Receivables as at the Effective Time, as set out in the Completion Accounts;
Actual Net Debt Amount means an amount (which may be a positive or a negative number) equal to the aggregate amount of the Actual Indebtedness less the aggregate amount of the Actual Cash, as set out in the Completion Accounts;
Actual Working Capital Amount means the Working Capital as at the Effective Time, as set out in the Completion Accounts;
Affiliate means, from time to time:
(a) | in the case of a body corporate, any group undertaking of such body corporate; and |
(b) | in the case of a person which is a limited partnership, the partners of the person or their nominees or a nominee or trustee for the person, or any investors in a fund which holds interests, directly or indirectly, in the limited partnership; and |
(c) | in the case of the Seller, any shareholder in Marlin 1 Limited; |
(d) | any Investment Fund of which any person encompassed within the meaning of paragraphs (a) to (c) above (or any group undertaking of that person) or that persons general partner, trustee, nominee, manager or adviser is a general partner, trustee, nominee, manager or advisor; and |
(e) | any Affiliate (within the meaning of paragraphs (a) to (d) above of any person encompassed by paragraphs (a) to (d) above, |
provided that, in the case of any Investment Fund, Affiliate shall not include any portfolio company of any Investment Fund or its Affiliates;
Agreed IT Costs means the aggregate cost of the TXT Licence, the cost of creating a new application in the Sellers HFM system to allow it to perform consolidation of the Group and the cost of creating a VPN connection to allow members of the Group to have secure access to the Sellers HFM system in connection with the Transition Services Agreement;
Amount Claimed in respect of any Notified Claim the amount claimed by the Buyer in respect of the relevant Notified Claim;
Antitrust Acts means the Cartel Act (Kartellgesetz) (Austria), the Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen) (Germany), and the Defence of Competition Law (Ley 15/2007, de 3 de julio, de Defensa de la Competencia) (Spain) or if a request for referral is made pursuant to Article 22(1) EUMR to the European Commission, the EUMR;
Antitrust Approvals shall mean the receipt of merger control clearance, or the expiration or termination of any waiting period, under any of the Antitrust Acts and, if a request for referral is made pursuant to Article 22(1) EUMR to the European Commission by the Relevant Authorities of one or more EU Member States and accepted by the European Commission, under the EUMR;
ARD means the Transfers of Undertakings Directive 2001/23/EC (as amended) and the related implementing legislation in each EU Member State;
Binding Offer Date means 13 August 2015;
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Bonus Bank Scheme means the discretionary plan for the benefit of senior management operated by the Group and paid to the beneficiaries of such scheme on the earlier of: (i) completion of the audit of certain group accounts for FY 2017; and (ii) an Exit event (as defined in the rules of such plan) having taken place;
Books and Records means the books and records of, or which otherwise relate to (to the extent they relate to), any member of the Group, and includes all notices, correspondence, orders, enquiries, drawings, plans, books of account and other documents and all computer discs or tapes or other machine legible programmes or other records;
Business Assets means all the assets necessary for the effective operation of the business of any member of the Group and Business Asset means any one of them;
Business Day means a day (not being a Saturday or Sunday) when banks generally are open in the City of London and Stockholm for the transaction of general banking business;
Business Information means all information which is used in, or otherwise relates to (to the extent it relates to), a member of the Groups business, customers or financial or other affairs, including information relating to:
(a) | the marketing of goods or services including customer names and lists and other details of customers, sales targets, sales statistics, market share statistics, prices, market research reports and surveys and advertising or other promotional materials; and/or |
(b) | future projects, business development or planning or commercial relationships and negotiations; |
Business Names means the business names listed in schedule 10, part 1;
Buyer Tax Claim means a Claim against any member of the Sellers Group for breach of the Warranties set out in paragraph 14 of schedule 6 or under or pursuant to the Tax Deed;
Buyers Bank Account means the bank account notified by the Buyer to the Seller at least five Business Days before the relevant due date for payment;
Buyers Group means the Buyer and its subsidiaries and subsidiary undertakings from time to time (but, subject to clause 17.9, excluding, for the avoidance of doubt, the Group) and any holding company or parent undertaking of the Buyer from time to time and all other subsidiaries and subsidiary undertakings of any such holding company or parent undertaking from time to time and member of the Buyers Group shall be construed accordingly;
Buyers Lawyers means Greenberg Traurig Maher LLP of 7th Floor, 200 Grays Inn Road, London WC1X 8HF;
Buyers Warranties means the warranties of the Buyer and the Guarantor set out in clause 8.10;
Carbon Dioxide Indemnity Amount has the meaning given in paragraph 3.5.1 of schedule 9;
Carbon Dioxide Matter has the meaning given in paragraph 1.2 of schedule 9;
Carve-out Accounts Condition means the condition set out in paragraph 1 of schedule 3;
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Carve-out Accounts means:
(a) | the audited combined consolidated financial statements of the Group for each of the three consecutive accounting reference periods, the last of which ends on 30 September 2014, and the earliest of which is for a nine-month period ending on 30 September 2012 prepared in accordance with IFRS and comprising a statement of financial position, income statement, cash flow statement and changes in equity or net investment, as the case may be, notes and a report from an independent auditor, reporting in accordance with generally accepted auditing standards in the U.S.; |
(b) | the unaudited interim condensed combined consolidated financial statements of the Group for the six month period from 1 October 2014 to 28 March 2015 with the comparative period from 1 October 2013 through 29 March 2014, prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and reviewed by the independent auditor under the US auditing standards prescribed by AU-C Section 930 Interim Financial Information ; |
(c) | the unaudited interim condensed combined consolidated financial statements of the Group for the nine month period from 1 October 2014 to 27 June 2015 with the comparative period from 1 October 2013 through 28 June 2014, prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and reviewed by the independent auditor under the US auditing standards prescribed by AU-C Section 930 Interim Financial Information ; |
(d) | the audited combined consolidated financial statements of the Group for each of the three consecutive accounting reference periods ended 30 September 2015, prepared in accordance with IFRS and comprising a statement of financial position, income statement, cash flow statement and changes in equity or net investment, as the case may be, notes and a report from an independent auditor, reporting in accordance with generally accepted auditing standards in the U.S.; |
(e) | unaudited schedule of differences between IFRS and US GAAP by income statement and balance sheet line item, for the purposes of inclusion in the unaudited pro forma financial information of the Guarantor, prepared in accordance with Article 11 of Regulation S-X. The periods to be presented: (X) for the income statement will be the years ended 30 September 2015 and 2014, the six months ended 28 March 2015 and 29 March 2014 and the nine months ended 27 June 2015 and 28 June 2014 and the three months ended 26 December 2015 and 27 December 2014; and (Y) for the balance sheet will be as at 28 March 2015, 27 June 2015, 30 September 2015 and as at 26 December 2015 as applicable; |
(f) | the unaudited interim condensed combined consolidated financial statements of the Group for the three month period from 1 October 2015 to 26 December 2015 with the comparative three month period from 1 October 2014 to 27 December 2014, prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and reviewed by the independent auditor under the US auditing standards prescribed by AU-C Section 930 Interim Financial Information ; and |
(g) | the unaudited combined consolidated financial statement data of the Group for the period from the last accounts completed in (a) through (f) through to the Effective Time, prepared in accordance with IFRS and comprising an income statement and statement of financial position together with an unaudited schedule of differences between IFRS and US GAAP by income statement line item; |
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Carve-out Accounts Due Date means in respect of:
(a) | the Carve-out Accounts referred to in paragraphs (a) and (b), together with associated unaudited schedule of differences referred to in paragraph (e) of the definition of Carve-out Accounts, 31 August 2015; |
(b) | the Carve-out Accounts referred to in paragraph (c), together with associated unaudited schedule of differences referred to in paragraph (e) of the definition of Carve-out Accounts, 30 September 2015; |
(c) | the Carve-out Accounts referred to in paragraph (d), together with associated unaudited schedule of differences referred to in paragraph (e) of the definition of Carve-out Accounts, 31 December 2015; and |
(d) | the Carve-out Accounts referred to in paragraph (f) of the definition of Carve-out Accounts, 15 March 2016; and |
(e) | the Carve-out Accounts referred to in paragraph (g) of the definition of Carve-out Accounts, 75 days following Completion; |
Carve-out (Post-Completion) Accounts means:
(a) | if the Completion Date is on or before 30 September 2015, the Carve-out Accounts referred to in paragraphs (c) (to the extent not delivered prior to Completion), (g) and (e) as applicable of the definition of Carve-out Accounts ; |
(b) | if the Completion Date is after the date set out in paragraph (a), but on or before 14 November 2015, the Carve-out Accounts referred to in paragraphs (d), (g) and (e) as applicable of the definition of Carve-out Accounts ; |
(c) | if the Completion Date is after the date set out in paragraph (b), but on or before 14 December 2015, the Carve-out Accounts referred to in paragraph (g) as applicable of the definition of Carve-out Accounts ; and |
(d) | if the Completion Date is after the date set out in paragraph (c), but on or before 30 January 2016, the Carve-out Accounts referred to in paragraphs (f), (g) and (e) as applicable of the definition of Carve-out Accounts ; |
Carve-out (Pre-Completion) Accounts means:
(a) | if the Target Completion Date is on or before 30 September 2015, the Carve-out Accounts referred to in paragraphs (a), and (b) or (c), with (e) as applicable of the definition of Carve-out Accounts ; |
(b) | if the Target Completion Date is after the date set out in paragraph (a), but on or before 9 November 2015, the Carve-out Accounts referred to in paragraphs (a) and (c) with (e) as applicable of the definition of Carve-out Accounts ; |
(c) | if the Target Completion Date is after the date set out in paragraph (b), but on or before 12 February 2016, the Carve-out Accounts referred to in paragraph (d) with (e) as applicable of the definition of Carve-out Accounts ; and |
(d) | if the Target Completion Date is after the date set out in paragraph (c), but on or before 14 April 2016, the Carve-out Accounts referred to in paragraph (f), with (e) as applicable of the definition of Carve-out Accounts ; |
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Cash means, in respect of each member of the Group, the aggregate of:
(a) | all cash balances in hand; |
(b) | cash equivalents; |
(c) | cash in transit (less any outstanding cheques held by such member of the Group); |
(d) | any balances credited to any account of such member of the Group with a financial institution and any related accrued interest; |
(e) | an amount equal to 50 per cent. of any amount paid by any member of the Group in connection with the preparation of the Carve-out Accounts as at or prior to Completion; and |
(f) | an amount equal to 50 per cent. of any amount paid by any member of the Group in respect of the Agreed IT Costs as at or prior to Completion, |
but excluding any Trapped Cash and excluding, for the avoidance of doubt, the Intra Group Receivables and the Excluded Items, in each case at the relevant time;
Claim means a Warranty Claim or any other claim against any member of the Sellers Group under, or pursuant to, the provisions of this Agreement or any other Transaction Document or any other document entered into pursuant to this Agreement (including, for the avoidance of doubt, the Tax Deed);
Companies Act means the Companies Act 2006;
Company Intellectual Property Rights means all Intellectual Property owned or used by a member of the Group;
Competition Condition means the condition set out in paragraph 2 of schedule 3;
Completion means completion of the sale and purchase of the Shares under this Agreement;
Completion Accounts means the accounts to be prepared in accordance with schedule 2 including details of the Indebtedness, Cash, Intra Group Payables and Intra Group Receivables and Working Capital;
Completion Date means the date on which Completion takes place;
Completion Disclosure Letter means the letter dated the Completion Date from the Seller to the Buyer in relation to the Warranties (as repeated at Completion pursuant to clause 8.2) (but only to the extent that the fact, matter or circumstance disclosed occurs subsequent to the Binding Offer Date) and delivered to the Buyers Lawyers before Completion and includes the documents appended to such letter, such documents being the Completion Disclosure Documents ;
Completion Statement has the meaning given in para 1.16(a) of part 1 of schedule 2;
Computer Contract means any agreement or arrangement (including any leasing, hire purchase, licensing, maintenance and/or service agreement or arrangement) between a member of the Group and any other person (including another member of the Group and/or any source code deposit agent) pursuant to which such other person provides an element of, or a service relating to, the Computer Systems;
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Computer Systems means the software, hardware and information and communication technology used by any member of the Group and all components of any of them;
Condition means a condition set out in schedule 3 and Conditions means all those conditions;
Confidentiality Agreement means the confidentiality agreement dated 26 May 2015 between Nomad Holdings Limited and Marlin 1 Limited pursuant to which the Seller or other members of the Sellers Group made available certain confidential information relating to the Group;
Consent Contracts means each of those contracts set out in schedule 13;
Consideration has the meaning given to it in clause 3.1;
Consideration Shares means 8,378,380 Nomad Ordinary Shares;
Continuing Commercial Agreements means the co-packing agreement and distribution agreement to be negotiated by the Buyer and the Seller pursuant to clause 13, the key terms of which are set out in schedule 15, and a Continuing Commercial Agreement shall mean either one of them;
Data Protection Legislation has the meaning given to it in schedule 6, paragraph 7.1;
Data Room means the virtual data room hosted by Merrill Corp. at https://datasite.merrillcorp.com/bidder/index_frame.do?projectId=211378 in connection with the Transaction as at 10 August 2015, and recorded on a memory stick provided by Merrill Corp to the Buyer and the Seller;
Deed of Termination means the deed, in the agreed form, between the Company and Findus Ltd relating to the termination of a Trade Marks and Technology Agreement;
Demerger means the transfer of the agricultural berries, fruits and juices business, by way of demerger, of Findus Norge AS;
Determination Date means the date on which the Completion Accounts are agreed by the parties or determined in accordance with schedule 2;
Disclosure Letter means the letter dated as at the Binding Offer Date from the Seller to the Buyer in relation to the Warranties and includes the documents contained in the Data Room and listed in the index of Disclosure Documents appended to such letter, such documents being the Disclosure Documents;
Dormant Subsidiaries means:
(a) | Findus Management and Services Limited, registered in the United Kingdom under registration number 03871208; |
(b) | Findus Deutschland GmbH, registered in the Federal Republic of Germany under registration number HRB 201226; |
(c) | Findus Thailand Limited, registered in the Kingdom of Thailand under registration number 165/2510; and |
(d) | Sudnif SA (in liquidation), registered in Zug, Swiss Federation under registration number CH-170.3.023.358-5; |
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Effective Time means 23:59 on the Saturday falling immediately prior to the Completion Date;
Employees means the Original Employees provided that, for the purposes of clause 8.2, any reference to Employees in schedule 6, paragraph 10 means in respect of the time immediately before Completion, the Original Employees together with any additional person employed (other than on a seasonal basis) by any member of the Group as at Completion, but excluding any Original Employee who has then ceased to be so employed by any member of the Group, and Employee means any one of the Employees;
Encumbrance means any mortgage, charge, pledge, lien, restriction, assignment, hypothecation, option, right to acquire, right of first refusal or right of pre-emption, third party right or interest or other encumbrance or security interest of any kind or any other agreement or arrangement the effect of which is the creation of security; or any agreement or arrangement or obligation to create any of the same;
Environment means any of the following media: air, water or land including those media within buildings or other natural or man made structures above or below ground and any living organisms or ecosystems;
Environmental Authority means any Relevant Authority having judicial, regulatory or administrative authority under Environmental Laws;
Environmental Claim means an Environmental Indemnity Claim or a claim for breach of the Warranties set out at paragraph 13 of schedule 6;
Environmental Escrow Release Date the date falling 36 months after the Completion Date;
Environmental Indemnity Amount means, from time to time, the Valladolid Indemnity Amount and the Carbon Dioxide Indemnity Amount;
Environmental Indemnity Claim means a Claim against the Seller made under clause 14 and schedule 9;
Environmental Laws means any applicable law, including any common law, statute, statutory instrument, treaty, regulation, decision, by-law, circular, code, guidance, order, notice, demand, decree, injunction, resolution or judgment, in each case having the force of law and which relate to Environmental Matters and which are in force and binding on any member of the Group at or prior to the Binding Offer Date, including for the avoidance of doubt any of the foregoing relating to human (including worker, but excluding food or product) health and safety and excluding for the avoidance of doubt any of the foregoing relating to town and country planning;
Environmental Matters means any of the following:
(a) | pollution, contamination or protection of the Environment; |
(b) | the production, generation, manufacture, processing, handling, keeping, possession, presence, storage, distribution, use, treatment, supply, receipt, sale, purchase, removal, transport, importation, exportation, disposal, release, spillage, deposit, escape, discharge, leak, emission, leaching or migration of Hazardous Substances or Waste; |
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(c) | exposure of any human or any other living organism to Hazardous Substances or Waste or other matters relating to human (including worker, but excluding food or product) health and safety; |
(d) | the creation of any noise, vibration, radiation, common law or statutory nuisance, or other impact on the Environment; and/or |
(e) | any other matters in relation to the condition, protection, maintenance, restoration or remediation of the Environment; |
Environmental Permits means all or any authorisations, certificates, approvals, permits, licences, registrations, notifications or consents (and all or any conditions attaching thereto) required under any Environmental Laws for the operation of any member of the Group or the occupation or use of any of the Properties by any member of the Group;
Escrow Account means the account managed by the Escrow Agent as established by and identified in the Escrow Agreement;
Escrow Agent means the escrow agent appointed pursuant to clause 4.11;
Escrow Agreement means the agreement between the Buyer, the Seller and the Escrow Agent relating to the establishment and operation of the Escrow Account, as agreed pursuant to clause 4.11;
Escrow Cash Funds means any funds deposited into the Escrow Account pursuant to clause 4.7.1 and held by the Escrow Agent in accordance with the terms of the Escrow Agreement;
Escrow Shares means such number of Consideration Shares as is equal in value to the Initial Escrow Value, with the value of the Consideration Shares to be determined in accordance with clause 4.6 as at the date which is three Business Days prior to the Completion Date, and to be deposited with the Escrow Agent at Completion or, as the case may be, the balance of the Consideration Shares held by the Escrow Agent after settlement of any Claim or any withdrawal of Escrow Shares pursuant to clause 4;
Estimated Cash Consideration has the meaning set out in clause 3.4;
Estimated Intra Group Payables means the Sellers good faith estimate of the Intra Group Payables as at the Effective Time;
Estimated Intra Group Receivables means the Sellers good faith estimate of the Intra Group Receivables as at the Effective Time;
Estimated Net Debt Amount means the Sellers good faith estimate of the Actual Net Debt Amount as at the Effective Time;
Estimated Working Capital Amount means the Sellers good faith estimate of the Actual Working Capital as at the Effective Time;
EU Member State means a member state of the European Union from time to time;
EUMR means Council Regulation (EC) No. 139/2004 of 20 January 2004 on the control of concentrations between undertakings, as amended;
European Commission means the Commission of the European Union as established by the Treaty of Rome 1957, as amended;
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European Union means the economic and political union of a number of European countries as enshrined by the Treaty on European Union 1992, as amended;
Excluded Items means any line items identified by inclusion in the column Excluded in the Reference Balance Sheet Mapping;
Finally Determined means if and when a court of competent jurisdiction has delivered judgment in respect of any Claim (whether on appeal or otherwise) and:
(a) | any such judgment has not been appealed against within the requisite time period for so doing; |
(b) | any such judgment has been appealed against but such appeal has been withdrawn; or |
(c) | there shall be no right of appeal against any such judgment; |
Final Escrow Release Date means 1 January 2022;
Findus Brand means the word mark FINDUS and any other word, logo, stylised word or other mark incorporating FINDUS that has been used by the Sellers Group in the United Kingdom in the 12 months prior to the Binding Offer Date;
Findus Trade Marks means the registered trade marks for the word FINDUS and/ or for the logo set out in part 2 of schedule 10;
First Escrow Release Date means 1 January 2019;
Food Safety Laws means all applicable laws and regulations concerning Food Safety Matters;
Food Safety Matters means any matter concerning food safety, including hygiene, food handling, food labelling, food packaging, food preparation, food production and food storage;
Force Majeure means acts, events, omissions or accidents, including: acts of God, including fire, flood, earthquake, windstorm or other natural disaster; war, threat of or preparation for war, armed conflict, imposition of sanctions, embargo, breaking off of diplomatic relations or similar actions; terrorist attack, civil commotion or riots; nuclear, chemical or biological contamination or sonic boom; fire, explosion or accidental damage; loss at sea; or interruption or failure of utility service, including but not limited to electric power, gas or water, in each case in so far as such acts, events, omissions or accidents are beyond a partys reasonable control;
Freely Transferable means: (a) the restrictions contemplated by the Lock-up Deed have expired or terminated; and (b) either: (1) the Consideration Shares are listed or traded on the London Stock Exchange; or (2) to the extent the Consideration Shares are not listed or traded on the London Stock Exchange, the Consideration Shares are listed on the New York Stock Exchange or the Nasdaq Global Market and a registration statement covering the resale of the Consideration Shares is effective and the use by the Seller of such registration statement is not limited in any way, including as a result of (A) suspension of sales under such registration statement as the result of any material misstatement or omission of a material fact in such registration statement; (B) any trading prohibition period for insiders; (C) lock-up periods or reductions in the number of shares that may be sold due to sales, or pending sales of shares by other holders of Nomad Ordinary Shares;
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French Domain means the domain theseafoodcompany.fr;
Fundamental Warranty Claim means a Warranty Claim for breach of any of the Warranties set out in paragraphs 1 and 2.1 of schedule 6;
General Indemnity Claim means any Claim pursuant to clause 7.6.1, clause 10.1, clause 10.2.2 or clause 10.3;
Group means the Company and each Subsidiary and member of the Group shall be construed accordingly;
HACCP has the meaning given to it in schedule 6, paragraph 23;
Hazardous Substances means any poisonous, noxious, dangerous, hazardous, radioactive, toxic, flammable, carcinogenic, corrosive, infectious, mutagenic, teratogenic, irritant or explosive materials or substances or any constituent or any mixture of any of them and/or any other materials or substances that are regulated under any Environmental Law;
Hedge Agreements means the following agreements and any transactions thereunder:
(a) | ISDA master agreement and schedule between Findus Treasury Ltd and National Westminster Bank PLC dated as of 1 May 2015 (as amended from time to time); and |
(b) | ISDA master agreement and schedule between Findus Treasury Ltd and Nordea Bank Finland PLC dated as of 12 July 2013 (as amended and restated on 1 July 2014, and as further amended from time to time); |
IFRS means applicable International Accounting Standards, International Financial Reporting Standards, Standard Interpretations Committee Standards or International Financial Reporting Standards Interpretations issued by the International Accounting Standards Board (or any successor body) or any committee thereof or body recognised by it from time to time;
Indebtedness means, in respect of each member of the Group, the aggregate outstanding amount (expressed as a positive number) of:
(a) | the principal and accrued interest on any borrowing or indebtedness in the nature of borrowing incurred by such member of the Group including bank debt, loans, overdrafts, drawn but unpaid amounts under letters of credit (which are secured by a third party which is not a member of the Group), any loan notes or bonds, any other interest bearing and/or secured lending provided by third parties to such member of the Group and any early repayment, prepayment, or break costs, fees or penalties in respect of any such items; |
(b) | in respect of any leases (including renewal or replacement) in place as of the Reference Balance Sheet Date the capitalised element of any finance lease or hire purchase contract as accounted for in accordance with the Accounting Policies and in respect of any leases entered into after the Reference Balance Sheet Date, the capitalised element of any finance lease or hire purchase contract as accounted for in accordance with IFRS; |
(c) | any deferred or contingent consideration payable in connection with the acquisition of any share capital, business, asset or undertaking, including in respect of the Frudesa acquisition and in respect of the Lutosa acquisition, but excluding any deferred or contingent consideration payable in connection with the La Cocinera acquisition; |
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(d) | declared and/or accrued but unpaid dividends of such member of the Group (other than dividends due to another member of the Group); |
(e) | any third party financial, accounting, tax, legal and other advisory fees and costs incurred by such member of the Group in connection with the preparation for, negotiation and implementation of the Transaction, this Agreement or any other Transaction Document, together with any VAT charged thereon, except to the extent that the VAT is recoverable; |
(f) | the aggregate amount payable under all incentive, bonus, or other arrangements for payment or other benefit to employees, directors or secretaries of, or consultants to, such member of the Group in connection with the Transaction, together with employers national insurance liability or other payroll taxes thereon (excluding, other than as set out in limb (k) below, any payments falling due to be made under the Bonus Bank Scheme); |
(g) | any unpaid amounts payable net of unpaid amounts receivable in respect of Tax payable or receivable in respect of any period of time ending on or before Completion (but excluding, for the avoidance of doubt, any provision for or asset in respect of deferred taxation or any amount which comprises Working Capital), which net amount may be a positive or negative amount. For the avoidance of doubt, Tax losses and other Tax assets shall not be brought into account (except to the extent used to reduce pre-Completion Taxes otherwise payable); |
(h) | all derivative instruments (including any interest or financial future transactions); |
(i) | all receivables sold or discounted otherwise than on a non-recourse basis; |
(j) | any amount in respect of the sale or discounting of a member of the Groups rights or assets in return for funding in the nature of finance; |
(k) | any amounts payable to previous employees Niklas Finné and Frank Thorsen and any other terminated employees as of the Effective Time (but not, for the avoidance of doubt, in respect of any other employees under the Bonus Bank Scheme); |
(l) | any amounts due or accrued in connection with any restructuring project including any manufacturing rationalisations and management restructurings, excluding the equivalent of up to £888,000 related to the Sweden SG&A restructuring currently incurred in accounting code 651114 as at the Reference Balance Sheet Date; |
(m) | any severance and related similar items or amounts due to terminated or former employees; |
(n) | any amounts required to be expended on vacant or unused properties to the extent recorded as a liability in accordance with past practice consistently applied; |
(o) | any amounts due in conjunction with financings or refinancings; |
(p) | any incurred but unpaid asset acquisition or disposal costs, to the extent recorded as a liability in accordance with past practice consistently applied; |
(q) | any liability in relation to any breach of the agreement entered into between Findus España S.L.U. or any other member of the Group and Grupo Empresarial Palacios Alimentacion, S.A., |
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excluding, for the avoidance of doubt, all foreign exchange contracts, pension scheme liabilities and obligations including in respect of the ITP2 plan in Sweden (Industrin och handelns tilläggspension ), hedging and currency protection, Intra Group Payables, Intra Group Trading Amounts and Excluded Items, in each case at the relevant time;
Independent Accountants means either:
(a) | Deloitte LLP or another independent firm of chartered accountants of international repute agreed by the Seller and the Buyer not being the auditors of the Buyer, the Seller or any member of the Group; or |
(b) | in default of agreement as to the identity of that independent firm within five Business Days of either party notifying the other of its wish to appoint an independent firm, a specific member of an independent firm of chartered accountants to be nominated on the application of either party by the President for the time being of the Institute of Chartered Accountants in England and Wales; |
Initial Cash Consideration means £400,000,000;
Initial Consideration means together, the Initial Cash Consideration and the Consideration Shares;
Initial Escrow Value the aggregate of 94,000,000 and the Environmental Indemnity Amount;
Insolvency Event means, in relation to any member of the Group, the Seller or a Third Party, as the case may be:
(a) | the passing of a resolution by way of company voluntary arrangement (in accordance with and within the meaning of Part I Insolvency Act 1986) or scheme of arrangement (under Part 26 Companies Act), or the making of any order by a Relevant Authority, for its winding up or administration; |
(b) | the making of an administration order by the court or the giving by it or its officers of a notice of intention to appoint an administrator; |
(c) | a provisional liquidator, liquidator, administrative receiver or other receiver, administrator, trustee or other similar officer taking possession of, or being appointed over, or an encumbrancer taking possession of, the whole or a material part of its property; |
(d) | the appointment of a receiver by the court over the whole or a material part of its property; |
(e) | it making a proposal for, or entering into, a company voluntary arrangement (in accordance with and within the meaning of Part I Insolvency Act 1986) or it entering into a scheme of arrangement (under Part 26 Companies Act); |
(f) | it filing with the court any documents as specified in Schedule A1 Insolvency Act 1986 with a view to it obtaining a moratorium pending its making proposals for a company voluntary arrangement; |
(g) | it making any application to strike it off the register pursuant to s1003 Companies Act; |
(h) |
default under any loan, mortgage, indenture or instrument (excluding trade payables) under which there may be issued or by which there may be secured or evidenced any |
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indebtedness for money borrowed by any member of the Group (or the payment of which is guaranteed by any member of the Group) other than indebtedness owed to a member of the Group or the Sellers Group, whether such Indebtedness is created before, on or after the Binding Offer Date, if that default: |
(i) | is caused by a failure to pay principal of such Indebtedness, immediately upon the expiration of the grace period provided in such Indebtedness ( Payment Default ); or |
(ii) | results in the acceleration of such Indebtedness prior to its stated maturity, |
and in each case the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates EUR 5 million or more; or |
(i) | any procedure or step which is analogous to those stated in paragraphs (a) to (h) being taken in any jurisdiction other than England and Wales; |
Insolvent Third Party means a Third Party in relation to whom an Insolvency Event has occurred within the 18 month period ending on the Notification Date;
Insurance Policies means all current insurance policies in respect of which any member of the Group is covered with an annual premium of £10,000 or more (including any active historic policies which provide cover on a losses occurring basis) excluding any automobile or health insurance policies and Insurance Policy means any one of them;
Intellectual Property means:
(a) | patents, trade marks, service marks, registered designs, applications and rights to apply for any of those rights, trade, business and company names, internet domain names and e-mail addresses, unregistered trade marks and service marks, rights in get-up, rights to goodwill associated with marks or logos or to sue for passing-off (or for unfair competition), copyrights and related rights, database rights, rights in software, trade secrets, know-how, utility models, topography rights, rights in designs and inventions; and |
(b) | rights, whether registered or unregistered and including all applications (or rights to apply) for, and renewals or extensions of, such rights of the same or similar nature or effect as or to those in paragraph (a) which now, or in the future, may subsist, anywhere in the world; |
Interim Period means the period from the Binding Offer Date to Completion;
Intra Group Agreements means any agreement, arrangement, whether written or unwritten, express or implied, including any service agreements, licences, distribution agreements, co-packing agreements which exist at Completion between on the one hand any one or more members of the Group and on the other hand, any one or more members of the Sellers Group (excluding the TSA, the Continuing Commercial Agreements contemplated by Clause 13.2 and the licence of the Findus Brand granted under Clause 13.3 of this Agreement);
Intra Group Payables means, in respect of a member of the Group, the aggregate of the amounts owing from such member of the Group to members of the Sellers Group at the relevant time, excluding Intra Group Trading Amounts;
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Intra Group Receivables means in respect of a member of the Group, the aggregate of the amounts owing from members of the Sellers Group to such member of the Group at the relevant time, excluding Intra Group Trading Amounts;
Intra Group Trading Amounts means in respect of a member of the Group, the aggregate of the amounts owed by or to such member of the Group in the ordinary and normal course of business including amounts owed in respect of salaries or other employee benefits, insurance (including health and motor insurance), pension or retirement benefit payments, management training and car rental payments paid or provided by or to any other member of the Group and goods or services supplied to any other member of the Group on standard terms to or by members of the Sellers Group at the relevant time provided that, in each case, such amounts have been, in the 12 months prior to Completion, accounted for by the incurring entity in its normal working capital pattern;
Investment Fund means any person, trust or fund holding shares for investment purposes;
Knowledge Persons means each of James Hill (Findus Group CEO), Bill Showalter (Findus Group CFO), Karen Noakes (Head of Findus Group Financial Planning & Analysis), Henrik Hjalmarsson (CEO Findus Sweden), Jørn-Gunnar Jacobsen (CEO Findus Norway), Steven Libermann (CEO Findus Southern Europe), Jordi Fabregas Torrens (CEO Findus Spain) and Kai Mäkinen (CEO Findus Finland);
Lock-up Deed means the letter to Nomad Foods Limited from the Seller to be entered into at Completion, pursuant to which the Seller agrees certain restrictions related to the Consideration Shares and, after Completion and where appropriate, references to the Lock-up Deed shall mean that document as executed by the Seller;
Long Stop Date means 30 April 2016;
Losses means losses, damages, payments, costs, charges, expenses and/or other liabilities of any kind, including fees of all external legal advisers and their disbursements and out-of-pocket expenses and Loss shall be construed accordingly;
Luxembourg GAAP means Luxembourg generally accepted accounting principles and practices in effect from time to time;
Material Adverse Change means a material adverse change in the business, operations, assets, position (financial, trading or otherwise) or profits of the Group taken as a whole since the Binding Offer Date or any matter, event or circumstance that is reasonably likely to result in such a material adverse effect, being a change which causes (i) a reduction in turnover or EBITDA (calculated on a basis consistent with past practice and determined on the basis of constant currency as at the Reference Balance Sheet Date) of the Group of ten percent. or more compared with the turnover or EBITDA of the Group for the 12 month period ending on the Reference Balance Sheet Date or (ii) a reduction in tangible fixed assets of the Group (determined on the basis of constant currency as at the Reference Balance Sheet Date, and excluding depreciation of fixed assets in the ordinary course of business) of ten percent. or more compared with the net assets of the Group as at the Reference Balance Sheet Date, respectively, but excluding a matter, event or circumstance arising out of or resulting from any of (or any combination of):
(a) | events affecting the French, Spanish, Swedish, Norwegian, Finnish, German, Danish, Belgian or global economy or European, US or global capital markets or financial markets, in each case, generally, including changes in interest rates, exchange rates and commodity prices; |
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(b) | events that generally affect the industries in which the Group operates and the markets (including geographic and products segments) in which the Group conducts business; |
(c) | acts of God, including earthquakes, adverse weather conditions or other natural catastrophes or epidemics or pandemics; |
(d) | acts of war (whether declared or undeclared), sabotage, terrorism, military action, civil war, civil commotion, riots or any threat of, preparation for, or material escalation or worsening thereof; |
(e) | political conditions generally in France, Spain, Sweden, Norway, Finland, Belgium or Europe; |
(f) | changes or prospective changes in applicable laws, regulations, accounting standards or practices, or, in each case, the interpretation and enforcement thereof; |
(g) | any matter, event, fact or circumstance to the extent disclosed, or deemed to be disclosed, in the Disclosure Letter in accordance with clause 8.5; |
(h) | the announcement or performance of this Agreement or of the Transaction; |
(i) | the Buyers acts or the acts of a member of the Buyers Group in relation to the information and consultation process of the Findus France Central Works Council, other than such acts occurring at the request or the direction of, or with the acquiescence or consent of, the Seller or another member of the Sellers Group; |
(j) | any act or omission of any member of the Sellers Group or member of the Group, taken with the prior written consent of, or at the direction of a member of the Buyers Group; |
(k) | any voluntary act of the Buyer or a member of the Buyers Group; |
(l) | any impact arising from the disposal of assets or liquidation of any of the Dormant Subsidiaries; |
(m) | any breach by the Buyer of the terms of this Agreement; or |
(n) | any failure by the Group to meet any budgets, projections, forecasts, or predictions of financial performance for any period (but not, in each case, the underlying cause for such failure); |
Material Agreement means those contracts to which a member of the Group is party and under which the Group currently does business with:
(a) | a Material Customer; or |
(b) | a Material Supplier, provided that such contracts are of more than three months in duration; |
Material Customer means:
(a) | the Groups top customers by net sales in each Relevant Territory comprising, in aggregate, in excess of 50 per cent. of the Groups net sales in such Relevant Territory for the nine month period ending on 27 June 2015 (up to a maximum of five customers per Relevant Territory); and |
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(b) | to the extent not captured by (a), the Groups top five customers overall by net sales for the nine month period ending on 27 June 2015; |
Material Deliverables means:
(a) | in respect of the Seller those actions or deliverables set out in paragraphs 1.1, 1.5, 1.8, 1.9, 1.10 of schedule 5; and |
(b) | in respect of the Buyer those actions or deliverables set out in paragraph 2.1, 2.2 and 2.5(a) of schedule 5; |
Material Employee means (a) an Employee whose base salary is £125,000 per annum or more (excluding any bonuses or other incentive payments) and (b) to the extent not captured by (a), the Managing Director and Finance Director in each Relevant Territory other than Germany or Denmark;
Material Group Member means any of the Company, Findus España SLU, Findus Manufacturing Spain SLU, Findus France SAS, Findus Finland Oy, Findus Norge AS and Frionor Sverige AB;
Material Relevant Authority means any government, government department or governmental, supranational, federal, statutory, regulatory or governmental investigative body, authority, court, tribunal, stock exchange, or governmental institution in any jurisdiction;
Material Supplier means any supplier of the Group with which the Group made purchases totalling 10 per cent. or more of the Groups total purchases in either of the Nordics Region or the Southern Europe Region for the nine month period ending on 27 June 2015 (up to a maximum of five suppliers for each such region);
Material Warranties means the Warranties set out in paragraphs 1, 2.1, 4, 5.1, 5.2, 10.1, 15.3 and 22.1 of schedule 6;
Nomad Ordinary Shares means ordinary shares of no par value in the capital of Nomad Foods Limited;
Nominated Entity has the meaning given in clause 6.2;
Non-Fundamental Warranty Claim means a Warranty Claim which is not a Fundamental Warranty Claim;
Nordics Region means Sweden, Norway, Finland and Denmark;
Notice means a notice, demand, request, statement, instrument, certificate or other communication given, delivered or made by either party to the other under, or in connection with, this Agreement;
Notification Date means in relation to any Claim, the date such Claim is notified to the Seller pursuant to schedule 7, paragraph 3;
Notified Claim a notification to the Seller by or on behalf of the Buyer:
(a) | on or before the second anniversary of Completion of a Claim (other than a Buyer Tax Claim or an Environmental Claim); or |
(b) | on or before the Final Escrow Release Date of a Buyer Tax Claim or an Environmental Claim, |
in each case in accordance with clause 4.5;
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Original Employees means the employees of any member of the Group on the Binding Offer Date, other than those employed on a seasonal basis;
Pension Schemes means any defined benefit or defined contribution pension scheme operated by any member of the Group, including the ITP2 plan in Sweden ( Industrin och handelns tilläggspension ), the ITP1 plan in Sweden; the SAF-LO plan in Sweden, the defined benefit scheme in Norway, the defined benefit scheme in France, and the defined contribution schemes in Norway, Finland and Denmark but excluding, for the avoidance of doubt, any other pension arrangement sponsored or maintained by a governmental authority;
Proceedings means any proceedings, suit or action arising out of or in connection with this Agreement;
Properties means the freehold and/or leasehold properties, details of which are set out in schedule 11, and Property means an individual property;
Recognised Investment Exchange means any recognised investment exchange (as such term is defined in s285 Financial Services and Markets Act 2000, as amended) or an investment exchange that has been recognised by the UK Financial Conduct Authority as a designated investment exchange;
Reference Balance Sheet means the consolidated balance sheet for the Group as at the Reference Balance Sheet Date set out in part 4 of schedule 2;
Reference Balance Sheet Date means 23 May 2015;
Reference Balance Sheet Mapping means the categorisation of line items in the Reference Balance Sheet as Working Capital or Excluded Items as set out in the Reference Balance Sheet;
Relevant Authority means any government, government department or governmental, supranational, federal, statutory, regulatory or investigative body, authority, court, tribunal, stock exchange, professional association or institution in any jurisdiction;
Relevant Competition Authority means the Relevant Authorities in Spain, Austria or Germany with legal authority to issue a decision, order or injunction pursuant to anti-trust, competition, merger control or similar laws granting or refusing consent to all or part of the transaction(s) effected or contemplated by this Agreement, or, in the case of a referral pursuant to Article 22(1) EUMR, the European Commission;
Relevant Person means:
(a) | in relation to clause 11.1.1(d) or 11.1.2(d), a director or employee or manager of any member of the Group or a person who was a director, employee or manager of any member of the Group at any time during the twelve months prior to the Completion Date, in each case with a base salary in excess of £50,000; and |
(b) | in relation to clause 11.2, a director, employee of any member of the Sellers Group or a person who was a director or employee of any member of the Sellers Group at any time during the twelve months prior to the Completion Date, in each case with a base salary in excess of £50,000 (excluding anyone notified in writing by a director of the Seller to the Buyer as not being a Relevant Person for the purposes of clause 11.2); |
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Relevant Territory means each of France, Spain, Belgium, Sweden, Norway, Finland, Denmark and Germany;
Remedial Action means:
(a) | investigating, sampling, monitoring, assessing, analysing, removing, remedying, cleaning up, making good, modifying, restoring, improving, abating, containing or ameliorating the presence in, or effect on, the Environment, the Properties or any other property of any Hazardous Substances or Waste, including the removal from any structure of Hazardous Substances or Waste incorporated into that structure (whether above or below ground, natural or man made and including all pipes and tanks); and |
(b) | the obtaining of any expert technical and/or legal advice required in relation to any of the above; |
Representative means in relation to any party, that partys directors, secretaries, employees, advisers or providers of finance;
Restricted Customer means, in relation to any member of the Group, any person who bought from that member of the Group ten per cent or more of the total sales made by such member during the twelve month period prior to the Completion Date;
Satisfaction Date means the date (not being later than the Long Stop Date) on which the last of the Conditions to be satisfied or waived is so satisfied or waived;
SEC means the U.S. Securities and Exchange Commission;
Second Escrow Release Date means 1 January 2020;
Sellers Bank Account means the bank account at Nordea, [omitted] (or such other account notified by the Seller to the Buyer at least five Business Days before the relevant due date for payment);
Sellers Group means the Seller, its subsidiaries and subsidiary undertakings from time to time (but excluding, subject to clause 17.9, the Group) and any holding company of the Seller from time to time and all other subsidiaries and subsidiary undertakings of any such holding company from time to time and member of the Sellers Group shall be construed accordingly;
Sellers Group Claims Incurred Insurance Policy means a claims incurred insurance policy issued by a licensed insurer (for the avoidance of doubt, not being a member of the Sellers Group) in the name of a member of the Sellers Group, where a claims incurred insurance policy is one which does not limit claims thereunder only to claims made during the particular period covered by the relevant policy or layer (including any additional period of extended reporting related thereto) such that a claim in respect of an event or matter which occurred during the particular period covered by the relevant policy or layer may be brought by the insured following that period in accordance with (and subject to) the terms and conditions of that policy or layer;
Sellers Group Claims Made Insurance Policy means a claims made insurance policy issued by a licensed insurer (for the avoidance of doubt, not being a member of the Sellers Group) in the name of a member of the Sellers Group, where a claims made insurance policy is one which limits claims thereunder only to claims made during the particular period covered by the relevant policy or layer (including any additional period of extended reporting related thereto);
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Sellers Group Guarantees means the surety bond given by LionGem Luxembourg 3 Sarl in relation to the Companys credit insurances relating to pension commitments dated 14 April 2009 and a guarantee given by the Seller in respect of obligations of the Company to Peab FU Rorkulten dated 12 December 2013;
Sellers Group Insurance Policies means insurance policies subscribed by a member of the Sellers Group providing coverage to any member of the Group, their activities, employees or assets;
Sellers Lawyers means Latham & Watkins of 99 Bishopsgate, London EC2M 3XF;
Sellers Original Group means the Sellers Group together with any subsidiary and subsidiary undertaking of the Seller as at the date of this Agreement and any holding company of the Seller as at the date of this Agreement and all other subsidiaries and subsidiary undertakings of any such holding company as at the date of this Agreement and member of the Sellers Original Group shall be construed accordingly;
Service Document means a claim form, summons, order, judgment or other process relating to or in connection with any Proceedings;
Shares means all the issued shares in the capital of the Company, details of which are given in schedule 1, part 1;
Southern Europe Region means France, Spain and Belgium;
Statement means a representation, warranty, statement, assurance, covenant, undertaking, indemnity, guarantee or commitment (whether contractual or otherwise);
Subsidiaries means the companies, details of which are given in schedule 1, part 2 and any reference to a Subsidiary is a reference to any one of them;
Swedish Directors means the directors of the Company and of Frionor Sverige AB as at the Binding Offer Date;
Target Completion Date means, subject to clause 7.4, the first Business Day following the first of the dates set out below that falls three or more Business Days after the Satisfaction Date:
(a) | 31 October 2015; |
(b) | 28 November 2015; |
(c) | 2 January 2016; |
(d) | 30 January 2016; |
(e) | 27 February 2016; |
(f) | 2 April 2016; |
(g) | 30 April 2016; and |
(h) | 28 May 2016; |
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Target Working Capital Amount means the aggregate of:
(a) | SEK 269,090,000; |
(b) | DKK (8,610,000); |
(c) | NOK 192,320,000,; |
(d) | EUR (11,800,000); |
(e) | THB 1,040,000; |
(f) | CHF (10,000); |
(g) | CZK 0; and |
(h) | GBP (320,000) |
(amounts in parenthesis shall be negative amounts) in each case, to be converted in accordance with clause 20, at the Effective Time.
Tax means any form of tax, levy, impost, duty, charge, contribution, deduction or withholding of any kind imposed, collected or assessed by, or payable to, a Tax Authority and all penalties, charges, surcharges, fines, costs and interest included in or relating to any of the foregoing or to any obligation in respect of any of the above (in all cases regardless of whether such taxes, penalties, charges, surcharges, fines, costs and interest are directly or primarily chargeable against, or attributable to, a member of the Group or any other person and regardless of whether a member of the Group has, or may have, any right of reimbursement against any other person);
Tax Authority means any government, state or municipality or any local, state, federal or other tax, fiscal, revenue, customs or excise authority, body or official in the United Kingdom or elsewhere;
Tax Deed means the deed of that name in the agreed form to be entered into between the Seller and the Buyer, and, after Completion and where appropriate, references to the Tax Deed shall mean that document as executed by the parties to it;
Tax Statute means all legislation, directives, orders and regulations in force or coming into force from time to time providing for or imposing Tax;
TFEU means the Treaty on the Functioning of the European Union, as amended;
Third Escrow Release Date means 1 January 2021;
Third Parties Act means the Contracts (Rights of Third Parties) Act 1999;
Third Party means any person other than:
(a) | the Buyer; |
(b) | a member of the Buyers Group; |
(c) | any person connected to the Buyer or a member of the Buyers Group; or |
(d) | an insurer; |
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Third Party Claim has the meaning given to it in schedule 7, paragraph 8;
Transaction means the transaction contemplated by this Agreement;
Transaction Documents means this Agreement, the Disclosure Letter, the Completion Disclosure Letter, the Escrow Agreement, the Deed of Termination, the Lock-up Deed, the Tax Deed and the TSA;
Transaction Information has the meaning given to it in clause 17.3;
Trapped Cash means any cash located in Thailand or otherwise held by any Dormant Subsidiary and all other cash which as at the close of business on the Completion Date is not capable of being spent, distributed, loaned or released by a member of the Group from the jurisdiction in which it is situated without deduction or withholding or additional cost (other than the bank fees charged by the bank in the ordinary course when transferring funds), provided always that the element of any such cash which is considered Trapped Cash shall be limited to the amount of the relevant deduction, withholding or additional cost, or cash which is not accessible in the manner described above within a period of ten Business Days from the Completion Date, including any cash securing rent deposits or any other cash held as collateral in respect of obligations of any third party;
TSA means the transitional services agreement to be negotiated by the Buyer and the Seller pursuant to clause 13, the key terms of which are set out in schedule 14;
TXT Licence has the meaning given in clause 10.4.1;
UK Business means the business carried on by members of the Sellers Group in the United Kingdom, including the brand name Youngs ;
Unsatisfied Amounts Claimed means at any date an amount equal to the aggregate of:
(a) | the whole or part of an Amount Claimed pursuant to a Notified Claim made before that date for which the Seller has accepted liability or for which it has been Finally Determined the Seller is liable but which liability has not in either case been satisfied by payment out of the Escrow Account or otherwise; and |
(b) | any remaining Amount Claimed pursuant to a Notified Claim made before that date which the Buyer has not withdrawn and for which the Seller has not accepted liability and in respect of which it shall not have been Finally Determined whether or not the Seller is liable; |
Valladolid Indemnity Amount has the meaning given in paragraph 3.3.1 of schedule 9;
Valladolid Matter has the meaning given in paragraph 1.1 of schedule 9;
VAT means value added taxes, sales taxes, consumption taxes and other similar turnover taxes;
Warranties means the warranties given in clause 8 and in schedule 6 and Warranty shall be construed accordingly;
Warranty Claim means a claim by the Buyer under, or pursuant to, the provisions of clauses 8.1 or 8.2;
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Waste means any waste as defined under Environmental Laws and otherwise anything which is disposed of, spoiled, abandoned, unwanted or surplus, irrespective of whether it is capable of being recovered or recycled or has any value; and
Working Capital means the aggregate value, at the relevant time, of those line items identified by inclusion in the column Working Capital in the Reference Balance Sheet Mapping, excluding, for the avoidance of doubt, Intra Group Receivables, Intra Group Payables, Cash, Indebtedness and Excluded Items, in each case at the relevant time.
1.2 | Contents page and headings |
In this Agreement the contents page and headings are included for convenience only and do not affect the interpretation or construction of this Agreement.
1.3 | Clauses and schedules |
In this Agreement:
1.3.1 | the Introduction and schedules form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement and any reference to this Agreement shall include the Introduction and the schedules; |
1.3.2 | any reference to the Introduction is a reference to the statements about the background to this Agreement made under the heading Introduction above; and |
1.3.3 | any reference to a clause or schedule is a reference to a clause of, or schedule to, this Agreement and any reference in a schedule to a part or paragraph is to a part or paragraph of that schedule. |
1.4 | Meaning of references |
In this Agreement any reference to:
1.4.1 | a company is to any company, corporation or other body corporate wherever and however incorporated or established; |
1.4.2 | any English statutory provision or English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or other legal concept or thing shall, in respect of any jurisdiction other than England, be deemed to include what most nearly approximates in that jurisdiction to the English statutory provision or English legal term; |
1.4.3 | the masculine, feminine or neuter gender includes the other genders and any reference to the singular includes the plural (and vice versa); |
1.4.4 | including means including without limitation , in particular means in particular but without limitation and other general words shall not be given a restrictive interpretation by reason of their being preceded or followed by words indicating a particular class of acts, matters or things; |
1.4.5 | liability under, pursuant to or arising out of (or any analogous expression) any agreement, contract, deed or other instrument includes a reference to contingent liability under, pursuant to or arising out of (or any analogous expression) that agreement, contract, deed or other instrument; |
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1.4.6 | regulation includes any regulation, rule, directive, request or guideline whether or not having the force of law of any government, government department or governmental, quasi-governmental, supranational, federal or statutory body, agency, department or regulatory, self-regulatory or other authority or organisation; |
1.4.7 | a document in the agreed form is a reference to a document in a form approved by, and for the purposes of identification initialled by or on behalf of, each party; |
1.4.8 | a person includes any individual, firm, company, government, state or agency of state or any joint venture, association, trust or partnership, works council or employee representative body (whether or not having a separate legal personality); |
1.4.9 | a statute or statutory provision includes any consolidation, re-enactment, modification or replacement of the same and any subordinate legislation in force under any of the same from time to time and, subject to the provisions of clause 8.2, except to the extent any consolidation, re-enactment, modification or replacement enacted after the Binding Offer Date would extend or increase the liability of any party to the others under this Agreement; |
1.4.10 | a time of the day is to London time and references to a day are to a period of 24 hours running from midnight to midnight; and |
1.4.11 | writing shall include any modes of reproducing words in a legible and non-transitory form provided that emails shall be deemed to be in writing for these purposes. |
1.5 | Meaning of parties |
In this Agreement any reference to a party or the parties is to a party or the parties (as the case may be) to this Agreement and shall include any successors and permitted assignees of a party and, for the purposes of clause 22.1 only, parties shall be deemed to include, in the case of the Buyer, each other member of the Buyers Group and, in the case of the Seller, each other member of the Sellers Group.
1.6 | Connected persons |
Connected , for the purposes of determining whether a person is connected with another person under this Agreement, shall be construed in accordance with s1122 Corporation Tax Act 2010.
1.7 | Companies Act definitions |
In this Agreement:
1.7.1 | the words and expressions accounting reference period , body corporate , parent undertaking and subsidiary undertaking have the meanings given to them in the Companies Act; and |
1.7.2 | subsidiary and holding company have the meanings given to them in the Companies Act save that, for the purposes of s1159 Companies Act, a company shall be treated as a member of another company if: |
(a) | any of its subsidiaries is a member of the subsidiary; or |
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(b) | any shares in that other company are held by a person acting on behalf of the company or any of its subsidiaries. |
2. | AGREEMENT TO SELL AND PURCHASE |
2.1 | Sale and purchase |
Subject to and on the terms set out in this Agreement, the Seller shall sell, with full title guarantee and free of any Encumbrance, and the Buyer shall purchase, free of any Encumbrance, the Shares at Completion together with all rights attaching or accruing to the Shares at or after Completion.
2.2 | Waiver of pre-emption rights |
The Seller shall procure that all rights of pre-emption over, or other rights to restrict the transfer of, the Shares, conferred either by the articles of association of the Company or in any other way, are irrevocably waived no later than Completion so as to permit the sale and purchase of the Shares pursuant to, and in accordance with, this Agreement.
3. | PURCHASE PRICE |
3.1 | Consideration |
The total price for the Shares shall be the Initial Consideration as adjusted pursuant to clause 3 (the Consideration ).
3.2 | Adjustment to Consideration |
The Initial Cash Consideration shall be adjusted as follows:
3.2.1 | there shall be added an amount, if any, by which the Actual Working Capital Amount exceeds the Target Working Capital Amount; |
3.2.2 | there shall be deducted an amount, if any, by which the Target Working Capital Amount exceeds the Actual Working Capital Amount; |
3.2.3 | there shall be added an amount, if any, by which the Actual Net Debt Amount is less than zero; |
3.2.4 | there shall be deducted an amount, if any, by which the Actual Net Debt Amount exceeds zero; |
3.2.5 | there shall be added an amount, if any, by which the Actual Intra Group Receivables exceed zero; and |
3.2.6 | there shall be deducted an amount, if any, by which the Actual Intra Group Payables exceed zero. |
3.3 | Delivery of estimates |
No later than three Business Days prior to the Target Completion Date, the Seller shall deliver to the Buyer a statement setting out:
3.3.1 | the Estimated Net Debt Amount; |
3.3.2 | the Estimated Working Capital Amount; |
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3.3.3 | the Estimated Intra Group Receivables; |
3.3.4 | the Estimated Intra Group Payables; and |
3.3.5 | the Estimated Cash Consideration. |
3.4 | Payments at Completion |
At Completion, the Buyer shall on account of the Consideration:
3.4.1 | pay to the Seller an amount (the Estimated Cash Consideration ) equal to: |
(a) | the Initial Cash Consideration; |
(b) | if the Estimated Working Capital Amount: |
(i) | exceeds the Target Working Capital Amount, plus an amount equal to such excess; or |
(ii) | is less that the Target Working Capital Amount, minus an amount equal to such shortfall; and |
(c) | if the Estimated Net Debt Amount: |
(i) | is less than zero, plus an amount equal to such shortfall; |
(ii) | is more than zero, minus an amount equal to such excess; |
(d) | minus the Estimated Intra Group Payables; and |
(e) | plus the Estimated Intra Group Receivables |
and
3.4.2 | procure that the Consideration Shares are allotted and issued to the Seller (subject to clause 4). |
3.5 | Preparation of Completion Accounts |
The parties shall comply with the requirements set out in schedule 2 in relation to the preparation of the Completion Accounts.
3.6 | Adjustment of Initial Consideration |
3.6.1 | If the Actual Working Capital Amount: |
(a) | exceeds the Estimated Working Capital Amount the Buyer shall pay to the Seller an amount equal to such excess; or |
(b) | is less than the Estimated Working Capital Amount, the Seller shall pay to the Buyer an amount equal to such shortfall, |
in either case in accordance with the provisions of clause 3.7.
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3.6.2 | If the Actual Net Debt Amount: |
(a) | exceeds the Estimated Net Debt Amount, the Seller shall pay to the Buyer an amount equal to such excess; or |
(b) | is less than the Estimated Net Debt Amount, the Buyer shall pay to the Seller an amount equal to such shortfall, |
in either case in accordance with the provisions of clause 3.7.
3.7 | Settlement of adjustment amounts |
3.7.1 | Payments made by the Buyer and the Seller pursuant to clauses 3.6 and 3.8 shall be made within 5 (five) Business Days of the Determination Date, together with an amount equal to the interest payable on such sum calculated on a daily basis at the rate which is 2% above the base lending rate of HSBC Bank plc from time to time in effect during the period from (and including) the Completion Date to (but excluding) the date of payment. |
3.7.2 | The amounts (if any) payable pursuant to clauses 3.6 and 3.8 shall, unless otherwise agreed by the parties, be set off against each other so that only any balance payable shall be paid on any date on which a payment is to be made pursuant to clauses 3.6 and 3.8. |
3.8 | Intra Group Amounts |
3.8.1 | On Completion: |
(a) | the Seller shall procure that the Estimated Intra Group Receivables are repaid by the relevant member(s) of the Sellers Group to the relevant member(s) of the Group; and |
(b) | the Buyer shall procure that the Estimated Intra Group Payables are repaid by the relevant member(s) of the Group to the relevant member(s) of the Sellers Group. |
3.8.2 | If any amount forming part of the Actual Intra Group Payables exceeds the amount estimated in respect thereof in the Estimated Intra Group Payables or if any amount forming part of the Actual Intra Group Receivables is less than the amount estimated in respect thereof in the Estimated Intra Group Receivables, the Buyer shall procure that the amount of the difference in each case is paid by the relevant member(s) of the Group to the member(s) of the Sellers Group against payments by the Seller to the Buyer of an amount equal thereto, which payments shall be made in accordance with clause 3.7 and shall release all relevant members of the Sellers Group from all sums so due. |
3.8.3 | If any amount forming part of the Actual Intra Group Receivables exceeds the amount estimated in respect thereof in the Estimated Intra Group Receivables, or if any amount forming part of the Actual Intra Group Payables is less than the amount estimated in respect thereof in the Estimated Intra Group Payables, the Seller shall procure that the amount of the difference in each case is paid to the relevant member(s) of the Group by the relevant member(s) of the Sellers Group against payment by the Buyer to the Seller of an amount equal thereto, which payments shall be made in accordance with clause 3.7 and shall release all relevant members of the Group from all sums so due. |
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3.8.4 | For the avoidance of doubt, if: |
(a) | in relation to any individual amount included within the Estimated Intra Group Payables or the Estimated Intra Group Receivables there is no corresponding amount included within the Actual Intra Group Payables or Actual Intra Group Receivables respectively, there shall be deemed to be a corresponding actual amount of zero; and |
(b) | in relation to any individual amount included within the Actual Intra Group Payables or Actual Intra Group Receivables, there is no corresponding amount included within the Estimated Intra Group Payables or Estimated Intra Group Receivables respectively, there shall be deemed to be a corresponding estimated amount of zero. |
3.8.5 | The Buyer and the Seller agree that, with effect from the date of this Agreement, all Intra Group Trading Amounts shall be settled in the ordinary course of business, in accordance with the terms on which such Intra Group Trading Amounts were incurred but in any event within three months of the Completion Date. |
3.9 | Receipt |
3.9.1 | Payment into: |
(a) | the Sellers Bank Account of any monies to be paid to the Seller by the Buyer under this Agreement; and |
(b) | the Buyers Bank Account of any monies to be paid to the Buyer by the Seller under this Agreement, |
shall in each case be accepted as a full and complete discharge of the relevant obligation.
3.9.2 | Receipt by: |
(a) | the Sellers Lawyers of any documents to be delivered to the Seller by the Buyer under this Agreement; and |
(b) | the Buyers Lawyers of any documents to be delivered to the Buyer by the Seller under this Agreement, |
shall in each case be accepted as a full and complete discharge of the relevant obligation.
3.10 | Payment pursuant to Claim |
If any payment (including, for the avoidance of doubt, the transfer of Escrow Shares as contemplated by this Agreement and the Escrow Agreement) is made by the Seller to the Buyer pursuant to a Claim made by the Buyer, the payment shall, so far as possible, be made by way of reduction of the Consideration and the Consideration shall accordingly be deemed to have been reduced by the amount of that payment.
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4. | ESCROW ACCOUNT |
4.1 | Payment into Escrow Account |
The Escrow Shares shall upon Completion be delivered by the Guarantor to the Escrow Agent and deposited into the Escrow Account in accordance with the Escrow Agreement and paragraph 2.2 of schedule 5.
4.2 | Operation in accordance with Escrow Agreement |
The Escrow Agent shall hold the Escrow Shares and the Escrow Cash Funds (if any) in accordance with the Escrow Agreement.
4.3 | Parties to give proper written instructions |
The Seller and the Buyer agree that upon either or both of them becoming entitled in accordance with this Agreement to make a transfer of any Escrow Shares or payment of any Escrow Cash Funds from the Escrow Account they each shall within five Business Days after the date the entitlement arises give joint written instructions to the Escrow Agent to transfer such Escrow Shares or make such payment in accordance with the terms of this Agreement.
4.4 | No transfers of Escrow Shares |
4.4.1 | The Seller shall not assign, lend, pledge or otherwise create any Encumbrance over the Escrow Shares save as permitted under this Agreement and the Escrow Agreement. |
4.4.2 | No transfer of Escrow Shares or Escrow Cash Funds shall be made save as expressly permitted under this Agreement and the Escrow Agreement. |
4.5 | Use of Escrow Shares |
Subject to clause 4.1.2, in the event of a Notified Claim, provided there are Escrow Shares deposited with the Escrow Agent or Escrow Cash Funds standing to the credit of the Escrow Account:
4.5.1 | the Buyer shall give to the Seller notice of the Notified Claim in the manner and within the time limits set out in paragraph 3 of schedule 7 or as set out in the Tax Deed (as the case may be); |
4.5.2 | within 20 Business Days after receipt of the Notified Claim the Seller shall give the Buyer notice stating: |
(a) | whether or not it accepts liability for the Notified Claim; and |
(b) | if it does, whether or not it accepts the Amount Claimed and if it does not accept the Amount Claimed the part of the Amount Claimed it does accept; |
4.5.3 | if the Seller fails to give notice in accordance with clause 4.5.2 the Amount Claimed shall be satisfied by the transfer of Escrow Cash Funds or Escrow Shares to the Buyer (or its nominee) in accordance with clause 4.5.6; |
4.5.4 | if the Seller accepts liability in respect of a Notified Claim and accepts the whole or part of the Amount Claimed, the parties shall procure that the Amount Claimed or (as appropriate) that part of the Amount Claimed which is accepted (a Settled Amount ) shall be satisfied by the transfer of Escrow Cash Funds or Escrow Shares to the Buyer in accordance with clause 4.5.6; |
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4.5.5 | if it is Finally Determined that the Seller is liable in whole or in part in respect of an Amount Claimed the amount for which it is Finally Determined that the Seller is liable (less any amount previously paid or which is awaiting payment pending instruction) under clause 4.5.4 above in respect of the relevant Notified Claim) (a Settled Amount ) shall be satisfied by the transfer of Escrow Cash Funds, Escrow Shares and/or cash to the Buyer in accordance with clause 4.5.6; |
4.5.6 | payment of any Settled Amount under clauses 4.5.3, 4.5.4 or 4.5.5 shall be satisfied in the following order: |
(a) | if and to the extent that the Seller has indicated that it wishes to pay the Settled Amount, or any part of the Settled Amount, in cash, by the Seller in cash; |
(b) | if and to the extent there are Escrow Cash Funds to the credit of the Escrow Account, from such Escrow Cash Funds; |
(c) | any shortfall, after having applied clause 4.5.6(a) and (b) shall, to the extent the Escrow Shares are Freely Transferable, be satisfied in cash; |
(d) | any shortfall, after having applied clause 4.5.6(a) and (b) shall, to the extent the Escrow Shares are not Freely Transferable, be satisfied by transfer of the Escrow Shares to such person as is nominated by the Buyer by notice in writing. |
4.5.7 | the Buyer will use all reasonable endeavours to cooperate with the Seller and the Escrow Agent to effect any transfer of Escrow Shares to satisfy the Sellers obligations under this clause 4 and the Seller shall have no additional liability if: |
(a) | despite giving notice to the Escrow Agent in accordance with clause 4.3, such Escrow Shares are not able to be transferred; or |
(b) | the Buyer fails to nominate a transferee to which the Escrow Shares are to be transferred; |
4.5.8 | on the Environmental Escrow Release Date the parties shall give irrevocable instruction to the Escrow Agent in accordance with clause 4.3 to transfer to the Seller (or such person as is nominated by the Seller) from the Escrow Account such number of Escrow Shares deposited in the Escrow Account pursuant to paragraphs 3.3.2(a) and 3.5.1 of schedule 9 as remain in the Escrow Account at that time, less any Unsatisfied Amounts Claimed in respect of any Environmental Indemnity Claim; |
4.5.9 | on the First Escrow Release Date the parties shall give irrevocable instruction to the Escrow Agent in accordance with clause 4.3 to transfer to the Seller (or such person as is nominated by the Seller) from the Escrow Account the Escrow Shares and Escrow Cash Funds (if any) remaining in the Escrow Account at that time less such number of Escrow Shares (valued in accordance with clause 4.6) and such amount of Escrow Cash Funds (if any), remaining in the Escrow Account, as in aggregate equals: |
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(a) | the Escrow Shares deposited pursuant to paragraphs 3.3.2(a) and 3.5.1 of schedule 9 which remain in the Escrow Account at the First Escrow Release Date; plus |
(b) | 30 million; plus |
(c) | any Unsatisfied Amounts Claimed (other than in respect of an Environmental Indemnity Claim), |
(provided that, if the sum of (a), (b) and (c) is more than the value of the Escrow Shares and Escrow Cash Funds remaining in the Escrow Account, no amounts shall be released);
4.5.10 | on the Second Escrow Release Date the parties shall give irrevocable instruction to the Escrow Agent in accordance with clause 4.3 to transfer to the Seller (or such person as is nominated by the Seller) from the Escrow Account the Escrow Shares and Escrow Cash Funds (if any) remaining in the Escrow Account at that time less such number of Escrow Shares (valued in accordance with clause 4.6) and such amount of Escrow Cash Funds (if any) as in aggregate equals: |
(a) | 12 million; plus |
(b) | any Unsatisfied Amounts Claimed, |
(provided that, if the sum of (a) and (b) is more than the value of the Escrow Shares and Escrow Cash Funds remaining in the Escrow Account, no amounts shall be released);
4.5.11 | on the Third Escrow Release Date the parties shall give irrevocable instruction to the Escrow Agent in accordance with clause 4.3 to transfer to the Seller (or such person as is nominated by the Seller) from the Escrow Account the Escrow Shares and Escrow Cash Funds (if any) remaining in the Escrow Account at that time less such number of Escrow Shares (valued in accordance with clause 4.6) and such amount of Escrow Cash Funds (if any) as in aggregate equals: |
(a) | 7 million; plus |
(b) | any Unsatisfied Amounts Claimed, |
(provided that, if the sum of (a) and (b) is more than the value of the Escrow Shares and Escrow Cash Funds remaining in the Escrow Account, no amounts shall be released);
4.5.12 | on the Final Escrow Release Date the parties shall give irrevocable instruction to the Escrow Agent in accordance with clause 4.3 to transfer to the Seller from the Escrow Account the Escrow Shares and Escrow Cash Funds (if any) remaining in the Escrow Account at that time less such number of Escrow Shares (valued in accordance with clause 4.6) and such amount of Escrow Cash Funds (if any) as in aggregate equals any Unsatisfied Amounts Claimed. |
4.5.13 | if at any time after the Final Escrow Release Date the value of the Escrow Shares (as valued in accordance with clause 4.6) or Escrow Cash Funds (if any) exceeds the Unsatisfied Amounts Claimed the excess shall be transferred to the Seller from the Escrow Account and the parties shall give irrevocable instruction to the Escrow Agent in accordance with clause 4.3. |
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4.6 | Valuation of Escrow Shares |
In the event the Buyer wishes to use the Escrow Shares to satisfy a Notified Claim (or where the Escrow Shares otherwise require to be valued under this Agreement and this Clause 4.6 is stated to apply to such valuation), the value of any Escrow Shares released from or retained in the Escrow Account shall be determined based upon the volume weighted average price of a Nomad Ordinary Share over the five Business Days prior to the date of release or valuation.
4.7 | Withdrawal |
4.7.1 | The Seller shall have the right, subject to the Lock-up Deed, at any time to withdraw some or all of the Escrow Shares provided that the Seller shall be required to deposit into the Escrow Account on the date of any such withdrawal an amount per Escrow Share equal to the volume weighted average price of a Nomad Ordinary Share over the five Business Days prior to the date of withdrawal. |
4.7.2 | If the Seller makes an election pursuant to clause 4.5.6(a) to pay all or part of any Settled Amount in cash, or if a Settled Amount is to be satisfied in the manner set out in 4.5.6(c), then, subject to the Lock-up Deed, the Seller may withdraw such number of Escrow Shares as are of equal value (rounding up the nearest whole share) to the value of the Settled Amount or part of the Settled Amount that is paid in cash, calculated on the basis of an amount per Escrow Share equal to the volume weighted average price of a Nomad Ordinary Share over the five Business Days prior to the date of withdrawal. |
4.7.3 | The Seller shall have the right, subject to the Lock-up Deed, once during any six month period by notice in writing to the Buyer, (the date of such notice being the Mark to Market Date ) to withdraw from the Escrow Account such number of Escrow Shares as is equal to the Escrow Excess (as defined below) if the aggregate of: |
(a) | the product of (X) the number of Escrow Shares then in the Escrow Account and (Y) the volume weighted average price of a Nomad Ordinary Share over the 30 days prior to the relevant Mark to Market Date; plus |
(b) | the Escrow Cash Funds in the Escrow Account, |
(the Mark to Market Value ) exceeds by 15 per cent or more:
(a) | the Initial Escrow Value, where such Mark to Market Date is prior to the First Escrow Release Date; |
(b) | the aggregate of the sums referred to in limbs (a) to (c) of clause 4.5.9, where such Mark to Market Date is on or after the First Escrow Release Date, but before the Second Escrow Release Date; |
(c) | the aggregate of the sums referred to in limbs (a) and (b) of clause 4.5.10, where such Mark to Market Date is on or after the Second Escrow Release Date, but before the Third Escrow Release Date; |
(d) | the aggregate of the sums referred to in limbs (a) and (b) of clause 4.5.11, where such Mark to Market Date is on or after the Third Escrow Release Date, |
the amount of any such excess being the Escrow Excess .
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4.7.4 | The Seller shall have the right, subject to the Lock-up Deed, to withdraw all of the Escrow Shares in order to participate in any sale to any person or group of persons acting in concert (as defined in the City Code on Takeovers and Mergers) of a majority of the Nomad Ordinary Shares (a Nomad Sale ), provided that promptly upon receipt of any consideration payable to the Seller in connection with the Nomad Sale, the Seller shall deposit into the Escrow Account such amount of the consideration received (whether in the form of shares, cash, loan notes or other securities) as is equal to: |
(a) | the Initial Escrow Value, where the Nomad Sale takes place prior to the First Escrow Release Date; |
(b) | the aggregate of the sums referred to in limbs (a) to (c) of clause 4.5.9, where the Nomad Sale takes place on or after the First Escrow Release Date, but before the Second Escrow Release Date; |
(c) | the aggregate of the sums referred to in limbs (a) and (b) of clause 4.5.10, where the Nomad Sale takes place on or after the Second Escrow Release Date, but before the Third Escrow Release Date; |
(d) | the aggregate of the sums referred to in limbs (a) and (b) of clause 4.5.11, where the Nomad Sale takes place on or after the Third Escrow Release Date, but before the Final Escrow Release Date; or |
(e) | the Unsatisfied Amounts Claimed (for the avoidance of doubt being no more than the Unsatisfied Amounts Claimed as at the Final Escrow Release Date), where the Nomad Sale takes place on or after the Final Escrow Release Date. |
4.8 | Amounts paid on account and recourse |
4.8.1 | To the extent that a transfer to the Buyer (or its nominee) of Escrow Shares, cash or Escrow Cash Funds in respect of a Notified Claim is less than the Amount Claimed, it shall be a payment on account of the amount agreed or finally decided to be payable in respect of such Notified Claim. |
4.8.2 | Subject to clause 4.5.6(a), for as long as there are Escrow Shares deposited with the Escrow Agent or Escrow Cash Funds standing to the credit of the Escrow Account, the Buyers first recourse in respect of any Claim shall be against the Escrow Shares and the Escrow Cash Funds in the manner set out in this clause 4. |
4.8.3 | The Buyers sole recourse in respect of any Environmental Indemnity Claim shall be against the Escrow Shares and Escrow Cash Funds in the manner set out in this clause 4 and schedule 9. |
4.9 | No limit or restriction for the purposes of this Agreement |
Other than as set out in clause 9.4.1 or schedule 7, neither the amount of the Escrow nor the other provisions of this clause 4 shall be regarded as imposing:
(a) | any limit on the amount that may be claimed under this Agreement; nor |
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(b) | any restriction on the Buyer insofar as there remain unsatisfied liabilities in relation to any Claim once the Escrow Shares and Escrow Cash Funds have been exhausted. |
4.10 | Listing of Consideration Shares |
The Buyer shall as soon as reasonably practicable following Completion procure that the Consideration Shares are:
(a) | listed on the Official List of the United Kingdom Financial Conduct Authority and admitted to trading on the Main Market of the London Stock Exchange; or |
(b) | listed on the New York Stock Exchange or the Nasdaq Global Market, |
provided that the Buyer shall not be liable to the Seller for any delay in such listings if and to the extent the delay is caused by the Sellers failure to deliver any required information (financial or otherwise) in connection with such listing.
4.11 | Escrow Agent |
4.11.1 | The Buyer and Seller shall co-operate in good faith to identify a third party escrow agent to act as Escrow Agent and to agree the terms of the Escrow Agreement under English law and subject to the jurisdiction of the English Courts with such Escrow Agent as soon as reasonably practicable after the Binding Offer Date, provided however that if the Buyer and the Seller have not agreed on the identity of an Escrow Agent and the terms of an Escrow Agreement within one month of the Binding Offer Date, the identity of the Escrow Agent and the terms of the Escrow Agreement may be unilaterally approved by either party, acting reasonably, provided that the Escrow Agreement: |
(a) | shall be consistent with the provisions of this clause 4; |
(b) | shall provide that no Escrow Shares or Escrow Cash Funds may be released from the Escrow Account except on the basis of a written instruction signed by both Buyer and Seller or by an order carrying the force of law; |
(c) | the governing law of the Escrow Agreement shall be New York law, and the exclusive jurisdiction for any disputes under the Escrow Agreement shall be that of the courts of New York. |
4.11.2 | Notwithstanding anything to the contrary in the Escrow Agreement, but subject to clause 4.11.3, the Buyer and the Seller agree: |
(a) | that they shall each be liable for 50 per cent. of all fees, costs and expenses payable under the Escrow Agreement; |
(b) | in respect of any other liability under the Escrow Agreement of the Buyer and/or Seller, each party shall be liable to the extent that their actions or omissions have caused such liability; and |
(c) | if either of the Buyer or Seller (the Paying Party ) pays an amount under the Escrow Agreement for which the other (the Liable Party ) is liable pursuant this clause 4.11.2, then the Liable Party shall within 5 Business Days of the demand of the Paying Party, pay to the Paying Party the full amount of any such payment. |
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4.11.3 | The parties agree that any interest which accrues on the Escrow Cash Funds shall not itself form part of the Escrow Cash Funds and shall be for the account of, and paid to, the Seller in accordance with the Escrow Agreement. Any negative interest payable on the Escrow Cash Funds shall be paid by the Seller in accordance with the Escrow Agreement. |
5. | CONDITIONS |
5.1 | Conditions |
Completion is conditional on the Conditions being satisfied or waived (such waiver to be in accordance with clause 5.4) on or before noon on the Long Stop Date.
5.2 | Satisfaction of Conditionsgeneral |
5.2.1 | The Buyer shall use its best endeavours (so far as lies within its powers) to procure the satisfaction of the Competition Condition as soon as reasonably practicable after the date of this Agreement. |
5.2.2 | The Seller and the Buyer shall co-operate fully in all actions necessary to procure the satisfaction of the Conditions including: |
(a) | the Seller providing the Buyer (or, where the relevant information or documents is or are competitively sensitive, the Buyers external legal advisers) on a timely basis with such information belonging to the Sellers Group or to which the Seller has access and is permitted to disclose as the Buyer reasonably requests to make any notification or filing to, or to respond to any information request from, any Relevant Competition Authority; |
(b) | keeping each other promptly informed of the progress of any such notification or filing; and |
(c) | providing each other with such assistance as may reasonably be required. |
5.2.3 | The parties agree that no own initiative filings shall be made with any Relevant Authority in relation to the Transaction other than to the Relevant Authority in each of Spain, Austria and Germany and, in the case of a referral request pursuant to Article 22(1) EUMR being accepted by the European Commission, any filing required pursuant to such referral. |
5.2.4 | As may be requested or desirable in order to satisfy the Competition Condition at the first stage of review, the Buyer shall, at its own cost, offer (and not withdraw) such undertakings in relation to the Group and its operations to the Relevant Competition Authority as may be necessary to secure satisfaction of the Competition Condition at the first stage of review, provided that the Buyer shall not be obliged to offer or give: |
(a) | any undertaking in relation to the Buyers Group (for the avoidance of doubt excluding the Group); or |
(b) | any undertaking in relation to the Group to the extent that such undertaking would have a material adverse effect on the business of the Group. |
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5.3 | Satisfaction of Conditionsspecific |
Notwithstanding the obligations in, and the generality of, clause 5.2, in respect of the Competition Condition:
5.3.1 | co-operation on the part of the Seller shall include attending (if so requested by the Buyer) and, if appropriate, requesting (but only if so directed by the Buyer) a hearing with any Relevant Competition Authority (withdrawing from any hearing attended by the Buyer as and when matters which are commercially sensitive to the Buyer arise which shall include reasons for the sale and purchase of the Shares) provided that if any commercially sensitive information is to be provided by the Seller, the Buyer will withdraw from such hearing; |
5.3.2 | the Buyer shall: |
(a) | make all appropriate submissions, notifications and filings required in connection with the Competition Condition, in consultation with the Seller, as soon as reasonably practicable after the Binding Offer Date and, in any event make the filings pursuant to the German and Austrian Antitrust Acts within five Business Days of the Binding Offer Date and commence pre notification with the Spanish Relevant Competition Authority within five Business Days after the Binding Offer Date; |
(b) | provide information which is reasonably requested or required by any Relevant Competition Authority as soon as reasonably practicable; |
(c) | consult with, and take account of the views of the Seller as to the mode, content and timing of all material communications (whether made orally or in writing) with any Relevant Competition Authority giving the Seller a reasonable opportunity to comment on drafts of such communications and to participate in telephone calls and meetings with any such Authority (save to the extent that such Relevant Competition Authority expressly requests that the Seller should not participate in such meetings or telephone calls); and |
(d) | provide the Seller with copies of all such communications, without delay, to the extent only that to do so is reasonably practicable and would not entail the disclosure of commercially sensitive information; and |
5.3.3 | the fees or costs payable to any Relevant Competition Authority in relation to the filings or notifications shall be borne by the Buyer. |
5.4 | Waiver |
5.4.1 | The Buyer may waive the Carve-out Accounts Condition (in whole or in part) at any time before satisfaction thereof by notice in writing to the Seller, and such waiver may be subject to such terms and conditions as the Buyer may specify. |
5.4.2 | The Buyer and the Seller jointly may waive the Competition Condition at any time before satisfaction thereof, such waiver to be in writing signed on behalf of both the Buyer and the Seller. |
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5.5 | Notification to other party |
5.5.1 | Upon either party becoming aware: |
(a) | of any Condition being satisfied; or |
(b) | of a matter, event or circumstance which will, or might, prevent a Condition from being satisfied on or before the Long Stop Date, |
that party shall immediately notify the other party of that fact in writing and shall supply to the other party written evidence (if available) of the satisfaction of that Condition or a written explanation as to why that Condition has, or may have, become incapable of satisfaction or why its satisfaction is, or might be, delayed.
5.5.2 | Where a notification has been made pursuant to clause 5.5.1(b), the party making such notification shall continue to keep the other party promptly informed of any and all further matters, events or circumstances as they arise or become known relating to the satisfaction of the relevant Condition. |
5.6 | If Conditions not satisfied or waived |
5.6.1 | Subject to clause 5.6.2, in the event of any Condition not being satisfied or waived (such waiver to be in accordance with clause 5.4) prior to the Long Stop Date, this Agreement shall automatically terminate whereupon the provisions of clause 9.2 shall apply. |
5.6.2 | The parties may mutually agree to extend the Long Stop Date whereupon the provisions of this Agreement shall apply as if such later date is the Long Stop Date. |
5.6.3 | If any Relevant Competition Authority institutes a Phase 2 or second stage investigation process under the Antitrust Acts which is reasonably likely to prevent a Condition from being satisfied on or before the Long Stop Date, either the Buyer or Seller may, by written notice to the other parties, elect to terminate this Agreement without liability on its part whereupon the provisions of clause 9.2 shall apply. |
6. | CONDUCT PENDING COMPLETION |
6.1 | Provisions regarding conduct pending Completion |
6.1.1 | Between the Binding Offer Date and the earlier of Completion or termination of this Agreement, the Seller shall comply, and shall procure that each member of the Group shall comply, with schedule 4. |
6.1.2 | The Buyer and Seller each agree to co-operate and to use reasonable endeavours in order to obtain, during the period between the Binding Offer Date and Completion, consents to the Transaction from the counterparties to the Consent Contracts. |
6.1.3 | No later than three Business Days prior to the Target Completion Date, the Seller shall deliver to the Buyer a draft (which shall be as complete as reasonably possible) of the Completion Disclosure Letter. |
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6.2 | Hedge Agreements |
6.2.1 | The parties will use their respective reasonable endeavours to procure that the Hedge Agreements are novated from Findus Treasury Limited to an entity nominated by the Buyer ( Nominated Entity ) with the novation to take effect from Completion. Without prejudice to the generality of the foregoing, reasonable endeavours shall include: |
(a) | in the case of the Buyer: |
(i) | using reasonable endeavours to offer to the counterparties to the Hedge Agreements commercially reasonable security for performance of any obligation of a member of the Buyers Group or, post Completion, the Group, pursuant to the Hedge Agreements, including the ability to draw down amounts from a credit facility available to the Group or Buyers Group following Completion; and |
(ii) | negotiating in good faith with the counterparties to the Hedge Agreements, any amendments to the terms of the Hedge Agreements, including the terms of any ISDA master agreement and schedule required by such counterparty to the Hedge Agreement. |
(b) | on the part of the Seller: |
(i) | cooperating with the counterparties to the Hedge Agreements and the Buyer to effect such novation; and |
(ii) | providing to the Buyer, such information as may be reasonably required to facilitate such novation. |
6.2.2 | If the parties have performed their obligations in accordance with clause 6.2.1 but no novation has taken place upon Completion, then: |
(a) | the Seller may terminate the Hedge Agreements; |
(b) | the agreements between Findus Treasury Limited and any member of the Group passing on the benefit or burden of a Hedge Agreement shall automatically terminate at the same time as the termination of the respective Hedge Agreement and any accrued rights, obligations and liabilities shall be waived by Findus Treasury Limited and, the parties shall procure, by each member of the Group and be dealt with solely by this clause 6.2; |
(c) | if an amount is received by any member of the Sellers Group from the counterparty to a Hedge Agreement, then the Seller shall pay to the Buyer the amount so received, less the reasonable third party expenses of recovering such amount, within 5 Business Days of receipt; and |
(d) | if an amount is payable by the Seller to the counterparty to a Hedge Agreement, then the Buyer shall pay to the Seller the amount so payable at the same time as that amount is payable by the Seller to the counterparty. |
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6.3 | Delivery of Carve-out Accounts |
6.3.1 | Pending Completion and for three months following Completion, subject to the Buyers performance of its obligations pursuant to clause 6.3.3 and 6.3.4, the Seller shall use its reasonable endeavours to deliver the Carve-out Accounts by the respective Carve-out Accounts Due Date. |
6.3.2 | The Seller and the Buyer shall co-operate fully in all actions necessary to ensure that the Carve-out Accounts are prepared in a timely fashion. |
6.3.3 | In respect of the third party costs and expenses incurred in connection with the preparation of the Carve-out Accounts: |
(a) | the Buyer and the Seller shall each be responsible for 50 per cent. of such costs and expenses incurred in the period up to Completion; and |
(b) | the Buyer shall be responsible for all such costs and expenses incurred following Completion. |
6.3.4 | The Buyer undertakes to indemnify, and to keep indemnified, within five Business Days of demand by the Seller, the Seller in respect of: |
(a) | all third party costs and expenses in connection with the preparation of the Carve-out Accounts incurred after Completion and paid by a member of the Sellers Group; and |
(b) | (to the extent not included in the Completion Accounts as Cash ), 50% of such third party costs and expenses in connection with the preparation of the Carve-out Accounts incurred before Completion and paid by a member of the Sellers Group. |
6.3.5 | The Seller undertakes to indemnify, and to keep indemnified, within five Business Days of demand by the Buyer, the Buyer in respect of 50% of such third party costs and expenses in connection with the preparation of the Carve-out Accounts incurred before Completion and paid after Completion by a member of the Buyers Group (including any member of the Group). |
6.4 | Insurance |
6.4.1 | The Buyer acknowledges that, as from the Completion Date, the members of the Group shall cease to be covered by certain of the Sellers Group Insurance Policies. The Seller shall cooperate with and provide assistance to the Buyer between the Binding Offer Date and the Completion Date so that as of the Completion Date, the Group shall be covered by insurance policies as may be directed by the Buyer to provide appropriate coverage for the business of the Group in accordance with good commercial practice applicable to companies in the same industries as the Group (at the Buyers cost). |
6.4.2 | In respect of: |
(a) | events or circumstances relating to each member of the Group that existed or occurred prior to Completion (for the avoidance of doubt, whether known or unknown as at the Completion Date) that are covered by a Sellers Group Claims Incurred Insurance Policy, the Seller shall use its reasonable endeavours to procure (so far as it is able in accordance with the terms of such policies) that any member of the Group may following Completion make a claim under such policy; and |
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(b) | any claim made in relation to the Group under any Sellers Group Claims Made Insurance Policies in respect of events or circumstances that were notified to insurers prior to the Completion Date, the Seller shall use its reasonable endeavours procure (so far as it is able in accordance with the terms of such policies) that the relevant member of the Group shall continue to have the benefit of such claim. |
6.4.3 | With respect to any claims under a Sellers Group Insurance Policy under which a member of the Group is permitted by clause 6.4.2 to make or pursue a claim: |
(a) | the Seller shall procure that the relevant member of the Sellers Group shall continue to pursue, to the extent reasonable and provided any third party costs are borne by the Buyer, the claim for the benefit of the member of the Group concerned and in so doing shall consult with and act upon the reasonable instructions of the relevant member of the Group; |
(b) | the Buyer shall provide such information and assistance as the Seller may request in connection with any such claims; and |
(c) | the Seller shall pay to the relevant member of the Group any amount received in respect of such claim, net of any third-party costs, fees and expenses reasonably incurred by any member of the Sellers Group in respect of such recovery. |
6.5 | VAT de-grouping |
The Seller shall procure that, on or before Completion, an application is made to H.M. Revenue and Customs under section 43B of the Value Added Tax Act 1994 for any member of the Group (including Findus Management and Services Limited) which is or would otherwise be, for United Kingdom VAT purposes, a member of the same group as any member of the Sellers Group other than another member of the Group (the Sellers VAT Group ) to be removed from the Sellers VAT Group with effect from the Completion Date. The Seller shall keep the Buyer fully and promptly informed about the status and progress of such application. The Seller and the Buyer shall promptly provide any information or other assistance reasonably requested by the other for the purpose of ensuring that each such member of the Group is removed from the Sellers VAT Group with effect from the Completion Date. The Seller shall promptly provide any information reasonably requested by the Buyer for the purpose of enabling each such member of the Group to be registered for United Kingdom VAT purposes (whether individually or as a member of a new or existing United Kingdom VAT group, as the Buyer sees fit) after Completion.
7. | COMPLETION |
7.1 | Completion |
Subject to clause 9.1.2, Completion shall take place at the offices of the Sellers Lawyers on the Target Completion Date.
7.2 | Completion arrangements |
7.2.1 | At Completion the Seller and the Buyer shall do all those things respectively required of them in schedule 5. |
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7.2.2 | All documents and items delivered and payments made in connection with Completion shall be held by the recipient to the order of the person delivering them until such time as Completion takes place. |
7.3 | Buyer not obliged to complete |
The Buyer is not obliged to complete the purchase of any of the Shares unless the purchase of all the Shares is completed simultaneously.
7.4 | Failure to deliver Material Deliverables |
7.4.1 | If on the Target Completion Date a party (the Defaulting Party ) fails to deliver a Material Deliverable, then the other party (the Non-defaulting Party ) may, by written notice to the Defaulting Party, elect to: |
(a) | proceed to Completion to the extent reasonably practicable, the Seller acknowledging that if the Buyer exercises its right pursuant to this clause 7.4.1, completion of the purchase of some of the Shares does not affect the Buyers rights in connection with the others; |
(b) | postpone Completion to the next occurring Target Completion Date (the Deferred Completion Date ) and the provisions of this Agreement shall apply as if the Deferred Completion Date is the Target Completion Date except that clause 7.4.2. shall apply in place of this clause 7.4.1; or |
(c) | waive all or any of the obligations of the Defaulting Party. |
7.4.2 | If on the Deferred Completion Date the Defaulting Party fails to deliver a Material Deliverable, then the Non-defaulting Party may, by written notice to the Defaulting Party elect to: |
(a) | proceed to Completion to the extent reasonably practicable, the Seller acknowledging that if the Buyer exercises its right pursuant to this clause 7.4.2, completion of the purchase of some of the Shares does not affect the Buyers rights in connection with the others; |
(b) | terminate this Agreement whereupon clause 9.2 shall apply; or |
(c) | waive all or any of the obligations of the Defaulting Party. |
7.5 | Termination Fee |
If on the Deferred Completion Date, Completion does not occur because of a failure of the Buyer to secure financing (including any failure to satisfy any conditions pursuant to the terms of such financing) in order to enable it to pay the Estimated Cash Consideration in accordance with paragraph 2.1 of schedule 5, the Buyer shall pay to the Seller in cash, in cleared funds, an aggregate amount of £34,200,000 (the Break Fee ) no later than five Business Days following the date of demand by the Seller, less the amount of any irrecoverable VAT payable (including by way of reverse charge) by the Buyer (or any company which is a member of the same group as the Buyer for VAT purposes) in respect of such payment. The Seller and the Buyer acknowledge and agree that this clause 7.5 is no more extensive than is reasonably necessary to protect the legitimate interests of the Seller and the Group and that the intention of both parties in agreeing this clause 7.5 is to compensate the Seller in the event of the Buyers failure as more particularly described above.
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7.6 | Claims against the Company, etc. |
The Seller covenants with the Buyer that the Seller shall pay to the Buyer on demand an amount or amounts equal to the total of all Losses made, suffered or incurred by, or on behalf of, any member of the Group as a result of any claim made against such member of the Group by any of the directors, secretaries or board members of any member of the Group who has not delivered a signed resignation and release at Completion in accordance with paragraph 1.6 of schedule 5 because of their resignation or removal from office.
8. | WARRANTIES |
8.1 | Warranties true and accurate |
The Seller warrants to the Buyer that each of the Warranties is, at the Binding Offer Date, true and accurate.
8.2 | Warranties to be true and accurate at Completion |
The Seller warrants to the Buyer that immediately before Completion:
8.2.1 | the Material Warranties shall be, in all respects, true and accurate; and |
8.2.2 | the Non-Material Warranties shall be true and accurate in all material respects, |
in each case by reference to the matters, events and circumstances then existing and on the basis that any reference in the Warranties and related definitions, whether express or implied, to the Binding Offer Date shall be construed as a reference to the Completion Date.
8.3 | Warranties separate and independent |
Subject to schedule 7 each Warranty is to be construed as a separate and independent Warranty and is not to be limited by any other Warranty or, subject to clauses 8.4 and 8.5 and as set out in schedule 7, any other provision of this Agreement or any other Transaction Document.
8.4 | Warranties qualified by the Disclosure Letter |
The Buyer shall not be entitled to claim that a matter, event or circumstance causes any of the Warranties to be breached or renders it inaccurate or misleading if it has been fairly disclosed to the Buyer in or by the Disclosure Letter or the Completion Disclosure Letter in the absence of any fraud, wilful misconduct or wilful concealment by the Seller or any of its present or former directors, secretaries or employees.
8.5 | Fair disclosure |
8.5.1 | A matter, event or circumstance disclosed, or deemed to be disclosed, in or by the Disclosure Letter or the Completion Disclosure Letter shall not be fairly disclosed or deemed fairly disclosed unless the information is disclosed with sufficient detail to enable a reasonable buyer to identify the nature and significance of the matter disclosed and to make a reasonably informed assessment of its impact on the Group or the relevant member of the Group, as the case may be. |
8.5.2 | In relation to those Warranties referred to in paragraph 10 of Schedule 7, a matter, event or circumstance disclosed, or deemed to be disclosed against such Warranties, in or by the Disclosure Letter or the Completion Disclosure Letter shall not be fairly disclosed or deemed fairly disclosed unless the information is disclosed by reference to any of the Warranties specified adjacent thereto in the third column of such table. |
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8.5.3 | Nothing disclosed by the Seller to the Buyer other than in or by the Disclosure Letter or the Completion Disclosure Letter and in accordance with the provisions of this clause 8.5 shall constitute disclosure for the purposes of this Agreement. |
8.6 | No claims against the Company and others |
The Seller shall not make any claim against any member of the Group or any director, secretary, employee, adviser or agent thereof or thereto on whom it may have relied before agreeing to any terms of any Transaction Document or authorising any statement in the Disclosure Letter or Completion Disclosure Letter.
8.7 | Company and others entitled to benefit |
Each member of the Group and its respective directors, employees, advisers or agents may enforce the provisions of clause 8.6 subject to and in accordance with:
8.7.1 | the provisions of the Third Parties Act; and |
8.7.2 | the provisions of clause 26.2. |
8.8 | Seller to notify breaches prior to Completion |
The Seller shall, between the Binding Offer Date and Completion, as soon as reasonably practicable notify the Buyer in writing, in sufficient detail to enable the Buyer to make a proper assessment of the matter, if it becomes aware of any matter, event or circumstance which, and that such matter, event or circumstance, would or may be reasonably likely to:
8.8.1 | constitute a breach of clauses 6.1, 8.1 or 8.2; or |
8.8.2 | give rise to a right for the Buyer to terminate this Agreement pursuant to clause 9.1, |
8.9 | Meaning of so far as the Seller is aware |
If any of the Warranties are expressed to be given so far as the Seller is aware or to the best of the knowledge, information and belief of the Seller or words to that effect, the Seller shall be deemed to be aware of, and have actual knowledge of, all matters, events and circumstances which were in the actual knowledge of each of the Knowledge Persons (having made reasonable enquiries, consistent with past practice) as at the Binding Offer Date (in the case of the Warranties as given at the Binding Offer Date pursuant to clause 8.1) or as at Completion (in the case of the Warranties as given immediately prior to Completion pursuant to clause 8.2).
8.10 | Buyers and Guarantors warranties |
8.10.1 | Each of the Buyer and the Guarantor severally warrants to the Seller, in respect of itself, as at the Binding Offer Date that: |
(a) | it is a limited company incorporated under the laws of its jurisdiction of incorporation and is duly organised, validly existing and has been in continuous existence since incorporation. |
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(b) | it has the right, power and authority, and has taken all action necessary, to execute, deliver and perform its obligations under each Transaction Document and each document to be delivered by the Buyer or the Guarantor at Completion. |
(c) | its obligations under each Transaction Document constitute, and its obligations under each document to be delivered by it at Completion will, when delivered, constitute, binding obligations of it enforceable in accordance with their respective terms subject to bankruptcy, insolvency, fraudulent transfer, moratorium, or similar laws applying to or affecting creditors rights generally and to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or in law); |
(d) | it is not subject to an Insolvency Event; and |
(e) | the execution and delivery of, and the performance by it of its obligations under, each Transaction Document and each document to be delivered by it at Completion will not: |
(i) | contravene or conflict with, or result in a breach of, any provision of the memorandum or articles of association or by-laws or equivalent constitutional documents of it; |
(ii) | contravene or conflict with, or result in a breach of, any binding order, judgment or decree of any Relevant Authority; |
(iii) | result in a violation or breach of any applicable law or regulation in any jurisdiction; and |
(iv) | except in connection with the Conditions, require the consent or approval of any Relevant Authority. |
8.10.2 | The Buyer and the Guarantor jointly and severally warrant to the Seller as at the Binding Offer Date that: |
(a) | the Buyer has or will have funds immediately available to it sufficient to satisfy its obligations hereunder at Completion and, in the case of any related loan facilities, the Buyer will be able to satisfy all conditions of drawdown thereunder at or prior to Completion; and |
(b) | the Guarantor will at Completion have the right, power, and authority to issue and allot the Consideration Shares to the Seller in accordance with clause 3.4.2 at Completion free from all Encumbrances except as otherwise provided in this Agreement or any Transaction Document. |
8.10.3 | Each of the Buyer and the Guarantor severally warrants to the Seller, in respect of itself, that, immediately before Completion, the warranties set out in clauses 8.10.1 and 8.10.2 shall be true and accurate. |
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9. | THE BUYERS REMEDIES |
9.1 | Rights to terminate or postpone Completion |
9.1.1 | If between the execution of this Agreement and Completion: |
(a) | a Material Relevant Authority: |
(i) | prohibits the acquisition of the Company and/or any of the Shares by the Buyer; or |
(ii) | issues any legally binding decision or order which would materially restrict the operation of any member of the Group (the effect of which is material on the Group as a whole) after Completion, |
in each case other than as a consequence of any changes or prospective changes in applicable laws or regulations, or, in each case, the interpretation and enforcement thereof, after the Binding Offer Date;
(b) | a Material Adverse Change occurs and, where such Material Adverse Change is capable of remedy, has not been remedied by the Seller prior to the Target Completion Date; or |
(c) | an Insolvency Event occurs in relation to the Seller or a member of the Group (other than a Dormant Subsidiary), |
the Buyer may terminate this Agreement by notice in writing whereupon the provisions of clause 9.2 shall apply.
9.1.2 | If between the execution of this Agreement and Completion a Material Relevant Authority institutes or credibly threatens any action, suit or investigation which seeks to prohibit or restrain or otherwise challenge the acquisition of the Company and/or any of the Shares or which would materially and adversely affect the business, operation or financial condition of any member of the Group (the effect of which would be material on the Group as a whole) after Completion (provided that this is not a consequence of changes or prospective changes in applicable laws, regulations, accounting standards or practices after the Binding Offer Date, or, in each case, the interpretation and enforcement thereof), the Buyer shall not be required (but for the avoidance of doubt, may nonetheless decide) to proceed to Completion while such action suit or investigation is pending or continues to be credibly threatened and: |
(a) | the parties shall cooperate with each other and use all reasonable endeavours to challenge such action, suit or investigation and/or apply for it to be dismissed, as applicable; |
(b) | if the action, suit or investigation is still pending or credibly threatened on the Long Stop Date, the parties may mutually agree to proceed to Completion; and |
(c) | if the parties do not agree to proceed with Completion, clause 5.6.1 and 5.6.2 shall apply, as if the existence of such action, suit or investigation were an unsatisfied Condition. |
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9.2 | Rights on termination |
If this Agreement is terminated pursuant to clauses 5.6, 7.4.2 or 9.1 all rights and obligations of the parties under this Agreement other than those arising pursuant to clauses 1, 7.5, 17, 22, 25, 26, 27, 28, 29 and 30 shall cease immediately, but all rights, obligations and liabilities of the parties which have accrued before termination shall continue to exist.
9.3 | No other termination |
Other than pursuant to clauses 5.6, 7.4.2 or 9.1, a party shall not be entitled to terminate this Agreement or any other Transaction Document. Notwithstanding that a party has become aware at any time:
9.3.1 | that there has been a material breach of any provision of this Agreement; or |
9.3.2 | that there may be a claim against a party in connection with this Agreement, |
a party shall not be entitled to rescind this Agreement or treat this Agreement as terminated (other than pursuant to clauses 5.6, 7.4.2 or 9.1) but shall be entitled only to claim damages in respect of such matter and accordingly, each party waives all and any rights of rescission it may have in respect of such matter (howsoever arising or deemed to arise), other than such rights in respect of the fraud of a party.
9.4 | Claims |
9.4.1 | Subject to clause 9.4.2, the provisions of schedule 7 shall apply. |
9.4.2 | The provisions contained in schedule 7 shall not apply to any Claim to the extent it arises as the consequence of, or is delayed as a result of, fraud, wilful misconduct or wilful concealment by the Seller or any of its present or former directors, secretaries or employees. |
10. | SELLERS AND BUYERs COVENANT |
10.1 | Demerger |
The Seller covenants with the Buyer that the Seller shall, at the direction of the Buyer, pay on demand to the Buyer an amount or amounts equal to the total of Losses made, suffered or incurred by, or on behalf of, any and all members of the Group in relation to Claims by creditors or other Third Parties to the extent resulting from or otherwise arising in connection with the Demerger (including claims by creditors of Synnøve Finden AS and/or any claims by the purchaser of Lier & Hardanger in relation to the ventilation system in the site acquired in connection with the Demerger).
10.2 | Dormant Subsidiaries |
10.2.1 | The Buyer undertakes to: |
(a) | use reasonable endeavours to wind up the Dormant Subsidiaries as soon as reasonably practicable after Completion; |
(b) | keep the Seller reasonably informed as to the status and progress of the winding up process; |
(c) |
take such action as the Seller may reasonably request in relation to the winding up of the Dormant Subsidiaries and the realising of any assets |
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held by the Dormant Subsidiaries, provided that the Buyer shall not be required to (i) take any action which would materially delay the winding up; or (ii) to give warranties or assume other liabilities (including restrictions on the operation of its business) related to the disposal of assets, other than warranties as to title and capacity or where liability for such warranties or other liabilities is assumed by the Seller or a member of the Sellers Group. |
10.2.2 | The Seller covenants with the Buyer that the Seller shall, at the direction of the Buyer, pay on demand to the Buyer an amount or amounts equal to the total of Losses made, suffered or incurred by, or on behalf of, any and all members of the Group in relation to claims by creditors or other Third Parties against the Dormant Subsidiaries or resulting from the winding up of the Dormant Subsidiaries to the extent in excess of the realised value of the assets of the Dormant Subsidiaries on or following Completion. |
10.3 | Palacios Claim |
The Seller covenants with the Buyer that the Seller shall, at the direction of the Buyer, pay on demand to the Buyer an amount or amounts equal to the total of Losses made, suffered or incurred by, or on behalf of, any and all members of the Group in relation to claims by Grupo Empresarial Palacios Alimentacion, S.A. ( Palacios ) in respect of the breach prior to Completion of the agreement between Findus Espana S.L.U. and Palacios dated 14 February 2013 which is the subject of the disclosure against Warranty 15.5 in the Disclosure Letter.
10.4 | Payment in relation to Agreed IT Costs |
10.4.1 | Prior to Completion, the Seller shall procure that a licence to use TXT e-solutions sales forecasting software (the TXT Licence ), used by members of the Group at the Binding Offer Date is obtained by the Company. |
10.4.2 | In respect of the Agreed IT Costs the Buyer and the Seller shall each be responsible for 50 per cent. of such Agreed IT Costs. |
10.4.3 | The Buyer undertakes to indemnify, and to keep indemnified, within five Business Days of demand by the Seller, the Seller in respect of 50% of all Agreed IT Costs to the extent incurred by a member of the Sellers Group and to the extent not included in the Completion Accounts as Cash . |
10.4.4 | The Seller undertakes to indemnify, and to keep indemnified, within five Business Days of demand by the Buyer, the Buyer in respect of 50% of all Agreed IT Costs paid after Completion by a member of the Buyers Group (including any member of the Group). |
11. | RESTRICTIONS ON BUSINESS ACTIVITIES |
11.1 | Sellers Undertakings |
11.1.1 | The Seller covenants with the Buyer that it shall not, either alone or in conjunction with or on behalf of any other person, and shall procure that no member of the Sellers Group shall, do any of the following things: |
(a) | at any time during the period of three years from the Completion Date, directly or indirectly carry on, be engaged, concerned or interested in a business which competes, directly or indirectly, with the business of any member of the Group as carried on at the Completion Date or at any time in the twelve months prior to that date, in a Relevant Territory in which that business is or was carried on at such date or during such time; |
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(b) | at any time during the period of three years from the Completion Date, in relation to goods or services sold by any member of the Group, solicit the business in a Relevant Territory of a person who is a Restricted Customer; |
(c) | at any time during the period of three years from the Completion Date, use or exploit any Business Information, save as required to perform its obligations under the TSA; |
(d) | at any time during the period commencing on the Binding Offer Date and expiring on the second anniversary of Completion, solicit or contact with a view to his engagement or employment by another person, a Relevant Person, whether or not such person would commit a breach of his employment contract by reason of leaving service, in either case where the person in question has Business Information or would be in a position to exploit the trade connections of any member of the Group; |
(e) | at any time during the period of three years from the Completion Date, use or, other than in connection with the disposal of the UK Business, dispose of the French Domain; or |
(f) | at any time during the period of three years from the Completion Date, fail to renew the French Domain prior to its expiry, provided that the Seller may procure that the French Domain is transferred to the Buyer or a member of the Group in a reasonable time prior to expiry to allow the relevant transferee to procure renewal. |
11.1.2 | The Seller covenants with the Buyer that it shall procure that no member of the Sellers Original Group nor any person who buys or carries on the UK Business (and shall ensure that a provision to this effect is included in any agreement governing the disposal of the UK Business) shall do any of the following things: |
(a) | at any time during the period of two years from the Completion Date, directly or indirectly carry on, be engaged, concerned or interested in a business which competes, directly or indirectly, with the business of any member of the Group as carried on at the Completion Date or at any time in the twelve months prior to that date in a Relevant Territory in which that business is or was carried on at such date or during such time; |
(b) | at any time during the period of two years from the Completion Date, in relation to goods or services sold by any member of the Group, solicit the business in a Relevant Territory of a person who is a Restricted Customer; |
(c) | at any time during the period of two years from the Completion Date, use or exploit any Business Information; |
(d) | at any time during the period commencing on the Binding Offer Date and expiring on the second anniversary of Completion, solicit or contact with a view to his engagement or employment by another person, a Relevant Person, whether or not such person would commit a breach of his employment contract by reason of leaving service, in either case where the person in question has Business Information or would be in a position to exploit the trade connections of any member of the Group; |
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(e) | at any time during the period of two years from the Completion Date, use or dispose of the French Domain; or |
(f) | at any time during the period of two years from the Completion Date, fail to renew the French Domain prior to its expiry, provided that the relevant member of the Sellers Original Group or person who acquires or buys the UK Business (as the case may be) may procure that the French Domain is transferred to the Buyer or a member of the Group in a reasonable time prior to expiry to allow the relevant transferee to procure renewal. |
11.1.3 | Nothing in clause 11.1 shall prevent: |
(a) | the Seller or any member of the Sellers Original Group, Sellers Group or any person who buys or carries on the UK Business from carrying on any existing business carried on by it or any of them as at the Completion Date in the same manner and scope as carried on at the Binding Offer Date in a Relevant Territory; |
(b) | any party or any member of the Sellers Original Group, any person which carries on or acquires the UK Business or any member of the Sellers Group, the Buyers Group, or the Group from entering into discussions with or employing or engaging any person who approaches it of his or her own volition or who responds to a general public advertisement or who is approached when they are no longer employed by (in the case of the Buyer) a member of the Sellers Group or (in the case of the Seller) a member of the Buyers Group or the Group; |
(c) | any member of the Sellers Group or the Sellers Original Group or any person which carries on or acquires the UK Business from manufacturing or supplying chilled products; or |
(d) | any person which carries on or acquires the UK Business from carrying on its business, including where it integrates such business with the UK Business or where it integrates the UK Business with its business. |
11.2 | Buyer Undertakings |
The Buyer covenants with the Seller that it shall not, either alone or in conjunction with or on behalf of any other person, and shall procure that no member of the Buyers Group or the Group shall at any time during the period commencing on the Binding Offer Date and expiring on the second anniversary of Completion, solicit or contact with a view to his engagement or employment by another person, a Relevant Person, whether or not such person would commit a breach of his employment contract by reason of leaving service.
11.3 | No holding out |
11.3.1 | Subject to clause 13.3, the Seller shall not, and shall procure that no member of the Sellers Group, the Sellers Original Group nor, in the case of an asset sale, any person which carries on or acquires the UK Business (to the extent not doing so prior to acquiring or carrying on the UK Business) shall, at any time during the period of two years following Completion: |
(a) | hold itself out (or authorise another person to hold the Seller or another member of the Sellers Group out) as being connected with any member of the Group or that it has any authority to act on behalf of any member of the Group; |
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(b) | directly or indirectly be concerned or take part in the carrying on of any business which uses the Business Names (alone, together or in conjunction with any other words or symbols), or any phonetic imitation thereof or any other name which is so similar to a Business Name as to be capable of an association with the Group; or |
(c) | directly or indirectly be concerned or take part in the carrying on of any business which uses any trade or service mark, business or domain name, distinctive mark, style, design or logo which, as at the Binding Offer Date, is or has in the previous 12 months been used by any member of the Group or anything which is reasonably capable of confusion with such mark, name, design or logo, |
and the Seller shall, within 30 Business Days of the Completion Date, procure that the necessary resolutions are passed and such other steps are taken as are necessary to change the names of any relevant member of the Sellers Group so as to remove all of the Business Names.
11.3.2 | Save for the TSA, the key terms of which are set out in schedule 14 or the Continuing Commercial Agreement the key terms of which are set out in schedule 15, the Buyer shall not, and shall procure that no member of the Buyers Group or member of the Group shall, at any time after Completion directly or indirectly be concerned or take part in the carrying on of any business which uses, other than the Business Names or Company Intellectual Property, any trade or service mark, business or domain name, distinctive mark, style, design or logo which, as at the Completion Date, is owned by and used exclusively by any member of the Sellers Group or the Sellers Original Group (excluding, in each case, any member of the Group) or anything which is reasonably capable of confusion with such mark, name, design or logo. |
11.4 | No discussions regarding sale of Company, etc. |
Pending Completion, the Seller shall not, and members of the Sellers Group shall not, directly or indirectly:
11.4.1 | enter into an agreement or arrangement; or |
11.4.2 | enter into, or be involved in, any discussion or negotiation, |
with any person except the Buyer or a person designated by the Buyer in connection with the sale of any member of the Group or the business or any part of the business or, except in the ordinary course of business and to the extent permitted by schedule 4, any of the assets of any member of the Group.
11.5 | Independent undertakings, etc. |
11.5.1 | The restrictions in clauses 11.1, 11.2 and 11.3 operate as separate restrictions in relation to each member of the Group and each trade or business of each member of the Group. |
11.5.2 |
The restrictions in clauses 11.1, 11.2 and 11.3, taken separately and together, are not more onerous or extensive than is necessary to, in the case of the Buyer, |
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protect the value of the Shares and the ability of the Buyer to sell, or procure the sale of, the Shares or the shares or business (or any part thereof) of any member of the Group, and, in the case of the Seller, protect the information relating to the business and operations of the Sellers Group disclosed to the Buyer in connection with the Transaction, and are also fair and reasonable, having regard to all the circumstances, including the amount payable for the Shares and the nature of the information disclosed. |
11.5.3 | In the event that a court or other competent authority holds that any of the restrictions in clauses 11.1, 11.2 or 11.3 would be unenforceable unless some part of it were deleted or its scope were reduced (by being limited to a specific type of business, by its duration or geographic extent being reduced or in any other way), the restriction shall have effect, and shall be deemed always to have had effect, subject to such alterations as are necessary to prevent it from being unenforceable. |
11.5.4 | Each of the restrictions in clauses 11.1, 11.2 and 11.3 is separate and entirely independent from the others so that it shall not be rendered unenforceable if (despite the foregoing) all or any of the other restrictions is unenforceable. |
11.6 | Shareholding in listed company allowed |
Nothing contained in clauses 11.1, 11.2 or 11.3 shall preclude or restrict the Seller or any member of the Sellers Group from holding shares in a listed company (wheresoever situated) provided such shares do not, when aggregated with the number of shares owned by any other member of the Sellers Group, confer more than three per cent of the votes which could normally be cast at a general meeting of the company.
12. | GUARANTEE |
12.1 | Guarantee |
In consideration for the Seller entering into this Agreement to sell the Shares to the Buyer, the Guarantor irrevocably and unconditionally:
12.1.1 | guarantees, as a primary obligation to the Seller, the due and punctual performance by the Buyer of all the Buyers obligations under this Agreement (the Guaranteed Obligations ); |
12.1.2 | undertakes to the Seller that: |
(a) | whenever the Buyer does not pay any amount when due under or in connection with the Guaranteed Obligations, the Guarantor shall immediately on demand and without deduction or withholding pay that amount as if the Guarantor was the principal obligor; and |
(b) | whenever the Buyer fails to perform any Guaranteed Obligation, the Guarantor shall immediately on demand perform (or procure the performance of) and satisfy (or procure the satisfaction of) that Guaranteed Obligation, |
so that the same benefits are conferred on the Seller as it would have received if the Guaranteed Obligations had been performed and satisfied by the Buyer; and
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12.1.3 | covenants with the Seller to fully indemnify, defend and hold harmless the Seller for and against any and all Losses regardless of whether based in whole or in part on strict liability, wilful or intentional misconduct, ordinary or gross negligence of the Buyer, or otherwise, which the Seller may suffer or incur (whether directly or indirectly) as a result or as a consequence of, or arising out of, any claim relating to the failure of the Buyer to perform any of the Guaranteed Obligations. |
12.2 | Continuing Guarantee |
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by the Buyer in respect of any Guaranteed Obligations, regardless of any intermediate payment or discharge in whole or in part.
12.3 | No discharge |
If any payment by the Buyer or the Guarantor or any discharge of any obligations of the Buyer or the Guarantor or any security for those obligations or otherwise is avoided or reduced as a result of insolvency or any similar event:
12.3.1 | the liability of the Buyer and the Guarantor shall continue as if the payment discharge, avoidance or reduction had not occurred; and |
12.3.2 | the Seller shall be entitled to recover the value or amount of that security or payment from the Guarantor, as if the payment, discharge, avoidance or reduction had not occurred. |
12.4 | Waiver |
The Guarantor waives any right it may have of first requiring the Seller to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantor under this clause 12. This waiver applies irrespective of any law or any provision of this Agreement to the contrary.
12.5 | Guarantee not affected |
The provisions and operation of this clause 12 shall not be affected by:
12.5.1 | any modification of or variation to the terms of any Guaranteed Obligation; |
12.5.2 | any irregularity, defect or informality in this Agreement or any legal limitation, disability or incapacity of the Buyer or lack of authority of any director, manager, official or any other person appearing to be acting for the Buyer; |
12.5.3 | any permitted transfer or assignment of rights or obligations under this Agreement; |
12.5.4 | any corporate reorganisation, reconstruction, amalgamation, dissolution, merger, acquisition of or by or other alteration in the corporate existence or structure of the Buyer; or |
12.5.5 | any composition or arrangement made by the Seller with any person. |
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13. | POST COMPLETION MATTERS |
13.1 | Transitional Services |
13.1.1 | The provisions set out in parts 1 and 2 of schedule 14 are the key terms of the TSA. The Seller and the Buyer each undertake to use their reasonable endeavours to negotiate in good faith and to agree long form documentation which reflects the key terms of the TSA on or before the Completion Date. Subject to such agreement, the Seller shall and the Buyer shall enter into the TSA on Completion. |
13.1.2 | If the Seller and the Buyer are not able to agree on long form documentation for the TSA on the Completion Date, the Seller and the Buyer shall each comply with the key terms set out in the relevant part of schedule 14 for the TSA as if such terms form a standalone, binding agreement on the applicable parties, pending entry by such parties into long form documentation for the TSA. |
13.1.3 | The TSA agreed in accordance with clause 13.1 shall include an express provision that the long form documentation supersedes the relevant part of schedule 14. |
13.2 | Continuing Commercial Agreements |
13.2.1 | The provisions set out in parts 1 and 2 of schedule 15 are the key terms of the Continuing Commercial Agreements. The Seller and the Buyer each undertake to use their reasonable endeavours to negotiate in good faith and to agree long form documentation which reflects the key terms of each agreement set out in schedule 15 on or before the Completion Date. Subject to such agreement, the Seller shall procure that the named member of the Sellers Group and the Buyer shall procure that the named member of the Group (in each case as set out in part 1 or part 2 of schedule 15) each enter into such agreed long form documentation on or before Completion. |
13.2.2 | If the Seller and the Buyer are not able to agree on long form documentation for a Continuing Commercial Agreement on the Completion Date, the Seller shall procure that the named member of the Sellers Group and the Buyer shall procure that the named member of the Group (in each case as set out in part 1 or part 2 of schedule 15) each comply with the key terms set out in the relevant part of schedule 15 for that Continuing Commercial Agreement as if such terms form a standalone, binding agreement on the applicable parties, pending entry by such parties into long form documentation for the relevant Continuing Commercial Agreement. |
13.2.3 | Such long form documentation agreed in accordance with clause 13.2 shall include an express provision that the long form documentation supersedes the relevant part of schedule 15. |
13.3 | Licence of Findus Brand |
13.3.1 |
The Buyer hereby grants, and shall procure the grant by those entities which are the members of the Buyers Group following Completion, a non-transferable, royalty-free, non-exclusive licence to the Seller to use the Findus Brand in the United Kingdom, which licence is sub-licensable by the Seller to the members of the Sellers Group and any third party who currently has a sub-licence from the Sellers Group to use the Findus Brand, for a period of six (6) months following Completion on and in relation to the products on which, and in the manner as, such Findus Brand was used by the Sellers Group during the 12 months period |
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immediately prior to the Binding Offer Date. Immaterial deviations from such use will be permissible to the extent strictly necessary for the purpose of continuing the business of the Seller Group for such six month period but for the avoidance of doubt, any new uses of the Findus Brand (e.g. in relation to different product types) are not permitted under this Clause 13.3. The licence granted in this Clause 13.3 shall be irrevocable unless the Sellers Group breaches Clause 13.3.2 or 13.3.3. |
13.3.2 | Any goodwill derived from the use of the Findus Brand by the Seller or the Sellers Group under Clause 13.3.1 shall accrue to the Buyer. The Buyer may, at any time, call for a confirmatory assignment of that goodwill and the Seller shall promptly execute it (or shall procure the execution of such assignment from the Sellers Group). |
13.3.3 | The Seller shall not, and shall procure that the Sellers Group shall not, use the Findus Brand in any way which causes damage to the goodwill or the repute of the Findus Brand, or which jeopardises or invalidates any trade mark applications or registrations incorporating the Findus Brand. |
13.4 | Release in relation to Swedish Directors |
Following Completion, at the next occurring annual shareholders meeting of the Company and Frionor Sverige AB, the Buyer undertakes to procure that the Swedish Directors who have resigned on or before Completion are discharged from liability for their administration of the Company or Frionor Sverige AB (as the case may be) prior to Completion (or, if earlier, the date of their resignation), provided and to the extent that the respective auditors of the Company and Frionor Sverige AB recommend such discharge.
13.5 | Termination of Intra Group Agreements from Completion |
The Seller hereby terminates, and procures the termination of, with effect from Completion, all Intra Group Agreements including all provisions of such agreements, whether or not they are expressly stated as surviving termination.
13.6 | Pensions arrangements |
The Seller and the Buyer shall implement the pension arrangements in schedule 8.
13.7 | Helsingborg Assets |
To the extent that the Seller or any member of the Group enters into a binding commitment prior to Completion under which it has agreed to dispose of surplus equipment and surplus factory premises at the Helsingborg, Sweden site, the Buyer shall procure that any consideration received by a member of the Group in respect of such disposal after Completion shall be paid to the Seller as soon as reasonably practicable after receipt and in any case within ten Business Days.
13.8 | Sellers Group Guarantees |
The Buyer shall use its reasonable efforts to ensure that as soon as reasonably practicable after Completion each relevant member of the Sellers Group is released from the Sellers Group Guarantees. Pending release of the Sellers Group Guarantees, the Buyer shall indemnify the Seller on demand against all Losses of a member of the Sellers Group arising in respect of a liability which was incurred after Completion under or by reason of any Sellers Group Guarantee.
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13.9 | Thai Bank Accounts |
13.9.1 | The Seller shall procure that Karen Noakes shall continue to act as signatory to Findus Thailand Ltds bank account for so long as she continues to be employed by a member of the Sellers Group and for a period of up to six months following Completion and shall from Completion act in accordance with the Buyers written instructions regarding the operation of this account, such instructions to be given by a single person nominated in writing by the Buyer for such purpose (which nominee shall from Completion be Paul Kenyon). If Karen Noakes ceases to be an employee of the Sellers Group during the period of six months following Completion (other than to become an employee of the Buyers Group or the Group) then the Seller shall co-operate with the Buyer and provide reasonable assistance (at the Buyers cost) to the Buyer in making alternative arrangements for a signatory to Findus Thailand Ltds bank account. |
13.9.2 | Following Completion, the Buyer shall indemnify the Seller and Karen Noakes on demand against all Losses of a member of the Sellers Group or Karen Noakes (as the case may be) resulting from any action taken by the Seller or Karen Noakes pursuant to Clause 13.9.1 in good faith in accordance with the Buyers instructions. |
13.10 | Karen Noakes entitled to benefit |
Karen Noakes may enforce the provisions of clause 13.9 subject to and in accordance with:
13.10.1 | the provisions of the Third Parties Act; and |
13.10.2 | the provisions of clause 26.2. |
14. | ENVIRONMENT |
The Seller and the Buyer shall implement the environmental arrangements in schedule 9.
15. | BUSINESS ASSETS |
15.1 | Transfer of Business Assets |
Without prejudice to schedule 6, paragraph 8.1.1, in the event that the Buyer discovers a member of the Sellers Group owns any Business Asset which has, in the three years prior to Completion, been used exclusively by the Group, the Seller shall procure that such Business Asset is transferred to the Buyer or a company nominated by the Buyer for nominal consideration provided that it has been requested to do so by the Buyer within 18 months following Completion.
15.2 | Sellers Group Assets |
In the event that the Seller discovers a member of the Group owns any asset which has, in the three years prior to Completion, been used exclusively by the Sellers Group, the Buyer shall procure that such asset is transferred to the Seller or a company nominated by the Seller for nominal consideration, provided that it has been requested to do so by the Seller within 18 months following Completion.
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16. | ACCESS, BOOKS AND RECORDS |
16.1 | Access |
Subject to applicable law, as from the date of this Agreement, the Buyer and any persons authorised by it, upon reasonable notice, at reasonable times and subject to giving such undertaking as to confidentiality as the Seller may reasonably require, shall be given reasonable access to:
16.1.1 | the premises, the Books and Records and the title deeds of each member of the Group; and |
16.1.2 | the directors, secretary and employees of the each member of the Group, |
and each member of the Group shall be instructed to give promptly all information and explanations to the Buyer or any such persons as they may reasonably request.
16.2 | Access to Books and Records retained by the Sellers Group |
For a period of seven years after Completion, the Seller shall:
(a) | maintain, and shall procure that each other member of the Sellers Group shall on reasonable notice by the Buyer and at the Buyers cost, provide copies to the Buyer of, any Books and Records held by a member of the Sellers Group to the extent relating to the business carried on by the Group as at Completion, provided that the Seller may destroy such Books and Records before seven years has elapsed if it has given the Buyer three months written notice that it intends to do so and the Buyer has not, at its own cost, arranged to take possession of such Books and Records from the Seller or the relevant member of the Sellers Group; and |
(b) | provide the Buyer, any member of the Buyers Group, or any of their respective employees, agents or advisers with reasonable access to any employees of the Sellers Group who have knowledge of the operations of the Group in order to respond to reasonable requests for historic information and assistance. |
16.3 | Access to Books and Records retained by the Buyers Group |
For a period of seven years after Completion, the Buyer shall:
(a) | maintain, and shall procure that each member of the Group shall on reasonable notice by the Seller and at the Sellers cost, provide copies to the Seller of, any Books and Records held by a member of the Group to the extent relating to the business carried on by the Sellers Group as at Completion, provided that the Buyer and each member of the Group may destroy such Books and Records before seven years has elapsed if it has given the Seller three months written notice that it intends to do so and the Seller has not, at its own cost, arranged to take possession of such Books and Records from the Buyer or the relevant member of the Group; and |
(b) | provide the Seller, any member of the Sellers Group, or any of their respective employees, agents or advisers with reasonable access to any employees of the Group who have knowledge of the operations of the Sellers Group (or of the Group, to the extent relevant to the Sellers Group) in order to respond to reasonable requests for historic information and assistance. |
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17. | CONFIDENTIALITY |
17.1 | Confidentiality Agreement |
This clause 17 shall be without prejudice to the Confidentiality Agreement which shall continue in full force and effect in accordance with its terms notwithstanding this Agreement.
17.2 | Confidentiality re Business Information |
17.2.1 | Subject to clause 17.4, the Seller covenants with the Buyer, for itself and for the benefit of each member of the Group, that before and after Completion it shall: |
(a) | treat all Business Information as confidential and shall not use, disclose or make available to any person any Business Information in its possession at Completion; |
(b) | treat all Business Information in the same manner (and use the same efforts to prevent the disclosure of Business Information) as it treats its own confidential information; and |
(c) | ensure that each member of the Sellers Group and the directors, secretaries, employees and advisers of any such member and each member of the Sellers Original Group shall comply with the provisions of this clause 17.2.1 as if the provisions of this clause were expressed to apply to it. |
17.2.2 | Following Completion, within 10 Business Days notice from the Seller, the Buyer shall procure that each member of the Buyers Group and each member of the Group shall: |
(a) | use all reasonable efforts to expunge from any computer system, word processor or other device (other than back up or archiving systems) in the possession or under control of a member of the Buyers Group or member of the Group all financial information which relates exclusively to the Sellers Group (other than the Group) and not seek to recover it, except as required by law or for the purpose of any judicial proceedings; and |
(b) | treat all financial information which relates (but not exclusively) to the Sellers Group in the same manner (and use the same efforts to prevent the disclosure of) as it treats its own confidential information; and |
(c) | to the extent such financial information relates exclusively to the Sellers Group, not use it to exploit any commercial position or trading relationship. |
17.3 | Confidentiality re Agreement |
Subject to clauses 17.4 and 17.7, each party shall:
17.3.1 | treat as confidential, and shall not disclose to any person, information obtained during negotiations relating to any Transaction Document or as a result of entering into or performing any Transaction Document which relates to: |
(a) | the provisions of any Transaction Document; |
(b) | the negotiations relating to any Transaction Document; |
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(c) | the subject matter of any Transaction Document; or |
(d) | the other party or, in the case of the Seller, any member of the Buyers Group or, in the case of the Buyer, any member of the Sellers Group, |
such information being Transaction Information ;
17.3.2 | treat such Transaction Information in the same manner (and use the same efforts to prevent the disclosure of Business Information) as it treats its own confidential information; and |
17.3.3 | ensure that each member of the Sellers Group, in the case of the Seller, and each member of the Buyers Group, in the case of the Buyer, complies with the provisions of clauses 17.3.1 and 17.3.2 as if the provisions of those clauses were expressed to apply to it. |
17.4 | Exceptions |
Subject to clause 17.5 and notwithstanding the provisions of clauses 17.2.1:
17.4.1 | each party, each member of the Sellers Group and each member of the Buyers Group may disclose Transaction Information (including by way of a public announcement or the issue of a circular); and |
17.4.2 | the Seller and each member of the Sellers Original Group may disclose Business Information, |
in each case:
(a) | if, and to the extent, required by law or for the purpose of any judicial proceedings; |
(b) | if, and to the extent, lawfully required by any Recognised Investment Exchange or regulatory or governmental body to which that party is subject or reasonably submits, including the London Stock Exchange, the SEC, the UK Listing Authority or the Takeover Panel, whether or not the requirement for disclosure has the force of law; |
(c) | if, and to the extent, required to vest the full benefit of a Transaction Document in that party; |
(d) | to a bona fide proposed assignee or potential purchaser of any shares in any member of the Buyers Group or the Sellers Group or the whole or any part of the business of any member of the Buyers Group or the Sellers Group if, and to the extent, desirable, in the reasonable opinion of the party proposing to make such disclosure, for the purposes of the proposed assignment or purchase, as the case may be; |
(e) | if, and to the extent, such information has already come into the public domain through no fault of that party; |
(f) | if, and to the extent, made to: |
(i) | the professional or investment advisers, auditors or finance providers of that party or of any other member of the Sellers Group (in the case of the Seller) or of any other member of the Buyers Group (in the case of the Buyer); |
(ii) |
the directors, secretary or employees of that party or of any other member of the Sellers Group (in the case of the Seller) or of any other member of the |
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Buyers Group (in the case of the Buyer) who need to know the information for the purposes of the transactions effected or contemplated by this Agreement; or |
(iii) | in the case of the Seller, the Sellers Affiliates and its and their respective Representatives, |
provided that the party making the disclosure shall procure that each of those persons comply with clause 17.2 (where the information disclosed is Business Information) or clause 17.3 (where the information disclosed is Transaction Information) in each case as if the provisions of the relevant clause were expressed to apply to it;
(g) | if, and to the extent, the other party has given its prior written consent to the disclosure, such consent not to be unreasonably withheld or delayed; or |
(h) | to any Tax Authority in connection with its Tax affairs. |
17.5 | Disclosure only after notice etc. |
17.5.1 | Any disclosure pursuant to clauses 17.4.2(a) or 17.4.2(b) shall, so far as is practicable, be made: |
(a) | after notice to, and consultation with, the other party (except where such notice or consultation is prohibited by law); and |
(b) | after taking into account the reasonable requirements of the other party as to the content, timing and manner of such disclosure, and the disclosing party shall take reasonable steps to cooperate with any action which the other party may reasonably elect to take to challenge legally the validity of that requirement, provided such action is not reasonably likely to prejudice the disclosing partys relationship with the relevant Recognised Investment Exchange, regulatory or governmental body. |
17.6 | Assignment of confidentiality obligations |
17.6.1 | The Seller shall procure the assignment to the Buyer of the benefit of the confidentiality and non-disclosure provisions in any confidentiality agreement or undertaking given by any other potential buyer of the Group but only to the extent that: |
(a) | such assignment is not prevented by the terms of any such agreement or undertaking; and |
(b) | such confidentiality and non-disclosure provisions relate to the Group or the business thereof and remain in force at Completion. |
17.6.2 | The Seller shall send a letter, in a form agreed with the Buyer, to the other parties to any such agreement or undertaking as is referred to in clause 17.6.1, authorising the Buyer to recover all information provided by or on behalf of the Seller to such parties or requesting certification to the Buyer of its destruction, in each case in accordance with the terms of such agreement or undertaking. |
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17.7 | Notices to customers etc. |
Nothing in this Agreement shall prohibit the Buyer from making or sending after Completion any announcement or communication to a customer, client or supplier of any member of the Group informing it that the Buyer has purchased the Shares (but not disclosing any further details of the terms of the Transaction).
17.8 | Time Limit |
The provisions of this clause 17 shall apply for five years following the date of this Agreement.
17.9 | Meaning of Sellers Group and Buyers Group |
For the purposes of clauses 17.2 to 17.8, and 18:
17.9.1 | Sellers Group shall, for the period from the date of this Agreement up to Completion, include the Group; and |
17.9.2 | Buyers Group shall, for the period following Completion, include each member of the Group for so long as it remains a subsidiary of the Buyer. |
18. | FURTHER ASSURANCE |
Each party shall, and shall procure that each member of the Buyers Group (in the case of the Buyer) and each member of the Sellers Group (in the case of the Seller) shall do, perform, sign, execute and deliver all such acts, deeds, documents and things (or procure the doing, performance, signing, execution or delivery thereof) as the other party may reasonably request:
18.1.1 | in relation to the Escrow Agreement, or the provisions of clause 4, until all Escrow Shares and Escrow Cash Funds have been distributed in accordance with clause 4; and |
18.1.2 | in all other cases at any time during the twelve months following Completion, |
in each case at the requesting partys cost, to give full effect to the Transaction Documents and to secure to the other party the full benefit of the rights, powers and remedies conferred upon it in or by the Transaction Documents.
19. | COSTS AND PAYMENTS |
19.1 | Pay own costs |
Except as otherwise stated in any other provision of this Agreement, each party shall pay its own costs, charges and expenses relating to the negotiation, preparation, execution and performance of this Agreement.
19.2 | Payments to be made without set-off or withholding |
All payments to be made by the Seller under this Agreement shall be made gross, free of right of counterclaim or set off and without deduction or withholding of any kind, save as may be required by law in which event the deduction or withholding shall not exceed the minimum amount which it is required by law to deduct or withhold and the Seller shall simultaneously pay to the Buyer such additional amounts as will ensure that, after the making of any deduction or withholding (including any additional deduction or withholding required as a result of the payment of the additional amount), the Buyer receives a sum equal to the sum it would have received had no deduction or withholding been made.
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19.3 | Taxes on receipt of payments |
If a party to this Agreement (the Recipient ) incurs any liability to Tax in respect of any sum paid to it pursuant to this Agreement by another party to this Agreement (the Payor ) the Payor shall simultaneously pay to the Recipient such additional amount as will ensure that the net amount received and retained by the Recipient (after taking account of such Tax, including any additional Tax payable as a result of the increase in the sum payable) is equal to the amount which would have been received and retained by the Recipient in the absence of such Tax, provided that if the Recipient shall have assigned or novated or declared a trust in respect of the benefit in whole or in part of this Agreement or shall have changed its tax residence such that it becomes tax resident in a jurisdiction other than (a) the United Kingdom (in the case of the Buyer), (b) the British Virgin Islands or the United Kingdom (in the case of the Guarantor) or (c) Sweden (in the case of the Seller), then the liability of the Payor under this clause 19.3 shall be limited to that (if any) which it would have been had no such assignment, novation, declaration of trust or change taken place. This Clause 19.3 shall not apply (a) in relation to any payment, delivery or receipt of the Consideration (including, for the avoidance of doubt, any adjustment thereto pursuant to clause 3); (b) in relation to any payment or receipt of Fees pursuant to schedule 14; (c) in relation to any payment or receipt of the Break Fee pursuant to clause 7.5; (d) in respect of any Tax attributable to a payment being properly treated as an adjustment to the Consideration; or (e) to the extent that the amount payable has already been increased to take account of the Tax that will or would be charged on receipt.
20. | CURRENCY CONVERSION |
20.1 | Rate of exchange |
For the purpose of converting amounts specified in one currency into another currency where required (including for the purposes of clause 4), the rate of exchange to be used shall be the closing mid-point spot rate for exchanges between those currencies quoted in the Financial Times (London edition) on the nearest Business Day for which that rate is so quoted on or prior to the date of the conversion.
20.2 | Date of conversion |
Where it is necessary to determine whether a monetary limit or threshold set out in schedule 7 has been reached or exceeded and the value of the Claim is expressed in a currency other than pounds sterling, the date of conversion for the purposes of translating that Claim into pounds sterling in accordance with clause 20.1 shall be the date of receipt by the Seller of written notification from the Buyer of the Claim.
21. | INTEREST |
If either party fails to pay on the due date any sum due from it under this Agreement (whether determined by agreement or pursuant to an order of a court or otherwise), interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at the rate of 4% above the base rate for the time being of HSBC Bank plc. That interest shall accrue on a daily basis and be compounded quarterly.
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22. | ENTIRE AGREEMENT |
22.1 | Entire agreement |
The Transaction Documents together constitute the whole and only agreement between the parties in relation to the sale and purchase of the Shares and supersede any previous agreement whether written or oral between all or any of the parties in relation to that subject matter save as provided in clauses 17.1 and 22.7.
22.2 | Buyers and Guarantors Statement |
Subject to clauses 17.1 and 22.7:
22.2.1 | each of the Buyer and the Guarantor represents that it has not relied on, or been induced to enter into any Transaction Document by, a Statement given by any member of the Sellers Group or any adviser to any member of the Sellers Group other than the Warranties or as otherwise set out in a Transaction Document; and |
22.2.2 | the Seller is not liable to the Buyer or the Guarantor for a Statement (including one made negligently) in connection with the Transaction other than as set out in a Transaction Document. |
22.3 | Sellers Statement |
Subject to clause 22.7:
22.3.1 | the Seller represents that it has not relied on, or been induced to enter into any Transaction Document by, any Statement given by any member of the Buyers Group or any member of the Group or any adviser or provider of finance to any member of the Buyers Group or any member of the Group other than the Buyers Warranties or as otherwise set out in a Transaction Document; and |
22.3.2 | neither the Buyer nor the Guarantor is liable to the Seller for any Statement (including one made negligently) in connection with the Transaction other than as set out in a Transaction Document. |
22.4 | No liability for the Group, the Buyers Group or advisers |
22.4.1 | No member of the Group or any adviser thereto shall have any liability to the Seller for a Statement in connection with the Transaction. |
22.4.2 | No member of the Buyers Group (other than the Buyer and the Guarantor, in each case, subject to clause 22.3.2) or adviser or provider of finance thereto shall have any liability to the Seller for a Statement in connection with the Transaction. |
22.4.3 | Any member of the Group and any member of the Buyers Group and any adviser or provider of finance to any member of the Group or any member of the Buyers Group may enforce the terms of this clause 22.4 subject to and in accordance with: |
(a) | the provisions of the Third Parties Act ; and |
(b) | the provisions of clause 26.2. |
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22.5 | No liability for the Sellers Group or advisers |
22.5.1 | No member of the Sellers Group (other than the Seller, subject to clause 22.2.2) or any of the Sellers Affiliates, or any of their respective Representatives, shall have any liability to the Buyer or the Guarantor in connection with the Transaction. |
22.5.2 | Any member of the Sellers Group, any of the Sellers Affiliates, and any of their respective Representatives may enforce the terms of this clause 22.5 subject to and in accordance with: |
(a) | the provisions of the Third Parties Act; and |
(b) | the provisions of clause 26.2. |
22.6 | No action re previous agreements etc. |
No party shall bring any action against another or (in the case of the Seller) against any other member of the Buyers Group or (in the case of the Buyer or the Guarantor) against any other member of the Sellers Group or any of the Sellers Affiliates or any of their respective Representatives, in relation to:
22.6.1 | any previous agreement(s) between them relating to the Transaction, subject to clause 17.1; or |
22.6.2 | save as provided in clause 22.7, any statement in connection with the Transaction other than as set out in a Transaction Document, |
and any member of the Buyers Group and any member of the Sellers Group and any of the Sellers Affiliates or any of their respective Representatives may enforce the terms of this clause 22.6 subject to, and in accordance with, the provisions of the Third Parties Act and the provisions of clause 26.2.
22.7 | Fraud etc. |
Nothing in this clause 22 shall have the effect of limiting or restricting any liability arising as a result of any fraud, wilful misconduct or wilful concealment.
22.8 | Financial promotion |
Each party acknowledges to each other party, after due and careful consideration, that:
22.8.1 | it is not entering into any of the Transaction Documents in consequence of, or reliance upon, any unlawful communication (as defined in s30(1) Financial Services and Markets Act 2000) made by such other party or such other partys professional advisers; and |
22.8.2 | except as expressly provided in any Transaction Document, it is entering the Transaction Documents solely in reliance upon its own commercial assessment and investigations and advice from its own professional advisers, |
and further acknowledges that each other party is entering into the Transaction Documents in reliance upon the acknowledgements given in clauses 22.8.1 and 22.8.2.
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23. | INVALIDITY |
23.1 | Invalidity |
If at any time all or any part of any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that shall not affect or impair:
23.1.1 | the legality, validity or enforceability in that jurisdiction of the remainder of that provision or all other provisions of this Agreement; or |
23.1.2 | the legality, validity or enforceability under the law of any other jurisdiction of that provision or all other provisions of this Agreement. |
24. | AMENDMENTS, WAIVERS AND RIGHTS |
24.1 | Amendments |
No amendment or variation of the terms of this Agreement shall be effective unless it is made in a written document signed by, or on behalf of, each party.
24.2 | Delay in exercise/non-exercise of rights |
Except as expressly set out in this Agreement, no delay in exercising, or non-exercise, by any party of any right, power or remedy provided by law or under this Agreement impairs, or constitutes a waiver or release of, that right, power or remedy.
24.3 | Waivers |
Any waiver or release, or time or indulgence, given by a party must be specifically granted in writing signed by the party granting it and shall:
24.3.1 | be confined to the specific circumstances in which it is given; |
24.3.2 | not affect any other enforcement of the same or any other right; and |
24.3.3 | unless it is expressed to be irrevocable, be revocable at any time in writing. |
24.4 | Exercise of rights |
No single or partial exercise of any right, power or remedy provided by law or under this Agreement prevents any other or further exercise of it or the exercise of any other right, power or remedy.
24.5 | Rights and remedies cumulative |
Except as expressly set out in this Agreement, the rights, powers and remedies of each party under this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by general law.
24.6 | Provisions remain in force notwithstanding Completion |
Any provision of this Agreement which is capable of being performed after, but which has not been performed at or before, Completion shall remain in full force and effect notwithstanding Completion.
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25. | ASSIGNMENT |
25.1 | No assignment |
Except as provided in clause 25.2 or 25.3, no person shall assign, transfer, charge or otherwise deal with all or any of its rights under this Agreement nor grant, declare, create or dispose of any right or interest in it.
25.2 | Permitted assignment by Buyer |
The Buyer (and assignees) may, without the consent of the Seller, assign to any member of the Buyers Group or by way of security to any bank or financial institution lending money for the purpose of the Buyer acquiring the Shares, in each case including any security agent or trustee on their behalf, without restriction all or any part of the benefit of, or its rights or benefits under, this Agreement together with any causes of action arising in connection with any of them. Any assignee of the Buyer shall be entitled to enforce the same against the Seller as if he were named in the Agreement as the Buyer and without reference to the price paid or value given by that person for the relevant assets provided that:
25.2.1 | the liability of the Seller as a result of the assignment shall not be greater than its liability had no assignment occurred; |
25.2.2 | the Seller may discharge its obligations under this Agreement to the assignor until it receives notice of the assignment; and |
25.2.3 | the Buyer will remain liable for any obligations under this Agreement. |
25.3 | Novation or assignment by Seller |
25.3.1 | The Seller may by notice to the Buyer novate the benefit and obligations of this Agreement and/or any other Transaction Document to which it is a party, in whole or in part, to any member of the Sellers Group with the prior written consent of the Buyer (such consent not to be unreasonably withheld or delayed, it being understood that the Seller intends to transfer the Consideration Shares and its rights and obligations in respect of the Escrow Shares (subject to the Lock-Up Deed) to a member of the Sellers Group) provided that: |
(a) | the liability of the Buyer and the Guarantor as a result of the novation shall not be greater than its liability had no novation occurred; |
(b) | the Buyer and the Guarantor may discharge their respective obligations under this Agreement to the novator until they receive notice of the novation; and |
(c) | the benefit and obligations of this Agreement shall be transferred together to the same novatee. |
25.3.2 | The Seller (and assignees) may, without the consent of the Buyer or the Guarantor, assign: |
(a) | the beneficial interest in the Consideration Shares, subject to the Lock-Up Deed and the Encumbrances created by this Agreement, the Tax Deed and the Escrow Agreement; or |
(b) | its rights pursuant to clause 7.5, |
to any member of the Sellers Group.
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25.3.3 | The Seller (and assignees) may, without the consent of the Buyer or the Guarantor, assign by way of security to any bank, financial institution or investor lending money to the Sellers Group, in each case including any security agent or trustee on their behalf, without restriction all or any part of the benefit of, or its rights or benefits under, this Agreement together with any causes of action arising in connection with any of them. Any assignee of the Seller shall be entitled to enforce the same against the Buyer and the Guarantor as if he were named in the Agreement as the Seller and without reference to the price paid or value given by that person for the relevant assets provided that: |
(a) | the liability of the Buyer and the Guarantor as a result of the assignment shall not be greater than its liability had no assignment occurred; |
(b) | the Buyer and the Guarantor may discharge their respective obligations under this Agreement to the assignor until they receive notice of the assignment; and |
(c) | the Seller will remain liable for any obligations under this Agreement. |
26. | THIRD PARTY RIGHTS |
26.1 | Generally no third party rights |
The parties do not intend that any term of this Agreement should be enforceable by virtue of the Third Parties Act by any person who is not a party to this Agreement save as provided in clauses 8.7, 13.10, 22.4, 22.5, 22.6 and in accordance with clause 26.2. Nothing in this clause 26.1 affects any right or remedy of a third party which exists or is available apart from that Act.
26.2 | Others entitled to benefit |
Those persons who have the benefit of clauses 8.7, 13.10, 22.4, 22.5 or 22.6 (as the case may be) may enforce the provisions of those clauses subject to and in accordance with the Contracts (Rights of Third Parties) Act 1999 provided that:
26.2.1 | this Agreement may be varied from time to time, terminated or rescinded without the consent of all or any of those persons and s2(1)(a) to (c) Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement; |
26.2.2 | none of those persons may assign any of their respective rights under any of those clauses either in whole or in part; |
26.2.3 | neither the Company nor any member of the Buyers Group or, following Completion, the Group nor any director, employee, agent or adviser thereof or thereto or provider of finance to any member of the Buyers Group or, following Completion, any member of the Group may take any steps to enforce all or any of its rights under this Agreement without the Buyers prior written consent and without first having appointed the Buyer as its agent to have sole conduct of all Proceedings involving that person; and |
26.2.4 | no member of the Sellers Group, any of the Sellers Affiliates or any adviser thereto or any of their directors, secretaries or employees may take any steps to enforce all or any of its rights under this Agreement without the Sellers prior written consent and without first having appointed the Seller as its agent to have sole conduct of all Proceedings involving that person. |
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27. | NOTICES |
27.1 | Form of notices |
A Notice shall be:
27.1.1 | in writing; |
27.1.2 | in the English language, and |
27.1.3 | delivered personally or sent by commercial courier or by email (provided that, if sent by email, a hard copy is also delivered personally or by commercial courier as soon as reasonably practicable thereafter and in any event within five Business Days of such email being sent) to the party due to receive the Notice marked for the attention of the person set out in clause 27.3 and to the address set out therein or to such other address, person or email address as may be notified from time to time in accordance with this clause by the relevant party to the other party, by not less than 5 Business Days written notice. |
27.2 | Notice deemed given |
Unless there is evidence that it was received earlier, a Notice is deemed given:
27.2.1 | if delivered personally, at the time of delivery; |
27.2.2 | if sent by commercial courier, on the date and at the time of signature of the couriers delivery receipt; and |
27.2.3 | if sent by email, at the time of sending provided that: |
(a) | no notification informing the sender that the message has not been delivered is received by the sender; and |
(b) | a hard copy of the email is delivered personally or by commercial courier within five Business Days of such email being sent, |
provided that if any Notice would otherwise become effective on a non-Business Day or after 17:00 hours on a Business Day, it shall instead become effective at 09:00 hours on the next Business Day.
27.3 | Details of the parties |
The details for the purposes of clause 27.1 are:
Party: |
Seller | |
For the attention of: |
Bill Showalter and Karen Noakes | |
Address: |
[omitted] |
|
E-mail address: |
[omitted] |
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with a copy to:
Name: |
Latham & Watkins | |
For the attention of: |
David Walker and Tom Evans | |
Address: |
99 Bishopsgate, London EC2M 3XF | |
E-mail address: |
david.walker@lw.com and tom.evans@lw.com |
Party: |
Buyer | |
Address: |
5 New Square, Bedfont Lakes Business Park, Feltham, Middlesex TW14 8HA |
|
Email address: |
[omitted] | |
For the Attention of: |
Paul Kenyon |
Party: |
Guarantor | |
Address: |
Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3RH |
|
Email address: |
[omitted] |
|
For the Attention of: |
Company Administrator |
In the case of each of the Buyer and the Guarantor, with a copy to:
Name: |
Mariposa Acquisition II, LLC | |
Address: |
5200 Blue Lagoon Drive, Suite 855, Miami, FL 33126 | |
Email address: |
[omitted] |
|
For the Attention of: |
Desiree DeStefano | |
Name: |
Greenberg Traurig, P.A., | |
Address: |
401 East Las Olas Boulevard, Suite 2000, Fort Lauderdale, FL 33301 |
|
Email address: |
beloffd@gtlaw.com | |
For the Attention of: |
Donn Beloff |
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28. | COUNTERPARTS |
28.1 | Any number of counterparts |
This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each of the parties has executed at least one counterpart.
28.2 | Each counterpart an original |
Each counterpart constitutes an original of this Agreement, but all the counterparts together constitute but one and the same instrument.
29. | GOVERNING LAW AND JURISDICTION |
29.1 | Governing law |
This Agreement, and any Dispute shall be governed by, and construed in accordance with, the law of England and Wales.
29.2 | English courts have jurisdiction |
The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any Dispute, and irrevocably waive any objection to proceedings before such courts on the grounds of venue or on the grounds that such proceedings have been brought in an inappropriate forum.
29.3 | Disputes |
For the purposes of clauses 29.1 and 29.2, Dispute means any dispute, controversy, claim or difference of whatever nature arising out of, relating to, or having any connection with this Agreement, including a dispute regarding the existence, formation, validity, interpretation, performance or termination of this Agreement or the consequences of its nullity and also including any dispute relating to any non-contractual rights or obligations arising out of, relating to, or having any connection with this Agreement.
29.4 | Judgments |
A judgment against either party in Proceedings brought in accordance with this clause 29 shall be conclusive and binding upon the relevant party and may be enforced in any other jurisdiction.
29.5 | Service of Service Documents |
Any Service Documents may be served on either party:
29.5.1 | by being delivered personally or sent by commercial courier in accordance with clause 27; |
29.5.2 | by being delivered personally or sent by commercial courier to such partys registered office from time to time; |
29.5.3 | by being delivered personally or sent by commercial courier to its agent in accordance with clause 30.3; or |
29.5.4 | in any other manner allowed by law. |
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This clause 29.5 applies to all Proceedings.
30. | AGENT FOR SERVICE OF PROCESS |
30.1 | Maintenance of agent |
The Seller and the Guarantor shall at all times maintain an agent for receipt of service of process in England.
30.2 | Appointment of agent |
The Seller appoints Law Debenture Corporate Services Limited of Fifth Floor, 100 Wood Street, London EC2V 7EX as its agent for that purpose. The Guarantor appoints the Buyer as its agent for that purpose.
30.3 | Service of documents |
Any Service Document shall be deemed to have been duly served if:
30.3.1 | marked for the attention of: |
(a) | in the case of the Seller: Law Debenture Corporate Services Limited, Fifth Floor, 100 Wood Street, London EC2V 7EX, with a copy to Tom Evans, Latham & Watkins (London) LLP, 99 Bishopsgate, London EC2M 3XF; and |
(b) | in the case of the Guarantor: the Buyer, as the details set out in clause 27.3; and |
30.3.2 | left at the specified address, in which case the Service Document shall, unless there is evidence that it was received earlier, be deemed to have been duly served at the time it is left; or |
30.3.3 | sent by commercial courier to the specified address, in which case the Service Document shall, unless there is evidence that it was received earlier, be deemed to have been duly served on the date and at the time of signature of the couriers delivery receipt, |
provided that if any Service Document would otherwise be duly served on a non Business Day or after 17:00 hours on a Business Day, it shall instead be duly served at 09:00 hours on the next Business Day.
30.4 | Replacement agent(s) |
If for any reason an agent appointed under this clause 30 ceases to act as such or ceases to have an address in England or Wales, the party whose agent has ceased to act or have an address in England or Wales (the Affected Party ) shall promptly appoint a replacement agent having an address for service in England and notify the other party of the appointment and the name and address of the replacement agent and the provisions of this clause 30 applying to service on an agent apply equally to service on a replacement agent. Failing such appointment and notification within five Business Days of cessation, the other party shall be entitled by notice to the Affected Party to appoint a replacement agent to act on the Affected Partys behalf.
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EXECUTION
The parties have shown their acceptance of the terms of this Agreement by executing it after the schedules.
71
EXECUTION
SIGNED by William J. Showalter, |
) | |||
on behalf of LIONGEM SWEDEN 1 AB |
) | /s/ William J. Showalter |
SIGNED by Paul Kenyon, |
) | |||
on behalf of IGLO FOODS GROUP LIMITED |
) | /s/ Paul Kenyon |
SIGNED by Paul Kenyon, |
) | |||
on behalf of NOMAD FOODS LIMITED |
) | /s/ Paul Kenyon |
Exhibit 3.1
No: 1818482
VIGILATE
British Virgin Islands
The BVI Business Companies Act 2004
MEMORANDUM OF ASSOCIATION
ARTICLES OF ASSOCIATION
OF
Nomad Foods Limited
A BVI BUSINESS COMPANY
INCORPORATED 1 APRIL 2014
AMENDED AND RESTATED ON 8 JUNE 2015
Elian Fiduciary Services (BVI) Limited
Nemours Chambers
Road Town, Tortola
British Virgin Islands VG1110
Regulated by the British Virgin Islands Financial Services
Commission.
ELIAN
REGISTRAR OF CORPORATE AFFAIR
BVI FINANCIAL SERVICES COMMISSION
FSC REGISTERED
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI
BUSINESS COMPANIES ACT 2004
MEMORANDUM OF ASSOCIATION
OF
Nomad Foods Limited
a company limited by shares
1 NAME
1.1 The name of the Company is Nomad Foods Limited.
2 STATUS
2.1 The Company is a company limited by shares.
3 REGISTERED OFFICE AND REGISTERED AGENT
3.1 The first registered office of the Company is at
Nemours Chambers, PO Box 3170, Road Town, Tortola, British Virgin Islands, the office of the first registered agent.
3.2 The first registered agent of the Company
is Ogier Fiduciary Services (BVI) Limited of Nemours Chambers P.O. Box 3170, Road Town, Tortola, British Virgin Islands.
3.3 The Company may change its registered
office or registered agent by a Resolution of Directors or a Resolution of Members. The change shall take effect upon the Registrar registering a notice of change filed under section 92 of the Act.
4 CAPACITY AND POWER
4.1 The Company has, subject to the Act and any other British Virgin
Islands legislation for the time being in force, irrespective of corporate benefit:
(a) full capacity to carry on or undertake any business or activity, do any act
or enter into any transaction; and
(b) for the purposes of sub-paragraph (a), full rights, powers and privileges.
4.2 There are subject to Clause 4.1 no limitations on the business that the Company may carry on.
REGISTRAR OF CORPORATE AFFAIR
BVI FINANCIAL SERVICES COMMISSION
FSC REGISTERED
1
5 NUMBER AND CLASSES OF SHARES
5.1 The Company is
authorised to issue an unlimited number of shares each of no par value which may be Ordinary Shares or Founder Preferred Shares.
6 DESIGNATIONS, POWERS,
PREFERENCES OF SHARES
6.1 Ordinary Shares confer upon the holder:
(a) the
right to an equal share (with the holders of Founder Preferred Shares) in the distribution of the surplus assets of the Company on its liquidation as are attributable to the holders of Ordinary Shares in accordance with the Articles;
(b) subject to the right of the Founder Preferred Shares in accordance with Article 4 to receive any Annual Dividend Amount from time to time, the right, together with the Founder
Preferred Shares, to receive such portion of all amounts available for distribution and from time to time distributed by way of dividend or otherwise at such time as the Directors shall determine as is attributable in accordance with Article 4.6;
and
(c) in respect of each such Ordinary Share the right to receive notice of, attend and vote as a Member at any meeting of Members, except that each holder of
Ordinary Shares does not have a right to vote on any Resolution of Members as provided for by Article 42.1 (Merger and Consolidation) and Article 43 (Acquisition), and no right to receive notice of or attend any meeting of Members in respect
thereof.
6.2 Founder Preferred Shares:
(a) confer upon the holder the right
to a share in the Annual Dividend Amount payable in accordance with Article 4 of the Articles;
(b) confer upon the holder the right to receive notice of, attend
and vote as a Member at any meeting of Members;
(c) subject to the right of the Founder Preferred Shares in accordance with Article 4 to receive any Annual
Dividend Amount from time to time, confer upon the holders the right, together with the holders of Ordinary Shares, to receive such portion of all amounts available for distribution and from time to time distributed by way of dividend or otherwise
at such time as the Directors shall determine as is attributable in accordance with Article 4.6;
(d) confer upon the holder the right to an equal share (with the
holders of Ordinary Shares) in the distribution of the surplus assets of the Company on its liquidation as are attributable to the Founder Preferred Shares in accordance with the Articles; and
(e) are convertible into Ordinary Shares in the circumstances specified in Article 5.
REGISTRAR OF CORPORATE AFFAIR
BVI FINANCIAL SERVICES COMMISSION
FSC REGISTERED
6.3 The Directors may at their discretion by a Resolution of Directors redeem, purchase or otherwise acquire all or any of the shares in
the Company, with the consent of the Member whose shares are to be redeemed, purchased or otherwise acquired (unless the Company is permitted by any other provision in the Memorandum or the Articles to purchase, redeem or otherwise acquire the
shares without such consent being obtained), subject to the Articles.
7 VARIATION OF RIGHTS
7.1 Subject to Clause 7.2, the rights attached to a class of shares as specified in Clauses 6.1 and 6.2 may only, whether or not the Company is being wound up, be varied in such a
manner which the Directors in their discretion determine may have a material adverse effect on such rights, with the consent in writing of the holders of not less than 50 (fifty) per cent. of the issued shares of that class, or by a resolution
passed by the holders representing not less than 50 (fifty) per cent. of the votes cast by eligible holders of the issued shares of that class at a separate meeting of the holders of that class. Notwithstanding the foregoing, the Directors may make
such variation to the rights of any class of shares that they, in their absolute discretion acting in good faith determine to be necessary or desirable in relation to or in connection with or resulting from an Acquisition (including at any time
after the Acquisition has been made) including without limitation in connection with admission to listing on the New York Stock Exchange.
7.2 For the purposes of
any consent required pursuant to Clause 7.1, the Directors may treat one or more classes of shares as forming one class if they consider that any proposed variation of the rights attached to each such class of shares as specified in Clauses 6.1 and
6.2 would affect each such class in materially the same manner.
8 REGISTERED SHARES
8.1 The Company shall issue registered shares only.
8.2 The Company is not authorised to issue
bearer shares, convert registered shares to bearer shares or exchange registered shares for bearer shares.
9 TRANSFER OF SHARES
9.1 A share may be transferred in accordance with the Articles.
10 AMENDMENT OF MEMORANDUM AND
ARTICLES
10.1 The Company may amend its Memorandum or Articles by way of a Resolution of Members or in accordance with the Articles.
REGISTRAR OF CORPORATE AFFAIR
BVI FINANCIAL SERVICES COMMISSION
FSC REGISTERED
We, Ogier Fiduciary Services (BVI) Limited of Nemours Chambers, Road Town, Tortola, British Virgin Islands, for the purpose of
incorporating a BVI business company under the laws of the British Virgin Islands hereby sign this Memorandum of Association.
Dated: 1 April 2014
Incorporator
Sgd: Tatenda Gotosa
Sgd: Kay Eade
Authorised Signatory
Authorised Signatory
Ogier Fiduciary Services (BVI) Limited
Ogier Fiduciary Services (BVI) Limited
REGISTRAR OF CORPORATE AFFAIR
BVI FINANCIAL SERVICES COMMISSION
FSC REGISTERED
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI
BUSINESS COMPANIES ACT, 2004
COMPANY LIMITED BY SHARES
ARTICLES OF
ASSOCIATION
OF
Nomad Foods Limited
TABLE OF CONTENTS
1 INTERPRETATION 1
2 SHARES 9
3 PRE-EMPTIVE RIGHTS 11
4 DIVIDEND RIGHTS 11
5 CONVERSION OF FOUNDER PREFERRED SHARES 12
6 DISCLOSURE REQUIREMENTS 14
7 CERTIFICATES 15
8 LIEN 16
9 CALLS IN RESPECT OF SHARES AND FORFEITURE 17
10 UNTRACED SHAREHOLDERS 18
11 TRANSFER OF SHARES 20
12 TRANSMISSION OF SHARES 20
13 COMPULSORY TRANSFER 21
14 ALTERATION OF SHARES 22
15 DISTRIBUTIONS 23
16 REDEMPTION OF SHARES AND TREASURY SHARES 25
17 MORTGAGES AND CHARGES OF SHARES 25
18 MEETINGS AND CONSENTS OF MEMBERS 26
19 PROCEEDINGS AT MEETINGS OF MEMBERS
27
20 VOTES OF MEMBERS 29
21 SQUEEZE OUT PROVISIONS 33
22 NUMBER OF DIRECTORS 33
23 ALTERNATE DIRECTORS 33
24 POWERS OF DIRECTORS 34
25 DELEGATION OF DIRECTORS POWERS 35
REGISTRAR OF CORPORATE AFFAIR
BVI FINANCIAL SERVICES COMMISSION
FSC REGISTERED
26 APPOINTMENT AND RETIREMENT OF DIRECTORS 36
27
DISQUALIFICATION AND REMOVAL OF DIRECTORS 37
28 DIRECTORS REMUNERATION AND EXPENSES 38
29 OFFICERS AND AGENTS 38
30 DIRECTORS INTERESTS 39
31 DIRECTORS GRATUITIES AND PENSIONS 40
32 PROCEEDINGS OF DIRECTORS 40
33 INDEMNIFICATION 42
34 RECORDS 43
35 REGISTERS OF CHARGES 44
36 CONTINUATION 45
37 SEAL 45
38 ACCOUNTS AND AUDIT 45
39 CAPITALISATION OF PROFITS 45
40 NOTICES 47
41 WINDING UP 49
42 MERGER AND CONSOLIDATION 49
43 ACQUISITION 50
44 AMENDMENT OF MEMORANDUM AND ARTICLES 50
REGISTRAR OF CORPORATE AFFAIR
BVI FINANCIAL SERVICES COMMISSION
FSC REGISTERED
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI
BUSINESS COMPANIES ACT 2004
ARTICLES OF ASSOCIATION
OF
Nomad Foods Limited
A COMPANY LIMITED BY SHARES
1 INTERPRETATION
1.1 In these Articles and the attached Memorandum, the following words shall
bear the following meanings if not inconsistent with the subject or context:
Acquisition means an initial acquisition by the Company or by any subsidiary thereof
(which may be in the form of a merger, capital stock exchange, asset acquisition, stock purchase, scheme of arrangement, reorganisation or similar business combination) of an interest in an operating company or business, as contemplated by the
Prospectus;
Act means the BVI Business Companies Act, 2004 (as amended), and includes the regulations made under the Act;
acting in concert shall be construed in accordance with the City Code on Takeovers and Mergers;
Admission means the initial admission of the Ordinary Shares to the standard listing segment of the Official List and to trading on the Main Market which occurred
on 15 April 2014;
Affiliate has the meaning given to it in Rule 405 under the US Securities Act;
Annual Dividend Amount means:
A x B
where:
A = an amount equal to 20 per cent. of the increase (if any) in the value of an
Ordinary Share. Such increase shall be calculated as being the difference between (i) the Dividend Price for that Dividend Year and (ii) (a) if no Annual Dividend Amount has previously been paid, a price of US$10.00 per Ordinary
Share, or (b) if an Annual Dividend Amount has previously been paid, the highest Dividend Price for any prior Dividend Year, provided that in each case such amount is subject to such adjustment either as the Directors in their absolute
discretion
REGISTRAR OF CORPORATE AFFAIR
BVI FINANCIAL SERVICES COMMISSION
FSC REGISTERED
1
determine to be fair and reasonable in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of
Admission or otherwise as determined in accordance with Article 5.4; and
B = the Preferred Share Dividend Equivalent;
Appointee has the meaning specified in article 26.3;
Articles means the articles of
association of the Company as the same may be amended, supplemented or otherwise modified from time to time;
Auditors means the auditors from time to time of the
Company;
Average Price means for any security, as of any date (or relevant period, as applicable): (i) in respect of Ordinary Shares or any other security,
the volume weighted average price for such security on the London Stock Exchange as reported by Bloomberg through its Volume at Price functions; (ii) if the London Stock Exchange is not the principal securities exchange or trading
market for that security, the volume weighted average price of that security on the principal securities exchange or trading market on which that security is listed or traded as reported by Bloomberg through its Volume at Price
functions; (iii) if the foregoing do not apply, the last closing trade price of that security in the over-the-counter market on the electronic bulletin board for that security as reported by Bloomberg; or (iv) if no last closing trade
price is reported for that security by Bloomberg, the last closing ask price of that security as reported by Bloomberg. If the Average Price cannot be calculated for that security on that date on any of the foregoing bases, the Average Price of that
security on such date shall be the fair market value as mutually determined by the Company and the holders of the majority of outstanding Founder Preferred Shares (acting reasonably);
Bloomberg means Bloomberg Financial Markets;
Board means a board of Directors at any time of
the Company or the Directors present at a duly convened meeting of Directors at which a quorum is present;
Business Day means a day (except Saturday or Sunday) on
which banks are open for business in London and the British Virgin Islands;
BVI means the territory of the British Virgin Islands;
Change of Control means, following an Acquisition, the acquisition of Control of the Company by any person or party (or by any group of persons or parties who are acting in
concert);
Company means Nomad Foods Limited incorporated under the Act;
Control means:
REGISTRAR OF CORPORATE AFFAIR
BVI FINANCIAL SERVICES COMMISSION
FSC REGISTERED
2
(a) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
(i) cast, or control the casting of, more than 50 (fifty) per cent. of the maximum number of votes that might be cast at a meeting of Members; or
(ii) appoint or remove all, or the majority, of the Directors or other equivalent officers of the Company; or
(iii) give directions with respect to the operating and financial policies of the Company with which the Directors or other equivalent officers of the Company are obliged to
comply; and/or
(b) the holding beneficially of more than 50 (fifty) per cent. of the issued shares of the Company (excluding any issued shares that carry no right
to participate beyond a specified amount in a distribution of either profits or capital),
but excluding in the case of each of (i) and (ii) above any
such power or holding that arises as a result of the issue of Ordinary Shares by the Company in connection with an Acquisition;
Conversion Date has the meaning
specified in Article 5.1;
Default Shares has the meaning specified in Article 6.4;
Depositary means Computershare Investor Services PLC, or such other custodian or other person (or a nominee for such custodian or other person) appointed under contractual
arrangements with the Company or other arrangements approved by the Board whereby such custodian or other person or nominee holds or is interested in shares of the Company or rights or interests in shares of the Company and issues securities or
other documents of title or otherwise evidencing the entitlement of the holder thereof to or to receive such shares, rights or interests, provided and to the extent that such arrangements have been approved by the Board for the purpose of these
Articles;
Director means a director of the Company for the time being or, as the case may be, the directors assembled as a Board or committee of such Board;
Disclosure Notice has the meaning specified in Article 6.1;
Dividend Date
means in respect of a Dividend Year the last day of such Dividend Year;
Dividend Determination Period means the last ten consecutive Trading Days of a Dividend
Year;
Dividend Price means the Average Price per Ordinary Share for the Dividend Determination Period in the relevant Dividend Year;
REGISTRAR OF CORPORATE AFFAIR
BVI FINANCIAL SERVICES COMMISSION
FSC REGISTERED
3
Dividend Year means the period commencing on the date of Admission and ending on the last day of the Companys first Financial
Year, and thereafter each Financial Year of the Company, except that:
(a) in the event of the Companys entry into liquidation, the relevant Dividend Year
shall end on the Trading Day immediately prior to the date of commencement of liquidation; and
(b) in the event of an automatic conversion of the Founder Preferred
Shares pursuant to Article 5.1, the relevant Dividend Year shall end on the Trading Day immediately prior to the Conversion Date;
Document has the meaning set out
in Article 40.1;
Dormant Company means a company which does not engage in trade or otherwise carry on business in the ordinary course;
equity security means a share (other than a bonus share) or a right to subscribe for, or to convert securities into, shares in the Company;
ERISA means the US Employee Retirement Income Security Act of 1974, as amended;
executed
includes any mode of execution;
Financial Year means the financial year of the Company, being in respect of the first financial year the period from incorporation
until 31 March 2015, being in respect of the second financial year the period from 1 April 2015 to 31 December 2015 and thereafter being each 12 month (or shorter) period ending on 31 December, or, whether in relation to the
second or any subsequent financial year, such other financial year(s) (each of which may be a 12 month period or any longer or shorter period) as may be determined from time to time by the Board and in accordance with any applicable laws and
regulations;
Founder means each of Martin E. Franklin and Noam Gottesman;
Founder Entity means each of Mariposa Acquisition II, LLC and TOMS Acquisition I, LLC;
Founder Preferred Share means a convertible preferred share of no par value in the Company having the rights and being subject to the restrictions specified in the Memorandum;
FCA means the Financial Conduct Authority of the United Kingdom or any successor;
holder, Member or shareholder in relation to shares means the member recorded as a holder of a share in the Companys register of Members;
Independent Directors means those Directors of the Board from time to time considered by the Board to be independent for the purposes of the UK Corporate Governance Code (or any
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other appropriate corporate governance regime complied with by the Company from time to time) together with the chairman of the Board
provided that such person was independent on appointment for the purposes of the UK Corporate Governance Code (or any other appropriate corporate governance regime complied with by the Company from time to time);
Law means every order in council, law, statutory instrument or regulation for the time being in force concerning companies incorporated in the British Virgin Islands and affecting
the Company (including, for the avoidance of doubt, the Act) in each case as amended, extended or replaced from time to time;
Listing Rules means the listing rules
of the UKLA as amended from time to time;
London Stock Exchange means the London Stock Exchange plc;
Main Market means the London Stock Exchanges main market for listed securities (or, if the Ordinary Shares are not at the relevant time traded on such market, the principal
stock exchange or securities market on which the Ordinary Shares are then listed or traded or if the Ordinary Shares are at the relevant time listed or traded on more than one stock exchange or securities market, the stock exchange or securities
market on which the Directors, in their absolute discretion, determine that Ordinary Shares have the greatest liquidity);
Memorandum means the memorandum of
association of the Company, as the same may be amended, supplemented or otherwise modified from time to time;
Office means the registered office of the Company;
Official List means the Official List maintained by the UKLA;
Ordinary Share
means an ordinary share of no par value in the Company having the rights and being subject to the restrictions specified in the Memorandum;
paid up in relation to
shares means fully paid or credited as fully paid, but excludes partly paid shares;
parent has the meaning specified in section 2 of the Act;
Payment Date means a day no later than ten Trading Days after the Dividend Date, except in respect of any Annual Dividend Amount becoming due on the Trading Day immediately prior
to the date of commencement of the Companys liquidation, in which case the Payment Date shall be such Trading Day, and except in respect of any Annual Dividend Amount becoming due on account of an automatic conversion immediately upon a Change
of Control pursuant to Article 5.1(a), in which case the Payment Date shall be the Trading Day immediately after such event;
Permitted Transferees means any of the
following donees or transferees of Founder Preferred Shares transferred to such donees or transferees from a Founder Entity: (i) a donee that receives Founder Preferred Shares as a bona fide gift made from a Founder
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Entity; (ii) any of the Directors or Founders (from time to time); (iii) a person immediately related to a Founder or a Director by
blood, marriage or adoption in connection with a transfer for estate planning purposes; (iv) any trust that is solely for the benefit of a Founder Entity or any of its Affiliates, or a Permitted Transferee of such Founder Entity or any direct or
indirect wholly-owned subsidiary of such trust; (v) any Affiliate or direct or indirect holder of equity, holder of partnership interests or member of a Founder Entity or any of its Affiliates, or a Permitted Transferee of such Founder Entity and/or
(vi) any other Founder Entity, or Affiliates or direct or indirect holders of equity, partnership interests or members of that other Founder Entity, and any Permitted Transferee of that Founder Entity;
Preferred Share Dividend Equivalent means such number of Ordinary Shares outstanding immediately following the Acquisition but excluding any Ordinary Shares issued to shareholders
or other beneficial owners of a company or business acquired pursuant to or in connection with the Acquisition (which total number is subject to such adjustment either as the Directors in their absolute discretion determine to be fair and reasonable
in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of Admission or otherwise as determined in accordance with Article 5.4);
Prospectus means the prospectus issued by the Company in connection with Admission; register of Members has the meaning specified in Article 2.9; Registrar means the Registrar of
Corporate Affairs of the British Virgin Islands;
Relevant System means a computer-based system and procedures which enable title to units of a Security (including
depositary interests) to be evidenced and transferred without a written instrument, and which facilitate supplementary and incidental matters;
Resolution of
Directors means either:
(a) a resolution approved at a duly convened and constituted meeting of Directors or of a committee of Directors by the affirmative vote of
a majority of the Directors present at the meeting who voted except that where a Director is given more than one vote, he shall be counted by the number of votes he casts for the purpose of establishing a majority; or
(b) a resolution consented to in writing by such number of Directors or such number of members of a committee of Directors as would have been required to approve a Resolution of
Directors under (a) above;
Resolution of Members means either:
(a) a
resolution approved at a duly convened and constituted meeting of the Members of the Company by the affirmative vote of a majority of the votes of the shares entitled to vote thereon which were present at the meeting and were voted; or
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(b) a resolution consented to in writing by a majority of the votes of shares entitled to vote thereon;
Sale Share has the meaning specified in Article 10.2;
Seal means any seal which has been duly
adopted as the common seal of the Company;
secretary means the secretary of the Company or other person appointed to perform the duties of the secretary of the
Company including a joint, assistant or deputy secretary;
Securities means shares and debt obligations of every kind of the Company, and including without
limitation options, warrants and rights to acquire shares or debt obligations, and Security shall be construed accordingly;
Special Resolution of Members means
either:
(a) a resolution approved at a duly convened and constituted meeting of the Members of the Company by the affirmative vote of not less than 75 (seventy
five) per cent. of the votes of the shares entitled to vote thereon which were present at the meeting and were voted; or
(b) a resolution consented to in writing
by not less than 75 (seventy five) per cent. of the votes of shares entitled to vote thereon;
subsidiary has the meaning as specified in section 2 of the Act;
Trading Day means any day on which the Main Market (or such other applicable securities exchange or quotation system) is open for business and on which the
Ordinary Shares may be dealt in (other than a day on which the Main Market (or such other applicable securities exchange or quotation system) is scheduled to or does close prior to its regular weekday closing time);
Transfer Notice has the meaning specified in Article 13.2;
Treasury Share means a share that
was previously issued but was repurchased, redeemed or otherwise acquired by the Company and not cancelled;
UK Corporate Governance Code means the UK Corporate
Governance Code (or equivalent code) issued by the Financial Reporting Council in the United Kingdom from time to time;
UKLA means the FCA acting in its capacity
as competent authority for the purposes of admissions to the Official List;
US or United States means the United States of America, its territories and
possessions, any state in the United States of America and District of Columbia;
US Securities Act means the US Securities Act of 1933, as amended; and
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US$, USD or United States Dollars means the currency of the United States.
1.2 A reference to any law, statute or statutory provision shall, unless the context otherwise requires, be construed as a reference to such law, statute or statutory provision as
the same may have been or may from time to time be amended, modified, extended, consolidated, re- enacted or replaced and shall include any subordinated legislation or regulation made thereunder.
1.3 Words denoting the singular include the plural and vice versa.
1.4 Words denoting a gender
include every gender.
1.5 References to persons shall include firms, corporations, partnerships, associations and other bodies of persons, whether corporate or
not.
1.6 The word may shall be construed as permissive and the word shall shall be construed as imperative.
1.7 The word signed shall include a signature or a representation of a signature affixed by mechanical means.
1.8 The words in writing shall mean written, facsimiled, or otherwise electronically transmitted or published in a readable form, printed, photographed or lithographed or
represented by any other substitute for writing or partly one or partly another.
1.9 References to something in electronic form shall include:
(a) something partly in electronic form;
(b) something, whether or not itself in electronic
form:
(i) made wholly or partly by electronic means; or
(ii) made wholly or
partly by means of something wholly or partly in electronic form.
1.10 The word discretion shall mean absolute discretion and the expression as the Directors may
determine shall mean as the Directors in their absolute discretion may determine.
1.11 References to notice means a notice in writing unless otherwise specifically
stated.
1.12 A reference to the Auditors or such other person confirming any matter shall be construed to mean confirmation of their opinion as to such matter
whether qualified or not.
1.13 A reference to a Clause, unless the context requires otherwise, is a reference to a clause of the Memorandum and a reference to an
Article, unless the context otherwise requires, is a reference to an Article of these Articles.
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1.14 Subject to the above provisions any words defined in the Act shall bear the same meaning in these Articles.
1.15 The headings in these Articles are intended for convenience only and shall not affect the construction of these Articles.
2 SHARES
2.1 Shares and other Securities may be issued and options to acquire shares or other
Securities may be granted at such times, to such persons, for such consideration and on such terms as the Directors may by Resolution of Directors determine.
2.2
The Company may issue fractions of shares and any such fractional shares shall rank pari passu in all respects with the other shares of the same class issued by the Company.
2.3 The maximum permitted number of joint holders of shares shall be four and the Company shall not be required to enter the names of more than four joint holders in the register
of Members of the Company.
2.4 The Company may exercise the powers of paying commissions and in such an amount or at such a percentage rate as the Directors may
determine. Subject to the provisions of the Act any such commission may be satisfied by the payment of cash or by the allotment of paid up or partly paid shares or partly in one way and partly in the other. The Company may also on any issue of
shares pay such brokerage as may be lawful.
2.5 Subject to the Law, the Directors may permit the holding of shares of any class in uncertificated form (including
in the form of depositary interests or similar interests, instruments or Securities) in such manner as the Directors may determine from time to time.
2.6
Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the Directors may, in their absolute discretion, think fit (subject always to any applicable laws and regulations
and the facilities and requirements of any Relevant System). The Company shall enter on the register of Members how many shares are held by each Member in uncertificated form and in certificated form and shall maintain the register of Members in
each case as is required by any applicable laws and regulations and the facilities and requirements of any Relevant System.
2.7 The rights conferred upon the
holders of any shares of any class issued with preferred, deferred or other rights shall not (unless otherwise expressly provided by the conditions of issue of such shares) be deemed to be varied or abrogated by the creation or issue of further
shares ranking pari passu therewith (excluding, for these purposes, the date from which such new shares shall rank for dividend) or in the case of Founder Preferred Shares (for the avoidance of doubt) the creation or issue of Ordinary Shares, or by
the exercise of any power under the disclosure provisions requiring Members to disclose an interest in the Companys shares pursuant to Article 6, the reduction of capital on such shares, the conversion of shares in accordance with these
Articles, or by the purchase or redemption by the Company of its
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own shares or the sale of any shares held as Treasury Shares in accordance with the provisions of the Act.
2.8 No shares may be issued for a consideration other than money, unless a Resolution of Directors has been passed stating:
(a) the amount to be credited for the issue of the shares;
(b) their determination of the
reasonable present cash value of the non-money consideration for the issue; and
(c) that, in their opinion, the present cash value of the non-money consideration
for the issue is not less than the amount to be credited for the issue of the shares.
2.9 The Company shall keep a register (the register of Members) containing:
(a) the names and addresses of the persons who hold shares;
(b) the number of
each class and series of shares held by each Member;
(c) the date on which the name of each Member was entered in the register of Members; and
(d) the date on which any person ceased to be a Member.
2.10 The register of Members may be in
any such form as the Directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until the Directors otherwise determine, the magnetic, electronic or
other data storage form shall be the original register of Members.
2.11 A share is deemed to be issued when the name of the Member is entered in the register of
Members.
2.12 Except as required by law, no person shall be recognised by the Company as holding any share upon any trust and (except as otherwise provided by
these Articles or by law) the Company shall not be bound by or recognise (even when having notice thereof) any interest in any share other than an absolute right of the registered holder to the entirety of a share or fraction thereof.
2.13 On a winding up of the Company the assets (if any) of the Company available for distribution to Members shall be distributed to the holders of Ordinary Shares and Founder
Preferred Shares pro rata to the number of such paid up shares held by each holder relative to the total number of issued and paid up Ordinary Shares as if such paid up Founder Preferred Shares had been converted into Ordinary Shares immediately
prior to the winding-up.
2.14 The Company may, subject to the provisions of the Act and of these Articles, issue warrants or grant options to subscribe for shares
in the Company. Such warrants or options shall be
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issued upon such terms and subject to such conditions as may be resolved upon by the Board.
3 PRE-EMPTIVE RIGHTS
3.1 Section 46 of the Act does not apply to the Company.
4 DIVIDEND RIGHTS
4.1 Commencing in 2015, and only once the Average Price per Ordinary Share
(subject to such adjustment either as the Directors in their absolute discretion determine to be fair and reasonable in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of Admission or otherwise as
determined in accordance with Article 5.4) for any ten consecutive Trading Days following Admission is at least US$11.50, the holders of Founder Preferred Shares will be entitled to receive in aggregate the Annual Dividend Amount in respect of each
Dividend Year as calculated in accordance with these Articles, payable in Ordinary Shares or cash, at the sole option of the Company. Each Annual Dividend Amount shall be divided between the holders pro rata to the number of Founder Preferred Shares
held by them on the relevant Dividend Date. If the Company determines to pay such Annual Dividend Amount in Ordinary Shares, then the Annual Dividend Amount will be paid on the relevant Payment Date by the issue to each holder of Founder Preferred
Shares of such number of whole Ordinary Shares as is equal to the pro rata amount of the Annual Dividend Amount to which they are entitled divided by the Dividend Price (provided that any fractional Ordinary Shares due to a holder resulting from
such calculation shall not be issued and such holder shall be entitled to be paid the nearest lower whole number of Ordinary Shares).
4.2 In the event of the
Company entering liquidation, the Dividend Date for the relevant Dividend Year shall be the Trading Day immediately prior to the date of commencement of liquidation and accordingly an Annual Dividend Amount shall be calculated as of such Dividend
Date and be payable on the relevant Payment Date.
4.3 In the event of an automatic conversion of Founder Preferred Shares occurring in accordance with Article 5.1,
the Dividend Date for the relevant Dividend Year shall be the Trading Day immediately prior to the relevant Conversion Date and accordingly an Annual Dividend Amount shall be calculated as of such Dividend Date and be payable on the relevant Payment
Date.
4.4 For the avoidance of doubt, any Annual Dividend Amount due in respect of a Dividend Year, including in accordance with Article 4.2 or 4.3, shall be
payable in full and shall not be subject to prorating notwithstanding any Dividend Year being longer or shorter than 12 months.
4.5 In the event an Annual Dividend
Amount is payable, where the Ordinary Shares (or any interests therein) are listed or traded on any stock exchange or securities market the Company shall use reasonable endeavours, including the issue of any prospectus, listing document or similar
as may be required, to procure that, upon the payment of the Annual
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Dividend Amount, the Ordinary Shares arising from such payment (or any interests therein) are promptly admitted to such stock exchange
or securities market (or where more than one, all of them) and that any interests in the Ordinary Shares (including depositary interests) be capable of being transferred in a Relevant System.
4.6 In addition to the right to receive an Annual Dividend Amount, Founder Preferred Shares confer upon the holders the right, together with the holders of the Ordinary Shares, to
receive all amounts available for distribution and from time to time distributed by way of dividend or otherwise at such time as the Directors shall determine (and in each case distributed among the holders of Founder Preferred Shares pro rata to
the number of Ordinary Shares held by the holders of Founder Preferred Shares, as if for such purpose the Founder Preferred Shares had been converted into Ordinary Shares immediately prior to such distribution plus, commencing in 2015, an amount
equal to 20 per cent. of the dividend which would be distributable on such number of Ordinary Shares equal to the Preferred Share Dividend Equivalent). Any such amount payable in respect of the Ordinary Shares and the Founder Preferred Shares
shall be divided between the holders of shares of the relevant class pro rata to the number of shares of such class held by them on the date the dividend is declared.
5 CONVERSION OF FOUNDER PREFERRED SHARES
5.1 Each Founder Preferred Share will automatically
convert into one Ordinary Share (subject to such adjustment either as the Directors in their absolute discretion determine to be fair and reasonable in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of
Admission or otherwise as determined in accordance with Article 5.4) on the earliest of the following to occur:
(a) subject to Article 5.6, immediately upon a
Change of Control; or
(b) immediately upon the last day of the seventh full Financial Year of the Company after completion of the Acquisition,
or, if either such date is not a Trading Day, on the first Trading Day immediately following such date (the Conversion Date).
5.2 A holder of Founder Preferred Shares may by notice in writing to the Company require the conversion of such number of that holders Founder Preferred Shares as is
specified in such notice (and, if such notice is silent as to the number of Founder Preferred Shares, that holder shall be deemed to have required the conversion of all of his Founder Preferred Shares), into an equal number of Ordinary Shares
(subject to such adjustment either as the Directors in their absolute discretion determine to be fair and reasonable in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of Admission or otherwise as
determined in accordance with Article 5.4), and in such circumstances those Founder Preferred Shares the subject of such notice shall be converted five Trading Days following receipt of the notice by the Company. In the event of a conversion
pursuant to this Article 5.2, the holder whose Founder Preferred Shares are converted shall not be entitled to receive, in respect of the Founder Preferred Shares converted, the relevant pro rata amount
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of the Annual Dividend Amount which may have been attributable to those Founder Preferred Shares in respect of the Dividend Year in
which the date of conversion occurs.
5.3 In the event of a conversion pursuant to Article 5.1 or Article 5.2:
(a) any share certificates relating to the converted shares shall be cancelled and the Company shall issue to the relevant Member new certificates in respect of the Ordinary Shares
which have arisen on the conversion unless the holder elects (or is deemed to have elected) to hold their new Ordinary Shares in uncertificated form;
(b) subject
to the terms of these Articles, the Ordinary Shares arising on conversion shall be credited as paid up and shall rank pari passu with the outstanding Ordinary Shares of the Company in issue at the Conversion Date, including as to dividends and other
distributions declared, by reference to a record date falling after the Conversion Date; and
(c) where the Ordinary Shares (or any interests therein) are listed or
traded on any stock exchange or securities market the Company shall use reasonable endeavours, including the issue of any prospectus, listing document or similar as may be required, to procure that, upon conversion, the Ordinary Shares arising from
such conversion (or any interests therein) are promptly admitted to such stock exchange or securities market (or where more than one, all of them) and that any interests in the Ordinary Shares (including depositary interests) be capable of being
transferred in a Relevant System.
5.4 Notwithstanding any other provisions in these Articles, in any circumstances where:
(a) the Directors or the holders of a majority of the outstanding Founder Preferred Shares consider that an adjustment should be made to (1) any factor relevant for the
calculation of the Annual Dividend Amount (including the amount which the Average Price per Ordinary Share must meet or exceed for any ten consecutive Trading Days following Admission in order for the right to an Annual Dividend Amount to commence
(initially set at US$11.50)), (2) the number of Ordinary Shares into which the Founder Preferred Shares shall convert, or (3) the Preferred Share Dividend Equivalent, whether following a consolidation or sub-division of the Ordinary Shares
in issue after the date of Admission or otherwise; or
(b) the holders of a majority of the outstanding Founder Preferred Shares disagree with any adjustment as
determined by the Directors,
the Directors will either (i) make such adjustment as is mutually determined by the Directors and the holders of the majority of
the outstanding Founder Preferred Shares (acting reasonably) or (ii) failing agreement within a reasonable time, will at the Companys expense appoint the Auditors, or such other person as the Directors shall, acting reasonably, determine
to be an expert for such purpose, to determine as soon as practicable what adjustment (if any) is fair and reasonable. Upon determination in either case the adjustment
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(if any) will be made and will take effect in accordance with the determination. The Auditors (or such other expert as may be appointed)
shall be deemed to act as an expert and not an arbitrator and applicable laws relating to arbitration shall not apply, the determination of the Auditors (or such other expert as may be appointed) shall be final and binding on all concerned and the
Auditors (or such other expert as may be appointed) shall be given by the Company all such information and other assistance as they may reasonable require.
5.5
Conversion of the Founder Preferred Shares pursuant to this Article 5 shall be in such manner as may be determined by the Company, including, without limitation, by redemption of such shares and applying the proceeds in the subscription for the
applicable number of Ordinary Shares, by means of sub-division and/or consolidation and/or a combination of both (in which case, for the avoidance of doubt, the requisite sub-division and/or consolidation shall be effected pursuant to the provisions
of these Articles), by automatically converting the Founder Preferred Shares into Ordinary Shares or by redesignating any such Founder Preferred Shares as Ordinary Shares.
5.6 Notwithstanding that circumstances may arise which would constitute a Change of Control, in the event that before such Change of Control occurs the Independent Directors
unanimously determine as such in their absolute discretion, the Founder Preferred Shares shall not automatically convert in accordance with the provisions of Article 5.1(a).
6 DISCLOSURE REQUIREMENTS
6.1 The Company may, by notice in writing (a Disclosure Notice)
require a person whom the Company knows to be or has reasonable cause to believe is or, at any time during the 3 (three) years immediately preceding the date on which the Disclosure Notice is issued, to have been interested in any shares:
(a) to confirm that fact or (as the case may be) to indicate whether or not it is the case; and
(b) to give such further information as may be required in accordance with Article 6.2.
6.2 A
Disclosure Notice may (without limitation) require the person to whom it is addressed:
(a) to give particulars of his status, domicile, nationality and residency;
(b) to give particulars of his own past or present interest in any shares (held by him at any time during the 3 (three) year period specified in Article 6.1);
(c) to disclose the identity of any other person who has a present interest in the shares held by him;
(d) where the interest is a present interest and any other interest in any shares subsisted during that 3 (three) year period at any time when his own interest subsisted, to give
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(so far as is within his knowledge) such particulars with respect to that other interest as may be required by the Disclosure Notice;
and
(e) where his interest is a past interest to give (so far as is within his knowledge) like particulars of the identity of the person who held that interest
immediately upon his ceasing to hold it.
6.3 Any Disclosure Notice shall require any information in response to such notice to be given within the prescribed
period (which is 14 (fourteen) calendar days after service of the notice or 7 (seven) days if the shares concerned represent 0.25 (nought point two five) per cent. or more in number of the issued shares of the relevant class) or such other
reasonable period as the Directors may determine.
6.4 If any Member is in default in supplying to the Company the information required by the Company within the
prescribed period or such other reasonable period as the Directors determine, the Directors in their absolute discretion may serve a direction notice on the Member. The direction notice may direct that in respect of the shares in respect of which
the default has occurred (the Default Shares) the Member shall not be entitled to attend or vote in meetings of Members or class meetings. Where the Default Shares represent at least 0.25 (nought point two five) per cent. in number of the class of
shares concerned the direction notice may additionally direct that dividends on such shares will be retained by the Company (without interest) and that no transfer of the Default Shares (other than a transfer authorised under the Articles) shall be
registered until the default is rectified; or subject always to the rules of a Relevant System, the Listing Rules and the requirements of the UKLA and the London Stock Exchange in respect of the Default Shares, the Directors may in their discretion
determine that the provisions of Article 13 should apply to such Default Shares.
6.5 Where Default Shares in which a person appears to be interested are held by a
Depositary, the provisions of this Article 6 shall be treated as applying only to those shares held by the Depositary in which such person appears to be interested and not (insofar as such persons apparent interest is concerned) to any other
shares held by the Depositary.
6.6 Where the Member on which a Disclosure Notice is served is a Depositary acting in its capacity as such, the obligations of the
Depositary as a Member shall be limited to disclosing to the Company such information relating to any person appearing to be interested in the shares held by it, as has been recorded by it pursuant to the arrangements entered into by the Company or
approved by the Board pursuant to which it was appointed as a Depositary.
7 CERTIFICATES
7.1 The Company may (but shall not be obliged to) issue to a Member without payment one certificate for all the shares of each class held by him (and upon transferring a part of
his holding of shares of any class to a certificate for the balance of such holding) or several certificates each for one or more of his certificated shares upon payment, for every certificate after the first, of such reasonable sum as the Directors
may determine. Every certificate shall specify the number, class and distinguishing numbers (if any) of the shares to which it relates
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and the amount or respective amounts paid up or partly paid thereon. The Company shall not be bound to issue more than one certificate
for certificated shares held jointly by several persons and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.
7.2 All
forms of certificate for shares or any other form of security shall be issued in such manner as the Directors may determine which may include under the Seal, which may be affixed to or printed on it or in such other manner as the Directors may
approve, having regard to the terms of allotment or issue of shares, and shall be signed autographically unless there shall be in force a Resolution of Directors adopting some method of mechanical signature in which event the signatures (if
authorised by such resolution) may be appended by the method so adopted.
7.3 If a share certificate is defaced, worn out, lost or destroyed it may be renewed on
such terms (if any) as to evidence and indemnity and payment of the liability and expenses reasonably incurred by the Company in investigating evidence as the Directors may determine but otherwise free of charge and (in the case of defacement or
wearing out) on delivery up of the old certificate.
7.4 Any Member receiving a certificate shall indemnify and hold the Company and its Directors and officers
harmless from any loss or liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possession thereof.
7.5 No provision of these Articles shall apply so as to require the Company to issue a certificate to any person holding such shares in uncertificated form.
7.6 Uncertificated shares of a class are not to be regarded as forming a separate class from certificated shares of that class.
8 LIEN
8.1 The Company shall have a first and paramount lien on every share (not being a paid
up share) for all monies (whether presently payable or not) payable at a fixed time or called in respect of that share. The Directors may at any time declare any share to be wholly or in part exempt from the provisions of this Article. The
Companys lien on a share shall extend to any amount payable in respect of it.
8.2 The Company may sell in such manner as the Directors determine any shares
on which the Company has a lien if a sum in respect of which the lien exists is presently payable and is not paid within 14 (fourteen) calendar days after notice has been given to the holder of the share or to the person entitled to it by
transmission or operation of the law, demanding payment and stating that if the notice is not complied with the shares may be sold.
8.3 To give effect to a sale
the Directors may authorise any person to execute an instrument of transfer of the shares sold to or in accordance with the directions of the purchaser. The title
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of the transferee to the shares shall not be affected by any irregularity in or invalidity of the proceedings in reference to the sale.
8.4 The net proceeds of the sale after payment of the costs shall be applied in payment of so much of the sum for which the lien exists as is presently payable and
any residue shall (upon surrender to the Company for cancellation of the certificate for the shares sold and subject to a like lien for any moneys not presently payable as existed upon the shares before the sale) be paid to the person entitled to
the shares at the date of the sale.
9 CALLS IN RESPECT OF SHARES AND FORFEITURE
9.1 Subject to the terms of allotment the Directors may make calls upon the Members in respect of any monies unpaid in respect of their shares and each Member
shall (subject to receiving at least 14 (fourteen) calendar days notice specifying when and where payment is to be made) pay to the Company as required by the notice the amount called in respect of his shares. A call may be required to be paid
by instalments. A call may, before receipt by the Company of any sum due thereunder, be revoked in whole or part and payment of a call may be postponed in whole or part. A person upon whom a call is made shall remain liable for calls made upon him
notwithstanding the subsequent transfer of the shares in respect whereof the call was made.
9.2 A call shall be deemed to have been made at the time when the
resolution of the Directors authorising the call was passed.
9.3 The joint holders of a share shall be jointly and severally liable to pay all calls in respect
thereof.
9.4 If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from
the calendar day it became due and payable until it is paid; either at the rate fixed by the terms of allotment of the share or in the notice of the call or at such rate not exceeding 15 (fifteen) per cent. per annum as the Directors may determine.
The Directors may waive payment of the interest wholly or in part.
9.5 An amount payable in respect of a share on allotment or at any fixed date, whether in
respect of the issue price or premium or as an instalment of a call, shall be deemed to be a call and if it is not paid the provisions of these Articles shall apply as if that amount had become due and payable by virtue of a call. The Company may
accept from a Member the whole or a part of the amount remaining unpaid on any shares held by him although no part of that amount has been called up.
9.6 Subject
to the terms of allotment, the Directors may make arrangements on the issue of shares to distinguish between Members as to the amounts and times of payment of calls in respect of their shares.
9.7 If a call remains unpaid after it has become due and payable the Directors may give to the person from whom it is due not less than (14) fourteen calendar days
notice requiring
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payment of the amount unpaid together with any interest which may have accrued and any expenses which may have been incurred by the
Company in respect thereof. The notice shall name the place where payment is to be made and shall state that if the notice is not complied with the shares in respect of which the call was made will be liable to be forfeited.
9.8 If the notice is not complied with any share in respect of which it was given may at any time thereafter before the payment required by the notice has been made be forfeited by
a resolution of the Directors and the forfeiture shall include all dividends or other moneys payable in respect of the forfeited shares and not paid before the forfeiture.
9.9 A forfeited share may be sold, re-allotted or otherwise disposed of on such terms and in such a manner as the Directors determine either to the person who was before the
forfeiture the holder or to any other person and at any time before sale re-allotment or other disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal a forfeited share is to be
transferred to any person the Directors may authorise some person to execute an instrument of transfer of the share to that person.
9.10 A person any of whose
shares have been forfeited shall cease to be a Member in respect of them and shall surrender to the Company for cancellation the certificate for any certificated shares forfeited but shall remain liable to the Company for all monies which at the
date of forfeiture were presently payable by him to the Company in respect of those shares with interest at the rate at which interest was payable on those monies before the forfeiture or at such rate as the Directors may determine from the date of
forfeiture and all expenses until payment but the Directors may waive payment wholly or in part or enforce payment without any allowance for the value of the shares at the time of forfeiture or for any consideration received on their disposal.
9.11 A declaration under oath by a Director or the secretary that a share has been forfeited on a specified date shall be conclusive evidence of the facts stated
in it as against all persons claiming to be entitled to the share and the declaration shall (subject to the execution of an instrument of transfer if necessary) constitute a good title to the share and the person to whom the share is disposed of
shall not be bound to see to the application of the consideration, if any, nor shall his title to the share be affected by any irregularity in or invalidity of the proceedings in reference to the forfeiture or disposal of the share.
10 UNTRACED SHAREHOLDERS
10.1 The Company may sell the share of a Member or of a person
entitled by transmission at the best price reasonably obtainable at the time of sale, if:
(a) during a period of not less than 12 (twelve) years before the date of
publication of the
advertisements referred to in sub-paragraph (c) of this Article 10.1 (or, if published on two different dates, the first date) (the
relevant period) at least three cash dividends have become payable in respect of the share;
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(b) throughout the relevant period no cheque payable on the share has been presented by the holder of, or the person entitled by
transmission to, the share to the paying bank of the relevant cheque no payment made by the Company by any other means permitted by Article 15.8 has been claimed or accepted and, so far as any Director of the Company at the end of the relevant
period is then aware, the Company has not at any time during the relevant period received any communication from the holder of, or person entitled by transmission to, the share;
(c) on expiry of the relevant period the Company has given notice of its intention to sell the share by advertisement in (i) a United Kingdom national daily newspaper
(ii) either one newspaper circulated widely in the British Virgin Islands or the BVI Gazette and (iii) a newspaper circulating in the area of the address of the holder of, or person entitled by transmission to, the share shown in the
register of Members; and
(d) the Company has not, so far as the Board is aware, during a further period of three months after the date of the advertisements
referred to in sub-paragraph (c) of this Article 10.1 (or the later advertisement if the advertisements are published on different dates) and before the exercise of the power of sale received a communication from the holder of, or person
entitled by transmission to, the share.
10.2 Where a power of sale is exercisable over a share pursuant to Article 10.1 (a Sale Share), the Company may at the same
time also sell any additional share issued in right of such Sale Share or in right of such an additional share previously so issued provided that the requirements of sub-paragraphs (b) to (d) of Article 10.1 (as if the words
throughout the relevant period were omitted from sub-paragraph (b) and the words on expiry of the relevant period were omitted from sub-paragraph (c)) shall have been satisfied in relation to the additional share.
10.3 To give effect to a sale pursuant to Article 10.1 and Article 10.2, the Board may authorise a person to transfer the share in the name and on behalf of the
holder of, or person entitled by transmission to, the share, or to cause the transfer of such share, to the purchaser or his nominee and in relation to an uncertificated share may require the operator of any Relevant System to convert the share into
certificated form. The purchaser is not bound to see to the application of the purchase money and the title of the transferee is not affected by an irregularity or invalidity in the proceedings connected with the sale of the share.
10.4 The Company shall be indebted to the Member or other person entitled by transmission to the share for the net proceeds of sale and shall carry any amount received on sale to a
separate account. The Company is deemed to be a debtor and not a trustee in respect of that amount for the Member or other person. Any amount carried to the separate account may either be employed in the business of the Company or invested as the
Board may think fit. No interest is payable on that amount and the Company is not required to account for money earned on it.
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11 TRANSFER OF SHARES
11.1 Subject to the Act and
the terms of these Articles any Member may transfer all or any of his certificated shares by an instrument of transfer in any usual form or in any other form which the Directors may approve. The Directors may, without assigning any reasons therefor,
refuse to register the transfer of a certificated share (whether paid up or not) unless the instrument of transfer is lodged with the Company and is accompanied by any certificates for the shares to which it relates and such other evidence as the
Directors may require to show the right of the transferor to make the transfer.
11.2 Subject to the Act, the Directors may accept such evidence of title of the
transfer of uncertificated shares as they shall in their discretion determine. The Directors may permit shares (or interests in shares) held in uncertificated form (including in the form of depositary interests or similar interests, instruments or
Securities) to be transferred by means of a Relevant System of holding and transferring shares (or interests in shares) in uncertificated form in such manner as the Directors may determine from time to time. The Directors shall, subject always to
the Act and any other applicable laws and regulations and the facilities and requirements of any Relevant System concerned and these Articles, have power to implement and/or approve any arrangements they may, in their absolute discretion, think fit
in relation to the evidencing of title to and transfer of interests in shares in the Company in uncertificated form (including in the form of depositary interests or similar interests, instruments or Securities), which may include arrangements
restricting transfers, and to the extent such arrangements are so implemented, no provision of these Articles shall apply or have effect to the extent that it is in any respect inconsistent (as determined by the Directors in their absolute
discretion) with the holding or transfer thereof or the shares in the Company represented thereby. The Directors may from time to time take such actions and do such things as they may, in their absolute discretion, think fit in relation to the
operation of any such arrangements.
11.3 If the Directors refuse to register a transfer of a share they shall, within two months after the date on which the
instrument of transfer was lodged with the Company, send to the transferor and the transferee notice of the refusal.
11.4 No fee shall be charged for the
registration of any instrument of transfer or, subject as otherwise herein provided, any other document relating to or affecting the title to any share.
11.5 The
Company shall be entitled to retain any instrument of transfer of a certificated share which is registered but any instrument of transfer which the Directors refuse to register shall be returned to the person lodging it when notice of the refusal is
given.
12 TRANSMISSION OF SHARES
12.1 If a Member dies, the survivor or
survivors where he was a joint holder, and his personal representatives where he was a sole holder or the only survivor of joint holders, shall be the only persons recognised by the Company as having any title to his interest; but nothing
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herein contained shall release the estate of a deceased Member from any liability in respect of any share which had been jointly held by
him.
12.2 A person becoming entitled to a share in consequence of the death, bankruptcy or incapacity of a Member may, upon such evidence being produced as the
Directors may properly require, elect either to become the holder of the share or to make such transfer thereof as the deceased, bankrupt or incapacitated Member could have made. If he elects to become the holder he shall give notice to the Company
to that effect. If he elects to transfer the share he shall execute an instrument of transfer of the share to the transferee. All of the Articles relating to the transfer of shares shall apply to the notice or instrument of transfer as if it were an
instrument of transfer executed by the Member and the death, bankruptcy or incapacity of the Member had not occurred.
12.3 A person becoming entitled to a share in
consequence of the death, bankruptcy or incapacity of a Member shall have the rights to which he would be entitled if he were the holder of the share except that he shall not before being registered as the holder of the share be entitled in respect
of it to attend or vote at any meeting of the Company or at any separate meeting of the holders of any class of shares in the Company.
13 COMPULSORY TRANSFER
13.1 Without limitation to any of their powers under Article 6 the Directors may at any time and from time to time call upon any Member by notice to provide them
with such information and evidence as they shall reasonably require in relation to such Member or beneficial owner which relates to or is connected with their holding of or interest in shares in the Company. In the event of any failure of the
relevant Member to comply with the request contained in such notice within a reasonable time as determined by the Directors in their sole and unfettered discretion, the Directors may require (to the extent permitted by the rules of any Relevant
System where applicable) the transfer by lawful sale, by gift or otherwise as permitted by law, of such shares in respect of which, in the reasonable determination of the Directors, such information or evidence in relation to such Member or
beneficial owner has not been provided. In the event that the Member cannot locate a purchaser qualified to acquire and hold the shares within such reasonable time as the Directors may determine then the Company may seek to locate (but does not
guarantee that it will locate) an eligible purchaser of the shares and shall introduce the selling Member to such purchaser. If no purchaser of the shares is found by the selling Member or located by the Company before the time the Company requires
the transfer to be made then the Member shall be obligated to sell the shares at the highest price that any purchaser has offered and the Member agrees that the Company shall have no obligation to the Member to find the best price for the relevant
shares.
13.2 In the event that the Directors require the transfer of shares in accordance with Article 13.1 above the Directors will serve a notice (a Transfer
Notice) on the relevant Member requiring such person within 28 (twenty eight) calendar days to transfer the applicable shares to another person. On and after the date of such Transfer Notice, and until registration of a
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transfer of the applicable shares to which it relates the rights and privileges attaching to the relevant shares will be suspended and
not capable of exercise. To the extent permitted under any Relevant System, the Directors may instruct the operator of such Relevant System to convert any uncertificated share which is subject to a Transfer Notice into certificated form.
13.3 Members who do not comply with the terms of any Transfer Notice shall forfeit or be deemed to have forfeited their shares immediately. The Directors, the Company and the duly
authorised agents of the Company, including, without limitation, the registrar of the Company, shall not be liable to any Member or otherwise for any loss incurred by the Company as a result of any Member breaching the compulsory transfer
restrictions referred to herein and any Member who breaches such restrictions is required under these Articles to indemnify the Company for any loss to the Company caused by such breach.
14 ALTERATION OF SHARES
14.1 Subject to the Act, where the Directors consider it necessary or
desirable to undertake any action as is specified in sub-paragraphs (a) to (f) below, the Company may, pursuant to a Resolution of Directors obtained at any time where such action is in relation to, or in connection with or resulting from
an Acquisition, or pursuant to a Resolution of Members at any time:
(a) consolidate and divide all or any of its shares into a smaller number than its existing
shares;
(b) sub-divide its shares, or any of them, into shares of a larger number so, however, that in such sub-division the proportion between the amount paid and
the amount (if any) unpaid on each reduced share shall be the same as in the case of the share from which the reduced share is derived;
(c) cancel any shares which
at the date of the passing of the resolution have not been taken up or agreed to be taken up by any person;
(d) convert all or any of its shares denominated in a
particular currency or former currency into shares denominated in a different currency, the conversion being effected at the rate of exchange (calculated to not less than three significant figures) current on the date of the resolution or on such
other dates as may be specified therein;
(e) where its shares are expressed in a particular currency or former currency, denominate or redenominate those shares,
whether by expressing the amount in units or subdivisions of that currency or former currency, or otherwise; and
(f) reduce any of the Companys reserve
accounts (including any share premium amount) in any manner.
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14.2 Whenever as a result of a consolidation of shares any Members would become entitled to fractions of a share, the Directors may, in
their absolute discretion, on behalf of those Members, sell the shares representing the fractions for the best price reasonably obtainable to any person (including, subject to the provisions of the Act, the Company) and distribute the net proceeds
of sale in due proportion among those Members. The Directors may authorise some person to execute an instrument of transfer of the shares to or in accordance with the directions of the purchaser. The transferee shall not be bound to see to the
application of the purchase money nor shall his title to the shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale.
15 DISTRIBUTIONS
15.1 The Directors may, by a Resolution of Directors,
authorise a distribution at a time and of an amount they think fit if they are satisfied, on reasonable grounds, that, immediately after the distribution, the value of the Companys assets will exceed its liabilities and the Company will be
able to pay its debts as they fall due. For the avoidance of doubt, the requirements of this Article 15.1 shall not apply in respect of any issue of Ordinary Shares to the holders of Founder Preferred Shares in satisfaction of any Annual Dividend
Amount to which such holders are entitled pursuant to Article 4.1.
15.2 Dividends may be paid in money, shares, or other property.
15.3 The Board may, before declaring any dividend, carry to reserve out of the profits of the Company (including any premiums received upon the issue of debenture or other
securities of the Company) such sums as they think proper as a reserve or reserves which shall, at the discretion of the Board, be applicable for any purpose to which the profits of the Company may be properly applied, and pending such application
may, at the like discretion, either be employed in the business of the Company or be invested in such investments as the Board may from time to time think fit. The Board may also without placing the same to reserve carry forward any profits which
they may think prudent not to divide.
15.4 All dividends or other distributions (including but not limited to dividends or distributions declared and paid in
accordance with Clauses 6.1 and 6.2 of the Memorandum and Articles 2.13, 4.1 and 4.6) shall be declared and paid only in respect of paid up shares and the holder of any share or shares not paid up as at the date such dividend is declared or such
distribution is authorised shall not be entitled to such dividend or distribution. For the purposes of calculating each holders pro rata share of any dividend or distribution paid, reference shall only be had to paid up shares (as at the date
the dividend is declared or the distribution authorised) of the class or classes to which the dividend or distribution relates. If any share is issued on terms providing that it shall rank for dividend or other distributions as from a particular
date, that share shall rank for dividend or other distribution accordingly.
15.5 Any Resolution of Directors declaring a dividend or a distribution on a share may
specify that the same shall be payable to the person registered as the holders of the shares at the close of business on a particular date notwithstanding that it may be a date prior to that on which the resolution is passed and thereupon the
dividend or distribution shall be payable to such
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persons in accordance with their respective holdings so registered, but without prejudice to the rights inter se in respect of such
dividend or distribution of transferors and transferees of any such shares.
15.6 Any Resolution of Directors declaring a dividend or other distribution may direct
that it shall be satisfied wholly or partly by the distribution of assets, may authorise the issue fractional certificates, may fix the value for distribution of any assets and may determine that cash shall be paid to any Member upon the footing of
the value so fixed in order to adjust the rights of Members and may vest any assets in trustees.
15.7 Notice in writing of any dividend that may have been declared
shall be given to each Member in accordance with Article 40 and all unclaimed dividends or other distributions may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed and the Company shall not be
constituted a trustee thereof. All dividends unclaimed for 3 years after notice shall have been given to a Member may be forfeited by Resolution of Directors for the benefit of the Company, and shall cease to remain owing by the Company.
15.8 Any dividend or other moneys payable in respect of a share may be paid by electronic transfer or cheque sent by post to the registered address (or in the case of a Depositary,
subject to the approval of the Board, such persons and addresses as the Depositary may require) of the person entitled or, if two or more persons are the holders of the share or are jointly entitled to it by reason of the death or bankruptcy of the
holder, to the registered address of the one of those persons who is first named in the register of Members or to such person and to such address as the person or persons entitled may in writing direct (and in default of which direction to that one
of the persons jointly so entitled as the Directors shall in their absolute discretion determine). Every cheque shall be made payable to the order of the person or persons entitled or to such other person as the person or persons entitled may in
writing direct and payment of the cheque shall be a good discharge to the Company. Any joint holder or other person jointly entitled to a share as aforesaid may give receipts for any dividend or other moneys payable in respect of the share. Every
cheque is sent at the risk of the person entitled to the payment. If payment is made by electronic transfer, the Company is not responsible for amounts lost or delayed in the course of making that payment.
15.9 The Directors may deduct from any dividend or distribution or other monies, payable to any Member on or in respect of a share, all sums of money (if any) presently payable by
him to the Company on account of calls or otherwise in relation to the shares.
15.10 No dividend or distribution or other moneys payable in respect of a share
shall bear interest against the Company unless otherwise provided by the rights attached to the share and no dividend shall be paid on Treasury Shares.
15.11 If,
in respect of a dividend or other distribution or other amount payable in respect of a share, on any one occasion:
(a) a cheque is returned undelivered or left
uncashed; or
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(b) an electronic transfer is not accepted,
and
reasonable enquiries have failed to establish another address or account of the person entitled to the payment, the Company is not obliged to send or transfer a dividend or other amount payable in respect of that share to that person until he
notifies the Company of an address or account to be used for that purpose. If the cheque is returned undelivered or left uncashed or transfer not accepted on two consecutive occasions, the Company may exercise this power without making any such
enquiries.
16 REDEMPTION OF SHARES AND TREASURY SHARES
16.1 The Company may
purchase, redeem or otherwise acquire and hold its own shares with the consent of the Member whose shares are to be purchased, redeemed or otherwise acquired.
16.2
The purchase, redemption or other acquisition by the Company of its own shares is deemed not to be a distribution where:
(a) the Company purchases, redeems or
otherwise acquires the shares pursuant to a right of a Member to have his shares redeemed or to have his shares exchanged for money or other property of the Company, or
(b) the Company purchases, redeems or otherwise acquires the shares by virtue of the provisions of section 176 of the Act.
16.3 Sections 60, 61 and 62 of the Act shall not apply to the Company.
16.4 Shares that the
Company purchases, redeems or otherwise acquires pursuant to this Article may be cancelled or held as Treasury Shares except to the extent that such shares are in excess of 50 (fifty) per cent. of the issued shares of that class in which case they
shall be cancelled but they shall be available for reissue.
16.5 All rights and obligations attaching to a Treasury Share are suspended and shall not be exercised
by the Company while it holds the share as a Treasury Share.
16.6 Treasury Shares may be disposed of by the Company on such terms and conditions (not otherwise
inconsistent with the Memorandum and Articles) as the Company may by Resolution of Directors determine.
16.7 Where shares are held by another body corporate of
which the Company holds, directly or indirectly, shares having more than 50 (fifty) per cent. of the votes in the election of directors of the other body corporate, all rights and obligations attaching to the shares held by the other body corporate
are suspended and shall not be exercised by the other body corporate.
17 MORTGAGES AND CHARGES OF SHARES
17.1 A Member may by an instrument in writing mortgage or charge his shares.
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17.2 There shall be entered in the register of Members at the written request of the Member:
(a) a statement that the shares held by him are mortgaged or charged;
(b) the name of the
mortgagee or chargee; and
(c) the date on which the particulars specified in sub-paragraphs (a) and (b) are entered in the register of Members.
17.3 Where particulars of a mortgage or charge are entered in the register of Members, such particulars may be cancelled:
(a) with the written consent of the named mortgagee or chargee or anyone authorised to act on his behalf; or
(b) upon evidence satisfactory to the Directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities as the Directors shall
consider necessary or desirable.
17.4 Whilst particulars of a mortgage or charge over shares are entered in the register of Members pursuant to this Article:
(a) no transfer of any share the subject of those particulars shall be effected;
(b) the Company may not purchase, redeem or otherwise acquire any such share; and
(c) no
replacement certificate shall be issued in respect of such shares,
without the written consent of the named mortgagee or chargee.
18 MEETINGS AND CONSENTS OF MEMBERS
18.1 The Company shall hold the first annual general
meeting within a period of 18 months following the date of an Acquisition. Not more than 15 months shall elapse between the date of one annual general meeting and the date of the next, unless such period is extended, or such requirement is waived,
by a Resolution of Members.
18.2 Any Director may convene meetings of the Members at such times and in such manner and places within or outside the British Virgin
Islands as the Director considers necessary or desirable.
18.3 Upon the written request of Members entitled to exercise 30 (thirty) per cent. or more of the voting
rights in respect of the matter for which the meeting is requested the Directors shall convene a meeting of Members.
18.4 The Director convening a meeting shall
give not less than 10 (ten) calendar days written notice of a meeting of Members to:
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(a) those Members who are entitled to vote at the meeting; and
(b) the other Directors.
18.5 A meeting of Members held in contravention of the requirement to
give notice is valid if Members holding at least 90 (ninety) per cent. of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a Member at the meeting
shall constitute a waiver in relation to all the shares which that Member holds.
18.6 The inadvertent failure of a Director who convenes a meeting to give notice
of a meeting to a Member or another Director, or the fact that a Member or another Director has not received notice, does not invalidate the meeting.
18.7 If the
Board, in its absolute discretion, considers that it is impractical or unreasonable for any reason to hold a meeting of Members at the time or place specified in the notice calling the meeting of Members, it may move and/or postpone the meeting of
Members to another time and/or place. Notice of the business to be transacted at such moved and/or postponed meeting is not required. The Board must take reasonable steps to ensure that Members trying to attend the meeting of Members at the original
time and/or place are informed of the new arrangements for the meeting of Members. Proxy forms can be delivered as specified in Article 20.10 until 48 (forty eight) hours before the rearranged meeting. Any postponed and/or moved meeting may also be
postponed and/or moved under this Article.
19 PROCEEDINGS AT MEETINGS OF MEMBERS
19.1 The quorum of any meeting of Members shall be one Member present in person or by proxy and entitled to vote.
19.2 A Member shall be deemed to be present at a meeting of Members if he participates by telephone or other electronic means and all Members participating in the meeting are able
to hear or read what is said or communicated by each other.
19.3 If a quorum is not present within half an hour from the time appointed for the meeting (or such
longer period as the chairman of the meeting may think fit and allow), or if during a meeting such a quorum ceases to be present, the meeting, if convened by or upon the requisition of Members, shall be dissolved. If otherwise convened, it shall
stand adjourned to such day, time and place as the chairman may determine or as otherwise may be specified in the original notice of meeting and, if at such adjourned meeting a quorum is not present within five minutes from the time appointed for
the holding of the meeting, those Members present in person or by proxy shall be a quorum.
19.4 The chairman may invite any person to attend and speak at any
meeting of Members of the Company where he considers this will assist in the deliberations of the meeting. The Directors may attend and speak at any meeting of Members and at any separate meeting of the holders of any class or series of shares.
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19.5 The notice of meeting may also specify a time (which shall not be more than 48 (forty eight) hours before the time fixed for the
meeting) by which a person must be entered on the register of Members in order to have the right to attend or vote at the meeting. Changes to entries on the register of Members after the time so specified in the notice shall be disregarded in
determining the rights of any person to so attend or vote.
19.6 The Directors may determine that those persons who are entered on the register of Members at the
close of business on a day determined by the Directors (which may not be more than 21 (twenty one) calendar days before the date on which the notices of meeting were sent) shall be the persons who are entitled to receive notice.
19.7 The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place. When a meeting is adjourned for 14 (fourteen) calendar days
or more, at least 7 (seven) calendar days notice shall be given specifying the day, time and place of the adjourned meeting and the general nature of the business to be transacted.
Otherwise it shall not be necessary to give any such notice.
19.8 At any meeting of Members,
the chairman (if any) of the Board or, if he is absent or unwilling, one of the other Directors who is appointed for that purpose by the Directors or (failing appointment by the Directors) by the Members present, shall preside as chairman of the
meeting. If none of the Directors are present or are present but unwilling to preside, the Members present and entitled to vote shall choose one of their number to preside as chairman of the meeting.
19.9 At any meeting of the Members the chairman is responsible for deciding in such manner as he considers appropriate whether any resolution proposed has been carried or not and
the result of his decision shall be announced to the meeting and recorded in the minutes of the meeting. If the chairman has any doubt as to the outcome of the vote on a proposed resolution, he shall cause a poll to be taken of all votes cast upon
such resolution. If the chairman fails to take a poll then any Member present in person or by proxy who disputes the announcement by the chairman of the result of any vote may immediately following such announcement demand that a poll be taken and
the chairman shall cause a poll to be taken.
If a poll is taken at any meeting, the result shall be announced to the meeting and recorded in the minutes of the
meeting.
19.10 The demand for a poll may be withdrawn before the poll is taken but only with the consent of the chairman. A demand so withdrawn shall not be taken
to have invalidated the result of a show of hands declared before the demand was made.
19.11 A poll shall be taken as the chairman directs and he may appoint
scrutineers (who need not be Members) and fix a day, time and place for declaring the result of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.
19.12 A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken either forthwith
or at such day, time and place as the chairman directs not being more than 30 (thirty) calendar
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days after the poll is demanded. The demand for a poll shall not prevent the continuance of a meeting for the transaction of any
business other than the question on which the poll was demanded. If a poll is demanded before the declaration of the result of a show of hands and the demand is duly withdrawn, the meeting shall continue as if the demand had not been made.
19.13 No notice need be given of a poll not taken forthwith if the day, time and place at which it is to be taken are announced at the meeting at which it is
demanded. In any other case at least 7 (seven) calendar days notice shall be given specifying the day, time and place at which the poll is to be taken.
19.14
In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall not be entitled to a casting vote in addition to any other vote he may have.
19.15 The provisions of this Article 19 in relation to any meeting of Members shall apply equally to any separate meeting of a class of Members.
20 VOTES OF MEMBERS
20.1 Subject to any rights or restrictions attached to any shares or class
of shares and to the provisions of the Articles:
(a) on a show of hands every Member who is present in person (or in the case of corporations, present by a duly
authorised representative) or by proxy shall have one vote; and
(b) on a poll every Member present in person (or in the case of corporations, present by a duly
authorised representative) or by proxy shall have one vote for every share of which he is the holder.
20.2 The following applies where shares are jointly owned:
(a) if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of Members and may speak as a Member;
(b) if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners; and
(c) if two or more of the joint owners are present in person or by proxy they must vote as one and in the event of disagreement between any of the joint owners of shares then the
vote of the joint owner whose name appears first (or earliest) in the register of Members in respect of the relevant shares shall be recorded as the vote attributable to the shares.
20.3 A Member in respect of whom an order has been made by any court having jurisdiction (whether in the British Virgin Islands or elsewhere) in matters concerning mental disorder
may vote, whether by a show of hands or by a poll, by his attorney, receiver or other person
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authorised in that behalf appointed by that court, and any such attorney, receiver or other person may vote by proxy. Evidence to the
satisfaction of the Board of the authority of the person claiming to exercise the right to vote shall be deposited at the office, or at such other place within the British Virgin Islands as is specified in accordance with these Articles for the
deposit of instruments of proxy, before the time appointed for holding the meeting or adjourned meeting or the holding of a poll at which the right to vote is to be exercised and in default the right to vote shall not be exercisable.
20.4 Unless the Directors otherwise decide, no Member shall be entitled to vote at any meeting of Members or at any separate meeting of the holders of any class of shares in the
Company, either in person or by proxy, in respect of any share held by him or to exercise rights as a holder of shares unless all calls and other sums presently payable by him in respect of shares of which he is the holder or one of the joint
holders have been paid.
20.5 No Member shall, if the Directors so determine, be entitled in respect of any share held by him to attend or vote (either personally
or by representative or by proxy) at any meeting of Members or separate class meeting of the Company or to exercise any other right conferred by membership in relation to any such meeting if he or any other person appearing to be interested in such
shares has failed to comply with a Disclosure Notice within 14 (fourteen) calendar days, in a case where the shares in question represent at least 0.25 (nought point two five) per cent. of their class, or within 7 (seven) calendar days, in any other
case, from the date of such Disclosure Notice. These restrictions will continue until the information required by the notice is supplied to the Company or until the shares in question are transferred or sold in circumstances specified for this
purpose in these Articles.
20.6 No objection shall be raised to the entitlement of any voter or to any person to vote as he did except at the meeting or adjourned
meeting or poll at which the vote objected to is or may be tendered, and every vote not disallowed at such meeting or poll shall be valid for all purposes. Any such objection made in due time shall be referred to the chairman of the meeting whose
decision shall be final and conclusive.
20.7 On a poll, a person entitled to more than one vote need not if he votes, use all his votes or cast all votes he uses
in the same way.
20.8 A Member may appoint another person as his proxy to exercise all or any of his rights to attend and to speak and vote at a meeting of the
Company. A proxy need not be a Member.
A Member may appoint more than one proxy to attend on the same occasion, provided that each proxy is appointed to exercise
the rights attached to a different share or shares held by him. When two or more valid but differing appointments of proxy are delivered or received for the same share for use at the same meeting, the one which is last validly delivered or received
(regardless of its date or the date of its execution) shall be treated as replacing and revoking the other or others as regards that share. If the Company is unable to determine which appointment was last validly delivered or received, none of them
shall be treated as valid in respect of that share.
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20.9 The instrument appointing a proxy shall be in writing in any usual form (or in another form approved by the Board) under the hand
of the appointer or his attorney duly authorised in writing or if the appointer is a corporation, either under its common seal or under the hand of an officer or attorney so authorised.
20.10 The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority
shall be:
(a) delivered to the Office or at such other place as is specified for that purpose in the notice of meeting or in the instrument of proxy issued by the
Company not less than 48 (forty eight) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote;
(b) given by email or any other electronic method to the address of the Company specified for that purpose in the notice of the meeting or in the instrument of proxy issued by the
Company not less than 48 (forty eight) hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote and subject to the need to deposit any power of attorney or other authority (if
any) under which an instrument of proxy is signed, an instrument so given shall be deemed to be duly deposited. However any power of attorney or other authority (if any) under which an instrument of proxy is executed, or a notarially certified copy
of such power or authority, shall not be given by email or any other electronic method;
(c) in the case of a poll taken more than 48 hours after it is demanded,
delivered as required by sub-paragraph (a) or (b) of this Article 20.10 not less than 24 (twenty four) hours before the time appointed for the taking of the poll; or
(d) in the case of a poll not taken immediately but taken not more than 48 (forty eight) hours after it was demanded, the time at which it was demanded,
and in default and unless the Board directs otherwise, the instrument of proxy shall not be treated as valid.
20.11 No instrument appointing a proxy shall be valid after the expiration of 12 months from the date named in it as the date of its execution, except at an adjourned meeting or on
a poll demanded at a meeting or an adjourned meeting in cases where the meeting was originally held within 12 months from such date. Notwithstanding this Article, the Directors may, at their discretion, accept the appointment of a proxy at any time
prior to holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote.
20.12 Without limiting the foregoing, in relation
to any shares which are held in uncertificated form, the Board may from time to time permit appointments of a proxy to be made by means of an uncertificated proxy instruction and may in a similar manner permit supplements to, or amendments or
revocations of, any such uncertificated proxy instruction to be made by like means. The Board may in addition prescribe the method of determining the time at which
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any such uncertificated proxy instruction (and/or other instruction or notification) is to be treated as received by the Company or a
participant acting on its behalf. The Board may treat any such uncertificated proxy instruction which purports to be or is expressed to be sent on behalf of a holder of a share as sufficient evidence of the authority of the person sending that
instruction to send it on behalf of that holder.
20.13 A vote given or poll demanded in accordance with the terms of an instrument of proxy shall be valid
notwithstanding the death or insanity of the principal or the revocation or determination of the instrument of proxy or of the authority under which the instrument of proxy was executed or the transfer of the share in respect of which the instrument
of proxy is given, provided that no intimation in writing of such death, insanity, revocation or determination shall have been received by the Company at the office or at such other place at which the instrument of proxy was duly deposited before
the commencement of the meeting or adjourned meeting at which the vote is given or the poll demanded or (in the case of a poll taken otherwise than on the same day as the meeting or adjourned meeting) the time appointed for taking the poll.
20.14 Notwithstanding anything contained in these Articles, and subject to such being permissible under the Law, the Directors of the Company may elect to provide
a facility for using electronic voting and polling by the holders for any purpose deemed appropriate by the Directors, including without limitation, the polling of holders and electronic voting by holders at any meeting of Members.
20.15 Any vote given by proxy may be given by email or any other electronic method (including any instruction or message under a Relevant System) to the address of the Company or
person nominated by the Company and specified for that purpose in the notice of meeting or in the instrument of proxy issued by the Company (unless using a Relevant System in which case such message may be received by the Companys agent) and,
with the exception of votes cast using a Relevant System subject to the need to deposit any power of attorney or other authority (if any) under which a vote given by proxy is made, a vote so given shall be deemed to be duly made. However, any power
of attorney or other authority (if any) under which a vote given by proxy is made, or a notarially certified copy of such power or authority, shall not be given by email or any other electronic method.
20.16 Subject to the specific provisions contained in this Article for the appointment of representatives of Members other than individuals the right of any individual to speak for
or represent a Member shall be determined by the law of the jurisdiction where, and by the documents by which, the Member is constituted or derives its existence. In case of doubt, the Directors may in good faith seek legal advice and unless and
until a court of competent jurisdiction shall otherwise rule, the Directors may rely and act upon such advice without incurring any liability to any Member or the Company.
20.17 Any corporation which is a Member may, by resolution of its Board or other governing body or officers authorised by such body, authorise such person or persons as it thinks
fit to act as its representative at any meeting of the Company or at any meeting of the holders of shares of
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any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he
represents as that corporation could exercise if it were an individual Member. A corporation present at any meeting by such representative shall be deemed for the purposes of these Articles to be present in person.
20.18 The chairman of any meeting at which a vote is cast by proxy or on behalf of any Member other than an individual may at the meeting but not thereafter call for a notarially
certified copy of such proxy or authority which shall be produced within 7 (seven) calendar days of being so requested or the votes cast by such proxy or on behalf of such Member shall be disregarded.
20.19 An action that may be taken by the Members at a meeting may also be taken by a Resolution of Members consented to in writing, without the need for any prior notice. If any
Resolution of Members is adopted otherwise than by the unanimous written consent of all Members, a copy of such resolution shall forthwith be sent to all Members not consenting to such resolution.
The consent may be in the form of counterparts, each counterpart being signed by one or more Members. If the consent is in one or more counterparts, and the counterparts bear
different dates, then the resolution shall take effect on the earliest date upon which eligible Members holding a sufficient number of votes of shares to constitute a Resolution of Members have consented to the resolution by signed counterparts.
21 SQUEEZE OUT PROVISIONS
21.1 Section 176 of the Act shall not apply to
the Company.
22 NUMBER OF DIRECTORS
22.1 The first Directors shall be
appointed by the first registered agent within 30 (thirty) calendar days of the incorporation of the Company and, thereafter, the Directors shall be elected by Resolution of Members or by Resolution of Directors for such term as the Members or
Directors, as applicable, determine.
22.2 The minimum number of Directors shall be one and there shall be no maximum number of Directors.
23 ALTERNATE DIRECTORS
23.1 Any Director (other than an alternate Director) may by notice sent
to or deposited at the office or tabled at the meeting of the Board or in any other manner approved by the Board appoint any other Director or any other person to be an alternate Director to attend and vote in his place at any meeting of the
Directors at which he is not personally present or to undertake and perform such duties and functions and to exercise such rights as he would personally.
23.2 Any
such appointment may be made generally or specifically or for any period or for any particular meeting and with and subject to any particular restrictions. An alternate Director need not be a Member.
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23.3 A Director may by notice delivered to the office or tabled at a meeting of the Board revoke the appointment of his alternate
Director and, subject to the provisions of this Article 23, appoint another person in his place. If a Director ceases to hold the office of Director or if he dies, the appointment of his alternate Director automatically ceases. If a Director retires
but is reappointed or deemed reappointed at the meeting at which his retirement takes effect, a valid appointment of an alternate Director which was in force immediately before his retirement continues to operate after his reappointment as if he has
not retired. The appointment of an alternate Director ceases on the happening of an event which, if he were a Director otherwise appointed, would cause him to vacate office.
23.4 Every alternate Director while he holds office as such shall be entitled:
(a) if his
appointor so directs the secretary to notice of meetings of the Directors and all committees of the Board of which his appointor is a member;
(b) to attend and to
exercise (subject to any restrictions) all the rights and privileges of his appointor at all such meetings at which his appointor is not personally present; and
(c) to sign written resolutions on behalf of his appointor.
23.5 A Director
acting as alternate Director has a separate vote at meetings of the Board and committees of the Board for each Director for whom he acts as alternate Director but he counts as only one for the purpose of determining whether a quorum is present.
23.6 Without prejudice to Article 23.3 every alternate Director shall ipso facto vacate office if and when his appointment expires by effluxion of time.
23.7 Save as otherwise provided in these Articles, an alternate Director shall be deemed for all purposes to be a Director and shall alone be responsible for his
own acts and defaults and he shall not be deemed to be the agent of the Director appointing him.
24 POWERS OF DIRECTORS
24.1 The business and affairs of the Company shall be managed by, or under the direction or supervision of, the Directors. The Directors have all the powers necessary for managing,
and for directing and supervising, the business and affairs of the Company. The Directors may pay all expenses incurred preliminary to and in connection with the incorporation of the Company and may exercise all such powers of the Company as are not
by the Act or by the Memorandum or the Articles required to be exercised by the Members.
24.2 The continuing Directors may act notwithstanding any vacancy in their
body.
24.3 Subject as hereinafter provided, the Directors may exercise all the powers of the Company to borrow or raise money (including the power to borrow for
the purpose of redeeming shares) and secure any debt or obligation of or binding on the Company in any manner including by the issue of debentures (perpetual or otherwise) and to secure the repayment of any money
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borrowed raised or owing by mortgage charge pledge or lien upon the whole or any part of the Companys undertaking property or
assets (whether present or future) and also by a similar mortgage charge pledge or lien to secure and guarantee the performance of any obligation or liability undertaken by the Company or any third party.
24.4 All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company shall be signed, drawn, accepted,
endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by Resolution of Directors.
24.5 Section 175 of
the Act shall not apply to the Company.
25 DELEGATION OF DIRECTORS POWERS
25.1 The Directors may, by Resolution of Directors, designate one or more committees, each consisting of one or more Directors, and delegate one or more of their
powers, including the power to affix the Seal, to the committee. They may also delegate to any other Director (whether holding any other executive office or not) such of their powers as they consider desirable to be exercised by him. Any such
delegation may be made subject to any conditions the Directors may impose, and either collaterally with or to the exclusion of their own powers and may be revoked or altered. Subject to any such conditions, the proceedings of a committee shall be
governed by the Articles regulating the proceedings of Directors so far as they are capable of applying and so far as the same are not superseded by any provisions in the Resolution of Directors establishing the committee, provided that it is not
necessary to give notice of a meeting of that committee to Directors other than the Director or Directors who form the committee.
25.2 The Directors have no power
to delegate to a committee of Directors any of the following powers:
(a) to amend the Memorandum or the Articles;
(b) to designate committees of Directors;
(c) to delegate powers to a committee of Directors;
(d) to appoint or remove Directors;
(e) to appoint or remove an agent;
(f) to approve a plan of merger, consolidation or arrangement;
(g) to make a
declaration of solvency or to approve a liquidation plan; or
(h) to make a determination that the Company will immediately after a proposed distribution, satisfy
the solvency test (as defined in the Act).
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25.3 Articles 25.1 and 25.2 do not prevent a committee of Directors, where authorised by the Resolution of Directors appointing such
committee or by a subsequent Resolution of Directors, from appointing a sub-committee and delegating powers exercisable by the committee to the sub-committee.
25.4
The Directors may, by power of attorney signed by any one or more persons duly authorised, appoint any person either generally or in respect of any specific matter, to represent the Company, act in its name and execute documents on its behalf.
26 APPOINTMENT AND RETIREMENT OF DIRECTORS
26.1 Subject to the Act and these
Articles, the Directors shall have power from time to time, without sanction of the Members, to appoint any person to be a Director, either to fill a casual vacancy or as an additional Director. A vacancy in relation to Directors occurs if a
Director dies or otherwise ceases to hold office prior to the expiration of his term of office.
26.2 Subject to the Act and these Articles, the Members may by a
Resolution of Members appoint any person as a Director and there shall be no requirement for the appointment of two or more Directors to be considered separately.
26.3 For so long as one or more of a Founder Entity, its Affiliates and its Permitted Transferee(s) in aggregate hold 20 (twenty) per cent. or more of the Founder
Preferred Shares in issue, such Founder Entity shall be entitled from time to time to nominate a person as a director of the Company and, subject to such person having consented in writing to such appointment pursuant to section 112 of the Act and
not being disqualified for appointment pursuant to section 111 of the Act, the Directors shall by a Resolution of Directors appoint such person as a director of the Company (each an Appointee). In the event such Founder Entity notifies the Company
in writing to remove any Appointee nominated by him the other Directors shall by a Resolution of Directors remove such Appointee, and in the event of such a removal the relevant Founder Entity shall have the right to nominate another person as a
director of the Company to fill such vacancy (and to subsequently request his removal, and to subsequently nominate any further persons as a director and subsequently request their removal from time to time) in accordance with the provisions of this
Article and in such circumstances the provisions of this Article shall apply.
26.4 In the event a Founder Entity and its Affiliates and its Permitted Transferee(s)
cease to hold Founder Preferred Shares or in aggregate hold less than 20 (twenty) per cent. of the Founder Preferred Shares in issue, such Founder Entity shall no longer be entitled to nominate a person as a director of the Company (or require their
removal) pursuant to Article 26.3, and the holders of a majority of the Founder Preferred Shares in issue (including any Founder Entity, Affiliates or Permitted Transferees continuing to hold Founder Preferred Shares) shall be entitled to exercise
that Founder Entitys former rights under Article 26.3 instead (which shall include being entitled to request the removal of that Founder Entitys Appointee).
26.5 In the event any Appointee resigns, the Founder Entity who nominated them for appointment shall no longer be entitled to nominate a person as a director of the Company
pursuant to
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Article 26.3, and the holders of a majority of the Founder Preferred Shares in issue shall be entitled to exercise that Founder
Entitys former rights under Article 26.3.
26.6 For the avoidance of doubt, no more than two Directors in total may be appointed to the Board at any one time
pursuant to Articles 26.3 to 26.5.
26.7 A Director is appointed for such term as may be specified in the Resolution of Directors or Resolution of Members
appointing him. Where the Directors appoint a person as Director to fill a vacancy, such replacement Director may be appointed for any term as the Directors in their discretion determine.
26.8 Each Director holds office for the term, if any, fixed by the Resolution of Members or Resolution of Directors appointing or otherwise provided for in the relevant
Directors service agreement or letter of appointment (if applicable), or until his earlier death, resignation or removal. If no term is fixed on the appointment of a Director, the Director serves indefinitely until his earlier death,
resignation or removal.
26.9 A person must not be appointed a Director unless he has in writing consented to being a Director of the Company.
26.10 A Director may resign his office by giving written notice of his resignation to the Company and the resignation has effect from the date the notice is received by the Company
at the office of its registered agent or from such later date as may be specified in the notice, provided in both instances that such resignation is in accordance with the terms of the relevant Directors service agreement or letter of
appointment (if applicable). A Director shall resign forthwith as
a Director if he is, or becomes, disqualified from acting as a Director under the Act.
26.11 A Director is not required to hold a share as a qualification to office.
27 DISQUALIFICATION AND REMOVAL OF DIRECTORS
27.1 The office of a Director
shall be vacated if:
(a) he ceases to be a Director by virtue of any provision of the Law or he ceases to be
eligible to be a Director or is disqualified in accordance with the Law; or
(b) he becomes
bankrupt or makes any arrangement or composition with his creditors generally or otherwise has any judgment executed on any of his assets; or
(c) he becomes of
unsound mind or incapable or an order is made by a court having jurisdiction (whether in the British Virgin Islands or elsewhere) in matters concerning mental disorder for his detention or for the appointment of a receiver or other person to
exercise powers with respect to his property or affairs; or
(d) he is absent from meetings of Directors for a consecutive period of 12 months and the other
Directors resolve that his office shall be vacated; or
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(e) he dies; or
(f) he resigns his office by
written notice to the Company; or
(g) he is removed by a Resolution of Members passed at a meeting of Members called for the purposes of removing the Director or
for purposes including the removal of the Director or by a written resolution passed by a Special Resolution of Members; or
(h) where there are more than two
Directors, all the other Directors request him to resign in writing,
and for the purposes of this Article 27.1, Section 114 of the Act shall not apply.
28 DIRECTORS REMUNERATION AND EXPENSES
28.1 The Directors shall be
remunerated for their services at such rate as the Directors shall determine.
28.2 The Directors may grant special remuneration to any Director who, being so
called upon, shall be willing to render any special or extra services to the Company. Such special remuneration may be made payable to such Director in addition to or in substitution for his ordinary remuneration as a Director and may be made
payable by a lump sum or by way of salary or commission or by any or all of those models or otherwise.
28.3 The Directors may be paid:
(a) all reasonable travelling, hotel and other out of pocket expenses properly incurred by them in connection with their attendance at meetings of Directors or committees of
Directors or meetings of Members or separate meetings of the holders of any class of shares or of debentures of the Company or otherwise in connection with the discharge of their duties; and
(b) all reasonable expenses properly incurred by them in seeking independent professional advice on any matter that concerns them in the furtherance of their duties as a Director
of the Company.
29 OFFICERS AND AGENTS
29.1 The Company may by Resolution of
Directors appoint officers of the Company at such times as may be considered necessary or expedient. Such officers may consist of a Chairman of the Board, a Chief Executive Officer, one or more vice-presidents, secretaries, assistant secretaries and
treasurers and such other officers as may from time to time be considered necessary or expedient. Any number of offices may be held by the same person.
29.2 The
officers shall perform such duties as are prescribed at the time of their appointment subject to any modification in such duties as may be prescribed thereafter by Resolution of Directors.
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29.3 The emoluments of all officers shall be fixed by Resolution of Directors.
29.4 The officers of the Company shall hold office until their death, resignation or removal. Any officer elected or appointed by the directors may be removed at any time, with or
without cause, by Resolution of Directors. Any vacancy occurring in any office of the Company may be filled by Resolution of Directors.
29.5 Subject to the
provisions of the Act, the Directors may appoint one or more of their number to the office of managing director or to any other executive office in the Company and may enter into an agreement or arrangement with any Director for his employment by
the Company or for the provision by him of any services outside the scope of the ordinary duties of a director.
Any such appointment, agreement or arrangement may
be made upon such terms as the Directors determine and they may remunerate any such Director for his services as they determine.
29.6 The Directors may, by a
Resolution of Directors, appoint any person, including a person who is a Director, to be an agent of the Company. An agent of the Company shall have such powers and authority of the Directors, including the power and authority to affix the Seal, as
are set forth in the Articles or in the Resolution of Directors appointing the agent, except that no agent has any power or authority with respect to the matters specified in Article 25.2. The Resolution of Directors appointing an agent may
authorise the agent to appoint one or more substitutes or delegates to exercise some or all of the powers conferred on the agent by the Company. The Directors may remove an agent appointed by the Company and may revoke or vary a power conferred on
him.
30 DIRECTORS INTERESTS
30.1 A Director shall, forthwith after
becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the Company, disclose the interest to all other Directors.
30.2 For the purposes of Article 30.1, a disclosure to all other Directors to the effect that a Director is a member, director or officer of another named entity
or has a fiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of the entry or disclosure, be entered into with that entity or individual, is a
sufficient disclosure of interest in relation to that transaction.
30.3 Subject to any applicable rules or regulations, a Director who is interested in a
transaction entered into or to be entered into by the Company may:
(a) vote on a matter relating to the transaction;
(b) attend a meeting of Directors at which a matter relating to the transaction arises and be included among the Directors present at the meeting for the purposes of a quorum; and
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(c) sign a document on behalf of the Company, or do any other thing in his capacity as a Director, that relates to the transaction,
and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from such transaction and
no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.
31 DIRECTORS GRATUITIES AND PENSIONS
31.1 The Directors may provide benefits, whether by the payment of gratuities or pensions or by insurance or otherwise, for any Director who has held but no longer holds any
executive office or employment with the Company or with any body corporate which is or has been a subsidiary of the Company or a predecessor in business of the Company or of any such subsidiary, and for any member of his family (including a spouse
and a former spouse) or any person who is or who was dependent on him, and may (as well before as after he ceases to hold such office or employment) contribute to any fund and pay premiums for the purchase or provision of any such benefit.
32 PROCEEDINGS OF DIRECTORS
32.1 Subject to the provisions of these Articles,
the Directors may regulate their proceedings as they think fit. A Director may, and the secretary at the request of a Director shall, call a meeting of the Directors by notifying each other Director in writing or otherwise. Questions arising at a
meeting shall be decided by a majority of votes. In the case of an equality of votes the chairman shall have a second or casting vote. A Director who is also an alternate Director shall be entitled to a separate vote for each Director for whom he
acts as alternate in addition to his own vote.
32.2 A Director shall be given not less than 48 (forty eight) hours notice of meetings of Directors. A meeting of
Directors held without 48 (forty eight) hours notice having been given to all Directors shall be valid if all the Directors entitled to vote at the meeting who do not attend waive notice of the meeting, and for this purpose the presence of a
Director at a meeting shall constitute a waiver by that Director. The inadvertent failure to give notice of a meeting to a Director, or the fact that a Director has not received the notice, does not invalidate the meeting.
32.3 The quorum for the transaction of the business of the Directors may be fixed by the Directors and unless so fixed at any other number shall be two except where there is a sole
Director, in which case the quorum shall be one. A person who is an alternate Director shall be counted in the quorum and any Director acting as an alternate Director shall also be counted as one for each of the Directors for whom he acts as
alternate.
32.4 The Directors or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islands as the
notice calling the meeting provides.
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32.5 A meeting of Directors may be held notwithstanding that such Directors may not be in the same place if a Director is, by any means,
in communication with one or more other Directors so that each Director participating in the communication can hear or read what is said or communicated by each of the others and any such meeting shall be deemed to be held in the place in which the
chairman of the meeting is present and each such Director shall be deemed to be present at such meeting and shall be counted when reckoning a quorum.
32.6 The
continuing Directors or the only continuing Director may act notwithstanding any vacancies in their number, but, if the number of Directors is less than the number fixed as the quorum, the continuing Directors or Director may act only for the
purpose of filling vacancies or of calling a meeting of Members. In lieu of minutes of a meeting a sole continuing Director shall record in writing and sign a note or memorandum of all matters requiring a Resolution of Directors. Such a note or
memorandum constitutes sufficient evidence of such resolution for all purposes.
32.7 The Directors may appoint one of their number to be the chairman of the Board
and may at any time remove him from that office. Unless he is unwilling to do so, the Directors so appointed shall preside at every meeting of Directors at which he is present. But if there is no Director holding that office, or if the Director
holding it is unwilling to preside or is not present within five minutes after the time appointed for the meeting, the Directors present may appoint one of their number to be chairman of the meeting.
32.8 All acts done by a meeting of Directors, or of a committee of Directors, or by a person acting as a Director shall, notwithstanding that it be afterwards discovered that there
was a defect in the appointment of any Director or that any of them were disqualified from holding office, be as valid as if every such person had been duly appointed and was qualified.
32.9 An action that may be taken by the Directors or a committee of Directors at a meeting may also be taken by a Resolution of Directors or a resolution of a committee of
Directors consented to in writing by such majority of Directors or by such majority of the members of the committee, as the case may be, as would have been required to approve such Resolution of Directors or such resolution of a committee of the
Directors at a duly convened meeting of Directors or the Committee as applicable without the need for any notice. The consent may be in the form of counterparts each counterpart being signed by one or more Directors. If the consent is in one or more
counterparts, and the counterparts bear different dates, then the resolution shall take effect on the date upon which the last Director has consented to the resolution by signed counterparts.
32.10 The Company shall keep a register of Directors containing:
(a) the names and addresses
of the persons who are Directors;
(b) the date on which each person whose name is entered in the register was appointed as a Director;
(c) the date on which each person named as a Director ceased to be a Director; and
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(d) such other information as may be prescribed by the Act and/or any applicable law, rules and regulations.
32.11 The register of Directors may be kept in any such form as the Directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able
to produce legible evidence of its contents. Until a Resolution of Directors determining otherwise is passed, the magnetic, electronic or other data storage shall be the original register of Directors.
33 INDEMNIFICATION
33.1 Subject to the limitations hereinafter provided the Company may
indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who:
(a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason
of the fact that the person is or was a Director; or
(b) is or was, at the request of the Company, serving as a director of, or in any other capacity is or was
acting for, another company or a partnership, joint venture, trust or other enterprise.
33.2 The indemnity in Article 33.1 only applies if the person acted
honestly and in good faith with a view to the best interests of the Company and, in the case of criminal proceedings, the person had no reasonable cause to believe that their conduct was unlawful.
33.3 The decision of the Directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as to whether the person had
no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of the Articles, unless a question of law is involved.
33.4 The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person
did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonable cause to believe that his conduct was unlawful.
33.5 The Company may purchase and maintain insurance in relation to any person who is or was a Director, officer or liquidator of the Company, or who at the request of the Company
is or was serving as a director, officer or liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by
the person in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability as provided in the Articles.
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34 RECORDS
34.1 The Company shall keep the
following documents at the office of its registered agent:
(a) the Memorandum and the Articles;
(b) the register of Members, or a copy of the register of Members;
(c) the register of
Directors, or a copy of the register of Directors; and
(d) copies of all notices and other documents filed by the Company with the Registrar in the previous 10
years.
34.2 If the Company maintains only a copy of the register of Members or a copy of the register of Directors at the office of its registered agent, it shall:
(a) within 15 (fifteen) calendar days of any change in either register, notify the registered agent in writing of the change; and
(b) provide the registered agent with a written record of the physical address of the place or places at which the original register of Members or the original register of
Directors is kept.
34.3 The Company shall keep the following records at the office of its registered agent or at such other place or places, within or outside the
British Virgin Islands, as the Directors may determine:
(a) minutes of meetings and Resolutions of Members and classes of Members;
(b) minutes of meetings and Resolutions of Directors and committees of Directors; and
(c) an
impression of the Seal, if any.
34.4 Where any original records referred to in this Article 34 are maintained other than at the office of the registered agent of
the Company, and the place at which the original records is changed, the Company shall provide the registered agent with the physical address of the new location of the records of the Company within 14 (fourteen) calendar days of the change of
location.
34.5 The records kept by the Company under this Article 34 shall be in written form or either wholly or partly as electronic records complying with the
requirements of the Electronic Transactions Act.
34.6 A Director is entitled, on giving reasonable notice, to inspect the documents and records of the Company:
(a) in written form;
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(b) without charge; and
(c) at a reasonable time
specified by the Director,
and to make copies of or take extracts from the documents and records.
34.7 Subject to Article 34.8, a Member is entitled, on giving written notice to the Company, to inspect:
(a) the Memorandum and Articles;
(b) the register of Members;
(c) the register of Directors; and
(d) minutes of meetings of Members and Resolutions of
Members and of those classes of Members of which he is a Member,
and to make copies of or take extracts from the documents and records.
34.8 The Directors may, if they are satisfied that it would be contrary to the Companys interests to allow a Member to inspect any document, or part of a document, specified
in Article 34.7(b), 34.7(c) or 34.7(d), refuse to permit the Member to inspect the document or limit the inspection of the document, including limiting the making of copies or the taking of extracts from the records.
34.9 The rights of inspection of a Director and a Member shall be exercisable during ordinary business hours.
35 REGISTERS OF CHARGES
35.1 The Company shall maintain at the office of its registered agent
a register of charges in which there shall be entered the following particulars regarding each mortgage, charge and other encumbrance created by the Company:
(a)
the date of creation of the charge;
(b) a short description of the liability secured by the charge;
(c) a short description of the property charged;
(d) the name and address of the trustee for
the security or, if there is no such trustee, the name and address of the chargee;
(e) unless the charge is a security to bearer, the name and address of the
holder of the charge; and
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(f) details of any prohibition or restriction contained in the instrument creating the charge on the power of the Company to create any
future charge ranking in priority to or equally with the charge.
36 CONTINUATION
36.1 The Company may by Resolution of Directors or Resolution of Members continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands in
the manner provided under those laws.
37 SEAL
37.1 The Seal (if any) shall
only be used by the authority of the Directors or of a committee of Directors authorised by the Directors.
37.2 Subject to the provisions of the Act, the Directors
may determine to have an official for use in any country, territory or place outside the British Virgin Islands, which shall be a facsimile of the Seal. Any such official seal shall in addition bear the name of every territory, district or place in
which it is to be used.
37.3 The Directors may determine who shall sign any instrument to which the Seal or any official seal is affixed and, in respect of the
Seal, unless otherwise so determined: (i) share certificates need not be signed or, if signed, a signature may be applied by mechanical or other means or may be printed; and (ii) every other instrument to which the Seal is affixed shall be
signed by a Director and by the secretary or by a second Director. A person affixing the Seal or any official seal to any instrument shall certify thereon the date upon which and the place at which it is affixed (or, in the case of a share
certificate, on which the Seal may be printed). The Directors may also decide, either generally or in a particular case, that a signature may be dispensed with or affixed by mechanical means.
38 ACCOUNTS AND AUDIT
38.1 No Member shall (as such) have any right of inspecting any
accounting records or other book or document of the Company except as conferred by the Act or authorised by the Directors or by these Articles.
38.2 The Company
may appoint auditors to examine the accounts and report thereon in accordance with the Law.
39 CAPITALISATION OF PROFITS
39.1 The Directors may by a Resolution of Directors:
(a) resolve to capitalise any
undistributed profits of the Company or any part of the amount for the time being standing to the credit of any of the Companys reserve accounts (including a capital reserve, profit and loss account or revenue reserve) or subject as
hereinafter provided any such amount standing to the credit of a share
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premium account or capital redemption reserve fund, whether or not available for distribution;
(b) appropriate the sum resolved to be capitalised to the Members who, in the case of any amount capable of being distributed by way of dividend, would have been entitled thereto
if so distributed or, in the case of any amount not so capable, to the Members who would have been entitled thereto on a winding-up of the Company and in either case in the same proportions and apply that sum on their behalf in or towards:
(i) paying up the amounts (if any) for the time being unpaid on shares held by them respectively, or
(ii) paying up in full unissued shares or debentures of an amount equal to that sum,
and allot
the shares or debentures, credited as paid up, to the Members (or as they
may direct) in those proportions, or partly in one way and partly in the other;
(c) make any arrangements it thinks fit to resolve a difficulty arising in the distribution of a capitalised reserve and in particular, without limitation, where
shares or debentures become distributable in fractions the Board may deal with the fractions as it thinks fit, including issuing fractional certificates, disregarding fractions or selling shares or debentures representing the fractions to a person
for the best price reasonably obtainable and distributing the net proceeds of the sale in due proportion amongst the Members (except that if the amount due to a Member is less than £10, or such other sum as the Board may decide, the sum may be
retained for the benefit of the Company);
(d) authorise a person to enter (on behalf of all the Members concerned) an agreement with the Company providing for
either:
(i) the allotment to the Members respectively, credited as paid up, of shares or debentures to which they may be entitled on the capitalisation; or
(ii) the payment by the Company on behalf of the Members (by the application of their respective proportions of the reserves resolved to be capitalised) of the
amounts or part of the amounts remaining unpaid on their existing shares,
an agreement made under the authority being effective and binding on all those
Members; and
(e) generally do all acts and things required to give effect to
the resolution.
39.2 Notwithstanding any other provision of these Articles, but subject to the rights attached to shares, the Board may fix any date as the record
date for a dividend, distribution, allotment or
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issue. The record date may be on or at any time before or after a date on which the dividend, distribution, allotment or issue is
declared, made or paid.
40 NOTICES
40.1 Any notice and any account, balance
sheet, report or other document (each a Document) to be given to or by any person pursuant to these Articles shall be in writing except that a notice calling a meeting of the Directors or a committee of Directors need not be in writing.
40.2 The Company may give any Document either:
(a) personally; or
(b) by sending it by post in a prepaid envelope addressed to the Member at his registered address or by leaving it at that address or by sending it to or leaving it at such other
address nominated for the purpose; or
(c) by transmitting it by facsimile to the registered address of the Member; or
(d) by sending it by electronic means (other than by transmission by facsimile) to such electronic address from time to time held by the Company for that Member, or by means of a
website, unless such Member notifies the Company otherwise and unless and until the Company receives such notice, a Member is deemed to agree to the sending of Documents by electronic means in any particular electronic form and to the sending of
documents by means of a website; or
(e) if service cannot be effected in accordance with sub-paragraphs (a) to (d) inclusive above, in any other manner
permitted by the Act.
40.3 Any Document to be given to the Company pursuant to these Articles may be given either:
(a) by being sent by post in a prepaid envelope addressed to the Company (i) at its Office, or by leaving it at such address or (ii) by sending it to or leaving it at
such other address nominated by the Directors from time to time for the purpose; or
(b) by transmitting it by facsimile (addressed to the Company) (i) to the
Companys Office or (ii) to such other address nominated by the Directors from time to time for the purpose ; or
(c) by sending it by electronic means
(other than by transmission by facsimile) to (i) such electronic address, or by means of a website, from time to time provided by the Company for the purpose of the service of Documents upon it, or (ii) such other electronic address
nominated by the Directors from time to time for the purpose; or
(d) if service cannot be effected in accordance with sub-paragraphs (a) to (c) inclusive
above, in any other manner permitted by the Act.
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40.4 In the case of joint holders of a share, all Documents shall be given to the joint holder whose name stands first in the register
of Members in respect of the joint holding and Documents so given shall be sufficient disclosure to all the joint holders.
40.5 A Member present, either in person
or by proxy, at any meeting of the Company or of the holders of any class of shares in the Company shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called.
40.6 Every person who becomes entitled to a share shall be bound by any notice in respect of that share which, before his name is entered in the register of Members, has been duly
given to a person from which he derives his title.
40.7 Service of any Document by post shall be proved by showing the date of posting, the address thereon and the
fact of prepayment.
40.8 A Document addressed to the office, a registered address or an address for service is, if sent by post, deemed to be given 2 (two)
calendar days after it has been posted or, if such day is not a Business Day, on the next Business Day, and in proving service it is sufficient to prove that the envelope containing the Document was properly addressed and duly posted.
40.9 A Document not sent by post but left at the office, a registered address or at an address for service is deemed to be given on the day it is left or, if such day is not a
Business Day, on the next Business Day.
40.10 Any Document sent by facsimile shall be deemed to be received within half an hour (local time in the jurisdiction
where the document is being sent) of the time on the transmission notice on the Business Day that it is sent or, if such time of receipt is after 5.00pm local time in the jurisdiction where the Document is sent, by 9.00am (local time in the
jurisdiction where the Document is sent) on the next Business Day.
40.11 Any Document sent by other electronic means shall be deemed to be received immediately
upon being sent on the Business Day that it is sent (provided that such time falls between 9.00am and 5.00pm local time in the jurisdiction where the Document is sent) or, if such day is not a Business Day, or the Document is sent outside the hours
of 9.00am to 5.00pm local time in the jurisdiction where the Document is sent, by 9.00am (local time in the jurisdiction where the Document is sent) on the next Business Day.
40.12 In proving service of a Document sent by facsimile or by electronic means it shall be sufficient to show that:
(a) in the case of a Document sent by facsimile, the facsimile was properly addressed to the facsimile number last notified to the sender by the recipient and that a transmission
report was generated by the senders facsimile machine recording a message from the recipients facsimile machine that all pages were successfully transmitted; and
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(b) in the case of a notice sent by other electronic means, the electronic message was properly addressed to the electronic address from
time to time held by the sender for the recipient, and that no error message has been received in relation to the electronic message or the Document by the sender.
40.13 Any Document served by an advertisement or notice published in a newspaper or the BVI Gazette is deemed to be given to all Members and other persons entitled
to receive it at noon on the day when the advertisement or notice appears or, where an advertisement or notice is given by more than one advertisement or notice and the advertisements or notices appear on different days, at noon on the last of the
days when the advertisements or notices appear.
40.14 Any Document served or delivered by the Company by any other means is deemed to be served when the Company
has taken the action it has been authorised to take for that purpose.
40.15 A Document may be given by the Company to the persons entitled to a share in
consequence of the death, bankruptcy or incapacity of a Member by sending or delivering it, in any manner authorised by these Articles for the giving of Documents to a Member, addressed to them by name, or by the title of representatives of the
deceased, or trustee of the bankrupt or curator of the Member or by any like description at the address, if any, supplied for that purpose by the persons claiming to be so entitled. Until such an address has been supplied, a notice may be given in
any manner in which it might have been given if the death, bankruptcy or incapacity had not occurred. If more than one person would be entitled to receive a notice in consequence of the death, bankruptcy or incapacity of a Member, notice given to
any one of such persons shall be sufficient notice to all such persons.
41 WINDING UP
41.1 The Directors may by a Resolution of Directors approve the winding up of the Company to occur at any time after an Acquisition has been completed where the Directors
reasonably conclude that the Company is or will become (and will be at the time of the winding up) a Dormant Company. For the avoidance of doubt such Resolution of Directors may, subject to the Act, be approved at any time, including prior to
completion of an Acquisition.
41.2 Save in the circumstances provided in Article 41.1 and Article 43, a Special Resolution of Members is required to approve the
voluntary winding-up of the Company.
41.3 If any proposal to wind up the Company is approved by a Special Resolution of Members, Resolution of Members or
Resolution of Directors pursuant to this Article 41 or Article 43, the Company shall proceed to be wound-up in accordance with section 199 of the Act.
42 MERGER
AND CONSOLIDATION
42.1 Subject to Article 42.2, the Company may, with the approval of a Resolution of Members (at any time), on which, where the Directors, in
their absolute discretion (acting in good faith) determine such action to be necessary or desirable in relation to, in connection with, or
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resulting from an Acquisition (including, at any time after an Acquisition has been made), only the holders of Founder Preferred Shares
shall be entitled to vote, merge or consolidate with one or more other BVI or foreign companies, in the manner provided in the Act.
42.2 Except in relation to a
Resolution of Members obtained pursuant to Article 42.1, only the holders of Ordinary Shares shall be entitled to vote on a Resolution of Members to approve the merger or consolidation of the Company with one or more other BVI or foreign companies.
42.3 A Resolution of Members (either pursuant to Article 42.1 or otherwise) shall not (unless the Law requires otherwise) be required in relation to a merger of a
parent company with one or more subsidiary companies (each as defined in section 169 of the Act) in accordance with section 172 of the Act.
43 ACQUISITION
43.1 Notwithstanding anything to the contrary in these Articles, but subject to compliance with the Law, any matters which the Directors consider it is necessary
or desirable to approve in relation to, in connection with or resulting from an Acquisition (whether before or after the Acquisition has occurred), may be approved at any time by a Resolution of Directors or, to the extent a resolution of Members is
required pursuant to the Law, upon the approval of a Resolution of Members (on which only the holders of Founder Preferred Shares shall be entitled to vote).
44
AMENDMENT OF MEMORANDUM AND ARTICLES
44.1 The Directors may at any time (including after an Acquisition) amend the Memorandum or these Articles where the Directors
determine, in their discretion, by a Resolution of Directors that such changes are necessary or desirable in relation to, in connection with or resulting from an Acquisition (including without limitation in connection with admission to listing on
the New York Stock Exchange) unless in each case the Directors in their discretion determine that such change would have a materially adverse effect on the rights attaching to any class of shares as set out in Clause 6.1 or 6.2 of the Memorandum (as
applicable), in which case such changes may only be made pursuant to a Resolution of Directors if also approved by the holders of each class of shares affected in such manner in accordance with Clause 7.1 of the Memorandum.
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We, Ogier Fiduciary Services (BVI) Limited of Nemours Chambers, Road Town, Tortola, British Virgin Islands, for the purpose of
incorporating a BVI business company under the laws of the British Virgin Islands hereby sign this Articles of Association.
Dated: 1 April 2014
Incorporator
Sgd: Tatenda Gotosa
Sgd: Kay Eade
Authorised Signatory
Authorised Signatory
Ogier Fiduciary Services (BVI) Limited
Ogier Fiduciary Services (BVI) Limited
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Exhibit 4.1
EXECUTION COPY
TO: | THE UNDERSIGNED HOLDERS OF ORDINARY SHARES OF NOMAD HOLDINGS LIMITED |
Re: | Registration Rights Agreement |
Each Holder of ordinary shares of no par value (the Ordinary Shares ) of Nomad Holdings Limited, a company limited by shares incorporated with limited liability under the laws of the British Virgin Islands (the Company ), and the Company have agreed to the following terms, conditions and provisions of this Registration Rights Agreement (this Agreement ). Holder shall refer to each holder of Ordinary Shares listed on Schedule I attached hereto, any additional holder of Ordinary Shares that becomes a party to this Agreement after the date hereof by signing a joinder to this Agreement, and any transferee of any such Holder that is an Affiliate of the Holder at the time of the transfer; provided that such transferee executes a customary joinder to this Agreement. Holders shall refer collectively to the Holders. Capitalized terms used herein and not defined shall have the meanings set forth on Exhibit A hereto.
Other than Section 1, which shall apply from the date of this Agreement, the provisions of this Agreement shall apply from the earlier of (i) the date that the Company becomes obligated to register an offering of any securities of the Company or any securities of the Company with the Commission under the Securities Act or the Exchange Act (as the case may be), other than pursuant to this Agreement and (ii) the date that the Company becomes subject to the reporting requirements of the Exchange Act (such date, the U.S. Registration Obligation Date ).
1. | General; London Listing Share Disposals; Rule 144 |
1.1 At any time that the Company is listed and traded on the London Stock Exchange plc ( London Listed ), if a Holder notifies the Company in writing of its intention to dispose of all or some of its Registrable Shares (a Share Disposal ), the Company shall cooperate with and provide such assistance to that Holder in connection with any such Share Disposal as it may reasonably request including, without limitation, (i) participation by the senior management of the Company in the preparation of a prospectus and roadshow or other marketing materials, and (ii) participation by the senior management of the Company in discussions with potential investors, one-on-one meetings with institutional investors and roadshow presentations. In connection with any Share Disposal, the priority and pro rata mechanics of Section 2.3(b) shall apply mutatis mutandis in respect of the Share Disposal. The Company shall bear all costs and expenses incurred in providing such assistance subject to applicable law; provided, however, that the Company shall have no obligation to pay any discounts or underwriting commissions of any selling Holder. If the U.S. Registration Obligation Date occurs and the Company remains London Listed, then the provisions of this Section 1.1 shall continue to apply with respect to any Share Disposal save as would be inconsistent with any other provision of this Agreement.
1.2 The Company shall, at the Companys expense, for so long as any Holder holds any Registrable Shares, cooperate with the Holders, as may be reasonably requested by any Holder from time to time, to facilitate any proposed sale of Registrable Shares by the requesting Holder(s) in accordance with the provisions of Rule 144, including, without limitation, by complying with the current public information requirements of Rule 144 and providing opinions of counsel, as may be reasonably necessary in order for such Holder to avail itself of such rule to allow such Holder to sell such Registrable Shares without registration.
2. | U.S. Registration |
2.1 In accordance with the procedures set forth in Section 3, the Company agrees to file with the Commission as soon as reasonably practicable following the occurrence of the U.S. Registration Obligation Date, a resale registration statement on Form F-1, Form F-3 or such other form under the Securities Act then available to the Company providing for the resale pursuant to Rule 415 from time to time by the Holders of any and all Registrable Shares issued or issuable (including the Prospectus, amendments and supplements to such registration statement, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement, the Mandatory Registration Statement ). The Company agrees to use its commercially reasonable efforts to cause the Commission to declare any Mandatory Registration Statement effective as soon as practicable after the filing thereof. The Company shall use its commercially reasonable efforts to cause any Mandatory Registration Statement
(or, if applicable, a Shelf Registration Statement (as defined below)) to remain continuously effective until the Termination Date (as defined below). Any Mandatory Registration Statement shall provide for the resale from time to time, and pursuant to any method or combination of methods legally available to, and requested by, the Holder(s) of the Registrable Shares.
2.2 At any time after the Company becomes eligible to use a shelf registration statement on Form F-3 (a Shelf Registration Statement ), the Company shall, in accordance with the procedures set forth in Section 2, have the option to file a Shelf Registration Statement (whether such registration statement is filed by the Company on its own account or on account of one or more third persons), or a post-effective amendment on Form F- 3 to the Mandatory Registration Statement (including the Prospectus, amendments and supplements to such registration statement, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement) covering any Registrable Shares registered under any Mandatory Registration Statement and any Additional Shares issued or distributed to Holders after the effectiveness of the Mandatory Registration Statement, or otherwise not included in such prior Mandatory Registration Statement, on behalf of the Holders thereof in the same manner, and subject to the same provisions in this Agreement as the Mandatory Registration Statement. The Company shall use its commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective as soon as practicable, keep such Shelf Registration Statement effective with the Commission at all times (except as otherwise provided herein), file a new Shelf Registration Statement on Form F-3 upon its expiration and cooperate in any offering using such Shelf Registration Statement, whether or not underwritten, by amending or supplementing the prospectus relating to such Shelf Registration Statement as promptly as practicable following a written request by the Holder or as otherwise required, until the Termination Date.
2.3 (a) One or more Holders (collectively, the Demanding Holder ) may, at any time that such Demanding Holder owns more than five percent (5%) of the outstanding number of Ordinary Shares, demand the Company cooperate in an underwritten offering of Registrable Shares by delivering a notice to the Company (a Notice ) stating that it intends to effect an underwritten offering (an Underwritten Offering ) of all or part of its Registrable Shares; provided, however, that, the Company shall not be obligated to effect more than two Fully Marketed Underwritten Offerings hereunder in any twelve-month period. Upon the Companys receipt of a Notice, the Company shall promptly deliver such Notice to all other Holders and permit each Holder to include its Registrable Shares for offer and sale in such Underwritten Offering if such Holder notifies the Company within five (5) Business Days after delivery of the Notice to such Shareholder; provided, however, that the Company shall not give such Notice to other Holders or permit them to include their Registrable Shares for offering and sale in such Underwritten Offering if the Notice specifies that the Underwritten Offering will take the form of a so-called bought deal not involving a period of pre-marketing to the public before the underwrites commit to purchase the relevant Shares. The Demanding Holder shall select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with an Underwritten Offering.
(b) If the managing underwriter of an Underwritten Offering advises the Company and the participating Holders in writing (with a copy to each party hereto requesting to participate in such underwritten offering) that in its opinion the number of Ordinary Shares which the Holders desire to sell, taken together with any Ordinary Shares requested to be included in such Underwritten Offering by the Company or other Shareholders, exceeds the Maximum Number of Securities, the Company will include in such Underwritten Offering Ordinary Shares in the following priority:
(i) first, the Ordinary Shares the Holders propose to sell up to the Maximum Number of Securities, and if the aggregate number of such Registrable Shares exceeds the Maximum Number of Securities, the Company shall include only such Holders pro rata share of the Maximum Number of Securities based on the aggregate number of Registrable Shares beneficially owned by such Holders;
(ii) second, to the Company (if applicable); and
(iii) third, to any other Person entitled to request the inclusion of Ordinary Shares in such Underwritten Offering.
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2.4 (a) Subject to the provisions of this Section 2.4 and a good faith determination by the Company that it is in the best interests of the Company to suspend the use of any Registration Statement, following the effectiveness of such Registration Statement (and the filings with any international, federal or state securities commissions), the Company, by written notice to the Holders, may direct the Holders to suspend sales of the Registrable Shares pursuant to such Registration Statement for such times as the Company reasonably may determine is necessary and advisable (but in no event for more than 30 consecutive days, subject to extension by the Company by up to an additional 60 consecutive days solely to the extent that the Company requires such extension of time to complete financial statements required under applicable law to be contained in the Companys filings under the Exchange Act, or 90 days in any 365-day period), if any of the following events shall occur: (i) an underwritten public offering of Ordinary Shares by the Company if the Company is advised by the underwriters that the concurrent resale of the Registrable Shares by the Holders pursuant to the Registration Statement would have a material adverse effect on the Companys offering, (ii) there is material non-public information regarding the Company which (A) the Company determines not to be in the Companys best interest to disclose, (B) would, in the good faith determination of the Company, require any revisions to the Registration Statement so that it will 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, in light of the circumstances under which they were made, not misleading, and (C) the Company is not otherwise required to disclose, (iii) the Company otherwise determines in good faith that an amendment or supplement to the Registration Statement is necessary such that the Registration Statement shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or (iv) the Company is required to file a post-effective amendment to a Registration Statement to incorporate the Companys quarterly or annual reports or audited financial statements on Forms 10-Q and 10-K; provided, however, that no suspension period permitted pursuant to this clause (iv) shall continue for more than five (5) consecutive Business Days.
(b) Prior to the earlier to occur of (i) the Company delivering to the Holders an End of Suspension Notice (as defined below), or (ii) the end of the maximum permissible suspension period, the Company shall use its commercially reasonable efforts to promptly amend or supplement the Registration Statement on a post-effective basis, if necessary, or to take such action as is necessary to make resumed use of the Registration Statement so as to permit the Holders to resume sales of the Registrable Shares as soon as possible.
(c) In the case of an event that causes the Company to suspend the use of a Registration Statement (a Suspension Event ), the Company shall give written notice (a Suspension Notice ) to the Holders to suspend sales of the Registrable Shares, and such notice shall state that such suspension shall continue only for so long as the Suspension Event or its effect is continuing and the Company is taking all reasonable steps to terminate suspension of the effectiveness of the Registration Statement as promptly as possible. The Holders shall not effect any sales of the Registrable Shares pursuant to such Registration Statement (or such filings) at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice. If so directed by the Company, each Holder will deliver to the Company (at the reasonable expense of the Company) all copies other than permanent file copies then in such Holders possession of the Prospectus covering the Registrable Shares at the time of receipt of the Suspension Notice. The Holders may recommence effecting sales of the Registrable Shares pursuant to the Registration Statement (or such filings) following further notice to such effect (an End of Suspension Notice ) from the Company, which End of Suspension Notice shall be given by the Company to the Holders in the manner described above promptly following the conclusion of any Suspension Event and its effect.
2.5 The Company shall indemnify and hold harmless each Holder, each person who controls any Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), and the officers, directors, members, managers, stockholders, partners, limited partners, agents and employees of each of them (each an Indemnified Party ), to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys fees) and expenses (collectively, Losses ), as incurred, arising out of or relating to (a) any untrue or alleged untrue statement of a material fact contained in a Registration Statement or any prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (b) any violation
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or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement; in each case, except to the extent, but only to the extent, that (i) such untrue statement or omission is based upon information regarding such Holder furnished in writing to the Company by or on behalf of such Holder expressly for use therein, or (ii) such information relates to such Holder or such Holders proposed method of distribution of the Registrable Shares and was approved in writing by or on behalf of the Holder expressly for use in the Registration Statement, such prospectus or in any amendment or supplement thereto.
Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, each director of the Company, each officer of the Company who shall sign a Registration Statement, each underwriter, broker or other Person acting on behalf of the holders of securities included in a Registration Statement, and each Person who controls any of the foregoing Persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) against any Losses, as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in a Registration Statement or any prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, but only to the extent that (i) such untrue statement or omission is based upon information regarding such Holder furnished in writing to the Company by or on behalf of such Holder expressly for use therein, or (ii) such information relates to such Holder or such Holders proposed method of distribution of the Registrable Shares and was approved in writing by or on behalf of the Holder expressly for use in the Registration Statement, such prospectus or in any amendment or supplement thereto.
If the indemnification provided in this Section 2.5 is unavailable to an Indemnified Party or insufficient to hold the Indemnified Party harmless for any Losses, then the Company shall contribute to the amount paid or payable by the Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Company and such Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of the Company and the Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, the Company or the Indemnified Party, and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The parties hereto agree that it would not be just and equitable if any contribution were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding sentence. Notwithstanding the provisions of this paragraph, no Indemnified Party shall be required to contribute pursuant to this paragraph, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Indemnified Party from the sale of the Registrable Shares subject to the proceeding exceeds the amount of any damages that such Indemnified Party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.
The provisions of this Section 2.5 shall be in addition to any other rights to indemnification or contribution that an indemnified party may have pursuant to law, equity, contract or otherwise.
2.6 The Company shall have no further obligations pursuant to this Agreement with respect to a particular Holder at the earlier of (a) such time as all of the Registrable Shares of such Holder have been sold, (b) such time as all of the Registrable Shares of such Holder have been sold, transferred or otherwise disposed of pursuant to Rule 144 without any volume or manner of sale restrictions and (c) such time as such Holder is not an Affiliate of the Company and holds Ordinary Shares which constitute two percent (2%) or less of the outstanding Ordinary Shares (the Termination Date ); provided, however, in each case, that the Companys obligations under Sections 2.5 and 4 of this Agreement shall remain in full force and effect following such time.
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3. | Registration Procedures . |
3.1 In connection with the obligations of the Company with respect to any registration pursuant to this Agreement, the Company shall:
(a) prepare and file with the Commission, as specified in this Agreement, each Registration Statement, which Registration Statements shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the Commission to be filed therewith, and use its commercially reasonable efforts to cause any Registration Statement to become and remain effective as set forth in Sections 2.1 and 2.2 hereof;
(b) subject to Section 2.4 hereof, (i) prepare and file with the Commission such amendments and post-effective amendments to each such Registration Statement as may be necessary to keep such Registration Statement effective for the period described in Section 2 hereof, (ii) cause each Prospectus contained therein to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 or any similar rule that may be adopted under the Securities Act, and (iii) comply in all material respects with the provisions of the Securities Act with respect to the disposition of all securities covered by each Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the selling Holders thereof;
(c) furnish to the Holders, without charge, such number of copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder may reasonably request, in order to facilitate the public sale or other disposition of the Registrable Shares; the Company hereby consents to the use of such Prospectus, including each preliminary Prospectus, by the Holders, if any, in connection with the offering and sale of the Registrable Shares covered by any such Prospectus;
(d) use its commercially reasonable efforts to register or qualify, or obtain exemption from registration or qualification for, all Registrable Shares by the time the applicable Registration Statement is declared effective by the Commission under all applicable state securities or blue sky laws of such domestic jurisdictions as any Holder covered by a Registration Statement shall reasonably request in writing, keep each such registration or qualification or exemption effective during the period such Registration Statement is required to be kept effective pursuant to Section 2 and do any and all other acts and things that may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Registrable Shares owned by such Holder; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for this Section 3.1(d), (ii) subject itself to taxation in any such jurisdiction, or (iii) submit to the general service of process in any such jurisdiction;
(e) notify each Holder with Registrable Shares covered by a Registration Statement promptly and, if requested by any such Holder, confirm such advice in writing (i) when such Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of the issuance by the Commission or any state securities authority of any stop order suspending the effectiveness of such Registration Statement or the initiation of any proceedings for that purpose, (iii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to such Registration Statement or related Prospectus or for additional information, and (iv) of the happening of any event during the period such Registration Statement is effective as a result of which such Registration Statement or the related Prospectus or any document incorporated by reference therein contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading (which information shall be accompanied by an instruction to suspend the use of the Registration Statement and the Prospectus until the requisite changes have been made);
(f) during the period of time referred to in Section 2.1 above, use its commercially reasonable efforts to avoid the issuance of, or if issued, to obtain the withdrawal of, any order enjoining or suspending the use or effectiveness of a Registration Statement or suspending the qualification (or exemption from qualification) of any of the Registrable Shares for sale in any jurisdiction, as promptly as practicable;
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(g) upon request, furnish to each requesting Holder with Registrable Shares covered by a Registration Statement, without charge, at least one conformed copy of such Registration Statement and any post-effective amendment or supplement thereto (without documents incorporated therein by reference or exhibits thereto, unless requested);
(h) except as provided in Section 2.4, upon the occurrence of any event contemplated by Section 3.1(e)(iv), use its commercially reasonable efforts to promptly prepare a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Shares, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and, upon request, promptly furnish to each requesting Holder a reasonable number of copies of each such supplement or post-effective amendment;
(i) enter into customary agreements and take all other action in connection therewith in order to expedite or facilitate the distribution of the Registrable Shares included in such Registration Statement;
(j) use its commercially reasonable efforts (including, without limitation, seeking to cure in the Companys listing or inclusion application any deficiencies cited by the exchange or market) to list or include all Registrable Shares on any securities exchange on which such Registrable Shares are then listed or included;
(k) prepare and file in a timely manner all documents and reports required by the Exchange Act and, to the extent the Companys obligation to file such reports pursuant to Section 15(d) of the Exchange Act expires prior to the expiration of the effectiveness period of the Registration Statement as required by Section 2 hereof, the Company shall register the Registrable Shares under the Exchange Act and shall maintain such registration through the effectiveness period required by Section 2 hereof;
(l) (i) otherwise use its commercially reasonable efforts to comply in all material respects with all applicable rules and regulations of the Commission, (ii) make generally available to its stockholders, as soon as reasonably practicable, earnings statements (which need not be audited) covering at least 12 months that satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, and (iii) delay filing any Registration Statement or Prospectus or amendment or supplement to such Registration Statement or Prospectus to which any Holder of Registrable Shares covered by any Registration Statement shall have reasonably objected on the grounds that such Registration Statement or Prospectus or amendment or supplement does not comply in all material respects with the requirements of the Securities Act, such Holder having been furnished with a copy thereof at least two (2) Business Days prior to the filing thereof, provided that the Company may file such Registration Statement or Prospectus or amendment or supplement following such time as the Company shall have made a good faith effort to resolve any such issue with the objecting Holder and shall have advised the Holder in writing of its reasonable belief that such filing complies in all material respects with the requirements of the Securities Act;
(m) cause to be maintained a registrar and transfer agent for all Registrable Shares covered by any Registration Statement from and after a date not later than the effective date of such Registration Statement;
(n) in connection with any sale or transfer of the Registrable Shares (whether or not pursuant to a Registration Statement) that will result in the securities being delivered no longer constituting Registrable Shares, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing the Registrable Shares to be sold, which certificates shall not bear any transfer restrictive legends, and to enable such Registrable Shares to be in such denominations and registered in such names as the Holders may request at least three (3) Business Days prior to any sale of the Registrable Shares;
(o) cause management of the Company to cooperate reasonably with each of the Holders with respect to (i) significant sales or placements of Registrable Shares, including by participating in roadshows, one-on-one meetings with institutional investors and responding to reasonable requests for information and (ii) any request for information or other diligence request by any such Holder or any underwriter;
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(p) use its commercially reasonable efforts to obtain a comfort letter from the independent public accountants for the Company and any acquisition target of the Company whose financial statements are required to be included or incorporated by reference in any Registration Statement, in form and substance customarily given by independent certified public accountants in an underwritten public offering, addressed to the underwriters, if any, and to the Holders of the Registrable Shares being sold pursuant to each Registration Statement;
(q) execute and deliver all instruments and documents (including an underwriting agreement or placement agent agreement, as applicable, in customary form and with customary indemnification and contribution provisions), participate in customary due diligence sessions and take such other actions and obtain such certificates and opinions as sellers of the Registrable Shares being sold (or if applicable, the underwriters) reasonably request in order to effect a public offering of such Registrable Shares and in such connection, whether or not an underwriting agreement or placement agent agreement is entered into and whether or not the offering is an underwritten offering, (A) make such representations and warranties to the Holders of such Registrable Shares and the underwriters or placement agents, if any, with respect to the business of the Company and its subsidiaries, and the Registration Statement and documents, if any, incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings or placement agents, if applicable, and, if true, confirm the same if and when requested, and (B) use its commercially reasonable efforts to furnish to the selling Holders and underwriters or placement agents, if any, of such Registrable Shares opinions and negative assurance letters of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters or placement agents, if any, and counsels to the selling Holders of Registrable Shares), covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such counsel and any such underwriters or placement agents; and
(r) upon reasonable request by a Holder, the Company shall file an amendment to any applicable Registration Statement (or Prospectus supplement, as applicable), to name additional Holders of Registrable Shares or otherwise update the information provided by any such Holder in connection with such Holders disposition of Registrable Shares.
3.2 The Company shall pay all Registration Expenses in connection with the registration of the Registrable Shares pursuant to this Agreement. Each Holder participating in a registration pursuant to Section 2 shall bear such Holders proportionate share (based on the total number of Registrable Shares sold in such registration) of all Selling Expenses and any other expense relating to a registration of Registrable Shares pursuant to this Agreement and any other Selling Expenses relating to the sale or disposition of such Holders Registrable Shares pursuant to any Registration Statement.
3.3 The Company may require the Holders to furnish in writing to the Company such information regarding the proposed distribution of Registrable Shares by such Holder as the Company may from time to time reasonably request in writing or as shall be required to effect the registration of the Registrable Shares, and no Holder shall be entitled to be named as a selling stockholder in any Registration Statement or use the Prospectus forming a part thereof if such Holder does not provide such information to the Company. Each Holder further agrees to furnish promptly to the Company in writing all information required from time to time to make the information previously furnished by such Holder not misleading. Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1(e)(ii), 3.1(e)(iii) or 3.1(e)(iv) hereof, such Holder will immediately discontinue disposition of Registrable Shares pursuant to a Registration Statement until (i) any such stop order is vacated or (ii) if an event described in Section 3.1(e)(iii) or 3.1(e)(iv) occurs, such Holders receipt of the copies of the supplemented or amended Prospectus. If so directed by the Company, such Holder will deliver to the Company (at the reasonable expense of the Company) all copies in its possession, other than permanent file copies then in such Holders possession, of the Prospectus covering such Registrable Shares current at the time of receipt of such notice.
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3.4 Except as set forth in Section 2.3(b), in any underwritten offering by any Holder, no other seller shall be permitted to reduce the number of shares of Ordinary Shares proposed to be sold by any such Holder.
3.5 Each Holder acknowledges and agrees that the Company may permit additional holders of Ordinary Shares who are or become Affiliates of the Company after the date hereof to be added as additional Holders under this Agreement, with all the rights applicable to Holders hereunder.
4. General Provisions.
4.1 The Company has not entered, and will not hereafter enter, into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders of Registrable Shares in this Agreement. To the extent that the Company, on or after the date hereof, grants any superior or more favorable rights or terms to any Person with respect to the rights granted hereunder and terms provided herein than those provided to the Holders of Registrable Shares as set forth herein, any such superior or more favorable rights or terms shall also be deemed to have been granted simultaneously to the Holders of Registrable Shares, and the Company shall promptly prepare and execute such documents to reflect and provide such Holders with the benefit of such superior or more favorable rights and/or terms with respect to their Registrable Shares. Upon the granting of any such rights and terms, the Company shall promptly provide notice to each Holder describing such rights and terms.
4.2 Except as otherwise provided herein, all costs and expenses incurred by or on behalf of the parties hereto in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses when due.
4.3 All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally to the recipient or when sent to the recipient by facsimile (receipt confirmed) or email, one (1) Business Day after the date when sent to the recipient by reputable overnight express courier services (charges prepaid) or three (3) Business Days after the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid; provided, however, that, any notice received at the addressees location on any Business Day after 5:30 p.m. (addressees local time) shall be deemed to have been received by 9:00 a.m. (addressees local time) on the next Business Day. Such notices, demands and other communications will be sent to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):
To the Company: | Nomad Holdings Limited | |
c/o International Administration Group (Guernsey) Limited | ||
Regency Court, Glategny Esplanade | ||
St Peter Port, Guernsey GY13RH | ||
Attn: Company Administrator | ||
Facsimile: +(44) 1481 716 868 | ||
email: [omitted] | ||
with a copy (which shall not constitute notice) to: | Greenberg Traurig, P.A. | |
401 E. Las Olas Blvd., Suite 2000 | ||
Fort Lauderdale, FL 33301 | ||
Attention: Donn Beloff, Esq. | ||
Facsimile No.: (954) 765-1477 | ||
email: [omitted] | ||
To Holder: | The address set forth beneath Holders signature hereto |
4.4 This Agreement may be executed in any number of separate counterparts (including by means of facsimile or portable document format (pdf)), each of which is an original but all of which taken together shall constitute one and the same instrument.
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4.5 This Agreement sets forth the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof.
4.6 Each of the provisions of this Agreement is severable, if any such provision is held to be or becomes invalid or unenforceable in any respect under the law of any jurisdiction, it shall have no effect in that respect and the parties shall use all reasonable efforts to replace it in that respect with a valid and enforceable substitute provision the effect of which is as close to its intended effect as possible.
4.7 THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED IN ANY WAY TO THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, THE PROPOSED TRANSACTION AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER OR RELATED IN ANY WAY TO THE FOREGOING, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAW OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE. THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT (A) THE REQUIREMENTS OF 6 DEL. C. § 2708 ARE SATISFIED BY THE PROVISIONS OF THIS AGREEMENT AND THAT SUCH STATUTE MANDATES THE APPLICATION OF DELAWARE LAW TO THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, THE PROPOSED TRANSACTION AND THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER, (B) THE PARTIES HAVE A REASONABLE BASIS FOR THE APPLICATION OF DELAWARE LAW TO THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, THE PROPOSED TRANSACTION AND THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER, (C) NO OTHER JURISDICTION HAS A MATERIALLY GREATER INTEREST IN THE FOREGOING, AND (D) THE APPLICATION OF DELAWARE LAW WOULD NOT BE CONTRARY TO THE FUNDAMENTAL POLICY OF ANY OTHER JURISDICTION THAT, ABSENT THE PARTIES CHOICE OF DELAWARE LAW HEREUNDER, WOULD HAVE AN INTEREST IN THE FOREGOING.
4.8 Except as expressly provided herein, neither this Agreement nor any of the rights, interests or obligations shall be assigned by any of the parties hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. A person who is not a party to this Agreement shall have no right to enforce any of its terms and this Agreement is not intended to give any person other than the parties and their permitted assigns any rights hereunder, other than as set forth under Section 2.5.
4.9 EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE GENERAL JURISDICTION OF THE DELAWARE COURT OF THE CHANCERY AND ANY STATE APPELLATE COURT THEREOF WITHIN THE STATE OF DELAWARE (OR, ONLY IF THE DELAWARE COURT OF CHANCERY DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF DELAWARE) FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND AGREES THAT ALL CLAIMS IN RESPECT OF THE SUIT, ACTION OR OTHER PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH PARTY AGREES TO COMMENCE ANY SUCH SUIT, ACTION OR OTHER PROCEEDING IN THE DELAWARE COURT OF THE CHANCERY (OR, ONLY IF THE DELAWARE COURT OF CHANCERY DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF DELAWARE). EACH PARTY WAIVES ANY DEFENSE OF IMPROPER VENUE OR INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT AND WAIVES ANY BOND, SURETY, OR OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER PARTY WITH RESPECT THERETO. ANY PARTY MAY MAKE SERVICE ON ANY OTHER PARTY BY SENDING OR DELIVERING A COPY OF THE PROCESS TO THE PARTY TO BE SERVED AT THE ADDRESS AND IN THE MANNER PROVIDED FOR THE GIVING OF NOTICES IN SECTION 4.3. NOTHING IN THIS SECTION 4.9, HOWEVER, SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AT EQUITY. EACH PARTY AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING SO BROUGHT SHALL BE CONCLUSIVE AND MAY BE ENFORCED BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW OR AT EQUITY.
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4.10 The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunder will cause irreparable injury to the other parties, for which damages, even if available, will not be an adequate remedy. Accordingly, each party hereby consents to the granting of injunctive relief by any court of competent jurisdiction to prevent breaches of this Agreement, to enforce specifically the terms and provisions hereof and to compel performance of such partys obligations, this being in addition to any other remedy to which any party is entitled under this Agreement. The parties further agrees to waive any requirement for the securing or posting of any bond in connection with any such remedy, and that such remedy shall be in addition to any other remedy to which a party is entitled at law or in equity.
4.11 EACH OF THE PARTIES HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT AND ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EACH OF THE PARTIES (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT SUCH OTHER PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
4.12 No amendment to this Agreement shall be valid unless it is in writing and duly executed by the parties hereto.
4.13 No failure or delay by a party in exercising any right or remedy provided by law or under this Agreement shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any further exercise of it or the exercise of any other remedy.
[Signature Page Follows]
10
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first below written
NOMAD HOLDINGS LIMITED | ||
By: |
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Name: | Martin E. Franklin | |
Title: | Director | |
Date: |
[Signature Page to Registration Rights Agreement]
HOLDERS: | ||
MARIPOSA ACQUISITION II, LLC | ||
By: |
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Name: | Martin E. Franklin | |
Title: | Manager | |
Date: | ||
Notice of Address:
Mariposa Acquisition II, LLC 5200 Blue Lagoon Drive Suite 855 Miami, FL 33126 Attn: Martin Franklin Facsimile No: (305) 675-0653 Email: [omitted] |
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[Signature Page to Registration Rights Agreement]
[Signature Page to Registration Rights Agreement]
[Signature Page to Registration Rights Agreement]
HOLDERS: | ||
TOMS ACQUISITION I LLC | ||
By: |
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Name: | Alejandro San Miguel | |
Title: | Secretary | |
Date: | ||
Notice of Address:
450 W. 14 th Street, 13 th Floor New York, New York 10014 Attn: Alex San Miguel Facsimile No: (212) 524-7333 Email: [omitted] |
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[Signature Page to Registration Rights Agreement]
HOLDERS: | ||
TOMS CAPITAL INVESTMENTS LLC | ||
By: |
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Name: | Alejandro San Miguel | |
Title: | Secretary | |
Date: | ||
Notice of Address:
450 W. 14 th Street, 13 th Floor New York, New York 10014 Attn: Alex San Miguel Facsimile No: (212) 524-7333 Email: [omitted] |
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[Signature Page to Registration Rights Agreement]
Annex A
Defined Terms
Additional Shares means (i) shares or other securities issued in respect of the Ordinary Shares by reason of or in connection with any stock dividend, stock distribution, stock split or similar issuance and (ii) in the case of a Holder that holds any preferred shares of the Company of no par value (Founder Preferred Shares) of the Company, any Ordinary Shares issued as dividends on such Founder Preferred Shares.
Affiliate means, as to any specified Person, (i) any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified Person, (ii) any executive officer, director, trustee or general partner of the specified Person and (iii) any legal entity for which the specified Person acts as an executive officer, director, trustee or general partner. For purposes of this definition, control (including the correlative meanings of the terms controlled by and under common control with), as used with respect to any Person, shall mean the possession, directly, or indirectly through one or more intermediaries, of the power to direct or cause the direction of the management and policies of such Person, whether by contract, through the ownership of voting securities, partnership interests or other equity interests or otherwise.
Business Day means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in New York, New York are authorized or obligated by applicable law, regulation or executive order to close.
Commission means the Securities and Exchange Commission, or any successor regulatory body.
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission pursuant thereto.
Form F-1 , Form F-3 and Form F-4 means the applicable form to be filed with the Commission and shall include any successor or similar form to such form under the Securities Act subsequently adopted by the Commission.
FINRA means the Financial Industry National Regulatory Agency.
Fully Marketed Underwritten Offering means an Underwritten Offering which includes road shows involving members of the directors or senior management of the Company in one-on-one meetings with prospective purchasers of the Registrable Shares and other customary marketing activities, as recommended by the underwriter(s).
Maximum Number of Securities means, with respect to an Underwritten Offering, the maximum number of securities which can be sold in such offering without materially and adversely affecting the marketability of such offering in the reasonable view of the managing underwriter for such Underwritten Offering.
Person means an individual, limited liability company, partnership, corporation, trust, unincorporated organization, government or agency or political subdivision thereof, or any other legal entity.
Registrable Shares means, with respect to any Holder, any Ordinary Shares held by such Holder as of the date hereof or acquired by such Holder after the date hereof and prior to the Termination Time, any Additional Shares in respect thereof and, in the case of Additional Shares of the type set forth in clause (ii) of the definition thereof, any Additional Shares issued after the date hereof, in each case, upon original issuance thereof, and at all times subsequent thereto, including upon the transfer thereof by the original Holder or any subsequent Holder, until, in the case of any such Ordinary Shares or Additional Shares, as applicable, the earliest to occur of:
(i) | the date on which they have been sold pursuant to a Registration Statement or sold pursuant to Rule 144; or |
(ii) | the date on which they are sold to the Company or its subsidiaries. |
A-1
Registration Expenses means any and all expenses incident to the performance of or compliance with this Agreement, including, without limitation: (i) all Commission, the New York Stock Exchange (NYSE) or such other exchange as the Registrable Shares are listed from time to time and FINRA fees, (ii) all fees and expenses incurred in connection with compliance with international, federal or state securities or blue sky laws (including, without limitation, any registration, listing and filing fees and reasonable fees and disbursements of counsel in connection with blue sky qualification of any of the Registrable Shares and the preparation of a blue sky memorandum and compliance with the rules of FINRA and NYSE or other applicable exchange), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, duplicating, printing, delivering and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, securities sales agreements, certificates and any other documents relating to the performance under and compliance with this Agreement, (iv) all fees and expenses incurred in connection with the listing or inclusion of any of the Registrable Shares on NYSE or other applicable exchange pursuant to Section 3.1(j) of this Agreement, (v) the fees and disbursements of counsel for the Company and of the independent public accountants of the Company (including, without limitation, the expenses of any special audit, agreed upon procedures and cold comfort letters required by or incident to such performance), and (vi) any fees and disbursements customarily paid in issues and sales of securities (including the fees and expenses of any experts retained by the Company in connection with any Registration Statement), provided, however, that Registration Expenses shall exclude brokers or underwriters discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Shares by a Holder and the fees and disbursements of any counsel to the Holders other than as provided for in clause (ii) above.
Registration Statement means any Mandatory Registration Statement or Shelf Registration Statement.
Rule 144 , Rule 158 , Rule 415 , or Rule 424 , respectively, means such specified rule promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission as a replacement thereto having substantially the same effect as such rule.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.
Selling Expenses means, if any, all underwriting or broker fees, discounts and selling commissions or similar fees or arrangements, fees of counsel to the selling Holders (other than as specifically provided in the definition of Registration Expenses above) and transfer taxes allocable to the sale of the Registrable Shares included in the applicable offering.
A-2
Schedule I
Pershing Square, L.P.
Pershing Square II, L.P.
Pershing Square International, Ltd.
Pershing Square Holdings, Ltd.
Birds Eye Iglo Limited Partnership Inc.
Mariposa Acquisition II, LLC
TOMS Acquisition I LLC
TOMS Capital Investments LLC
S-1
Exhibit 4.2
EXECUTION VERSION
IGLO FOODS BONDCO PLC, as Issuer
FLOATING RATE SENIOR SECURED NOTES DUE 2020
INDENTURE
Dated as of July 17, 2014
IGLO FOODS FINCO LIMITED,
as Parent Guarantor
IGLO FOODS MIDCO LIMITED, IGLO FOODS GROUP LIMITED, BIRDS EYE LIMITED, BIRDS EYE IPCO LIMITED, IGLO HOLDING GMBH, LIBERATOR GERMAN NEWCO GMBH, FROZEN FISH INTERNATIONAL GMBH, IGLO GMBH, IGLO AUSTRIA HOLDING GMBH, IGLO AUSTRIA GMBH, IGLO BELGIUM NV AND IGLO NEDERLAND B.V.,
as Subsidiary Guarantors
DEUTSCHE TRUSTEE COMPANY LIMITED,
as Trustee
DEUTSCHE BANK AG, LONDON BRANCH,
as Paying Agent, Transfer Agent and Calculation Agent
DEUTSCHE BANK LUXEMBOURG S.A.,
as Luxembourg Registrar and Luxembourg Paying Agent
CREDIT SUISSE AG, LONDON BRANCH,
as Security Agent
The taking of (a) any of the Notes Documents (defined herein) or (b) any certified copy thereof or (c) any document which constitutes substitute documentation thereof including written confirmations or references (the Stamp Duty Sensitive Documents ) into Austria may cause the imposition of Austrian stamp duty. The same, inter alia, applies to (i) the sending of Stamp Duty Sensitive Documents to an Austrian addressee by fax, (ii) the sending of any e-mail communication to which an electronic scan copy (e.g., pdf or tif) of a Stamp Duty Sensitive Document is attached to an Austrian addressee and (iii) the sending of any e-mail communication carrying an electronic or digital signature which refers to a Stamp Duty Sensitive Document to an Austrian addressee. Accordingly, in particular, keep any Stamp Duty Sensitive Documents outside of Austria and avoid (A) sending Stamp Duty Sensitive Documents by fax to an Austrian addressee, (B) sending any e-mail communication to which an electronic scan copy of a Stamp Duty Sensitive Document is attached to an Austrian addressee and (C) sending any e-mail communication carrying an electronic or digital signature which refers to a Stamp Duty Sensitive Document to an Austrian addressee.
TABLE OF CONTENTS
Page | ||||||
Article 1 Definitions |
1 | |||||
Section 1.01 |
Definitions |
1 | ||||
Section 1.02 |
Other Definitions |
41 | ||||
Section 1.03 |
Rules of Construction |
42 | ||||
Article 2 The Notes |
43 | |||||
Section 2.01 |
Additional Notes |
43 | ||||
Section 2.02 |
Form and Dating |
44 | ||||
Section 2.03 |
Execution and Authentication |
44 | ||||
Section 2.04 |
Registrar and Paying Agent |
44 | ||||
Section 2.05 |
Money Held by Paying Agent |
45 | ||||
Section 2.06 |
Holder Lists |
46 | ||||
Section 2.07 |
Transfer and Exchange |
46 | ||||
Section 2.08 |
Replacement Notes |
47 | ||||
Section 2.09 |
Outstanding Notes |
47 | ||||
Section 2.10 |
Temporary Notes |
48 | ||||
Section 2.11 |
Cancellation |
48 | ||||
Section 2.12 |
Common Codes and ISINs |
48 | ||||
Section 2.13 |
Defaulted Interest |
48 | ||||
Section 2.14 |
Currency |
49 | ||||
Article 3 Redemption |
49 | |||||
Section 3.01 |
Notices to Trustee and Paying Agents |
49 | ||||
Section 3.02 |
Selection of Notes To Be Redeemed or Repurchased |
50 | ||||
Section 3.03 |
Notice of Redemption |
50 | ||||
Section 3.04 |
Effect of Notice of Redemption |
51 | ||||
Section 3.05 |
Deposit of Redemption Price |
52 | ||||
Section 3.06 |
Notes Redeemed in Part |
52 | ||||
Article 4 Covenants |
52 | |||||
Section 4.01 |
Limitation on Indebtedness |
52 | ||||
Section 4.02 |
Limitation on Restricted Payments |
57 | ||||
Section 4.03 |
Limitation on Liens |
65 | ||||
Section 4.04 |
Limitation on Restrictions on Distributions from Restricted Subsidiaries |
66 | ||||
Section 4.05 |
Limitation on Sales of Assets and Subsidiary Stock |
68 | ||||
Section 4.06 |
Limitation on Affiliate Transactions |
71 | ||||
Section 4.07 |
Impairment of Security Interest |
74 | ||||
Section 4.08 |
Additional Subsidiary Guarantees |
75 | ||||
Section 4.09 |
Reports |
76 | ||||
Section 4.10 |
Suspension of Covenants on Achievement of Investment Grade Status |
78 | ||||
Section 4.11 |
Additional Intercreditor Agreements |
78 | ||||
Section 4.12 |
Payment of Notes |
79 | ||||
Section 4.13 |
Withholding Taxes |
79 | ||||
Section 4.14 |
Change of Control |
82 |
- 2 -
Section 4.15 |
Compliance Certificate |
84 | ||||
Section 4.16 |
Limitation on Issuer Activities |
84 | ||||
Section 4.17 |
Payments for Consent |
85 | ||||
Section 4.19 |
Listing |
85 | ||||
Article 5 Successor COMPANY |
86 | |||||
Section 5.01 |
Merger and Consolidation |
86 | ||||
Article 6 Defaults and Remedies |
89 | |||||
Section 6.01 |
Events of Default |
89 | ||||
Section 6.02 |
Remedies Upon Event of Default |
91 | ||||
Section 6.03 |
Acceleration |
91 | ||||
Section 6.04 |
Other Remedies |
92 | ||||
Section 6.05 |
Waiver of Past Defaults |
92 | ||||
Section 6.06 |
Control by Majority |
92 | ||||
Section 6.07 |
Limitation on Suits |
92 | ||||
Section 6.08 |
Rights of Holders to Receive Payment |
93 | ||||
Section 6.09 |
Collection Suit by Trustee |
93 | ||||
Section 6.10 |
Trustee May File Proofs of Claim |
93 | ||||
Section 6.11 |
Priorities |
94 | ||||
Section 6.12 |
Undertaking for Costs |
94 | ||||
Section 6.13 |
Waiver of Stay or Extension Laws |
94 | ||||
Section 6.14 |
Restoration of Rights and Remedies |
94 | ||||
Section 6.15 |
Rights and Remedies Cumulative |
95 | ||||
Section 6.16 |
Delay or Omission Not Waiver |
95 | ||||
Section 6.17 |
Indemnification of Trustee |
95 | ||||
Article 7 Trustee |
95 | |||||
Section 7.01 |
Duties of Trustee |
95 | ||||
Section 7.02 |
Rights of Trustee |
97 | ||||
Section 7.03 |
Individual Rights of Trustee |
100 | ||||
Section 7.04 |
Trustees Disclaimer |
100 | ||||
Section 7.05 |
Notice of Defaults |
100 | ||||
Section 7.06 |
Compensation and Indemnity |
100 | ||||
Section 7.07 |
Replacement of Trustee |
102 | ||||
Section 7.08 |
Successor Trustee by Merger |
102 | ||||
Section 7.09 |
Certain Provisions |
103 | ||||
Section 7.10 |
Agents; General Provisions |
103 | ||||
Article 8 Satisfaction and Discharge of Indenture; Defeasance |
104 | |||||
Section 8.01 |
Satisfaction and Discharge of Liability on Notes; Defeasance |
104 | ||||
Section 8.02 |
Conditions to Defeasance |
105 | ||||
Section 8.03 |
Application of Money |
105 | ||||
Section 8.04 |
Repayment to Issuer |
105 | ||||
Section 8.05 |
Indemnity for European Government Obligations |
106 | ||||
Section 8.06 |
Reinstatement |
106 |
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Article 9 Amendments and Waivers |
106 | |||||
Section 9.01 |
Without Consent of Holders |
106 | ||||
Section 9.02 |
With Consent of Holders |
107 | ||||
Section 9.03 |
Revocation and Effect of Consents and Waivers |
109 | ||||
Section 9.04 |
Notation on or Exchange of Notes |
109 | ||||
Section 9.05 |
Trustee and Security Agent to Sign Amendments |
110 | ||||
Article 10 Note Guarantees |
110 | |||||
Section 10.01 |
Note Guarantees |
110 | ||||
Section 10.02 |
Successors and Assigns |
112 | ||||
Section 10.03 |
No Waiver |
112 | ||||
Section 10.04 |
Modification |
112 | ||||
Section 10.05 |
Execution of Supplemental Indenture for Guarantors |
112 | ||||
Section 10.06 |
Release of the Note Guarantees |
113 | ||||
Section 10.07 |
Limitations on Obligations of Guarantors |
113 | ||||
Section 10.08 |
Non-Impairment |
117 | ||||
Article 11 Collateral, Security Documents and the Security Agent |
117 | |||||
Section 11.01 |
Collateral and Security Documents |
117 | ||||
Section 11.02 |
Suits To Protect the Collateral |
119 | ||||
Section 11.03 |
Resignation and Replacement of Security Agent |
119 | ||||
Section 11.04 |
Amendments |
119 | ||||
Section 11.05 |
Release of Liens |
119 | ||||
Section 11.06 |
Compensation and Indemnity |
120 | ||||
Section 11.07 |
Conflicts |
121 | ||||
Article 12 Miscellaneous |
122 | |||||
Section 12.01 |
Notices |
122 | ||||
Section 12.02 |
Certificate and Opinion as to Conditions Precedent |
123 | ||||
Section 12.03 |
Statements Required in Certificate or Opinion |
124 | ||||
Section 12.04 |
When Notes Disregarded |
124 | ||||
Section 12.05 |
Rules by Trustee, Paying Agent and Registrar |
124 | ||||
Section 12.06 |
Legal Holidays |
124 | ||||
Section 12.07 |
Governing Law |
124 | ||||
Section 12.08 |
Consent to Jurisdiction and Service |
125 | ||||
Section 12.09 |
No Recourse Against Others |
125 | ||||
Section 12.10 |
Successors |
125 | ||||
Section 12.11 |
Counterparts |
125 | ||||
Section 12.12 |
Table of Contents; Headings |
125 | ||||
Section 12.13 |
Prescription |
125 | ||||
Section 12.14 |
Place of Performance |
126 | ||||
Section 12.15 |
Additional Limitations |
126 |
- 4 -
Exhibits | ||
Exhibit A-1 | Provisions Relating to the Notes | |
Exhibit A-2 | Form of the Note | |
Exhibit B | Form of Supplemental Indenture | |
Schedules | ||
Schedule 1 | Issue Date Security Documents | |
Schedule 2 | Post-Closing Date Security Documents |
INDENTURE dated as of July 17, 2014 among Iglo Foods BondCo Plc, a public limited company incorporated under the laws of the England and Wales, with its registered office at 5 New Square, Bedfont Lakes Business Park, Feltham, Middlesex, TW14 8HA, United Kingdom, as the issuer (the Issuer ), Iglo Foods Finco Limited (the Parent Guarantor ), Iglo Foods Midco Limited, Iglo Foods Group Limited, Birds Eye Limited, Birds Eye IPco Limited, iglo Holding GmbH, Liberator German Newco GmbH, Frozen Fish International GmbH, iglo GmbH, Iglo Austria Holding GmbH, Iglo Austria GmbH, Iglo Belgium NV and Iglo Nederland B.V. (together, the Subsidiary Guarantors and, together with the Parent Guarantor, the Guarantors ), Deutsche Trustee Company Limited, as trustee (the Trustee ), Deutsche Bank AG, London Branch, as paying agent, transfer agent and calculation agent, Deutsche Bank Luxembourg S.A., as Luxembourg registrar and Luxembourg paying agent, and Credit Suisse AG, London Branch, as security agent (the Security Agent ).
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders (as defined below) of the Issuers 500,000,000 Floating Rate Senior Secured Notes due 2020 (the Initial Notes ) and any Additional Notes (as defined below). Unless the context otherwise requires, in this Indenture references to the Notes include any Additional Notes that are actually issued.
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions.
Acquired Indebtedness means Indebtedness (1) of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary, or (2) assumed in connection with the acquisition of assets from such Person, in each case whether or not Incurred by such Person in connection with such Person becoming a Restricted Subsidiary or such acquisition or (3) of a Person at the time such Person merges with or into or consolidates or otherwise combines with Midco or any Restricted Subsidiary. Acquired Indebtedness shall be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of assets and, with respect to clause (3) of the preceding sentence, on the date of the relevant merger, consolidation or other combination.
Additional Assets means:
(1) any property or assets (other than Indebtedness and Capital Stock) used or to be used by Midco, a Restricted Subsidiary or otherwise useful in a Similar Business (it being understood that capital expenditures on property or assets already used in Similar Business or to replace any property or assets that are the subject of such Asset Disposition shall be deemed an investment in Additional Assets);
(2) the Capital Stock of a Person that is engaged in a Similar Business and becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Midco or a Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary.
Additional Notes means additional Floating Rate Senior Secured Notes due 2020 (other than the Initial Notes) that may be issued under this Indenture in accordance with Section 2.01, as part of the same series as the Initial Notes.
1
Affiliate of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, control when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms controlling and controlled have meanings correlative to the foregoing.
Agent means any Registrar, Transfer Agent, Authenticating Agent, Calculation Agent or Paying Agent, collectively, the Agents.
Agreed Security Principles means the agreed security principles as set out in Schedule 12 to the Senior Facility Agreement, as of the Issue Date, as applied mutatis mutandis with respect to the Notes in good faith by the Issuer.
Asset Disposition means any direct or indirect sale, lease (other than an operating lease entered into in the ordinary course of business), transfer, issuance or other disposition, or a series of related sales, leases (other than operating leases entered into in the ordinary course of business), transfers, issuances or dispositions that are part of a common plan, of shares of Capital Stock of a Restricted Subsidiary (other than directors qualifying shares), property or other assets (each referred to for the purposes of this definition as a disposition) by Midco or any of its Restricted Subsidiaries, including any disposition by means of a merger, consolidation or similar transaction. Notwithstanding the preceding provisions of this definition, the following items shall not be deemed to be Asset Dispositions:
(1) a disposition by a Restricted Subsidiary to Midco or by Midco or a Restricted Subsidiary to a Restricted Subsidiary;
(2) a disposition of cash, Cash Equivalents, Temporary Cash Investments or Investment Grade Securities;
(3) a disposition of inventory, trading stock, security equipment or other equipment or assets in the ordinary course of business;
(4) a disposition of obsolete, damaged, retired, surplus or worn out equipment or assets or equipment, facilities or other assets that are no longer useful in the conduct of the business of Midco and its Restricted Subsidiaries and any transfer, termination, unwinding or other disposition of hedging instruments or arrangements not for speculative purposes;
(5) transactions permitted under Section 5.01 or a transaction that constitutes a Change of Control;
(6) an issuance or transfer of Capital Stock by a Restricted Subsidiary to Midco or to another Restricted Subsidiary or as part of or pursuant to an equity incentive or compensation plan approved by the Board of Directors or the issuance of directors qualifying shares and shares issued to individuals as required by applicable law;
(7) any dispositions of Capital Stock, properties or assets in a single transaction or series of related transactions with a fair market value (as determined in good faith by Midco) of less than 15.0 million or, if greater, 0.5% of Total Assets;
(8) any Restricted Payment that is permitted to be made, and is made, under Section 4.02 and the making of any Permitted Payment or Permitted Investment or, solely for purposes of Section 4.05(a)(3), asset sales, the proceeds of which are used to make such Restricted Payments or Permitted Investments;
2
(9) the granting of Liens not prohibited by Section 4.03;
(10) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements or any sale of assets received by Midco or a Restricted Subsidiary upon the foreclosure of a Lien granted in favor of Midco or any Restricted Subsidiary;
(11) the licensing, sub-licensing, lease or assignment of intellectual property or other general intangibles and licenses, sub-licenses, leases or subleases of other property, in each case, in the ordinary course of business;
(12) foreclosure, condemnation, taking by eminent domain or any similar action with respect to any property or other assets;
(13) the sale or discount (with or without recourse, and on customary or commercially reasonable terms) of accounts receivable or notes receivable arising in the ordinary course of business, or the conversion or exchange of accounts receivable for notes receivable;
(14) any issuance, sale or disposition of Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary;
(15) any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than Midco or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired, or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;
(16) any surrender or waiver of contract rights or the settlement, release, recovery or surrender of contract, tort or other claims of any kind;
(17) any disposition of assets to a Person who is providing services related to such assets, the provision of which have been or are to be outsourced by Midco or any Restricted Subsidiary to such Person; provided, however , that the Board of Directors shall certify that in the opinion of the Board of Directors, the outsourcing transaction will be economically beneficial to Midco and its Restricted Subsidiaries (considered as a whole); provided, further, that the fair market value of the assets disposed of, when taken together with all other dispositions made pursuant to this clause (17), does not exceed 30.0 million or, if greater, 0.9% of Total Assets;
(18) any disposition with respect to property built, owned or otherwise acquired by Midco or any Restricted Subsidiary pursuant to customary sale and lease-back transactions, asset securitizations and other similar financings permitted by this Indenture;
(19) an issuance of Capital Stock by a Restricted Subsidiary to Midco or to another Restricted Subsidiary, an issuance or sale by a Restricted Subsidiary of Preferred Stock or Disqualified Stock that is permitted by Section 4.01 or an issuance of Capital Stock by Midco pursuant to an equity incentive or compensation plan approved by the Board of Directors;
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(20) sales, transfers or other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding agreements; provided that any cash or Cash Equivalents received in such sale, transfer or disposition is applied in accordance with Section 4.05;
(21) sales or dispositions of receivables in connection with any Qualified Receivables Financing or any factoring transaction or in the ordinary course of business or arising as a result of the entry into of service and supply agreements with third party service providers in relation to the collection and settlement of outstanding customer invoices; and
(22) any sale, lease, license, transfer or other disposal of the German Property; provided that Midco or such Restricted Subsidiary, as the case may be, receives consideration at least equal to the fair market value (such fair market value to be determined on the date of agreeing to such disposition), as determined in good faith by the Board of Directors of Midco, of the shares and assets subject to such disposition and any Net Available Cash received in connection with sum sale or disposition must be applied in accordance with Section 4.05.
Associate means (i) any Person engaged in a Similar Business of which Midco or its Restricted Subsidiaries are the legal and beneficial owners of between 20% and 50% of all outstanding Voting Stock and (ii) any joint venture entered into by Midco or any Restricted Subsidiary.
Bankruptcy Law means (a) Title 11 of the U.S. Code (as may be amended from time to time) or (b) any other law of the United States (or any political subdivision thereof), Germany (or any political subdivision thereof), Luxembourg (or any political subdivision thereof) or the United Kingdom (or any political subdivision thereof), or the laws of any other relevant jurisdiction or any political subdivision thereof relating to bankruptcy, insolvency, receivership, winding up, liquidation, reorganization or relief of debtors.
Board of Directors means (1) with respect to Midco or any corporation, the board of directors or managers, as applicable, of the corporation, or any duly authorized committee thereof; (2) with respect to any partnership, the board of directors or other governing body of the general partner of the partnership or any duly authorized committee thereof; and (3) with respect to any other Person, the board or any duly authorized committee of such Person serving a similar function. Whenever any provision of this Indenture requires any action or determination to be made by, or any approval of, a Board of Directors, such action, determination or approval shall be deemed to have been taken or made if approved by a majority of the directors (excluding employee representatives, if any) on any such Board of Directors (whether or not such action or approval is taken as part of a formal board meeting or as a formal board approval).
Business Day means each day that is not a Saturday, Sunday or other day on which banking institutions in London, United Kingdom are authorized or required by law to close; provided , however , that for any payments to be made under this Indenture, such day shall also be a day on which the Trans-European Automated Real-time Gross Settlement Express Transfer ( TARGET ) payment system is open for the settlement of payments.
Calculation Agent means a financial institution appointed by the Issuer to calculate the interest rate payable on the Notes in respect of each interest period, which shall initially be Deutsche Bank AG, London Branch.
Capital Stock of any Person means any and all shares of, rights to purchase, warrants or options for, or other equivalents of or partnership or other interests in (however designated), equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.
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Capitalized Lease Obligations means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes and reflected as a liability on a balance sheet (other than in the footnotes thereto), in each case on the basis of IFRS. The amount of Indebtedness represented by such obligation will be the capitalized amount of such obligation at the time any determination thereof is to be made as determined on the basis of IFRS, and the Stated Maturity thereof will be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty.
Cash Equivalents means:
(1) securities issued or directly and fully Guaranteed or insured by the United States or Canadian governments, a member state of the European Union, Japan, Switzerland or Norway or, in each case, any agency or instrumentality thereof (provided that the full faith and credit of such country or such member state is pledged in support thereof), having maturities of not more than two years from the date of acquisition;
(2) certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits or bankers acceptances having maturities of not more than one year from the date of acquisition thereof issued by any lender party or by any bank or trust company (a) whose commercial paper is rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moodys (or if at the time neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization) or (b) (in the event that the bank or trust company does not have commercial paper which is rated) having combined capital and surplus in excess of 250.0 million;
(3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clauses (1) and (2) entered into with any bank meeting the qualifications specified in clause (2) above;
(4) commercial paper rated at the time of acquisition thereof at least A-2 or the equivalent thereof by S&P or P-2 or the equivalent thereof by Moodys or carrying an equivalent rating by a Nationally Recognized Statistical Rating Organization, if both of the two named rating agencies cease publishing ratings of investments or, if no rating is available in respect of the commercial paper, the issuer of which has an equivalent rating in respect of its long-term debt, and in any case maturing within one year after the date of acquisition thereof;
(5) readily marketable direct obligations issued by any state of the United States of America, any province of Canada, any member state of the European Union, Japan, Switzerland or Norway or any political subdivision thereof, in each case, having one of the two highest rating categories obtainable from either Moodys or S&P (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization) with maturities of not more than two years from the date of acquisition;
(6) Indebtedness or preferred stock issued by Persons with a rating of BBB- or higher from S&P or Baa3 or higher from Moodys (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization) with maturities of 12 months or less from the date of acquisition;
(7) bills of exchange issued in the United States, Canada, a member state of the European Union, Switzerland, Norway or Japan eligible for rediscount at the relevant central bank and accepted by a bank (or any dematerialized equivalent);
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(8) interests in any investment company, money market or enhanced high yield fund which invests 95% or more of its assets in instruments of the type specified in clauses (1) through (7) above; and
(9) for purposes of clause (2) of the definition of Asset Disposition , the marketable securities portfolio owned by Midco and its Subsidiaries on the Issue Date and, with respect to the Iglo Group, owned on the Issue Date.
Change of Control means:
(1) Midco becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) any person or group of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Issue Date), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Issue Date), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of Midco, provided that for the purposes of this clause, (x) no Change of Control shall be deemed to occur by reason of Midco becoming a Subsidiary of a Successor Parent and (y) any Voting Stock of which any Permitted Holder is the beneficial owner (as so defined) shall not be included in any Voting Stock of which any such person or group is the beneficial owner (as so defined), unless that person or group is not an affiliate of a Permitted Holder and has greater voting power with respect to that Voting Stock; or
(2) the sale, lease, transfer, conveyance or other disposition (other than by way of merger, consolidation or other business combination transaction), in one or a series of related transactions, of all or substantially all of the assets of Midco and its Restricted Subsidiaries taken as a whole to a Person, other than a Restricted Subsidiary or one or more Permitted Holders;
provided that, in each case, a Change of Control shall not be deemed to have occurred if such Change of Control is also a Specified Change of Control Event.
Clearstream means Clearstream Banking, société anonyme, as currently in effect or any successor securities clearing agency.
Code means the United States Internal Revenue Code of 1986, as amended.
Collateral means any and all assets from time to time in which a security interest has been or will be granted on the Issue Date or thereafter pursuant to any Security Document to secure the obligations under this Indenture, the Notes and/or any Note Guarantee.
Commodity Hedging Agreements means, in respect of a Person, any commodity purchase contract, commodity futures or forward contract, commodities option contract or other similar contract (including commodities derivative agreements or arrangements), to which such Person is a party or a beneficiary.
Common Depositary means, with respect to the Notes issued in whole or in part in global form, a depositary common to Euroclear and Clearstream, being initially Deutsche Bank AG, London Branch, until a successor Common Depositary, if any, shall have become such pursuant to this Indenture, and thereafter Common Depositary shall mean or include each Person who is then a Common Depositary hereunder.
Company means Iglo Foods Holdings Limited.
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Consolidated EBITDA for any period means, without duplication, the Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income:
(1) Consolidated Interest Expense and Receivables Fees;
(2) Consolidated Income Taxes;
(3) consolidated depreciation expense;
(4) consolidated amortization or impairment expense;
(5) any expenses, charges or other costs related to any issuance of Capital Stock, listing of Capital Stock, Investment, acquisition (including amounts paid in connection with the acquisition or retention of one or more individuals comprising part of a management team retained to manage the acquired business and any expenses, charges or other costs related to deferred or contingent payments), disposition, recapitalization or the Incurrence of any Indebtedness permitted by this Indenture (whether or not successful) (including any such fees, expenses or charges related to the Transactions (including any expenses in connection with related due diligence activities)), in each case, as determined in good faith by the Board of Directors or an Officer of Midco;
(6) any minority interest expense (whether paid or not) consisting of income attributable to minority equity interests of third parties in such period and any prior period or any net earnings, income or share of profit of any Associates except to the extent of dividends declared or paid on, or other cash payments in respect of, equity interests held by third parties;
(7) the amount of management, monitoring, consulting and advisory fees and related expenses paid in such period to the Permitted Holders to the extent permitted by Section 4.06;
(8) other non-cash charges, write-downs or items reducing Consolidated Net Income (excluding any such non-cash charge, write-down or item to the extent it represents an accrual of or reserve for cash charges in any future period) or other items classified by Midco as special, extraordinary, exceptional, unusual or nonrecurring items less other non-cash items of income increasing Consolidated Net Income (other than non-cash items increasing Consolidated Net Income pursuant to clauses (1) to (15) of the definition of Consolidated Net Income and excluding any such non-cash item of income to the extent it represents a receipt of cash in any future period);
(9) the proceeds of any business interruption insurance received or that become receivable during such period to the extent the associated losses arising out of the event that resulted in the payment of such business interruption insurance proceeds were included in computing Consolidated Net Income;
(10) payments received or that become receivable with respect to expenses that are covered by the indemnification provisions in any agreement entered into by such Person in connection with an acquisition to the extent such expenses were included in computing Consolidated Net Income;
(11) any Receivables Fees and discounts on the sale of accounts receivables in connection with any Qualified Receivables Financing representing, in Midcos reasonable determination, the implied interest component of such discount for such period; and
(12) reasonably identifiable and factually supportable expected cost savings, operating expense reductions, restructuring charges and expenses and cost saving synergies related to
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acquisitions, divestitures, restructuring, cost savings initiatives and other similar initiatives relating to transactions consummated or initiatives implemented after the Issue Date and projected by the Parent Guarantor in good faith to result from actions with respect to which substantial steps have been, will be, or are expected to be, taken (in the good faith determination of the Parent Guarantor and evidenced by a certificate of a responsible accounting or financial officer of the Parent Guarantor) within eighteen months after such transaction or initiative is consummated, provided that the addback in this clause (12) shall be subject to a cap during any four fiscal quarter period of not more than 30% of Consolidated EBITDA.
Notwithstanding the foregoing, the provision for taxes and the depreciation, amortization, non-cash items, charges and write downs of a Restricted Subsidiary shall be added to Consolidated Net Income to compute Consolidated EBITDA only to the extent (and in the same proportion, including by reason of minority interests) that the net income (loss) of such Restricted Subsidiary was included in calculating Consolidated Net Income for the purposes of this definition.
Consolidated Income Taxes means taxes or other payments, including deferred Taxes, based on income, profits or capital (including without limitation withholding taxes) and franchise taxes of any of Midco and its Restricted Subsidiaries whether or not paid, estimated, accrued or required to be remitted to any Governmental Authority.
Consolidated Interest Expense means, for any period (in each case, determined on the basis of IFRS), the consolidated net interest income/expense of Midco and its Restricted Subsidiaries, whether paid or accrued, including any pension liability interest cost, plus or including (without duplication) any interest, costs and charges consisting of:
(1) interest expense attributable to Capitalized Lease Obligations;
(2) amortization of debt discount and premium (but not debt issuance costs, commissions, fees and expenses);
(3) non cash interest expense (excluding any non cash interest expense attributable under IFRS to foreign exchange translations or movement in the mark to market valuation of Hedging Obligations or other derivative instruments and any deemed finance charge under IFRS in respect of any pension liabilities and other provisions);
(4) the product of (a) all dividends or other distributions in respect of all Disqualified Stock of Midco and all Preferred Stock of any Restricted Subsidiary (other than dividends and other distributions payable solely in Capital Stock of Midco (other than Disqualified Stock)), to the extent held by Persons other than Midco or a Restricted Subsidiary multiplied by (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined national, state and local statutory tax rate of such Person, expressed as a decimal, as estimated in good faith by a responsible accounting or financial officer of Midco;
(5) the consolidated interest expense that was capitalized during such period;
(6) interest actually paid by Midco or any Restricted Subsidiary under any Guarantee of Indebtedness or other obligation of any other Person; and
(7) interest accrued on any Indebtedness of a Parent that is Guaranteed by Midco or any Restricted Subsidiary to the extent (x) serviced directly or indirectly by Midco or any Restricted Subsidiary and (y) not already included in calculating Consolidated Interest Expense, but excluding amortization of fees and any interest or other expense associated with Subordinated Shareholder Funding.
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Consolidated Leverage means the sum of the aggregate outstanding Indebtedness of Midco and its Restricted Subsidiaries (excluding Hedging Obligations except to the extent provided in Section 4.01(f)(iii)), less cash and Cash Equivalents, as of the relevant date of calculation on a consolidated basis on the basis of IFRS.
Consolidated Leverage Ratio means, as of any date of determination, the ratio of (x) Consolidated Leverage at such date to (y) the aggregate amount of Consolidated EBITDA for the period of the four most recent fiscal quarters ending prior to the date of such determination for which internal consolidated financial statements of Midco are available. In the event that Midco or any of its Restricted Subsidiaries Incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness subsequent to the commencement of the period for which the Consolidated Leverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Consolidated Leverage Ratio is made (the Calculation Date ), then the Consolidated Leverage Ratio will be calculated giving pro forma effect (as determined in good faith by a responsible accounting or financial officer of Midco), including in respect of anticipated expense and cost reduction synergies, to such Incurrence, assumption, guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable reference period; provided , however , that the pro forma calculation shall not give effect to (i) any Indebtedness Incurred on the Calculation Date pursuant to Section 4.01(b) or (ii) the discharge on the Calculation Date of any Indebtedness to the extent that such discharge results from the proceeds Incurred pursuant to Section 4.01(b); provided further , however , that the pro forma calculation may give effect to anticipated acquisitions which have not yet occurred but which have become subject to a definitive purchase agreement or contract, where the Indebtedness to be Incurred is to finance such acquisitions in whole or in part and such Indebtedness, if Incurred prior to the completion of any such acquisition, is funded into escrow and released to Midco or any Restricted Subsidiary only in connection with the completion of such acquisition; and provided further, however, that no cash or Cash Equivalents shall be included in the calculation of Consolidated Leverage Ratio that are, or are derived from, the proceeds of Indebtedness in respect of which the pro forma calculation is to be made, except, for the avoidance of doubt, to the extent cash or Cash Equivalents will be expended in a transaction to which pro forma effect is given.
In addition, for purposes of calculating the Consolidated Leverage Ratio:
(1) acquisitions and Investments that have been made by Midco or any of its Restricted Subsidiaries, including through mergers or consolidations, or any Person or any of its Subsidiaries which are Restricted Subsidiaries acquired by Midco or any of its Restricted Subsidiaries, and including all related financing transactions and including increases in ownership of Subsidiaries which are Restricted Subsidiaries, during the reference period or subsequent to such reference period and on or prior to the Calculation Date, or that are to be made on the Calculation Date, will be given pro forma effect (as determined in good faith by a responsible accounting or financial officer of Midco and may include anticipated expense and cost reduction synergies) as if they had occurred on the first day of the reference period;
(2) the Consolidated EBITDA (whether positive or negative) attributable to discontinued operations, as determined in accordance with IFRS, and operations, businesses or group of assets constituting a business or operating unit (and ownership interests therein) disposed of on or prior to the Calculation Date, will be excluded on a pro forma basis as if such disposition occurred on the first day of such period (taking into account anticipated expense and cost reduction synergies resulting from any such disposal, as determined in good faith by a responsible accounting or financial officer of Midco);
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(3) the Consolidated Interest Expense attributable to discontinued operations, as determined in accordance with IFRS, and operations, businesses or group of assets constituting a business or operating unit (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded on a pro forma basis as if such disposition occurred on the first day of such period, but only to the extent that the obligations giving rise to such Consolidated Interest Expense will not be obligations of Midco or any of its Restricted Subsidiaries following the Calculation Date;
(4) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such reference period;
(5) any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such reference period;
(6) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness), and if any Indebtedness is not denominated in Midcos functional currency, that Indebtedness for purposes of the calculation of Consolidated Leverage shall be treated in accordance with IFRS; and
(7) for purposes of calculating the Consolidated EBITDA for such period, if, since the beginning of such period, a transfer of shares of, or other transaction has occurred or is contractually committed with respect to, such Person or any of its Restricted Subsidiaries, that constitutes an event that is contemplated by the definition of Specified Change of Control Event (any such transaction, a Specified Change of Control Transaction ), and solely for the purposes of making the determination pursuant to Specified Change of Control Event, Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto (including any anticipated expense and cost reduction synergies from cooperation and other arrangements associated with the Specified Change of Control Transaction calculated in good faith by a responsible accounting or financial officer of Midco) as if such Specified Change of Control Transaction (including such anticipated expense and cost reduction synergies associated with the Specified Change of Control Transaction calculated in good faith by a responsible accounting or financial officer of Midco) had occurred on the first day of such period.
Consolidated Net Income means, for any period, the net income (loss) of Midco and its Restricted Subsidiaries determined on a consolidated basis on the basis of IFRS; provided , however , that there will not be included in such Consolidated Net Income:
(1) subject to the limitations contained in clause (2) below, any net income (loss) of any Person if such Person is not a Restricted Subsidiary, except that Midcos equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash or Cash Equivalents actually distributed by such Person during such period to Midco or a Restricted Subsidiary as a dividend or other distribution or return on investment or could have been distributed, as reasonably determined by an Officer of Midco (subject, in the case of a dividend or other distribution or return on investment to a Restricted Subsidiary, to the limitations contained in clause (2) below);
(2) solely for the purpose of determining the amount available for Restricted Payments under Section 4.02(a)(C)(1), any net income (loss) of any Restricted Subsidiary (other than Subsidiary Guarantors) if such Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Issuer or a Guarantor by operation of the terms of such Restricted Subsidiarys
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charter or any agreement, instrument, judgment, decree, order, statute or governmental rule or regulation applicable to such Restricted Subsidiary or its shareholders (other than (a) restrictions that have been waived or otherwise released, (b) restrictions pursuant to the Notes or this Indenture, (c) contractual restrictions in effect on the Issue Date with respect to such Restricted Subsidiary (including pursuant to the Senior Credit Facilities Agreement or the Intercreditor Agreement), and other restrictions with respect to such Restricted Subsidiary that, taken as a whole, are not materially less favorable to the Holders than such restrictions in effect on the Issue Date, and (d) restrictions permitted under 4.04(b), except that Midcos equity in the net income of any such Restricted Subsidiary for such period will be included in such Consolidated Net Income up to the aggregate amount of cash or Cash Equivalents actually distributed or that could have been distributed by such Restricted Subsidiary during such period to Midco or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend to another Restricted Subsidiary, to the limitation contained in this clause);
(3) any net gain (or loss) realized upon the sale or other disposition of any asset or disposed operations of Midco or any Restricted Subsidiaries (including pursuant to any sale/leaseback transaction) which is not sold or otherwise disposed of in the ordinary course of business (as determined in good faith by an Officer or the Board of Directors of Midco);
(4) any extraordinary, one-off, exceptional, unusual or nonrecurring gain, loss, expense or charge (including for the avoidance of doubt, (i) any rebranding of the business (or any part thereof); and (ii) any tax referable to any payments, dividends or other distributions made or declared intra-group) or any charges or reserves in respect of any restructuring, redundancy, relocation, refinancing, integration or severance or other post-employment arrangements, signing, retention or completion bonuses, transaction costs (including costs related to the Transactions or any investments), acquisition costs, business optimization, system establishment, software or information technology implementation or development, costs related to governmental investigations and curtailments or modifications to pension or post- retirement benefits schemes, litigation or any asset impairment charges or the financial impacts of natural disasters (including fire, flood and storm and related events), in each case, as determined in good faith by Midco;
(5) the cumulative effect of a change in accounting principles;
(6) any non-cash compensation charge or expense arising from any grant of stock, stock options or other equity based awards and any non-cash deemed finance charges in respect of any pension liabilities or other provisions, any non-cash net after tax gains or losses attributable to the termination or modification of any employee pension benefit plan and any charge or expense relating to any payment made to holders of equity based securities or rights in respect of any dividend sharing provisions of such securities or rights to the extent such payment was made pursuant to Section 4.02;
(7) all deferred financing costs written off and premiums paid or other expenses Incurred directly in connection with any early extinguishment of Indebtedness or Hedging Obligations and any net gain (loss) from any write- off or forgiveness of Indebtedness;
(8) any unrealized gains or losses in respect of Hedging Obligations or other financial instruments or any ineffectiveness recognized in earnings related to qualifying hedge transactions or the fair value of changes therein recognized in earnings for derivatives that do not qualify as hedge transactions, in each case, in respect of Hedging Obligations;
(9) any unrealized foreign currency transaction gains or losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person and any unrealized foreign exchange gains or losses relating to translation of assets and liabilities denominated in foreign currencies;
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(10) any unrealized foreign currency translation or transaction gains or losses in respect of Indebtedness or other obligations of Midco or any Restricted Subsidiary owing to Midco or any Restricted Subsidiary;
(11) any purchase accounting effects including, but not limited to, adjustments to inventory, property and equipment, software and other intangible assets and deferred revenues in component amounts required or permitted by IFRS and related authoritative pronouncements (including the effects of such adjustments pushed down to Midco and the Restricted Subsidiaries), as a result of any consummated acquisition or the amortization or write-off of any amounts thereof (including any write-off of in process research and development);
(12) any goodwill or other intangible asset impairment charge, amortization or write-off;
(13) Consolidated Income Taxes to the extent in excess of cash payments made in respect of such Consolidated Income Taxes;
(14) the impact of capitalized, accrued or accreting or pay-in- kind interest or principal on Subordinated Shareholder Funding; and
(15) any one-time non-cash charges or any amortization or depreciation, in each case to the extent related to the Transactions or any acquisition of another Person or business or resulting from any reorganization or restructuring involving the Parent Guarantor or its Subsidiaries.
Consolidated Senior Secured Leverage means the sum of the aggregate outstanding Senior Secured Indebtedness of Midco and its Restricted Subsidiaries (excluding Hedging Obligations entered into for bona fide hedging purposes and not for speculative purposes (as determined in good faith by an Officer or the Board of Directors of Midco)), less cash and Cash Equivalents, as of the relevant date of calculation on a consolidated basis on the basis of IFRS.
Consolidated Senior Secured Leverage Ratio means, as of any date of determination, the ratio of (x) the Consolidated Senior Secured Leverage at such date to (y) the aggregate amount of Consolidated EBITDA for the period of the four most recent fiscal quarters ending prior to the date of such determination for which internal consolidated financial statements of the Issuer are available, in each case calculated with such pro forma and other adjustments as are consistent with the pro forma provisions set forth in the definition of Consolidated Leverage Ratio.
Contingent Obligations means, with respect to any Person, any obligation of such Person guaranteeing in any manner, whether directly or indirectly, any operating lease, dividend or other obligation that does not constitute Indebtedness ( primary obligations ) of any other Person (the primary obligor ), including any obligation of such Person, whether or not contingent:
(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor;
(2) to advance or supply funds: (a) for the purchase or payment of any such primary obligation; or (b) to maintain the working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or
(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
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Credit Facility means, with respect to Midco or any of its Subsidiaries, one or more debt facilities, indentures or other arrangements (including the Senior Credit Facilities Agreement or commercial paper facilities and overdraft facilities) with banks, other financial institutions or investors providing for revolving credit loans, term loans, notes, receivables financing (including through the sale of receivables to such institutions or to special purpose entities formed to borrow from such institutions against such receivables), letters of credit or other Indebtedness, in each case, as amended, restated, modified, renewed, refunded, replaced, restructured, refinanced, repaid, increased or extended in whole or in part from time to time (and whether in whole or in part and whether or not with the original administrative agent and lenders or another administrative agent or agents or other banks or institutions and whether provided under the original Senior Credit Facilities Agreement or one or more other credit or other agreements, indentures, financing agreements or otherwise) and in each case including all agreements, instruments and documents executed and delivered pursuant to or in connection with the foregoing (including any notes and letters of credit issued pursuant thereto and any Guarantee and collateral agreement, patent and trademark security agreement, mortgages or letter of credit applications and other Guarantees, pledges, agreements, security agreements and collateral documents). Without limiting the generality of the foregoing, the term Credit Facility shall include any agreement or instrument (1) changing the maturity of any Indebtedness Incurred thereunder or contemplated thereby, (2) adding Subsidiaries of Midco as additional borrowers or guarantors thereunder, (3) increasing the amount of Indebtedness Incurred thereunder or available to be borrowed thereunder or (4) otherwise altering the terms and conditions thereof.
Currency Agreement means, in respect of a Person, any foreign exchange contract, currency swap agreement, currency futures contract, currency option contract, currency derivative or other similar agreement to which such Person is a party or beneficiary.
Default means any event which is, or after notice or passage of time or both would be, an Event of Default.
Designated Non-Cash Consideration means the fair market value (as determined in good faith by Midco) of non-cash consideration received by Midco or one of its Restricted Subsidiaries in connection with an Asset Disposition that is so designated as Designated Non-Cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation, less the amount of cash, Cash Equivalents or Temporary Cash Investments received in connection with a subsequent payment, redemption, retirement, sale or other disposition of such Designated Non-Cash Consideration. A particular item of Designated Non-Cash Consideration will no longer be considered to be outstanding when and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise disposed of in compliance with Section 4.05.
Designated Preference Shares means, with respect to Midco or any Parent, Preferred Stock (other than Disqualified Stock) (a) that is issued for cash (other than to Midco or a Subsidiary of Midco or an employee stock ownership plan or trust established by Midco or any such Subsidiary for the benefit of their employees to the extent funded by Midco or such Subsidiary) and (b) that is designated as Designated Preference Shares pursuant to an Officers Certificate of Midco at or prior to the issuance thereof, the Net Cash Proceeds of which are excluded from the calculation set forth in Section 4.02(a)(C)(2).
Disinterested Director means, with respect to any Affiliate Transaction, a member of the Board of Directors of Midco having no material direct or indirect financial interest in or with respect to such Affiliate Transaction. A member of the Board of Directors of Midco shall be deemed not to have such a financial interest by reason of such members holding Capital Stock of Midco or any Parent or any options, warrants or other rights in respect of such Capital Stock.
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Disqualified Stock means, with respect to any Person, any Capital Stock of such Person which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock in whole or in part, in each case on or prior to the earlier of (a) the Stated Maturity of the Notes or (b) the date on which there are no Notes outstanding; provided , however , that (i) only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock and (ii) any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Issuer to repurchase such Capital Stock upon the occurrence of a change of control or asset sale (howsoever defined or referred to) shall not constitute Disqualified Stock if any such redemption or repurchase obligation is subject to compliance by the relevant Person with Section 4.02. For purposes hereof, the amount of Disqualified Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock, such fair market value to be determined as set forth herein.
Equity Offering means (x) a sale of Capital Stock of Midco (other than Disqualified Stock) other than offerings registered on Form S-8 (or any successor form) under the Securities Act or any similar offering in other jurisdictions, or (y) the sale of Capital Stock or other securities, the proceeds of which are contributed to the equity (other than through the issuance of Disqualified Stock or Designated Preference Shares or through an Excluded Contribution) of, or as Subordinated Shareholder Funding to, Midco or any of its Restricted Subsidiaries.
Escrowed Proceeds means the proceeds from the offering of any debt securities or other Indebtedness paid into an escrow account with an independent escrow agent on the date of the applicable offering or Incurrence pursuant to escrow arrangements that permit the release of amounts on deposit in such escrow account upon satisfaction of certain conditions or the occurrence of certain events. The term Escrowed Proceeds shall include any interest earned on the amounts held in escrow.
Euro Equivalent means, with respect to any monetary amount in a currency other than euro, at any time of determination thereof by the Issuer or the Trustee, the amount of euro obtained by converting such currency other than euro involved in such computation into euro at the spot rate for the purchase of euro with the applicable currency other than euro as published in The Financial Times in the Currency Rates section (or, if The Financial Times is no longer published, or if such information is no longer available in The Financial Times, such source as may be selected in good faith by the Issuer) on the date of such determination.
euro or means the currency introduced at the start of the third stage of the European economic and monetary union pursuant to the Treaty establishing the European Community, as amended by the Treaty on European Union.
Euroclear means Euroclear Bank SA/NV or any successor securities clearing agency.
European Government Obligations means any security that is (1) a direct obligation of any country that is a member of the European Monetary Union and whose long-term debt is rated A-1 or higher by Moodys or A+ or higher by S&P or the equivalent rating category of another internationally recognized rating agency on the date of this Indenture, for the payment of which the full faith and credit of such country is pledged or (2) an obligation of a person controlled or supervised by and acting as an agency or instrumentality of any such country the payment of which is unconditionally Guaranteed as a full faith and credit obligation by such country, which, in either case under the preceding clause (1) or (2), is not callable or redeemable at the option of the issuer thereof.
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Exchange Act means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, as amended.
Excluded Contribution means Net Cash Proceeds or property or assets received by Midco as capital contributions to the equity (other than through the issuance of Disqualified Stock or Designated Preference Shares or an Excluded Amount) of Midco after the Issue Date or from the issuance or sale (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by Midco or any Subsidiary of Midco for the benefit of its employees to the extent funded by Midco or any Restricted Subsidiary) of Capital Stock (other than Disqualified Stock or Designated Preference Shares) of Midco, in each case, to the extent designated as an Excluded Contribution pursuant to an Officers Certificate of Midco.
Existing Senior Credit Facilities Agreement means the term and revolving facilities agreement entered into on October 27, 2006, among inter alios, Midco, certain lenders and other parties thereto.
fair market value wherever such term is used in this Indenture, may be conclusively established by means of an Officers Certificate or a resolution of the Board of Directors of Midco setting out such fair market value as determined by such Officer or such Board of Directors in good faith.
Fixed Charge Coverage Ratio means, with respect to any Person as of any date of determination, the ratio of (x) the aggregate amount of Consolidated EBITDA of such Person for the period of the four most recent fiscal quarters prior to the date of such determination for which internal consolidated financial statements are available to (y) the Consolidated Interest Expense of such Person for such four fiscal quarters.
In the event that the specified Person or any of its Subsidiaries which are Restricted Subsidiaries Incurs, repays, repurchases, redeems, defeases or otherwise acquires, retires, extinguishes or discharges any Indebtedness (other than Indebtedness Incurred under any revolving facility unless such Indebtedness has been permanently repaid and has not been replaced) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and prior to or, except as provided in the proviso below, on the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the Calculation Date ), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect (as determined in good faith by a responsible accounting or financial officer of Midco (including in respect of anticipated expense and cost reduction synergies)) to such Incurrence, repayment, repurchase, redemption, defeasance or other acquisition, retirement, extinguishment or discharge of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period; provided , however , that the pro forma calculation of the Fixed Charge Coverage Ratio shall not give effect to (i) any Indebtedness Incurred on the Calculation Date pursuant to Section 4.01(b) (other than for the purposes of the calculation of the Fixed Charge Coverage Ratio under Section 4.01(b)(v)) or (ii) the discharge on the Calculation Date of any Indebtedness to the extent that such discharge results from the proceeds Incurred pursuant to Section 4.01(b).
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) if since the beginning of such period Midco or any Restricted Subsidiary has disposed of any company, any business, or any group of assets constituting an operating unit of a business (any such disposition, a Sale ) or if the transaction giving rise to the need to calculate the Fixed Charge Coverage Ratio is such a Sale, Consolidated EBITDA for such period will be reduced
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by an amount equal to the Consolidated EBITDA (if positive) attributable to the assets which are the subject of such Sale for such period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such period (in each case taking into account anticipated expense and cost reduction synergies resulting from such Sale); provided that if any such Sale constitutes discontinued operations in accordance with IFRS, Consolidated Net Income shall be reduced by an amount equal to the Consolidated Net Income (if positive) attributable to such operations for such period or increased by an amount equal to the Consolidated Net Income (if negative) attributable thereto for such period;
(2) if since the beginning of such period, Midco or any Restricted Subsidiary (by merger or otherwise) has made an Investment in any Person that thereby becomes a Restricted Subsidiary, or otherwise has acquired any company, any business, or any group of assets constituting an operating unit of a business (any such Investment or acquisition, a Purchase ), including any such Purchase occurring in connection with a transaction causing a calculation to be made hereunder, Consolidated EBITDA for such period will be calculated after giving pro forma effect thereto as if such Purchase occurred on the first day of such period (including in respect of anticipated expense and cost reduction synergies as determined in good faith by a responsible accounting or financial officer of Midco);
(3) if since the beginning of such period, any Person (that became a Restricted Subsidiary or was merged or otherwise combined with or into Midco or any Restricted Subsidiary since the beginning of such period) will have made any Sale or any Purchase that would have required an adjustment pursuant to clause (1) or (2) above if made by Midco or a Restricted Subsidiary since the beginning of such period, Consolidated EBITDA for such period will be calculated after giving pro forma effect thereto as if such Sale or Purchase occurred on the first day of such period;
(4) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months, or, if shorter, at least equal to the remaining term of such Indebtedness);
(5) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period;
(6) any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period;
(7) interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible accounting or financial officer of Midco to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with IFRS; and
(8) in making such computation, the Consolidated Interest Expense of such Person attributable to interest or any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based on the average daily balance of such Indebtedness during the applicable period.
German Property means the automated cold storage warehouse in which UBG Vermietungs GmbH & Co. OHG has a freehold interest at Aeckern 4, 48734 Reken, Germany.
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Governmental Authority means any nation, sovereign or government, any state, province, territory or other political subdivision thereof, and any entity or authority exercising executive, legislative, judicial, regulatory, self regulatory or administrative functions of or pertaining to government, including a central bank or stock exchange.
Guarantee means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person, including any such obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or
(2) entered into primarily for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided , however , that the term Guarantee will not include endorsements for collection or deposit in the ordinary course of business. The term Guarantee used as a verb has a corresponding meaning.
Guarantor means any of the Parent Guarantor and the Subsidiary Guarantors.
Hedging Obligations of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Hedging Agreement (each, a Hedging Agreement ).
Holder means each Person in whose name the Notes are registered on the Registrars books, which shall initially be the respective nominee of Clearstream and Euroclear.
IFRS means International Financial Reporting Standards (formerly International Accounting Standards) (IFRS) endorsed from time to time by the European Union or any variation thereof with which Midco or its Restricted Subsidiaries are, or may be, required to comply; provided that at any date after the Issue Date Midco may make an irrevocable election to establish that IFRS shall mean, except as otherwise specified herein, IFRS as in effect on a date that is on or prior to the date of such election.
Iglo means Iglo Foods Holdings Limited, a private limited company incorporated in England and Wales.
Iglo Group means Iglo together with its subsidiaries.
Incur means issue, create, assume, enter into any Note Guarantee of, incur, extend or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be deemed to be Incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary and the terms Incurred and Incurrence have meanings correlative to the foregoing and any Indebtedness pursuant to any revolving credit or similar facility shall only be Incurred at the time any funds are borrowed thereunder.
Indebtedness means, with respect to any Person on any date of determination (without duplication): (1) the principal of indebtedness of such Person for borrowed money;
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(2) the principal of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(3) all reimbursement obligations of such Person in respect of letters of credit, bankers acceptances or other similar instruments (the amount of such obligations being equal at any time to the aggregate then undrawn and unexpired amount of such letters of credit or other instruments plus the aggregate amount of drawings thereunder that have been reimbursed) (except to the extent such reimbursement obligations relate to trade payables or other obligations not constituting Indebtedness and such obligations are satisfied within 30 days of Incurrence), in each case only to the extent that the underlying obligation in respect of which the instrument was issued would be treated as Indebtedness;
(4) the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables), where the deferred payment is arranged primarily as a means of raising finance, which purchase price is due more than one year after the date of placing such property in service or taking final delivery and title thereto;
(5) Capitalized Lease Obligations of such Person;
(6) the principal component of all obligations, or liquidation preference, of such Person with respect to any Disqualified Stock or, with respect to any Restricted Subsidiary, any Preferred Stock (but excluding, in each case, any accrued dividends);
(7) the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of (a) the fair market value of such asset at such date of determination (as determined in good faith by Midco) and (b) the amount of such Indebtedness of such other Persons;
(8) Guarantees by such Person of the principal component of Indebtedness of other Persons to the extent Guaranteed by such Person; and
(9) to the extent not otherwise included in this definition, net obligations of such Person under Currency Agreements, Interest Rate Agreements and Commodity Hedging Agreements (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such obligation that would be payable by such Person at such time).
The term Indebtedness shall not include Subordinated Shareholder Funding or any lease, concession or license of property (or Guarantee thereof) which would be considered an operating lease under IFRS as in effect on the Issue Date, any asset retirement obligations, any prepayments of deposits received from clients or customers in the ordinary course of business, or obligations under any license, permit or other approval (or Guarantees given in respect of such obligations) Incurred prior to the Issue Date or in the ordinary course of business. For the avoidance of doubt and notwithstanding the above, the term Indebtedness excludes any accrued expenses and trade payables.
The amount of Indebtedness of any Person at any time in the case of a revolving credit or similar facility shall be the total amounts of funds borrowed and then outstanding. The amount of Indebtedness of any Person at any date shall be determined as set forth above or otherwise provided in this Indenture, and (other than with respect to letters of credit or Guarantees or Indebtedness specified in clause (7) or (8) above) shall equal the amount thereof that would appear on a balance sheet of such Person (excluding any notes thereto) prepared on the basis of IFRS. Indebtedness represented by loans, notes or other debt
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instruments shall not be included to the extent funded with the proceeds of Indebtedness which the Parent Guarantor or any Restricted Subsidiary has guaranteed or for which any of them is otherwise liable and which is otherwise included.
Notwithstanding the above provisions, in no event shall the following constitute Indebtedness:
(1) Contingent Obligations Incurred in the ordinary course of business, obligations under or in respect of Qualified Receivables Financings and accrued liabilities Incurred in the ordinary course of business that are not more than 90 days past due;
(2) in connection with the purchase by Midco or any Restricted Subsidiary of any business, any post-closing payment adjustments to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided , however , that if, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is paid within 30 days thereafter; or
(3) for the avoidance of doubt, any obligations in respect of workers compensation claims, early retirement or termination obligations, pension fund obligations or contributions or similar claims, obligations or contributions or social security or wage Taxes or under any Tax Sharing Agreement.
Independent Financial Advisor means an investment banking or accounting firm of international standing or any third party appraiser of international standing; provided , however , that such firm or appraiser is not an Affiliate of Midco.
Initial Public Offering means an Equity Offering of common stock or other common equity interests of Midco or any Parent or any successor of Midco or any Parent (the IPO Entity ) following which there is a Public Market and, as a result of which, the shares of common stock or other common equity interests of the IPO Entity in such offering are listed on an internationally recognized exchange or traded on an internationally recognized market.
Intercreditor Agreement means the Intercreditor Agreement dated July 3, 2014, by and among, inter alios , the Issuer, the Parent Guarantor, the Subsidiary Guarantors and the Security Agent and to which the Trustee acceded on or about the date hereof, as amended from time to time.
Interest Rate Agreement means, with respect to any Person, any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement to which such Person is party or a beneficiary.
Investment means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of any direct or indirect advance, loan or other extensions of credit (other than advances or extensions of credit to customers, suppliers, directors, officers or employees of any Person in the ordinary course of business, and excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or the Incurrence of a Guarantee of any obligation of, or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such other Persons and all other items that are or would be classified as investments on a balance sheet prepared on the basis of IFRS; provided , however , that endorsements of negotiable instruments and documents in the ordinary course of business will not be deemed to be an Investment. If Midco or any Restricted Subsidiary issues, sells or otherwise disposes of any Capital Stock of
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a Person that is a Restricted Subsidiary such that, after giving effect thereto, such Person is no longer a Restricted Subsidiary, any Investment by Midco or any Restricted Subsidiary in such Person remaining after giving effect thereto will be deemed to be a new Investment at such time.
For purposes of Section 4.02:
(1) Investment will include the portion (proportionate to Midcos equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided , however , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, Midco will be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to (a) Midcos Investment in such Subsidiary at the time of such redesignation less (b) the portion (proportionate to Midcos equity interest in such Subsidiary) of the fair market value of the net assets (as conclusively determined by the Board of Directors of Midco in good faith) of such Subsidiary at the time that such Subsidiary is so re-designated a Restricted Subsidiary; and
(2) any property transferred to or from an Unrestricted Subsidiary will be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors of Midco.
The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced (at Midcos option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment.
Investment Grade means (i) BBB- or higher by S&P, (ii) Baa3 or higher by Moodys, or (iii) the equivalent of such ratings by S&P or Moodys, or of another Nationally Recognized Statistical Ratings Organization.
Investment Grade Securities means:
(1) securities issued or directly and fully Guaranteed or insured by the United States or Canadian government or any agency or instrumentality thereof (other than Cash Equivalents);
(2) securities issued or directly and fully guaranteed or insured by a member state of the European Union, Norway or Switzerland or any agency or instrumentality thereof (other than Cash Equivalents);
(3) debt securities or debt instruments with a rating of BBB or higher from S&P or Baa3 or higher by Moodys or the equivalent of such rating by such rating organization or, if no rating of Moodys or S&P then exists, the equivalent of such rating by any other Nationally Recognized Statistical Ratings Organization, but excluding any debt securities or instruments constituting loans or advances among Midco and its Subsidiaries;
(4) investments in any fund that invests exclusively in investments of the type described in clauses (1), (2) and (3) above which fund may also hold cash and Cash Equivalents pending investment or distribution; and
(5) any investment in repurchase obligations with respect to any securities of the type described in clauses (1), (2) and (3) above which are collateralized at par or over.
Investment Grade Status shall occur when the Notes receive both of the following:
(1) a rating of BBB or higher from S&P; and
(2) a rating of Baa3 or higher from Moodys;
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or the equivalent of such rating by either such rating organization or, if no rating of Moodys or S&P then exists, the equivalent of such rating by any other Nationally Recognized Statistical Ratings Organization.
IPO Market Capitalization means an amount equal to (i) the total number of issued and outstanding shares of common stock or common equity interests of the IPO Entity at the time of closing of the Initial Public Offering multiplied by (ii) the price per share at which such shares of common stock or common equity interests are sold in such Initial Public Offering.
Issue Date means July 17, 2014.
Lien means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).
Luxembourg means the Grand Duchy of Luxembourg.
Management Advances means loans or advances made to, or Guarantees with respect to loans or advances made to, directors, officers, employees or consultants of any Parent, Midco or any Restricted Subsidiary:
(1) (a) in respect of travel, entertainment or moving related expenses Incurred in the ordinary course of business or (b) for purposes of funding any such persons purchase of Capital Stock or Subordinated Shareholder Funding (or similar obligations) of Midco, its Subsidiaries or any Parent with (in the case of this sub-clause (b)) the approval of the Board of Directors;
(2) in respect of moving related expenses Incurred in connection with any closing or consolidation of any facility or office; or
(3) in the case of this clause (3), not exceeding 6.25 million in the aggregate outstanding at any time.
Management Investors means the officers, directors, employees and other members of the management of or consultants to any Parent, Midco or any of their respective Subsidiaries, or spouses, family members or relatives thereof, or any trust, partnership or other entity for the benefit of or the beneficial owner of which (directly or indirectly) is any of the foregoing, or any of their heirs, executors, successors and legal representatives, who at any date beneficially own or have the right to acquire, directly or indirectly, Capital Stock of Midco, any Restricted Subsidiary or any Parent, or such entity as may hold shares transferred by departing members of the management team of Midco or any Restricted Subsidiary for future redistribution to such management team.
Market Capitalization means an amount equal to (i) the total number of issued and outstanding shares of common stock or common equity interests of the IPO Entity on the date of the declaration of the relevant dividend multiplied by (ii) the arithmetic mean of the closing prices per share of such common stock or common equity interests for the 30 consecutive trading days immediately preceding the date of declaration of such dividend.
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Moodys means Moodys Investors Service, Inc. or any of its successors or assigns that is a Nationally Recognized Statistical Rating Organization.
Nationally Recognized Statistical Rating Organization means a nationally recognized statistical rating organization within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act.
Net Available Cash from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of:
(1) all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses Incurred, and all Taxes paid or required to be paid or accrued as a liability under IFRS (after taking into account any available tax credits or deductions and any Tax Sharing Agreements), as a consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon such assets, or which by its terms or by applicable law are required to be repaid out of the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made to minority interest holders (other than any Parent, Midco or any of their respective Subsidiaries) in Subsidiaries or joint ventures as a result of such Asset Disposition; and
(4) the deduction of appropriate amounts required to be provided by the seller as a reserve, on the basis of IFRS, against any liabilities associated with the assets disposed of in such Asset Disposition and retained by Midco or any Restricted Subsidiary after such Asset Disposition, including pension and other post-employment benefits liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such transaction.
Net Cash Proceeds , with respect to any issuance or sale of Capital Stock or Subordinated Shareholder Funding, means the cash proceeds of such issuance or sale net of attorneys fees, accountants fees, underwriters or placement agents fees, listing fees, discounts or commissions and brokerage, consultant and other fees and charges actually Incurred in connection with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale (after taking into account any available tax credit or deductions and any tax sharing arrangements).
Notes means the Initial Notes and any Additional Notes.
Notes Documents means the Notes (including Additional Notes), this Indenture, the Security Documents, the Intercreditor Agreement and any Additional Intercreditor Agreements.
Note Guarantee means the guarantee by each Guarantor of the Issuers obligations under this Indenture and the Notes, executed pursuant to the provisions of this Indenture.
Offering Memorandum means the offering memorandum dated July 3, 2014 in relation to the Notes.
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Officer means, with respect to any Person, (1) the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer, any Managing Director or the Secretary (a) of such Person or (b) if such Person is owned or managed by a single entity, of such entity, or (2) any other individual designated as an Officer for the purposes of this Indenture by the Board of Directors of such Person.
Officers Certificate means, with respect to any Person, a certificate signed by one Officer of such Person.
Opinion of Counsel means a written opinion from legal counsel reasonably satisfactory to the Trustee. The counsel may be an employee of, or counsel to, Midco or its Subsidiaries.
Parent means any Person of which Midco at any time is or becomes a Subsidiary after the Issue Date and any holding companies established by any Permitted Holder for purposes of holding its investment in any Parent.
Parent Holdco means any Person of which Midco at any time is or becomes a Subsidiary after the Issue Date.
Parent Expenses means:
(1) costs (including all professional fees and expenses) Incurred by any Parent in connection with reporting obligations under or otherwise Incurred in connection with compliance with applicable laws, rules or regulations of any governmental, regulatory or self-regulatory body or stock exchange, this Indenture or any other agreement or instrument relating to Indebtedness of Midco or any Restricted Subsidiary, including in respect of any reports filed with respect to the Securities Act, Exchange Act or the respective rules and regulations promulgated thereunder;
(2) customary indemnification obligations of any Parent owing to directors, officers, employees or other Persons under its charter or by-laws or pursuant to written agreements with any such Person to the extent relating to Midco and its Subsidiaries;
(3) obligations of any Parent in respect of director and officer insurance (including premiums therefor) to the extent relating to Midco and its Subsidiaries;
(4) fees and expenses payable by any Parent in connection with the Transactions;
(5) general corporate overhead expenses, including (a) professional fees and expenses and other operational expenses of any Parent related to the ownership or operation of the business of Midco or any of its Restricted Subsidiaries, (b) costs and expenses with respect to any litigation or other dispute relating to the Transactions or the ownership, directly or indirectly, by any Parent, (c) any Taxes and other fees and expenses required to maintain such Parents corporate existence and to provide for other ordinary course operating costs, including customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of such Parent and (d) to reimburse reasonable out of pocket expenses of the Board of Directors of such Parent;
(6) other fees, expenses and costs relating directly or indirectly to activities of Midco and its Subsidiaries or any Parent or any other Person established for purposes of or in connection with the Transactions or which holds directly or indirectly any Capital Stock or Subordinated Shareholder Funding of Midco, in an amount not to exceed 5.0 million in any fiscal year;
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(7) any income taxes, to the extent such income taxes are attributable to the income of Midco and its Restricted Subsidiaries and, to the extent of the amount actually received in cash from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided, however, that the amount of such payments in any fiscal year do not exceed the amount that the Issuer and its Subsidiaries would be required to pay in respect of such taxes on a consolidated basis on behalf of an affiliated group consisting only of the Issuer and its Subsidiaries;
(8) expenses Incurred by any Parent in connection with any Public Offering or other sale of Capital Stock or Indebtedness: (a) where the net proceeds of such offering or sale are intended to be received by or contributed to Midco or a Restricted Subsidiary; (b) in a pro-rated amount of such expenses in proportion to the amount of such net proceeds intended to be so received or contributed; or (c) otherwise on an interim basis prior to completion of such offering so long as any Parent shall cause the amount of such expenses to be repaid to Midco or the relevant Restricted Subsidiary out of the proceeds of such offering promptly if completed; and
(9) costs and expenses equivalent to those set out in clauses (1) to (8) above with respect to a Special Purpose Vehicle.
Pari Passu Indebtedness means Indebtedness of the Issuer or any Guarantor if such Indebtedness ranks equally in right of payment to the Notes, the Parent Guarantee or the Subsidiary Guarantees of such Guarantor, as the case may be.
Paying Agent means any Person authorized by the Issuer to pay the principal of (and premium, if any) or interest on any Note on behalf of the Issuer.
Permitted Asset Swap means the concurrent purchase and sale or exchange of assets used or useful in a Similar Business or a combination of such assets and cash, Cash Equivalents or Temporary Cash Investments between Midco or any of its Restricted Subsidiaries and another Person; provided that any cash or Cash Equivalents received in excess of the value of any cash or Cash Equivalents sold or exchanged must be applied in accordance with Section 4.05.
Permitted Collateral Liens means Liens on the Collateral:
(1) that are described in one or more of clauses (2), (3), (4), (5), (6), (8), (9), (11), (12), (14), (18), (22) and (23) of the definition of Permitted Liens and, in each case, arising by law or that would not materially interfere with the ability of the Security Agent to enforce the security interests in the Collateral;
(2) to secure:
(i) the Notes (other than any Additional Notes) and any related Note Guarantees;
(ii) Indebtedness permitted to be Incurred under Section 4.01(a);
(iii) Indebtedness described under Section 4.01(b)(i), which Indebtedness may, to the extent permitted by the Intercreditor Agreement as in effect on the Issue Date, have super senior priority status in respect of the proceeds from the enforcement of the Collateral;
(iv) Indebtedness described under Section 4.01(b)(ii) to the extent Incurred by the Issuer or a Guarantor and to the extent such guarantee is in respect of Indebtedness otherwise permitted to be secured and specified in this definition of Permitted Collateral Liens;
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(v) Indebtedness described under Section 4.01(b)(v) that is incurred by the Issuer or a Guarantor; provided that, at the time of the acquisition or other transaction pursuant to which such Indebtedness was incurred and after giving effect to the incurrence of such Indebtedness on a pro forma basis, (a) Midco would have been able to incur 1.00 of additional Senior Secured Indebtedness pursuant to Section 4.01(a)(2) or (b) the Consolidated Senior Secured Leverage Ratio would not be greater than it was immediately prior to giving pro forma effect to such acquisition or other transaction and to the Incurrence of such Indebtedness;
(vi) Indebtedness described under Section 4.01(b)(vi); provided that to the extent permitted by the Intercreditor Agreement as in effect on the Issue Date, Hedging Obligations Incurred in compliance with Section 4.01 that are not subordinated in right of payment to the Notes may have super senior priority status in respect of the proceeds from the enforcement of the Collateral;
(vii) Indebtedness described under Section 4.01(b)(vii) (other than with respect to Capitalized Lease Obligations), Section 4.01(b)(xi) or Section 4.01(b)(xii);
(viii) any Refinancing Indebtedness in respect of Indebtedness referred to in the foregoing clauses (i) to (vii);
provided , that each of the secured parties to any such Indebtedness (acting directly or through its respective creditor representative) will have entered into the Intercreditor Agreement or an Additional Intercreditor Agreement; provided , further that subject to the Agreed Security Principles, all property and assets (including, without limitation, the Collateral) securing such Indebtedness (including any Guarantees thereof) or Refinancing Indebtedness secure the Notes and this Indenture on a senior or pari passu basis (including by application of payment order, turnover or equalization provisions substantially consistent with the corresponding provisions set forth in the Intercreditor Agreement or any Additional Intercreditor Agreement), except to the extent provided in clauses (iii) and (vi) above.
Permitted Holders means, collectively, (1) Permira Advisers, LLP and any Affiliate thereof, (2) Senior Management, (3) any Related Person of any Person specified in clauses (1) and (2), (4) any Person who is acting as an underwriter in connection with a public or private offering of Capital Stock of any Parent or Midco, acting in such capacity and (5) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the foregoing or any Persons mentioned in the following sentence are members; provided that, in the case of such group and without giving effect to the existence of such group or any other group, Permira Advisers, LLP and any Affiliate thereof and such Persons referred to in the following sentence, collectively, have exclusive legal and beneficial ownership of more than 50% of the total voting power of the voting Stock of Midco or any of its direct or indirect parent companies owned by such group. Any person or group whose acquisition of beneficial ownership constitutes a (x) Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture or (y) a Change of Control which is also a Specified Change of Control Event, will thereafter, together with its Affiliates, constitute an additional Permitted Holder.
Permitted Investment means (in each case, by Midco or any of its Restricted Subsidiaries):
(1) Investments in (a) a Restricted Subsidiary (including the Capital Stock of a Restricted Subsidiary) or Midco or (b) a Person (including the Capital Stock of any such Person) and such Person will, upon the making of such Investment, become a Restricted Subsidiary;
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(2) Investments in another Person and as a result of such Investment such other Person is merged, consolidated or otherwise combined with or into, or transfers or conveys all or substantially all its assets to, Midco or a Restricted Subsidiary;
(3) Investments in cash, Cash Equivalents, Temporary Cash Investments or Investment Grade Securities;
(4) Investments in receivables owing to Midco or any Restricted Subsidiary created or acquired in the ordinary course of business and Investments in connection with any Qualified Receivables Financing;
(5) Investments in payroll, travel, relocation, entertainment and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;
(6) Management Advances;
(7) Investments in Capital Stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to Midco or any Restricted Subsidiary, or as a result of foreclosure, perfection or enforcement of any Lien, or in satisfaction of judgments or pursuant to any plan of reorganization or similar arrangement including upon the bankruptcy or insolvency of a debtor;
(8) Investments made as a result of the receipt of non-cash consideration from a sale or other disposition of property or assets, including an Asset Disposition, in each case, that was made in compliance with Section 4.05;
(9) Investments in existence on, or made pursuant to legally binding commitments in existence on, the Issue Date, and any extension, modification or renewal of any such Investment; provided that the amount of the Investment may be increased (i) as required by the terms of the Investment as in existence on the Issue Date or (ii) as otherwise permitted under this Indenture;
(10) Currency Agreements, Interest Rate Agreements, Commodity Hedging Agreements and related Hedging Obligations, which transactions or obligations are Incurred in compliance with Section 4.01; (11) Investments, taken together with all other Investments made pursuant to this clause
(11) and at any time outstanding, in an aggregate amount at the time of such Investment (net of any distributions, dividends, payments or other returns in respect of such Investments) not to exceed 50.0 million or, if greater, 1.5% of Total Assets; provided that, if an Investment is made pursuant to this clause in a Person that is not a Restricted Subsidiary and such Person subsequently becomes a Restricted Subsidiary or is subsequently designated a Restricted Subsidiary pursuant to Section 4.02, such Investment shall thereafter be deemed to have been made pursuant to clause (1) or (2) of the definition of Permitted Investments and not this clause;
(12) Investments in Associates in an aggregate amount when taken together with all other Investments made pursuant to this clause (12) that are at the time outstanding not to exceed 50 million; provided, that, if an Investment is made pursuant to this clause in a Person that is not a
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Restricted Subsidiary and such Person subsequently becomes a Restricted Subsidiary or is subsequently designated a Restricted Subsidiary pursuant to this Indenture, such Investment shall thereafter be deemed to have been made pursuant to clause (1) or (2) of the definition of Permitted Investments and not this clause (12);
(13) pledges or deposits with respect to leases or utilities provided to third parties in the ordinary course of business or Liens otherwise described in the definition of Permitted Liens or made in connection with Liens permitted under Section 4.03;
(14) any Investment to the extent made using Capital Stock of Midco (other than Disqualified Stock), Subordinated Shareholder Funding or Capital Stock of any Parent as consideration;
(15) any transaction to the extent constituting an Investment that is permitted and made in accordance with Section 4.06(b) (except for those described in Section 4.06(b)(i), Section 4.06(b)(iii), Section 4.06(b)(vi), Section 4.06(b)(viii), Section 4.06(b)(ix) and Section 4.06(b)(xii));
(16) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or licenses or leases of intellectual property, in any case, in the ordinary course of business and in accordance with this Indenture;
(17) guarantees, keepwells and similar arrangements not prohibited under Section 4.01;
(18) Investments in the Notes or other Indebtedness of Midco and any Restricted Subsidiary;
(19) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or licenses or leases of intellectual property, in any case, in the ordinary course of business and in accordance with this Indenture;
(20) Investments acquired after the Issue Date as a result of the acquisition by Midco or any of its Restricted Subsidiaries of another Person, including by way of a merger, amalgamation or consolidation with or into Midco or any of its Restricted Subsidiaries in a transaction that is not prohibited by Section 5.01 to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(21) Investments of cash held on behalf of merchants or other business counterparties in the ordinary course of business in bank deposits, time deposit accounts, certificates of deposit, bankers acceptances, money market deposits, money market deposit accounts, bills of exchange, commercial paper, governmental obligations, investment funds, money market funds or other securities; and
(22) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility, workers compensation, performance and other similar deposits, in each case, in the ordinary course of business.
Permitted Liens means, with respect to any Person:
(1) Liens on assets or property of a Restricted Subsidiary that is not a Guarantor securing any Indebtedness of such Restricted Subsidiary permitted under Section 4.01;
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(2) pledges, deposits or Liens under workmens compensation laws, unemployment insurance laws, social security laws or similar legislation, or insurance related obligations (including pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements), or in connection with bids, tenders, completion guarantees, contracts (other than for borrowed money) or leases, or to secure utilities, licenses, public or statutory obligations, trade obligations or to secure surety, indemnity, judgment, appeal or performance bonds, guarantees of government contracts (or other similar bonds, instruments or obligations), or as security for contested taxes or import or customs duties or for the payment of rent, or other obligations of like nature, in each case Incurred in the ordinary course of business (including, in each case, to secure letters of credit or similar instruments to assure payment of such obligation);
(3) Liens imposed by law, including carriers, warehousemens, mechanics, landlords, materialmens and repairmens or other like Liens, in each case for sums not yet overdue for a period of more than 60 days or that are bonded or being contested in good faith by appropriate proceedings;
(4) Liens for taxes, assessments or other governmental charges not yet delinquent or which are being contested in good faith by appropriate proceedings; provided that appropriate reserves required pursuant to IFRS have been made in respect thereof;
(5) Liens in favor of issuer of surety, performance or other bonds, guarantees or letters of credit or bankers acceptances (not issued to support Indebtedness for borrowed money) issued pursuant to the request of and for the account of Midco or any Restricted Subsidiary in the ordinary course of its business;
(6) encumbrances, ground leases, easements (including reciprocal easement agreements), survey exceptions, or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including minor defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to the conduct of the business of Midco and its Restricted Subsidiaries or to the ownership of its properties which do not materially impair their use in the operation of the business of Midco and its Restricted Subsidiaries;
(7) Liens on assets or property of Midco or any Restricted Subsidiary (other than the Collateral) securing Hedging Obligations permitted under this Indenture;
(8) licenses, subleases and sublicenses of assets (including real property and intellectual property rights), in each case entered into in the ordinary course of business;
(9) Liens arising out of judgments, decrees, orders or awards not giving rise to an Event of Default so long as any appropriate legal proceedings which may have been duly initiated for the review of such judgment, decree, order or award have not been finally terminated or the period within which such proceedings may be initiated has not expired;
(10) Liens on assets or property of Midco or any Restricted Subsidiary for the purpose of securing Capitalized Lease Obligations or Purchase Money Obligations, or securing the payment of all or a part of the purchase price of, or securing other Indebtedness Incurred to finance or refinance the acquisition, improvement or construction of, assets or property acquired or constructed in the ordinary course of business; provided that (a) the aggregate principal amount of Indebtedness secured by such Liens is otherwise permitted to be Incurred under this Indenture and (b) any such Lien may not extend to any assets or property of Midco or any Restricted Subsidiary other than assets or property acquired, improved, constructed or leased with the proceeds of such Indebtedness and any improvements or accessions to such assets and property;
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(11) Liens arising by virtue of any statutory or common law provisions or standard terms and conditions of business relating to bankers liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary or financial institution;
(12) Liens arising from Uniform Commercial Code financing statement filings (or similar filings in other applicable jurisdictions) regarding operating leases entered into by Midco and its Restricted Subsidiaries in the ordinary course of business;
(13) Liens existing on, or provided for or required to be granted under written agreements existing on, the Issue Date;
(14) Liens on property, other assets or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary (or at the time Midco or a Restricted Subsidiary acquires such property, other assets or shares of stock, including any acquisition by means of a merger, consolidation or other business combination transaction with or into Midco or any Restricted Subsidiary); provided , however that such Liens are limited to all or part of the same property, other assets or stock (plus improvements, accession, proceeds or dividends or distributions in connection with the original property, other assets or stock) that secured (or, under the written arrangements under which such Liens arose, could secure) the obligations to which such Liens relate;
(15) Liens on assets or property of Midco or any Restricted Subsidiary securing Indebtedness or other obligations of Midco or such Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary, or Liens in favor of Midco or any Restricted Subsidiary;
(16) Liens (other than Permitted Collateral Liens) securing Refinancing Indebtedness Incurred to refinance Indebtedness that was previously so secured, and permitted to be secured under this Indenture; provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced or is in respect of property that is or could be the security for or subject to a Permitted Lien hereunder;
(17) any interest or title of a lessor under any Capitalized Lease Obligation or operating lease;
(18) (a) mortgages, liens, security interests, restrictions, encumbrances or any other matters of record that have been placed by any government, statutory or regulatory authority, developer, landlord or other third party on property over which Midco or any Restricted Subsidiary has easement rights or on any leased property and subordination or similar arrangements relating thereto and (b) any condemnation or eminent domain proceedings affecting any real property;
(19) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(20) Liens on cash accounts securing Indebtedness incurred under Section 4.01(b)(x) with local financial institutions;
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(21) Liens on Escrowed Proceeds for the benefit of the related holders of debt securities or other Indebtedness (or the underwriters or arrangers thereof) or on cash set aside at the time of the Incurrence of any Indebtedness or government securities purchased with such cash, in either case to the extent such cash or government securities prefund the payment of interest on such Indebtedness and are held in an escrow account or similar arrangement to be applied for such purpose;
(22) Liens securing or arising by reason of any netting or set-off arrangement entered into in the ordinary course of banking or other trading activities, or liens over cash accounts securing cash management services (including overdrafts), to implement cash pooling arrangements or to cash collateralize letters of credit;
(23) Liens arising out of conditional sale, title retention, hire purchase, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business; (24) Liens provided that the maximum amount of Indebtedness secured in the aggregate at any one time pursuant to this clause
(24) does not exceed 25.0 million;
(25) Liens on Capital Stock or other securities or assets of any Unrestricted Subsidiary that secure Indebtedness of such Unrestricted Subsidiary;
(26) any security granted over the marketable securities portfolio described in clause (9) of the definition of Cash Equivalents in connection with the disposal thereof to a third party;
(27) Liens on Receivables Assets Incurred in connection with a Qualified Receivables Financing;
(28) Liens on Indebtedness permitted to be Incurred pursuant to Section 4.01(b)(xv);
(29) Liens on assets or property of any Restricted Subsidiary that is not a Subsidiary Guarantor securing any Indebtedness of any such Subsidiary;
(30) Liens on any proceeds loan made by Midco or any Restricted Subsidiary in connection with any future incurrence of Indebtedness permitted under this Indenture and securing that Indebtedness;
(31) Liens on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge or redemption of Indebtedness;
(32) Liens over cash paid into an escrow account pursuant to any purchase price retention arrangement as part of any permitted disposal by Midco or a Restricted Subsidiary on condition that the cash paid into such escrow account in relation to a disposal does not represent more than 25% of the net proceeds of such disposal;
(33) Liens created on any asset of Midco or a Restricted Subsidiary established to hold assets of any stock option plan or any other management or employee benefit or incentive plan or unit trust of Midco or a Restricted Subsidiary securing any loan to finance the acquisition of such assets;
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(34) Liens over treasury stock of Midco or a Restricted Subsidiary purchased or otherwise acquired for value by Midco or such Restricted Subsidiary pursuant to a stock buy back scheme or other similar plan or arrangement; (35) Liens on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partial payments by a third party relating to such property or assets;
(36) limited recourse Liens in respect of the ownership interests in, or assets owned by, any joint ventures which are not Restricted Subsidiaries securing obligations of such joint ventures;
(37) (a) Liens created for the benefit of or to secure, directly or indirectly, the Notes, (b) Liens pursuant to the Intercreditor Agreement and the security documents entered into pursuant to this Indenture, (c) Liens in respect of property and assets securing Indebtedness if the recovery in respect of such Liens is subject to loss-sharing as among the Holders of the Notes and the creditors of such Indebtedness pursuant to the Intercreditor Agreement or an Additional Intercreditor Agreement and (d) Liens securing Indebtedness incurred under Section 4.01(b)(i) to the extent the Agreed Security Principles would permit such Lien to be granted to such Indebtedness and not to the Notes;
(38) Liens on receivables securing Indebtedness described under Section 4.01(b)(xiii);
(39) Liens securing Indebtedness described under Section 4.01(b)(xv); and
(40) any extension, renewal, refinancing or replacement, in whole or in part, of any Lien described in the foregoing clauses (1) through (39) (but excluding clause (20)); provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced.
Permitted Reorganization means any amalgamation, demerger, merger, voluntary liquidation, consolidation, reorganization, winding up or corporate reconstruction involving Midco or any of its Restricted Subsidiaries and the assignment, transfer or assumption of intercompany receivables and payables among Midco and its Restricted Subsidiaries in connection therewith (a Reorganization) that is made on a solvent basis; provided that: (a) all of the business and assets of Midco or such Restricted Subsidiaries remain owned by Midco or its Restricted Subsidiaries, (b) any payments or assets distributed in connection with such Reorganization remain within Midco and its Restricted Subsidiaries, (c) if any shares or other assets form part of the Collateral, substantially equivalent Liens must be granted over such shares or assets of the recipient such that they form part of the Collateral and (d) prior to any such Reorganization occurring after the date that is six months from the Issue Date, the Issuer will provide to the Trustee and the Security Agent an Officers Certificate confirming that no Default is continuing or would arise as a result of such Reorganization, upon which the Trustee and Security Agent may conclusively rely.
Person means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision thereof or any other entity.
Preferred Stock , as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.
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Public Debt means any Indebtedness consisting of bonds, debentures, notes or other similar debt securities issued in (1) a public offering registered under the Securities Act or (2) a private placement to institutional investors that is underwritten for resale in accordance with Rule 144A or Regulation S under the Securities Act, whether or not it includes registration rights entitling the holders of such debt securities to registration thereof with the SEC for public resale.
Public Market means any time after:
(1) an Equity Offering has been consummated; and
(2) shares of common stock or other common equity interests of the IPO Entity having a market value in excess of 100.0 million on the date of such Equity Offering have been distributed pursuant to such Equity Offering.
Public Offering means any offering, including an Initial Public Offering, of shares of common stock or other common equity interests that are listed on an exchange or publicly offered (which shall include an offering pursuant to Rule 144A and/or Regulation S under the Securities Act to professional market investors or similar persons).
Purchase Money Obligations means any Indebtedness Incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets (including Capital Stock), and whether acquired through the direct acquisition of such property or assets or the acquisition of the Capital Stock of any Person owning such property or assets, or otherwise.
Qualified Receivables Financing means any Receivables Financing that meets the following conditions: (1) the Board of Directors of Midco shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to Midco and the Receivables Subsidiary, (2) all sales of accounts receivable and related assets to the Receivables Subsidiary are made at fair market value (as determined in good faith by Midco), and (3) the financing terms, covenants, termination events and other provisions thereof shall be on market terms (as determined in good faith by Midco) and may include Standard Securitization Undertakings.
The grant of a security interest in any accounts receivable of Midco or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Indebtedness under a Credit Facility or Indebtedness in respect of the Notes shall not be deemed a Qualified Receivables Financing.
Receivables Assets means any assets that are or will be the subject of a Qualified Receivables Financing.
Receivables Fees means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.
Receivables Financing means any transaction or series of transactions that may be entered into by Midco or any of its Subsidiaries pursuant to which Midco or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by Midco or any of its Subsidiaries), or (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of Midco or any
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of its Subsidiaries, and any assets related thereto, including all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interest are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by Midco or any such Subsidiary in connection with such accounts receivable.
Receivables Repurchase Obligation means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.
Receivables Subsidiary means a Wholly Owned Subsidiary of Midco (or another Person formed for the purposes of engaging in a Qualified Receivables Financing with Midco in which Midco or any Subsidiary of Midco makes an Investment and to which Midco or any Subsidiary of Midco transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of Midco and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of Midco (as provided below) as a Receivables Subsidiary and:
(1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by Midco or any other Restricted Subsidiary (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is subject to terms that are substantially equivalent in effect to a guarantee of any losses on securitized or sold receivables by Midco or any other Restricted Subsidiary, (iii) is recourse to or obligates Midco or any other Restricted Subsidiary in any way other than pursuant to Standard Securitization Undertakings, or (iv) subjects any property or asset of Midco or any other Restricted Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;
(2) with which neither Midco nor any other Restricted Subsidiary has any contract, agreement, arrangement or understanding other than on terms which Midco reasonably believes to be no less favorable to Midco or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Midco; and
(3) to which neither Midco nor any other Restricted Subsidiary has any obligation to maintain or preserve such entitys financial condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Board of Directors of Midco shall be evidenced to the Trustee by filing with the Trustee a copy of the resolution of the Board of Directors of Midco giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing conditions.
refinance means refinance, refund, replace, renew, repay, modify, restate, defer, substitute, supplement, reissue, resell, extend or increase (including pursuant to any defeasance or discharge mechanism) and the terms refinances , refinanced and refinancing as used for any purpose in this Indenture shall have a correlative meaning.
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Refinancing Indebtedness means Indebtedness that is Incurred to refund, refinance, replace, exchange, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) any Indebtedness existing on the date of this Indenture or Incurred in compliance with this Indenture (including Indebtedness of Midco that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of Midco or another Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness; provided , however , that:
(1) if the Indebtedness being refinanced constitutes Subordinated Indebtedness, the Refinancing Indebtedness has a final Stated Maturity at the time such Refinancing Indebtedness is Incurred that is the same as or later than the final Stated Maturity of the Indebtedness being refinanced or, if shorter, the Notes;
(2) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced (plus, without duplication, any additional Indebtedness Incurred to pay interest or premiums required by the instruments governing such existing Indebtedness and costs, expenses and fees Incurred in connection therewith); and
(3) if the Indebtedness being refinanced is expressly subordinated to the Notes or the Guarantees, such Refinancing Indebtedness is subordinated to the Notes or the Guarantees on terms at least as favorable to the Holders as those contained in the documentation governing the Indebtedness being refinanced,
provided , however , that Refinancing Indebtedness shall not include Indebtedness of Midco or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary.
Refinancing Indebtedness in respect of any Credit Facility or any other Indebtedness may be Incurred from time to time after the termination, discharge or repayment of any such Credit Facility or other Indebtedness.
Related Person means, with respect to any Permitted Holder:
(1) any controlling equityholder or Subsidiary of such Person; or
(2) in the case of an individual, any spouse, family member or relative of such individual, any trust or partnership for the benefit of one or more of such individual and any such spouse, family member or relative, or the estate, executor, administrator, committee or beneficiaries of any thereof; or
(3) any trust, corporation, partnership or other Person for which one or more of the Permitted Holders and other Related Persons of any thereof constitute the beneficiaries, stockholders, partners or owners thereof, or Persons beneficially holding in the aggregate a majority (or more) controlling interest therein; or
(4) in the case of Permira Advisers, LLP, any investment fund or vehicle managed, sponsored or advised by such Person or any successor thereto, or by any Affiliate of such Person or any such successor.
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Related Taxes means, without duplication:
(1) any Taxes, including sales, use, transfer, rental, ad valorem, value added, stamp, property, consumption, franchise, license, capital, registration, business, customs, net worth, gross receipts, excise, occupancy, intangibles or similar Taxes (other than (x) Taxes measured by income and (y) withholding imposed on payments made by any Parent), required to be paid (provided such Taxes are in fact paid) by any Parent by virtue of its:
(i) being organized or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than, directly or indirectly, Midco or any of Midcos Subsidiaries);
(ii) issuing or holding Subordinated Shareholder Funding;
(iii) being a holding company parent, directly or indirectly, of Midco or any of Midcos Subsidiaries; (iv) receiving dividends from or other distributions in respect of the Capital Stock of, directly or indirectly, Midco or any of Midcos Subsidiaries; or
(v) having made any payment in respect to any of the items for which Midco is permitted to make payments to any Parent pursuant to Section 4.02; or
(2) if and for so long as Midco is a member of a group filing a consolidated or combined tax return with any Parent, any Taxes measured by income for which such Parent is liable up to an amount not to exceed with respect to such Taxes the amount of any such Taxes that Midco and its Subsidiaries would have been required to pay on a separate company basis or on a consolidated basis if Midco and its Subsidiaries had paid tax on a consolidated, combined, group, affiliated or unitary basis on behalf of an affiliated group consisting only of Midco and its Subsidiaries.
Responsible Officer means, when used with respect to the Trustee, any officer within the applicable corporate trust services department of the Trustee, including any director, associate director, assistant secretary or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Persons knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
Restricted Investment means any Investment other than a Permitted Investment.
Restricted Subsidiary means any Subsidiary of Midco other than an Unrestricted Subsidiary.
S&P means Standard & Poors Investors Ratings Services or any of its successors or assigns that is a Nationally Recognized Statistical Rating Organization.
SEC means the U.S. Securities and Exchange Commission or any successor thereto.
Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder, as amended.
Security Documents means each collateral pledge agreement, security interest agreement, security assignment agreement or other document under which collateral is pledged to secure the Notes.
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Senior Credit Facilities Agreement means the senior facilities agreement to be dated on or about the Issue Date, among Midco, certain of its Subsidiaries, as borrowers and guarantors, the original lenders (as named therein), and Credit Suisse AG, London Branch, as agent and security agent, as amended, restated, modified, renewed, refunded, replaced, restructured, refinanced, repaid, increased or extended in whole or in part from time to time.
Senior Finance Documents means the Senior Credit Facilities Agreement and such other documents identified as Finance Documents pursuant to the Senior Credit Facilities Agreement.
Senior Indebtedness means, whether outstanding on the Issue Date or thereafter Incurred, all amounts payable by, under or in respect of all other Indebtedness of the Issuer or any Guarantor, including premiums and accrued and unpaid interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer or such Guarantor at the rate specified in the documentation with respect thereto whether or not a claim for post filing interest is allowed in such proceeding) and fees relating thereto; provided, however, that Senior Indebtedness will not include:
(1) any obligation of any Guarantor to Midco or any Restricted Subsidiary;
(2) any liability for taxes owed or owing by Midco or any Restricted Subsidiary;
(3) any Indebtedness, guarantee or obligation of any Guarantor that is expressly subordinate or junior in right of payment to any other Indebtedness, guarantee or obligation of such Guarantor; or
(4) any Capital Stock.
Senior Management means the officers, directors, and other members of senior management of Midco or any of its Subsidiaries.
Senior Secured Indebtedness means, with respect to any Person as of any date of determination, any Indebtedness for borrowed money that is secured by a first priority Lien on the Collateral and that is Incurred under Section 4.01(a) or clauses (i), (iv), (v), (vii), (xi), (xiii) or (xiv) of Section 4.01(b) and any Refinancing Indebtedness in respect thereof that is secured by a first priority Lien on the Collateral.
Significant Subsidiary means any Restricted Subsidiary that meets any of the following conditions:
(1) Midcos and its Restricted Subsidiaries investments in and advances to the Restricted Subsidiary exceed 10% of the total assets of Midco and its Restricted Subsidiaries on a consolidated basis as of the end of the most recently completed fiscal year;
(2) Midcos and its Restricted Subsidiaries proportionate share of the total assets (after intercompany eliminations) of the Restricted Subsidiary exceeds 10% of the total assets of Midco and its Restricted Subsidiaries on a consolidated basis as of the end of the most recently completed fiscal year; or
(3) Midcos and its Restricted Subsidiaries equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principle of the Restricted Subsidiary exceeds 10% of such income of Midco and its Restricted Subsidiaries on a consolidated basis for the most recently completed fiscal year.
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Similar Business means (a) any businesses, services or activities engaged in by Midco or any of its Subsidiaries or any Associates on the Issue Date, (b) the frozen food business and (c) any businesses, services and activities engaged in by Midco or any of its Subsidiaries or any Associates that are related, complementary, incidental, ancillary or similar to any of the foregoing or are extensions or developments of any thereof.
Special Purpose Vehicle means an entity established by any Parent for the purpose of maintaining an equity incentive or compensation plan for Management Investors.
Specified Change of Control Event means the occurrence of any event that would constitute a Change of Control pursuant to the definition thereof; provided that immediately prior to the occurrence of such event and immediately thereafter and giving pro forma effect thereto, the Consolidated Senior Secured Leverage Ratio would have been no greater than 5.25 to 1.0. Notwithstanding the foregoing, only one Specified Change of Control Event shall be permitted under this Indenture after the Issue Date.
Standard Securitization Undertakings means representations, warranties, covenants, indemnities and guarantees of performance entered into by Midco or any Subsidiary of Midco which the Issuer has determined in good faith to be customary in a Receivables Financing, including those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.
Stated Maturity means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.
Subordinated Indebtedness means, with respect to any Person, any Indebtedness (whether outstanding on the Issue Date or thereafter Incurred) which is expressly subordinated in right of payment to the Notes or the Note Guarantees pursuant to a written agreement.
Subordinated Shareholder Funding means:
(1) collectively, any funds provided to Midco by a Parent in exchange for or pursuant to any security, instrument or agreement other than Capital Stock, in each case issued to and held by a Parent or a Permitted Holder, together with any such security, instrument or agreement and any other security or instrument other than Capital Stock issued in payment of any obligation under any Subordinated Shareholder Funding; provided , however , that such Subordinated Shareholder Funding:
(i) does not mature or require any amortization, redemption or other repayment of principal or any sinking fund payment prior to six months after the Stated Maturity of the Notes (other than through conversion or exchange of such funding into Capital Stock (other than Disqualified Stock) of Midco or any funding meeting the requirements of this definition) or the making of any such payment prior to six months after the Stated Maturity of the Notes is restricted by the Intercreditor Agreement, an Additional Intercreditor Agreement or another intercreditor agreement;
(ii) does not require, prior to six months after the Stated Maturity of the Notes, payment of cash interest, cash withholding amounts or other cash gross-ups, or any similar cash amounts or the making of any such payment prior to the six-month anniversary of the Stated Maturity of the Notes is restricted by the Intercreditor Agreement, an Additional Intercreditor Agreement or another intercreditor agreement;
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(iii) contains no change of control or similar provisions and does not accelerate and has no right to declare a default or event of default or take any enforcement action or otherwise require any cash payment, in each case, prior to six months after the Stated Maturity of the Notes or the payment of any amount as a result of any such action or provision or the exercise of any rights or enforcement action, in each case, prior to six months after the Stated Maturity of the Notes is restricted by the Intercreditor Agreement, an Additional Intercreditor Agreement or another intercreditor agreement;
(iv) does not provide for or require any security interest or encumbrance over any asset of Midco or any of its Subsidiaries; and
(v) pursuant to its terms or to the Intercreditor Agreement, an Additional Intercreditor Agreement or another intercreditor agreement, is fully subordinated and junior in right of payment to the Notes pursuant to subordination, payment blockage and enforcement limitation terms which are customary in all material respects for similar funding or are no less favorable in any material respect to Holders than those contained in the Intercreditor Agreement as in effect on the Issue Date with respect to the Subordinated Liabilities (as defined therein); and
(2) the Inter-company Loan Agreement made between Midco and the Parent Guarantor as lender on or about November 2, 2006 and amended and restated on November 7, 2012 and May 23, 2013, as the same may be amended, modified, restated, renewed, extended, increased, restructured or refinanced in whole or in part provided that any such amendment, modification, restatement, renewal, extension, increase, restructuring or refinancing shall comply with clause (a) above of this definition and after such amendment, modification, restatement, renewal, extension, increase, restructuring or refinancing any such instrument or obligation shall still constitute Subordinated Shareholder Funding under clause (a) above.
Subsidiary means, with respect to any Person:
(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; or
(2) any partnership, joint venture, limited liability company or similar entity of which: (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership interests or otherwise; and (b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.
Subsidiary Guarantee means a Guarantee of the obligations of the Issuer pursuant to the Notes, including any payment obligation resulting from a Change of Control, provided on a senior basis by a Subsidiary Guarantor.
Subsidiary Guarantor means Midco and any Restricted Subsidiary that Guarantees the Notes.
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Successor Parent with respect to any Person means any other Person with more than 50% of the total voting power of the Voting Stock of which is, at the time the first Person becomes a Subsidiary of such other Person, beneficially owned (as defined below) by one or more Persons that beneficially owned (as defined below) more than 50% of the total voting power of the Voting Stock of the first Person immediately prior to the first Person becoming a Subsidiary of such other Person. For purposes hereof, beneficially own has the meaning correlative to the term beneficial owner, as such term is defined in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue Date).
Taxes means all present and future taxes, levies, imposts, deductions, charges, duties and withholdings and any charges of a similar nature (including interest, penalties and other liabilities with respect thereto) that are imposed by any government or other taxing authority.
Tax Sharing Agreement means any tax sharing or profit and loss pooling or similar agreement with customary or arms-length terms entered into with any Parent or Unrestricted Subsidiary, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof and of this Indenture.
Temporary Cash Investments means any of the following:
(1) any investment in: (a) direct obligations of, or obligations Guaranteed by, (i) the United States of America or Canada, (ii) any member state of the European Union, (iii) Japan, Switzerland or Norway, (iv) any country in whose currency funds are being held specifically pending application in the making of an investment or capital expenditure by Midco or a Restricted Subsidiary in that country with such funds or (v) any agency or instrumentality of any such country or member state; or (b) direct obligations of any country recognized by the United States of America rated at least A by S&P or A2 by Moodys (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moodys then exists, the equivalent of such rating by any Nationally Recognized Statistical Rating Organization);
(2) overnight bank deposits, and investments in time deposit accounts, certificates of deposit, bankers acceptances and money market deposits (or, with respect to foreign banks, similar instruments) maturing not more than one year after the date of acquisition thereof issued by: (a) any lender under the Senior Credit Facilities Agreement; (b) any institution authorized to operate as a bank in any of the countries or member states referred to in sub-clause (1)(a) above; or (c) any bank or trust company organized under the laws of any such country or member state or any political subdivision thereof, in each case, having capital and surplus aggregating in excess of 250.0 million (or the foreign currency equivalent thereof) and whose long-term debt is rated at least A- by S&P or A2 by Moodys (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moodys then exists, the equivalent of such rating by any Nationally Recognized Statistical Rating Organization) at the time such Investment is made;
(3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) or (2) above entered into with a Person meeting the qualifications described in clause (2) above;
(4) Investments in commercial paper, maturing not more than 270 days after the date of acquisition, issued by a Person (other than Midco or any of its Subsidiaries), with a rating at the time as of which any Investment therein is made of P-2 (or higher) according to Moodys or A-2 (or higher) according to S&P (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moodys then exists, the equivalent of such rating by any Nationally Recognized Statistical Rating Organization);
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(5) Investments in securities maturing not more than one year after the date of acquisition issued or fully Guaranteed by any state, commonwealth or territory of the United States of America, Canada, any member state of the European Union or Japan, Switzerland, Norway or by any political subdivision or taxing authority of any such state, commonwealth, territory, country or member state, and rated at least BBB by S&P or Baa3 by Moodys (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moodys then exists, the equivalent of such rating by any Nationally Recognized Statistical Rating Organization);
(6) bills of exchange issued in the United States, Canada, a member state of the European Union, Switzerland, Norway or Japan eligible for rediscount at the relevant central bank and accepted by a bank (or any dematerialized equivalent);
(7) any money market deposit accounts issued or offered by a commercial bank organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development, in each case, having capital and surplus in excess of 250.0 million (or the foreign currency equivalent thereof) or whose long term debt is rated at least A by S&P or A2 by Moodys (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moodys then exists, the equivalent of such rating by any Nationally Recognized Statistical Rating Organization) at the time such Investment is made;
(8) investment funds investing 95% of their assets in securities of the type described in clauses (1) through (7) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution); and
(9) investments in money market funds complying with the risk limiting conditions of Rule 2a-7 (or any successor rule) of the SEC under the U.S. Investment Company Act of 1940, as amended.
Total Assets means the consolidated total assets of Midco and its Restricted Subsidiaries in accordance with IFRS as shown on the most recent balance sheet of such Person.
Transactions means the entry into the Senior Credit Facilities Agreement, the issuance and sale of the Notes and the application of the proceeds from the Senior Credit Facilities Agreement and the Notes (together with available cash as described in the Offering Memorandum) to repay the amounts outstanding under the Existing Senior Credit Facilities Agreement, and the closing out, replacement or entry into new Hedging Obligations pursuant thereto, the payment or incurrence of any fees, expense, taxes or charges associated therewith and any transactions related or incidental thereto.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended.
Uniform Commercial Code means the New York Uniform Commercial Code.
Unrestricted Subsidiary means:
(1) any Subsidiary of Midco (other than the Issuer) that at the time of determination is an Unrestricted Subsidiary (as designated by the Board of Directors of Midco in the manner provided below); and
(2) any Subsidiary of an Unrestricted Subsidiary.
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The Board of Directors of Midco may designate any Subsidiary of Midco (including any newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary through merger, consolidation or other business combination transaction, or Investment therein, but not including the Issuer) to be an Unrestricted Subsidiary only if:
(1) such Subsidiary or any of its Subsidiaries does not own any Capital Stock or Indebtedness of, or own or hold any Lien on any property of, Midco or any other Subsidiary of Midco which is not a Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary; and
(2) such designation and the Investment of Midco in such Subsidiary complies with Section 4.02.
Any such designation by the Board of Directors of Midco shall be evidenced to the Trustee and the Security Agent by filing with the Trustee and the Security Agent a resolution of the Board of Directors of Midco giving effect to such designation and an Officers Certificate certifying that such designation complies with the foregoing conditions.
The Board of Directors of Midco may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving effect to such designation (1) no Default or Event of Default would result therefrom and (2)(x) Midco could Incur at least 1.00 of additional Indebtedness under Section 4.01(a) or (y) the Fixed Charge Coverage Ratio for Midco and its Restricted Subsidiaries would not be less than it was immediately prior to giving effect to such designation, in each case, on a pro forma basis taking into account such designation. Any such designation by the Board of Directors shall be evidenced to the Trustee and the Security Agent by promptly filing with the Trustee and the Security Agent a copy of the resolution of the Board of Directors giving effect to such designation or an Officers Certificate certifying that such designation complied with the foregoing provisions.
Voting Stock of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors.
Wholly Owned Subsidiary means a Restricted Subsidiary, all of the Voting Stock of which (other than directors qualifying shares or shares required by any applicable law or regulation to be held by a Person other than Midco or another Wholly Owned Subsidiary) is owned by Midco or another Wholly Owned Subsidiary.
Section 1.02 Other Definitions.
Term |
Defined in Section |
|
Additional Amounts |
4.13(a) | |
Additional Intercreditor Agreement |
4.11(a) | |
Affiliate Transaction |
4.06(a) | |
Agent Members |
Exhibit A-1 | |
Applicable Procedures |
Exhibit A-1 | |
Asset Disposition Offer |
4.05(d) | |
Asset Disposition Offer Amount |
4.05(g) | |
Asset Disposition Offer Period |
4.05(g) | |
Asset Disposition Purchase Date |
4.05(g) | |
Authenticating Agent |
2.03 | |
Authentication Order |
2.03 | |
Authorized Agent |
12.08 | |
Change of Control Offer |
4.14(b) | |
Change of Control Payment |
4.14(b)(i) | |
Change of Control Payment Date |
4.14(b)(ii) |
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covenant defeasance option |
8.01(b) | |
cross acceleration provision |
6.01(d)(ii) | |
Definitive Registered Note |
Exhibit A-1 | |
Directive |
2.04(i) | |
Event of Default |
6.01 | |
Excess Proceeds |
4.05(c) | |
Excluded Amounts |
4.02(a) | |
Global Note |
Exhibit A-1 | |
Global Notes Legend |
Exhibit A-1 | |
Initial Agreement |
4.04(b)(iii) | |
Initial Default |
6.02 | |
Initial Lien |
4.03 | |
Initial Notes |
Recitals | |
legal defeasance option |
8.01(b) | |
payment default |
6.01(d)(i) | |
Payor |
4.13(a) | |
Permitted Payments |
4.02(b) | |
protected purchaser |
2.08 | |
QIB |
Exhibit A-1 | |
Registrar |
2.04(i) | |
Regulation S |
Exhibit A-1 | |
Regulation S Notes |
Exhibit A-1 | |
Relevant Taxing Jurisdiction |
4.13(a)(ii) | |
Restricted Notes Legend |
Exhibit A-1 | |
Restricted Payment |
4.02(a) | |
Restricted Period |
Exhibit A-1 | |
Reversion Date |
4.10 | |
Rule 144A |
Exhibit A-1 | |
Rule 144A Notes |
Exhibit A-1 | |
Securities Act |
Exhibit A-1 | |
Security Agent |
Preamble | |
Successor Company |
5.01(a)(i) | |
Suspension Event |
4.10 | |
Transfer Agent |
2.04(i) | |
Transfer Restricted Notes |
Exhibit A-1 | |
Trustee |
Preamble |
Section 1.03 Rules of Construction .
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with IFRS as of the Issue Date;
(c) or is not exclusive;
(d) including means including without limitation;
(e) words in the singular include the plural and words in the plural include the singular; and
(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to secured Indebtedness merely by virtue of its nature as unsecured Indebtedness.
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ARTICLE 2
THE NOTES
Section 2.01 Additional Notes .
(a) Any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.10, Section 2.11, Section 2.12, Section 2.13 or Section 3.06 or Exhibit A-1), there shall be (a) established in or pursuant to a resolution of the Board of Directors of the Issuer and (b) (i) set forth or determined in the manner provided in an Officers Certificate of the Issuer and (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:
(i) the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.10, Section 2.11, Section 2.12, Section 2.13 or Section 3.06 or Exhibit A-1 and except for Notes which, pursuant to Section 2.06, are deemed never to have been authenticated and delivered hereunder);
(ii) the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shall accrue; and
(iii) if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Exhibit A-1 hereto and any circumstances in addition to or in lieu of those set forth in Section 2.3 of Exhibit A-1 in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof.
(b) If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors, a copy of an appropriate record of such action shall be certified by an Officers Certificate and delivered to the Trustee at or prior to the delivery of the Officers Certificate of the Issuer or this Indenture supplemental hereto setting forth the terms of the Additional Notes.
(c) This Indenture is unlimited in aggregate principal amount. The Issuer may, subject to applicable law and this Indenture, issue an unlimited principal amount of Additional Notes; provided , that if the Additional Notes are not fungible with the Notes for U.S. federal income tax purposes, the Additional Notes will be issued with a separate ISIN or Common Code, as applicable, from the Notes, such that the Additional Notes are distinguishable from the Notes.
(d) The Notes and, if issued, any related Additional Notes will be treated as a single class for all purposes under this Indenture, including, without limitation, with respect to waivers, amendments, redemptions and offers to purchase, except as otherwise provided for herein. For the purposes of calculating the aggregate principal amount of Notes that have consented to or voted in favor of any amendment, waiver, consent, modification or other similar action, the Issuer (acting reasonably and in good faith) shall be entitled to select a record date as of which the Euro Equivalent of the principal amount of any Notes shall be calculated in such consent or voting
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process; provided that the Euro Equivalent shall be calculated by converting such currency other than euro involved in such computation into euro on the date notes of the relevant series were first issued.
Section 2.02 Form and Dating .
Provisions relating to the Notes are set forth in Exhibit A-1, which is hereby incorporated in and expressly made a part of this Indenture. The Notes, and the Trustees or Authenticating Agents certificate of authentication for each, will be substantially in the form of Exhibit A-2 hereto. The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the parties hereto expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer is subject, if any, or usage, provided that any such notation, legend or endorsement is in a form acceptable to the Issuer, the Paying Agent and the Trustee. Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons and only in minimum denominations of 100,000 and whole multiples of 1,000 in excess thereof.
Section 2.03 Execution and Authentication .
At least one Officer of the Issuer shall sign the Notes for the Issuer by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the time the Trustee, or its Authenticating Agent, authenticates the Note, the Note shall be valid nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee or an Authenticating Agent (as the case may be) signs manually or by facsimile signature the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee or an Authenticating Agent (as the case may be) shall authenticate and make available for delivery Notes as set forth in Exhibit A-1 following receipt of an authentication order signed by an Officer of the Issuer directing the Trustee or an Authenticating Agent to authenticate such Notes (the Authentication Order ).
The Trustee may appoint one or more authenticating agents (each, an Authenticating Agent ) to authenticate the Notes. Such an agent may authenticate Notes whenever the Trustee may do so. The term Authenticating Agent includes Deutsche Bank Luxembourg S.A., and any successor or additional Authenticating Agent appointed hereunder. The Trustee initially appoints Deutsche Bank Luxembourg S.A., who accepts such appointment, as Authenticating Agent. Unless limited by the terms of such appointment, an Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An Authenticating Agent has the same rights as any Registrar, Paying Agent or any other Agent for service of notices and demands.
Section 2.04 Registrar and Paying Agent .
(a) The Issuer will maintain one or more Paying Agents for the Notes in the City of London (each, a Paying Agent ). In addition, the Issuer undertakes to maintain a Paying Agent in a
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European Union member state that will not be obligated to withhold or deduct tax pursuant to the European Union Directive 2003/48/EC (as amended) or any other directive implementing the conclusions of the ECOFIN meeting of 26 and 27 November 2000 regarding the taxation of savings income (the Directive ), or any law implementing or complying with or introduced in order to conform to, such Directive. The initial Paying Agent will be Deutsche Bank AG, London Branch. Deutsche Bank AG, London Branch hereby accepts such appointment.
The Issuer will maintain a registrar (the Registrar ). The initial Registrar will be Deutsche Bank Luxembourg S.A. Deutsche Bank Luxembourg S.A. hereby accepts such appointment. The Issuer will also maintain a transfer agent (the Transfer Agent ). The initial Transfer Agent will be Deutsche Bank Luxembourg S.A. Deutsche Bank Luxembourg S.A. hereby accepts such appointment. The terms Registrar and Transfer Agent include any co-registrars and additional transfer agents, as applicable. The Registrar will maintain a register reflecting ownership of the Notes outstanding from time to time, if any, and together with the Transfer Agent, will facilitate transfers of the Notes on behalf of the Issuer. A register of the Notes shall be maintained at the registered office of the Issuer. In case of inconsistency between the register of the Notes kept by the Registrar and the one kept by the Issuer at its registered office, the register kept by the Issuer shall prevail.
(b) The Issuer shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. Such agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee of the name and address of any such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee may act, or may arrange for appropriate parties to act, as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.06. The Issuer, Midco or any of its Restricted Subsidiaries may act as Paying Agent or Registrar in respect of the Notes.
(c) The Issuer may change any Registrar, Paying Agent or Transfer Agent upon written notice to such Registrar, Paying Agent or Transfer Agent and to the Trustee, without prior notice to the Holders; provided , however , that no such removal shall become effective until (i) acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar, Paying Agent, or Transfer Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall, to the extent that the Trustee determines that it is able and agrees to, serve as Registrar or Paying Agent or Transfer Agent until the appointment of a successor in accordance with Section 2.04(a); provided further that in no event may the Issuer appoint a Paying Agent in any member state of the European Union where the Paying Agent would be obliged to withhold or deduct tax in connection with any payment made by it in relation to the Notes unless the Paying Agent would be so obliged if it were located in all other member states. The Registrar, any Paying Agent or the Transfer Agent may resign by providing 30 days written notice to the Issuer and the Trustee. In addition, for so long as Notes are listed on the Official List of the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so require, the Issuer will publish notice of any change of Paying Agent, Registrar or Transfer Agent in a newspaper having a general circulation in Luxembourg or, to the extent and in the manner permitted by such rules, post such notice on the official website of the Luxembourg Stock Exchange ( www.bourse.lu ).
Section 2.05 Money Held by Paying Agent .
No later than 10:00 a.m. London time on each due date of the principal of, interest and premium (if any) on any Note, the Issuer shall deposit with the appropriate Paying Agent (or if the Issuer or a Restricted Subsidiary of the Issuer is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal, interest and
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premium (if any) when so becoming due and, subject to receipt of such monies, the Paying Agent shall make payment on the Notes in accordance with this Indenture. If the Issuer or a Restricted Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee or such entity designated by the Trustee for this purpose and to account for any funds disbursed by the Paying Agent. Upon complying with this Section 2.05, the Paying Agent shall have no further liability for the money delivered to the Trustee. For the avoidance of doubt, the Paying Agent and the Trustee shall be held harmless and have no liability with respect to payments or disbursements to be made by the Paying Agent and Trustee (i) for which payment instructions are not made or that are not otherwise deposited by the respective times set forth in this Section 2.05, and (ii) shall not be obligated to make any payments until they have confirmed or are able to identify receipt of funds sufficient to make the relevant payment.
Section 2.06 Holder Lists .
The Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. Following the exchange of beneficial interests in Global Notes for Definitive Registered Notes, the Issuer shall furnish, or cause the Registrar to furnish, to the Trustee, the Transfer Agent and the Paying Agent in writing at least five Business Days before each interest payment date, and at such other times as the Trustee may reasonably require, the names and addresses of Holders of such Definitive Registered Notes.
Section 2.07 Transfer and Exchange .
The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Exhibit A-1. When a Note is presented to the Registrar or Transfer Agent, as the case may be, with a request to register a transfer, the Registrar or the Transfer Agent, as the case may be, shall register the transfer as requested if its requirements therefor are met. When Notes are presented to the Registrar or the Transfer Agent, as the case may be, with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuer shall execute and the Trustee or an Authenticating Agent, upon receipt of an authentication order, shall authenticate Notes at the request of the Registrar or the Transfer Agent, as the case may be. The Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.07. The Registrar and the Transfer Agent are not required to register the transfer or exchange of any Notes (i) for a period of 15 days prior to any date fixed for the redemption of the applicable Notes, (ii) for a period of 15 days immediately prior to the date fixed for selection of the applicable Notes to be redeemed in part, (iii) for a period of 15 days prior to the record date with respect to any interest payment date, or (iv) which the Holder has tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or an Asset Disposition Offer.
Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, each Agent, the Paying Agent, the Transfer Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and (subject to Section 2 of the Notes) interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent, the Transfer Agent or the Registrar shall be affected by notice to the contrary.
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Any Holder of a Global Note shall, by acceptance of such Global Note, agree that transfers of beneficial interest in such Global Note may be effected only through a book-entry system maintained by (a) the Holder of such Global Note (or its agent) or (b) any Holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book-entry.
All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
Section 2.08 Replacement Notes .
If any mutilated Note is surrendered to the Registrar, the Trustee or the Issuer and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuer will issue and the Trustee, upon receipt of an Authentication Order, shall authenticate or cause the Authenticating Agent to authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) notifies the Issuer or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuer or the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a protected purchaser ) and (c) satisfies any other reasonable requirements of the Trustee. If required by the Trustee, each Agent or the Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, an Authenticating Agent, Paying Agent and the Registrar from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder for their expenses in replacing a Note including reasonable fees and expenses of counsel. In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuer in its discretion may pay such Note instead of issuing a new Note in replacement thereof.
Every replacement Note is an additional obligation of the Issuer and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.
Section 2.09 Outstanding Notes .
Notes outstanding at any time are all Notes authenticated by the Trustee or an Authenticating Agent except for those canceled by either of them, those delivered to either of them for cancellation and those described in this Section 2.09 as not outstanding. Subject to Section 12.04, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note.
If a Note is replaced pursuant to Section 2.08, it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Note is held by a protected purchaser.
If the Paying Agent receives (or if the Issuer or a Restricted Subsidiary of the Issuer is acting as Paying Agent and such Paying Agent segregates and holds in trust) in accordance with this Indenture, by 10:00 a.m. London time on each redemption date or maturity date money sufficient to
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pay all principal and interest and premium, if any, payable on that date with respect to any Notes (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not, as advised to it in writing by the Issuer or, as the case may be, the Registrar, prohibited as advised to it in writing by the Issuer from paying such amount to the relevant Holders on that date pursuant to the terms of this Indenture or the Intercreditor Agreement, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
Section 2.10 Temporary Notes .
In the event that Definitive Registered Notes are to be issued under the terms of this Indenture, until such Definitive Registered Notes are ready for delivery, the Issuer may prepare and the Trustee or an Authenticating Agent, upon receipt of an authentication order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Definitive Registered Notes but may have variations that the Issuer considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee or an Authenticating Agent, upon receipt of an authentication order, shall authenticate Definitive Registered Notes and deliver them in exchange for temporary Notes upon surrender of such temporary Notes at the office or agency of the Issuer, without charge to the Holder.
Section 2.11 Cancellation .
The Issuer at any time may deliver Notes to the Registrar for cancellation. The Paying Agent, Transfer Agent and the Trustee shall forward to the Registrar any Notes surrendered to them for registration of transfer, exchange or payment. The Registrar or the Paying Agent (or an agent authorized by the Registrar) and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures (subject to record retention requirements under applicable law) or deliver canceled Notes to the Issuer pursuant to written direction by an Officer of the Issuer. Certification of the destruction of all canceled Notes shall be delivered to the Issuer upon the Issuers request. The Issuer may not issue new Notes to replace Notes it has redeemed or delivered to the Registrar for cancellation. If the Issuer shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Notes, unless and until the same are surrendered to the Registrar for cancellation pursuant to this Section 2.11. Neither the Trustee nor any Authenticating Agent shall authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.
Section 2.12 Common Codes and ISINs .
The Issuer in issuing the Notes may use Common Codes and ISINs (if then generally in use) and, if so, the Trustee and Agents shall use Common Codes and ISINs in notices of redemption as a convenience to Holders; provided , however , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Trustee and the Paying Agent of any change in the Common Code or ISINs.
Section 2.13 Defaulted Interest .
If the Issuer defaults in a payment of interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the
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Notes and in Section 4.12 hereof. The Issuer will notify the Trustee as soon as practicable in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Issuer will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) will mail or cause to be mailed to the Holders in accordance with Section 12.01 a notice that states the special record date, the related payment date and the amount of such interest to be paid. The Issuer undertakes to promptly inform the Luxembourg Stock Exchange (for so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange and admitted to trading on the Euro MTF market thereof) of any such special record date.
Section 2.14 Currency .
The euro is the sole currency of account and payment for all sums payable by the Issuer and the Guarantors, under or in connection with the Notes and the Note Guarantees, including damages. Any amount received or recovered in a currency other than euro, whether as a result of, or the enforcement of, a judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the Issuer, any Guarantor or otherwise by any Holder or by the Trustee, in respect of any sum expressed to be due to it from the Issuer or a Guarantor will only constitute a discharge to the Issuer or such Guarantor, as applicable, to the extent of the euro amount, which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so).
If that euro amount is less than the euro amount expressed to be due to the recipient or the Trustee under any Note, the Issuer and the Guarantors will indemnify them against any loss sustained by such recipient or the Trustee as a result. In any event, the Issuer and the Guarantors will indemnify the recipient or the Trustee on a joint or several basis against the cost of making any such purchase. For the purposes of this Section 2.14, it will be prima facie evidence of the matter stated therein for the Holder of a Note or the Trustee to certify in a manner reasonably satisfactory to the Issuer (indicating the sources of information used) the loss it Incurred in making any such purchase. These indemnities constitute a separate and independent obligation from the Issuers and the Guarantors other obligations, will give rise to a separate and independent cause of action, will apply irrespective of any waiver granted by any Holder of a Note or the Trustee (other than a waiver of the indemnities set out herein) and will continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under any Note, any Note Guarantee, or to the Trustee.
Except as otherwise specifically set forth herein, for purposes of determining compliance with any euro-denominated restriction herein, the Euro Equivalent amount for purposes hereof that is denominated in a non-euro currency shall be calculated based on the relevant currency exchange rate in effect on the date such non-euro amount is Incurred or made, as the case may be.
ARTICLE 3
REDEMPTION
Section 3.01 Notices to Trustee and Paying Agents .
If the Issuer elects to redeem the Notes pursuant to Section 5 or Section 6 of the Notes, it shall notify, on or before the publication of the notice of such redemption, the Trustee and the Paying Agent of the redemption date and the principal amount of the Notes to be redeemed and the section of the Note pursuant to which the redemption will occur.
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The Issuer shall give each notice to the Registrar and the Paying Agent provided for in this Article 3 at least 10 days, but not more than 60 days, before the redemption date unless the Registrar or the Paying Agent (as the case may be) consents to a shorter period in its sole discretion. In the case of a redemption pursuant to Section 5 of the Notes, such notice shall be accompanied by an Officers Certificate from the Issuer to the effect that such redemption will comply with the conditions herein.
In the case of a redemption provided for by Section 6 of the Notes, prior to the publication or mailing of any notice of redemption of Notes pursuant to the foregoing, the Issuer will deliver to the Registrar, Trustee and the Paying Agent (a) an Officers Certificate from the Issuer stating that it is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to its right so to redeem have been satisfied and (b) an opinion of an independent tax counsel of recognized standing to the effect that there has been such amendment or change as described in Section 6 of the Notes that would entitle the Issuer to redeem the Notes thereunder. The Registrar, Trustee and the Paying Agent will accept such Officers Certificate and opinion as sufficient existence of the satisfaction of the conditions precedent described above, in which event it will be conclusive and binding on the Holders. Any such notice by the Issuer may be canceled by the Issuer at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect.
Section 3.02 Selection of Notes To Be Redeemed or Repurchased .
If less than all of the Notes are to be redeemed at any time, the Paying Agent or the Registrar will select Notes for redemption on a pro rata basis or in accordance with the procedures of Clearstream or Euroclear (as applicable), unless otherwise required by law or applicable stock exchange or depository requirements; provided , however , that no Note of 100,000 in aggregate principal amount or less shall be redeemed in part and only Notes in integral multiples of 1,000 will be redeemed. Neither the Paying Agent nor the Registrar will be liable for any selections made by it in accordance with this Section 3.02.
If the Notes are to be redeemed in part only, the notice of redemption shall state the portion of the principal amount to be redeemed. In the case of a Definitive Registered Note, a new Definitive Registered Note in principal amount equal to the unredeemed portion of any Definitive Registered Note redeemed in part will be issued in the name of the Holder thereof upon cancellation of the original Definitive Registered Note. In the case of a Global Note, an appropriate notation will be made on such Global Note to decrease the principal amount thereof to an amount equal to the unredeemed portion thereof. Subject to the terms of the applicable redemption notice, Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of Notes called for redemption.
Section 3.03 Notice of Redemption .
Subject to Section 3.03(ii) below, not less than 10 days but not more than 60 days before a date for redemption of Notes, the Issuer shall transmit to each Holder of Notes (with a copy to the Trustee and Registrar) a notice of redemption in accordance with Section 12.01; provided , however , that any notice of a redemption provided for by Section 6 of the Notes shall not be given earlier than 90 days prior to the earliest date on which the Payor would be obligated to make a payment of Additional Amounts. In addition, for so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange and admitted to trading on the Euro MTF and the rules of the Luxembourg Stock Exchange so require, the Issuer shall publish notice of redemption in accordance with the prevailing rules of the Luxembourg Stock Exchange.
(a) The notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date and the record date;
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(ii) the redemption price and, if applicable, the appropriate calculation of such redemption price and the amount of accrued interest to the redemption date;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(v) if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed;
(vi) that, unless the Issuer defaults in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;
(vii) the Common Codes or ISINs, as applicable, if any, printed on the Notes being redeemed; and
(viii) the paragraph of the Notes or section of this Indenture pursuant to which the Notes are being redeemed; and
(ix) that no representation is made as to the correctness or accuracy of the Common Codes or ISINs, as applicable, if any, listed in such notice or printed on the Notes.
(b) At the Issuers request, the Registrar or the Paying Agent shall give the notice of redemption in the Issuers name and at the Issuers expense. In such event, the Issuer shall deliver to the Registrar and the Paying Agent, with a copy to the Trustee, on the date on which notice of redemption is to be delivered to the Holders, an Officers Certificate requesting that the Registrar or the Paying Agent give such notice and the information required and within the time periods specified by this Section 3.03.
Section 3.04 Effect of Notice of Redemption .
Once notice of redemption is delivered, Notes called for redemption cease to accrue interest, and become due and payable, on the redemption date and at the redemption price stated in the notice; provided , however , that any redemption notice given in respect of the redemption referred to in Section 5 of the Notes may, at the Issuers discretion, be subject to the satisfaction of one or more conditions precedent. Upon surrender to the Paying Agent, the Notes shall be paid at the redemption price stated in the notice, plus accrued interest, if any, to, but not including, the redemption date; provided , however , that if the redemption date is after a regular record date and on or prior to the interest payment date, the accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
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Section 3.05 Deposit of Redemption Price .
No later than 10:00 a.m. London time on each redemption date, the Issuer shall deposit with the Paying Agent (or, if the Issuer or a Restricted Subsidiary of the Issuer is the Paying Agent, shall segregate and hold in trust) money in immediately available funds sufficient to pay the redemption or purchase price of and accrued interest on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuer to the Registrar for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuer has deposited with the Paying Agent funds sufficient to pay the redemption or purchase price of, plus accrued and unpaid interest and Additional Amounts, if any, on, the Notes to be redeemed, unless the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture. For the avoidance of doubt, the Paying Agent and the Trustee shall be held harmless and have no liability with respect to payments or disbursements to be made by the Paying Agent and Trustee (i) for which payment instructions are not made or that are not otherwise deposited by the respective times set forth in this Section 3.05, and (ii) shall not be obligated to make payment until they have confirmed receipt of funds sufficient to make the relevant payment.
Section 3.06 Notes Redeemed in Part .
Subject to the terms hereof, upon surrender of a Note that is redeemed in part, the Issuer shall execute and the Trustee or an Authenticating Agent shall authenticate for the Holder (at the Issuers expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered.
ARTICLE 4
COVENANTS
Section 4.01 Limitation on Indebtedness .
(a) Midco will not, and will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness); provided , however , that Midco and any of the Restricted Subsidiaries may Incur Indebtedness if on the date of such Incurrence and after giving pro forma effect thereto (including pro forma application of the proceeds thereof), (1) the Fixed Charge Coverage Ratio for Midco and its Restricted Subsidiaries is at least 2.0 to 1.0; and (2) to the extent that Indebtedness is Senior Secured Indebtedness, the Consolidated Senior Secured Leverage Ratio would have been no greater than 5.25 to 1.0.
(b) Section 4.01(a) will not prohibit the Incurrence of the following Indebtedness ( Permitted Debt ):
(i) Indebtedness Incurred by Midco or any Restricted Subsidiary pursuant to any Credit Facility (including letters of credit or bankers acceptances issued or created under any Credit Facility), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness in a maximum aggregate principal amount at any time outstanding not exceeding (i) 1,500.0 million, plus (ii) in the case of any refinancing of any Indebtedness permitted under this Section 4.01(b)(i) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(ii) (A) Guarantees by Midco or any Restricted Subsidiary of Indebtedness of Midco or any Restricted Subsidiary, so long as the Incurrence of such Indebtedness is
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permitted to be Incurred under this Section 4.01; provided that, if the Indebtedness being guaranteed is subordinated to the Notes or a Note Guarantee, then the guarantee must be subordinated to the Notes or such Note Guarantee to the same extent as the Indebtedness being guaranteed; or
(B) without limiting Section 4.03, Indebtedness arising by reason of any Lien granted by or applicable to such Person securing Indebtedness of Midco or any Restricted Subsidiary so long as the Incurrence of such Indebtedness is permitted under the terms of this Indenture;
(iii) Indebtedness of Midco owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by Midco or any Restricted Subsidiary; provided , however , that:
(A) if the Issuer or a Guarantor is the obligor on any such Indebtedness and the obligee is a Restricted Subsidiary that is not a Guarantor, such Indebtedness is unsecured and, ((i) except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of Midco and its Restricted Subsidiaries and (ii) to the extent legally permitted (Midco and the Restricted Subsidiaries having completed all procedures required in the reasonable judgment of directors or officers of the obligee or obligor to protect such Persons from any penalty or civil or criminal liability in connection with the subordination of such Indebtedness)) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Issuer, or the applicable Note Guarantee, in the case of a Guarantor; and
(B) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being beneficially held by a Person other than Midco or a Restricted Subsidiary and any sale or other transfer of any such Indebtedness to a Person other than Midco or a Restricted Subsidiary, shall be deemed, in each case, to constitute an Incurrence of such Indebtedness not permitted by this Section 4.01(b)(iii) by Midco or such Restricted Subsidiary, as the case may be;
(iv) Indebtedness represented by (a) the Notes (other than any Additional Notes), (b) any Indebtedness (other than Indebtedness described in clauses (i) and (iii) of this Section 4.01(b)) outstanding on the Issue Date, (c) any Indebtedness of the Iglo Group outstanding on the Issue Date and (d) Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (iv) or clause (v) of this Section 4.01(b) or Incurred pursuant to Section 4.01(a) and (e) Management Advances;
(v) Indebtedness (i) outstanding on the date on which a Person becomes a Restricted Subsidiary or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) Midco or any Restricted Subsidiary or (ii) Incurred to provide all or a portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which a Person became a Restricted Subsidiary or was otherwise acquired by Midco or a Restricted Subsidiary; provided, however, that, in each of clauses (i) and (ii) of this Section 4.01(b)(v), at the time of such acquisition or other transaction (x) Midco would have been able to Incur 1.00 of additional Indebtedness pursuant to Section 4.01(a) after giving effect to the Incurrence of such Indebtedness pursuant to this Section 4.01(b)(v) or (y) the Fixed Charge Coverage Ratio for Midco and its Restricted Subsidiaries would not be less than it was immediately prior to giving effect to such acquisition or other transaction;
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(vi) Indebtedness under Currency Agreements, Interest Rate Agreements and Commodity Hedging Agreements entered into not for speculative purposes (as determined in good faith by the Board of Directors or Senior Management of Midco);
(vii) Indebtedness represented by (A) Capitalized Lease Obligations or Purchase Money Obligations or (B) Indebtedness otherwise Incurred to finance the purchase, lease, rental or cost of design, construction, installation or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, and any Indebtedness which refinances, replaces or refunds such Indebtedness, in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this Section 4.01(b)(vii) and then outstanding, will not exceed at any time outstanding the greater of (x) 25.0 million and (y) 0.75% of Total Assets;
(viii) Indebtedness in respect of (a) workers compensation claims, self-insurance obligations, performance, indemnity, surety, judgment, appeal, advance payment, customs, value added tax (VAT) or other tax or other guarantees or other similar bonds, instruments or obligations and completion guarantees and warranties provided by Midco or a Restricted Subsidiary or relating to liabilities, obligations or guarantees Incurred in the ordinary course of business or in respect of any governmental requirement, (b) letters of credit, bankers acceptances, guarantees or other similar instruments or obligations issued or relating to liabilities or obligations Incurred in the ordinary course of business or in respect of any governmental requirement; provided, however, that upon the drawing of such letters of credit or similar instruments, the obligations are reimbursed within 30 days following such drawing, (c) the financing of insurance premiums in the ordinary course of business and (d) any customary cash management, cash pooling or netting or setting off arrangements in the ordinary course of business;
(ix) Indebtedness arising from agreements providing for customary guarantees, indemnification, obligations in respect of earn-outs or other adjustments of purchase price or, in each case, similar obligations, in each case, Incurred or assumed in connection with the acquisition or disposition of any business or assets or Person or any Capital Stock of a Subsidiary (other than Guarantees of Indebtedness Incurred by any Person acquiring or disposing of such business or assets or such Subsidiary for the purpose of financing such acquisition or disposition); provided that, in the case of a disposition, the maximum liability of Midco and its Restricted Subsidiaries in respect of all such Indebtedness shall at no time exceed the gross proceeds, including the fair market value of non-cash proceeds (measured at the time received and without giving effect to any subsequent changes in value), actually received by Midco and its Restricted Subsidiaries in connection with such disposition;
(x) (A) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within 30 Business Days of Incurrence;
(B) customer deposits and advance payments received in the ordinary course of business from customers for goods or services purchased in the ordinary course of business;
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(C) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions Incurred in the ordinary course of business of Midco and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of Midco and its Restricted Subsidiaries; and
(D) Indebtedness Incurred by a Restricted Subsidiary in connection with bankers acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management of bad debt purposes, in each case Incurred or undertaken in the ordinary course of business;
(xi) Indebtedness in an aggregate outstanding principal amount which, when taken together with any Refinancing Indebtedness in respect thereof and the aggregate principal amount of all other Indebtedness Incurred pursuant to this Section 4.01(b)(xi) and then outstanding, will not exceed the greater of 100.0 million and 3.0% of Total Assets;
(xii) Indebtedness in an aggregate outstanding principal amount which, when taken together with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness Incurred pursuant to this Section 4.01(b)(xii) and then outstanding, will not exceed 100% of the Net Cash Proceeds received by Midco from the issuance or sale (other than to a Restricted Subsidiary) of its Subordinated Shareholder Funding or its Capital Stock (other than Disqualified Stock, Designated Preference Shares or an Excluded Contribution) or otherwise contributed to the equity (other than through the issuance of Disqualified Stock, Designated Preference Shares or an Excluded Contribution) of Midco, in each case, subsequent to the Issue Date; provided , however , that (i) any such Net Cash Proceeds that are so received or contributed shall be excluded for purposes of making Restricted Payments under Section 4.02(a) and Sections 4.02(b)(i), 4.02(b)(vi) and 4.02(b)(x) to the extent Midco and its Restricted Subsidiaries Incur Indebtedness in reliance thereon and (ii) any Net Cash Proceeds that are so received or contributed shall be excluded for purposes of Incurring Indebtedness pursuant to this Section 4.01(b)(xii) to the extent Midco or any of its Restricted Subsidiaries makes a Restricted Payment under Section 4.02(a) and Sections 4.02(b)(i) and 4.02(b)(vi)(3) in reliance thereon;
(xiii) Indebtedness Incurred in a Qualified Receivables Financing or arising as a result of the entry into of service and supply agreements with third party service providers in relation to the collection and settlement of outstanding invoices;
(xiv) Indebtedness under daylight borrowing facilities incurred in connection with the Transactions or any refinancing of Indebtedness (including by way of set-off or exchange) so long as any such Indebtedness is repaid within three days of the date on which such Indebtedness is Incurred;
(xv) Indebtedness consisting of local lines of credit or working capital facilities not exceeding 25 million outstanding at one time; and
(xvi) Indebtedness in respect of the leaseback of the German Property.
(c) For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this Section 4.01:
(i) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 4.01(a) and Section 4.01(b), Midco, in its sole
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discretion, will classify, and may from time to time reclassify, such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of the clauses under Section 4.01(a) or Section 4.01(b);
(ii) all Indebtedness outstanding on the Issue Date under the Senior Credit Facilities Agreement shall be deemed initially Incurred on the Issue Date under Section 4.01(b)(i) and not Section 4.01(a) or Section 4.01(b)(iv)(b) and may not be reclassified pursuant to Section 4.01(c)(i);
(iii) Guarantees of, or obligations in respect of letters of credit, bankers acceptances or other similar instruments relating to, or Liens securing, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(iv) if obligations in respect of letters of credit, bankers acceptances or other similar instruments are Incurred pursuant to any Credit Facility and are being treated as Incurred pursuant to Section 4.01(a) or Section 4.01(b)(i), Section 4.01(b)(vii), Section 4.01(b)(xi), Section 4.01(b)(xii) or Section 4.01(b)(xv) and the letters of credit, bankers acceptances or other similar instruments relate to other Indebtedness, then such other Indebtedness shall not be included;
(v) the principal amount of any Disqualified Stock of Midco or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;
(vi) Indebtedness permitted by this Section 4.01 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.01 permitting such Indebtedness; and
(vii) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined on the basis of IFRS.
(d) Accrual of interest, accrual of dividends, the accretion of accreted value, the accretion or amortization of original issue discount, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock or the reclassification of commitments or obligations not treated as Indebtedness due to a change in IFRS will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.01. The amount of any Indebtedness outstanding as of any date shall be (a) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (b) the principal amount, or liquidation preference thereof, in the case of any other Indebtedness.
(e) If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date.
(f) For purposes of determining compliance with any euro-denominated restriction on the Incurrence of Indebtedness, the Euro Equivalent of the aggregate principal amount of Indebtedness denominated in another currency shall be calculated based on the relevant currency
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exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or, at the option of Midco, first committed, in the case of Indebtedness Incurred under a revolving credit facility; provided that (i) if such Indebtedness is Incurred to refinance other Indebtedness denominated in a currency other than euro, and such refinancing would cause the applicable euro-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such euro-denominated restriction shall be deemed not to have been exceeded so long as the aggregate principal amount of such Refinancing Indebtedness does not exceed the aggregate principal amount of such Indebtedness being refinanced; (ii) the Euro Equivalent of the aggregate principal amount of any such Indebtedness outstanding on the Issue Date shall be calculated based on the relevant currency exchange rate in effect on the Issue Date; and (iii) if and for so long as any such Indebtedness is subject to a Currency Agreement with respect to the currency in which such Indebtedness is denominated covering principal and interest on such Indebtedness, the amount of such Indebtedness, if denominated in euro, will be the amount of the principal payment required to be made under such Currency Agreement and, otherwise, the Euro Equivalent of such amount plus the Euro Equivalent of any premium which is at such time due and payable but is not covered by such Currency Agreement.
(g) Notwithstanding any other provision of this Section 4.01, the maximum amount of Indebtedness that Midco or a Restricted Subsidiary may Incur pursuant to this Section 4.01 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(h) Neither the Issuer nor any Guarantor will Incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Issuer or any Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee, if any, on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuer or any Guarantor solely by virtue of being unsecured or by virtue of being secured with different collateral or by virtue of being secured on a junior priority basis or by virtue of the application of waterfall or other payment ordering provisions affecting different tranches of Indebtedness.
Section 4.02 Limitation on Restricted Payments .
(a) Midco will not, and will not permit any of its Restricted Subsidiaries, directly or indirectly, to:
(i) declare or pay any dividend or make any other payment or distribution on or in respect of Midcos or any Restricted Subsidiarys Capital Stock (including any payment in connection with any merger or consolidation involving Midco or any of its Restricted Subsidiaries) except:
(A) dividends or distributions payable in Capital Stock of Midco (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock of Midco or in Subordinated Shareholder Funding;
(B) dividends or distributions payable to Midco or a Restricted Subsidiary (and, in the case of any such Restricted Subsidiary making such dividend or distribution, to holders of its Capital Stock other than Midco or another Restricted Subsidiary on no more than a pro rata basis, measured by value); and
(C) dividends or distributions payable to any Parent in respect of Indebtedness of such Parent which is guaranteed by Midco or any Restricted Subsidiary, provided that the net proceeds of such Indebtedness have been contributed to Midco or a Restricted Subsidiary pursuant to a proceeds loan with customary subordination provisions for senior subordinated debt securities or otherwise as equity or Subordinated Shareholder Funding and that such dividends or distributions are otherwise permitted pursuant to such proceeds loan or this Section 4.02;
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(ii) purchase, redeem, retire or otherwise acquire for value any Capital Stock of Midco or any direct or indirect Parent of Midco held by Persons other than Midco or a Restricted Subsidiary (other than in exchange for Capital Stock of Midco (other than Disqualified Stock));
(iii) make any principal payment on, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Indebtedness (other than (a) any such payment, purchase, repurchase, redemption, defeasance or other acquisition or retirement or in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case, due within one year of the date of purchase, repurchase, redemption, defeasance or other acquisition or retirement and (b) any Indebtedness Incurred pursuant to Section 4.01(b)(iii);
(iv) make any payment (other than by capitalization of interest or any payment in the form of additional Subordinated Shareholder Funding) on or with respect to, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value, any Subordinated Shareholder Funding; or
(v) make any Restricted Investment in any Person,
(any such dividend, distribution, payment, purchase, redemption, repurchase, defeasance, other acquisition, retirement or Restricted Investment referred to in clauses (i) through (v) of this Section 4.02(a) are referred to herein as a Restricted Payment ), if at the time Midco or such Restricted Subsidiary makes such Restricted Payment:
(A) a Default shall have occurred and be continuing (or would result immediately thereafter therefrom);
(B) Midco is not able to Incur an additional 1.00 of Indebtedness pursuant to Section 4.01(a)(1) after giving effect, on a pro forma basis, to such Restricted Payment; or
(C) the aggregate amount of such Restricted Payment and all other Restricted Payments made subsequent to the Issue Date (and not returned or rescinded) (including Permitted Payments permitted below by clauses (v), (x), (xi), (xv) and (xviii) of Section 4.02(b), but excluding all other Restricted Payments permitted by Section 4.02(b)) would exceed the sum of (without duplication):
(1) 50% of Consolidated Net Income for the period (treated as one accounting period) from the first day of the last fiscal quarter commencing prior to the Issue Date to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which internal consolidated financial statements of Midco are available (or, in the case such Consolidated Net Income is a deficit, minus 100% of such deficit);
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(2) 100% of the aggregate Net Cash Proceeds, and the fair market value (as determined in accordance with the next succeeding paragraph) of property or assets or marketable securities, received by Midco from the issue or sale of its Capital Stock (other than Disqualified Stock or Designated Preference Shares) or Subordinated Shareholder Funding subsequent to the Issue Date or otherwise contributed to the equity (other than through the issuance of Disqualified Stock or Designated Preference Shares) of Midco subsequent to the Issue Date (other than Net Cash Proceeds or property or assets or marketable securities received from an issuance or sale of such Capital Stock to a Restricted Subsidiary or an employee stock ownership plan or trust established by Midco or any Subsidiary of Midco for the benefit of its employees to the extent funded by Midco or any Restricted Subsidiary, (y) Net Cash Proceeds or property or assets or marketable securities to the extent that any Restricted Payment has been made from such proceeds in reliance on Section 4.02(b)(vi) and (z) Excluded Contributions);
(3) 100% of the aggregate Net Cash Proceeds, and the fair market value (as determined in accordance with the next succeeding paragraph) of property or assets or marketable securities, received by Midco or any Restricted Subsidiary from the issuance or sale (other than to Midco or a Restricted Subsidiary or an employee stock ownership plan or trust established by Midco or any Subsidiary of Midco for the benefit of its employees to the extent funded by Midco or any Restricted Subsidiary) by Midco or any Restricted Subsidiary subsequent to the Issue Date of any Indebtedness that has been converted into or exchanged for Capital Stock of Midco (other than Disqualified Stock or Designated Preference Shares) or Subordinated Shareholder Funding (plus the amount of any cash, and the fair market value (as determined in accordance with the next succeeding paragraph) of property or assets or marketable securities, received by Midco or any Restricted Subsidiary upon such conversion or exchange);
(4) an amount equal to:
(a) |
100% of the aggregate Net Cash Proceeds, and the fair market value (as determined in accordance with the next succeeding paragraph) of property or assets or marketable securities, received by Midco or any Restricted Subsidiary in connection |
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with any repurchases, redemptions or other acquisitions or retirements of any such Restricted Investment, proceeds realized upon the sale or other disposition to a Person other than Midco or a Restricted Subsidiary of any such Restricted Investment, repayments of loans or advances or other transfers of assets (including by way of dividend, distribution, interest payments or returns of capital) to Midco or any Restricted Subsidiary; |
(b) | 100% of the fair market value (as determined in accordance with the next succeeding paragraph) of the Investment in an Unrestricted Subsidiary as of the date such entity becomes a Restricted Subsidiary (valued as provided in the definition of Investment ) upon the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or its merger, consolidation, amalgamation with or into, or liquidation into, Midco or a Restricted Subsidiary; and |
(c) | 100% of the fair market value (as determined in accordance with the next succeeding paragraph) of property or assets received by Midco or any Restricted Subsidiary upon the transfer or conveyance of substantially all the assets of an Unrestricted Subsidiary to Midco or a Restricted Subsidiary; |
provided , however , that no amount will be included in Consolidated Net Income for purposes of the preceding clause (i) to the extent that it is (at Midcos option) included under this clause (iv); and
(5) 100% of the aggregate Net Cash Proceeds, and the fair market value (as determined in accordance with the next succeeding paragraph) of property or assets or of marketable securities received by Midco or any of its Restricted Subsidiaries in connection with:
(a) | the sale or other disposition (other than to Midco or a Restricted Subsidiary or an employee stock ownership plan or trust established by Midco or any Subsidiary of Midco for the benefit of its employees to the extent funded by Midco or any Restricted Subsidiary) of Capital Stock of an Unrestricted Subsidiary; and |
(b) | any dividend or distribution made by an Unrestricted Subsidiary or Affiliate to Midco or a Restricted Subsidiary; |
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provided , however , that no amount will be included in Consolidated Net Income for purposes of the preceding Section 4.02(a)(C)(1) to the extent that it is (at Midcos option) included under this clause (5).
Notwithstanding the foregoing, any amounts (such amounts, the Excluded Amounts ) that would otherwise be included in the calculation of the amount available for Restricted Payments pursuant to Section 4.02(a)(C)(2) will be excluded to the extent (1) such amounts result from the receipt of Net Cash Proceeds or property or assets or marketable securities received in contemplation of, or in connection with, an event that would otherwise constitute a Change of Control pursuant to the definition thereof, (2) the purpose, or effect of, the receipt of such Net Cash Proceeds or property or assets or marketable securities was to repay Indebtedness to reduce the Consolidated Leverage Ratio so that there would be an occurrence of a Specified Change of Control Event that would not have been achieved without the receipt of such Net Cash Proceeds or property or assets or marketable securities and (3) no Change of Control Offer is made in accordance with the requirements of this Indenture.
The fair market value of property or assets other than cash covered by the preceding sentence shall be the fair market value thereof as determined in good faith by an officer of Midco, or, if such fair market value exceeds 10.0 million, by the Board of Directors.
(b) The foregoing provisions will not prohibit any of the following (collectively, Permitted Payments ):
(i) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Capital Stock, Disqualified Stock, Designated Preference Shares, Subordinated Shareholder Funding or Subordinated Indebtedness made by exchange (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares) for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of Midco (other than Disqualified Stock, Designated Preference Shares or Excluded Amounts), Subordinated Shareholder Funding or a substantially concurrent contribution to the equity (other than through the issuance of Disqualified Stock or Designated Preference Shares or through an Excluded Contribution or Excluded Amounts) of Midco; provided , however , that to the extent so applied, the Net Cash Proceeds, or fair market value (as determined in accordance with the preceding sentence) of property or assets or of marketable securities, from such sale of Capital Stock, Subordinated Shareholder Funding or such contribution will be excluded from Section 4.02(a)(C)(2);
(ii) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness made by exchange for, or out of the proceeds of the substantially concurrent sale of, Indebtedness permitted to be Incurred pursuant to Section 4.01;
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(iii) any purchase, repurchase, redemption, defeasance or other acquisition, cancellation or retirement of Preferred Stock of Midco or a Restricted Subsidiary made by exchange for or out of the proceeds of the substantially concurrent sale of Preferred Stock of Midco or a Restricted Subsidiary, as the case may be, that, in each case, is permitted to be Incurred pursuant to Section 4.01, and that in each case, constitutes Refinancing Indebtedness;
(iv) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness:
(A) (i) from Net Available Cash to the extent permitted pursuant to Section 4.05, but only if the Issuer shall have first complied with the terms described under Section 4.05 and purchased all Notes tendered pursuant to any offer to repurchase all the Notes required thereby, prior to purchasing, repurchasing, redeeming, defeasing or otherwise acquiring or retiring such Subordinated Indebtedness and (ii) at a purchase price not greater than 100% of the principal amount of such Subordinated Indebtedness plus accrued and unpaid interest;
(B) to the extent required by the agreement governing such Subordinated Indebtedness, following the occurrence of a Change of Control (or other similar event described therein as a change of control), but only (i) if the Issuer shall have first complied with the terms described under Section 4.14 and purchased all Notes tendered pursuant to the offer to repurchase all the Notes required thereby, prior to purchasing, repurchasing, redeeming, defeasing or otherwise acquiring or retiring such Subordinated Indebtedness and (ii) at a purchase price not greater than 101% of the principal amount of such Subordinated Indebtedness plus accrued and unpaid interest; or
(C) (i) consisting of Acquired Indebtedness (other than Indebtedness Incurred (A) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by Midco or a Restricted Subsidiary or (B) otherwise in connection with or contemplation of such acquisition) and (ii) at a purchase price not greater than 100% of the principal amount of such Subordinated Indebtedness plus accrued and unpaid interest and any premium required by the terms of any Acquired Indebtedness;
(v) any dividends paid within, or redemption or repurchase consummated within, 60 days after the date of declaration or the giving of the redemption or repayment notice if at such date of declaration or notice such dividend or redemption or repayment, as the case may be, would have complied with this Section 4.02;
(vi) the purchase, repurchase, redemption, defeasance or other acquisition, cancellation or retirement for value of Capital Stock of Midco, any Restricted Subsidiary or any Parent (including any options, warrants or other rights in respect thereof) and loans, advances, dividends or distributions by Midco to any Parent or Special Purpose Vehicle to permit any Parent or Special Purpose Vehicle to purchase, repurchase, redeem, defease or otherwise acquire, cancel or retire for value Capital Stock of Midco, any Restricted Subsidiary or any Parent (including any options, warrants or other rights in respect thereof), or payments to purchase, repurchase, redeem, defease or otherwise acquire, cancel or retire for value Capital Stock of Midco, any Restricted Subsidiary or any Parent (including any options, warrants or other rights in respect thereof), in each case from Management
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Investors; provided that such payments, loans, advances, dividends or distributions do not exceed an amount (net of repayments of any such loans or advances) equal to (1) 10.0 million, plus (2) 5.0 million multiplied by the number of calendar years that have commenced since the Issue Date, plus (3) the Net Cash Proceeds received by Midco or its Restricted Subsidiaries since the Issue Date (including through receipt of proceeds from the issuance or sale of its Capital Stock or Subordinated Shareholder Funding to a Parent) from, or as a contribution to the equity (in each case under this Section 4.02(b)(vi), other than through the issuance of Disqualified Stock or Designated Preference Shares) of Midco from, the issuance or sale to Management Investors of Capital Stock (including any options, warrants or other rights in respect thereof) plus (d) the Net Cash Proceeds from key man life insurance policies, to the extent such Net Cash Proceeds in clauses (2) and (3) of this Section 4.02(b)(vi) are not included in any calculation under Section 4.02(a)(C)(2) and are not Excluded Contributions or Excluded Amounts;
(vii) the declaration and payment of dividends to holders of any class or series of Disqualified Stock, or of any Preferred Stock of a Restricted Subsidiary, Incurred in accordance with the terms of Section 4.01;
(viii) purchases, repurchases, redemptions, defeasances or other acquisitions or retirements of Capital Stock deemed to occur upon the exercise of stock options, warrants or other rights in respect thereof if such Capital Stock represents a portion of the exercise price thereof;
(ix) dividends, loans, advances or distributions to any Parent or other payments by Midco or any Restricted Subsidiary in amounts equal to (without duplication):
(A) the amounts required for any Parent to pay any Parent Expenses or any Related Taxes; or
(B) amounts constituting or to be used for purposes of making payments (i) of fees and expenses Incurred in connection with the Transactions or disclosed in the Offering Memorandum or (ii) to the extent specified in clauses (ii), (iii), (v), (vii), (xi) and (xii) of Section 4.06(b);
(x) so long as no Default or Event of Default has occurred and is continuing (or would result from), the declaration and payment by Midco of, or loans, advances, dividends or distributions to any Parent to pay, dividends on the common stock or common equity interests of Midco or any Parent following a Public Offering of such common stock or common equity interests, in an amount not to exceed in any fiscal year the greater of (a) 6% of the Net Cash Proceeds received by Midco from such Public Offering or contributed to the equity (other than through the issuance of Disqualified Stock or Designated Preference Shares or through an Excluded Contribution or Excluded Amounts) of Midco or loaned as Subordinated Shareholder Funding to Midco and (b) following the Initial Public Offering, an amount equal to the greater of (i) the greater of (A) 7% of the Market Capitalization and (B) 7% of the IPO Market Capitalization; provided that after giving pro forma effect to such loans, advances, dividends or distributions, the Consolidated Leverage Ratio shall be equal to or less than 3.75 to 1.00 and (ii) the greater of (A) 5% of the Market Capitalization and (B) 5% of the IPO Market Capitalization; provided that after giving pro forma effect to such loans, advances, dividends or distributions, the Consolidated Leverage Ratio shall be equal to or less than 4.00 to 1.00;
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(xi) so long as no Default or Event of Default has occurred and is continuing (or would result from), Restricted Payments (including loans or advances) in an aggregate amount outstanding at any time not to exceed 50.0 million or, if greater, 1.5% of Total Assets;
(xii) payments by Midco, or loans, advances, dividends or distributions to any Parent to make payments, to holders of Capital Stock of Midco or any Parent in lieu of the issuance of fractional shares of such Capital Stock; provided , however , that any such payment, loan, advance, dividend or distribution shall not be for the purpose of evading any limitation of this Section 4.02 or otherwise to facilitate any dividend or other return of capital to the holders of such Capital Stock (as determined in good faith by the Board of Directors or an Officer of Midco);
(xiii) the making of any payments and any reimbursements as contemplated in the section entitled Use of Proceeds in the Offering Memorandum;
(xiv) Restricted Payments in an aggregate amount outstanding at any time not to exceed the aggregate cash amount of Excluded Contributions, or consisting of non-cash Excluded Contributions, or Investments to the extent made in exchange for or using as consideration Investments previously made under this Section 4.02(b)(xiv);
(xv) (A) the declaration and payment of dividends to holders of any class or series of Designated Preference Shares of Midco issued after the Issue Date; and (B) the declaration and payment of dividends to any Parent or any Affiliate thereof, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preference Shares of such Parent issued after the Issue Date; provided , however , that, in the case of clauses (A) and (B), the amount of all dividends declared or paid pursuant to this Section 4.02(b)(xv) shall not exceed the Net Cash Proceeds received by Midco or the aggregate amount contributed in cash to the equity (other than through the issuance of Disqualified Stock or an Excluded Contribution or an Excluded Amount or, in the case of Designated Preference Shares by a Parent or an Affiliate, the issuance of Designated Preference Shares) of Midco or loaned as Subordinated Shareholder Funding to Midco, from the issuance or sale of such Designated Preference Shares;
(xvi) dividends or other distributions of Capital Stock, Indebtedness or other securities of Unrestricted Subsidiaries;
(xvii) payment of any Receivables Fees and purchases of Receivables Assets pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and payments arising as a result of the entry into of service and supply agreements with third party service providers in relation to the collection and settlement of outstanding customer invoices;
(xviii) so long as no Default or Event of Default has occurred and is continuing (or would result therefrom), any Restricted Payment; provided that, on the date of any such Restricted Payment, the Consolidated Leverage Ratio does not exceed 3.75 to 1.0 on a pro forma basis after giving effect thereto;
(xix) advances or loans to (a) any future, present or former officer, director, employee or consultant of Midco or a Restricted Subsidiary or any Parent to pay for the purchase or other acquisition for value of Capital Stock of the Issuer or any Parent (other than Disqualified Stock or Designated Preference Shares), or any obligation under a forward
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sale agreement, deferred purchase agreement or deferred payment arrangement pursuant to any management equity plan or stock option plan or any other management or employee benefit or incentive plan or other agreement or arrangement or (b) any management equity plan or stock option plan or any other management or employee benefit or incentive plan or unit trust or the trustees of any such plan or trust to pay for the purchase or other acquisition for value of Capital Stock of Midco or any Parent (other than Disqualified Stock or Designated Preference Shares); provided however , that the total aggregate amount of Restricted Payments made under this Section 4.02(b)(xix) does not exceed 10.0 million in any calendar year (with unused amounts in any calendar year being carried over in the next two succeeding calendar years);
(xx) without duplication, any dividends, distributions or other payments to any Parent or Unrestricted Subsidiary to the extent that such dividends, distributions or payments are made in order to carry out group contributions under the tax laws or regulations of an applicable jurisdiction; and
(xxi) dividends, loans, distributions, advances or other payments by Midco or any of its Restricted Subsidiaries to or on behalf of any Parent to service the substantially concurrent payment of regularly scheduled interest amounts due under any Indebtedness designated as Senior Subordinated Notes under the Intercreditor Agreement or any Additional Intercreditor Agreement; provided that the Net Cash Proceeds of such Indebtedness have been contributed to Midco or any of its Restricted Subsidiaries and such Indebtedness has been guaranteed by, or is otherwise considered Indebtedness of, Midco or any of its Restricted Subsidiaries Incurred in accordance with Section 4.01.
(c) The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued by Midco or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment. The fair market value of any cash Restricted Payment shall be its face amount, and the fair market value of any non-cash Restricted Payment shall be determined conclusively by the Board of Directors of Midco acting in good faith.
Section 4.03 Limitation on Liens .
Midco will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create, Incur or suffer to exist any Lien upon any of its property or assets (including Capital Stock of a Restricted Subsidiary), whether owned on the Issue Date or acquired after that date, or any interest therein or any income or profits therefrom, which Lien is securing any Indebtedness (such Lien, the Initial Lien ), except (a) in the case of any property or asset that does not constitute Collateral, (1) Permitted Liens or (2) Liens on property or assets that are not Permitted Liens if the Notes and this Indenture (or a Note Guarantee in the case of Liens of a Guarantor) are directly secured equally and ratably with, or prior to, in the case of Liens with respect to Subordinated Indebtedness, the Indebtedness secured by such Initial Lien for so long as such Indebtedness is so secured, and (b) in the case of any property or asset that constitutes Collateral, Permitted Collateral Liens.
Any such Lien created in favor of the Notes pursuant to Section 4.03(a)(2) will be automatically and unconditionally released and discharged upon (i) the release and discharge of the Initial Lien to which it relates, and (ii) otherwise as set forth under Section 11.05.
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Section 4.04 Limitation on Restrictions on Distributions from Restricted Subsidiaries .
(a) Midco will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(i) pay dividends or make any other distributions in cash or otherwise on its Capital Stock or pay any Indebtedness or other obligations owed to Midco or any Restricted Subsidiary;
(ii) make any loans or advances to Midco or any Restricted Subsidiary; or
(iii) sell, lease or transfer any of its property or assets to Midco or any Restricted Subsidiary,
provided that (x) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock and (y) the subordination of (including the application of any standstill requirements to) loans or advances made to Midco or any Restricted Subsidiary to other Indebtedness Incurred by Midco or any Restricted Subsidiary shall not be deemed to constitute such an encumbrance or restriction.
(b) The provisions of Section 4.04(a) will not prohibit:
(i) any encumbrance or restriction pursuant to (a) any Credit Facility (including the Senior Finance Documents) or (b) any other agreement or instrument, in each case, in effect at or entered into on the Issue Date;
(ii) any encumbrance or restriction pursuant to an agreement or instrument of a Person or relating to any Capital Stock or Indebtedness of a Person, entered into on or before the date on which such Person was acquired by or merged, consolidated or otherwise combined with or into Midco or any Restricted Subsidiary, or was designated as a Restricted Subsidiary or on which such agreement or instrument is assumed by Midco or any Restricted Subsidiary in connection with an acquisition of assets (other than Capital Stock or Indebtedness Incurred as consideration in, or to provide all or any portion of the funds utilized to consummate, the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was acquired by Midco or was merged, consolidated or otherwise combined with or into Midco or any Restricted Subsidiary entered into or in connection with such transaction) and outstanding on such date; provided that, for the purposes of this Section 4.04(b)(ii), if another Person is the Successor Company, any Subsidiary thereof or agreement or instrument of such Person or any such Subsidiary shall be deemed acquired or assumed by Midco or any Restricted Subsidiary when such Person becomes the Successor Company;
(iii) any encumbrance or restriction:
(A) that restricts in a customary manner the subletting, assignment or
transfer of any property or asset that is subject to a lease, license or similar contract, or the assignment or transfer of any lease, license or other contract;
(B) contained in mortgages, pledges, charges or other security agreements permitted under this Indenture or securing Indebtedness of Midco or a Restricted Subsidiary permitted under this Indenture to the extent such encumbrances or restrictions restrict the transfer of the property or assets subject to such mortgages, pledges, charges or other security agreements; or
(C) pursuant to customary provisions restricting dispositions of real property interests set forth in any reciprocal easement agreements of Midco or any Restricted Subsidiary;
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(iv) any encumbrance or restriction pursuant to Purchase Money Obligations and Capitalized Lease Obligations permitted under this Indenture, in each case, that impose encumbrances or restrictions on the property so acquired or any encumbrance or restriction pursuant to a joint venture agreement that imposes restrictions on the transfer of the assets of the joint venture;
(v) any encumbrance or restriction with respect to a Restricted Subsidiary (or any of its property or assets) imposed pursuant to an agreement entered into for the direct or indirect sale or disposition to a Person of all or substantially all the Capital Stock or assets of such Restricted Subsidiary (or the property or assets that are subject to such restriction) pending the closing of such sale or disposition;
(vi) customary provisions in leases, licenses, joint venture agreements and other similar agreements and instruments entered into in the ordinary course of business;
(vii) encumbrances or restrictions arising or existing by reason of applicable law or any applicable rule, regulation or order, or required by any regulatory authority or any governmental licenses, concessions, franchises or permits, including restrictions or encumbrances on cash or deposits (including assets in escrow accounts) paid on property;
(viii) any encumbrance or restriction on cash or other deposits or net worth imposed by customers or suppliers, or as required by insurance, surety or bonding companies or indemnities, in each case, under agreements entered into in the ordinary course of business;
(ix) any encumbrance or restriction pursuant to Currency Agreements, Interest Rate Agreements or Commodity Hedging Agreements;
(x) any encumbrance or restriction arising pursuant to an agreement or instrument relating to any Indebtedness permitted to be Incurred subsequent to the Issue Date pursuant to Section 4.01 if the encumbrances and restrictions contained in any such agreement or instrument taken as a whole are not materially less favorable to the Holders than (i) the encumbrances and restrictions contained in the Senior Credit Facilities Agreement, together with the security documents associated therewith, and the Intercreditor Agreement, in each case, as in effect on the Issue Date or (ii) in comparable financings (as determined in good faith by Midco or the Issuer) or where Midco or the Issuer determines when such Indebtedness is Incurred that such encumbrances or restrictions will not adversely affect, in any material respect, Midcos or the Issuers ability to make principal or interest payments on the Notes;
(xi) any encumbrance or restriction existing by reason of any lien permitted under Section 4.03.
(xii) restrictions effected in connection with a Qualified Receivables Financing that, in the good faith determination of the Board of Directors or an Officer of Midco, are necessary or advisable to effect such Qualified Receivables Financing; or
(xiii) any agreement, encumbrance or restriction that extends, renews, refinances or replaces any of the encumbrance or restriction referred to in clauses (i) through (xii) of this Section 4.04(b) or this clause (xiii) (an Initial Agreement ) or contained in any amendment, supplement or other modification to an agreement referred to in clauses (i) through (xii) of this Section 4.04(b) or this clause (xiii); provided , however , that such encumbrances and restrictions contained in any such agreement, encumbrance or restriction are no less favorable in any material respect to the Holders taken as a whole than the encumbrances and restrictions so extended, refinanced, replaced, amended, supplemented or modified (as determined in good faith by Midco or the Issuer).
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Section 4.05 Limitation on Sales of Assets and Subsidiary Stock .
(a) Midco will not, and will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i) Midco or such Restricted Subsidiary, as the case may be, receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at least equal to the fair market value (such fair market value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by the Board of Directors of Midco, of the shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap);
(ii) in any such Asset Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition (excluding any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, other than Indebtedness) received by Midco or such Restricted Subsidiary, as the case may be, is in the form of cash, Cash Equivalents or Temporary Cash Investments; and
(iii) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by Midco or such Restricted Subsidiary, as the case may be:
(A) to the extent Midco or any Restricted Subsidiary, as the case may be, elects (or is required by the terms of any Indebtedness of a Restricted Subsidiary), (i) to prepay, repay or purchase any Senior Indebtedness of the Issuer or any Guarantor or any Indebtedness of a non-Guarantor Restricted Subsidiary or any Indebtedness that is secured by Liens on assets which do not constitute Collateral (in each case, other than Indebtedness owed to Midco or any Restricted Subsidiary) (or any Refinancing Indebtedness in respect thereof) within 365 days from the later of (1) the date of such Asset Disposition and (2) the receipt of such Net Available Cash; provided , however , that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (a), Midco or such Restricted Subsidiary will retire such Indebtedness; or (ii) to prepay, repay or purchase Notes and/or Pari Passu Indebtedness at a price of no more than 100% of the principal amount of such Pari Passu Indebtedness, and with respect to the Notes, at a price of no less than 100% of the principal amount of such Notes plus accrued and unpaid interest and Additional Amounts, if any, to the date of such prepayment, repayment or purchase; provided that the Issuer shall redeem, repay or repurchase Pari Passu Indebtedness that is Public Debt pursuant to this clause (ii) only if the Issuer makes (at such time or subsequently in compliance with this Section 4.05) an offer to the Holders of the Notes to purchase their Notes in accordance with the
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provisions set forth below for an Asset Disposition Offer for an aggregate principal amount of Notes at least equal to the proportion that (x) the total aggregate principal amount of Notes outstanding bears to (y) the sum of the total aggregate principal amount of Notes outstanding plus the total aggregate principal amount outstanding of such Pari Passu Indebtedness; or
(B) to the extent Midco or such Restricted Subsidiary elects, to make a capital expenditure or invest in or commit to invest in Additional Assets (including by means of an investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received by Midco or another Restricted Subsidiary) within 365 days from the later of (1) the date of such Asset Disposition and (2) the receipt of such Net Available Cash; provided , however , that any such reinvestment in Additional Assets made pursuant to a definitive binding agreement or a commitment approved by the Board of Directors of Midco that is executed or approved within such time will satisfy this requirement, so long as such investment is consummated within 180 days of such 365th day,
(or any combination on the foregoing); provided that, pending the final application of any such Net Available Cash in accordance with clause (A) or clause (B) of this Section 4.05(a)(iii), Midco and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net Available Cash in any manner not prohibited by this Indenture.
(b) Any Net Available Cash from Asset Dispositions that is not applied or invested or committed to be applied or invested as provided in the preceding paragraph will be deemed to constitute Excess Proceeds under this Indenture. On the 366th day after an Asset Disposition, or at such earlier date that the Issuer or Midco elects, if the aggregate amount of Excess Proceeds under this Indenture exceeds 20.0 million, the Issuer will be required within 10 Business Days to make an offer ( Asset Disposition Offer ) to all Holders of Notes issued under this Indenture and, to the extent the Issuer or Midco elects, to all holders of other outstanding Pari Passu Indebtedness, to purchase the maximum aggregate principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Disposition Offer applies that may be purchased out of the Excess Proceeds, at an offer price in respect of the Notes in an amount equal to (and, in the case of any such Pari Passu Indebtedness, an offer price of no more than) 100% of the principal amount of the Notes and 100% of the principal amount of such Pari Passu Indebtedness, as applicable (or, if issued with original issue discount, the accreted value of the Notes or such Pari Passu Indebtedness, as applicable), plus, in each case, accrued and unpaid interest, if any, to, but not including, the date of purchase, in accordance with the procedures set forth in this Indenture or the agreements governing such Pari Passu Indebtedness, as applicable, in minimum denominations of 100,000 and in integral multiples of 1,000 in excess thereof.
(c) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so validly tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, Midco may use any remaining Excess Proceeds for general corporate purposes, subject to other covenants contained in this Indenture. If the aggregate principal amount of the Notes surrendered in any Asset Disposition Offer by Holders and other Pari Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds, the Excess Proceeds shall be allocated among the Notes and Pari Passu Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Notes and Pari Passu Indebtedness. For the purposes of calculating the aggregate principal amount of any such Indebtedness not denominated in euro such Indebtedness shall be calculated by converting any such aggregate principal amounts into their Euro Equivalent determined as of a date selected by the Issuer or Midco that is within the Asset Disposition Offer Period. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero.
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(d) To the extent that any portion of Net Available Cash payable in respect of the Notes is denominated in a currency other than the currency in which the relevant Notes are denominated, the amount thereof payable in respect of such Notes shall not exceed the net amount of funds in the currency in which such Notes are denominated that is actually received by Midco upon converting such portion into such currency.
(e) The Asset Disposition Offer, in so far as it relates to the Notes, will remain open for a period of not less than 20 Business Days following its commencement (the Asset Disposition Offer Period ). No later than five Business Days after the termination of the Asset Disposition Offer Period (the Asset Disposition Purchase Date ), the Issuer will purchase the aggregate principal amount of Notes and, to the extent they elect, Pari Passu Indebtedness required to be purchased pursuant to this Section 4.05 (the Asset Disposition Offer Amount ) or, if less than the Asset Disposition Offer Amount has been so validly tendered, all Notes and Pari Passu Indebtedness validly tendered in response to the Asset Disposition Offer.
(f) On or before the Asset Disposition Purchase Date, the Issuer will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Notes and Pari Passu Indebtedness or portions of Notes and such Pari Passu Indebtedness so validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Notes and Pari Passu Indebtedness so validly tendered and not properly withdrawn in minimum denominations of 100,000 and in integral multiples of 1,000 in excess thereof.
(g) The Issuer will deliver to the Trustee an Officers Certificate stating that such Notes or portions thereof were accepted for payment by the Issuer in accordance with the terms of this Section 4.05. The Issuer or the Paying Agent (at the direction and expense of the Issuer), as the case may be, will promptly (but in any case not later than five Business Days after termination of the Asset Disposition Offer Period) mail or deliver to each tendering Holder of Notes an amount equal to the purchase price of the Notes so validly tendered and not properly withdrawn and arrange for the deduction of the appropriate amount of Notes from such Holders account with Euroclear or Clearstream (as applicable). Any Note not so accepted will be promptly mailed or delivered (or transferred by book entry) by the Issuer to the Holder thereof.
(h) For the purposes of Section 4.05(a)(ii), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness of Midco or Indebtedness of a Restricted Subsidiary (other than Subordinated Indebtedness of the Issuer or a Guarantor) and the release of Midco or such Restricted Subsidiary from, or its indemnification against, all liability on such Indebtedness in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Midco or any Restricted Subsidiary from the transferee that are converted by Midco or such Restricted Subsidiary into cash or Cash Equivalents within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that Midco and each other Restricted Subsidiary are released from, or indemnified against any liability under, any Guarantee of payment of such Indebtedness in connection with such Asset Disposition;
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(iv) consideration consisting of Indebtedness of Midco or any Restricted Subsidiary (other than Subordinated Indebtedness) received after the Issue Date from Persons who are not Midco or any Restricted Subsidiary; and
(v) any Designated Non-Cash Consideration received by Midco or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 4.05 that is at that time outstanding, not to exceed the greater of 20.0 million and 0.6% of Total Assets (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value).
The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations (or rules of any exchange on which the Notes are then listed) in connection with the repurchase of Notes pursuant to this Indenture. To the extent that the provisions of any securities laws or regulations (or exchange rules) conflict with provisions of this Section 4.05, the Issuer will comply with the applicable securities laws and regulations (or exchange rules) and will not be deemed to have breached its obligations under this Indenture by virtue of any conflict.
Section 4.06 Limitation on Affiliate Transactions .
(a) Midco will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or conduct any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of Midco (any such transaction or series of related transactions being an Affiliate Transaction ) involving aggregate value in excess of 5.0 million unless:
(i) the terms of such Affiliate Transaction taken as a whole are not materially less favorable to Midco or such Restricted Subsidiary, as the case may be, than those that could be obtained in a comparable transaction at the time of such transaction or the execution of the agreement providing for such transaction in arms length dealings with a Person who is not such an Affiliate; and
(ii) in the event such Affiliate Transaction involves an aggregate value in excess of 15.0 million, the terms of such transaction have been approved by a majority of the members of the Board of Directors.
Any Affiliate Transaction shall be deemed to have satisfied the requirements set forth in clause (ii) of this Section 4.06(a) if such Affiliate Transaction is approved by a majority of the Disinterested Directors. If there are no Disinterested Directors, any Affiliate Transaction shall be deemed to have satisfied the requirements set forth in this Section 4.06 if Midco or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Midco or such Restricted Subsidiary from a financial point of view or stating that the terms are not materially less favorable to the Issuer or its relevant Restricted Subsidiary than those that could reasonably have been obtained in a comparable transaction by Midco or such Restricted Subsidiary with an unrelated Person on an arms length basis.
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(b) The provisions of Section 4.06(a) will not apply to:
(i) any Restricted Payment permitted to be made pursuant to Section 4.02, any Permitted Payments (other than pursuant to Section 4.02(b)(ix)(B)(ii)) or any Permitted Investment (other than Permitted Investments as defined in paragraphs (1)(b), (2) and (11) of the definition thereof);
(ii) any issuance, transfer or sale of Capital Stock, options, other equity-related interests or other securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, or entering into, or maintenance of, any employment, consulting, collective bargaining or benefit plan, program, agreement or arrangement, related trust or other similar agreement and other compensation arrangements, options, warrants or other rights to purchase Capital Stock of Midco, any Restricted Subsidiary or any Parent, restricted stock plans, long-term incentive plans, stock appreciation rights plans, participation plans or similar employee benefits or consultants plans (including valuation, health, insurance, deferred compensation, severance, retirement, savings or similar plans, programs or arrangements) or indemnities provided on behalf of officers, employees, directors or consultants approved by the Board of Directors of Midco, in each case in the ordinary course of business;
(iii) any Management Advances and any waiver or transaction with respect thereto;
(iv) any transaction between or among Midco and any Restricted Subsidiary (or entity that becomes a Restricted Subsidiary as a result of such transaction) or between or among Restricted Subsidiaries;
(v) the payment of reasonable fees and reimbursement of expenses to, and customary indemnities (including under customary insurance policies) and employee benefit and pension expenses provided on behalf of, directors, officers, consultants or employees of Midco, any Restricted Subsidiary or any Parent (whether directly or indirectly and including through any Person owned or controlled by any of such directors, officers or employees);
(vi) the Transactions, the entry into and performance of obligations of Midco or any of its Restricted Subsidiaries under the terms of any transaction arising out of, and any payments pursuant to or for purposes of funding, any agreement or instrument in effect as of or on the Issue Date as these agreements and instruments may be amended, modified, supplemented, extended, renewed, replaced or refinanced from time to time in accordance with the other terms of this Section 4.06 or to the extent not more disadvantageous to the Holders in any material respect and the entry into and performance of any registration rights or other listing agreement;
(vii) the execution, delivery and performance of any Tax Sharing Agreement, or any arrangement pursuant to which Midco or any of its Restricted Subsidiaries is required or permitted to file a consolidated tax return, or the formation and maintenance of any consolidated group for tax, accounting or cash pooling or management purposes in the ordinary course of business;
(viii) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business, which are fair to Midco or the relevant Restricted Subsidiary in the reasonable determination of the Board of Directors or the Senior Management of Midco or the relevant Restricted Subsidiary, or are on terms no less favorable than those that could reasonably have been obtained at such time from an unaffiliated party;
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(ix) any transaction in the ordinary course of business between or among Midco or any Restricted Subsidiary and any Affiliate of Midco or an Associate or similar entity that would constitute an Affiliate Transaction solely because Midco or a Restricted Subsidiary or any Affiliate of Midco or a Restricted Subsidiary or any Affiliate of any Permitted Holder owns an equity interest in or otherwise controls such Affiliate, Associate or similar entity;
(x) (a) issuances or sales of Capital Stock (other than Disqualified Stock or Designated Preference Shares) of Midco or options, warrants or other rights to acquire such Capital Stock or Subordinated Shareholder Funding; provided that the interest rate and other financial terms of such Subordinated Shareholder Funding are approved by a majority of the members of the Board of Directors in their reasonable determination and (b) any amendment, waiver or other transaction with respect to any Subordinated Shareholder Funding in compliance with the other provisions of this Indenture, the Intercreditor Agreement or any Additional Intercreditor Agreement, as applicable;
(xi) without duplication in respect of payments made pursuant to Section 4.06(b)(xii), (A) payments by Midco or any Restricted Subsidiary to any Permitted Holder (whether directly or indirectly, including through any Parent) of annual management, consulting, monitoring or advisory fees and related expenses in an aggregate amount not to exceed 3.75 million per year and (B) customary payments by Midco or any Restricted Subsidiary to any Permitted Holder (whether directly or indirectly, including through any Parent) for financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with loans, capital markets transactions, acquisitions or divestitures, which payments (or agreements providing for such payments) in respect of this Section 4.06(b)(xi) are approved by a majority of the Board of Directors in good faith;
(xii) payment to any Permitted Holder of all reasonable out of pocket expenses Incurred by such Permitted Holder in connection with its direct or indirect investment in Midco and its Subsidiaries;
(xiii) any transaction effected as part of a Qualified Receivables Financing;
(xiv) any participation in a public tender or exchange offers for securities or debt instruments issued by Midco or any of its Subsidiaries that are conducted on arms length terms and provide for the same price or exchange ratio, as the case may be, to all holders accepting such tender or exchange offer;
(xv) any transactions for which Midco or a Restricted Subsidiary delivers a written letter or opinion to the Trustee from an Independent Financial Advisor stating that such transaction is (A) fair to Midco or such Restricted Subsidiary from a financial point of view or (B) on terms not less favorable that might have been obtained in a comparable transaction at such time on an arms length basis from a Person who is not an Affiliate;
(xvi) pledges of Capital Stock of Unrestricted Subsidiaries;
(xvii) the entry into of service and supply agreements with third party service providers in relation to the collection and settlement of outstanding customer invoices; and
(xviii) investments by any Permitted Holder in securities of any of the Parent Guarantors Restricted Subsidiaries so long as (A) each such investment complies with Section 4.06(a)(i), (B) the investment is being offered generally to other investors in a bona fide capital markets offering on the same or more favorable terms and (C) the investment constitutes less than 5% of the issue amount of such securities.
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Section 4.07 Impairment of Security Interest .
(a) Midco shall not, and shall not permit any Restricted Subsidiary to, take or knowingly or negligently omit to take any action that would have the result of materially impairing the security interest with respect to the Collateral (it being understood, subject to the paragraph below, that the Incurrence of Permitted Collateral Liens shall under no circumstances be deemed to materially impair the security interest with respect to the Collateral) for the benefit of the Trustee and the Holders, and Midco shall not, and shall not permit any Restricted Subsidiary to, grant to any Person other than the Security Agent, for the benefit of the Trustee and the Holders and the other beneficiaries described in the Security Documents and the Intercreditor Agreement or any Additional Intercreditor Agreement, any Lien over any of the Collateral that is prohibited by Section 4.03.
(b) Notwithstanding Section 4.07(a), (i) Midco and its Restricted Subsidiaries may Incur Permitted Collateral Liens and the Collateral may be discharged and released in accordance with this Indenture, the applicable Security Documents or the Intercreditor Agreement or any Additional Intercreditor Agreement; (ii) the applicable Security Documents may be amended from time to time to cure any ambiguity, mistake, omission, defect, manifest error or inconsistency therein; (iii) Midco and its Restricted Subsidiaries may discharge and release security interests with respect to the Collateral in connection with the implementation of a Permitted Reorganization and (iv) the security interest and the related Security Documents may be amended, extended, renewed, restated, supplemented or otherwise modified or released (followed by an immediate retaking of a Lien of at least equivalent ranking over the same assets); provided , however , that in the case of clause (i) and (iv) of this Section 4.07(b), except with respect to any discharge or release in accordance with this Indenture, the applicable Security Documents or the Intercreditor Agreement or any Additional Intercreditor Agreement, the Security Documents may not be amended, extended, renewed, restated, supplemented, released or otherwise modified or replaced, unless contemporaneously with any such action, Midco delivers to the Trustee either (1) a solvency opinion, in form and substance reasonably satisfactory to the Trustee from an Independent Financial Advisor confirming the solvency of Midco and its Subsidiaries, taken as a whole, after giving effect to any transactions related to such amendment, extension, renewal, restatement, supplement, release, modification or replacement, (2) a duly executed certificate from the Chief Financial Officer or the Board of Directors of the relevant Person, in form and substance reasonably satisfactory to the Trustee, which confirms the solvency of the person granting such security interest, after giving effect to any transactions related to such amendment, extension, renewal, restatement, supplement, release, modification or replacement, or (3) an Opinion of Counsel, in form and substance reasonably satisfactory to the Trustee, confirming that, after giving effect to any transactions related to such amendment, extension, renewal, restatement, supplement, release, modification or replacement, the Lien or Liens created under the Security Documents, so amended, extended, renewed, restated, supplemented, released, modified or replaced are valid Liens not otherwise subject to any limitation, imperfection or new hardening period, in equity or at law, that such Lien or Liens were not otherwise subject to immediately prior to such amendment, extension, renewal, restatement, supplement, release, modification or replacement.
(c) In the event that Midco complies with the requirements of this Section 4.07, the Trustee and the Security Agent shall (subject to each of the Trustee and the Security Agent being indemnified and secured to its satisfaction) consent to such amendments without the need for instructions from the Holders.
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Section 4.08 Additional Subsidiary Guarantees .
(a) Midco will not cause or permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors, directly or indirectly, to Guarantee in whole or in part any Indebtedness of the Issuer or any Guarantor under the Senior Credit Facilities Agreement (or other Indebtedness that is Incurred under Section 4.01(b)(1)) or Public Debt unless such Restricted Subsidiary becomes a Subsidiary Guarantor on the date on which such other Guarantee is Incurred and, if applicable, executes and delivers to the Trustee a supplemental indenture in the form attached to this Indenture pursuant to which such Restricted Subsidiary will provide a Subsidiary Guarantee, which Subsidiary Guarantee will be subordinated to such Restricted Subsidiarys Guarantee of such other Indebtedness.
(b) A Restricted Subsidiary that is not a Subsidiary Guarantor may become a Subsidiary Guarantor if it executes and delivers to the Trustee a supplemental indenture in the form attached to this Indenture pursuant to which such Restricted Subsidiary will provide a Subsidiary Guarantee.
(c) Each additional Subsidiary Guarantee will be limited as necessary to recognize certain defenses generally available to guarantors (including those that relate to fraudulent conveyance or transfer, voidable preference, financial assistance, corporate purpose, thin capitalization, distributable reserves, capital maintenance or similar laws, regulations or defenses affecting the rights of creditors generally) or other considerations under applicable law.
(d) Notwithstanding Sections 4.08(a), 4.08(b) and 4.08(c), Midco shall not be obligated to cause such Restricted Subsidiary to Guarantee the Notes to the extent and for so long as the Incurrence of such Subsidiary Guarantee is contrary to the Agreed Security Principles or could give rise to or result in: (i) any breach or violation of statutory limitations, corporate benefit, financial assistance, fraudulent preference, thin capitalization rules, capital maintenance rules, guidance and coordination rules or the laws rules or regulations (or analogous restriction) of any applicable jurisdiction; (ii) any risk or liability for the officers, directors or (except in the case of a Restricted Subsidiary that is a partnership) shareholders of such Restricted Subsidiary (or, in the case of a Restricted Subsidiary that is a partnership, directors or shareholders of the partners of such partnership); or (iii) any cost, expense, liability or obligation (including with respect to any Taxes) other than reasonable out-of-pocket expenses.
(e) Future Note Guarantees granted pursuant to Section 4.08 shall be released as set forth under Section 10.06. A Note Guarantee of a future Subsidiary Guarantor may also be released at the option of the Issuer if at the date of such release there is no Indebtedness of such Subsidiary Guarantor outstanding which was Incurred after the Issue Date and which could not have been Incurred in compliance with this Indenture if such Subsidiary Guarantor had not been designated as a Subsidiary Guarantor. The Trustee and the Security Agent shall each take all necessary actions, including the granting of releases or waivers under the Intercreditor Agreement or any Additional Intercreditor Agreement, to effectuate any release of a Note Guarantee in accordance with these provisions, subject to each of the Trustee and the Security Agent being indemnified and secured to its satisfaction.
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Section 4.09 Reports .
(a) So long as any Notes are outstanding, Midco will provide to the Trustee the following reports:
(i) within 150 days after the end of the Companys fiscal year beginning with the first fiscal year ending after the Issue Date and thereafter within 120 days after the end of the Companys fiscal year, annual reports containing, to the extent applicable, the following information: (A) audited consolidated balance sheets of the Company as of the end of the two most recent fiscal years and audited consolidated income statements and statements of cash flow of the Company for the two most recent fiscal years, including complete footnotes to such financial statements and the report of the independent auditors on the financial statements; (B) unaudited pro forma income statement information and balance sheet information of the Company (which, for the avoidance of doubt, shall not include the provision of a full income statement or balance sheet to the extent not reasonably available), together with explanatory footnotes, for any material acquisitions, dispositions or recapitalizations that have occurred since the beginning of the most recently completed fiscal year (unless such pro forma information has been provided in a previous report pursuant to clause (ii) or (iii) of this Section 4.09(a)); provided that such pro forma financial information will be provided only to the extent available without unreasonable expense, in which case Midco will provide, in the case of a material acquisition, acquired company financials; (C) an operating and financial review of the audited financial statements, including a discussion of the results of operations, financial condition, EBITDA, and liquidity and capital resources of the Company (including a summary description of the Senior Credit Facilities Agreement), and a discussion of material commitments and contingencies and critical accounting policies; (D) a summary description of the business and material affiliate transactions; and (e) a summary description of material recent developments;
(ii) within 60 days following the end of the first three fiscal quarters in each fiscal year of the Company (or 90 days for the quarter ended June 30, 2014), all quarterly reports of the Company containing the following information: (A) an unaudited condensed consolidated balance sheet as of the end of such quarter and unaudited condensed statements of income and cash flow for the most recent quarter year-to-date period ending on the unaudited condensed balance sheet date, and the comparable prior year periods, together with condensed footnote disclosure; (B) unaudited pro forma income statement information and balance sheet information (which, for the avoidance of doubt, shall not include the provision of a full income statement or balance sheet to the extent not reasonably available), together with explanatory footnotes, for any material acquisitions, dispositions or recapitalizations that have occurred since the beginning of the relevant quarter; provided that such pro forma financial information will be provided only to the extent available without unreasonable expense, in which case Midco will provide, in the case of a material acquisition, acquired company financials; (C) an operating and financial review of the unaudited financial statements, including a discussion of the results of operations, financial condition, EBITDA and material changes in liquidity and capital resources, and a discussion of material changes not in the ordinary course of business in commitments and contingencies since the most recent report; and (D) material recent developments; and
(iii) promptly after the occurrence of any material acquisition, disposition or restructuring or any senior executive officer changes at Midco or change in auditors of Midco or any other material event that Midco or any of its Restricted Subsidiaries announces publicly, a report containing a description of such event.
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(b) All financial statement and pro forma financial information shall be prepared in accordance with IFRS as in effect on the date of such report or financial statement (or otherwise on the basis of IFRS as then in effect) and on a consistent basis for the periods presented; provided , however , that the reports set forth in clauses (i), (ii) and (iii) in Section 4.09(a) may, (x) in the event of a change in applicable IFRS, present earlier periods on a basis that applied to such periods and (y) to the extent comparable prior period financial information of the Company does not exist, the comparable prior period financial information of Iglo Group may be provided in lieu thereof. Except as provided for above, no report need include separate financial statements for any Subsidiaries of Midco. The filing of an Annual Report on Form 20-F within the time period specified in Section 4.09(a)(i) will satisfy such provision.
(c) Notwithstanding Section 4.09(a) and Section 4.09(b), Midco may satisfy its obligations under clauses (i) and (ii) of Section 4.09(a) by delivering the corresponding consolidated annual and quarterly reports of Midco or any Parent Holdco. To the extent that material differences exist between the management, business, assets, shareholding or results of operations or financial condition of Midco and the Company or such other Parent Holdco that is the reporting entity, the annual and quarterly reports shall include an explanation and an unaudited reconciliation of such material differences.
(d) At any time that any of Midcos Subsidiaries are Unrestricted Subsidiaries and any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, constitutes a Significant Subsidiary of Midco, then the annual and quarterly financial information required by clauses (i) and (ii) of Section 4.09(a) shall include either (A) a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of Midco and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries or (B) stand-alone audited or unaudited financial statements, as the case may be, of such Unrestricted Subsidiary or Unrestricted Subsidiaries (as a group or otherwise) together with an unaudited reconciliation to the financial information of Midco and its Subsidiaries, which reconciliation shall include the following items: revenues, EBITDA, net income, cash, total assets, total debt, shareholders equity, capital expenditures and interest expense.
(e) Substantially concurrently with the issuance to the Trustee of the reports specified in Section 4.09(a), Midco shall also (a) use its commercially reasonable efforts (i) to post copies of such reports on such website as may be then maintained by Midco and its Subsidiaries or (ii) otherwise to provide substantially comparable availability of such reports (as determined by Midco in good faith) or (b) to the extent Midco determines in good faith that it cannot make such reports available in the manner described in the preceding clause (a) owing to applicable law or after the use of its commercially reasonable efforts, furnish such reports to the Holders and, upon request, prospective purchasers of the Notes. Midco will also make available copies of all reports required by Section 4.09(a), if and so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange and admitted for trading on the Euro MTF market and the rules of the Luxembourg Stock Exchange so require, at the offices of the Paying Agent in Luxembourg or, to the extent and in the manner permitted by such rules, post such reports on the official website of the Luxembourg Stock Exchange.
(f) For so long as the Notes remain outstanding and during any period during which Midco is not subject to Section 13 or 15(d) of the Exchange Act nor exempt therefrom pursuant to Rule 12g3-2(b), Midco shall furnish to the Holders and, upon their request, prospective purchasers of the Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
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Section 4.10 Suspension of Covenants on Achievement of Investment Grade Status .
If, on any date following the Issue Date, the Notes have achieved Investment Grade Status, and no Default or Event of Default has occurred and is continuing (a Suspension Event ), then, beginning on that day and continuing until such time, if any, at which the Notes cease to have Investment Grade Status (the Reversion Date ), Section 4.01, Section 4.02, Section 4.04, Section 4.05, Section 4.06, Section 4.07, Section 4.08 and Section 5.01(b)(iii) of this Indenture and, in each case, any related default provision of this Indenture, will cease to be effective and will not be applicable to Midco and its Restricted Subsidiaries. Such sections and any related default provisions will again apply according to their terms from the first day on which a Suspension Event ceases to be in effect. Such sections will not, however, be of any effect with regard to actions of Midco or any Restricted Subsidiary properly taken during the continuance of the Suspension Event, and Section 4.02 will be interpreted as if it has been in effect since the date of such indenture except that no default will be deemed to have occurred solely by reason of a Restricted Payment made while that covenant was suspended. On the Reversion Date, all Indebtedness Incurred during the continuance of the Suspension Event will be classified as having been outstanding on the Issue Date, so that it is classified as permitted under Section 4.01(b)(iv)(b). In addition, this Indenture will also permit, without causing a Default or Event of Default, Midco or any of the Restricted Subsidiaries to honor any contractual commitments or take actions in the future after any date on which the Notes cease to have Investment Grade Status as long as the contractual commitments were entered into during the Suspension Event and not in anticipation of the Notes no longer having Investment Grade Status. Midco shall notify the Trustee in writing that the conditions set forth in the first paragraph under this caption has been satisfied; provided that, no such notification shall be a condition for the suspension of the covenants described under this caption to be effective.
Section 4.11 Additional Intercreditor Agreements .
(a) At the request of the Issuer, in connection with the Incurrence by the Issuer or its Restricted Subsidiaries of any (i) Indebtedness permitted pursuant to Section 4.01(a) or Section 4.01(b)(i), Section 4.01(b)(ii), Section 4.01(b)(iv), Section 4.01(b)(v), Section 4.01(b)(vi), Section 4.01(b)(vii) (other than with respect to Capitalized Lease Obligations), Section 4.01(b)(xi) or Section 4.01(b)(xii) and (ii) any Refinancing Indebtedness in respect of Indebtedness referred to in clause (i) of this Section 4.11(a), the Issuer, the relevant Restricted Subsidiaries, the Trustee and the Security Agent shall enter into with the holders of such Indebtedness (or their duly authorized Representatives) an intercreditor agreement (an Additional Intercreditor Agreement ) or a restatement, amendment or other modification of the existing Intercreditor Agreement on substantially the same terms as the Intercreditor Agreement (or terms not materially less favorable to the Holders), including containing substantially the same terms with respect to release of Note Guarantees and priority and release of the security interests in the Collateral; provided that such Additional Intercreditor Agreement will not impose any personal obligations on the Trustee or Security Agent or, in the opinion of the Trustee or Security Agent, as applicable, adversely affect the rights, duties, liabilities or immunities of the Trustee or Security Agent under this Indenture or the Intercreditor Agreement.
(b) At the direction of the Issuer and without the consent of Holders, the Trustee and the Security Agent shall from time to time enter into one or more amendments to any Intercreditor Agreement to: (i) cure any ambiguity, omission, defect, manifest error or inconsistency of any such agreement, (ii) increase the amount or types of Indebtedness covered by any such agreement that may be Incurred by Midco or any Restricted Subsidiary that is subject to any such agreement (including with respect to any Intercreditor Agreement or Additional Intercreditor Agreement, the addition of provisions relating to new Indebtedness ranking junior in right of payment to the Notes), (iii) add Restricted Subsidiaries to the Intercreditor Agreement or an Additional Intercreditor
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Agreement, (iv) further secure the Notes (including Additional Notes), (v) make provision for equal and ratable pledges of the Collateral to secure Additional Notes, (vi) implement any Permitted Collateral Liens, (vii) amend the Intercreditor Agreement or any Additional Intercreditor Agreement in accordance with the terms thereof or (viii) make any other change to any such agreement that does not adversely affect the Holders in any material respect. In formulating its opinion on such matters, the Trustee shall be entitled to request and rely absolutely on such evidence as it deems appropriate, including an Officers Certificate and an Opinion of Counsel. The Issuer shall not otherwise direct the Trustee or the Security Agent to enter into any amendment to any Intercreditor Agreement without the consent of the Holders of the majority in aggregate principal amount of the Notes then outstanding, except as otherwise permitted below under Section 9.01 and the Issuer may only direct the Trustee and the Security Agent to enter into any amendment to the extent such amendment does not impose any personal obligations on the Trustee or Security Agent or, in the opinion of the Trustee or Security Agent, adversely affect their respective rights, duties, liabilities or immunities under this Indenture or the Intercreditor Agreement or any Additional Intercreditor Agreement.
(c) In relation to any Intercreditor Agreement or Additional Intercreditor Agreement, the Trustee (and Security Agent, if applicable) shall consent on behalf of the Holders to the payment, repayment, purchase, repurchase, defeasance, acquisition, retirement or redemption of any obligations subordinated to the Notes thereby; provided , however , that such transaction would comply with Section 4.02 and the terms of the Intercreditor Agreement and any Additional Intercreditor Agreement.
(d) Each Holder, by accepting a Note, shall be deemed to have agreed to and accepted the terms and conditions of the Intercreditor Agreement or any Additional Intercreditor Agreement (whether then entered into or entered into in the future pursuant to the provisions described herein) and to have directed the Trustee and the Security Agent to enter into any such Additional Intercreditor Agreement. A copy of the Intercreditor Agreement or any Additional Intercreditor Agreement shall be made available for inspection during normal business hours on any Business Day upon prior written request at the offices of the listing agent for the Notes.
Section 4.12 Payment of Notes .
The Issuer shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due and the Paying Agent is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture.
Section 4.13 Withholding Taxes .
(a) All payments made by the Issuer, a Successor Company or Guarantor (a Payor ) on the Notes or the Note Guarantees will be made free and clear of and without withholding or deduction for, or on account of, any Taxes unless the withholding or deduction of such Taxes is then required by law. If any deduction or withholding for, or on account of, any Taxes imposed or levied by or on behalf of:
(i) Luxembourg or any political subdivision or Governmental Authority thereof or therein having power to tax;
(ii) any jurisdiction from or through which payment on any such Note or Note Guarantee is made by the Issuer, Successor Company, Guarantor or their agents, or any political subdivision or Governmental Authority thereof or therein having the power to tax; or
(iii) any other jurisdiction in which the Payor is incorporated, engaged in business, organized or otherwise considered to be a resident for tax purposes, or any political subdivision or Governmental Authority thereof or therein having the power to tax (each of clause (1), (2) and (3), a Relevant Taxing Jurisdiction ),
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will at any time be required from any payments made by or on behalf of a Payor with respect to any Note or Note Guarantee, including payments of principal, redemption price, premium, if any, or interest, the Payor will pay (together with such payments) such additional amounts (the Additional Amounts ) as may be necessary in order that the net amounts received in respect of such payments after such withholding or deduction (including any such deduction or withholding from such Additional Amounts), will equal the amounts which would have been received in respect of such payments on any such Note or Note Guarantee in the absence of such withholding or deduction; provided , however , that no such Additional Amounts will be payable for or on account of:
(A) | any Taxes that would not have been so imposed but for the existence of any actual or deemed present or former connection between the relevant Holder or the beneficial owner of a Note (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over the relevant Holder or beneficial owner, if the relevant Holder or beneficial owner is an estate, nominee, trust, partnership, limited liability company or corporation) and the Relevant Taxing Jurisdiction (including being a citizen or resident or national of, or carrying on a business or maintaining a permanent establishment in, or being physically present in, the Relevant Taxing Jurisdiction) but excluding, in each case, any connection arising solely from the acquisition, ownership or holding of such Note or Note Guarantee or the enforcement or receipt of any payment in respect thereof; |
(B) | any Taxes that are imposed or withheld by reason of the failure by the Holder or the beneficial owner of the Note (to the extent it is legally entitled to do so) to comply with a written request of the Payor addressed to the Holder, after reasonable notice, to provide certification, information, documents or other evidence concerning the nationality, residence, identity or connection with the Relevant Taxing Jurisdiction of the Holder or such beneficial owner or to make any declaration or similar claim or satisfy any other reporting requirement relating to such matters, in each case, that is required by applicable law, treaty, regulation or administrative practice of the Relevant Taxing Jurisdiction as a precondition to exemption from all or part of such Taxes; |
(C) | any Taxes that are payable otherwise than by deduction or withholding from a payment of the principal of, premium, if any, or interest, if any, on the Notes or any Note Guarantee; |
(D) | any estate, inheritance, gift, value added, sales, transfer, personal property or similar Tax |
(E) |
any Taxes that are required to be deducted or withheld on a payment to an individual and that are required to be made pursuant to Council Directive 2003/48/EC or any other Directive implementing the conclusions of the |
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ECOFIN Council meeting of November 26-27, 2000 on taxation of savings income or any law implementing or complying with, or introduced in order to conform to such Directives or pursuant to the Luxembourg law of December 23, 2005 introducing a withholding tax on certain savings income paid to Luxembourg; |
(F) | any Taxes imposed pursuant to or in connection with Sections 1471 through 1474 of the Code, the Treasury regulations thereunder or any similar law or regulations adopted pursuant to an intergovernmental agreement between a non-U.S. jurisdiction and the United States with respect to the foregoing; |
(G) | any Taxes imposed in connection with a Note presented for payment (where presentation is permitted or required for payment) by or on behalf of a Holder or beneficial owner who would have been able to avoid such Tax by presenting the relevant Note to, or otherwise accepting payment from, another paying agent; |
(H) | any combination of clauses (A) through (G) of this Section 4.13(a). |
(b) Such Additional Amounts will also not be payable (x) if the payment could have been made without such deduction or withholding if the beneficiary of the payment had presented the Note for payment (where presentation is permitted or required for payment) within 30 days after the relevant payment was first made available for payment to the Holder (except to the extent that the Holder would have been entitled to Additional Amounts had the Notes been presented on the last day of such 30-day period) or (y) where, had the beneficial owner of the Note been the Holder, such beneficial owner would not have been entitled to payment of Additional Amounts by reason of any of clauses (A) to (H) of Section 4.13(a).
(c) No Additional Amounts shall be paid with respect to any payment to any Holder who is a fiduciary or a partnership or other than the sole beneficial owner of such Notes to the extent that the beneficiary or settlor with respect to such fiduciary, the member of such partnership or the beneficial owner of such Notes would not have been entitled to Additional Amounts had such beneficiary, settlor, member or beneficial owner held such Notes directly.
(d) The Payor will (i) make any required withholding or deduction and (ii) remit the full amount deducted or withheld to the relevant taxing authority in accordance with applicable law. The Payor will use all reasonable efforts to obtain certified copies of tax receipts evidencing the payment of any Taxes so deducted or withheld from each Relevant Taxing Jurisdiction imposing such Taxes, in such form as provided in the ordinary course by the Relevant Taxing Jurisdiction and as is reasonably available to the Issuer and will provide such certified copies to the Trustee, if such certified copies are available. Such copies shall be made available to the Holders upon request and will be made available at the offices of the Luxembourg Paying Agent if the Notes are then admitted for trading on the Euro MTF market.
(e) If any Payor becomes aware that it will be obligated to pay Additional Amounts under or with respect to any payment made on any Note or Note Guarantee, at least 30 days prior to the date of such payment, the Payor will deliver to the Trustee an Officers Certificate stating the fact that Additional Amounts will be payable and the amount so payable and such other information necessary to enable the Paying Agent to pay Additional Amounts to Holders on the relevant payment date (unless such awareness of an obligation to pay Additional Amounts arises less than 45 days prior to the relevant payment date, in which case the Payor may deliver such Officers Certificate as promptly as practicable after the date that is 30 days prior to the payment date). The Trustee will be entitled to rely solely on such Officers Certificate as conclusive proof that such payments are necessary.
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(f) Wherever in this Indenture or the Notes Guarantees there is mentioned, in any context:
(i) the payment of principal;
(ii) purchase or redemption prices in connection with a purchase or redemption of Notes;
(iii) interest; or
(iv) any other amount payable on or with respect to any of the Notes,
such reference shall be deemed to include payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
(g) The Payor will pay any present or future stamp, court or documentary taxes, or any other property or similar taxes, charges or levies that arise in any jurisdiction from the execution, delivery, issuance, registration or enforcement of any Notes, any Note Guarantee, this Indenture, the Security Documents or any other document or instrument in relation thereto (other than a transfer of the Notes other than the initial resale by the initial purchasers) or the receipt of any payments with respect thereto (limited, solely in the case of taxes attributable to the receipt of any payments with respect thereto, to any such taxes that are not excluded under clauses (A) through (B) and (D) through (G) or any combination thereof) excluding any such taxes, charges or levies imposed by any jurisdiction that is not a Relevant Taxing Jurisdiction, and the Payor agrees to indemnify the Holders for any such taxes paid by such Holders. The foregoing obligations of this Section 4.13 will survive any termination, defeasance or discharge of this Indenture and will apply mutatis mutandis to any jurisdiction in which any successor to the Payor is organized, engaged in business or from or through which payment on any such Note or Note Guarantee is made by or on behalf of any Payor or any political subdivision or taxing authority or agency thereof or therein.
Section 4.14 Change of Control .
(a) If a Change of Control occurs, subject to this Section 4.14, each Holder will have the right to require the Issuer to repurchase all or part (equal to 100,000 aggregate principal amount and integral multiples of 1,000 in excess thereof for the Notes) of such Holders Notes at a purchase price in cash equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided , however , that the Issuer shall not be obliged to repurchase Notes as described under this Section 4.14, in the event and to the extent that it has unconditionally exercised its right to redeem all of the Notes as described under Section 5 of the Notes, and that all conditions to such redemption have been satisfied or waived.
(b) Unless the Issuer has unconditionally exercised its right to redeem all the Notes as described under Section 5 of the Notes and all conditions to such redemption have been satisfied or waived, no later than the date that is 60 days after any Change of Control, the Issuer will mail a notice (the Change of Control Offer ) to each Holder of any such Notes, with a copy to the Trustee:
(i) stating that a Change of Control has occurred or may occur and that such Holder has the right to require the Issuer to purchase such Holders Notes at a purchase
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price in cash equal to 101% of the principal amount of such Notes plus accrued and unpaid interest, to, but not including, the date of purchase (subject to the right of Holders of record on a record date to receive interest on the relevant interest payment date) (the Change of Control Payment );
(ii) stating the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the Change of Control Payment Date );
(iii) describing the circumstances and relevant facts regarding the transaction or transactions that constitute the Change of Control;
(iv) describing the procedures determined by the Issuer, consistent with this Indenture, that a Holder must follow in order to have its Notes repurchased; and
(v) if such notice is mailed prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control.
(c) On the Change of Control Payment Date, if the Change of Control shall have occurred, the Issuer will, to the extent lawful:
(i) accept for payment all Notes properly tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes so tendered;
(iii) deliver or cause to be delivered to the Trustee an Officers Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Issuer in the Change of Control Offer;
(iv) in the case of Global Notes, deliver, or cause to be delivered, to the Paying Agent the Global Notes in order to reflect thereon the portion of such Notes or portions thereof that have been tendered to and purchased by the Issuer; and
(v) in the case of Definitive Registered Notes, deliver, or cause to be delivered, to the relevant Registrar for cancellation all Definitive Registered Notes accepted for purchase by the Issuer.
(d) If any Definitive Registered Notes have been issued, the relevant Paying Agent will promptly mail to each Holder of Definitive Registered Notes so tendered the Change of Control Payment for such Notes, and the Trustee (or an Authenticating Agent) will, at the cost of the Issuer, promptly authenticate (or cause to be authenticated) and mail (or cause to be transferred by book entry) to each Holder of Definitive Registered Notes a new Note equal in aggregate principal amount to the unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in an aggregate principal amount that is at least 100,000 and in integral multiples of 1,000 in excess thereof.
(e) If and for so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange and admitted for trading on the Euro MTF market and the rules of the Luxembourg Stock Exchange so require, the Issuer will publish notices relating to the Change of Control Offer as soon as reasonably practicable after the Change of Control Payment Date in a leading newspaper of
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general circulation in Luxembourg (which is expected to be the Luxemburger Wort ) or, to the extent and in the manner permitted by such rules, post such notices on the official website of the Luxembourg Stock Exchange ( www.bourse.lu ).
(f) The Issuer will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
(g) The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations (or rules of any exchange on which the Notes are then listed) in connection with the repurchase of Notes pursuant to this Section 4.14. To the extent that the provisions of any securities laws or regulations (or exchange rules) conflict with provisions of this Indenture, the Issuer will comply with the applicable securities laws and regulations (or exchange rules) and will not be deemed to have breached its obligations, or require a repurchase of the Notes, under the Change of Control provisions of this Indenture by virtue of the conflict.
Section 4.15 Compliance Certificate .
The Issuer will deliver to the Trustee no later than the date on which the Company is required to deliver annual reports pursuant to Section 4.09, an Officers Certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Issuer is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any events of which it is aware which would constitute certain Defaults, their status and what action the Issuer is taking or proposes to take in respect thereof.
Section 4.16 Limitation on Issuer Activities .
(a) The Issuer will not engage in any business activity except any activity (i) relating to the Incurrence of Indebtedness represented by the Notes, any Additional Notes or as permitted by this Indenture (including any Indebtedness Incurred in the future) and making Investments pursuant to the Notes Proceeds Loan or any future proceeds loan with the proceeds from such Incurrence of Indebtedness (including the lending of the proceeds from the Incurrence of such Indebtedness and the receipt of interest, principal and other payments thereon), (ii) undertaken with the purpose of, related to, or otherwise incidental or resulting from the Incurrence of such Indebtedness or the making of such Investments or in connection with fulfilling its obligations thereunder, including pursuant to the Security Documents, the Notes Proceeds Loan, the Intercreditor Agreement, and Additional Intercreditor Agreement, future agreements similar to any of the foregoing, and any repurchase, purchase, repayment, redemption, refinancing or prepayment of, or any consent, amendment, supplement or modification with respect to, or similar actions with respect to, such Indebtedness and Investments, (iii) undertaken with the purpose of, related to or otherwise incidental or resulting from the establishment and maintenance of the Issuers corporate existence, (iv) other activities that are not material in nature (as compared to the consolidated business activities of Midco and its Restricted Subsidiaries taken as a whole) or otherwise could not reasonably be expected to result in an Event of Default pursuant to clause (v) of the definition thereof or (v) reasonably related to the foregoing.
(b) The Issuer shall not (i) issue any Capital Stock (other than to Midco or any Wholly Owned Subsidiary and the issuance of directors qualifying shares and other nominal amounts of Capital Stock that are required to be held by other Persons under applicable law) or (ii) undertake
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any transaction that will require the Issuer to register as an investment company or an entity controlled by an investment company as defined in the US Investment Company Act of 1940, as amended and the rules and regulations thereunder.
(c) The Issuer and Midco will not, and Midco will not permit any of its Restricted Subsidiaries or any other Person that is an obligor under the Notes Proceeds Loan, to (i) sell, dispose, prepay, repay, repurchase, redeem or otherwise acquire, reduce or retire any amounts outstanding under the Notes Proceeds Loan or (ii) amend, modify, supplement or waive any rights under the Notes Proceeds Loan in a manner that would adversely affect the rights in any material respect of the Issuer or its creditors with respect to the Notes Proceeds Loan, except in the case of clause (i) or (ii), (A) in connection with a redemption, repayment, purchase, refinancing, prepayment, repurchase, acquisition, reduction, retirement or similar action with respect to outstanding Notes in a manner not prohibited by this Indenture, (B) as provided for in the Security Documents, future agreements similar to any of the foregoing or as provided under Section 11.05 or (C) in connection with, pursuant to or to reflect any amendment, modification, supplement or waiver under the Notes or this Indenture.
Section 4.17 Payments for Consent .
(a) Midco will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid and is paid to all holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.
(b) Notwithstanding Section 4.17(a), Midco and its Restricted Subsidiaries shall be permitted, in any offer or payment of consideration for, or as an inducement to, any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes, to exclude holders of the Notes in any jurisdiction where (i) the solicitation of such consent, waiver or amendment, including in connection with an exchange offer or offer to purchase for cash, or (ii) the payment of the consideration therefor (A) would require Midco or any of its Restricted Subsidiaries to file a registration statement, prospectus or similar document under any applicable securities laws (including, but not limited to, the United States federal securities laws and the laws of the European Union or its member states), which Midco in its sole discretion determines (acting in good faith) would be materially burdensome; or (B) such solicitation would otherwise not be permitted under applicable law in such jurisdiction or with respect to such category of holders of Notes.
Section 4.19 Listing .
The Issuer will use its reasonable best efforts to (i) obtain the listing of the Notes on the Official List of the Luxembourg Stock Exchange and the admission to trading of the Notes on the Euro MTF Market of the Luxembourg Stock Exchange as promptly as practicable after the Issue Date and (ii) maintain such listing and admission to trading for so long as such Notes are outstanding; provided that if the Issuer is unable to obtain such listing, or if maintenance of such listing becomes unduly onerous, it will, prior to the delisting of the Notes from the Official List of the Luxembourg Stock Exchange, use its reasonable best efforts to obtain and maintain a listing of such Notes on another recognised stock exchange as defined in section 1005 of the Income Tax Act 2007 of the United Kingdom.
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ARTICLE 5
SUCCESSOR COMPANY
Section 5.01 Merger and Consolidation .
(a) Parent Guarantor . The Parent Guarantor will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the Successor Company ) will be a Person organized and existing under the laws of any member state of the European Union, the United Kingdom or the United States of America, any State of the United States or the District of Columbia, Canada or any province of Canada, Norway or Switzerland and the Successor Company (if not the Parent Guarantor) expressly assumes all the obligations of the Parent Guarantor under this Indenture, the Parent Guarantee, the Intercreditor Agreement, any Additional Intercreditor Agreement and the Security Documents, as applicable; and
(ii) the Parent Guarantor shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each to the effect that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture and an Opinion of Counsel to the effect that such supplemental indenture (if any) has been duly authorized, executed and delivered and is a legal, valid and binding agreement enforceable against the Successor Company (in each case, in form and substance reasonably satisfactory to the Trustee), provided that in giving an Opinion of Counsel, counsel may rely on an Officers Certificate as to any matters of fact, including as to satisfaction of clause Section 5.01(a)(i).
Any Indebtedness that becomes an obligation of Midco or any Restricted Subsidiary (or that is deemed to be Incurred by any Restricted Subsidiary that becomes a Restricted Subsidiary) as a result of any such transaction undertaken in compliance with this Section 5.01, and any Refinancing Indebtedness with respect thereto, shall be deemed to have been Incurred in compliance with Section 4.01.
For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer, or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Parent Guarantor, which properties and assets, if held by the Parent Guarantor instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Parent Guarantor on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Parent Guarantor.
The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Parent Guarantor under this Indenture but in the case of a lease of all or substantially all its assets, the predecessor company will not be released from its obligations under such indenture or the Parent Guarantee.
The Parent Guarantor may consolidate or otherwise combine with or merge into an Affiliate incorporated or organized for the purpose of changing the legal domicile of the Parent Guarantor, reincorporating the Parent Guarantor in another jurisdiction, or changing the legal form of the Parent Guarantor.
Section 5.01(a) will not apply to the creation of a new subsidiary of the Parent Guarantor that becomes a parent of one or more of the Parent Guarantors Subsidiaries.
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(b) The Issuer . The Issuer will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless:
(i) the Successor Company will be a Person organized and existing under the laws of any member state of the European Union, the United Kingdom or the United States of America, any State of the United States or the District of Columbia, Canada or any province of Canada, the Bailiwick of Jersey, Norway or Switzerland and the Successor Company (if not the Issuer) will expressly assume (A) by supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Issuer under the Notes and this Indenture and (B) all obligations of the Issuer under the Intercreditor Agreement, any Additional Intercreditor Agreement and the Security Documents, as applicable;
(ii) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any Subsidiary of the Successor Company as a result of such transaction as having been Incurred by the Successor Company or such Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, either (A) the Successor Company would be able to Incur at least an additional 1.00 of Indebtedness pursuant to Section 4.01(a) or (B) the Fixed Charge Coverage Ratio for Midco and its Restricted Subsidiaries would not be less than it was immediately prior to giving effect to such transaction; and
(iv) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each to the effect that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture and an Opinion of Counsel to the effect that such supplemental indenture (if any) has been duly authorized, executed and delivered and is a legal, valid and binding agreement enforceable against the Successor Company (in each case, in form and substance reasonably satisfactory to the Trustee), provided that in giving an Opinion of Counsel, counsel may rely on an Officers Certificate as to any matters of fact, including as to satisfaction of Section 5.01(b)(i) and Section 5.01(b)(ii).
Any Indebtedness that becomes an obligation of Midco or any Restricted Subsidiary (or that is deemed to be Incurred by any Restricted Subsidiary that becomes a Restricted Subsidiary) as a result of any such transaction undertaken in compliance with this Section 5.01, and any Refinancing Indebtedness with respect thereto, shall be deemed to have been Incurred in compliance Section 4.01.
Notwithstanding the preceding clauses (ii), (iii) and (iv) (which do not apply to the transactions referred to in this sentence), the Issuer may consolidate or otherwise combine with or merge into an Affiliate incorporated or organized for the purpose of changing the legal domicile of the Issuer, reincorporating the Issuer in another jurisdiction, or changing the legal form of the Issuer.
(c) Subsidiary Guarantor . No Subsidiary Guarantor:
(i) consolidate with or merge with or into any Person;
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(ii) sell, convey, transfer or dispose of, all or substantially all its assets as an entirety or substantially as an entirety, in one transaction or a series of related transactions, to any Person; or
(iii) permit any Person to merge with or into such Subsidiary Guarantor, unless:
(A) the other Person is the Issuer, the Parent Guarantor, a Subsidiary Guarantor or any Restricted Subsidiary that becomes a Subsidiary Guarantor concurrently with the transaction; or
(B) (1) either (x) a Guarantor is the continuing Person or (y) the resulting, surviving or transferee Person expressly assumes all of the obligations of the Subsidiary Guarantor under this Indenture, its Subsidiary Guarantee, the Intercreditor Agreement, and Additional Intercreditor Agreement and the Security Documents, as applicable; and (2) immediately after giving effect to the transaction, no Default has occurred and is continuing; or
(C) the transaction constitutes a sale or other disposition (including by way of consolidation or merger) of the Subsidiary Guarantor or the sale or disposition of all or substantially all the assets of the Subsidiary Guarantor (in each case other than to Midco or a Restricted Subsidiary) otherwise permitted by this Indenture,
provided however , that the prohibition in clauses (i), (ii) and (iii) above shall not apply to the extent that compliance therewith could give rise to or result in (x) any breach or violation of statutory limitations, corporate benefit, financial assistance, fraudulent preference, thin capitalization rules, capital maintenance rules, guidance and coordination rules or the laws rules or regulations (or analogous restriction) of any applicable jurisdiction, (y) any risk or liability for the officers, directors or (except in the case of a Restricted Subsidiary that is a partnership) shareholders of such Restricted Subsidiary (or, in the case of a Restricted Subsidiary that is a partnership, directors or shareholders of the partners of such partnership) or (z) any cost, expense, liability or obligation (including with respect to any Taxes) other than reasonable out of pocket expenses.
Notwithstanding the preceding clause B(2) and the provisions described under Section 5.01(a) and Section 5.01(b) (which do not apply to transactions referred to in this sentence), (A) any Restricted Subsidiary (other than the Issuer) may consolidate or otherwise combine with, merge into or transfer all or part of its properties and assets to the Issuer or a Guarantor and (B) any Subsidiary Guarantor may consolidate or otherwise combine with, merge into or transfer all or part of its properties and assets to the Issuer or any other Subsidiary Guarantor. Notwithstanding the preceding clause B(2) (which does not apply to the transactions referred to in this sentence), a Subsidiary Guarantor may consolidate or otherwise combine with or merge into an Affiliate incorporated or organized for the purpose of changing the legal domicile of the Subsidiary Guarantor reincorporating the Subsidiary Guarantor in another jurisdiction, or changing the legal form of the Subsidiary Guarantor.
Any Indebtedness that becomes an obligation of Midco or any Restricted Subsidiary (or that is deemed to be Incurred by any Restricted Subsidiary that becomes a Restricted Subsidiary) as a result of any such transaction undertaken in compliance with this Section 5.01, and any Refinancing Indebtedness with respect thereto, shall be deemed to have been Incurred in compliance with Section 4.01.
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default .
Each of the following is an Event of Default under this Indenture:
(a) default in any payment of interest, or Additional Amounts, if any, on any Note when due and payable, continued for 30 days;
(b) default in the payment of the principal amount of or premium, if any, on any Note issued under this Indenture when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;
(c) failure by Midco or any of its Restricted Subsidiaries to comply for 60 days after written notice by the Trustee on behalf of the Holders or by the Holders of at least 25% in aggregate principal amount of the outstanding Notes with its other agreements contained in this Indenture or the Notes (in each case, other than a default in performance, or breach of, a covenant or agreement specifically addressed in clauses (a) and (b) of this Section 6.01;
(d) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Midco or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by Midco or any of its Restricted Subsidiaries) other than Indebtedness owed to Midco or a Restricted Subsidiary, whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default:
(i) is caused by a failure to pay principal at stated maturity on such Indebtedness, immediately upon the expiration of the grace period provided in such Indebtedness ( payment default ); or
(ii) results in the acceleration of such Indebtedness prior to its maturity (the cross acceleration provision ),
and, in each case, the aggregate principal amount of any such Indebtedness, together with the aggregate principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates 25.0 million or more;
(e) Midco or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:
(i) commences proceedings to be adjudicated bankrupt or insolvent;
(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;
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(iii) other than on a solvent basis, consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;
(iv) other than on a solvent basis, makes a general assignment for the benefit of its creditors; or
(v) admits in writing that it is unable to pay its debts as they become due;
(f) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against Midco or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary, in a proceeding in which Midco or any such Restricted Subsidiaries, that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;
(ii) other than on a solvent basis, appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of Midco or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary, or for all or substantially all of the property of Midco or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary; or
(iii) other than on a solvent basis, orders the liquidation of Midco or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary and the order or decree remains unstayed and in effect for 60 consecutive days;
(g) failure by the Issuer, Midco or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments aggregating in excess of 25.0 million (exclusive of any amounts that a solvent insurance company has acknowledged liability for), which judgments are not paid, discharged or stayed for a period of 60 days after the judgment becomes final (the judgment default provision );
(h) any security interest shall, at any time, cease to be in full force and effect (other than in accordance with the terms of the relevant Security Document, the Intercreditor Agreement, any Additional Intercreditor Agreement and this Indenture) with respect to Collateral having a fair market value in excess of 10.0 million for any reason other than the satisfaction in full of all obligations under this Indenture or the release or amendment of any such security interest in accordance with the terms of this Indenture, the Intercreditor Agreement, any Additional Intercreditor Agreement or the Security Document or any such security interest created thereunder shall be declared invalid or unenforceable or Iglo Foods Holdco Limited, the Issuer, Midco or any Restricted Subsidiary shall assert in writing that any such security interest is invalid or unenforceable and any such Default continues for 10 days; and
(i) the Parent Guarantee or any Subsidiary Guarantee of a Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of such Note Guarantee or this Indenture) or is declared invalid or unenforceable in a judicial proceeding or any Guarantor denies or disaffirms in writing its obligations under its Note Guarantee and any such Default continues for 10 days.
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Notwithstanding the foregoing, a default under clause (c), (d) or (g) of this Section 6.01 will not constitute an Event of Default until the Trustee or the Holders of 25% in aggregate principal amount of the outstanding Notes notify the Issuer of the default and, with respect to clauses (c), (d) and (g) of this Section 6.01, the Issuer does not cure such default within the time specified in clause (c), (d) or (g) of this Section 6.01, as applicable, after receipt of such notice.
Section 6.02 Remedies Upon Event of Default .
Holders of the Notes may not enforce this Indenture or the Notes except as provided in this Indenture and may not enforce the Security Documents except as provided in such Security Documents and the Intercreditor Agreement or any Additional Intercreditor Agreement.
Notwithstanding anything to the contrary herein, (i) if a Default occurs for a failure to deliver a required certificate in connection with another default (an Initial Default ) then at the time such Initial Default is cured, such Default for a failure to report or deliver a required certificate in connection with the Initial Default will also be cured without any further action and (ii) any Default or Event of Default for the failure to comply with the time periods prescribed in Section 4.10, or otherwise to deliver any notice or certificate pursuant to any other provision of this Indenture shall be deemed to be cured upon the delivery of any such report required by such covenant or notice or certificate, as applicable, even though such delivery is not within the prescribed period specified in this Indenture.
Section 6.03 Acceleration .
(a) If an Event of Default (other than an Event of Default with respect to the Issuer or Midco described in Section 6.01(e) or Section 6.01(f) above) occurs and is continuing, the Trustee by notice to the Issuer or the Holders of at least 25% in aggregate principal amount of the outstanding Notes by written notice to the Issuer and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, including Additional Amounts, if any, on all the Notes under this Indenture to be due and payable. Upon such a declaration, such principal, premium and accrued and unpaid interest, including Additional Amounts, if any, will be due and payable immediately. In the event of a declaration of acceleration of the Notes because an Event of Default described in Section 6.01(d) has occurred and is continuing, the declaration of acceleration of the Notes shall be automatically annulled if the event of default or payment default triggering such Event of Default pursuant to Section 6.01(d) shall be remedied or cured, or waived by the holders of the Indebtedness, or the Indebtedness that gave rise to such Event of Default shall have been discharged in full, within 30 days after the declaration of acceleration with respect thereto and if (1) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium or interest, including Additional Amounts, if any, on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.
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(b) If an Event of Default with respect to the Issuer or Midco described in Section 6.01(e) or Section 6.01(f) above occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest, including Additional Amounts, if any, on all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.
Section 6.04 Other Remedies .
Subject to Articles 11 and 12 and to the duties of the Trustee as provided for in Article 7, if an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law.
To the extent permitted by the Intercreditor Agreement, the Trustee may direct the Security Agent (subject to being indemnified and/or secured to its satisfaction in accordance with the Intercreditor Agreement) to take enforcement action with respect to the Collateral if any amount is declared or becomes due and payable pursuant to Section 6.02 (but not otherwise).
Section 6.05 Waiver of Past Defaults .
The Holders of a majority in aggregate principal amount of the outstanding Notes under this Indenture by notice to the Trustee may, on behalf of all Holders, waive all past or existing Defaults or Events of Default (except with respect to nonpayment of principal, premium or interest, or Additional Amounts, if any) and rescind any such acceleration with respect to such Notes and its consequences if rescission would not conflict with any judgment or decree of a court of competent jurisdiction.
Section 6.06 Control by Majority .
The Holders of a majority in aggregate principal amount of the Notes then outstanding may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is materially prejudicial to the rights of other Holders or would involve the Trustee in personal liability; provided , however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.
Section 6.07 Limitation on Suits .
(a) Except to enforce the right to receive payment of principal or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Notes unless:
(i) such Holder has previously given the Trustee written notice that an Event of Default is continuing;
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(ii) the Holders of at least 25% in aggregate principal amount of the outstanding Notes have requested in writing the Trustee to pursue the remedy;
(iii) such Holders have offered in writing the Trustee security and/or indemnity against any loss, liability or expense;
(iv) the Trustee has not complied with such request within 60 days after the receipt of the written request and the offer of security and/or indemnity; and
(v) the Holders of a majority in aggregate principal amount of the outstanding Notes have not given the Trustee a written direction that, in the opinion of the Trustee, is inconsistent with such request within such 60-day period.
Section 6.08 Rights of Holders to Receive Payment .
Subject to Section 9.02, the right of any Holder to receive payment of principal of and interest on the Notes held by such Holder, on or after the respective due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
Section 6.09 Collection Suit by Trustee .
If an Event of Default specified in Section 6.01(a) or Section 6.01(b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any other obligor on the Notes for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.06.
Section 6.10 Trustee May File Proofs of Claim .
Subject to the Intercreditor Agreement, the Trustee may file such proofs of claim and other papers or documents and take such actions as may be necessary or advisable (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes) or any Guarantor, their creditors or their property and, shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the properly incurred compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
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Section 6.11 Priorities .
If the Trustee or the Security Agent collects any money or property pursuant to this Article 6, it shall, subject to the terms of the Intercreditor Agreement, pay out the money or property in the following order:
FIRST: to the Trustee, the Agents and the Security Agent for amounts due under Section 7.02, Section 7.06 and Section 11.06;
SECOND: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, interest and Additional Amounts, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, interest and Additional Amounts, if any, respectively;
THIRD: to the Issuer, any Guarantor or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.11. At least 15 days before such record date, the Trustee shall mail to each Holder and the Issuer a notice that states the record date, the payment date and amount to be paid.
Section 6.12 Undertaking for Costs .
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee or the Security Agent for any action taken or omitted by it as the Trustee or the Security Agent, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.12 does not apply to a suit by the Trustee, the Security Agent or a Paying Agent, a suit by a Holder pursuant to Section 6.08 or a suit by Holders of more than 10% in principal amount of the Notes then outstanding.
Section 6.13 Waiver of Stay or Extension Laws .
The Issuer and each of the Guarantors (to the extent it may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.
Section 6.14 Restoration of Rights and Remedies .
If the Trustee or the Security Agent or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or the Security Agent or to such Holder, then and in every such case, subject to any determination in such proceeding, the Issuer, any Guarantor, the Trustee, the Security Agent and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee, the Security Agent and the Holders shall continue as though no such proceeding had been instituted.
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Section 6.15 Rights and Remedies Cumulative .
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.11, no right or remedy herein conferred upon or reserved to the Trustee, or the Security Agent or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 6.16 Delay or Omission Not Waiver .
No delay or omission of the Trustee, or the Security Agent or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee, or the Security Agent or to the Holders, may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 6.17 Indemnification of Trustee .
Prior to taking any action under this Article 6, the Trustee shall be entitled to indemnification or other security satisfactory to it in its sole discretion against all losses, liabilities and expenses caused by taking or not taking such action.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee .
(a) If an Event of Default, of which a Responsible Officer of the Trustee has actual knowledge, has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture or an indenture supplement hereto and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such persons own affairs.
(b) Except during the continuance of an Event of Default:
(A) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants, duties or obligations shall be read into this Indenture against the Trustee; provided that to the extent the duties of the Trustee under this Indenture and the Notes may be qualified, limited or otherwise affected by the provisions of the Notes Documents, the Trustee shall be required to perform those duties only as so qualified, limited or affected, and shall be held harmless and shall not incur any liability of any kind for so acting; and
(B) in the absence of fraud on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed
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therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, with respect to certificates or opinions specifically required to be furnished to it hereunder, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein) and shall be entitled to seek advice from legal counsel in relation thereto.
(c) The Trustee may not be relieved from liability for its own grossly negligent action, its own grossly negligent failure to act, its own willful misconduct or fraud, except that:
(A) This Section 7.01(c) does not limit the effect of Section 7.01(b);
(B) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts; and
(C) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.03, Section 6.05 or Section 6.06.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to Section 7.01(a), Section 7.01(b) and Section 7.01(c).
(e) No provision of this Indenture, the Intercreditor Agreement or the other Notes Documents shall require the Trustee to expend or risk its own funds or otherwise incur liability in the performance of any of its duties hereunder or under the Intercreditor Agreement or the other Notes Documents or to take or omit to take any action under this Indenture or under the Intercreditor Agreement or the other Notes Documents or take any action at the request or direction of Holders if it has grounds for believing that repayment of such funds is not assured to it or it does not receive indemnity or security satisfactory to it in its discretion against any loss, liability or expense which might be incurred by it in compliance with such request or direction nor shall the Trustee be required to do anything which is illegal or contrary to applicable laws. The Trustee will not be liable to the Holders if prevented or delayed in performing any of its obligations or discretionary functions under this Indenture by reason of any present or future law applicable to it, by any governmental or regulatory authority or by any circumstances beyond its control. No provision of this Indenture or of the Notes Documents shall require the Trustee to indemnify the Security Agent, and the Security Agent waives any claim it may otherwise have by operation of law in any jurisdiction to be indemnified by the Trustee acting as principal vis-à-vis its agent, the Security Agent (but this does not prejudice the Security Agents rights to bring any claim or suit against the Trustee (including for damages in the case of gross negligence, willful misconduct or fraud of the Trustee)).
(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.
(g) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(h) Each Holder, by its acceptance of any Notes and the Note Guarantees of the Notes by the Guarantors, if any, consents and agrees to the Agreed Security Principles and the terms of the Notes Documents, the Intercreditor Agreement, and any other Security Documents to which the Trustee may be a party (including, without limitation, the provisions providing for foreclosure and
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release of Collateral) as the same may be in effect or as may be amended from time to time in accordance with their terms and authorizes and directs the Trustee to enter into and perform its obligations and exercise its rights under the Notes Documents, the Intercreditor Agreement, and such Security Documents in accordance therewith, to bind the Holders on the terms set forth in the Notes Documents, the Intercreditor Agreement, and such Security Documents and to execute any and all documents, amendments, waivers, consents, releases or other instruments authorized or required to be executed by it pursuant to the terms thereof.
Section 7.02 Rights of Trustee .
(a) The Trustee may refrain from taking any action in any jurisdiction if the taking of such action in that jurisdiction would, in its opinion, based upon legal advice in the relevant jurisdiction, be contrary to any law of that jurisdiction or, to the extent applicable, the State of New York. Furthermore, the Trustee may also refrain from taking such action if it would otherwise render it liable to any person in that jurisdiction, the State of New York or if, in its opinion based upon such legal advice, it would not have the power to take such action in that jurisdiction by virtue of any applicable law in that jurisdiction, in the State of New York or if it is determined by any court or other competent authority in that jurisdiction, in the State of New York that it does not have such power.
(b) The Trustee may conclusively rely and shall be fully protected in relying on any document (whether in its original, electronic or facsimile form) believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.
(c) Before the Trustee acts or refrains from acting, it may require an Officers Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers Certificate or Opinion of Counsel.
(d) The Trustee may act through attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(e) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture, the Intercreditor Agreement or any Additional Intercreditor Agreement or any other Notes Document; provided , however , that the Trustees conduct does not constitute willful misconduct, gross negligence or fraud.
(f) The Trustee may retain professional advisers to assist it in performing its duties under this Indenture, the Intercreditor Agreement or any Additional Intercreditor Agreement or any Notes Document. The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(g) The Trustee shall not be bound to make any investigation into the facts or matters stated in any Officers Certificate, Opinion of Counsel, or any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer.
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(h) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture or the Intercreditor Agreement, unless such Holders shall have offered to the Trustee indemnity and/or other security satisfactory to the Trustee against the costs, expenses and liabilities which may be incurred by it in compliance with such request, order or direction.
(i) In the event the Trustee receives inconsistent or conflicting requests and indemnity from two or more groups of Holders, each representing less than the majority in aggregate principal amount of the Notes then outstanding, pursuant to the provisions of this Indenture (as qualified, limited or otherwise affected by the provisions of the Intercreditor Agreement), the Trustee, in its sole discretion, may determine what action, if any, shall be taken and shall be held harmless and shall not incur any liability for its failure to act until such inconsistency or conflict is, in its reasonable opinion, resolved.
(j) The Trustee shall have no duty to inquire as to the performance of the Issuer with respect to the covenants contained in Article 4. Delivery of reports, information and documents to the Trustee under Section 4.09 is for informational purposes only and the Trustees receipt of the foregoing shall not constitute actual or constructive notice of any information contained therein or determinable from information contained therein, including the Issuers compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers Certificates).
(k) The Trustee shall not have any obligation or duty to monitor, determine or inquire as to compliance, and shall not be responsible or liable for compliance with restrictions on transfer, exchange, redemption, purchase or repurchase, as applicable, of minimum denominations imposed under this Indenture or under applicable law or regulation with respect to any transfer, exchange, redemption, purchase or repurchase, as applicable, of any interest in any Notes.
(l) If any Guarantor is substituted to make payments on behalf of the Issuer pursuant to Article 10, the Issuer shall promptly notify the Trustee of such substitution.
(m) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified and/or secured to its satisfaction, are extended to, and shall be enforceable by the Trustee in each of its capacities hereunder, under the Intercreditor Agreement, any Additional Intercreditor Agreements and the other Notes Documents, by the Security Agent and by each Agent in their various capacities hereunder, custodian and other Person employed to act as agent hereunder. Each of the Trustee, the Security Agent and each other Agent shall not be liable for acting in good faith on instructions believed by it to be genuine and from the proper party.
(n) The Trustee shall not be required to give any bond or surety with respect to the performance of its duties or the exercise of its powers under this Indenture.
(o) At any time that the security granted pursuant to the Security Documents has become enforceable and the Holders have given a direction to the Trustee to enforce such security, the Trustee is not required to give any direction to the Security Agent with respect thereto unless it has been indemnified or received security in accordance with Section 7.01(e). In any event, in connection with any enforcement of such security, the Trustee is not responsible for:
(i) any failure of the Security Agent to enforce such security within a reasonable time or at all;
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(ii) any failure of the Security Agent to pay over the proceeds of enforcement of the Collateral;
(iii) any failure of the Security Agent to realize such security for the best price obtainable;
(iv) monitoring the activities of the Security Agent in relation to such enforcement;
(v) taking any enforcement action itself in relation to such security;
(vi) agreeing to any proposed course of action by the Security Agent which could result in the Trustee incurring any liability for its own account; or
(vii) paying any fees, costs or expenses of the Security Agent.
(p) The permissive rights of the Trustee to take the actions permitted by this Indenture will not be construed as an obligation or duty to do so.
(q) Anything in this Indenture to the contrary notwithstanding, in no event shall the Trustee be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits, loss of business, goodwill or opportunity of any kind), even if foreseeable and even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(r) The Trustee may assume without inquiry in the absence of actual knowledge of a Responsible Officer that the Issuer is duly complying with its obligations contained in this Indenture required to be performed and observed by it, and that no Default or Event of Default or other event which would require repayment of the Notes has occurred.
(s) In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of, or caused by, directly or indirectly, forces beyond its control, including, without limitation, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God; it being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances;.
(t) The Trustee may request that the Issuer deliver an Officers Certificate setting forth the names of the individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture or the Notes Documents, which Officers Certificate may be signed by any person authorized to sign an Officers Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.
(u) No provision of this Indenture shall require the Trustee to do anything which, in its opinion, may be illegal or contrary to applicable law or regulation.
(v) The Trustee shall not be required to take notice or be deemed to have notice of any Default or Event of Default hereunder unless a Responsible Officer of the Trustee shall be specifically notified in writing of such Default or Event of Default by the Issuer or by the Holders of at least 25% of the aggregate principal amount of Notes then outstanding, at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.
(w) The Trustee and the Paying Agent shall be entitled to make payments net of any taxes or other sums required by any applicable law to be withheld or deducted.
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Section 7.03 Individual Rights of Trustee .
The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. For the avoidance of doubt, any Agent, Paying Agent, Transfer Agent, Authenticating Agent or Registrar may do the same with like rights.
Section 7.04 Trustees Disclaimer .
The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Intercreditor Agreement, the Security Documents or the Notes or the Note Guarantees or any other Notes Document or the Collateral, it shall not be accountable for the Issuers use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuers direction under any provision of this Indenture, and it shall not be responsible for any statement of the Issuer in this Indenture, the Offering Memorandum or any document issued in connection with the sale of the Notes or in the Notes other than the Trustees certificate of authentication if signed by the Trustee. The Trustee shall not be charged with knowledge of the identity of any Significant Subsidiary unless the Trustee shall have received notice thereof in accordance with Section 12.01 hereof from the Issuer or any Holder. Nothing hereunder shall require the Trustee to file any financing or continuation statements or recording any documents or instruments in any public office at any time or otherwise perfecting or maintain the perfection of any Lien or security interest in the Collateral.
Section 7.05 Notice of Defaults .
If a Default occurs and is continuing and a Responsible Officer of the Trustee is informed in writing of such occurrence by the Issuer, the Trustee must give notice of the Default to the Holders within 60 days after being so notified by the Issuer. Except in the case of a Default in the payment of principal of, or premium, if any, or interest on any Note, the Trustee may withhold notice if and so long as the Trustee in good faith determines that withholding notice is in the interests of Holders.
Section 7.06 Compensation and Indemnity .
The Issuer, or, upon the failure of the Issuer to pay, each Guarantor (if any), jointly and severally, shall pay to the Trustee from time to time such compensation as the Issuer and Trustee may from time to time agree for its acceptance of this Indenture and services hereunder and under the Notes Documents. The Trustees compensation shall not be limited by any law on compensation of a trustee of an express trust.
In the event of the occurrence of an Event of Default or the Trustee considering it expedient or necessary or being requested by the Issuer to undertake duties which the Trustee reasonably determines to be of an exceptional nature or otherwise outside the scope of the normal duties of the Trustee, the Issuer shall pay to the Trustee such additional remuneration for such duties.
The Issuer and each Guarantor (if any), jointly and severally, shall reimburse the Trustee promptly upon request for all properly incurred disbursements, advances and expenses incurred or
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made by it (as evidenced in an invoice from the Trustee), including costs of collection, in addition to the compensation for its services. Such expenses shall include the properly incurred compensation and expenses, disbursements and advances of the Trustees agents, counsel, accountants and experts. The Issuer and each Guarantor (if any), jointly and severally, shall indemnify the Trustee, the Agents and their respective officers, directors, agents and employers against any and all loss, liability, taxes or expenses (including properly incurred attorneys fees) incurred by or in connection with the acceptance or administration of its duties under this Indenture, the Notes Documents, including the costs and expenses of enforcing this Indenture against the Issuer (including this Section 7.06) and defending itself against any claim (whether asserted by the Issuer or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, under the Intercreditor Agreement, any Additional Intercreditor Agreement or the Notes Documents, as the case may be.
The Trustee shall notify the Issuer of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Issuer shall not relieve the Issuer or any Guarantor of its indemnity obligations hereunder, under the Intercreditor Agreement, any Additional Intercreditor Agreement or any other Notes Documents, as the case may be. Except in cases where the interests of the Issuer and the Trustee may be adverse, the Issuer shall defend the claim and the indemnified party shall provide reasonable cooperation at the Issuers and any Guarantors expense in the defense. Notwithstanding the foregoing, such indemnified party may, in its sole discretion, assume the defense of the claim against it and the Issuer and any Guarantor shall, jointly and severally, pay the properly incurred fees and expenses of the indemnified partys defense (as evidenced in an invoice from the Trustee). Such indemnified parties may have separate counsel of their choosing and the Issuer and any Guarantor, jointly and severally, shall pay the properly incurred fees and expenses of such counsel (as evidenced in an invoice from the Trustee). The Issuer need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such partys own willful misconduct, gross negligence or fraud.
To secure the Issuers and any Guarantors payment obligations in this Section 7.06, the Trustee, the Security Agent and the Agents have a lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.
The Issuers and any Guarantors payment and indemnity obligations pursuant to this Section 7.06 and any lien arising thereunder shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee and the Agents. Without prejudice to any other rights available to the Trustee and the Agents under applicable law, when the Trustee and the Paying Agents incur expenses after the occurrence of a Default specified in Section 6.01(e) and Section 6.01(f) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.
For the avoidance of doubt, the rights, privileges, protections, immunities and benefits given to the Trustee in this Article 7, including its right to be indemnified, are extended to, and shall be enforceable by the Trustee in each of its capacities hereunder, under the Intercreditor Agreement and any Additional Intercreditor Agreement and by the Security Agent, each Agent, custodian and other Person employed with due care to act as agent hereunder. For purposes of this Section 7.06, Trustee shall include any predecessor Trustee; provided, however , that the gross negligence or willful misconduct of any Trustee shall not affect the rights of any other Trustee hereunder.
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Section 7.07 Replacement of Trustee .
(i) The Trustee may resign at any time by providing 30 days notice to the Issuer. The Holders of a majority in principal amount of the Notes then outstanding may remove the Trustee at any time by so notifying the Trustee and may appoint a successor Trustee. The Issuer shall be entitled to remove the Trustee or any Holder who has been a bona fide Holder for not less than six months may petition any court for removal of the Trustee and appointment of a successor Trustee, if:
(A) the Trustee has or acquires a conflict of interest in its capacity as Trustee that is not eliminated;
(B) the Trustee is adjudged bankrupt or insolvent; or
(C) the Trustee otherwise becomes incapable of acting as Trustee hereunder.
(ii) If the Trustee resigns, is removed pursuant to Section 7.07(i) or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee.
(iii) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture and the Notes Documents. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided that all sums owing to the Trustee hereunder have been paid and subject to the lien provided for in Section 7.06.
(iv) If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, (i) the retiring Trustee or the Holders of 10% in principal amount of the Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee, or (ii) the retiring Trustee may appoint a successor Trustee at any time prior to the date on which a successor Trustee takes office; provided that such appointment is reasonably satisfactory to the Issuer.
(v) Notwithstanding the replacement of the Trustee pursuant to this Section 7.07, the Issuers obligations under Section 7.06 shall continue for the benefit of the retiring Trustee.
(vi) For the avoidance of doubt, the rights, privileges, protections, immunities and benefits given to the Trustee in this Article 7, including its right to be indemnified, are extended to, and shall be enforceable by each Agent and the Security Agent employed to act hereunder.
Section 7.08 Successor Trustee by Merger .
If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.
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In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.
Section 7.09 Certain Provisions .
Each Holder by accepting a Note authorizes and directs on his or her behalf the Trustee to enter into and to take such actions and to make such acknowledgements as are set forth in this Indenture and the Intercreditor Agreement or other documents entered into in connection therewith.
The Trustee shall not be responsible for the legality, validity, effectiveness, suitability, adequacy or enforceability of the Security Documents or any obligation or rights created or purported to be created thereby or pursuant thereto or any security or the priority thereof constituted or purported to be constituted thereby or pursuant thereto, nor shall it be responsible or liable to any person because of any invalidity of any provision of such documents or the unenforceability thereof, whether arising from statute, law or decision of any court. The Trustee shall be under no obligation to monitor or supervise the functions of the Security Agent under the Security Documents and shall be entitled to assume that the Security Agent is properly performing its functions and obligations thereunder and the Trustee shall not be responsible for any diminution in the value of or loss occasioned to the assets subject thereto by reason of the act or omission by the Security Agent in relation to its functions thereunder. The Trustee shall have no responsibility whatsoever to the Issuer, any Guarantor or any Holder as regards any deficiency which might arise because the Trustee is subject to any tax in respect of the Security Documents, the security created thereby or any part thereof or any income therefrom or any proceeds thereof.
Section 7.10 Agents; General Provisions .
(i) Actions of Agents . The rights, powers, duties and obligations and actions of each Agent under this Indenture are several and not joint.
(ii) Agents of Trustee . The Issuer and the Agents acknowledge and agree that in the event of a Default or Event of Default, the Trustee may, by notice in writing to the Issuer and the Agents, require that the Agents act as agents of, and take instructions exclusively from, the Trustee. Until they have received such written notice from the Trustee, the Agents shall act solely as agents of the Issuer.
(iii) Money Held . The Agents hold all funds as banker subject to the terms of this Indenture and shall not be liable for any interest earned thereon. Such money held by the Agents will not be held in accordance with the rules established by the UK Financial Conduct Authority in the UK Financial Conduct Authoritys Handbook of rules and guidance from time to time in relation to client money.
(iv) Publication of Notices . Any obligation the Agents may have to publish a notice to Holders of the Notes on behalf of the Issuer will have been met upon delivery of the notice to Euroclear or Clearstream, if and so long as any Notes are represented by one or more Global Notes and ownership of book-entry interests therein are shown on the records of Euroclear or Clearstream.
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ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.01 Satisfaction and Discharge of Liability on Notes; Defeasance .
(a) This Indenture, and the rights of the Trustee and the Holders under the Intercreditor Agreement and any Additional Intercreditor Agreement and the Security Documents will be discharged and cease to be of further effect (except as to surviving rights of conversion or transfer or exchange of the Notes, as expressly provided for in this Indenture) as to all outstanding Notes when (i) either (A) all the Notes previously authenticated and delivered (other than certain lost, stolen or destroyed Notes, and certain Notes for which provision for payment was previously made and thereafter the funds have been released to the Issuer) have been delivered to the Trustee for cancellation; or (B) all Notes not previously delivered to the Trustee for cancellation (1) have become due and payable, (2) will become due and payable at their Stated Maturity within one year or (3) are to be called for redemption within one year under arrangements reasonably satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer; (ii) the Issuer has deposited or caused to be deposited with the Trustee (or such entity designated by the Trustee for this purpose), cash in euro, European Government Obligations denominated in euro or a combination thereof, as applicable, in an amount sufficient to pay and discharge the entire indebtedness on the Notes not previously delivered to the Paying Agent for cancellation, for principal, premium, if any, and interest to the date of deposit (in the case of Notes that have become due and payable), or to the Stated Maturity or redemption date, as the case may be; (iii) the Issuer has paid or caused to be paid all other sums payable under this Indenture; (iv) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or on the redemption date, as the case may be and (v) the Issuer has delivered to the Trustee an Officers Certificate and an Opinion of Counsel ( provided that such counsel may not be an employee of Midco or its Subsidiaries) each to the effect that all conditions precedent under this Section 8.01 relating to the satisfaction and discharge of this Indenture have been complied with, provided that any such counsel may rely on any Officers Certificate as to matters of fact (including as to compliance with clauses (i), (ii) and (iii) of this Section 8.01(a)).
(b) Subject to Section 8.01(a), 8.01(c) and Section 8.02, the Issuer at any time may terminate (i) all its and each Guarantors obligations under the Notes, any Note Guarantees and this Indenture ( legal defeasance option ), and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the Notes or (ii) its, Midcos and the Restricted Subsidiaries obligations under Article 4 (other than Section 4.14) and under Section 5.01 (other than Section 5.01(a)(i), Section 5.01(a)(ii), Section 5.01(b)(i), Section 5.01(b)(ii) and Section 5.01(c)(iii)(B)(2)), and thereafter any omission to comply with such obligations shall not constitute a Default or an Event of Default with respect to the Notes and the events set forth in Section 6.01(c) (other than with respect to Section 5.01(a)(i), Section 5.01(a)(ii), Section 5.01(b)(i), Section 5.01(b)(ii) and Section 5.01(c)(iii)(B)(2)), Section 6.01(d), Sections 6.01(e) and 6.01(f) (in each case, with respect only to Midco and its Significant Subsidiaries), Section 6.01(g), Section 6.01(h) and Section 6.01(i) shall not constitute Events of Default ( covenant defeasance option ). The Issuer at its option at any time may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.
If the Issuer exercises its legal defeasance option or its covenant defeasance option, the Collateral will be released and each Guarantor (if any) will be released from all its obligations under its Note Guarantee.
Upon satisfaction of the conditions set forth herein and upon request of the Issuer, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuer terminates.
(c) Notwithstanding Section 8.01(a) and Section 8.01(b) above, the Issuers and any Guarantors obligations in Section 2.07, Section 2.08, Section 2.09, Section 2.10, Section 2.11, Section 2.12, Section 2.13, Section 2.14, Section 7.01, Section 7.02, Section 7.03, Section 7.06, Section 7.07, this Article 8 and Section 11.06, as applicable, shall survive until the Notes have been paid in full. Thereafter, the Issuers and any Guarantors obligations in Section 7.06, Section 8.05, Section 8.06 and Section 11.06, as applicable, shall survive.
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Section 8.02 Conditions to Defeasance .
(i) The Issuer may exercise its legal defeasance option or its covenant defeasance option only if the Issuer has irrevocably deposited in trust (the defeasance trust ) with the Trustee (or such entity designated by the Trustee for this purpose) cash in euro, European Government Obligations denominated in euro or a combination thereof, in such amounts as will be sufficient for the payment of principal, premium, if any, and interest on the outstanding Notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of:
(A) an Opinion of Counsel in the United States to the effect that Holders or beneficial owners of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. 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 deposit and defeasance had not occurred (and in the case of legal defeasance only, such Opinion of Counsel in the United States must be based on a ruling of the U.S. Internal Revenue Service or change in applicable U.S. federal income tax law since the issuance of the Notes);
(B) an Officers Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying, defrauding or preferring any creditors of the Issuer; and
(C) an Officers Certificate and an Opinion of Counsel (which opinion of counsel may be subject to customary assumptions and qualifications), each stating that all conditions precedent provided for or relating to legal defeasance or covenant defeasance, as the case may be, have been complied with.
(ii) Before or after a deposit, the Issuer may make arrangements satisfactory to the Trustee for the redemption of Notes at a future date in accordance with Article 3.
Section 8.03 Application of Money .
The Trustee shall apply the deposited money and the money from the European Government Obligations deposited with it pursuant to Section 8.02 in accordance with this Indenture to the payment of principal of and interest on the Notes.
Section 8.04 Repayment to Issuer .
The Trustee and the Paying Agent shall as soon as practicable upon written request by the Issuer turn over any money or European Government Obligations held by it as provided in this Article 8 which, in the written opinion of an internationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if European Government Obligations have been so deposited), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article 8.
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Subject to any applicable abandoned property law, the Trustee shall pay to the Issuer upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Issuer for payment as general creditors, and the Trustee and the Paying Agent shall have no further liability with respect to such monies.
Section 8.05 Indemnity for European Government Obligations .
The Issuer and any Guarantor, jointly and severally, shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited European Government Obligations or the principal and interest received on such European Government Obligations.
Section 8.06 Reinstatement .
If the Trustee is unable to apply any money or European Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers and the Guarantors obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee is permitted to apply all such money or European Government Obligations in accordance with this Article 8; provided, however, that if the Issuer has made any payment of principal of or interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or European Government Obligations held by the Trustee.
ARTICLE 9
AMENDMENTS AND WAIVERS
Section 9.01 Without Consent of Holders .
Without the consent of any Holder, the Issuer, the Trustee, the Security Agent and the other parties thereto, as applicable, may amend or supplement any Notes Documents to:
(a) cure any ambiguity, omission, defect, error or inconsistency, conform any provision to the Description of the Notes section of the Offering Memorandum, or reduce the minimum denomination of the Notes;
(b) provide for the assumption by a successor Person of the obligations of the Issuer or any Guarantor under any Notes Document;
(c) provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code);
(d) add to the covenants or provide for a Note Guarantee for the benefit of the Holders or surrender any right or power conferred upon Midco or any Restricted Subsidiary;
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(e) make any change that does not adversely affect the rights of any Holder in any material respect;
(f) at the Issuers election, comply with any requirement of the SEC in connection with the qualification of this Indenture under the Trust Indenture Act, if such qualification is required;
(g) make such provisions as necessary (as determined in good faith by the Issuer) for the issuance of Additional Notes;
(h) to provide for any Restricted Subsidiary to provide a Subsidiary Guarantee in accordance with Section 4.01 and Section 4.08;
(i) to evidence and provide for the acceptance and appointment under this Indenture, the Intercreditor Agreement or any Additional Intercreditor Agreement, as applicable, of a successor Trustee or the Security Agent pursuant to the requirements thereof or to provide for the accession by the Trustee or the Security Agent to any Notes Document;
(j) to conform the text of this Indenture, the Security Documents or the Notes to any provision of the Description of the Notes in the Offering Memorandum to the extent that such provision in the Description of the Notes was intended to be a verbatim recitation of a provision of this Indenture, the Security Documents or the Notes;
(k) as provided in Section 4.11;
(l) in the case of the Security Documents, to mortgage, pledge, hypothecate or grant a security interest in favor of the Security Agent for the benefit of parties to the Senior Credit Facilities Agreement, in any property which is required by the Senior Credit Facilities Agreement (as in effect on the Issue Date) to be mortgaged, pledged or hypothecated, or in which a security interest is required to be granted to the Security Agent, or to the extent necessary to grant a security interest for the benefit of any Person; provided that the granting of such security interest is not prohibited by this Indenture and Section 4.07 is complied with;
(m) to add to the covenants or to provide for a Guarantee for the benefit of the Holders or surrender any right or power conferred upon Midco or any Restricted Subsidiary; or
(n) to add security to or for the benefit of the Notes, or to effectuate or confirm and evidence the release, termination, discharge or retaking of any Note Guarantee or Lien or any amendment in respect thereof with respect to or securing the Notes when such release, termination, discharge or retaking or amendment is provided for under this Indenture or the Security Documents.
Section 9.02 With Consent of Holders .
Subject to certain exceptions, the Notes Documents may be amended, supplemented or otherwise modified with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, such Notes) and, subject to certain exceptions, any default or compliance with any provisions thereof may be waived with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, such Notes). However, without the consent of Holders holding not less than 90% of the then outstanding aggregate principal amount of Notes affected, an amendment or waiver may not, with respect to any such Notes held by a non-consenting Holder:
(a) reduce the principal amount of such Notes whose Holders must consent to an amendment;
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(b) reduce the stated rate of or extend the stated time for payment of interest on any such Note;
(c) reduce the principal of or extend the Stated Maturity of any such Note;
(d) reduce the premium payable upon the redemption of any such Note or change the time at which any such Note may be redeemed, in each case as described in paragraph 5 of the Notes;
(e) make any such Note payable in money other than that stated in such Note (except to the extent the currency stated in the Notes has been succeeded or replaced pursuant to applicable law);
(f) impair the right of any Holder to receive payment of principal of and interest on such Holders Notes on or after the due dates therefor or to institute suit for the enforcement of any such payment on or with respect to such Holders Notes;
(g) make any change to Section 4.13 that adversely affects the right of any Holder of such Notes in any material respect or amends the terms of such Notes in a way that would result in a loss of an exemption from any of the Taxes described thereunder or an exemption from any obligation to withhold or deduct Taxes so described thereunder unless the Payor agrees to pay Additional Amounts, if any, in respect thereof;
(h) release (i) all or substantially all the Security Interests granted for the benefit of the Holders in the Collateral or (ii) all or substantially all the Guarantors from their obligations under the Note Guarantees or this Indenture, in each case, other than pursuant to the terms of this Indenture, the Intercreditor Agreement, any Additional Intercreditor Agreement or the Security Documents, as applicable;
(i) waive a Default or Event of Default with respect to the nonpayment of principal, premium or interest on the Notes (except pursuant to a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of such Notes and a waiver of the payment default that resulted from such acceleration); or
(j) make any change in the amendment or waiver provisions which require the Holders consent described in this Section 9.02.
In formulating its decisions on such matters described in Section 9.01 and Section 9.02, the Trustee shall be entitled to rely on such evidence as it deems appropriate, including Officers Certificates and Opinions of Counsel.
For so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so require, the Issuer will publish notice of any amendment, supplement or waiver in a newspaper having a general circulation in Luxembourg or, to the extent and in the manner permitted by such rules, post such notice on the official website of the Luxembourg Stock Exchange ( www.bourse.lu ).
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment of the Notes Documents, but it shall be sufficient if
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such consent approves the substance thereof. A consent to any amendment or waiver under this Indenture by any Holder of Notes given in connection with a tender of such Holders Notes will not be rendered invalid by such tender.
After an amendment under this Section 9.02 becomes effective, in case of Holders of Definitive Notes, the Issuer shall mail to the Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.
Except as set forth in this Section 9.02, the Notes issued on the Issue Date, and any Additional Notes, will be treated as a single class for all purposes under this Indenture, including with respect to waivers and amendments. For the purposes of calculating the aggregate principal amount of Notes that have consented to or voted in favor of any amendment, waiver, consent, modifications or other similar action, the Issuer (acting reasonably and in good faith) shall be entitled to select a record date as of which the Euro Equivalent of the principal amount of any Notes shall be calculated in such consent or voting process; provided that the Euro Equivalent shall be calculated by converting such currency other than euro involved in such computation into euro on the date notes of the relevant series were first issued.
Section 9.03 Revocation and Effect of Consents and Waivers .
(a) A written consent to an amendment or a waiver by a Holder shall bind the Holder and every subsequent Holder of that Note or portion of the Notes that evidences the same debt as the consenting Holders Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the written consent or waiver as to such Holders Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers Certificate from the Issuer certifying that the requisite number of consents have been received. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the (a) receipt by the Issuer or the Trustee of the requisite number of consents, (b) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (c) execution of such amendment or waiver (or supplemental indenture) by the Issuer and the Trustee.
(b) The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their written consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding Section 9.03(a), those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.
Section 9.04 Notation on or Exchange of Notes .
If an amendment changes the terms of a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Note shall issue and the Trustee or an Authenticating Agent shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment.
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Section 9.05 Trustee and Security Agent to Sign Amendments .
The Trustee, the Issuer and the Security Agent shall sign any amendment authorized pursuant to this Article 9 if the amendment does not impose any personal obligations on the Trustee or the Security Agent or adversely affect the rights, duties, liabilities or immunities of the Trustee and the Security Agent under this Indenture and the Intercreditor Agreement, as applicable. If it does, the Trustee or the Security Agent may, but need not, sign it. In signing such amendment the Trustee and the Security Agent, as applicable, shall be entitled to receive an indemnity and/or security satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers Certificate and an Opinion of Counsel stating that such amendment complies with this Indenture, the other Notes Documents and that such amendment has been duly authorized, executed and delivered and is the legally valid and binding obligation of the Issuer and the Guarantors (if any) enforceable against them in accordance with its terms, subject to customary qualifications. Subject to this Section 9.05 and the terms of the Intercreditor Agreement, the Security Agent shall at the direction of the Issuer sign amendments to this Indenture.
ARTICLE 10
NOTE GUARANTEES
Section 10.01 Note Guarantees .
(a) The Notes will be guaranteed, as of the Issue Date, by the Parent Guarantor and the Subsidiary Guarantors.
(b) Subject to this Article 10, any Guarantor, as primary obligor and not merely as a surety, jointly and severally, unconditionally, on a senior basis and subject to the Agreed Security Principles and any limitations set out in any supplemental indenture, guarantees to each Holder of a Note authenticated and delivered by the Trustee (or the Authenticating Agent), to the Trustee and its successors and assigns to the Security Agent (on behalf of and for the benefit of the Holders, for the purpose of this Article 10, and not in its individual capacity, but solely in its role as representative of the Holders in holding and enforcing the Collateral and the Security Documents), irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that:
(i) the principal of, Additional Amounts and premium, if any, and interest on, the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest, Additional Amounts and premium, if any, on the Notes (to the extent permitted by law) and all other obligations of the Issuer to the Holders or the Trustee or the Security Agent hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.
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(c) To the extent permitted by the applicable law and subject to the Agreed Security Principles, each Guarantor hereby agrees that its obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action or any delay or omission to assert any claim or to demand or enforce any remedy hereunder or thereunder, any waiver, surrender, release or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenant that this Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.
(i) If any Holder, the Trustee, or the Security Agent is required by any court or otherwise to return to or for the benefit of the Issuer, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid by either the Issuer or the Guarantors to the Trustee, the Security Agent, or such Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.
(ii) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders, the Security Agent, and the Trustee, on the other hand,
(A) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and
(B) in the event of any declaration of acceleration of such obligations as provided in Article 6, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.
(iii) Each Guarantor also agrees to pay any and all costs and expenses (including attorneys fees and expenses) incurred by the Trustee or the Security Agent in enforcing any rights under this Section.
(d) Notwithstanding any other provision of the Notes Documents, the Note Guarantee granted by a Guarantor incorporated in Austria (an Austrian Guarantor ), is meant to be and shall be interpreted as abstract guarantee ( abstrakter Garantievertrag ) and the obligations of such Austrian Guarantor shall be obligations as principal debtor and not as surety ( Bürgschaft ) and not as a joint obligation as a borrower ( Mitschuldner ) and such Austrian Guarantor undertakes to pay the amounts so demanded under or pursuant to this Note Guarantee unconditionally, irrevocably, upon first demand and without raising any defences or objections, set-off or counterclaim and without verification of the legal ground ( unbedingt, unwiderruflich, auf erste Aufforderung und unter Verzicht auf alle Einwendungen oder Einreden, ohne Aufrechnung oder die Geltendmachung von Gegenforderungen und ohne Prüfung des Rechtsgrunds ).
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Section 10.02 Successors and Assigns .
This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee, the Security Agent and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
Each party to this Indenture hereby agrees and undertakes to execute and deliver all such documents and do all such acts and things which are legally required to fully and effectively give effect to this Section 10.02.
Section 10.03 No Waiver .
Neither a failure nor a delay on the part of the Security Agent, the Trustee or the Holders in exercising any right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Security Agent, the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 10 at law, in equity, by statute or otherwise.
Section 10.04 Modification .
No modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances.
Section 10.05 Execution of Supplemental Indenture for Guarantors .
Each Subsidiary which is required to become a Guarantor pursuant to this Indenture shall promptly execute and deliver to the Trustee a supplemental indenture in the form attached to this Indenture as Exhibit B pursuant to which such Subsidiary shall become a Guarantor under this Article 10. Concurrently with the execution and delivery of such supplemental indenture, the Issuer shall deliver to the Trustee an Opinion of Counsel and an Officers Certificate to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors rights generally to the principles of equity, whether considered in a proceeding at law or in equity, and any other matters which are set out as qualifications or reservations as to matters of law of general application, the Note Guarantee of such Guarantor is a legally valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms and to such other matters as the Trustee may reasonably request. The obligations of a Guarantor executing and delivering a supplemental indenture to this Indenture providing for a Note Guarantee of the Notes under this Article 10 shall be subject to such limitations as are mandated under applicable laws in addition to the limitations set forth in Section 10.07 and set out in the relevant supplemental indenture.
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Section 10.06 Release of the Note Guarantees .
(a) The Note Guarantee of a Guarantor will terminate and release:
(i) in the case of a Subsidiary Guarantee, upon a sale or other disposition (including by way of consolidation or merger) of ownership interests in the Subsidiary Guarantor (directly or through a parent company) such that the Subsidiary Guarantor does not remain a Restricted Subsidiary (or, in the case of Midco, a Subsidiary of the Parent Guarantor), or the sale or disposition of all or substantially all the assets of the Subsidiary Guarantor (other than to Midco or a Restricted Subsidiary), in each case, otherwise not prohibited by this Indenture;
(ii) in the case of a Subsidiary Guarantee, upon the designation in accordance with this Indenture of the Subsidiary Guarantor as an Unrestricted Subsidiary;
(iii) upon defeasance or discharge of the Notes, as provided in Article 8;
(iv) with respect to a Subsidiary Guarantor that is not a Significant Subsidiary, so long as no Event of Default has occurred and is continuing, to the extent that such Subsidiary Guarantor (A) is unconditionally released and discharged from its liability with respect to the Senior Credit Facilities Agreement and (B) does not guarantee any other Credit Facility or Public Debt
(v) upon the full and final payment and performance of all obligations of the Issuer under this Indenture and the Notes;
(vi) upon the release of the Guarantors Note Guarantee under any Indebtedness that triggered such Guarantors obligation to guarantee the Notes under Section 4.08;
(vii) in accordance with the provisions of the Intercreditor Agreement or any Additional Intercreditor Agreement;
(viii) as described in Article 9;
(ix) in connection with the implementation of a Permitted Reorganization; or (x) with respect to an entity that is not the successor Guarantor, as a result of a transaction permitted by Section 5.01.
(b) The Trustee and the Security Agent shall take all necessary actions reasonably requested in writing by Midco, including the granting of releases or waivers under the Intercreditor Agreement or any Additional Intercreditor Agreement, to effectuate any release of a Note Guarantee in accordance with these provisions, subject to customary protections and indemnifications. Each of the releases set forth above shall be effected by the Trustee and the Security Agent without the consent of or liability to the Holders or any other action or consent on the part of the Trustee or the Security Agent.
Section 10.07 Limitations on Obligations of Guarantors .
(a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the applicable Guarantor without rendering the Note Guarantee, as it relates to such Guarantor, voidable under applicable laws relating to fraudulent conveyance, fraudulent transfer, improper corporate benefit, financial assistance or similar laws affecting the rights of creditors generally.
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(b) Limitations on Obligations of Local Guarantors.
(i) Limitations on Obligations of Austrian Guarantors. To the extent that the Note Guarantee in this Section 10 is given by any Austrian Guarantor, any and all obligations ( Verpflichtungen ) and liabilities ( Haftungen ) of an Austrian Guarantor under such Note Guarantee shall at all times be limited so that at no time the assumption of a liability ( Haftungen ) and/or obligation ( Verpflichtung ) shall be required to the extent that such liability ( Haftung ) or obligation ( Verpflichtung ) would violate Austrian capital maintenance rules ( Kapitalerhaltungsvorschriften ) pursuant to Austrian company law, in particular sections 82 et seq. of the Austrian Act on Limited Liability Companies ( Gesetz über Gesellschaften mit beschränkter Haftung ) and/or sections 52 and 65 et seq. of the Austrian Stock Corporation Act ( Aktiengesetz ) (the Austrian Capital Maintenance Rules ). Should any obligation ( Verpflichtung ) and/or liability ( Haftung ) of an Austrian Guarantor under the Note Guarantee in this Section 10 violate or contradict the Austrian Capital Maintenance Rules and therefore be held invalid or unenforceable in whole or in part or should the assumption or enforcement of such obligation ( Verpflichtung ) or liability ( Haftung ) expose any managing director or member of the supervisory board of any Austrian Guarantor to personal liability or criminal responsibility, such obligation/or liability shall be deemed to be replaced by an obligation ( Verpflichtung ) and/or liability ( Haftung ) of a similar nature (i) which is in compliance with the Austrian Capital Maintenance Rules, (ii) which does not expose the managing directors or members of the supervisory board of the Austrian Guarantor to any personal liability or criminal responsibility; and (iii) which provides the best possible security interest admissible in accordance with the Austrian Capital Maintenance Rules in favour of the Holders. By way of example, should it be held that the Note Guarantee pursuant to this Section 10 contradicts the Austrian Capital Maintenance Rules in relation to any amount of the obligations secured by such Note Guarantee, the Note Guarantee pursuant to this Section 10 shall be reduced to such an amount which is permitted pursuant to the Austrian Capital Maintenance Rules, and potentially even to zero.
(ii) Limitations on Obligations of German Guarantors. In relation to each Guarantor incorporated in the Federal Republic of Germany in the form of a GmbH or GmbH & Co. KG (a German Guarantor ), the following limitations shall apply:
(A) The Holders, the Trustee and the Security Agent agree, other than in accordance with the procedure set out in the following paragraphs of this Section 10.07(b)(ii), not to enforce any guarantee created hereunder granted by a German Guarantor if and to the extent that such guarantee is an up-stream or cross-stream guarantee and the enforcement would otherwise lead to the situation that it would create or aggravate an existing under-balance ( Unterbilanz ) of such German Guarantor (or, in the case of a GmbH & Co. KG, of its general partner) and that such German Guarantor did not have sufficient net assets (i.e. assets minus liabilities and liability reserves ( Reinvermögen )) to maintain its (or, in the case of a GmbH & Co. KG, its general partners) stated share capital ( Stammkapital ) whereby the net assets shall be determined in accordance with applicable law at the time of the determination, provided that for the purposes of the calculation of the amount to be enforced (if any) the following balance sheet items shall be adjusted as follows:
(1) the amount of any increase of stated share capital of such German Guarantor (or, in the case of a GmbH & Co. KG, the stated share capital of its general partner) after the date of this Indenture which is not permitted under the Notes Documents shall be deducted from the stated share capital;
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(2) loans and other contractual liabilities incurred by such German Guarantor, and/or, in the case of a GmbH & Co. KG, its general partner, in violation of the provisions of any of the Notes Documents shall be disregarded to the extent that such violation results from grossly negligent or willful misbehavior; and
(3) to the extent payment under the guarantee would deprive a German Guarantor, or (in the case of a GmbH & Co. KG) the general partner of such German Guarantor, of the liquidity necessary to fulfill its financial liabilities to its creditors, then, for the determination of the net assets, the assets of such German Guarantor or, in the case of a GmbH & Co. KG, the assets of its general partner shall be calculated at the lesser of their book value ( Buchwert ) and their realization value assuming a negative prognosis for the business continuance ( Liquidationswert bei negativer Fortführungsprognose ).
(B) The limitations set out in the preceding paragraph shall only apply if and to the extent that (i) within 15 Business Days following the making of a demand against a German Guarantor under the guarantee created hereunder the relevant German Guarantor has confirmed in writing to the Trustee (x) to what extent the guarantee is an up-stream or cross-stream guarantee as described in paragraph (A) above and (y) which amount of such cross-stream and/or up-stream guarantee cannot be enforced as it would cause the net assets of such German Guarantor or, in the case of a GmbH & Co. KG, its general partner to fall below its stated share capital or create or aggravate an existing under-balance of such German Guarantor (or, in the case of a GmbH & Co. KG, of its general partner) (taking into account the adjustments set out in paragraph (A) above) (the Management Determination ); and (ii) if the Trustee contests the Management Determination (arguing that no or a lesser amount would be necessary to maintain the stated share capital or to avoid the creation or aggravation of an existing under-balance of such German Guarantor (or, in the case of a GmbH & Co. KG, of its general partner)), within 40 Business Days of the date the Trustee has notified the respective German Guarantor that it contests the Management Determination, the Trustee receives a determination by auditors of international standard and reputation (the Auditors Determination ) appointed by the German Guarantor of the amount that would have been necessary on the date the demand under the guarantee was made to maintain its or its general partners stated share capital or to avoid the creation or aggravation of an existing under-balance of such German Guarantor (or, in the case of a GmbH & Co. KG, of its general partner).
(C) If the Trustee, acting reasonably, disagrees with the Auditors Determination, it shall notify the respective German Guarantor accordingly. The Holders, the Trustee and the Security Agent shall only be entitled to enforce the guarantee up to the amount which is undisputed between themselves and the respective German Guarantor in accordance with the provisions of paragraph (B) above. In relation to the amount which is disputed by the Trustee, the Holders, the Trustee and the Security Agent shall be entitled to further pursue their claims under this guarantee (if any) in court but shall bear the burden of proof that the Auditors Determination is incorrect; it being understood, for the avoidance of doubt, that the respective German Guarantor shall not be obliged to pay such further amount claimed by the Holders or the Trustee or the Security Agent on demand.
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(D) If the guarantee was enforced without limitation because the Management Determination and/or the Auditors Determination (as the case may be) was not delivered within the relevant timeframe, the relevant Holders or Trustee or Security Agent shall repay to the respective German Guarantor any amount which is necessary to maintain its stated share capital or, in the case of a GmbH & Co. KG, that of its general partner or to avoid the creation or aggravation of an existing under-balance of such German Guarantor (or, in the case of a GmbH & Co. KG, of its general partner), calculated as of the date the demand under the guarantee was made and in accordance with paragraph (A) above.
(E) In the case that any German Guarantor claims in accordance with the provisions of paragraphs (B) and (D) above that the guarantee granted hereunder can only be enforced in a limited amount (as set out above), the relevant German Guarantor (or, in the case of a GmbH & Co. KG, its general partner) shall realize any asset that is shown in the balance sheet with a book value ( Buchwert ) that is significantly lower than the market value of such asset and that can be realized to the extent legally permitted and commercially justifiable.
(F) The limitations set out in this Section 10.07(b)(ii) shall apply mutatis mutandis to all payment obligations of a German Guarantor incurred under or in connection with the Notes Documents in respect of the obligations of any of its Holding Companies or Affiliates (other than any of its Subsidiaries) under or in connection with the Notes Documents (by way of indemnification or otherwise).
(G) The limitations set out in this Section 10.07(b)(ii) do not apply if and to the extent that the German Guarantor is a party to a domination and/or profit and loss pooling agreement ( Beherrschungs - und / oder Gewinnabführungsvertrag ) as dominated entity, provided that the enforcement of the guarantee and/or other payment obligations does not lead to a violation of the capital maintenance requirement as set out in Section 30 para 1 of the German Limited Liability Companies Act ( Gesetz betreffend die Gesellschaften mit beschränkter Haftung ).
(H) In this Section 10.07(b)(ii):
(1) 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.
(2) Holding Company means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.
(3) 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;
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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.
(iii) Limitations on Obligations of Belgian Guarantors. The liability of any Guarantor incorporated in Belgium (a Belgian Guarantor ) under the Senior Finance Documents and the Notes Documents in relation to the Notes shall in all circumstances be limited to an amount equal to: (a) any intra-group loans or facilities made to a Belgian Guarantor by any other member of the Group (as defined in the Senior Credit Facilities Agreement) (whether or not such intra-group loan is retained by the Belgian Guarantor for its own purposes or on-lent to another member of the Group); or (b) 85 per cent. of the net assets (as determined in accordance with the Belgian Companies Code and accounting principles generally accepted in Belgium, but not taking intra-group debts into account as debts) of that Belgian Guarantor calculated on the basis of the most recent audited annual accounts available at the date on which the relevant demand is made, whichever amount is higher.
Section 10.08 Non-Impairment .
The failure to endorse a Note Guarantee on any Note shall not affect or impair the validity thereof.
ARTICLE 11
COLLATERAL, SECURITY DOCUMENTS AND THE SECURITY AGENT
Section 11.01 Collateral and Security Documents .
(a) The payment obligations of the Issuer and the Guarantors under the Notes, the Note Guarantees and this Indenture will, subject to the Agreed Security Principles, benefit from (i) on the Issue Date, the security set forth in Schedule 1, (ii) on the Post-Closing Date, the security set forth in Schedule 2 and (iii) property and assets that thereafter secure the obligations under this Indenture, the Notes and the Note Guarantees pursuant to any Security Documents (including pursuant to Section 4.08).
(b) The Issuer will deliver to the Trustee copies of all documents delivered to the Security Agent pursuant to the Security Documents, and the Issuer will, and will cause each of its Restricted Subsidiaries to, do or cause to be done all such acts and things as may be necessary or proper, or as may be required by the provisions of the Security Documents, to assure and confirm to the Trustee that the Security Agent holds, for the benefit of the Trustee and the Holders, duly created, enforceable and perfected Liens as contemplated hereby and by the Security Documents, so as to render the same available for the security and benefit of this Indenture and of the Notes secured thereby, according to the intent and purposes herein expressed. Subject to the Agreed Security Principles, the Issuer will take, and will cause its Restricted Subsidiaries to take (including as may be requested by the Trustee or the Security Agent) any and all actions reasonably required to cause the Security Documents and the Intercreditor Agreement to create and maintain, as security for the obligations of the Issuer and the Guarantors hereunder, valid and enforceable perfected Liens in and on all the Collateral ranking in right and priority of payment as set forth in this Indenture and the Intercreditor Agreement, and subject to no other Liens other than as permitted by the terms of this Indenture and the Intercreditor Agreement.
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(c) Neither the Trustee nor the Security Agent nor any of their respective officers, directors, employees, attorneys or agents will be responsible or liable for the existence, genuineness, value or protection of any property securing the Notes, for the legality, enforceability, effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency or protection of any Lien, or for any defect or deficiency as to any such matters, or for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the Liens or Security Documents or any delay in doing so.
(d) Each of the Issuer, the Trustee and the Holders agree that the Security Agent shall be the joint creditor (together with the Holders) of each and every obligation of the parties hereto under the Notes and this Indenture, and that accordingly the Security Agent will have its own independent right to demand performance by the Issuer of those obligations, except that such demand shall only be made with the prior written notice to the Trustee and as permitted under the Intercreditor Agreement. However, any discharge of such obligation to the Security Agent, on the one hand, or to the Trustee or the Holders, as applicable, on the other hand, shall, to the same extent, discharge the corresponding obligation owing to the other.
(e) The Security Agent agrees that it will hold the security interests in the Collateral created under the Security Documents to which it is a party as contemplated by this Indenture and the Intercreditor Agreement, and any and all proceeds thereof, for the benefit of, among others, the Trustee and the Holders, without limiting the Security Agents rights including under Section 11.02, to act in preservation of the security interest in the Collateral. The Security Agent will, subject to being indemnified and/or secured in accordance with the Intercreditor Agreement, take action or refrain from taking action in connection therewith only as directed by the Trustee, subject to the terms of the Intercreditor Agreement.
(f) Each Holder, by its acceptance thereof of a Note, shall be deemed (i) to have consented and agreed to the terms of the Security Documents, the Intercreditor Agreement and any Additional Intercreditor Agreement entered into in compliance with Section 4.11. (including, without limitation, the provisions providing for foreclosure and release of the Collateral and authorizing the Security Agent to enter into the Security Documents on its behalf) as the same may be in effect or may be amended from time to time in accordance with its terms and authorizes and directs the Security Agent to enter into the Security Documents and to perform its obligations and exercise its rights thereunder in accordance therewith, (ii) to have authorized the Issuer, the Trustee and the Security Agent, as applicable, to enter into the Security Documents, the Intercreditor Agreement and any Additional Intercreditor Agreement and to be bound thereby and (iii) to have appointed and authorized the Security Agent and the Trustee to give effect to the provisions in the Intercreditor Agreement and any Additional Intercreditor Agreement. Each Holder, by accepting a Note, appoints the Security Agent as its trustee under the Security Documents and authorizes it to act on such Holders behalf, including by entering into and complying with the provisions of the Intercreditor Agreement. The Trustee hereby acknowledges that the Security Agent is authorized to act under the Security Documents on behalf of the Trustee, with the full authority and powers of the Trustee thereunder. The Security Agent is hereby authorized to exercise such rights, powers and discretions as are specifically delegated to it by the terms of the Security Documents, including the power to enter into the Security Documents, as trustee on behalf of the Holders and the Trustee, together with all rights, powers and discretions as are reasonably incidental thereto or necessary to give effect to the trusts created thereunder. The Security Agent shall, however, at all times be entitled to seek directions from the Trustee and shall be obligated to follow those directions if given. The Security Agent hereby accepts its appointment as the trustee of the Holders and the Trustee under the Security Documents, and its authorization to so act on such Holders and the Trustees behalf. The claims of Holders will be subject to the Intercreditor Agreement and any Additional Intercreditor Agreement entered into in compliance with Section 4.11.
(g) Subject to Section 4.07, the Issuer is permitted to pledge the Collateral in connection with future issuances of its Indebtedness or Indebtedness of its Restricted Subsidiaries, including any Additional Notes, in each case, permitted under this Indenture and on terms consistent with the relative priority of such Indebtedness.
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Section 11.02 Suits To Protect the Collateral .
Subject to the provisions of the Security Documents and the Intercreditor Agreement, the Security Agent shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of any of the Security Documents or this Indenture, and such suits and proceedings as the Security Agent, in its sole discretion, may deem expedient to preserve or protect the security interests in the Collateral created under the Security Documents (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the Lien on the Collateral or be prejudicial to the interests of the Holders or the Trustee).
Section 11.03 Resignation and Replacement of Security Agent .
Any resignation or replacement of, the Security Agent shall be made in accordance with the Intercreditor Agreement.
Section 11.04 Amendments .
Subject to the rights and obligations of the Security Agent under the terms of the Intercreditor Agreement, the Security Agent agrees that it will enter into an amendment to the Intercreditor Agreement or enter into or amend any other Additional Intercreditor Agreement entered into in accordance with Section 4.11 upon a direction of the Issuer to do so, given in accordance with Section 4.11. The Security Agent shall sign any amendment authorized pursuant to Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Security Agent, subject to the rights and obligations of the Security Agent under the terms of the Intercreditor Agreement.
Section 11.05 Release of Liens .
(a) The Issuer and its Subsidiaries will be entitled to release the security interests in respect of the Collateral under any one or more of the following circumstances:
(i) other than the existing security interest in respect of shares of Capital Stock of the Issuer, in connection with any sale or other disposition of Collateral to a Person that is not the Issuer or a Restricted Subsidiary (but excluding any transaction subject to Article 5), if such sale or other disposition does not violate Section 4.05 or is otherwise permitted in accordance with this Indenture;
(ii) in the case of a Guarantor that is released from its Note Guarantee pursuant to the terms of this Indenture, the release of the property and assets, and Capital Stock, of such Guarantor;
(iii) as described under Article 9;
(iv) upon payment in full of principal, interest and all other obligations on the Notes or defeasance or discharge of the Notes, as provided in Article 8;
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(v) if the Issuer designates any Restricted Subsidiary to be an Unrestricted Subsidiary in accordance with the applicable provisions of this Indenture, the release of the property and assets, and Capital Stock, of such Unrestricted Subsidiary;
(vi) in connection with the implementation of a Permitted Reorganization;
(vii) only with respect to the Liens on the Capital Stock of Midco, immediately preceding or after completion of an Initial Public Offering in which Midco is the IPO Entity;
(viii) in connection with the granting of Liens on such property or assets, which may include Collateral, or the sale or transfer of such property or assets, which may include Collateral, in each case pursuant to a Qualified Receivables Financing; and
(ix) as otherwise permitted in accordance with this Indenture.
(b) In addition, the security interest created by the Security Documents will be released (a) in accordance with an enforcement action pursuant to the Intercreditor Agreement or any Additional Intercreditor Agreement and (b) as may be permitted by Section 4.07.
(c) The Security Agent and the Trustee (if necessary) will take all necessary action reasonably requested by the Issuer to effectuate any release of Collateral securing the Notes and the Note Guarantees, in accordance with the provisions of this Indenture, the Intercreditor Agreement or any Additional Intercreditor Agreement and the relevant Security Document. Each of the releases set forth above shall be effected by the Security Agent without the consent of the Holders or any action on the part of the Trustee (unless action is required by it to effect such release).
(d) The Security Agent and the Trustee will agree to any release of the security interest in respect of the Collateral that is in accordance with this Indenture, the Intercreditor Agreement or any Additional Intercreditor Agreement and the relevant Security Document, without requiring any Holder consent or any action on the part of the Trustee. Upon request of the Issuer, upon receipt of an Officers Certificate and an Opinion of Counsel stating that all conditions precedent in respect of such release have been satisfied, the Security Agent shall execute, deliver or acknowledge any necessary or proper instruments of termination, satisfaction or release to evidence the release of Collateral permitted to be released pursuant to this Indenture, the Intercreditor Deed and the Security Documents. At the request of the Issuer, the Security Agent shall execute and deliver an appropriate instrument evidencing such release (in the form provided by the Issuer).
Section 11.06 Compensation and Indemnity .
The Issuer, failing which the Guarantors, to the extent legally possible and subject to the Agreed Security Principles, shall pay to the Security Agent from time to time compensation for its services, in accordance with the applicable fee letter, subject to any terms of the Intercreditor Agreement as in effect from time to time which may address the compensation of the Security Agent. The Security Agents compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer and each Guarantor, if any, jointly and severally, if any, to the extent legally possible and subject to the Agreed Security Principles, shall reimburse the Security Agent upon request for all out-of-pocket expenses properly incurred or made by it (as evidenced in an invoice from the Security Agent), including costs of collection, in addition to the compensation for its services. Such expenses shall include the properly incurred compensation and expenses, disbursements and advances of the Security Agents agents, counsel, accountants and experts. The Issuer and each Guarantor, if any, jointly and severally shall indemnify the Security Agent and its officers, directors, agents and employers against any and all loss, liability or expense (including properly incurred attorneys fees) incurred by or in connection with its rights, duties, and
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obligations under this Indenture, the Intercreditor Agreement, any Additional Intercreditor Agreement or the Security Documents, as the case may be, including the properly incurred costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any such rights, powers or duties. The Security Agent shall notify the Issuer of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however , that any failure so to notify the Issuer shall not relieve the Issuer or any Guarantor of its indemnity obligations hereunder, under the Intercreditor Agreement, any Additional Intercreditor Agreement or the Security Documents, as the case may be. The Issuer shall defend the claim and the indemnified party shall provide cooperation at the Issuers and any Guarantors expense in the defense. Notwithstanding the foregoing, such indemnified party may, in its sole discretion, assume the defense of the claim against it and the Issuer and each Guarantor, if any, shall, jointly and severally, pay the properly incurred fees and expenses of the indemnified partys defense (as evidenced in an invoice from the Security Agent). Such indemnified parties may have separate counsel of their choosing and the Issuer and the Guarantors, jointly and severally, to the extent legally possible and subject to the Agreed Security Principles, shall pay the properly incurred fees and expenses of such counsel (as evidenced in an invoice from the Security Agent). The Issuer need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such partys own willful misconduct, gross negligence or fraud.
To secure the Issuers and any Guarantors payment obligations in this Section 11.06, the Security Agent shall subject to the Intercreditor Agreement and any Additional Intercreditor Agreement, have a lien on the Collateral and the proceeds of the enforcement of the Collateral for all monies payable to it under this Section 11.06.
The Issuers and any Guarantors payment obligations pursuant to this Section 11.06 and any lien arising hereunder shall, if any, to the extent legally possible and subject to the Agreed Security Principles, survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Security Agent. Without prejudice to any other rights available to the Security Agent under applicable law, when the Security Agent incurs expenses after the occurrence of a Default specified in Section 6.01(e) or Section 6.01(f) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.
Section 11.07 Conflicts .
Each of the Issuer, the Guarantors (if any), the Trustee and the Holders acknowledge and agree that the Security Agent is acting as security agent and trustee not just on their behalf but also on behalf of the creditors named in the Intercreditor Agreement and acknowledge and agree that pursuant to the terms of the Intercreditor Agreement, the Security Agent may be required by the terms thereof to act in a manner which may conflict with the interests of the Issuer, the Guarantors, the Trustee and the Holders (including the Holders interests in the Collateral and the Note Guarantees) and that it shall be entitled to do so in accordance with the terms of the Intercreditor Agreement.
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ARTICLE 12
MISCELLANEOUS
Section 12.01 Notices .
Any notice or communication shall be in writing, in the English language and delivered in person or mailed by first-class mail addressed as follows:
if to the Issuer:
Iglo Foods BondCo Plc
5 New Square
Bedfont Lakes Business Park
Feltham, Middlesex TW14 8HA
United Kingdom
Facsimile: +44 (2) 208918 3476
Attention: Julie Fabris
with a copy to:
Cravath, Swaine & Moore LLP
CityPoint, One Ropemaker Street
London EC2Y 9HR
United Kingdom
Facsimile: +44 20 7860 1150
Attention: Philip Boeckman
if to the Registrar, Transfer Agent or Authenticating Agent:
Deutsche Bank Luxembourg S.A.
2, boulevard Konrad Adenauer
L-1115 Luxembourg
Luxembourg
Attention: Lux Registrar
Fax: +352 47 3136
if to the Trustee:
Deutsche Trustee Company Limited
Winchester House
1 Great Winchester Street
London EC2N 2DB
United Kingdom
Attention: Managing Director
Fax: +44 (0)207 547 6149
if to the Security Agent:
Credit Suisse AG, London Branch
One Cabot Square
London E14 4QJ
United Kingdom
Attention: Ian Croft
Fax: +44 (0)207 888 8398
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if to the Paying Agent:
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
United Kingdom
Attention: Debt & Agency Services
Fax: +44 (0)207 547 6149
Each of the Issuer or the Trustee by notice to the others may designate additional or different addresses for subsequent notices or communications.
All notices to Holders will be validly given if mailed to them at their respective addresses in the register of the Holders, if any, maintained by the Registrar with a copy to the Trustee. For so long as any of the Notes are listed on the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange shall so require, notices with respect to the Notes will be published in a newspaper having general circulation in Luxembourg or, to the extent and in the manner permitted by such rules, posted on the official website of the Luxembourg Stock Exchange ( www.bourse.lu ). For so long as any Notes are represented by Global Notes, all notices to Holders will be delivered to Euroclear and Clearstream, each of which will give such notices to the holders of Book-Entry Interests. Such notices may also be published on the website of the Luxembourg Stock Exchange ( www.bourse.lu ), to the extent and in the manner permitted by the rules of the Luxembourg Stock Exchange.
Each such notice shall be deemed to have been given on the date of such publication or, if published more than once on different dates, on the first date on which publication is made; provided that , if notices are mailed, such notice shall be deemed to have been given on the later of such publication and the seventh day after being so mailed. Any notice or communication mailed to a Holder shall be mailed to such Person by first-class mail or other equivalent means and shall be sufficiently given to such Holder if so mailed within the time prescribed. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.
Any notices provided by the Issuer to an Agent shall be in the English language or a certified translation.
Notwithstanding any other provision of this Indenture and other Notes Documents, any communication to be made under or in connection with the Notes Documents shall be made to the address outside the Republic of Austria. The foregoing sentence applies mutatis mutandis to any communication made by fax, electronic message or in other written form.
Section 12.02 Certificate and Opinion as to Conditions Precedent .
Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture, the Issuer shall furnish to the Trustee:
(i) an Officers Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and any other matters that the Trustee may reasonably request; and
(ii) if requested by the Trustee, an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with and any other matters that the Trustee may reasonably request.
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Section 12.03 Statements Required in Certificate or Opinion .
Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.16) shall include:
(i) a statement that the Person making such certificate or opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, such Person has made such examination or investigation as is necessary to enable that Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such Person, such covenant or condition has been complied with.
Section 12.04 When Notes Disregarded .
In determining whether the Holders of the required principal amount of the Notes have concurred in any direction, waiver or consent, the Notes owned by the Issuer or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer will be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the Trustee knows are so owned shall be so disregarded. Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.
Section 12.05 Rules by Trustee, Paying Agent and Registrar .
The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agent may make reasonable rules for their functions.
Section 12.06 Legal Holidays .
If the due date for any payment in respect of any Notes is not a Business Day at the place at which such payment is due to be paid, the Holder thereof will not be entitled to payment of the amount due until the next succeeding Business Day at such place, and will not be entitled to any further interest or other payment as a result of any such delay. If a regular record date is not a Business Day, the record date shall not be affected.
Section 12.07 Governing Law .
THIS INDENTURE AND THE NOTES, INCLUDING ANY NOTE GUARANTEES, AND THE RIGHTS AND DUTIES OF THE PARTIES THEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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Section 12.08 Consent to Jurisdiction and Service .
The Issuer and each Guarantor irrevocably (i) agree that any legal suit, action or proceeding against the Issuer or any Guarantor arising out of or based upon this Indenture, the Notes or any Note Guarantee or the transactions contemplated hereby may be instituted in any U.S. Federal or state court in the Borough of Manhattan, The City of New York court and (ii) waive, to the fullest extent they may effectively do so, any objection which they may now or hereafter have to the laying of venue of any such proceeding. The Issuer has appointed (and any Subsidiary becoming a Guarantor shall appoint) Corporation Service Company, located at 1180 Avenue of the Americas, Suite 210, New York, NY 10036, as their authorized agent (the Authorized Agent ) upon whom process may be served in any such action arising out of or based on this Indenture, the Notes or the transactions contemplated hereby which may be instituted in any New York court, expressly consent to the jurisdiction of any such court in respect of any such action, and waive any other requirements of or objections to personal jurisdiction with respect thereto and waives any right to trial by jury. Such appointment shall be irrevocable. The Issuer and each Guarantor represents and warrants that the Authorized Agent has agreed to act as such agent for service of process and agrees to take any and all action, including the filing of any and all documents and instruments that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Issuer and each Guarantor shall be deemed, in every respect, effective service of process upon the Issuer and each Guarantor.
Section 12.09 No Recourse Against Others .
No director, officer, employee, incorporator or shareholder of the Issuer, the Parent Guarantor or any of its Subsidiaries or Affiliates as such, shall have any liability for any obligations of the Issuer or any Guarantor under the Notes Documents, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
Section 12.10 Successors .
All agreements of the Issuer and each Guarantor, if any, in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.
Section 12.11 Counterparts .
This Indenture may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Indenture by facsimile or other electronic transmission (i.e., a pdf or tif) shall be effective as delivery of a manually executed counterpart thereof. One signed copy is enough to prove this Indenture.
Section 12.12 Table of Contents; Headings .
The table of contents, cross- reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
Section 12.13 Prescription .
Claims against the Issuer or any Guarantor for the payment of principal, or premium, if any, on the Notes will be prescribed five years after the applicable due date for payment thereof. Claims against the Issuer or any Guarantor for the payment of interest on the Notes will be prescribed three years after the applicable due date for payment of interest.
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Section 12.14 Place of Performance . The parties agree that the exclusive place of performance (Erfüllungsort) for all rights and obligations under any Notes Document shall be at the seat of the Security Agent in London, or any other place reasonably designated by the Security Agent but in any case a place outside the Republic of Austria, which especially means that the payment of amounts under this Indenture shall be made to a bank account respectively, and from a bank account outside of the Republic of Austria. It is expressly agreed between the parties hereto that any such performance within the Republic of Austria will not establish Austria as the place of performance and shall be deemed not effective with respect to any party hereto.
Section 12.15 Additional Limitations . Notwithstanding any provision to the contrary in any Notes Document, the obligations (Verpflichtungen) and liabilities (Haftungen) of an Austrian Guarantor under any Notes Document shall at all times be limited so that at no time the assumption of a liability (Haftung) and/or obligation (Verpflichtung) shall be required to the extent that such liability (Haftung) or obligation (Verpflichtung) would violate Austrian Capital Maintenance Rules. Should any obligation (Verpflichtung) and/or liability (Haftung) of an Austrian Guarantor under any Notes Document violate or contradict the Austrian Capital Maintenance Rules and therefore be held invalid or unenforceable in whole or in part or should the assumption or enforcement of such obligation (Verpflichtung) or liability (Haftung) expose any managing director or member of the supervisory board of any Austrian Guarantor to personal liability or criminal responsibility, such obligation/or liability shall be deemed to be replaced by an obligation (Verpflichtung) and/or liability (Haftung) of a similar nature (i) which is in compliance with the Austrian Capital Maintenance Rules, (ii) which does not expose the managing directors or members of the supervisory board of the Austrian Guarantor to any personal liability or criminal responsibility; and (iii) which provides the best possible security interest admissible in accordance with the Austrian Capital Maintenance Rules in favour of the Holders.
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IGLO FOODS BONDCO PLC, as Issuer | ||
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(Signature Page to Indenture)
IGLO FOODS FINCO LIMITED , as Parent Guarantor | ||
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(Signature Page to Indenture)
IGLO FOODS GROUP LIMITED , as a Subsidiary Guarantor | ||
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(Signature Page to Indenture)
IGLO FOODS MIDCO LIMITED , as a Subsidiary Guarantor | ||
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(Signature Page to Indenture)
BIRDS EYE IPCO LIMITED , as a Subsidiary Guarantor | ||
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(Signature Page to Indenture)
BIRDS EYE LIMITED , as a Subsidiary Guarantor | ||
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(Signature Page to Indenture)
FROZEN FISH INTERNATIONAL GMBH , as a Subsidiary Guarantor | ||||
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Name: | Francesco Fattori | Markus Mischko | ||
Title: | Managing Director | Managing Director |
(Signature Page to Indenture)
IGLO AUSTRIA GMBH , as a Subsidiary Guarantor | ||||
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Name: | Dr. Rainer Herrmann | A. Backhausen | ||
Title: | General Manager | Finance & HR Dir. |
(Signature Page to Indenture)
IGLO AUSTRIA HOLDING GMBH , as a Subsidiary Guarantor | ||||
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Name: | Dr. Rainer Herrmann | A. Backhausen | ||
Title: | General Manager | Finance & HR Dir. |
(Signature Page to Indenture)
IGLO BELGIUM NV , as a Subsidiary Guarantor | ||
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Name: | Guillaume Argand | |
Title: | General Manager |
(Signature Page to Indenture)
IGLO GMBH , as a Subsidiary Guarantor | ||||
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Name: | Francesco Fattori | Markus Mischko | ||
Title: | Managing Director | Managing Director |
(Signature Page to Indenture)
IGLO HOLDING GMBH , as a Subsidiary Guarantor | ||||
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Name: | Francesco Fattori | Markus Mischko | ||
Title: | Managing Director | Managing Director |
(Signature Page to Indenture)
IGLO NEDERLAND B.V. , as a Subsidiary Guarantor | ||
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Name: | Antie Schubeit | |
Title: | General Manager | |
Iglo Nederland BV |
(Signature Page to Indenture)
LIBERATOR GERMAN NEWCO GMBH , as a Subsidiary Guarantor | ||||
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Name: | Francesco Fattori | Markus Mischko | ||
Title: | Managing Director | Managing Director |
(Signature Page to Indenture)
DEUTSCHE TRUSTEE COMPANY LIMITED , as Trustee | ||||||
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Name: | Miriam Keeler | |||||
Title: | Associate Director | |||||
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Title: | Associate Director |
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DEUTSCHE BANK AG, LONDON BRANCH as the Paying Agent, Transfer Agent and Calculation Agent |
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Name: | Miriam Keeler | |||||
Title: | Director | |||||
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Name: | S Ferguson | |||||
Title: | Associate Director |
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DEUTSCHE BANK LUXEMBOURG S.A. , as Luxembourg Register and Luxembourg Paying Agent |
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Name: | Miriam Keeler | |||||
Title: | Attorney | |||||
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Name: | S Ferguson | |||||
Title: | Attorney |
(Signature Page to Indenture)
CREDIT SUISSE AG, LONDON BRANCH , as Security Agent | ||||||||||
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Name: | Ian Croft | Shumin Papaioannou | ||||||||
Title: | Assistant Vice President Operations | Authorised Signatory |
(Signature Page to Indenture)
EXHIBIT A-1
PROVISIONS RELATING
TO THE NOTES
These provisions relating to the Notes are in addition to and not in lieu of the provisions relating to the Notes found in Articles 2 and 3 of the Indenture. In the event any inconsistency between the language in this Exhibit A-1 and corresponding language in the Indenture, the language in the Indenture shall control.
1. | Definitions . |
Capitalized terms used but not otherwise defined in this Exhibit A-1 shall have the meanings assigned to them in the Indenture. For the purposes of this Exhibit A-1 the following terms shall have the meanings indicated below:
Applicable Procedures means, with respect to any transfer or transaction involving a Regulation S Global Note or beneficial interest therein, the rules and procedures of the Common Depositary for such Global Note, Euroclear and Clearstream, in each case to the extent applicable to such transaction and as in effect from time to time.
Definitive Registered Note means a certificated Note that does not include the Global Notes Legend.
Global Notes has the meaning given to it in Section 2.1(a)(v) of this Exhibit A-1.
Global Notes Legend means the legend set forth under that caption in this Exhibit A-1.
QIB means a qualified institutional buyer as defined in Rule 144A.
Regulation S means Regulation S under the Securities Act.
Regulation S Global Notes has the meaning given to it in Section 2.1(a)(ii) of this Exhibit A-1.
Regulation S Notes means all Notes offered and sold outside the United States in reliance on Regulation S.
Restricted Period , with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Notes are first offered to persons other than distributors (as defined in Regulation S) in reliance on Regulation S, notice of which day shall be promptly given by the Issuer to the Trustee, and (b) the Issue Date with respect to such Notes.
Restricted Notes Legend means the legend set forth under that caption in this Exhibit A-1.
Rule 144A means Rule 144A under the Securities Act.
Rule 144A Global Notes has the meaning given to it in Section 2.1(a)(i) of this
Rule 144A Notes means all Notes offered and sold to QIBs in reliance on Rule 144A.
Transfer Restricted Notes means Definitive Registered Notes and any other Notes that bear or are required to bear the Restricted Notes Legend.
A-1-1
2. | The Notes . |
2.1 Form and Dating .
(a) Global Notes .
(i) Notes offered and sold within the United States to QIBs in reliance on Rule 144A and denominated in euro shall be issued initially in the form of one or more permanent global notes in fully registered form without interest coupons (collectively, the Rule 144A Global Notes ).
(ii) Notes offered and sold outside the United States in reliance on Regulation S and denominated in euro shall be issued initially in the form of one or more permanent global notes in fully registered form without interest coupons (collectively, the Regulation S Global Notes ).
(iii) The Rule 144A Global Notes and the Regulation S Global Notes shall bear the Global Notes Legend and the Restricted Notes Legend. The Rule 144A Global Notes and the Regulation S Global Notes shall be deposited on behalf of the purchasers of the Notes represented thereby, and registered in the name of the nominee of the applicable Common Depositary, duly executed by the Issuer and authenticated by the Trustee or an Authenticating Agent as provided in the Indenture.
(iv) Beneficial ownership interests in the Regulation S Global Notes shall not be exchangeable for interests in the Rule 144A Global Notes or any other security without a Restricted Security Legend until the expiration of the Restricted Period.
(v) The Rule 144A Global Notes and the Regulation S Global Notes are each referred to herein as a Global Note and are collectively referred to herein as Global Notes . The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee or Registrar and the Common Depositary or its nominee and on the schedules thereto as hereinafter provided, in connection with transfers, exchanges, redemptions and repurchases of beneficial interests therein.
(b) Book-Entry Provisions . This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Common Depositary.
The Issuer shall execute and the Trustee or an Authenticating Agent, as the case may be, shall, in accordance with this Section 2.1(b) and Section 2.2 and pursuant to an order of the Issuer signed by one Officer, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the nominee of the Common Depositary for such Global Note or Global Notes and (ii) shall be delivered by the Trustee or Authenticating Agent, as the case may be, to such Common Depositary or pursuant to such Common Depositarys instructions.
Members of, or participants in, Euroclear or Clearstream ( Agent Members ) shall have no rights under the Indenture with respect to any Global Note held on their behalf by the Common Depositary or under such Global Note, and the Common Depositary may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by Euroclear or Clearstream or impair, as between Euroclear or Clearstream and their respective Agent Members, the operation of customary practices thereof governing the exercise of the rights of a holder of a beneficial interest in any Global Note.
(e) Definitive Registered Notes . Except as provided in Section 2.3 or 2.4 of this Exhibit A-1, owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of certificated Notes.
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2.2 Authentication . The Trustee or an Authenticating Agent, as the case may be, shall authenticate and make available for delivery the Notes upon a written order of the Issuer signed by one of its Officers. Such order shall (a) specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated, (b) direct the Trustee or an Authenticating Agent to authenticate such Notes and (c) certify that all conditions precedent to the issuance of such Notes have been complied with in accordance with the terms hereof.
2.3 Transfer and Exchange .
(a) Transfer and Exchange of Definitive Registered Notes . When Definitive Registered Notes are presented to the Registrar or Transfer Agent, as the case may be, with a request:
(i) to register the transfer of such Definitive Registered Notes; or
(ii) to exchange such Definitive Registered Notes for an equal principal amount of Definitive Registered Notes of other authorized denominations,
the Registrar or the Transfer Agent, as the case may be, shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met, provided, however, that the Definitive Registered Notes surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar or the Transfer Agent, as the case may be, duly executed by the Holder thereof or its attorney duly authorized in writing; and
(2) in the case of Transfer Restricted Notes, are accompanied by the following additional information and documents, as applicable:
(i) if such Definitive Registered Notes are being delivered to the Registrar or the Transfer Agent, as the case may be, by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in the form set forth on the reverse side of the Note);
(ii) if such Definitive Registered Notes are being transferred to the Issuer, a certification to that effect (in the form set forth on the reverse side of the Note); or
(iii) if such Definitive Registered Notes are being transferred pursuant to an exemption from registration in accordance with Rule 144A, Regulation S or Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (x) a certification to that effect (in the form set forth on the reverse side of the Note) and (y) if the Issuer or Registrar or Transfer Agent, as the case may be, so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i) of this Exhibit A-1.
(b) Restrictions on Transfer of a Definitive Registered Note for a Beneficial Interest in a Global Note . A Definitive Registered Note may not be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Registrar of a Definitive Registered Note, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer, the Registrar and the Transfer Agent, together with:
(i) certification (in the form set forth on the reverse side of the Note) that such Definitive Registered Note is being transferred (1) to a QIB in accordance with Rule 144A or (2) outside the United States in an offshore transaction within the meaning of Regulation S and in compliance with Rule 904 under the Securities Act; and
(ii) written instructions directing the Registrar to make an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Notes represented by the Global Note, such instructions to contain information regarding the account to be credited with such increase,
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then the Trustee or the Registrar shall cancel such Definitive Registered Note and cause the aggregate principal amount of Notes represented by the Global Note to be increased by the aggregate principal amount of the Definitive Registered Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Registered Note so cancelled; provided that, in no event shall a Regulation S Global Note be exchanged by the Issuer for a Definitive Registered Note prior to the expiration of the Restricted Period. If no Global Notes are then outstanding and the Global Note has not been previously exchanged for certificated securities pursuant to Section 2.4 of this Exhibit A-1, the Issuer shall issue and the Trustee or an Authenticating Agent shall authenticate, upon written order of the Issuer in the form of an Officers Certificate, a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes .
(i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Common Depositary, in accordance with the Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Common Depositary therefor. A transferor of a beneficial interest in a Global Note shall deliver a written order given in accordance with the Common Depositarys procedures containing information regarding the participant account of the Common Depositary to be credited with a beneficial interest in such Global Note or another Global Note and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Note and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Note being transferred. Transfers by an owner of a beneficial interest in a Rule 144A Global Note to a transferee who takes delivery of such interest through a Regulation S Global Note, whether before or after the expiration of the Restricted Period, shall be made only upon receipt by the Registrar of a certification in the form provided in Exhibit B from the transferor to the effect that such transfer is being made in accordance with Regulation S or pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if applicable) under the Securities Act.
(ii) Notwithstanding any other provisions of this Exhibit A-1 (other than the provisions set forth in Section 2.4 of this Exhibit A-1), a Global Note may not be transferred as a whole except by the Common Depositary to a successor Common Depositary or a nominee of such successor Common Depositary.
(d) Restrictions on Transfer of Regulation S Global Note .
(i) Prior to the expiration of the Restricted Period, interests in the Regulation S Global Note may only be held through Euroclear or Clearstream. During the Restricted Period, beneficial ownership interests in the Regulation S Global Note may only be sold, pledged or transferred through Euroclear or Clearstream in accordance with the Applicable Procedures and only (1) to the Issuer, (2) so long as such security is eligible for resale pursuant to Rule 144A, to a person whom the selling holder reasonably believes is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (3) in an offshore transaction in accordance with Regulation S, (4) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if applicable) under the Securities Act or any other available
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exemption or (5) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Prior to the expiration of the Restricted Period, transfers by an owner of a beneficial interest in the Regulation S Global Note to a transferee who takes delivery of such interest through the Rule 144A Global Note shall be made only in accordance with Applicable Procedures and upon receipt by the Registrar of a written certification from the transferor of the beneficial interest in the form provided in Exhibit C to the effect that such transfer is being made to a QIB within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A. Such written certification shall no longer be required after the expiration of the Restricted Period.
(ii) Upon the expiration of the Restricted Period, beneficial ownership interests in the Regulation S Global Note shall be transferable in accordance with applicable law and the other terms of the Indenture.
(e) Legend .
(i) Except as permitted by the following paragraph (ii), (iii) or (iv), each Note certificate evidencing the Global Notes and the Definitive Registered Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (RULE 144A)) OR (B) IT IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT; (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE RESALE RESTRICTION TERMINATION DATE) THAT IS [IN THE CASE OF THE RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE ISSUER, THE GUARANTORS OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO NON U.S. PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT, OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH INVESTOR ACCOUNT OR ACCOUNTS BE AT ALL TIMES WITHIN ITS OR
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THEIR CONTROL AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, AND ANY APPLICABLE LOCAL LAWS AND REGULATIONS, AND FURTHER SUBJECT TO THE ISSUERS AND THE TRUSTEES RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE; AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
BY ITS ACQUISITION OF THIS SECURITY, THE HOLDER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT (1) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF OR WITH ASSETS OF, AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (ERISA), A PLAN SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE CODE), OR AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO INCLUDE THE ASSETS OF ANY SUCH PLANS (COLLECTIVELY, PLANS), OR A GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA), CHURCH PLAN (AS DEFINED IN SECTION 3(33) OF ERISA, NON U.S. OR OTHER PLAN OR ARRANGEMENT THAT IS SUBJECT TO FEDERAL, STATE, LOCAL OR NON U.S. LAWS OR REGULATIONS THAT ARE SUBSTANTIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (SIMILAR LAW), OR (B) THE ACQUISITION AND HOLDING OF THIS SECURITY OR AN INTEREST THEREIN BY THE HOLDER DOES NOT AND WILL NOT CONSTITUTE OR RESULT IN A NON EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE OR A NON EXEMPT VIOLATION OF SIMILAR LAW, AND (2) THE HOLDER WILL NOT SELL OR OTHERWISE TRANSFER THIS SECURITY UNLESS SUCH SUBSEQUENT TRANSFEREE HAS MADE THE REPRESENTATIONS AND WARRANTEES IN (1) ABOVE.
Each Definitive Registered Note shall bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted Note that is a Definitive Registered Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Note for a Definitive Registered Note that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Note if the Holder certifies in writing to the Transfer Agent and Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note).
(iii) Upon a sale or transfer after the expiration of the Restricted Period of any Note acquired pursuant to Regulation S, all requirements that such Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Note be issued in global form shall continue to apply.
(iv) Any additional Notes sold in a registered offering under the Securities Act shall not be required to bear the Restricted Notes Legend.
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(f) Cancellation or Adjustment of Global Note . At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Registered Notes, transferred, redeemed, repurchased or cancelled, such Global Note shall be returned by the Common Depositary to an Authenticating Agent for cancellation or retained and cancelled by an Authenticating Agent. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Definitive Registered Notes, transferred in exchange for an interest in another Global Note, redeemed, repurchased or cancelled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Registrar with respect to such Global Note, by the Trustee, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges .
(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee or an Authenticating Agent shall authenticate, Definitive Registered Notes and Global Notes at the Registrars request.
(ii) No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant to Section 2.07, 3.06, 4.05, 4.14 or 9.04 of the Indenture).
(iii) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, the Paying Agent or the Registrar may deem and treat the person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.
(iv) All Notes issued upon any transfer or exchange pursuant to the terms of the Indenture shall evidence the same debt and shall be entitled to the same benefits under the Indenture as the Notes surrendered upon such transfer or exchange.
(h) No Obligation of the Trustee .
(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Common Depositary or any other Person with respect to the accuracy of the records of the Common Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Common Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to the registered Holders (which shall be the Common Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Common Depositary subject to the applicable rules and procedures of the Common Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Common Depositary with respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance, and shall not be responsible or liable for compliance, with any restrictions on transfer, exchange, redemption, purchase or repurchase, as applicable, imposed under the Indenture or under applicable law or regulation with respect to any transfer, exchange, redemption, purchase or repurchase, as applicable of any interest in any Note (including, without limitation, any transfers between or among
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Common Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of the Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof, it being understood that without limiting the generality of the foregoing, the Trustee shall not have any obligation or duty to monitor, determine or inquire as to compliance, and shall not be responsible or liable for compliance, with restrictions on transfer, exchange, redemption, purchase or repurchase, as applicable, of minimum denominations imposed under the Indenture or under applicable law or regulation with respect to any transfer, exchange, redemption, purchase or repurchase, as applicable, of any interest in any Note.
2.4 Definitive Registered Notes .
(a) A Global Note deposited with the Common Depositary pursuant to Section 2.1 of this Exhibit A-1 shall be transferred to the beneficial owners thereof in the form of Definitive Registered Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 of this Exhibit A-1 and (i) the Common Depositary notifies the Issuer that it is unwilling or unable to continue as a Common Depositary for such Global Note and a successor depositary is not appointed by the Issuer within 120 days of such notice or after the Issuer becomes aware of such cessation, or (ii) if the owner of a book-entry interest in such Global Note requests such exchange in writing delivered through the Depository or the Issuer following an Event of Default and enforcement action is being taken in respect thereof under the Indenture.
(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Common Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee or an Authenticating Agent shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Registered Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in minimum denominations of 100,000 and multiples of 1,000 in excess thereof and registered in such names as the Common Depositary shall direct. Any certificated Note in the form of a Definitive Registered Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(e), of this Exhibit A-1, bear the Restricted Notes Legend.
(c) Subject to the provisions of Section 2.4(b) of this Exhibit A-1, the registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under the Indenture or the Notes.
(d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i) or (ii) of this Exhibit A-1, the Issuer will promptly make available to the Trustee a reasonable supply of Definitive Registered Notes in fully registered form without interest coupons.
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EXHIBIT A-2
[FORM OF FACE OF NOTE]
[FLOATING RATE SENIOR SECURED NOTES DUE 2020]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR BANK SA/NV (EUROCLEAR), OR CLEARSTREAM BANKING, SOCIETE ANONYME (CLEARSTREAM), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF ITS AUTHORIZED NOMINEE, OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM (AND ANY PAYMENT IS MADE TO ITS AUTHORIZED NOMINEE, OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, ITS AUTHORIZED NOMINEE, HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF EUROCLEAR OR CLEARSTREAM OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT.
THE TAKING OF THIS DOCUMENT OR ANY CERTIFIED COPY THEREOF OR ANY DOCUMENT WHICH CONSTITUTES SUBSTITUTE DOCUMENTATION THEREOF INCLUDING WRITTEN CONFIRMATIONS OR REFERENCES (THE STAMP DUTY SENSITIVE DOCUMENTS) INTO AUSTRIA MAY CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY. THE SAME, INTER ALIA, APPLIES TO (I) THE SENDING OF STAMP DUTY SENSITIVE DOCUMENTS TO AN AUSTRIAN ADDRESSEE BY FAX, (II) THE SENDING OF ANY E-MAIL COMMUNICATION TO WHICH AN ELECTRONIC SCAN COPY (E.G., PDF OR TIF) OF A STAMP DUTY SENSITIVE DOCUMENT IS ATTACHED TO AN AUSTRIAN ADDRESSEE AND (III) THE SENDING OF ANY E-MAIL COMMUNICATION CARRYING AN ELECTRONIC OR DIGITAL SIGNATURE WHICH REFERS TO A STAMP DUTY SENSITIVE DOCUMENT TO AN AUSTRIAN ADDRESSEE. ACCORDINGLY, IN PARTICULAR, KEEP ANY STAMP DUTY SENSITIVE DOCUMENTS OUTSIDE OF AUSTRIA AND AVOID (A) SENDING STAMP DUTY SENSITIVE DOCUMENTS BY FAX TO AN AUSTRIAN ADDRESSEE, (B) SENDING ANY E-MAIL COMMUNICATION TO WHICH AN ELECTRONIC SCAN COPY OF A STAMP DUTY SENSITIVE DOCUMENT IS ATTACHED TO AN AUSTRIAN ADDRESSEE AND (C) SENDING ANY E-MAIL COMMUNICATION CARRYING AN ELECTRONIC OR DIGITAL SIGNATURE WHICH REFERS TO A STAMP DUTY SENSITIVE DOCUMENT TO AN AUSTRIAN ADDRESSEE.
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THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (RULE 144A)) OR (B) IT IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT; (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE RESALE RESTRICTION TERMINATION DATE) THAT IS [IN THE CASE OF THE RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE ISSUER, THE GUARANTORS OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO NON U.S. PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT, OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH INVESTOR ACCOUNT OR ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, AND ANY APPLICABLE LOCAL LAWS AND REGULATIONS, AND FURTHER SUBJECT TO THE ISSUERS AND THE TRUSTEES RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE; AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
BY ITS ACQUISITION OF THIS SECURITY, THE HOLDER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT (1) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF OR WITH ASSETS OF, AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (ERISA), A PLAN SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE CODE), OR AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO INCLUDE THE ASSETS OF ANY SUCH PLANS (COLLECTIVELY, PLANS), OR A GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA), CHURCH PLAN (AS DEFINED IN SECTION 3(33) OF ERISA, NON U.S. OR OTHER PLAN OR ARRANGEMENT THAT IS SUBJECT TO FEDERAL, STATE, LOCAL OR NON U.S. LAWS OR REGULATIONS THAT ARE SUBSTANTIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (SIMILAR LAW), OR (B) THE ACQUISITION AND HOLDING OF THIS SECURITY OR AN INTEREST THEREIN BY THE HOLDER DOES NOT AND WILL NOT CONSTITUTE OR RESULT IN A NON EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE OR A NON EXEMPT VIOLATION OF SIMILAR LAW, AND (2) THE HOLDER WILL NOT SELL OR OTHERWISE TRANSFER THIS SECURITY UNLESS SUCH SUBSEQUENT TRANSFEREE HAS MADE THE REPRESENTATIONS AND WARRANTEES IN (1) ABOVE.
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[Each Definitive Registered Note shall bear the following additional legend:]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
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Common Code: [Reg S]
[144A ]
ISIN: [Reg S]
[144A ]
[Floating Rate Senior Secured Notes due 2020]
No. | |
IGLO FOODS BONDCO PLC
Iglo Foods BondCo Plc, a public limited company incorporated under the laws of England and Wales, promises to pay to [●] or its registered assigns the principal sum of EUROS subject to adjustments listed on the Schedule of Increases or Decreases in the Global Note attached hereto, on June 15, 2020.
Interest on the Notes will accrue at a rate per annum, reset quarterly, equal to three-month EURIBOR plus 4.50%, as determined by the calculation agent.
Interest Payment Dates: March 15, June 15, September 15 and December 15, commencing September 15, 2014.
Record Dates: March 1, June 1, September 1 and December 1.
Additional provisions of this Note are set forth on the other side of this Note.
Dated: |
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IN WITNESS WHEREOF, Iglo Foods BondCo Plc has caused this Note to be signed manually or by facsimile by its duly authorized officers.
Iglo Foods BondCo Plc | ||
By: |
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Name: | ||
Title: |
This is one of the Notes referred to in the Indenture.
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Deutsche Bank Luxembourg S.A., not in its individual capacity but solely as Authenticating Agent duly appointed by DEUTSCHE TRUSTEE COMPANY LIMITED, as Trustee | ||
By: |
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Name: | ||
Title: | ||
By: |
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Name: | ||
Title: |
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[SENIOR SECURED FLOATING RATE NOTES DUE 2020]
1. (a) Interest .
Iglo Foods BondCo Plc, a public limited company incorporated under the laws of England and Wales (such company, and its successors and assigns under the Indenture hereinafter referred to, being herein called the Issuer ), promises to pay interest on the principal amount of this Note at a rate per annum (the Applicable Rate ), reset quarterly, equal to EURIBOR plus 4.50%. The Issuer shall pay interest on this Note quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, commencing
, . The Issuer will make each interest payment to Holders of record on March 1, June 1, September 1 and December 1 immediately preceding the related interest payment date. Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Issue Date until the principal hereof is due. Interest shall be computed on the basis of a 360-day year and the actual number of days elapsed. Interest on overdue principal, interest, premium or Additional Amounts will accrue at a rate that is 1% higher than the rate of interest otherwise applicable to the Notes.
(b) | Calculation of Interest; Calculation Agent . |
The Calculation Agent shall, as soon as practicable after 11:00 a.m. (Brussels time) on each Determination Date, determine the Applicable Rate and calculate the aggregate amount of interest payable in respect of the following Interest Period (the Interest Amount ). The Interest Amount shall be calculated by applying the Applicable Rate to the principal amount of each Note outstanding at the commencement of the Interest Period, multiplying each such amount by the actual amounts of days in the Interest Period concerned divided by 360. All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 4.876545% (or .04876545) being rounded to 4.87655% (or .0487655). The determination of the Applicable Rate and the Interest Amount by the Calculation Agent shall, in the absence of willful default or manifest error, be final and binding on all parties. In no event will the rate of interest on the Notes be higher than the maximum rate permitted by applicable law.
Determination Date with respect to an Interest Period, means the day that is two TARGET Settlement Days preceding the first day of such Interest Period.
EURIBOR with respect to an Interest Period, means the rate (expressed as a percentage per annum) for deposits in euro for a three-month period beginning on the day that is two TARGET Settlement Days after the Determination Date that appears on EURIBOR1 as of 11:00 a.m. Brussels time, on the Determination Date. If EURIBOR1 does not include such a rate or is unavailable on a Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the eurozone inter-bank market, as selected by the Calculation Agent, to provide such banks offered quotation (expressed as a percentage per annum) as of approximately 11:00 a.m., Brussels time, on such Determination Date, to prime banks in the eurozone inter-bank market for deposits in a Representative Amount in euro for a three month period beginning on the day that is two TARGET Settlement Days after the Determination Date. If at least two such offered quotations are so provided, the rate for the Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Calculation Agent will request each of three major banks in London, as selected by the Calculation Agent, to provide such banks rate (expressed as a percentage per annum), as of approximately 11:00 a.m., Brussels time, on such Determination Date, for loans in a Representative Amount in euro to leading European banks for a three-month period beginning on the day that is two TARGET Settlement Days after the Determination Date. If at least two such rates are so provided, the rate for the Interest Period will be the arithmetic mean of such rates. If fewer than such rates are so provided then the rate for the Interest Period will be the rate in effect with respect to the immediately preceding Interest Period.
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EURIBOR1 means the display page so designated on Reuters (or such other page as may replace that page on that service, or such other service as may be nominated as the information vendor).
eurozone means the region comprised of member states of the European Union that adopt the euro.
Interest Period means the period commencing on and including an interest payment date and ending on and including the day immediately preceding the next succeeding interest payment date, with the exception that the first Interest Period shall commence on and include the Issue Date and end on and include September 15, 2014.
Representative Amount means the greater of (i) 1,000,000 and (ii) an amount that is representative for a single transaction in the relevant market at the relevant time.
TARGET Settlement Day means any day on which the Trans European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open.
2. Method of Payment .
Holders must surrender Notes to the Paying Agent to collect principal payments. The Issuer shall pay principal, premium, Additional Amounts, if any, and interest in euro. Principal, interest and premium, if any, on the Global Notes (as defined below) will be payable at the specified office or agency of one or more Paying Agents; provided that all such payments with respect to the Notes represented by one or more Global Note registered in the name of or held by a nominee of a common depositary for Euroclear and Clearstream, as applicable, will be made by wire transfer of immediately available funds to the account specified by the Holder or Holders thereof.
Principal, premium, if any, interest and Additional Amounts, if any, on Definitive Registered Notes will be payable at the specified office or agency of one or more Paying Agents maintained for such purposes in London. In addition, interest on the Definitive Registered Notes may be paid by check mailed to the person entitled thereto as shown on the register for the Definitive Registered Notes.
The rights of Holders to receive the payments of interest on such Notes are subject to applicable procedures of Euroclear and Clearstream. If the due date for any payment in respect of any Notes is not a Business Day at the place at which such payment is due to be paid, the Holder thereof will not be entitled to payment of the amount due until the next succeeding Business Day at such place, and will not be entitled to any further interest or other payment as a result of any such delay.
3. Paying Agent and Registrar .
Initially, Deutsche Bank AG, London Branch, will act as Paying Agent and Deutsche Bank Luxembourg S.A. will act as Registrar and Transfer Agent. The Issuer may appoint and change any Registrar, Transfer Agent or Paying Agent. The Issuer, Midco or any of its Restricted Subsidiaries may act as Registrar, Transfer Agent and Paying Agent.
4. Indenture .
The Issuer issued the Notes under the Indenture dated as of July 17, 2014 (the Indenture ), among the Issuer, Iglo Foods Finco Limited (the Parent Guarantor ), Iglo Foods Midco Limited, Iglo Foods Group Limited, Birds Eye Limited, Birds Eye IPco Limited, iglo Holding GmbH, Liberator German Newco GmbH, Frozen Fish International GmbH, iglo GmbH, Iglo Austria Holding GmbH, Iglo Austria GmbH, Iglo Belgium NV and Iglo Nederland B.V. (together, the Subsidiary Guarantors and, together with the Parent Guarantor, the Guarantors), Deutsche Trustee Company Limited, as trustee (the Trustee ), Deutsche
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Bank AG, London Branch, as paying agent, transfer agent and calculation agent, Deutsche Bank Luxembourg S.A., as Luxembourg registrar and Luxembourg paying agent, and Credit Suisse AG, London Branch, as security agent (the Security Agent ). The terms of the Notes include those stated in the Indenture. Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all terms and provisions of the Indenture, and Holders are referred to the Indenture for a statement of such terms and provisions. In the event of a conflict, the terms of the Indenture control.
The Notes are general, senior obligations of the Issuer. This Note is one of the Notes referred to in the Indenture.
5. Optional Redemption .
(a) Except as provided in this Section 5 and Section 6, the Notes are not redeemable at the option of the Issuer until July 17, 2015.
(b) At any time prior to July 17, 2015, the Issuer may redeem the Notes in whole or in part, at its option, upon not less than 10 days nor more than 60 days prior notice at a redemption price equal to 100% of the principal amount of such Notes plus the relevant Applicable Premium for the Notes as of, and accrued and unpaid interest and Additional Amounts, if any, to the redemption date.
(c) On or after July 17, 2015, the Issuer may redeem the Notes in whole or in part, from time to time at its option, upon not less than 10 days nor more than 60 days prior notice, at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest to the redemption date:
Twelve-month period commencing July 17, |
Redemption Price | |||
2015 |
101.000 | % | ||
2016 and thereafter |
100.000 | % |
(c) Prior to July 17, 2015, the Issuer may on one or more occasions redeem the Notes with the net cash proceeds received by the Issuer from any Equity Offering at a redemption price equal to 100.0% of the principal amount of the Notes so redeemed, plus a premium equal to the interest rate per annum on the Notes in effect on the date that the notice of redemption is given, plus accrued and unpaid interest to the redemption date, in an aggregate principal amount for all such redemptions not to exceed 40% of the original aggregate principal amount of the Notes (including Additional Notes); provided , that:
(1) | in each case the redemption takes place not later than 180 days after the closing of the related Equity Offering; and |
(2) | not less than 60% of the original principal amount of the Notes being redeemed (including the principal amount of any Additional Notes) remain outstanding immediately thereafter. |
Notice of any redemption upon any Equity Offering may be given prior to the completion thereof.
Any redemption and notice of redemption may, at the Issuers discretion, be subject to the satisfaction of one or more conditions precedent (including, in the case of a redemption related to any Equity Offering, the consummation of such Equity Offering).
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Applicable Premium means the greater of:
(x) | 1% of the principal amount of such Note; and |
(y) | as of any redemption date, the excess (to the extent positive) of: |
a. | the present value at such redemption date of (i) the redemption price of such Note at July 17, 2015 (such redemption price (expressed in percentage of principal amount) being set forth in the table under Section 5(c) hereof (excluding accrued but unpaid interest)), plus (ii) all required interest payments due on such Note to and including such date (excluding accrued but unpaid interest), computed upon the redemption date using a discount rate equal to the Bund Rate at such redemption date plus 50 basis points and assuming that the rate of interest on such Note from the redemption date through July 17, 2015 will equal the rate of interest on such Note in effect on the applicable redemption date; over |
b. | the outstanding principal amount of such Note, |
as calculated by the Issuer or on behalf of the Issuer by such Person as the Issuer shall designate. For the avoidance of doubt, calculation of the Applicable Premium shall not be an obligation or duty of the Trustee or any Agent.
Bund Rate means the yield to maturity at the time of computation of direct obligations of the Federal Republic of Germany (Bunds or Bundesanleihen) with a constant maturity (as officially compiled and published in the most recent financial statistics that have become publicly available at least two Business Days (but not more than five Business Days) prior to the redemption date (or, if such financial statistics are not so published or available, any publicly available source of similar market data selected by Midco or the Issuer in good faith)) most nearly equal to the period from the redemption date to July 17, 2015; provided , however , that if the period from the redemption date to July 17, 2015 is not equal to the constant maturity of a direct obligation of the Federal Republic of Germany for which a weekly average yield is given, the Bund Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of direct obligations of the Federal Republic of Germany for which such yields are given, except that if the period from such redemption date to July 17, 2015 is less than one year, the weekly average yield on actually traded direct obligations of the Federal Republic of Germany adjusted to a constant maturity of one year shall be used.
6. Redemption for Taxation Reasons .
The Issuer or Successor Company, as defined below, may redeem the Notes in whole, but not in part, at any time upon giving not less than 10 nor more than 60 days notice to the Holders of the Notes (which notice will be irrevocable) at a redemption price equal to 100% of the outstanding principal amount thereof, together with accrued and unpaid interest, if any, to, but excluding, the date fixed for redemption (a Tax Redemption Date ) (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) and all Additional Amounts (see Section 4.13 of the Indenture), if any, then due and which will become due on the Tax Redemption Date as a result of the redemption or otherwise, if the Issuer, Successor Company or Guarantor determine in good faith that, as a result of:
(1) | any change in, or amendment to, the laws or treaties (or any regulations or rulings promulgated thereunder) of a Relevant Taxing Jurisdiction (as defined below) affecting taxation; or |
(2) | any change in, amendment to or introduction of an official position regarding the application, administration or interpretation of such laws, treaties, regulations or rulings (including pursuant to a holding, judgment or order by a court of competent jurisdiction) of a Relevant Taxing Jurisdiction (each of the foregoing in clauses (1) and (2), a Change in Tax Law ), |
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the Issuer, Successor Company or Guarantor (in the case of a Guarantor, only if the relevant payment cannot be made by the Issuer or any other Guarantor without triggering payment of Additional Amounts) are, or on the next interest payment date in respect of the Notes would be, required to pay any Additional Amounts, and such obligation cannot be avoided by taking reasonable measures available to the Issuer, Successor Company or Guarantor (including, for the avoidance of doubt, the appointment of a new Paying Agent where this would be reasonable but not including assignment of the obligation to make payment with respect to the Notes). In the case of redemption due to withholding as a result of a Change in Tax Law in a jurisdiction that is a Relevant Taxing Jurisdiction at the date of the Offering Memorandum, such Change in Tax Law must be announced and become effective on or after the date of the Offering Memorandum. In the case of redemption due to withholding as a result of a Change in Tax Law in a jurisdiction that becomes a Relevant Taxing Jurisdiction after the date of the Offering Memorandum, such Change in Tax Law must be announced and become effective on or after the date the jurisdiction becomes a Relevant Taxing Jurisdiction, unless the Change in Tax Law would have applied to the predecessor of the Successor Company. Notice of redemption for taxation reasons will be published in accordance with the procedures described under Section 3.03 of the Indenture. Notwithstanding the foregoing, no such notice of redemption will be given (a) earlier than 90 days prior to the earliest date on which the Payor would be obliged to make such payment of Additional Amounts if a payment in respect of the Notes were then due and (b) unless at the time such notice is given, such obligation to pay such Additional Amounts remains in effect. Prior to the publication or mailing of any notice of redemption of the Notes pursuant to the foregoing, the Issuer or Successor Company will deliver to the Trustee (a) an Officers Certificate stating that it is entitled to effect such redemption and that it would not be able to avoid the obligation to pay Additional Amounts by taking reasonable measures available to it and (b) a written opinion of an independent tax counsel of recognized standing to the effect that the Issuer, Successor Company or Guarantor has or have been or will become obligated to pay Additional Amounts as a result of a Change in Tax Law. The Trustee will accept and shall be entitled to rely on such Officers Certificate and opinion as sufficient evidence of the satisfaction of the conditions precedent described above and compliance with the Indenture, without further inquiry, in which event it will be conclusive and binding on the Holders.
The foregoing will apply mutatis mutandis to any jurisdiction in which any successor to the Issuer is incorporated or organized or any political subdivision or taxing authority or agency thereof or therein.
7. Sinking Fund .
The Issuer is not required to make mandatory redemption payments or sinking fund payments with respect to the Notes. Midco and its Restricted Subsidiaries may at any time and from time to time purchase Notes in the open market or otherwise.
8. Notice of Redemption .
Subject to the next paragraph, not less than 10 days but not more than 60 days before a date for redemption of Notes, the Issuer shall transmit to each Holder (with a copy to the Trustee) a notice of redemption in accordance with Section 12.01 of the Indenture; provided, however , that any notice of redemption provided for by Section 6 of the Notes shall not be given earlier than 90 days prior to the earliest date on which the Payor would be obliged to make a payment of Additional Amounts unless, at the time such notice is given, the obligation to pay such Additional Amounts remains in effect.
At the Issuers request, the Registrar or the Paying Agent shall give the notice of redemption in the Issuers name and at the Issuers expense. In such event, the Issuer shall deliver to the Registrar and the Paying Agent on or prior to the date on which notice of redemption is to be delivered to the Holders, an Officers Certificate requesting that the Registrar or the Paying Agent give such notice and the information required and within the time periods specified by this Section.
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If less than all of the Notes are to be redeemed at any time, the Paying Agent or the Registrar will select Notes for redemption on a pro rata basis or in accordance with the procedures of Clearstream or Euroclear (as applicable), unless otherwise required by law or applicable stock exchange or depository requirements. Neither the Paying Agent nor the Registrar will be liable for any selections made by it in accordance with this paragraph.
If the Notes are to be redeemed in part only, the notice of redemption shall state the portion of the principal amount to be redeemed. In the case of a Definitive Registered Note, a new Definitive Registered Note in principal amount equal to the unredeemed portion of any Definitive Registered Note redeemed in part will be issued in the name of the Holder thereof upon cancellation of the original Definitive Registered Note. In the case of a Global Note, an appropriate notation will be made on such Global Note to decrease the principal amount thereof to an amount equal to the unredeemed portion thereof. Subject to the terms of the applicable redemption notice, Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of Notes called for redemption
So long as any Notes are listed on the Official List of the Luxembourg Stock Exchange and admitted for trading on the Euro MTF market and the rules of the Luxembourg Stock Exchange so require, any such notice to the Holders of the Notes shall to the extent and in the manner permitted by such rules be posted on the official website of the Luxembourg Stock Exchange and in addition to such release, not less than 10 days nor more than 60 days prior to the redemption date, the Issuer will mail, or at the expense of the Issuer, cause to be mailed, such notice to Holders with a copy to the Trustee by first-class mail, postage prepaid, at their respective addresses as they appear on the registration books of the Registrar. Such notice of redemption may also be posted on the website of the Luxembourg Stock Exchange ( www.bourse.lu ) to the extent and in the manner permitted by the rules of the Luxembourg Stock Exchange.
9. Additional Amounts .
All payments made by a Payor on the Notes or any Note Guarantee, as applicable, will be made free and clear of and without withholding or deduction for, or on account of, any Taxes subject to and in accordance with Section 4.13 of the Indenture.
10. Repurchase of Notes at the Option of Holders upon (i) a Change of Control and (ii) the occurrence of certain Asset Sales .
If a Change of Control occurs, each Holder of Notes will have the right, subject to certain conditions specified in the Indenture, to require the Issuer to repurchase all or any part of such Holders Notes at a purchase price in cash equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) as provided in, and subject to the terms of, the Indenture.
In accordance with Section 4.05 of the Indenture, the Issuer will be required to, or may be permitted to, offer to purchase Notes upon the occurrence of certain events, including certain Asset Dispositions.
11. Security .
The Notes will be secured by the Collateral. Reference is made to the Indenture and the Intercreditor Agreement for terms relating to such security, including the release, termination and discharge thereof. Enforcement of the Security Documents is subject to the Intercreditor Agreement. The Issuer shall not be required to make any notation on this Note to reflect any grant of such security or any such release, termination or discharge.
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12. Denominations; Transfer; Exchange .
The Notes are in registered form without interest coupons in minimum denominations of 100,000 and multiples of 1,000 in excess thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. In connection with any such transfer or exchange, the Indenture requires the transferring or exchanging Holder to, among other things, furnish appropriate endorsements and transfer documents, furnish information regarding the account of the transferee at Euroclear or Clearstream, where appropriate, furnish certain certificates and opinions, and pay any taxes, duties and governmental charges in connection with such transfer or exchange. Any such transfer or exchange will be made without charge to the Holder, other than Taxes payable in connection with such transfer.
13. Persons Deemed Owners .
Except as provided in Section 2, the registered Holder of this Note will be treated as the owner of it for all purposes. Only registered Holders will have rights under the Indenture, including, without limitation, with respect to enforcement and the pursuit of other remedies.
14. Unclaimed Money .
If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Issuer at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look to the Issuer for payment as general creditors and the Trustee and the Paying Agent shall have no further liability with respect to such monies.
15. Discharge and Defeasance .
Subject to certain conditions, the Issuer at any time may terminate all its and each Guarantors obligations under this Note, any Note Guarantee and the Indenture if the Issuer, among other things, deposits or causes to be deposited with the Trustee, cash in euro, European Government Obligations denominated in euro, or a combination thereof, in an amount sufficient for the payment of principal, premium, if any, and interest on the outstanding Notes to redemption or maturity, as the case may be.
16. Amendment, Waiver .
The Indenture and the Notes may be amended as set forth in the Indenture.
17. Defaults and Remedies .
Each of the following is an Event of Default under the Indenture:
(a) default in any payment of interest, or Additional Amounts, if any, on any Note when due and payable, continued for 30 days;
(b) default in the payment of the principal amount of or premium, if any, on any Note issued under this Indenture when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;
(c) failure by Midco or any of its Restricted Subsidiaries to comply for 60 days after written notice by the Trustee on behalf of the Holders or by the Holders of at least 25% in aggregate principal amount of the outstanding Notes with its other agreements contained in this Indenture or the Notes (in each case, other than a default in performance, or breach of, a covenant or agreement specifically addressed in clauses (a) and (b) of this Section 17;
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(d) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Midco or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by Midco or any of its Restricted Subsidiaries) other than Indebtedness owed to Midco or a Restricted Subsidiary, whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default:
(i) is caused by a failure to pay principal at stated maturity on such Indebtedness, immediately upon the expiration of the grace period provided in such Indebtedness ( payment default ); or
(ii) results in the acceleration of such Indebtedness prior to its maturity (the cross acceleration provision ),
and, in each case, the aggregate principal amount of any such Indebtedness, together with the aggregate principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates 25.0 million or more;
(e) Midco or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:
(i) commences proceedings to be adjudicated bankrupt or insolvent;
(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;
(iii) other than on a solvent basis, consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;
(iv) other than on a solvent basis, makes a general assignment for the benefit of its creditors; or
(v) admits in writing that it is unable to pay its debts as they become due;
(f) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Issuer, Midco or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary, in a proceeding in which the Issuer, Midco or any such Restricted Subsidiaries, that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;
(ii) other than on a solvent basis, appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer, Midco or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its
A-2-14
Restricted Subsidiaries), would constitute a Significant Subsidiary, or for all or substantially all of the property of the Issuer, Midco or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary; or
(iii) other than on a solvent basis, orders the liquidation of the Issuer, Midco or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary and the order or decree remains unstayed and in effect for 60 consecutive days;
(g) failure by the Issuer, Midco or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for Midco and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments aggregating in excess of 25.0 million (exclusive of any amounts that a solvent insurance company has acknowledged liability for), which judgments are not paid, discharged or stayed for a period of 60 days after the judgment becomes final (the judgment default provision);
(h) any security interest shall, at any time, cease to be in full force and effect (other than in accordance with the terms of the relevant Security Document, the Intercreditor Agreement, any Additional Intercreditor Agreement and this Indenture) with respect to Collateral having a fair market value in excess of 10.0 million for any reason other than the satisfaction in full of all obligations under this Indenture or the release or amendment of any such security interest in accordance with the terms of this Indenture, the Intercreditor Agreement, any Additional Intercreditor Agreement or the Security Document or any such security interest created thereunder shall be declared invalid or unenforceable or Iglo Foods Holdco Limited, the Issuer, Midco or any Restricted Subsidiary shall assert in writing that any such security interest is invalid or unenforceable and any such Default continues for 10 days; and
(i) the Parent Guarantee or any Subsidiary Guarantee of a Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of such Note Guarantee or this Indenture) or is declared invalid or unenforceable in a judicial proceeding or any Guarantor denies or disaffirms in writing its obligations under its Note Guarantee and any such Default continues for 10 days.
A default under clause (c), (d) or (g) of this Section 17 will not constitute an Event of Default until the Trustee or the Holders of 25% in aggregate principal amount of the outstanding Notes notify the Issuer of the default and, with respect to clauses (c), (d) and (g) of this Section 17, the Issuer does not cure such default within the time specified in clause (c), (d) or (g) of this Section 17, as applicable, after receipt of such notice.
18. Trustee Dealings with the Issuer
The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.
19. No Recourse Against Others .
No director, officer, employee, incorporator or shareholder of Midco or any of its Subsidiaries or Affiliates, as such, shall have any liability for any obligations of the Issuer or any Guarantor under any Notes Documents, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
A-2-15
20. Authentication .
This Note shall not be valid until an authorized signatory of the Trustee or an Authenticating Agent manually signs the certificate of authentication on the other side of this Note. The signature shall be conclusive evidence that the security has been authenticated under the Indenture.
21. Abbreviations .
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
22. Governing Law .
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
23. Common Codes and ISINs .
The Issuer in issuing the Notes may use Common Codes and ISINs (if then generally in use) and, if so, the Trustee shall use Common Codes and ISINs in notices of redemption as a convenience to Holders; provided, however , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers.
24. Subject to Intercreditor Agreement .
This Note and the Indenture are entered into with the benefit of and subject to the terms of the Intercreditor Agreement and any Additional Intercreditor Agreement. In the event of any conflict between this Note, the Indenture and the Intercreditor Agreement or any Additional Intercreditor Agreement, the terms of the Intercreditor Agreement or any Additional Intercreditor Agreement, as applicable, shall apply, except that with regards to the rights, duties and obligations of the Trustee, the Indenture shall apply.
The Issuer will furnish to any Holder of Notes upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note.
A-2-16
[ASSIGNMENT FORM]
THE TAKING OF THIS DOCUMENT OR ANY CERTIFIED COPY THEREOF OR ANY DOCUMENT WHICH CONSTITUTES SUBSTITUTE DOCUMENTATION THEREOF INCLUDING WRITTEN CONFIRMATIONS OR REFERENCES (THE STAMP DUTY SENSITIVE DOCUMENTS) INTO AUSTRIA MAY CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY. THE SAME, INTER ALIA, APPLIES TO (I) THE SENDING OF STAMP DUTY SENSITIVE DOCUMENTS TO AN AUSTRIAN ADDRESSEE BY FAX, (II) THE SENDING OF ANY E-MAIL COMMUNICATION TO WHICH AN ELECTRONIC SCAN COPY (E.G., PDF OR TIF) OF A STAMP DUTY SENSITIVE DOCUMENT IS ATTACHED TO AN AUSTRIAN ADDRESSEE AND (III) THE SENDING OF ANY E-MAIL COMMUNICATION CARRYING AN ELECTRONIC OR DIGITAL SIGNATURE WHICH REFERS TO A STAMP DUTY SENSITIVE DOCUMENT TO AN AUSTRIAN ADDRESSEE. ACCORDINGLY, IN PARTICULAR, KEEP ANY STAMP DUTY SENSITIVE DOCUMENTS OUTSIDE OF AUSTRIA AND AVOID (A) SENDING STAMP DUTY SENSITIVE DOCUMENTS BY FAX TO AN AUSTRIAN ADDRESSEE, (B) SENDING ANY E-MAIL COMMUNICATION TO WHICH AN ELECTRONIC SCAN COPY OF A STAMP DUTY SENSITIVE DOCUMENT IS ATTACHED TO AN AUSTRIAN ADDRESSEE AND (C) SENDING ANY E-MAIL COMMUNICATION CARRYING AN ELECTRONIC OR DIGITAL SIGNATURE WHICH REFERS TO A STAMP DUTY SENSITIVE DOCUMENT TO AN AUSTRIAN ADDRESSEE.
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
(Print or type assignees legal name)
(Insert assignees soc. sec. or tax I.D. No.)
(Insert assignees name, address and zip or post code)
and irrevocably appoint
to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.
Date: |
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Your Signature: | ||
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Sign exactly as your name appears on the other side of this Note. |
A-2-17
Signature Guarantee*: |
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* | (Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee) |
A-2-18
[FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER RESTRICTED NOTES]
This certificate relates to principal amount of Notes held in (check applicable box) ¨ book-entry or ¨ definitive registered form by the undersigned.
The undersigned (check one box below):
¨ | as requested the Trustee by written order to deliver, in exchange for its beneficial interest in the Global Note held by the Common Depositary, a Definitive Registered Note in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above); | |
¨ | as requested the Trustee by written order to exchange or register the transfer of a Note. |
In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) | ¨ | the Issuer; or | ||||
(2) | ¨ | the Registrar for registration in the name of the Holder, without transfer; or | ||||
(3) | ¨ | pursuant to an effective registration statement under the U.S. Securities Act of 1933; or | ||||
(4) | ¨ | inside the United Sates to a qualified institutional buyer (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or | ||||
(5) | ¨ | outside the United Sates in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933 and such Note shall be held immediately after the transfer through Euroclear or Clearstream until the expiration of the Restricted Period (as defined in the Indenture); or | ||||
(6) | ¨ | pursuant to Rule 144 under the U S. Securities Act of 1933 or another available exemption from registration. |
Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5) or (6) is checked, the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Trustee or the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933.
Date: |
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Your Signature:
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Sign exactly as your name appears on the other side of this Note. |
Signature Guarantee*: |
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* | (Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee) |
TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a qualified institutional buyer within the meaning of Rule 144A under the U.S. Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigneds foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Date: |
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Signature: |
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(to be executed by an executive officer of purchaser) |
A-2-20
Schedule of Increases and Decreases in the Global Notes
The initial principal amount of this Global Note is . The following increases or decreases in this Global Note have been made:
Date of Increase/Decrease |
Amount of
Decrease in Principal Amount of this Global Note |
Amount of
Increase in Principal Amount of this Global Note |
Principal Amount
of this Global Note Following such Decrease or Increase |
Signature of
Authorized Signatory of Registrar or Paying Agent |
||||
A-2-21
[FORM OF OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.14 ( Change of Control ) or Section 4.05 ( Limitation on Sales of Assets and Subsidiary Stock ) of the Indenture, check the box:
Asset Disposition | ¨ | Change of Control | ¨ |
If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.14 or Section 4.05 of the Indenture, state the amount (minimum amount of 100,000):
Date: |
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Your Signature:
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(Sign exactly as your name appears on the other side of the Note) |
Signature Guarantee*: |
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* | (SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE) |
A-2-22
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE
THE TAKING OF THIS DOCUMENT OR ANY CERTIFIED COPY THEREOF OR ANY DOCUMENT WHICH CONSTITUTES SUBSTITUTE DOCUMENTATION THEREOF INCLUDING WRITTEN CONFIRMATIONS OR REFERENCES (THE STAMP DUTY SENSITIVE DOCUMENTS) INTO AUSTRIA MAY CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY. THE SAME, INTER ALIA, APPLIES TO (I) THE SENDING OF STAMP DUTY SENSITIVE DOCUMENTS TO AN AUSTRIAN ADDRESSEE BY FAX, (II) THE SENDING OF ANY E-MAIL COMMUNICATION TO WHICH AN ELECTRONIC SCAN COPY (E.G., PDF OR TIF) OF A STAMP DUTY SENSITIVE DOCUMENT IS ATTACHED TO AN AUSTRIAN ADDRESSEE AND (III) THE SENDING OF ANY E-MAIL COMMUNICATION CARRYING AN ELECTRONIC OR DIGITAL SIGNATURE WHICH REFERS TO A STAMP DUTY SENSITIVE DOCUMENT TO AN AUSTRIAN ADDRESSEE. ACCORDINGLY, IN PARTICULAR, KEEP ANY STAMP DUTY SENSITIVE DOCUMENTS OUTSIDE OF AUSTRIA AND AVOID (A) SENDING STAMP DUTY SENSITIVE DOCUMENTS BY FAX TO AN AUSTRIAN ADDRESSEE, (B) SENDING ANY E-MAIL COMMUNICATION TO WHICH AN ELECTRONIC SCAN COPY OF A STAMP DUTY SENSITIVE DOCUMENT IS ATTACHED TO AN AUSTRIAN ADDRESSEE AND (C) SENDING ANY E-MAIL COMMUNICATION CARRYING AN ELECTRONIC OR DIGITAL SIGNATURE WHICH REFERS TO A STAMP DUTY SENSITIVE DOCUMENT TO AN AUSTRIAN ADDRESSEE.
SUPPLEMENTAL INDENTURE No. [●] (this Supplemental Indenture ), dated as of [●], among [●], a company organized and existing under the laws of [●] (the Guarantor ), Iglo Foods BondCo Plc, a public limited company incorporated under the laws of the England and Wales, with its registered office at 5 New Square, Bedfont Lakes Business Park, Feltham, Middlesex, TW14 8HA, United Kingdom, as the issuer (the Issuer ), and Deutsche Trustee Company Limited, as trustee (the Trustee ).
W I T N E S S E T H
WHEREAS, the Issuer has heretofore executed and delivered to the Trustee an indenture (the Indenture ), dated as of July 17, 2014 providing for the issuance of the Issuers euro denominated floating rate senior secured notes due 2020 (the Notes );
WHEREAS, the Indenture provides that under certain circumstances a Parent or Subsidiary of Midco may execute and deliver to the Trustee a supplemental indenture pursuant to which such entity shall unconditionally guarantee all of the Issuers obligations under the Notes and the Indenture on the terms and conditions set forth herein (the Note Guarantee ); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Issuer, the Guarantor and the Trustee are authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
B-1
2. AGREEMENT TO GUARANTEE. The Guarantor hereby agrees to provide an unconditional Note Guarantee on the terms and subject to the conditions set forth in the Indenture including but not limited to Article 10 thereof.
3. [GUARANTEE LIMITATIONS.]
4. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator or stockholder of any Guarantor, as such, shall have any liability for any obligations of the Issuer or any Guarantor under the Notes Documents, the Note Guarantees or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
5. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE, THE NOTES AND THE NOTE GUARANTEES.
6. Each of the parties hereto irrevocably agrees that any suit, action or proceeding arising out of, related to, or in connection with the Indenture, this Supplemental Indenture, the Notes and the Note Guarantees or the transactions contemplated hereby, and any action arising under U.S. federal or state securities laws, may be instituted in any U.S. federal or state court located in the State and City of New York, Borough of Manhattan; irrevocably waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding; and irrevocably submits to the jurisdiction of such courts in any such suit, action or proceeding. The Issuer and each of the Guarantors has appointed Corporation Service Company, located at 1180 Avenue of the Americas, Suite 210, New York, NY 10036, United States of America, as its authorized agent upon whom process may be served in any such suit, action or proceeding which may be instituted in any federal or state court located in the State of New York, Borough of Manhattan arising out of or based upon the Indenture, this Supplemental Indenture, the Notes or the transactions contemplated hereby or thereby, and any action brought under U.S. federal or state securities laws (the Authorized Agent ). The Issuer and each of the Guarantors expressly consents to the jurisdiction of any such court in respect of any such action and waives any other requirements of or objections to personal jurisdiction with respect thereto and waives any right to trial by jury. Such appointment shall be irrevocable unless and until replaced by an agent reasonably acceptable to the Trustee. The Issuer and each of the Guarantors represents and warrants that the Authorized Agent has agreed to act as said agent for service of process, and the Issuer agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Issuer shall be deemed, in every respect, effective service of process upon the Issuer and any Guarantor.
7. C OUNTERPARTS . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
8. E FFECT OF H EADINGS . The Section headings herein are for convenience only and shall not affect the construction hereof.
9. T HE T RUSTEE . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guarantor and the Issuer.
B-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.
Dated: [●] | ||||
IGLO FOODS BONDCO PLC as Issuer |
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By: |
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Name: | ||||
Title: |
B-3
DEUTSCHE TRUSTEE COMPANY LIMITED | ||
as Trustee | ||
By: |
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Authorized Signatory | ||
By: |
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Authorized Signatory |
B-4
[GUARANTOR] | ||||
By: |
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Name: | ||||
Title: |
B-5
Schedule 1
Issue Date Security Documents
Security Document |
Governing Law |
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First-ranking English law debenture in the agreed form in favor of the Security Agent incorporating fixed and floating charges over all of the present and future assets of the Issuer and each Guarantor incorporated in the United Kingdom; | England & Wales |
Schedule 1
Schedule 2
Post-Closing Date Security Documents
Security Document |
Governing Law |
|
Share pledge granted by Iglo Austria Holding GmbH over the entire issued share capital of Iglo Austria GmbH | Austrian | |
Share pledge by Iglo Foods Group Limited over the entire issued share capital of Iglo Austria Holding GmbH | Austrian | |
Bank account pledge by Iglo Austria GmbH pledging receivables from bank accounts | Austrian | |
Loan receivables pledge by Iglo Austria Holding GmbH pledging loan receivables | Austrian | |
Share pledge granted by Midco and Iglo Foods Group Limited over the entire issued share capital of Iglo Belgium NV | Belgium | |
Bank account pledge granted by Iglo Belgium NV | Belgium | |
Receivables pledge granted by Iglo Belgium NV | Belgium | |
Share pledge granted by Iglo Foods Group Limited over the entire issued share capital of Iglo Nederland B.V. | Belgium | |
Pledge of intellectual property rights granted by Iglo Nederland B.V. | Belgium | |
Share pledge granted by Iglo Foods Group Limited over the entire issued share capital of Iglo Holding GmbH | German | |
Share pledge granted by Iglo Holding GmbH over the entire issued share capital of Liberator German Newco GmbH, Frozen Fish International GmbH and iglo GmbH | German | |
Bank account pledge granted by iglo Holding GmbH | German | |
Bank account pledge granted by Liberator German Newco GmbH | German | |
Bank account pledge granted by Frozen Fish International GmbH | German | |
Bank account pledge granted by iglo GmbH | German | |
Security assignment agreement over intercompany loans granted by Iglo Holding GmbH | German | |
Security assignment agreement granted by Frozen Fish International GmbH over the intellectual property rights of Frozen Fish International GmbH | German | |
Security assignment agreement granted by iglo GmbH over the intellectual property rights of iglo GmbH | German | |
Security transfer agreement granted by Frozen Fish International GmbH over the fixed assets, inventory and stock of Frozen Fish International GmbH | German | |
Security transfer agreement granted by iglo GmbH over the fixed assets, inventory and stock of iglo GmbH | German | |
Security agreements granted by Liberator German Newco GmbH over the freehold real estate interests of Liberator German Newco GmbH | German | |
Share pledge granted by Iglo Foods Group Limited over the entire issued share capital of Compagnia Surgelati Italiana S.p.A | Italian |
Schedule 2
Exhibit 10.1
EXECUTION VERSION
The taking of (a) any of the Finance Documents (including this document) or (b) any certified copy thereof or (c) any document which constitutes substitute documentation thereof including written confirmations or references (the Stamp Duty Sensitive Documents) into Austria may cause the imposition of Austrian stamp duty. The same, inter alia, applies to (i) the sending of Stamp Duty Sensitive Documents to an Austrian addressee by fax, (ii) the sending of any e-mail communication to which an electronic scan copy (e.g., pdf or tif) of a Stamp Duty Sensitive Document is attached to an Austrian addressee and (iii) the sending of any e-mail communication carrying an electronic or digital signature which refers to a Stamp Duty Sensitive Document to an Austrian addressee. Accordingly, in particular, keep any Stamp Duty Sensitive Documents outside of Austria and avoid (A) sending Stamp Duty Sensitive Documents by fax to an Austrian addressee, (B) sending any e-mail communication to which an electronic scan copy of a Stamp Duty Sensitive Document is attached to an Austrian addressee and (C) sending any e-mail communication carrying an electronic or digital signature which refers to a Stamp Duty Sensitive Document to an Austrian addressee.
AMENDMENT AND RESTATEMENT AGREEMENT
RELATING TO A SENIOR FACILITIES AGREEMENT ORIGINALLY DATED 3 JULY 2014
AS AMENDED AND RESTATED PURSUANT TO AN AMENDMENT AND RESTATEMENT
AGREEMENT DATED 6 MAY 2015
dated 23 October 2015
for
IGLO FOODS MIDCO LIMITED
with
CREDIT SUISSE AG, LONDON BRANCH
BARCLAYS BANK PLC
UBS LIMITED
acting as Facility C3 Arrangers
with
CREDIT SUISSE AG, LONDON BRANCH
acting as Agent
and
CREDIT SUISSE AG, LONDON BRANCH
acting as Security Agent
Ref: L-238225
CONTENTS
CLAUSE | PAGE | |||||
1. |
DEFINITIONS AND INTERPRETATION | 1 | ||||
2. |
CONDITIONS PRECEDENT | 3 | ||||
3. |
EFFECTIVE DATE | 3 | ||||
4. |
CERTAIN RIGHTS OF FINANCE PARTIES | 3 | ||||
5. |
CONFIRMATION OF SECURITY AND GUARANTEES | 4 | ||||
6. |
REPRESENTATIONS | 5 | ||||
7. |
ACCESSIONS | 6 | ||||
8. |
CONDITIONS SUBSEQUENT | 8 | ||||
9. |
TERMINATION | 8 | ||||
10. |
MISCELLANEOUS | 9 | ||||
11. |
GOVERNING LAW | 9 |
THE SCHEDULES
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SCHEDULE | PAGE | |||||
SCHEDULE 1 The Parties |
11 | |||||
SCHEDULE 2 Conditions Precedent and Conditions Subsequent |
14 | |||||
SCHEDULE 3 Amended Agreement |
22 |
(i)
THIS AGREEMENT is entered into by way of deed on 23 October 2015 between:
(1) | IGLO FOODS MIDCO LIMITED , a company incorporated in England and Wales with registered number 5879252, for itself and as Obligors Agent ( Midco ); |
(2) | THE ENTITIES listed in Part I of Schedule 1 as borrowers (the Borrowers ), represented (other than in the case of Midco) by Midco as the Obligors Agent; |
(3) | THE ENTITIES listed in Part I of Schedule 1 as guarantors (the Guarantors , together with the Borrowers, the Obligors ), represented (other than in the case of Midco) by Midco as the Obligors Agent; |
(4) | CREDIT SUISSE AG, LONDON BRANCH, BARCLAYS BANK PLC and UBS LIMITED as mandated lead arrangers and bookrunners in relation to Facility C3 (whether acting individually or together, the Facility C3 Arrangers ); |
(5) | THE ENTITIES listed in Part II of Schedule 1 as original lenders under Facility C3 (the Original Facility C3 Lenders ); |
(6) | COMMERZBANK AKTIENGESELLSCHAFT, FRANKFURT as a Revolving Facility 2 Lender ( Commerzbank ); |
(7) | CREDIT SUISSE AG, LONDON BRANCH as agent of the other Finance Parties (the Agent ); and |
(8) | CREDIT SUISSE AG, LONDON BRANCH , as security agent for the other Secured Parties (the Security Agent ). |
BACKGROUND:
Following receipt by the Agent of the Facility C3 Additional Facility Notice, this Agreement is being entered into at the request of Midco pursuant to paragraph (j) of clause 2.4 ( Additional Facilities ) of the Original Facilities Agreement in order to facilitate the establishment of that Additional Facility.
IT IS AGREED as follows:
1. | DEFINITIONS AND INTERPRETATION |
1.1 | Definitions |
In this Agreement:
Amended Agreement means the Original Facilities Agreement, as amended and restated in the form set out in Schedule 3 ( Amended Agreement ).
Effective Date means the date on which the Agent (acting on the instructions of the Facility C3 Arrangers) confirms to Midco and the Original Facility C3 Lenders in accordance with Clause 2 ( Conditions Precedent ) that each of the conditions set out in paragraph (b) of that Clause has been satisfied.
Facility C3 Additional Facility Notice means an Additional Facility Notice (as defined in the Original Facilities Agreement) relating to Facility C3 dated on or about the date of this Agreement between the Facility C3 Arrangers, the Agent and Midco.
1
Fee and Syndication Letter means the fee and syndication letter entered into between, among others, the Facility C3 Arrangers and Midco dated on or around the date of this Agreement.
Findus Acquisition Completion Date means the date of completion of the Findus Acquisition.
Funds Flow Statement means a funds flow statement demonstrating the payments required to be executed and the funds flow steps occurring on the Findus Acquisition Completion Date (including sources and uses).
Information Memorandum has the meaning given to such term in the Fee and Syndication Letter.
Long Stop Date means 15 January 2016.
Original Facilities Agreement means the Senior Facilities Agreement dated 3 July 2014 as amended and restated pursuant to an amendment and restatement agreement dated 6 May 2015 between, among others, Midco and the Agent.
Party means a party to this Agreement.
1.2 | Incorporation of defined terms and interpretation |
(a) | Unless a contrary indication appears, a term defined in the Amended Agreement has the same meaning in this Agreement (notwithstanding that the Effective Date may not have occurred). |
(b) | The principles of construction set out in the Amended Agreement shall have effect as if set out in this Agreement (notwithstanding that the Effective Date may not have occurred). |
1.3 | Clauses |
In this Agreement any reference to a Clause or a Schedule is, unless the context otherwise requires, a reference to a Clause in or a Schedule to this Agreement.
1.4 | Third party rights |
Unless otherwise provided in this Agreement, a person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
Each of the Finance Parties may enforce and enjoy the benefit of any provision of this Agreement expressed to be in their favour or for their benefit, subject always to the terms of Clause 10 ( Miscellaneous ) and Clause 11 ( Governing law ) below.
1.5 | Designation |
In accordance with the Original Facilities Agreement, each of Midco and the Agent designate this Agreement as a Finance Document.
1.6 | Effect as a Deed |
All the parties intend this document to take effect as a deed, even though certain of the parties may only execute it under hand.
2
1.7 | Parties to this Agreement |
(a) | Commerzbank has requested that it be a Party, notwithstanding that there is no requirement for it to be a Party under the terms of the Original Facilities Agreement. |
(b) | Commerzbank is executing this Agreement itself on the basis that this is required by its constitution. It is acknowledged by all Parties that the fact that Commerzbank is a Party to this Agreement is entirely without prejudice to the rights and obligations of the Finance Parties under the Finance Documents, including the provisions of clause 41 ( Amendments and waivers ) of the Original Facilities Agreement and the Amended Agreement and shall not operate as an amendment or waiver of the requirements thereof. |
2. | CONDITIONS PRECEDENT |
(a) | The Effective Date shall only occur if the requirements of paragraphs (b) and (c) below have then been satisfied. |
(b) | Midco shall deliver to the Agent the conditions precedent documents listed in Part I of Schedule 2 ( Conditions Precedent ) in form and substance satisfactory to the Agent (acting on the instructions of the Facility C3 Arrangers (acting reasonably)). |
(c) | The Agent shall notify Midco and the Original Facility C3 Lenders promptly upon the date that it has received all of the documents and other evidence listed in Part I of Schedule 2 ( Conditions Precedent ). |
(d) | At least five Business Days prior to the Effective Date (or such later date as the Facility C3 Arrangers may agree), Midco shall deliver to the Agent the Funds Flow Statement. |
(e) | The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification and neither the Agent nor Security Agent shall be liable for any damages, costs or losses whatsoever in connection with this Agreement and/or in connection with the establishment of Facility C3 (unless directly caused by its gross negligence or wilful misconduct). |
3. | EFFECTIVE DATE |
(a) | On and with effect from the Effective Date the Original Facilities Agreement shall be amended and restated in the form set out in Schedule 3 ( Amended Agreement ). |
(b) | Contemporaneously on the occurrence of the amendment and restatement referred to in paragraph (a) above each Original Facility C3 Lender shall assume Facility C3 Commitments in the amount set out opposite its name in Part II of Schedule 1 ( The Parties ) on the terms of the Amended Agreement. |
4. | CERTAIN RIGHTS OF FINANCE PARTIES |
(a) |
Midco shall promptly indemnify each Party and each Finance Party for any costs, expense, loss or liability incurred in connection with this Agreement, the Amended Agreement and/or the Facility C3 Additional Facility Notice (and the transactions and matters described in any such agreement or document) and/or as a result of any payments to be made on behalf of or at the |
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direction of Midco or any other member of the Group pursuant to this Agreement or the Funds Flow Statement on the Effective Date (including as a result of any such payment not being made in whole or in part by the relevant member of the Group). |
(b) | For the avoidance of doubt, upon the occurrence of the Effective Date, the Agent shall update the register of Lenders to reflect the establishment of Facility C3, the Commitments of the Original Facility C3 Lenders in respect of Facility C3 as set out in Part II of Schedule 1 ( The Parties ) and (to the extent applicable) to reflect any transactions made on the Effective Date as contemplated by this Agreement. |
(c) | Midco shall, within three Business Days of demand, pay to each Party (or reimburse each Party for) all fees of (or which are payable to), and all reasonable costs and expenses (including legal fees) incurred by, that Party in connection with this Agreement and the transactions and matters contained herein. |
(d) | Each Party agrees that the Facility C3 Arrangers shall not have any responsibility or liability (whether direct or indirect, in contract or tort or otherwise) for or in connection with this Agreement, the Amended Agreement and/or the Facility C3 Additional Facility Notice (or any transaction or matter referred to in any such agreement or document). |
5. | CONFIRMATION OF SECURITY AND GUARANTEES |
5.1 | Continuing obligations |
The provisions of the Original Facilities Agreement and the other Finance Documents (including, without limitation, the guarantee and indemnity of each Guarantor and each of the Transaction Security Documents) shall, save as amended by this Agreement, continue in full force and effect.
5.2 | Confirmation of guarantees |
Midco, for itself and for and on behalf of each other Obligor, acknowledges and confirms its acceptance of this Agreement and the Amended Agreement and agrees that it and each other Obligor is bound, with effect from the Effective Date, as an Obligor by the terms of the Amended Agreement, and confirms, for the benefit of the Finance Parties that:
(a) | the guarantees and indemnities set out in clause 23 ( Guarantee and indemnity ) of the Amended Agreement shall: |
(i) | apply in respect of all of the obligations of each Obligor under the Finance Documents including, with effect from the Effective Date, the Amended Agreement; and |
(ii) | extend to all new obligations of any Obligor under the Finance Documents arising from the amendments and other transactions referred to in Clause 3 ( Effective Date ) (including, without limitation, any new obligations arising from the transactions effected pursuant to this Agreement and, with effect from the Effective Date, the Amended Agreement), including, without limitation, obligations arising as a result of any Utilisation of Facility C3; and |
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(b) | the liabilities and obligations arising under the Amended Agreement (including, without limitation, obligations arising as a result of any Utilisation of Facility C3) and the other Finance Documents shall form part of (but do not limit) the Secured Obligations, Secured Liabilities, Liabilities or, as the case may be, Secured Claims, each as defined (as the context requires) in each Transaction Security Document to which the relevant Obligor is a party. |
5.3 | Confirmation of Security |
Midco, for itself and for and on behalf of each other Obligor confirms for the benefit of the Finance Parties that the Security created by each Obligor pursuant to each Transaction Security Document to which each such Obligor is a party shall:
(a) | remain in full force and effect notwithstanding the amendments and other transactions referred to in Clause 3 ( Effective Date ); and |
(b) | secure all of the Secured Obligations, the Secured Liabilities, the Liabilities or, as the case may be, the Secured Claims, under (and as each term is defined in (in each case, as the context requires)) the Finance Documents as amended (including, but not limited to, under the Amended Agreement, and as the terms Secured Obligations, Secured Liabilities, Liabilities or, as the case may be, Secured Claims are to be construed pursuant to paragraph (b) of Clause 5.2 ( Confirmation of guarantees )). |
5.4 | No waiver |
No waiver is given by entering into this Agreement or the transactions contemplated by this Agreement.
5.5 | Further assurance |
(a) | Midco shall ensure that each Obligor shall, at the request of the Agent (acting reasonably) and at such Obligors own expense, do all such acts and things necessary or desirable to give effect to the transactions and amendments effected or to be effected pursuant to this Agreement (including, without limitation, those arising pursuant to Clause 3 ( Effective Date ) and/or this Clause 5 and/or to establish Facility C3 with the ranking and Security which it is intended to have under the terms of the Facility C3 Additional Facility Notice). |
(b) | Midco hereby confirms that each Obligor has irrevocably authorised Midco (and, to the extent legally possible, has relieved it from the restrictions pursuant to section 181 of the German Civil Code ( Bürgerliches Gesetzbuch ) and/or any similar restrictions applicable pursuant to any other applicable law) to sign on its behalf this Agreement and all other documents required to implement the transactions contemplated by this Agreement. |
6. | REPRESENTATIONS |
6.1 | Representations |
(a) | Midco on behalf of itself and each other Obligor makes the representations and warranties in clause 24.2 ( Status ), 24.3 ( Binding obligations ), clause 24.5 ( Power and authority ) and clause 24.6 ( Validity and admissibility in evidence ) contained in the Amended Agreement (by reference to the facts and circumstances then existing) on: |
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(i) | the date of this Agreement; and |
(ii) | the Effective Date, |
but as if:
(A) | references to this Agreement, Transaction Document, Transaction Documents and Finance Document in those representations and warranties were instead references to this Agreement and to the Original Facilities Agreement and, on the Effective Date, to this Agreement and the Amended Agreement; and |
(B) | in the case of paragraph (i) above, the Effective Date had occurred on the date of this Agreement. |
(b) | Midco represents and warrants that: |
(i) | the Information Memorandum and the base case financial model and any other material written factual information provided in connection with any lender presentation (the Information ) is true and accurate in all material respects as at the date it is provided or as at the date (if any) at which it is stated; |
(ii) | nothing has occurred or been omitted and no information has been given or withheld that results in the Information being untrue or misleading in any material respect as at the date it is provided; and |
(iii) | any financial projections contained in any Information have been prepared in good faith on the basis of recent historical information and on the basis of reasonable assumptions. |
(c) | The representations and warranties set out in paragraph (b) above are deemed to be made by Midco on the date of this Agreement, the date of the Facility C3 Additional Facility Notice, the Effective Date and on the Findus Acquisition Completion Date by reference to the facts and circumstances then existing. |
(d) | Midco shall promptly notify the Facility C3 Arrangers and the Original Facility C3 Lenders in writing if any representation and warranty set out in paragraph (b) above is incorrect or misleading and (as applicable) Midco agrees to supplement the Information promptly to ensure that each such representation and warranty is correct when made. |
(e) | Midco acknowledges that the Facility C3 Arrangers and the Original Facility C3 Lenders will be relying on the representations and warranties set out in this Clause 6 and, in addition, shall be relying on the Information without carrying out any independent verification. |
7. | ACCESSIONS |
7.1 | Original Facility C3 Lenders |
(a) | By signing this Agreement, upon the occurrence of the Effective Date, each Original Facility C3 Lender: |
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(i) | agrees to become a Lender under Facility C3 and to be bound by the terms of the Amended Agreement as a Lender under Facility C3; |
(ii) | confirms that it intends to incur liabilities under the Finance Documents in respect of Facility C3 with a Facility C3 Commitment in the amount set out alongside its name in Part II of Schedule 1 ( The Parties ); |
(iii) | confirms that it intends to be a party to the Intercreditor Agreement as a Credit Facility Lender, a Credit Facility Finance Party, a Senior Secured Facilities Lender and a Senior Secured Creditor (each as defined in the Intercreditor Agreement); |
(iv) | undertakes to perform all the obligations expressed in the Intercreditor Agreement to be assumed by a Credit Facility Lender, a Credit Facility Finance Party, a Senior Secured Facilities Lender and a Senior Secured Creditor (each as defined in the Intercreditor Agreement) and agrees that it shall be bound by all the provisions of the Intercreditor Agreement as if it had been an original party to the Intercreditor Agreement as a Credit Facility Lender, a Credit Facility Finance Party, a Senior Secured Facilities Lender and a Senior Secured Creditor; and |
(v) | confirms, for the purposes of clause 18.5 ( Lender status confirmation ) of the Amended Agreement that is a Qualifying Lender. |
(b) | Upon the occurrence of the Effective Date, each Original Facility C3 Lender shall assume the same obligations to and acquire the same rights against each party under this Agreement and the Amended Agreement as a Lender and an Original Facility C3 Lender and under the Intercreditor Agreement as a Credit Facility Lender, a Credit Facility Finance Party, a Senior Secured Facilities Lender and a Senior Secured Creditor as it would have assumed or acquired under each such agreement had it been an original party to those agreements in those capacities (as amended from time to time) and, in the case of the Amended Agreement and the capacity as an Original Facility C3 Lender, assuming such capacity existed at such time. |
(c) | Upon the occurrence of the Effective Date, the Original Term Facility Borrower shall be the Borrower of Facility C3 (and each Original Facility C3 Lender acknowledges and agrees to the same) and Midco on behalf of itself (including in its capacity as Original Term Facility Borrower) and each other Obligor and each Original Facility C3 Lender agree that each Obligor (including Midco in its capacity as Original Term Facility Borrower) and each Original Facility C3 Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors (including Midco in its capacity as Original Term Facility Borrower) and such Original Facility C3 Lender would have assumed and/or acquired under the Finance Documents had Midco always been the borrower of Facility C3 and that Original Facility C3 Lender been an Original Lender in such capacity under the Finance Documents. |
(d) | Upon the occurrence of the Effective Date, each Original Facility C3 Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Original Facility C3 Lender and those Finance Parties would have assumed and/or acquired under the Finance Documents had that Original Facility C3 Lender been an Original Lender in such capacity under the Finance Documents. |
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(e) | Upon the occurrence of the Effective Date, each Original Facility C3 Lender confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the Lenders in accordance with the Original Facilities Agreement on or prior to the Effective Date. |
(f) | This Agreement shall be deemed to be, and shall take effect in accordance with its terms as, a Lender Accession Notice for the purposes of the Amended Agreement. |
7.2 | Facility C3 Arrangers |
(a) | By signing this Agreement, upon the occurrence of the Effective Date, each Facility C3 Arranger: |
(i) | confirms that it intends to be a party to the Intercreditor Agreement as a Credit Facility Finance Party, an Arranger and a Senior Secured Creditor (each as defined in the Intercreditor Agreement) as if it had been an original party to the Intercreditor Agreement in those capacities; and |
(ii) | undertakes to perform all the obligations expressed in the Intercreditor Agreement to be assumed by a Credit Facility Finance Party, an Arranger and a Senior Secured Creditor (each as defined in the Intercreditor Agreement) and agrees that it shall be bound by all the provisions of the Intercreditor Agreement as if it had been an original party to the Intercreditor Agreement as Credit Facility Finance Party, an Arranger and a Senior Secured Creditor. |
(b) | Upon the occurrence of the Effective Date, each Facility C3 Arranger shall assume the same obligations to and acquire the same rights against each party under the Intercreditor Agreement as a Credit Facility Finance Party, an Arranger and a Senior Secured Creditor as it would have assumed or acquired under the Intercreditor Agreement had it been an original party to the Intercreditor Agreement in those capacities. |
8. | CONDITIONS SUBSEQUENT |
As soon as reasonably practicable after the Effective Date (and in any event within 60 Business Days of the Effective Date (or such later period as the Agent (acting on the instructions of the Facility C3 Arrangers may agree))), Midco shall deliver to the Agent all of the documents and other evidence listed in Part II and Part III of Schedule 2 ( Conditions Precedent and Conditions Subsequent ) in form and substance satisfactory to the Agent (acting reasonably).
9. | TERMINATION |
(a) | If the Effective Date has not occurred on or prior to the Long Stop Date, this Agreement shall terminate and shall be of no further force or effect and the provisions of the Original Facilities Agreement and the other Finance Documents (including the guarantee and indemnity of each Guarantor) shall continue in full force and effect. |
(b) | This Agreement shall terminate and shall be of no further force or effect and the provisions of the Original Facilities Agreement and the other Finance Documents (including the guarantee and indemnity of each Guarantor) shall continue in full force and effect if: |
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(i) | the Findus Acquisition Agreement is terminated by any party thereto; |
(ii) | the Seller (as defined in the Findus Acquisition Agreement) has entered into a sale and purchase agreement to sell the Findus Target (or all or substantially all of the assets of the Findus Target or Findus Target Group) to a purchaser other than the Buyer (as defined in the Findus Acquisition Agreement); or |
(iii) | Midco confirms in writing to the Agent and the Original Facility C3 Lenders that the offer of the Buyer (as defined in the Findus Acquisition Agreement) to acquire the Findus Target has been withdrawn, repudiated or cancelled. |
10. | MISCELLANEOUS |
10.1 | Incorporation of terms |
The provisions of clause 22.1 ( Transaction Expenses ), 36 ( Notices ), clause 39 ( Partial invalidity ) and clause 45 ( Enforcement ) of the Original Facilities Agreement shall be incorporated into this Agreement as if set out in full in this Agreement and as if references in those clauses to this Agreement or the Finance Documents are references to this Agreement.
10.2 | Counterparts |
This 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 Agreement.
11. | GOVERNING LAW |
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
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This Agreement has been entered into on the date stated at the beginning of this Agreement and is executed as a deed by Midco for itself as Midco, as an Obligor and as Obligors Agent for and on behalf of each other Obligor and is intended to be and is delivered by Midco for itself as Midco, as an Obligor and as Obligors Agent for and on behalf of each other Obligor as a deed on the date specified above.
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SCHEDULE 1
T HE P ARTIES
PART I
T HE O BLIGORS
Senior Term Facilities Borrower
Name of Borrower |
Registration number (or equivalent, if any) |
|
Iglo Foods Midco Limited |
[omitted] |
|
Revolving Facility Borrowers | ||
Name of Borrower |
Registration number (or equivalent, if any) |
|
Iglo Foods Midco Limited |
[omitted] |
|
Iglo Foods Group Limited |
[omitted] | |
iglo Holding GmbH |
registered with the commercial register ( Handelsregister ) of the local court ( Amstgericht ) of Bremerhaven under [omitted] | |
Liberator German Newco GmbH |
registered with the commercial register ( Handelsregister ) of the local court ( Amstgericht ) of Bremerhaven under [omitted] |
|
Iglo Nederland B.V. |
[omitted] | |
Iglo Austria Holding GmbH |
[omitted] | |
Birds Eye IPco Limited |
||
Guarantors | ||
Name of Guarantor |
Registration number (or equivalent, if any) |
|
Iglo Foods Finco Limited |
[omitted] | |
Iglo Foods Midco Limited |
[omitted] | |
Iglo Foods BondCo plc |
[omitted] | |
Iglo Foods Group Limited |
[omitted] | |
Birds Eye IPco Limited |
[omitted] | |
iglo Holding GmbH |
registered with the commercial register ( Handelsregister ) of the local court ( Amstgericht ) of Bremerhaven under [omitted] | |
Liberator German Newco GmbH |
registered with the commercial register ( Handelsregister ) of the local court ( Amstgericht ) of Bremerhaven under [omitted] |
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Name of Guarantor |
Registration number (or equivalent, if any) |
|
Iglo Austria Holding GmbH |
registered with the commercial register ( Firmenbuch ) of the Vienna commercial court ( Handelsgericht Wien ) under [omitted] | |
Iglo Nederland B.V. |
||
iglo GmbH |
registered with the commercial register (Handelsregister) of the local court (Amstgericht) of Hamburg under [omitted] | |
Birds Eye Limited |
||
Iglo Austria GmbH |
registered with the commercial register ( Firmenbuch ) of the Vienna commercial court ( Handelsgericht Wien ) under [omitted] | |
Frozen Fish International GmbH |
registered with the commercial register ( Handelsregister ) of the local court ( Amstgericht ) of Bremerhaven under [omitted] |
|
Iglo Belgium NV |
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PART II
O RIGINAL F ACILITY C3 L ENDERS
Name of Original Facility C3 Lender | Facility C3 Commitments | |||
Credit Suisse AG, London Branch |
| 325,000,000 | ||
Total: |
| 325,000,000 |
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S CHEDULE 2
C ONDITIONS P RECEDENT AND C ONDITIONS S UBSEQUENT
PART I
C ONDITIONS P RECEDENT
1. | Obligors |
1.1 | A copy of the constitutional documents of Midco and Finco. |
1.2 | A copy of a resolution of the board of directors of Midco and Finco: |
(a) | approving the terms of and the transactions contemplated by this Agreement (and the Amended Agreement), the Facility C3 Additional Facility Notice, the Facility C3 Commitment Letter, each Fee Letter falling under paragraph (b) of that definition and the Debenture (as defined below) (such documents, together the Additional Facility Documents ) to which each is a party and resolving that it execute, deliver and perform the Additional Facility Documents to which it is a party (and with respect to Finco, authorising the entry into and performance of the Additional Facility Documents by Midco on its behalf (as applicable to it)); |
(b) | authorising a specified person or persons to execute the Additional Facility Documents to which each is a party on its behalf and any other documents and notices to be signed by or on behalf of it under or in connection with the Additional Facility Documents; and |
(c) | confirming each of the matters specified in Clause 5 ( Confirmation of Security and Guarantees ) of this Agreement, including that the guarantee issued by itself to the Finance Parties under and in accordance with clause 23 ( Guarantee and indemnity ) of the Original Facilities Agreement will extend to include the Facility C3 Loan and all other obligations of the Obligors arising under or in connection with Facility C3, and will be legal, valid and binding and in full force and effect notwithstanding the amendments to the Original Facilities Agreement in the form set out in Schedule 3 ( Amended Agreement ), including the establishment of Facility C3. |
1.3 | A copy of a resolution signed by all the holders of the issued shares in Midco approving the terms of and the transactions contemplated by the Additional Facility Documents to which it is a party. |
1.4 | A specimen of the signature of each person authorised by the resolutions referred to above in relation to the Additional Facility Documents. |
1.5 | A certificate of an authorised signatory of Midco certifying that: |
(a) | each copy document relating to it and to Finco and specified in this Part I of Schedule 2 are correct, complete and in full force and effect and have not been amended or superseded; and |
(b) | borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing, securing or similar limit binding on either of them or any other Obligor to be exceeded. |
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2. | Legal opinions |
A legal opinion of Linklaters LLP, legal advisers to the Agent and the Security Agent in England and Wales as to capacity and enforceability under English law.
3. | Other documents and evidence |
3.1 | Duly executed copies of: |
(a) | the Agents countersignature to the Facility C3 Additional Facility Notice; |
(b) | an English law debenture (the Debenture ) granted by each of Midco and Finco in favour of the Security Agent as security for the Secured Obligations; |
(c) | the Findus Acquisition Agreement; and |
(d) | a Utilisation Request in relation to Facility C3, which includes instructions for the Agent to deduct and to pay the proceeds of Facility C3 to Midco in an amount which is net of all fees payable with respect to Facility C3 on the Utilisation Date for Facility C3 under the terms of each Fee Letter falling under paragraph (b) of that definition and all other fees, costs and expenses of the Facility C3 Arrangers and/or Original Facility C3 Lenders payable by Midco under the terms of any Additional Facility Document. |
3.2 | A certificate of Midco (signed by a director): |
(a) | confirming that each of the conditions in Clause 2.4 ( Additional Facilities ) of the Original Facilities Agreement have been satisfied, including (without limitation) that the Agent has been delivered a copy of the Facility C3 Additional Facility Notice at least 3 Business Days prior to the Effective Date; |
(b) | confirming that the Findus Acquisition is a Permitted Acquisition under paragraph (d) of that definition and the requirements specified in relation to any such Permitted Acquisition have been satisfied; |
(c) | confirming that the Additional Facility Documents and the transactions contemplated by the Additional Facility Documents (including, without limitation, the indebtedness contemplated by the Additional Facility Documents and the Transaction Security Documents contemplated thereby) are not prohibited by and do not conflict with the terms of the Intercreditor Agreement, the terms of the Original Facilities Agreement (including, without limitation, Clause 26.2 ( Financial condition ) of the Original Facilities Agreement) and the terms of the Senior Secured Notes and each other Senior Secured Finance Document (as defined in the Intercreditor Agreement) (with such certificate to be accompanied with evidence setting out the basis for such certification on a pro forma basis for the transactions and debt incurrence and repayments (if any) to be undertaken on the Effective Date); |
(d) | requesting that the Security Agent enter into the new Transaction Security contemplated by this Agreement; |
(e) | confirming that all conditions and all requirements for completion of the Findus Acquisition have been satisfied other than (i) as referred to in paragraph (f) below and/or (ii) payment of the consideration expressed to be payable under the Findus Acquisition Agreement, and that on the payment of such amount, the acquisition will be unconditional and will be consummated on the Utilisation Date for Facility C3; and |
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(f) | confirming that the Findus Acquisition Agreement has not been amended or waived (in whole or in part) and no consent has been given thereunder from the version approved by the Facility C3 Arrangers prior to the date of this Agreement, in a manner that is material and adverse to the interests of the Original Facility C3 Lenders (save for any amendments, waivers or consents approved in writing by such Facility C3 Arrangers (such approval not to be unreasonably withheld or delayed)). |
3.3 | In relation to an Original Facility C3 Lender which is not already a Lender: |
(a) | the performance by such Original Facility C3 Lender of all necessary know your customer or other similar identification checks under all applicable laws and regulations in connection with the Facility C3; and |
(b) | the performance by the Agent and (as applicable) the Security Agent of all necessary know your customer or other similar identification checks under all applicable laws and regulations in relation to that Original Facility C3 Lender. |
3.4 | The following reports (the Reports ) (together with a reports proceeds side letter (to the extent applicable)) and (in the case of the Reports listed in paragraphs (b) and (c) below (only)) reliance letters for the benefit of each of the Original Facility C3 Lenders and Syndication Lenders (as defined in the Facility C3 Commitment Letter) in relation to each such Report: |
(a) | legal due diligence report or reports prepared by: |
(i) | Advokatfirmaet BA-HR DA in relation to operations of the Findus Target Group in Norway; |
(ii) | Cuatrecasas, Gonçalves Pereira in relation to operations of the Findus Target Group in Spain; |
(iii) | FIDAL in relation to operations of the Findus Target Group in France; |
(iv) | Setterwalls Advokatbyrå in relation to operations of the Findus Target Group in Sweden; |
(v) | Liedekerke Wolters Waelbroeck Kirkpatrick in relation to operations of the Findus Target Group in Belgium; |
(vi) | Pestalozzi Attorneys at Law Ltd in relation to operations of the Findus Target Group in Switzerland; |
(vii) | Krogerus Attorneys Ltd in relation to operations of the Findus Target Group in Finland; and |
(viii) | Kromann Reumert in relation to operations of the Findus Target Group in Denmark. |
(b) | due diligence report or reports prepared by KPMG LLP in relation to: |
(i) | financial due diligence of the Findus Target Group; |
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(ii) | financial due diligence of the operations of the Findus Target Group in Sweden, Norway Finland and Denmark; |
(iii) | financial due diligence of the operations of the Findus Target Group in France, Spain and Belgium; |
(iv) | pensions due diligence of the Findus Target Group; and |
(v) | operational due diligence of the Findus Target Group. |
(c) | a tax structure memorandum prepared (the Structure Memorandum ) by Ernst & Young LLP, and a structure chart of the Group pro forma for the Findus Acquisition. |
3.5 | A financial model, including profit and loss, balance sheet, cashflow projections and cost savings and synergies, relating to the Group, the Findus Target Group and the Findus Acquisition (the Base Case Model ). |
3.6 | Consolidated pro forma audited financial statements of the Findus Target (reflecting the financial position of the Findus Target Group) for (i) a period of 9 Months ending 30 September 2012, (ii) the financial year ending 30 September 2013 and (iii) the financial year ending 30 September 2014. |
3.7 | Consolidated pro forma unaudited financial statements of the Target (reflecting the financial position of the Target Group) for the period of 9 Months ending 30 June 2015. |
3.8 | Evidence that each member of the Findus Target Group is being acquired pursuant to the Findus Acquisition free of: |
(a) | any Financial Indebtedness (other than Permitted Financial Indebtedness), any Security (other than Permitted Security) and any guarantees (other than Permitted Guarantees); and |
(b) | notwithstanding paragraph (a) above, any obligations (whether present or future, actual or contingent and including, without limitation, any obligations under or in respect of any guarantee) and any Security in relation to any Financial Indebtedness of any shareholder of the Findus Target (or any Affiliate thereof, but excluding any member of the Findus Target Group). |
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PART II
N ON -F INDUS T ARGET G ROUP C ONDITIONS S UBSEQUENT
The following are to be provided within 60 Business Days of the Effective Date (in form and substance satisfactory to the Agent (acting reasonably)), provided that for the purposes of this Part II of Schedule 2 (only) the term Obligor shall exclude Midco and Finco
1. | Obligors |
1.1 | A copy of the constitutional documents of each Obligor or a certificate signed by such Obligor certifying that the constitutional documents previously delivered to the Agent for the purposes of the Original Facilities Agreement have not been amended and remain in full force and effect. |
1.2 | A copy of a resolution of the board of directors (or, as customary, managing directors or supervisory board) of each Obligor: |
(a) | approving the terms of and the transactions contemplated by the Finance Documents, resolving that it execute, deliver and perform the Finance Documents to which it is a party and ratifying the entry into and performance of the Additional Facility Documents by Midco on its behalf (as applicable to it); |
(b) | authorising and ratifying specified person or persons to execute the Finance Documents and any other documents and notices to be signed by or on behalf of it under or in connection with the Finance Documents; and |
(c) | confirming each of the matters specified in Clause 5 ( Confirmation of Security and Guarantees ) of this Agreement, including that the guarantee issued by itself to the Finance Parties under and in accordance with Clause 23 ( Guarantee and indemnity ) of the Original Facilities Agreement will extend to include the Facility C3 Loan and all other obligations of the Obligors arising under or in connection with Facility C3 and will be legal, valid and binding and in full force and effect notwithstanding the amendments to the Original Facilities Agreement in the form set out in Schedule 3 ( Amended Agreement ), including the establishment of Facility C3. |
1.3 | A specimen of the signature of each person authorised by the resolutions referred to above in relation to the Finance Documents. |
1.4 | If required under applicable law (but in any event in relation to each Obligor incorporated in the United Kingdom, each Austrian Obligor, each Dutch Obligor and each German Obligor) a copy of a resolution signed by all the holders of the issued shares of that Obligor: |
(a) | approving the terms of and the transactions contemplated by the Finance Documents and ratifying the entry into and performance of the Additional Facility Documents by Midco on its behalf (as applicable to it); |
(b) | in relation to each German Obligor and each Austrian Obligor, authorising the entry into the Finance Documents instructing the managing director(s) of such Obligor to execute the Finance Documents; and |
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(c) | in relation to each Dutch Obligor, approving the resolutions referred to above and the transactions contemplated thereby, and appointing a special representative to represent the Dutch Obligor in case of a conflict of interest. |
1.5 | In relation to each Dutch Obligor, such evidence as may be required to ensure that the Finance Parties are in compliance with the Wet ter voorkoming van witwassen en financieren van terrorisme . |
1.6 | A certificate of an authorised signatory of each Obligor confirming and certifying that: |
(a) | each copy document relating to that Obligor specified in this Schedule 2 is correct, complete and in full force and effect and has not been amended or superseded; and |
(b) | borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing, securing or similar limit binding on any Obligor to be exceeded. |
2. | Transaction Security / Transaction Security Documents |
2.1 | Duly executed confirmation agreement in relation to each of the Austrian law Transaction Security Documents. |
2.2 | Duly executed Belgian law confirmations in relation to: |
(a) | the share pledge over all of the share capital in Iglo Belgium NV; |
(b) | the receivable pledge granted by Iglo Belgium NV; and |
(c) | the bank account pledge granted by Iglo Belgium NV. |
2.3 | Duly executed Dutch law confirmations and second-ranking: |
(a) | share pledge over all of the share capital of Iglo Nederland B.V.; |
(b) | pledge of intellectual property rights granted by Iglo Nederland B.V.; and |
(c) | bank account pledge in relation to bank accounts held by the German Obligors. |
2.4 | Duly executed English law debenture granted by each Obligor incorporated in England and Wales in favour of the Security Agent. |
2.5 | Duly executed confirmation and subordinate ranking pledge agreements in relation to each of the German law Transaction Security Documents. |
2.6 | Duly executed supplemental extension and confirmation deed in relation to each of the Italian law Transaction Security Documents. |
3. | Legal opinions |
3.1 | A legal opinion of the legal advisers to the Agent and the Security Agent as to enforceability under Austrian law. |
3.2 | A legal opinion of the legal advisers to the Obligors as to capacity under Austrian law. |
3.3 | A legal opinion of the legal advisers to the Agent and the Security Agent as to enforceability under Belgian law. |
19
3.4 | A legal opinion of the legal advisers to the Obligors as to capacity under Belgian law. |
3.5 | A legal opinion of the legal advisers to the Agent and the Security Agent as to capacity and enforceability under Dutch law. |
3.6 | A legal opinion of Linklaters LLP, legal advisers to the Agent and the Security Agent in England and Wales as to capacity and enforceability under English law. |
3.7 | A legal opinion of the legal advisers to the Agent and the Security Agent as to enforceability under German law. |
3.8 | A legal opinion of the legal advisers to the Obligors as to capacity under German law. |
3.9 | A legal opinion of the legal advisers to the Agent and the Security Agent as to enforceability under Italian law. |
4. | Other documents and evidence |
4.1 | A certificate of Midco (signed by an authorised signatory) confirming: |
(a) | the list of Material Companies; |
(b) | each Material Company has provided a guarantee in favour of the Finance Parties and confirmed the transactions contemplated by the Additional Facility Documents; and |
(c) | the Guarantor Coverage test is satisfied. |
20
PART III
F INDUS T ARGET G ROUP C ONDITIONS S UBSEQUENT
The following are to be provided (notwithstanding the timing of accession specified in paragraph (a) of Clause 27.29 ( Guarantors ) of the Amended Agreement) within 60 Business Days of the Effective Date (or such later period as the Facility C3 Arrangers may agree) (acting reasonably))
1.1 | Evidence that each member of the Findus Target Group which as at the Utilisation Date of Facility C3: |
(a) | is incorporated in Finland, Norway, Spain and Sweden (other than any such member of the Findus Target Group that is immaterial)); or |
(b) | owns or holds any material intellectual property used in the business of the Findus Target Group (excluding any such member of the Target Group incorporated in France), |
has acceded to the Amended Agreement as a Guarantor pursuant to Clause 31.4 ( Additional Guarantors ) of the Amended Agreement.
1.2 | Transaction Security over all of the issued share capital of the Findus Target and Findus Holding France SAS, in each case, granted in favour of the Security Agent by a Guarantor. |
21
SCHEDULE 3
A MENDED A GREEMENT
22
The taking of (a) any of the Finance Documents (including this document) or (b) any certified copy thereof or (c) any document which constitutes substitute documentation thereof including written confirmations or references (the Stamp Duty Sensitive Documents) into Austria may cause the imposition of Austrian stamp duty. The same, inter alia, applies to (i) the sending of Stamp Duty Sensitive Documents to an Austrian addressee by fax, (ii) the sending of any e-mail communication to which an electronic scan copy (e.g., pdf or tif) of a Stamp Duty Sensitive Document is attached to an Austrian addressee and (iii) the sending of any e-mail communication carrying an electronic or digital signature which refers to a Stamp Duty Sensitive Document to an Austrian addressee. Accordingly, in particular, keep any Stamp Duty Sensitive Documents outside of Austria and avoid (A) sending Stamp Duty Sensitive Documents by fax to an Austrian addressee, (B) sending any e-mail communication to which an electronic scan copy of a Stamp Duty Sensitive Document is attached to an Austrian addressee and (C) sending any e-mail communication carrying an electronic or digital signature which refers to a Stamp Duty Sensitive Document to an Austrian addressee .
SENIOR FACILITIES AGREEMENT
dated 3 July 2014
as amended and restated on the 2015 Effective Date pursuant to the 2015 SFA
Amendment and Restatement Agreement and as further amended and restated on the
Second 2015 Effective Date pursuant to the Second 2015 SFA Amendment and
Restatement Agreement
for
IGLO FOODS MIDCO LIMITED
with
DEUTSCHE BANK AG, LONDON BRANCH
as left lead bank
and
DEUTSCHE BANK AG, LONDON BRANCH
CREDIT SUISSE AG, LONDON BRANCH
as global co-ordinators
and
DEUTSCHE BANK AG, LONDON BRANCH
CREDIT SUISSE AG, LONDON BRANCH
NOMURA INTERNATIONAL PLC
as mandated lead arrangers and bookrunners
CREDIT SUISSE AG, LONDON BRANCH, BARCLAYS BANK PLC and UBS LIMITED
as Facility C3 Arrangers
with
CREDIT SUISSE AG, LONDON BRANCH
acting as Agent
and
CREDIT SUISSE AG, LONDON BRANCH
acting as Security Agent
Ref: L- 238225
CONTENTS
CLAUSE | PAGE | |||||
SECTION 1 | ||||||
INTERPRETATION | ||||||
1. |
Definitions and interpretation | 2 | ||||
SECTION 2 | ||||||
THE FACILITIES | ||||||
2. |
The Facilities | 51 | ||||
3. |
Purpose | 58 | ||||
4. |
Conditions of Utilisation | 59 | ||||
SECTION 3 | ||||||
UTILISATION | ||||||
5. |
UtilisationLoans | 62 | ||||
6. |
UtilisationLetters of Credit | 66 | ||||
7. |
Letters of Credit | 69 | ||||
8. |
Optional Currencies | 71 | ||||
9. |
Ancillary Facilities | 71 | ||||
SECTION 4 | ||||||
REPAYMENT, PREPAYMENT AND CANCELLATION | ||||||
10. |
Repayment | 78 | ||||
11. |
Illegality, voluntary prepayment and cancellation | 78 | ||||
12. |
Mandatory prepayment | 81 | ||||
13. |
Restrictions | 87 | ||||
SECTION 5 | ||||||
COSTS OF UTILISATION | ||||||
14. |
Interest | 89 | ||||
15. |
Interest Periods | 90 | ||||
16. |
Changes to the calculation of interest | 91 | ||||
17. |
Fees | 92 | ||||
SECTION 6 | ||||||
ADDITIONAL PAYMENT OBLIGATIONS | ||||||
18. |
Tax gross-up and indemnities | 95 | ||||
19. |
Increased Costs | 104 | ||||
20. |
Other indemnities | 104 | ||||
21. |
Mitigation by the Lenders | 106 | ||||
22. |
Costs and expenses | 106 | ||||
SECTION 7 | ||||||
GUARANTEE | ||||||
23. |
Guarantee and indemnity | 108 | ||||
SECTION 8 | ||||||
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT | ||||||
24. |
Representations | 116 | ||||
25. |
Information undertakings | 120 | ||||
26. |
Financial covenant | 126 | ||||
27. |
General undertakings | 136 | ||||
28. |
Events of Default | 147 |
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CLAUSE | PAGE | |||||
SECTION 9 |
|
|||||
CHANGES TO PARTIES | ||||||
29. |
Changes to the Lenders | 153 | ||||
30. |
Debt Purchase Transactions | 158 | ||||
31. |
Changes to the Obligors | 162 | ||||
SECTION 10 | ||||||
THE FINANCE PARTIES | ||||||
32. |
Role of the Agent, the Arrangers, the Issuing Bank and others | 166 | ||||
33. |
Conduct of business by the Finance Parties | 175 | ||||
34. |
Sharing among the Finance Parties | 175 | ||||
SECTION 11 | ||||||
ADMINISTRATION | ||||||
35. |
Payment mechanics | 177 | ||||
36. |
Set-off | 179 | ||||
37. |
Notices | 179 | ||||
38. |
Calculations and certificates | 182 | ||||
39. |
Partial invalidity | 182 | ||||
40. |
Remedies and waivers | 183 | ||||
41. |
Amendments and waivers | 183 | ||||
42. |
Confidentiality | 185 | ||||
43. |
Counterparts | 188 | ||||
SECTION 12 | ||||||
GOVERNING LAW AND ENFORCEMENT | ||||||
44. |
Governing law | 189 | ||||
45. |
Enforcement | 189 | ||||
46. |
General Austrian limitation | 191 |
THE SCHEDULES
SCHEDULE | PAGE | |||||
SCHEDULE 1 |
The Parties |
[ | ] | |||
SCHEDULE 2 |
Conditions Precedent and Conditions Subsequent |
[ | ] | |||
SCHEDULE 3 |
Requests |
[ | ] | |||
SCHEDULE 4 |
Form of Transfer Certificate and Lender Accession Undertaking |
[ | ] | |||
SCHEDULE 5 |
Form of Accession Letter |
[ | ] | |||
SCHEDULE 6 |
Form of Resignation Letter |
[ | ] | |||
SCHEDULE 7 |
Form of Compliance Certificate |
[ | ] | |||
SCHEDULE 8 |
LMA Form of Confidentiality Undertaking |
[ | ] | |||
SCHEDULE 9 |
Timetables |
[ | ] | |||
SCHEDULE 10 |
Form of Letter of Credit |
[ | ] | |||
SCHEDULE 11 |
Material Companies |
[ | ] | |||
SCHEDULE 12 |
Security Principles |
[ | ] | |||
SCHEDULE 13 |
Form of Lender Accession Notice |
[ | ] | |||
SCHEDULE 14 |
Form of Additional Facility Notice |
[ | ] | |||
SCHEDULE 15 |
Forms of Notifiable Debt Purchase Transaction Notice |
[ | ] | |||
SCHEDULE 16 |
Form of Exchange Certificate |
[ | ] |
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THIS AGREEMENT is dated 3 July 2014 as amended and restated on the 2015 Effective Date pursuant to the 2015 SFA Amendment and Restatement Agreement and as further amended and restated on the Second 2015 Effective Date pursuant to the Second 2015 SFA Amendment and Restatement Agreement and made between:
(1) | IGLO FOODS MIDCO LIMITED , a company incorporated in England and Wales with registered number 5879252 ( Midco ); |
(2) | THE ENTITIES listed in Part I of Schedule 1 ( The Parties ) as borrowers (the Original Borrowers ); |
(3) | THE ENTITIES listed in Part I of Schedule 1 ( The Parties ) as guarantors (the Original Guarantors ); |
(4) | DEUTSCHE BANK AG, LONDON BRANCH as left lead bank (the Left Lead Bank ); |
(5) | DEUTSCHE BANK AG, LONDON BRANCH and CREDIT SUISSE AG, LONDON BRANCH as global co-ordinators (the Global Co-ordinators ); |
(6) | DEUTSCHE BANK AG, LONDON BRANCH, CREDIT SUISSE AG, LONDON BRANCH and NOMURA INTERNATIONAL PLC as mandated lead arrangers and bookrunners (whether acting individually or together, and together with the Left Lead Bank and the Global Co-ordinators, the Arrangers ); |
(7) | CREDIT SUISSE AG, LONDON BRANCH, BARCLAYS BANK PLC and UBS LIMITED as mandated lead arrangers and bookrunners in relation to Facility C3 (whether acting individually or together, the Facility C3 Arrangers ); |
(8) | THE FINANCIAL INSTITUTIONS listed in the 2015 Allocations Table (the Original Lenders ); |
(9) | THE FINANCIAL INSTITUTIONS listed in part II of schedule 1 ( The Parties ) of the Second 2015 SFA Amendment and Restatement Agreement (the Original Facility C3 Lenders ); |
(10) | CREDIT SUISSE AG, LONDON BRANCH , as agent of the other Finance Parties (the Agent ); and |
(11) | CREDIT SUISSE AG, LONDON BRANCH , as security agent for the Secured Parties (the Security Agent ). |
IT IS AGREED as follows:
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SECTION 1
INTERPRETATION
1. | DEFINITIONS AND INTERPRETATION |
1.1 | Definitions |
In this Agreement:
2015 Allocations Table has the meaning given to the term Allocations Table in the 2015 SFA Amendment and Restatement Agreement.
2015 Effective Date has the meaning given to the term Effective Date in the 2015 SFA Amendment and Restatement Agreement.
2015 Funds Flow Statement has the meaning given to the term Funds Flow Statement in the 2015 SFA Amendment and Restatement Agreement.
2015 SFA Amendment and Restatement Agreement means the amendment and restatement agreement in relation to this Agreement dated 6 May 2015 between, among others, Midco and the Agent.
Acceptable Bank means:
(a) | a Lender and, to the extent not a Lender, the list of banks with whom the Group has certain banking arrangements as at the date of this Agreement as agreed between Midco and the Arrangers prior to the Closing Date; |
(b) | any bank or financial institution which has a rating for its long-term debt obligations of BBB- or higher by Standard & Poors Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moodys Investors Service Limited or a comparable rating from an internationally recognised credit rating agency; or |
(c) | any other bank or financial institution approved by the Agent (acting reasonably). |
Accession Letter means a document substantially in the form set out in Schedule 5 ( Form of Accession Letter ) or any other form agreed by the Agent and the Obligors Agent.
Accounting Principles means generally accepted accounting principles in the jurisdiction of incorporation of the relevant member of the Group or International Accounting Standards.
Acquired Group means, in relation to Permitted Acquisition under paragraph (d) of the definition of Permitted Acquisition, the entity (and its Subsidiaries) or business or undertaking (as the case may be) acquired by the Group pursuant to such Permitted Acquisition.
Acquisition Costs means all non-periodic fees, costs and expenses, stamp, registration and other Taxes incurred or required to be paid by any member of the Group in connection with any Permitted Acquisition or the Transaction Documents.
Additional Borrower means a company which becomes a Borrower in accordance with Clause 31 ( Changes to the Obligors ).
Additional Facility has the meaning given to it in Clause 2.4 ( Additional Facilities ).
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Additional Facility Commencement Date means, in respect of an Additional Facility, the date specified as the Commencement Date in the Additional Facility Notice relating to that Additional Facility.
Additional Facility Commitment means, in respect of an Additional Facility Lender and an Additional Facility, the Base Currency Amount specified as its Lender Commitment in the Additional Facility Notice delivered by that Additional Facility Lender, to the extent not cancelled, reduced or transferred by such Additional Facility Lender under this Agreement.
Additional Facility Documents means, in relation to any Additional Facility, the Additional Facility Debt Instrument, any fee letter entered into, under or in connection with the Additional Facility and any other document or instrument relating to that Additional Facility and designated as such by Midco and the relevant Additional Facility Lender.
Additional Facility Debt Instrument means, in relation to any Additional Facility, the indenture, facility agreement, or other equivalent document by which that Additional Facility is issued or, as the case may be, made available.
Additional Facility Lender has the meaning given to it in Clause 2.4 ( Additional Facilities ).
Additional Facility Notice means a notice substantially in the form set out in Schedule 14 ( Form of Additional Facility Notice ) or any other form agreed by the Agent and the Obligors Agent.
Additional Facility Revolving Loan means loans made or to be made under an Additional Revolving Facility or the principal amount outstanding for the time being of those loans under an Additional Revolving Facility.
Additional Facility Term Loan means loans made or to be made under an Additional Term Facility or the principal amount outstanding for the time being of those loans under an Additional Term Facility.
Additional Guarantor means a company which becomes a Guarantor in accordance with Clause 31 ( Changes to the Obligors ).
Additional Obligor means an Additional Borrower or an Additional Guarantor.
Additional Revolving Facility means any Additional Facility designated as a Revolving Facility by Midco under paragraph (k) of Clause 2.4 ( Additional Facilities ).
Additional Term Facility means any Additional Facility designated as a Term Facility by Midco under paragraph (k) of Clause 2.4 ( Additional Facilities ).
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.
Agents Spot Rate of Exchange means the Agents spot rate of exchange for the purchase of the relevant currency with the Base Currency in the London foreign exchange market at or about 11:00 a.m. on a particular day.
Allocations Table means the allocations and commitments table agreed in writing by Midco and the Left Lead Bank as notified to the Agent on or prior to the Closing Date (provided that, in relation to an Original Lender which is a Party on the date on which this Agreement is entered
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into, the commitments of that Original Lender on or prior to the Closing Date shall be those agreed by that Original Lender and the Left Lead Bank, as the same may be reduced pursuant to Clause 29 ( Changes to the Lenders )).
Ancillary Commencement Date means, in relation to an Ancillary Facility, the date on which that Ancillary Facility is first made available, which date shall be a Business Day within the Availability Period for a Revolving Facility.
Ancillary Commitment means, in relation to an Ancillary Lender and an Ancillary Facility, the maximum Base Currency Amount which that Ancillary Lender has agreed (whether or not subject to satisfaction of conditions precedent) to make available from time to time under an Ancillary Facility and which has been authorised as such under Clause 9 ( Ancillary Facilities ), to the extent that amount is not cancelled or reduced under this Agreement or the Ancillary Documents relating to that Ancillary Facility.
Ancillary Document means each document relating to or evidencing the terms of an Ancillary Facility.
Ancillary Facility means any ancillary facility made available by an Ancillary Lender in accordance with Clause 9 ( Ancillary Facilities ).
Ancillary Lender means each Lender (or Affiliate of a Lender) which makes available an Ancillary Facility in accordance with Clause 9 ( Ancillary Facilities ).
Ancillary Outstandings means, at any time, in relation to an Ancillary Lender and an Ancillary Facility, the aggregate of the equivalents (as calculated by that Ancillary Lender) in the Base Currency of the following amounts outstanding under that Ancillary Facility then in force:
(a) | the principal amount under each overdraft facility and on demand short-term loan facility (net of any credit balances on any account of any Borrower of an Ancillary Facility with the Ancillary Lender making available that Ancillary Facility to the extent that such credit balance is freely available to be set off by that Ancillary Lender against liabilities owed to it by that Borrower under that Ancillary Facility) (ignoring, for this purpose, where agreed by the Ancillary Lender, any liability in respect of BACS facilities); |
(b) | the face amount of each guarantee, bond and letter of credit under that Ancillary Facility (to the extent not repaid or prepaid); and |
(c) | the amount fairly representing the aggregate exposure (excluding interest and similar charges) of that Ancillary Lender under each other type of accommodation provided under that Ancillary Facility, |
in each case, as determined by such Ancillary Lender in accordance with the relevant Ancillary Document or normal banking practice.
Auditors means one of PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte & Touche or such other firm of national or international repute appointed by Midco after consultation with the Agent.
Austrian Capital Maintenance Rules has the meaning given to it in Clause 23.12 ( Limitations on obligations of Austrian Guarantors ).
Austrian Guarantor has the meaning given to it in Clause 23.5 ( Guarantor intent ).
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Austrian Obligor means an Obligor incorporated in the Republic of Austria.
Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.
Availability Period means:
(a) | in relation to Facility B1 and Facility B2, the period from (and including) the date of this Agreement to (and including) the Closing Date; |
(b) | in relation to Facility C1 and Facility C2, the 2015 Effective Date only; |
(c) | in relation to Facility C3, the period from (and including) the Second 2015 Effective Date to (and including) the earlier of (i) the Utilisation Date under Facility C3 and (ii) 15 January 2016; |
(d) | in relation to Revolving Facility 1, the period from (and including) the date of this Agreement to (and including) the date falling one Month prior to the Termination Date applicable to Revolving Facility 1; |
(e) | in relation to Revolving Facility 2, the period from (and including) the 2015 Effective Date to (and including) the date falling one Month prior to the Termination Date applicable to Revolving Facility 2; and |
(f) | in relation to any Additional Facility, the period specified in the Additional Facility Notice relating to that Additional Facility. |
Available Amount has the meaning ascribed to such term in Clause 26.4 ( Baskets ).
Available Commitment means, in relation to a Facility, a Lenders Commitment under that Facility minus (subject to Clause 9.7 ( Affiliates of Lenders as Ancillary Lenders ) and as set out below):
(a) | the amount (or, in the case of a Revolving Facility only, the Base Currency Amount) of its participation in any outstanding Utilisations under that Facility and, in the case of a Revolving Facility only, the Base Currency Amount of the aggregate of its Ancillary Commitments; and |
(b) | in relation to any proposed Utilisation amount (or, in the case of a Revolving Facility only, the Base Currency Amount), the amount of its participation in any other Utilisations that are due to be made under that Facility on or before the proposed Utilisation Date and, in the case of a Revolving Facility only, the Base Currency Amount of its Ancillary Commitment in relation to any new Ancillary Facility that is due to be made available on or before the proposed Utilisation Date. |
For the purposes of calculating a Lenders Available Commitment in relation to any proposed Utilisation under a Revolving Facility only, the following amounts shall not be deducted from a Lenders Commitment under that Facility:
(i) | that Lenders participation in any Revolving Facility Utilisations that are due to be repaid or prepaid on or before the proposed Utilisation Date; and |
(ii) | that Lenders (or its Affiliates) Ancillary Commitments to the extent that they are due to be reduced or cancelled on or before the proposed Utilisation Date. |
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Available Facility means, in relation to a Facility, the aggregate for the time being of each Lenders Available Commitment in respect of that Facility.
Base Currency means euro.
Base Currency Amount means:
(a) | in relation to a Utilisation, the amount specified in the Utilisation Request delivered by a Borrower for that Utilisation (or, in the case of a Utilisation under a Revolving Facility, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agents Spot Rate of Exchange on the date which is three Business Days before the Utilisation Date or, if later, on the date the Agent receives the Utilisation Request in accordance with the terms of this Agreement) and, in the case of a Letter of Credit, as adjusted under Clause 6.7 ( Revaluation of Letters of Credit ) at annual intervals; and |
(b) | in relation to an Ancillary Commitment, the amount specified as such in the notice delivered to the Agent by Midco pursuant to Clause 9.2 ( Availability ) (or, if the amount specified is not denominated in the Base Currency, that amount converted into the Base Currency at the Agents Spot Rate of Exchange on the date which is three Business Days before the Ancillary Commencement Date for that Ancillary Facility or, if later, the date the Agent receives the notice of the Ancillary Commitment in accordance with the terms of this Agreement), |
as adjusted to reflect any repayment, prepayment, consolidation or division of a Utilisation, or (as the case may be) cancellation or reduction of an Ancillary Facility.
Belgian Additional Obligor means an Additional Obligor incorporated in Belgium.
Belgian Companies Code means the Belgian Companies Code of 7 May 1999, as amended from time to time.
Belgian Obligor means an Obligor incorporated in Belgium.
Bidco means Iglo Foods Group Limited (formerly known first as Liberator Bidco Limited and subsequently as Birds Eye Group Limited), a company incorporated in England and Wales with registered number 5879466, which is a wholly-owned subsidiary of Midco.
BondCo means Iglo Foods BondCo plc, a company incorporated in England and Wales with registered number 09094345, which is a wholly-owned subsidiary of Midco.
Borrower means a Term Facility Borrower (and, in the case of Facility C3, as at the Second 2015 Effective Date, the Original Term Facility Borrower (only)) or a Revolving Facility Borrower.
Borrowings has the meaning given to that term in Clause 26.1 ( Financial definitions ).
Break Costs means the amount (if any) by which:
(a) | the interest (but, for the avoidance of doubt, excluding any 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, |
- 6 -
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 Interbank 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 day (other than a Saturday or Sunday) on which banks are open for general business in London and:
(a) | (in relation to any date for payment or purchase of a currency other than euro) the principal financial centre of the country of that currency; or |
(b) | (in relation to any date for payment or purchase of euro) any TARGET Day. |
Capital Expenditure has the meaning given to that term in Clause 26.1 ( Financial definitions ).
Cash means cash in hand (or in transit or in tills or payments made by cheques or debit cards or credit cards which are yet to be received in cleared funds) and credit balances or amounts on deposit with an Acceptable Bank which are freely transferable and freely convertible and accessible by a member of the Group within 90 days or held in a blocked account and not subject to any Security (other than one arising under the Transaction Security Documents).
Cash Equivalent Investments means, at any time:
(a) | certificates of deposit maturing within one year of the relevant date of calculation and issued by an Acceptable Bank; |
(b) | any investment in marketable debt obligations issued or guaranteed by the government of the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year of the relevant date of calculation and not convertible or exchangeable into any other security; |
(c) | debt securities maturing within one year of the relevant date of calculation which are not convertible or exchangeable into any other security, are rated either BBB-or higher by Standard & Poors Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moodys Investors Service Limited (or, if no rating is available in respect of the debt securities, the issue of which has, in respect of its long-term debt obligations, an equivalent rating); |
(d) | open market commercial paper not convertible or exchangeable into any other security: |
(i) | for which a recognised trading market exists; |
(ii) | issued by an issuer incorporated in the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State; |
(iii) | which matures within one year of the relevant date of calculation; and |
(iv) | which has a credit rating of either BBB-or higher by Standard & Poors Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moodys Investors Service Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; |
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(e) | bills of exchange issued in the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State eligible for rediscount at the relevant central bank and accept ed by an Acceptable Bank (or any dematerialised equivalent); |
(f) | any investment accessible within 90 days in money market funds which has a credit rating of either BBB- or higher by Standard & Poors Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moodys Investors Service Limited and which invests substantially all its assets in securities of the types described in paragraphs (a) to (e) above; or |
(g) | any other debt security approved by the Majority Lenders, |
in each case, to which any member of the Group is beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security (other than one arising under the Transaction Security Documents).
Cashflow has the meaning given to that term in Clause 26.1 ( Financial definitions ).
Change of Control means:
(a) | any person or persons acting in concert gain control directly or indirectly of more than 50 per cent. of the voting shares of Listco (where 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 of shares in Listco by any of them, either directly or indirectly, to obtain or consolidate control of Listco); or |
(b) | Listco ceases to control directly or indirectly more than 50 per cent. of the voting shares of Midco. |
Charged Property has the meaning given to such term in the Intercreditor Agreement.
Clean-Up Default means, in respect of a Permitted Acquisition under paragraphs (d) and (e) of the definition of Permitted Acquisition, any Default or Event of Default which is subsisting on or arising after the completion of such Permitted Acquisition but prior to expiry of the relevant Clean-Up Period relating to that Permitted Acquisition to the extent it relates exclusively to a member of the Acquired Group of such Permitted Acquisition (or any obligation to procure or ensure in relation to a member of that Acquired Group).
Clean-Up Period means, in respect of a Permitted Acquisition under paragraphs (d) and (e) of the definition of Permitted Acquisition, the period from the date of completion of such Permitted Acquisition to the date falling 120 days thereafter.
Closing Date means the date of first Utilisation under this Agreement.
Code means the US Internal Revenue Code of 1986.
Commitment means a Revolving Facility 1 Commitment, a Revolving Facility 2 Commitment, a Facility B1 Commitment, a Facility B2 Commitment, a Facility C1 Commitment, a Facility C2 Commitment, a Facility C3 Commitment or an Additional Facility Commitment.
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Compliance Certificate means a certificate substantially in the form set out in Schedule 7 ( Form of Compliance Certificate ).
Confidential Information means all information relating to Midco, any Obligor, the Group, the Finance Documents or a 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 a 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 information that:
(i) | is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 42 ( Confidentiality ); or |
(ii) | is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or |
(iii) | 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. |
Confidentiality Undertaking means a confidentiality undertaking substantially in the agreed form as set out in Schedule 8 ( LMA Form of Confidentiality Undertaking ) or in any other form agreed between Midco and the Agent, in each case capable of being relied on by Midco and not to be amended in any material respect other than as agreed to by Midco (acting reasonably).
Consolidated EBITDA has the meaning given to such term in Clause 26.1 ( Financial definitions ).
Consolidated Total Net Debt has the meaning given to such term in Clause 26.1 ( Financial definitions ).
Credit Facility has the meaning given to such term in the Intercreditor Agreement.
CTA means the Corporation Tax Act 2009.
Debt Cover has the meaning given to such term in Clause 26.1 ( Financial definitions ).
Debt Cover Condition has the meaning given to such term in Clause 27.35 ( Covenant suspension/relaxation ).
Debt Purchase Transaction means, in relation to a person, a transaction where such person:
(a) | owns or purchases by way of assignment or transfer; |
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(b) | enters into any sub-participation in respect of; or |
(c) | enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of, |
any Commitment or amount outstanding under or in respect of this Agreement.
Declared Default means an Event of Default under paragraph (a) of that definition in respect of which a notice of acceleration has been served pursuant to paragraph (a) of Clause 28.16 ( Acceleration ).
Default means:
(a) | an Event of Default under paragraph (a) of that definition or any event or circumstance specified as such in Clause 28 ( Events of Default ) which would (with the expiry of a grace period in, or the giving of notice under, Clause 28 ( Events of Default ), or any combination of any of the foregoing) be an Event of Default under paragraph (a) of that definition; and |
(b) | with respect to each Revolving Facility only, a Financial Covenant Event of Default or any requirement of Clause 26 ( Financial covenant ) not being satisfied which would (with the expiry of the period for remedy provided for in paragraph (d) of Clause 26.3 ( Financial testing )) be an Event of Default. |
Delegate means any delegate, agent, attorney or co-trustee appointed by the Security Agent.
Designated Gross Amount has the meaning given to that term in Clause 9.2 ( Availability ).
Designated Net Amount has the meaning given to that term in Clause 9.2 ( Availability ).
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 Facilities (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.
Dutch Additional Obligor means an Additional Obligor incorporated in the Netherlands.
Dutch Civil Code means the Dutch Civil Code ( Burgerlijk Wetboek ).
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Dutch Financial Supervision Act means the Dutch Financial Supervision Act ( Wet op het financieel toezicht ) dated 28 September 2006 published in the Dutch government gazette nr. 475 on 31 October 2006, as amended from time to time.
Dutch Obligor means an Obligor incorporated in the Netherlands.
Environmental Claim means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law.
Environmental Law means any applicable law or regulation which relates to:
(a) | the pollution or protection of the environment; |
(b) | harm to or the protection of human health; |
(c) | the conditions of the workplace; or |
(d) | any emission or substance capable of causing harm to any living organism or the environment. |
Environmental Permits means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by any member of the Group.
EURIBOR means, in relation to any Loan in euro:
(a) | the applicable Screen Rate; or |
(b) | (if no Screen Rate is available for the Interest Period of that Loan) the Interpolated Screen Rate for that Loan; or |
(c) | (if no Screen Rate is available for the Interest Period of that Loan and it is not possible to calculate an Interpolated Screen Rate for that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks as the rate which the relevant Reference Bank could borrow funds in the European interbank market, |
as of (in the case of paragraphs (a) and (c) above) the Specified Time on the Quotation Day for euro for a period equal in length to the Interest Period of the relevant Loan, and provided that (in each case) if any such rate is below zero, EURIBOR will be deemed to be zero.
Euro Denominated Facility means each of Facility B1, Facility C1, Facility C3, Revolving Facility 1, Revolving Facility 2 and any Additional Facility designated as such by Midco under paragraph (k) of Clause 2.4 ( Additional Facilities ).
Event of Default means:
(a) | with respect to each Facility, any event or circumstance specified as such in Clause 28 ( Events of Default ); and |
(b) | with respect to each Revolving Facility only, a Financial Covenant Event of Default. |
Excess Cashflow has the meaning given to that term in Clause 26.1 ( Financial definitions ).
Exchange Certificate means a certificate substantially in the form set out in Schedule 16 ( Form of Exchange Certificate ) or any other form agreed by the Agent and the Obligors Agent.
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Exchange Lender means each financial institution, trust, fund or other entity which has executed an Exchange Certificate with the Agent and Midco.
Expiry Date means, for a Letter of Credit, the last day of its Term.
Existing Ancillary Facility means any facility or other financial accommodation made available by a Lender (or an Affiliate of any such Lender) to one or more members of the Group as an ancillary facility under the Existing Senior Facilities Agreement.
Existing Senior Facilities Agreement means the senior facilities agreement between, among others, Iglo Foods Midco Limited and Credit Suisse AG, London Branch originally dated 27 October 2006 (as amended from time to time).
Facility means a Term Facility, a Revolving Facility or an Additional Facility.
Facility B1 means the term loan facility made available under this Agreement as described in paragraph (a)(i) of Clause 2.1 ( The Facilities ).
Facility B1 Commitment means:
(a) | in relation to an Original Lender (other than an Exchange Lender), the amount in euro set opposite its name under the heading Facility B1 Commitment in the Allocations Table and the amount of any other Facility B1 Commitment transferred to it under this Agreement; |
(b) | in relation to an Exchange Lender, from and including the Closing Date, the amount in euro of any such Facility B1 Exchange Commitment assumed by it in accordance with Clause 5.5 ( Exchange Mechanism ) and the amount of any other Facility B1 Commitment transferred to it under this Agreement; and |
(c) | in relation to any other Lender, the amount in euro of any Facility B1 Commitment transferred to it under this Agreement, |
to the extent not cancelled, reduced or transferred by it under this Agreement or re-allocated and re-designated pursuant to the 2015 SFA Amendment and Restatement Agreement.
Facility B1 Exchange Commitment means, in relation to an Exchange Lender, the amount in euro designated as a Facility B1 Exchange Commitment in the Exchange Certificate executed by that Exchange Lender, the Agent and Midco (or such lower amount as may be notified to the Agent and the Exchange Lender by the Left Lead Bank on or prior to the Closing Date).
Facility B1 Loan means a loan made or to be made under Facility B1 or the principal amount outstanding for the time being of that loan.
Facility B2 means the term loan facility made available under this Agreement as described in paragraph (a)(ii) of Clause 2.1 ( The Facilities ).
Facility B2 Commitment means:
(a) | in relation to an Original Lender (other than an Exchange Lender), the amount in sterling set opposite its name under the heading Facility B2 Commitment in the Allocations Table and the amount of any other Facility B2 Commitment transferred to it under this Agreement; |
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(b) | in relation to an Exchange Lender, from and including the Closing Date, the amount in sterling of any such Facility B2 Exchange Commitment assumed by it in accordance with Clause 5.5 ( Exchange Mechanism ) and the amount of any other Facility B2 Commitment transferred to it under this Agreement; and |
(c) | in relation to any other Lender, the amount in sterling of any Facility B2 Commitment transferred to it under this Agreement, |
to the extent not cancelled, reduced or transferred by it under this Agreement or re-allocated and re-designated pursuant to the 2015 SFA Amendment and Restatement Agreement.
Facility B2 Exchange Commitment means, in relation to an Exchange Lender, the amount in sterling designated as a Facility B2 Exchange Commitment in the Exchange Certificate executed by that Exchange Lender, the Agent and Midco (or such lower amount as may be notified to the Agent and the Exchange Lender by the Left Lead Bank on or prior to the Closing Date).
Facility B2 Loan means a loan made or to be made under Facility B2 or the principal amount outstanding for the time being of that loan.
Facility C1 means the term loan facility made available under this Agreement as described in paragraph (a)(iii) of Clause 2.1 ( The Facilities ).
Facility C1 Closing Margin means 3.75 per cent. per annum, unless, as at the 2015 Effective Date, Debt Cover for the then most recent Relevant Period in respect of which a Compliance Certificate has been delivered (calculated pro forma for (i) any Financial Indebtedness that has been or will be incurred and/or Financial Indebtedness that has been or will be repaid or prepaid subsequent to such Compliance Certificate up to ( and including) the 2015 Effective Date and (ii) the aggregate amount of available Cash as at the 2015 Effective Date (with the amount of such Cash calculated pro forma for any payments or receipts or other transactions to be made or undertaken on the 2015 Effective Date)) is less than 4.25:1, in which case the Margin applicable to Facility C1 as at, and from, the 2015 Effective Date shall be the Margin listed in the table in the definition of Margin which corresponds to (x) Facility C1 and (y) the range for Debt Cover set out in that table within which such Debt Cover falls (but without prejudice to any subsequent increase or decrease in Margin as a result of the operation of the provisions of the definition of Margin).
Facility C1 Commitment means:
(a) | in relation to an Original Lender, the amount in euro set opposite its name under the heading Facility C1 Commitment in the 2015 Allocations Table and the amount of any other Facility C1 Commitment transferred to it under this Agreement; and |
(b) | in relation to any other Lender, the amount in euro of any Facility C1 Commitment transferred to it under this Agreement, |
to the extent not cancelled, reduced or transferred by it under this Agreement.
Facility C1 Loan means a loan made or to be made under Facility C1 or the principal amount outstanding for the time being of that loan (including, for the avoidance of doubt, any loan deemed to have been made under Facility C1 on the 2015 Effective Date pursuant to the 2015 SFA Amendment and Restatement Agreement).
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Facility C2 means the term loan facility made available under this Agreement as described in paragraph (a)(iv) of Clause 2.1 ( The Facilities ).
Facility C2 Closing Margin means 4.25 per cent. per annum, unless, as at the 2015 Effective Date, Debt Cover for the then most recent Relevant Period in respect of which a Compliance Certificate has been delivered (calculated pro forma for (i) any Financial Indebtedness that has been or will be incurred and/or Financial Indebtedness that has been or will be repaid or prepaid subsequent to such Compliance Certificate up to (and including) the 2015 Effective Date and (ii) the aggregate amount of available Cash as at the 2015 Effective Date (with the amount of such Cash calculated pro forma for any payments or receipts or other transactions to be made or undertaken on the 2015 Effective Date)) is less than 4.25:1, in which case the Margin applicable to Facility C2 as at, and from, the 2015 Effective Date shall be the Margin listed in the table in the definition of Margin which corresponds to (x) Facility C2 and (y) the range for Debt Cover set out in that table within which such Debt Cover falls (but without prejudice to any subsequent increase or decrease in Margin as a result of the operation of the provisions of the definition of Margin).
Facility C2 Commitment means:
(a) | in relation to an Original Lender, the amount in sterling set opposite its name under the heading Facility C2 Commitment in the 2015 Allocations Table and the amount of any other Facility C2 Commitment transferred to it under this Agreement; and |
(b) | in relation to any other Lender, the amount in sterling of any Facility C2 Commitment transferred to it under this Agreement, |
to the extent not cancelled, reduced or transferred by it under this Agreement.
Facility C2 Loan means a loan made or to be made under Facility C2 or the principal amount outstanding for the time being of that loan (including, for the avoidance of doubt, any loan deemed to have been made under Facility C2 on the 2015 Effective Date pursuant to the 2015 SFA Amendment and Restatement Agreement).
Facility C3 means the term loan facility made available under this Agreement as described in paragraph (a)(v) of Clause 2.1 ( The Facilities ).
Facility C3 Closing Margin means 4.00 per cent. per annum, unless, as at the Second 2015 Effective Date, Debt Cover for the then most recent Relevant Period in respect of which a Compliance Certificate has been delivered (calculated pro forma for (i) any Financial Indebtedness that has been or will be incurred and/or Financial Indebtedness that has been or will be repaid or prepaid subsequent to such Compliance Certificate up to (and including) the Second 2015 Effective Date, (ii) the Findus Acquisition as if that acquisition occurred at the beginning of such Relevant Period and after taking into account any Pro Forma Adjustment in relation to the Findus Acquisition and for such Relevant Period and (iii) the aggregate amount of available Cash as at the Second 2015 Effective Date (with the amount of such Cash calculated pro forma for any payments or receipts or other transactions to be made or undertaken on the Second 2015 Effective Date)) is more than or equal to 4.25:1, in which case the Margin
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applicable to Facility C3 as at, and from, the Second 2015 Effective Date shall be the Margin listed in the table in the definition of Margin which corresponds to (x) Facility C3 and (y) the range for Debt Cover set out in that table within which such Debt Cover falls (but without prejudice to any subsequent increase or decrease in Margin as a result of the operation of the provisions of the definition of Margin).
Facility C3 Commitment means:
(a) | in relation to an Original Facility C3 Lender, the amount in euro set opposite its name in Part II of Schedule 1 ( The Parties ) of the Second 2015 SFA Amendment and Restatement Agreement and the amount of any other Facility C3 Commitment transferred to it under this Agreement; and |
(b) | in relation to any other Lender, the amount in euro of any Facility C3 Commitment transferred to it under this Agreement, |
to the extent not cancelled, reduced or transferred by it under this Agreement.
Facility C3 Commitment Letter means the commitment letter in respect of Facility C3 between, among others, each of the Facility C3 Arrangers and Midco dated 5 October 2015.
Facility C3 Loan means a loan made or to be made under Facility C3 or the principal amount outstanding for the time being of that loan.
Facility Office means the office or offices notified by a Lender or the Issuing Bank to the Agent in writing on or before the date it becomes a Lender or the Issuing Bank (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.
FATCA means:
(a) | sections 1471 to 1474 of the Code, any associated regulations and other official guidance; |
(b) | any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the United States of America and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; and |
(c) | any agreement pursuant to the implementation of paragraphs (a) or (b) above with the United States Internal Revenue Service, the government of the United States of America 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 United States of America), 1 July 2014; |
(b) | in relation to a withholdable payment described in section 1473(1)(A)(ii) of the Code (which relates to gross proceeds from the disposition of property of a type that can produce interest from sources within the United States of America), 1 January 2017; or |
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(c) | in relation to a passthru payment described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017, |
or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA after the date of this Agreement.
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:
(a) | any letter or letters dated on or about the date of this Agreement between: |
(i) | the Arrangers and Midco and/or Bidco; |
(ii) | the Agent and Midco and/or Bidco; or |
(iii) | the Security Agent and Midco and/or Bidco, |
setting out any of the fees referred to in Clause 17 ( Fees );
(b) | any letter or letters dated on or about the Second 2015 Effective Date between (among others): |
(i) | the Facility C3 Arrangers and Midco and/or Bidco; |
(ii) | the Agent and Midco and/or Bidco; or |
(iii) | the Security Agent and Midco and/or Bidco, |
setting out any of the fees referred to in Clause 17 ( Fees ); and
(c) | any other agreement setting out fees referred to in Clause 17.4 ( Fees payable in respect of Letters of Credit ) or Clause 17.5 ( Interest, commission and fees on Ancillary Facilities ). |
Finance Document means this Agreement, any Accession Letter, any Lender Accession Notice, any Additional Facility Document, any Additional Facility Notice (including, for the avoidance of doubt, the Additional Facility Notice in respect of Facility C3), any Ancillary Document, any Compliance Certificate, any Exchange Certificate, any Fee Letter, each Mandate Document, the Intercreditor Agreement, any Resignation Letter, any Selection Notice, any Transaction Security Document, any Utilisation Request, the 2015 SFA Amendment and Restatement Agreement, the Second 2015 SFA Amendment and Restatement Agreement and any other document designated as a Finance Document by the Agent and Midco.
Finance Party means the Agent, the Arrangers, the Facility C3 Arrangers, the Security Agent, a Lender, the Issuing Bank or any Ancillary Lender.
Financial Covenant Event of Default means, subject to paragraph (d) of Clause 26.3 ( Financial testing ) and paragraph (f) of Clause 1.2 ( Construction ), any requirement of Clause 26.2 ( Financial covenant ) is not satisfied.
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Financial Indebtedness means, at any time, Borrowings together with:
(a) | indebtedness owed by one member of the Group to another member of the Group; |
(b) | for the purposes of Clause 28.4 ( Cross default ) only, indebtedness arising under derivative transactions (taking into account only the marked to market value of any net payments); and |
(c) | indebtedness arising under any agreements in relation to Subordinated Debt. |
Financial Quarter has the meaning given to that term in Clause 26.1 ( Financial definitions ).
Financial Year has the meaning given to that term in Clause 26.1 ( Financial definitions ).
Finco means Iglo Foods Finco Limited (formerly known first as Liberator Pikco Limited and subsequently as BEIG Pikco Limited and Iglo Foods Pikco Limited), a company incorporated in England and Wales with registered number 5879462, which is a wholly-owned subsidiary of Holdco.
Findus Acquisition means the proposed acquisition of 100 per cent. of the issued share capital of the Findus Target by Bidco pursuant to (and in accordance with) the Findus Acquisition Agreement.
Findus Acquisition Agreement means the agreement to be entered into in connection with the Findus Acquisition, pursuant to which the shareholders of the Findus Target will sell and Bidco will purchase 100 per cent. of the issued share capital of the Findus Target.
Findus Italy means C.S.I.Compagnia Surgelati Italiana S.p.A., a company incorporated in Italy with Fiscal Code 07025700961 and whose registered office is at Roma (RO), via Caterina Troiani 75, Italy.
Findus Target means Findus Sverige AB.
Findus Target Group means the Findus Target and its Subsidiaries.
Flotation means a successful application being made for the admission of, or any other initial issuance by way of listing, flotation or public offering (or its equivalent) of or in relation to, all or any part of the share capital of a member of the Group, in each case to trading on any recognised investment exchange (as that term is used in the Financial Services and Markets Act
2000) or in or on any exchange or market replacing the same or any other recognised exchange or market for trading securities in any jurisdiction or country and, thereafter, any other public offering (or its equivalent) of or in relation to, all or any part of the share capital of such entity.
Flotation Proceeds means the Net Proceeds of any Flotation.
Funds Flow Statement means a funds flow statement (included sources and uses) in the agreed form.
German Additional Obligor means an Additional Obligor incorporated in Germany.
German Borrower means a Borrower incorporated in Germany.
German Obligor means an Obligor incorporated in Germany.
German Property means the automated cold storage warehouse in which UBG Vermietungs GmbH & Co. OHG has a freehold interest at Aeckern 4, 48734 Reken, Germany.
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Group means Midco and each of its Subsidiaries for the time being.
Group Structure Chart means the group structure chart in the agreed form relating to the Group as delivered to the Agent pursuant to Clause 4.1 ( Conditions precedent ).
Guarantor means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with Clause 31 ( Changes to the Obligors ).
Guarantor Company means Finco and any member of the Group which is (or which is required to become) a Guarantor.
Guarantor Coverage has the meaning it is given in Clause 27.29 ( Guarantors ).
Hedging Agreement has the meaning given to it in the Intercreditor Agreement.
Holdco means Iglo Foods Holdco Limited (formerly known first as Liberator Holdco Limited and subsequently as BEIG Holdco Limited), a company incorporated in England and Wales with registered number 5879245, which is a wholly-owned subsidiary of Topco.
Holding Company means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.
Hull Site means the property located at Kingston Upon Hull (more particularly described in the Hull Certificate of Title).
IFRS means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
Intellectual Property means:
(a) | any patents, trade marks, service marks, designs, business names, copyrights, design rights, moral rights, inventions, confidential information, knowhow and other intellectual property rights and interests, whether registered or unregistered; and |
(b) | the benefit of all applications and rights to use such assets of each member of the Group. |
Intercreditor Agreement means the intercreditor agreement dated on or about the date of this Agreement between, among others, Midco and the Security Agent.
Interest Period means, in relation to a Loan, each period determined in accordance with Clause 15 ( Interest Periods ) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 14.3 ( Default interest ).
Interpolated Screen Rate means, in relation to EURIBOR or LIBOR for any Loan, the rate 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 the currency of that Loan.
Intra-Group Loans means the loans made by one member of the Group to another member of the Group.
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IPco means Birds Eye IPco Limited (formerly known as Liberator Ipco Limited), a company incorporated in England and Wales with registered number 5894145, which is a wholly-owned subsidiary of Bidco.
Issuing Bank means any Lender which has notified the Agent that it has agreed to Midcos request to be an Issuing Bank pursuant to the terms of this Agreement (and, if more than one Lender has so agreed, such Lenders shall be referred to whether acting individually or together as the Issuing Bank ), provided that , in respect of a Letter of Credit issued or to be issued pursuant to the terms of this Agreement, the Issuing Bank shall be the Issuing Bank which has issued or agreed to issue that Letter of Credit.
ITA means the Income Tax Act 2007.
Italian Civil Code means the Italian civil code, enacted by Royal Decree No. 262 of 16 March 1942, as subsequently amended and supplemented.
Joint Venture means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity.
L/C Proportion means, in relation to a Lender in respect of any Letter of Credit, the proportion (expressed as a percentage) borne by that Lenders Available Commitment under the relevant Revolving Facility to the relevant Available Facility under the relevant Revolving Facility immediately prior to the issue of that Letter of Credit, adjusted to reflect any assignment or transfer under this Agreement to or by that Lender.
Legal Reservations means:
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court, the principle of reasonableness and fairness and the limitation of enforcement by laws relating to bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria, administration and other laws generally affecting the rights of creditors; |
(b) | the time barring of claims under applicable limitation laws (including the Limitation Acts), the possibility that an undertaking to assume liability for or indemnify a person against non-payment of stamp duty may be void and defences of set-off or counterclaim; and |
(c) | any other general principles which are set out as to matters of law in the legal opinions delivered to the Agent under Part I of Schedule 2 ( Conditions Precedent and Conditions Subsequent ). |
Lender means:
(a) | any Original Lender; |
(b) | any Exchange Lender; |
(c) | any Original Facility C3 Lender; |
(d) | any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 29 ( Changes to the Lenders ); and |
(e) | upon their accession to this Agreement and the Intercreditor Agreement, any Additional Facility Lender, |
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which in each case has not ceased to be a Party in accordance with the terms of this Agreement.
Lender Accession Notice means a notice substantially in the form set out in Schedule 13 ( Form of Lender Accession Notice ) or any other form agreed by the Agent and the Obligors Agent.
Letter of Credit means:
(a) | a letter of credit, substantially in the form set out in Schedule 10 ( Form of Letter of Credit ) or in any other form requested by a Revolving Facility Borrower (or Midco on its behalf) and agreed by the Agent and the Issuing Bank; or |
(b) | any guarantee, indemnity or other instrument in a form requested by a Revolving Facility Borrower (or Midco on its behalf) and agreed by the Agent and the Issuing Bank. |
LIBOR means, in relation to any Loan:
(a) | the applicable Screen Rate; or |
(b) | (if no Screen Rate is available for the currency or Interest Period of that Loan) the Interpolated Screen Rate for that Loan; or |
(c) | (if no Screen Rate is available for the currency or Interest Period of that Loan and it is not possible to calculate an Interpolated Screen Rate for that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the London interbank market, |
as of (in the case of paragraphs (a) and (c) above) the Specified Time on the Quotation Day for the offering of deposits in the currency of that Loan and for a period equal in length to the Interest Period for that Loan, and provided that (in each case) if any such rate is below zero, LIBOR will be deemed to be zero.
Listco means Nomad Holdings Limited (a company incorporated in the British Virgin Islands in accordance with the laws of the British Virgin Islands with number 1818482).
Listco Affiliate means Listco and each of its Affiliates (excluding any member of the Group).
LMA means the Loan Market Association.
Loan means a Term Loan or a Revolving Facility Loan.
Local Facilities means current account, overdraft, letter of credit, foreign exchange and SWIFT and BACS facilities made available to a member of the Group together with any guarantee given by another member of the Group in respect of any Borrowing thereunder.
LTM EBITDA means Consolidated EBITDA as stated in the most recent Compliance Certificate, calculated in accordance with Clause 26.3 ( Financial testing ).
Majority Lenders means:
(a) | (for the purposes of paragraph (a) of Clause 41.1 ( Required consents ), in the context of a waiver in relation to a proposed Utilisation under a Facility) of the condition in Clause 4.1 ( Conditions precedent )), a Lender or Lenders whose Available Commitments with respect to the relevant Facility aggregate more than 66 2 ⁄ 3 per cent. of the Available Facility; and |
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(b) | (in any other case), a Lender or Lenders whose Commitments aggregate more than 66 2 ⁄ 3 per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66 2 ⁄ 3 per cent. of the Total Commitments immediately prior to that reduction). |
Majority RCF Lenders means a Revolving Facility Lender or Revolving Facility Lenders whose Revolving Facility Commitments aggregate more than 66 2 ⁄ 3 per cent. of the Total Revolving Facility Commitments (or, if the Total Revolving Facility Commitments have been reduced to zero, aggregated more than 66 2 ⁄ 3 per cent. of the Total Revolving Facility Commitments immediately prior to that reduction).
Mandate Documents means:
(a) | the mandate letter between, among others, each of the Arrangers (or their Affiliates) and Midco dated 20 June 2014; |
(b) | the bond engagement letter between, among others, each of the Arrangers (or their Affiliates) and Midco dated 20 June 2014; |
(c) | the Facility C3 Commitment Letter; and |
(d) | each other mandate document entered into in connection with the above letters and designated a Mandate Document by Midco and the Arrangers or the Facility C3 Arrangers (as applicable) (or their respective Affiliates). |
Mandatory Prepayment Account means an interest-bearing account:
(a) | held by a Borrower with the Agent, the Security Agent or any Acceptable Bank; |
(b) | identified in a letter between Midco and the Agent as a Mandatory Prepayment Account; |
(c) | subject to Security in favour of the Security Agent which Security is in form and substance satisfactory to the Agent and Security Agent; and |
(d) | from which no withdrawals may be made by any members of the Group except as contemplated by this Agreement, |
as the same may be redesignated, substituted or replaced from time to time.
Margin means:
(a) | in relation to any Facility B1 Loan, 4.25 per cent. per annum; |
(b) | in relation to any Facility B2 Loan, 4.75 per cent. per annum; |
(c) | in relation to any Facility C1 Loan, the Facility C1 Closing Margin; |
(d) | in relation to any Facility C2 Loan, the Facility C2 Closing Margin; |
(e) | in relation to any Facility C3 Loan, the Facility C3 Closing Margin; |
(f) | in relation to any Revolving Facility 1 Loan, 4.25 per cent. per annum; |
(g) | in relation to any Revolving Facility 2 Loan, the Revolving Facility 2 Closing Margin; |
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(h) | in relation to any Additional Facility, the percentage rate per annum as set out in the Additional Facility Notice relating to that Additional Facility; |
(i) | in relation to any Unpaid Sum relating or referable to a Facility, the rate per annum specified above (or, as applicable, in the definition of Facility C1 Closing Margin, Facility C2 Closing Margin, Facility C3 Closing Margin and Revolving Facility 2 Closing Margin) for that Facility; and |
(j) | in relation to any other Unpaid Sum, the highest rate specified above (or, as applicable, in the definition of Facility C1 Closing Margin, Facility C2 Closing Margin, Facility C3 Closing Margin and Revolving Facility 2 Closing Margin), |
but if:
(i) | no Event of Default has occurred and is continuing; and |
(ii) | Debt Cover in respect of the most recently completed Relevant Period in respect of which a Compliance Certificate has been delivered after the 2015 Effective Date is within the range set out below, |
then the Margin for a Loan under each of the Facilities listed in the table below at any time after the 2015 Effective Date will be the percentage per annum set out below in the column for that Facility opposite that range:
Debt Cover |
Facility
B1 Margin % p.a. |
Facility
B2 Margin % p.a. |
Facility
C1 Margin % p.a. |
Facility
C2 Margin % p.a. |
Facility
C3 Margin % p.a. |
Revolving
Facility 1 Margin % p.a. |
Revolving
Facility 2 Margin % p.a. |
|||||||||||||||||||||
Greater than or equal to 4.25:1 |
4.25 | 4.75 | 3.75 | 4.25 | 4.25 | 4.25 | 4.25 | |||||||||||||||||||||
Less than 4.25:1 but greater than or equal to 3.75:1 |
4.00 | 4.50 | 3.50 | 4.00 | 4.00 | 4.00 | 4.00 | |||||||||||||||||||||
Less than 3.75:1 |
3.75 | 4.25 | 3.50 | 4.00 | 4.00 | 3.75 | 3.75 |
However:
(A) | any increase or decrease in the Margin for a Loan in connection with the Margin ratchet set out in the table above after the 2015 Effective Date shall take effect on the date which is two Business Days after receipt by the Agent of the Compliance Certificate for that Relevant Period pursuant to Clause 25.2 ( Provision and contents of Compliance Certificate ) or, if a decrease has not taken effect because of an Event of Default continuing, on the first day on which that Event of Default ceases to be continuing; |
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(B) | if, following receipt by the Agent of the annual audited financial statements of the Group and related Compliance Certificate, those statements and Compliance Certificate do not confirm the basis for a varied Margin or demonstrate that the Margin should have been varied using the table above when it has not been, then the provisions of Clause 14.2 ( Payment of interest ) shall apply and the Margin for that Loan shall be the percentage per annum determined using the table above and the revised ratio of Debt Cover calculated using the figures in the Compliance Certificate related to the annual audi ted financial statements of the Group; and |
(C) | whilst an Event of Default is continuing, the Margin for each Facility shall be the highest Margin set out in relation to that Facility in the table above for a Loan under that Facility (or, in the case of any Additional Facility, the highest rate set out in the applicable Additional Facility Notice), it being understood that once that Event of Default is waived or otherwise ceases to be outstanding the Margin will be recalculated on the basis of the financial statements delivered for the most recent Financial Quarter and the provisions above. |
Material Adverse Effect means a material adverse effect on:
(a) | the consolidated business, assets or financial condition of the Group taken as a whole such that the Group taken as a whole would be reasonably likely to be unable to perform its payment obligations under any of the Finance Documents; or |
(b) | subject to the Legal Reservations and the Perfection Requirements, the validity or enforceability of any Security granted pursuant to any of the Finance Documents in any way which is materially adverse to the interests of the Lenders under the Finance Documents taken as a whole, and, if capable of remedy, not remedied within 20 Business Days of Midco becoming aware of the issue or being given notice of the issue by the Agent. |
Material Company means, at any time:
(a) | an Obligor; or |
(b) | a Subsidiary of Midco which: |
(i) | is listed in Schedule 11 ( Material Companies ) while such Subsidiary satisfies the criteria in paragraph (ii) below; or |
(ii) | has earnings before interest, tax, depreciation and amortisation calculated on the same basis as Consolidated EBITDA, representing 5 per cent. or more of Consolidated EBITDA, or has gross assets, representing 5 per cent. or more of the gross assets of the Group, calculated on a consolidated basis. |
Compliance with the conditions set out in paragraph (b)(ii) above shall be determined by reference to the most recent Compliance Certificate and/or the latest audited financial statements of that Subsidiary (consolidated in the case of a Subsidiary which itself has
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Subsidiaries) and the latest audited consolidated financial statements of the Group (or, if such audited financial statements are not available or required by law, such other appropriate accounts as Midco and the Agent shall agree).
However, if a Subsidiary has been acquired since the date as at which the latest audited consolidated financial statements of the Group were prepared, the financial statements shall be deemed to be adjusted as set out in paragraph (c) of Clause 26.3 ( Financial testing ) in order to take into account the acquisition of that Subsidiary.
A report by the Auditors of Midco that a Subsidiary is or is not a Material Company shall, in the absence of manifest error, be conclusive and binding on all Parties.
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:
(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. Monthly shall be construed accordingly.
Net Proceeds means the cash proceeds received by any member of the Group after the Closing Date (and, if the recipient is not a wholly-owned Subsidiary of a member of the Group, the proceeds proportionate to the interest held by the Group in the recipient) in connection with any disposal, Flotation or insurance claim, after deducting:
(a) | fees, costs and expenses incurred by any member of the Group with respect to that disposal, Flotation or claim to persons who are not members of the Group (including, without limitation, bonus payments to management of the disposed business); |
(b) | any Tax incurred and required to be paid or reserved for by the seller or claimant in connection with that disposal, Flotation or claim (as reasonably determined by the seller or claimant) or the transfer of the proceeds thereof intra-Group; |
(c) | amounts retained to cover anticipated liabilities reasonably expected to arise in connection with the disposal or Flotation; and |
(d) | costs of closure, relocation, reorganisation and restructuring, and costs incurred preparing the asset for disposal or Flotation. |
New Debt Financing has the meaning given to such term in the Intercreditor Agreement.
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New Equity means (a) a subscription for shares in Midco by its immediate Holding Company or (b) any other form of equity contribution to Midco from its immediate Holding Company which, in each case, is not redeemable prior to the latest Termination Date for each of the Facilities.
Obligor means a Borrower or a Guarantor.
Obligors Agent means Midco, appointed to act on behalf of each Obligor in relation to the Finance Documents pursuant to Clause 2.3 ( Obligors Agent ).
Offering Memorandum means the final version of the offering memorandum in relation to the Senior Secured Notes.
Optional Currency means, in relation to a Revolving Facility Utilisation, sterling or any other currency (other than the Base Currency) which complies with the conditions set out in Clause 4.2 ( Conditions relating to Optional Currencies ).
Original Closing Date means the date on which Bidco completed the acquisition of the Target.
Original Facilities means the Facilities other than any Additional Facility.
Original Financial Statements means the most recent audited annual consolidated financial statements of Topco and the Group as delivered to the Agent pursuant to Clause 4.1 ( Conditions precedent ).
Original Obligor means an Original Borrower or an Original Guarantor.
Original Revolving Facility Borrower means a Borrower listed in Part I of Schedule 1 ( The Parties ) as a Revolving Facility Borrower.
Original Senior Secured Notes has the meaning given to that term in the Intercreditor Agreement.
Original Term Facility Borrower means a Borrower listed in Part I of Schedule 1 ( The Parties ) as a Senior Term Facilities Borrower.
Pari Passu Debt Loan has the meaning given to that term in the Intercreditor Agreement.
Participating Member State means any member state of the European Union that adopts or has adopted, and in each case continues to adopt, the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
Party means a party to this Agreement.
Perfection Requirements means the making or the procuring of the appropriate registrations, filings, endorsements, notarisations, stampings and/or notifications of the Transaction Security Documents and/or the Transaction Security created thereunder in order to perfect the Transaction Security.
Permitted Acquisition means:
(a) | an acquisition by a member of the Group of an asset sold, leased, transferred or otherwise disposed of by another member of the Group in circumstances constituting a Permitted Disposal or a Permitted Transaction; |
(b) | an acquisition of securities which are Cash Equivalent Investments; |
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(c) | the acquisition by a member of the Group of the share of the other joint venture partner under the terms of any joint venture agreement existing on the Original Closing Date; |
(d) | an acquisition (not being an acquisition by Midco) of (A) the issued share capital of a limited liability company provided that following such acquisition the Group shall own more than fifty (50) per cent. of such shares, or (B) any business or undertaking (or part thereof) provided that following such acquisition the Group shall own the majority of such business or undertaking, in each case of a general nature similar or related to the business of the Group, but only if: |
(i) | no Event of Default is continuing on the acquisition contract date for the acquisition or would occur as a result of the acquisition ; |
(ii) | in the case of any single acquisition greater in value than EUR 50,000,000 (or its equivalent) (including associated costs and expenses) for the acquisition and any Financial Indebtedness remaining in the acquired company (or any such business): |
(A) | financial and legal due diligence and any other due diligence prepared or provided in respect of such acquisition; and |
(B) | all the acquisition-related documentation, |
has been delivered to the Agent prior to execution of the relevant acquisition agreement (on a non-reliance basis); |
(iii) | for the Relevant Period ending on the Quarter Date falling immediately prior to the date of entry into a formal contract in respect of any acquisition (after taking into account any Pro Forma Adjustment in relation to such acquisition and any Financial Indebtedness incurred to fund such acquisition (and, in relation to the period following the Closing Date but prior to the first Quarter Date to occur after the Closing Date, calculated pro forma for the transactions occurring on the Closing Date)), Debt Cover does not exceed 5.25:1 (and such Debt Cover calculation shall be confirmed by a certificate from Midco); |
(iv) | the business or undertaking to be acquired has no material contingent liabilities save to the extent reflected in the Total Purchase Price or as indemnified by the relevant vendor or to the extent that they will be discharged within six Months of the acquisition closing; |
(v) | for the 12 month period ending on the most recent month end for which accounts are available before the date of the Groups entry into a formal contract to make the acquisition, the acquired entity, business or undertaking has: (A) positive earnings before interest, tax, depreciation and amortisation calculated on the same basis as Consolidated EBITDA and taking into account any Pro Forma Adjustment; or (B) the consideration (including associated costs and expenses) for the acquisition and any Financial Indebtedness remaining in the acquired company (or any such business) at the date of acquisition does not exceed 10,000,000 (or its equivalent in other currencies) in aggregate in respect of any such acquisition; and |
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(vi) | the acquired entity, business or undertaking carries on substantially all of its business in a country or countries in which a member of the Group was incorporated on or before June 2012, or in the European Union, or in the United States of America, or in any other country provided that if that country is under an embargo or sanctions by the United States of America or a member country of the European Union such acquisition will require the prior written consent of the Majority Lenders; or |
(e) | an acquisition (not being an acquisition by Midco) of (A) the issued share capital of a limited liability company provided that following such acquisition the Group shall own more than fifty (50) per cent. of such shares, or (B) any business or undertaking (or part thereof) provided that following such acquisition the Group shall own the majority of such business or undertaking, in each case of a general nature similar or related to the business of the Group, but only if: |
(i) | no Event of Default is continuing on the acquisition contract date for the acquisition or would occur as a result of the acquisition; |
(ii) | the acquired entity, business or undertaking carries on substantially all of its business in a country or countries in the European Union, or in the United States of America, or in any other country that is not (unless the Majority Lenders first agree otherwise in writing) under an embargo or sanctions by the United States of America or a member country of the European Union; |
(iii) | the Total Purchase Price for that acquisition and each other acquisition undertaken pursuant to this paragraph (e), does not in aggregate exceed (A) 25,000,000 (or its equivalent in other currencies) in each Financial Year and (B) 100,000,000 (or its equivalent in other currencies) over the life of the Facilities, in each case, plus the amount of any New Equity and/or Subordinated Debt used to finance such Total Purchase Price; and |
(f) | the acquisition of the issued share capital of a limited liability company (including by way of formation) which has not traded prior to the date of the acquisition. |
Permitted Disposal means any sale, lease, licence, transfer or other disposal which, except in the case of paragraph (b) below, is on arms length terms and which is:
(a) | of trading assets made by any member of the Group in the ordinary course of trading of the disposing entity; |
(b) | of any asset by a member of the Group (the Disposing Company ) to another member of the Group (the Acquiring Company ), but, if the Disposing Company is a Guarantor, the Acquiring Company must also be a Guarantor and if the Disposing Company has given Security over the asset the Acquiring Company must, subject to the Security Principles, give equivalent Security over the asset; |
(c) | of any asset from an Obligor to a member of the Group which is not an Obligor, provided that the aggregate amount transferred by all Obligors (net of the value of any assets transferred from a member of the Group which is not an Obligor to an Obligor) does not exceed at any time EUR 30,000,000 or its equivalent; |
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(d) | of assets (other than shares, businesses or intellectual property) in exchange for other assets reasonably comparable or superior as to type or quality for use in the business; |
(e) | of assets (other than shares in any member of the Group) which are obsolete or which are no longer required for the relevant persons business or operations; |
(f) | of Cash or Cash Equivalent Investments; |
(g) | constituted by a licence of Intellectual Property; |
(h) | to a Joint Venture, to the extent permitted by Clause 27.8 ( Joint Ventures ); |
(i) | of assets compulsorily acquired by any governmental authority; |
(j) | a lease or licence of Real Property in the ordinary course of business; |
(k) | of the German Property, provided that the following conditions are met: |
(i) | the proceeds must be used to prepay the Facilities as set out in Clause 12.3 ( Application of mandatory prepayments ); and |
(ii) | the German Property must be leased back to the Group on terms to be agreed immediately upon disposal; |
(l) | of the Hull Site; |
(m) | arising as a result of any Permitted Security (including by way of release of proceeds from any escrow or similar arrangements relating to any Senior Secured Creditor Liabilities (as defined in the Intercreditor Agreement) or Second Lien Debt Liabilities (as defined in the Intercreditor Agreement)) or Permitted Transaction; |
(n) | of fixed assets where the proceeds of disposal are used within 12 Months of that disposal to purchase replacement fixed assets comparable or superior as to type, value and quality; |
(o) | of any asset pursuant to a contractual arrangement existing as at the Original Closing Date; |
(p) | of receivables on a non-recourse basis (with customary warranties as to title), provided that the aggregate amount of such outstanding receivables does not exceed EUR 40,000,000 (or its equivalent) at any time; or |
(q) | of assets for cash where the net consideration receivable (when aggregated with the net consideration receivable for any other sale, lease, licence, transfer or other disposal not allowed under the preceding paragraphs) does not exceed the higher of (i) EUR 50,000,000 (or its equivalent) and (ii) 15 per cent. of LTM EBITDA in any Financial Year of Midco. |
Permitted Financial Indebtedness means Financial Indebtedness:
(a) | constituting the Original Senior Secured Notes or (in the case of Finco only) constituting Senior Subordinated Notes, or arising under any of the Finance Documents or otherwise to the extent permitted under Clause 2.4 ( Additional Facilities ) or arising under any agreements in relation to Subordinated Debt, in each case provided that the relevant creditor (or representative thereof) is a party to the Intercreditor Agreement in such capacity, and subject always to the terms of this Agreement and the Intercreditor Agreement; |
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(b) | to the extent covered by a Letter of Credit or other letter of credit, guarantee or indemnity issued under an Ancillary Facility; |
(c) | arising under a foreign exchange transaction for spot or forward delivery entered into in connection with protection against fluctuation in currency or interest rates and not for investment or speculative purposes; |
(d) | arising under a Permitted Loan, Permitted Guarantee, Permitted Transaction or Permitted Joint Venture; |
(e) | of any person acquired by a member of the Group after the Closing Date which is incurred under arrangements in existence at the date of acquisition, but not incurred or the principal amount increased (otherwise than by capitalisation of interest) or its maturity date extended in contemplation of, or since, that acquisition, and outstanding only for a period of six Months following the date of acquisition; |
(f) | under finance or capital leases of vehicles, plant, equipment or computers, provided that the aggregate capital value of all such items so leased under outstanding leases by members of the Group does not exceed EUR 10,000,000 or its equivalent at any time; |
(g) | raised by the leaseback of the German Property; |
(h) | raised by the issue of redeemable shares which are either held by another member of the Group or not redeemable at the option of their holder until after the latest Termination Date for each of the Facilities; |
(i) | raised under Local Facilities, provided that the aggregate amount of that indebtedness does not exceed at any time EUR 15,000,000 (or its equivalent); |
(j) | arising under any cash pooling or management arrangement with an Acceptable Bank; |
(k) | falling within paragraph (f) of the definition of Borrowings; |
(l) | arising in connection with any forward contracts for fish stock entered into in the ordinary course of business; and |
(m) | not permitted by the preceding paragraphs (although permitted to be used for any purpose, including any of those set out in the above paragraphs) and the outstanding principal amount of which does not exceed the higher of (i) EUR 40,000,000 (or its equivalent) and (ii) 13 per cent. of LTM EBITDA in aggregate for the Group at any time. |
Permitted Guarantee means:
(a) | any guarantee arising under the Finance Documents, and, provided that such guarantee is subject to the terms of the Intercreditor Agreement, the Senior Secured Finance Documents (as defined in the Intercreditor Agreement), the Second Lien Debt Documents (as defined in the Intercreditor Agreement) and/or the Senior Subordinated Notes Finance Documents (as defined in the Intercreditor Agreement); |
(b) | a guarantee by a member of the Group of the obligations of an Obligor which is a member of the Group; |
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(c) | a guarantee by an Obligor of the obligations of a member of the Group not being an Obligor, provided that the aggregate amount guaranteed does not exceed EUR 20,000,000 or its equivalent in aggregate for all such guarantees at any time; |
(d) | a guarantee by a member of the Group which is not an Obligor of the obligations of another member of the Group which is not an Obligor; |
(e) | guarantees granted by persons or undertakings acquired pursuant to a Permitted Acquisition and existing at the time of such acquisition, provided that such guarantees are discharged within a period of six Months after the date of the acquisition; |
(f) | guarantees of Permitted Transactions and Treasury Transactions not prohibited under Clause 27.27 ( Treasury Transactions ); |
(g) | guarantees to landlords; |
(h) | guarantees or counter-indemnities in favour of financial institutions which have guaranteed rent obligations of a member of the Group; |
(i) | the endorsement of negotiable instruments in the ordinary course of trade; |
(j) | any guarantees guaranteeing performance by a member of the Group under any contract entered into in the ordinary course of business; |
(k) | any guarantee of a Joint Venture to the extent permitted by Clause 27.8 ( Joint Ventures ); |
(l) | any guarantee in respect of Permitted Financial Indebtedness; |
(m) | any guarantee given in respect of the netting or set-off arrangements permitted pursuant to paragraph (b) of the definition of Permitted Security; |
(n) | any guarantee granted in connection with a Permitted Disposal in an amount not exceeding the value of the asset disposed of; |
(o) | any indemnity granted to the trustee of any employee share option or unit trust scheme; |
(p) | a guarantee required by applicable law to be issued to secure claims of employees in respect of part-time work arrangements, transfer of employment relationships or similar claims; and |
(q) | any guarantee not permitted by the preceding paragraphs and the outstanding principal amount of which does not exceed the higher of (i) EUR 10,000,000 (or its equivalent) and (ii) 3 per cent. of LTM EBITDA in aggregate for the Group at any time; |
Permitted Holding Company Activity means:
(a) | normal holding company activities, including (without limitation) those referred to in the definition of Permitted Payments as carried on at that level; |
(b) | any Permitted Loans in respect of Permitted Joint Ventures (other than a Permitted Loan to a Permitted Joint Venture entered by Finco or Bondco); |
(c) | any Permitted Loans in respect of Permitted Payments (other than a Permitted Loan to Finco, except where such Permitted Loan is in respect of paragraphs (a), (b), (c) or (e) of Permitted Payments); |
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(d) | any Financial Indebtedness and/or other liabilities incurred under the Finance Documents or falling under paragraph (a) of the definition of Permitted Financial Indebtedness; |
(e) | in the case of Midco, Bondco and Bidco, guarantees of Permitted Financial Indebtedness and, in the case of Finco, guarantees of Permitted Financial Indebtedness falling under paragraph (a) of the definition of Permitted Financial Indebtedness, in each case other than in relation to Subordinated Debt, and guarantees of any Senior Subordinated Notes; |
(f) | the provision of management and administrative services, research and development and marketing and the secondment of employees; |
(g) | any Permitted Transaction (other than under paragraphs (d) and (h) of that definition); |
(h) | in the case of Bidco, the holding of Intellectual Property of the Group on behalf of itself and the Group; |
(i) | in the case of Finco, any Permitted Share Issue under paragraph (f) of that definition; and |
(j) | in the case of Midco and Bondco, the entry into and performance of its obligations under any engagement letter, purchase agreement, escrow agreement, indenture and/or any other document entered into in connection with the incurrence of any Senior Secured Notes and/or any Second Lien Debt Notes (provided that, in each case, such document, transaction and performance is not prohibited by this Agreement or the Intercreditor Agreement). |
Permitted Joint Venture means:
(a) | any investment in any Joint Venture pursuant to any agreement existing on the Original Closing Date (provided that the amount of such investment is not increased since that date); |
(b) | any other investment (other than by Midco or Finco) in any Joint Venture of a general nature similar or related to the business of the Group (a Joint Venture Investment ), provided that: |
(i) | no member of the Group is to incur unlimited liability in respect of its involvement in a Joint Venture; |
(ii) | no Event of Default is continuing or would result from such investment being made; and |
(iii) | for the Relevant Period ending on the Quarter Date falling immediately prior to the date of such Joint Venture Investment (calculated pro forma taking into account such Joint Venture Investment and any Financial Indebtedness incurred to fund such Joint Venture Investment (and, in relation to the period following the Closing Date but prior to the first Quarter Date to occur after Closing Date, calculated pro forma for the transactions occurring on the Closing Date)), Debt Cover does not exceed 5.25:1 (and such Debt Cover calculation shall be confirmed by a certificate from Midco). |
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Permitted Loan means:
(a) | any trade credit extended by any member of the Group to its customers on normal commercial terms and in the ordinary course of its trading activities and any advance payment made in relation to capital expenditure in the ordinary course of business; |
(b) | a loan made to a Joint Venture to the extent permitted under Clause 27.8 ( Joint Ventures ); |
(c) | subject to the terms of the Intercreditor Agreement, any loan made for the purposes of enabling an Obligor which is a member of the Group to meet its payment obligations under the Finance Documents to make a Permitted Payment and (to the extent permitted) a payment under an Intra-Group Loan or to facilitate compliance with applicable law; |
(d) | a loan made by an Obligor which is a member of the Group to another Obligor which is a member of the Group, or made by a member of the Group which is not an Obligor to another member of the Group, provided that , in the event that a member of the Group which is not an Obligor is a creditor in relation to Financial Indebtedness made available to any Obligor having a value in aggregate in excess of EUR 5,000,000 (or its equivalent) at any time, such member of the Group which is not an Obligor will accede to the Intercreditor Agreement as an Intra-Group Lender (as such term is defined in the Intercreditor Agreement); |
(e) | any loan made by an Obligor which is a member of the Group to a member of the Group which is not an Obligor or to a member of the Group whose shares are subject to the Transaction Security, so long as the aggregate amount of the Financial Indebtedness under any such loans does not exceed EUR 20,000,000 or its equivalent at any time; |
(f) | a loan made by a member of the Group to an employee or director of any member of the Group if the amount of that loan when aggregated with the amount of all loans to employees and directors by members of the Group does not exceed EUR 5,000,000 or its equivalent at any time; |
(g) | any loans made to an employee share option scheme or unit trust scheme up to an aggregate amount of EUR 5,000,000 or its equivalent; |
(h) | any deferred consideration on Permitted Disposals; |
(i) | any loans existing on the Original Closing Date; |
(j) | loans which constitute Permitted Financial Indebtedness (except under paragraph (c) of that definition); and |
(k) | any loan (other than a loan made by a member of the Group to another member of the Group) so long as the aggregate amount of the Financial Indebtedness under any such loans does not exceed the higher of (i) EUR 10,000,000 (or its equivalent) and (ii) 3 per cent. of LTM EBITDA at any time. |
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Permitted Payment means:
(a) | the making of a loan, a payment of a dividend by Midco, a payment of interest on or repayment of principal of any Subordinated Debt, or a reduction of share capital of Midco, provided that: |
(i) | after taking into account the payment, repayment or reduction, Debt Cover (calculated pro forma for the proposed dividend, payment or reduction and pro forma for the source of funding for such payment, including, as applicable, any Financial Indebtedness incurred to fund such payment and/or (but without double counting) any reduction in Cash) is equal to or less than 3.75:1; and |
(ii) | no Event of Default is continuing or would arise from the relevant payment, repayment or reduction being made; |
(b) | the making of a loan, a payment of a dividend by Midco, a payment of interest on or repayment of principal of any Subordinated Debt, or a reduction of share capital of Midco, provided that: |
(i) | after taking into account the payment, repayment or reduction, Debt Cover (calculated pro forma for the proposed dividend, payment or reduction, including the reduction in Cash consequent on using Retained Cash to fund such payment) is equal to or less than 4.25:1; and |
(ii) | it is funded from Retained Cash, excluding: |
(A) | the proceeds from the sale of the Hull Site; and |
(B) | the de minimis amount set out in paragraph (c)(B) of Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ); and |
(iii) | no Event of Default is continuing or would arise from the relevant payment, repayment or reduction being made; |
(c) | the making of a loan, a payment of a dividend by Midco, a payment of interest on or repayment of principal of any Subordinated Debt, or a reduction of share capital of Midco which is funded from any Flotation Proceeds received by the Group which are permitted to be retained pursuant to paragraph (d) of Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ), provided that no Event of Default is continuing or would arise from the relevant payment, repayment or reduction being made; |
(d) | the payment of a dividend to Midco or any of its Subsidiaries; |
(e) | the making of a loan, the payment of a dividend or interest on, or the repayment of principal of, any Subordinated Debt or Intra-Group Loan to enable Midco to make payments of its or its Holding Companies reasonably and properly incurred administrative costs, directors fees, tax and professional fees and regulatory costs; |
(f) | payments to Listco or an adviser of Listco for corporate finance and mergers and acquisitions and transaction advice actually provided to the Group on bona fide arms length commercial terms; |
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(g) | the payment of a dividend or distribution of share premium reserve or redemption, repurchase, defeasement, retirement, repayment or reduction of its share capital by a member of the Group (other than Midco), provided that , if such a member of the Group is not a wholly-owned Subsidiary of its Holding Company, the dividend or distribution or other payment attributable to its minority shareholders shall be proportionate to their shareholding; |
(h) | a payment which is a Permitted Transaction; |
(i) | a payment to fund the purchase of any of the management equity (together with the purchase or repayment of any related loans) and/or to make other compensation payments to departing management; and |
(j) | any payments not permitted by the preceding paragraphs, in an aggregate annual amount not exceeding EUR 5,000,000 per Financial Year. |
Permitted Security means:
(a) | any lien arising by operation of law or agreement of similar effect and in the ordinary course of trading and, if arising as a result of any default or omission by any member of the Group, which does not subsist for a period of more than 60 days; |
(b) | any Security arising under any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances of members of the Group (including an Ancillary Facility which is an overdraft comprising more than one account) but only so long as such arrangement is not established with the primary intention of preferring any lenders; |
(c) | any Security or Quasi-Security over or affecting any asset acquired by a member of the Group after the Closing Date if: |
(i) | the Security or Quasi-Security was not created in contemplation of the acquisition of that asset by a member of the Group; |
(ii) | the principal amount secured has not been increased (otherwise than by a capitalisation of interest) in contemplation of or since the acquisition of that asset by a member of the Group; and |
(iii) | the Security or Quasi-Security is removed or discharged within four Months of the date of acquisition of such asset; |
(d) | any Security or Quasi-Security over or affecting any asset of any company which becomes a member of the Group after the Closing Date, where the Security or Quasi-Security is created prior to the date on which that company becomes a member of the Group if: |
(i) | the Security or Quasi-Security was not created in contemplation of the acquisition of that company; |
(ii) | the principal amount secured has not increased (otherwise than by a capitalisation of interest) in contemplation of or since the acquisition of that company; and |
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(iii) | the Security or Quasi-Security is removed or discharged within four Months of that company becoming a member of the Group; |
(e) | any 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 business and, unless disputed in good faith, not arising as a result of any default or omission by any member of the Group that is continuing for a period of more than 60 days; |
(f) | any Security or Quasi-Security arising in connection with a disposal which is a Permitted Disposal or arising in connection with a Permitted Acquisition; |
(g) | any Security or Quasi-Security arising as a consequence of any finance lease permitted pursuant to paragraph (f) of the definition of Permitted Financial Indebtedness; |
(h) | any Security under netting or set-off arrangements under Treasury Transactions not prohibited under Clause 27.27 ( Treasury Transactions ); |
(i) | any Security arising as a result of legal proceedings discharged within 30 days or otherwise contested in good faith (and not otherwise constituting an Event of Default); |
(j) | any Transaction Security (provided that such Security is subject to the terms of the Intercreditor Agreement), including cash collateral to secure obligations under the Finance Documents but excluding any Transaction Security in relation to Senior Subordinated Notes or Senior Subordinated Notes Proceeds Loans, and any Security arising in connection with any escrow or similar arrangements relating to any Senior Secured Creditor Liabilities (as defined in the Intercreditor Agreement) or Second Lien Debt Liabilities (as defined in the Intercreditor Agreement); |
(k) | any Security over any rental deposits in respect of any property leased or licensed by a member of the Group in respect of amounts representing not more than 12 Months rent for that property; |
(l) | any Security over documents of title and goods as part of a documentary credit transaction entered into in the ordinary course of business; |
(m) | any Security granted by a member of the Group not being an Obligor to a financial institution as part of the arrangements with that institution to provide Local Facilities to that member of the Group in an amount not exceeding in aggregate EUR 5,000,000 or its equivalent for all such members of the Group at any time; |
(n) | any Security over shares in Joint Ventures to secure obligations to the other joint venture partners; |
(o) | any Security over bank accounts in favour of the account holding bank and granted as part of that financial institutions standard terms and conditions; |
(p) | any Security which does not secure any outstanding actual or contingent obligation; |
(q) | any Security arising by operation of law in respect of taxes being contested in good faith; |
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(r) | any Security required to be created by applicable law to secure claims of employees in respect of part-time work arrangements; |
(s) | any rights of way, pre-emption rights, land charges of owners and similar rights relating to land or buildings and not securing Financial Indebtedness; |
(t) | any Security securing indebtedness, the outstanding principal amount of which (when aggregated with the outstanding principal amount of any other indebtedness which has the benefit of Security given by any member of the Group other than any permitted under the preceding paragraphs) does not exceed the higher of (i) EUR 20,000,000 (or its equivalent) and (ii) 6 per cent. of LTM EBITDA at any time; or |
(u) | cash collateral (including, without limitation, cash in blocked accounts) to secure the obligations of any member of the Group arising under any letter of credit or similar instrument issued at the request of any such member of the Group; |
Permitted Share Issue means an issue of:
(a) | New Equity; |
(b) | shares by a member of the Group which is a Subsidiary to its immediate Holding Company or to another member of the Group or to a minority shareholder proportionate to its existing holding where (if the existing shares of the Subsidiary are the subject of the Transaction Security) the newly issued shares (to the extent held by a member of the Group) also become subject to the Transaction Security on the same terms; |
(c) | shares to a member of the Group pursuant to a Permitted Acquisition; |
(d) | shares where the issue constitutes a Permitted Transaction; |
(e) | shares where the issuance is part of a Permitted Joint Venture; or |
(f) | shares by Finco. |
Permitted Transaction means:
(a) | any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Security or Quasi-Security given, or other transaction arising under the Finance Documents; |
(b) | the solvent liquidation or reorganisation of any member of the Group which is not an Obligor so long as any payments or assets distributed as a result of such liquidation or reorganisation are distributed to other members of the Group; |
(c) | unless an Event of Default is then outstanding, a reorganisation on a solvent basis of an Obligor (other than Finco, Midco, Bidco, Bondco or a Borrower) where: |
(i) | all of the business, assets or shares of that member remain within the Group and the value or percentage of any minority interest in any member of the Group held by any person which is not a member of the Group is not increased; and |
(ii) | if the assets or the shares in it were subject to the Transaction Security immediately prior to such reorganisation, the Lenders will enjoy (subject to the Security Principles, in the reasonable opinion of the Agent and supported by any professional opinions and reports as it reasonably requires) the same or equivalent guarantees from it (or its successor) and the same or equivalent Security over the same assets and over the shares in it (or, in each case, its successor) after the reorganisation; |
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(d) | transactions (other than the granting or creation of Security or the incurring or permitting to subsist of Financial Indebtedness) conducted in the ordinary course of trading on arms length terms; |
(e) | any conversion of Intra-Group Loans into distributable reserves or registered share capital; |
(f) | any conversion, equitisation or forgiveness (or similar transaction or step) of Subordinated Debt in anticipation of a Flotation, provided that (i) such transaction is permitted by the Intercreditor Agreement; (ii) there is no payment in cash or Cash Equivalents which is not a Permitted Payment; (iii) no Senior Subordinated Notes Proceeds Loan is outstanding or, if then outstanding, is not outstanding in an amount which is less than the principal outstanding amount of the corresponding Senior Subordinated Notes to which that Senior Subordinated Notes Proceeds Loan corresponds; and (iv) any shares or other equity interests issued or arising as a result of such transaction are subject to Transaction Security; |
(g) | any acquisition by a member of the Group, or a loan to a trust or special purpose vehicle to fund the acquisition, of shares and loan notes of directors and employees whose appointment and/or contract is terminated; or |
(h) | the entry into of service and supply agreements with third party service providers in relation to the collection and settlement of outstanding customer invoices. |
Qualifying Lender has the meaning given to that term in Clause 18.1 ( Definitions ).
Quarter Date means the last day of a Financial Quarter.
Quasi-Security has the meaning given to that term in Clause 27.12 ( Negative pledge ).
Quotation Day means, in relation to any period for which an interest rate is to be determined:
(a) | (if the currency is sterling) the first day of that period; |
(b) | (if the currency is euro) two TARGET Days before the first day of that period; or |
(c) | (for any other currency) two Business Days before the first day of that period, |
unless market practice differs in the Relevant Interbank Market for a currency, in which case the Quotation Day for that currency will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and, if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).
RCF Declared Default means a Financial Covenant Event of Default in respect of which a notice of acceleration has been served pursuant to paragraph (b) of Clause 28.16 ( Acceleration ).
RCF Drawings has the meaning given to such term in Clause 26.2 ( Financial condition ).
Real Property means:
(a) | any freehold, leasehold or immovable property; and |
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(b) | any buildings, fixtures, fittings, fixed plant or machinery from time to time situated on or forming part of that freehold, leasehold or immovable property. |
Receiver means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.
Reference Banks means, in relation to LIBOR or EURIBOR, the principal London offices of three commercial banks (each of which satisfy the ratings requirement set out in paragraph (b) of the definition of Acceptable Bank) as may be appointed by the Agent in consultation with Midco.
Related Fund , in relation to a trust, fund or other entity (the first fund ), means another trust, fund or other entity which is:
(a) | managed or advised by the same investment manager or investment adviser as the first fund; or |
(b) | managed or advised by an Affiliate of the investment manager or investment adviser of the first fund, |
and in either case, has substantially the same investment criteria and objectives.
Relevant Interbank Market means, in relation to euro, the European interbank market and, in relation to any other currency, the London interbank market.
Relevant Jurisdiction means, in relation to an Obligor:
(a) | its jurisdiction of incorporation; and |
(b) | where relevant, any jurisdiction whose laws govern any of the Transaction Security Documents entered into by it. |
Relevant Period has the meaning given to that term in Clause 26.1 ( Financial definitions ).
Renewal Request means a written notice delivered to the Agent in accordance with Clause 6.6 ( Renewal of a Letter of Credit ).
Repeating Representations means each of the representations set out in Clause 24.2 ( Status ), Clause 24.3 ( Binding obligations ), Clause 24.4 ( Non-conflict with other obligations ), Clause 24.5 ( Power and authority ) and Clause 24.6 ( Validity and admissibility in evidence ).
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 6 ( Form of Resignation Letter ).
Restructuring Expenditure means any expenditure incurred to finance or refinance costs and expenses related to restructuring (including, without limitation, relocations, redundancies, carve-outs and corporate reorganisations) or to refinance such expenditure (including the proceeds of utilisations of a Revolving Facility).
Retained Cash has the meaning given to that term in Clause 26.1 ( Financial definitions ).
Revolving Facility means Revolving Facility 1, Revolving Facility 2 and/or (as the context requires) any Additional Revolving Facility.
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Revolving Facility 1 means the revolving credit facility made available under this Agreement as described in paragraph (a)(vi) of Clause 2.1 ( The Facilities ).
Revolving Facility 2 means the revolving credit facility made available under this Agreement as described in paragraph (a)(vii) of Clause 2.1 ( The Facilities ).
Revolving Facility Borrower means:
(a) | any Original Revolving Facility Borrower; and |
(b) | any Additional Borrower under a Revolving Facility. |
Revolving Facility 2 Closing Margin means 4.25 per cent. per annum, unless, as at the 2015 Effective Date, Debt Cover for the then most recent Relevant Period in respect of which a Compliance Certificate has been delivered (calculated pro forma for (i) any Financial Indebtedness that has been or will be incurred and/or Financial Indebtedness that has been or will be repaid or prepaid subsequent to such Compliance Certificate up to (and including) the 2015 Effective Date and (ii) the aggregate amount of available Cash as at the 2015 Effective Date (with the amount of such Cash calculated pro forma for any payments or receipts or other transactions to be made or undertaken on the 2015 Effective Date)) is less than 4.25:1, in which case the Margin applicable to Revolving Facility 2 as at, and from, the 2015 Effective Date shall be the Margin listed in the table in the definition of Margin which corresponds to (x) Revolving Facility 2 and (y) the range for Debt Cover set out in that table within which such Debt Cover falls (but without prejudice to any subsequent increase or decrease in Margin as a result of the operation of the provisions of the definition of Margin).
Revolving Facility Commitment means any Revolving Facility 1 Commitment, Revolving Facility 2 Commitment or Additional Facility Commitment in relation to an Additional Revolving Facility.
Revolving Facility 1 Commitment means:
(a) | in relation to an Original Lender, the amount in the Base Currency set opposite its name under the heading Revolving Facility 1 Commitment in the Allocations Table and the amount of any other Revolving Facility 1 Commitment transferred to it under this Agreement; and |
(b) | in relation to any other Lender, the amount in the Base Currency of any Revolving Facility 1 Commitment transferred to it under this Agreement, |
to the extent not transferred by it, cancelled or reduced under this Agreement or re-allocated and re-designated pursuant to the 2015 SFA Amendment and Restatement Agreement.
Revolving Facility 2 Commitment means:
(a) | in relation to an Original Lender, the amount in the Base Currency set opposite its name under the heading Revolving Facility 2 Commitment in the 2015 Allocations Table and the amount of any other Revolving Facility 2 Commitment transferred to it under this Agreement; and |
(b) | in relation to any other Lender, the amount in the Base Currency of any Revolving Facility 2 Commitment transferred to it under this Agreement, |
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to the extent not transferred by it, cancelled or reduced under this Agreement.
Revolving Facility Lender means a Lender which has a Revolving Facility Commitment.
Revolving Facility Loan means a Revolving Facility 1 Loan, Revolving Facility 2 Loan or an Additional Facility Revolving Loan.
Revolving Facility 1 Lender means a Lender which has a Revolving Facility 1 Commitment.
Revolving Facility 1 Loan means a loan made or to be made under Revolving Facility 1 or the principal amount outstanding for the time being of that loan.
Revolving Facility 2 Lender means a Lender which has a Revolving Facility 2 Commitment.
Revolving Facility 2 Loan means a loan made or to be made under Revolving Facility 2 or the principal amount outstanding for the time being of that loan.
Revolving Facility Utilisation means a Revolving Facility Loan or a Letter of Credit.
Rollover Loan means one or more Revolving Facility Loans:
(a) | made or to be made on the same day that: |
(i) | a maturing Revolving Facility Loan is due to be repaid; or |
(ii) | a demand by the Agent pursuant to a drawing in respect of a Letter of Credit is due to be met; |
(b) | the aggregate amount of which is equal to or less than the maturing Revolving Facility Loan or the relevant claim in respect of that Letter of Credit; |
(c) | in the same currency as the maturing Revolving Facility Loan (unless it arose as a result of the operation of Clause 8.2 ( Unavailability of a currency )) or the relevant claim in respect of that Letter of Credit; and |
(d) | made or to be made to the same Borrower for the purpose of: |
(i) | refinancing that maturing Revolving Facility Loan; |
(ii) | satisfying the relevant claim in respect of that Letter of Credit; or |
(iii) | replacing an expiring Letter of Credit in an amount not greater than that expiring Letter of Credit. |
Screen Rate means:
(a) | in relation to LIBOR, the London interbank offered rate administered by the ICE Benchmark Administration Limited (or any other person that takes over administration of that rate) for the relevant currency and period as displayed on pages LIBOR01 and LIBOR02 of the Thomson Reuters screen (or any replacement page which displays that rate); and |
(b) | in relation to EURIBOR, the euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of that rate) for the relevant period as displayed on page EURIBOR01 of the Thomson Reuters screen (or any replacement page which displays that rate), |
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or (in each case) 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(s) or service(s) cease to be available, the Agent may (in consultation with Midco) specify any other page or service displaying the relevant rate.
Second 2015 Effective Date has the meaning given to the term Effective Date in the Second 2015 SFA Amendment and Restatement Agreement.
Second 2015 Funds Flow Statement has the meaning given to the term Funds Flow Statement in the Second 2015 SFA Amendment and Restatement Agreement.
Second 2015 SFA Amendment and Restatement Agreement means the amendment and restatement agreement in relation to this Agreement dated 23 October 2015 between, among others, Midco and the Agent.
Second Lien Debt has the meaning given such term in the Intercreditor Agreement.
Second Lien Debt Notes has the meaning given to such term in the Intercreditor Agreement.
Second Lien Debt Purchase means any repayment, prepayment, purchase, defeasance, redemption, acquisition or retirement (or any other transaction of similar effect) of Second Lien Debt Liabilities (as defined in the Intercreditor Agreement).
Secured Obligations has the meaning given to such term in the Intercreditor Agreement.
Secured Parties has the meaning given to such term in the Intercreditor Agreement.
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.
Security Principles are the security principles set out in Schedule 12 ( Security Principles ).
Selection Notice means a notice substantially in the form set out in Part II of Schedule 3 ( Requests ) given in accordance with Clause 15 ( Interest Periods ) in relation to a Term Facility, or any other form agreed by the Agent and the Obligors Agent.
Senior Secured Noteholders has the meaning given to that term in the Intercreditor Agreement.
Senior Secured Notes has the meaning given to such term in the Intercreditor Agreement.
Senior Secured Notes Indenture has the meaning given to such term in the Intercreditor Agreement.
Senior Subordinated Debt has the meaning given to such term in the Intercreditor Agreement.
Senior Subordinated Notes has the meaning given to such term in the Intercreditor Agreement.
Senior Subordinated Notes Creditors has the meaning given to such term in the Intercreditor Agreement.
Senior Subordinated Notes Issuer has the meaning given to such term in the Intercreditor Agreement.
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Senior Subordinated Notes Liabilities has the meaning given to that such term in the Intercreditor Agreement.
Senior Subordinated Notes Proceeds Loan has the meaning given to such term in the Intercreditor Agreement.
Senior Term Facilities means each Term Facility.
Spanish Civil Procedural Law means Law 1/2000 of 7 January ( Ley de Enjuiciamiento Civil ), as amended from time to time.
Spanish Commercial Code means the Spanish commercial code of 1881.
Spanish Companies Law means Spanish Royal Legislative Decree 1/2010, of 2 July, approving the Spanish Capital Companies Law ( Ley de Sociedades de Capital ), as amended from time to time.
Spanish Insolvency Law means Spanish Law 22/2006, of 9 July, on Insolvency ( Ley 22/2003, de 9 de julio, Concursal ), as amended from time to time.
Spanish Guarantor means a Guarantor incorporated in Spain.
Spanish Obligor means an Obligor incorporated in Spain.
Spanish Public Document means, a documento público , being either an escritura pública or a póliza or efecto intervenido por fedatario público .
Specified Time means a time determined in accordance with Schedule 9 ( Timetables ).
Sterling Denominated Facility means Facility B2, Facility C2 and any Additional Facility designated as such by Midco under paragraph (k) of Clause 2.4 ( Additional Facilities ).
Structural Adjustment has the meaning given to such term in Clause 41.2 ( Exceptions ).
Subordinated Debt means any loans made to Midco which are subordinated to the Facilities pursuant to the Intercreditor Agreement and on the terms set out in the Intercreditor Agreement applying to Subordinated Liabilities, including the accession of the relevant creditor to the terms of the Intercreditor Agreement as a Subordinated Creditor.
Subordinated Liabilities has the meaning given to such term in the Intercreditor Agreement.
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.
Super Majority Lenders means a lender or lenders whose Commitments aggregate more than 90 per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 90 per cent. of the Total Commitments immediately prior to that reduction).
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Swedish Obligor means an Obligor incorporated in Sweden.
Target means shares in certain companies and certain assets, intellectual property rights and property associated with the European food business of the Vendor.
TARGET2 means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007.
TARGET Day means any day on which TARGET2 is open for the settlement of payments in euro.
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
Taxes Act means the Income and Corporation Taxes Act 1988.
Term means each period determined under this Agreement for which the Issuing Bank is under a liability under a Letter of Credit.
Term Facility means Facility B1, Facility B2, Facility C1, Facility C2, Facility C3 or an Additional Term Facility.
Term Facility Borrower means:
(a) | any Original Term Facility Borrower; and |
(b) | any Additional Borrower under the Term Facilities. |
Term Loan means a Facility B1 Loan, Facility B2 Loan, Facility C1 Loan, Facility C2 Loan, Facility C3 Loan or an Additional Facility Term Loan.
Termination Date means:
(a) | in relation to Facility B1, 30 June 2020; |
(b) | in relation to Facility B2, 30 June 2020; |
(c) | in relation to Facility C1, 30 June 2020; |
(d) | in relation to Facility C2, 30 June 2020; |
(e) | in relation to Facility C3, 30 June 2020; |
(f) | in relation to Revolving Facility 1, 31 December 2019; |
(g) | in relation to Revolving Facility 2, 31 December 2019; and |
(h) | in relation to any Additional Facility, the date set out in the Additional Facility Notice relating to that Additional Facility. |
Topco means Iglo Foods Holdings Limited (formerly known first as Liberator Topco Limited and subsequently as BEIG Topco Limited), a company incorporated in England and Wales with registered number 5879473.
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Total Additional Facility Commitments means the aggregate of the Additional Facility Commitments (being zero on the 2015 Effective Date).
Total Commitments means the aggregate of the Total Facility B1 Commitments, Total Facility B2 Commitments, Total Facility C1 Commitments, Total Facility C2 Commitments, Total Facility C3 Commitments, Total Revolving Facility 1 Commitments, Total Revolving Facility 2 Commitments and Total Additional Facility Commitments.
Total Facility B1 Commitments means the aggregate of the Facility B1 Commitments (being, on the Closing Date, the aggregate amount of Facility B1 Commitments set out in the Allocations Table and Facility B1 Commitments assumed by the Exchange Lenders in accordance with Clause 5.5 ( Exchange Mechanism )).
Total Facility B2 Commitments means the aggregate of the Facility B2 Commitments (being, on the Closing Date, the aggregate amount of Facility B2 Commitments set out in the Allocations Table and Facility B2 Commitments assumed by the Exchange Lenders in accordance with Clause 5.5 ( Exchange Mechanism )).
Total Facility C1 Commitments means the aggregate of the Facility C1 Commitments (being, as at the 2015 Effective Date, the aggregate amount of Facility C1 Commitments set out in the 2015 Allocations Table).
Total Facility C2 Commitments means the aggregate of the Facility C2 Commitments (being, as at the 2015 Effective Date, the aggregate amount of Facility C2 Commitments set out in the 2015 Allocations Table).
Total Facility C3 Commitments means the aggregate of the Facility C3 Commitments (being, as at the Second 2015 Effective Date, the aggregate amount of Facility C3 Commitments set out in Part II of Schedule 1 ( The Parties ) of the Second 2015 SFA Amendment and Restatement Agreement).
Total Purchase Price means, in relation to any acquisition, the consideration (including associated costs and expenses) for that acquisition and any Financial Indebtedness remaining in the acquired company (or any such business) at the date of acquisition.
Total Revolving Facility Commitments means the aggregate of the Total Revolving Facility 1 Commitments, the Total Revolving Facility 2 Commitments and the Total Additional Facility Commitments with respect to Additional Revolving Facilities.
Total Revolving Facility 1 Commitments means the aggregate of the Revolving Facility 1 Commitments (being, on the Closing Date, the aggregate amount of Revolving Facility 1 Commitments set out in the Allocations Table).
Total Revolving Facility 2 Commitments means the aggregate of the Revolving Facility 2 Commitments (being, as at the 2015 Effective Date, the aggregate amount of Revolving Facility 2 Commitments set out in the 2015 Allocations Table).
Transaction Documents means the Finance Documents.
Transaction Security has the meaning given to that term in the Intercreditor Agreement.
Transaction Security Documents means any document described as a Transaction Security Document or required to be delivered under any section entitled Transaction Security in
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Schedule 2 ( Conditions Precedent and Conditions Subsequent ) or under the Intercreditor Agreement and any other document, instrument or agreement creating or evidencing or purporting to create or evidence Transaction Security.
Transfer Certificate and Lender Accession Undertaking means an agreement substantially in the form set out in Schedule 4 ( Form of Transfer Certificate and Lender Accession Undertaking ) or any other form agreed between the Agent and Midco.
Transfer Date means, in relation to an assignment or transfer, the later of:
(a) | the proposed Transfer Date specified in the Transfer Certificate and Lender Accession Undertaking; and |
(b) | the date on which the Agent executes the Transfer Certificate and Lender Accession Undertaking. |
Treasury Transactions means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.
Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents.
US Tax Obligor means:
(i) | a Borrower which is resident for tax purposes in the United States of America; or |
(ii) | an Obligor some or all of whose payments under the Finance Documents are from sources within the United States for United States federal income tax purposes. |
Utilisation means a Loan or a Letter of Credit.
Utilisation Date means the date on which a Utilisation is made.
Utilisation Request means a notice substantially in the relevant form set out in Part IA or Part 1B of Schedule 3 ( Requests ) or any other form agreed by the Agent and the Obligors Agent.
VAT means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature.
Vendor means Unilever N.V., a company incorporated in the Netherlands, whose corporate seat is in Rotterdam and whose registered office is at Weena 455, 3013 AL Rotterdam, the Netherlands and Unilever PLC, a company incorporated in England and Wales (registered number 41424), whose registered office is at Port Sunlight, Wirral, Merseyside CH62 4ZD, United Kingdom.
1.2 | Construction |
(a) | Unless a contrary indication appears, a reference in this Agreement to: |
(i) | any Arranger , the Agent , any Finance Party , any Facility C3 Arranger , any Issuing Bank , any Lender , any Obligor , any Party , the Security Agent or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees and, in the case of the Security Agent, any person for the time being appointed as Security Agent or Security Agents in accordance with the Finance Documents; |
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(ii) | a document in agreed form is a document which is agreed in writing by or on behalf of Midco and the Agent; |
(iii) | assets includes present and future properties, revenues and rights of every description; |
(iv) | the European interbank market means the interbank market for euro operating in Participating Member States; |
(v) | a Finance Document or a Transaction Document or any other agreement or instrument is a reference to that Finance Document or Transaction Document or other agreement or instrument as amended, novated, supplemented, extended or restated (however fundamentally); |
(vi) | a guarantee means (other than in Clause 23 ( Guarantee and indemnity )) any guarantee, letter of credit, bond, indemnity or similar assurance against loss; |
(vii) | indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, or actual or contingent; |
(viii) | law shall be construed as any law (including common or customary law), statute, constitution, decree, judgement, treaty, regulation, directive, by-law, order or any other legislative measure of any government, supranational, local government, statutory or regulatory body or court. Any reference in this Agreement to any law shall be construed as a reference to such measure as the same may have been or from time to time may be amended or, as the case may be, re-enacted; |
(ix) | a Lenders participation in relation to a Letter of Credit shall be construed as a reference to the relevant amount that is or may be payable by a Lender in relation to that Letter of Credit; |
(x) | a person includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or partnership (whether or not having separate legal personality) of two or more of the foregoing; |
(xi) | 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 for entities or persons such as the relevant entity or person) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation; |
(xii) | a provision of law is a reference to that provision as amended or re-enacted; and |
(xiii) | a time of day is a reference to London time. |
(b) | Section, Clause and Schedule headings are for ease of reference only. |
(c) | 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. |
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(d) | A Borrower providing cash cover for a Letter of Credit or an Ancillary Facility means a Borrower paying an amount in the currency of the Letter of Credit (or, as the case may be, Ancillary Facility) to an interest-bearing account in the name of the Borrower and the following conditions being met: |
(i) | the account is with the Agent (if the cash cover is to be provided for all the Lenders) or with a Finance Party or Ancillary Lender (if the cash cover is to be provided for that Finance Party or Ancillary Lender); |
(ii) | until no amount is or may be outstanding under that Letter of Credit or Ancillary Facility, withdrawals from the account may only be made to pay a Finance Party amounts due and payable to it under this Agreement in respect of that Letter of Credit or Ancillary Facility; and |
(iii) | the Borrower has executed a security document over that account, in form and substance satisfactory to the Agent or the Finance Party or Ancillary Lender with which that account is held, creating a first ranking security interest over that account. |
(e) | A default, Default, an Event of Default or a Financial Covenant Event of De fault is continuing if it has not been remedied or waived. |
(f) | In relation to any Financial Covenant Event of Default caused by the failure to meet the requirements of Clause 26.2 ( Financial condition ) on any Quarter Date but where the requirements of Clause 26.2 ( Financial condition ) are complied with on the next Quarter Date, then the Financial Covenant Event of Default caused by the failure to meet the requirements of Clause 26.2 ( Financial condition ) on the former Quarter Date shall be deemed remedied to the satisfaction of the Revolving Facility Lenders unless, prior to that next Quarter Date, the Agent or Revolving Facility Lenders have exercised any of their rights under paragraph (b) of Clause 28.16 ( Acceleration ). |
(g) | A Borrower repaying or prepaying a Letter of Credit or Ancillary Outstandings means: |
(i) | that Borrower providing cash cover for that Letter of Credit or in respect of the Ancillary Outstandings; |
(ii) | the maximum amount payable under the Letter of Credit or Ancillary Facility being reduced or cancelled; or |
(iii) | the Issuing Bank or Ancillary Lender being satisfied that it has no further liability under that Letter of Credit or Ancillary Facility, |
and the amount by which a Letter of Credit is, or Ancillary Outstandings are, repaid or prepaid under paragraphs (i) and (ii) above is the amount of the relevant cash cover or reduction.
(h) | An amount borrowed includes any amount utilised by way of Letter of Credit or under an Ancillary Facility. |
(i) | A Lender funding its participation in a Utilisation includes a Lender participating in a Letter of Credit. |
(j) | An outstanding amount of a Letter of Credit at any time is the maximum amount that is or may be payable by the relevant Borrower in respect of that Letter of Credit at that time. |
(k) | For the purposes of Clause 26.2 ( Financial condition ), drawn in relation to a Letter of Credit or bank guarantee shall be construed as a reference to the relevant amount being due and payable under or in relation to that Letter of Credit or bank guarantee (as applicable) and undrawn shall be construed accordingly. |
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(l) | For the purposes of the Intercreditor Agreement (only), the term Arranger shall be construed so as to also include any Facility C3 Arranger. |
1.3 | Italian terms |
In this Agreement, where it relates to an Italian entity, a reference to:
(a) | a winding-up, administration or dissolution or the like includes, without limitation, any scioglimento , liquidazione and any other proceedings or legal concepts similar to the foregoing; |
(b) | a receiver, administrative receiver, administrator or the like includes, without limitation, a curatore , commissario giudiziale , commissario liquidatore , commissario straordinario , liquidatore , or any other person performing the same function of each of the foregoing; |
(c) | an insolvency proceeding includes, without limitation, any procedura concorsuale (including fallimento , concordato preventivo , accordo di ristrutturazione dei debiti, liquidazione coatta amministrativa , amministrazione straordinaria and cessione dei beni ai creditori pursuant to Article 1977 of the Italian Civil Code) and any other proceedings or legal concepts similar to the foregoing; |
(d) | a step or procedure taken in connection with insolvency proceedings in respect of any person includes such person formally making a proposal to assign its assets pursuant to Article 1977 of the Italian Civil Code ( cessione dei beni ai creditori ) or filing a petition for a concordato preventivo , accordo di ristrutturazione dei debiti, or entering into a similar arrangement for the majority of such persons creditors; and |
(e) | an attachment includes a pignoramento. |
1.4 | Dutch terms |
In this Agreement, where it relates to a Dutch entity, a reference to:
(a) | a necessary action to authorise where applicable, includes, without limitation: |
(i) | any action required to comply with the Dutch Works Councils Act ( Wet op de ondernemingsraden ); and |
(ii) | obtaining an unconditional positive advice ( advies ) from the competent works council(s); |
(b) | a winding-up, administration or dissolution includes a Dutch entity being: |
(i) | declared bankrupt ( failliet verklaard ); or |
(ii) | dissolved ( ontbonden ); |
(c) | a moratorium includes surséance van betaling and granted a moratorium includes ( voorlopige ) surséance verleend ; |
(d) | a trustee in bankruptcy includes a curator ; |
(e) | an administrator includes a bewindvoerder ; |
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(f) | a security right includes any mortgage ( hypotheek ), pledge ( pandrecht ), financial collateral agreement ( financiëlezekerheidsovereenkomst ), retention of title arrangement ( eigendomsvoorbehoud ), right of retention ( recht van retentie ), right to reclaim goods ( recht van reclame ), and, in general, any right in rem ( beperkt recht ), created for the purpose of granting security ( goederenrechtelijke zekerheid ); and |
(g) | a subsidiary includes a dochtermaatschappij as defined in Article 2:24a of the Dutch Civil Code; |
(h) | a receiver or an administrative receiver does not include a curator or bewindvoerder ; and |
(i) | an attachment includes a beslag . |
1.5 | Spanish terms |
In this Agreement, where it relates to a Spanish entity, a reference to:
(a) | financial assistance has the meaning stated under: |
(i) | Article 150 of the Spanish Companies Law for a Spanish public company ( Sociedad Anónima ) or in any other legal provision that may substitute such Article 150 or be applicable to any Spanish Obligor in respect of such financial assistance; or |
(ii) | Article 143 of the Spanish Companies Law for a Spanish limited liability company ( Sociedad de Responsabilidad Limitada ) or in any other legal provision that may substitute such Article 143 or be applicable to any Spanish Obligor in respect of such financial assistance; |
(b) | insolvency ( concurso or any other equivalent legal proceeding) and any step or proceeding related to it has the meaning attributed to them under the Spanish Insolvency Law and insolvency proceeding includes, without limitation, a declaración de concurso , necessary or voluntary ( necesario o voluntario ) and the filing of the notice foreseen in Article 5 bis of the Spanish Insolvency Law; |
(c) | winding-up, administration or dissolution includes, without limitation, disolución , liquidación , or administración concursal or any other similar proceedings; |
(d) | receiver, administrative receiver, administrator or the like includes, without limitation, administración del concurso or any other person performing the same function; |
(e) | composition, compromise, assignment or arrangement with any creditor includes, without limitation, the celebration of a convenio ; |
(f) | person being unable to pay its debts includes that person being in a state of insolvencia or concurso ; |
(g) | matured obligation includes, without limitation, any crédito líquido , vencido y exigible ; and |
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(h) | security interest includes any mortgage ( hipoteca ), pledge ( prenda ), and, in general, any right in rem ( garantia real ) governed by Spanish law, created for the purpose of granting security. |
1.6 | Swedish provisions |
(a) | If any party to this agreement that is incorporated in Sweden (the Obligated Party ) is required to hold an amount on trust on behalf of another party (the Beneficiary ), the Obligated Party shall hold such money as agent for the Beneficiary on a separate account in accordance with the Swedish Act of 1944 in respect of assets held on account (Sw. Lag (1944:181) om redovisningsmedel ) and shall promptly pay or transfer the same to the Beneficiary or as the Beneficiary may direct. |
(b) | For the avoidance of doubt, the Parties agree that any novation effected in accordance with Clause 29 ( Changes to the Lenders ) shall, in relation to any Transaction Security governed by Swedish law, take effect as an assignment and assumption and transfer of such security interests. |
(c) | Notwithstanding any other provisions in this Agreement or any other Finance Document, the sale, lease, transfer or disposal of assets subject to Transaction Security governed by Swedish law shall always be subject to the prior written consent of the Security Agent, such consent to be granted at the Security Agents sole discretion on a case by case basis. |
1.7 | Currency symbols and definitions |
(a) | £ , Sterling and sterling denote the lawful currency of the United Kingdom, Euro , euro , and EUR denote the single currency of the Participating Member States and US$ and US Dollars denote the lawful currency of the United States of America. |
(b) | The equivalent in any currency (the first currency ) of any amount in another currency (the second currency ) shall be construed as a reference to the amount in the first currency which could be purchased with that amount in the second currency at the Agents Spot Rate of Exchange (or at about such time and on such date as the Agent may from time to time reasonably determine to be appropriate in the circumstances). |
1.8 | 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 enjoy the benefit of any term of any Finance Document. |
(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. |
1.9 | Intercreditor Agreement |
(a) | This Agreement is subject to, and has the benefit of, the Intercreditor Agreement. |
(b) | Terms used and not defined in this Agreement shall have the meaning given to them in the Intercreditor Agreement unless contrary indication appears in this Agreement. |
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SECTION 2
THE FACILITIES
2. | THE FACILITIES |
2.1 | The Facilities |
(a) | Subject to the terms of this Agreement, the Lenders make available: |
(i) | to Midco, a euro term loan facility in an aggregate amount equal to the Total Facility B1 Commitments; |
(ii) | to Midco, a sterling term loan facility in an aggregate amount equal to the Total Facility B2 Commitments; |
(iii) | to Midco, a euro term loan facility in an aggregate amount equal to the Total Facility C1 Commitments; |
(iv) | to Midco, a sterling term loan facility in an aggregate amount equal to the Total Facility C2 Commitments; |
(v) | to Midco, a euro term loan facility in an aggregate amount equal to the Total Facility C3 Commitments; |
(vi) | to the Revolving Facility Borrowers, a multicurrency revolving credit facility in an aggregate Base Currency Amount which is equal to the Total Revolving Facility 1 Commitments; and |
(vii) | to the Revolving Facility Borrowers, a multicurrency revolving credit facility in an aggregate Base Currency Amount which is equal to the Total Revolving Facility 2 Commitments; |
(b) | Subject to the terms of this Agreement and the Ancillary Documents, an Ancillary Lender may make available an Ancillary Facility to any of the Borrowers. |
2.2 | 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 shall be a separate and independent debt. |
(c) | A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents. |
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2.3 | Obligors Agent |
(a) | Each Obligor (other than Midco) by its execution of this Agreement or an Accession Letter (as the case may be) irrevocably appoints Midco to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises: |
(i) | Midco 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 execute on its behalf any Accession Letter, Additional Facility Notice, Exchange Certificate or other Finance Document, 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 (including, without limitation, by increasing the obligations of such Obligor howsoever fundamentally, whether by increasing the liabilities guaranteed or otherwise), 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 Midco, |
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.
(b) | Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors Agent or given to the Obligors Agent 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 Obligors Agent and any other Obligor, those of the Obligors Agent shall prevail. |
(c) | To the extent legally permissible, each of the Obligors hereby releases the Obligors Agent from any restrictions on representing several persons and self-dealing under any applicable law, and in particular from the restrictions of Section 181 of the German Civil Code ( Bürgerliches Gesetzbuch ), to make use of any authorisation granted under this Agreement and to perform its duties and obligations as Obligors Agent hereunder and under or in connection with the Finance Documents. |
(d) | In connection with the raising of any Finance Document into a Spanish Public Document, Midco shall act as the agent of each Obligor and is hereby authorised on behalf of each Obligor to enter into, enforce the rights of each Obligor under and represent each Obligor in respect of the granting of a Spanish Public Document. |
2.4 | Additional Facilities |
(a) | Subject to paragraph (b) below, at any time after the Closing Date, any member of the Group may enter into, and incur Financial Indebtedness under, any New Debt Financing in accordance with the terms of this Clause 2.4 and the Intercreditor Agreement. |
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(b) | Other than with the prior written consent of the Majority Lenders, no member of the Group may enter into a New Debt Financing constituting a Credit Facility or a Pari Passu Debt Loan other than by way of an Additional Facility in accordance with the terms of this Clause 2.4 without the prior consent of the Majority Lenders. |
(c) | Additional Facilities may become committed in accordance with this Clause 2.4 and subject to the terms of this Agreement if Midco delivers a duly completed Additional Facility Notice in the agreed form to the Agent signed by Midco and the provider of such Additional Facility in accordance with this Clause 2.4. |
(d) | Midco may at any time or times notify the Agent by delivery of an Additional Facility Notice that it wishes to add one or more additional facilities into this Agreement, either as a new facility and/or as an additional tranche of any existing facility (each an Additional Facility ). An Additional Facility may be made available by way of term or revolving facilities (including loans or letters of credit) or in the form of any of the following facilities: |
(i) | an overdraft facility; |
(ii) | a guarantee, bonding, documentary or stand-by letter of credit facility; |
(iii) | a short-term loan facility; |
(iv) | a derivatives facility; |
(v) | a foreign exchange facility; or |
(vi) | any other facility or accommodation required in connection with the business of the Group and which is agreed by Midco with an Additional Facility Lender. |
(e) | Save as set out in paragraphs (a) to (d) above, no consent of any Finance Party is required to establish a New Debt Financing (other than any Lender which is to provide the relevant New Debt Financing and the Agent (in the case of a New Debt Financing by way of a Credit Facility or a Pari Passu Debt Loan) provided that, unless otherwise agreed by the Majority Lenders (or, in the case of paragraph (xii) below, all the Lenders): |
(i) | any transaction funded with a New Debt Financing must be otherwise permitted under the Finance Documents; |
(ii) | no Additional Facility may be used as part of or in connection with any bond, pass-through or conduit structure (or equivalent); |
(iii) | no New Debt Financing may be provided by, or be beneficially owned by, a member of the Group or a Listco Affiliate; |
(iv) | each Additional Facility must rank pari passu with, in right of payment and ranking of security, the other Facilities under the Finance Documents and must be established under, and included within, this Agreement; |
(v) | the aggregate of the Margin in respect of any Additional Facility may not exceed 1.00 per cent. over the maximum Margin in respect of the Original Facilities or, in the case of fixed rate instruments, the aggregate total interest cost (excluding default interest, gross up costs and similar amounts) may not exceed 1.00 per cent. over the maximum Margin in respect of the Original Facilities plus the aggregate of the swap rates notified by Midco for the same or similar maturities as those applicable to the relevant instruments or parts thereof; |
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(vi) | neither the final repayment date of any New Debt Financing nor any scheduled repayment instalment date (other than in respect of any Additional Facility which is a revolving facility) may fall prior to the later to occur of the Termination Date for Facility C1 and the Termination Date for Facility C2 and, in relation to any Second Lien Debt or Senior Subordinated Debt, the date falling 6 months after the later to occur of the Termination Date for Facility C1 and the Termination Date for Facility C2; |
(vii) | no New Debt Financing shall have a right to receive prepayments in priority to the Original Facilities under paragraph (a) of Clause 12.3 ( Application of mandatory prepayments ) (but an Additional Facility may be permitted to benefit on a pari passu pro rata basis); |
(viii) | the relevant creditor (or representative thereof) is a party to the Intercreditor Agreement in the relevant capacity including, in relation to a person which is to be a lender under an Additional Facility, if that person is not already a Lender it shall become party to the Intercreditor Agreement as a Credit Facility Lender or a Pari Passu Debt Creditor in respect of a Pari Passu Debt Loan prior to first utilisation of such Additional Facility; |
(ix) | in relation to any New Debt Financing by way of Senior Secured Notes, Pari Passu Debt Notes or Second Lien Debt Notes, the issuer is an Issuer under and as defined in the Intercreditor Agreement and in relation to any Second Lien Debt Loan (as defined in the Intercreditor Agreement), the borrower is Midco; |
(x) | utilisation or issue of any New Debt Financing for any transaction shall be subject to the conditions that: |
(A) | no Event of Default has occurred and is continuing at the time of a utilisation or issue of that New Debt Financing and no Event of Default will occur as a direct result of making such utilisation or issuance; and |
(B) | for the Relevant Period ending on the Quarter Date falling immediately prior to the date of utilisation or issuance of such New Debt Financing, Debt Cover (calculated (x) pro forma as if the full amount of that utilisation or issuance of that New Debt Financing had occurred at the beginning of such Relevant Period but taking into account, for the purposes of such calculation, the application of such utilisation or issue and, where such utilisation or issuance is to be used to fund a Permitted Acquisition under paragraph (d) of that definition, calculated pro forma for such Permitted Acquisition as if such acquisition had occurred at the beginning of such Relevant Period and after taking into account any Pro Forma Adjustment in relation to such acquisition and for such Relevant Period (y) pro forma for any Permitted Payment in the period following such Quarter Date and (z) in relation to the period following the Closing Date but prior to the first Quarter Date to occur after the Closing Date, pro forma for the transactions occurring on the Closing Date) does not exceed 5.25:1 as confirmed by a certificate from Midco containing the relevant calculations; |
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(xi) | Midco delivers to the Agent before the Additional Facility Commencement Date: |
(A) | a duly executed copy of each Additional Facility Document relating to the relevant Additional Facility; and |
(B) | a certification from Midco confirming that the foregoing conditions to the relevant New Debt Financing have been satisfied (save to the extent that a confirmation has been received from the Agent that these conditions have been waived by (x) each of the Additional Facility Lenders in the case of any Additional Facility by way of a Credit Facility or a Pari Passu Debt Loan and (y) the Majority Lenders); and |
(xii) | no term of the New Debt Financing would otherwise require all Lender consent under Clause 41 ( Amendments and waivers ). |
(f) | An Additional Facility Notice shall be irrevocable and no Additional Facility Notice will be regarded as having been duly completed unless it specifies the following matters in respect of the relevant Additional Facility: |
(i) | the proposed Borrower; |
(ii) | the persons to become Additional Facility Lenders in respect of that Additional Facility; |
(iii) | to the extent applicable to the relevant Additional Facility: |
(A) | the Base Currency Amount being made available and the currency or currencies in which that Additional Facility is available for utilisation; |
(B) | the rate of interest applicable to that Additional Facility (including any applicable Margin and Margin ratchet); |
(C) | the Termination Date (together with, if applicable, any other scheduled repayment dates) for that Additional Facility; |
(D) | the Availability Period for that Additional Facility; and |
(E) | the Additional Facility Commencement Date for that Additional Facility. |
An Additional Facility Notice must be delivered to the Agent no later than 3 Business Days prior to the Utilisation Date under that Additional Facility.
(g) | Subject to the conditions set out in paragraphs (a) to (f) above being satisfied, following receipt by the Agent of a duly completed Additional Facility Notice and with effect from the relevant Additional Facility Commencement Date (or any later date on which the conditions set out in paragraph (h) below are satisfied): |
(i) | the Lenders in respect of the relevant Additional Facility (each an Additional Facility Lender ) shall make available that Additional Facility in the aggregate principal amount set out in the Additional Facility Notice; |
(ii) | each of the Obligors and each such Additional Facility Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and such Additional Facility Lenders would have assumed and/or acquired had the Additional Facility Lenders been Original Lenders; |
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(iii) | each such Additional Facility Lender shall become a Party as a Lender; |
(iv) | each such Additional Facility Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as those Additional Facility Lenders and those Finance Parties would have assumed and/or acquired had the Additional Facility Lenders been Original Lenders; and |
(v) | the Commitments of the other Lenders shall continue in full force and effect. |
(h) | The establishment of an Additional Facility will only be effective on: |
(i) | receipt by the Agent of the Additional Facility Notice and a Lender Accession Notice from each person referred to in the relevant Additional Facility Notice as an Additional Facility Lender and Midco; and |
(ii) | in relation to an Additional Facility Lender which is not already a Lender: |
(A) | that Additional Facility Lender entering into a Creditor/Agent Accession Undertaking (as defined in the Intercreditor Agreement); and |
(B) | the performance by the Agent of all necessary know your customer or other similar identification checks under all applicable laws and regulations in relation to that Additional Facility Lender making available an Additional Facility, the completion of which the Agent shall promptly notify to Midco. |
(i) | Each Obligor irrevocably authorises the Obligors Agent to sign each Additional Facility Notice on its behalf and each Finance Party irrevocably authorises and instructs the Agent and the Security Agent to acknowledge, execute and confirm acceptance of each Additional Facility Notice, Lender Accession Notice and, if applicable, Creditor/Agent Accession Undertaking (as defined in the Intercreditor Agreement) on its behalf. Upon countersigning a duly completed Additional Facility Notice, the Agent shall inform the Lenders and shall provide a copy of each such executed Additional Facility Notice, Lender Accession Notice and, if applicable, Creditor/Agent Accession Undertaking (as defined in the Intercreditor Agreement) to the Lenders and Midco. To the extent legally possible, each Obligor hereby relieves the Obligors Agent from the restrictions pursuant to section 181 of the German Civil Code ( Bürgerliches Gesetzbuch ) and similar restrictions applicable to it pursuant to any other applicable law. |
(j) | Without prejudice to clause 8 ( New Credit Facilities, Pari Passu Debt, Second Lien Debt, Senior Subordinated Notes and Hedging Agreements ) of the Intercreditor Agreement, the Finance Parties shall be required to enter into any amendment to or replacement of the then current Finance Documents (including for the purpose of reflecting the terms of any Additional Facility in the Finance Documents) and/or take such other action as is required by Midco in order to facilitate the establishment of any Additional Facility otherwise permitted by this Agreement, including in relation to any changes to, the taking of, or the release coupled with the retaking of, any guarantee or Security provided that, unless otherwise agreed by the Majority Lenders, neither the Agent nor the Security Agent shall be required to execute a release of assets from any existing Transaction Security or a release of any existing guarantee under Clause 23 ( Guarantee and indemnity ) pursuant to this paragraph (j) unless: |
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(i) | replacement security will be provided pursuant to which the relevant Lenders (or the Security Agent on their behalf) will continue to have security in respect of the applicable assets or, as the case may be, a replacement guarantee will be provided; and |
(ii) | the Agent (acting reasonably) is satisfied that (x) the release coupled with the retaking of the relevant security or, as the case may be, guarantee will not expose the Finance Parties in whose favour the relevant security or guarantee has been granted to new insolvency hardening periods which are materially prejudicial to the interests of the Lenders taken as a whole under the Finance Documents and (y) the release of any existing Transaction Security will not lead to loss of the ranking of the respective existing Transaction Security relative to any other creditors, |
provided further that, for the avoidance of doubt, nothing in this paragraph will prohibit or restrict the execution of (or the right to require the execution of) any additional guarantee or Transaction Security Documents and/or any supplemental agreements, confirmations and/or any other similar or equivalent documents, provided that all such guarantees, security documents and/or supplemental agreements, confirmations and/or equivalent documents (as the case may be) are in favour of each of the Finance Parties or Secured Parties (or the Agent or Security Agent on their behalf or for their benefit) equally.
The Agent and the Security Agent are each irrevocably authorised and instructed by each Finance Party to execute any such amended or replacement Finance Documents as may be required pursuant to this paragraph and/or take such action on behalf of the Finance Parties (and shall do so on the request of and at the cost of Midco).
(k) | For the avoidance of doubt, at the option of Midco (but subject to paragraphs (a) to (h) above): |
(i) | an Additional Facility may be designated as a Term Facility or Revolving Facility or neither; |
(ii) | an Additional Facility may be designated as a Euro Denominated Facility or Sterling Denominated Facility or neither; |
(iii) | an Additional Facility may only be made available on a basis which is pari passu with any other Facilities made available from time to time; |
(iv) | an Additional Facility shall only be made available on a secured basis pro rata with the other Facilities (provided that, for the avoidance of doubt, any Security granted by any member of the Group in respect of obligations of the Group under an Additional Facility shall constitute Transaction Security securing the Secured Obligations for the purposes of this Agreement and the Intercreditor Agreement); and |
(v) | subject to paragraph (iv) above, an Additional Facility shall be entitled to benefit from any Transaction Security. |
(l) | Except as provided in paragraphs (d) and (e) above, the terms applicable, or which may be disapplied in relation to, any Additional Facility will be those agreed by the Additional Facility Lenders in respect of that Additional Facility and the Obligors Agent (including, without limitation, any terms as to margin, margin protection, fees, prepayment and repayment). If there is any inconsistency between any such term agreed or disapplied in respect of an Additional Facility and any term of this Agreement, the term agreed in respect of the Additional Facility shall prevail (without prejudice to paragraphs (d) and (e) above). |
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(m) | Each Additional Facility Lender, by executing a Lender Accession Notice, confirms (for the avoidance of doubt) that the 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 relevant Additional Facility becomes effective. |
(n) | Each Obligor confirms that its guarantee and indemnity obligations set out in Clause 23 ( Guarantee and indemnity ) and/or any Accession Letter or other Finance Document will extend to include the Additional Facility Loans and other obligations arising under the Additional Facilities subject to any limitations specifically set out in Clause 23 ( Guarantee and indemnity ), the relevant Accession Letter or elsewhere in the Finance Documents (and that the Transaction Security Documents shall be construed accordingly). |
3. | PURPOSE |
3.1 | Purpose |
(a) | The Borrower: |
(i) | of Facility B1 and Facility B2 shall apply all amounts under those Facilities towards refinancing indebtedness under the Existing Senior Facilities Agreement in accordance with the Funds Flow Statement; |
(ii) | of Facility C1 and Facility C2 shall apply all amounts under those Facilities towards refinancing indebtedness under Facility B1 and Facility B2 in accordance with the 2015 SFA Amendment and Restatement Agreement and the 2015 Funds Flow Statement; and |
(iii) | of Facility C3 shall apply all amounts under Facility C3 towards financing, directly or indirectly, in whole or in part: |
(A) | the cash consideration payable by it (or, as the case may be, any other member of the Group) pursuant to the Findus Acquisition; |
(B) | repaying or, as the case may be, prepaying indebtedness of the Findus Target Group (together with the amount of all accrued interest and any fees, costs and expenses payable by any member of the Findus Target Group in connection with any such repayment or prepayment, including (without limitation) any breakage costs, prepayment fees, commitment fees, documentary credit fees, close-out amounts and similar fees, costs and expenses); |
(C) | fees, costs and expenses incurred by any member of the Group in connection with Facility C3 and/or (as applicable) any of the matters ref erred to in paragraphs (A) and/or (B) above; and |
(D) | the general corporate purposes of the Group, |
in each case, in accordance with the Second 2015 Funds Flow Statement.
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(b) | Each Revolving Facility Borrower shall apply all amounts borrowed by it under a Revolving Facility, any Letter of Credit and any utilisation of any Ancillary Facility towards: |
(i) |
(A) | in the case of Revolving Facility 1, refinancing indebtedness made available under any revolving credit facility and/or ancillary facility under the Existing Senior Facilities Agreement in accordance with the Funds Flow Statement; and |
(B) | in the case of Revolving Facility 2, refinancing indebtedness made available under Revolving Facility 1 (including any ancillary facility made available thereunder) in accordance with the 2015 SFA Amendment and Restatement Agreement and the 2015 Funds Flow Statement; |
(ii) | the general corporate purposes of the Group (including to fund Restructuring Expenditure); and |
(iii) | the provision of cash collateral pursuant to paragraph (u) of Permitted Security, |
provided that a maximum aggregate amount of EUR 75,000,000 may be drawn over the life of a Revolving Facility to fund Restructuring Expenditure.
(c) | The Borrower of any Additional Facility shall, subject to the terms of this Agreement, apply all utilisations under that Facility in a manner permitted by this Agreement and the Additional Facility Documents relevant to that Additional Facility. |
3.2 | Monitoring |
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4. | CONDITIONS OF UTILISATION |
4.1 | Conditions precedent |
(a) | The Lenders will only be obliged to comply with Clause 5.4 ( Lenders participation ) in respect of a Utilisation under a Facility, if: |
(i) | (other than in respect of a Utilisation under Facility C1, Facility C2, Facility C3 or Revolving Facility 2) on or before the Utilisation Date for that Utilisation, the Agent has received (or, acting on the instructions of the Arrangers, has waived the requirement to receive) all of the documents and other evidence listed in Part I of Schedule 2 ( Conditions Precedent and Conditions Subsequent ) in form and substance satisfactory to the Agent (acting reasonably); |
(ii) | (other than in respect of a Utilisation under Facility C1 or Facility C2 on the 2015 Effective Date) on the date of the Utilisation Request and on the proposed Utilisation Date: |
(A) | in the case of a Rollover Loan, no notice of acceleration or cancellation has been given pursuant to Clause 28.16 ( Acceleration ) as a result of the occurrence of an Event of Default; and |
(B) | in the case of any other Utilisation, no Default is continuing or would result from the proposed Utilisation; |
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(iii) | in the case of any Utilisation to be made on the Closing Date, on the date of the Utilisation Request, each of the representations and warranties set out in Clause 24 ( Representations ) are true and accurate; |
(iv) | in the case of any Utilisation (other than a Rollover Loan or a Utilisation under Facility C1 or Facility C2 on the 2015 Effective Date), on the date of the Utilisation Request and on the proposed Utilisation Date, the Repeating Representations that are stipulated to be made by an Obligor on the date of the Utilisation Request and on the proposed Utilisation Date are true and accurate (in all material respects in the case of Repeating Representations to which a materiality test is not already applied in accordance with their terms); and |
(v) | in the case of a Utilisation under Facility C3: |
(A) | Midco has confirmed, in a certificate (or, as the case may be, in the relevant Utilisation Request) containing calculations in reasonable detail, that for the Relevant Period ending on the Quarter Date falling immediately prior to the proposed Utilisation Date, Debt Cover (calculated (x) pro forma as if the full amount of the Utilisation requested in the applicable Utilisation Request has occurred at the beginning of such Relevant Period but taking into account, for the purposes of such calculation, the application of such Utilisation and calculated pro forma for the Findus Acquisition as if that acquisition has occurred at the beginning of such Relevant Period and after taking into account any Pro Forma Adjustment in relation to such acquisition and for such Relevant Period and (y) pro forma for any Permitted Payment in the period following such Quarter Date) does not exceed 5.25:1; and |
(B) | the Agent has received the certificate referred to in paragraph (e)(xi) of Clause 2.4 ( Additional Facilities ) with respect to Facility C3. |
(b) | The Agent shall notify Midco and the Lenders promptly upon being satisfied as to the condition in paragraph (a)(i) above. |
4.2 | Conditions relating to Optional Currencies |
(a) | A currency will constitute an Optional Currency in relation to a Revolving Facility Utilisation if it is in sterling or: |
(i) | it is readily available in the amount required and freely convertible into the Base Currency in the Relevant Interbank Market at the Specified Time or, if later, on the date the Agent receives the relevant Utilisation Request and the Utilisation Date for that Utilisation; and |
(ii) | it has been approved by the Agent (acting on the instructions of all the Lenders participating in a Revolving Facility acting reasonably) on or prior to receipt by the Agent of the relevant Utilisation Request for that Utilisation. |
(b) | If the Agent has received a written request from Midco for a currency to be approved under paragraph (a)(ii) above, the Agent will confirm to Midco by the Specified Time: |
(i) | whether or not the Lenders have granted their approval; and |
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(ii) | if approval has been granted, the minimum amount (approximately equivalent to the minimum amount for a Utilisation in the Base Currency) for any subsequent Utilisation in that currency. |
4.3 | Maximum number of Utilisations |
(a) | A Borrower (or Midco) may not deliver a Utilisation Request if, as a result of the proposed Utilisation: |
(i) | 30 or more Revolving Facility Loans; |
(ii) | more than 1 Facility B1 Loan; |
(iii) | more than 1 Facility B2 Loan; |
(iv) | more than 1 Facility C1 Loan; |
(v) | more than 1 Facility C2 Loan; |
(vi) | more than 1 Facility C3 Loan; or |
(vii) | more than 10 Additional Facility Loans. |
would be outstanding (unless otherwise agreed by Midco and the Agent).
(b) | A Borrower (or Midco) may not request that a Facility B1 Loan, Facility B2 Loan, Facility C1 Loan, Facility C2 Loan, Facility C3 Loan or an Additional Facility Term Loan be divided. |
(c) | Any Loan made by a single Lender under Clause 8.2 ( Unavailability of a currency ) shall not be taken into account in this Clause 4.3. |
(d) | A Borrower (or Midco) may not request that a Letter of Credit be issued under a Revolving Facility if, as a result of the proposed Utilisation, more than 16 Letters of Credit would be outstanding. |
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SECTION 3
UTILISATION
5. | UTILISATIONLOANS |
5.1 | Delivery of a Utilisation Request |
A Borrower (or Midco on its behalf) may utilise a Facility by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time.
5.2 | Completion of a Utilisation Request for Loans |
(a) | Each Utilisation Request for a Loan is irrevocable and will not be regarded as having been duly completed unless: |
(i) | it identifies the Facility to be utilised; |
(ii) | in the case of a Utilisation on the Closing Date, it includes and sets out the aggregate amount of the Facility B1 Exchange Commitments and Facility B2 Exchange Commitments to be utilised on such date (in each case complying with Clause 5.3 ( Currency and amount )); |
(iii) | to the extent applicable, the requirements of paragraph (f) of Clause 26.3 ( Financial testing ) are satisfied; |
(iv) | the proposed Utilisation Date is a Business Day within the Availability Period applicable to that Facility; |
(v) | the currency and amount of the Utilisation comply with Clause 5.3 ( Currency and amount ); and |
(vi) | the proposed Interest Period complies with Clause 15 ( Interest Periods ). |
(b) | Multiple Utilisations may be requested in a Utilisation Request where the proposed Utilisation Date is the Closing Date. Only one Utilisation may be requested in each subsequent Utilisation Request. |
(c) | For the avoidance of doubt, there shall be no requirement to comply with the requirements of Clause 4.1 ( Conditions precedent ), Clause 5.1 ( Delivery of a Utilisation Request ) and the other paragraphs of this Clause 5.2 in respect of Utilisations under Facility C1 and Facility C2 on the 2015 Effective Date and these Facilities shall be automatically utilised on the 2015 Effective Date in accordance with the terms of the 2015 SFA Amendment and Restatement Agreement. |
5.3 | Currency and amount |
(a) | The currency specified in a Utilisation Request must be: |
(i) | in relation to a Facility B1, in euro; |
(ii) | in relation to a Facility B2, in sterling; |
(iii) | in relation to a Facility C1, in euro; |
(iv) | in relation to a Facility C2, in sterling; |
(v) | in relation to a Facility C3, in euro; |
(vi) | in relation to a Revolving Facility, in the Base Currency or an Optional Currency; and |
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(vii) | in relation to a relevant Additional Facility, as specified in the Additional Facility Documents relating to that Additional Facility. |
(b) | The amount of the proposed Utilisation must be in an amount the Base Currency Amount of which does not exceed the relevant Available Facility and must also be: |
(i) | for Facility B1, the full amount of Facility B1 (including the full amount of any Facility B1 Exchange Commitments); |
(ii) | for Facility B2 the full amount of Facility B2 (including the full amount of any Facility B2 Exchange Commitments); |
(iii) | in the case of Facility C1, the aggregate amount of the Facility C1 Commitments set out in the 2015 Allocations Table; |
(iv) | in the case of Facility C2, the aggregate amount of the Facility C2 Commitments set out in the 2015 Allocations Table; |
(v) | in the case of Facility C3, the aggregate amount of Facility C3 Commitments; |
(vi) | for Revolving Facility 1 and Revolving Facility 2: |
(A) | if the currency selected is the Base Currency, a minimum of EUR 1,000,000 or, if less, the Available Facility; |
(B) | if the currency selected is sterling, a minimum of £750,000 or, if less, the Available Facility; or |
(C) | if the currency selected is an Optional Currency, the minimum amount specified by the Agent pursuant to paragraph (b)(ii) of Clause 4.2 ( Conditions relating to Optional Currencies ) or, if less, the Available Facility; or |
(vii) | in relation to the relevant Additional Facility, as specified in the Additional Facility Documents relating to that Additional Facility. |
5.4 | Lenders participation |
(a) | If the conditions set out in this Agreement have been met, each Lender shall (subject to Clause 5.5 ( Exchange Mechanism ) and paragraph (d) below) make its participation in each Loan available by the Utilisation Date through its Facility Office. |
(b) | Subject to Clause 5.5 ( Exchange Mechanism ) and paragraph (d) below, the amount of each Lenders 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 Agent shall determine the Base Currency Amount of each Revolving Facility Loan which is to be made in an Optional Currency and notify each Lender of the amount, currency and the Base Currency Amount of each Loan and the amount of its participation in that Loan by the Specified Time. |
(d) | Each Lender under any Facility C1 Loan and/or any Facility C2 Loan shall make its participation in any Loan made on the 2015 Effective Date under such Facilities available in accordance with the terms of the 2015 SFA Amendment and Restatement Agreement. |
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5.5 | Exchange Mechanism |
(a) | Each Exchange Lender shall: |
(i) | in respect of its Facility B1 Exchange Commitment, make its participation in Facility B1 available on the Closing Date by making a Facility B1 Loan in an amount equal to its Facility B1 Exchange Commitment; and |
(ii) | in respect of its Facility B2 Exchange Commitment, make its participation in Facility B2 available on the Closing Date by making a Facility B2 Loan in an amount equal to its Facility B2 Exchange Commitment, |
in each case in accordance with the Exchange Certificate and this Clause 5.5, and each of the parties to this Agreement acknowledge and agree that the obligations of the Exchange Lenders under Clause 2.1 ( The Facilities ) and Clause 5.4 ( Lenders participation ) shall be satisfied accordingly.
(b) | On the Closing Date: |
(i) | each Exchange Lender shall automatically accede and become a Party to this Agreement as an Exchange Lender and a Lender, and to the Intercreditor Agreement as a Credit Facility Lender; |
(ii) | the relevant Facility B1 Exchange Commitment and Facility B2 Exchange Commitment will be assumed by the relevant Exchange Lender as if it had been an original party to this Agreement with such Commitment; |
(iii) | each Exchange Lender shall be deemed to have made its participation in a Facility B1 Loan (and Midco shall be deemed to have utilised such Facility B1 Loan) on the Closing Date, such that a Facility B1 Loan shall automatically be constituted as owing to each Exchange Lender in an amount equal to the Facility B1 Exchange Commitment of that Exchange Lender; |
(iv) | each Exchange Lender shall be deemed to have made its participation in a Facility B2 Loan (and Midco shall be deemed to have utilised such Facility B2 Loan) on the Closing Date, such that a Facility B2 Loan shall automatically be constituted as owing to each Exchange Lender in an amount equal to the Facility B2 Exchange Commitment of that Exchange Lender; |
(v) | each Exchange Lender shall assume the same obligations and acquire the same rights against each other party under this Agreement as a Lender and under the Intercreditor Agreement as a Credit Facility Lender as it would have assumed and/or acquired under each such agreement had it been an original party to those agreements as a Lender and Credit Facility Lender respectively; |
(vi) | each Obligor and each Exchange Lender shall assume obligations towards one another and acquire rights against one another as they would have assumed and/or acquired under the Finance Documents had the Exchange Lender been an original party to this Agreement and the Intercreditor Agreement as a Lender and a Credit Facility Lender respectively; |
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(vii) | each Exchange Lender and each other Finance Party shall assume obligations towards one another and acquire rights against one another as they would have assumed and/or acquired under the Finance Documents had the Exchange Lender been an original party to this Agreement and the Intercreditor Agreement as a Lender and a Credit Facility Lender respectively; and |
(viii) | for the avoidance of doubt, the Commitments of the other Lenders shall continue in full force and effect. |
(c) | Midco and each other party to this Agreement confirms and acknowledges that: |
(i) | indebtedness created or deemed made pursuant to this Clause 5.5 and each Exchange Certificate shall, on and from the Closing Date, constitute indebtedness under this Agreement by way of a Facility B1 Loan or Facility B2 Loan (as applicable) and the Agent shall be instructed to record such indebtedness in the books of the Agent accordingly; |
(ii) | all Facility B1 Loans made on the Closing Date shall form a single class of Facility B1 Loan without any distinction between them; and |
(iii) | all Facility B2 Loans made on the Closing Date shall form a single class of Facility B2 Loan without any distinction between them. |
(e) | Each Obligor irrevocably authorises the Obligors Agent to sign each Exchange Certificate on its behalf and each Finance Party irrevocably authorises and instructs the Agent and the Security Agent to acknowledge, execute and confirm acceptance of each Exchange Certificate on its behalf. To the extent legally possible, each Obligor hereby relieves the Obligors Agent from the restrictions pursuant to section 181 of the German Civil Code ( Bürgerliches Gesetzbuch ) and similar restrictions applicable to it pursuant to any other applicable law. |
(d) | Each Exchange Lender confirms (for the avoidance of doubt) that the 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 Closing Date. |
(e) | Each Obligor confirms that its guarantee and indemnity obligations set out in Clause 23 ( Guarantee and indemnity ) and/or any Accession Letter or other Finance Document will extend to include the indebtedness and other obligations arising pursuant to this Clause 5.5 and each Exchange Certificate, subject to any limitations specifically set out in Clause 23 ( Guarantee and indemnity ), the relevant Accession Letter or elsewhere in the Finance Documents (and that the Transaction Security Documents shall be construed accordingly). |
5.6 | Limitations on Utilisations |
(a) | No Facility B1 Loan or Facility B2 Loan shall be made unless: |
(i) | Loans under each of those Facilities are made at the same time and on a pro rata basis; and |
(ii) | all Facility B1 Exchange Commitments and Facility B2 Exchange Commitments of the Exchange Lenders are utilised in full under such Facilities. |
(b) | A Revolving Facility shall not be utilised unless Facility C1 and Facility C2 have been (or will simultaneously be) utilised in full. |
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(c) | The maximum aggregate: |
(i) | Base Currency Amount of all Letters of Credit; and |
(ii) | the amount of the Ancillary Commitments of all the Lenders, |
together shall not at any time exceed EUR 50,000,000.
6. | UTILISATIONLETTERS OF CREDIT |
6.1 | Revolving Facility |
(a) | A Revolving Facility may be utilised by way of Letters of Credit. |
(b) | Other than Clause 5.6 ( Limitations on Utilisations ), Clause 5 ( UtilisationLoans ) does not apply to Utilisations by way of Letters of Credit. |
6.2 | Delivery of a Utilisation Request for Letters of Credit |
A Revolving Facility Borrower (or Midco on its behalf) may request a Letter of Credit to be issued by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time.
6.3 | Completion of a Utilisation Request for Letters of Credit |
Each Utilisation Request for a Letter of Credit is irrevocable and will not be regarded as having been duly completed unless:
(a) | it specifies that it is for a Letter of Credit; |
(b) | it identifies whether the Letter of Credit is to be made under Revolving Facility 1, Revolving Facility 2 or under an Additional Revolving Facility; |
(c) | it identifies the Revolving Facility Borrower of the Letter of Credit; |
(d) | it identifies the Issuing Bank which is to issue the Letter of Credit; |
(e) | the proposed Utilisation Date is a Business Day within the Availability Period applicable to a Revolving Facility; |
(f) | the currency and amount of the Letter of Credit comply with Clause 6.4 ( Currency and amount ); |
(g) | the form of Letter of Credit is attached and is agreed with the Issuing Bank or is in the form set out in Schedule 10 ( Form of Letter of Credit ); |
(h) | the delivery instructions for the Letter of Credit are specified; |
(i) | the Term of the Letter of Credit is specified; |
(j) | the beneficiary of the Letter of Credit is a person which the Issuing Bank and each Lender are not prohibited from dealing with by any applicable law or regulation; and |
(k) | to the extent applicable, the requirements of paragraph (f) of Clause 26.3 ( Financial testing ) are satisfied. |
6.4 | Currency and amount |
(a) | The currency specified in a Utilisation Request must be the Base Currency or an Optional Currency. |
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(b) | Subject to paragraph (a) of Clause 5.6 ( Limitations on Utilisations ), the amount of the proposed Letter of Credit must be an amount whose Base Currency Amount is not more than the Available Facility and which is: |
(i) | if the currency selected is euro, a minimum of EUR 1,000,000 or, if less, the Available Facility; |
(ii) | if the currency selected is sterling, a minimum of £750,000 or, if less, the Available Facility; or |
(iii) | if the currency selected is an Optional Currency (other than sterling), the minimum amount specified by the Agent pursuant to paragraph (b)(ii) of Clause 4.2 ( Conditions relating to Optional Currencies ) or, if less, the Available Facility. |
6.5 | Issue of Letters of Credit |
(a) | If the conditions set out in this Agreement have been met, the Issuing Bank shall issue the Letter of Credit on the Utilisation Date. |
(b) | Subject to paragraph (a)(i) of Clause 4.1 ( Conditions precedent ), the Issuing Bank will only be obliged to comply with paragraph (a) above if on the date of the Utilisation Request or Renewal Request and on the proposed Utilisation Date: |
(i) | Facility C1 and Facility C2 have been (or are at the same time) utilised in full; |
(ii) | in the case of a Letter of Credit to be renewed in accordance with Clause 6.6 ( Renewal of a Letter of Credit ), no notice of acceleration or cancellation has been given pursuant to Clause 28.16 ( Acceleration ) as a result of the occurrence of an Event of Default and, in the case of any other Utilisation, no Default is continuing or would result from the proposed Utilisation; |
(iii) | in relation to a Utilisation to be made on the Closing Date, on the date of the Utilisation Request, each of the representations and warranties set out in Clause 24 ( Representations ) are true and accurate; |
(iv) | in relation to any Utilisation, on the date of the Utilisation Request and on the proposed Utilisation Date, the Repeating Representations that are stipulated to be made by each Obligor on the date of the Utilisation Request and on the proposed Utilisation Date are true and accurate (in all material respects in the case of Repeating Representations to which a materiality test is not already applied in accordance with their terms); and |
(v) | it would not be unlawful for the Issuing Bank to issue the Letter of Credit. |
(c) | The amount of each Lenders participation in each Letter of Credit will be equal to the proportion borne by its Available Commitment to the Available Facility (in each case in relation to a Revolving Facility) immediately prior to the issue of the Letter of Credit. |
(d) | The Agent shall determine the Base Currency Amount of each Letter of Credit which is to be issued in an Optional Currency and shall notify the Issuing Bank and each Lender of the details of the requested Letter of Credit and its participation in that Letter of Credit by the Specified Time. |
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6.6 | Renewal of a Letter of Credit |
(a) | A Revolving Facility Borrower (or Midco on its behalf) may request that any Letter of Credit issued on behalf of that Revolving Facility Borrower be renewed by delivery to the Agent of a Renewal Request in substantially similar form to a Utilisation Request for a Letter of Credit by the Specified Time. |
(b) | The Finance Parties shall treat any Renewal Request in the same way as a Utilisation Request for a Letter of Credit, except that the conditions set out in paragraph (g) of Clause 6.3 ( Completion of a Utilisation Request for Letters of Credit ) shall not apply. |
(c) | The terms of each renewed Letter of Credit shall be the same as those of the relevant Letter of Credit immediately prior to its renewal, except that: |
(i) | its amount may be less than the amount of the Letter of Credit immediately prior to its renewal; and |
(ii) | its Term shall start on the date which was the Expiry Date of the Letter of Credit immediately prior to its renewal, and shall end on the proposed Expiry Date specified in the Renewal Request. |
(d) | If the conditions set out in this Agreement have been met, the Issuing Bank shall amend and re-issue any Letter of Credit pursuant to a Renewal Request. |
6.7 | Revaluation of Letters of Credit |
(a) | If any Letters of Credit are denominated in an Optional Currency, the Agent shall, at annual intervals after the date of the respective Letter of Credit, recalculate the Base Currency Amount of each Letter of Credit by notionally converting into the Base Currency the outstanding amount of that Letter of Credit on the basis of the Agents Spot Rate of Exchange on the date of calculation. |
(b) | Midco shall, if requested by the Agent within five Business Days of any calculation under paragraph (a) above, ensure that within three Business Days sufficient Revolving Facility Utilisations are prepaid to prevent the Base Currency Amount of the Revolving Facility Utilisations exceeding the Total Revolving Facility Commitments (after deducting the total Ancillary Commitments) by more than 5 per cent. following any adjustment to a Base Currency Amount under paragraph (a) above. |
6.8 | Cash cover |
If the Facilities are prepaid in full, or on the Termination Date for a Revolving Facility there are Letters of Credit outstanding under that Revolving Facility, Midco shall:
(a) | provide cash cover in an amount not exceeding the amount of each such Letter of Credit; |
(b) | provide counter-indemnification by a financial institution approved by the Issuing Bank in respect of each such Letter of Credit; or |
(c) | at the request of the Issuing Bank, use all reasonable endeavours to procure the release of the Issuing Bank from its obligations under each such Letter of Credit. |
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7. | LETTERS OF CREDIT |
7.1 | Immediately payable |
If a Letter of Credit or any amount outstanding under a Letter of Credit is expressed to be immediately payable, the Borrower that requested (or on behalf of which Midco requested) the issue of that Letter of Credit shall repay or prepay that amount immediately.
7.2 | Claims under a Letter of Credit |
(a) | Each Revolving Facility Borrower irrevocably and unconditionally authorises the Issuing Bank to pay any claim made or purported to be made under a Letter of Credit requested by it (or requested by Midco on its behalf) and which appears on its face to be in order (in this Clause 7, a claim ). |
(b) | Each Revolving Facility Borrower shall immediately on demand, or if such payment is being funded by a Revolving Facility Loan within three Business Days of demand, pay to the Agent for the Issuing Bank an amount equal to the amount of any claim. |
(c) | Each Revolving Facility Borrower acknowledges that the Issuing Bank: |
(i) | is not obliged to carry out any investigation or seek any confirmation from any other person before paying a claim; and |
(ii) | deals in documents only and will not be concerned with the legality of a claim or any underlying transaction or any available set-off, counterclaim or other defence of any person. |
(d) | The obligations of a Revolving Facility Borrower under this Clause 7.2 will not be affected by: |
(i) | the sufficiency, accuracy or genuineness of any claim or any other document; or |
(ii) | any incapacity of, or limitation on the powers of, any person signing a claim or other document. |
7.3 | Indemnities |
(a) | Each Revolving Facility Borrower shall immediately on demand indemnify the Issuing Bank against any cost, loss or liability incurred by the Issuing Bank (otherwise than by reason of the Issuing Banks gross negligence or wilful misconduct) in acting as the Issuing Bank under any Letter of Credit requested by (or on behalf of) that Revolving Facility Borrower. |
(b) | Each Lender shall (according to its L/C Proportion) immediately on demand indemnify the Issuing Bank against any cost, loss or liability incurred by the Issuing Bank (otherwise than by reason of the Issuing Banks gross negligence or wilful misconduct) in acting as the Issuing Bank under any Letter of Credit (unless the Issuing Bank has been reimbursed by an Obligor pursuant to a Finance Document). |
(c) | If any Lender is not permitted (by its constitutional documents or any applicable law) to comply with paragraph (b) above, then that Lender will not be obliged to comply with paragraph (b) above and shall instead be deemed to have taken, on the date the Letter of Credit is issued (or, if later, on the date the Lenders participation in the Letter of Credit is transferred or assigned to the Lender in accordance with the terms of this Agreement), an undivided interest and participation in the Letter of Credit in an amount equal to its L/C Proportion of that Letter of Credit. On receipt of demand from the Agent, that Lender shall pay to the Agent (for the account of the Issuing Bank) an amount equal to its L/C Proportion of the amount demanded. |
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(d) | The Revolving Facility Borrower which requested (or on behalf of which Midco requested) a Letter of Credit shall immediately on demand reimburse any Lender for any payment it makes to the Issuing Bank under this Clause 7.3 in respect of that Letter of Credit. |
(e) | The obligations of each Lender under this Clause 7 are continuing obligations and will extend to the ultimate balance of sums payable by that Lender in respect of any Letter of Credit, regardless of any intermediate payment or discharge in whole or in part. |
(f) | The obligations of any Lender or Revolving Facility Borrower under this Clause 7 will not be affected by any act, omission, matter or thing which, but for this Clause 7, would reduce, release or prejudice any of its obligations under this Clause 7 (without limitation and whether or not known to it or any other person), including: |
(i) | any time, waiver or consent granted to, or composition with, any Obligor, any beneficiary under a Letter of Credit or any other person; |
(ii) | the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor or 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, any beneficiary under a Letter of Credit 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 beneficiary under a Letter of Credit or any other person; |
(v) | any amendment (however fundamental) or replacement of a Finance Document, any Letter of Credit (if made with the consent of Midco) or any other document or security; |
(vi) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document, any Letter of Credit or any other document or security; or |
(vii) | any insolvency or similar proceedings. |
7.4 | Rights of contribution |
No Obligor will be entitled to any right of contribution or indemnity from any Finance Party in respect of any payment it may make under this Clause 7.
7.5 | Settlement conditional |
Any settlement or discharge between a Lender and the Issuing Bank shall be conditional upon no security or payment to the Issuing Bank by a Lender or any other person on behalf of a Lender being avoided or reduced by virtue of any laws relating to bankruptcy, insolvency, liquidation or similar laws of general application and, if any such security or payment is so avoided or reduced, the Issuing Bank shall be entitled to recover the value or amount of such security or payment from such Lender subsequently as if such settlement or discharge had not occurred.
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7.6 | Exercise of rights |
The Issuing Bank shall not be obliged before exercising any of the rights, powers or remedies conferred upon it in respect of any Lender by this Agreement or by law:
(a) | to take any action or obtain judgment in any court against any Obligor; |
(b) | to make or file any claim or proof in a winding-up or dissolution of any Obligor; or |
(c) | to enforce or seek to enforce any other security taken in respect of any of the obligations of any Obligor under this Agreement. |
8. | OPTIONAL CURRENCIES |
8.1 | Selection of currency |
A Revolving Facility Borrower (or Midco on its behalf) shall select the currency of a Revolving Facility Utilisation in a Utilisation Request.
8.2 | Unavailability of a currency |
If before the Specified Time on any Quotation Day:
(a) | a Lender notifies the Agent that the Optional Currency requested is not readily available to it in the amount required; or |
(b) | a Lender notifies the Agent that compliance with its obligation to participate in a Loan in the proposed Optional Currency would contravene a law or regulation applicable to it, |
the Agent will give notice to the relevant Revolving Facility Borrower to that effect by the Specified Time on that day. In this event, any Lender that gives notice pursuant to this Clause 8.2 will be required to participate in the Loan in the Base Currency (in an amount equal to that Lenders proportion of the Base Currency Amount or, in respect of a Rollover Loan, an amount equal to that Lenders proportion of the Base Currency Amount of the Rollover Loan that is due to be made) and its participation will be treated as a separate Loan denominated in the Base Currency during that Interest Period.
8.3 | Agents calculations |
Each Lenders participation in a Loan will be determined in accordance with paragraph (b) of Clause 5.4 ( Lenders participation ).
9. | ANCILLARY FACILITIES |
9.1 | Type of Facility |
An Ancillary Facility may be by way of:
(a) | an overdraft facility; |
(b) | a guarantee, bonding, documentary or stand-by letter of credit facility; |
(c) | a short-term loan facility; |
(d) | a derivatives facility; |
(e) | a foreign exchange facility; or |
(f) | any other facility or accommodation required in connection with the business of the Group and which is agreed by Midco with an Ancillary Lender. |
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9.2 | Availability |
(a) | If Midco and a Lender agree and except as otherwise provided in this Agreement, the Lender may provide an Ancillary Facility on a bilateral basis in place of all or part of that Lenders unutilised Revolving Facility Commitment (which shall (except for the purpose of determining the Majority Lenders) be reduced by the amount of the Ancillary Commitment under that Ancillary Facility). |
(b) | Without prejudice to Clause 9.9 ( Existing Ancillary Facilities ) and subject to paragraph (d) below, an Ancillary Facility shall not be made available unless, not later than three Business Days prior to the Ancillary Commencement Date for an Ancillary Facility, the Agent has received from Midco: |
(i) | a notice in writing requesting the establishment of an Ancillary Facility and specifying: |
(A) | whether the Ancillary Facility is to be made under Revolving Facility 2 or under an Additional Revolving Facility; |
(B) | the proposed Revolving Facility Borrower(s) (or Affiliates of a Revolving Facility Borrower) which may use the Ancillary Facility; |
(C) | the proposed Ancillary Commencement Date and expiry date of the Ancillary Facility; |
(D) | the proposed type of Ancillary Facility to be provided; |
(E) | the proposed Ancillary Lender; |
(F) | the proposed Ancillary Commitment, the maximum amount of the Ancillary Facility (if not denominated in the Base Currency) and, if the Ancillary Facility is an overdraft facility comprising more than one account, its maximum gross amount (that amount being the Designated Gross Amount ) and its maximum net amount (that amount being the Designated Net Amount ); and |
(G) | the proposed currency of the Ancillary Facility; |
(ii) | a copy of the proposed Ancillary Document; and |
(iii) | any other information which the Agent may reasonably request in connection with the Ancillary Facility. |
The Agent shall promptly notify Midco, the Ancillary Lender and the other Lenders of the establishment of an Ancillary Facility.
No amendment or waiver of a term of any Ancillary Facility shall require the consent of any Finance Party other than the relevant Ancillary Lender.
(c) | Subject to compliance with paragraph (b) above: |
(i) | the Lender concerned will become an Ancillary Lender; and |
(ii) | the Ancillary Facility will be available, |
with effect from the date agreed by Midco and the Ancillary Lender.
(d) |
Notwithstanding any term of this Clause 9 to the contrary, each Revolving Facility 2 Lender shall (where applicable) make any Ancillary Facility which such Revolving Facility 2 Lender had, prior |
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to the 2015 Effective Date, made available in place of all or part (as applicable) of its Revolving Facility 1 Commitment and that is outstanding on the 2015 Effective Date, instead available in place of all or part (as applicable) of its Revolving Facility 2 Commitment on the 2015 Effective Date in accordance with the terms of the 2015 SFA Amendment and Restatement Agreement. |
9.3 | Terms of Ancillary Facilities |
(a) | Except as provided below, the terms of any Ancillary Facility will be those agreed by the Ancillary Lender and Midco. |
(b) | However, those terms: |
(i) | must be based upon normal commercial terms at that time (except as varied by this Agreement); |
(ii) | may allow only Revolving Facility Borrowers (or Affiliates of Borrowers nominated pursuant to Clause 9.8 ( Affiliates of Borrowers )) to use the Ancillary Facility; |
(iii) | may not allow the Ancillary Outstandings to exceed the Ancillary Commitment; |
(iv) | may not allow the Ancillary Commitment of a Lender to exceed the Available Commitment with respect to a Revolving Facility of that Lender; and |
(v) | must require that the Ancillary Commitment is reduced to nil, and that all Ancillary Outstandings are repaid (or cash cover provided in respect of all the Ancillary Outstandings) not later than the Termination Date for a Revolving Facility. |
(c) | If there is any inconsistency between any term of an Ancillary Facility and any term of this Agreement, this Agreement shall prevail, except for (i) Clause 38.3 ( Day count convention ) which shall not prevail for the purposes of calculating fees, interest or commission relating to an Ancillary Facility and (ii) an Ancillary Facility comprising more than one account where the terms of the Ancillary Documents shall prevail. |
(d) | Interest, commission and fees on Ancillary Facilities are dealt with in Clause 17.5 ( Interest, commission and fees on Ancillary Facilities ). |
9.4 | Repayment of Ancillary Facility |
(a) | An Ancillary Facility shall cease to be available on the Termination Date in relation to a Revolving Facility or such earlier date on which its expiry date occurs or on which it is cancelled in accordance with the terms of this Agreement. |
(b) | If an Ancillary Facility expires in accordance with its terms, the Ancillary Commitment of the Ancillary Lender shall be reduced to zero (and its Revolving Facility Commitment shall be increased accordingly). |
(c) | No Ancillary Lender may demand repayment or prepayment of any amounts or demand cash cover for any liabilities made available or incurred by it under its Ancillary Facility (except where the Ancillary Facility is provided on a net limit basis to the extent required to bring any gross outstandings down to the net limit) unless: |
(i) | the Total Revolving Facility Commitments have been cancelled in full, or all outstanding Utilisations under a Revolving Facility have become due and payable in accordance with the terms of this Agreement, or the Agent has declared all outstanding Utilisations under a Revolving Facility immediately due and payable, or the expiry date of the Ancillary Facility occurs; |
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(ii) | it becomes unlawful in any applicable jurisdiction for the Ancillary Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in its Ancillary Facility; or |
(iii) | the Ancillary Outstandings (if any) under that Ancillary Facility can be refinanced by a Revolving Facility Utilisation under a Revolving Facility and the Ancillary Lender gives sufficient notice to enable a Utilisation under a Revolving Facility to be made to refinance those Ancillary Outstandings. |
(d) | For the purposes of determining whether or not the Ancillary Outstandings under an Ancillary Facility mentioned in paragraph (c)(iii) above can be refinanced by a Utilisation under a Revolving Facility: |
(i) | the Revolving Facility Commitment of the Ancillary Lender will be increased by the amount of the respective Ancillary Commitment; and |
(ii) | the Utilisation may (so long as paragraph (c)(i) above does not apply) be made irrespective of whether a Default is outstanding or any other applicable condition precedent is not satisfied (but only to the extent that the proceeds are applied in refinancing those Ancillary Outstandings) and irrespective of whether Clause 4.3 ( Maximum number of Utilisations ) or paragraph (a)(v) of Clause 5.2 ( Completion of a Utilisation Request for Loans ) applies. |
(e) | On the making of a Utilisation under a Revolving Facility to refinance Ancillary Outstandings: |
(i) | each Lender will participate in that Utilisation in an amount (as determined by the Agent) which will result as nearly as possible in the aggregate amount of its participation in the Revolving Facility Utilisations then outstanding bearing the same proportion to the aggregate amount of the Revolving Facility Utilisations then outstanding as its Revolving Facility Commitment bears to the Total Revolving Facility Commitments; and |
(ii) | the relevant Ancillary Facility shall be cancelled. |
(f) | In relation to an Ancillary Facility which comprises an overdraft facility where a Designated Net Amount has been established, the Ancillary Lender providing that Ancillary Facility shall only be obliged to take into account for the purposes of calculating compliance with the Designated Net Amount those credit balances which it is permitted to take into account by the then current law and regulations in relation to its reporting of exposures to the Financial Conduct Authority as netted for capital adequacy purposes. |
9.5 | Ancillary Outstandings |
Each Revolving Facility Borrower and each Ancillary Lender agrees with and for the benefit of each Lender that:
(a) | the Ancillary Outstandings under any Ancillary Facility provided by that Ancillary Lender shall not exceed the Ancillary Commitment applicable to that Ancillary Facility and, where the Ancillary Facility is an overdraft facility comprising more than one account, Ancillary Outstandings under that Ancillary Facility shall not exceed the Designated Net Amount in respect of that Ancillary Facility; and |
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(b) | where all or part of the Ancillary Facility is an overdraft facility comprising more than one account, the Ancillary Outstandings (calculated on the basis that the words in brackets in paragraph (a) of the definition of that term were deleted) shall not exceed the Designated Gross Amount applicable to that Ancillary Facility. |
9.6 | Information |
Each Revolving Facility Borrower and each Ancillary Lender shall, promptly upon request by the Agent, supply the Agent with any information relating to the operation of an Ancillary Facility (including the Ancillary Outstandings) as the Agent may reasonably request from time to time. Each Revolving Facility Borrower consents to all such information being released to the Agent and the other Finance Parties.
9.7 | Affiliates of Lenders as Ancillary Lenders |
(a) | Subject to the terms of this Agreement, an Affiliate of a Lender may become an Ancillary Lender. In such case, the Lender and its Affiliate shall be treated as a single Lender whose Revolving Facility Commitment is the amount set out opposite the relevant Lenders name in the 2015 Allocations Table and/or the amount of any Revolving Facility Commitment transferred to or assumed by that Lender under this Agreement, to the extent (in each case) not cancelled, reduced or transferred by it under this Agreement. For the purposes of calculating the Lenders Available Commitment with respect to a Revolving Facility, the Lenders Commitment shall be reduced to the extent of the aggregate of the Ancillary Commitments of its Affiliates. |
(b) | Midco shall specify any relevant Affiliate of a Lender in any notice delivered by Midco to the Agent pursuant to paragraph (b)(i) of Clause 9.2 ( Availability ). |
(c) | An Affiliate of a Lender which becomes an Ancillary Lender shall accede to this Agreement and the Intercreditor Agreement by delivery to the Security Agent of a duly completed Creditor/Agent Accession Undertaking (as defined in the Intercreditor Agreement). |
(d) | If a Lender assigns all of its rights and benefits or transfers all of its rights and obligations to a New Lender (as defined in Clause 29 ( Changes to the Lenders ), its Affiliate shall cease to have any obligations under this Agreement or any Ancillary Document. |
(e) | Where this Agreement or any other Finance Document imposes an obligation on an Ancillary Lender and the relevant Ancillary Lender is an Affiliate of a Lender which is not a party to that document, the relevant Lender shall ensure that the obligation is per formed by its Affiliate. |
9.8 | Affiliates of Borrowers |
(a) | Subject to the terms of this Agreement, an Affiliate of a Revolving Facility Borrower may with the approval of the relevant Lender become a borrower with respect to an Ancillary Facility. |
(b) | Midco shall specify any relevant Affiliate of a Revolving Facility Borrower in any notice delivered by Midco to the Agent pursuant to paragraph (b)(i) of Clause 9.2 ( Availability ). |
(c) | If a Revolving Facility Borrower ceases to be a Borrower under this Agreement in accordance with Clause 31.3 ( Resignation of a Borrower ), its Affiliate shall cease to have any rights under this Agreement or any Ancillary Document (unless that Affiliate is also the Affiliate of another Borrower). |
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(d) | Where this Agreement or any other Finance Document imposes an obligation on a Borrower under an Ancillary Facility and the relevant Borrower is an Affiliate of a Revolving Facility Borrower which is not a party to that document, the relevant Borrower shall ensure that the obligation is performed by its Affiliate. |
(e) | Any reference in this Agreement or any other Finance Document to a Borrower being under no obligations (whether actual or contingent) as a Borrower under such Finance Document shall be construed to include a reference to any Affiliate of a Revolving Facility Borrower being under no obligations under any Finance Document or Ancillary Document (unless that Affiliate is also the Affiliate of another Borrower). |
9.9 | Existing Ancillary Facilities |
(a) | Midco may at any time prior to the Closing Date (or such later date as the Agent may agree) request that any Existing Ancillary Facility be deemed to be an Ancillary Facility established and made available under Revolving Facility 1 by delivering to the Agent: |
(i) | a notice in writing requesting that such Existing Ancillary Facility be deemed to be an Ancillary Facility under Revolving Facility 1 and specifying: |
(A) | the relevant Revolving Facility Borrower(s) (or Affiliates of a Revolving Facility Borrower) which may use such Ancillary Facility; |
(B) | the expiry date of such Ancillary Facility; |
(C) | the type of Ancillary Facility; |
(D) | the Ancillary Lender; |
(E) | the Ancillary Commitment, the maximum amount of the Ancillary Facility (if not denominated in the Base Currency) and, if the Ancillary Facility is an overdraft facility comprising more than one account, its maximum gross amount (that amount being the Designated Gross Amount) and its maximum net amount (that amount being the Designated Net Amount); and |
(F) | the currency of such Ancillary Facility; |
(ii) | confirmation from the relevant Ancillary Lender that it has agreed to such Existing Ancillary Facility being an Ancillary Facility under Revolving Facility 1 in place of all or part of that Lenders unutilised Revolving Facility 1 Commitment; |
(iii) | a copy of the relevant Ancillary Document; and |
(iv) | any other information which the Agent may reasonably request in connection with that Ancillary Facility. |
(b) | Subject to compliance with paragraph (a) above and provided that the Ancillary Lender under such Existing Ancillary Facility is a Revolving Facility 1 Lender with an unutilised Revolving Facility 1 Commitment at least equal to the maximum amount of such Existing Ancillary Facility: |
(i) | the Lender concerned will become an Ancillary Lender; and |
(ii) | the Existing Ancillary Facility shall be established and available as an Ancillary Facility under this Agreement, |
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with effect from the Closing Date (or such other date as may be agreed between the relevant Lender, Midco and the Agent).
(c) | Each party to this Agreement confirms and acknowledges that any Existing Ancillary Facility established and made available as an Ancillary Facility pursuant to this Clause 9.9 shall constitute an Ancillary Facility under this Agreement in respect of Revolving Facility 1 and the Agent shall be instructed to record such Ancillary Facility in the books of the Agent accordingly. |
(d) | For the avoidance of doubt, the application of this Clause 9.9 is without prejudice to the operation of paragraph (d) of Clause 9.2 ( Availability ) and the 2015 SFA Amendment and Restatement Agreement. |
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SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
10. | REPAYMENT |
10.1 | Repayment of Term Loans |
(a) | The Borrower under Facility B1 shall repay the Facility B1 Loans in full on the Termination Date for Facility B1 in euro. |
(b) | The Borrower under Facility B2 shall repay the Facility B2 Loans in full on the Termination Date for Facility B2 in sterling. |
(c) | The Borrower under Facility C1 shall repay the Facility C1 Loa ns in full on the Termination Date for Facility C1 in euro. |
(d) | The Borrower under Facility C2 shall repay the Facility C2 Loans in full on the Termination Date for Facility C2 in sterling. |
(e) | The Borrower under Facility C3 shall repay the Facility C3 Loans in full on the Termination Date for Facility C3 in euro. |
(f) | The Borrower(s) in relation to each Additional Facility shall repay (or procure the repayment of) any amounts owing under that Facility in the manner specified in the Additional Facility Documents relating to that Additional Facility. |
(g) | The Borrowers may not reborrow any part of a Term Facility which is repaid. |
10.2 | Repayment of Revolving Facility Loans |
Each Revolving Facility Borrower which has drawn a Revolving Facility Loan shall repay that Loan on the last day of its Interest Period.
10.3 | Repayment of Ancillary Facilities |
On the Termination Date applicable to the relevant Revolving Facility, each Revolving Facility Borrower under an Ancillary Facility shall repay all amounts (if any) owing or outstanding under that Ancillary Facility.
11. | ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION |
11.1 | Illegality |
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in any Utilisation:
(a) | that Lender shall promptly notify the Agent upon becoming aware of that event; |
(b) | upon the Agent notifying Midco, the Commitments of that Lender will be immediately cancelled or, as the case may be, on such date that Lenders Commitments shall be transferred to another person pursuant to Clause 29.10 ( Replacement of Lenders ); and |
(c) |
each Borrower shall repay that Lenders participation in the Utilisations made to that Borrower on the last day of the Interest Period for each Utilisation occurring after the Agent has notified Midco or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period |
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permitted by law) or, as the case may be, on such date that Lenders participation in the Utilisations shall be transferred at par to another person as set out in Clause 29.10 ( Replacement of Lenders ). |
11.2 | Illegality in relation to an Issuing Bank |
If it becomes unlawful for an Issuing Bank to issue or leave outstanding any Letter of Credit in any jurisdiction, then:
(a) | that Issuing Bank shall promptly notify the Agent upon becoming aware of that event; |
(b) | upon the Agent notifying Midco, the Issuing Bank shall not be obliged to issue any Letter of Credit in that jurisdiction; |
(c) | Midco shall procure that the relevant Borrower shall use its best endeavours to procure the release of each Letter of Credit issued by that Issuing Bank and outstanding at such time; and |
(d) | unless any other Lender (or other person pursuant to Clause 29.10 ( Replacement of Lenders )) has agreed to be an Issuing Bank pursuant to the terms of this Agreement, a Revolving Facility shall cease to be available for the issue of Letters of Credit in that jurisdiction. |
11.3 | Cancellation |
(a) | Subject to paragraph (d) below, Midco may, if it gives the 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 EUR 1,000,0 00 in relation to Euro Denominated Facilities or £1,000,000 in relation to Sterling Denominated Facilities (or its equivalent)) of an Available Facility. Any cancellation under this Clause 11.3 shall reduce the Commitments of the Lenders rateably under that Facility. |
(b) | If the Closing Date has not occurred by 31 July 2014 (or such later date as may be agreed with each of the Arrangers and Lenders (including, for the avoidance of doubt, any Exchange Lenders)), this Agreement and all Commitments in relation to this Agreement shall immediately and automatically be cancelled on such date. |
(c) | In relation to each Facility, any Commitments which, at the end of the Availability Period applicable to that Facility, are unutilised shall immediately and automatically be cancelled at such time. |
(d) | Any cancellation (whether in whole or in part) to be made by Midco with respect to Revolving Facility 1 Commitments on the 2015 Effective Date shall not require Midco to give the Agent any prior notice of such cancellation. |
(e) | The Total Facility C3 Commitments shall be immediately and automatically cancelled (and any Loans under Facility C3 shall be immediately prepaid and cancelled) if: |
(i) | the Findus Acquisition Agreement is terminated by any party thereto; |
(ii) | the Seller (as defined in the Findus Acquisition Agreement) has entered into a sale and purchase agreement to sell the Findus Target (or all or substantially all of the assets of the Findus Target or Findus Target Group) to a purchaser other than the Buyer (as defined in the Findus Acquisition Agreement); or |
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(iii) | Midco confirms in writing to the Agent and the Facility C3 Arrangers that the offer of the Buyer (as defined in the Findus Acquisition Agreement) to acquire the Findus Target has been withdrawn, repudiated or cancelled. |
11.4 | Voluntary prepayment of Term Loans |
(a) | Subject to the Intercreditor Agreement and to paragraph (c) below, a Borrower to which a Term Loan has been made may, if it or Midco gives the Agent not less than five Business Days (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of that Term Loan (but, if in part, being a minimum amount of EUR 1,000,000 in relation to Euro Denominated Facilities or £1,000,000 in relation to Sterling Denominated Facilities (or the equivalent)). |
(b) | A Term Loan may only be prepaid after the last day of the Availability Period (or, if earlier, the day on which the applicable Available Facility is zero). |
(c) | Any voluntary prepayment of a Term Loan (whether in whole or in part) to be made by a Borrower or Midco on the 2015 Effective Date shall not require it or Midco to give the Agent any prior notice of such prepayment. |
11.5 | Voluntary prepayment of Revolving Facility Utilisations |
(a) | Subject to paragraph (b) below, a Borrower to which a Revolving Facility Utilisation has been made may, if such Borrower or Midco gives the Agent not less than five Business Days (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of a Revolving Facility Utilisation (but, if in part, being an amount that reduces the Base Currency Amount of the Revolving Facility Utilisation by a minimum amount of EUR 1,000,000 (or its equivalent)). |
(b) | Any voluntary prepayment of a Revolving Facility 1 Loan (whether in whole or in part) to be made by a Borrower or Midco on the 2015 Effective Date shall not require such Borrower or Midco to give the Agent any prior notice of such prepayment. |
11.6 | Right of cancellation and repayment in relation to a single Lender or Issuing Bank |
(a) | If: |
(i) | any sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of Clause 18.2 ( Tax gross-up ); |
(ii) | any Lender or Issuing Bank claims indemnification from an Obligor under Clause 18.3 ( Tax indemnity ) or Clause 19.1 ( Increased Costs ); |
(iii) | a Market Disruption Event occurs pursuant to Clause 16 ( Changes to the calculation of interest ) in relation to certain but not all the Lenders; or |
(iv) | at any time a Lender becomes a Non-Consenting Lender, |
Midco may, whilst the circumstance giving rise to the requirement or indemnification continues, give the Agent notice:
(A) | (if such circumstances relate to a Lender) of cancellation of the Commitments of that Lender and its intention to procure the repayment of that Lenders participation in the Utilisations or to require the transfer of that Lenders rights and obligations pursuant to Clause 29.10 ( Replacement of Lenders ); or |
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(B) | (if such circumstances relate to the Issuing Bank) of repayment of any outstanding Letter of Credit issued by it and cancellation of its appointment as an Issuing Bank under this Agreement in relation to any Letters of Credit to be issued in the future or its request to transfer that Issuing Banks rights and obligations pursuant to Clause 29.10 ( Replacement of Lenders ). |
(b) | On receipt of a notice referred to in paragraph (a) above in relation to a Lender, the Commitments of that Lender shall immediately be reduced to zero or transferred to another person pursuant to Clause 29.10 ( Replacement of Lenders ). |
(c) | On the last day of each Interest Period which ends after Midco has given notice under paragraph (a)(i), (ii) or (iii) above in relation to a Lender (or, if earlier, the date specified by Midco in that notice), each Borrower to which a Utilisation is outstanding shall repay that Lenders participation in that Utilisation together with all interest and other amounts accrued under the Finance Documents or the relevant Lender shall transfer its rights and obligations pursuant to Clause 29.10 ( Replacement of Lenders ). |
(d) | On the last day of each Interest Period which ends after Midco has given notice under paragraph (a)(iv) above in relation to a Lender (or, if earlier, the date specified by Midco in that notice), each Borrower to which a Utilisation is outstanding shall, with the consent of each of the Lenders forming the Majority Lenders (unless the prepayment is funded by New Equity or Subordinated Debt received after the Closing Date or Retained Cash) repay that Lenders participation in that Utilisation together with all interest and other amounts accrued under the Finance Documents and/or the relevant Lender shall transfer its rights and obligations pursuant to Clause 29.10 ( Replacement of Lenders ). |
12. | MANDATORY PREPAYMENT |
12.1 | Exit |
(a) | Upon the occurrence of: |
(i) | a Change of Control; or |
(ii) | the sale of all or substantially all of the assets of the Group, whether in a single transaction or a series of related transactions, |
Midco shall immediately notify the Agent (who shall notify the Finance Parties), and each Lender shall be entitled to require, by written notice to the Obligors Agent received not later than the date 30 days after the date on which the Lenders received notice that such event has occurred, that its Commitments are cancelled and all outstanding Utilisations (together with all other amounts accrued or owing under the Finance Documents) in respect of that Lender become immediately due and payable, whereupon:
(A) | all such amounts will become immediately due and payable and the Borrowers will immediately prepay or procure the prepayment of all Utilisations and Ancillary Outstandings provided by that Lender, together with accrued interest and all other amounts accrued or owing under the Finance Documents to and in respect of that Lender; |
(B) |
each Borrower will immediately repay or procure the repayment of all sums advanced to it under any Ancillary Facility (including all Ancillary Outstandings), |
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together with all other amounts accrued or owing by the Obligors in connection therewith, made available by that Lender (provided that a Borrower and an Ancillary Facility Lender may agree, as between themselves only and notwithstanding paragraph (1) above, that any Ancillary Facilities will continue to remain available on a bilateral basis between such parties and not under (or subject to the terms of) the Finance Documents (in which case such Ancillary Facilities will be treated as repaid in full for all purposes under the Finance Documents)); and |
(C) | the Commitments of that Lender will be cancelled and such Lender shall have no Commitments or obligation to participate in further Utilisations requested under this Agreement. |
12.2 | Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds |
(a) | For the purposes of this Clause 12.2, Clause 12.3 ( Application of mandatory prepayments ) and Clause 12.4 ( Mandatory Prepayment Account ): |
Disposal means a sale, lease, licence, transfer, loan or other disposal by a person of any asset, undertaking or business (whether by a voluntary or involuntary single transaction or series of transactions).
Disposal Proceeds means the Net Proceeds received by any member of the Group (including any amount received in repayment of intercompany debt) for any Disposal made by any member of the Group, except for Excluded Disposal Proceeds.
Excluded Disposal Proceeds means the Net Proceeds of any Disposal which is or which are:
(i) | of trading assets made by any member of the Group in the ordinary course of trading of the disposing entity; |
(ii) | of any asset by a member of the Group (the Disposing Company ) to another member of the Group (the Acquiring Company ), but if the Disposing Company is a Guarantor, the Acquiring Company must also be a Guarantor and if the Disposing Company has given Security over the asset the Acquiring Company must, subject to the Security Principles, give equivalent Security over the asset; |
(iii) | of any asset from an Obligor to a member of the Group which is not an Obligor provided that the aggregate amount transferred by all Obligors (net of the value of any assets transferred from a member of the Group which is not an Obligor to an Obligor) does not exceed at any time EUR 30,000,000 (or its equivalent); |
(iv) | of assets (other than shares, businesses or intellectual property) in exchange for other assets reasonably comparable or superior as to type or quality for use in the business; |
(v) | of Cash or Cash Equivalent Investments; |
(vi) | constituted by a licence of Intellectual Property; |
(vii) | made to a Joint Venture, to the extent permitted by Clause 27.8 ( Joint Ventures ); |
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(viii) | of the German Property, provided that the following conditions are met: |
(A) | the proceeds must be used as set out in Clause 12.3 ( Application of mandatory prepayments ); and |
(B) | the German Property must be leased back to the Group on terms to be agreed immediately upon disposal; |
(ix) | of the Hull Site; |
(x) | arising as a result of any Permitted Security or Permitted Transaction; |
(xi) | a lease or licence of Real Property in the ordinary course of business; |
(xii) | an individual Disposal not falling under the preceding paragraphs where the Net Proceeds from that Disposal are an amount less than EUR 2,000,000 (or its equivalent); |
(xiii) | applied or committed to be applied or designated by the board of directors of Midco for application in the purchase of assets, Permitted Acquisitions and Capital Expenditure within 12 Months of receipt (or such longer period as the Majority Lenders may agree), provided that if so designated or committed, they are actually so applied within 18 Months of receipt; or |
(xiv) | disposals not falling under the preceding paragraphs, the Net Proceeds of which when aggregated with the Net Proceeds of other Disposals made in the same Financial Year of Midco and not falling under the preceding paragraphs do not exceed an amount of EUR 15,000,000 (or its equivalent) in any Financial Year. |
Excluded Insurance Proceeds means any Net Proceeds of insurance claims:
(i) | which are third party liability, business interruption or similar claims; |
(ii) | which do not exceed an amount of EUR 5,000,000 (or its equivalent) in aggregate in any Financial Year; or |
(iii) | which are applied, committed to be so applied or designated by the board of directors of Midco to be so applied: |
(A) | to meet a third party claim; or |
(B) | to the replacement, reinstatement and/or repair of the assets in respect of which the relevant insurance claim was made, |
within 12 Months of receipt (or such longer period as the Majority Lenders may agree), provided that if so designated or committed they are actually so applied within 18 Months of receipt. |
German Property Proceeds means the Net Proceeds:
(i) | from any sale and leaseback of the German Property; and |
(ii) | from any insurance claims in respect of the German Property, except for Excluded Insurance Proceeds. |
Insurance Proceeds means the Net Proceeds of any insurance claim received by any member of the Group, except for Excluded Insurance Proceeds and other than constituting German Property Proceeds.
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(b) | Midco shall ensure that the Borrowers prepay Utilisations at the times and in the order of application contemplated by Clause 12.3 ( Application of mandatory prepayments ) in respect of: |
(i) | the amount of Disposal Proceeds; and |
(ii) | the amount of Insurance Proceeds. |
(c) | Excess Cashflow |
For any Financial Year of Midco commencing with the Financial Year ending on 31 December 2016, Midco shall ensure that the Borrowers prepay Utilisations at the time and in the order of application contemplated by Clause 12.3 ( Application of mandatory prepayments ) in an amount equal to:
(i) | in respect of each Financial Year at the end of which Debt Cover is greater than 4.5:1, 50 per cent. of the Excess Cashflow for that Financial Year; |
(ii) | in respect of each Financial Year at the end of which Debt Cover is equal to or less than 4.5:1 but greater than 3.75:1, 25 per cent. of Excess Cashflow for that Financial Year; and |
(iii) | for the avoidance of doubt, in respect of each Financial Year at the end of which Debt Cover is equal to or less than 3.75:1, none of the Excess Cashflow for that Financial Year, |
(and, for this purpose, Debt Cover shall be calculated after taking into account any prepayment to be made under this paragraph (c) to the extent not leading to double counting), provided that from the applicable percentage of Excess Cashflow shall be deducted:
(A) | any voluntary prepayments made during that Financial Year; and |
(B) | an amount of EUR 15,000,000 as a de minimis amount. |
(d) | Flotation |
Upon the occurrence of a Flotation not resulting in a Change of Control, Midco shall ensure that the Borrowers prepay Utilisations in the following amounts at the times and in the order of application contemplated by Clause 12.3 ( Application of mandatory prepayments ):
(i) | if, on the immediately preceding Quarter Date, Debt Cover for the Relevant Period ending on such Quarter Date was greater than 4.50:1: |
(A) | an amount equal to the lower of (x) 50 per cent. of the Flotation Proceeds and (y) an amount that would result in Debt Cover for the Relevant Period ending on such Quarter Date, if Debt Cover was re -tested on that Quarter Date pro forma for that prepayment (only), being equal to 4.50:1; and |
(B) |
if, after taking into account any prepayment made pursuant to paragraph (A) above, Debt Cover for the Relevant Period ending on such Quarter Date calculated pro forma for the prepayment required pursuant to paragraph (A) above would be greater than 3.75:1 (but not greater than 4.50:1), an amount equal to the lower of (x) 25 per cent. of the Flotation Proceeds, (y) the difference between 50 per cent. of the Flotation Proceeds and the amount required to be prepaid under paragraph (A) above and (z) an amount that would result in Debt |
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Cover for the Relevant Period ending on such Quarter Date, if Debt Cover was re-tested on that Quarter Date pro forma for that prepayment and any prepayment required pursuant to paragraph (A) above (only), being equal to 3.75:1; or |
(ii) | if, on the immediately preceding Quarter Date, Debt Cover for the Relevant Period ending on such Quarter Date was greater than 3.75:1 (but not greater than 4.50:1), an amount equal to the lower of (x) 25 per cent. of the Flotation Proceeds and (y) an amount that would result in Debt Cover for the Relevant Period ending on such Quarter Date, if Debt Cover was re-tested on that Quarter Date pro forma for that prepayment (only), being equal to 3.75:1; or |
(iii) | (for the avoidance of doubt) if, on the immediately preceding Quarter Date, Debt Cover for the Relevant Period ending on such Quarter Date was equal to or less than 3.75:1, none of the Flotation Proceeds. |
Any balance will be retained by the Group and may be used for any purpose not expressly prohibited under the Finance Documents or may (at the option of Midco) be applied in making a Permitted Payment.
(e) | German Property Proceeds |
Midco shall ensure that the Borrowers apply an amount equal to 100 per cent. of the German Property Proceeds in prepayment of the Utilisations at the times and in the order of application contemplated by Clause 12.3 ( Application of mandatory prepayments ).
12.3 | Application of mandatory prepayments |
(a) | A prepayment made under paragraph (b) or (d) of Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ) shall be applied in the following order: |
(i) | first, in prepayment of Term Loans as contemplated below; |
(ii) | secondly, in cancellation of Available Commitments under a Revolving Facility (and the Available Commitments of the Lenders under a Revolving Facility will be cancelled rateably); |
(iii) | thirdly, in prepayment and cancellation of Revolving Facility Utilisations and of Revolving Facility Commitments; and |
(iv) | fourthly, in repayment and cancellation of the Ancillary Outstandings and Ancillary Commitments. |
(b) | A prepayment under paragraph (b) or (d) of Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ) shall prepay the Term Loans if after the applicable Availability Period, in amounts which reduce each of the Term Loans by the same proportion and pro rata across those Loans. |
(c) | A prepayment made under paragraph (c) of Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ) shall be applied as Midco may elect. |
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(d) | A prepayment made under paragraph (e) of Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ) shall be applied against each of the Term Loans pro rata. |
To the extent that there are any German Property Proceeds remaining after all Term Facilities have been repaid, then these shall be applied against the Revolving Facility Utilisations pro rata (whereafter the Revolving Facility Commitments shall be cancelled).
(e) | Unless Midco makes an election under paragraph (f) below, the Borrowers shall apply such amount against prepayments and cancellations which are due under this Agreement in accordance with paragraphs (a) or (c) above at the following times: |
(i) | in the case of any prepayment relating to the amounts of Disposal Proceeds, Insurance Proceeds, Flotation Proceeds or German Property Proceeds, promptly upon receipt of those proceeds; and |
(ii) | in the case of any prepayment relating to an amount of Excess Cashflow, on the last day of the first Interest Period ending at least 15 Business Days after the date of delivery of the annual consolidated accounts of Midco pursuant to Clause 25.1 ( Financial statements ) for the relevant Financial Year. |
(f) | Midco may, by giving the Agent not less than three Business Days (or such shorter period as the Majority Lenders may agree) prior written notice, elect that any amounts to be applied in prepayment pursuant to Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ) be paid into the Mandatory Prepayment Account. |
(g) | If Midco has made an election under paragraph (f) above but an Event of Default under Clause 28.1 ( Non-payment ) has occurred and is continuing or a notice of acceleration or cancellation has been given pursuant to Clause 28.16 ( Acceleration ), that election shall no longer apply and the amount of the relevant prepayment shall be immediately due and payable (unless the Majority Lenders otherwise agree in writing). |
(h) | The Agent shall notify the Lenders as soon as possible of any prepayment of any Term Loan to be made under Clause 11.4 ( Voluntary prepayment of Term Loans ) or Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ). |
12.4 | Mandatory Prepayment Account |
(a) | Midco shall ensure that: |
(i) | Disposal Proceeds, Insurance Proceeds, Excess Cashflow, Flotation Proceeds and German Property Proceeds in respect of which Midco has made an election under paragraph (f) of Clause 12.3 ( Application of mandatory prepayments ) are paid into a Mandatory Prepayment Account promptly upon receipt by a member of the Group; |
(ii) | an amount equal to any Excess Cashflow in respect of which Midco has made an election under paragraph (f) of Clause 12.3 ( Application of mandatory prepayments ) is paid into a Mandatory Prepayment Account promptly after such election, and |
Midco and each Borrower irrevocably authorise the Agent to apply amounts credited to the Mandatory Prepayment Account which are required to be applied pursuant to paragraph (b), (c), (d) or (e) of Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property
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Proceeds ) to pay amounts due and payable under Clause 12.3 ( Application of mandatory prepayments ) and otherwise under the Finance Documents on the last day of the Interest Period relating to the relevant Term Loan.
A Lender, Security Agent or Agent with which a Mandatory Prepayment Account is held acknowledges and agrees that (A) interest shall accrue at normal commercial rates on amounts credited to that account and, subject to there being no Event of Default continuing, that the account holder shall be entitled to withdraw or transfer such interest (which shall be paid in accordance with the mandate relating to such account) and (B) such Mandatory Prepayment Account is subject to the Transaction Security.
12.5 | General |
(a) | All prepayments to be made under Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ) (other than a mandatory prepayment under paragraph (d) of Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds )) are subject to permissibility under local law (including, without limitation, financial assistance, corporate benefit restrictions on up-streaming of cash intra-group and the fiduciary and statutory duties of the directors of the relevant members of the Group). There will be no requirement to make any prepayment where the Tax or other cost to the Group of making that payment or making the relevant funds available to another member of the Group to enable such payment to be made is disproportionate to the amount to be prepaid. For the avoidance of doubt, such payment is disproportionate if the costs exceed an amount equal to 3 per cent. of the amount to be prepaid. Midco shall ensure that all members of the Group will use their reasonable endeavours to overcome any restrictions and/or minimise any costs of a prepayment. If at any time those restrictions are removed, any relevant proceeds will be applied in prepayment of the Facilities at the end of the next Interest Period. |
(b) | Notwithstanding Clause 12.3 ( Application of mandatory prepayments ), if a Borrower is unable to up-stream moneys required to be prepaid in accordance with this Clause 12 but can prepay Term Loans made to it otherwise than in accordance with the order of prepayment describe d in Clause 12.3 ( Application of mandatory prepayments ), then that Borrower will prepay Term Loans made to it unless the relevant Borrower certifies to the Lender that it is not able to as a result of matters described in paragraph (a) above. |
13. | RESTRICTIONS |
13.1 | Notices of cancellation or prepayment |
(a) | Subject to paragraph (b) below, any notice of cancellation or prepayment given by any Party under Clause 11 ( Illegality, voluntary prepayment and cancellation ) or Clause 12 ( Mandatory prepayment ) 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 notice of prepayment and/or cancellation given by Midco under paragraph (a) of Clause 11.3 (C ancellation ), Clause 11.4 ( Voluntary prepayment of Term Loans ) and/or Clause 11.5 ( Voluntary prepayment of Revolving Facility Utilisations ) may provide that the relevant prepayment and/or cancellation (as applicable) referred to therein is conditional. |
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13.2 | Interest and other amounts |
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs and subject to Clause 17.6 ( Call premium ), without premium or penalty.
13.3 | No reborrowing of Term Facilities |
No Borrower may reborrow any part of a Term Facility which is prepaid.
13.4 | Reborrowing of Revolving Facility |
Unless a contrary indication appears in this Agreement, any part of a Revolving Facility which is prepaid may be reborrowed in accordance with the terms of this Agreement.
13.5 | Prepayment in accordance with Agreement |
No Borrower shall repay or prepay all or any part of the Utilisations or cancel all or any part of the Commitments, except at the times and in the manner expressly provided for in this Agreement.
13.6 | No reinstatement of Commitments |
No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
13.7 | Agents receipt of notices |
If the Agent receives a notice under Clause 11 ( Illegality, voluntary prepayment and cancellation ) or Clause 12 ( Mandatory prepayment ), it shall promptly forward a copy of that notice to either Midco or the affected Lender, as appropriate.
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SECTION 5
COSTS OF UTILISATION
14. | INTEREST |
14.1 | Calculation of interest |
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
(a) | Margin; and |
(b) | LIBOR or, in relation to any Loan in euro, EURIBOR. |
14.2 | Payment of interest |
(a) | 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). |
(b) | If the annual audited financial statements of the Group and related Compliance Certificate received by the Agent show that a higher Margin should have applied during a certain period, then Midco shall (or shall ensure the relevant Borrower shall) promptly pay to the Agent any amounts necessary to put the Agent and the Lenders in the position they would have been in had the appropriate rate of the Margin applied during such period. |
(c) | If the annual audited financial statements of the Group and related Compliance Certificate received by the Agent show that a lower Margin should have applied during a certain period, then the next payments of interest falling due on the Loans shall be reduced to the extent necessary to put the Obligors in the position they would have been in had the appropriate rate of the Margin applied during such period, provided that future payments to a Lender will only be reduced to the extent it was a Lender during the relevant period where a lower rate of Margin should have applied. |
14.3 | 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 1 per cent. 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 Agent (acting reasonably). Any interest accruing under this Clause 14.3 shall be immediately payable by the Obligor on demand by the Agent. |
(b) | If any overdue amount consists of all or part of a 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 1 per cent. higher than the rate which would have applied if the overdue amount had not become due. |
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(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. |
14.4 | Notification of rates of interest |
The Agent shall promptly notify the Lenders and the relevant Borrower (or Midco) of the determination of a rate of interest under this Agreement.
15. | INTEREST PERIODS |
15.1 | Selection of Interest Periods |
(a) | A Borrower (or Midco on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan or (if the Loan is a Term Loan and has already been borrowed) in a Selection Notice. |
(b) | Each Selection Notice for a Term Loan is irrevocable and must be delivered to the Agent by the Borrower (or Midco on behalf of the Borrower) to which that Term Loan was made not later than the Specified Time. |
(c) | If a Borrower (or Midco) fails to deliver a Selection Notice to the Agent in accordance with paragraph (b) above, the relevant Interest Period will be one Month. |
(d) | Subject to this Clause 15, a Borrower (or Midco) may select an Interest Period of one, two, three or six Months or any other period agreed between Midco and the Agent (if such period is longer than six Months, acting on the instructions of all the Lenders under the relevant Facility). In addition, a Borrower (or Midco on its behalf) may select an Interest Period of a period necessary so that the last day of the relevant Interest Period matches any relevant payments under the Hedging Agreements. |
(e) | Each Interest Period for a Term Loan shall start on the Utilisation Date or (if already made) on the last day of its preceding Interest Period. |
(f) | A Revolving Facility Loan has one Interest Period only. |
(g) | An Interest Period for a Loan shall not extend beyond the Termination Date applicable to its facility. |
(h) | Prior to the date on which the Arrangers confirm to Midco that syndication of Facility B1, Facility B2 and Revolving Facility 1 (if any) has been completed (or, if earlier, the date falling 6 Months after the Closing Date), Interest Periods shall, if requested by the Arrangers, be one Month. |
(i) | If the 2015 Effective Date falls within an Interest Period for Facility B1 and Facility B2; |
(i) | such Interest Period will continue to apply to the corresponding Re -allocated Commitments (as defined in the 2015 SFA Amendment and Restatement Agreement) and any corresponding Utilisations thereunder for the remainder of such Interest Period; |
(ii) | LIBOR or EURIBOR (as the case may be) will continue to accrue at the same rate in respect of such Utilisations under such Re-allocated Commitments for the remainder of such Interest Period following the 2015 Effective Date as it did in such Interest Period before such date; but |
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(iii) | the Margin accruing in respect of such Utilisations under such Re -allocated Commitments for the remainder of such Interest Period on and after the 2015 Effective Date will be the Margin set out in this Agreement applying to Facility C1 Loans and Facility C2 Loans (as applicable). |
(j) | Prior to the date on which the Facility C3 Arrangers confirm to Midco that syndication of Facility C3 has been completed (or, if earlier, the date falling four Months after the Findus Acuqisition Completion Date), Interest Periods for Facility C3 shall, if requested by the Facility C3 Arrangers, be one Month. |
15.2 | 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).
15.3 | Consolidation and division of Term Loans |
If two or more Interest Periods:
(i) | relate to Term Loans in the same currency made under the same Facility; |
(ii) | end on the same date; and |
(iii) | are made to the same Borrower, |
those Term Loans will, unless that Borrower (or Midco on its behalf) specifies to the contrary in the Selection Notice for the next Interest Period, be consolidated into, and treated as, a single Term Loan on the last day of the Interest Period.
16. | CHANGES TO THE CALCULATION OF INTEREST |
16.1 | Absence of quotations |
Subject to Clause 16.2 ( Market disruption ), if LIBOR or, if applicable, EURIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by the Specified Time on the Quotation Day, the applicable LIBOR or EURIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.
16.2 | Market disruption |
(a) | If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lenders share of that Loan for the Interest Period shall be the rate per annum which is the sum of: |
(i) | the Margin; and |
(ii) | the rate notified to the 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. |
(b) | In this Agreement Market Disruption Event means: |
(i) | at or about noon on the Quotation Day for the relevant Interest Period, the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR or, if applicable, EURIBOR for the relevant currency and Interest Period; or |
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(ii) | before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 50 per cent. of that Loan) that the cost to it of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR or, if applicable, EURIBOR. |
16.3 | Alternative basis of interest or funding |
(a) | If a Market Disruption Event occurs and the Agent or Midco so requires, the Agent and Midco shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest. |
(b) | Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and Midco, be binding on all Parties. |
16.4 | Break Costs |
(a) | 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. |
(b) | Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue. |
17. | FEES |
17.1 | Commitment fee |
Midco shall pay to the Agent (for the account of each Lender) a fee in euro in relation to Euro Denominated Facilities, in sterling in relation to Sterling Denominated Facilities and in the Base Currency in relation to a Revolving Facility, computed at the rate of:
(i) | in respect of Revolving Facility 1, 40 per cent. of the Margin in relation to Revolving Facility 1 Loans on that Lenders Available Commitment under Revolving Facility 1 on and from the date of this Agreement until the end of the Availability Period applicable to Revolving Facility 1; |
(ii) | in respect of Revolving Facility 2, 40 per cent. of the Margin in relation to Revolving Facility 2 Loans on that Lenders Available Commitment under Revolving Facility 2 on and from the 2015 Effective Date until the end of the Availability Period applicable to Revolving Facility 2; and |
(iii) | in respect of any Additional Facility, as determined in accordance with the terms of any Additional Facility Notice, |
provided that no such fee shall accrue or be payable in respect of Facility B1, Facility B2, Facility C1, Facility C2 or Facility C3.
The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the relevant Availability Period, on the last day of the relevant Availability Period and on the cancelled amount of the relevant Lenders Commitment at the time
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the cancellation is effective (or, in the case of an Additional Facility Loan, at such other times and/or (as the case may be) for such other periods as determined in accordance with the terms of any Additional Facility Notice). |
17.2 | Arrangement fee |
(a) | Subject to a Utilisation being made under this Agreement, Midco shall pay to the Arrangers an arrangement fee in the amount and at the times agreed in a Fee Letter. |
(b) | Subject to a Utilisation being made under this Agreement, Midco shall pay to the Facility C3 Arrangers the fees in the amount and at the times agreed in the Fee Letter referred to in paragraph (b)(i) of the definition of Fee Letter. |
17.3 | Agency fee |
Subject to a Utilisation being made under this Agreement, Midco shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
17.4 | Fees payable in respect of Letters of Credit |
(a) | Each Borrower shall pay to the Agent for the account of the Issuing Bank a fronting fee at the rate of 0.125 per cent. per annum on the outstanding amount which is counter -indemnified by the other Lenders of each Letter of Credit requested by it for the period from the issue of that Letter of Credit until its Expiry Date. |
(b) | Each Borrower shall pay to the Agent (for the account of each Lender) a Letter of Credit fee (computed at the rate per annum equal to the Margin applicable to a Revolving Facility Loan) on the outstanding amount of each Letter of Credit requested by it for the period from the issue of that Letter of Credit until its Expiry Date. This fee shall be distributed according to each Lenders L/C Proportion of that Letter of Credit. |
(c) | The accrued fronting fee and Letter of Credit fee on a Letter of Credit set out in paragraphs (a) and (b) above, respectively, shall be payable on the last day of each successive period of three Months (or such shorter period as shall end on the Expiry Date for that Letter of Credit) starting on the date of issue of that Letter of Credit. The accrued fronting fee and Letter of Credit fee are also payable to the Agent on the cancelled amount of any Lenders Revolving Facility Commitment at the time the cancellation is effective if that Commitment is cancelled in full and the Letter of Credit is prepaid or repaid in full. |
(d) | If a Borrower cash covers any part of a Letter of Credit then: |
(i) | no fronting fee shall be payable to the Issuing Bank (but the Letter of Credit fee shall be payable for the account of each Lender but calculated, for this purpose, at the rate of 50 per cent. of the Margin applicable to a Revolving Facility) until the expiry of the Letter of Credit; and |
(ii) | each Borrower will be entitled to withdraw the interest accrued on the cash cover to pay the fees set out in paragraph (i) above. |
17.5 | Interest, commission and fees on Ancillary Facilities |
The rate and time of payment of interest, commission, fees and any other remuneration (the Ancillary Charges ) in respect of each Ancillary Facility shall be determined by agreement between the relevant Ancillary Lender and the Borrower of that Ancillary Facility based upon normal market rates and terms.
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17.6 | Call premium |
(a) | If any Re-pricing Event occurs: |
(i) | in respect of any Facility other than Facility C3, at any time during the period from (and including) the 2015 Effective Date to (and including) the date falling twelve Months after the 2015 Effective Date, Midco shall pay to the Agent on the date of such Re-pricing Event (for the account of each Lender whose participations in Utilisations under any such Facility are the subject of the relevant Re -pricing Event); and |
(ii) | in respect of Facility C3, at any time during the period from (and including) the Second 2015 Effective Date to (and including) the date falling six Months after the Second 2015 Effective Date, Midco shall pay to the Agent on the date of such Re -pricing Event (for the account of each Lender whose participations in Utilisations under Facility C3 are the subject of the relevant Re-pricing Event), |
in each case, a fee (a Call Premium ) in an aggregate amount equal to one per cent. of that Lenders participation in those Utilisations which are subject to that Re-pricing Event.
(b) | In this Clause: |
Re-pricing Event means:
(i) | any prepayment or repayment of any Utilisation with the proceeds of, or any conversion or rollover of Utilisations into, any new, additional or replacement, securities, issuance, facility, tranche or commitment (or any increase in any securities, issuance, facility, tranche or commitment) the all-in yield of which as of the date of establishment (including any original issue discount payable (with such original issue discount being equated to interest based on an assumed three year life to maturity) but excluding any arrangement, structuring or other upfront fees and any prepayment fees payable in connection therewith) is lower than the all-in yield (calculated on the same basis) applicable to the relevant Facility in respect of which the relevant Utilisation to be prepaid or repaid (or, as applicable, converted or rolled -over) relates as of the date of establishment of the relevant new, additional or replacement, securities, issuance, facility, tranche or commitment (or increase in any securities, issuance, facility, tranche or commitment); or |
(ii) | any amendment to any Finance Document the effect of which is to reduce the all-in yield applicable to any Facility (in each case, calculated on a consistent basis and excluding any arrangement, structuring or other upfront fees and any prepayment fees payable in connection therewith or consequent thereon), |
but in each case excluding any prepayment, repayment or amendment in connection with a Change of Control.
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SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
18. | TAX GROSS-UP AND INDEMNITIES |
18.1 | Definitions |
(a) | In this Agreement: |
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:
(i) | a Lender (other than a Lender within paragraph (ii) below) which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is: |
(A) | a Lender: |
(1) | which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document; or |
(2) | 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 which is within the charge to United Kingdom corporation tax in respect of any payments made in respect of that advance, |
(B) | a Lender which is: |
(1) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(2) | a partnership, each member of which is: |
(a) | a company so resident in the United Kingdom; or |
(b) | 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 |
(3) | 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 |
(C) | a Treaty Lender; or |
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(ii) | a Lender that 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:
(i) | a company resident in the United Kingdom for United Kingdom tax purposes; or |
(ii) | a partnership each member of which is: |
(A) | a company so resident in the United Kingdom; or |
(B) | 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 |
(iii) | 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 18.2 ( Tax gross-up ) or a payment under Clause 18.3 ( Tax indemnity ).
Treaty Lender means a Lender which:
(i) | is treated as a resident of a Treaty State for the purposes of the Treaty; |
(ii) | does not carry on a business in the jurisdiction of incorporation of the respective Obligor through a permanent establishment with which that Lenders participation in the Loan is effectively connected; and |
(iii) | fulfils any other condition which must be fulfilled under the double taxation agreement by residents of the Treaty State for such resident to obtain exemption from taxation on interest in the Obligors Relevant Jurisdiction, subject to the completion of procedural formalities. |
Treaty State means a jurisdiction having a double taxation agreement (a Treaty ) with the jurisdiction of incorporation of the relevant Obligor which makes provision for full exemption from tax imposed by the jurisdiction of incorporation of the relevant Obligor on interest.
UK Non-Bank Lender means:
(i) | where a Lender becomes a Party on the day on which this Agreement is entered into or is an Exchange Lender, a Lender which gives a Tax Confirmation to the Agent or Midco (either in connection with this Agreement or the Existing Senior Facilities Agreement or (in the case of an Exchange Lender) in the Exchange Certificate executed by it) or which is treated as a UK Non-Bank Lender for the purposes of the Existing Senior Facilities Agreement; |
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(ii) | where a Lender becomes a Party after the day on which this Agreement is entered into, a Lender which gives a Tax Confirmation in the Transfer Certificate and Lender Accession Undertaking or the Lender Accession Notice which it executes on becoming a Party. |
Unless a contrary indication appears, in this Clause 18 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination.
18.2 | Tax gross-up |
(a) | Subject to Clause 18.8 ( Tax gross-up by Guarantors ), each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. |
(b) | Midco 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 Agent accordingly. Similarly, a Lender or Issuing Bank shall notify the Agent on becoming so aware in respect of a payment payable to that Lender or Issuing Bank. If the Agent receives such notification from a Lender or Issuing Bank it shall promptly notify Midco 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. |
(d) | An Obligor is not required to make an increased payment to a Lender under paragraph (c) above for a Tax Deduction in respect of Tax imposed by the respective Obligors Relevant Jurisdiction from a payment of, 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 it was 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 (or, in the case of an Exchange Lender, the date such Exchange Lender became a lender under the Existing Senior Facilities Agreement) in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or concession of any relevant taxing authority; |
(ii) | the relevant Lender is a Qualifying Lender solely under paragraph (i)(B) of the definition of Qualifying Lender; and |
(A) | the Board of HM Revenue and Customs has given (and not revoked) a direction (a Direction ) under section 931 of the ITA which relates to that payment and that Lender has received from that Obligor or Midco a certified copy of that Direction; and |
(B) | the payment could have been made to the Lender without any Tax Deduction in the absence of that Direction; or |
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(iii) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (i)(B) of the definition of Qualifying Lender and; |
(A) | the relevant Lender has not given a Tax Confirmation to Midco; and |
(B) | the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to Midco, on the basis that the Tax Confirmation would have enabled Midco to have formed a reasonable belief that the payment was an excepted payment for the purpose of section 930 of the ITA; |
(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 (g) below; or |
(v) | the relevant Lender is a Treaty Lender and the relevant Obligor is incorporated in the United Kingdom and it has not received a direction (other than that of a provisional nature) from HM Revenue and Customs which is in full force and effect entitling the relevant Obligor to make such payment to that Lender without deducting United Kingdom Tax. |
(e) | 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. |
(f) | 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 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. |
(g) | 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 (including the filing of any relevant tax forms prior to the end of an Interest Period). |
(h) | A UK Non-Bank Lender shall promptly notify Midco and the Agent if there is any change in the position from that set out in the Tax Confirmation given by it. |
(i) | A Guarantor shall only be obliged to make a payment for or on account of a Tax Deduction if that payment would have been required to be made by the respective Obligor on the underlying liability. |
18.3 | Tax indemnity |
(a) | Subject to Clause 18.8 ( Tax gross-up by Guarantors ), each Obligor shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party 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. |
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(b) | Paragraph (a) above shall not apply: |
(i) | 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; |
(B) | under the law of the jurisdiction in which that Finance Partys Facility Office is located in respect of amounts received or receivable in that jurisdiction; or |
(C) | 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 |
(ii) | to the extent a loss, liability or cost: |
(A) | is compensated for by an increased payment under Clause 18.2 ( Tax gross-up ); |
(B) | would have been compensated for by an increased payment under Clause 18.2 ( Tax gross-up ) but was not so compensated solely because one of the exclusions in paragraph (d) of Clause 18.2 ( Tax gross-up ) applied; |
(C) | where the relevant Finance Party is a Lender, to the extent such loss, liability or cost would not have been suffered if the relevant Finance Party was a Qualifying Lender, but on the relevant date that Finance Party 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 (or in the case of an Exchange Lender, the date such Exchange Lender became an lender under the Existing Senior Facilities Agreement) in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or concession of any relevant taxing authority; 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 Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify Midco (or the relevant Obligor). |
(d) | A Protected Party shall, on receiving a payment from an Obligor under this Clause 18.3, notify the Agent. |
18.4 | Tax Credit |
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
(a) | a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part or to that Tax Payment; and |
(b) | that Finance Party has obtained, utilised and retained 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.
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18.5 | Lender status confirmation |
Each Lender which becomes a Party to this Agreement after the Closing Date shall state, in the Transfer Certificate and Lender Accession Undertaking or the Lender Accession Notice which it executes on becoming a party (or, if it becomes a Lender pursuant to an assignment, in a notice delivered to Midco), which of the following categories it falls into:
(a) | a Qualifying Lender (other than a Treaty Lender); or |
(b) | a Treaty Lender. |
If a New Lender does not provide information as to its status in accordance with this Clause 18.5 then such New Lender shall be treated for the purposes of this Agreement as if it is not a Qualifying Lender until such time as it provides such information.
18.6 | Stamp taxes |
(a) | Midco shall pay and, within three Business Days of demand, indemnify each Finance Party and Arranger (or Facility C3 Arranger, as applicable) against any cost, loss or liability that the Finance Party or Arranger (or Facility C3 Arranger, as applicable) incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document, provided that this Clause 18.6 shall not apply in respect of any stamp duty, registration and other similar Taxes which are payable in respect of an assignment, transfer or other alienation of any kind by a Lender of any its rights and/or obligations under a Finance Document. |
(b) | The Parties hereto agree that no Party shall bring, send to or otherwise produce in Austria (i) an original copy, notarised copy, certified copy or a substitute documentation ( Ersatzbeurkundung und/oder rechtsbezeugende Beurkundung ) of any Finance Document or other document which refers to any Finance Document, or (ii) a copy of any Finance Document or other document which refers to any Finance Document signed or endorsed by one or more Parties (the Stamp Duty Sensitive Documents ); in addition, the Parties hereto agree that no Party shall send (iii) Stamp Duty Sensitive Documents to an Austrian addressee by fax, (iv) any e -mail communication to which an electronic scan copy (e.g. pdf or tif) of a Stamp Duty Sensitive Document is attached to an Austrian addressee or (v) any e -mail communication carrying an electronic or digital signature which refers to a Stamp Duty Sensitive Document to an Austrian addressee other than in the event that: |
(i) | this does not cause a liability of a Party to pay stamp duty or other Tax in Austria; |
(ii) |
a Party wishes to enforce any of its rights under or in connection with such Finance Document in Austria and is only able to do so (including, without limitation, for reason of any objection or defence raised by an Obligor or a Guarantor in any form of proceedings in Austria) by bringing, sending to or otherwise producing in Austria (1) an original copy, notarised copy or certified copy of the relevant Finance Document or other document which refers to any Finance Document or (2) a copy of any Finance Document or other document which refers to any Finance Document signed or endorsed by one or more Party and it would not be sufficient for that Party to bring, send to or otherwise produce in Austria a simple copy (a copy which is not an original copy, notarised copy or certified copy) of the relevant Finance Document or other document which refers to any Finance Document for the purposes of such enforcement; in furtherance of the foregoing, a Party shall (I) not object to the introduction into evidence of an uncertified copy of any Finance |
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Document or other document which refers to any Finance Document or raise a defence to any action or to the exercise of any remedy on the basis of an original or certified copy of any Finance Document or other document which refers to any Finance Document not having been introduced into evidence, unless such uncertified copy actually introduced into evidence does not accurately reflect the content of the original document and (II) if such Party is a party to the proceedings before such Austrian court or authority, stipulate as to the accuracy ( Echtheit ) of an uncertified copy of any such Finance Document or other document which refers to any Finance Document, unless such uncertified copy actually introduced into evidence does not accurately reflect the content of the original document; or |
(iii) | a Party is required by law, governmental body, court, authority or agency pursuant to any law or legal requirement, to bring an original or certified copy of any Finance Document or other document which refers to any Finance Document into Austria. |
(c) | If and to the extent that a breach by any Party of any obligation under paragraph (b) of this Clause 18.6 results in any cost, loss or liability being incurred by any of the other Parties in relation to any Austrian stamp duty payable in respect to any Finance Document, the Party responsible for such breach shall pay and indemnify such other Parties against any such cost, loss or liability which such other Parties incur as a consequence of such breach, provided that a Finance Party shall only be liable where such cost, loss or liability is incurred as a result of its gross negligence or wilful misconduct. |
18.7 | Value added tax |
(a) | All amounts set out in 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 VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply, and, accordingly, subject to paragraph (c) below, if VAT is chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party). |
(b) | If VAT is 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 (the Relevant Party ) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the a mount of such VAT. The Recipient will promptly pay to the Relevant Party an amount equal to any credit or repayment from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply. |
(c) | Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Finance Party against all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that neither it nor any other member of any group of which it is a member for VAT purposes is entitled to credit or repayment from the relevant tax authority in respect of the VAT. |
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18.8 | Tax gross-up by Guarantors |
A Guarantor shall not be required to make an additional payment under Clause 18.2 ( Tax gross- up ) or Clause 18.3 ( Tax indemnity ) in respect of a Guarantee Payment Amount to the extent that the Borrower which is principally liable for the amounts which constitute the Guarantee Payment Amount would not be required to make an additional payment under Clause 18.2 ( Tax gross-up ) or Clause 18.3 ( Tax indemnity ) if it were to make payment of the Guarantee Payment Amount in place of the relevant Guarantor and, if required to make such payment, the Guarantor would only be liable to the same extent as such Borrower. For the purposes of this Clause 18.8, Guarantee Payment Amount means any amount for which a Guarantor is liable pursuant to the operation of Clause 23 ( Guarantee and indemnity ).
18.9 | 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 (including its applicable passthru payment percentage or other information required under the US Treasury Regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Partys compliance with FATCA. |
(b) | If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes 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 its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then: |
(i) | if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such Party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and |
(ii) | if that Party failed to confirm its applicable passthru payment percentage then such Party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable passthru payment percentage is 100%, |
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until (in each case) 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 where the Agent reasonably believes that its obligations under FATCA require it, each Lender shall, within ten Business Days of: |
(i) | where a Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement; |
(ii) | where the Borrower is a US Tax Obligor and the relevant Lender is an Exchange Lender, the Closing Date; |
(iii) | where a Borrower is a US Tax Obligor and the relevant Lender is a New Lender, the relevant Transfer Date; |
(iv) | where a Borrower is a US Tax Obligor and the relevant Lender is an Original Facility C3 Lender, the Second 2015 Effective Date; |
(v) | the date a new US Tax Obligor accedes as a Borrower; or |
(vi) | where the Borrower is not a US Tax Obligor, the date of a request from the Agent, |
supply to the Agent:
(i) | a withholding certificate on Form W -8 or Form W-9 (or any successor form) (as applicable); or |
(ii) | any withholding statement and other documentation, authorisations and waivers as the Agent may require to certify or establish the status of such Lender under FATCA. |
(f) | The Agent shall provide any withholding certificate, withholding statement, documentation, authorisations and waivers it receives from a Lender pursuant to paragraph (e) above to the Borrower and shall be entitled to rely on any such withholding certificate, withholding statement, documentation, authorisations and waivers provided without further verification. The Agent shall not be liable for any action taken by it under or in connection with this paragraph (f). |
(g) | Each Lender agrees that if any withholding certificate, withholding statement, documentation, authorisations and waivers provided to the Agent pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, it shall promptly update such withholding certificate, withholding statement, documentation, authorisations and waivers or promptly notify the Agent in writing of its legal inability to do so. The Agent shall provide any such updated withholding certificate, withholding statement, documentation, authorisations and waivers or a copy of any such notification to the Borrower. The Agent shall not be liable for any action taken by it under or in connection with this paragraph (g). |
18.10 | 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 Midco, the Agent and the other Finance Parties. |
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19. | INCREASED COSTS |
19.1 | Increased Costs |
(a) | Subject to Clause 19.3 ( Exceptions ), Midco shall, within three Business Days of a demand by the 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 or (ii) compliance with any law or regulation made after the date of this Agreement. |
(b) | In this Agreement Increased Costs means: |
(i) | a reduction in the rate of return from a Facility or on a Finance Partys (or its Affiliates) overall capital; |
(ii) | an additional or increased cost; or |
(iii) | a reduction of any amount due and payable under any Finance Document, |
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 an Ancillary Commitment or funding or performing its obligations under any Finance Document or Letter of Credit.
19.2 | Increased Cost claims |
(a) | A Finance Party intending to make a claim pursuant to Clause 19.1 ( Increased Costs ) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify Midco. |
(b) | Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs. |
19.3 | Exceptions |
(a) | Clause 19.1 ( Increased Costs ) does not apply to the extent any Increased Cost is: |
(i) | attributable to a Tax Deduction required by law to be made by an Obligor; |
(ii) | attributable to a FATCA Deduction required by law to be made by a Party; |
(iii) | compensated for by Clause 18.3 ( Tax indemnity ) (or would have been compensated for under Clause 18.3 ( Tax indemnity ) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 18.3 ( Tax indemnity ) applied); or |
(iv) | attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation. |
20. | OTHER INDEMNITIES |
20.1 | 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 |
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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; or |
(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 Arranger, Facility C3 Arranger and each other Finance Party to whom that Sum is due against any cost, loss or liability arising 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. |
20.2 | Other indemnities |
Midco shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Arranger, each Facility C3 Arranger and each other Finance Party against (i) any Break Costs of any Lender that arise as a result of any condition to any prepayment and/or cancellation of any Facility as specified in any notice of prepayment and/or cancellation given by Midco under Clause 11.3 ( Cancellation ), Clause 11.4 (V oluntary prepayment of Term Loans ) and/or Clause 11.5 ( Voluntary prepayment of Revolving Facility Utilisations ) not being satisfied and the corresponding prepayment and/or cancelation not being made (or not being made in full) on the date specified in such notice, and (ii) any cost, loss or liability incurred by it as a result of:
(a) | the occurrence of any Event of Default; |
(b) | 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 34 ( Sharing among the Finance Parties ); |
(c) | funding, or making arrangements to fund, its participation in a Utilisation 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); |
(d) | issuing or making arrangements to issue a Letter of Credit requested by Midco or a Borrower in a Utilisation Request, but not issued by reason of the operation of any one or more of the provisions of this Agreement; or |
(e) | a Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice of prepayment given by a Borrower or Midco. |
20.3 | Indemnity to the Agent |
Midco shall promptly indemnify the Agent against any reasonable cost, loss or liability incurred by the Agent (acting reasonably) as a result of:
(a) | investigating any event which it reasonably believes is a Default; |
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(b) | entering into or performing any foreign exchange contract for the purposes of paragraph (b) of Clause 35.9 ( Change of currency ); or |
(c) | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised. |
20.4 | Transaction indemnity |
Midco shall promptly indemnify each Arranger, each Facility C3 Arranger, each of the Agent and the Security Agent, and each of their respective Affiliates, and each officer or employee of any such person, against any reasonable cost, loss or liability incurred by an Arranger and/or the Facility C3 Arranger and/or the Agent and/or the Security Agent, or any of their respective Affiliates (or officer or employee of any such person) in connection with or arising out of the transactions contemplated by this Agreement, the 2015 SFA Amendment and Restatement Agreement, the Second 2015 SFA Amendment and Restatement Agreement, the Intercreditor Agreement or any other Finance Document, unless such loss or liability is caused by the gross negligence or wilful misconduct of that Arranger or Facility C3 Arranger or Agent or Security Agent or its Affiliate.
Any Affiliate or any officer or employee of an Arranger, Facility C3 Arranger, Agent or Security Agent or any of their Affiliates may rely on this Clause 20.4.
21. | MITIGATION BY THE LENDERS |
21.1 | Mitigation |
(a) | Each Finance Party shall, in consultation with Midco, 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 11.1 ( Illegality ) (or, in respect of the Issuing Bank, Clause 11.2 ( Illegality in relation to an Issuing Bank )), Clause 18 ( Tax gross-up and indemnities ) or Clause 19.1 ( 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. |
21.2 | Limitation of liability |
(a) | Midco 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 21.1 ( Mitigation ). |
(b) | A Finance Party is not obliged to take any steps under Clause 21.1 ( Mitigation ) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it in any material respect. |
22. | COSTS AND EXPENSES |
22.1 | Transaction expenses |
Midco shall, within 20 Business Days of demand, pay the Agent, the Arrangers, the Facility C3 Arrangers, the Issuing Bank and the Security Agent the amount of all reasonable legal costs and expenses (but, for the avoidance of doubt, no other costs or expenses) reasonably incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with the negotiation, preparation, perfection and syndication of:
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(a) | the Finance Documents and any other documents referred to in this Agreement, the 2015 SFA Amendment and Restatement Agreement, the Second 2015 SFA Amendment and Restatement Agreement, the Intercreditor Agreement and the Transaction Security; and |
(b) | any other Finance Documents executed after the date of this Agreement. |
22.2 | Amendment costs |
If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 35.9 ( Change of currency ), Midco shall, within three Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all reasonable costs and expenses (including legal fees) incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.
22.3 | Enforcement and preservation costs |
Midco shall, within three Business Days of demand, pay to each Arranger, each Facility C3 Arranger and each other Finance Party the amount of all costs and expenses (including legal fees) incurred by it in connection with the enforcement of or, after a Declared Default or an RCF Declared Default, the preservation of any rights under any Finance Document and the Transaction Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Transaction Security or enforcing these rights.
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SECTION 7
GUARANTEE
23. | GUARANTEE AND INDEMNITY |
23.1 | Guarantee and indemnity |
Each Guarantor irrevocably and unconditionally, jointly and severally:
(i) | guarantees to each Finance Party punctual performance by each other Obligor of all that Obligors obligations under the Finance Documents; |
(ii) | undertakes with each Finance Party that, whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and |
(iii) | indemnifies each Finance Party immediately on demand against any cost, loss or liability suffered by that Finance Party if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Finance Party would otherwise have been entitled to recover. |
23.2 | 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.
23.3 | Reinstatement |
If any payment by an Obligor or any discharge given by a Finance Party (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is avoided or reduced as a result of insolvency or any similar event:
(a) | the liability of each Obligor shall continue as if the payment, discharge, avoidance or reduction had not occurred; and |
(b) | each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, avoidance or reduction had not occurred. |
23.4 | Waiver of defences |
The obligations of each Guarantor under this Clause 23 will not be affected by an act, omission, matter or thing which, but for this Clause 23, would reduce, release or prejudice any of its obligations under this Clause 23 (without limitation and whether or not known to it or any Finance Party), including:
(a) | any time, waiver or consent granted to, or composition with, any Obligor or other person; |
(b) | 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; |
(c) | 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; |
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(d) | 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; |
(e) | any amendment, novation, supplement, extension (whether of maturity or otherwise) or restatement (however fundamental and of whatsoever nature) or replacement of a Finance Document or any other document or security; |
(f) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or |
(g) | any insolvency or similar proceedings. |
23.5 | Guarantor intent |
(a) | Without prejudice to the generality of Clause 23.4 ( Waiver of defences ), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purpose of or in connection with any of the following: acquisitions of any nature, increasing working capital, enabling investor distributions to be made, carrying out restructurings, refinancing existing facilities, refinancing any other indebtedness, making facilities available to new borrowers, any other variation or extension of the purposes for which any facility or amount might be made available from time to time, and any fees, costs and/or expenses associated with any of the foregoing. |
(b) | Notwithstanding any other provision of the Finance Documents the guarantee and indemnity granted by a Guarantor incorporated in Austria (an Austrian Guarantor ), is meant to be and shall be interpreted as abstract guarantee ( abstrakter Garantievertrag ) and the obligations of such Austrian Guarantor shall be obligations as principal debtor and not as surety ( Bürgschaft ) and not as a joint obligation as a borrower ( Mitschuldner ) and such Austrian Guarantor undertakes to pay the amounts so demanded under or pursuant to this guarantee and indemnity unconditionally, irrevocably, upon first demand and without raising any defences or objections, set-off or counterclaim and without verification of the legal ground ( unbedingt, unwiderruflich, auf erste Aufforderung und unter Verzicht auf alle Einwendungen oder Einreden, ohne Aufrechnung oder die Geltendmachung von Gegenforderungen und ohne Prüfung des Rechtsgrunds ). |
23.6 | Immediate recourse |
Each 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 that Guarantor under this Clause 23. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
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23.7 | 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 no Guarantor shall be entitled to the benefit of the same; and |
(b) | hold in an interest-bearing suspense account any money received from any Guarantor or on account of any Guarantors liability under this Clause 23. |
23.8 | Deferral of Guarantors 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 Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:
(a) | to be indemnified by an Obligor; |
(b) | to claim any contribution from any other guarantor of any Obligors 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 any Guarantor has given a guarantee, undertaking or indemnity under Clause 23.1 ( 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 a 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 Agent or as the Agent may direct for application in accordance with Clause 35 ( Payment mechanics ).
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23.9 | Release of Guarantors right of contribution |
If any Guarantor (a Retiring Guarantor ) ceases to be a Guarantor in accordance with the terms of this Agreement and the Intercreditor Agreement for the purpose of any sale or other disposal of that Retiring Guarantor then, on the date such Retiring Guarantor ceases to be a Guarantor:
(a) | that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent ) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and |
(b) | each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents 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 any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor. |
23.10 | Additional security |
This guarantee is in addition to and not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
23.11 | Limitations on obligations of German Guarantors |
In relation to each Guarantor incorporated in the Federal Republic of Germany in the form of a GmbH or GmbH & Co. KG (a German Guarantor ), the following limitations shall apply:
(a) | The Finance Parties agree, other than in accordance with the procedure set out in the following paragraphs of this Clause 23, not to enforce any guarantee created hereunder granted by a German Guarantor if and to the extent that such guarantee is an up-stream or cross-stream guarantee and the enforcement would otherwise lead to the situation that it would create or aggravate an existing under-balance ( Unterbilanz ) of such German Guarantor (or, in the case of a GmbH & Co. KG, of its general partner) and that such German Guarantor did not have sufficient net assets (i.e. assets minus liabilities and liability reserves ( Reinvermögen )) to maintain its (or, in the case of a GmbH & Co. KG, its general partners) stated share capital ( Stammkapital ) whereby the net assets shall be determined in accordance with applicable law at the time of the determination, provided that for the purposes of the calculation of the amount to be enforced (if any) the following balance sheet items shall be adjusted as follows: |
(i) | the amount of any increase of stated share capital of such German Guarantor (or, in the case of a GmbH & Co. KG, the stated share capital of its general partner) after the date of this Agreement which is not permitted under the Finance Documents shall be deducted from the stated share capital; |
(ii) | loans and other contractual liabilities incurred by such German Guarantor, and/or, in the case of a GmbH & Co. KG, its general partner, in violation of the provisions of any of the Finance Documents shall be disregarded to the extent that such violation results from grossly negligent or wilful misbehaviour; and |
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(iii) | to the extent payment under the guarantee would deprive a German Guarantor, or (in the case of a GmbH & Co. KG) the general partner of such German Guarantor, of the liquidity necessary to fulfil its financial liabilities to its creditors (a Liquidity Impairment ), then, for the determination of the net assets, the assets of such German Guarantor or, in the case of a GmbH & Co. KG, the assets of its general partner shall be calculated at the lesser of their book value ( Buchwert ) and their realisation value assuming a negative prognosis for the business continuance ( Liquidationswert bei negativer Fortführungsprognose ). |
(b) | The limitations set out in the preceding paragraph shall only apply if and to the extent that (i) within 15 Business Days following the making of a demand against a German Guarantor under the guarantee created hereunder the relevant German Guarantor has confirmed in writing to the Agent (x) to what extent the guarantee is an up-stream or cross-stream guarantee as described in paragraph (a) above and (y) which amount of such cross-stream and/or up-stream guarantee cannot be enforced as it would cause the net assets of such German Guarantor or, in the case of a GmbH & Co. KG, its general partner to fall below its stated share capital or create or aggravate an existing under-balance of such German Guarantor (or, in the case of a GmbH & Co. KG, of its general partner) (taking into account the adjustments set out in paragraph (a) above) (the Management Determination ); and (ii) if the Agent (acting on the instructions of the Majority Lenders) contests the Management Determination (arguing that no or a lesser amount would be necessary to maintain the stated share capital or to avoid the creation or aggravation of an existing under-balance of such German Guarantor (or, in the case of a GmbH & Co. KG, of its general partner)), within 40 Business Days of the date the Agent has notified the respective German Guarantor that the Majority Lenders have contested the Management Determination, the Agent receives a determination by auditors of international standard and reputation (the Auditors Determination ) appointed by the German Guarantor of the amount that would have been necessary on the date the demand under the guarantee was made to maintain its or its general partners stated share capital or to avoid the creation or aggravation of an existing under-balance of such German Guarantor (or, in the case of a GmbH & Co. KG, of its general partner). |
(c) | If the Agent acting on the instructions of the Majority Lenders disagrees with the Auditors Determination, it shall notify the respective German Guarantor accordingly. The Finance Parties shall only be entitled to enforce the guarantee up to the amount which is undisputed between themselves and the respective German Guarantor in accordance with the provisions of paragraph (b) above. In relation to the amount which is disputed by the Majority Lenders, the Finance Parties shall be entitled to further pursue their claims under this guarantee (if any) in court but shall bear the burden of proof that the Auditors Determination is incorrect; it being understood, for the avoidance of doubt, that the respective German Guarantor shall not be obliged to pay such further amount claimed by the Finance Parties on demand. |
(d) |
If the guarantee was enforced without limitation because the Management Determination and/or the Auditors Determination (as the case may be) was not delivered within the |
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relevant timeframe, the Finance Parties shall repay to the respective German Guarantor any amount which is necessary to maintain its stated share capital or, in the case of a GmbH & Co. KG, that of its general partner or to avoid the creation or aggravation of an existing under-balance of such German Guarantor (or, in the case of a GmbH & Co. KG, of its general partner), calculated as of the date the demand under the guarantee was made and in accordance with paragraph (a) above. |
(e) | In the case that any German Guarantor claims in accordance with the provisions of paragraphs (b) and (d) above that the guarantee granted hereunder can only be enforced in a limited amount (as set out above), the relevant German Guarantor (or, in the case of a GmbH & Co. KG, its general partner) shall realise any asset that is shown in the balance sheet with a book value ( Buchwert ) that is significantly lower than the market value of such asset and that can be realised to the extent legally permitted and commercially justifiable. |
(f) | The limitations set out in this Clause 23 shall apply mutatis mutandis to all payment obligations of a German Guarantor incurred under or in connection with the Finance Documents in respect of the obligations of any of its Holding Companies or Affiliates (other than any of its Subsidiaries) under or in connection with the Finance Documents (by way of indemnification or otherwise). |
(g) | The limitations set out in this Clause 23.11 do not apply if and to the extent that the German Guarantor is a party to a domination and/or profit and loss pooling agreement ( Beherrschungs- und/oder Gewinnabführungsvertrag ) as dominated entity, provided that the enforcement of the guarantee and/or other payment obligations does not lead to a violation of the capital maintenance requirement as set out in Section 30 para 1 of the German Limited Liability Companies Act ( Gesetz betreffend die Gesellschaften mit beschränkter Haftung ). |
23.12 | Limitations on obligations of Austrian Guarantors |
(a) |
To the extent that the guarantee and indemnity in this Clause 23 is given by any Austrian Guarantor, any and all obligations ( Verpflichtungen ) and liabilities ( Haftungen ) of an Austrian Guarantor under such guarantee and indemnity shall at all times be limited so that at no time the assumption of a liability ( Haftungen ) and/or obligation ( Verpflichtung ) shall be required to the extent that such liability ( Haftung ) or obligation ( Verpflichtung ) would violate Austrian capital maintenance rules ( Kapitalerhaltungsvorschriften ) pursuant to Austrian company law, in particular sections 82 et seq. of the Austrian Act on Limited Liability Companies ( Gesetz über Gesellschaften mit beschränkter Haftung ) and/or sections 52 and 65 et seq. of the Austrian Stock Corporation Act ( Aktiengesetz ) (the Austrian Capital Maintenance Rules ). Should any obligation ( Verpflichtung ) and/or liability ( Haftung ) of an Austrian Guarantor under the guarantee and indemnity in this Clause 23 violate or contradict the Austrian Capital Maintenance Rules and therefore be held invalid or unenforceable in whole or in part or should the assumption or enforcement of such obligation ( Verpflichtung ) or liability ( Haftung ) expose any managing director or member of the supervisory board of any Austrian Guarantor to personal liability or criminal responsibility, such obligation/or liability shall be deemed to be replaced by an obligation ( Verpflichtung ) and/or liability ( Haftung ) of a similar nature (i) which is in compliance with the Austrian Capital Maintenance Rules, (ii) which does not expose the managing directors or |
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members of the supervisory board of the Austrian Guarantor to any personal liability or criminal responsibility; and (iii) which provides the best possible security interest admissible in accordance with the Austrian Capital Maintenance Rules in favour of the Finance Parties. By way of example, should it be held that the guarantee and indemnity pursuant to this Clause 23 contradicts the Austrian Capital Maintenance Rules in relation to any amount of the obligations secured by such guarantee and indemnity, the guarantee and indemnity pursuant to this Clause 23 shall be reduced to such an amount which is permitted pursuant to the Austrian Capital Maintenance Rules, and potentially even to zero. |
23.13 | Limitations on obligations of Belgian Guarantors |
The Finance Parties agree that the liability of any Guarantor incorporated in Belgium (a Belgian Guarantor ) under the Finance Documents and the Senior Secured Notes Finance Documents (as defined in the Intercreditor Agreement) in relation to the Original Senior Secured Notes shall in all circumstances be limited to an amount equal to: (a) any intra-group loans or facilities made to a Belgian Guarantor by any other member of the Group (whether or not such intra-group loan is retained by the Belgian Guarantor for its own purposes or on-lent to another member of the Group); or (b) 85 per cent. of the net assets (as determined in accordance with the Belgian Companies Code and accounting principles generally accepted in Belgium, but not taking intra-group debts into account as debts) of that Belgian Guarantor calculated on the basis of the most recent audited annual accounts available at the date on which the relevant demand is made, whichever amount is higher.
23.14 | Limitations on obligations of Finnish Guarantors |
The obligations and liabilities of each Guarantor incorporated in Finland (each a Finnish Guarantor ) in its capacity as a Guarantor under the Finance Documents shall be limited if (and only if), and only to the extent they would constitute (i) unlawful financial assistance within the meaning of Chapter 13 Section 10 of the Finnish Companies Act (1.9.2006/624, as amended, the Finnish Companies Act ) or (ii) unlawful distribution of assets within the meaning of Chapter 13 Section 1 of the Finnish Companies Act and it is agreed that the liability of each Finnish Guarantor under the Finance Documents only applies to the extent permitted by the above mentioned provisions of the Finnish Companies Act.
23.15 | Limitations on obligations of Norwegian Guarantors |
Without limiting the generality of the foregoing, the obligations and liabilities of any Guarantor incorporated in Norway (each a Norwegian Guarantor ) under this Clause 23 shall be limited if (and only if) required by the mandatory provisions of the Norwegian Private Limited Liability Companies Act of 13 June 1997 No. 44 or the Norwegian Public Limited Liability Companies Act of 13 June 1997 No. 45 (as the case may be) (the Norwegian Companies Act ), including but not limited to Sections 8-7 and 8-10 cf. Sections 1-3 and 1-4, regulating unlawful financial assistance and other restrictions on a Norwegian limited liability companys capacity or ability to grant guarantees and joint and several liability, loans or security interests. It is understood that the obligations and liabilities of each Norwegian Guarantor under this Clause 23 shall always be interpreted so as to make each Norwegian Guarantor liable to the fullest extent permitted by the above provisions of the Norwegian Companies Act.
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23.16 | Limitations on obligations of Spanish Guarantors |
Notwithstanding the foregoing and any other provisions of this Agreement, the obligations and liabilities of any Spanish Guarantor under this Clause 23 or any other provision of this Agreement, shall be deemed not to be assumed by such Spanish Guarantor to the extent that they constitute or may constitute unlawful financial assistance within the meaning of article 150 of the Spanish Companies Law (where the company is a Spanish public company ( Sociedad Anónima )) or article 143 of the Spanish Companies Law (where the company is a Spanish limited liability company ( Sociedad de Responsabilidad Limitada )). Accordingly, the obligations and liabilities of any Spanish Guarantor under this Clause 23, Clause 31.4 ( Additional Guarantors ) or any other provision of this Agreement, the Intercreditor Agreement, any Accession Letter or Debtor Accession Deed (as defined in the Intercreditor Agreement) and any of the other Finance Documents shall not include and shall not be extended to any repayment obligations in respect of financing used in or towards (i) payment of or refinance of the purchase price or subscription for the shares or quotas in the Spanish Guarantor and/or the acquisition of or subscription for the shares or quotas in its controlling corporation directly or indirectly (or, where the company is a Spanish limited liability company ( Sociedad de Responsabilidad Limitada ), of any company of its group) or (ii) repaying or refinancing a financing used for the purposes stated in (i) above. Likewise, the obligations and liabilities of any Spanish Guarantor under this Clause 23, Clause 31.4 ( Additional Guarantors ) or any other provision of this Agreement, the Intercreditor Agreement, any Accession Letter or Debtor Accession Deed (as defined in the Intercreditor Agreement) and any of the other Finance Documents shall not include and shall not be extended to any obligations which could reasonably be expected to result in a breach of article 401 et seq of the Spanish Companies Law.
23.17 | Limitations on obligations of Swedish Obligors |
The obligations and liabilities of each Swedish Obligor under any Finance Document shall be limited, if (and only if) required by the mandatory provisions of the Swedish Companies Act ( Sw. Aktiebolagslag (2005:551 )) regulating:
(a) | unlawful distribution of assets and transfer of value ( Sw. värdeöverföring ) pursuant to Chapter 17, Sections 1 to 4 of the Swedish Companies Act; and |
(b) | prohibited loans, security and guarantees pursuant to Chapter 21, Section 1 to 3 of the Swedish Companies Act. |
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SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
24. | REPRESENTATIONS |
24.1 | General |
Each Obligor (unless otherwise stated below) makes the applicable representations and warranties set out in this Clause 24 on the dates set out in Clause 24.20 ( Times when representations made ) to each Finance Party.
Status, authorisations and governing law
24.2 | Status |
(a) | It and each of its Subsidiaries (which is a Material Company) is duly incorporated with limited liability and validly existing under the law of its jurisdiction of incorporation. |
(b) | It and each of its Subsidiaries (which is a Material Company) has the power to own its assets and carry on its business as it is being conducted. |
24.3 | Binding obligations |
Subject to the Legal Reservations and, in the case of paragraph (b) below, the Perfection Requirements:
(a) | the obligations expressed to be assumed by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations; and |
(b) | (without limiting the generality of paragraph (a) above) each Transaction Security Document to which it is a party creates the security interests which that Transaction Security Document purports to create and those security interests are valid and effective in all material respects. |
24.4 | Non-conflict with other obligations |
The entry into and performance by it of, and the transactions contemplated by, the Transaction Documents and the granting of the Transaction Security do not:
(a) | contravene any law or regulation applicable to it in any material respect; |
(b) | contravene its constitutional documents in any material respect; or |
(c) | breach any agreement or instrument binding upon it to an extent which has a Material Adverse Effect. |
24.5 | Power and authority |
(a) | It has the power to enter into, perform and deliver, and has taken or will have taken prior thereto all necessary action to authorise its entry into, performance and delivery of, the Transaction Documents to which it is or will be a party and the transactions contemplated by those Transaction Documents. |
(b) | No limit on its powers will be exceeded as a result of the borrowing, grant of Security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party. |
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24.6 | Validity and admissibility in evidence |
(a) | Subject to the Legal Reservations and the Perfection Requirements, all Authorisations required: |
(i) | to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party; and |
(ii) | to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions, |
have been obtained or effected and are (or will be) in full force and effect.
(b) | All Authorisations necessary for the conduct of the business, trade and ordinary activities of members of the Group have been obtained or effected and are in full force and effect if failure to obtain or effect those Authorisations has a Material Adverse Effect. |
24.7 | Governing law and enforcement |
(a) | Subject to the Legal Reservations, the choice of law by which a Finance Document (to which it is a party) is expressed to be governed will be recognised and enforced in its Relevant Jurisdictions. |
(b) | Subject to the Legal Reservations, any judgment obtained from a court expressed to have jurisdiction in relation to a Finance Document to which it is a party will be recognised and enforced in its Relevant Jurisdictions. |
No default or tax liability
24.8 | No default |
(a) | On the date of this Agreement: |
(i) | no Event of Default is continuing; and |
(ii) | no default (however defined) is continuing under any Transaction Document that is not a Finance Document which has a Material Adverse Effect. |
(b) | No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) 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 has a Material Adverse Effect. |
24.9 | Taxation |
It is not (and none of its Subsidiaries being a Material Company is) overdue (taking into account any extension or grace period) in the filing of any Tax returns to an extent which has or would have a Material Adverse Effect.
Provision of informationgeneral
24.10 | No misleading information |
(a) | To the best of its knowledge and belief, all factual information contained in the Offering Memorandum in relation to the Group and its holding companies is true and accurate in all material respects as at the date thereof or (as the case may be) as at the date the information is expressed to be given. |
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(b) | The expressions of opinion or intention provided in the Offering Memorandum were made after careful consideration and were based on assumptions believed by Midco to be reasonable as at the date they were provided or as at the date (if any) they were stated. |
(c) | To the best of its knowledge and belief, no information relating to the Group or its holding companies has been omitted from the Offering Memorandum and no such information has been withheld that results in the Offering Memorandum (taken as a whole) being untrue or misleading in any material respect as at its stated date. |
24.11 | Financial Statements |
(a) | The Original Financial Statements were prepared in accordance with the Accounting Principles consistently applied. |
(b) | The most recent financial statements delivered pursuant to Clause 25 ( Information undertakings ): |
(i) | have been prepared in accordance with the Accounting Principles as applicable at the date of such financial statements; and |
(ii) | give a true and fair view of (if audited) or (if unaudited) fairly present in all material respects (having regard to the fact that financial statements which are not audited are prepared for management purposes) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate. |
No proceedings or breach of laws
24.12 | No proceedings pending or threatened |
No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which are likely to be adversely determined and, if adversely determined, would have a Material Adverse Effect, have been started or (to the best of its knowledge or belief) threatened against it or any of its Subsidiaries.
24.13 | No breach of laws |
It has not breached any law or regulation, which breach would have a Material Adverse Effect.
24.14 | Environmental Laws |
(a) | Each member of the Group is in compliance with Clause 27.3 ( Environmental compliance ) and no circumstances have occurred which would prevent such compliance in a manner or to an extent which would have a Material Adverse Effect. |
(b) | No Environmental Claim has been commenced or is threatened against any member of the Group where that claim would have, if determined against that member of the Group, a Material Adverse Effect. |
Ownership of assets
24.15 | Legal and beneficial ownership |
(a) | So far as it is aware, it (and, in the case of each of its Subsidiary, that Subsidiary) is the sole legal and beneficial owner of the shares and assets over which it purports to grant Transaction Security. |
(b) | So far as it is aware, it (and, in the case of each of its Subsidiary, that Subsidiary) has good title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted, in each case to the extent that the absence thereof would have a Material Adverse Effect. |
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24.16 | Intellectual Property |
(a) | It: |
(i) | is the sole legal and beneficial owner of or has licensed to it all the Intellectual Property which is material in the context of its business and which is required by it in order to carry on its business as it is being conducted; |
(ii) | does not, in carrying on its business, infringe any Intellectual Property of any third party where such infringement would have a Material Adverse Effect; and |
(iii) | has taken all formal or procedural actions (including payment of fees) required to maintain any Intellectual Property owned by it save to the extent that failure to do so would not have a Material Adverse Effect. |
(b) | So far as it is aware, there are no adverse circumstances relating to the validity, subsistence or use of any of its or its Subsidiaries Intellectual Property which would have a Material Adverse Effect. |
Provision of informationGroup
24.17 | Holding Companies |
Neither Finco, Midco, Bondco nor Bidco has traded or incurred any liabilities or commitments (actual or contingent, present or future), other than (i) in the case of Finco acting as a Holding Company of Midco and in the case of Midco acting as a Holding Company of Bidco and (ii) any Permitted Holding Company Activity.
24.18 | Group Structure Chart |
The Group Structure Chart delivered to the Agent pursuant to Clause 4.1 ( Conditions precedent ) shows all members of the Group (other than any dormant companies) and is true, accurate and complete in all material respects.
24.19 | Dutch representations |
(a) | No notice under Article 36 of the Tax Collection Act ( Invorderingswet 1990 ) has been given by any Dutch Obligor. |
(b) | The centre of main interests of each Dutch Obligor (as referred to in Council Regulation (E C) No. 1346/2000 of 29 May 2000 on insolvency proceedings) is located in the Netherlands. |
(c) | Each Dutch Obligor is in compliance with the Dutch Financial Supervision Act and any regulations issued pursuant thereto. |
24.20 | Times when representations made |
(a) | All the representations and warranties in this Clause 24 are made by each Obligor on the date of this Agreement. |
(b) | The representations and warranties set out in Clause 24.11 ( Financial Statements ) are deemed to be made by each Obligor on the date of delivery of the relevant financial statements. |
(c) | The Repeating Representations are deemed to be made by each Obligor on the date of each Utilisation Request and on each Utilisation Date. |
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(d) | The Repeating Representations are deemed to be made by each Additional Obligor on the day on which it becomes (or it is proposed that it becomes) an Additional Obligor. |
(e) | Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances existing at the date the representation or warranty is deemed to be made. |
25. | INFORMATION UNDERTAKINGS |
The undertakings in this Clause 25 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.
In this Clause 25:
Annual Financial Statements means the financial statements for a Financial Year delivered pursuant to paragraph (a)(i) of Clause 25.1 ( Financial statements ) or, as the case may be (other than for the purposes of Clause 25.3 ( Requirements as to financial statements )), Clause 25.4 ( Alternative reporting ).
Quarterly Financial Statements means the financial statements delivered pursuant to paragraph (b) of Clause 25.1 ( Financial statements ) or, as the case may be (other than for the purposes of Clause 25.3 ( Requirements as to financial statements )), Clause 25.4 ( Alternative reporting ).
25.1 | Financial statements |
Subject to Clause 25.4 ( Alternative reporting ), Midco shall supply to the Agent in sufficient copies for all the Lenders:
(a) | as soon as they are available, but in any event: |
(i) | within 120 days after the end of each of its Financial Years, Topcos audited consolidated financial statements for that Financial Year; and |
(ii) | within any statutory time period allowed for the preparation thereof and only if requested by the Agent, the financial statements (consolidated if appropriate) of each Borrower for that Financial Year (if available or required by law to be prepared); and |
(b) | as soon as they are available, but in any event within 60 days of the end of each Financial Quarter, Topcos financial statements, on a consolidated basis for that Financial Quarter. |
25.2 | Provision and contents of Compliance Certificate |
(a) | Midco shall supply a Compliance Certificate to the Agent with: |
(i) | each set of Annual Financial Statements; and |
(ii) | each set of Quarterly Financial Statements. |
(b) | Each Compliance Certificate shall set out, among other things: |
(i) | computations (in reasonable detail) as to compliance with Clause 26 ( Financial covenant ) or a certification that the financial covenant in Clause 26 ( Financial covenant ) is not required to be tested in accordance with Clause 26.2 ( Financial condition ); |
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(ii) | details of the prepayments (if any) to be made from Excess Cashflow under Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ); |
(iii) | the Margin computations (including, for the avoidance of doubt, the calculation of Debt Cover for the Relevant Period to which that Compliance Certificate relates) as set out in the definition of Margin as at the date at which those financial statements were drawn up; |
(iv) | LTM EBITDA for the Relevant Period to which that Compliance Certificate relates; |
(v) | confirmation that no Default is continuing (or, if a Default is continuing, specify the Default and the steps being taken to remedy it); |
(vi) | Debt Cover for the Relevant Period and whether or not the Debt Cover Condition has been met; and |
(vii) | as applicable, set out any of the matters referred to in Clause 25.4 ( Alternative reporting ). |
(c) | If necessary, Midco shall provide a reconciliation in reasonable detail to allow the financial covenant set out in Clause 26 ( Financial covenant ) to be calculated from the relevant financial statements delivered pursuant to Clause 25.1 ( Financial statements ). |
(d) | Each Compliance Certificate provided together with the Annual Financial Statements shall (in addition to the requirements of paragraph (b) above): |
(i) | list the Guarantors and (in reasonable detail) computations as to compliance with the coverage test pursuant to Clause 27.29 ( Guarantors ) to the extent that such Clause is required to be complied with at such time; and |
(ii) | to the extent Clause 27.35 ( Covenant suspension/relaxation ) applies, set out the total gross assets of the Group, together with the details of any material adjustments required in order to exclude the gross assets of each person which is consolidated in such financial statements but is not a member of the Group. |
(e) | Each Compliance Certificate shall be signed by two directors of Midco and, if required to be delivered with the consolidated Annual Financial Statements, shall be reported on by Midcos Auditors on the proper extraction of the numbers used in the financial covenant calculations in such manner (if any) and on such conditions that the Auditors specify (unless at least two of the Big Four firms of auditors have adopted a general policy of not providing such reports). |
25.3 | Requirements as to financial statements |
(a) | Midco shall procure that each set of Annual Financial Statements and Quarterly Financial Statements includes a balance sheet, profit and loss account and cashflow statement. In addition, Midco shall procure that each set of Annual Financial Statements shall be audited by the Auditors. |
(b) | Each set of financial statements delivered by Midco pursuant to this Clause 25: |
(i) | shall be certified on behalf of Midco by a director of Midco (without personal liability) as giving a true and fair view of (in the case of Annual Financial Statements for any Financial Year), or fairly representing (in other cases), the financial condition and operations of Topco and its Subsidiaries as at the date on which those financial statements were drawn up; |
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(ii) | in the case of the consolidated financial statements of Topco and its Subsidiaries, shall be accompanied by a statement of Topco comparing actual performance for the period to which the financial statements relate to the actual performance for the corresponding period in the preceding Financial Year; and |
(iii) | shall be prepared using the Accounting Principles, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, Midco notifies the Agent that there has been a change in the Accounting Principles or the accounting practices and financial reference periods from those applied in the preparation of the Original Financial Statements and it delivers to the Agent: |
(A) | a description of any change necessary for those financial statements to reflect the Accounting Principles or accounting practices applied in the preparation of the Original Financial Statements; and |
(B) | sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Agent and the Revolving Facility Lenders to determine whether Clause 26 ( Financial covenant ) has been complied with, to determine the Margin as set out in the definition of Margin and to determine the amount of any prepayments to be made from Excess Cashflow under Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ). |
(c) | If Midco notifies the Agent of a change in accordance with paragraph (iii) above or of a change of its Financial Year end, then Midco and the Agent shall enter into negotiations in good faith with a view to agreeing: |
(i) | whether or not the change might result in any material alteration in the commercial effect of any of the terms of this Agreement; and |
(ii) | if so, any amendments to this Agreement which may be necessary to ensure that the change does not result in any material alteration in the commercial effect of those terms, |
and if any amendments are agreed they shall take effect and be binding on each of the Parties in accordance with their terms.
(d) | If no such agreement is reached within 30 days of that notification of change, the Agent shall (if so requested by the Majority Lenders) instruct the Auditors of Midco or independent accountants (approved by Midco or, in the absence of such approval within five days of request by the Agent of such approval, a firm with recognised expertise) to determine any amendment to Clause 26.2 ( Financial condition ), the Margin computations set out in the definition of Margin, the amount of any prepayments to be made from Excess Cashflow under Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ) and any other terms of this Agreement which the Auditors or, as the case may be, accountants (acting as experts and not arbitrators) consider appropriate to ensure the change does not result in any material alteration in the commercial effect of the terms of this Agreement. Those amendments shall take effect when so determined by the Auditors or, as the case may be, accountants. The cost and expense of the Auditors or accountants shall be for the account of Midco. |
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(e) | Any reference in this Agreement to any financial statements (other than any delivered in reliance on Clause 25.4 ( Alternative reporting ) shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared. |
25.4 | Alternative reporting |
Notwithstanding the requirements of Clause 25.1 ( Financial statements ) and paragraphs (a) and (b) of Clause 25.3 ( Requirements as to financial statements ), delivery to the Agent of financial statements which are the same as those delivered to public shareholders in Listco (in each case) for a period which corresponds to a period in respect of which financial statements are required to be delivered pursuant to Clause 25.1 ( Financial statements ), shall satisfy the requirements of Clause 25.1 ( Financial statements ) and of paragraphs (a) and (b) of Clause 25.3 ( Requirements as to financial statements ) (including as regards the form and constituent parts of, and the methodology and basis of preparation of, such financial statements and as regards the requirements in relation to the certification of such financial statements and any accompanying statement), provided however that if Midco delivers any financial statements in reliance on this Clause, it shall:
(i) | in the accompanying Compliance Certificate, state that the financial statements have been delivered in reliance on this Clause and further that the provisions of paragraph (iv) below have been complied with with respect to such financial statements; |
(ii) | in the accompanying Compliance Certificate, set out or attach details of any adjustments required in order to determine the matters listed in paragraphs (b), (c) and (d) of Clause 25.2 ( Provision and contents of Compliance Certificate ); |
(iii) | in the accompanying Compliance Certificate, set out or attach details of any adjustments required in order to exclude the results of, in the event that those financial statements are consolidated at a level above Topco, and each person which is consolidated in such financial statements but is not a member of the Group; |
(iv) | in the accompanying Compliance Certificate, confirm whether such financial statements cover each member of the Group (and if not, confirm which members of the Group are excluded from such financial statements and the reason for such exclusion); |
(v) | to extent such financial statements have been prepared using Accounting Principles and/or accounting practices which are not consistent with those applied in the preparation of the Original Financial Statements, comply with the requirements of paragraph (b)(iii) of Clause 25.3 ( Requirements as to financial statements ) and paragraphs (c) and (d) of Clause 25.3 ( Requirements as to financial statements ) mutatis mutandis with respect to such financial statements in so far as they relate to the Group; and |
(vi) | for the avoidance of any doubt, to the extent that Midco relies on this Clause, it shall still be required to (A) deliver financial statements for each period contemplated in paragraphs (a) and (b) of Clause 25.1 ( Financial statements ) and (B) deliver each Compliance Certificate to the Agent contemplated in, and in accordance with the requirements of, Clause 25.2 ( Provision and contents of Compliance Certificate ). |
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25.5 | Law and regulation |
Notwithstanding any term of the Finance Documents to the contrary, all reporting updates and other information and disclosure requirements in the Finance Documents shall be subject to any legal or regulatory restrictions relating to the supply of information concerning Listco and its Subsidiaries (including, for the avoidance of doubt, the Group), including, without limitation, any requirements of the London Stock Exchange or which result from the nature of the Senior Secured Notes.
25.6 | Calls |
(a) | Midco shall ensure that a public trading and quarterly update call is held for each class of holders of its debt securities (and that the Agent and the Lenders are each invited to join each such call) with senior management of the Group not less frequently than once in each Financial Quarter. |
(b) | Midco shall notify the Agent of (and through the Agent, invite each Lender to join) any other public call held generally for its Senior Secured Noteholders or any class of holder of (or trustee in respect of) debt securities of the Group (including, for the avoidance of doubt, each such call for its Senior Secured Noteholders) with Midco providing reasonable notice of such call in advance, together with the applicable access code and such other information necessary for a Lender to directly join such call, provided that no Lender shall have a right to speak on any such call (other than to register attendance and complete or comply with any other procedural formality) without the prior consent of Midco. |
25.7 | Year end |
Midco shall notify the Agent of a change of its Financial Year end or a change of the Financial Year end of Topco.
25.8 | Information: miscellaneous |
Midco shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):
(i) | at the same time as they are despatched, copies of all documents despatched by Midco or any Obligors (other than in the ordinary course of business) to its creditors generally (or any class of them) and to its shareholders if required to be given to shareholders as a matter of mandatory law; |
(ii) | copies of all documents and notices provided to any agent, trustee or representative in respect of the Senior Secured Notes or any New Debt Financing for the purposes of such agent, trustee or representative (as the case may be) providing su ch document or notice to the relevant creditors generally in respect of such Senior Secured Notes or New Debt Financing; and |
(iii) | promptly on request, such factual information regarding the Group as any Finance Party through the Agent may reasonably request, |
subject always to Clause 25.5 ( Law and regulation ).
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25.9 | Notification of default |
Midco shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.
25.10 | 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 the composition of the shareholders of an Obligor after the date of this Agreement; or |
(iii) | a proposed assignment or transfer by a Lender of any of its rights and/or obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
obliges the Agent or any Lender (or, in the case of 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 Agent or any Lender, supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied with the results of 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 Agent, supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied with the results of 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) | Midco shall, by not less than 10 Business Days prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Obligor pursuant to Clause 31 ( Changes to the Obligors ). |
(d) | Following the giving of any notice pursuant to paragraph (c) above, if the accession of such Additional Obligor obliges the 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, Midco shall, promptly upon the request of the Agent or any Lender, supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the 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 Agent or such Lender or any prospective new Lender to carry out and be satisfied with the results of 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 Obligor. |
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(e) | In the event that Midco has delivered any Lender Accession Notice or Additional Facility Notice and the Lender referred to therein is not currently a Lender, Midco shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent in order for the Agent to carry out and be satisfied with the results of all necessary know your customer or other checks in relation to that Lender that it is required to carry out as a consequence of that person becoming a Lender. |
26. | FINANCIAL COVENANT |
26.1 | Financial definitions |
In this Clause 26:
Borrowings means, at any time, the outstanding principal or capital amount of any indebtedness for or in respect of:
(a) | moneys borrowed; |
(b) | acceptance credits (or dematerialised equivalents); |
(c) | moneys raised under or pursuant to bonds (other than a performance bond or advance payment bond issued in respect of the obligations of any member of the Group incurred in the ordinary course of business), notes, debentures, loan stock or any similar instrument; |
(d) | any finance or capital lease or hire purchase contract which would, in accordance with the Accounting Principles (for the avoidance of doubt, as applied in the preparation of the Original Financial Statements and so as to exclude operating leases to the extent they would otherwise be reclassified and treated as finance or capital leases), be treated as a finance or capital lease but only to the extent of such treatment; |
(e) | receivables sold or discounted (other than to the extent there is no recourse); |
(f) | 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 in respect of an underlying liability of an entity which is not a member of the Group which would fall within one of the other paragraphs of this definition; |
(g) | the acquisition cost of any asset where the deferred payment is arranged primarily as a method of raising finance and in circumstances where the due date for payment is more than 180 days after the expiry of the period customarily allowed by the relevant supplier save where the payment deferral results from non-satisfaction or delayed satisfaction of contract terms by the supplier or from contract terms establishing payment schedules tied to total or partial contract completion and/or to the results of operational testing procedures; |
(h) | the sale price of any asset to the extent paid by the person liable before the time of sale or delivery where such advance payment is arranged primarily as a method of raising finance unless such arrangements are entered into customarily by customers of the Group; |
(i) | any amount raised under any other transaction which would be treated as borrowing in accordance with the Accounting Principles; and |
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(j) | (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in the paragraphs above, |
provided that indebtedness owed by one member of the Group to another member of the Group and Subordinated Debt shall not be taken into account and excluding, for the avoidance of doubt, pension liabilities and liabilities in respect of other provisions which are treated as borrowings under IFRS and any indebtedness under forward contracts for fish entered into in the ordinary course of business.
Capital Expenditure means any expenditure or obligation in respect of expenditure which, in accordance with the Accounting Principles, is treated as capital expenditure (other than any Permitted Acquisition and only taking into account the actual cash payment made where assets are replaced and part of the purchase price is paid by way of part exchange).
Cashflow means, in respect of any Relevant Period, Consolidated EBITDA for that Relevant Period (without double counting):
(a) | plus the amount of any rebate, refund or credit in respect of any Tax on profits, gains or income actually received in cash by any member of such Group during such period (unless paid or payable to the Vendor); |
(b) | plus to the extent not included in Consolidated EBITDA, the amount (net of any applicable withholding tax) of any dividends or other profit distributions received in cash by any member of the Group during such period from any person which is not itself a member of the Group; |
(c) | minus all Capital Expenditure actually paid by a member of the Group during the Relevant Period except to the extent funded from: |
(i) | Retained Cash; |
(ii) | any Permitted Financial Indebtedness (other than a Revolving Facility); |
(iii) | capital contributions received from landlords in relation to Real Property in respect of which a member of the Group is a tenant; or |
(iv) | New Equity or Subordinated Debt received after the Closing Date; |
(d) | minus the aggregate of the consideration paid for or cost of any Permitted Acquisitions and the amount of any investment in a Permitted Joint Venture made in cash during that period to the extent not included in Consolidated EBITDA and in each case except to the extent funded from Retained Cash (to the extent permitted under the Finance Documents), any Permitted Financial Indebtedness, New Equity or Subordinated Debt received after the Closing Date; |
(e) | plus the amount of any loan which was made in respect of a Joint Venture Investment which is repaid in cash to a member of the Group; |
(f) | minus all amounts of Tax on profits, gains or income actually paid (other than any such Tax which is netted off against any proceeds received by the Group in accordance with paragraph (b) of the definition of Net Proceeds) and minus the amount of any withholding tax withheld from any amount paid to any member of the Group which has been taken into account in calculating Consolidated EBITDA for such period and minus any Increased Costs notified by any Finance Party pursuant to Clause 19.1 ( Increased Costs ); |
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(g) | plus any decrease in and minus any increase of Working Capital between the beginning and end of such Relevant Period; |
(h) | to the extent not taken into account in any other paragraph in this definition, minus all non-cash credits and release of provisions and plus all non-cash debits and other non-cash charges and provisions included in establishing Consolidated EBITDA for such period; |
(i) | to the extent not taken into account in any other paragraph in this definition, plus any positive and minus any negative one-off, non-recurring, extraordinary or exceptional items received or which are paid by any member of the Group in cash during such period to the extent not already taken into account in calculating Consolidated EBITDA for such period or provided for in Acquisition Costs, Refinancing Costs or funded from Retained Cash, any Permitted Financial Indebtedness, New Equity or Subordinated Debt received after the Closing Date; |
(j) | to the extent included in Consolidated EBITDA or in any other paragraph of this definition, excluding the effect of all cash movements associated with the Refinancing Costs (to the extent included in Cashflow); |
(k) | plus any New Equity and/or any Subordinated Debt received after the Closing Date to the extent permitted under paragraph (d) of Clause 26.3 ( Financial testing ); |
(l) | deducting any fees, cash or charges of a non-recurring nature related to any equity offering, investments, acquisitions or Permitted Financial Indebtedness (whether or not successful) except to the extent funded from Retained Cash (to the extent permitted by the Finance Documents) or paid out of the proceeds raised on an equity or debt securities offering or other Permitted Financial Indebtedness; and |
(m) | deducting the amount of management, consulting, investor and advisory fees (other than in respect of any cash movements falling under paragraph (l) above) paid to Listco to the extent not taken into account in Consolidated EBITDA and other than those funded from Retained Cash (to the extent permitted by the Finance Documents), any Permitted Financial Indebtedness, New Equity or Subordinated Debt received after the Closing Date. |
Consolidated EBITDA means, for any Relevant Period, the consolidated profits of the Group from ordinary activities:
(a) | before deducting Interest Payable, any other Interest for which any member of the Group is liable and any deemed finance charge in respect of any pension liabilities and other provisions; |
(b) | before deducting any amount of Tax on profits, gains or income paid or payable by any member of the Group; |
(c) |
after adding back (to the extent otherwise deducted) any amount attributable to any amortisation whatsoever (including amortisation of any goodwill arising on any Permitted |
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Acquisition, Acquisition Costs or Refinancing Costs), any depreciation whatsoever and any costs or provisions relating to any share option schemes of the Group existing on the Original Closing Date; |
(d) | after deducting (to the extent included) Interest Income and/or any other Interest accruing in favour of any member of the Group; |
(e) | excluding any items (positive or negative) of a one-off, non-recurring, extraordinary or exceptional nature (including, without limitation, the costs associated with any restructuring programme or any aborted equity or debt securities offering); |
(f) | after deducting (to the extent otherwise included and not already deducted pursuant to paragraph (j) below) the amount of profit (or adding back the loss) of any member of the Group which is attributable to any third party (not being a member of the Group) which is a shareholder in such member of the Group; |
(g) | after deducting (to the extent otherwise included) any gain over book value arising in favour of a member of the Group in the disposal of any asset (not being any disposals made in the ordinary course of trading) during such period and any gain arising on any revaluation of any asset during such period; |
(h) | after adding back (to the extent otherwise deducted) any loss against book value incurred by a member of the Group on the disposal of any asset (not being any disposal made in the ordinary course of trading) during such period and any loss arising on any revaluation of any asset during such period; |
(i) | after adding back Acquisition Costs and Refinancing Costs to the extent deducted; |
(j) | after adding back (to the extent not otherwise included) the amount of any dividends or other profit distributions (net of withholding tax) received in cash by any member of the Group during such period from companies which are not members of the Group, and after deducting (to the extent not otherwise deducted) the amount of any dividends or other profit distributions paid in cash by any member of the Group during such period to companies which are not members of the Group; |
(k) | plus any New Equity and/or any Subordinated Debt received after the Closing Date to the extent permitted under paragraph (d) of Clause 26.3 ( Financial testing ); |
(l) | after adding (to the extent not already included) the realised gains or deducting (to the extent not otherwise deducted) the realised losses arising at maturity or on termination of forward foreign exchange and other currency hedging contracts entered into with respect to the operational cashflows of the Group (but taking no account of any unrealised gains or loss on any hedging instrument whatsoever); |
(m) | after adding back (to the extent otherwise deducted) any fees, costs or charges of a non-recurring nature related to any equity offering, compensation payments to departing management, investments (including any Joint Venture Investment), acquisitions or Permitted Financial Indebtedness (whether or not successful); |
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(n) | after adding back (to the extent otherwise deducted) any costs or provisions relating to any share option or management incentive schemes of the Group existing at the Original Closing Date; |
(o) | after adding the proceeds of any business interruption insurance; |
(p) | after deducting the amount of profit of any entity (which is not a member of the Group) in which any member of the Group has an ownership interest to the extent that the amount of such profit included in the accounts of the Group exceeds the amount (net of any applicable withholding tax) received in cash by members of the Group through distributions by that entity; and |
(q) | before taking into account any gain or loss arising from any Debt Purchase Transaction or any purchase or buy-back by Finco or any member of the Group of any liabilities under or in connection with any New Debt Financing (or any transaction having a similar economic effect). |
Consolidated Net Finance Charges means, for any Relevant Period, the amount of Interest Payable during that period less Interest Income during that period.
Consolidated Total Net Debt means, at any time, the aggregate amount of all obligations of the Group for or in respect of Borrowings but:
(a) | including , in the case of finance leases, only the capitalised value therefor; and |
(b) | deducting the aggregate amount of available Cash and Cash Equivalent Investments held by any member of the Group, |
and so that no amount shall be included or excluded more than once.
Current Assets means the aggregate of trade receivables and other current assets (but excluding Cash and Cash Equivalent Investments) maturing within 12 Months of the date of computation and excluding :
(a) | receivables in relation to tax rebates or credits on profits; |
(b) | extraordinary items, exceptional items and other non-operating items; |
(c) | insurance claims; and |
(d) | any accrued Interest owing to any member of the Group. |
Current Liabilities means the aggregate of all liabilities (including trade creditors and other current liabilities and accrued expenses) falling due within 12 Months of the date of computation but excluding :
(a) | liabilities for Borrowings and Interest; |
(b) | liabilities for Tax on profits; |
(c) | extraordinary items, exceptional items and other non-operating items; |
(d) | insurance claims; and |
(e) | liabilities in relation to dividends declared but not paid by Midco. |
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Debt Cover means, for any Relevant Period, the ratio of Consolidated Total Net Debt on the last day of that Relevant Period to Consolidated EBITDA for that Relevant Period.
Excess Cashflow means (without double counting), for any Financial Year of Midco, Cashflow for that period less:
(a) | Net Debt Service (ignoring any reduction in Net Debt Service resulting from mandatory or voluntary prepayments made in previous Financial Years); |
(b) | to the extent that the Net Proceeds giving rise to the relevant mandatory prepayment have been included in calculating Cashflow (and not deducted under paragraph (d) below), mandatory prepayments falling due (other than in respect of Excess Cashflow calculated for the immediately preceding Financial Year) during such period; |
(c) | to the extent included in Cashflow, any amount of New Equity or Subordinated Debt received after the Closing Date; |
(d) | the amount of Net Proceeds received by the Group which are permitted to be retained by the Group (including, for the avoidance of doubt, the proceeds from the sale of the Hull Site); |
(e) | the amount of any Flotation Proceeds received by the Group which are permitted to be retained by the Group; |
(f) | (to the extent otherwise included) Acquisition Costs, Refinancing Costs and Restructuring Expenditure, in each case, not funded by Borrowings; and |
(g) | any payments falling under paragraphs (c), (f) and (g) of the definition of Permitted Payment, to the extent of payments to persons that are not members of the Group, and paragraph (i) of the definition of Permitted Payment, |
and for the avoidance of doubt excluding (to the extent otherwise included) the proceeds of any Financial Indebtedness incurred pursuant to any Facility, any Additional Facility, the Senior Secured Notes or any New Debt Financing.
Financial Quarter means the period commencing on the day after one Quarter Date and ending on the next Quarter Date.
Financial Year means the annual accounting period of the Group ending on or about 31 December in each year.
Interest means interest and amounts in the nature of interest in respect of any Borrowings, including, without limitation:
(a) | the interest element of finance leases; |
(b) | discount and acceptance fees and costs payable (or deducted) in respect of any Borrowings; |
(c) | fees payable in connection with the issue or maintenance of any bond, letter of credit, guarantee or other assurance against financial loss which constitutes Borrowings and is issued by a third party on behalf of a member of the Group and accrues after the Closing Date; |
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(d) | repayment and prepayment premiums payable or incurred in repaying or prepaying any Borrowings; and |
(e) | commitment, utilisation and non-utilisation fees payable or incurred or accrued in respect of Borrowings. |
Interest Income means, for the Relevant Period, the amount of Interest accrued (whether or not received) due to members of the Group during such period.
Interest Payable means for the Relevant Period, the aggregate of Interest accrued (whether or not paid or capitalised) in respect of any Borrowings of any member of the Group during that testing period but:
(a) | excluding any amortisation of fees, costs and expenses incurred in connection with the raising of any Borrowings; |
(b) | excluding any Increased Costs notified by a Finance Party and payable by the Group pursuant to Clause 19.1 ( Increased Costs ); and |
(a) | excluding any capitalised Interest, the amount of any discount amortised and other non-cash interest charges during the Relevant Period, |
and calculated on the basis that:
(i) | the amount of Interest accrued will be increased by an amount equal to any amount payable by members of the Group under hedging agreements in respect of Interest in relation to that Relevant Period; and |
(ii) | the amount of Interest accrued will be reduced by an amount equal to any amount payable to members of the Group under hedging agreements in respect of Interest in relation to that Relevant Period. |
Net Debt Service means, in respect of any Relevant Period, the aggregate of:
(a) | Consolidated Net Finance Charges; |
(b) | the aggregate of all scheduled payments of principal of any Borrowings (and in the case of the Term Facilities as adjusted as the result of any voluntary or mandatory prepayments made in previous Relevant Periods or the current Relevant Period) falling due for payment but excluding any amounts falling due under any overdraft or a Revolving Facility (including, without limitation, any Ancillary Facility) which were available for simultaneous redrawing according to the terms of such facility but for any voluntary cancellation; and |
(c) | the amount of the capital element of any payments in respect of that Relevant Period payable under any finance lease or capital lease entered into by any member of the Group, |
and so that no amount shall be included more than once.
Quarter Date means each of 31 March, 30 June, 30 September and 31 December.
Refinancing Costs means fees, costs and expenses incurred by a member of the Group in connection with this Agreement and the transactions contemplated by the Mandate Documents as set out in the Funds Flow Statement.
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Relevant Period means each period of 12 Months ending on the last day of Midcos Financial Year and each period of 12 Months ending on the last day of each Financial Quarter of Midcos Financial Year.
Retained Cash means (without double counting) the aggregate of:
(a) | Net Proceeds permitted to be retained (and not required to be reinvested in the Groups business); |
(b) | Excess Cashflow arising from a previous Financial Year which Midco is not obliged to prepay (including any de minimis amount which has been permitted to be deducted in calculating that Excess Cashflow in a previous Financial Year); and |
(c) | any Flotation Proceeds not required to be prepaid, |
in each case to the extent not already taken into account in any other paragraph of the relevant definition or otherwise applied in making payments, or satisfaction of consideration for transactions permitted under the Finance Documents.
Working Capital means, on any date, Current Assets less Current Liabilities.
26.2 | Financial condition |
Midco shall ensure that if, in respect of any Relevant Period ending after the Closing Date, the aggregate amount of:
(i) | all Revolving Facility Loans; |
(ii) | drawn Letters of Credit; and |
(iii) | Ancillary Outstandings (but excluding Ancillary Outstandings by way of undrawn letters of credit and undrawn bank guarantees under the relevant Ancillary Facility), |
(together the RCF Drawings ) calculated as at the last day of each such Relevant Period, is equal to or exceeds 30 per cent. of the Total Revolving Facility Commitments as at such date, Debt Cover in respect of that Relevant Period shall not exceed 8.00:1.
26.3 | Financial testing |
(a) | The financial covenant set out in Clause 26.2 ( Financial condition ) shall be calculated in accordance with the Accounting Principles as applied in the preparation of the Original Financial Statements and tested by reference to each of the financial statements and/or each Compliance Certificate delivered pursuant to Clause 25 ( Information undertakings ). |
(b) | In respect of any Relevant Period, the exchange rate used in relation to Consolidated Total Net Debt shall be the average for the same period as the exchange rate used for Consolidated EBITDA, save only where and to the extent that part of the principal element of such Consolidated Total Net Debt is subject to a currency hedge (the Currency Hedged Debt ) where such Currency Hedged Debt shall be converted at the applicable hedged rate. |
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(c) | For the purposes of the calculation of LTM EBITDA and of the calculation of Debt Cover (but not Cashflow or Excess Cashflow) (the Acquisition and Disposal Adjustment ): |
(i) | there shall be included in determining Consolidated EBITDA for any Relevant Period (including the portion thereof occurring prior to the relevant acquisition): |
(A) | the earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, mutatis mutandis ) for the period of any person, property, business or material fixed asset acquired and not subsequently sold, transferred or otherwise disposed of by any member of the Group during such period (each such person, property, business or asset acquired and not subsequently disposed of, an Acquired Entity or Business ); and |
(B) | if material (unless, in relation to any material adjustment which could be made as a result of net cost savings, Midco elects not to include such net cost savings in the determination of Consolidated EBITDA), an adjustment in respect of each Acquired Entity or Business acquired during such period equal to the amount of the Pro Forma Adjustment with respect to such Acquired Entity or Business for such period; and |
(ii) | there shall be excluded in determining Consolidated EBITDA for any period the earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, mutatis mutandis ) of any person, property, business or material fixed asset sold, transferred or otherwise disposed of by any member of the Group during such period (including the portion thereof occurring prior to such sale, transfer, disposition or conversion) (each such person, property, business or asset so sold or disposed of, a Sold Entity or Business ). |
Pro Forma Adjustment shall mean, for any Relevant Period that ends on any of the first five Quarter Dates to fall after the completion date of the acquisition of or investment in an Acquired Entity or Business, with respect to the Consolidated EBITDA of that Acquired Entity or Business, the pro forma increase or decrease in such Consolidated EBITDA (calculated for the Relevant Period by including on a pro forma basis the full run-rate effect of synergies and/or cost savings and/or additional cost for that acquisition) where:
(a) | such synergies and/or cost savings and/or additional cost to be taken into account are those reasonably achievable over the period (the Projected Period ) commencing on (and assuming that the relevant acquisition or investment has occurred on) the most recent Quarter Date (the First Quarter Date ) prior to the acquisition contract date and ending on the fifth Quarter Date following the acquisition completion date assuming for this purpose that such acquisition occurred on the First Quarter Date (as certified by Midco in a certificate signed by the Chief Financial Officer/Finance Director, issued by reference to Midcos knowledge with regard to the information reasonably available at such time and, in addition, if the aggregate amount of the synergies and/or cost savings and/or additional cost for that acquisition exceeds 5% of Consolidated EBITDA (prior to any Pro Forma Adjustment) of the Group, verified by independent third party due diligence from a professional advisory firm of international repute or other person approved by the Agent); |
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(b) | for the avoidance of doubt, the full run-rate effect shall be the annualised effect of such synergies and/or cost savings and/or additional cost, |
provided further that any such pro forma increase or decrease to such Consolidated EBITDA shall be without duplication for the effect of any assumed increase or decrease actually realised during such period and already included in such Consolidated EBITDA.
(d) | For the purpose of calculating Debt Cover pursuant to Clause 26.2 ( Financial condition ) (only), and subject to paragraphs (e) to (g) below, Midco may elect that all or any part of any New Equity and/or any Subordinated Debt (in each case without double counting any such amount): |
(i) | received after the Closing Date (in each case, to the extent not spent), shall be added to Consolidated EBITDA either during the Relevant Period it is received in or during that Relevant Period (provided the corresponding Compliance Certificate states that such election has been made and sets out the adjustment to the Debt Cover calculations that result from such election); |
(ii) | received after the end of a Relevant Period (the Prior Relevant Period ) but before the date falling 20 Business Days after the Compliance Certificate has been delivered, shall be added to Consolidated EBITDA for the Prior Relevant Period and shall be taken into account as if received immediately prior to the end of the Prior Relevant Period and Debt Cover will be recalculated accordingly to the extent Midco provides, in such 20 Business Day period, a revised Compliance Certificate stating that such election has been made and setting out the calculations that result from such election; or |
(iii) | received after the Prior Relevant Period but before the date falling 20 Business Days after the Compliance Certificate has been delivered for the Prior Relevant Period, to the extent RCF Drawings equal or exceed 30 per cent. of Total Revolving Facility Commitments as at the last day of the Prior Relevant Period, shall be applied so as to reduce RCF Drawings such that RCF Drawings would not have equalled or exceeded 30 per cent. of Total Revolving Facility Commitments as at the last day of the Prior Relevant Period if RCF Drawings were re-tested on such date pro forma for the application of such New Equity and/or any Subordinated Debt. |
(e) | To the extent Midco exercises its rights under paragraph (d) above to add such amount to Consolidated EBITDA, the relevant New Equity and/or Subordinated Debt shall be taken into account in calculating the financial undertakings for the three Relevant Periods occurring immediately after the end of the Prior Relevant Period in the manner described in paragraph (d) above. |
(f) | To the extent Midco exercises its rights under paragraph (d) above to reduce RCF Drawings, no member of the Group may deliver a Utilisation Request in relation to any Revolving Facility Utilisation (excluding any Rollover Loan) prior to the next Quarter Date to occur after the Prior Relevant Period in respect of which a Compliance Certificate has been delivered, unless Midco confirms in each such Utilisation Request that: |
(i) | the aggregate of RCF Drawings (x) as at the date of that Utilisation Request and (y) on the proposed Utilisation Date will not (when calculated pro forma for each Revolving Facility Utilisation contemplated in a Utilisation Request), equal or exceed 30 per cent. of Total Revolving Facility Commitments; or |
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(ii) | the requirements of Clause 26.2 ( Financial condition ) would have been satisfied for the Prior Relevant Period if re-tested as at the last day of the Prior Relevant Period but calculated pro forma for the proposed Revolving Facility Utilisation (and the application of such Utilisation) and any change in Consolidated Total Net Debt since the last day of the Prior Relevant Period (with such Utilisation Request providing reasonable details of such calculation). |
(g) | For the purposes of this Clause 26, Midco may only elect to include one injection of New Equity and/or Subordinated Debt in any Relevant Period and no more than two such injections during the life of the Facilities. |
(h) | The effect of all unrealised currency exchange gains or losses shall be excluded from the calculation of any financial covenant ratios (save as set out in paragraph (b) above). |
26.4 | Baskets |
(a) | If, in any Financial Year of Midco commencing after the Closing Date (the Original Financial Year ), the aggregate amount of any fixed numeric basket originally applied, committed to be applied or to be applied or designated by the board of directors of Midco to be applied in that Financial Year is less than the fixed numeric basket originally available for that Financial Year (without any carry forward) (the numeric difference being referred to as the Available Amount ), then the maximum fixed numeric basket for the immediately following Financial Year (the Carry Forward Year ) shall be increased by an amount equal to the Available Amount. |
(b) | In any Carry Forward Year, the original amount of that fixed numeric basket shall be treated as having been applied before any Available Amount carried for ward into such Carry Forward Year. Any amount carried forward may be carried forward for one year only. |
27. | GENERAL UNDERTAKINGS |
The undertakings in this Clause 27 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.
Authorisations and compliance with laws
27.1 | Authorisations |
Subject to the Legal Reservations and the Perfection Requirements, each Obligor shall promptly obtain, comply with and do all that is necessary to maintain in full force and effect any Authorisation required under any applicable law to:
(a) | enable it to perform its obligations under the Finance Documents; |
(b) | ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and |
(c) | carry on its business, where failure to do so has a Material Adverse Effect. |
27.2 | Compliance with laws |
Each Obligor shall (and Midco shall ensure that each member of the Group will) comply in all respects with all laws to which it may be subject, if failure so to comply would have a Material Adverse Effect.
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27.3 | Environmental compliance |
Each Obligor shall (and Midco shall ensure that each member of the Group will):
(a) | comply with all Environmental Laws; |
(b) | obtain, maintain and ensure compliance with all requisite Environmental Permits; and |
(c) | implement procedures to monitor compliance with and to prevent liability under any Environmental Law, |
where failure to do so would have a Material Adverse Effect.
27.4 | Taxation |
Each Obligor shall (and Midco shall ensure that each member of the Group will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed or, if later, before incurring material penalties, unless and only to the extent that:
(a) | such payment is being contested in good faith and in accordance with the relevant procedures; |
(b) | adequate reserves are being maintained in accordance with the Accounting Principles for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under Clause 25 ( Information undertakings ) (if required to be disclosed under the Accounting Principles); and |
(c) | such payment can be withheld without incurring material penalties and failure to pay those Taxes does not have a Material Adverse Effect. |
Restrictions on business focus
27.5 | Merger |
No Obligor shall (and Midco shall ensure that no other member of the Group will) enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction other than a Permitted Transaction.
27.6 | Change of business |
Midco shall procure that no substantial change is made to the general nature of the business of the Group taken as a whole from that carried on by the Group as at the date of this Agreement.
27.7 | Acquisitions |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and Midco shall ensure that no other member of the Group will) acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them). |
(b) | Paragraph (a) above does not apply to an acquisition of a company, shares, securities or a business or undertaking (or, in each case, any interest in any of them) or the incorporation of a company which is a Permitted Acquisition. |
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27.8 | Joint Ventures |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and Midco shall ensure that no member of the Group will): |
(i) | enter into, invest in or acquire (or agree to invest in or acquire, unless such agreement is subject to Majority Lender approval) any shares, stocks, securities or other interest in any Joint Venture; or |
(ii) | transfer any assets or lend to or guarantee or give an indemnity for or give Security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing, unless such agreement is subject to Majority Lender approval). |
(b) | Paragraph (a) above does not apply to any acquisition (or agreement to acquire) any interest in a Joint Venture or transfer of assets (or agreement to transfer assets) to a Joint Venture or loan made to or guarantee given in respect of the obligations of a Joint Venture if such transaction is a Permitted Joint Venture. |
27.9 | Holding Companies |
(a) | None of Finco, Midco, Bondco or Bidco shall trade, carry on any business, own any assets or incur any liabilities except for a Permitted Holding Company Activity. |
(b) | Notwithstanding anything in this Agreement or any other Finance Document, Midco shall ensure that, at all times, Bondco is and remains a wholly-owned Subsidiary of Midco and Bondco does not have any Subsidiaries or own any shares or equity interests in any other person or entity. |
27.10 | Centre of main interests and establishments |
No Obligor whose jurisdiction of incorporation is in a member state of the European Union shall deliberately change its centre of main interests (as that term is used in Article 3(1) of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the Regulation )) in a manner which would materially adversely affect the interests of the Lenders as a whole.
Restrictions on dealing with assets and Security
27.11 | Pari passu ranking |
Each Obligor shall ensure that at all times any claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
27.12 | Negative pledge |
In this Clause 27.12, Quasi-Security means a transaction described in paragraph (a)(ii) below.
(a) | Except as permitted under paragraph (b) below: |
(i) | no Obligor shall (and Midco shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets; and |
(ii) | no Obligor shall (and Midco shall ensure that no other member of the Group will): |
(A) | sell, transfer or otherwise dispose to any person who is not a member of the Group of any of its assets on terms whereby they are or may be leased to or reacquired by an Obligor or by any other member of the Group; |
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(B) | sell, transfer or otherwise dispose of any of its receivables to any person who is not a member of the Group on recourse terms (other than as is customary for a securitisation programme); |
(C) | 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 |
(D) | 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 Borrowings or of financing the acquisition of an asset.
(b) | Paragraph (a) above does not apply to any Security or (as the case may be) Quasi-Security, which is Permitted Security. |
27.13 | Disposals |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and Midco shall ensure that no member of the Group will) enter into a single transaction or a series of transactions (whether related or not and whether voluntary or involuntary) to sell, lease, transfer or otherwise dispose of any asset. |
(b) | Paragraph (a) above does not apply to: |
(i) | any sale, lease, transfer or other disposal which is a Permitted Disposal; or |
(ii) | a Permitted Transaction. |
27.14 | Arms length basis |
(a) | Except as permitted by paragraph (b) below, no Obligor shall (and Midco shall ensure no member of the Group will) enter into any material transaction with any Listco Affiliate or any person not being a member of the Group except on arms length terms or better. |
(b) | The following transactions shall not be a breach of this Clause 27.14: |
(i) | fees, costs and expenses payable under the Transaction Documents or agreed by the Agent; and |
(ii) | any Permitted Transactions. |
Restrictions on movement of cashcash out
27.15 | Loans or credit |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and Midco shall ensure that no member of the Group will) be a creditor in respect of any Financial Indebtedness. |
(b) | Paragraph (a) above does not apply to: |
(i) | a Permitted Loan; |
(ii) | a Permitted Payment; or |
(iii) | a Permitted Guarantee. |
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27.16 | No guarantees or indemnities |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and Midco shall ensure that no member of the Group will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person. |
(b) | Paragraph (a) above does not apply to a guarantee which is: |
(i) | a Permitted Guarantee; or |
(ii) | a Permitted Transaction. |
27.17 | Dividends and share redemption |
(a) | Except as permitted under paragraph (b) below, Midco shall ensure that no member of the Group will: |
(i) | declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital); |
(ii) | repay or distribute any dividend or share premium reserve; |
(iii) | pay or allow any member of the Group to pay any management, advisory or other fee to or to the order of any of the shareholders of Midco; or |
(iv) | redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so. |
(b) | Paragraph (a) above does not apply to: |
(i) | a Permitted Payment; or |
(ii) | a Permitted Transaction. |
27.18 | Subordinated Debt and Senior Subordinated Notes |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and Midco shall ensure that no member of the Group will): |
(i) | repay or prepay any principal amount (or capitalised interest) outstanding under or in respect of any Subordinated Debt, any Subordinated Liabilities or any Senior Subordinated Notes Liabilities; |
(ii) | pay any interest or any other amounts payable in connection with or in respect of any Subordinated Debt, any Subordinated Liabilities or any Senior Subordinated Notes Liabilities; or |
(iii) | purchase, redeem, defease, acquire, retire or discharge, exchange or enter into any sub-participation arrangements in respect of any amount outstanding under or in respect of any Subordinated Debt, any Subordinated Liabilities or any Senior Subordinated Notes Liabilities. |
(b) | Paragraph (a) above does not apply to a payment, repayment, prepayment, purchase, redemption, defeasance or discharge which is: |
(i) | a Permitted Payment; or |
(ii) | a Permitted Transaction. |
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Restrictions on movement of cashcash in
27.19 | Financial Indebtedness |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and Midco shall ensure that no member of the Group will) incur or allow to remain outstanding any Financial Indebtedness. |
(b) | Paragraph (a) above does not apply to Financial Indebtedness which is: |
(i) | Permitted Financial Indebtedness; or |
(ii) | a Permitted Transaction. |
27.20 | Share capital |
No Obligor shall (and Midco shall ensure no member of the Group will) issue any shares except pursuant to a Permitted Share Issue or a Permitted Transaction.
Miscellaneous
27.21 | Insurance |
(a) | Each Obligor shall (and Midco shall ensure that each member of the Group will) maintain insurances on and in relation to its business and assets against those material risks and to the extent as is usual for companies carrying on the same or substantially similar business. |
(b) | All insurances must be with reputable independent insurance companies or underwriters. |
27.22 | Pensions |
Midco shall ensure that all pension schemes operated by or maintained for the benefit of members of the Group and/or any of its employees are funded to the extent required by applicable law and regulations, where failure to do so would have a Material Adverse Effect.
27.23 | Access |
Each Obligor shall, and Midco shall ensure that each member of the Group will, while an Event of Default under Clause 28.1 ( Non-payment ) or Clause 28.5 ( Insolvency ) is continuing or (on the instructions of the Majority RCF Lenders only) while a Financial Covenant Event of Default is continuing, permit the Agent and/or the Security Agent and/or accountants or other professional advisers and contractors of the Agent or Security Agent free access during normal business hours and on reasonable notice, at the risk and cost of the Obligor or Midco and after having consulted with Midco, to the premises, assets, books, accounts and records of each member of the Group.
27.24 | Intellectual Property |
Each Obligor shall (and Midco shall procure that each Group member will):
(a) | preserve and maintain the subsistence and validity of the Intellectual Property necessary for the business of the relevant Group member; |
(b) | use reasonable endeavours to prevent any infringement in any material respect of the Intellectual Property; |
(c) | make registrations and pay all registration fees and taxes necessary to maintain the Intellectual Property in full force and effect and record its interest in that Intellectual Property; |
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(d) | not use or permit the Intellectual Property to be used in a way or take any step or omit to take any step in respect of that Intellectual Property which may materially and adversely affect the existence or value of the Intellectual Property or imperil the right of any member of the Group to use such property; and |
(e) | not discontinue the use of the Intellectual Property, |
where, in each case, failure to do so would have a Material Adverse Effect.
27.25 | Amendments |
No Obligor shall (and Midco shall ensure that no member of the Group will) amend, vary, novate, supplement, supersede, waive or terminate any provision of the constitutional documents dealing with the transfer of shares of any member of the Group whose shares are subject to Security except in writing and in a way which would not materially and adversely affect the interests of the Lenders taken as a whole.
27.26 | Financial assistance |
Each Obligor shall (and Midco shall procure each member of the Group will) comply, where applicable, in all respects with Sections 678 to 679 of the United Kingdom Companies Act 2006 (as amended) and any equivalent legislation in other jurisdictions, including in relation to the execution of the Transaction Security Documents and payment of amounts due under this Agreement.
27.27 | Treasury Transactions |
No Obligor shall (and Midco will procure that no members of the Group will) enter into any Treasury Transaction, other than:
(i) | hedging transactions entered into for the purpose of hedging any interest rate exposures arising in connection with the Term Facilities, any Senior Secured Notes or any New Debt Financing (excluding any Senior Subordinated Notes Liabilities), in each case up to the aggregate principal amount outstanding thereunder from time to time and documented by the Hedging Agreements; |
(ii) | spot and forward delivery foreign exchange contracts entered into in the ordinary course of business and not for speculative purposes; |
(iii) | currency hedging of any principal or interest in relation to any Term Facility, any Senior Secured Notes or any New Debt Financing (excluding any Senior Subordinated Notes Liabilities) and (in each case) not for speculative purposes; and |
(iv) | any Treasury Transaction entered into for the hedging of actual or projected real exposures arising in the ordinary course of trading activities of a member of the Group and not for speculative purposes. |
27.28 | Cash management |
(a) | Subject to paragraph (b) below, each Obligor will use reasonable endeavours to ensure that it shall not, and none of its Subsidiaries will, at any time, hold cash in excess of EUR 10,000,000 in aggregate or its equivalent with any bank which is not an Acceptable Bank for more than 3 Months. |
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(b) | No Obligor shall be obliged at any time to procure that any Subsidiary transfers any cash under paragraph (a) above: |
(i) | at a time when to do so would cause the Obligor or the Subsidiary (despite that person using all reasonable endeavours to avoid the relevant Tax liability) to incur a material Tax liability or to otherwise incur any material cost or expense; |
(ii) | if (despite using all reasonable efforts to avoid the breach or result) to do so would breach any applicable law or agreement or result in personal liability for the Obligor or the Subsidiary or any of such persons directors or management; or |
(iii) | if it involves an amount which is less than EUR 10,000,000 in aggregate or its equivalent for each such Subsidiary. |
27.29 | Guarantors |
(a) | Subject to paragraphs (c), (d) and (e) below, Midco shall ensure that any member of the Group which is a Material Company shall, subject to the Security Principles, become an Additional Guarantor in accordance with the terms hereof and deliver all of the documents and other evidence required by Clause 31.4 ( Additional Guarantors ) and as soon as reasonably practicable after Midco delivers the Annual Financial Statements which first show that member of the Group to be a Material Company. |
(b) | Subject to paragraphs (c), (d) and (e) below, Midco shall ensure that, as at the date falling 60 days after the Closing Date and as at the end of each Financial Year: |
(i) | the aggregate (without double counting) earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA as specified in Clause 26.1 ( Financial definitions )) of the Guarantors (taking each entity on an unconsolidated basis and excluding all intra-group items) is no less than 80 per cent. of the Consolidated EBITDA of the Group; and |
(ii) | the aggregate (without double counting) total gross assets of the Guarantors (taking each entity on an unconsolidated basis and excluding intra-group items) is no less than 80 per cent. of the total gross assets of the Group, |
and, for the purposes of paragraphs (i) and (ii) above (the Guarantor Coverage ), as determined by reference to the Original Financial Statements and the most recent Annual Financial Statements delivered by Midco.
(c) | Subject to paragraph (e) below, where any member of the Group is not eligible to be a Guarantor pursuant to paragraph 1(b)(ii) of Schedule 12 ( Security Principles ), its EBITDA and gross assets shall not be included in the Consolidated EBITDA and gross assets of the Group for the calculation of Guarantor Coverage, provided that Midco shall use its reasonable endeavours to assist in overcoming any relevant restrictions to enable such member of the Group to act as a Guarantor and, if despite such efforts such member of the Group has remained unable to act as a Guarantor, Midco shall, subject to the Security Principles, use its reasonable endeavours to enable other members of the Group to accede as Guarantors in the place of such member of the Group in order to meet the Guarantor Coverage. |
(d) | Subject to paragraph (e) below, any member of the Group acquired as a result of a Permitted Acquisition shall be taken into account for the purposes of calculating the Guarantor Coverage. |
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(e) | Notwithstanding the preceding paragraphs, for the purposes of this Clause 27.29, Midco shall be under no obligation to ensure that Findus Italy accedes as a Guarantor, and the references to the Group and Consolidated EBITDA in this Clause 27.29 shall be deemed to exclude Findus Italy. |
27.30 | Further assurance |
(a) | Each Obligor shall (and Midco shall procure that each member of the Group will) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)): |
(i) | subject to the Security Principles, to perfect within the timeframes set out therein the Security created or intended to be created under or evidenced by the Transaction Security Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law at the times provided; and/or |
(ii) | following the occurrence of a Declared Default or an RCF Declared Default, to facilitate the realisation of the assets which are, or are intended to be, the subject of Security under the Transaction Security Documents. |
(b) | If any Obligor which has entered into one or more Transaction Security Documents acquires an asset (including any right, account, investment or otherwise) which is either not subject to that Transaction Security Document, or in relation to which a perfection requirement or other step must be taken in relation to that asset in connection with an existing Transaction Security Document, that Obligor shall (in all cases subject to the Security Principles) ensure that a Transaction Security Document is entered into, or, as required by the applicable Transaction Security Document that a similar perfection requirement or other step is taken, in each case in connection with that asset. |
27.31 | Second Lien Debt Purchase Condition |
(a) | No Obligor shall (and Midco shall ensure that no other member of the Group will) undertake any Second Lien Debt Purchase or enter into a legally binding commitment or offer for a Second Lien Debt Purchase unless: |
(i) | such Second Lien Debt Purchase is funded with the net cash proceeds of New Equity or Subordinated Debt received after the Closing Date and which has not been used for any other purpose; |
(ii) | such Second Lien Debt Purchase is funded with an amount which would otherwise be available to be, and is at that time permitted to be, paid by way of a Permitted Payment; or |
(iii) | such Second Lien Debt Purchase is made following the occurrence of a Change of Control and the Group is in compliance with the requirements of Clause 12.1 ( Exit ), |
and provided that, in each case no Event of Default is continuing or would occur as a result of such Second Lien Debt Purchase.
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(b) | Midco shall ensure that any Second Lien Debt that is the subject of a Second Lien Debt Purchase is extinguished at the time of such Second Lien Debt Purchase. |
27.32 | Subordinated Liabilities |
No Obligor shall (and Midco shall ensure that no other member of the Group will) create, have outstanding or permit to exist any present or future liabilities or obligations owed to a direct or indirect shareholder of Midco other than Subordinated Liabilities owed to a Subordinated Creditor (each as defined in the Intercreditor Agreement) (provided that, for the avoidance of doubt, this Clause 27.32 shall not serve to restrict the payment of any fees, costs and expenses contemplated by the definition of Permitted Payment).
27.33 | Public rating |
Midco will use reasonable endeavours:
(a) | to obtain a public corporate rating for itself or another appropriate member of the Group as soon as reasonably possible from two out of three of Moodys Investors Service Inc., Standard & Poors Financial Services LLC and Fitch Ratings Ltd., and in any event to cause the officers of the Group with appropriate seniority and expertise to hold meetings with two out of three of such rating agencies, for the purpose of obtaining such credit ratings; and |
(b) | to the extent such ratings continue to be available to maintain a public corporate rating for Midco or another appropriate member of the Group from two out of three of such rating agencies. |
27.34 | Conditions subsequent |
(a) | As soon as reasonably practicable after the Closing Date (and in any event within the time periods specified therein), Midco shall provide or procure the provision of all the documents and other evidence set out in Part II of Schedule 2 ( Conditions Precedent and Conditions Subsequent ) each in form and substance satisfactory to the Agent (acting reasonably). |
27.35 | Covenant suspension/relaxation |
Notwithstanding anything to the contrary in any Finance Document, during the period which (but only for so long as) Debt Cover (calculated on a pro forma basis for any action, transaction or incurrence to be entered into by an Obligor or any member of the Group) is equal to or less than 3.75:1 (the Debt Cover Condition ) and provided that no Default or Event of Default has occurred and is continuing at the time such action, transaction or incurrence is to be entered into, the terms of this Agreement shall be construed so as to take account of the following (and shall be interpreted accordingly):
(i) | each reference to 5 in paragraph (ii) of paragraph (b) of the definition of Material Company shall be construed (and interpreted accordingly) as if it were instead a reference to 10; |
(ii) | paragraphs (b), (c) and (d) of Clause 27.29 ( Guarantors ) shall be suspended and shall cease to apply; |
(iii) | Clauses 27.17 ( Dividends and share redemption ) and 27.18 ( Subordinated Debt and Senior Subordinated Notes ) shall be suspended and shall cease to apply; |
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(iv) |
(A) | in relation to any potential Additional Obligor (other than any Holding Company Guarantor (as defined below)), the condition precedent in paragraph 17 of Part III of Schedule 2 ( Conditions Precedent and Conditions Subsequent ) shall be (notwithstanding paragraph (B) below) construed (and interpreted accordingly) as if it had been replaced in its entirety and instead read Evidence that each direct Holding Company of the Additional Obligor that is a member of the Group has become Party as an Additional Guarantor (any such Holding Company prior to its accession being a Holding Company Guarantor ) and has granted Transaction Security over the entire issued share capital of the Additional Obligor held by it in accordance with the Security Principles; and |
(B) | in relation to any potential Additional Obligor which is required, as a result of the condition precedent referred to (and as to be construed and interpreted as set out in) in paragraph (A) above, to be Party as an Additional Guarantor by virtue of it being a Holding Company Guarantor, the condition precedent in paragraph 17 of Part III of Schedule 2 ( Conditions Precedent and Conditions Subsequent ) (notwithstanding paragraph (A) above) shall be construed (and interpreted accordingly) as if it had been replaced in its entirety and instead read Evidence that the Additional Obligor has granted Transaction Security over the entire issued share capital of each Obligor held by it in accordance with the Security Principles; |
(v) | the reference to EUR 50,000,000 or its equivalent in paragraph (q) of Permitted Disposal shall instead be construed (and interpreted accordingly) as if it were instead a reference to three per cent. of the total gross assets of the Group as shown in the Compliance Certificate delivered with the most recent Annual Financial Statements (and with any Permitted Disposal effected in reliance on this paragraph (q) being, for the purposes of testing compliance with Clause 27.13 ( Disposal s), converted into the functional currency of such Annual Financial Statements as at the date of such Permitted Disposal in a manner consistent with the Accounting Principles); and |
(vi) | the fixed numerical baskets contained in the following provisions shall be construed (and interpreted accordingly) as if each were 25 per cent. higher than the applicable amount as at the 2015 Effective Date and as if the Debt Cover Condition was not satisfied on the 2015 Effective Date: paragraph (d)(ii) of Permitted Acquisition, paragraphs (c) and (p) of the definition of Permitted Disposal, paragraphs (f), (i) and (m) of the definition of Permitted Financial Indebtedness, paragraphs (c) and (q) of the definition of Permitted Guarantee, paragraphs (d), (e), (f), (g) and (k) of the definition of Permitted Loan, paragraph (j) of the definition of Permitted Payment and paragraphs (m) and (t) of the definition of Permitted Security, |
in each case subject always to paragraph (c) of Clause 28.18 ( Operation of Clause 27 (General undertakings) ) and without prejudice to any rights of any Finance Party that may have arisen pursuant to any Finance Document (including, without limitation, Clause 4.1 ( Conditions precedent ) and/or Clause 28 ( Events of Default )) by reference to any provision, definition or term of this Agreement and the application, effect and/or meaning of such provision, definition or term immediately prior to the Debt Cover Condition being met.
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28. | EVENTS OF DEFAULT |
Each of the events or circumstances set out in Clause 28.1 ( Non-payment ) to Clause 28.15 ( Tax status ) is an Event of Default.
28.1 | Non-payment |
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable, unless:
(a) | in the case of principal and interest, payment is made within three Business Days of its due date; and |
(b) | in the case of any other amount, payment is made within seven Business Days of its due date. |
28.2 | Other obligations |
(a) | An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 28.1 ( Non-payment ) and Clause 26.2 ( Financial covenant )). |
(b) | No Event of Default under paragraph (a) above will occur, save in the case of failure to comply with Clause 27.34 ( Conditions subsequent ), if the failure to comply is capable of remedy and is remedied within 20 Business Days of the earlier of the Agent giving written notice to Midco or Midco becoming aware of the failure to comply. |
28.3 | Misrepresentation |
(a) | Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made. |
(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 earlier of the Agent giving written notice to Midco or Midco becoming aware of the failure to comply. |
28.4 | Cross default |
(a) | Any Financial Indebtedness of any member of the Group is not paid when due or within any originally applicable grace period. |
(b) | Any Financial Indebtedness of any member of the Group 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 any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described). |
(d) | Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described) but excluding as a result of a Financial Covenant Event of Default. |
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(e) | An RCF Declared Default occurs. |
(f) | No Event of Default will occur under any of paragraphs (a) to (d) above of this Clause 28.4 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is less than EUR 20,000,000 or its equivalent. |
For the purpose of any of paragraphs (a) to (d) above of this Clause 28.4 (only):
(i) | Financial Indebtedness shall not include Financial Indebtedness which constitutes any Subordinated Debt or any Financial Indebtedness supported by a Letter of Credit issued under a Revolving Facility; and |
(ii) | any reference to Group shall be deemed to include any Senior Subordinated Notes Issuer to the extent that the Senior Subordinated Notes Creditors have been granted or received the benefit of any Security from any member of the Group in respect of the Senior Subordinated Notes Liabilities or any guarantee, indemnity or other assurance against loss from any member of the Group in respect of the Senior Subordinated Notes Liabilities. |
28.5 | Insolvency |
(a) | Midco or a Material Company is unable or admits inability to pay its debts as they fall due, suspends or threatens to suspend 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 with a view to a general rescheduling of any of its indebtedness (or, in relation to a Material Company having its seat in Germany, any event occurs which constitutes a cause for the initiation of insolvency proceedings ( Eröffnungsgrund ) as set out in sections 17 and 19 of the German Insolvency Code ( Insolvenzordnung )). |
(b) | A Material Company incorporated in Sweden is required to prepare a special balance sheet (Sw. kontrollbalansräkning ). |
28.6 | Insolvency proceedings |
(a) | Any corporate action, legal proceedings or other formal procedure or step is taken in relation to: |
(i) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Material Company or Midco other than a Permitted Transaction, other than the solvent liquidation or reorganisation of any member of the Group which does not materially and adversely affect the interests of the Lenders; |
(ii) | a composition or assignment with any creditor of any Material Company or Midco for reasons of financial difficulty of the Material Company or Midco; |
(iii) | the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not an Obligor), receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of any Material Company or Midco or any of its assets; or |
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(iv) | any analogous procedure or step being taken in any jurisdiction, in particular, but not limiting the events listed above, in relation to a Material Company having its seat in Germany: |
(A) | a petition for insolvency proceedings in respect of its assets ( Antrag auf Eröffnung eines Insolvenzverfahrens ) being filed; or |
(B) | actions being taken pursuant to section 21 of the German In solvency Code ( Insolvenzordnung ) by the competent court. |
(b) | For the purpose of paragraph (a)(i) above, a reorganisation shall include a company reorganisation (Sw. företagsrekonstruktion ) pursuant to the Swedish Reorganisation Act (Sw. lag (1996:764) om företagsrekonstruktion ). |
(c) | Paragraph (a) above shall not apply to any proceedings which are contested in good faith and discharged, stayed or dismissed within 20 Business Days of commencement. |
28.7 | Creditors process |
Any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of a Material Company or Midco exceeding an aggregate value of EUR 20,000,000 or its equivalent, unless such process is either being contested in good faith and/or shown as frivolous or vexatious and is discharged within 20 Business Days after commencement.
28.8 | Unlawfulness and invalidity |
(a) | It is or becomes unlawful for an Obligor to perform any of its material obligations under the Finance Documents or any Transaction Security created or expressed to be created or evidenced by the Transaction Security Documents ceases to be effective and this individually or cumulatively, materially and adversely affects the interests of the Lenders taken as a whole under the Finance Documents. |
(b) | Subject to the Legal Reservations and Perfection Requirements, any material obligation or obligations of any Obligor under any Finance Document are not or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively, materially and adversely affects the interests of the Lenders taken as a whole under the Finance Documents. |
(c) | No Event of Default under paragraphs (a) and (b) above will occur if the issue is capable of being remedied and is remedied within 20 Business Days of the earlier of Midco becoming aware of the issue or being given written notice of the issue by the Agent. |
28.9 | Intercreditor Agreement |
Any party (other than (i) a Finance Party or (ii) a member of the Group) fails to comply with the provisions of, or does not perform its obligations under, the Intercreditor Agreement or a representation or warranty given by that party in the Intercreditor Agreement is incorrect in any material respect, and, if the non-compliance or circumstances giving rise to the misrepresentation are capable of remedy, it is not remedied within 20 Business Days of the earlier of the Agent giving written notice to that party or that party becoming aware of the non-compliance or misrepresentation.
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28.10 | Cessation of business |
The Group taken as a whole suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.
28.11 | Audit qualification |
The Auditors of the Group qualify the audited annual consolidated financial statements of Midco in a way which has a Material Adverse Effect.
28.12 | Repudiation and rescission of agreements |
An Obligor rescinds or purports to rescind or repudiates or evidences an intention to repudiate a Finance Document or evidences an intention to rescind or repudiate a Finance Document in any way which is materially adverse to the interest of the Lenders under that Finance Document taken as a whole.
28.13 | Material adverse change |
Any event or circumstance occurs which has a Material Adverse Effect.
28.14 | Unsatisfied judgment |
Any Obligor fails to pay a final judgment against it and that failure to pay has a Material Adverse Effect.
28.15 | Tax status |
A notice under Article 36 of the Tax Collection Act ( Invorderingswet 1990 ) has been given by any member of the Group.
28.16 | Acceleration |
(a) | On and at any time after the occurrence of an Event of Default under paragraph (a) of that definition which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to Midco: |
(i) | cancel the Total Commitments and/or Ancillary Commitments, at which time they shall immediately be cancelled; |
(ii) | declare that all or part of the Utilisations, 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; |
(iii) | declare that all or part of the Utilisations be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; |
(iv) | declare that cash cover in respect of each Letter of Credit is immediately due and payable, at which time it shall become immediately due and payable; |
(v) | declare that cash cover in respect of each Letter of Credit is payable on demand, at which time it shall immediately become due and payable on demand by the Agent on the instructions of the Majority Lenders; |
(vi) | declare all or any part of the amounts (or cash cover in relation to those amounts) outstanding under the Ancillary Facilities to be immediately due and payable, at which time they shall become immediately due and payable; |
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(vii) | declare that all or any part of the amounts (or cash cover in relation to those amounts) outstanding under the Ancillary Facilities be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or |
(viii) | exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents. |
(b) | Subject to the terms of the Intercreditor Agreement, on and at any time after the occurrence of an Event of Default under paragraph (b) of that definition which is continuing, the Agent may, and shall if so directed by the Majority RCF Lenders by notice to Midco: |
(i) | cancel the Total Revolving Facility Commitments and/or Ancillary Commitments, at which time they shall immediately be cancelled; |
(ii) | declare that all or part of the Revolving Facility Utilisations, together with accrued interest, and all other amounts accrued or outstanding under each Revolving Facility be immediately due and payable, at which time they shall become immediately due and payable; |
(iii) | declare that all or part of the Revolving Facility Utilisations be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority RCF Lenders; |
(iv) | declare that cash cover in respect of each Letter of Credit is immediately due and payable, at which time it shall become immediately due and payable; |
(v) | declare that cash cover in respect of each Letter of Credit is payable on demand, at which time it shall immediately become due and payable on demand by the Agent on the instructions of the Majority RCF Lenders; |
(vi) | declare all or any part of the amounts (or cash cover in relation to those amounts) outstanding under the Ancillary Facilities to be immediately due and payable, at which time they shall become immediately due and payable; |
(vii) | declare that all or any part of the amounts (or cash cover in relation to those amounts) outstanding under the Ancillary Facilities be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority RCF Lenders; and/or |
(viii) | exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents. |
28.17 | Clean-Up Period |
Notwithstanding any other provision of this Agreement, in relation to any Permitted Acquisition under paragraphs (d) and (e) of the definition of Permitted Acquisition, any Default or Event of Default which is a Clean-Up Default will be deemed not to be a breach of representation, warranty or undertaking, or a Default or an Event of Default (as the case may be) for the duration of the relevant Clean-Up Period if:
(i) | it would have been (if it were not for this provision) a breach of representation, warranty or undertaking or a Default or an Event of Default only by reason of circumstances relating exclusively to a member of the Acquired Group of such Permitted Acquisition (or any obligation to procure or ensure in relation to a member of that Acquired Group); |
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(ii) | it is capable of remedy and reasonable steps are being taken to remedy it; |
(iii) | the circumstances giving rise to it have not be procured by or approved by Finco, Midco or any other member of the Group; |
(iv) | it is not reasonably likely to have a Material Adverse Effect; and |
(v) | it does not exist at the end of the Clean-Up Period, |
provided that, notwithstanding the above, if the relevant circumstances are continuing on or after the end of the Clean-Up Period, there shall be an Event of Default.
28.18 | Operation of Clause 27 ( General undertakings ) |
(a) | When establishing whether any action, transaction and/or incurrence of a liability is permitted under the terms of the Finance Documents by reference to LTM EBITDA, the Group shall be entitled to rely on the fact that such action, transaction and/or incurrence was permitted by reference to LTM EBITDA at the time that action was originally taken, that transaction was originally committed to or that liability was originally incurred (as the case may be) assuming that is the case and, to the extent so permitted, no subsequent change in Consolidated EBITDA shall in and of itself cause such action, transaction and/or incurrence to constitute or be deemed to constitute or result in a breach of any representation, warranty, undertaking or other term of the Finance Documents or a Default or an Event of Default. |
(b) | Notwithstanding any term of any Finance Document to the contrary, any Financial Indebtedness incurred by reference to LTM EBITDA may be refinanced, replaced, renewed or extended, notwithstanding any subsequent change in Consolidated EBITDA, provided that the principal amount of such Financial Indebtedness is not increased (other than as represents the fees, costs and expenses for such financing, replacement, renewal or extension) and the maturity date is the same or longer as that applicable to the Financial Indebtedness being refinanced, replaced, renewed or extended. |
(c) | A certificate from Midco confirming that the Debt Cover Condition is satisfied shall be prima facie evidence thereof. If at any time after the Debt Cover Condition has been satisfied the Debt Cover Condition ceases to be satisfied, any breach of the Finance Documents that arises as a result of any of the obligations, restrictions or other terms referred to in Clause 27.35 ( Covenant suspension/relaxation ) ceasing to be construed or suspended in the manner described in that Clause shall not (provided that it did not constitute a Default or an Event of Default at the time the relevant action, transaction or incurrence was entered into) constitute or be deemed to constitute or result in a breach of any representation, warranty, undertaking or other term of the Finance Documents or a Default or an Event of Default. |
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SECTION 9
CHANGES TO PARTIES
29. | CHANGES TO THE LENDERS |
29.1 | Assignments and transfers by the Lenders |
(a) | Subject to this Clause 29, a Lender (the Existing Lender ) may: |
(i) | assign any of its rights; or |
(ii) | transfer by novation any of its rights and obligations, |
under any Finance Document to another bank or financial institution or to 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 (the New Lender ).
(b) | The Agent shall maintain a book-entry transfer register (the Register) solely in its capacity as Agent for the Borrowers for the purposes of all assignments or transfers made pursuant to this Clause 29 and shall provide a copy of the Register to Midco at six-Monthly intervals starting from the date of this Agreement and otherwise upon request by Midco. |
(c) | For the avoidance of doubt and notwithstanding any other provision of the Finance Documents, the Facility B1 Commitments and Facility B2 Commitments of each Original Lender which is a Party on the date on which this Agreement is entered into shall be reduced on a pro rata basis (or otherwise in the manner agreed between the Arrangers and Midco) in an aggregate amount equal to the amount of any Facility B1 Exchange Commitments (in the case of the Facility B1 Commitments of such Original Lenders) and Facility B2 Exchange Commitments (in the case of the Facility B2 Commitments or such Original Lenders) in any Exchange Certificate received on or prior to the Closing Date. |
29.2 | Conditions of assignment or transfer |
(a) | Midco must be consulted before an assignment or transfer by an Existing Lender, unless the assignment or transfer is: |
(i) | to another Lender or an Affiliate of a Lender; or |
(ii) | to a fund within the same investor group as the fund which is the Existing Lender (including, for the avoidance of doubt, to any Related Fund); or |
(iii) | by an Original Lender in the course of syndication of Facility B1 and/or Facility B2 and/or Revolving Facility 1; or |
(iv) | by an Original Facility C3 Lender in the course of syndication of Facility C3. |
(b) | Each assignment or transfer of part of any Lenders participation shall (when aggregated with related assignments and transfers, including with its Affiliates and Related Funds) be in a minimum amount of: |
(i) | EUR 1,000,000 (or its equivalent) in aggregate in respect of Commitments under a Term Facility (or, if less, all of that Lenders remaining Commitments under that Facility); or |
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(ii) | EUR 1,000,000 (or its equivalent) in aggregate in respect of Commitments under a Revolving Facility (or, if less, all of that Lenders remaining Commitments under that Facility), |
or, in relation to any Revolving Facility 1 Commitment or Revolving Facility 2 Commitment, such lower amount as may be agreed by Midco in connection with the provision of an Ancillary Facility.
(c) | The consent of the Issuing Bank is required for any assignment or transfer by an Existing Lender of any of its rights and/or obligations under a Revolving Facility. |
(d) | An assignment will only be effective on: |
(i) | receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties and the other Secured Parties as it would have been under if it was an Existing Lender; |
(ii) | the New Lender entering into a Creditor/Agent Accession Undertaking (as defined in the Intercreditor Agreement); |
(iii) | the performance by the Agent of all know your customer or other checks relating to any person that it is required to carry out in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender; and |
(iv) | receipt by Midco of the notice required by Clause 18.5 ( Lender status confirmation ). |
(e) | A transfer will only be effective if the New Lender enters into a Creditor/Agent Accession Undertaking (as defined in the Intercreditor Agreement) and if the procedure set out in Clause 29.5 ( Procedure for transfer ) is complied with. |
(f) | If (other than in the course of syndication of Facility B1 and/or Facility B2 and/or Revolving Facility 1 and/or Facility C3): |
(i) | a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and |
(ii) | as a result of circumstances existing at the date the assignment a transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 18 ( Tax gross-up and indemnities ) or Clause 19.1 ( Increased Costs ), |
then the New Lender 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 or change had not occurred.
(g) | If the Existing Lender has consented to an amendment or waiver request which is outstanding at the time of assignment or transfer, the transfer may only be made if the New Lender has also consented to that request. |
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29.3 | Assignment or transfer fee |
Unless the Agent otherwise agrees and excluding an assignment or transfer to an Affiliate of a Lender or made in connection with primary syndication of the Facilities, the New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of EUR 1,500.
29.4 | 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 Transaction Documents, the Transaction Security or any other documents; |
(ii) | the financial condition of any Obligor; |
(iii) | the performance and observance by any Obligor or any other member of the Group of its obligations under the Transaction Documents or any other documents; or |
(iv) | the accuracy of any statements (whether written or oral) made in or in connection with any Transaction Document or any other document, |
and any representations or warranties implied by law are excluded.
(b) | Each New Lender confirms to the Existing Lender, the other Finance Parties and the Secured 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 or any other Finance Party in connection with any Transaction Document or the Transaction Security; 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 retransfer from a New Lender of any of the rights and obligations assigned or transferred under this Clause 29; 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 Transaction Documents or otherwise. |
29.5 | Procedure for transfer |
(a) | Subject to the conditions set out in Clause 29.2 ( Conditions of assignment or transfer ), a transfer is effected in accordance with paragraph (c) below when the Agent executes an otherwise duly completed Transfer Certificate and Lender Accession Undertaking delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate and Lender Accession Undertaking 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 and Lender Accession Undertaking. |
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(b) | The Agent shall only be obliged to execute a Transfer Certificate and Lender Accession Undertaking 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 similar other checks under all applicable laws and regulations in relation to the transfer to such New Lender. |
(c) | On the Transfer Date: |
(i) | to the extent that, in the Transfer Certificate and Lender Accession Undertaking, the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security, each of the Obligors and other members of the Group party to any Finance Document or the Transaction Security and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and in respect of the Transaction Security and their respective rights against one another under the Finance Documents and in respect of the Transaction Security shall be cancelled (being the Discharged Rights and Obligations ); |
(ii) | each of the Obligors and other members of the Group party to any Finance Document 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 or other member of the Group and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender; |
(iii) | the Agent, the Arrangers, the Facility C3 Arrangers, the Security Agent, the New Lender, the other Lenders, the Issuing Bank and any relevant Ancillary Lender shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security 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 Agent, the Arrangers, the Facility C3 Arrangers, the Security Agent, the Issuing Bank and any relevant Ancillary Lender 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. |
(d) | At the request of the Agent or the New Lender, the New Lender and the Existing Lender shall promptly raise the duly completed Transfer Certificate and Lender Accession Undertaking to the status of Spanish Public Document in the form of escritura pública . |
(e) | For the avoidance of doubt, the Parties agree that a transfer effected in accordance with this Clause 29.5 shall constitute a novation within the meaning of articles 1271 et seq. of the French Code Civil , provided that, notwithstanding any such novation, all the rights (including in relation to Transaction Security) of the Secured Parties against the Obligors shall be maintained. |
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29.6 | Copy of Transfer Certificate and Lender Accession Undertaking to Midco |
The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate and Lender Accession Undertaking, send to Midco a copy of that Transfer Certificate and Lender Accession Undertaking.
29.7 | Security Interests over Lenders rights |
In addition to the other rights provided to Lenders under this Clause 29, each Lender may at any time create Security in or over (whether by way 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 Security to secure obligations to a federal reserve or central bank; and |
(b) | in the case of any Lender which is a fund, any 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 Security shall: |
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant Security for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by an Obligor 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. |
29.8 | Sub-participations |
The Lenders may enter into any sub-participations or other arrangements by which a third party acquires direct or indirect commercial control over a Lenders rights and/or obligations under this Agreement provided that Midco must be consulted where a third party is to acquire direct or indirect commercial control over a Lenders voting rights under this Agreement.
29.9 | Lender Accession Notice and Exchange Certificate |
Each Lender which executes a Lender Accession Notice or Exchange Certificate confirms, for the avoidance of doubt, that the 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 such person becomes Party to this Agreement and that it is bound by that decision to the same extent as it would have been had it been a Lender under this Agreement at the relevant time of such amendment or waiver being approved.
29.10 | Replacement of Lenders |
(a) | If at any time any Lender or the Issuing Bank becomes an Affected Lender or Non-Consenting Lender, then Midco may, on 10 Business Days prior written notice to the Agent and that Lender or Issuing Bank (as the case may be and unless Midco and the Agent agree to a longer time period in relation to any request), replace that Lender or Issuing Bank by ca using it to, and that Lender or Issuing Bank shall, by execution of a Transfer Certificate and Lender Accession Undertaking within that 10-Business Day, period transfer all of its rights and obligations under this Agreement to a Lender or other entity designated by Midco for a purchase price equal to that Lenders or Issuing Banks participations in the Utilisations then outstanding, in either case with all accrued interests, fees and other amounts payable to that Lender or Issuing Bank under this Agreement or any Ancillary Document. |
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(b) | For the purposes of this Clause 29.10: |
Affected Lender means a Lender or Issuing Bank in respect of which a Borrower or Midco is at that time entitled to serve a notice under Clause 11.6 ( Right of cancellation and repayment in relation to a single Lender or Issuing Bank ) or whose rights and obligations under this Agreement would, but for this Clause 29.10, be cancelled pursuant to Clause 11.1 ( Illegality ) or 11.2 ( Illegality in relation to an Issuing Bank ); and
Non-Consenting Lender means any Lender which does not agree to consent to any waiver or amendment of any provision of the Finance Documents which has been requested by Midco or any other Obligor where the requested amendment or waiver has been approved by the Majority Lenders and requires the consent of more than the Majority Lenders.
(c) | This Clause 29.10 shall not apply to a Listco Affiliate (unless the Majority Lenders otherwise agree). |
30. | DEBT PURCHASE TRANSACTIONS |
30.1 | Debt Purchase Transactions |
(a) | Finco and Midco shall not and shall ensure that no Obligor or other member of the Group shall (i) enter into any Debt Purchase Transaction other than by Midco in accordance with the other provisions of this Clause 30 or (ii) beneficially own all or any part of the share capital of a company that is a Lender or a party to, or itself be a Lender or a party to, a Debt Purchase Transaction of the type referred to in paragraphs (b) or (c) of the definition of Debt Purchase Transaction. |
(b) | Midco may purchase by way of assignment, pursuant to Clause 29 ( Changes to the Lenders ), a participation in any Term Loan (other than in respect of an Additional Facility) in respect of which it is the Borrower and any related Commitment in accordance with paragraph (e) below or where: |
(i) | such purchase is made for a consideration of par or less than par; |
(ii) | such purchase is made using one of the processes set out at paragraphs (c) or (d) below; |
(iii) | such purchase is made at a time when no Default is continuing; and |
(iv) | the consideration for such purchase is funded from (1) that part of Excess Cashflow which is not required to be applied in prepayment of the Facilities pursuant to the other terms of this Agreement or (2) New Equity received after the Closing Date. |
(c) |
(i) | A Debt Purchase Transaction referred to in paragraph (b) above may be entered into by Midco pursuant to a solicitation process (a Solicitation Process ) which is carried out as follows. |
(ii) |
Prior to 11.00 am on a given Business Day (the Solicitation Day ) Midco or a financial institution acting on its behalf (the Purchase Agent ) will approach at the same time |
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each Lender which participates in the relevant Term Facilities to enable them to offer to sell to the relevant Borrower(s) an amount of their participation in one or more Term Facilities. Any Lender wishing to make such an offer shall, by 11.00 am on the second Business Day following such Solicitation Day, communicate to the Purchase Agent details of the amount of its participations, and in which Term Facilities, it is offering to sell and the price at which it is offering to sell such participations. Any such offer shall be irrevocable until 11.00 am on the third Business Day following such Solicitation Day and shall be capable of acceptance by Midco on behalf of the relevant Borrower(s) on or before such time by communicating its acceptance in writing to the Purchase Agent or, if it is the Purchase Agent, the relevant Lenders. The Purchase Agent (if someone other than Midco) will communicate to the relevant Lenders which offers have been accepted by 12 noon on the third Business Day following such Solicitation Day. In any event by 11.00 am on the fourth Business Day following such Solicitation Day, Midco shall notify the Agent of the amounts of the participations purchased through the relevant Solicitation Process, the identity of the Term Facilities to which they relate and the average price paid for the purchase of participations in each relevant Term Facility. The Agent shall disclose such information to any Lender that requests such disclosure. |
(iii) | Any purchase of participations in the Term Facilities pursuant to a Solicitation Process shall be completed and settled on or before the fifth Business Day after the relevant Solicitation Day. |
(iv) | In accepting any offers made pursuant to a Solicitation Process Midco shall be free to select which offers and in which amounts it accepts but on the basis that in relation to a participation in a particular Term Facility it accepts offers in inverse order of the price offered (with the offer or offers at the lowest price being accepted first) and that if in respect of participations in a particular Term Facility it receives two or more offers at the same price it shall only accept such offers on a pro rata basis. |
(d) |
(i) | A Debt Purchase Transaction referred to in paragraph (b) above may also be entered into by Midco pursuant to an open order process (an Open Order Process ) which is carried out as follows. |
(ii) | Midco may by itself or through another Purchase Agent place an open order (an Open Order ) to purchase participations in one or more of the Term Facilities up to a set aggregate amount at a set price by notifying at the same time all the Lenders participating in the relevant Term Facilities of the same. Any Lender wishing to sell pursuant to an Open Order will, by 11.00 am on any Business Day following the date on which the Open Order is placed but no earlier than the first Business Day, and no later than the fifth Business Day, following the date on which the Open Order is placed, communicate to the Purchase Agent details of the amount of its participations, and in which Term Facilities, it is offering to sell. Any such offer to sell shall be irrevocable until 11.00 am on the Business Day following the date of such offer from the Lender and shall be capable of acceptance by Midco on behalf of the relevant Borrower(s) on or before such time by it communicating such acceptance in writing to the relevant Lender. |
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(iii) | Any purchase of participations in the Term Facilities pursuant to an Open Order Process shall be completed and settled by Midco on or before the fourth Business Day after the date of the relevant offer by a Lender to sell under the relevant Open Order. |
(iv) | If in respect of participations in a Term Facility the Purchase Agent receives on the same Business Day two or more offers at the set price such that the maximum amount of such Term Facility to which an Open Order relates would be exceeded, Midco shall only accept such offers on a pro rata basis. |
(v) | Midco shall, by 11.00 am on the sixth Business Day following the date on which an Open Order is placed, notify the Agent of the amounts of the participations purchased through such Open Order Process and the identity of the Term Facilities to which they relate. The Agent shall disclose such information to any Lender that requests the same. |
(e) | For the avoidance of doubt, there is no limit on the number of occasions a Solicitation Process or an Open Order Process may be implemented. |
(f) | In relation to any Debt Purchase Transaction entered into pursuant to this Clause 30, notwithstanding any other term of this Agreement or the other Finance Documents: |
(i) | on completion of the relevant Debt Purchase Transaction, the portions of the Loans to which it relates shall (unless Midco confirms in a certificate to the Agent dated on or prior to the date of such Debt Purchase Transaction that there would be a material adverse tax impact on the Group as a result of such cancelation) be extinguished; |
(ii) | such Debt Purchase Transaction and the related extinguishment referred to in paragraph (i) above shall not constitute a prepayment of the Facilities; |
(iii) | for the purposes of the calculation of Consolidated EBITDA and testing compliance with the financial covenant in Clause 26 ( Financial covenant ) any impact of a Debt Purchase Transaction on Consolidated EBITDA shall be ignored; |
(iv) | the Borrower which is the assignee shall be deemed to be an entity which fulfils the requirements of Clause 29.1 ( Assignments and transfers by the Lenders ) to be a New Lender; |
(v) | no member of the Group shall be deemed to be in breach of any provision of Clause 27 ( General undertakings ) solely by reason of such Debt Purchase Transaction; |
(vi) | Clause 34 ( Sharing among the Finance Parties ) shall not be applicable to the consideration paid under such Debt Purchase Transaction; |
(vii) | for the avoidance of doubt, any extinguishment of any part of the Term Loans shall not affect any amendment or waiver which prior to such extinguishment had been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement; |
(viii) | no member of the Group which entered into a Debt Purchase Transaction will be entitled to receive any payment pursuant to this Agreement or any other Finance Document unless it receives such amount pro rata with all other Lenders in the relevant Facility; |
(ix) |
any amount received by any member of the Group which has entered into a Debt Purchase Transaction (including, without limitation, the proceeds of any enforcement of security) shall be held on trust for distribution to the other Finance Parties and such |
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member of the Group shall promptly (and in any event within 5 Business Days) pay an amount equal to that amount to the Agent for application in accordance with Clause 35.5 ( Partial payments ) (ignoring for the purposes of such application any member of the Group); and |
(x) | no member of the Group which participates in a Debt Purchase Transaction shall be permitted to sell, transfer, assign, sub-participate or otherwise dispose of the subject matter of that Debt Purchase Transaction and Clause 30.2 ( Disenfranchisement on Debt Purchase Transactions ) shall apply. |
30.2 | Disenfranchisement on Debt Purchase Transactions |
(a) | For so long as a Listco Affiliate or a member of the Group: |
(i) | has entered into a Debt Purchase Transaction; |
(ii) | beneficially owns a Commitment; or |
(iii) | has entered into a sub-participation agreement relating to a Commitment or other agreement or arrangement having a substantially similar economic effect and such agreement or arrangement has not been terminated, |
in ascertaining the Majority Lenders or the Super Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments or the agreement of any specified group of Lenders has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents such Commitment shall be deemed to be zero and such member of the Group or Listco Affiliate or the person with whom it has entered into such sub-participation, other agreement or arrangement shall be deemed not to be a Lender (other than for the purposes of this Clause 30.2).
(b) | Each Lender shall, unless such Debt Purchase Transaction is an assignment or transfer, promptly notify the Agent in writing if it knowingly enters into a Debt Purchase Transaction with a Listco Affiliate or a member of the Group (a Notifiable Debt Purchase Transaction ), such notification to be substantially in the form set out in Part I of Schedule 15 ( Forms of Notifiable Debt Purchase Transaction Notice ). |
(c) | A Lender shall promptly notify the Agent if a Notifiable Debt Purchase Transaction to which it is a party is terminated, or ceases to be with a Listco Affiliate or a member of the Group, such notification to be substantially in the form set out in Part II of Schedule 15 ( Forms of Notifiable Debt Purchase Transaction Notice ). |
(d) | Each Listco Affiliate and each member of the Group that is a Lender agrees that: |
(i) | in relation to any meeting or conference call to which all the Lenders are invited to attend or participate, it shall not attend or participate in the same if so requested by the Agent or, unless the Agent otherwise agrees, be entitled to receive the agenda or any minutes of the same; and |
(ii) | in its capacity as Lender, unless the Agent otherwise agrees, it shall not be entitled to receive any report or other document prepared at the behest of, or on the instructions of, the Agent or one or more of the Lenders. |
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30.3 | Prohibited Debt Purchase Transactions |
(a) | Notwithstanding Clause 30.1 ( Debt Purchase Transactions ) and Clause 30.2 ( Disenfranchisement on Debt Purchase Transactions ) above, Finco shall not, Midco shall not, no member of the Group shall and no Listco Affiliate shall, enter into any Debt Purchase Transaction or beneficially own all or any part of the share capital of a company that is a Lender or a party to, or itself be a Lender or a party to, any Commitment or any Debt Purchase Transaction in relation to any Additional Facility. |
31. | CHANGES TO THE OBLIGORS |
31.1 | Assignment and transfers by Obligors |
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
31.2 | Additional Borrowers |
(a) | Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 25.10 ( Know your customer checks ), Midco may request that any of its Subsidiaries (other than Bondco) becomes an Additional Borrower. That Subsidiary shall become an Additional Borrower if: |
(i) | in relation to Revolving Facility 2, that Subsidiary is incorporated in the United Kingdom, Germany, Austria, France, the Netherlands, Ireland or Denmark; or |
(ii) | all the Lenders (calculated, for this purpose, as if that definition only included Lenders under the respective Facility to which the respective Borrower wishes to accede), acting reasonably, approve the addition of that Subsidiary for the purposes of the relevant Facility, |
and (in each case):
(A) | Midco and that Subsidiary deliver to the Agent a duly completed and executed Accession Letter; |
(B) | the Subsidiary is (or becomes) a Guarantor prior to becoming a Borrower; |
(C) | Midco confirms that no Default is continuing or would occur as a result of that Subsidiary or becoming an Additional Borrower; and |
(D) | the Agent has received all of the documents and other evidence listed in Parts II and III of Schedule 2 ( Conditions Precedent and Conditions Subsequent ) in relation to that Additional Borrower, each in form and substance satisfactory to the Agent, acting reasonably. |
(b) | The Agent shall notify Midco 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 and Conditions Subsequent ) in relation to such Subsidiaries. |
31.3 | Resignation of a Borrower |
(a) | In this Clause 31.3, Clause 31.5 ( Resignation of a Guarantor ) and Clause 31.7 ( Resignation and release of Security on disposal ), Third Party Disposal means the disposal of an Obligor to a person which is not a member of the Group where that disposal is permitted under Clause 27.13 ( Disposals ) (and Midco confirms in writing to the Agent and the Security Agent to that effect). |
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(b) | Midco may request that any Borrower (other than Bidco or Midco) ceases to be a Borrower by delivering to the Agent a Resignation Letter. |
(c) | The Agent shall accept a Resignation Letter and notify Midco and the other Finance Parties of its acceptance if: |
(i) | Midco has confirmed that no Default is continuing or would result from the acceptance of the Resignation Letter; |
(ii) | the Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents; and |
(iii) | if the Borrower ceases to be a Borrower in connection with a Third Party Disposal, Midco has confirmed that it shall ensure that any relevant Disposal Proceeds will be applied in accordance with Clause 12.3 ( Application of mandatory prepayments ). |
(d) | Upon notification by the Agent to Midco of its acceptance of the resignation of a Borrower, that company shall cease to be a Borrower and shall have no further rights or obligations under the Finance Documents as a Borrower. |
31.4 | Additional Guarantors |
(a) | Subject to compliance with the provisions of paragraphs (b) and (c) of Clause 25.10 ( Know your customer checks ), Midco may request that any of its Subsidiaries become an Additional Guarantor. |
(b) | A member of the Group shall become an Additional Guarantor if: |
(i) | Midco and the proposed Additional Guarantor deliver to the Agent a duly completed and executed Accession Letter; |
(ii) | the Agent has received all of the documents and other evidence listed in Part III of Schedule 2 ( Conditions Precedent and Conditions Subsequent ) in relation to that Additional Guarantor, each in form and substance satisfactory to the Agent; and |
(iii) | it grants security in accordance with and if required by the Security Principles. |
(c) | The Agent shall notify Midco 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 and Conditions Subsequent ) in relation to such Subsidiary. |
31.5 | Resignation of a Guarantor |
(a) | Midco may request that a Guarantor (other than Finco), Bidco, Midco, Bondco and a Material Company (other than as a result of a Permitted Disposal to a non-Group company)) ceases to be a Guarantor by delivering to the Agent a Resignation Letter if: |
(i) |
(A) | that Guarantor is being disposed of by way of a Third Party Disposal (as defined in Clause 31.3 ( Resignation of a Borrower )) and Midco has confirmed this is the case; and |
(B) | the Guarantor Coverage test set out in Clause 27.29 ( Guarantors ) is, taking into account the resignation of the relevant Guarantor, still met; or |
(ii) | the Super Majority Lenders have consented to the resignation of that Guarantor. |
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(b) | The Agent shall accept a Resignation Letter and notify Midco and the Lenders of its acceptance if: |
(i) | Midco has confirmed that no Default is continuing or would result from the acceptance of the Resignation Letter; |
(ii) | no payment is due from the Guarantor under Clause 23.1 ( Guarantee and indemnity ); |
(iii) | where the Guarantor is also a Borrower, it is under no actual or contingent obligations as a Borrower and has resigned and ceased to be a Borrower under Clause 31.3 ( Resignation of a Borrower ); |
(iv) | Midco has confirmed that such Guarantor has ceased to be a guarantor and has ceased to provide any other credit support in relation to the Senior Secured Notes and all New Debt Financing; and |
(v) | if the Guarantor ceases to be a Guarantor in connection with a Third Party Disposal, Midco has confirmed that it shall ensure that the Disposal Proceeds will be applied in accordance with Clause 12.3 (Application of mandatory prepayments ). |
(c) | Upon notification by the Agent to Midco of its acceptance of the resignation of a Guarantor, that company shall cease to be a Guarantor and shall have no further obligations under the Finance Documents as a Guarantor. |
31.6 | Repetition of representations |
Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the representations and warranties referred to in paragraph (d) of Clause 24.20 ( Times when representations made ) 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.
31.7 | Resignation and release of Security on disposal |
(a) | If a Borrower or Guarantor resigns in accordance with the terms of this Agreement, then, provided that Midco confirms in writing to the Agent and the Security Agent that such Borrower or Guarantor ceased to be a guarantor in relation to all Senior Secured Notes and New Debt Financings: |
(i) | where that Borrower or Guarantor created Transaction Security over any of its assets or business in favour of the Security Agent, or Transaction Security in favour of the Security Agent was created over the shares (or equivalent) of that Borrower or Guarantor, the Security Agent shall, at the cost and request of Midco, release those assets, business or shares (or equivalent) and issue, where applicable, certificates of non-crystallisation, but excluding any Transaction Security over the shares in Midco; |
(ii) | the resignation of that Borrower or Guarantor and related release of Transaction Security referred to in paragraph (i) above shall not become effective until the date of resignation; and |
(iii) | in the case of resignation in connection with a disposal, if the relevant disposal of that Borrower or Guarantor is not made, the Resignation Letter of that Borrower or Guarantor and the related release of Transaction Security referred to in paragraph (i) above shall have no effect and the obligations of the Borrower or Guarantor and the Transaction Security created or intended to be created by or over that Borrower or Guarantor shall continue in full force and effect. |
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(b) | If an Obligor disposes of any asset as expressly permitted by and in accordance with the terms of this Agreement (and Midco confirms in writing to the Agent and the Security Agent to that effect) and such asset is the subject of Transaction Security in favour of the Security Agent, the Security Agent shall, at the cost and request of Midco, release those assets and issue certificates of non-crystallisation. |
(c) | If an Obligor wishes to enter into any netting or set-off arrangements of a kind described in paragraph (b) of the definition of Permitted Security and is required to grant Security over the bank accounts which are the subject of that arrangement and/or its rights under any agreement governing or administering that arrangement and such assets (including any such rights) are the subject of Transaction Security in favour of the Security Agent, then the Security Agent shall, at the cost and request of Midco, release those assets and issue certificates of non-crystallisation, provided, however, that the applicable Obligor shall consult with the Security Agent as to whether any replacement Transaction Security in favour of the Security Agent may be granted over those assets without adversely affecting the commercial arrangement in relation to the desired netting or set-off arrangements (and, if the Obligor and the Security Agent agree (each acting reasonably and in good faith), such replacement Transaction Security shall be granted by the relevant Obligor in favour of the Security Agent, subject to the Security Principles). |
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SECTION 10
THE FINANCE PARTIES
32. | ROLE OF THE AGENT, THE ARRANGERS, THE ISSUING BANK AND OTHERS |
32.1 | Appointment of the Agent |
(a) | Each of the Arrangers, the Facility C3 Arrangers, the Lenders and the Issuing Bank appoints the Agent to act as its agent under and in connection with the Finance Documents. |
(b) | Each of the Arrangers, the Facility C3 Arrangers, the Lenders and the Issuing Bank authorises the Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions. |
(c) | In connection with the ratification and raising of any Finance Document into the status of a Spanish Public Document, the Agent shall act as the agent and representative of each Finance Party and is hereby authorised on behalf of each Finance Party to enter into, enforce the rights of each Finance Party and represent each Finance Party in respect of the granting of any Spanish Public Document. |
32.2 | Duties of the Agent |
(a) | Subject to paragraph (b) below, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party. |
(b) | Without prejudice to Clause 29.6 ( Copy of Transfer Certificate and Lender Accession Undertaking to Midco ), paragraph (a) above shall not apply to any Transfer Certificate and Lender Accession Undertaking or Exchange Certificate. |
(c) | Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to an other Party. |
(d) | If the 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. |
(e) | If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, the Arrangers, the Facility C3 Arrangers or the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties. |
(f) | The Agents duties under the Finance Documents are solely mechanical and administrative in nature. |
(g) | Neither the Agent nor the Security Agent shall have any duty or be under any obligation or responsibility to review or check the adequacy, accuracy or completeness, or otherwise monitor the application of (including the occurrence of any default or termination event under or in respect of), any Lender Accession Notice, Additional Facility Notice, Additional Facility Document, Exchange Certificate or any information provided by an Additional Facility Lender or Exchange Lender. |
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(h) | The 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). |
32.3 | Role of the Arrangers and Facility C3 Arrangers |
Except as specifically provided in the Finance Documents, none of the Arrangers or Facility C3 Arrangers has any obligations of any kind to any other Party under or in connection with any Finance Document.
32.4 | No fiduciary duties |
(a) | Nothing in this Agreement constitutes the Agent, any Arranger, any Facility C3 Arranger and/or the Issuing Bank acting as a trustee or fiduciary of any other person. |
(b) | None of the Agent, the Security Agent, any Arranger, any Facility C3 Arranger the Issuing Bank or any Ancillary Lender 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. |
32.5 | Business with the Group |
The Agent, the Security Agent, any Arranger, any Facility C3 Arranger, the Issuing Bank and each Ancillary Lender may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
32.6 | Rights and discretions |
(a) | The Agent, the Security Agent and the Issuing Bank may: |
(i) | rely on: |
(A) | any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised; and |
(B) | any statement made by a director, authorised signatory or employee of any person regarding any matter which may reasonably be assumed to be within his knowledge or within his power to verify; |
(ii) | assume that: |
(A) | any instructions received by it from the Majority Lenders, the Super 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 |
(iii) | rely on a certificate or any statement by or 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 or statement.
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(b) | The Agent and the Security 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 28.1 ( 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 Midco (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 Agent and the Security 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 Agent and the Security Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent and/or the Security Agent (and so separate from any lawyers instructed by the Lenders) if the Agent and/or the Security Agent in its reasonable opinion deems this to be desirable. |
(e) | The Agent and the Security Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the 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 Agent and the Security Agent may act in relation to the Finance Documents through its officers, employees and agents and neither the Agent nor the Security Agent shall: |
(i) | be liable for any error of judgment made by any such person; or |
(ii) | be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person, |
unless such error or such loss was directly caused by the Agents (or Security Agents, as the case may be) gross negligence or wilful misconduct.
(g) | Unless a Finance Document expressly provides otherwise the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement. |
(h) | Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent, the Security Agent, the Arrangers, the Facility C3 Arrangers or the Issuing Bank 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. |
(i) | Notwithstanding any provision of any Finance Document to the contrary, neither the Agent nor the Security Agent is 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. |
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32.7 | Lenders Instructions |
(a) | The 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 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; |
(B) | the Super Majority Lenders if the relevant Finance Document stipulates the matter is a Super Majority Lender decision; and |
(C) | 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 Agent and the Security 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 Agent and the Security 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 Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all the Finance Parties other than the Security Agent. |
(d) | Each of the Agent and the Security 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 Documents and which may include payment in advance) for any cost, loss or liability (together with any associated VAT) which it may incur in complying with those instructions. |
(e) | In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders. |
(f) | The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lenders consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (f) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Transaction Security Documents or enforcement of the Transaction Security or Transaction Security Documents. |
32.8 | Responsibility for documentation |
None of the Agent, the Security Agent, the Arrangers, the Facility C3 Arrangers, the Issuing Bank or any Ancillary Lender is responsible or liable for:
(a) | the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, any Arranger, any Facility C3 Arranger, the Issuing Bank, an |
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Ancillary Lender, an Obligor or any other person given in or in connection with any Finance Document 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;
(b) | the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security; 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. |
32.9 | No duty to monitor |
Neither the Agent or the Security Agent shall be bound to enquire:
(a) | whether or not any Default (or default, event of default, or termination event, howsoever described) has occurred; |
(b) | as to the performance, default or any breach by any Party of its obligations under any Finance Document; or |
(c) | whether any other event specified in any Finance Document has occurred. |
32.10 | 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 Agent, the Security Agent, the Issuing Bank or any Ancillary Lender), none of the Agent, the Security Agent, the Issuing Bank, nor any Ancillary Lender will 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 or the Transaction Security, unless directly caused by its gross negligence or wilful misconduct; |
(ii) | any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising in relation to any Additional Facility Notice or Additional Facility Document and/or failure by any person to comply with any applicable law or regulation, unless directly caused by its gross negligence or wilful misconduct; |
(iii) | exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or the Transaction Security, unless caused directly by its gross negligence or wilful misconduct; or |
(iv) | without prejudice to the generality of paragraphs (i) to (iii) 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 |
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(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 (i) nationalisation, expropriation or other governmental actions, (ii) any regulation, currency restriction, devaluation or fluctuation, (iii) market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event), (iv) breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems, (v) natural disasters or acts of God, (vi) war, terrorism, insurrection or revolution or (vii) strikes or industrial action.
(b) | No Party (other than the Agent, the Security Agent, the Issuing Bank or an Ancillary Lender (as applicable)) may take any proceedings against any officer, employee or agent of the Agent, the Issuing Bank or any Ancillary Lender in respect of any claim it might have against the Agent, the Issuing Bank or an Ancillary Lender or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document or any Transaction Document and any officer, employee or agent of the Agent, the Issuing Bank or any Ancillary Lender may rely on this Clause 32 subject to Clause 1.8 ( Third party rights ) and the provisions of the Third Parties Act. |
(c) | The 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 Agent if the 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 Agent for that purpose. |
(d) | Nothing in this Agreement shall oblige the Agent or any Arranger or any Facility C3 Arranger to carry out any know your customer or other checks in relation to any person or 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 Agent, each Arranger and each Facility C3 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 Agent or any Arranger or any Facility C3 Arranger. |
(e) | Without prejudice to any provision of any Finance Document excluding or limiting the Agents or the Security Agents liability, any liability of the Agent or the Security Agent arising under or in connection with any Finance Document or the Transaction Security shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent (or Security Agent, as applicable) 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 Agent (or Security Agent, as applicable) at any time which increase the amount of that loss. In no event shall the Agent or the Security 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 Agent or the Security Agent has been advised of the possibility of such loss or damages. |
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32.11 | Lenders indemnity to the Agent and the Security Agent |
(a) | 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 each of the Agent and the Security Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Agent or the Security Agent (otherwise than by reason of the Agents or the Security Agents gross negligence or wilful misconduct) in acting as Agent or as Security Agent under the Finance Documents (unless the Agent or the Security Agent has been reimbursed by an Obligor pursuant to a Finance Document). |
(b) | Upon the appointment of a successor, the retiring Security Agent shall be discharged from any further obligation in respect of the Finance Documents, including in relation to any action taken or not taken by the retiring Security Agent in connection with its retirement or resignation, but shall remain entitled to the benefit of paragraph (a) above. |
32.12 Resignation of the Agent
(a) | The Agent may (after consultation with Midco) resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving notice to the Lenders and Midco. |
(b) | Alternatively, the Agent may resign by giving notice to the Lenders and Midco, in which case the Majority Lenders (after consultation with Midco) may appoint a successor Agent. |
(c) | If the Majority Lenders have not appointed a successor Agent in accordance with paragraph (b) above within 30 days of notice of resignation being given, the Agent (after consultation with Midco) may appoint a successor Agent (acting through an office in the United Kingdom. |
(d) | The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. |
(e) | The Agents resignation notice shall only take effect upon the appointment of a successor. |
(f) | Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 32.12. Its 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. |
(g) | After consultation with Midco, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with paragraph (b) above. In this event, the Agent shall resign in accordance with paragraph (b) above. |
(h) | The Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor 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 Agent under the Finance Documents, either: |
(i) | the Agent fails to respond to a request under Clause 18.9 ( FATCA Information ) and Midco or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
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(ii) | the information supplied by the Agent pursuant to Clause 18.9 ( FATCA Information ) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or |
(iii) | the Agent notifies Midco and the Lenders that the 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) Midco or a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, Midco or that Lender, by notice to the Agent, requires it to resign.
32.13 | Confidentiality |
(a) | In acting as agent for the Finance Parties, the 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 Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it. |
(c) | Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent, any Arranger or any Facility C3 Arranger are 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 a breach of a fiduciary duty. |
32.14 | Relationship with the Lenders |
(a) | The Agent may treat each Lender as a Lender, entitled to payments under this Agreement and acting through its Facility Office 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) | Each Lender shall supply the Agent with any information that the Security Agent may reasonably specify (through the Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent. Each Lender shall deal with the Security Agent exclusively through the Agent and shall not deal directly with the Security Agent. |
(c) | Any Lender may by notice to the 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, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 37.5 ( Electronic communication )) electronic mail address and/or any other information required to enable the sending and receipt 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, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 37.2 ( Addresses ) and paragraph (a)(iii) of Clause 37.5 ( Electronic communication ) and the 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. |
32.15 | Credit appraisal by the Lenders, Issuing Bank and Ancillary 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, Issuing Bank and Ancillary Lender
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confirms to the Agent, each Arranger, each Facility C3 Arranger, the Issuing Bank and each Ancillary Lender 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:
(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 the Transaction Security and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security; |
(c) | whether that Finance Party 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, the Transaction Security 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; |
(d) | the adequacy, accuracy and/or completeness of any information provided by the Agent, any Party or any other person under or in connection with any Finance Document, 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 |
(e) | the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security affecting the Charged Property. |
32.16 | Reference Banks |
The Agent may (in consultation with Midco) from time to time appoint any person who complies with the definition of Reference Banks to be a Reference Bank for the purposes of the Finance Documents.
32.17 | Deduction from amounts payable by the Agent |
If any Party owes an amount to the Agent under the Finance Documents, the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the 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.
32.18 | Reliance and engagement letters |
Each Finance Party confirms that each of the Arrangers (or the Facility C3 Arrangers, as applicable) and the Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Arrangers (or the Facility C3 Arrangers, as applicable) or the Agent (as the case may be)), the terms of any reliance letter or engagement letters relating to any reports or letters provided by accountants in connection with the Finance Documents or the transactions contemplated in the Finance Documents (including any net asset letter in connection with the financial assistance procedures) and to bind it in respect of those reports or letters and to sign such letters on its behalf and further confirms that it agrees to be bound by and accepts the terms and qualifications set out in such letters.
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33. | 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. |
34. | SHARING AMONG THE FINANCE PARTIES |
34.1 | 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 35 ( Payment mechanics ) and applies that amount to a payment due under the Finance Documents, then:
(a) | the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery to the Agent; |
(b) | the 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 Agent and distributed in accordance with Clause 35 ( Payment mechanics ), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and |
(c) | the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the Sharing Payment ) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 35.5 ( Partial payments ). |
34.2 | Redistribution of payments |
The 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) in accordance with Clause 35.5 ( Partial payments ).
34.3 | Recovering Finance Partys rights |
(a) | On a distribution by the Agent under Clause 34.2 ( Redistribution of payments ), the Recovering Finance Party will be subrogated to the rights of the Finance Parties which have shared in the redistribution. |
(b) | If and to the extent that the Recovering Finance Party is not able to rely on its rights under paragraph (a) above, the Finance Parties which have shared in the redistribution will turn over any proceeds received from the relevant Obligor on such rights promptly upon receipt of the same to the Recovering Finance Party. |
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34.4 | 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 Finance Party which has received a share of the relevant Sharing Payment pursuant to Clause 34.2 ( Redistribution of payments ) shall, upon request of the Agent, pay to the Agent for 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); and |
(b) | that Recovering Finance Partys rights of subrogation in respect of any reimbursement shall be cancelled and the relevant Obligor will be liable to the reimbursing Finance Party for the amount so reimbursed. |
34.5 | Exceptions |
(a) | This Clause 34 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause 34, 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 the other Finance Party of the legal or arbitration proceedings; and |
(ii) | the 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. |
34.6 | Ancillary Lenders |
(a) | This Clause 34 shall not apply to any receipt or recovery by a Lender in its capacity as an Ancillary Lender at any time prior to service of notice under paragraph (a) or (b) of Clause 28.16 ( Acceleration ). |
(b) | Following service of notice under paragraph (a) or (b) of Clause 28.16 ( Acceleration ), this Clause 34 shall apply to all receipts or recoveries by Ancillary Lenders except to the extent that the receipt or recovery represents a reduction from the Designated Gross Amount for an Ancillary Facility to its Designated Net Amount. |
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SECTION 11
ADMINISTRATION
35. | PAYMENT MECHANICS |
35.1 | Payments to the Agent |
(a) | On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, excluding a payment under the terms of an Ancillary Document, that Obligor or Lender shall make the same available to the 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 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 (or, in relation to euro, in a principal financial centre in a Participating Member State or London) with such bank as the Agent specifies. |
35.2 | Distributions by the Agent |
Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 35.3 ( Distributions to an Obligor ) and Clause 35.4 ( Clawback ), be made available by the 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 Agent by not less than five Business Days notice with a bank 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).
35.3 | Distributions to an Obligor |
The Agent may (with the consent of the Obligor or in accordance with Clause 36 ( 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.
35.4 | Clawback |
(a) | Where a sum is to be paid to the Agent under the Finance Documents for another Party, the 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) | If the Agent pays an amount to another Party and it proves to be the case that the 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 Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds. |
35.5 | Partial payments |
(a) | If the Agent receives a payment for application against amounts due in respect of any Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under those Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under those 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 Agent, the Arrangers, the Facility C3 Arrangers, the Issuing Bank and the Security Agent under those Finance Documents; |
(ii) | secondly , in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under those Finance Documents; |
(iii) | thirdly , in or towards payment pro rata of any principal due but unpaid under those Finance Documents and any amount due but unpaid under Clause 7.2 ( Claims under a Letter of Credit ) and Clause 7.3 ( Indemnities ); and |
(iv) | fourthly , in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
(b) | The Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (a)(ii) to (a)(iv) above. |
(c) | Paragraphs (a) and (b) above will override any appropriation made by an Obligor. |
35.6 | 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.
35.7 | Business Days |
(a) | Any payment 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. |
35.8 | Currency of account |
(a) | Subject to paragraphs (b) to (e) below, the Base Currency is the currency of account and payment for any sum due from an Obligor under any Finance Document. |
(b) | A repayment of a Utilisation or Unpaid Sum or a part of a Utilisation or Unpaid Sum shall be made in the currency in which that Utilisation or Unpaid Sum is denominated on its due date. |
(c) | Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued. |
(d) | Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred. |
(e) | Any amount expressed to be payable in a currency other than the Base Currency shall be paid in that other currency and (unless a contrary indication appears) any fee expressed to be payable in respect of a Facility shall be made in the currency in which such Facility was denominated when such fee accrued. |
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35.9 | 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: |
(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 Agent (after consultation with Midco); and |
(ii) | any translation from one currency or currency unit to an other 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 Agent (acting reasonably). |
(b) | If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with Midco) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency. |
35.10 | Additional Facility administration |
Notwithstanding anything to the contrary in any Finance Document (unless it would require an all Lender consent), in relation to any Additional Facility, the Agent, Midco and the relevant Additional Facility Lender shall be permitted to agree alternative arrangements regarding the administration and operation of that Additional Facility (including, without limitation, in relation to the time, method and place of payments and the delivery of notices and other communications in relation to that Additional Facility).
36. | SET-OFF |
(a) | If an Event of Default is continuing, 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. |
(b) | Any credit balances taken into account by an Ancillary Lender when operating a net limit in respect of any overdraft under an Ancillary Facility shall on enforcement of the Finance Documents be applied first in reduction of the overdraft provided under that Ancillary Facility in accordance with its terms. |
37. | NOTICES |
37.1 | 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 fax or letter.
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37.2 | Addresses |
The address and fax number (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 any Obligor, that identified with Midcos name below; |
(b) | in the case of each Lender, the Issuing Bank, or each Ancillary Lender, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and |
(c) | in the case of the Agent or the Security Agent: |
Address: One Cabot Square, London, E14 4QJ
Email:
Fax No: .
Attention: Agency Desk,
or any substitute address, fax number or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days notice.
37.3 | 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 fax, when received in legible 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 37.2 ( Addresses ), if addressed to that department or officer.
(b) | Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agents or Security Agents signature below (or any substitute department or officer as the Agent or Security Agent shall specify for this purpose). |
(c) | All notices from or to an Obligor shall be sent through the Agent. |
(d) | Any communication or document made or delivered to Midco in accordance with this Clause 37.3 will be deemed to have been made or delivered to each of the Obligors. |
37.4 | Notification of address and fax number |
Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to Clause 37.2 ( Addresses ) or changing its own address or fax number, the Agent shall notify the other Parties.
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37.5 | Electronic communication |
(a) | Any communication to be made between the Agent or the Security Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means if the Agent, the Security Agent and the relevant Lender: |
(i) | agree that, unless and until notified to the contrary, this is to be an accepted form of communication; |
(ii) | notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and |
(iii) | notify each other of any change to their address or any other such information supplied by them. |
(b) | Any electronic communication made between the Agent and a Lender or the Security Agent will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or Security Agent shall specify for this purpose. |
37.6 | Use of websites |
(a) | Midco 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 a website designated by Midco and the Agent (the Designated Website ) if: |
(i) | the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method; |
(ii) | both Midco and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and |
(iii) | the information is in a format previously agreed between Midco and the Agent. |
If any Lender (a Paper Form Lender ) does not agree to the delivery of information electronically, then the Agent shall notify Midco accordingly and Midco shall, at its own cost, supply the information to the Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event, Midco shall, at its own cost, supply the Agent with at least one copy in paper form of any information required to be provided by it.
(b) | The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by Midco and the Agent. |
(c) | Midco shall, promptly upon becoming aware of its occurrence, notify the Agent if: |
(i) | the Designated Website cannot be accessed due to technical failure; |
(ii) | the password specifications for the Designated Website change; |
(iii) | any new information which is required to be provided under this Agreement is posted on the Designated Website; |
(iv) | any existing information which has been provided under this Agreement and posted on the Designated Website is amended; or |
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(v) | Midco becomes aware that the Designated Website or any information posted on the Designated Website is or has been infected by any electronic virus or similar software. |
If Midco notifies the Agent under paragraph (i) or (v) above, all information to be provided by Midco under this Agreement after the date of that notice shall be supplied in paper form unless and until the 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 Agent, one paper copy of any information required to be provided under this Agreement which is posted on the Designated Website. Midco shall, at its own cost, comply with any such request within 10 Business Days. |
37.7 | 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 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. |
37.8 | Communications to be made outside Austria |
Notwithstanding any other provision of the Finance Documents, any communication to be made under or in connection with the Finance Documents shall be made to the address outside the Republic of Austria. The foregoing sentence applies mutatis mutandis to any communication made by fax, electronic message or in other written form.
38. | CALCULATIONS AND CERTIFICATES |
38.1 | 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.
38.2 | Certificates and determinations |
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
38.3 | 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 Interbank Market differs, in accordance with that market practice.
39. | PARTIAL INVALIDITY |
If, at any time, any provision of the Finance Documents 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.
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40. | REMEDIES AND WAIVERS |
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
41. | AMENDMENTS AND WAIVERS |
41.1 | Required consents |
(a) | Subject to Clause 41.2 ( Exceptions ), any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and Midco and any such amendment or waiver will be binding on all Parties. |
(b) | The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 41. |
(c) | Each Obligor agrees to any such amendment or waiver permitted by this Clause 41 which is agreed to by Midco; this includes any amendment or waiver which would, but for this paragraph (c), require the consent of all of the Guarantors. |
41.2 | Exceptions |
(a) | An amendment or waiver that has the effect of changing or which relates to: |
(i) | the definition of Majority Lenders or Super Majority Lenders in Clause 1.1 ( Definitions ); |
(ii) | the definitions of Instructing Group or Majority Senior Secured Creditors in the Intercreditor Agreement; |
(iii) | any provision which expressly requires the consent of all the Lenders; |
(iv) | Clause 2.2 ( Finance Parties rights and obligations ), Clause 29 ( Changes to the Lenders ), Clause 34 ( Sharing among the Finance Parties ) (other than changes consequential on or required to implement a Structural Adjustment) or this Clause 41 (including the definition of Structural Adjustment); |
(v) | any amendment to the order of priority of subordination under the Intercreditor Agreement or the manner in which the proceeds of enforcement of the Transaction Security are distributed (other than changes consequential on or required to implement a Structural Adjustment); or |
(vi) | clauses 2 ( Ranking and Priority ), 11 ( Effect of Insolvency Event ), 12 ( Turnover of receipts ), 13 ( Redistribution ), 14 ( Enforcement of Transaction Security ), 16 ( Application of proceeds ), 16.10 ( Equalisation ), 26 ( Consents, amendments and override ) and 30 ( Governing law ) of the Intercreditor Agreement, |
shall not be made without the prior consent of all the Lenders.
(b) | An amendment or waiver that has the effect of changing or which relates to: |
(i) |
Clause 26.2 ( Financial condition ) or any other term or provision of or definition contained in Clause 26 ( Financial covenant ) but (in each case) solely insofar as that amendment or waiver relates to the calculation, determination, testing, removal and/or remedy of the |
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financial covenant in Clause 26.2 ( Financial condition ) for the purposes of a Default under paragraph (b) of that definition or an Event of Default under paragraph (b) of that definition (and not for any other purpose, including, without limitation, for the purposes of calculating any Margin and/or Debt Cover as used in any basket or threshold or incurrence test (in each case) to determine whether any particular transaction is permitted or is not permitted); |
(ii) | a waiver of any Financial Covenant Event of Default or any Default that arises as a result of any Financial Covenant Event of Default; |
(iii) | paragraph (b) of Clause 28.16 ( Acceleration ); and |
(iv) | the definition of Financial Covenant Event of Default or Majority RCF Lenders, |
shall require the consent of the Majority RCF Lenders (and no consent of any other Finance Party shall be required).
(c) | An amendment or waiver that has the effect of releasing any Transaction Security (unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document or unless the Guarantor Coverage set out in Clause 27.29 ( Guarantors ) is maintained, taking into account the effect of that release) shall not be made without the prior consent of the Super Majority Lenders. |
(d) | Any term of the Finance Documents may be amended by the Agent and the Obligors Agent (without the consent of any other Party) in order to correct any manifest error, resolve ambiguities or reflect changes of a minor, technical or administrative nature. |
(e) | Any amendment or waiver which relates to the rights or obligations applicable to a particular Utilisation, Loan, Facility or class of Lenders, and which does not materially and adversely affect the rights or interests of Lenders in respect of other Utilisations, Loans, Facilities or another class of Lender, shall only require the consent of the Majority Lenders (or the relevant Super Majority Lenders, as the case may be) as if references in this Clause 41.2 to Lenders were only to Lenders participating in that Utilisation, Loan, Facility or forming part of that affected class. |
(f) | An amendment or waiver which relates to the rights or obligations of the Agent, any Arranger, any Facility C3 Arranger, the Issuing Bank, the Security Agent or any Ancillary Lender may not be effected without the consent of the Agent, that Arranger, that Facility C3 Arranger, the Issuing Bank, the Security Agent or that Ancillary Lender. |
(g) | Any waiver of a right of prepayment under Clause 12.2 ( Disposal, insurance, Excess Cashflow, Flotation and German Property Proceeds ) shall require only the consent of the Majority Lenders. |
(h) | Subject to the provisions of the Intercreditor Agreement, a Structural Adjustment may be approved only with the consent of the Majority Lenders and of each Lender that is assuming a Commitment or an increased Commitment in the relevant Loan or Facility or whose Commitment is being extended or redenominated or to whom any amount is owing which is being reduced, deferred or redenominated (as the case may be). |
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(i) | For the purposes of this Clause 41, Structural Adjustment means: |
(i) | an amendment, waiver or variation of the terms of some or all of the Finance Documents that results from or is intended to result from or constitutes: |
(A) | the introduction of an additional loan, commitment or facility into the Finance Documents; |
(B) | an increase in or addition of any Commitment, any extension of the availability of any Commitment, any redenomination of any Commitment into another currency except as set out in this Agreement, or extension of any Availability Period; |
(C) | an extension to the date of payment or maturity of any principal, interest, fees, commission or other amount payable under the Finance Documents (save for an extension of the maturity of a Revolving Facility Loan where such extension is made as an alternative to the granting of a Rollover Loan); |
(D) | a reduction in the Margin or a reduction in any payment of principal, interest, fees, commission or other amount payable; |
(E) | a change in currency of payment of any principal, interest, fees, commission or other amount payable under the Finance Documents; and |
(F) | any amendment to the Finance Documents (including changes to, the taking of or the release coupled with the immediate retaking of Security) consequential on or required to implement anything described in paragraphs (A) to (E) above. |
(j) | If a Lender does not accept or reject a waiver or request within 10 Business Days (unless Midco and the Agent agree to a longer time period in relation to any request) of it being made , its Commitment and/or participation shall not be included for the purpose of calculating the Total Commitments or participations under the relevant Facility when ascertaining whether a certain percentage of Total Commitments and/or participations has been obtained to approve an amendment or waiver. |
42. | CONFIDENTIALITY |
42.1 | 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 42.2 ( Disclosure of information ), Clause 42.3 ( Disclosure to numbering service providers ) and Clause 42.4 ( Disclosure to administration/settlement services providers ) and to ensure that all Confidential Information is protected with security measure and a degree of care that it would apply to its own confidential information.
42.2 | Disclosure of information |
(a) |
Any Finance Party may disclose to (x) any of its Affiliates and Related Funds 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)(x) 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 |
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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 and (y) any other person: |
(i) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under one or more Finance Documents and to any of that persons Affiliates, Related Funds, Representatives and professional advisers; |
(ii) | with (or through) whom that Finance Party 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 by reference to, one or more Finance Documents and/or one or more Obligors and to any of that persons Affiliates, Related Funds, Representatives and professional advisers; |
(iii) | 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; or |
(iv) | required in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; |
(v) | to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 29.7 ( Security Interests over Lenders rights ); or |
(vi) | who is a Party, |
such Confidential Information as that Lender or other Finance Party shall consider appropriate if:
(A) | in relation to paragraphs (a)(i) and (a)(ii) above, the person to whom the information is to be given has entered into a Confidentiality Undertaking; or |
(B) | in relation to paragraph (a)(v) above, the person to whom the information is to be given is informed of its confidential nature and that some or all of such information may be price-sensitive information. |
(b) | Any Finance Party may disclose to a rating agency or its professional advisers, or (with the consent of Midco) any other person (excluding, for the avoidance of doubt, any person listed or, as the case may be, described in paragraph (a) above), such information about any Obligor or the Group which it has received from the Obligors under this Agreement and the Finance Documents as that Finance Party shall consider appropriate if that rating agency or such person is informed of its confidential nature and that some or all of such information may be pricesensitive information. |
(c) | Any Confidentiality Undertaking signed by a Finance Party pursuant to this Clause 42.2 shall supersede any prior confidentiality undertaking signed by such Finance Party for the benefit of any member of the Group. A copy of each Confidentiality Undertaking (and any amendment thereto) shall be provided to Midco by the respective Lender within 10 Business Days of Midcos written request. |
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42.3 | Disclosure to numbering service providers |
(a) | Notwithstanding any other term of any Finance Documents or any other agreement between the Parties to the contrary (whether express or implied), 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 Facilities and/or one or more Obligors the following information: |
(i) | names of Obligors; |
(ii) | country of domicile of Obligors; |
(iii) | place of incorporation of Obligors; |
(iv) | date of this Agreement; |
(v) | the names of the Agent, the Arrangers and the Facility C3 Arrangers; |
(vi) | date of each amendment and restatement of this Agreement; |
(vii) | amount of Total Commitments; |
(viii) | currencies of the Facilities; |
(ix) | type of Facilities; |
(x) | ranking of Facilities; |
(xi) | Termination Date for Facilities; |
(xii) | changes to any of the information previously supplied pursuant to paragraphs (i) to (xi) above; and |
(xiii) | such other information agreed between such Finance Party and Midco, |
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 Facilities 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) | Each Obligor represents that none of the information set out in paragraphs (i) to (xiii) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information. |
(d) | The Agent shall notify Midco and the other Finance Parties of: |
(i) | the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Facilities and/or one or more Obligors; and |
(ii) | the number or, as the case may be, numbers assigned to this Agreement, the Facilities and/or one or more Obligors by such numbering service provider. |
42.4 | Disclosure to administration/settlement service providers |
Notwithstanding any other term of any Finance Document or any other agreement between the Parties to the contrary (whether express or implied), any Finance Party may disclose to any person appointed by:
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(i) | that Finance Party; |
(ii) | a person to (or through) whom that Finance Party assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under this Agreement; and/or |
(iii) | a person with (or through) whom that Finance Party 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 any Obligor, |
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 Clause 42.4 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 Midco and the relevant Finance Party.
42.5 | Consent pursuant to Austrian Banking Act |
For the avoidance of doubt, each Austrian Obligor herewith explicitly consents within the meaning of section 38 para 1 no 5 of the Austrian Banking Act ( Bankwesengesetz BWG ) to a disclosure of Confidential Information pursuant to, and in accordance with the limitations of, this Clause 42 and explicitly waives any banking secrecy obligations the Finance Parties may have under section 38 of the Austrian Banking Act in this respect.
43. | 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.
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SECTION 12
GOVERNING LAW AND ENFORCEMENT
44. | GOVERNING LAW |
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
45. | ENFORCEMENT |
45.1 | Jurisdiction of English courts |
(a) | The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of 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) | This Clause 45.1 is for the benefit of the Finance Parties and Secured Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties and Secured Parties may take concurrent proceedings in any number of jurisdictions. |
45.2 | Service of process |
(a) | Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales): |
(i) | irrevocably appoints Midco as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document and Midco, by its execution of this Agreement, accepts that appointment; and |
(ii) | agrees that failure by an agent for service of process to notify the relevant Obligor of the process will not invalidate the proceedings concerned. |
(b) | If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, Midco (on behalf of all the Obligors) must immediately (and in any event within 60 days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose. |
(c) | Each Obligor not incorporated in England and Wales expressly consents to the provisions of this Clause 45 and Clause 44 ( Governing law ). |
45.3 | Place of performance |
The Parties agree that the exclusive place of performance ( Erfüllungsort ) for all rights and obligations under any Finance Document shall be at the seat of the Agent in London, or any other place reasonably designated by the Agent but in any case a place outside the Republic of Austria, which especially means that the payment of amounts under any Facility shall be made to a bank account respectively, and from a bank account outside of the Republic of Austria. Any communication to be made under or in connection with this Agreement or any other Finance Document shall be made to an address outside of the Republic of Austria. It is expressly agreed between the Parties hereto that any such performance within the Republic of Austria will not establish Austria as the place of performance and shall be deemed not effective with respect to any Party hereto.
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45.4 | Executive proceedings |
(a) | Upon enforcement, the sum payable by a Spanish Obligor shall be the aggregate amount of the balance of the accounts maintained by the Agent (or the relevant Lender, as the case may be) pursuant to Clause 38.1 ( Accounts ). For the purposes of Articles 571 et seq. of the Spanish Civil Procedural Law, the Parties agree that such balances shall be considered as due, liquid and payable and may be claimed pursuant to that law. |
(b) | For the purposes of the provisions of Art. 571 et seq. of the Spanish Civil Procedural Law, the Parties agree that the amount of the debt to be claimed through executive proceedings shall be determined by the Agent (or a Lender, as the case may be) in a certificate evidencing the balances shown in the relevant account(s) referred to in paragraph (a) of this Clause 45.4. For the Agent or a Lender to exercise executive action it must present: |
(i) | an original notarial first or authentic copy with enforcement attributes ( efectos ejecutivos ) of this Agreement; |
(ii) | a notarial certificate, if required, for the purposes described in paragraph (c) of this Clause 45.4; |
(iii) | the notarial document ( acta notarial ) which: |
(A) | incorporates the certificate of amounts due by the Spanish Obligor issued by the Agent (or the relevant Lender, as the case may be); |
(B) | sets out an excerpt of the credits and debits, including the interest applied, which appears in the relevant account(s) referred to in paragraph (a) of this Clause 45.4; and |
(C) | evidences that the amounts due and payable by the Spanish Obligor have been calculated in accordance with this Agreement and that such amounts match the balance of the accounts, and |
(iv) | a notarial document ( acta notarial ) evidencing that the Spanish Obligor has been served notice for the amount that is due and payable. |
(c) | Paragraph (b) of this Clause 45.4 is also applicable to any Lender with regard to its Commitments or participations in Utilisations. Such Lender may issue the appropriate certification of the balances of the relevant account(s) referred to in paragraph (a) of this Clause 45.4 and the certification of the balances of such accounts may be legalised by a notary. |
(d) | The amount of the balances determined in accordance with this Clause 45.4 shall be notified to the relevant Spanish Obligor in an attestable manner at least three days in advance of exercising any executive action. |
(e) | Each Spanish Obligor hereby authorises the Agent (and each Lender, as appropriate) to request and obtain certificates and documents issued by the notary which has formalised this Agreement in order to evidence the entries in the notarys registry-book and the relevant entry date for the purpose of number 4 of Article 517, of the Spanish Civil Procedural Law. The cost of such certificate and documents will be for the account of the relevant Spanish Obligor. |
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(f) | This Agreement shall be raised to the status of a Spanish Public Document by the Spanish Obligors for the purposes contemplated in Article 517 et seq. of the Spanish Civil Procedural Law and other related provisions. |
46. | GENERAL AUSTRIAN LIMITATION |
Notwithstanding any provision to the contrary in any Finance Document, the obligations ( Verpflichtungen ) and liabilities ( Haftungen ) of an Austrian Obligor under any Finance Document shall at all times be limited so that at no time the assumption of a liability ( Haftungen ) and/or obligation ( Verpflichtung ) shall be required to the extent that such liability ( Haftung ) or obligation ( Verpflichtung ) would violate Austrian Capital Maintenance Rules ( Kapitalerhaltungsvorschriften ) pursuant to Austrian company law, in particular sections 82 et seq. of the Austrian Act on Limited Liability Companies ( Gesetz über Gesellschaften mit beschränkter Haftung ) and/or sections 52 and 65 et seq. of the Austrian Stock Corporation Act ( Aktiengeset z) (the Austrian Capital Maintenance Rules ). Should any obligation ( Verpflichtung ) and/or liability ( Haftung ) of an Austrian Obligor under any Finance Document violate or contradict the Austrian Capital Maintenance Rules and therefore be held invalid or unenforceable in whole or in part or should the assumption or enforcement of such obligation ( Verpflichtung ) or liability ( Haftung ) expose any managing director or member of the supervisory board of any Austrian Obligor to personal liability or criminal responsibility, such obligation/or liability shall be deemed to be replaced by an obligation ( Verpflichtung ) and/or liability ( Haftung ) of a similar nature (i) which is in compliance with the Austrian Capital Maintenance Rules, (ii) which does not expose the managing directors or members of the supervisory board of the Austrian Obligor to any personal liability or criminal responsibility; and (iii) which provides the best possible security interest admissible in accordance with the Austrian Capital Maintenance Rules in favour of the Finance Parties.
THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.
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EXECUTED and DELIVERED as a DEED by
[EXCHANGE LENDER]
By: | ||
Name: | ||
Title |
In the presence of:
Name of witness: |
Occupation of witness: |
Address of witness: |
EXECUTED and DELIVERED as a DEED by
IGLO FOODS MIDCO LIMITED
By: | ||
Name: | ||
Title |
In the presence of:
Name of witness: |
Occupation of witness: |
Address of witness: |
This Agreement is accepted as an Exchange Certificate for the purposes of the New Senior Facilities Agreement by the Agent, and as a Creditor/Agent Accession Undertaking for the purposes of the Intercreditor Agreement by the Agent and the Security Agent.
CREDIT SUISSE AG, LONDON BRANCH
(as Agent and Security Agent)
By: |
Acknowledged and agreed by the Existing Agent
CREDIT SUISSE AG, LONDON BRANCH
(as Existing Agent)
By: |
SIGNATURE PAGES TO THE AMENDMENT AND RESTATEMENT AGREEMENT
MIDCO
SIGNED as a DEED by
IGLO FOODS MIDCO LIMITED
acting by a Director in the presence of a witness |
|
|||||||
Name: | S TEFAN D ESCHEEMAEKER | |||||||
Title: | D IRECTOR |
Signature of witness |
|
Name: | G ARY B ELLINGHAM |
Address: |
200 G RAY S INN R OAD , L ONDON , WC1X 8HF |
Occupation: | S OLICITOR |
THE OBLIGORS
SIGNED as a DEED by
IGLO FOODS MIDCO LIMITED or Itself as an Obligor and as ObligorsAgent for and on behalf of each other Obligor acting by a Director in the presence of a witness |
|
|||||||
Name: | S TEFAN D ESCHEEMAEKER | |||||||
Title: | D IRECTOR |
Signature of witness |
|
Name: | G ARY B ELLINGHAM |
Address: |
200 G RAY S INN R OAD L ONDON , WC1X 8HF |
Occupation: | S OLICITOR |
FACILITY C3 ARRANGERS
CREDIT SUISSE AG, LONDON BRANCH
By: |
|
By: |
|
|||||
N AME : | G EORGE T ZIRAS | N AME : | E DUARDO T ROCHA | |||||
T ITLE : | D IRECTOR | T ITLE : | D IRECTOR |
BARCLAYS BANK PLC |
By: |
|
UBS LIMITED
By: |
|
By: |
|
|||||
Oliver Gaunt | Holly Clements | |||||||
Executive Director | Director | |||||||
UBS Investment Bank | UBS Investment Bank |
ORIGINAL FACILITY C3 LENDERS
CREDIT SUISSE AG, LONDON BRANCH
By: |
|
By: |
|
|||||
N AME : | G EORGE T ZIRAS | N AME : | E DUARDO T ROCHA | |||||
T ITLE : | D IRECTOR | T ITLE : | D IRECTOR |
COMMERZBANK
COMMERZBANK AKTIENGESELLSCHAFT, FRANKFURT
By: |
|
By: |
|
|||||
Heiko T eucher | Erik Holzmann | |||||||
D i r ector | Associate |
AGENT
CREDIT SUISSE AG, LONDON BRANCH
By: |
/s/ Melanie Harries |
By: | /s/ Ian Croft | |||||
Melanie Harries |
Ian Croft | |||||||
Assistant Vice President |
Assistant Vice President | |||||||
Operations |
Operations |
SECURITY AGENT
CREDIT SUISSE AG, LONDON BRANCH
By: |
/s/ Melanie Harries |
By: | /s/ Ian Croft | |||||
Melanie Harries |
Ian Croft | |||||||
Assistant Vice President |
Assistant Vice President | |||||||
Operations |
Operations |
Exhibit 10.2
NOMAD FOODS LIMITED
LONG TERM 2015 INCENTIVE PLAN (adopted by resolution of the Board on June 15, 2015) |
RULES
1 | DEFINITIONS AND INTERPRETATION |
1.1 | In the Plan, unless the context otherwise requires: |
Agreement means a restricted share agreement executed pursuant to this Plan granting an Award to an eligible individual
Acquiring Company means a company that obtains Control of the Company as described at Rule 10.1 and 10.2 or proposes to obtain Control of the Company as described at Rule 10.3
Award means a right over Shares granted under the Plan by the execution of an Agreement
Board means the board of directors of the Company or a duly authorised committee of the Board (which includes the Committee)
Change of Control means an event described at Rule 10.1 or 10.2, ( Takeovers and other corporate events );
Committee means the remuneration committee or other duly authorised committee of the Board or duly authorised official of the Company or, on and after the occurrence of a Change of Control the remuneration committee of the Board as constituted immediately before such event occurs
Commencement Date means June 15, 2015
Company means Nomad Foods Limited (registered in the British Virgin Islands with number 1818482)
Control means control within the meaning of section 1124 of the Corporation Tax Act 2010
Dealing Code means, at any time, the share dealing code or insider trader policy adopted by the Company and in force at that time
Dealing Day means any day on which the London Stock Exchange is open for the transaction of business
Grant Date means the date on which an Award is granted
Good Leaver means, unless otherwise provided in an Agreement, a Participant ceasing employment with a Group Company in the circumstances set out at Rule 9.1
Group Company means the Company or any Subsidiary of the Company
ITEPA means the Income Tax (Earnings and Pensions) Act 2003
Listing Rules means the Listing Rules published by the United Kingdom Listing Authority
London Stock Exchange means London Stock Exchange plc or any successor to that company
Misconduct means a Participant (a) being dismissed without notice or resigning in circumstances where his employing company would have been entitled to dismiss him without notice, or (b) committing a material breach of his employment contract or settlement agreement with his employing company.
Participant means a person who holds an Award, including where applicable his personal representatives
Performance Conditions means a condition or conditions related to (a) the financial performance of the Company and/or (b) the Participant remaining employed by or having a service relationship with a Group Company for a specified period, which in either case are specified by the Committee in an Agreement, and must be fulfilled or waived in accordance with the Rules and the Agreement for the Award to Vest
Performance Period means the period over which a Performance Condition is measured, specified by the Committee at the Grant Date, of an Award, which shall be a period of no longer than five years less a day.
Plan means the Nomad Foods 2015 Long Term Incentive Plan as amended from time to time
Rule means a rule of the Plan
Shares means ordinary shares of no par value in the capital of the Company
Subsidiary means a body corporate which is a subsidiary (within the meaning of section 1159 of the Companies Act 2006)
Tax Liability means any amount of tax or social security contributions (excluding UK employers National Insurance Contributions unless expressly otherwise provided in an Agreement) for which a Participant would or may be liable and for which any Group Company or former Group Company would or may be obliged to (or would or may suffer a disadvantage if it were not to) account to any relevant authority.
Vest means, in relation to an Award, the Shares subject to an Award ceasing to be subject to restrictions under the Plan in relation to all or a proportion of the Shares subject to it in accordance with Rule 5 and Vesting shall be construed accordingly
Vested Shares means those Shares in respect of which an Award vests in accordance with Rule 5.
1.2 | Any reference in the Plan to any enactment includes a reference to that enactment as from time to time modified, extended or re-enacted. |
1.3 | Expressions in italics and headings are for guidance only and do not form part of the Plan. |
2 | ELIGIBILITY |
An individual is eligible to be granted an Award only if he is an employee, director or officer of, or an independent contractor to a Group Company .
3 | GRANT OF AWARDS |
3.1 | Terms of grant |
Subject to Rule 3.4 ( Timing of grant ), Rule 3.5 ( Approvals and consents ) and Rule 4 ( Limits ), the Committee may resolve that an Award should be granted:
(a) | on the terms set out in the Plan; and/or |
(b) | on such additional terms relating to Performance Conditions or otherwise as the Committee may specify. |
to any person who is eligible to be granted an Award under Rule 2 ( Eligibility) . In the event of any conflict or inconsistency between the Rules and an Agreement, the terms of the Agreement shall prevail.
3.2 | Method of grant |
An Award shall be granted by an Agreement in the form from time to time approved by the Committee and executed by the Company and the Participant.
3.3 | Grantor of Awards |
Unless specified to the contrary by the Committee on the Grant Date, the Shares subject to an Award may be delivered to an eligible individual through:
(a) | the issue of new Shares; and/or |
(b) | the transfer of Shares out of treasury or otherwise. |
3.4 | Timing of grant |
Subject to Rule 3.5 ( Approvals and consents ), an Award may be granted at any time other than (a) during a close period, as defined in the Dealing Code; or (b) the Dealing Day on or after the date on which the Company announces its results for any period, but an Award may not be granted after the tenth anniversary of the Commencement Date.
3.5 | Approvals and consents |
The grant of any Award shall be subject to obtaining any approval or consent required under the Listing Rules, the Dealing Code, the City Code on Takeovers and Mergers or any other UK or non-UK regulation or enactment.
3.6 | Non-transferability and bankruptcy |
An Award granted to any person shall lapse immediately if:
(a) | transferred, assigned, charged or otherwise disposed of (except on his death when it may be transmitted to his personal representatives); or |
(b) | the Participant is declared bankrupt (unless the Committee decides otherwise). |
4 | LIMITS |
4.1 | 10% in 10 years limit |
No Award shall be granted on any date if, as a result, the number of Shares issued or issuable pursuant to Awards granted in the period of ten years ending on that date under the Plan and under any other employee share plan operated by the Company, would exceed such number as represents 10% of the ordinary share capital of the Company in issue at that time.
5 | VESTING OF AWARDS |
5.1 | Timing of Vesting |
Subject to Rules 6.2 (Restrictions on Vesting) and 10 (Takeovers and other corporate events) , an Award shall Vest on the expiry of the Performance Period, subject to the satisfaction of the Performance Conditions relating to the Award.
5.2 | Dividends |
Unless otherwise provided in an Agreement, the Participant shall waive dividends in respect of any Shares that are not Vested Shares.
6 | RESTRICTIONS ON VESTING |
6.1 | Restrictions on vesting: regulatory and tax issues |
No Award shall Vest unless and until the following conditions are satisfied:
(a) | the Vesting would be lawful in all relevant jurisdictions and in compliance with the Listing Rules, the Dealing Code, the City Code on Takeovers and Mergers and any other relevant UK or overseas regulation or enactment. In particular, if an Award would Vest during a period during which the Participant (being a person covered by the Dealing Code) is not permitted to deal in Shares, then unless the Committee in exceptional circumstances otherwise determines the Vesting shall be postponed until the first date on which the Participant is permitted to deal in Shares; |
(b) | if, on Vesting of an Award, a Tax Liability would arise and the Board decides that such Tax Liability shall not be satisfied by the sale of Shares pursuant to Rule 7 then the Participant must have entered into arrangements acceptable to the Board that the relevant Group Company will receive the amount of such Tax Liability; and |
(c) | the relevant Performance Conditions have been satisfied, or waived by the Committee, in whole or in part, in accordance with Rule 12.5. |
6.2 | Tax Liability before Vesting |
If a Participant will, or is likely to, incur any Tax Liabiliity on the Vesting of an Award then that Participant must enter into arrangements acceptable to any relevant Group Company to ensure that it receives the amount of such Tax Liability. If no such arrangement is made then the Participant authorises the Company to sell or procure the sale of sufficient of the Shares subject to his Award on his behalf to ensure that the relevant Group Company receives the amount required to discharge the Tax Liability and the number of Shares subject to his Award shall be reduced accordingly.
For the purposes of this Rule 6.2, references to Group Company include any former Group Company.
7 | TAX INDEMNITY |
In consideration of the grant to him of an Award the Participant shall covenant with the Company (on behalf of every Group Company) to recover from him all and any Tax Liability, and to indemnify and keep indemnified on a continuing basis the Company in respect of such Tax Liability. For the purposes of such indemnity the Participant authorises the Company to deduct sufficient funds which, in the reasonable opinion of the Board, would be equal to any Tax Liability from any payment made to or in respect of the Participant by the Company during the 92 days following the date of Vesting
If there is no such payment or deduction made for whatever reason or the outstanding Tax Liability exceeds the amount of such payment or deduction, the Participant hereby agrees that the full amount of the outstanding Tax Liability be recovered by the sale of sufficient Vested Shares on or following the Vesting of his Award on his behalf to ensure that any relevant Group Company or former Group Company receives the amount required to discharge the Tax Liability which arises on Vesting, except to the extent that the Board decides that all or part the Tax Liability shall be funded in a different manner.
8 | LAPSE OF AWARDS |
An Award shall lapse:
(a) | in accordance with the Rules; or |
(b) | at any time to the extent that the Committee determines that there is no prospect of Vesting; |
(c) | On the day prior to the fifth anniversary of the date of grant of an Award; |
(d) | In any other circumstances provided for in an Agreement |
On the lapse of an Award the Company shall procure that the Shares the subject of such Award are forfeited by means of cancellation, or the purchase of such Shares for no consideration by the Company or any person nominated for such purposes by the Company.
9 | CEASING EMPLOYMENT |
9.1 | Good leavers |
Unless the Agreement otherwise provides, if a Participant ceases to be a director, employee or officer of a Group Company, or to provide services as an independent contractor to a Group Company before the end of the Performance Period by reason of death, disability, or under any other exceptional circumstances deemed by the Committee to make the Participant a Good Leaver, the Award shall Vest to the extent that the Performance Conditions have been satisfied over the shortened period from the start of the Performance Period to the date of cessation of office or employment or the termination of the service agreement with the Group Company. Unless provided to the contrary by the Performance Conditions, the extent to which the Performance Conditions have been satisfied in such circumstances shall be
determined by the Committee on such reasonable basis as it decides, and the Board shall reduce the number of Shares subject to the Award to reflect the proportion of the Performance Period elapsed at the date of cessation. Any part of the Award which remains unvested at such cessation shall lapse immediately. The Board may at its discretion postpone the Vesting of Shares for a period of up to 12 months (though not past the fifth anniversary of the date of grant of an Award) and make Vesting conditional on the Participant abiding by the terms of their employment contract or settlement agreement with their employing company.
9.2 | Cessation of office or employment other than as a Good Leaver |
Unless the Agreement otherwise provides, if a Participant ceases to be a director, employee or officer of a Group Company before the end of the Performance Period:
(a) | for Misconduct, or commits or is found to have committed Misconduct at any time following cessation, an Award shall lapse immediately; |
(b) | for any other reason where the Participant is not a Good Leaver, the Award shall Vest only to the extent that the relevant Performance Conditions were satisfied at the date of cessation. The Board may at its discretion postpone the Vesting of Shares for a period of up to 12 months (though not past the fifth anniversary of the date of grant of an Award) and make Vesting conditional on the Participant abiding by the terms of their employment contract or settlement agreement with their employing company. |
9.3 | Meaning of ceasing employment |
Unless the Agreement otherwise provides, a Participant shall not be treated for the purposes of this Rule 9 as ceasing to be a director, officer or employee of a Group Company until such time as he is no longer a director, officer or employee of any Group Company. If any Participant ceases to be such a director, officer or employee in circumstances where he retains a statutory right to return to work then he shall be treated as not having ceased to be such a director or employee until such time (if at all) as he ceases to have such a right to return to work while not acting as an employee, officer or director.
The reason for the termination of office or employment of a Participant shall be determined by reference to Rules 9.1 to 9.2 regardless of whether such termination was lawful or unlawful.
10 | TAKEOVERS AND OTHER CORPORATE EVENTS |
10.1 | General offers |
If any person (or any group of persons acting in concert):
(a) | obtains Control of the Company as a result of making a general offer to acquire the whole of the issued share capital of the Company; or |
(b) | obtains Control of the Company as a result of making a general offer to acquire all the shares in the Company which are of the same class as the Shares |
the Board shall, within seven days of becoming aware of that event, notify every Participant of it and subject to Rule 6.1 ( Restrictions on vesting: regulatory and tax issues ) and Rule 10.3 ( Internal reorganisations ), and unless the Agreement otherwise provides, the Committee may determine that all Awards shall (i) Vest to the extent that the Performance Conditions are deemed satisfied over the shortened period from the start of the Performance Period to the date of the Change of Control, or (ii) Vest to the extent that the Committee sees fit if it decides at its discretion to waive such Performance Condition in whole or in part. The Committee may in addition determine that Awards shall be scaled back to reflect the period between the start of the Performance Period and the date of the Change of Control as a proportion of the Performance Period as a whole.
10.2 | Schemes of arrangement and winding-up |
In the event that:
(a) | a compromise or arrangement is sanctioned by the Court under the law of the jurisdiction in which the Company is based in connection with or for the purposes of a Change in Control of the Company; |
(b) | the Company passes a resolution for a voluntary winding up of the Company; or |
(c) | an order is made for the compulsory winding-up of the Company |
then unless the Agreement otherwise provides, and subject to Rule 6.1 ( Restrictions on vesting: regulatory and tax issues ) and Rule 10.3 ( Internal reorganisations ), the Committee may determine that all Awards shall, (i) Vest to the extent that the Committee determines that Performance Conditions are deemed to be satisfied over the shortened period from the start of the Performance Period to the date of the relevant event described at (a) to (c) above, or (ii) Vest to the extent that the Committee sees fit if it decides at its discretion to waive such Performance Condition in whole or in part. The Committee may in addition determine that Awards shall be scaled back to reflect the period between the start of the Performance Period and the date of the Change of Control as a proportion of the Performance Period as a whole.
10.3 | Internal reorganisations |
In the event that:
(a) | a company is expected to obtain Control of the Company as a result of an offer referred to in Rule 10.1 ( General offers ) or a compromise or arrangement referred to in Rule 10.2(a) ( Schemes of arrangement and winding-up ); and |
(b) | at least 75% of the shares in the Acquiring Company are expected to be held by substantially the same persons who immediately before the obtaining of Control of the Company were shareholders in the Company |
then the Committee, with the consent of the Acquiring Company, may decide before the obtaining of such Control that an Award shall not Vest under Rule 10.1 ( General offers ) or Rule 10.2 ( Schemes of arrangement and winding-up ) but shall be automatically surrendered in consideration for the grant of a new award which the Committee determines is equivalent to the Award it replaces, except that it will be over shares in the Acquiring Company or some other company.
The Rules will apply to any new award granted under this Rule 10.3 as if references to Shares were references to shares over which the new award is granted and references to the Company were references to the company whose shares are subject to the new award.
11 | ADJUSTMENT OF AWARDS |
11.1 | General rule |
In the event of:
(a) | any variation of the share capital of the Company; or |
(b) | a demerger, special dividend or other similar event which affects the market price of Shares to a material extent |
The Committee may make such adjustments as it considers appropriate to the number of Shares comprised in an Award.
12 | AMENDMENTS |
12.1 | General rule on amendments |
Except as described in Rule 12.2 ( Shareholder approval ) and Rule 12.4 ( Amendments to the disadvantage of Participants ) the Committee may at any time amend the Plan or the terms of any Award granted under it.
12.2 | Shareholder approval |
Except as described in Rule 12.3 ( Exception to shareholder approval ), no amendment to the material advantage of an individual to whom an Award has been or may be granted shall be made under Rule 12.1 ( General rule on amendments ) to the provisions concerning the overall limits on the issue of Shares without the prior approval by ordinary resolution of the members of the Company in general meeting.
12.3 | Exception to shareholder approval |
Rule 12.2 ( Shareholder approval ) shall not apply to any minor amendment to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for Participants or any Group Company.
12.4 | Amendments to the disadvantage of Participants |
No amendment to the material disadvantage of Participants (other than a change to any Performance Condition) shall be made under Rule 12.1 ( General rule on amendments ) unless:
(a) | the Board shall have invited every relevant Participant to indicate whether or not he approves the amendment; and |
(b) | The amendment is approved by a majority of those Participants who have given such an indication. |
12.5 | Amendments to a Performance Condition |
The Committee may amend any Performance Conditions without prior shareholder approval if:
(a) | an event has occurred which causes the Committee reasonably to consider that it would be appropriate to amend the Performance Conditions; |
(b) | the amended Performance Condition will, in the reasonable opinion of the Committee, be not materially less difficult to satisfy than the unamended Performance Conditions would have been but for the event in question; and |
(c) | The Committee shall act fairly and reasonably in making the amendment. |
13 | MISCELLANEOUS |
13.1 | Employment |
The rights and obligations of any individual under the terms of his office or employment with any Group Company shall not be affected by his participation in the Plan or any right which he may have to participate in it. An individual who participates in the Plan waives any and all rights to compensation or damages in consequence of the termination of his office or employment for any reason whatsoever insofar as those rights arise or may arise from him ceasing to have rights under an Award as a result of such termination. Participation in the Plan shall not confer a right to continued employment upon any individual who participates in it. The grant of any Award does not imply that any further Award will be granted nor that a Participant has any right to receive any further Award.
13.2 | Disputes |
In the event of any dispute or disagreement as to the interpretation of the Plan, or as to any question or right arising from or relating to the Plan, the decision of the Committee shall be final and binding upon all persons.
13.3 | Exercise of powers and discretions |
The exercise of any power or discretion by the Committee shall not be open to question by any person and a Participant or former Participant shall have no rights in relation to the exercise of or omission to exercise any such power or discretion.
13.4 | Share rights |
All Shares allotted under the Plan shall rank equally in all respects with Shares then in issue except for any rights attaching to such Shares by reference to a record date before the date of the allotment.
Participants shall be entitled to all rights attaching to such Shares by reference to a record date on or after the date of such transfer.
13.5 | Notices |
Any notice or other communication under or in connection with the Plan may be given:
(a) | by personal delivery or by post, in the case of a company to its registered office, and in the case of an individual to his last known address, or, where he is a director or employee of a Group Company, either to his last known address or to the address of the place of business at which he performs the whole or substantially the whole of the duties of his office or employment; |
(b) | in an electronic communication to their usual business address or such other address for the time being notified for that purpose to the person giving the notice; or |
(c) | by such other method as the Committee determines. |
13.6 | Third parties |
No third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Plan.
13.7 | Benefits not pensionable |
Benefits provided under the Plan shall not be pensionable.
13.8 | Data protection |
Each Participant consents to the collection, processing and transfer of his personal data for any purpose relating to the operation of the Plan. This includes:
(a) | providing personal data to any Group Company and any third party such as trustees of any employee benefit trust, administrators of the Plan, registrars, brokers and any of their respective agents; |
(b) | processing of personal data by any such Group Company or third party; |
(c) | transferring personal data to a country outside the European Economic Area (including a country which does not have data protection laws equivalent to those prevailing in the European Economic Area); and |
(d) | providing personal data to potential purchasers of the Company, the Participants employer or the business in which the Participant works. |
13.9 | Governing law |
The Plan and all Awards shall be governed by and construed in accordance with the law of England and Wales and the Courts of England and Wales have exclusive jurisdiction to hear any dispute.
Exhibit 10.3
DATED JUNE 2015
IGLO FOODS GROUP LIMITED
AND
STÉFAN DESCHEEMAEKER
AND
NOMAD FOODS LIMITED
SERVICE AGREEMENT
GREENBERG TRAURIG MAHER LLP
7 TH F LOOR
200 G RAY S I NN R OAD
L ONDON WC1X 8HF
THIS AGREEMENT is made the day of June 2015
BETWEEN:
(1) | IGLO FOODS GROUP LIMITED , a company incorporated in England and Wales (registered number 05879466) whose registered office is at 5 New Square, Bedfont Lakes Business Park, Feltham, Middlesex, TW14 8HA (the Company ); and |
(2) | STÉFAN DESCHEEMAEKER of 33 Avenue de Foestraets, Brussels 1180 Belgium (the Executive ); and |
(3) | NOMAD FOODS LIMITED incorporated in the British Virgin Islands with Company Number 1818482, whose registered office is Nemours Chambers, Road Town, Tortola, British Virgin Islands ( NOMAD ) |
NOW IT IS AGREED that the Company shall employ the Executive on the following terms and conditions:
1. | COMMENCEMENT AND TERM |
1.1 | The Executives employment under this Agreement shall commence on the date of this Agreement (the Commencement Date ). |
1.2 | The employment of the Executive shall (subject to the provisions of this Agreement) be for an indefinite period terminable by either party giving the other not less than 12 months notice in writing, such notice to expire at any time. |
2. | EXECUTIVES DUTIES |
2.1 | The Executive shall during the continuance of the contract of employment: |
2.1.1 | serve to the best of his ability in the capacity of Chief Executive Officer and as a director of the Company and Nomad; |
2.1.2 | report to the Board of Directors of Nomad (the Board ); |
2.1.3 | faithfully and diligently perform such duties and exercise such powers consistent with them as the Board (or anyone authorised by the Board) may from time to time properly and reasonably assign to or confer upon him; |
2.1.4 | comply with the reasonable instructions of the Board from time to time; and |
2.1.5 | do all in his power to protect promote develop and extend the business interests and reputation of the Group. |
2.2 | The Executive shall also be appointed to the Board of Directors of Nomad and shall serve as its Chief Executive Officer: |
2.2.1 The Executive shall not be entitled to any additional compensation or fees (from the Company, Nomad or otherwise) as a result of such appointment, nor shall it give rise to an employment relationship with Nomad;
2.2.2 Removal from the Board of Nomad shall not (1) give rise to any breach of contract by the Company or any Associated Company and (2) in itself affect the Executives employment with the Company;
2.2.3 The additional obligations relating to the appointment to the Board of Nomad set out in the Schedule to this Agreement shall apply.
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2.3 | The Executive shall unless prevented by sickness, injury or other incapacity or as otherwise agreed by the Board and subject to this Agreement devote the whole of his time attention and abilities during his working hours (which shall be normal business hours and such additional hours as may be reasonably necessary for the proper performance of his duties) to the business and affairs of the Group. The Executive acknowledges that he has unmeasured working time for the purposes of Regulation 20 of the Working Time Regulations. |
2.4 | The Executive shall work at the Companys offices at Bedfont Lakes, Middlesex or such other place of business of the Group which the Board may reasonably require for the proper performance of his duties and the Executive may be required to travel both inside and outside of the UK on the business of the Group. |
2.5 | The Executive shall not during the continuance of this Agreement without the prior written consent of the Board of Nomad (such consent not to be unreasonably withheld or delayed) directly or indirectly carry on or be engaged concerned or interested in any other business trade or occupation otherwise than as a holder directly or through nominees of either not more than 3 per cent in aggregate of any class of shares, debentures or other securities in issue from time to time of any company which are for the time being quoted or dealt in on any recognised investment exchange (as defined by Section 285 of the Financial Services and Markets Act 2001) or passive shareholdings for investment purposes in companies which do not at the relevant time compete or otherwise conflict with the business of the Company or any Associated Company. Notwithstanding the foregoing, the Executive shall be entitled to retain: |
2.5.1 | his directorship of AB InBev and of its holding company, EPS, and of Telnet; |
2.5.2 | his professorship at the Université Libre de Bruxelles |
(the Interests ) provided always that:
(a) the Interests do not interfere with his duties under this Agreement at any point; and
(b) he makes all reasonable efforts to step down from his Telnet directorship within a period of three months from the date of this Agreement and (in any event) he agrees to ensure that he will no longer be a director of Telnet within six months from the date of this Agreement.
2.6 | Following the service of notice by either party to terminate the Executives employment, or if the Executive purports to terminate this Agreement in breach of contract, the Board may by written notice for a maximum of six months require the Executive not to perform any services for a defined period or until the termination of his employment. During this period: |
2.6.1 | the Company shall not be obliged to provide any work, or vest any powers in the Executive, who shall have no right to perform any services for the Company and the Board may appoint a replacement to carry out the Executives duties and responsibilities; |
2.6.2 | the Executive shall continue to receive his salary and contractual benefits in the usual way; |
2.6.3 | the Executive shall remain an employee of the Company and (save as varied by the operation of this clause) be bound by the terms of this Agreement, particularly in relation to any duties of confidentiality and fidelity; |
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2.6.4 | the Executive shall use all reasonable endeavours to remain contactable at all times during normal working hours by telephone and shall remain ready to attend work on reasonable notice (if so required by the Company); |
2.6.5 | the Executive shall not engage in any activities or other occupation (whether paid or unpaid) in breach of his obligations under this Agreement. In particular, the Executive shall not directly or indirectly or on behalf of (or together with) any other person, firm or company be, or prepare to be, concerned or otherwise interested in any other business or activity which is or will be or is likely to be in competition with the business of the Company or any of its Associated Companies; |
2.6.6 | the Executive shall not access any premises of the Company or any Associated Company; |
2.6.7 | the Executive shall not contact any officer, employee, consultant, shareholder, client, customer, employee, agent, distributor or other business contact of the Company or any Associated Company save in a social context and with the prior, written consent of the Board, such consent not to be unreasonably withheld; |
2.6.8 | the Company reserves the right to suspend or cancel access to the Company intranet, email and other systems and reserves the right to require the return of all Company property, including PC and mobile phone; |
2.6.9 | the Executive shall cease to be an authorised signatory of the Company or hold a Power of Attorney for the Company (if requested in writing by the Company); |
2.6.10 | the Executive shall take all accrued holiday (in respect of the period up until the Termination Date) and no contractual holiday entitlement shall accrue; |
2.6.11 | the Executive shall not make any public statements in relation to the Company or any Associated Company or its or their officers or employees. |
2.7 | If the Executive proposes to commence a new role, in circumstances where the proposed new group in which he would be employed or engaged does not compete with the business of the Company or any Associated Company (and does not propose to so compete for the duration of what would have been the Executives notice period), the Company will give reasonable consideration to any request to release him from its employment to enable the Executive to take up the new role, provided that the Executive agrees to forfeit any remaining pay due in respect of any notice period, confirms that he will continue to be bound by the provisions of this Agreement which are expressed to take effect after the Termination Date, including clauses 5 and 7, and agrees to enter into such documentation recording that position and waiving all claims against the Group, as the Company may reasonably require. For the avoidance of doubt, the decision whether or not to release the Executive shall be in the absolute discretion of the Company, taking account of whatever circumstances and factors it sees fit. |
2.8 | The Company shall be able to suspend the Executive for so long as is reasonable, in order to investigate a complaint made against him. |
3. | SALARY, BONUS AND EQUITY |
3.1 | The Company shall pay to the Executive a base salary (which shall accrue from day to day) at the rate of £700,000 per annum inclusive of any directors fees payable to the Executive under the articles of association of the Company or any Associated Company subject to statutory deductions. The salary shall be payable by equal monthly instalments by credit transfer to the Executives bank or building society account. |
3.2 |
The salary payable to the Executive under clause 3.1 shall be reviewed by the remuneration committee of the Company annually, the first such review to take place in 2017 at the time the Company normally reviews salaries for senior management and may, (if at all), be increased |
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by such amount as the remuneration committee may in its absolute discretion decide and notify to the Executive in writing. For the avoidance of doubt, the Executives salary shall not be decreased on any review. |
3.3 | The Executive shall during the continuance of the employment be eligible to be paid bonuses of such amounts, at such times and subject to the achievement of such financial and other performance targets as the Board and the remuneration committee of the Company may in their absolute discretion decide. The Executives target annual discretionary bonus shall be 100% of his base salary. For the avoidance of doubt, no entitlement to any part of a bonus accrues on a daily basis. A payment in one year does not create any entitlement to receive a further bonus payment. Where the Executives employment ends during a bonus year, the Company shall (in its absolute discretion and taking account of any such facts or circumstances as it sees fit) give consideration to a pro rata bonus payment. |
3.4 | The Executive shall be granted an equity award on the following terms, to be granted within 30 days of Nomad adopting its long term incentive plan. In this clause 3, the following definitions shall have the following meanings: |
The First Award shall mean an award over 1,000,000 shares in Nomad comprising the Primary Award and the Secondary Award;
The First Performance Condition shall mean the closing mid-market price of the Companys common stock on the London Stock Exchange (or such other exchange on which the Company maintains its principal listing) exceeding $25.00 per share for a continuous period of ten (10) business days;
The First Stage Date shall mean the two year anniversary of the Commencement Date;
The Primary Award shall be 500,000 shares in Nomad;
The Second Award shall mean an award over 1,000,000 shares in Nomad;
The Second Performance Condition shall be the cumulative adjusted earnings before interest, taxes, depreciation and amortization ( Adjusted EBITDA ) of the Company equalling or exceeding a US$ target to be agreed between the Company and the Executive following the Commencement Date (the Performance Target ) for, and as of the end of, the performance period commencing on the Commencement Date and ending on the Vesting Date (the Performance Period );
The Second Stage Date shall mean the four year anniversary of the Commencement Date;
The Secondary Award shall be 500,000 shares in Nomad;
The Staging Date shall mean the First Stage Date and/or the Second Stage Date, as applicable;
The Vesting Date shall mean the four year anniversary of the Commencement Date.
3.5 | The Primary Award shall be eligible to vest on the First Stage Date and the Secondary Award shall be eligible to vest on the Second Stage Date provided that in each case the Executive is CEO of the Company, and not under notice, on the relevant Staging Date. |
3.6 | Subject in each case to the conditions set out in clause 3.5 and to achievement of the First Performance Condition: |
(a) | the Primary Award shall vest on the later of (1) the First Stage Date and (2) the first business day following the day on which the First Performance Condition is satisfied; |
(b) | the Secondary Award shall vest on the fourth anniversary of the Commencement Date. |
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3.7 | Unless otherwise vested, the Primary Award and Secondary Award shall lapse on the fourth anniversary of the Commencement Date. |
3.8 | The Executive shall be eligible for the Second Award subject to satisfaction of the Second Performance Condition and the Executive being CEO of the Company, and not under notice, on the Vesting Date. |
3.9 | The Second Award shall vest on the later of (1) the day on which the Compensation Committee of the Board of Directors of Nomad certifies (if at all) that the Second Performance Condition has been satisfied and (2) the Vesting Date. |
3.10 | Eligibility for the Second Award is also subject to the following: |
3.10.1 | The Performance Target must be achieved, if at all, as of the end of the Performance Period and, therefore, cannot be achieved before the end of the Performance Period; |
3.10.2 | In assessing whether the Second Performance Condition has been achieved, the Company may use such accounting methods, assumptions, guidance and principles as it shall in its reasonable discretion see fit; |
3.10.3 | The Performance Target may be adjusted by the Company to reflect any acquisitions or divestitures by the Company after the date of this Agreement. The calculation of adjusted EBITDA will include adjustments to conform to As Adjusted EBITDA reported by the Company. |
3.11 | Where the Award (or any part thereof) lapses, but the Executive is a good leaver (such term to be defined in the grant documentation and outlined below) the relevant time-vesting condition of the Award (being the First Stage Date, the Second Stage Date and the Vesting Date) will be deemed to be satisfied insofar as the Executive would receive a pro rata award (based on the time from the Commencement Date until the earlier of the Termination Date and the date on which the Company exercises its rights under clause 2.6 of this Agreement) subject always to achievement of the First Performance Condition and/or the Second Performance Condition (as applicable). In the event of a takeover of the Company prior to the First or Second Award vesting, the Award shall vest to the extent that the Remuneration Committee of the Board ( Remco ) at its sole discretion determines, taking into account all circumstances including the progress made towards achieving performance conditions during the curtailed vesting period. |
3.12 | For the purposes of the equity award described above, the Company agrees that: |
3.12.1 EBITDA will be adjusted and calculated in a way which is consistent with how the Company reports (or plans to report) to the public; and
3.12.2 should there be a change in the way the Company so reports, EBITDA will be adjusted equitably to reflect the changes.
3.13 | Good leaver in this clause shall be the Executives employment by the Company terminating as a result of death, retirement at normal retirement age, permanent illness, redundancy (as defined in section 139 of the Employment Rights Act 1996), disability or dismissal for any reason other than under-performance (which shall be determined in the reasonable opinion of the Board) or cause. |
4. | BENEFITS |
4.1 | The Company shall pay for the benefit of the Executive an annual contribution of £70,000 at the choice of the Executive either into such pension plan (whether personal or company) as the Executive may direct in writing or to the Executive directly in equal monthly instalments. A contracting-out certificate is not currently in force in respect of the employment of the Executive. |
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4.2 | The Company shall pay, in respect of the Executive, premiums to a: |
4.2.1 | private medical insurance scheme in respect of the Executive and the Executives dependants; |
4.2.2 | permanent health insurance scheme; |
4.2.3 | life assurance scheme (3 times salary) |
with such level of benefits as the Board shall in its absolute discretion decide. The Executives participation in such schemes is subject to (1) the premiums for the Executives cover being at such a rate that the Company considers reasonable (2) any statutory or other regulatory limit applicable to such premium (3) the insurer accepting the Executive for cover and (4) the rules of the relevant scheme and the rules of the insurance policy of the relevant insurance provider from time to time in force.
4.3 | The Company reserves the right to (1) change the provider of any of the benefits available under this clause and (2) alter the level of coverage available to the Executive at any time. The Company shall only be obliged to make payments to the Executive under the permanent health scheme if and to the extent it has received payment from the insurance provider for that purpose. The Company shall have no liability in the event that insurance cover is refused, or any conditions or limitations are applied, by the provider. The Company shall be under no obligation to take any action to enforce the terms of any insurance policy or challenge any decision of the relevant policy provider. |
4.4 | The Company shall pay to the Executive a car allowance of £14,400 paid by equal monthly instalments in arrears. |
4.5 | The Executive shall be entitled to 25 days paid holiday in each of the Companys holiday years in addition to the usual public and bank holidays. On termination the Executive shall be paid in lieu of any untaken holiday entitlement (if any) or shall he obliged to repay any holiday pay received in excess of the Executives entitlement (if any). One days pay for the purposes of this clause shall be calculated at the rate of 1/260 th of the Executives annual salary. |
4.6 | Holiday shall be taken at such times as are approved by the Board and may not be carried forward from one holiday year to the next without the approval of the Board (which will not be unreasonably withheld or delayed). The Company may require the Executive to take any holiday due to him at any time after notice of termination has been served by either party. |
4.7 | In the event that the Executive is unable to carry out his duties by reason of sickness or injury he shall, subject to compliance with the Companys procedures relating to notification and certification periods, be entitled to statutory sick pay in accordance with the relevant statutory rules. In addition, the Company will continue to make payments of salary to the Executive (subject to credit for any statutory sick pay and any payment to the Executive of benefit under any permanent health insurance scheme provided by the Company) and continue to provide the benefits provided for in this Agreement for all periods of such incapacity up to a maximum of 26 weeks of such incapacity in any period of 52 weeks. To the extent that any sickness or injury is caused by the negligence or breach of duty of any third party and the Executive makes a claim for damages against such third party any payments or benefits provided under this clause shall be deemed a loan by the Company and recoverable to the extent that a judgement is obtained and satisfied. |
4.8 | The Company shall reimburse the Executive for all reasonable vouched for travelling and similar out-of-pocket expenses incurred in the discharge of his duties subject to the Companys expenses policy in force from time to time. |
4.9 |
The Executive shall undergo an examination by a registered medical practitioner nominated by the Company at such times as the Company may reasonably request and at the expense of the Company, and hereby consents to the medical adviser disclosing the results of the |
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examination to the Company and shall provide the Company with such formal consents as may be reasonably requested for this purpose and shall co-operate in ensuring the prompt delivery to the Company of any such report. |
4.10 | If the Executive shall be a director of the Company or any Associated Company (save for Nomad), the Company shall pay premiums to a directors and officers liability insurance policy which offers cover for the Executive in respect of any office he may hold in the Company or any Associated Company. Such cover shall be on no less favourable terms than are applicable to other offices of the Company or any Associated Company. The terms of the cover in respect of his appointment as a director of Nomad are set out in the Schedule to this Agreement. |
5. | COMPANY PROPERTY AND CONFIDENTIALITY |
In this clause, Intellectual Property Rights shall mean all patents, rights to Inventions, copyright and related rights, trade marks, service marks, trade, business and domain names, rights in trade dress, rights in get-up and goodwill or to sue for passing off, design rights and registered designs, rights in confidential information (including know-how) and database rights in each case whether registered or unregistered and any other intellectual property rights and including all applications for and renewals or extensions of such rights in any part of the world. Inventions shall mean any invention, idea, discovery, improvement, development or innovation, whether or not patentable or capable of registration, and whether or not recorded in any medium.
5.1 | The Executive acknowledges that all Intellectual Property Rights subsisting developed by the Executive in the course of his employment (whether or not during working hours or using Company resources) shall belong to the Company absolutely. To the extent that they do not automatically vest in the Company, the Executive shall hold them on trust for the Company. |
5.2 | The Executive shall give the Company full details in writing of all Inventions and of all works embodying Intellectual Property Rights made wholly or partially by him at any time in the course of his employment which relate wholly or partly to the business of the Company or any Associated Company. |
5.3 | The Executive hereby irrevocably waives all moral rights under the Copyright Designs and Patents Act 1988 (and any similar or equivalent rights in other jurisdictions) in relation to any existing or future works created by him in the course of his employment. |
5.4 | The Executive acknowledges that the client and candidate databases of the Company and any Associated Company are their key assets and all intellectual property rights in such and their contents are and shall remain at all times the property of the Company. Any databases created by the Executive in the course of his employment shall be the property of the Company and the Executive agrees to take any such steps as may be necessary to assign such rights to the Company. |
5.5 | The Executive shall not copy or download in any format or use in whole or part the contents of any Company or Associated Company database (except as required by law or in the proper performance of the Executives duties for the Company). |
5.6 | During his employment with the Company and thereafter the Executive shall not use any databases or any other intellectual property rights owned by the Company or any Associated Company directly or indirectly to procure a commercial benefit to himself or another party or to create a commercial detriment to the Company or any Associated Company. |
5.7 | On the termination of the Executives employment (or earlier if requested): |
5.7.1 | the Executive will immediately cease to use all databases owned by the Company or any Associated Company and/or by him in the course of his employment; and |
5.7.2 | the Executive shall forthwith surrender to a representative of the Company all documents and other materials including discs and memory sticks which contain any copies or extracts from databases owned by the Group and delete all electronic copies or extracts of the databases or their contents. |
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5.8 | The Executive acknowledges that he shall become aware of and have access to Confidential Information. Confidential Information shall mean trade secrets and confidential information (howsoever stored) relating to the Company, Associated Companies, its and their businesses and its and their past, current or prospective clients or customers, including information relating to finances, business transactions, research activities, dealings and affairs and prospective business transactions, Board decisions, customers (including customer lists, customer requirements and their identity), existing and planned product lines, price lists and pricing structures (including discounts, special prices or special contract terms offered to or agreed with customers), technology used by the Company or any Associated Company in their products and services, business plans, sales and marketing information, plans and strategies, computer systems, source codes and software, directors and information relating to employees, suppliers, licensors, agents, distributors or contractors. This shall include information expressly designated by the Company or any Associated Company as being confidential. |
5.9 | The Executive shall not (save as required by law or in the proper performance of his duties) either during his employment or after its termination (for whatever reason) use or disclose to any person, company or other organisation whatsoever, and shall use his reasonable endeavours to prevent the publication or disclosure of, any Confidential Information. |
5.10 | This clause shall not apply to: |
5.10.1 | use or disclosure authorised by the Company or required by law; |
5.10.2 | any information which is already in, or comes into, the public domain other than through the unauthorised disclosure of the Executive. |
5.11 | On the Termination Date (or earlier if so requested by the Company), the Executive shall return all property of the Company and any Associated Company in his possession, custody or control, including his company car, credit cards, books, keys, notes, correspondence, codes, security passes, computer software and hardware (including laptops and hard disks), papers, drawings, designs, records and mobile telephones and all information (on whatever media and wherever located) relating to the business and affairs of the Company or any Associated Company or its or their clients. For the avoidance of doubt, this clause shall not prevent the Executive retaining his own property and information. |
5.12 | This clause survives the termination of this Agreement and the Executives employment under it, howsoever caused. |
6. | TERMINATION |
6.1 | The Company may not terminate this Agreement in circumstances which would prejudice the Executives entitlement under any permanent health insurance scheme in respect of which the Company or any Associated Company pays or has paid premiums for the Executive in which the Executive participates and either he: |
6.1.1 is in actual receipt of benefits thereunder; or
6.1.2 is not in receipt of benefits but the Executive is absent from work by reason of sickness or injury in circumstances where it is reasonably foreseeable that he may be entitled to payments under the Companys PHI scheme as a consequence of the sickness or injury causing his absence
save pursuant to clause 6.3 below or by reason of redundancy.
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6.2 | The Company may terminate the Executives employment at any time by serving a notice under this clause stating that the Company is exercising its rights under this clause and stating that it will pay to the Executive within 14 days a sum equal to the basic salary (as at the date of this Agreement), pension payment under clause 4.1 and car allowance under clause 4.4 in lieu of any required period of notice less deductions for income tax and national insurance, provided always that if the Company should decide not to exercise its rights under this clause, the Executive shall not be entitled to enforce the payment referred to as a contractual debt nor as liquidated damages and his sole remedy shall be a claim in damages in respect of any unexpired period of notice. For the avoidance of doubt, such payment shall not include (1) any bonus that might otherwise be due during the relevant period; (2) any benefits which the Executive might have been entitled to receive during the period; or (3) any payment in respect of holiday entitlement which may have accrued during that period. |
6.3 | The Company shall at all times be entitled to terminate this Agreement and the Executives employment forthwith without any payment by way of compensation, damages, payment in lieu of notice or otherwise if the Executive: |
6.3.1 | is guilty of any gross misconduct; or |
6.3.2 | commits any serious, material or repeated breach or non-observance of any of the terms or conditions of this Agreement; or |
6.3.3 | neglects or refuses to carry out any of his duties or to comply with any reasonable and lawful instruction of the Company; or |
6.3.4 | has a bankruptcy order made against him or makes any arrangement with or for the benefit of his creditors; or |
6.3.5 | is charged with or convicted of any criminal offence (other than an offence under any road traffic legislation for which a fine or non-custodial penalty is imposed); or |
6.3.6 | is disqualified from acting as a director or resigns as a director of the Company or any Associated Company without the prior written approval of the Company; or |
6.3.7 | is disqualified from membership of, or is subject to any disciplinary sanction by, any professional or other body, membership of which is relevant to his employment under this Agreement; or |
6.3.8 | is guilty of any fraud or dishonesty or acts in any way which in the reasonable opinion of the Company brings the Company or any Associated Company into material disrepute, or is materially adverse to its or their interests; or |
6.3.9 | fails materially to comply with any policy of the Company or any Associated Company including its rules relating to the use of its electronic communications systems; or |
6.3.10 | materially breaches the Companys policies and procedures dealing with the Bribery Act 2010 whether or not criminal or other sanctions are imposed; or |
6.3.11 | enters into any transaction or behaves in any other way which constitutes an offence for the purposes of Part V of the Criminal Justice Act 1993 or which constitutes market abuse for the purposes of Part VIII of FSMA. |
The rights of the Company under clause are without prejudice to any other rights that it may have at law to terminate this Agreement or to accept a breach by the Executive as having brought it to an end. Any delay by the Company in exercising its rights to terminate shall not constitute a waiver thereof.
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6.4 | If the employment of the Executive is transferred to an Associated Company by reason of the liquidation of the Company for the purposes of reconstruction or amalgamation or as part of any arrangement for the amalgamation or reconstruction of the Company not involving insolvency and the Executive is offered employment with any concern or undertaking resulting from such reconstruction or amalgamation on the same terms and conditions (save for the identity of the employer) as this Agreement the Executive shall have no claim against the Company in respect of such transfer or termination. |
6.5 | On termination (or once notice has been served by either party and the Company has exercised its rights under clause 2.6 of this Agreement), the Executive shall: |
(a) | at the request of the Board immediately resign from any office held by him in the Group (including Nomad) without claim for compensation (without prejudice to any claims he may have for damages for breach of this Agreement) and in the event of his failure to do so the Company is irrevocably authorised to appoint some person in his name and on his behalf to sign and deliver such resignations to the Board; and |
(b) | immediately repay all outstanding debts and loans due to the Company or any Associated Company and the Company is hereby authorised to deduct from any monies due to the Executive a sum in repayment of all or any part of any such debts or loans. |
7. | EXECUTIVES COVENANTS |
7.1 | For the purpose of this clause 7: |
the Business means any business carried on by the Group at the Termination Date and with which the Executive has been concerned to a material extent in the 12 months immediately preceding such termination or the date on which the Company exercises its rights under clause 2.6 (whichever is the earlier);
references to Associated Companies shall only be reference to Associated Companies in respect of which the Executive has carried out material duties in the period of 12 months prior to the Termination Date or the date on which the Company has exercised its rights under clause 2.6 (whichever is the earlier);
Restricted Person shall mean any person who or which has at any time during the period of 12 months immediately preceding the Termination Date or the date on which the Company exercises its rights under clause 2.6 (whichever is the earlier) done business with the Company or any Associated Company as customer or client or distributor or consultant and with whom or which the Executive shall have had material dealings, contact with or responsibility for during the course of the employment;
Key Employee shall mean any person who at the Termination Date or the date on which the Company exercises its rights under clause 2.6 (whichever is the earlier) is employed or engaged by the Group, with whom the Executive has had material contact and (a) is employed or engaged in a senior capacity and/or (b) is in the possession of confidential information belonging to the Group and/or (c) is directly managed by or reports to the Executive.
7.2 | The Executive acknowledges that during the course of the employment with the Company that he will receive and have access to Confidential Information of the Group and that he will have influence over and connection with customers, clients and employees of the Group with which the Executive comes in contact during the employment and accordingly he is willing to enter into the covenants described in clauses 7.3 and 7.4 in order to provide the Group with reasonable protection for its interests. |
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7.3 | The Executive covenants with the Company that he will not in connection with the carrying on of any business in competition with the Business for the period of 12 months after the Termination Date without the prior written consent of the Board either alone or jointly with or on behalf of any person directly or indirectly: |
7.3.1 | canvass, solicit or approach or cause to be canvassed or solicited or approached for orders in respect of any services provided and/or any goods sold by the Group any Restricted Person; |
7.3.2 | solicit or entice away or endeavour to solicit or entice away from the Group, or employ or engage, any Key Employee. |
7.4 | The Executive covenants with the Company that he will not for the period of 12 months after the Termination Date without the prior written consent of the Board either alone or jointly with or on behalf of any person directly or indirectly carry on or set up or be employed or engaged by or otherwise assist in or be interested in any capacity (save as a shareholder of not more than 1% in aggregate of any class of shares, debentures or other securities of any company which are quoted on or dealt in any recognised investment exchange) in a business anywhere within the United Kingdom, Italy, Germany, Austria, the Netherlands, Belgium, Portugal, France, Ireland, Russia and Turkey and such other areas in which the Company or any Associated Company carries on business or plans to carry on business (and in which plans the Executive has been involved) at the Termination Date and in respect of which the Executive shall have carried out material duties or been materially engaged or concerned at any time during the period of 12 months immediately preceding the Termination Date which is (or is likely to be) in competition with the Business, provided that a business shall only be regarded as competing with the Business if such business includes the preparation, processing and/or supply of frozen foods, goods and products for supply or distribution in countries in which any part of the Business supplies or distributes its products at the Termination Date. |
7.5 | The periods during which clauses 7.3 and 7.4 are expressed to operate shall each be reduced by such period as the Executive shall have complied during his notice period with a direction to perform no duties and/or not to enter all or any premises of the Group pursuant to clause 2.6. |
7.6 | The covenants contained in clauses 7.3.1 and 7.3.2 and 7.4 are intended to be separate and severable and enforceable as such. |
7.7 | While the aforesaid restrictions are considered by the parties to be reasonable in all the circumstances, it is agreed that if any restriction shall be adjudged to be void or ineffective for whatever reason but would be adjudged to be valid and effective if part of the wording thereof were deleted the said restrictions shall apply with such modifications as may be necessary to make them valid and effective. |
8. | STATUTORY PARTICULARS |
8.1 | The Executives period of continuous employment commenced on the Commencement Date. |
8.2 | There is no formal disciplinary procedure in relation to the Executives employment. The Executive shall be expected to maintain the highest standards of integrity and behaviour. |
8.3 | If the Executive is not satisfied with any disciplinary decision taken in relation to him, he may apply in writing within 14 days of that decision to the Board whose decision shall be final. |
8.4 | If the Executive has any grievance in relation to his employment he may raise it in writing with the Board whose decision shall be final. |
8.5 | There are no collective agreements applicable to the Executives employment. |
8.6 | This clause 8 is not intended to be of contractual effect. |
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9. | MISCELLANEOUS |
9.1 | The Executive hereby warrants that by virtue of entering into this Agreement he is not and will not be in breach of any express or implied terms of any contract, court order or of any other obligation legally binding upon him. |
9.2 | Any benefits provided by the Company to the Executive or his family which are not expressly referred to in this Agreement shall be regarded as ex gratis benefits provided at the entire discretion of the Company and shall not form part of the Executives contract of employment. |
9.3 | The Company shall be entitled without notice to the Executive at any time during the Executives employment and upon termination to set off and/or make deductions from the Executives salary or from any other sums due to the Executive from the Company or any Associated Company in respect of any overpayment of any kind made to the Executive or in respect of any outstanding debt or other sum due from him. |
9.4 | A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement. |
9.5 | The Company will pay direct to the Executives legal advisers (Dechert) provided the Company receives within 14 days of the date of this Agreement an invoice from them (addressed to the Executive and marked as payable by the Company), their reasonable legal fees incurred solely in connection with advising the Executive on the terms of this Agreement, up to a maximum of £6000 (exclusive of VAT). |
10. | DEFINITIONS AND INTERPRETATION |
10.1 | In this Agreement unless the context otherwise requires: |
Associated Company means any company which is a holding company or a subsidiary of the Company or a subsidiary of the Companys holding company and holding company and subsidiary shall have the meanings given by s.1159 Companies Act 2006 or as amended from time to time and Associated Companies shall be construed accordingly;
Group means the Company and the Associated Companies;
Termination Date means the last day of the Executives employment with the Company under this Agreement.
10.2 | In this Agreement the headings are for convenience only and shall not affect its construction or interpretation. References to clauses are references to clauses in this Agreement and references to a person shall where the context permits include reference to a corporate body or an unincorporated body of persons. Any word which denotes the singular shall where the context permits include the plural and vice versa and any word which denotes the masculine gender shall where the context permits include the feminine and/or the neuter genders and vice versa. Any reference to a statutory provision shall be deemed to include a reference to any statutory amendment modification or re-enactment. |
10.3 | This Agreement contains the entire understanding between the parties and supersedes all (if any) subsisting agreements arrangements and understandings (written or oral) relating to the employment of the Executive which such agreements, arrangements and understandings shall be deemed to have been terminated by mutual consent. The Executive warrants that he has not entered into this Agreement in reliance on any warranty representation or undertaking of any nature whatsoever which is not contained in or specifically incorporated in this Agreement. |
10.4 | Any amendments to this Agreement shall only be valid if set out in writing and signed by both parties. |
10.5 | This Agreement is governed by and shall be construed in accordance with the law of England and Wales and is subject to the exclusive jurisdiction of the Courts of England and Wales. |
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EXECUTION
The parties have shown their acceptance of the terms of this Deed by executing it as a deed below.
EXECUTED as a deed by a Director, duly authorised for and on behalf of the Company, in the presence of: |
) ) ) |
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Signature of Witness: |
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Name of Witness: | B. J. MURRAY | |||
Address of Witness: |
214 EPSON ROAD GUILDFORD GU1 2RA |
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Occupation of Witness: | GROUP HR DIRECTOR | |||
EXECUTED as a deed by STEFAN | ) |
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DESCHEEMAEKER in the presence of: | ||||
Signature of Witness: |
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Name of Witness: | CANDICE WOODBRIDGE | |||
Address of Witness: | 5 PARTRIDGE CLOSE, GREINTON, SOMERSET, TA7 9BA | |||
Occupation of Witness: | EXECUTIVE ASSISTANT | |||
EXECUTED as a deed by a Director, duly | ) |
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authorised for and on behalf of Nomad, in the presence of: |
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Signature of Witness: |
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Name of Witness: | MELANIE LOWEIN | |||
Address of Witness: |
LITTLE PETERLEY, HEALTH END ROAD, LITTLE KINGSHILL BUCKINGHAMSHIRE HP16 0EB |
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Occupation of Witness: | P.A. |
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SCHEDULE
OBLIGATIONS IN RESPECT OF DIRECTORSHIP OF NOMAD
1. | APPOINTMENT |
1.1 | Your appointment and any re-appointment as a Director is subject to Nomads articles of association (as amended from time to time) (the Articles ). Nothing in this letter will be taken to exclude or vary the Articles as they apply to you as a Director of Nomad. |
1.2 | The Board has resolved that all directors are subject to annual election at Nomads 2015 annual general meeting and expects to do so in subsequent years. You will therefore be required to be put forward for re-election at each annual general meeting of Nomad. If the shareholders do not confirm your appointment or re-elect you as a director, or you are retired from office under the Articles, your appointment shall terminate automatically, with immediate effect and without compensation. |
1.3 | You shall, during the appointment: |
1.3.1 | act as a Director of Nomad and comply with all obligations on you under British Virgin Islands law (including but without limitation the BVI Business Companies Act (the BVI Companies Act ) and all applicable provisions of common law) and regulations or any other applicable laws and regulations in your positions as such including, without limitation, the Disclosure and Transparency Rules, the Listing Rules and the rules of the London Stock Exchange or any other stock exchanges on which Nomad shares are listed and/or traded; |
1.3.2 | comply with the Articles; |
1.3.3 | abide by any statutory, fiduciary or common-law duties to Nomad; and |
1.3.4 | not do anything that would cause you to be disqualified from acting as a Director. |
2. | TERMINATION OF APPOINTMENT |
2.1 | Subject to (i) the Articles and the BVI Companies Act, and any ordinance, statutory instrument or regulation made thereunder, or any other applicable law or regulations; or (ii) paragraph 2.2, your appointment as a Director of Nomad may be terminated at any time by Nomad giving you three months notice in writing. |
2.2 | Nomad will, without prejudice to Article 27.1 of the Articles, be entitled to terminate your appointment as a director of Nomad, at any time, by summary notice in writing with immediate effect if: |
2.2.1 | you have committed any serious breach or any repeated or continued material breach of your obligations to Nomad (which include an obligation not to breach your fiduciary duties and obligations set out in this Schedule) or of any requirement under British Virgin Islands law or regulations or any other applicable law or regulations; |
2.2.2 | all the other Directors of Nomad by notice in writing request that you resign; |
2.2.3 | you are disqualified or prohibited by law from being or acting as a Director or from being involved in the management of Nomad; |
2.2.4 | you are not re-elected as a Director of Nomad by shareholders of Nomad or you are removed from office by the Shareholders of Nomad in accordance with applicable law and the Articles; |
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2.2.5 | you have been declared bankrupt or have made an arrangement or composition with or for the benefit of your creditors or you have any judgment executed on any of your assets; |
2.2.6 | you are convicted of any arrestable criminal office (other than an offence made under the road traffic legislation in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed); |
2.2.7 | you become incapable, in the reasonable opinion of Nomad, of properly performing your duties, having been given due warning by Nomad and having failed to remedy the situation to the satisfaction of Nomad within a reasonable period from the date of such warning; |
2.2.8 | you, in the reasonable opinion of the Board, are guilty of serious misconduct or willful and persistent neglect of your obligations under this appointment; |
2.2.9 | you, in the reasonable opinion of the Board, act in such a way as to seriously jeopardise the business of Nomad; or |
2.2.10 | you are guilty of any fraud or dishonesty or act in any manner which, in the opinion of Nomad, brings or is likely to bring you or Nomad into disrepute or is materially adverse to the interests of Nomad; |
2.2.11 | your employment with Iglo Foods Group Limited ceases or Iglo Foods Group Limited exercises its rights under clause 2.6 of this Agreement. |
2.3 | Without prejudice to paragraph 11 of this Schedule, if your appointment is terminated by Nomad for any reason, you will not be entitled to director fees or any other director compensation, other than fees that have accrued on a pro rata basis up to the date of termination. |
2.4 | You may terminate your appointment as a director of Nomad at any time by giving notice in writing to Nomad. |
2.5 | You will not at any time after the termination of your appointment represent yourself, or allow yourself to be held out or presented in any way, as connected with or interested in the business of Nomad other than in your capacity as a shareholder of Nomad or as a person affiliated with a shareholder of Nomad, save to the extent that you are communicating with any person in respect of any actual or prospective claim brought against you in your capacity as a former director of Nomad) and save in respect of your employment with Iglo Foods Group Limited (if subsisting). |
2.6 | You agree that on termination of your appointment: |
2.6.1 | you will resign in writing from the office of director (if such termination did not arise as a result of your resignation) and you hereby irrevocably authorise Nomad as your attorney in your name and on your behalf to sign all documents and do all things necessary to give effect to this; and |
2.6.2 | you will forthwith deliver to Nomad all records, documents, accounts, letters and papers of every description (including in particular board papers and board minutes) and copies thereof (the Documents ) within your possession or control as a director of Nomad relating to the affairs and business of Nomad and any other property belonging to Nomad. Nomad shall grant you reasonable access and permit you to take copies of the Documents to the extent you are required to disclose them by law, any stock exchange regulation or any binding judgment, order or requirement of any court or other competent authority, any tax authority to the extent reasonably required for the purposes of your tax affairs or to your professional advisers for a purpose reasonably incidental to your appointment. |
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3. | ROLE |
3.1 | The Board as a whole is collectively responsible for the success of Nomad and: |
3.1.1 | provides entrepreneurial leadership of Nomad within a framework of prudent and effective controls which enable risk to be assessed and managed; |
3.1.2 | sets Nomads strategic aims, ensures that the necessary financial and human resources are in place for Nomad to meet its objectives and reviews management performance; and |
3.1.3 | sets Nomads values and standards and ensures that its obligations to its shareholders and others are understood and met. |
The Board as a whole must take decisions objectively in the interests of Nomad. Further, once you have been appointed as a director, you understand that the Board will be responsible for overseeing Nomads compliance with the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules or any other stock exchanges on which Nomad shares are listed and/or traded.
3.2 | As a Director, you will be expected to exercise the general fiduciary duties of care and confidentiality expected of every company director which include an obligation not to do anything that might bring Nomad into disrepute. You should constructively challenge and help develop proposals on strategy and to help implement the business strategy. You should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance. You should satisfy yourself on the integrity and accuracy of financial information and that financial controls and systems of risk management are robust and defensible. |
3.3 | All Directors must act in the way they consider, in good faith, would be most likely to promote the success of Nomad for the benefit of its members as a whole. |
3.4 | You will be required to comply with and, where applicable, accept responsibility (publicly and, where necessary, in writing) under or by: |
3.4.1 | the BVI Companies Act; |
3.4.2 | the Disclosure and Transparency Rules and the Listing Rules; |
3.4.3 | the rules of the London Stock Exchange; |
3.4.4 | the terms of the Articles; |
3.4.5 | any other law or regulation applicable to Nomad directors; and |
3.4.6 | in any event, the terms set out in the statement of adherence to Directors responsibilities which will be printed in Nomads accounts. |
3.5 | You shall have no power to enter into any legal or other commitment or contract on behalf of Nomad unless duly authorised by a resolution of the Board or a committee of the Board. You shall not hold yourself out as in any way authorised to bind Nomad unless duly authorised by a resolution of the Board or a committee of the Board. |
3.6 | In your role as Director, you must carefully consider any potential acquisition by Nomad of an operating company or business. In performing this task, you must take into account the criteria and guidelines for evaluating any potential acquisition agreed by the Board. |
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4. | DUTIES |
4.1 | You will be expected to use your reasonable efforts to attend Board meetings, the annual general meeting of Nomad and any other general meetings of Nomad. It is anticipated that Board meetings will be held on a quarterly basis. Further meetings may have to be called at shorter notice as and when required, to discuss particular topics of importance, although the Board will wherever possible abide by the minimum notice period for Board meetings set out in Article 32.2 of the Articles. Attendance in person may not be required to the extent the Board determines that remote participation in accordance with Article 32.5 of the Articles (permitting attendance by telephone or video conference or the like at Board meetings) will suffice. |
4.2 | With your agreement, you may serve on committees of the Board. |
4.3 | You will be expected to devote appropriate preparation time ahead of each meeting if appropriate. |
5. | RELATIONSHIP BETWEEN PARTIES |
The relationship between you and Nomad shall be one of officeholder and not one of employment. At no time shall you or Nomad hold you out as being an employee.
6. | INFORMATION |
6.1 | You will be entitled to receive such information as is provided to all directors in their capacity as a director including information reports on a quarterly basis outlining the current performance of the Company. |
6.2 | You may request, in your capacity as a director, information in respect of the Company or any of its subsidiaries or any meeting of the Board (or any committee of the Board established from time to time) which information will be provided only upon the prior approval of the Chairmen of the Board. |
7. | FEES AND EXPENSES |
7.1 | You are not entitled to any fees from Nomad and nor shall you participate in any bonus or pension schemes of Nomad by virtue of your appointment save as provided in clause 3.4 of the main body of this Agreement. The payments made to you by Iglo Foods Group Limited pursuant to the service agreement of even date shall include any entitlement to fees which may arise by virtue of your appointment with Nomad. |
7.2 | Nomad will reimburse all expenses reasonably incurred by you (including travel, accommodation and telephone calls and any applicable value added or equivalent taxes properly payable thereon) in undertaking your duties as a Director, including attendance at Board meetings provided that you provide evidence of expenditure as may be reasonably requested by Nomad. |
7.3 | You will be able to consult Nomads outside advisers at Nomads expense when you consider you need professional advice in connection with the performance of your duties as a Director. In addition, it may be appropriate in some circumstances for you to seek advice from an independent advisor at Nomads expense. In such an event and prior to such independent advice being sought or expense being incurred, you should consult with the Board of Nomad (and if the interests of other Directors are the same as yours such independent advice should be sought jointly with the other Directors). |
8. | OTHER DIRECTORSHIP AND DISCLOSURES |
8.1 | You confirm that you have disclosed fully to the Board, all circumstances in respect of which there is, or there might be, a conflict of interest with Nomad, and you confirm that if any such circumstances arise in respect of which there is or there might be a conflict of interest, during your appointment, you will communicate this to the Board as soon as reasonably practicable. |
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You confirm that you have disclosed your, and your connected persons (as defined in section 96B(2) of the Financial Services and Markets Act (the FSMA )) interests in any other business which gives rise, or which may give rise, to a conflict of interest with Nomad and you confirm that if any such interest arises during the course of your appointment (whether yours or any member of your connected persons) you will disclose this immediately to the Board as soon as reasonably practicable.
8.2 | For the purposes of determining whether you have any interest in any securities in any company or other firm, the provisions of Chapter 5 of the Disclosure and Transparency Rules, or any other regulation or standard deemed relevant by the Board, shall apply. |
9. | COMPLIANCE |
9.1 | It is a criminal offence to disclose inside information (as defined in section 118C of the FSMA) about a company to anyone who makes use of this information and deals in that companys securities before such information (which could be price sensitive) is known publicly and, under certain circumstances this may also be an offence in the British Virgin Islands. |
9.2 | You shall at all times comply (and procure that your connected person as defined in section 96B(2) of the FSMA comply) with any code of conduct relating to securities transactions by directors and specified employees adopted, issued and amended by Nomad from time to time, including the Model Code (to the extent adopted by Nomad), and any other code on dealings or securities applicable to Nomad, and the rules of any regulatory authority. |
10. | CONFIDENTIALITY |
10.1 | Notwithstanding any other fiduciary obligations you may have to Nomad, you will be expected to treat as secret and confidential, and not at any time, either during your appointment or afterwards, for any reason, disclose or permit to be disclosed to any person, or otherwise make use of or permit use to be made of, any information of a confidential or commercially sensitive nature relating to Nomads business, affairs or finances which comes to your attention as a result of this appointment. |
10.2 | Your attention is drawn to the requirements under both legislation and regulation as to the disclosure of price sensitive information. Consequently, you should avoid making any statements that might risk a breach of these requirements without prior clearance from the Board. |
11. | INDEMNITY |
11.1 | If you were or are made a party or are threatened to be made a party to or are involved in any actual or threatened or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a proceeding), by reason of the fact that you are or were a director of Nomad or are or were serving at the request of Nomad in any other capacity, Nomad shall indemnify you and hold you harmless to the full extent authorized by the laws of the British Virgin Islands, subject to the provisions of Section 132 of the BVI Companies Act or any successor act, as applicable and Article 33 of the Articles, against all expense, liability and loss and any applicable value added or equivalent taxes properly payable thereon (including attorneys fees and related disbursements, judgments, fines, penalties and amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by you in connection therewith. For the avoidance of doubt, this indemnity shall not apply where you have committed fraud in undertaking your duties. |
11.2 | Expenses (including attorneys fees, costs and charges) incurred by you in defending a proceeding shall be paid by Nomad in advance of the final disposition of such proceeding upon receipt of your undertaking to repay all amounts so advanced in the event that it shall ultimately be determined that you are not entitled to be indemnified by Nomad as provided in paragraph 11.1 hereof. |
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11.3 | Any indemnification or advance of expenses (including attorneys fees, costs and charges) under paragraphs 11.1 and 11.2 hereof shall be made promptly, and in any event thirty (30) days of your written request (and, in the case of advance of expenses, receipt of your written undertaking to repay such amount if it shall ultimately be determined that you are not entitled to be indemnified therefor pursuant to the terms hereof). Your costs and expenses incurred in connection with successfully establishing your right to indemnification, in whole or in part, shall also be indemnified by Nomad. |
11.4 | Nomad undertakes to purchase and maintain D&O insurance for the benefit of the Directors as permitted by Article 33.5 of the Articles and Section 133 of the BVI Companies Act. The terms of such insurance policy or policies shall, without limitation, be on terms no less advantageous than the terms provided to other members of the board of directors of Nomad from time to time, and shall in any event include full cover, on terms no less advantageous than are provided to the current and former directors from time to time, for a period of at least six years after the date on which you cease to be a director of Nomad, irrespective of the reason for or means of such termination. |
11.5 | The indemnification and advancement of expenses provided hereby shall not be deemed exclusive of any other rights to which you may be entitled under any law, bylaw, agreement, vote of shareholders or directors or otherwise. |
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Exhibit 10.4
(As required by the Employment Rights Act 1996)
A. |
Employer: | Iglo Foods Group Limited (the Company) | ||
B. |
Name of employee: | Paul Kenyon | ||
C. |
Position held: | Chief Finance Officer | ||
D. |
Working hours: | Your notional hours of work will be 0845 to 1700 with an unpaid break of 45 minutes for lunch, Monday to Friday inclusive, at a time which is suitable to the requirements of the business. | ||
E. |
Date employment begins: | Your employment in this role begins on 6 th June 2012 | ||
Your employment with the Company which will count as a continuous period of employment begins on 6 th June 2012 . | ||||
F. |
Date continuous employment begins: | No previous employment with any other person, firm or company will count as part of your continuous employment with the Company. | ||
G. |
Annual rate of salary: | Your salary will be £415,000 per annum. | ||
H. |
Normal place of work: | UK Head Office - Bedfont Lakes, Middlesex |
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1. | REMUNERATION |
Basic salary
Your basic salary will be paid subject to statutory deductions, pro rata, on a monthly basis in arrears by way of direct transfer to your bank account. It will normally be paid on or as near as circumstances permit to the 21st day in each calendar month.
Group Performance Bonus Plan
The company operates a discretionary performance related bonus scheme. The details of which will be notified to employees annually.
Review
Your salary will be considered for review in April 2013 and thereafter on an annual basis and you may or may not be awarded an increase, subject to your performance and the performance of the Company. The Company may, from time to time, change the date of the review.
Deductions
The Company reserves the right to deduct from your salary, either during your employment or at the end, any sum required or permitted by law, including but not limited to any overpayment made to you by the Company or any associated company, pay in respect of holidays taken in excess of accrued entitlement, or outstanding loans or advances. You will receive written notification of any deduction in advance.
Expenses
While staying in the Bedfont area mid week the Company will reimburse your reasonable hotel accommodate expenses for a maximum of 4 nights per week although it is anticipated that on most weeks this would be a maximum of 3 nights a weeks since it is your intention to work from home on Fridays when it is practical to do so. It is expected that any hotel would be from our preferred supplier list and comply with the Travel and Expenses Policy.
In accordance with the Iglo Travel and Expenses policy we will reimburse you for your substance costs when staying overnight including, dinner and breakfast.
We recognise that the level of time you spend working in Bedfont will not satisfy the HMRC criteria of being a home worker based in Bristol and that the level of support highlighted above would constitute a taxable benefit. Iglo Group will bear the tax via the PSA process which is managed by our Finance dept thus removing any personal tax liability you may have.
1.1 | CASH CAR ALLOWANCE |
You will receive a car allowance at the rate of £1,100.00 per month, subject to the agreement of the Company and in accordance with the Companys car policy as amended from time to time.
Full details of the Company car policy, procedure and rules are available from the HR Centre.
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If you are disqualified from driving by a Court or as a result of disability you must immediately inform your manager in writing. If you are disqualified, for whatever reason, you may no longer be able to carry out your duties. The Company will consider the possibility of alternative work. However, if this is not reasonably practicable, the Company reserves the right to terminate your employment.
You will also have to comply with the Companys Road Safety Management Programme, details of which are available from the HR Centre.
2. | HOURS OF WORK |
You acknowledge that you have unmeasured working time for the purposes of Regulation 20 of the Working Time Regulations 1998.
From time to time you may be required to attend events outside of your notional working hours (e.g. training courses). No additional payments will be made in respect of this.
3. | DUTIES & VARIATION OF WORK |
During your notional working hours and during any additional hours you may be required to work, you will devote the whole of your time and attention and abilities to the service of the Company and as reasonably directed any of its associated companies.
The Company reserves the right to reasonably vary your duties and the content of your job, from time to time, in the interests of the efficient running of the business of the Company or to require you to undertake any duties which are reasonably appropriate to your position, abilities and experience.
Training & development
You will be required to undergo any training or development that is required by the Company and is necessary for you to fulfil your role.
4. | LOCATION |
Your normal place of work is given in paragraph H but in order to fulfil your duties you may, from time to time, be required to travel to other offices.
If required, and with appropriate notice and consultation, you may be required to relocate to another location on a temporary or permanent basis.
5. | HOLIDAYS |
Holiday year
The Companys holiday year is 1 January to 31 December.
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Holiday entitlement
You will be entitled to 25 days holiday per year plus all public holidays applicable in your normal place of work. Time off for religious festivals which do not fall on public holidays should be taken from your holiday entitlement.
Accrual
Holiday entitlement will accrue at the rate of 2 days (3 in December) per each complete calendar month of employment in a holiday year.
Entitlement on termination
If your employment is terminated and the holiday you have taken exceeds your accrued entitlement, you will pay the Company for the number of days or part days difference. The Company reserves the right to deduct any money due in respect of excess holidays from any final salary or other payment due to you.
If your employment is terminated and you have taken less than your holiday entitlement, the Company may:
(a) pay you for the number of days or part days difference; and/or
(b) require you to take any holiday entitlement to which you may be entitled during any period that you are placed on garden leave and the rights and obligations in Regulations 15(3) and 15(4) of the Working Time Regulations 1998 are varied accordingly.
Regulations for taking holidays
i. | All holidays must be agreed in advance by your manager. Authorisation for the timing or length of these holidays may be refused if the timing is not convenient to the Company. |
ii. | Up to 5 days holiday a year may be nominated as holiday by the Company, for example, for office closures between Christmas and New Year. |
iii. | It is in your own interests to plan and take your holidays each year. You will not be able to carry forward holiday from one holiday year to the next without the express consent of your manager; even with this permission this is limited to 5 days. Except upon termination of your employment, no payment will be made for holidays which have been accrued but not taken. |
6. | SICKNESS & INDUSTRIAL INJURY BENEFIT SCHEME (SIIBS) |
Details for reporting absence from work as a result of sickness or injury will be given to you by your manager.
You are eligible (subject to your length of service) to receive benefit under the Companys Sickness & Industrial Injury Benefit Scheme (SIIBS). This scheme is not contractual and does not form part of your terms and conditions of employment; it is a benefit extended by the Company which may be withdrawn at any time.
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Payment in respect of sickness absence is therefore at the Companys discretion. Any benefits payable under the scheme include any benefits due under Statutory Sick Pay. Details of the scheme will be explained in your induction.
Injury caused by a third party
If your absence from work is due to any injury caused by somebody else and you subsequently receive damages or a settlement of any claim in respect of the injury, you will repay to the Company the amount of sickness benefit which has been paid to you. The amount of repayment will not exceed the amount you have received in settlement less any costs borne by you in connection with the claim.
Medical examination
The Company will be entitled, at its expense, to require you to be examined by a medical practitioner of the Companys choice at any time and you agree that the doctor carrying out the examination may disclose to and discuss with the Company the results of the examination.
7. | PENSION |
You are eligible to become a member of the Birds Eye Limited Group Pension Plan and details will be issued under separate cover. You will be automatically entered into the scheme unless you opt out by signing theopt out declaration on the enclosed form. Entry date will be the 1 st of the month following your start date.
Under this arrangement a number of investment options are available for you to choose from. Upon commencement, you will be entered into the default Birds Eye Limited Group Pension Plan - Lifestyle Option 10, however, you may switch into alternative investments at any time.
Iglo Foods Group Limited will contribute 10% of your pensionable pay into the plan on your behalf. You will be required to sacrifice a proportion of your salary equivalent to 4.5% of your pensionable pay, less the Lower Earning Limit, the Company will make this contribution directly into your plan.
The scheme also provides for additional personal contributions should you so wish. Any additional contributions will be deducted from you net earnings.
For your information the pension provider is Prudential.
8. | TERMINATION OF EMPLOYMENT |
Your employment may be terminated by either you, or by the Company, by giving six months written notice.
Summary Termination
The Company may terminate your employment without notice, and without payment in lieu of notice if:
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(a) you are guilty of gross misconduct or serious negligence;
(b) you are guilty of conduct which brings of is likely to bring you, the Company or any associated company into disrepute;
(c ) you are adjudged bankrupt;
(d) you are prohibited by the law or articles of association of the Company or any regulatory body from being a director;
(e) you voluntarily resign as a director.
Suspension
In order to investigate any complaint of misconduct or negligence, the Company is entitled to suspend you on full pay for as long as is necessary to complete a proper investigation and hold a disciplinary hearing. Suspension is not to be regarded as disciplinary action and will be for as short a period as possible.
Pay in lieu of notice
In the event of either you or the Company serving notice, the Company may, if it chooses, provide you with a payment in lieu of notice for the unexpired portion of the notice period. For the avoidance of doubt payment in lieu of notice will be limited to any basic salary, car allowance, Outer London or shift (if these allowances are applicable) payable during the unexpired portion of the notice period. Entitlement to bonus and any other variable pay will be dealt with in accordance with the rules of the relevant scheme and will not extend beyond the date of termination of your employment. Membership of the Iglo Foods Group Limited Pension Fund will cease at the date of termination, however your pension investments with the Prudential will remain with you.
Work during notice period
During your notice period the Company may ask you only to perform specific duties or no duties at all and may ask you not to attend work during all or any part of your notice period (i.e. put you on garden leave). In addition, the Company may instruct you not to communicate with suppliers, clients, investors, employees, agents, trustees or representatives of the Company or any associated companies. All other obligations and payment of salary and benefits will be unaffected and you will continue to be bound by all other express and implied terms in your contract of employment.
9. | POST TERMINATION COVENANTS |
You agree that you will not directly or indirectly, either alone or jointly with or on behalf of any person, firm or company and whether on your own account or otherwise:
- | for a period of six months following the termination of your employment with the Company (less any period spent on garden leave under clause 7), work for or be engaged by, or otherwise provide services the same or similar to those you provided to the Company in the 12 months prior to the termination of your employment, to any material competitors, suppliers, customers or partners of the Company or any associated company or any company or organisation whose business is wholly or partly similar to or in competition with the Company or any associated company in the Restricted Area, without the prior written consent of the Company which may be given or refused at the Companys sole discretion. |
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- | for a period of six months following the termination of your employment with the Company (less any period spent on garden leave under clause 7), in competition with the Company in relation to services the same as or similar to the services you provided to the Company in the 12 months prior to the termination of your employment, deal with or solicit the custom of or endeavour to entice away from the Company or any associated company any person who was a client, customer or supplier, or who was a potential client, customer or supplier, of the Company in the 12 months prior to the termination of your employment and with whom you were concerned or had personal contact in such 12 month period. |
- | for a period of six months following the termination of your employment with the Company (less any period spent on garden leave under clause 7), solicit or entice any Senior Employee of the Company or any associated company away from the Company or any associated company. |
- | at any time after termination of your employment represent yourself as being in any way connected with or interested in the business of the Company or any associated company. |
You agree that the time limitation and the restrictions as described in this section are fair and reasonable and will not unreasonably interfere with your ability to make a living.
Each of the obligations contained in the covenants as set out above is an entirely separate and independent restriction on you, despite the fact that it may be contained in the same phrase or sub-clause, and if any part is found to be unenforceable the remainder will remain valid and enforceable. The restrictions are considered by you and the Company to be reasonable, but in the event that any such restriction is held to be void or ineffective but would be valid and effective if some part thereof were deleted, such restriction shall apply with such modification as may be necessary to make it valid and effective.
For the purposes of this clause the following definitions apply:-
Restricted Area means the United Kingdom, Italy and Germany.
Senior Employee means any person who at the date of termination of your employment is employed or engaged directly or indirectly by the Company or any associated company as an employee, director, consultant or agent and with whom you had material contact during the course of his employment and (a) is employed or engaged in a managerial, finance, research or design or marketing capacity and/or (b) is in the possession of confidential information belonging to the Company or any associated company and/or (c) is directly managed by or reports to you .
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10.1 | CONFIDENTIALITY, INTELLECTUAL PROPERTY AND DATA PROTECTION |
a) | On request and in any event on termination of the your employment for any reason you will immediately return to the Company all property belonging to the Company in your possession or under his/her control including, but not limited to, any car, credit or charge cards, his/her security pass, all keys, computer hard and software including discs and all documents in whatever form (including notes, papers and minutes of meetings, records, customer lists, computer printouts, plans, projections) together with all copies, extracts or summaries. The ownership of all such property and documents will at all times remain vested in the Company as appropriate. |
b) | You shall not remove from Companys premises or copy or make any abstract, summary or précis of the whole or part of any document belonging to the Company except in the proper performance of his/her duties. |
10.2 | a) You shall not either during the period of employment with the Company, except in the proper course of your duties, or thereafter disclose or divulge to any person, firm, company or organisation any information of a secret or confidential character developed or acquired by you during your employment with the Company relating to the trade or business of the Company or any associated company including, but not limited to: |
i. | Recipes and product specification; |
ii. | the methods of treatment, processing, manufacture, production or distribution, process and production controls including quality controls; |
iii. | research and development; |
iv. | market research findings and marketing strategies; |
v. | the development of new products; |
vi. | business plans and strategies; |
vii. | identity of suppliers and their terms of business; |
viii. | identity of customers and details of their requirements and prices charged. |
b) | You shall not either during the period of employment with the Company, except in the proper course of your duties, or thereafter use any information of a secret or confidential character developed or acquired by you during your employment with the Company relating to any of the matters set out in Sub-Clause (a) hereof. |
c) | The restrictions in Sub-Clause (a) and (b) hereof will not apply to any information which has become available to the public generally, otherwise than through unauthorised disclosure. |
d) | You acknowledge that any disclosure or misuse of confidential information is likely to cause irreparable and substantial harm to the Company and damages will not be a sufficient remedy. Therefore in addition to all other remedies to which the Company may be entitled as a matter of law, the Company shall also be entitled to enforce these provisions by means of injunctions. |
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10.3 | a) You shall communicate forthwith to the Company full particulars of every invention, improvement and discovery made or discovered by you during the period of your employment with the Company and arising out of or in consequence of such employment. |
b) | The Patents Act 1977 shall determine to whom, as between you and the Company, an invention shall be taken to belong. |
c) | You shall, at the request and cost of the Company, both while in the employment of the Company and thereafter, take all necessary steps (including executing documents) to procure the granting to the Company or any third party nominated by the Company of a patent in the United Kingdom and similar protection abroad in respect of every such invention, improvement and discovery that belongs to the Company and upon such patent and/or similar protection being granted, shall execute all documents required by the Company to deal with the said patent and/or similar protection in such manner as the Company may think fit. |
d) | You will (both during and after the termination of your employment) at the Companys expense anywhere in the world and at any time promptly do everything (including executing documents) that may be required by the Company to defend or protect for the benefit of the Company or any associated company all inventions, improvements and discoveries and the right, title and interest of the Company in or to them. |
e) | Should the Company so desire, an invention, improvement and discovery which belongs to the Company shall not be made the subject of a patent or similar protection but may be worked by the Company as a secret process. |
10.4 | a) The entire copyright and all similar rights (including future copyright, the right to register trade marks or service marks and the right to register designs and design rights) throughout the world in works of any description produced by you during the period of employment with the Company and arising out of or in consequence of such employment shall vest in and belong to the Company absolutely throughout the world for the full periods of protection available in law, including all renewals and extensions. |
b) | You will (both during and after the termination of your employment) at the Companys request and expense anywhere in the world and at any time promptly do everything (including executing documents) that may be required by the Company to assure, defend or protect the right, title and interest of the Company or any associated company in or to such works. |
10.5 | a) The Company intend to process and use personal data relating to you where it is necessary for compliance with any legal duty of the Company or appropriate in the course of your employment which includes but is not limited to: |
i. | maintaining and processing records on a confidential and anonymous basis so that it can fulfil its duties under the Equality Act 2010; |
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ii. | information concerning whether you are a member of a trade union to the extent needed, if at all, so that the Company can ensure that appropriate union dues are deducted from your salary where requested; |
iii. | information concerning your physical and mental well being which has been obtained from the Employee or from a medical practitioner in accordance with the Access to Medical Records Act 1988; |
iv. | administration of and information relating to your salary and other contractual benefits for payroll and pension purposes; |
v. | information disclosed by you or discovered as appropriate concerning any criminal offences committed or alleged to have been committed; |
vi. | communication with you and information obtained in the course of appraising and assessing you for the purposes of performance assessment, training, development and career advancement; |
vii. | information provided to a prospective transferee setting out your basic salary, length of service, redundancy pay entitlement and other basic contractual terms in the event that such information is needed on the transfer of an undertaking; |
viii. | disclosure to and use by external bodies for any of the purposes described within this Clause 9.5. |
b) | Your consent to the processing and use of your personal data as set out in this Clause 9.5. |
10.6 | You undertake to the Company that to the best of your knowledge you will not be in breach of any existing or any former terms of employment applicable to you by reason of you entering into this Agreement. |
11. | DISCIPLINARY, GRIEVANCE & OTHER POLICIES |
The disciplinary and grievance procedures do not form part of this contract and the Company reserves the right to amend them at any time.
Disciplinary procedure
Details of this policy and procedure are available from your local HR department. If you are dissatisfied with any disciplinary decision relating to you, you may appeal in writing in accordance with the disciplinary procedure to your HR manager.
Grievance procedure
If you wish to pursue a grievance you must submit the grievance in writing in accordance with the procedure which is available from your local HR department.
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Other policies and procedures
You will comply with all Company and site rules, policies and procedures contained within policy documents, site manuals, rules and procedure documents and conditions of employment published from time to time, which are applicable to you. Copies of these policies can be obtained from local HR department and include, without limitation, Iglo Foods Group Limiteds health, safety and hygiene rules and equal opportunities and harassment policies.
For the avoidance of doubt such rules, policies and procedures can be changed, replaced or withdrawn at any time at the discretion of the Company. Breach of any Company rules, policies or procedures may result in disciplinary action, up to and including dismissal.
12. | OUTSIDE EMPLOYMENT |
During your employment with the Company you must not, except with written prior permission of the Board of the Company, be employed or engaged in any capacity with any business other than the Company.
13. | CONFLICTS OF INTEREST |
During your employment with the Company you must not, except with the written prior permission of the Board of the Company, belong to or have any financial interest in any business or organisation which gives rise or may give rise to a conflict of interest. You must notify the Board of the Company as soon as possible if you become aware that such a conflict exists or may exist.
14. | BREACHES |
In the event of your failure to comply with these terms and conditions (breach of contract), the Company will be entitled to recover compensation from you for any losses that the Company suffers as a result of such breach.
15. | ENTIRE AGREEMENT |
These terms and conditions of employment supersede all prior agreements, understandings and arrangements, both verbal and written between you and the Company and constitute the entire agreement between you and the Company in respect of the subjects described above.
16. | WARRANTY |
You warrant that by entering into this contract and any other arrangements made between you and the Company you will not be in breach of or subject to any express or implied term of any contract with any other person or any obligation to any third party, including notice period, the provisions of any restrictive covenants or any confidentiality obligations arising out of any employment with any other employer or former employer.
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17. | RIGHT TO SEARCH |
Any employee who steals or deals in an unauthorised manner with the property of the company or any of its associated companies or their employees, or causes wilful damage to machinery or other property may be liable to disciplinary action which may lead to summary dismissal for gross misconduct and prosecution.
Any employee shall on request submit to being searched (including belongings and storage lockers) by authorised persons of the company. At the request of the person being searched, an independent witness may be requested.
The condition to submit to search if requested applies equally to employees of all work levels within the Company.
18. | COMPANY PROPERTY |
All Company property, documentary and electronic records containing confidential information shall be surrendered to an officer of the Company on any termination of your employment or upon request at any time during the course of your employment.
19. | CHANGES TO THESE TERMS |
The Company reserves the right at its sole discretion to make changes to these terms and conditions of employment. You will be given at least one months notice of any change.
I hereby acknowledge that I have read and understood the above and I accept these provisions as being the terms and conditions of my employment with the Company.
Signed:
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Date:
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20 th November 2015 | |||||
Paul Kenyon |
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Exhibit 10.5
ADVISORY SERVICES AGREEMENT
This ADVISORY SERVICES AGREEMENT (this Agreement ), effective as of June 1, 2015 (the Effective Date ), is entered into by and between Nomad Foods Limited (the Company ), Mariposa Capital, LLC, a Delaware limited liability company ( Mariposa ) and TOMS Capital LLC ( TOMS and together with Mariposa, Advisors ).
WHEREAS, the Company desires to receive from Advisors, and Advisors desire to provide to the Company, the Services (as defined below) pursuant to the terms and conditions set forth in this Agreement; and
WHEREAS, the compensation arrangements set forth in this Agreement are designed to compensate Advisors for providing such Services to the Company.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, the parties hereto agree as follows:
1. Agreement; Term .
(a) The Company hereby retains Advisors to perform, and Advisors agree to render to the Company and its direct and indirect subsidiaries ( Subsidiaries ), on the terms herein set forth, the following services (collectively, the Services ):
(i) | corporate development and advisory services; |
(ii) | advisory services with respect to mergers and acquisitions; |
(iii) | investor relations services; |
(iv) | strategic planning advisory services; |
(v) | capital expenditure allocation advisory services; |
(vi) | strategic treasury advisory services (including without limitation advice regarding financings, equity offerings, global cash planning and other related services); and |
(vii) | such other services relating to the Company and its Subsidiaries as may from time to time be mutually agreed to among the parties. |
(b) It is expressly understood and agreed that Advisors shall devote only so much time, and shall consult with and advise the officers and directors of the Company only to such extent and, at such times and places, as may be mutually convenient to the Company and Advisors. Each Advisor shall be free to provide similar services to such other business enterprises or activities as such Advisor may deem fit without any limitation or restriction whatsoever.
(c) The initial term of this Agreement shall commence as of the Effective Date and shall terminate on the first anniversary of the Effective Date (the Initial Term ). The Initial Term shall be automatically renewed for successive one-year terms (each, a Renewal Term ) unless either party notifies the other party in writing of its intention not to renew the
Agreement no later than 90 days prior to the expiration of the Initial Term or a Renewal Term, as the case may be. This Agreement may only be terminated by the Company upon a vote of a majority of the Companys directors. In the event that this Agreement is terminated by the Company, the effective date of the termination shall be six months following the expiration of the Initial Term or a Renewal Term, as the case may be.
2. Compensation and Expenses .
(a) For the Services to be rendered by Advisors hereunder, Advisors shall receive an annual fee (the Management Fee ) equal to $2,000,000 to be split equally among the Advisors. The Company shall pay the Management Fee in quarterly installments, in advance, equal to $500,000. Within ten (10) days of the date hereof, the Company shall pay Advisors an amount representing the pro rata portion of the Management Fee for the quarter ending June 30, 2015.
(b) The Company shall reimburse each Advisor for the cost of all reasonable out-of-pocket fees and expenses incurred by such Advisor and its respective affiliates in the performance of the Services hereunder and all matters related thereto. The aforementioned expenses will be payable by the Company to such Advisor or its respective designee promptly following presentation by such Advisor of invoices for such expenses.
3. Relationship of the Parties . Each Advisor is providing the Services hereunder as an independent contractor. Nothing in this Agreement shall be deemed to constitute any parties hereto as joint venturers, alter egos, partners or participants in an unincorporated business or other separate entity, nor in any manner create any employer-employee or principal-agent relationship between the Company and/or any of its Subsidiaries on the one hand, and any Advisor or any of such Advisors members, advisors, officers or employees on the other hand (notwithstanding the fact that the Company and an Advisor may have in common any officers, directors, stockholders, members, managers, employees, or other personnel).
4. Directors and Officers . Nothing in this Agreement shall be construed to relieve the directors or officers of the Company and its Subsidiaries from the performance of their respective duties or limit the exercise of their powers in accordance with the Companys and its Subsidiaries charter, bylaws, operating agreement, other constituent documents, applicable law, or otherwise. The activities of the Company and its Subsidiaries shall at all times be subject to the control and direction of their respective directors and officers. The Company and its Subsidiaries reserve the right to make all decisions with regard to any matter upon which any Advisor has rendered its advice and consultation. The Company, its Subsidiaries and Advisors expressly acknowledge and agree that Advisors are being engaged by the Company and its Subsidiaries to provide the Services to the Company and its Subsidiaries, for which Advisors will be compensated pursuant to the terms of this Agreement. Advisors shall not, and shall have no authority to, control the Company or its Subsidiaries or the Companys or its Subsidiaries day-to-day operations, whether through the performance of Advisors duties hereunder or otherwise. Moreover, although the Company and/or its Subsidiaries may grant to any Advisor authority to sign, review or approve the Companys and/or its Subsidiaries checks, payments,
2
expenditures, transfers and/or conveyances, any such grant of authority shall be made by the Company or its Subsidiaries, as applicable, and accepted by each Advisor with the express understanding and limitation that such Advisor shall possess and exercise such authority solely in its capacity as a provider of the Services pursuant to the terms of this Agreement, and in no other capacity, and that no inference shall be drawn therefrom as to any ability of any Advisor to control the Company or its Subsidiaries or the Companys or its Subsidiaries day-to-day operations or any liability or responsibility therefor. The Companys and its Subsidiaries directors, officers and employees shall retain all responsibility for the Company, its Subsidiaries and their operations as and to the extent required by the Companys and its Subsidiaries charter, bylaws, operating agreement, other constituent documents, and applicable law.
5. Limitation of Liability . Neither Advisors nor any of their respective affiliates, nor any of their respective members, managers, partners, directors, officers, employees, agents and/or controlling persons, nor any successor by operation of law (including by merger) of any such person, nor any entity that acquires all or substantially all of the assets of any such person in a single transaction or series of related transactions (all of the foregoing, collectively, the Advisor Indemnitees ) shall be liable to the Company or any of its Subsidiaries or affiliates or any of the security holders or creditors of the Company or any of its affiliates for (i) any damage, loss, liability, deficiency, diminution in value, action, suit, claim, proceeding, investigation, audit, demand, assessment, fine, judgment, cost or other expense (including, without limitation, legal fees and expenses) (collectively Liabilities ) directly or indirectly (whether direct or indirect, in contract or tort or otherwise) arising out of, related to, caused by, based upon or in connection with the performance of the Services contemplated by this Agreement unless such Liability shall be proven to result directly and primarily from the willful misconduct of such person or (ii) any Outside Activities (as defined below). Advisors make no representations or warranties, express or implied, in respect of the Services provided by any Advisor Indemnitee. In no event will any Advisor Indemnitee be liable to the Company (x) for any special, indirect, punitive, incidental or consequential damages, including, without limitation, loss of profits or savings or lost business, whether or not such damages are foreseeable or such Advisor Indemnitee has been advised of the possibility of such damages or (y) in respect of any Liabilities relating to any third party claims (whether based in contract, tort or otherwise), except as set forth in Section 6 below. Under no circumstances will the aggregate of any and all Liabilities of Advisor Indemnitees exceed, in the aggregate, the fees actually paid to Advisors hereunder.
6. Indemnification . The Company and its Subsidiaries shall jointly and severally reimburse, defend, indemnify and hold Advisor Indemnitees, and each of them, harmless from and against any Liabilities arising out of, related to, caused by, based upon or in connection with (a) any act or omission of, or on behalf of, the Company, any of its Subsidiaries, Advisors or any of Advisor Indemnitees, except to the extent proven to result directly and primarily from the willful misconduct of the person seeking indemnification, or (b) any act or omission made at the direction of the Company or any of its Subsidiaries (collectively, Claims ). The Company and its Subsidiaries and affiliates shall jointly and severally defend at their own cost and expense any and all suits or actions (just or unjust) which may be brought against the Company, its Subsidiaries or any of their affiliates, or any Advisor Indemnitee or in which any Advisor
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Indemnitee may be impleaded with others upon any Claims, or upon any matter, directly or indirectly arising out of, related to, caused by, based upon or in connection with this Agreement or the performance (or failure of performance) hereof by any Advisor Indemnitee.
7. Notices . All notices, requests, demands or other communications permitted or required to be given hereunder shall be given or made in writing and shall be (i) delivered personally (including delivery by commercial courier), (ii) sent by registered or certified airmail, postage prepaid, or (iii) sent by telecopier, addressed to the party to whom they are directed at the following addresses, or at such other address as ay be designated by notice from such party hereunder:
To the Company:
Nomad Foods Limited
Nemours Chambers
Road Town
Tortola
British Virgin Islands
Attention: Elian Corporate Services
Facsimile No.: +1-(284) 494 0883
To Mariposa:
Mariposa Capital, LLC
5200 Blue Lagoon Drive
Suite 855
Miami, Florida 33126
Attention: Desiree DeStefano
Facsimile No.: +1-(305) 675-0653
To TOMS:
TOMS Capital LLC
450 West 14th Street
13th Floor
New York, NY 10014
Attention: Alex San Miguel
Facsimile No: +1 (212) 524-7301
Any notice, request, demand or other communication permitted or required to be given hereunder shall be deemed conclusively to have been given: (a) on the first business day following the day timely deposited with a nationally recognized overnight delivery service with an order for next-day delivery, with the cost of delivery prepaid for the account of the sender; (b) on the fifth business day following the day duly sent by certified or registered United States mail,
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postage prepaid and return receipt requested; or (c) if delivered by other means, when actually received by the addressee on a business day (or on the next business day if received after the close of normal business hours or on any non-business day).
8. Assignment; Successors and Assigns . This Agreement and the rights, duties and obligations of the Company and its Subsidiaries hereunder may not be assigned or delegated by the Company or its Subsidiaries without the prior written consent of Advisors. This Agreement and the rights, duties and obligations of Advisors hereunder may not be assigned or delegated by Advisors, other than to an affiliate of an Advisor, without the prior written consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned). All covenants, promises and agreements by or on behalf of the parties contained in this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.
9. Amendments . No amendment, supplement or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by Advisors and the Company (in the case of an amendment or supplement) or by the waiving party (in the case of a waiver); provided, however, that the allocation of the Management Fee may be amended upon delivery of a joint written instruction from the Advisors to the Company.
10. Applicable Law; WAIVER OF JURY TRIAL . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to principles of conflicts of law or choice of law that would compel the application of the substantive laws of any other jurisdiction. EACH PARTY HERETO HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.
11. Section Headings . The headings of each section are contained herein for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
12. Entire Agreement . This Agreement sets forth the entire agreement of the parties hereto with regard to the subject matter hereof and supersedes and replaces all prior agreements, understandings and representations, oral or written, with regard to such matters.
13. Severability . If any provision of this Agreement or application thereof under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.
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14. Counterparts . This Agreement may be executed in counterparts, each of which shall be an original, and both of which together shall constitute one and the same document. Any counterpart may be executed by PDF or facsimile signature and such PDF or facsimile signature shall be deemed an original.
15. Further Assurances . Each party hereto agrees to use all reasonable efforts to obtain all consents and approvals, and to do all other things, necessary for the transactions contemplated by this Agreement. The parties agree to take such further action and to deliver or cause to be delivered any additional agreements or instruments as any of them may reasonably request for the purpose of carrying out this Agreement and the agreements and transactions contemplated hereby.
16. Attorneys Fees . If any action at law or in equity is necessary or desirable to enforce or interpret the terms of this Agreement, to protect the rights obtained hereunder, or where any provision hereof is validly asserted as a defense, then each Advisor shall be entitled to recover from the Company its reasonable attorneys fees incurred in connection therewith, including attorneys fees on appeal, and all costs and disbursements, in addition to any other available relief or remedy to which it may be entitled.
17. Outside Activities . The Company hereby acknowledges and agrees that one or more of Advisor Indemnitees have had, and from time to time may have, outside activities or interests that conflict or may conflict with the best interests of the Company, its Subsidiaries or any of their affiliates (collectively, Outside Activities ), including (without limitation) investment opportunities or investments in, ownership of, or participation in entities that are or could be complementary to, or competitive with, the Company, its Subsidiaries or any of their affiliates. The Company hereby consents to all such Outside Activities, and no Advisor Indemnitee shall be liable to the Company, its Subsidiaries or any of their affiliates for breach of any duty (contractual or otherwise), including without limitation any fiduciary duties, by reason of any such activities or of such persons participation therein. In the event that any Advisor Indemnitee acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both the Company, its Subsidiaries or any of their affiliates, on the one hand, and any Advisor Indemnitee, on the other hand, or any other person, no Advisor Indemnitee shall have any duty (contractual or otherwise), including without limitation any fiduciary duties, to communicate, present or offer such corporate opportunity to the Company, its Subsidiaries or any of their affiliates and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Company, its Subsidiaries or any of their affiliates for breach of any duty (contractual or otherwise), including without limitation any fiduciary duties, by reason of the fact that any Advisor Indemnitee directly or indirectly pursues or acquires such opportunity for itself, directs such opportunity to another person, or does not present or communicate such opportunity to the Company, its Subsidiaries or any of their affiliates, even though such corporate opportunity may be of a character that, if presented to the Company, its Subsidiaries or any of their affiliates, could be taken by the Company, its Subsidiaries or any of their affiliates, as applicable. The Company hereby renounces any interest, right, or expectancy in any such opportunity not offered to it by Advisor Indemnitees to the fullest extent permitted by law. For the avoidance of doubt, the provisions of this Section 17 shall not limit in any respect the provisions of Section 4 of this Agreement.
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18. Construction . The construction of this Agreement shall not take into consideration the party who drafted or whose representative drafted any portion of this Agreement, and no canon of construction shall be applied that resolves ambiguities against the drafter of a document.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Advisory Services Agreement as of the date first above written.
COMPANY: | ||
NOMAD FOODS LIMITED | ||
By: |
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|
|
||
Name: | Paul Kenyon | |
Title: | Secretary |
[Signature Page to Advisory Services Agreement]
ADVISORS: | ||
MARIPOSA CAPITAL, LLC | ||
By: |
|
|
|
||
Name: |
Desiree DeStefano |
|
Title: |
CFO |
|
TOMS CAPITAL, LLC | ||
By: |
|
|
|
||
Name: |
A. San Miguel |
|
Title: |
Partner |
[Signature Page to Advisory Services Agreement]
Exhibit 10.6
|
FINAL VERSION |
10 April 2014
NOMAD HOLDINGS LIMITED
and
THE DIRECTORS OF NOMAD HOLDINGS LIMITED
and
TOMS ACQUISITION I LLC
and
MARIPOSA ACQUISITION II, LLC
and
BARCLAYS BANK PLC
and
CITIGROUP GLOBAL MARKETS LIMITED
PLACING AGREEMENT
Herbert Smith Freehills LLP
1
TABLE OF CONTENTS
Clause | Headings | Page | ||||
1. |
DEFINITIONS AND INTERPRETATION |
2 | ||||
2. |
APPLICATIONS FOR ADMISSION AND APPOINTMENTS |
10 | ||||
3. |
AGREEMENT TO ISSUE AND SELL SHARES AND WARRANTS |
12 | ||||
4. |
APPROVAL, RELEASE AND DELIVERY OF DOCUMENTS |
14 | ||||
5. |
PRE-CLOSING OBLIGATIONS |
16 | ||||
6. |
CLOSING |
17 | ||||
7. |
CONDITIONS |
19 | ||||
8. |
UNDERTAKINGS |
21 | ||||
9. |
COMMISSIONS, COSTS AND EXPENSES |
21 | ||||
10. |
TRANSFER TAXES |
24 | ||||
11. |
WARRANTIES |
25 | ||||
12. |
INDEMNITIES AND WAIVER OF CLAIMS |
27 | ||||
13. |
TERMINATION |
35 | ||||
14. |
WITHHOLDING AND GROSS-UP |
37 | ||||
15. |
NOTICES |
37 | ||||
16. |
GENERAL |
39 | ||||
17. |
APPOINTMENT OF PROCESS AGENT |
44 | ||||
18. |
GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS |
44 |
SCHEDULE 1 |
DIRECTORS |
46 | ||||
SCHEDULE 2 |
PLACING BANKS |
47 | ||||
SCHEDULE 3 |
WARRANTIES OF THE COMPANY AND THE FOUNDERS |
48 | ||||
SCHEDULE 4 |
DOCUMENTS IN THE AGREED FORM |
64 | ||||
SCHEDULE 5 |
DOCUMENTS TO BE DELIVERED |
67 | ||||
SCHEDULE 6 |
UNDERTAKINGS |
74 | ||||
SCHEDULE 7 |
CERTIFICATES |
84 | ||||
SCHEDULE 8 |
SELLING RESTRICTIONS |
87 | ||||
SCHEDULE 9 |
PLACING ALLOCATION TABLE |
89 | ||||
SCHEDULE 10 |
FORM OF LOCK-UP DEED |
90 | ||||
SCHEDULE 11 |
FORM OF US PURCHASERS LETTER |
94 | ||||
SCHEDULE 12 |
AI PLACEES |
99 |
THIS AGREEMENT is made on 2014
BETWEEN:
1. | NOMAD HOLDINGS LIMITED , a company incorporated with limited liability in the British Virgin Islands with registered number 1818482 whose registered office is situated at Nemours Chambers, Road Town, Tortola, British Virgin Islands (the Company ); |
2. | THE PERSONS whose names and addresses are set out in Parts A and B of Schedule 1 (the Directors ); |
3. | TOMS ACQUISITION I LLC , a limited liability company formed in the State of Delaware with file number 5488316 whose registered office is situated at c/o Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808; |
4. | MARIPOSA ACQUISITION II, LLC , a limited liability company formed in the State of Delaware with file number 5486660 whose registered office is situated at c/o National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904; |
5. | BARCLAYS BANK PLC, a company incorporated in England with registered number 1026167 whose registered office is situated at 1 Churchill Place, London E14 5HP ( Barclays ); and |
6. | CITIGROUP GLOBAL MARKETS LIMITED a company incorporated in England with registered number 01763297 whose registered office is situated at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB ( Citi ) (each of Barclays and Citi being a Placing Bank and together, the Placing Banks ), |
(together the Parties ).
WHEREAS:
(A) | The Company was incorporated and registered in the British Virgin Islands under the BVI Companies Act (as defined below) on 1 April 2014. |
(B) | The Company will apply to the UK Listing Authority for approval of the Final Prospectus (as defined below) and for the admission of the whole of its ordinary share capital and the Warrants (as defined below) to the standard listing segment of the Official List (as defined below) and to the London Stock Exchange for the whole of its ordinary share capital and the Warrants to be admitted to trading on the main market for listed securities. |
(C) | In connection with the Offer (as defined below) and the Companys application for Admission (as defined below), the Preliminary Prospectus (as defined below) and the Final Prospectus (as defined below) have been prepared. |
(D) | The Company proposes to issue the New Ordinary Shares (as defined below) (with Matching Warrants (as defined below)) at the Offer Price (as defined below) by means of the Offer pursuant to the terms of this Agreement and under the terms set out in the Final Prospectus or any other arrangements or transactions contemplated by the Final Prospectus or this Agreement. |
(E) | The Founder Entities (as defined below) will subscribe for New Ordinary Shares (with Matching Warrants) at the Offer Price pursuant to the terms of this Agreement and under the terms set out in the Final Prospectus or any other arrangements or transactions contemplated by the Final Prospectus or this Agreement. |
(F) | The Offer is being made outside the United States pursuant to Regulation S under the Securities Act (as defined below). In so far as Shares (as defined below) and/or Warrants are to be made available in the United States in connection with these arrangements, they are to be made available only to QIBs (as defined below) or to a limited number of accredited investors (as defined below) pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Neither the Shares nor the Warrants shall be registered under the Securities Act. |
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IT IS AGREED as follows:
1. | DEFINITIONS AND INTERPRETATION |
1.1 | Definitions |
In this Agreement (including the Recitals and Schedules to it) the following expressions have the respective meanings set out below, unless the contrary intention appears:
2010 PD Amending Directive has the meaning given to it in paragraph 7 of Schedule 8;
Accounts Date means 1 April 2014;
Accounts Publication Date means the day falling three months after publication of the Companys annual report and accounts for the year ending 31 December 2015 or, in the event the Company changes its financial year end, the day falling three months after publication of the Companys annual report and accounts for the next financial year ending after 31 December 2015;
accredited investor has the meaning given in Rule 501(a)(1), (3), (5), (7) and (8) under the Securities Act;
Acquisition means the acquisition by the Company (or by any subsidiary thereof) of a company or business as described in Part I (Investment Opportunity and Strategy) of the Final Prospectus (and, in the context of the Acquisition, references to a company without reference to a business and references to a business without reference to a company shall in both cases be construed to mean both a company or a business);
Acquisition Closing Date means the date of the completion of the Acquisition;
Admission means admission of all of the Companys ordinary share capital and the Warrants, issued and to be issued in connection with the Offer, to the standard listing segment of the Official List becoming effective in accordance with the Listing Rules and to trading on the London Stock Exchanges main market for listed securities becoming effective in accordance with the Admission and Disclosure Standards;
Admission and Disclosure Standards means the requirements contained in the publication entitled Admission and Disclosure Standards dated 16 April 2013 containing, among other things, the admission requirements to be met by companies seeking admission to trading on the London Stock Exchanges main market for listed securities, as amended from time to time;
Affiliate has the meaning given to it in Rule 405 under the Securities Act;
Agent has the meaning given to it in clause 17.2;
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Agreed Rate means the one month London Inter Bank Offered Rate (LIBOR) as quoted on a reputable information service;
AI Placee means each accredited investor whose name, contact details and indicative allocation of New Ordinary Shares and Matching Warrants is set out in Schedule 12 (together, the AI Placees );
Articles of Association means the articles of association of the Company from time to time;
associate has the meaning given to it by section 345 of the Companies Act;
Auditors means the auditors of the Company, being PricewaterhouseCoopers LLP of 1 Embankment Place, London, WC2N 6RH;
Authorisation has the meaning given to it in paragraph 59 of Schedule 3;
Board of Directors means the board of directors of the Company (or a duly constituted and authorised committee thereof);
Business Day means a day other than a Saturday or Sunday on which trading banks are open for general banking business in London and the British Virgin Islands;
BVI Companies Act means the British Virgin Islands Business Companies Act 2004 as amended, supplemented or replaced from time to time;
Chairman means Lord Myners of Truro, CBE, or the Chairman of the Board of Directors from time to time, provided that such person was independent on appointment for the purposes of the UK Corporate Governance Code;
CJA means the Criminal Justice Act 1993;
Claims has the meaning given to it in clause 12.1;
Closing Date means 15 April 2014 or such other date which the Company, the Founders and the Placing Banks may agree in writing for settlement of subscriptions for the Offer, being no later than 29 April 2014;
Corporate Governance Code means the UK Corporate Governance Code published by the Financial Reporting Council;
Companies Act means the Companies Act 2006;
Companys Counsel means:
| as to US law, Greenberg Traurig LLP, 200 Park Avenue, New York, New York 10166; |
| as to English law, Greenberg Traurig Maher LLP, 200 Grays Inn Road, London EC1X 8HF; and |
| as to British Virgin Islands law, Ogier, Ogier House, St. Julians Avenue, St. Peter Port, Guernsey GY1 1WA; |
Competent Authority has the meaning given to it in the Listing Rules;
Completion has the meaning given to it in clause 11.2.4(A);
Conditions means the conditions set out in clause 7.1;
CREST means the computer-based system and procedures which enable title to units of a security to be evidenced and transferred in dematerialised form (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations);
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CREST Nominee means Barclays Capital Nominees (NO2) LTD, nominee number CREST 598 (NO2);
CREST Regulations means the Uncertificated Securities Regulations 2001;
CTA 09 means the Corporation Tax Act 2009;
CTA 10 means the Corporation Tax Act 2010;
Deed Poll means the deed poll, in the agreed form, duly executed by the Depositary on 7 April 2014;
Depositary means the depositary from time to time under the Deed Poll which at the date of this Agreement is Computershare Investor Services PLC;
Depositary Agreement means the depositary agreement, in the agreed form, duly executed by the Company and the Depositary dated on the date of this Agreement;
Depositary Interests means the depositary interests each representing one Share or one Warrant (as the case may be) and issued by the Depositary from time to time pursuant to the Deed Poll;
Directors means the persons whose names and addresses are set out in Parts A and B of Schedule 1;
Directors Questionnaire means the questionnaire, in the agreed form, and answers to it, completed by each of the Directors duly signed and dated;
Directors Responsibility Statements means the letters completed by each of the Directors and addressed to the Company and the Placing Banks, in the agreed form, among other things, accepting responsibility for the information contained in the Preliminary Prospectus, the Final Prospectus and any Supplementary Prospectus, duly signed by, or on behalf of, each Director on or prior to the date of this Agreement;
Disclosure and Transparency Rules means the UK Disclosure Rules and Transparency Rules of the UK Listing Authority made under Part VI of FSMA;
Disposal has the meaning given to it in paragraph 4.1 of Schedule 6;
Encumbrance means any pledge, lien, security interest, claim, equity, mortgage, charge, encumbrance or third party right or interest of any nature whatsoever and including for the avoidance of doubt any pre-emptive or similar right;
ERISA means the US Employee Retirement Income Security Act of 1974, as amended;
Euroclear means Euroclear UK & Ireland Limited;
Exchange Act means the United States Securities Exchange Act of 1934, as amended;
FCA means the Financial Conduct Authority of the United Kingdom;
FCA Handbook means the Financial Conduct Authority Handbook of Rules and Guidance and all other rules and regulations made by the FCA under FSMA;
FCPA has the meaning given to it in paragraph 90 of Schedule 3;
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Final Prospectus means the final prospectus of the Company in the agreed form to be published on the date of this Agreement in connection with the Offer;
Founder Directors means each of the Directors listed in Part A of Schedule 1;
Founder Entities means Toms Acquisition I LLC and Mariposa Acquisition II, LLC;
Founder Preferred Shares means the convertible preferred shares in the capital of the Company;
Founders means the Founder Directors and the Founder Entities (and Founder shall mean any one of them);
FSMA means the Financial Services and Markets Act 2000;
Governmental Agency has the meaning given to it in paragraph 59 of Schedule 3;
IFRS means the International Financial Reporting Standards as adopted in the European Union;
Indemnified Person has the meaning given to it in clause 12.21;
Indemnifying Person has the meaning given to it in clause 12.1;
Independent Non-Executive Directors means Lord Myners of Truro, CBE, Alun Cathcart and Guy Yamen or the non-executive directors of the Board of Directors from time to time considered by the Board of Directors to be independent for the purposes of the UK Corporate Governance Code;
Insider Letters means the individual letters, in the agreed form, addressed to the Company and the Placing Banks duly executed by each of Mariposa Acquisition II, LLC, Toms Acquisition I LLC, and each Director, on or prior to the date of this Agreement;
Investment Company Act means the United States Investment Company Act of 1940, as amended;
Judgment Currency has the meaning given to it in clause 16.20;
Listing Condition means the condition set out in clause 7.1.8;
Listing Rules means the Listing Rules of the UK Listing Authority made under Part VI of FSMA;
Lock-up Period has the meaning given to it in paragraph 4.1 of Schedule 6;
London Stock Exchange means London Stock Exchange plc;
Losses has the meaning given to it in clause 12.1;
LPDT Rules means the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules;
Matching Warrants means the 48,500,000 Warrants proposed to be issued to subscribers of New Ordinary Shares in the Offer on the basis of one Warrant per New Ordinary Share;
Material Adverse Change means any material adverse change, or any development involving a prospective material adverse change, in the condition (financial, operational, legal or otherwise), or in the earnings, business affairs, solvency or prospects of the Company , whether or not arising in the ordinary course of business;
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Memorandum of Association means the memorandum of association of the Company from time to time;
Model Code means the Model Code on directors dealings in securities set out in LR 9 Annex 1 of the Listing Rules;
Money Laundering Laws has the meaning given to it in paragraph 89 of Schedule 3;
New Ordinary Shares means the 48,500,000 new Shares proposed to be issued by the Company as part of the Offer;
New Securities has the meaning given to it in paragraph 23 of Schedule 6;
No Significant Change Letter means the comfort letter, in the agreed form, relating to there having been no significant change in the financial or trading position of the Company since the Accounts Date, from the Reporting Accountants and addressed to the Directors and the Placing Banks and dated the date of the Final Prospectus;
Non-Founder Directors means each of the Directors listed in Part B of Schedule 1;
OECD Convention has the meaning given to it in paragraph 90 of Schedule 3;
OFAC means the Office of Foreign Assets Control of the US Department of the Treasury;
Offer means an offering of New Ordinary Shares (with Matching Warrants) (i) to certain investors in the United Kingdom and elsewhere outside the United States pursuant to Regulation S under the Securities Act; and (ii) in the United States only to QIBs and accredited investors pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and which, in each case, shall be made pursuant to the terms of this Agreement and under the terms set out in the Final Prospectus;
Offer Documents means the Prospectuses, the Press Releases, the Roadshow Materials and any amendments or supplements to any of the foregoing and any other document published or otherwise distributed to investors by or on behalf of the Company or the Founders or their respective Affiliates in connection with the Offer or Admission and any supplements or amendments thereto;
Offer Price means US$10.00 per New Ordinary Share (with one Matching Warrant);
Official List means the official list maintained by the UK Listing Authority pursuant to Part VI of the FSMA;
other economic sanctions has the meaning given to it in paragraph 91 of Schedule 3;
payee has the meaning given to it in clause 9.4.2;
payer has the meaning given to it in clause 9.4.2;
Placing Banks Counsel means Herbert Smith Freehills LLP of Exchange House, Primrose Street, London EC2A 2EG;
Placing Proceeds has the meaning given to it in clause 9.1.1;
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Plan Asset Regulations means the regulations promulgated by the US Department of Labor at 29 CFR 2510.3-101, as modified by section 3(42) of ERISA;
Plan Investor means (i) any employee benefit plan that is subject to Part 4 of Subtitle B of Title I of ERISA, (ii) a plan, individual retirement account or other arrangement that is subject to section 4975 of the US Internal Revenue Code of 1986, as amended, (iii) entities whose underlying assets are considered to include plan assets of any plan, account or arrangement described in preceding paragraph (i) or (ii), or (iv) any governmental plan, church plan, non-US plan or other investor whose purchase or holding of Shares would be subject to any state, local, non-US or other laws or regulations similar to Part 4 of Subtitle B of Title I of ERISA or section 4975 of the US Internal Revenue Code of 1986, as amended, or that would have the effect of the Plan Asset Regulations;
Preliminary Prospectus means the preliminary prospectus of the Company dated 7 April 2014;
Press Releases means the press releases, in the agreed form, to be issued (i) on or about the date of this Agreement relating to the publication of the Final Prospectus and (ii) any other press release relating to the Offer (including any press release issued in connection with the publication of any Supplementary Prospectus), the issue of which is authorised by the Company;
Prospectuses means the Preliminary Prospectus, the Final Prospectus and any Supplementary Prospectus;
Prospectus Directive has the meaning given to it in paragraph 7 of Schedule 8;
Prospectus Rules means the Prospectus Rules of the UK Listing Authority made under Part VI of FSMA;
Publicity Guidelines means the publicity guidelines, in the agreed form, prepared by the Companys Counsel in connection with the Offer;
QIBs means qualified institutional buyers within the meaning of Rule 144A under the Securities Act;
Register of Members means the register of members in relation to the Shares and the register of warrantholders in relation to the Warrants maintained by the Registrar;
Registrar of Companies means the Registrar of Corporate Affairs in the British Virgin Islands;
Registrars means Computershare Investor Services (BVI) Limited of Woodbourne Hall, P O Box 3162, Road Town, Tortola, British Virgin Islands, acting as registrars in connection with the Offer;
Registrars Agreement means the agreement, in the agreed form, duly executed by the Company and the Registrars on or about the date of this Agreement;
Regulation D means Regulation D under the Securities Act;
Regulation S means Regulation S under the Securities Act;
Regulatory Information Service means a regulatory information service authorised by the UK Listing Authority to receive, process and disseminate regulatory information in respect of listed companies;
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Relevant Persons has the meaning given to it in paragraph 9 of Schedule 6;
Relevant Sum has the meaning given to it in clause 9.4.3;
Reporting Accountants means the auditors of the Company, being PricewaterhouseCoopers LLP of 1 Embankment Place, London, WC2N 6RH;
Restricted Announcement has the meaning given to it in paragraph 2.1 of Schedule 6;
Restricted Period has the meaning given to it in paragraph 2.1 of Schedule 6;
Roadshow Materials means the presentation, in the agreed form, prepared by the Company and used during the course of presentations in connection with the Offer;
Rule 144A means Rule 144A under the Securities Act;
Securities Act means the United States Securities Act of 1933, as amended;
Share Option Deeds means the option deeds entered into between the Company and each Non-Founder Director granting each Non-Founder Director the option to acquire Shares;
Shares means ordinary shares of no par value in the capital of the Company excluding, for the avoidance of doubt, the Founder Preferred Shares;
Supplementary Prospectus means any prospectus supplementary to the Final Prospectus published by the Company in accordance with section 87G of FSMA;
Taxation or tax means all taxes, levies, imposts, duties, charges or withholdings of any nature whatsoever imposed by a tax authority of any jurisdiction, together with all penalties, charges and interest relating to any of the foregoing and regardless of whether the Company, or a Placing Bank or any other person concerned is primarily or directly liable or not and regardless of whether or not such taxes, levies, imposts duties, charges, withholdings, penalties and interest are attributable directly or primarily to the Company or a Placing Bank or any other person concerned, including (without limitation) corporation tax, advance corporation tax, income tax, capital gains tax, VAT, duties of customs and excise, national insurance contributions, capital duty, stamp duty, stamp duty reserve tax, stamp duty land tax and any other transfer tax or duty, all taxes, duties or charges replaced by or replacing any of them, and all other taxes on gross or net income, profits or gains, distributions, receipts, importations, sales, use, occupation, franchise, value added, and personal property;
Transaction Agreements means this Agreement, the Depositary Agreement and the Warrant Instrument and any amendment or supplement thereto;
Transfer Taxes means stamp duty, stamp duty reserve tax, capital duty or any similar issuance or transfer tax or duty and any related costs, fines, penalties or interest (if any) whether of the United Kingdom or elsewhere;
UK Listing Authority means the FCA acting in its capacity as the competent authority in the United Kingdom under Part VI of the FSMA;
United States and US means the United States of America, its territories and possessions, any state of the United States and the District of Colombia;
US Treasuries means securities issued by the United States Department of the Treasury;
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VAT means value added tax chargeable under or pursuant to the Value Added Tax Act 1994 or the EC Council Directive 2006/112/EC on the common system of value added tax and any other sales, purchase or turnover tax of a similar nature, whether imposed in the United Kingdom or elsewhere;
Verification Bundles means the materials, in the agreed form, prepared by the Companys Counsel and comprising information provided by the Company in order to verify material statements and information contained in the Roadshow Materials approved by the Directors on the date of the publication of the Final Prospectus;
Verification Notes means the notes, in the agreed form, prepared by the Companys Counsel and comprising information provided by the Company in order to verify material statements and information contained in the Preliminary Prospectus and the Final Prospectus signed by the Directors on the date of the publication of the Final Prospectus, together with the answers thereto;
Warrant Instrument means the deed poll entered into by the Company on the date of this Agreement setting out the rights and interests of the registered holders of the Warrants for the time being and to afford protection for such rights and interests;
Warrants means the 50,025,000 warrants to subscribe for Shares proposed to be issued by the Company pursuant to the Warrant Instrument;
Warranties means the representations, warranties and undertakings of the Company and the Founders set out in Schedule 3 and Warranty means any one of them; and
Warrantor means, in relation to any Warranty, the party expressed in this Agreement to be giving the Warranty in the terms of that Warranty.
1.2 | Agreed form documents |
Any reference to a document being in the agreed form means in the form of the draft or proof thereof signed or initialled for the purpose of identification by the Placing Banks Counsel and the Companys Counsel, or as otherwise evidenced as being in the agreed form by communications between the Placing Banks Counsel and the Companys Counsel as the case may be, with such alterations (if any) as may subsequently be agreed by or on behalf of the Placing Banks, the Founders, the Directors and the Company (as the case may be). A complete list of documents in the agreed form as at the date of this Agreement is set out in Schedule 4.
1.3 | Subordinate legislation |
References to a statutory provision include any subordinate legislation made from time to time under that provision.
1.4 | Modification and re-enactment |
References to a statutory provision include that provision as from time to time amended, modified or re-enacted so far as such amendment, modification or re- enactment applies or is capable of applying to any transactions entered into in accordance with this Agreement.
1.5 | Companies Act |
The expressions company , holding company , subsidiary undertaking and subsidiary shall have the same meanings in this Agreement as in the Companies Act.
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1.6 | CREST Regulations |
Expressions defined or used in the CREST Regulations shall have the same meanings in this Agreement (except where the context otherwise requires).
1.7 | Recitals, Clauses and Schedules |
References in this Agreement to recitals, clauses and schedules are, unless otherwise specified, to the recitals and clauses of and schedules to this Agreement.
1.8 | Headings |
Headings shall be ignored in construing this Agreement.
1.9 | Time of day |
References to time of day are to London, United Kingdom, time.
1.10 | References to includes or including |
References to includes or including shall mean includes without limitation or including without limitation.
1.11 | Singular and plural |
Words in the singular shall include the plural and vice versa.
1.12 | References to gender |
References to one gender include other genders.
1.13 | References to a person |
A reference to a person shall include a reference to a firm, a body corporate, an unincorporated association, a partnership or to an individuals executors or administrators.
1.14 | Analogous legal terms |
References to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall in respect of any jurisdiction other than England be deemed to include what most nearly approximates the English legal term in that jurisdiction and references to any English statute or enactment shall be deemed to include any equivalent or analogous laws or rules in any other jurisdiction.
1.15 | References to this Agreement |
References to this Agreement include this Agreement as amended or supplemented in accordance with its terms.
2. | APPLICATIONS FOR ADMISSION AND APPOINTMENTS |
2.1 | Applications for Admission |
2.1.1 | The Company undertakes to apply or procure the application as soon as practicable after the date of this Agreement, to: |
(A) | the UK Listing Authority for admission of the Shares and Warrants to the standard listing segment of the Official List; |
(B) | the London Stock Exchange for admission of the Shares and Warrants to trading on its main market for listed securities; and |
(C) | Euroclear for admission of the Depositary Interests as participating securities (as defined in the CREST Regulations) in CREST. |
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2.1.2 | Each of the Company, the Founder Entities and the Directors severally undertakes that it will (in the case of each of the Founder Entities and the Directors so far as is within its power) duly perform all of its respective obligations in connection with the Offer and Admission and will use all reasonable endeavours to execute or cause to be executed all such documents, provide or cause to be provided all such information, and do or cause to be done all such things as may be required by or are necessary to comply with the requirements of the UK Listing Authority, the London Stock Exchange, Euroclear and all other applicable legislation and regulation, in each case in connection with such applications and the Offer. |
2.1.3 | The Company, the Founder Entities and the Directors undertake to apply to the UK Listing Authority for formal approval of the Final Prospectus for the purposes of, and in accordance with, the Listing Rules and the Prospectus Rules and shall use all reasonable endeavours to obtain such approval as soon as practicable and in any event before publishing the Final Prospectus. |
2.1.4 | The Company, the Founder Entities and the Directors shall use all reasonable endeavours to secure Admission by not later than 8.00 a.m. on the Closing Date (or such other time and/or date as the Company and the Placing Banks agree). |
2.2 | Appointment of the Placing Banks as agents of the Company |
2.2.1 | The Company confirms its appointment of each Placing Bank as joint global coordinator and joint bookrunner to the Offer, and each Placing Bank confirms its acceptance of such appointment, subject to the terms of this Agreement. |
2.2.2 | The appointments under clause 2.2.1 confer on each Placing Bank all powers, authorities and discretions which are necessary for, or incidental to, the performance by each Placing Bank of its functions as a joint global coordinator and joint bookrunner to the Offer (including, without limitation, the power to appoint sub-agents or to delegate the exercise of any of its powers, authorities or discretions to such persons as each Placing Bank sees fit, including the appointment of selling agents who are registered broker-dealers in the United States to offer, sell and effect transactions in the United States and the appointment of its subsidiaries or associates to offer, sell and effect transactions outside the United States). The Company agrees to ratify all actions which each Placing Bank and its sub-agents and delegates lawfully take pursuant to this appointment. |
2.3 | Assistance to the Placing Banks |
Each of the Company, the Founder Entities and the Directors severally undertakes to each of the Placing Banks that it or he will at all times provide to each Placing Bank all information and assistance and take all actions (including paying all relevant fees) reasonably requested by them or that may be required by them to satisfy their obligations under or in connection with the Offer, the LPDT Rules and the Admission and Disclosure Standards, including (without limitation) to provide the FCA with any such information or explanation the FCA may require for the purpose of verifying whether the Listing Rules and the Prospectus Rules are being, and have been, complied with by the Company.
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2.4 | The Company authorises each of the Placing Banks to give to the Registrar and/or to Euroclear any instructions consistent with this Agreement and/or the Offer Documents that it reasonably considers to be necessary for, or incidental to, the performance of its functions as a joint global coordinator and joint bookrunner in connection with the Offer, Admission and the applications for the Depositary Interests to be transferred through and held in dematerialised form through CREST (including, without limitation, delivery to Euroclear of the letter referred to in clause 7.1.10). |
2.5 | The Company, the Founder Entities, and the Directors each undertake to the Placing Banks not to revoke the appointments, authorities or instructions contained in this clause 2 before the earlier of (i) the termination of this Agreement and (ii) the Closing Date. |
2.6 | Each of the Company, the Founder Entities, and the Directors consents to each of the Placing Banks disclosing to the FCA at any time before or after Admission any information which the relevant Placing Bank in its absolute discretion deems: (i) to relate to the Company; and (ii) to address non-compliance with the LPDT Rules. Nothing in this Agreement shall require a Placing Bank to do anything inconsistent with, or restrict a Placing Bank from complying with, its legal or regulatory responsibilities, duties or obligations. |
3. | AGREEMENT TO ISSUE AND SELL SHARES AND WARRANTS |
3.1 | Issue and allotment by the Company |
3.1.1 | Subject to the satisfaction (or waiver, if capable of waiver) of the Conditions (other than the Listing Condition) and to this Agreement not having been terminated under clause 13, the Company undertakes to the Placing Banks that it will prior to 8.00 a.m. on the Closing Date, against the undertaking to make payment pursuant to clause 6.2 (Payment), allot and issue, in accordance with the terms and conditions of the Offer, New Ordinary Shares and Matching Warrants as directed by the Placing Banks. |
3.1.2 | The Company undertakes to the Placing Banks that it will (a) allot and issue all New Ordinary Shares to be allotted and issued by it pursuant to clause 3.1.1 fully paid up in cash at the Offer Price, free from all Encumbrances and (b) allot and issue all Matching Warrants to be allotted and issued by it pursuant to clause 3.1.1 in compliance with the Warrant Instrument and free of any payment and free from all Encumbrances. |
3.1.3 | The Company undertakes to the Placing Banks that it will, in accordance with the terms and conditions of the Warrant Instrument, allot and issue Shares on any valid exercise of Warrants, fully paid up in cash and free from all Encumbrances. |
3.2 | Placing commitment |
Subject to the terms of this Agreement and relying on the covenants, undertakings, representations and warranties contained in this Agreement, and subject to the satisfaction (or waiver, if capable of waiver) of the Conditions and subject to this Agreement not having been terminated under clause 13, each Placing Bank severally, and not jointly nor jointly and severally, agrees that it will in each case at the Offer Price on the Closing Date: (i) purchase from the Company; or (ii) use reasonable endeavours to procure subscribers for, or failing which itself subscribe for, the number of New Ordinary Shares (with Matching Warrants) set forth against
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its name in Part B of Schedule 9, provided that nothing in this Agreement shall require the Placing Banks to purchase, procure subscribers for, or failing which subscribe for, any New Ordinary Shares (with Matching Warrants) that are to be subscribed for by the Founders pursuant to clause 3.3.3.
3.3 | Commitment of the Founders |
Subject to the terms of this Agreement:
3.3.1 | Toms Acquisition I LLC agrees that, as soon as reasonably practicable on the Closing Date, it shall subscribe for 750,000 Founder Preferred Shares (with 750,000 Warrants being issued to Toms Acquisition I LLC on the basis of one Warrant per Founder Preferred Share) at US$10.00 per Founder Preferred Share and undertakes to the Company to pay an amount equal to the aggregate subscription price for such Founder Preferred Shares as soon as reasonably practicable on the Closing Date; |
3.3.2 | Mariposa Acquisition II, LLC agrees that, as soon as reasonably practicable on the Closing Date, it shall subscribe for 750,000 Founder Preferred Shares (with 750,000 Warrants being issued to Mariposa Acquisition II, LLC on the basis of one Warrant per Founder Preferred Share) at US$10.00 per Founder Preferred Share and undertakes to the Company to pay an amount equal to the aggregate subscription price for such Founder Preferred Shares as soon as reasonably practicable on the Closing Date; and |
3.3.3 | each Founder Entity severally, and not jointly nor jointly and severally, agrees that it shall subscribe for the number of New Ordinary Shares (with Matching Warrants) set forth against its name in Part A of Schedule 9, in each case at the Offer Price as soon as reasonably practicable on the Closing Date. |
3.4 | Non-binding indications of interest |
It is acknowledged by each of the Company, the Founder Entities and the Directors that any information it or he may receive or has received regarding the identity of persons expressing an interest in subscribing for or purchasing New Ordinary Shares (with Matching Warrants) in the Offer and the prices at which they may be willing to do so will be based on non-binding indications of interest from such persons and that there can be no assurance that such persons will, or that there will be any obligation on such persons to, subsequently agree to acquire any New Ordinary Shares (with Matching Warrants) or to acquire the number of New Ordinary Shares (with Matching Warrants) indicated or at the prices so indicated. Each of the Company, the Founder Entities and the Directors agrees that any such information obtained or received by it or him or any of such persons officers or employees will be held in confidence and recognises that such information may constitute inside information in relation to the Company and/or its securities for the purposes of the CJA and that use of such information may constitute market abuse for the purposes of FSMA. Each of the Company, the Founder Entities and the Directors severally agrees to conduct itself and, where relevant, direct its officers and employees to conduct themselves so as to avoid an offence under the CJA or a breach of the legislation and rules in relation to market abuse by reference to such information.
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3.5 | Basis of allocation |
The Placing Banks shall determine, in consultation with the Company and the Founders the basis of allocations and the proportions in which subscribers under the Offer will receive New Ordinary Shares (with Matching Warrants) and it is acknowledged by the Company, the Founder Entities and the Directors that the Placing Banks have (to the extent permitted by law and subject to confidentiality restrictions) discussed with them the basis of allocations and the identity of potential subscribers in the Offer.
3.6 | Contents of the Offer Documents |
The Company, the Founder Entities and the Directors acknowledge that the Placing Banks are not responsible for and have not authorised and will not authorise the contents of the Prospectus or any other Offer Document for the purposes of section 90 of FSMA and the Prospectus Rules or otherwise and that neither of the Placing Banks have been requested to verify, nor is, nor shall be, responsible for verifying, the accuracy, completeness or fairness of any information in any of the Offer Documents (or any supplement or amendment to any of the foregoing).
4. | APPROVAL, RELEASE AND DELIVERY OF DOCUMENTS |
4.1 | Approvals |
4.1.1 | The Company confirms to each Placing Bank that a meeting (or meetings) of the Board of Directors has (or have) been held which has (or have): |
(A) | authorised the Company to enter into and perform its obligations under this Agreement; |
(B) | (i) ratified or approved the content and form, and taken responsibility for; and (ii) authorised and ratified or approved the publication of each of the Offer Documents, as appropriate; |
(C) | approved the making of the Offer and the applications for Admission; |
(D) | approved the making of an application to Euroclear for admission of the Depositary Interests as participating securities (as defined in the CREST Regulations) in CREST; and |
(E) | authorised all necessary steps to be taken by the Company in connection with each of the above matters. |
4.1.2 | Each of the Founders confirms to each Placing Bank and the Company that it has approved the Roadshow Materials. |
4.1.3 | The Company, each of the Founder Entities and each of the Directors confirms that all necessary resolutions of the Company and its shareholders (and any necessary resolutions of any members of their subsidiary undertakings or associates) are passed to authorise the Shares and Warrants being held by the Depositary or its nominated custodian whereby the Depositary will issue Depositary Interests which shall be admitted as participating securities (as defined in the CREST Regulations) in CREST. |
4.1.4 |
The Company, each of the Founder Entities and each of the Directors confirms that all necessary resolutions have been passed by and/or |
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consents obtained from the Companys shareholders to enable the Company to give effect to its obligations under this Agreement and the terms of the Offer. |
4.2 | Publication of Offer Documents |
4.2.1 | The Company shall publish the Final Prospectus in a form satisfactory to each of the Placing Banks and furnish promptly to each of the Placing Banks, in such quantities as they may request, copies of the Final Prospectus and any Supplementary Prospectus together with any other documentation relating to the Offer as they may reasonably request from time to time, and procure that each of the Offer Documents is approved, filed, published and/or made available or issued in accordance with, and complies with, the LPDT Rules (as applicable) and that: |
(A) | a press release, in the agreed form, is delivered to a Regulatory Information Service in time for release no later than 8.00 a.m. on the date of this Agreement; |
(B) | sufficient copies of the Final Prospectus and any Supplementary Prospectus are made available at the appropriate times to the public and/or to subscribers for the New Ordinary Shares (with Matching Warrants); |
(C) | sufficient copies of any Final Prospectus and Supplementary Prospectus are made available at the registered office of the Company, the offices of the Registrars and the Document Viewing Facility (as defined in the Listing Rules) and on the Companys website, in accordance with the requirements of the Prospectus Rules; and |
(D) | the documents described in the Final Prospectus and any Supplementary Prospectus as being available for inspection are made available as described in the Final Prospectus or any such Supplementary Prospectus. |
4.3 | Delivery of documents |
4.3.1 | Immediately following execution of this Agreement, each of the Company and the Directors shall deliver, or procure to be delivered, to the Placing Banks, to the extent not previously delivered, the documents listed in Part A of Schedule 5, other than the documents in paragraph 2 thereof and the Directors shall deliver the Insider Letters to be entered into by each such person. |
4.3.2 | Immediately following execution of this Agreement, each of the Founder Entities shall deliver, or procure to be delivered, to the Placing Banks, to the extent not previously delivered, the Insider Letters to be entered into by each of the Founder Entities. |
4.3.3 | Prior to the publication of any Supplementary Prospectus, each of the Company and the Directors shall deliver or procure to be delivered, to the Placing Banks, the documents listed in Part B of Schedule 5, other than the documents in paragraph 6 thereof. |
4.3.4 | Prior to the publication of any Supplementary Prospectus each of the Founder Entities shall deliver, or procure to be delivered, to the Placing Banks, the documents listed in paragraph 6 of Part B of Schedule 5. |
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4.3.5 | Each of the Company and the Directors shall, no later than noon on the Business Day prior to the Closing Date deliver or procure to be delivered to the Placing Banks, the documents listed in Part C of Schedule 5, other than the documents in paragraph 7 thereof. |
4.3.6 | Each of the Founder Entities shall, no later than noon on the Business Day prior to the Closing Date, deliver or procure to be delivered to the Placing Banks, the documents listed in paragraph 7 of Part C of Schedule 5. |
5. | PRE-CLOSING OBLIGATIONS |
5.1 | Admission of Depositary Interests to CREST |
Each of the Company, the Founder Entities and the Directors shall procure that on or before Admission:
5.1.1 | all necessary filings have been made with the Registrar of Companies to facilitate the transfer of Depositary Interests through CREST; |
5.1.2 | securities application forms (in connection with the Shares and the Warrants) are submitted by the Company to Euroclear; |
5.1.3 | the Registrars confirm to Euroclear that they are the registrars for all of the Shares and Warrants; and |
5.1.4 | the Registrars and the Depositary take all necessary steps and give all necessary instructions to Euroclear to allow the Depositary Interests to be held in dematerialised form as at and from Admission. |
5.2 | Determination of the Allocations |
Allocations under the Offer will be determined in accordance with clause 3.5.
5.3 | Notification of details for delivery of New Ordinary Shares and Matching Warrants |
No later than 5.00 p.m. on the second Business Day prior to the Closing Date, the Placing Banks shall notify the Company and the Registrars of the number of New Ordinary Shares and Matching Warrants to be issued and in each case delivered on the Closing Date and the names, addresses and, if relevant, custodial details of the persons to whom such New Ordinary Shares and Matching Warrants are to be issued and delivered, together with the relevant number of New Ordinary Shares and Matching Warrants to be delivered to each such person.
5.4 | Settlement by the Company in respect of AI Placees |
5.4.1 | The Company shall arrange to settle directly with AI Placees in respect of New Ordinary Shares (and Matching Warrants) to be subscribed for by AI Placees pursuant to the Offer as set forth in Schedule 12, and such arrangments shall include the requirement that no New Ordinary Shares or Matching Warrants shall be allotted or issued to an AI Placee unless and until cleared funds in respect of the New Ordinary Shares (and Matching Warrants) to be subscribed for by such AI Placee, as set forth against his or her name in Schedule 12, have been received. The Company shall notify the Placing Banks by no later than 10.00 a.m. on the Closing Date of any AI Placee who has defaulted on his or her obligation to pay the subscription price due from him or her (the aggregate of all such defaults to pay the subscription price being the Defaulted Subscription Amount ) with full supporting information. |
5.4.2 | The Aggregate AI Subscription Price set out in Schedule 12 less the Defaulted Subscription Amount shall be deducted from the aggregate of the amounts payable by the Placing Banks in accordance with clause 6.2.1. Such deduction shall be divided between the Placing Banks in equal proportions. |
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5.5 | Calculation of estimated net proceeds and invoice of expenses |
No later than 5.00 p.m. on the Business Day immediately prior to the Closing Date, the Placing Banks shall deliver to the Company:
5.5.1 | an estimate of the amount to be paid by the Placing Banks on the Closing Date in accordance with the provisions of clause 6.2.1; and |
5.5.2 | an invoice in respect of the costs and expenses payable by the Company pursuant to clause 9.3 (to the extent that such costs and expenses are known to the Placing Banks at that time), |
provided that, for the avoidance of doubt, nothing in this clause 5.5 shall alter the amount the Placing Banks are required to pay under clause 6.2.1 or preclude the Placing Banks from seeking payments for amounts they are entitled to recover under clause 9.3.
5.6 | Allotment of New Ordinary Shares and Matching Warrants |
5.6.1 | The Company and, so far as each Director has the power to do so, each Director will procure that on or before the Business Day prior to the Closing Date, the Board of Directors passes appropriate resolutions and takes all other necessary steps to allot and issue on the Closing Date, conditional only on Admission, (i) the New Ordinary Shares fully paid up at the Offer Price and (ii) the Matching Warrants, to subscribers in the proportions and as otherwise directed by the Placing Banks. |
5.6.2 | The Company will arrange to issue the New Ordinary Shares and Matching Warrants to the Depositary or its nominated custodian and for the Depositary to issue Depositary Interests in respect thereof to the CREST Nominee, which will hold such Depositary Interests as nominee for the persons entitled thereto, and for such Depositary Interests to be credited to the CREST account of the CREST Nominee notified to the Company by the Placing Banks (such notification to be made no later than the Business Day prior to the Closing Date). |
6. | CLOSING |
6.1 | Issue of Shares and Warrants |
Upon satisfaction or waiver (if capable of waiver) of the Conditions (other than the Listing Condition in the case of clause 6.1.1) and subject to this Agreement not having been terminated in accordance with clause 13, the Company undertakes to the Placing Banks that by 8.00 a.m. on the Closing Date:
6.1.1 | Issue of New Ordinary Shares and Matching Warrants |
conditional on Admission and (in respect of New Ordinary Shares and Matching Warrants subscribed for by AI Placees) against the amounts received by the Company referred to in clause 5.4.1 and (in respect of
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New Ordinary Shares and Matching Warrants subscribed for otherwise than by AI Placees) against the undertaking to make payment pursuant to clause 6.2, it will issue the New Ordinary Shares and Matching Warrants to be issued pursuant to the Offer to the Depositary or its nominated custodian, procure that the Depositary Interests in respect of such New Ordinary Shares and Matching Warrants are credited to the CREST account of the CREST Nominee notified to the Company by the Placing Banks under clause 5.6.2, instruct the CREST Nominee to hold such Depositary Interests as nominee for the persons entitled thereto (as directed by the Placing Banks), and instruct the Registrars to register the Depositary or its nominated custodian as the holder of such New Ordinary Shares and Matching Warrants in the Register of Members;
6.1.2 | Notification to CREST |
it will immediately following Admission notify CREST that the Conditions have been satisfied or waived (as the case may be).
6.2 | Payment |
6.2.1 | Following satisfaction or waiver (if capable of waiver) of the Conditions on the Closing Date and against compliance by the Company, each of the Founder Entities and each of the Directors with its or his obligations under clauses 4 and 5 and this clause 6, each Placing Bank shall make or procure payment to the Company of an amount equal to the aggregate of: (i) any monies received by it from the Founders for New Ordinary Shares (with Matching Warrants) pursuant to the Offer and (ii) the Offer Price multiplied by the number of New Ordinary Shares (with Matching Warrants) set forth against its name in the Part B of Schedule 9, less: |
(A) | any amount that it is entitled to deduct pursuant to clause 5.4.2; |
(B) | the commission payable to it by the Company pursuant to clause 9.1; |
(C) | the costs and expenses payable to it by the Company pursuant to clause 9.3; |
(D) | any amount in respect of VAT payable to it by the Company pursuant to clause 9.4; and |
(E) | an amount equal to the aggregate of any amounts payable to it by the Company pursuant to clause 10.1. |
6.2.2 | Any payment of monies under this clause 6.2 shall be made by wire transfer by the Placing Bank in United States dollars on the Closing Date to the account notified by the Company to the Placing Banks no later than two Business Days prior to the Closing Date (it being acknowledged that the bank with which the account is held and the jurisdiction in which it is located must be reasonably acceptable to the Placing Banks and it being further acknowledged that depending on the location of such account, the monies may not be received on the day of transfer), evidence of such payment taking the form of a confirmation from the Placing Banks that they have made the relevant payment to the Company and the compliance by each Placing Bank with its obligations under this clause 6 will be a complete discharge of its obligations under this Agreement. |
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6.3 | Exercise by Placing Banks of Companys rights |
The Company acknowledges and agrees that, subject to compliance by the Placing Banks with this clause 6, the Placing Banks may exercise any and all rights which the Company may have against any person who for any reason whatsoever has failed to pay for any New Ordinary Shares (with Matching Warrants). For the avoidance of doubt, and without limitation to the generality of the foregoing, in the event that any AI Placee fails to pay any amount due from it in respect of any New Ordinary Shares and Matching Warrants in accordance with clause 5.4.1 or fails to provide a duly executed letter in the form of Schedule 11 on a timely basis (or the contents of such letter are inaccurate) or otherwise fails to comply with the terms and conditions of the Offer, the Placing Banks may re-allocate and sell to other investors such New Ordinary Shares and Matching Warrants or exercise such other rights or take such other actions as the Placing Banks deem appropriate in their sole discretion.
7. | CONDITIONS |
7.1 | Conditions to this Agreement |
The obligations of the Placing Banks under this Agreement are subject to the following conditions:
7.1.1 | Warranties |
the Warranties being true and accurate and not misleading in each case on the date of this Agreement, the date of any Supplementary Prospectus and the Closing Date as though, in each such case, they had been given and made on such date and time by reference to the facts and circumstances then subsisting;
7.1.2 | Compliance |
each of the Company, the Founder Entities and the Directors having complied with all their respective obligations under this Agreement and having satisfied all the Conditions to be satisfied by any of them, in each case under this Agreement or under the terms and conditions of the Offer, which fall to be performed or satisfied on or prior to Admission;
7.1.3 | Indemnity |
no matter having arisen prior to Admission which in the opinion of the Placing Banks might reasonably be expected to give rise to a Claim under clause 12;
7.1.4 | Approval of Final Prospectus |
the Final Prospectus having been approved by the UK Listing Authority and being filed with the FCA in accordance with the Prospectus Rules and FSMA not later than 3.00 p.m. on the date of this Agreement (or such later time or date as the Placing Banks may agree with the Company);
7.1.5 | Publication of the Final Prospectus |
the Final Prospectus being published and made available to the public in accordance with the Prospectus Rules not later than 3.00 p.m. on the date of this Agreement (or such later time or date as the Placing Banks may agree with the Company);
7.1.6 | Receipt of documents |
delivery of the documents referred to in clause 4.3 in accordance with the terms set out in clause 4.3;
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7.1.7 | Amendments and Supplements |
no event referred to in section 87G of FSMA arising between the date of publication of the Final Prospectus and Admission and no Supplementary Prospectus being published by or on behalf of the Company and/or the Founders prior to Admission;
7.1.8 | Admission |
Admission occurring not later than 8.00 a.m. on the Closing Date (or such later time and/or date as the Company and the Placing Banks may agree (the Listing Condition ));
7.1.9 | Depositary Interests |
the Company and the Depositary having entered into the Depositary Agreement and the Depositary having entered into the Deed Poll;
7.1.10 | Admission to CREST |
the delivery to the Placing Banks on or before at least one day before Admission of a letter or letters from the Depositary addressed to Euroclear dated the date of Admission confirming to Euroclear that all the outstanding conditions for the admission of all of the Depositary Interests to CREST have been satisfied;
7.1.11 | Material Adverse Change |
there not having occurred in the opinion of the Placing Banks, acting in good faith, any Material Adverse Change (whether or not foreseeable);
7.1.12 | Subscription by the Founder Entities |
the Founder Entities (i) paying in cleared funds for the New Ordinary Shares (with Matching Warrants) set out against their names in Part A of Schedule 9 as soon as reasonably practicable on the Closing Date, (ii) complying with their obligations in paragraph 24 of Schedule 6, and (iii) subscribing for such New Ordinary Shares and Matching Warrants as soon as reasonably practicable on the Closing Date;
7.1.13 | Issue of the Founder Preferred Shares |
the valid issue of the fully paid Founder Preferred Shares and Warrants (as described in paragraphs 4.3 of Part VIII (Additional Information) of the Final Prospectus) by no later than Admission on the Closing Date;
7.1.14 | Entry into the Warrant Instrument |
the Warrant Instrument having been executed by the Company and remaining in full force and effect, and having not lapsed or been amended or terminated prior to Admission; and
7.1.15 | Entry into of the Insider Letters |
each of the Insider Letters being entered into and the obligations in such letters being legal, valid, binding and enforceable,
together, the Conditions and each a Condition .
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7.2 | Non satisfaction or waiver |
7.2.1 | If any of the Conditions having fallen due for satisfaction (each Condition being due for satisfaction by the time and date specified therein or, where no such time or date is specified, by Admission) or waiver (if capable of waiver) have not been fulfilled or waived in writing by the Placing Banks (in their absolute discretion) or have become incapable of being satisfied by the relevant time and date, then this Agreement and all the obligations of the parties hereunder shall, except as provided in clause 13.3, forthwith cease to have effect. |
7.2.2 | The Placing Banks may not waive the Conditions set out in clauses 7.1.4, 7.1.5 and 7.1.8. |
8. | UNDERTAKINGS |
8.1 | The provisions of Schedule 6 shall have effect as undertakings to each of the Placing Banks. |
8.2 | In connection with the Offer, the Placing Banks agree to comply with the selling restrictions set out in Schedule 8. |
9. | COMMISSIONS, COSTS AND EXPENSES |
9.1 | Commission |
9.1.1 | Subject to the satisfaction (or waiver if capable of waiver) of the Conditions and to this Agreement not having been terminated under clause 13 prior to Admission on the Closing Date, the Company undertakes to pay to the Placing Banks on the Closing Date a commission of 2.00 per cent. of an amount equal to the aggregate of the Offer Price multiplied by the total number of New Ordinary Shares (with Matching Warrants) set out in Part B of Schedule 9 (the Placing Proceeds ) (together with any amounts in respect of VAT properly chargeable in respect of the relevant supply payable in accordance with clause 9.4). |
9.1.2 | For the avoidance of doubt, commissions shall not be payable on any New Ordinary Shares (with Matching Warrants) subscribed for by the Founders. |
9.1.3 | The commission payable pursuant to clause 9.1.1 shall be allocated between the Placing Banks in equal proportions. |
9.2 | Set-off |
Payment of commission in accordance with clause 9.1 (including any VAT chargeable thereon) shall be made in cleared funds on the Closing Date by deduction of the amount of such commission (including any VAT chargeable thereon) from the payment to be made by the Placing Banks pursuant to clause 6.2.
9.3 | Company costs and expenses |
9.3.1 |
In addition to the commissions referred to in clause 9.1 the Company undertakes to pay or cause to be paid (subject to the satisfaction (or waiver if capable of waiver) of the Conditions and to this Agreement not having been terminated under clause 13) all costs, charges, fees and expenses (including, without limitation, such part of any such costs, charges, fees and expenses as relates to VAT, as the case may be, |
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chargeable on any supply or supplies for which such costs, charges, fees and expenses are all or any part of the consideration, such VAT, as the case may be, to be payable in accordance with clause 9.4) in connection with or incidental to the Offer, Admission and the arrangements referred to or described in the Transaction Agreements including, without limitation: |
(A) | all fees and expenses payable to the UK Listing Authority (including fees payable pursuant to the Listing Rules), the London Stock Exchange or in respect of CREST; |
(B) | all costs and expenses payable in connection with the preparation, printing, distribution and filing of the Offer Documents; |
(C) | all costs and expenses payable in connection with the Transaction Agreements, any closing documents and any other documents in connection with the Offer and the offering, allotment, subscription, issue, purchase, sale, transfer and delivery of the Shares and Warrants in connection with the Offer and/or the arrangements contemplated by the Transaction Agreements; |
(D) | all costs and expenses incurred by the Placing Banks in connection with the offer of New Ordinary Shares and Matching Warrants to AI Placees; |
(E) | the cost of preparing and despatching certificates to represent the Shares and Warrants; |
(F) | the costs and expenses of the Registrars and the Depositary; |
(G) | the fees, disbursements and expenses of the Companys Counsel, the Reporting Accountants, counsel in any other jurisdiction and any other experts or advisers retained by the Company; |
(H) | the fees, disbursements and expenses of the Placing Banks Counsel (including, without limitation, the fees, disbursements and expenses of any overseas legal counsel instructed by the Placing Banks Counsel) such fees not to exceed the cap agreed between the Placing Banks and the Company (and for the avoidance of doubt such cap excludes any applicable VAT, disbursements or expenses of: (i) the Placing Banks Counsel; or (ii) overseas/legal counsel instructed by the Placing Banks Counsel); |
(I) | such Transfer Taxes paid or payable by the Company pursuant to clause 10.1; |
(J) | printing, public relations, marketing, advertising, courier, postage and telecommunications expenses; |
(K) | the costs and expenses relating to investor presentations or other meetings with prospective investors undertaken in connection with the marketing of the Offer (including, without limitation, the cost of hiring the venues and travel and accommodation expenses); |
(L) | all travel and out-of-pocket expenses properly incurred by each Placing Bank in connection with the Offer, Admission and the arrangements referred to in, or contemplated by, the Transaction Agreements; |
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(M) | all filing fees and similar expenses in connection with the qualification of the Shares and Warrants for offering and sale in any jurisdiction agreed between the Placing Banks and the Company or contemplated by the Offer Documents; and |
(N) | all other costs and expenses properly incurred by each of the Placing Banks in connection with the Offer or the performance of their obligations under this Agreement. |
9.3.2 | The Company undertakes upon request by either of the Placing Banks from time to time to promptly pay to or to reimburse to them the amount of any such costs, charges, fees and expenses referred to in this clause 9.3 which any of them may have properly paid or incurred. |
9.3.3 | Without prejudice to their right to receive payment directly from the Company pursuant to this clause 9.3, the Placing Banks shall be entitled and are authorised to deduct some or all of such costs, charges, fees and expenses payable pursuant to this clause 9.3 from any payment to be made by the Placing Banks to the Company under this Agreement. Deduction of these amounts under this clause 9.3 will discharge the Companys obligations to pay those amounts, but only to the extent of the amounts deducted and no further. Any further amounts payable will be paid promptly on demand. |
9.4 | VAT |
9.4.1 | Amounts payable by the Company to either of the Placing Banks for any supply (for VAT purposes) made by the Placing Banks under or pursuant to this Agreement are expressed exclusive of amounts payable in respect of VAT. |
9.4.2 | If the performance by either of the Placing Banks (for the purposes of this clause 9.4 only, each a payee ) of any of its obligations under this Agreement shall represent for VAT purposes the making by a payee of any supply to the Company (for the purposes of this clause 9.4 only, the payer ) that is subject to VAT at a positive rate, the payer shall pay in addition to such consideration (if any) payable for the supply an amount equal to any VAT properly chargeable on such supply (if any) within 14 days of presentation of a valid VAT invoice in respect of such supply. |
9.4.3 | Subject to clause 9.4.4, where a sum (a Relevant Sum ) is payable or is to be reimbursed by the payer to a payee in respect of any cost, charge, fee or expense, and such cost, charge, fee or expense includes an amount in respect of VAT, which is borne by the relevant payee on the supply or supplies for which the cost, charge, fee or expense in question is all or any part of the consideration, the payer shall pay to the relevant payee in respect of such VAT an amount equal to the amount of such VAT which the relevant payee certifies is not recoverable by it (or by the representative member of a VAT group of which it is a member) by repayment or credit (such certificate to be conclusive in the absence of manifest error) such payment to be made within 14 days of the later of: |
(A) | the date upon which payment of VAT in respect of the Relevant Sum has been made by the relevant payee; and |
(B) | the date on which certification in accordance with this clause 9.4.3 is produced to the payer. |
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9.4.4 | If the Relevant Sum constitutes for VAT purposes the reimbursement of costs, charges, fees or expenses incurred by a payee as agent of the payer excluding where the relevant payee acts as an agent for the payer within the meaning of Sections 47(2A) or 47(3) of the Value Added Tax Act 1994 (or an equivalent provision in another relevant jurisdiction), the payer shall pay to the relevant payee an amount equal to the element included in the costs, charges, fees or expenses in respect of VAT (that is to say the part of the costs, charges, fees or expenses which relates to the VAT chargeable on any supply or supplies for which such costs or expenses are all or any part of the consideration) provided that in such case the relevant payee shall use its reasonable endeavours to procure that, as soon as reasonably practicable, the person making the supply or supplies in respect of which the costs, charges, fees or expenses are incurred issues, a valid VAT invoice to the payer, that names the payer as the recipient of the relevant supply or supplies. |
10. | TRANSFER TAXES |
10.1 | Transfer Taxes to be paid by the Company |
The Company shall be liable to pay and reimburse the Placing Banks in respect of all Transfer Taxes which may arise in connection with the execution, delivery and performance of this Agreement and/or Admission and/or the issue, subscription or delivery of the New Ordinary Shares or Warrants (or Depositary Interests in respect of the foregoing) to the initial subscribers thereof (including, if applicable, to the Placing Banks), including but not limited to any Transfer Taxes arising in respect of any issue, transfer or agreement to transfer to or by the Depositary or its nominated custodian or the CREST Nominee or acquisition or agreement to acquire from or by the Depositary or its nominated custodian or the CREST Nominee, New Ordinary Shares or Warrants. For the avoidance of doubt, the Company shall not be liable under this clause 10.1 to pay to and reimburse the Placing Banks in respect of any Transfer Taxes in respect of any subsequent sale of New Ordinary Shares or Warrants by subscribers procured by the Placing Banks to any other person or, in circumstances where a Placing Bank has subscribed for New Ordinary Shares or Warrants as principal, in respect of any subsequent sale of such Shares or such Warrants by a Placing Bank to any other person.
10.2 | Method of payment |
Any amount payable by the Company pursuant to clause 10.1 shall be paid as follows:
10.2.1 | by a Placing Bank deducting from the amount payable to the Company pursuant to clause 6.2 any sum payable by the Company pursuant to clause 10.1. Such deduction may include the Placing Banks reasonable estimate of the maximum amount of such Transfer Taxes (if any) payable by the Company pursuant to clause 10.1; |
10.2.2 |
to the extent that the actual amount in respect of Transfer Taxes or any related costs, fines, penalties or interest actually payable by the Company pursuant to clause 10.1 exceeds the amount deducted by the Placing |
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Banks in respect thereof from the payment made by the Placing Banks to the Company pursuant to clause 10.2.1 above, the Company shall on demand pay to the Placing Banks, a sum equal to the excess and the Company will indemnify the Placing Banks against all Claims and Losses suffered or incurred by any Placing Bank in connection with enforcing its rights against the Company under this clause 10.2.2; |
10.2.3 | to the extent that the actual amount in respect of Transfer Taxes or any related costs, fines, penalties or interest actually payable by the Company to the Placing Banks pursuant to clause 10.1 is less than the amount deducted by the Placing Banks from the payment to the Company pursuant to clause 10.2.1 above, the excess or amount of recovery will be promptly repaid or paid to the Company on discovery of that fact (or, if such sum has been accounted for to the relevant tax authority, the Placing Banks shall, subject to having such security in respect of costs and expenses as it may require, take all reasonable steps as may be required to obtain a refund of such sum (together, where relevant, with interest at the appropriate rate from the relevant tax authority) and shall on receipt thereof pay any such amounts recovered to the Company after deduction of any costs and expenses properly incurred by the Placing Banks). |
11. | WARRANTIES |
11.1 | Warranties by the Company and the Founders |
Each of the Company and the Founders severally represents and warrants to the Placing Banks in the terms of the Warranties set out in Schedule 3.
11.2 | Repetition of Warranties |
11.2.1 | Each of the Warranties are given as at the date of this Agreement and shall be deemed to be repeated and given as of the date that any Supplementary Prospectus is published by the Company and on the Closing Date, in each case, by reference to the facts and circumstances subsisting at such time. |
11.2.2 | Each of the certificates to be delivered pursuant to paragraphs 5, 6 and 7 of Part B of Schedule 5 and paragraphs 6, 7 and 8 of Part C of Schedule 5 will have effect as a representation and warranty, as of their date, by the Company and the Founders as the case may be, to the Placing Banks as to the matters contained therein. |
11.2.3 | Each of the Company and the Founders acknowledges that each of the Placing Banks is entering into this Agreement in reliance on the Warranties and that each Warranty shall be separately construed and shall not be limited by reference (express or implied) to the terms of any other Warranty or any other term of this Agreement. |
11.2.4 | Each party giving a Warranty under this Agreement severally undertakes to each Placing Bank: |
(A) | not to do, or omit to do, anything which would or might cause any Warranty given by it to become untrue, inaccurate, misleading or breached at any time (by reference to the facts and circumstances existing at that time) between the date of this Agreement and the Closing Date ( Completion ); and |
(B) | promptly to give notice to each of the Placing Banks if it becomes aware of a fact or circumstance which constitutes a breach of any of the Warranties given by it or has caused or would or might cause any Warranty given by it to become untrue, inaccurate or misleading at any time (by reference to the facts and circumstances existing at that time) before Completion or if it becomes aware, before Completion, of a fact or circumstance which would or might give rise to a claim under any of the indemnities as contained in, or given pursuant to, clause 12 or any other provision of this Agreement. |
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11.3 | Announcements |
11.3.1 | If, at any time prior to Completion, either of the Placing Banks: |
(A) | receives notice of the type referred to in clause 11.2.4(B); or |
(B) | becomes aware that any of the Warranties was, is, has become or is reasonably likely to become untrue, inaccurate, misleading or breached in any respect, |
the Placing Banks may (without prejudice to its right to terminate this Agreement pursuant to clause 13 and without prejudice to the Conditions and the determination of the Placing Banks whether or not to waive such Conditions) require the Company, at its own expense, to amend, update or supplement the Final Prospectus (such amendment or supplement to be in a form approved by the Placing Banks) and/or require the Company, at its own expense, to make such announcements and/or despatch such communications and/or take such other steps as the Placing Banks, consider necessary or desirable in connection with the untruth, inaccuracy or misleading nature of the representation, warranty or undertaking concerned.
11.3.2 | If the Company fails to comply with any such requirement, the Placing Banks may require that the Company shall: |
(A) | cease to communicate any Offer Document which contains any reference to the Placing Banks; and/or |
(B) | notify any person to whom any Offer Document has been despatched and any other person known to be relying on any Offer Document, of the relevant circumstances which render such Offer Document untrue, inaccurate or misleading or not in compliance with applicable legal or regulatory requirements. |
11.4 | Maximum liability of the Founders |
11.4.1 | The aggregate liability of Noam Gottesman and Toms Acquisition I LLC pursuant to this Agreement shall not exceed US$14,596,000, save to the extent that any such liability arises as a result of the fraud or wilful default of either of Noam Gottesman or Toms Acquisition I LLC. |
11.4.2 | The aggregate liability of Martin Franklin and Mariposa Acquisition II, LLC pursuant to this Agreement shall not exceed US$14,596,000, save to the extent that any such liability arises as a result of the fraud or wilful default of either of Martin Franklin or Mariposa Acquisition II, LLC. |
11.4.3 | For the avoidance of doubt, the limitations in this clause 11.4 shall not apply in relation to clause 3.3 and paragraph 24 of Schedule 6. |
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11.5 | Maximum Liability of the Non-Founder Directors |
The aggregate liability of each Non-Founder Director pursuant to this Agreement shall not exceed the amount set out opposite his name in Part B of Schedule 1, save to the extent that any such liability arises as a result of the fraud or wilful default of such Non-Founder Director.
11.6 | Time limit on claims |
11.6.1 | Subject to clause 11.6.2, no claim shall be brought against any Founder Entity or Director in respect of any breach of this Agreement (other than in relation to paragraphs 4.1, 7.4, 19, 21 and 23 of Schedule 6) unless notice in writing of the claim (giving reasonable details of the claim) has been given to the relevant Founder Entity or Director by no later than the Accounts Publication Date and, in relation to any claim which may be outstanding on the Accounts Publication Date, unless court proceedings have been instituted or commenced against the relevant Director in a court of competent jurisdiction prior to the date falling 12 months after the Accounts Publication Date. |
11.6.2 | The limitation in clause 11.6.1 shall not apply in relation to any claim: |
(A) | arising as a result of the Warranties set out in paragraphs 1, 2 and 3 of Schedule 3 being untrue, inaccurate, misleading or breached in any respect; or |
(B) | resulting from fraud or wilful default, in each case in respect of or on the part of the person for whose benefit the limitation would have otherwise applied. |
11.7 | All representations, warranties and undertakings given or deemed to be given under this Agreement or any document delivered under it shall remain in full force and effect notwithstanding the completion of the subscription and purchase of the New Ordinary Shares and Matching Warrants, the completion of the Offer and all other matters and arrangements referred to or contemplated by this Agreement. |
11.8 | Where any of the Warranties are qualified by reference to awareness and/or knowledge and/or information and/or belief, that reference shall be deemed to include a statement to the effect that the relevant Warranty has been given after making all reasonable enquiries (unless expressly stated to the contrary, as when the word actual is used). |
12. | INDEMNITIES AND WAIVER OF CLAIMS |
12.1 | Indemnity by the Company |
The Company (the Indemnifying Person ) undertakes to indemnify and hold harmless each of the Indemnified Persons against all claims, actions, proceedings, investigations, demands, judgments and awards (together Claims ) which may be brought, made, threatened or alleged against or otherwise involve all or any of the Indemnified Persons and against all losses, liabilities, damages, costs, charges, duties, expenses (including legal expenses) and Taxation (other than any Taxation incurred by an Indemnified Person on its net income, profits or gains) (together Losses ), on demand, whether joint or several, which may be suffered or incurred by any of the Indemnified Persons (including, without limitation, all Losses
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which all or any of the Indemnified Persons may incur in investigating, preparing for, disputing or defending, or providing evidence in connection with, any such Claims (whether or not the Indemnified Person is an actual or potential party to such Claims) or Losses or in establishing any Claim or mitigating any Loss on its part or otherwise enforcing its rights under this clause 12.1) which arise, directly or indirectly, out of, or are attributable to, or connected with anything done or omitted to be done by any person (including the relevant Indemnified Person) in connection with the Offer, Admission or the arrangements contemplated by the Offer Documents (or any of them) or the Transaction Agreements (or any of them) or any other agreement relating to the Offer (or any amendment or supplement to any of them), including but not limited to:
12.1.1 | any and all Losses or Claims in connection with or arising out of the Offer Documents (or any of them) not containing or fairly presenting, or being alleged not to contain or fairly present, all information required to be contained therein or any statement therein being or being alleged to be in any respect untrue, inaccurate or misleading or not based on reasonable grounds or an untrue or alleged untrue statement of a material fact contained in any Offer Document or any omission or alleged omission in any Offer Document to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; |
12.1.2 | any and all Losses or Claims in connection with or arising out of any breach or alleged breach by the Company, any of the Founder Entities or any Director of any of their respective obligations (including, without limitation, the Warranties given by them pursuant to clause 11 and the undertakings given by them pursuant to clause 8) in this Agreement or in connection with the Offer, Admission or the arrangements contemplated by the Offer Documents (or any of them) or the Transaction Agreements (or any of them) or any other agreement relating to the Offer (or any amendment or supplement to any of them); |
12.1.3 | any and all Losses or Claims in connection with or arising out of the publication, distribution or issue of the Offer Documents (or any of them) or any other documents or materials relating to the Offer or Admission; |
12.1.4 | any and all Losses or Claims in connection with or arising out of any failure or alleged failure by the Company or any of the Directors or any of the Companys Affiliates, agents, employees or advisers (in each case other than the relevant Indemnified Person) to comply with FSMA, the LPDT Rules, the Admission and Disclosure Standards or any other applicable legal or regulatory requirements in any jurisdiction in relation to the Offer, Admission or to the arrangements contemplated by the Offer Documents (or any of them) or the Transaction Agreements (or any of them) or any other agreement relating to the Offer (or any amendment or supplement to any of them); |
12.1.5 | any and all Losses or Claims whatsoever suffered or incurred by such Indemnified Person as a person who has communicated or approved the contents of any financial promotion made in connection with the Offer or the application for Admission for the purpose of section 21 of FSMA; |
12.1.6 |
any and all Losses or Claims in connection with or arising out of the carrying out (whether as an agent to the Company or otherwise) by an |
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Indemnified Person of any of its obligations or services under or in connection with the Offer, Admission or the arrangements contemplated by the Offer Documents (or any of them) or the Transaction Agreements (or any of them) or any other agreement relating to the Offer (or any amendment or supplement to any of them) either before, on or after the date of this Agreement; and |
12.1.7 | any and all Losses or Claims whatsoever suffered or incurred by any Indemnified Person in connection with or arising out of any failure by any AI Placee to pay, in full and on a timely basis, all amounts due from it in respect of any New Ordinary Shares and Matching Warrants for which it has agreed to subscribe as set out in Schedule 12 or any failure by any AI Placee to provide a duly executed letter in the form of Schedule 11 on a timely basis (or the contents of such letter are inaccurate) or to otherwise comply with the terms and conditions of the Offer. |
12.2 | Scope of indemnity |
The indemnity contained in clause 12.1 shall not apply to any Claims or Losses:
12.2.1 | (otherwise than in connection with the matters referred to in clauses 12.1.1, 12.1.2, 12.1.3, 12.1.4 and 12.1.7) to the extent finally judicially determined by a court of competent jurisdiction to have arisen primarily out of the gross negligence, fraud or wilful default on the part of such Indemnified Person; or |
12.2.2 | comprising a decline in the market value of the New Ordinary Shares which is suffered or incurred by an Indemnified Person as a result of it having been required to subscribe for New Ordinary Shares pursuant to clause 3.2 (save with respect to New Ordinary Shares and Matching Warrants referred to in clause 12.1.7) unless such decline is caused by or results from or is attributable to or would not have arisen but for (in each case directly or indirectly) the negligence or default of the Company or any breach by the Company of its obligations under the Transaction Agreements (or any of them) or any other agreement relating to the Offer (or any amendment or supplement to any of them), including without limitation a breach of the Warranties or any circumstance which constitutes such a breach. |
12.3 | Notification and conduct of claims |
12.3.1 | If any Indemnified Person becomes aware of any Claim against it in respect of which indemnification under this clause 12 may be sought, that Indemnified Person (or, if the Indemnified Person is not a party to this Agreement and an associated Indemnified Person who is a party to this Agreement so elects, that Indemnified Person who is a party to this Agreement) shall as soon as reasonably practicable notify the Indemnifying Person from whom indemnification under this clause 12 will be sought of such Claim. It is agreed that failure by the Indemnified Person to so notify the Indemnifying Person informed shall not relieve the Indemnifying Person from any liability set out in this clause 12 or otherwise. |
12.3.2 |
In case any such Claim is brought against any Indemnified Person, the Indemnifying Person shall, unless the Indemnified Person elects to assume the defence themselves, assume the defence thereof and appoint |
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counsel satisfactory to the Indemnified Person and shall be liable to pay the fees and expenses of such counsel related to such Claim. In any Claim, any Indemnified Person shall have the right to retain its own counsel and assume the defence themselves, but the fees and expenses of such counsel shall be at the expense of the Indemnified Person unless: |
(A) | the Indemnifying Person and the Indemnified Person shall have mutually agreed to the retention of such counsel; |
(B) | representation of both the Indemnifying Person and the Indemnified Persons by the same counsel (in the absolute discretion of the Indemnified Person) would be or becomes inappropriate due to actual or potential differing interests between them; |
(C) | pursuant to this clause 12.3.2, the Indemnified Person has elected to assume the defence itself or the Indemnifying Person has failed to appoint counsel satisfactory to the Indemnified Person; or |
(D) | the relevant Indemnified Persons insurers confirm that rights under its policies of insurance may be prejudiced. |
It is understood that the Indemnifying Person shall reimburse such fees and expenses as they are incurred in respect of clauses 12.3.2(A) to 12.3.2(D).
12.3.3 | Each Indemnifying Person agrees that if it becomes aware of any Claim relevant for the purpose of this clause 12 or any matter which may give rise to any such Claim, it shall promptly notify the Placing Banks thereof and shall promptly provide the Placing Banks with such information and copies of such documents relating to such Claim as they may reasonably request. |
12.4 | Claims by the Company, the Founder Entities or the Directors |
12.4.1 | Each of the Company, the Founder Entities and the Directors agrees not to (and shall procure that none of its Affiliates nor any persons asserting claims on behalf of or in right of such person shall bring, make, threaten or allege any Claims against or otherwise involve any Indemnified Person to recover any Losses which the Company, the Founder Entities, or the Directors may suffer or incur (including, without limitation, all Losses which such person may incur in investigating, preparing for, disputing or defending, or providing evidence in connection with, any such Claims or Losses or in establishing any Claims or mitigating any Loss on its part) by reason of, or arising out of, directly or indirectly, attributable to, or in connection with, the carrying out or the performance by any Indemnified Persons, or on their behalf, of their obligations or services under or in connection with the Offer, Admission or the arrangements contemplated by the Offer Documents (or any of them) or the Transaction Agreements (or any of them) or any other agreement relating to the Offer (or any amendment or supplement to any of them) on, before or after the date of this Agreement unless and to the extent that such Claims or Losses (otherwise than in connection with the matters referred to in clauses 12.1.1, 12.1.2, 12.1.3, 12.1.4 and 12.1.7) are finally judicially determined by a court of competent jurisdiction to have arisen primarily out of the gross negligence, fraud or wilful default on the part of such Indemnified Person. |
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12.4.2 | Notwithstanding any rights or claims which the Company, the Founders or any of their respective subsidiaries, Affiliates or any of the directors, officers or employees of any of them may have or assert against a Placing Bank in connection with the Offer, Admission or the arrangements contemplated by the Offer Documents (or any of them) or the Transaction Agreements (or any of them) or any other agreement relating to the Offer (or any amendment or supplement to any of them), no claim will be brought by any such person against any director or any other officer or employee of any Indemnified Person in respect of any conduct, action or omission by the individual concerned in connection with the Offer, Admission or the arrangements contemplated by the Offer Documents (or any of them) or the Transaction Agreements (or any of them) or any other agreement relating to the Offer (or any amendment or supplement to any of them). |
12.5 | Settlement of claims |
The Indemnifying Person agrees that it will not, without the prior written consent of the relevant Indemnified Person(s), settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any Governmental Agency, commenced, pending or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this clause 12 (whether or not the Indemnified Persons are actual or potential parties thereto) unless such settlement, compromise or consent:
12.5.1 | includes an unconditional release of each Indemnified Person from all liability arising out of such litigation, investigation, proceeding or claim; and |
12.5.2 | does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person. |
12.6 | Proportionate liability |
If an Indemnifying Person enters into any agreement or arrangement with any adviser or any other person for the purpose of or in connection with the Offer, the terms of which provide that the liability of the adviser or such other person to the Indemnifying Person or any other person, or the liability of any Indemnifying Person to any other person, is excluded or limited in any manner, and any Indemnified Person may have joint or joint and several liability with such adviser or such other person to the Indemnifying Person or to any other person arising out of the performance of its duties under this Agreement, the Indemnifying Person shall:
12.6.1 | not be entitled to recover any amount from an Indemnified Person in respect of any Loss suffered by an Indemnifying Person, in excess of the proportion of such Loss equal to the proportion of that Indemnified Persons contribution to the overall fault for such Loss, as agreed between the relevant parties or, in the absence of agreement, as determined by a court of competent jurisdiction and in any such event (but without prejudice to the foregoing) the Indemnifying Person shall not be entitled to recover more from an Indemnified Person than would have been recoverable had such agreement or arrangement not been entered into; |
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12.6.2 | indemnify the Indemnified Person in respect of any increased liability to any third party which would not have arisen in the absence of such exclusion or limitation; and |
12.6.3 | take such other action as the Indemnified Person may require to ensure that the Indemnified Person is not prejudiced as a consequence of such agreement or arrangement. |
12.7 | Regulatory obligations |
Nothing in this Agreement shall exclude or restrict any duty or liability of any Indemnified Person which it has under FSMA or under the regulatory system (as defined in the FCA Handbook) to the extent such exclusion or restriction is prohibited by the FCA Handbook. The parties agree that the terms of this Agreement, including this clause 12, are reasonable, honest, fair and professional.
12.8 | Enforceability |
Without prejudice to the generality of clause 16.9, each of the sub-clauses in this clause 12 and each of the exclusions of liability and indemnities within those sub-clauses is and shall be construed as separate and severable and in the event that any such sub-clause, exclusion of liability or indemnity is determined by any court to be unenforceable in whole or in part for any reason, such unenforceability shall not affect or impair the enforceability of the other sub-clauses or the remainder of any sub-clause as appropriate and any such other sub-clauses or parts thereof, as appropriate, shall continue to bind the parties.
12.9 | Rights in addition to others |
The indemnities contained in this clause 12 are in addition to any rights which any Indemnified Person may have at common law or otherwise, including but not limited to any right of contribution and the provisions of this clause 12 shall remain in full force and effect notwithstanding the completion of all matters and arrangements referred to in or contemplated by this Agreement or any termination of this Agreement.
12.10 | Discretion of Indemnified Persons |
Each of the Placing Banks shall have an absolute discretion whether or not to exercise or enforce any right under this Agreement, shall be free to deal with its rights under this Agreement without regard to the interests of any Indemnified Person and shall not be required to account to any Indemnified Person in respect of any amount which it receives under this Agreement and shall not be liable to any Indemnified Person for any loss arising from any act or omission with respect to this Agreement.
12.11 | Discretion of Indemnifying Persons |
Each of the Placing Banks shall be entitled to take, in their absolute discretion, any and all steps (including, without limitation, instituting proceedings) against each of the Indemnifying Persons in relation to any Claims and Losses which may arise under this Agreement.
12.12 | Unavailability or inadequacy of indemnities |
In the event that the indemnity provided in clause 12.1 is unavailable, or insufficient, to hold harmless an Indemnified Person in respect of any Claims or Losses (save where no amounts would have been payable in any case in respect of such Claims or Losses by virtue of clause 12.2), in either such case as a result
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of any rule of law or other limit on their validity or effectiveness (other than a limit provided in this Agreement) then in lieu of indemnifying such Indemnified Person thereunder, each Indemnifying Person shall contribute to the aggregate amount of such Claims or Losses incurred or suffered by any such Indemnified Person, as incurred:
12.12.1 | in such proportion as is appropriate to reflect the relative benefits (as described in clause 12.13) received from the Offer by the Company on the one hand, and each of the Placing Banks on the other hand; or |
12.12.2 | if the allocation provided by clause 12.12.1 is not permitted by any applicable law or regulation, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 12.12.1 but also the relative fault (as described in clause 12.14) of the Company on the one hand, and each of the Placing Banks on the other hand, in connection with any of the acts or statements or omissions which resulted in such Claims or Losses, as well as any other relevant equitable considerations. |
12.13 | Benefits received |
The relative benefits received by the Company on the one hand, and each of the Placing Banks on the other hand, from the Offer, shall be deemed to be in the same respective proportions as the total gross proceeds from the Offer (before deducting expenses) received by the Company and the total commissions received by the Placing Banks bear to the total gross proceeds from the Offer.
12.14 | Determination of fault |
The relative fault of the Company on the one hand, and each of the Placing Banks on the other hand, shall be determined by reference to, among other things, whether any untrue statement or alleged untrue statement in the Offer Documents or any omission or alleged omission from the Offer Documents relates to information supplied by the Company on the one hand, or any of the Placing Banks on the other hand, and by the parties relative intent, knowledge, access to information and opportunity to correct or prevent the publication of such untrue statement or alleged untrue statement or such omission or alleged omission.
12.15 | Obligation to contribute |
The Company agrees that it would not be just and equitable if contributions pursuant to clause 12.12 to clause 12.18 were determined by pro rata allocation (even if the Placing Banks were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in clauses 12.12 to clause 12.18. The aggregate amount of any Claims or Losses incurred by an Indemnified Person shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Person in investigating, preparing for, defending, or providing evidence in connection with any litigation, or any investigation or proceeding by any Governmental Agency, commenced or threatened, or any Claim or Loss which arise, directly or indirectly, out of or are attributable to or connected with anything done or omitted to be done by any person (including by the relevant Indemnified Person) in connection with the Offer, Admission or the arrangements contemplated by the Offer Documents, or any of them (or any amendment or supplement to any of them), or this Agreement or any other agreement relating to the Offer (or any amendment or supplement to any of them), including but not limited to those based on any untrue statement or alleged untrue statement or omission or alleged omission.
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12.16 | Limit on contribution |
Notwithstanding any other provision of clause 12.12 to clause 12.18, none of the Placing Banks shall be required to contribute any amount in excess of the placing commissions received by it pursuant to this Agreement and any obligation to contribute under clause 12.12 are several in proportion to their respective placing obligations and not joint nor joint and several.
12.17 | Effect of fraud obligation to contribute |
Notwithstanding clause 12.12, no person guilty of fraud or fraudulent misrepresentation (within the meaning of section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraud or fraudulent misrepresentation.
12.18 | Right of Indemnified Persons to contribution |
For the purposes of clauses 12.12 to clause 12.18, each Indemnified Person shall have the same rights to contribution as each of the Placing Banks.
12.19 | Contracts (Rights of Third Parties) Act 1999 |
12.19.1 | Each Indemnified Person shall have the right under the Contracts (Rights of Third Parties) Act 1999 (which shall apply to this Agreement only to the extent provided in this clause 12.19) to enforce its rights against the Company under this clause 12 provided that, save to the extent notified in writing to the relevant Indemnified Person, Barclays (without obligation) will have the sole conduct of any action to enforce such rights on behalf of an Indemnified Person connected with it. |
12.19.2 | Save as provided in this clause 12.19, Indemnified Persons other than the relevant Placing Bank will not be entitled directly to enforce their rights against the Company under this Agreement under the Contracts (Rights of Third Parties) Act 1999 or otherwise. The parties to this Agreement may agree to terminate this Agreement or vary any of its terms without the consent of any Indemnified Person and the Placing Banks will have no responsibility to any Indemnified Person under or as a result of this Agreement. |
12.20 | Taxation |
No claim under this clause 12 shall be made in respect of:
12.20.1 | Taxation (which includes, for the avoidance of doubt, Transfer Taxes) which an Indemnified Person is compensated for under clause 9.4 or clause 10 of this Agreement, or would have been compensated for under clause 9.4 or clause 10 of this Agreement but was not so compensated solely because one of the exclusions in clause 9.4 or clause 10 of this Agreement applied; |
12.20.2 | Taxation incurred by an Indemnified Person on its net income, profit or gain; and/or |
12.20.3 | recoverable VAT. |
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12.21 | Indemnified Person |
For the purposes of this clause 12, the expression Indemnified Person shall include in the case of each Placing Bank:
12.21.1 | that Placing Bank and each of its subsidiaries, branches and Affiliates; |
12.21.2 | a person who is, on or at any time after the date of this Agreement a director, officer, partner, employee or agent of an undertaking specified in clause 12.21.1 above; and |
12.21.3 | its selling agents and each person, if any, who controls such Placing Bank within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and such Placing Banks Affiliates, subsidiaries, associates and branches and agents of the foregoing persons and holding companies and the subsidiaries of such subsidiaries, branches, Affiliates, associates and holding companies and each of such persons respective directors, officers, employees and agents, |
(each an Indemnified Person ).
13. | TERMINATION |
13.1 | Termination Events |
If at any time before Admission:
13.1.1 | there shall have been a breach by any of the Company, the Founder Entities or the Directors of any of the Warranties contained in this Agreement or any other provision of this Agreement or any of the Warranties is not or has ceased to be, true, accurate and not misleading; |
13.1.2 | any Condition has not been satisfied by the time and date it is required to have been satisfied or waived (if capable of waiver) by the Placing Banks or if any matter or circumstance arises as a result of which it is reasonable to expect that any of the Conditions will not be satisfied at the required time(s) (if any) and continue to be satisfied at Admission; |
13.1.3 | any statement contained in any Offer Document is or has become or has been discovered to be untrue, inaccurate or misleading in any material respect, or any matter has arisen which would, if any of the Offer Documents were to be issued at that time, constitute a material omission from the Offer Document; |
13.1.4 | a matter has arisen which in the opinion of the Placing Banks acting in good faith might reasonably be expected to give rise to a claim under clause 12; |
13.1.5 | in the opinion of the Placing Banks acting in good faith, a Material Adverse Change has occurred or is likely to occur (whether or not foreseeable at the date of this Agreement); |
13.1.6 | a Supplementary Prospectus has been published or, in the opinion of the Placing Banks acting in good faith, a Supplementary Prospectus is required to be published and made available pursuant to section 87G of FSMA; |
13.1.7 | an application of the Company for Admission is withdrawn or refused by the UK Listing Authority or the London Stock Exchange; |
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13.1.8 | there having occurred or it being likely that there will occur, in each case, in the opinion of the Placing Banks: |
(A) | any material adverse change in the financial markets in the United States, the United Kingdom, the British Virgin Islands or in any member or associate member of the European Union or the international financial markets, any outbreak or escalation of hostilities, war, act of terrorism, declaration of emergency or martial law or other calamity or crisis or event or any change or development involving a prospective change in national or international political, financial, economic, monetary or market conditions (primary or secondary) or currency exchange rates or controls; |
(B) | (a) a suspension or material limitation of (i) trading of any securities of the Company on the London Stock Exchange or on any exchange or over-the-counter market, or (ii) trading generally on the London Stock Exchange, the New York Stock Exchange, the NASDAQ Stock Market or any over-the-counter market; (b) a fixing of or minimum or maximum prices for trading, or the imposition of a requirement for maximum ranges for prices, by any of said exchanges or by such system or by order of any governmental authority; or (c) a material disruption in commercial banking or securities settlement or clearance services in the United States or in the United Kingdom or in the British Virgin Islands or in a member or associated member of the European Union; |
(C) | any actual adverse or prospective adverse change or development in United States or United Kingdom or the British Virgin Islands taxation or taxation in a member or associate member of the European Union, materially and adversely, affecting the Company, the New Ordinary Shares or Warrants or the transfer thereof or exchange controls have been imposed by the United States or the British Virgin Islands or the United Kingdom; or |
(D) | a banking moratorium has been declared by the United States or the United Kingdom or the British Virgin Islands or a member or associate member of the European Union, |
then each of the Company, the Founder Entities and the Directors will inform each of the Placing Banks forthwith of any such event (to the extent that they are aware of such event) and (whether or not the Placing Banks are so informed) the Placing Banks may in their absolute discretion give notice to the Company (copied to each other party to this Agreement) to terminate this Agreement on behalf of all parties, in each case except to the extent specified in clause 13.3.
13.2 | Withdrawal of applications for Admission |
If any notice is given by the Placing Banks to the Company pursuant to this clause 13 or the Agreement terminates pursuant to clause 7 before Admission, the Placing Banks shall, on behalf of the Company, withdraw the applications for Admission.
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13.3 | Effect of termination |
If this Agreement is terminated either in full or in part, pursuant to the provisions of this clause 13, clause 7 or otherwise:
13.3.1 | such termination shall be without prejudice to any accrued rights or obligations of any party under this Agreement; and |
13.3.2 | the provisions of clauses 1, 9, 10, 11, 12, 13, 14, 15, 16, 17 and 18 shall remain in full force and effect. |
14. | WITHHOLDING AND GROSS-UP |
14.1 | No deductions |
All sums payable to the Placing Banks or to any other Indemnified Person under this Agreement shall be paid free and clear of all deductions or withholdings unless the deduction or withholding is required by law, in which event the relevant person making the payment shall pay such additional amount as shall be required to ensure that the net amount received by the Placing Banks or any other Indemnified Person will equal the full amount which would have been received by it had no such deduction or withholding been made.
14.2 | Gross-up |
If HM Revenue & Customs or any other tax authority brings into charge to tax (or into any computation of income, profit or gains for the purposes of any charge to tax or would do so but for the utilisation of any tax relief) any sum payable to the Placing Banks or any other Indemnified Person under this Agreement (other than any remuneration paid pursuant to this Agreement including the commissions due under clause 9.1) then the person liable to make such payment shall pay such additional amount as shall be required to ensure that the total amount paid, less the tax chargeable thereon or that which would be so chargeable but for the availability of relief in respect of that charge to tax is equal to the amount that would otherwise be so received under this Agreement (any such additional payments being made on demand of the Placing Banks or the Indemnified Person concerned).
14.3 | Effect of certification |
The recipient Placing Bank or other Indemnified Person shall certify to the Company that the original payment received by the relevant recipient is subject to tax, that certificate to be conclusive save in the case of manifest error.
15. | NOTICES |
15.1 | Written communications |
Save as otherwise provided in this Agreement, a notice (including any approval, consent or other communication) in connection with this Agreement:
15.1.1 | must be in writing in the English language; |
15.1.2 | must be left at the address of the addressee or sent by pre-paid first class post to the address of the addressee or sent by facsimile to the facsimile number of the addressee, in each case which is specified in this clause 15 in relation to the party to whom the notice is addressed, and marked for the attention of the person so specified, or to such other address or facsimile number in England or Wales, and/or marked for the attention of such other person as the relevant party may from time to time specify by notice given in accordance with this clause 15; |
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For the avoidance of doubt, no notice, demand or other communication given under this Agreement may be given by e-mail.
The relevant details of each party at the date of this Agreement are:
If to the Company or any Director to: | Address: | |
International Administration Group | ||
(Guernsey) Limited | ||
Regency Court | ||
Glategny Esplanade | ||
St. Peter Port | ||
Guernsey | ||
Fax Number: +44 (0)1481 716868 | ||
For the attention of: Mark Woodall | ||
If to Toms Acquisition I LLC to: | Address: | |
450 West 14 th Street, 13 th Floor | ||
New York | ||
NY 10014 | ||
United States | ||
Fax Number: 212 524 7301 | ||
For the attention of: Alex San Miguel | ||
If to Mariposa Acquisition II, LLC to: | Address: | |
5200 Blue Lagoon Drive | ||
Suite 855 | ||
Miami, Florida 33126 | ||
United States | ||
Fax Number: 305 675 0653 | ||
For the attention of: Desiree DeStefano | ||
If to any of the Placing Banks, to: | The contact details set out against that persons name in Schedule 2 |
15.2 | Effect of notice |
In the absence of evidence of earlier receipt, any notice shall take effect from the time that it is deemed to be received in accordance with clause 15.3 below.
15.3 | Service |
15.3.1 | Subject to clause 15.4 below, a notice is deemed to be received: |
(A) | in the case of a notice left at the address of the addressee, upon delivery at that address; |
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(B) | in the case of a posted letter, on the third day after posting or, if posted to or from a place outside the United Kingdom, the seventh day after posting; and |
(C) | in the case of a facsimile, on production of a transmission report from the machine from which the facsimile was sent which indicates that the facsimile was sent in its entirety to the facsimile number of the recipient. |
15.4 | Business Day |
A notice received or deemed to be received in accordance with clause 15.3 on a day which is not a Business Day or after 5.00 p.m. on any Business Day according to local time in the place of receipt, shall be deemed to be received on the next following Business Day.
15.5 | Change in details |
Each Party undertakes to notify all of the other Parties by notice served in accordance with this clause if the address specified herein is no longer an appropriate address for the service of notices.
16. | GENERAL |
16.1 | Acknowledgement of no duty |
16.1.1 | Each of the Company, the Founder Entities and the Directors agrees and acknowledges that each Indemnified Person is acting solely pursuant to a contractual relationship with the Company on an arms length basis with respect to the Offer (including in connection with determining the terms of the Offer), and on the terms, and with the obligations and duties expressly stated in this Agreement and that such person is not acting as a financial adviser or fiduciary to the Company, the Founder Entities, the Directors or any other person in respect of the Offer. It is acknowledged by all parties that: |
(A) | the Indemnified Persons may be engaged in a broad range of transactions that involve interests that differ from those of the Company, the Founder Entities, the Directors or any other person and the Indemnified Persons may take into account any factors (including those solely in its interest) they consider appropriate in performing duties or exercising rights under this Agreement; and |
(B) | no Indemnified Person has advised as to, or is required to give, the Company, the Founder Entities, the Directors, or any other person, any general financial or strategic advice or any legal, tax, investment, accounting, regulatory or other specialist or technical advice in connection with the Offer in any jurisdiction, and the Company, the Founder Entities, the Directors, and any such other person have consulted their own, and will rely on their own expertise and that of, specialist legal, tax, investment, accounting or regulatory advisers to the extent they deem appropriate, and in respect of the due diligence investigations in connection with the Offer and no Indemnified Person shall have any responsibility to the Company, the Founder Entities, the Directors or any other person with respect thereto. |
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16.1.2 | No Placing Bank shall have any liability for any claims brought against any person (and the Company, the Founder Entities, and the Directors confirm they will not make any claim against any of the Placing Banks) in respect of the timing, terms and structure of the Offer, or that the Offer Price was set at a level that is too high or too low, or with respect to any sales of any New Ordinary Shares or Warrants by investors following allocation to them of such New Ordinary Shares or Warrants. |
16.1.3 | The parties further agree that it is not their intention to create a fiduciary relationship between the Company, the Founder Entities and the Directors on the one hand and either of the Placing Banks on the other. |
16.1.4 | The Company, the Founder Entities and the Directors acknowledge and agree: |
(A) | each of the Placing Banks is and has been acting for the Company and no one else in connection with the Offer and the Admission and will not regard, and have not regarded, any other person as their client and have not been and will not be responsible to anyone other than the Company for providing the protections afforded to clients of each of the Placing Banks nor for providing advice in relation to the Offer, the Admission or any of the transactions contemplated by this Agreement; |
(B) | any advice, whether written or oral, given by a Placing Bank to the Company, or any communications between a Placing Bank and the Company, may not be used or relied upon by any third party and may not be disclosed to any third party without the prior written approval of the relevant Placing Bank (other than the Companys professional advisers who may place no reliance on such advice); |
(C) | each of the Placing Banks is a full service securities firm and they, along with their respective Affiliates, are engaged in various activities, including securities trading, investment management, financing and brokerage activities and financial planning and benefits counselling for both companies and individuals; |
(D) | in the ordinary course of the activities referred to in this clause 16.1.4(D), each of the Placing Banks and their respective Affiliates may actively trade the debt and equity securities (or related derivative securities) of the Company and its related bodies corporate for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities; |
(E) | no Placing Bank is obliged to disclose to the Company, the Founder Entities, the Directors or utilise for the benefit of the Company, the Founder Entities, or the Directors any non-public information which a Placing Bank obtains in the course of its business; and |
(F) | each of the Placing Banks will use and rely on information provided by or on behalf of the Company in performing their obligations under this Agreement, without having independently verified the information, and the Placing Banks do not assume responsibility for the accuracy and completeness of the information or any other information on which it may rely in connection with this Agreement. |
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16.2 | Basis of liability |
The obligations of each of the Placing Banks under this Agreement are several and not joint or joint and several. Other than as expressly set out in this Agreement, nothing contained or implied in this Agreement constitutes a Placing Bank the partner, agent or representative of any other Placing Bank for any purpose or creates any partnership, agency or trust between them and none of them has the authority to bind the others in any way. No Placing Bank is liable to any other person for the acts or omissions of, advice given by or failure or default of another Placing Bank.
16.3 | Several obligations |
Any agreement, covenant, representation, warranty or undertaking pursuant to this Agreement on the part of two or more parties shall, save where the contrary is expressly provided, be deemed to be made on a several basis. Other than where joint action is expressly provided for, each of the Placing Banks and the Indemnified Persons shall (except as otherwise agreed among them) have the right to protect and enforce each of its rights without joining any of the others in any proceedings.
16.4 | Successors |
This Agreement will operate for the benefit of and be binding upon (as appropriate) the parties hereto and the Indemnified Persons under clause 12 and their respective successors or legal personal representatives. No subscriber or purchaser of any of the New Ordinary Shares or Warrants from the Placing Banks shall be deemed as successor or assignor by reason merely of such subscription or purchase.
16.5 | Release, compromise, etc. |
Any liability to a Placing Bank, Director, Founder Entity or the Company under this Agreement may in whole or in part be released, compounded or compromised and time or indulgence may be given by such Placing Bank, Director, Founder Entity or the Company in its absolute discretion as regards any person under such liability without in any way prejudicing or affecting the rights of such Placing Bank, Director, Founder Entity or the Company against any other person under the same or a similar liability, whether joint and several or otherwise.
16.6 | No waiver |
The rights and remedies of the parties to this Agreement or any Indemnified Person shall not be affected by any failure to exercise or delay in exercising any right or remedy or by the giving of any indulgence by any other party or by anything whatsoever except a specific waiver or release in writing and any such waiver or release shall not prejudice or affect any other rights or remedies of the parties or any Indemnified Person. No single or partial exercise of any right or remedy shall prevent any further or other exercise thereof or the exercise of any other right or remedy.
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16.7 | Time of the essence |
Any date or period specified in this Agreement may be postponed or extended by mutual agreement in writing between the Company (for itself and on behalf of the Founder Entities and the Directors) and the Placing Banks but, as regards any date or period originally fixed or any date or period so postponed or extended, time shall be of the essence.
16.8 | Counterparts |
This Agreement may be executed in any number of counterparts and by the parties to it on separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same document.
16.9 | Severability |
If any provision in or part of this Agreement is void or unenforceable due to any applicable law, it shall be deemed deleted and the remaining provisions of this Agreement shall continue in full force and effect.
16.10 | Further assurance |
At any time after the date of this Agreement the Company shall, and shall use all reasonable endeavours to procure that any necessary third party shall, at the cost of the Company, execute such documents and do such acts and things as the Placing Banks may reasonably require for the purpose of giving full effect to all the provisions of this Agreement by which he, she or it is bound.
16.11 | Survival of representations, warranties and obligations |
Each of the representations, warranties, agreements, undertakings and indemnities set out in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of any Placing Bank and notwithstanding the issue, sale, transfer or delivery of and payment for the New Ordinary Shares or Warrants or completion of the Offer.
16.12 | Assignment |
None of the rights or obligations under this Agreement may be assigned or transferred without the written consent of the other parties.
16.13 | Variation |
No variation of this Agreement (or any document referred to herein) shall be effective unless it is in writing (which for this purpose does not include email) signed by or on behalf of each of the parties to this Agreement. The expression variation includes any variation, supplement, deletion or replacement however effected.
16.14 | Contracts (Rights of Third Parties) Act 1999 |
16.14.1 | Save as provided in clause 12.19, a person who is not a party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement but this does not affect any right or remedy of a third party which exists or is available apart from that Act. |
16.14.2 | Notwithstanding clause 12.19, this Agreement may be varied or terminated without the consent from and without reference to persons entitled to enforce the terms of this Agreement by virtue of the Contracts (Rights of Third Parties) Act 1999. |
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16.15 | Indemnities without prejudice |
The indemnities set out or referred to in this Agreement shall be in addition to and shall not limit, affect or prejudice any other right, relief or remedy available to any Indemnified Person.
16.16 | Remedies cumulative with those at law |
The powers, rights and remedies conferred on the parties herein and each Indemnified Person pursuant to clause 12 shall be in addition and without prejudice to all other powers, rights and remedies available to the parties and each Indemnified Person pursuant to clause 12 by law.
16.17 | Interest |
Interest shall run (before and after judgment) on any sums due and payable hereunder from the due date for payment thereof until the date of actual payment at the Agreed Rate.
16.18 | Without prejudice to liabilities |
The provisions of this Agreement are without prejudice to any liabilities which any of the parties may have under any rule of law or equity (including without limitation the Companies Act, FSMA and the Securities Act) to the extent they cannot be excluded or restricted as provided under this Agreement.
16.19 | Recovery |
Save under any applicable policy of insurance lawfully maintained by the Company, no Director shall seek to recover any amount from the Company or any of its officers or employees, other than each other, in connection with any claim or matter arising out of this Agreement or seek to set off against, or withhold from, any sum owing to the Company or any of its or their officers or employees any amount owing by the Company or its or their officers or employees in connection with such claim or matter.
16.20 | Judgment Currency |
The Company and the Founders agree to indemnify each Placing Bank against any loss incurred by such Placing Bank as a result of any judgment or order being given or made for any amount due hereunder and such judgment or order being expressed and paid in a currency (the Judgment Currency ) other than pounds sterling and as a result of any variation between: (i) the rate of exchange at which the pounds sterling amount is converted into Judgment Currency for the purpose of such judgment or order; and (ii) the rate of exchange at which such Placing Bank is able to purchase pounds sterling, at the business day nearest the date of judgment, with the amount of the Judgment Currency actually received by the relevant Placing Bank. The foregoing indemnity shall constitute a separate and independent obligation of the Company and the Founders and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term rate of exchange shall include any premium and costs of exchange payable in connection with the purchase of or conversions into the relevant currency.
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17. | APPOINTMENT OF PROCESS AGENT |
17.1 | Each of the Company, the Founders and the Non-Founder Directors shall maintain an agent for service of process in England. |
17.2 | Each of the Company, the Founders and the Non-Founder Directors shall, prior to Admission on the Closing Date, appoint Law Debenture Corporate Services Limited of Fifth Floor, 100 Wood Street, London EC2V 7EX as a process agent in the UK (the Agent ), to act as its agent to accept service of process in England in any legal action or proceedings arising out of or in connection with this Agreement and shall procure that the Agent will, prior to Admission on the Closing Date, confirm in writing to the Placing Banks its acceptance of such appointment. All correspondence with the Agent shall be delivered in accordance with clause 15. |
17.3 | If the Agent appointed under this clause 17 ceases to be able to act as such or to have an address in England, each of the Company, the Founders and the Non- Founder Directors irrevocably agrees to appoint a new process agent having an address in England and to deliver to the Placing Banks within 10 Business Days a copy of a written acceptance of appointment by the new process agent. If any of the Company, the Founders and the Non-Founder Directors do not make such an appointment within 10 Business Days of such cessation, then the Placing Banks, acting reasonably, may do so on behalf of the Company, the Founders and the Non-Founder Directors and at the cost of the Company, the Founders and the Non-Founder Directors and shall notify the Company, the Founders and the Non- Founder Directors if it does so. |
17.4 | Each party agrees that without preventing any other mode of service, any document in an action (including, but not limited to, a claim form or any other document to be served under the Civil Procedure Rules) may be served on any party by being delivered to or left for that party at its address for service of notices under clause 15 or, in the case of each of the Company, the Founders and the Non-Founder Directors, by being delivered to the Agent. |
18. | GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS |
18.1 | Governing Law |
This Agreement and any dispute or claim arising out of or in connection with it or its subject matter, existence, negotiation, validity, termination or enforceability (including non-contractual disputes or claims) shall be governed by and construed in accordance with English law.
18.2 | Submission to jurisdiction |
18.2.1 | Each party irrevocably agrees for the benefit of each of the Placing Banks that the courts of England have exclusive jurisdiction in relation to any dispute or claim arising out of or in connection with this Agreement or its subject matter, existence, negotiation, validity, termination or enforceability (including non-contractual disputes or claims). |
18.2.2 | Each of the Company, the Founder Entities and the Directors irrevocably waives any right that it may have to object to an action being brought in any such court as is referred to in clause 18.2.1 on the grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement and further irrevocably agrees that a judgment or order of any such court in connection with this Agreement shall be conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction. |
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18.2.3 | Regardless of whether the courts of any country other than England have jurisdiction to consider a dispute falling within clause 18.2.1 of this Agreement, the Company irrevocably undertakes that it will neither issue nor cause to be issued originating or other process in respect to such a dispute in any jurisdiction other than England. |
18.2.4 | The submission to the jurisdiction of the Courts of England shall not (and shall not be construed so as to) limit the right of the Placing Banks to bring legal proceedings in any other court of competent jurisdiction including, without limitation, the courts having jurisdiction by reason of any other partys domicile. Legal proceedings by the Placing Banks in any one or more jurisdictions shall not preclude legal proceedings by either of them in any other jurisdiction, whether by way of substantive action, ancillary relief, enforcement or otherwise. |
18.3 | Service of Process |
Each party agrees that, without preventing any other mode of service, any document in an action (including, but not limited to, a claim form or any other document to be served under the Civil Procedure Rules) may be served on any party by being delivered to or left for that party at its address for service of notices under clause 15.1 or, in the case of each of the Company, the Founder Entities and the Directors, by being delivered to the Agent. Each party undertakes to either maintain such an address at all times in the United Kingdom or maintain the appointment of an Agent (as applicable) and to notify the other party in advance of any change from time to time of the details of such address in accordance with the manner prescribed for service of notices under clause 15.3.
IN WITNESS WHEREOF this Agreement has been entered into the day and year first above written.
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SCHEDULE 1
DIRECTORS
PART A
FOUNDER DIRECTORS
Name |
Address |
|
Martin Franklin | c/o Jarden Corporation | |
5200 Blue Lagoon Drive | ||
Suite 855 | ||
Miami, Florida | ||
United States | ||
Noam Gottesman | c/o TOMS Capital LLC | |
450 West 14th Street | ||
Floor 13 | ||
New York, NY 10014 | ||
United States |
PART B
NON-FOUNDER DIRECTORS
Name |
Address |
Maximum Liability in
US dollars |
||||
Alun Cathcart |
[omitted] |
US$ | 75,000 | |||
Lord Myners of Truro, CBE |
[omitted] |
US$ | 100,000 | |||
Guy Yamen |
c/o TPY Capital |
US$ | 75,000 | |||
21 Tuval St. (Yahalom Bldg) |
||||||
25th Floor |
||||||
Suite 74-77 |
||||||
52520 Ramat Gan |
||||||
Israel |
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SCHEDULE 2
PLACING BANKS
JOINT GLOBAL CO-ORDINATORS AND JOINT BOOKRUNNERS
Name |
Address, facsimile number and contact |
|
Barclays Bank PLC | Address: | |
Equity Syndicate Desk | ||
5 The North Colonnade | ||
London E14 4BB | ||
Fax number: +44 (0)20 7516 3404 | ||
For the attention of: Equity Syndicate Desk | ||
Citigroup Global Markets Limited | Address: | |
Citigroup Centre | ||
Canary Wharf | ||
Canada Square, | ||
London E14 5LB | ||
Fax number: +44 (0)20 7986 1103 | ||
For the attention of: ECM Syndicate Desk |
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SCHEDULE 3
WARRANTIES OF THE COMPANY AND THE FOUNDERS
Offer documents and listing
1. | Each of the Offer Documents is true and accurate in all material respects and not misleading in any material respect and each of: (i) the Offer Documents taken together; and (ii) each of the Preliminary Prospectus and the Final Prospectus, fairly presents (or when issued and published will fairly present) the information contained therein and does not or, when made, will not contain any untrue statement of any material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. All forecasts, estimates and expressions of opinion, intention, belief or expectation contained in the Offer Documents are and will be, at their respective dates, truly and honestly held and have been made on reasonable grounds and after due and careful enquiry. |
2. | Each of: (1) the Offer Documents taken together; and (2) the Prospectuses contain (or will when published contain) all particulars and information required by, and comply with (and, to the extent applicable, will comply with), the Companies Act, FSMA, the CJA, the LPDT Rules, the Admission and Disclosure Standards, the rules and regulations of the London Stock Exchange, the CREST Regulations and all other applicable laws and regulations. Each of the Preliminary Prospectus and the Final Prospectus contain (or will when published contain), having regard to the particular nature of the Shares and Warrants and the Company, the information necessary to enable investors to make an informed assessment of: (a) the assets and liabilities, financial position, profits and losses and prospects of the Company; and (b) the rights attaching to the Shares and Warrants and such information is in a form which is comprehensible and easy to analyse. |
3. | There are no facts or matters known, or which could have been known, to the Warrantor omitted from any of the Offer Documents as at their respective dates (following publication, if applicable), the omission of which would make any statement of a material fact or expression of opinion, intention or expectation contained in any of the Offer Documents misleading in any respect. |
4. | The section in the Final Prospectus entitled Summary is written in a concise manner and in non-technical language and its content (i) conveys the key information of the securities concerned and (ii) provides, in conjunction with the Final Prospectus, appropriate information about essential elements of the securities concerned, in each case in order to aid investors when considering whether to invest in such securities. |
5. | There are no matters other than those disclosed in the Final Prospectus or otherwise in writing to the UK Listing Authority or the London Stock Exchange (copies of such letters have been provided to each of the Placing Banks) which the Warrantor considers should be taken into account by the UK Listing Authority or the London Stock Exchange in considering the applications for Admission. |
6. |
The statements set forth in Part VII (Taxation), in Part VIII (Additional Information) of the Final Prospectus under the headings: Share Capital, Articles of Association of the Company, Directors Letters of Appointment, City Code, Material contracts and BVI Law, in Part IX (the Terms and Conditions of the |
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Warrants), and in Part XI (Depositary Interests) insofar as they purport to constitute a summary of the laws and documents referred to therein, are true, accurate and complete in all material respects and not misleading in any material respect. |
7. | All statements made or information provided by or on behalf of the Company to the UK Listing Authority (including in connection with any application for certain information to be omitted from the Final Prospectus) are (or, when made, will be) true and accurate in all material respects and are not (or, when made, will not be) misleading in any material respect and there are no facts which have not been disclosed to the UK Listing Authority in connection therewith which by their omission make any such statements misleading or which are otherwise material for disclosure to the UK Listing Authority. |
Verification and due diligence
8. | The Verification Notes have been read by the Directors and approved by them and have been prepared in good faith with due care and the replies given have been prepared or approved by persons having appropriate knowledge and responsibility to enable them properly to provide such replies. There are no facts which are known to any of the Directors which materially adversely affect (whether by omission or otherwise) the accuracy or completeness of any of the replies contained in the Verification Notes. |
9. | The Verification Bundles have been approved by the Directors and have been prepared in good faith with due care. There are no facts which are known to any of the Directors which materially adversely affect (whether by omission or otherwise) the accuracy or completeness of any of the information contained in the Verification Bundles. |
10. | All information provided by or on behalf of the Company to any of the Placing Banks in connection with their due diligence enquiries or similar requests for information in connection with the Offer has been supplied in good faith and such information was, when supplied, true and accurate in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make any of the statements contained therein in light of the circumstances under which such statements were made, not misleading. |
Offering materials
11. | There has been no distribution of any offering material in connection with the Offer other than the Offer Documents. |
12. | There is no material information disclosed in the Roadshow Materials or the Preliminary Prospectus which is not disclosed in the Final Prospectus which would be material for disclosure. |
Directors
13. | The Placing Banks have been furnished in writing with all material information relating to the Directors which has been requested by them. |
14. | Each of the Directors has full power and authority to enter into and perform their obligations pursuant to this Agreement and this Agreement constitutes a valid and legally binding agreement enforceable against each of the Directors in accordance with its terms. |
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15. | Each of the Directors has had explained to him and understands his responsibilities and obligations as a director of a listed company under the LPDT Rules and FSMA. |
16. | The answers given to the Directors Questionnaire by each of (i) in relation to the Warranty given by the Company, the Directors and (ii) in relation to the Warranty given by the Founders, the Founder Directors, were when given, and remain true, accurate and complete and not misleading either by omission or misstatement. |
17. | The information contained in the Directors Responsibility Statements of (i) in relation to the Warranty given by the Company, the Directors and (ii) in relation to the Warranty given by the Founders, the Founder Directors, is complete and accurate in all respects and not misleading in any respect and the Directors have read and approved the contents of the Final Prospectus. |
Corporate organisation and business
18. | The Company is a company with limited liability, duly incorporated and validly existing under the laws of the British Virgin Islands, with full power and authority under its Articles of Association and otherwise to conduct its business as described in the Final Prospectus and to enter into and perform its obligations pursuant to the Offer, this Agreement and any other agreement to be entered into by it in connection with the Offer (including, without limitation, the power to pay commissions, fees, costs and expenses provided for in this Agreement). |
19. | The Company does not have any subsidiaries nor will it have any subsidiaries prior to completion of the Offer. |
20. | The Company is not: |
20.1 | in violation of its Articles of Association or other governing or constitutional documents (which are in full force and effect on Admission), the violation of any of which would, singly or in aggregate, be material; or |
20.2 | in breach or default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, any document of title or in any bond, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company is a party or by which the Company may be bound, or to which any of their properties or assets is subject, the breach or default of any of which, singly or in aggregate, would be material and the Company is not aware of any circumstances likely to give rise to such a breach or default; or |
20.3 | in violation of any applicable law, statute, rule, licence regulation, judgment, order, writ, claim form or decree of any government, government instrumentality or court having jurisdiction over the Company or any of their assets or properties, the violation of any of which would, singly or in aggregate, be material. |
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Share capital
21. | The issued share capital of the Company as at the date of the Final Prospectus is as described in paragraph 3.1 of Part VIII (Additional Information) of the Final Prospectus, and all of the issued shares of the Company (including, for the avoidance of doubt, the New Ordinary Shares and the Founder Preferred Shares (as described in paragraph 4.3 of Part VIII (Additional Information) of the Final Prospectus)) have been, or when issued will be, duly and validly authorised and issued, are, or when issued will be, fully paid and are not, or when issued will not be, subject to calls for further payment or otherwise assessable and are, or when issued will be, free from all Encumbrances (save for the Founders rights in respect of the Founder Preferred Shares as described in paragraphs 4.3 of Part VIII (Additional Information) of the Final Prospectus) and will conform upon Admission to the descriptions thereof contained in the Final Prospectus. |
22. | Save as fairly disclosed in paragraphs 4.3, 10 and 15.8 of Part VIII (Additional Information) and Part IX (The Terms and Conditions of the Warrants) of the Final Prospectus, there are no rights (conditional or otherwise) to require the issue of any shares or other securities (including without limitation any loan capital) or securities convertible into or exchangeable for, or warrants, rights or options to purchase, or obligations, commitments or intentions to create the same which are outstanding and in force. |
23. | The New Ordinary Shares will, upon issue, be free from all Encumbrances and will rank pari passu in all respects and will conform to the description thereof in the Final Prospectus. |
24. | The New Ordinary Shares are freely issuable by the Company to or for the account of the subscribers procured by the Placing Banks (or to the Placing Banks themselves) and there are no restrictions on voting or transfer of the Shares under the laws of the British Virgin Islands or upon declaration or payment of any dividend or distribution thereon. |
Warrants
25. | All of the Warrants, when issued, will be duly and validly authorised and issued and are not, or when issued will not be, subject to calls for further payment or otherwise assessable and are, or when issued will be, free from all Encumbrances and will conform upon Admission to the descriptions thereof contained in the Final Prospectus. |
26. | The Warrants are freely issuable by the Company to or for the account of the subscribers procured by the Placing Banks (or to the Placing Banks themselves) and there are no restrictions on voting or transfer of the Warrants under the laws of the British Virgin Islands. |
Compliance and corporate governance
27. | The Directors have established procedures which, as at and from Admission, enable the Company to comply with the LPDT Rules on an ongoing basis. The Company does not have an external management company as defined in the Listing Rules and the discretion of the Directors to make strategic decisions on behalf of the Company has not been limited or transferred to another person and the Directors have the capability to act on key strategic matters in the absence of a recommendation from any other person. |
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28. | The Company has reviewed the compliance of the Company with the provisions of the Corporate Governance Code and as at the date of Admission, save as fairly disclosed in the Final Prospectus in Part III (The Company, its Board and the Acquisition Structure) under the heading Corporate governance, will be in compliance with the provisions of the Corporate Governance Code and has established procedures to enable the Company, following Admission, to comply with its provisions. |
29. | Each of the Directors has the benefit of an indemnity provided by the Company indemnifying the Director against liabilities incurred in his office as director, in terms that are in accordance with the BVI Companies Act. |
30. | There are no shadow directors of the Company. |
No dividends
31. | Since incorporation of the Company, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its share capital. |
CREST
32. | The Depositary Interests are eligible for admission to, and will be freely transferable in, CREST and the terms of issue of the Depositary Interests and the Articles of Association comply with all the requirements of Euroclear, the CREST Regulations, the Depositary Agreement and the Deed Poll. The Depositary Interests do not contravene BVI law and will, when issued be freely convertible into Shares or Warrants (as applicable). The holders of Depositary Interests will, on issue of the Depositary Interests, benefit from all the rights attaching to the Shares or Warrants (as applicable), including voting rights and, in the case of Shares, dividends and participation in corporate actions. |
Financial information
33. | The financial information included in section B of Part VI (Financial Information on the Company) of the Final Prospectus: |
33.1 | has been prepared and presented in conformity with IFRS and its interpretation promulgated by the International Accounting Standards Board, applied and in a form consistent with that which will be adopted in the Companys next published financial statements: |
33.2 | gives a true and fair view of the state of affairs and financial condition of the Company as at the dates stated; and |
33.3 | has been prepared after due and careful enquiry by the Company and is presented on the basis set out in the Final Prospectus consistently with the accounting policies of the Company. |
34. | The Company does not have any off-balance sheet arrangements, investment or liability. |
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Information provided to the Reporting Accountants
35. | All information supplied by or on behalf of the Company to the Reporting Accountants for the purposes of preparing the No Significant Change Letter and any of the Reporting Accountants other reports and comfort letters in connection with the Offer, and in respect of any updates to such, has been supplied in good faith after due and careful enquiry; such information was when supplied and remains true and accurate in all respects and was not by itself or by omission misleading in any respect and no further information has been withheld which might reasonably have affected the contents of such reports in any respect. |
Working capital
36. | The Company has sufficient working capital for its present requirements, that is, for at least 12 months from the date of the Final Prospectus. |
Auditors
37. | The Auditors who audited the financial statements of the Company included in the Final Prospectus are independent auditors in respect of the Company. |
Financial reporting procedures
38. | The Directors have established procedures which provide a reasonable basis for them to make proper judgments on an ongoing basis as to the financial position and prospects of the Company and the Company maintains a system of internal financial and accounting controls sufficient to provide reasonable assurance that: |
38.1 | transactions are executed in accordance with managements general or specific authorisations; |
38.2 | transactions are recorded as necessary to permit the preparation of returns and reports which are complete and accurate in all material respects to regulatory bodies as and when required by them and the preparation of financial statements in accordance with IFRS and the BVI Companies Act and to maintain accountability for assets; and |
38.3 | the Companys asset records are compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. |
39. | There are no weaknesses in the Companys internal control over financial reporting (whether or not remedied) of the Company and there has been no fraud that involves any member of management or any other employee of the Company. |
No significant change
40. | Save as set out in paragraph 12 of Part VIII (Additional Information) of the Final Prospectus, since the Accounts Date, there has been no significant change in the financial or trading position of the Company and there has been no Material Adverse Change or circumstances likely to lead to a Material Adverse Change since the Accounts Date. |
No Trading
41. | Since the date of its incorporation, the Company has not conducted any business or traded. |
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Borrowings and obligations
42. | Save as fairly disclosed in the Final Prospectus in Part V (Share Capital, Liquidity and Capital Resources and Accounting Policies) under the heading Indebtedness, the Company has not entered into nor is bound by any material obligation, agreement, covenant, contract or instrument and other than fees and expenses payable in connection with the Offer and any indemnities given by the Company pursuant to this Agreement neither the Company nor any person acting on its behalf has entered into or assumed any note, debenture, guarantee or indemnity, material liability (including, without limitation, material contingent liability) or other indebtedness in the nature of borrowing. |
Insolvency
43. | The Company: |
43.1 | is, and immediately after the Closing Date will be, solvent as such term is understood under the laws of the British Virgin Islands and it will not be unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986 or any analogous law or regulation; |
43.2 | has not had a controller appointed or is in liquidation, in provisional liquidation, under administration or is being wound up or has had a receiver appointed to any part of its property; |
43.3 | is not subject to any arrangement, assignment, moratorium or composition, protected from creditors under any statute or being dissolved (in each case, other than to carry out a reconstruction or amalgamation while solvent on terms approved by the other parties to this Agreement); |
43.4 | has not had an application or order made (and in the case of an application, which has not been stayed, withdrawn or dismissed within 30 days), resolution passed, proposal put forward, or any other action taken which is preparatory to or could result in the events described in paragraphs 43.1 to 43.3 above; |
43.5 | is otherwise able to pay its debts when they fall due; and |
43.6 | is not subject to any other proceedings with a substantially similar effect to 43.1 to 43.4 under the law of any jurisdiction. |
44. | The Company has not taken any action (including, but not limited to, the convening of meetings to vote on relevant resolutions), nor have any other steps been taken or legal proceedings commenced or been threatened against the Company for its winding-up or dissolution or for any similar or analogous proceeding in any jurisdiction or for the Company to enter into any arrangement or composition for the benefit of creditors or for the appointment of a receiver, administrator, provisional liquidator or similar officer. |
45. | There is not outstanding any liability, obligation or commitment of any kind on the part of the Directors or the Company in relation to any current or pending insolvency proceedings in relation to the Company. |
Arrangements with Directors and Shareholders
46. |
There are no loans made by the Company to, nor are there any debts owing to the Company from, any of the shareholders of the Company and/or any of the |
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Directors of the Company and/or any associate of any of them save, in each case, to the extent (individually or in aggregate) that would not be and would not be reasonably likely to be, material in the context of the Offer or Admission. |
47. | Save as fairly disclosed in Part VIII (Additional Information) of the Final Prospectus: |
47.1 | there are no existing material contracts or engagements to which the Company is a party and in which any of the Directors or any associate of any of them is interested; and |
47.2 | no shareholder has any rights, in his capacity as such, in relation to the Company. |
48. | For the purposes of paragraphs 46 and 47, associate has the meaning: |
48.1 | in the case of an individual, given to the connected person under sections 252 to 254 of the Companies Act; and |
48.2 | in the case of a body corporate, given to associated company in sections 449 of the CTA 10. |
Tax
49. | The Company is not subject to income tax in the British Virgin Islands and is not, and never has been, treated as resident in any other jurisdiction for Tax purposes. The Company is not, and never has been, subject to Tax in any jurisdiction other than the British Virgin Islands by virtue of having a permanent establishment in that jurisdiction. |
50. | Except as fairly disclosed in the sections headed British Virgin Islands taxation and United Kingdom taxation of Part VII (Taxation) of the Final Prospectus, no stamp duty or other issuance or transfer taxes and no capital gains, income, withholding or other tax are payable in the United Kingdom or the British Virgin Islands in connection with the sale or issue and delivery by the Company of the New Ordinary Shares or Matching Warrants (or Depositary Interests in respect of the same) to or for the account of the Placing Banks or purchasers or subscribers procured by them. |
50.1 | The Company is, to the extent required, registered for the purposes of VAT and has complied with the terms of legislation relating to VAT. |
50.2 | The Company is not nor has it been treated as a member of a group for the purposes of VAT legislation with any company and has not applied for such treatment. |
51. | Since incorporation: |
51.1 | the Company has not been involved in any transaction which has given or may give rise to a liability to tax (or would have given or might have given rise to such a liability but for the availability of any relief) other than tax in respect of normal trading income or receipts arising from transactions entered into by it in the ordinary course of business; |
51.2 | no disposal has taken place or other event occurred which has or may have the effect of crystallising a liability to tax; and |
51.3 | no accounting period (as defined in section 9 of the CTA 09) of the Company has ended as referred to in section 10(1) of that Act. |
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52. | Since incorporation neither (i) in relation to the Warranty given by the Company, the Company nor any Director (in their capacity as such), nor (ii) in relation to the Warranty given by the Founders, the Company nor the Founder Directors (in their capacity as such), as the case may be, has paid or become liable to pay, and there are no circumstances by reason of which it or they may become liable to pay, to any tax authority any penalty, fine, surcharge or interest in respect of tax (including, without limitation, in respect of any failure to make any return, give any notice or supply any information to any relevant tax authority, or any failure to pay tax on the due date for payment). |
53. | All transactions between the Company and any third party have been and are on fully arms length terms. To the best of the Warrantors knowledge, there are no circumstances in existence which could cause any tax authority to make any adjustment for tax purposes to the terms on which any transaction between the Company and any third party is treated as taking place and no such adjustment has been made or attempted in fact. |
Compliance with laws and regulations
54. | The Company has established procedures to ensure compliance with all applicable regulatory requirements in the British Virgin Islands and other relevant jurisdictions. |
55. | In relation to (i) the Warranty given by the Company, the Company and the Directors, and (ii) the Warranty given by the Founders, the Company and the Founder Directors, have at all times complied with all applicable laws and regulations of the United Kingdom (including, without limitation, FSMA, the LPDT Rules, the Admission and Disclosure Standards, the CJA and the Companies Act) and of the British Virgin Islands (including the BVI Companies Act), and with the provisions of the Companys Memorandum of Association and Articles of Association and have or will have the right, power and authority under the Articles of Association of the Company to enter into and perform this Agreement (including, without limitation, the power to pay commissions, fees, costs and expenses provided for in this Agreement), to make the Offer, to allot and issue the New Ordinary Shares and Matching Warrants in certificated and uncertificated form, to issue the Offer Documents in the manner proposed and, subject to approval of the Final Prospectus by the UK Listing Authority, and Admission, there are no other consents, authorisations or approvals required by the Company in connection with the entering into and the performance of this Agreement and the actions referred to in this paragraph 55 of Schedule 3 which have not been irrevocably and unconditionally obtained. |
56. | The statutory books, books of accounts and other records legally required to be kept by the Company are up-to-date, complete and accurate in all material respects and no notice or allegation that any of such books or records is incorrect or should be rectified has been received. All accounts, documents and returns required by law to be delivered or made to the Registrar of Companies or any other authority have been duly and correctly delivered or made without material omission or default. |
57. |
Neither (i) in relation to the Warranty given by the Company, the Company, nor the Founders, nor the Directors, nor (ii) in relation to the Warranty given by the Founders, the Company nor the Founders, nor in the case of each of (i) and (ii) its or their Affiliates nor any person acting on its or their behalf (other than the Placing |
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Banks and their respective Affiliates, as to whom each of the Company and the Founders makes no representation) has done or engaged in, or will do or engage in, directly or indirectly, any act or any course of conduct in relation to the Offer in breach of the CJA or sections 89 or 90 of the Financial Services Act 2012 or constituting market abuse under section 118 of FSMA, in each case including any regulations made pursuant thereto, or the equivalent provisions under the securities laws applicable in any other relevant jurisdiction. |
58. | Neither (i) in relation to the Warranty given by the Company, the Company nor the Founders nor the Directors, nor (ii) in relation to the Warranty given by the Founders, the Company nor the Founders, nor in the case of each of (i) and (ii) its or their Affiliates nor any person acting on its or their behalf (other than the Placing Banks and their respective Affiliates, as to whom each of the Company and the Founders makes no representation) has done or engaged in, or will do or engage in, directly or indirectly, any action designed to stabilise, maintain or manipulate, or which has constituted or which might reasonably be expected to cause or result in the stabilisation, maintenance or manipulation of the price of any security of the Company or any instrument evidencing rights to Shares or Warrants or any other such security. |
Consents, authorisations and approvals
59. | All consents, approvals, authorisations, filings, orders, registrations, notifications, permits, certificates, licences, concessions, clearances and qualifications (each an Authorisation ) of or with any court or governmental, supranational, regulatory, self-regulatory, taxation or stock exchange authority, agency, institution, or body including but not limited to the Competition Commission and the Commission of the European Union (each a Governmental Agency ) having jurisdiction over the Company or any Affiliate of the Company or any of their properties or any stock exchange authorities: |
59.1 | required by the Company for the issue and sale of the New Ordinary Shares and Matching Warrants (and the Depositary Interests in respect thereof) and for this Agreement or any of the agreements in the agreed form to be duly and validly authorised, executed and delivered, to give effect to the arrangements contemplated therein and to perform any obligations, referred to in or contemplated by this Agreement or the Offer Documents; or |
59.2 | necessary to conduct the business of the Company: (i) have been made or obtained and are in full force and effect, or will be in full force and effect prior to Admission and the Company is in compliance with all relevant Authorisations; or (ii) have been fulfilled and performed except where the failure of such Authorisations to be in full force and effect, or the failure of the Company to be in compliance with them, would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Change. |
No event has occurred which allows, or after notice or lapse of time would allow, revocation or termination of any Authorisation where such revocation or termination would, singly or in the aggregate, reasonably be expected to result in a Material Adverse Change or results or would result in any other impairment of the rights of the holder of any such Authorisation.
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The Offer, the allotment, issue and sale of the New Ordinary Shares and Matching Warrants (and the Depositary Interests in respect thereof), the distribution of the Offer Documents and any other documents in connection with the Offer and the Admission, the compliance by the Company with the provisions of this Agreement and the consummation of the transactions contemplated herein will not result in any review, revocation or termination of any Authorisation.
60. | The making of the Offer, the allotment, issue and sale of the New Ordinary Shares and Matching Warrants (and the Depositary Interests in respect thereof), the distribution of the Offer Documents and any other documents in connection with the Offer and Admission, the execution, delivery and performance by the Company of this Agreement and all other agreements to be entered into in connection with the Offer and the consummation of the other transactions contemplated in this Agreement: |
60.1 | have been or will prior to Admission have been duly authorised, executed and delivered by the Company; |
60.2 | will not: (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, (ii) result in any third party being capable of terminating, or constitute a repayment event under, or (iii) result in the creation or imposition of any Encumbrance upon any property or assets of the Company pursuant to, any agreement, any indenture, mortgage, deed of trust or loan agreement or other instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject; and |
60.3 | will not result in any violation of the provisions of the Articles of Association of the Company which are in force at the relevant time or, to the extent material, any statute or any order, rule or regulation of any Governmental Agency having jurisdiction over the Company or any of its properties. |
61. | There are no outstanding, pending, threatened or imminent actions, suits, proceedings, claims, reviews, reports, adjudications, penalties, fines, complaints, sanctions or investigations of any Governmental Agency in relation to the Company or in relation to any Authorisations. |
62. | The Company has fulfilled and followed all relevant industry best practice relating to the Authorisations, including, but not limited to, compliance with all relevant codes, guidance, codes of practice and practice notes issued by any Governmental Agency or in association with the Authorisations. |
Related party transactions
63. | Save as fairly disclosed in paragraph 16 of Part VIII (Additional Information) of the Final Prospectus under the heading Related party transactions, the Company has not entered and will not enter into any related party transaction (within the meaning set out in the IFRS) in the period covered by the financial information contained in the Final Prospectus and up to, and including, Completion. |
Contracts
64. |
Save as fairly disclosed in paragraph 15 of Part VIII (Additional Information) of the Final Prospectus under the heading Material contracts, since its incorporation the |
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Company has not entered into: (a) any material contract outside the ordinary course of its business; or (b) any contract or commitment outside the ordinary course of its business which contains any provision under which the Company has any entitlement or obligation which is material to the Company as of the date hereof; or (c) any contract or commitment of an unusual or onerous nature which, in the context of the issue and sale of the New Ordinary Shares or Matching Warrants, might be material to the conduct of the business of the Company. |
65. | Each of the Material Contracts (being the contracts fairly disclosed in paragraph 15 of Part VIII (Additional Information) of the Final Prospectus under the heading Material Contracts has been duly authorised, executed and delivered by the Company and constitutes a valid, subsisting and legally binding agreement, enforceable in accordance with its respective terms except that such enforceability may be limited by applicable bankruptcy, insolvency, reorganisation, moratorium or other similar laws affecting the enforcement of creditors rights generally and general principles of equity. |
66. | The summary of those Material Contracts contained in the Final Prospectus is accurate and complete in all material respects and not misleading. |
Litigation, arbitration and other proceedings
67. | Neither: |
67.1 | the Company is engaged in any litigation, arbitration, prosecution or other legal proceedings (including any inquiries or investigation by any court or Governmental Agency or governmental body, domestic or foreign); nor |
67.2 | is any such proceeding pending or threatened against the Company or so far as the Warrantor is aware, imminent; nor |
67.3 | is there any claim so far as the Warrantor is aware or any fact likely to give rise to a claim, |
which in any such case may result in or has resulted in during the 12 months preceding the date of the Final Prospectus a material effect on the financial position of the Company or which would materially affect, singly or in the aggregate, the Offer or the consummation of the transactions contemplated by this Agreement by the Company.
68. | The Company, nor any of its officers or agents or employees in relation to the affairs of the Company has been a party to any undertaking or assurance given to any court or government agency or the subject of any injunction which is still in force. |
Employment and Pensions
69. | The Company does not have any material employee or pensions related liabilities. |
Insurance
70. |
The Company maintains, from well-established and reputable insurers, insurance of the type and in amounts reasonably considered by the Company and the Directors to be adequate for their business and, to the best of the Warrantors knowledge, consistent with insurance coverage maintained by companies carrying on similar businesses or owning assets of a similar nature. No claim under any policy of insurance taken out in connection with the business or assets of the |
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Company which is material is outstanding and there are no current circumstances likely to give rise to such a claim. Such insurances are in full force and effect and there exist no circumstances which could render any of such insurances void or voidable. |
Real Estate
71. | The Company does not own or lease, and has not owned or leased any real property. |
Assets
72. | The Company does not have any material assets. |
Intellectual property
73. | The Company has not infringed any Intellectual Property owned or licensed by a third party to the extent that such infringement, in aggregate, would reasonably be expected to result in a Material Adverse Change. |
United States
74. | None of the Company, the Founders, nor their respective Affiliates nor any persons acting on their behalf (other than the Placing Banks and their respective Affiliates, as to whom each of the Company, its Affiliates and each of the Founders makes no representation), directly or indirectly, has made or will make offers or sales of any security, or has solicited or will solicit offers to buy, or otherwise has negotiated or will negotiate in respect of any security, under circumstances that would require the registration of the Shares or Warrants under the Securities Act. |
75. | The Company is a foreign private issuer as such term is defined in Rule 405 under the Securities Act. |
76. | At the date hereof, there is no substantial US market interest, as such term is defined in Regulation S, in any class of securities to be offered or sold in connection with the Offer. |
77. | None of the Company, the Founders or their respective Affiliates has entered or will enter into any contractual arrangement with a distributor (as defined by Regulation S) with respect to the distribution of the New Ordinary Shares or Matching Warrants, except with the Placing Banks pursuant to this Agreement. |
78. | Save as described in the section headed Use of Proceeds in Part I of the Prospectus, prior to completion of the Acquisition, the Company will invest or deposit the net proceeds of the offering and sale of the New Ordinary Shares (with Matching Warrants) and any proceeds received from the subscription for the Founder Preferred Shares (with Matching Warrants) in US Treasuries or such money market fund instruments as approved by the Non-Founder Directors, in a manner that will not result in the Company being an investment company as such term is defined in the Investment Company Act. |
79. | Prior to completion of the Acquisition, the Company will invest or deposit any proceeds received from the exercise of Warrants in a manner that will not result in the Company being an investment company as such term is defined in the Investment Company Act. |
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80. | None of (i) in relation to the Warranty given by the Company, the Company nor the Founders, nor the Directors, nor (ii) in relation to the Warranty given by the Founders, the Company nor the Founders, nor in the case of each of (i) and (ii) their respective Affiliates nor any person acting on their behalf (other than the Placing Banks and their respective Affiliates, as to whom each of the Company and its Affiliates makes no representation), directly or indirectly, has engaged or will engage in any directed selling efforts (as defined in Regulation S) with respect to the New Ordinary Shares or Matching Warrants. |
81. | The Company is not and immediately after giving effect to the offering and sale of the New Ordinary Shares (with Matching Warrants) and the application of the net proceeds thereof as described in the Final Prospectus, will not be an investment company as such term is defined in the Investment Company Act. |
82. | None of (i) in relation to the Warranty given by the Company, the Company, nor the Founders, nor the Directors, nor (ii) in relation to the Warranty given by the Founders, the Company, nor the Founders, nor in the case of each of (i) and (ii) their respective Affiliates nor any person acting on their behalf (other than the Placing Banks and their respective Affiliates, as to whom each of the Company and its Affiliates makes no representation), directly or indirectly, has engaged or will engage in any form of general solicitation or general advertising as those terms are defined in Rule 502(c) of Regulation D in connection with any offer or sale of the New Ordinary Shares or the Matching Warrants. |
83. | The New Ordinary Shares and the Matching Warrants are eligible for re-sale pursuant to Rule 144A and will not be, at the Closing Date, of the same class as securities listed on a national securities exchange registered under section 6 of the Exchange Act, or quoted in a US automated inter dealer quotation system. |
84. | Subject to compliance by the Placing Banks with the selling restrictions set forth in Schedule 8, no registration of the New Ordinary Shares and Matching Warrants is required under the Securities Act in connection with the offer, allotment, issue, sale and delivery of the New Ordinary Shares and Matching Warrants to the Placing Banks or to subscribers or purchasers procured by the Placing Banks, as applicable, in the manner contemplated by this Agreement and the Final Prospectus. |
85. | The issue and delivery of any Shares upon any exercise of Warrants, in the manner contemplated by this Agreement and the Final Prospectus, will not require registration under the Securities Act. |
Ethics, bribery and corruption
86. | Neither (i) in relation to the Warranty given by the Company, the Company nor any of its officers, employees, representatives or agents, nor (ii) in relation to the Warranty given by the Founders, the Company nor any of its respective officers, employees, representatives or agents (other than the Non-Founder Directors, as to whom the Founders make no representation), has either in private business dealings or in dealings with the public / government sector directly or indirectly given, offered or received or agreed (either themselves or in agreement with others) to offer, give or receive any bribe or committed or attempted to commit (either themselves or in agreement with others) any other corrupt act. |
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87. | Neither (i) in relation to the Warranty given by the Company, the Company nor any of its officers, employees, representatives or agents, nor (ii) in relation to the Warranty given by the Founders, the Company nor any of its respective officers, employees, representatives or agents (other than the Non-Founder Directors, as to whom the Founders make no representation) has received, agreed or attempted to receive the proceeds of or profits from a crime or agreed to assist any person to retain the benefits of a crime. |
88. | Neither (i) in relation to the Warranty given by the Company, the Company nor any of its officers, employees, representatives or agents, nor (ii) in relation to the Warranty given by the Founders, the Company nor any of its respective officers, employees, representatives or agents (other than the Non-Founder Directors, as to whom the Founders make no representation) have been investigated (or are being investigated or are subject to a pending or threatened investigation) or are involved in an investigation (as a witness or possible suspect) in relation to any of the matters set out in paragraphs 86 or 87 by any law enforcement agency or any customer, or been debarred from bidding for any contract/business, and there are no such circumstances which are likely to give rise to such investigation. |
89. | The operations of the Company are and have been conducted at all times in compliance with the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the Money Laundering Laws ) and no action, suit or proceeding by or before any court or Governmental Agency, authority or body or any arbitrator involving the Company or any of its Affiliates with respect to Money Laundering Laws is pending or, to the best knowledge of the Warrantor, threatened. |
90. | None of (i) in relation to the Warranty given by the Company, the Company nor the Founders nor the Directors, nor (ii) in relation to the Warranty given by the Founders, the Company nor the Founders, nor in the case of each of (i) and (ii), to the knowledge of the Warrantor, any agent, employee or Affiliate of these, is aware of, or has taken any action, directly or indirectly, that could result in a violation by such persons of the US Foreign Corrupt Practices Act of 1977, as amended, or the rules and regulations thereunder (the FCPA ) (including, without limitation, making use of the mail or any means or instrument of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorisation of the payment of any money, or other property, gift, promise to give, or authorisation of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political office, in contravention of the FCPA), the OECD Convention on Bribery of Foreign Public Officials in International Business Transactions (the OECD Convention ) or any similar law or regulation, to which the Company, any director, officer, agent, or employee of the Company or to the knowledge of the Warrantor, any Affiliate is subject; and the Company and its Affiliates have conducted their businesses in compliance with the FCPA, the OECD Convention and any applicable similar law or regulation and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. |
91. |
Neither the Company, nor any director, officer, or, to the knowledge of the Warrantor, any employee or Affiliate of the Company (other than, in relation to the Warranty given by the Founders, the Non-Founder Directors, as to whom the |
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Founders make no representation) is currently subject to any sanctions administered by the Office of Foreign Assets Control of the US Department of the Treasury ( OFAC ), the US State Department, the US Commerce Department or other US agencies or any similar sanctions imposed by the European Union, the United Nations or any other body, governmental or other, to which the Company or any of its Affiliates is subject (collectively, other economic sanctions ). |
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SCHEDULE 4
DOCUMENTS IN THE AGREED FORM
Document | Marked | |
Offer Documents | ||
Final Prospectus | A | |
Press Release to be issued on or about the date of this Agreement | B | |
Press Release to be issued on or about the Closing Date | C | |
Roadshow Materials | D | |
From the Company | ||
Warrant Instrument | E | |
Letters of appointment for the Directors | F | |
Verification Notes | G | |
Verification Bundles | H | |
Minutes of the meetings of the Board of Directors approving the Preliminary Prospectus and the pre-marketing of the Offer | I | |
Minutes of the meetings of the Board of Directors approving the Offer Documents (other than the Preliminary Prospectus), this Agreement, the Verification Notes, the Verification Bundles and (where appropriate) the other documents referred to in this Agreement and authorising the steps to be taken by the Company in connection with the Offer, including the execution of this Agreement and authorising the Directors to allot: (i) the New Ordinary Shares; (ii) the Founder Preferred Shares; (iii) the Warrants; and (iv) any Shares allotted to Non-Founder Directors in connection with the arrangements disclosed in the Preliminary Prospectus; and for all pre-emption rights in the Articles of Association to be waived in respect of such allotments | J | |
Minutes of the meetings of the Board of Directors, authorising any steps to be taken in connection with Admission and closing and settlement of the Offer, including the allotment and issuance, conditional only on Admission, of the New Ordinary Shares and Matching Warrants to subscribers in the proportions and as otherwise directed by the Placing Bank, and, to the extent not previously provided, approving any Offer Documents issued after the date of this Agreement | K | |
Letter addressed to the Placing Banks from the Company addressing the following: (i) the fact that there has been no significant change in the financial and trading position, including the indebtedness position, of the Company since the Accounts Date; (ii) the sufficiency of the Companys working capital, and (iii) the extraction of financial information | L |
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Document | Marked | |
Memorandum on directors responsibilities for a prospectus | M | |
Memorandum on the responsibilities and obligations of a director of a company admitted to the standard segment of the Official List | N | |
Memorandum on the financial reporting procedures of the Company | O | |
Registrars Agreement | P | |
Depositary Agreement | Q | |
Deed Poll | R | |
Securities Application Forms in respect of the Shares and Warrants | S | |
Share Option Deeds | T | |
From the Directors | ||
Directors Responsibility Statements | U | |
Directors powers of attorney | V | |
Letters of consent to appointment | W | |
Directors Questionnaires | X | |
From the Directors and Founder Entities | ||
Insider Letters executed by the Founder Entities and the Directors | Y | |
From the Founder Entities | ||
Promissory note addressed to the Company | Z | |
From Founder Directors | ||
Letter of undertaking from all Founder Directors to Non-Founder Directors in relation to their Letters of Appointment | AA | |
From Companys Counsel | ||
English law opinion | BB | |
BVI law opinion in relation to the Company | CC | |
BVI law opinion in relation to the Depositary Interests | DD | |
British Virgin Islands letter in relation to, inter alia, BVI taxation | EE | |
Memorandum in relation to the directors duties under BVI law | FF | |
Legal opinion provided to CREST in relation to Depositary Interests | GG |
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Document | Marked | |
Rule 10b-5 disclosure letter | HH | |
US law opinion | II | |
Short form report | JJ | |
No Significant Change Letter | KK | |
Financial position and prospects (FPP) procedures comfort letter | LL | |
UK taxation comfort letter | MM | |
Prospectus comfort letter | NN | |
Bring down comfort letter (UK) | OO | |
US SAS 72 comfort letter | PP | |
US SAS 72 bring down comfort letter | ||
International SAS 72 look-alike comfort letter | RR | |
International SAS 72 look-alike bring down comfort letter | SS |
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SCHEDULE 5
DOCUMENTS TO BE DELIVERED
PART A
DELIVERY OF DOCUMENTS ON, OR PRIOR TO, THE DATE OF THIS AGREEMENT
On, or prior to, the date of this Agreement, the Company shall deliver the following documents to the Placing Banks:
Documents from the Company, the Founders and the Directors
1. | Two certified copies of the minutes of the meetings of the Board of Directors approving: |
1.1 | the Preliminary Prospectus and the marketing of the Offer; and |
1.2 | the Offer Documents, this Agreement, the Verification Notes, the Verification Bundles and (where appropriate) the other documents referred to in this Agreement and authorising the steps to be taken by the Company in connection with the Offer, including the execution of this Agreement and authorising the Directors to allot: (i) the New Ordinary Shares; (ii) the Founder Preferred Shares; (iii) the Warrants; and (iv) any Shares allotted to Non-Founder Directors in connection with the arrangements disclosed in the Preliminary Prospectus; and for all pre-emption rights in the Articles of Association to be waived in respect of such allotments (and, if the said minutes are of such a committee, a certified copy of the minutes of the Board of Directors appointing such committee), |
both in the agreed form.
2. | Two certified copies of the Final Prospectus bearing evidence of the formal approval of the UK Listing Authority pursuant to the Prospectus Rules and dated the date of this Agreement. |
3. | Two certified copies of each of the other Offer Documents (other than any Supplementary Prospectus and any press release required to be issued in connection with the publication of any Supplementary Prospectus). |
4. | An original version and certified copy of the Verification Notes, signed by each of the persons named therein as being responsible for such answers, in the agreed form, and copies of all evidence supporting answers in the notes. |
5. | A copy of the Application for admission of securities to the Official List (in the form required by paragraph 3.3.2(1)R of the Listing Rules), duly signed by a Director or Company Secretary. |
6. | A copy of the Application for admission to trading on the London Stock Exchange (LSE Form 1) in relation to the Shares, duly signed by a Director or Company Secretary. |
7. | A copy of Form A (application for the approval of a prospectus) (referred to in paragraph 3.1.1R(1) of the Prospectus Rules), duly signed by a Director or Company Secretary. |
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8. | Two original letters addressed to the Placing Banks from the Company, in the agreed form, dated the same date as the Final Prospectus, duly signed by the Company, addressing the following: |
8.1 | the fact that there has been no significant change in the financial and trading position, including the indebtedness position, of the Company since the Accounts Date; |
8.2 | the sufficiency of the Companys working capital; and |
8.3 | the extraction of financial information. |
9. | An original and certified copy of each of the Directors Responsibility Statements. |
10. | An original and certified copy of each of the powers of attorney, in the agreed form, signed by the Directors. |
11. | Two copies of the memorandum of advice from the Companys Counsel relating to the Directors responsibilities as directors of a listed company, in the agreed form, dated 28 March 2014. |
12. | Two copies of the memorandum of advice from the Companys Counsel relating to the Directors responsibilities for the Prospectus, in the agreed form, dated 28 March 2014. |
13. | A copy of the memorandum of advice from the Companys Counsel as to British Virgin Islands law relating to the Directors duties, responsibilities and liabilities pursuant to the laws of the British Virgin Islands, in the agreed form, dated 28 March 2014. |
14. | Two certified copies of each of the Directors Questionnaires. |
15. | Two original versions of the Insider Letters. |
Documents from, or relating to the documents from, the Reporting Accountants.
16. | Two original letters addressed to the Directors and the Placing Banks in relation to the Preliminary Prospectus, in the agreed form, dated the same date as the Preliminary Prospectus, duly signed by the Reporting Accountants. |
17. | Two original versions of the short form report, in the agreed form, dated the same date as the Final Prospectus, duly signed by the Reporting Accountants. |
18. | Two certified copies of the letter, in the agreed form, addressed to the Directors and dated the date of the Final Prospectus consenting to the inclusion in the Final Prospectus of their reports and letters in the form and context in which they are included in the Final Prospectus and authorising, for the purposes of paragraph 5.5.3R(2)(f) of the Prospectus Rules, the contents of those reports and letters, duly signed by the Reporting Accountants. |
19. | Two original versions of the No Significant Change Letter, addressed to the Directors and the Placing Banks dated the same date as the Final Prospectus, duly signed by the Reporting Accountants. |
20. | Two original letters, in the agreed form, addressed to the Directors and the Placing Banks and dated the date of the Final Prospectus confirming the accuracy of the section headed United Kingdom taxation in Part VII (Taxation) of the Final Prospectus, duly signed by the Reporting Accountants. |
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21. | Two certified copies of the memorandum on financial position and prospects (FPP) procedures prepared by the Company dated 10 April 2014. |
22. | Two original letters, in the agreed form, addressed to the Directors and the Placing Banks dated the same date as the Final Prospectus relating to the financial position and prospects (FPP) procedures established by the Company, duly signed by the Reporting Accountants. |
23. | Two original versions of the US SAS 72 comfort letter and international SAS 72 lookalike comfort letter, addressed to the Directors and the Placing Banks, in the agreed form, dated the date of the Final Prospectus duly signed by the Reporting Accountants. |
Other documents
24. | Two original letters from Companys Counsel addressed to the Placing Banks confirming the accuracy of the section headed British Virgin Islands taxation in Part VII (Taxation) of the Final Prospectus, duly signed and dated the date of the Final Prospectus. |
25. | Two certified copies of the Registrars Agreement. |
26. | Two certified copies of the Warrant Instrument. |
27. | Two certified copies of the Depositary Agreement. |
28. | Two certified copies of the Deed Poll. |
29. | Two certified copies of the certificate of incorporation, the Memorandum of Association and Articles of Association of the Company. |
30. | Two certified copies of any other document, not referred to above, stated in the Final Prospectus as being available for inspection. |
31. | Two certified copies of each power of attorney pursuant to which any party executes this Agreement or any other agreement in connection with the Offer. |
The Placing Banks may, in their absolute discretion, elect that delivery of any of the documents referred to in this Part A of Schedule 5 may be deferred and in lieu of any such delivery require delivery of the relevant document in a form reasonably satisfactory to them at a later time specified by the Placing Banks.
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PART B
DELIVERY OF DOCUMENTS PRIOR TO THE PUBLICATION OF ANY
SUPPLEMENTARY PROSPECTUS
Prior to the publication of any Supplementary Prospectus, the Company shall deliver the following documents to the Placing Banks:
Documents from the Company, the Founders and the Directors
1. | Two certified copies of the minutes of the meetings of the Board of Directors approving the Supplementary Prospectus and, to the extent not previously provided, approving any Offer Documents issued on or prior to the date of the Supplementary Prospectus and after the date of this Agreement (and, if the said minutes are of such a committee, to the extent not previously provided, a certified copy of the minutes of the Board of Directors appointing such committee). |
2. | An original version and certified copy of any additions to the Verification Notes in relation to the Supplementary Prospectus signed by or on behalf of each of the persons named therein as being responsible for the answers. |
3. | Two certified copies of the Supplementary Prospectus bearing evidence of the formal approval of the UK Listing Authority pursuant to the Prospectus Rules and the Listing Rules. |
4. | Two certified copies of the press release, in the agreed form, to be issued in connection with the publication of the Supplementary Prospectus. |
5. | Two original letters from the Company in the form of Part A of Schedule 7 of this Agreement duly signed by a Director or the Secretary of the Company authorised to do so and dated the date of the Supplementary Prospectus. |
6. | Two original letters from each of the Founder Entities in the form of Part B of Schedule 7 of this Agreement duly signed by a director or the secretary of such Founder Entity authorised to do so and dated the date of the Supplementary Prospectus. |
7. | Two original letters from each of the Founder Directors in the form of Part C of Schedule 7 of this Agreement duly signed by him and dated the date of the Supplementary Prospectus. |
Documents from the Reporting Accountants
8. | Two original versions of the bring-down letters, in the agreed form, addressed to the Directors and the Placing Banks, dated the date of the Supplementary Prospectus, duly signed by the Reporting Accountants. |
9. | Two original versions of the bring-down US SAS 72 comfort letter and international SAS 72 lookalike comfort letter, in the agreed form, addressed to the Directors and the Placing Banks, dated the date of the Supplementary Prospectus, duly signed by the Reporting Accountants. |
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Other documents
10. | Two certified copies of any documents stated in the Supplementary Prospectus as being available for inspection which have not already been provided to the Placing Banks. |
The Placing Banks may, in their absolute discretion, elect that delivery of any of the documents referred to in this Part B of Schedule 5 may be deferred and in lieu of any such delivery require delivery of the relevant document in a form reasonably satisfactory to them at a later time specified by the Placing Banks.
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PART C
DELIVERY OF DOCUMENTS ON THE CLOSING DATE
On, or prior to, the Closing Date the Company shall deliver the following documents to the Placing Banks:
Documents from the Company, the Founders and the Directors
1. | Two certified copies of the minutes of the meetings of the Board of Directors, authorising any steps to be taken in connection with Admission and closing and settlement of the Offer, including the allotment and issuance, conditional only on Admission, of the New Ordinary Shares and Matching Warrants to subscribers in the proportions and as otherwise directed by the Placing Banks, and, to the extent not previously provided, approving any Offer Documents issued after the date of this Agreement (and, if the said minutes are of such a committee, to the extent not previously provided, a certified copy of the minutes of the Board of Directors appointing such committee). |
2. | A copy of the security application form in respect of the Depositary Interests that has been given to Euroclear, in the agreed form. |
3. | A copy of the CREST enablement letters confirming that the conditions for admission of the Depositary Interests to CREST are satisfied. |
4. | A copy of the legal opinion provided by the Companys Counsel to CREST in relation to BVI law. |
5. | A copy of the OPS Bulletins provided to Euroclear in relation to the Depositary Interests. |
6. | Two original letters from the Company in the form of Part A of Schedule 7 of this Agreement duly signed by a Director or the Secretary of the Company authorised to do so and dated the date of the Closing Date. |
7. | Two original letters from each of the Founder Entities in the form of Part B Schedule 7 of this Agreement duly signed by a director, managing member or the secretary of such Founder Entity authorised to do so and dated the date of the Closing Date. |
8. | Two original letters from each of the Founder Directors in the form of Part C Schedule 7 of this Agreement duly signed by him and dated the date of the Closing Date. |
Documents from the Reporting Accountants
9. | Two original versions of the bring-down letters, in the agreed form, addressed to the Directors and the Placing Banks, dated the date of the Closing Date, duly signed by the Reporting Accountants. |
10. | Two original versions of the bring-down US SAS 72 comfort letter and international SAS 72 lookalike comfort letter, in the agreed form, addressed to the Directors and the Placing Banks, dated the date of the Closing Date, duly signed by the Reporting Accountants. |
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Opinions and letters from legal advisers
11. | Two original versions of the signed Rule 10b-5 disclosure letter addressed to the Placing Banks, in the agreed form, from the Companys Counsel dated the date of the Closing Date. |
12. | Two original versions of the signed US legal opinion addressed to the Placing Banks, in the agreed form, from the Companys Counsel dated the date of the Closing Date. |
13. | Two original versions of the signed English law opinion of the Companys Counsel, in the agreed form, addressed to the Placing Banks dated the date of the Closing Date. |
14. | Two original versions of the signed Delaware law opinion, in the agreed form, addressed to the Placing Banks, from Greenberg Traurig LLP dated the date of the Closing Date, in relation to Mariposa Acquisition II, LLC. |
15. | Two original versions of the signed British Virgin Islands law opinion of the Companys Counsel in relation to the Company addressed to the Placing Banks, in the agreed form, dated the date of the Closing Date. |
16. | Two original versions of the signed Delaware law opinion, in the agreed form, addressed to the Placing Banks, from Greenberg Traurig LLP dated the date of the Closing Date in relation to Toms Acquisition I LLC. |
17. | Two original versions of the signed Rule 10b-5 disclosure letter addressed to the Placing Banks from the Placing Banks Counsel dated the date of the Closing Date. |
18. | Two original versions of the signed US legal opinion addressed to the Placing Banks, from the Placing Banks Counsel dated the date of the Closing Date. |
19. | Two original versions of the signed English law opinion of the Placing Banks Counsel, addressed to the Placing Banks, dated the date of the Closing Date. |
The Placing Banks may, in their absolute discretion, elect that delivery of any of the documents referred to in this Part C of Schedule 5 may be deferred and in lieu of any such delivery require delivery of the relevant document in a form reasonably satisfactory to them at a later time specified by the Placing Banks.
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SCHEDULE 6
UNDERTAKINGS
1. | COMMITMENTS, ARRANGEMENTS AND DEVELOPMENTS |
1.1 | During the period from the date of this Agreement until the date which is 180 calendar days after the Closing Date, neither the Company nor any of the Directors nor any director from time to time of the Company shall take any steps which would be inconsistent with any expression of policy or intention in the Offer Documents without prior consultation with each of the Placing Banks. |
2. | PUBLIC ANNOUNCEMENTS |
2.1 | Save in relation to an announcement, advertisement, statement or communication required by law or by any securities exchange or governmental or regulated body (a Restricted Announcement ), each of the Company, the Founder Entities and the Directors severally undertakes not to circulate, distribute, publish, issue, make or despatch (and will not authorise any other person to circulate, distribute, publish, issue, make or despatch) any public announcement, advertisement document or communication concerning the Company, the Offer or otherwise relating to the assets, liabilities, profits, losses, financial or trading conditions or the earnings, business affairs or business prospects of the Company which is or may be material in the context of the Company or in relation to the Offer at any time prior to the date which is 90 calendar days after the Closing Date (the Restricted Period ), without having first furnished to each of the Placing Banks a copy of each such proposed announcement or communication as far in advance of the announcement as reasonably practicable to enable them to comment thereon and to consult with them and having obtained the Placing Banks prior written consent as to its contents and the timing and manner of its release. |
2.2 | The Company undertakes to make all such announcements concerning the Offer as shall be necessary to comply with the LPDT Rules, the Admission and Disclosure Standards, the Companies Act and FSMA or which the Placing Banks otherwise reasonably consider to be necessary or desirable and each of the Placing Banks shall be entitled (following consultations with the other parties to this Agreement where practicable) to make any such announcement if the Company fails (in the opinion of such Placing Bank) promptly to fulfil its obligations under this paragraph 2.2. |
2.3 | The Company undertakes that it will not at any time during the Restricted Period make any Restricted Announcement without first: |
2.3.1 | notifying the Placing Banks as to the content of publication of such Restricted Announcement; |
2.3.2 | making available drafts of such Restricted Announcement to the Placing Banks in sufficient time prior to its publication to allow the Placing Banks an opportunity to consider and comment on the same; |
2.3.3 | consulting with the Placing Banks as to the content of publication of such Restricted Announcement; and |
2.3.4 | taking account of the Placing Banks reasonable requirements. |
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3. | RESTRICTIONS ON THE COMPANY IN RELATION TO THE SHARES |
3.1 | Without prejudice to paragraph 7.2 of this Schedule 6 and subject to paragraph 3.2 of this Schedule 6, the Company undertakes that it will not, without the prior written consent of each of the Placing Banks, during the period commencing on the date of this Agreement and ending on the date which is 180 days from the date of this Agreement: (a) undertake any consolidation or sub-division of its share capital or any capitalisation issue; or (b) directly or indirectly, allot, issue, offer, sell, lend, pledge, contract to sell or issue, grant any option, right or warrant to purchase or otherwise dispose of any Shares (or any interest therein or in respect thereof) or other securities of the Company exchangeable for, convertible into or representing the right to receive Shares or any such substantially similar securities; or (c) otherwise enter into any transaction (including any derivative transaction) directly or indirectly, permanently or temporarily, to dispose of any Shares; or (d) undertake any other transaction with the same economic effect as any of the foregoing or announce an offering of Shares or any interest therein; or (e) to announce publicly any intention to enter into any transaction described in paragraphs (a) to (d) above. |
3.2 | The undertaking in paragraph 3.1 shall not apply to: |
3.2.1 | the issue by the Company of any Shares upon the conversion of the Founder Preferred Shares as described in paragraph 4.3 of Part VIII (Additional Information) of the Final Prospectus; or |
3.2.2 | the issue by the Company of any Shares upon the exercise of the Warrants as described in paragraph 1 of Part IX (Terms and Conditions of the Warrants) of the Final Prospectus; |
3.2.3 | any of the matters referred to in paragraphs 3.1 (a) to (e) when carried out in relation to the Acquisition; or |
3.2.4 | the issue and offer by the Company of Shares pursuant to the Offer and to Non-Founder Directors under their Letters of Appointment and Share Option Deeds. |
4. | RESTRICTIONS ON THE FOUNDERS AND THE NON-FOUNDER DIRECTORS IN RELATION TO THE SHARES AND WARRANTS |
4.1 | Subject to paragraph 4.2 of this Schedule 6, each of the Founder Entities and the Directors severally undertakes that (other than as provided for in this Agreement) it will not and will procure that no Affiliate of it shall, without the prior written consent of each of the Placing Banks, during the period (the Lock-up Period ) commencing on the date of this Agreement and ending on the date which is the earlier of: (i) 365 days from the Acquisition Closing Date; or (ii) the liquidation of the Company for failure to complete an Acquisition: |
4.1.1 | directly or indirectly, offer, sell, lend, pledge, contract to sell, distribute, grant any option, right or warrant to purchase or otherwise dispose of: |
(A) | any Shares (including, but not limited to, any Shares received by the conversion of the Founder Preferred Shares) or Warrants; |
(B) | the Founder Preferred Shares; or |
(C) | any other securities which are exchangeable for, convertible into or representing the right to receive Shares, Founder Preferred Shares or any substantially similar securities; or |
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4.1.2 | otherwise enter into any transaction (including any derivative transaction) directly or indirectly, permanently or temporarily, to dispose of any Shares or the Founder Preferred Shares or Warrants; or |
4.1.3 | undertake any other transaction with the same economic effect as any of the foregoing; or |
4.1.4 | announce an offering of any Shares, Founder Preferred Shares or Warrants or any interest therein; or |
4.1.5 | to announce publicly any intention to enter into any transaction described in paragraphs 4.1.1 to 4.1.4 above (each, a Disposal ). |
4.2 | The undertaking in paragraph 4.1 of this Schedule 6 shall not apply to any of the following provided that in each case the Disposal is conducted in accordance with all applicable laws (including the Securities Act), the Articles of Association and the Warrant Instrument (as applicable) (including without limitation that the transferee is not a Prohibited Person as described therein): |
4.2.1 | a Disposal by: (i) Mariposa Acquisition II, LLC or Martin Franklin of up to an aggregate amount of 10 per cent. of their Shares; or (ii) Toms Acquisition I LLC or Noam Gottesman of up to an aggregate amount of 10 per cent. of their Shares or Warrants, as a bona fide gift (in each case, by reference to the number of Shares and Warrants they held immediately following Admission); |
4.2.2 | a Disposal of Founder Preferred Shares as a bona fide gift made with the prior written consent of the Placing Banks; |
4.2.3 | a Disposal of Shares, Founder Preferred Shares or Warrants by a Director for estate planning purposes to persons immediately related to the relevant Director, as the case may be, making such Disposal by blood, marriage or adoption; |
4.2.4 | a Disposal of Shares, Founder Preferred Shares or Warrants by a Director to (i) any trust that is solely for the benefit of the relevant Director, as the case may be, and/or the persons described in paragraph 4.2.3 of this Schedule 6 or (ii) any direct or indirect wholly-owned subsidiary of such trust; |
4.2.5 | a Disposal of Shares, Founder Preferred Shares or Warrants by a Founder Director or a Founder Entity to any of the Companys Directors (from time to time); |
4.2.6 | a Disposal of Shares, Founder Preferred Shares or Warrants by a Founder Entity to any of its Affiliates or direct or indirect holders of equity, holders of partnership interests or members; |
4.2.7 | a Disposal of Shares, Founder Preferred Shares or Warrants to a Founder Entity (or Affiliates or direct or indirect holders of equity, partnership interests or members of a Founder Entity); |
4.2.8 | a Disposal of Shares, Founder Preferred Shares or Warrants to a direct or indirect subsidiary of the Company or to a target company or shareholders of a target company (or direct or indirect subsidiary of a target company) in connection with, or as a result of transactions related to, the completion of the Acquisition; |
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4.2.9 | after the Acquisition Closing Date, a Disposal of Shares by any Founder Entity (or in the event of a Disposal under paragraph 4.2.6 of this Schedule 6, any Affiliate or direct or indirect equity holder, holder of partnership interest or member of such Founder Entity) to any person if and to the extent that either (i) the proceeds of sale are used solely for the purpose of making a payment by way of charitable gift to a charitable organisation registered with the applicable charities regulator or (ii) such person is a charitable organisation registered with the applicable charities regulator; provided, however, that the aggregate number of Shares which are the subject of such Disposals by a Founder Entity and any equity holder, holder of partnership interest or member referred to therein of such Founder Entity shall not exceed up to an aggregate amount of 10 per cent. of the number of Shares such Founder Entity would have held immediately following Admission having exercised all the Warrants it held at that time; |
4.2.10 | an acceptance of a general offer for the Shares or Warrants made to all holders of Shares and/or Warrants on equal terms; |
4.2.11 | the provision of an irrevocable undertaking to accept an offer as described in paragraph 4.2.10 of this Schedule 6; |
4.2.12 | after the Acquisition Closing Date, any Disposal of Shares by a Founder to any person if and to the extent that the proceeds of sale are used solely for the purpose of meeting any tax liability incurred in connection with, or as a result of transactions related to, the completion of the Acquisition; or |
4.2.13 | a Disposal of any Shares or Warrants acquired by a Founder Entity or Director after the date of Admission in any open-market transaction; |
provided that:
(A) | with respect to any of the Disposals listed in paragraphs 4.2.1 to 4.2.8 of this Schedule 6 above, the relevant disposing Founder Entity or Director shall deliver to each of the Placing Banks and the Company, prior to or contemporaneously with making such a Disposal, an enforceable lock-up agreement in the form set out in Schedule 10 of this Agreement, duly executed by the permitted transferee (or the trustee or legal guardian of such transferee) in respect of the Shares, Founder Preferred Shares or Warrants (as applicable) to be transferred to him, her or it; and |
(B) | each Founder Entity or Director severally undertakes to each of the Placing Banks and the Company that any Disposal by it pursuant to this paragraph 4.2 shall, to the extent permitted by relevant law or regulation, be notified in writing to each of the Placing Banks and the Company no later than five Business Days after the entry into of any agreement relating to the same. |
Promptly following receipt of an agreement referred to in paragraph 4.2(A) above, the Company shall duly execute such agreement and deliver it to the Placing Banks.
5. | COPIES OF DOCUMENTS AND PROVISION OF INFORMATION |
During the period from the date of this Agreement until the date which is 180 days after the Closing Date, the Company undertakes to furnish to each of the Placing Banks copies of all reports or other communications (financial or other) furnished
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to shareholders or warrantholders and to deliver to each of the Placing Banks: (i) as soon as they are available, copies of any reports and financial statements furnished to or filed with the FCA, the London Stock Exchange or any securities exchange on which any class of securities of the Company is listed (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to the FCA, the London Stock Exchange or any securities exchange on which any class of securities of the Company is listed); and (ii) such additional information concerning the business and financial condition of the Company as each of the Placing Banks may from time to time reasonably request.
6. | SUPPLEMENTARY PROSPECTUS |
6.1 | The Company will comply with FSMA and the LPDT Rules so as to permit the completion of the distribution of the New Ordinary Shares and Matching Warrants as contemplated in this Agreement and the Offer Documents. If at any time after the Final Prospectus has been lodged with the FCA for approval and prior to Admission: |
6.1.1 | any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of the Placing Banks, the Company or the respective legal advisers, to amend or supplement any Offer Document in order that such Offer Document will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances existing at the time it is delivered to a subscriber of New Ordinary Shares and Matching Warrants; |
6.1.2 | if there arises or is noted any matter referred to in section 87G of FSMA of which the Company is, or becomes, aware prior to Admission and which requires the Company to deal with such change in accordance with section 87G of FSMA, the Prospectus Rules and/or the Listing Rules; or |
6.1.3 | if it shall be necessary, in the opinion of the Placing Banks Counsel or Companys Counsel, at any such time to amend or supplement any Offer Document in order to comply with the requirements of FSMA, the Prospectus Rules and/or the Listing Rules or other appropriate law or regulation (as the case may be), |
the Company, the Founders or the Directors (as the case may be) will:
(A) | promptly bring such event or condition to the notice of the Placing Banks and shall promptly prepare and file with the UK Listing Authority (or procure the filing with the FCA of) such amendment or supplement as may be necessary to correct such statement or omission or to make such Offer Document comply with such requirements. Before amending or supplementing any Offer Documents, the Company will furnish the Placing Banks with a copy of each such proposed amendment or supplement, and will not make any such proposed amendment or supplement without the consent of each of the Placing Banks, such consent not to be unreasonably withheld or delayed, provided always that (i) nothing in this paragraph shall prevent the Company or the Founders or the Directors from complying with their obligations at law or under FSMA or the LPDT Rules and (ii) this paragraph shall be without prejudice to the rights of the Placing Banks pursuant to clause 13; and |
(B) | furnish to the Placing Banks such number of copies or such amendment or supplement as the Placing Banks may reasonably request. |
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6.2 | Each of the Company, the Founder Entities and the Directors undertakes promptly to notify each of the Placing Banks if it comes to its or his attention at any time on or before Admission that any person wishes to exercise statutory withdrawal rights after the issue by the Company of a Supplementary Prospectus. However, the Founder Entities shall have no right of withdrawal in the event a Supplementary Prospectus is issued. |
7. | SELLING RESTRICTIONS AND EXERCISE OF WARRANTS |
7.1 | The Company, each of the Founder Entities and each of the Directors severally undertakes that it has (and undertakes that each of its Affiliates has) complied, and will (and will procure that each of their respective Affiliates will) comply with all relevant laws and regulations of each relevant jurisdiction (including, without prejudice to the generality of the foregoing, all requirements of all applicable regulatory authorities in each such jurisdiction) in connection with the Offer and the release or distribution of any document or information relating to the Offer in each such jurisdiction. |
7.2 | The Company, each of the Founder Entities and each of the Directors severally undertakes that it has not (and undertakes that each of its Affiliates has not) made, and will not (and will procure that each of its Affiliates will not) make, directly or indirectly, offers or sales of any Shares or other securities of the Company exchangeable for, convertible into or representing the right to receive Shares or any such substantially similar securities or otherwise enter into any transaction (including any derivative transaction) in respect of such Shares, Warrants or other securities nor has it solicited, nor will it solicit, offers to buy or otherwise negotiate in respect of any such security under circumstances which, either separately or together, constitute an unlawful offering to the public in, or otherwise contravene the laws of any jurisdiction or which would require registration under the Securities Act and will, notwithstanding the foregoing, promptly, from time to time, take such action as each of the Placing Banks may reasonably request to qualify the Shares or Warrants for offering and sale under the securities laws of any such jurisdiction and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares. |
7.3 | For so long as there remain unexercised Warrants, the Company shall not allow any person to exercise their Warrants where to do so would affect the Companys ability to meet the requirements in Listing Rule 4.3.2 which require a sufficient number of Shares, being 25 per cent. of the Shares, to be in public hands. |
7.4 | Each of the Company, the Founder Entities and the Directors severally undertakes that it will and undertakes that its Affiliates and any person acting on its behalf (other than the Placing Banks and their respective Affiliates, as to whom no undertaking is made) will comply with all applicable provisions of the US federal securities laws in connection with the issue and delivery of any Shares upon any exercise of Warrants. |
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8. | DIVIDENDS AND SHARE CAPITAL |
Other than in connection with an Acquisition, the Company will not, on or after the date of this Agreement until after the Acquisition Completion Date declare, make or pay any dividends or other distribution on any of its share capital nor increase, reduce or modify any part thereof in any way.
9. | RELATED PARTY TRANSACTIONS |
For so long as the Company has a listing on the standard listing segment of the Official List, the Company will not enter into any transaction which would constitute a related party transaction as defined in Chapter 11 of the Listing Rules (were Chapter 11 of the Listing Rules to apply to the Company) without the specific prior approval of a majority of the Relevant Persons (where Relevant Persons means the non-executive directors determined by the Board of Directors to be independent for the purposes of the Corporate Governance Code and the Chairman of the Board of Directors from time to time, if he was independent at the time of his appointment for the purposes of the Corporate Governance Code).
10. | ACQUISITION |
The Company will not enter into the Acquisition without the specific prior approval of a majority of the Relevant Persons.
11. | AUTHORITY OF REGISTRARS AND DEPOSITARY |
The Company undertakes to provide the Registrars and the Depositary respectively with all necessary authorisations, information and instructions to enable the Registrars and the Depositary respectively to perform their duties in accordance with, and as contemplated by, this Agreement, the Final Prospectus (as amended or supplemented from time to time), the Registrars Agreement, the Depositary Agreement and the Deed Poll. Prior to the Acquisition Closing Date, the Company undertakes not to exercise any right to terminate the Registrars Agreement or the Depositary Agreement without the written consent of each of the Placing Banks.
12. | INVESTMENT COMPANY ACT |
The Company is not, and immediately after giving effect to the offer and sale of the New Ordinary Shares (with Matching Warrants) and the application of the proceeds thereof as described in the Prospectus, will not be an investment company as such term is defined in the Investment Company Act.
13. | NO DIRECTED SELLING EFFORTS |
None of the Company, the Founder Entities, the Directors, nor their respective Affiliates nor any person acting on its or their behalf (other than the Placing Banks and their respective Affiliates, as to whom no undertaking is made), directly or indirectly, will engage in any directed selling efforts (within the meaning of Regulation S) in connection with any offer or sale of the New Ordinary Shares or Matching Warrants.
14. | NO GENERAL SOLICITATION |
None of the Company, the Founder Entities, the Directors nor their respective Affiliates nor any person acting on its or their behalf (other than the Placing Banks and their respective Affiliates, as to whom no undertaking is made), directly or
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indirectly, will engage in any form of general solicitation or general advertising (within the meaning of Rule 502(c) of Regulation D) in connection with any offer or sale of the New Ordinary Shares or Matching Warrants.
15. | RULE 144A ELIGIBLE SECURITIES |
For so long as the New Ordinary Shares, Warrants and Shares issued and delivered upon exercise of Warrants are restricted securities within the meaning of Rule 144(a)(3) under the Securities Act, the Company will not become an open- end company, unit investment trust or face-amount certificate company, as such terms are defined in, and that it is not registered or required to be registered under Section 8 of, the Investment Company Act.
16. | RULE 144A INFORMATION |
For so long as any of the New Ordinary Shares, Warrants and Shares issued and delivered upon exercise of Warrants remain outstanding and are restricted securities (within the meaning of Rule 144(a)(3) under the Securities Act), the Company undertakes that during any period in which it is not subject to Section 13 or 15(d) of the Exchange Act nor exempt from reporting pursuant to Rule 12g3-2b under the Exchange Act, it will make available to any holder or beneficial owner of New Ordinary Shares, Warrants and Shares issued and delivered upon exercise of Warrants which are restricted securities and to any prospective purchaser (as designated by such holder or beneficial owner) of such restricted securities, in each case upon request, any information required to be provided by Rule 144A(d)(4) under the Securities Act. The undertakings of the company in this paragraph 16 are enforceable by such holders who are not parties to this Agreement by virtue of the Contracts (Rights of Third Parties) Act 1999.
17. | LIMITATIONS ON RESALES BY AFFILIATES |
The Company undertakes that, for so long as the New Ordinary Shares, Warrants and Shares issued and delivered upon exercise of Warrants are restricted securities within the meaning of Rule 144(a)(3) under the Securities Act, it will not, and will not permit any of its Affiliates to, resell in the United States any Shares and Warrants acquired by any of them other than in transactions that meet the applicable requirements of Regulation S or are otherwise exempt from, or not subject to, the registration requirements of the Securities Act.
18. | ERISA |
The Company undertakes that it will use its best endeavours to monitor its shareholder base and restrict ownership of, or other equity interests in, its Shares by Plan Investors to less than 25 per cent. of its Shares, after excluding the ownership of, or equity interests in, any Shares held by each of the Founders and the Directors and any of their respective affiliates (as such term is defined in the Plan Asset Regulations).
19. | BOARD COMPOSITION |
The Company and each of the Directors undertakes that it or he will not approve the appointment of a director to the Board of Directors unless the Board of Directors at the relevant time is satisfied that the Company will maintain its status as a foreign private issuer (as defined in Rule 405 under the Securities Act).
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20. | USE OF PROCEEDS |
20.1 | The Company will use the net proceeds received by it from the sale of the New Ordinary Shares (with Matching Warrants) and any proceeds raised from the subscription for the Founder Preferred Shares in the manner specified in the Prospectus under the paragraph entitled Use of proceeds in Part I (Investment Opportunity and Strategy) of the Final Prospectus. Neither the Company nor any of the Founders will, directly or indirectly, use the proceeds of the Offer and any proceeds received from the subscription for the Founder Preferred Shares or from any exercise of the Warrants or lend, contribute or otherwise make available such proceeds to any Affiliate, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any US sanctions administered by OFAC or any similar sanctions imposed by the European Union, the United Nations or any other body, governmental or otherwise. |
20.2 | Save as described in the section headed Use of Proceeds in Part I of the Prospectus, prior to completion of the Acquisition, the Company will invest or deposit the net proceeds received by it from the sale of the New Ordinary Shares (with Matching Warrants) and any proceeds raised from the subscription for the Founder Preferred Shares in US Treasuries or such money market fund instruments as approved by the Non-Founder Directors, in a manner that will not result in the Company being an investment company as such term is defined in the Investment Company Act. |
20.3 | Prior to completion of the Acquisition, the Company will invest or deposit any proceeds received from the exercise of Warrants in a manner that will not result in the Company being an investment company as such term is defined in the Investment Company Act. |
21. | COMPLIANCE WITH LPDT RULES |
Prior to the Acquisition Closing Date, each of the Directors will, and will ensure that the Company will, as of the date of this Agreement, comply with the LPDT Rules on an ongoing basis.
22. | REGISTER OF MEMBERS |
The Company undertakes that it has not maintained, does not currently maintain and will not maintain any register of members in the United Kingdom at any time prior to the Acquisition Closing Date.
23. | REORGANISATION IN CONNECTION WITH AN ACQUISITION |
Notwithstanding clause 16.4 of this Agreement and, without prejudice to paragraph 4 of Schedule 6, in the event that any of the Founder Entities or Directors receive, in connection with the Acquisition, an interest in an entity other than the Company (such securities, the New Securities ), each of the Founder Entities and Directors acknowledges and agrees that the New Securities shall be (i) subject to the transfer restrictions set forth in paragraph 4.1 of Schedule 6 and (ii) entitled to the benefits of the same exceptions to such transfer restrictions permitted by paragraph 4.2 of Schedule 6 to the Placing Agreement to the same extent as such exceptions apply to the Disposal of the Shares.
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24. | SUBSCRIPTION BY THE FOUNDERS |
Each of the Founder Entities severally undertakes that (i) no later than two Business Days prior to the Closing Date, it will (A) deposit cleared funds (in an amount equal to the Offer Price multiplied by the number of New Ordinary Shares (with Matching Warrants) set forth against its name in Part A of Schedule 9 (such New Ordinary Shares (with Matching Warrants), the Founder Subscription Securities , and such amount, the Founder Subscription Funds ) in an account at its custodian (or an affiliate thereof); and (B) instruct such custodian to enter into a receive versus payment instruction with the CREST Nominee providing for the transfer, as soon as reasonably practicable on the Closing Date, of the Founder Subscription Funds; and (ii) subject to Admission occurring not later than the Closing Date (or such later time and date as the Company and the Placing Banks may agree), (A) it will not, nor will it instruct any person acting on its behalf to, amend, modify, terminate or cancel the instruction described in sub-paragraph 24(i)(B) above; and (B) it will make or procure payment of the Founder Subscription Funds and subscribe for the Founder Subscription Securities on the Closing Date as described in sub-paragraph 24(i)(B) above.
Toms Acquisition I LLC confirms that its custodian for these purposes and the custodians details are as follows:
Agent Name: |
[omitted] |
|
Custodian Name: |
[omitted] |
|
Crest ID: |
[omitted] |
|
Reference: | [omitted] |
and Mariposa Acquisition II, LLC confirms that its custodian for these purposes and the custodians details are as follows:
Agent Name: |
[omitted] |
|
Custodian Name: |
[omitted] |
|
Crest ID: |
[omitted] |
|
Reference: | [omitted] |
Each of Noam Gottesman and Martin Franklin severally undertakes that each of Toms Acquisition I LLC and Mariposa Acquisition II, LLC, respectively, will comply with its obligations in this paragraph 24 of Schedule 6.
25. | ISSUANCE OF FOUNDER PREFERRED SHARES |
The Company undertakes that, until after the Acquisition Closing Date, it will not issue any Founder Preferred Shares unless such issuance has first been approved by a majority of Independent Non-Executive Directors and the Chairman of the Board of Directors.
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SCHEDULE 7
CERTIFICATES
PART A
CERTIFICATE FROM THE COMPANY
[Letterhead of the Company]
To: | Barclays Bank PLC | |||
Citigroup Global Markets Limited | ||||
[●] 2014 |
Dear Sirs
Proposed Offer
We refer to the Placing Agreement dated [●] 2014 in which a draft of this letter appears as Schedule 7 (the Placing Agreement ). Words and expressions defined in the Placing Agreement have the same meanings herein.
We confirm, with respect to the representations, warranties and undertakings given by the Company under the Placing Agreement, that (subject only to the giving of this letter):
i. | we have complied with our undertakings and obligations under the Placing Agreement in all respects to the extent that they fall due for performance on or before the date of this letter; |
ii. | none of the representations, warranties or undertakings referred to in clause 11 of the Placing Agreement has been breached or was untrue, inaccurate or misleading when made and none of such representations, warranties or undertakings would be breached or be untrue, inaccurate or misleading were it to be repeated by reference to the facts and circumstances subsisting at the date hereof; and |
iii. | since the date of the Placing Agreement, there has been no Material Adverse Change. |
This letter shall be governed by and construed in accordance with English law.
Yours faithfully |
|
Director for and on behalf of Nomad Holdings Limited |
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PART B
CERTIFICATE FROM THE FOUNDER ENTITIES
[Letterhead of the Founder Entity]
To: | Barclays Bank PLC | |||
Citigroup Global Markets Limited | ||||
[●] 2014 |
Dear Sirs
Proposed Offer
We refer to the Placing Agreement dated [●] 2014 in which a draft of this letter appears as Schedule 7 (the Placing Agreement ). Words and expressions defined in the Placing Agreement have the same meanings herein.
We confirm, with respect to the representations, warranties and undertakings given by [name of the Founder Entity] under the Placing Agreement, that (subject only to the giving of this letter):
i. | we have complied with our undertakings and obligations under the Placing Agreement in all respects to the extent that they fall due for performance on or before the date of this letter; |
ii. | none of the representations, warranties or undertakings referred to in clause 11 of the Placing Agreement has been breached or was untrue, inaccurate or misleading when made and none of such representations, warranties or undertakings would be breached or be untrue, inaccurate or misleading were it to be repeated by reference to the facts and circumstances subsisting at the date hereof; and |
iii. | since the date of the Placing Agreement, there has been no Material Adverse Change. |
This letter shall be governed by and construed in accordance with English law.
Yours faithfully |
|
Director for and on behalf of [name of the Founder Entity] |
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PART C
CERTIFICATE FROM THE FOUNDER DIRECTORS
To: | Barclays Bank PLC | |||
Citigroup Global Markets Limited | ||||
[●] 2014 |
Dear Sirs
Proposed Offer
I refer to the Placing Agreement dated [●] 2014 in which a draft of this letter appears as Schedule 7 (the Placing Agreement ). Words and expressions defined in the Placing Agreement have the same meanings herein.
I confirm, with respect to the representations, warranties and undertakings given by me under the Placing Agreement, that (subject only to the giving of this letter):
i. | I have complied with my undertakings and obligations under the Placing Agreement in all respects to the extent that they fall due for performance on or before the date of this letter; |
ii. | none of the representations, warranties or undertakings referred to in clause 11 of the Placing Agreement has been breached or was untrue, inaccurate or misleading when made and none of such representations, warranties or undertakings would be breached or be untrue, inaccurate or misleading were it to be repeated by reference to the facts and circumstances subsisting at the date hereof; and |
iii. | since the date of the Placing Agreement, there has been no Material Adverse Change. |
This letter shall be governed by and construed in accordance with English law.
Yours faithfully |
|
[Name of Founder Director] |
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SCHEDULE 8
SELLING RESTRICTIONS
United States
1. | Each of the Placing Banks severally understands and agrees that the New Ordinary Shares and Matching Warrants have not been and will not be registered under the Securities Act and may not be offered or sold within the United States, except pursuant to an exemption from, or in transactions not subject to, the registration requirements of the Securities Act. |
2. | Each of the Placing Banks severally agrees that its Affiliates and any persons acting on its or their behalf has not solicited and will not solicit offers, and has not offered or sold, and will not offer or sell, the New Ordinary Shares or Matching Warrants as part of its distribution at any time except (A) in the United States to (i) persons it reasonably believes to be QIBs in transactions meeting the requirements of Rule 144A or that are otherwise exempt from the registration requirements of the Securities Act or (ii) persons it reasonably believes to be accredited investors in transactions that are otherwise exempt from the registration requirements of the Securities Act and upon the receipt of a signed investor letter from the accredited investor substantially in the form of the US Purchasers Letter in Schedule 11 of this Agreement, in each case, in transactions that are exempt from the registration requirements of the Securities Act, or (B) outside the United States in accordance with Rule 903 of Regulation S. |
3. | Each of the Placing Banks severally agrees, represents, warrants and undertakes to the Company that neither it, its Affiliates nor any persons acting on its or their behalf has engaged or will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the New Ordinary Shares or Warrants. |
4. | Each of the Placing Banks severally agrees, represents, warrants and undertakes to the Company that neither it, its Affiliates nor any persons acting on its or their behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Rule 502(c) of Regulation D under the Securities Act) in connection with any offer or sale of the New Ordinary Shares or Matching Warrants in the United States. |
United Kingdom
5. | Each of the Placing Banks severally agrees, represents, warrants and undertakes to the Company and the Founders that it has not offered or sold and will not offer or sell any New Ordinary Shares or Matching Warrants to the public in the United Kingdom nor requested the admission of the Shares and Warrants to trading on a regulated market situated or operating in the United Kingdom prior to the Final Prospectus having been approved by the UK Listing Authority and made available in accordance with FSMA and the Prospectus Rules. |
6. | Each of the Placing Banks severally agrees, represents, warrants and undertakes to the Company and the Founders that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the New Ordinary Shares and Matching Warrants in, from or otherwise involving the United Kingdom. |
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European Economic Area
7. | In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State ), each of the Placing Banks represents and agrees it has not made and will not make an offer of any New Ordinary Shares or Matching Warrants to the public in that Relevant Member State, except that it may make an offer of any New Ordinary Shares or Matching Warrants to the public in that Relevant Member State at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: |
(i) | to any legal entity which is a qualified investor as defined under the Prospectus Directive; |
(ii) | to fewer than 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive); and |
(iii) | in any other circumstances falling within Article 3(2) of the Prospectus Directive, |
provided that no such offer of New Ordinary Shares or Matching Warrants shall result in a requirement for the publication by the Company or any Placing Bank of a prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in that Member State.
For the purposes of this provision, the expression an offer of any New Ordinary Shares or Matching Warrants to the public in relation to any New Ordinary Shares or Matching Warrants in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Offer and any New Ordinary Shares or Matching Warrants to be offered so as to enable an investor to decide to acquire any New Ordinary Shares or Matching Warrants, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State. The expression Prospectus Directive means Directive 2003/71/EC (and the amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State and the expression 2010 PD Amending Directive means Directive 2010/73/EC.
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SCHEDULE 9
PLACING ALLOCATION TABLE
PART A
NEW ORDINARY SHARES AND MATCHING WARRANTS TO BE ACQUIRED BY THE
FOUNDER ENTITIES
New Ordinary Shares (each with one Matching Warrant per Share) |
||
Mariposa Acqusition II, LLC | 750,000 New Ordinary Shares and 750,000 Matching Warrants | |
Toms Acquisition I LLC | 750,000 New Ordinary Shares and 750,000 Matching Warrants | |
Total | 1,500,000 New Ordinary Shares and 1,500,000 Matching Warrants |
PART B
PLACING COMMITMENTS
New Ordinary Shares (each with one Matching Warrant per Share) |
||
Barclays | 23,500,000 New Ordinary Shares and 23,500,000 Matching Warrants | |
Citi | 23,500,000 New Ordinary Shares and 23,500,000 Matching Warrants | |
Total | 47,000,000 New Ordinary Shares and 47,000,000 Matching Warrants |
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SCHEDULE 10
FORM OF LOCK-UP DEED
THIS DEED is made on by of
(the Covenantor).
WHEREAS:
(1) (i) Mariposa Acquisition II, LLC; (ii) Toms Acquisition I LLC; ((i) and (ii) each a Founder Entity ); (iii) Noam Gottesman; (iv) Martin Franklin; ((iii) and (iv) each a Founder Director ); (v) Barclays Bank PLC; (vi) Citigroup Global Markets Limited ((v) and (vi) each a Placing Bank ); (vii) Alun Cathcart; (viii) Guy Yamen, (ix) Lord Myners of Truro, CBE; ((vii), (viii), (ix) each a Non-Founder Director and each, together with each of the Founder Directors, a Director ); and (ix) Nomad Holdings Limited (the Company ) entered into a placing agreement on [●] 2014 (the Placing Agreement );
(2) Pursuant to the terms of the Placing Agreement the relevant disposing Founder Entity, Founder Director or Non-Founder Director has agreed to deliver to each of the Placing Banks and the Company, prior to or contemporaneously with making any Disposal permitted pursuant to paragraphs 4.2.1 to 4.2.7 of Schedule 6 of the Placing Agreement, a lock-up agreement in the agreed form, duly executed by the permitted transferee (or the trustee or legal guardian of such transferee) (a Permitted Transferee ) in respect of the Shares, Founder Preferred Shares or Warrants (as applicable) to be transferred to the Permitted Transferee; and
(3) The Covenantor is a Permitted Transferee and is entering into this Deed as required by the terms of the Placing Agreement.
NOW THIS DEED WITNESSES AS FOLLOWS:
1. | DEFINITION AND INTERPRETATION |
1.1 | Unless a contrary indication appears, a term defined in the Placing Agreement has the same meaning when used in this Deed; and |
1.2 | The principles of constructions set out in clauses 1.3 to 1.15 of the Placing Agreement shall be incorporated into this Deed mutatis mutandis as if set out in full in this Deed. |
2. | RESTRICTION ON TRANSFERS |
2.1 | The Covenantor represents, warrants and undertakes that it is a permitted transferee for the purposes of paragraphs 4.2.1 to 4.2.7 of Schedule 6 of the Placing Agreement. |
2.2 | Subject to clause 3, the Covenantor undertakes that it will not, and will procure that no Affiliate of it shall, without the prior written consent of each of the Placing Banks, during the period commencing on the date of this Deed and ending on the date which is the earlier of: (i) 365 days from the Acquisition Closing Date; or (ii) the liquidation of the Company for failure to complete an Acquisition, make any Disposal. |
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3. | EXCEPTIONS TO THE TRANSFER RESTRICTION |
3.1 | The undertaking in clause 2.2 shall not apply to any of the following provided that in each case the Disposal is conducted in accordance with all applicable laws (including the Securities Act), the Articles of Association and the Warrant Instrument (as applicable) (including without limitation that the transferee is not a Prohibited Person as described therein): |
3.1.1 | a Disposal by: (i) Mariposa Acquisition II, LLC or Martin Franklin of up to an aggregate amount of 10 per cent. of their Shares; or (ii) Toms Acquisition I LLC or Noam Gottesman of up to an aggregate amount of 10 per cent. of their Shares, as a bona fide gift (by reference, in each case, to the number of Shares and Warrants they held immediately following Admission); |
3.1.2 | a Disposal of Shares, Founder Preferred Shares or Warrants by the Covenantor as a bona fide gift made with the prior written consent of the Placing Banks; |
3.1.3 | a Disposal of Shares, Founder Preferred Shares or Warrants by a Coventantor for estate planning purposes to persons immediately related to the Coventantor by blood, marriage or adoption; |
3.1.4 | a Disposal of Shares, Founder Preferred Shares or Warrants by a Coventantor to (i) any trust that is solely for the benefit of the Coventantor and/or persons immediately related to the Coventantor by blood, marriage or adoption or (ii) any direct or indirect wholly-owned subsidiary of such trust; |
3.1.5 | a Disposal of Shares, Founder Preferred Shares or Warrants to any of the Companys Directors (from time to time); |
3.1.6 | a Disposal of Shares, Founder Preferred Shares or Warrants by a Covenantor to any of its Affiliates or direct or indirect holders of equity so long as such holders of equity are Affiliates of either a Founder Entity or a Founder Director; |
3.1.7 | a Disposal of Shares, Founder Preferred Shares or Warrants to a Founder Entity (or Affiliates or direct or indirect holders of equity, partnership interests or members of a Founder Entity); |
3.1.8 | a Disposal of Shares, Founder Preferred Shares or Warrants to a direct or indirect subsidiary of the Company or to a target company (or direct or indirect subsidiary) or shareholders of a target company in connection with, or as a result of transactions related to, the completion of the Acquisition; |
3.1.9 | after the Acquisition Closing Date, a Disposal of Shares by any Founder Entity (or in the event of a Disposal under clause 3.1.6, any Affiliate or direct or indirect equity holder, holder of partnership interest or member of such Founder Entity) to any person if and to the extent that either (i) the proceeds of sale are used solely for the purpose of making a payment by way of charitable gift to a charitable organisation registered with the applicable charities regulator or (ii) such person is a charitable organisation registered with the applicable charities regulator; provided, however, that the aggregate number of Shares which are the subject of such Disposals by a Founder Entity and any equity holder, holder of partnership interest or member referred to therein of such Founder Entity shall not exceed up to an aggregate amount of 10 per cent. of the number of Shares such Founder Entity would have held immediately following Admission having exercised the Warrants it held at that time; |
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3.1.10 | an acceptance of a general offer for the Shares or Warrants made to all holders of Shares or Warrants (as applicable) on equal terms; |
3.1.11 | the provision of an irrevocable undertaking to accept an offer as described in clause 3.1.10; |
3.1.12 | after the Acquisition Closing Date, any Disposal of Shares by a Covenantor to any person if and to the extent that the proceeds of sale are used solely for the purpose of meeting any tax liability incurred in connection with, or as a result of transactions related to, the completion of the Acquisition; or |
3.1.13 | a Disposal of any Shares or Warrants acquired by a Covenantor after the date of Admission in any open-market transaction; |
provided that: (a) with respect to any of the Disposals listed in clauses 3.1.1 to 3.1.8 above, the Covenantor shall deliver to each of the Placing Banks and the Company, prior to, or contemporaneously with, making such a Disposal, an enforceable Lock-Up Deed in the same form as this Deed, duly executed by the permitted transferee (or the trustee or legal guardian of such transferee) in respect of the Shares, Founder Preferred Shares or Warrants (as applicable) to be transferred to him, her or it; and (b) the Covenantor undertakes to each of the Placing Banks and the Company that any Disposal by it pursuant to this Deed shall, to the extent permitted by relevant law or regulation, be notified in writing to each of the Placing Banks and the Company no later than five Business Days after the entry into of any agreement relating to the same.
3.2 | Promptly following receipt of an agreement referred to in sub-paragraph (a) above, the Company shall duly execute such agreement and deliver it to the Placing Banks. |
4. | CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 |
No term of this Deed is enforceable under the Contracts (Rights of Third Parties Act) 1999, by a person who is not a party to this Deed.
5. | PROCESS AGENT |
5.1 | Each of the Company and the Covenantor shall maintain an agent for service of process in England. |
5.2 | Each of the Company and the Covenantor shall, prior entering into this Deed, appoint [●] of [●] as process agent in the UK (the Agent ) to act as its agent to accept service of process in England in any legal action or proceedings arising out of or in connection with this Deed and shall procure that the Agent will, no later than the date hereof, confirm in writing to the Placing Banks its acceptance of such appointment. All correspondence with the Agent shall be marked for the attention of the party notified to the Placing Banks in the written acceptance letter mentioned in this clause 5.2 and delivered in accordance with clause 6 and clause 15 of the Placing Agreement. |
5.3 |
If the Agent ceases to be able to act as such or to have an address in England, each of the Company and the Covenantor agrees to appoint a new process agent having an address in England and to deliver to the Placing Banks within 10 Business Days a copy of a written acceptance of appointment by the new process agent. If either of the Company or the Covenantor does not make such an appointment within 10 Business Days of such cessation, then each of the Placing |
92
Banks, acting reasonably, may do so on behalf of the Company and the Covenantor and at the cost of the Company and the Covenantor, and shall notify the Company and the Covenantor if it does so. |
6. | GENERAL |
6.1 | The provisions of clauses 15.1 (subject to clause 6.2 below), 15.2, 15.3, 15.4, 16.8, 16.9, 16.12, 16.13, 17.4 and 18 of the Placing Agreement shall be incorporated into this Deed mutatis mutandis as if set out in full in this Deed. References in these incorporated clauses to Agreement shall be deemed to be to this Deed, references to Founders, Non-Founder Directors, Founder Entities and Directors shall be deemed to be solely to the Covenantor (save that the undertaking in clause 18.2.3 shall be deemed made by each of the Company and the Covenantor), and references to prior to Admission on the Closing Date shall be deemed to be to prior to entering into this Deed. |
6.2 | For the purposes of clause 15 of the Placing Agreement, the relevant details of the Covenantor are set out below and the relevant details of each of the Company and the Placing Banks are as set out in clause 15 of the Placing Agreement. |
Relevant details for the Covenantor:
Address:
Fax Number:
For the attention of:
IN WITNESS WHEREOF , this Deed has been entered into the day and year first above written.
EXECUTED as a Deed by | ) | |||
[ NAME OF COVENANTOR ] | ) | |||
in the presence of: | ) | |||
) | ||||
Signature of witness | ||||
Name of witness | ||||
(in BLOCK CAPITALS) | ||||
Address of witness | ||||
EXECUTED as a Deed by | ) | |||
NOMAD HOLDINGS LIMITED | ) | |||
acting by: | ) | |||
) | ||||
Director | ||||
Director/Secretary |
93
SCHEDULE 11
FORM OF US PURCHASERS LETTER
Nomad Holdings Limited
Nemours Chambers
Road Town
Tortola, British Virgin Islands
Citigroup Global Markets Inc. ( Citi )
390 Greenwich Street
New York 10028
United States
Attention: Equity Syndicate Desk
Barclays Bank PLC and Barclays Capital, Inc. ( Barclays )
5, The North Colonnade
London E14 4BB
United Kingdom
Attention: Equity Syndicate Desk
(each of Citi and Barclays being a Placing Bank and together, the Placing Banks )
[●] 2014
Ladies and Gentlemen:
Subscription for new ordinary shares of no par value (the New Ordinary Shares) and matching warrants (Matching Warrants and together the Securities) of Nomad Holdings Limited (the Company)
In connection with our subscription for Securities of the Company, we represent, warrant, agree and acknowledge as follows:
1. | We are subscribing for the Securities for investment purposes, and not with a view to distribution or resale, directly or indirectly, in the United States. |
2. | We acknowledge that we have received and read a copy of the preliminary prospectus dated 7 April 2014 and the placing announcement dated [●] 2014 relating to the Securities (together the Prospectus ). In particular, we have read the section titled Risk Factors as set out in the Prospectus. We have had access to such information regarding the Company and the Securities have made such investigation with respect thereto as we deem necessary to make our investment decision and we have made our own assessment and have satisfied ourselves concerning the relevant tax, legal, currency and other economic considerations relevant to our investment in the Securities. We have had the opportunity to ask questions and receive answers concerning the terms and conditions of the offering of the Securities. |
94
3. | We acknowledge that neither Placing Agent is making any recommendations to us or advising us regarding the suitability or merits of any transaction we may enter into in connection with the Placing, and we acknowledge that participation in the Placing is on the basis that we are not and will not be a client of either of the Placing Agents and that the Placing Agents are acting for the Company and no one else in connection with the Placing, and will not be responsible to anyone other than their respective clients for the protections afforded to their clients, nor for providing advice in relation to the Placing, the contents of the Prospectus or any transaction, arrangements or other matters referred to herein, or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of the Placing Agents rights and obligations under the Placing Agreement, including any right to waive or vary any condition or exercise any termination right contained therein; |
4. | We hereby acknowledge to the Placing Agents and the Company that we have been warned that an investment in the Securities is only suitable for acquisition by the person who: |
a. | has a significantly substantial asset base such that would enable the person to sustain any loss that might be incurred as a result of acquiring the Securities; and |
b. | is sufficiently financially sophisticated to be reasonably expected to know the risks involved in acquiring the Securities. |
5. | We are an accredited investor ( AI ) within the meaning of Regulation D under the US Securities Act of 1933, as amended (the Securities Act ), and are acquiring the Securities for our own account or for the account of an AI. We meet the criteria for being an AI on the basis that we are one of the following: |
| a bank, insurance company, registered investment company, business development company, or small business investment company; |
| a charitable organisation, corporation, or partnership with assets exceeding $5 million; |
| a business in which all the equity owners are AIs; |
| a natural person who has individual net worth, or joint net worth with the persons spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person; or |
| a trust with assets in excess of $5 million not formed to acquire the securities offered, whose purchases a sophisticated person makes. |
6. | If we are acquiring Securities for the account of one or more AIs, we represent that we have sole investment discretion with respect to each such account and that we have full power to make the acknowledgements, representations and agreements contained herein on behalf of each such account. |
95
7. | Except with the express consent of the Company given in respect of a subscription for the Securities, no portion of the assets used by us to purchase, and no portion of the assets used by us to hold the Securities or any beneficial interest therein constitutes or will constitute the assets of (a) an employee benefit plan that is subject to Part 4 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended, ( ERISA ), (b) a plan, individual retirement account or other arrangement that is subject to Section 4975 of the Code, or (c) entities whose underlying assets include plan assets of any plan, account or arrangement described in (a) or (b) above, or (d) any governmental plan, church plan, non-US plan or other investor whose purchase or holding of Securities would be subject to any state, local, non-US or other laws or regulations similar to Part 4 of Subtitle B of Title I of ERISA or section 4975 of the Code or that would have the effect of the regulations issued by the US Department of Labor set forth at 29 CFR section 251 0.3-1 01, as modified by section 3(42) of ERISA. |
8. | If an entity, we were not formed for the purposes of investing in Securities of the Company. |
9. | We acknowledge that we are not acquiring the Securities as a result of any general solicitation or general advertising (as those terms are defined in Regulation D under the Securities Act). |
10. | We understand that the Securities are being offered in a transaction not involving any public offering in the United States within the meaning of the Securities Act and have not been and will not be registered under the Securities Act, and that the Securities are restricted securities within the meaning of Rule 144(a)(3) under the Securities Act and (a) we agree that the Securities may not be offered, resold, pledged or otherwise transferred except (i) outside the United States in a transaction complying with the provisions of Rule 903 or Rule 904 of Regulation S under the Securities Act, (ii) to a person whom we reasonably believe is a qualified institutional buyer ( QIB ) within the meaning of Rule 144A under the Securities Act ( Rule 144A ) purchasing for its own account or for the account of a QIB in a transaction meeting the requirements of Rule 144A, (iii) in accordance with Rule 144 under the Securities Act (if available), (iv) pursuant to another available exemption from the registration requirements of the Securities Act or (v) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States, and (b) we will, and each subsequent holder will be required to, notify any subsequent purchaser of the Securities from us or it of the resale restrictions referred to in (a) above. |
11. | We understand that the Company is not, and does not propose to be, registered as an investment company under the Investment Company Act and the rules thereunder. If in the future we decide to offer, sell, transfer, assign, novate or otherwise dispose of the Securities, we will do so only under the circumstances which will not require the Company to register under the US Investment Company Act. |
12. | We are aware, and each beneficial owner of the Securities has been advised, that the issue of the Securities to us is being made in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act. |
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13. | We understand that no representation has been made as to the availability of Rule 144 or any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Securities. We understand that the Securities may not be deposited into any unrestricted depositary facility established or maintained by a depository bank, unless and until such time as the Securities are no longer restricted securities within the meaning of Rule 144(a)(3) under the Securities Act. |
14. | We acknowledge that any sale, transfer, assignment, novation, pledge or other disposal made other than in compliance with such laws and the above-stated restrictions will be subject to the forfeiture and/or compulsory transfer provisions as provided in the Companys Articles. |
15. | We satisfy any and all standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our residence or otherwise applicable to us. |
16. | We are empowered, authorised and qualified to purchase the Securities and the person signing this letter on our behalf has been duly authorised by us to do so. |
17. | We acknowledge the content of the Prospectus is exclusively the responsibility of the Company and the Directors and none of the Placing Agents, the Registrars nor any person acting on their behalf nor any of their respective affiliates is responsible for or shall have any liability for any information, representation or statement contained in this letter or any information published by or on behalf of the Company, and none of the Placing Agents, the Registrars nor any person acting on their behalf nor any of their respective affiliates will be liable for our decision to participate in the Placing based on any information, representation or statement contained in this letter or otherwise. |
18. | We have not relied on any information given or representations, warranties or statements made by the Company, the Directors, the Founders, the Founder Entities, the Placing Agents, the Registrars or any other person in connection with the Placing other than information contained in the Prospectus and/or any supplementary prospectus or regulatory announcement issued by or on behalf of the Company on or after the date hereof and prior to Admission. We irrevocably and unconditionally waive any rights it may have in respect of any other information or representation. |
We understand that the foregoing representations, warranties, agreements and acknowledgments are required in connection with United States and other securities laws and you and your respective affiliates, the underwriter of the offering and their respective affiliates and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. If any of the representations or agreements made by us are no longer accurate or have not been complied with, we will immediately notify the Company. We irrevocably authorise you and your respective affiliates and the underwriters of the offering and their respective affiliates to produce this letter to any interested party in any administrative or legal proceeding or official enquiry with respect to the matters set forth herein.
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Very truly yours | ||
|
||
[Name of Investor] | ||
By: | ||
Title: |
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SCHEDULE 12
AI PLACEES
Name |
Address |
New Ordinary
Shares |
Matching
Warrants |
Subscription
Price |
||||
- |
- | - | - | - |
Aggregate AI Subscription Price | Nil |
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for and on behalf of NOMAD HOLDINGS LIMITED SIGNED by: |
) ) ) |
|
for and on behalf of BARCLAYS BANK PLC SIGNED by: |
) ) ) |
|
||
DAVID SEAL, DIRECTOR |
for and on behalf of CITIGROUP GLOBAL MARKETS LIMITED SIGNED by: A. CARTER |
) ) ) ) |
|
for and on behalf of TOMS ACQUISITION I LLC SIGNED by: |
) ) ) |
|
for and on behalf of MARIPOSA ACQUISITION II, LLC SIGNED by: |
) ) ) |
|
SIGNED by NOAM GOTTESMAN |
) ) |
|
SIGNED by MARTIN FRANKLIN |
) ) |
|
SIGNED by ALUN CATHCART |
) ) |
|
SIGNED by GUY YAMEN |
) ) |
|
SIGNED by LORD MYNERS OF TRURO, CBE |
) ) |
|
Exhibit 21.1
Significant Subsidiaries
The following table provides a list of all of our significant subsidiaries.
Name |
Country of Incorporation |
|
Iglo Foods Holding Limited | England | |
Iglo Foods Holdco Limited | England | |
Iglo Foods Finco Limited | England | |
Iglo Foods Midco Limited | England | |
Iglo Foods Group Limited | England | |
Iglo Holding GmbH | Germany | |
Liberator Germany Newco GmbH | Germany | |
Frozen Fish International GmbH | Germany | |
Iglo GmbH | Germany | |
Iglo Services GmbH | Germany | |
Birds Eye Ipco Limited | England | |
Birds Eye Limited | England | |
Iglo Foods Bondco plc | England | |
C.S.I. Compagnia Surgelati Italiana S.p.A. | Italy | |
Iglo Austria Holdings GmbH | Austria | |
Iglo Austria GmbH | Austria | |
Iglo France S.A.S. | France | |
Iglo Belgium S.A. | Belgium | |
Iglo Netherland B.V. | Netherlands | |
Iglo Portugal | Portugal | |
Birds Eye Ireland Limited | Republic of Ireland | |
Iglo Dondurulmus Gida Hizmetleri Limited Sirketi | Turkey | |
Limited Liability Company Iglo | Russia | |
Iglo Foods Finance Limited | England | |
Findus Sverige Holdings AB | Sweden | |
Findus Sverige AB | Sweden | |
Findus Holding France SAS | France | |
Findus France SAS | France | |
Foodvest International AB | Sweden | |
Lion/Gem Norway 1 AS | Norway | |
Findus Norge Holdings AS | Norway | |
Findus Norge AS | Norway |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form F-1 of Nomad Foods Limited of our report dated 8 September 2015 relating to the financial statements of Nomad Foods Limited, which appear in such Registration Statement. We also consent to the reference to us under the heading Experts Predecessor and Successor in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
London, United Kingdom
23 November 2015
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form F-1 of Nomad Foods Limited of our report dated 8 September 2015 relating to the financial statements of Iglo Foods Holdings Limited, which appear in such Registration Statement. We also consent to the reference to us under the heading Experts Predecessor and Successor in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
London, United Kingdom
23 November 2015
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form F-1 of Nomad Foods Limited of our report dated 8 September 2015 relating to the financial statements of Findus Sverige AB, which appears in such Registration Statement. We also consent to the reference to us under the heading ExpertsFindus in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
London, United Kingdom
23 November 2015