Exhibit (b)(5)
TERMS AND CONDITIONS OF THE BONDS
The following is the text of the Terms and Conditions of the Bonds
substantially in the form in which they will be endorsed on the Bonds (except
that italicised text will not appear on the Bonds):
The issue of the U.S.$750,000,000 Step-Up Callable Floating Rate
Subordinated Guaranteed Bonds due 2010 (the "Bonds", which expression shall in
these Terms and Conditions (the "Conditions"), unless the context otherwise
requires, include any further bonds issued pursuant to Condition 12 and forming
a single series therewith) of Credit Suisse Group Finance (U.S.) Inc. (the
"Issuer") was authorised by a resolution of the Board of Directors of the Issuer
dated 2nd October, 2000. The Bonds have the benefit of an irrevocable and
unconditional subordinated guarantee of Credit Suisse Group (the "Guarantor")
authorised pursuant to a resolution of the Board of Directors of Credit Suisse
Group dated 28th August, 2000. A fiscal agency agreement (the "Fiscal Agency
Agreement") dated 5th October, 2000 has been entered into in relation to the
Bonds among the Issuer, the Guarantor, The Chase Manhattan Bank, as fiscal and
principal paying agent, and the paying agents named therein. The fiscal agent
and the paying agents for the time being are referred to below respectively as
the "Fiscal Agent" and the "Paying Agents" (which expression shall include the
Fiscal Agent). The Fiscal Agency Agreement includes the form of the Bonds and
the interest coupons relating to them (the "Coupons", which expression shall,
unless the context otherwise requires, include the talons for further interest
coupons (the "Talons")). Copies of the Fiscal Agency Agreement are available for
inspection during normal business hours at the specified offices of the Paying
Agents. The holders of the Bonds (the "Bondholders") and the holders of the
Coupons (the "Couponbolders", and collectively with the Bondholders, the
"holders") are entitled to the benefit of, and are deemed to have notice of, all
the provisions of the Fiscal Agency Agreement applicable to them.
1. Form, Denomination and Title
(a) Form and denomination
The Bonds are serially numbered and in bearer form in the denominations
of U.S.$1,000, U.S.$10,000 and U.S.$100,000, each with Coupons attached on
issue. Bonds of one denomination may not be exchanged for Bonds of any other
denomination.
(b) Title
Title to the Bonds and Coupons passes by delivery. The holder of any
Bond or Coupon will (except as otherwise required by law) be treated as its
absolute owner for all purposes (whether or not such Bond or Coupon is overdue
and regardless of any notice of ownership, trust or any interest in it, any
writing on it, or its theft or loss) and no person will be liable for so
treating the holder.
2. Status
The Bonds and Coupons constitute direct, unconditional, unsecured and
subordinated obligations of the Issuer and rank pari passu with all other
present or future unsecured and subordinated obligations of the Issuer and
without any preference among themselves. The
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payment of principal and interest on the Bonds will be subordinated to the prior
payment in full of all present and future creditors of the Issuer other than
those creditors whose claims, by operation of law or pursuant to their terms,
rank or are expressed to rank pari passu with or junior to the claims of
holders.
Subject to applicable law, no holder may exercise, claim or plead any
right of set-off, compensation or retention in respect of any amount owed to it
by the Issuer arising under or in connection with the Bonds or the Coupons and
each holder shall, by virtue of being the holder of any Bond or Coupon (as the
case may be), be deemed to have waived all such rights of set-off, compensation
or retention.
The subordination provisions set out above are irrevocable. The Issuer
may not create or permit to exist any charge or other security interest over its
assets to secure the obligations of the Issuer in respect of the Bonds.
3. Guarantee
The complete text of the Guarantee is set out immediately following
these Conditions.
(a) Guarantee
The Guarantor has, pursuant to a guarantee dated 5th October, 2000 and
governed by Swiss law, undertaken for the benefit of the holders irrevocably and
unconditionally to guarantee, on a subordinated basis, the payment of principal
and interest and any other amounts due under these Conditions (the "Guarantee").
(b) Status
The Guarantee constitutes an unconditional, unsecured and subordinated
obligation of the Guarantor and ranks pari passu with all other present or
future unsecured and subordinated obligations of the Guarantor. The rights of
holders under the Guarantee will be subordinated to the claims of all present
and future creditors of the Guarantor other than those creditors whose claims,
by operation of law or pursuant to their terms, rank or are expressed to rank
pari passu with or junior to the claims of holders.
In addition, the rights of holders under the Guarantee will effectively
be subordinated to the claims of all present and future creditors of the
Guarantor's subsidiaries.
Subject to applicable law, no holder may exercise, claim or plead any
right of set-off, compensation or retention in respect of any amount owed to it
by the Guarantor arising under or in connection with the Guarantee and each
holder shall, by virtue of being the holder of any Bond or Coupon (as the case
may be), be deemed to have waived all such rights of set-off, compensation or
retention.
The subordination provisions set out above are irrevocable. The
Guarantor may not create or permit to exist any charge or other security
interest over its assets to secure the obligations of the Guarantor in respect
of the Guarantee.
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(c) Rights of holders
All rights in respect of the Guarantee are held, and may be exercised
exclusively, by the holders, each of whom is directly entitled to require the
Guarantor to fulfill its obligations under the Guarantee in respect of such
holder's claims under the Bonds and may enforce such claims directly against the
Guarantor without first having recourse to the Issuer.
(d) Consolidation or merger
The Guarantor has agreed pursuant to the Guarantee that it will not
consolidate with or merge into any other Person (as defined below) or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, unless the Person formed by such consolidation or into which the
Guarantor is merged or the Person that acquires by conveyance or transfer, or
which leases, the properties and assets of the Guarantor substantially as an
entirety shall be a corporation (including a bank), partnership, limited
liability company or trust (or a branch of any of the foregoing), shall be
validly existing under the laws of the jurisdiction of its organization and
shall expressly assume in writing the guarantee of the due and punctual payment
of the principal of and interest on the Bonds (including any additional amounts
as specified in Condition 7) pursuant to the terms of the Guarantee and the
performance or observance of every covenant in the Guarantee on the part of the
Guarantor to be performed or observed.
"Person" means any individual, corporation, bank, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
(e) Modification of Guarantee
For so long as any of the Bonds are outstanding, any amendment or
modification of the Guarantee shall require the consent of Bondholders holding
at least 75 per cent. in principal amount of the Bonds for the time being
outstanding, except for amendments or modifications to correct any manifest
error in the Guarantee, which shall not require any such consent.
4. Interest
(a) The Bonds bear interest from, and including, 5th October, 2000 (the
"Issue Date") at the applicable rate determined in accordance with paragraph (c)
below (the "Rate of Interest"). Interest on the Bonds is payable quarterly in
arrear on 5th January, 5th April, 5th July and 5th October in each year (each an
"Interest Payment Date"), the first Interest Payment Date being 5th January,
2001, provided, however, that if any Interest Payment Date would otherwise fall
on a day which is not a Business Day (as defined below) in New York City, it
will be postponed to the next Business Day in New York City unless it would
thereby fall into the next calendar month, in which case it will be brought
forward to the immediately preceding Business Day in New York City. The period
from, and including, the Issue Date to, but excluding, the first Interest
Payment Date and each subsequent period from, and including, an Interest Payment
Date to, but excluding, the next succeeding Interest Payment Date is called an
"Interest Period".
"Business Day" means a day on which commercial banks and foreign
exchange markets are open in the relevant city.
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(b) Each Bond will cease to bear interest from the due date for redemption
unless, upon due presentation, payment of principal is improperly withheld or
refused. In such event it shall continue to bear interest (both before and after
judgment) at the Rate of Interest then in effect until whichever is the earlier
of (a) the day on which all sums due in respect of such Bond up to that day are
received by or on behalf of the relevant holder, and (b) the day seven days
after the Fiscal Agent has notified Bondholders of receipt of all sums due in
respect of all the Bonds up to that seventh day (except to the extent that there
is failure in the subsequent payment to the relevant holders under these
Conditions).
(c) The Rate of Interest in respect of each Interest Period will be
determined by The Chase Manhattan Bank or its duly appointed successor (the
"Calculation Agent") in accordance with the following provisions:
(i) on the second Business Day in London before the commencement
of the relevant Interest Period (the "Interest Determination
Date"), the Calculation Agent will determine the Screen Rate
(as defined below) as at or about 11.00 a.m., London time, on
the Interest Determination Date in question;
(ii) if the Screen Rate is unavailable, the Calculation Agent will:
(A) request each of the Reference Banks (as defined
below) to provide the Calculation Agent with its
offered quotation to leading banks in the London
interbank market for U.S. dollar deposits for a
period equal to the relevant Interest Period, as at
or about 11.00 a.m., London time, on the Interest
Determination Date in question; and
(B) determine the arithmetic mean (rounded, if necessary,
to the fifth decimal place, with 0.000005 being
rounded upwards) of the offered quotations; and
(iii) if fewer than two such quotations are provided as requested,
the Calculation Agent will determine the arithmetic mean
(rounded, if necessary, as aforesaid) of the rates quoted by
major banks in New York City, selected by the Calculation
Agent, at approximately 11.00 a.m., New York City time, on the
Interest Determination Date in question, for loans in U.S.
dollars to leading European banks for a period equal to the
relevant Interest Period commencing on the first day of the
relevant Interest Period,
and the Rate of Interest for such Interest Period shall be the rate or, as the
case may be, the arithmetic mean so determined plus the Margin (as defined
below), provided, however, that if the Calculation Agent is unable to determine
a rate, or, as the case may be, an arithmetic mean in accordance with the above
provisions in relation to any Interest Period the Rate of Interest applicable to
the Bonds for such Interest Period shall be the Rate of Interest applicable to
the Bonds for the last preceding Interest Period to which one of subparagraphs
(i), (ii) or (iii) of this paragraph (c) shall have applied.
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"Margin" means (x) during the period from, and including, the Issue
Date to, but excluding, the Interest Payment Date falling in October 2005, 0.625
per cent. per annum, and (y) thereafter, 1.375 per cent. per annum.
"Reference Banks" means four major banks in the London interbank market
selected by the Calculation Agent.
"Screen Rate" means (x) the offered rate for three-month deposits in
U.S. dollars displayed on Telerate Page 3750 (or such replacement page on that
service which displays the information), or (y) if the service specified in (x)
above does not, or ceases to, display the information, the arithmetic average
(rounded upwards, if necessary, to the nearest fifth decimal place with 0.000005
being rounded upwards), determined by the Calculation Agent of the rates for
three-month deposits in U.S. dollars as displayed on the Reuters Screen LIBO
Page (or such replacement page on that service which displays the information),
or (z) if the service specified in (y) above does not, or ceases to, display the
information, such other screen service as may be determined by the Calculation
Agent.
(d) The Calculation Agent shall, as soon as practicable after 11.00 a.m.,
London time, on each Interest Determination Date, but in no event later than the
second Business Day in London thereafter, determine the U.S. dollar amount
payable in respect of interest with respect to each denomination of Bonds (the
"Interest Amount") for the relevant Interest Period. Each Interest Amount shall
be determined by applying the Rate of Interest for such Interest Period to the
principal amount of one Bond of the relevant denomination multiplying the
product by the actual number of days in such Interest Period divided by 360 and
rounding the resultant figure to the nearest cent (half a cent being rounded
upwards).
(e) The Calculation Agent shall use its best efforts to cause the Rate of
Interest and each Interest Amount for each applicable Interest Period to be
published in accordance with Condition 13 and, so long as the Bonds are listed
on the Luxembourg Stock Exchange, to be notified to the Luxembourg Stock
Exchange as soon as possible after their determination but in no event later
than the second Business Day in London thereafter.
(f) All notifications, opinions, determinations, certificates,
calculations, rates and decisions given, expressed, made or obtained for the
purposes of the provisions of this Condition, whether by the Reference Banks or
any of them or the Calculation Agent, will (in the absence of wilful default,
bad faith or manifest error) be final and binding on the Issuer and the
Guarantor, the Reference Banks, the Calculation Agent, the Paying Agents, the
Fiscal Agent and all holders and (in the absence of wilful default, bad faith or
manifest error) no liability to the Issuer, the Guarantor or the holders shall
attach to the Reference Banks or the Calculation Agent in connection with the
exercise or non-exercise by them of their powers, duties and discretions under
this Condition.
(g) The Issuer and the Guarantor will procure that so long as any of the
Bonds remain outstanding there shall at all times be a Calculation Agent for the
purposes of the Bonds. The Issuer and the Guarantor may at any time (and if for
any reason the Calculation Agent at any time defaults in its obligation to
determine the Rate of Interest or calculate any Interest Amount in accordance
with paragraph (c) or (d) above, as the case may be, or is unable or unwilling
to
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continue to act as Calculation Agent, the Issuer and the Guarantor, as promptly
as practicable, will) terminate the appointment of the Calculation Agent and
replace it with another leading commercial bank or investment bank. The
Calculation Agent may not resign its duties or be removed without a successor
having been appointed. Notice of any change in the Calculation Agent will be
given to the holders in accordance with Condition 13.
5. Redemption and Purchase
(a) Final redemption
Unless previously redeemed, or purchased and cancelled, the Bonds will
be redeemed at their principal amount on the Interest Payment Date falling in
October 2010. The Bonds may not be redeemed at the option of the Issuer other
than in accordance with this Condition.
(b) Redemption at the Option of the Issuer
The Bonds may be redeemed at the option of the Issuer in whole, but not
in part, on the Interest Payment Date falling in October 2005 on giving not less
than 30 nor more than 60 days' notice to the Bondholders (which notice shall be
irrevocable), at their principal amount.
(c) Redemption for taxation reasons
The Bonds may be redeemed at the option of the Issuer in whole, but not
in part, on any Interest Payment Date at any time prior to maturity on giving
not less than 30 nor more than 60 days' notice to the Bondholders (which notice
shall be irrevocable), at their principal amount, (i) if (x) the Issuer has or
will or the Guarantor would, if required to pay under the Guarantee, become
obliged to pay additional amounts as provided or referred to in Condition 7 as a
result of any change in, or amendment to, the laws or regulations of the United
States or Switzerland, as the case may be, or of any political subdivision or
any authority thereof or therein having power to tax, or any change in the
application or official interpretation of such laws or regulations, which change
or amendment becomes effective on or after the issue date of the Bonds, and (y)
such obligation cannot be avoided by the Issuer (or the Guarantor, as the case
may be) taking reasonable measures available to it; or (ii) if the Issuer or the
Guarantor is prevented by applicable law from making payment of the full amount
then due and payable. Prior to the publication of any notice of redemption
pursuant to this paragraph, the Issuer shall deliver to the Fiscal Agent a
certificate signed by two Directors of the Issuer (or two Managing Directors of
the Guarantor, as the case may be) stating that the Issuer is entitled to effect
such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Issuer so to redeem have occurred, and
an opinion of independent legal advisers of recognised standing to the effect
that the Issuer (or the Guarantor, as the case may be) has or will become
obliged to pay such additional amounts as a result of such change or amendment
or become prevented by applicable law from making such payments, as the case may
be.
In addition, if the Issuer shall determine that any payment made
outside the United States by the Issuer (or the Guarantor, as the case may be)
or any Paying Agent of principal or interest due in respect of any Bond would,
under any present or future laws or regulations of the United States, be subject
to any certification, identification or other information reporting requirement
of any kind, the effect of which requirement is the disclosure to the Issuer,
the Guarantor, any
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Paying Agent or any governmental authority of the nationality, residence or
identity of a beneficial owner of such Bond or Coupon who is a United States
Alien (other than such a requirement (a) which would not be applicable to a
payment made by the Issuer (or the Guarantor, as the case may be) or any Paying
Agent (i) directly to the beneficial owner or (ii) to a custodian, nominee or
other agent of the beneficial owner, or (b) which can be satisfied by such
custodian, nominee or other agent certifying to the effect that such beneficial
owner is a United States Alien, provided that, in each case referred to in
clauses (a)(ii) and (b), payment by such custodian, nominee or agent to such
beneficial owner is not otherwise subject to any such requirement), the Issuer
shall redeem the Bonds, in whole but not in part, at their principal amount
(together with interest accrued to the date fixed for redemption) or, at the
election of the Issuer, if the conditions of the next paragraph are satisfied,
pay the additional amounts specified in such paragraph. The Issuer shall make
such determination and election as soon as practicable and publish prompt notice
thereof (the "Determination Notice") stating the effective date of such
certification, identification or other information reporting requirements,
whether the Issuer will redeem the Bonds or whether the Issuer has elected to
pay the additional amounts specified in the next paragraph, and (if applicable)
the last date by which the redemption of the Bonds must take place, as provided
in the next succeeding sentence. If the Issuer elects to redeem the Bonds
pursuant to this paragraph, such redemption shall take place on such date, not
later than one year after the publication of the Determination Notice, as the
Issuer shall elect on giving not less than 30 nor more than 60 days' notice to
the Bondholders. Notwithstanding the foregoing, the Issuer shall not so redeem
the Bonds if the Issuer or the Guarantor shall subsequently determine, not less
than 30 days prior to the date fixed for redemption, that subsequent payments
would not be subject to any such certification, identification or other
information reporting requirement, in which case the Issuer or the Guarantor
shall publish prompt notice of such determination and any earlier redemption
notice shall be revoked and of no further effect. Prior to the publication of
any notice of redemption pursuant to this paragraph, the Issuer shall deliver to
the Fiscal Agent a certificate signed by two Directors of the Issuer (or two
Managing Directors of the Guarantor, as the case may be) stating that the Issuer
is entitled to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Issuer so to redeem
have occurred, and an opinion of independent legal advisers of recognized
standing to such effect based on such statement of facts.
If and so long as the certification, identification or other
information reporting requirements referred to in the preceding paragraph would
be fully satisfied by payment of a backup withholding tax or similar charge
(without any requirement that the nationality, residence or identity of such
beneficial owner be disclosed to the Issuer, the Guarantor, any Paying Agent or
any governmental authority), the Issuer may elect to pay as additional amounts
such amounts as may be necessary so that every net payment made outside the
United States following the effective date of such requirements by the Issuer,
the Guarantor or any Paying Agent of principal or interest due in respect of any
Bond or any Coupon of which the beneficial owner is a United States Alien, after
deduction or withholding for or an account of such backup withholding tax or
similar charge (other than a backup withholding tax or similar charge which (i)
would not be applicable in the circumstances referred to in the parenthetical
clause of the first sentence of the preceding paragraph, or (ii) is imposed as a
result of presentation of such Bond or Coupon for payment more than 30 days
after the date on which such payment becomes due and payable or on which payment
thereof is duly provided for, whichever occurs later), will not be less than the
amount provided for in such Bond or Coupon to be then due and payable. If the
Issuer elects to
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pay any additional amounts pursuant to this paragraph, the Issuer shall have the
right to redeem the Bonds in whole but not in part at any time pursuant to the
applicable provisions of the preceding paragraph and the redemption price of
such Bonds shall not be reduced for applicable withholding taxes. If the Issuer
elects to pay additional amounts pursuant to this paragraph and the condition
specified in the first sentence of this paragraph should no longer be satisfied,
then the Issuer shall redeem the Bonds, in whole but not in part, pursuant to
the applicable provisions of the preceding paragraph and the redemption price of
such Bonds shall not be reduced for applicable withholding taxes.
"United States Alien" means any person who, for United States federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States federal
income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
(d) Notice of redemption
Notice of any redemption under this Condition will be given to the
holders in accordance with Condition 13. All Bonds in respect of which a notice
of redemption is given under this Condition (unless such notice of redemption is
revoked in accordance with this Condition) shall be redeemed on the date
specified in such notice in accordance with this Condition.
(e) Purchases
The Issuer and the Guarantor and any of their respective Subsidiaries
(as defined in the Fiscal Agency Agreement) may at any time purchase Bonds by
tender, in the open market or otherwise at any price. Any purchase shall be made
in accordance with applicable laws or regulations, including (without
limitation) applicable stock exchange regulations. The Bonds so purchased, while
held by or on behalf of the Issuer, the Guarantor or any such Subsidiary, shall
not entitle the holder to vote at any meetings of the Bondholders and shall not
be deemed to be outstanding for the purposes of calculating quorums at meetings
of the Bondholders or for the purposes of paragraph (a) of Condition 11. Bonds
so purchased may be held, resold or surrendered to any Paying Agent for
cancellation.
(f) Cancellation
All Bonds which are redeemed and any unmatured Coupons attached thereto
or surrendered therewith at the time of redemption shall forthwith be cancelled.
All Bonds so cancelled and all Bonds purchased and cancelled pursuant to
paragraph (e) above (together with all unmatured Coupons cancelled therewith)
shall be forwarded to the Fiscal Agent and cannot be reissued or resold.
6. Payments and Exchange of Talons
(a) Method of payment
Payments of principal and interest will be made against presentation
and surrender (or, in the case of a partial payment, endorsement) of Bonds or
the appropriate Coupons (as the case
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may be) at the specified office of any Paying Agent (subject to paragraph (b)
below) by U.S. dollar cheque drawn on a bank in New York City, or by transfer to
a U.S. dollar account maintained by the payee with a bank outside the United
States. Payments of interest due in respect of any Bond other than on
presentation and surrender of matured Coupons shall be made only against
presentation and either surrender or endorsement (as appropriate) of the
relevant Bond.
(b) U.S. paying agent
Payments of interest in respect of Bonds may only be made at the
specified offices of Paying Agents outside the United States, except that they
may be made at the specified office of a Paying Agent in New York City if (i)
the Issuer shall have appointed Paying Agents with specified offices outside the
United States with the reasonable expectation that such Paying Agents would be
able to make payment at such offices of the full amount of the interest on the
Bonds in U.S. dollars when due, (ii) payment of the full amount of such interest
at all specified offices of the Paying Agents outside the United States is
illegal or effectively precluded by exchange controls or other similar
restrictions and (iii) the relevant payment is permitted by applicable U.S. law.
If a Bond is presented for payment of principal at the specified office of any
Paying Agent in the United States in circumstances where interest (if any is
payable against presentation of the Bond) is not to be paid there, the relevant
Paying Agent will annotate the Bond with the record of the principal paid and
return it to the holder for the obtaining of interest elsewhere. Except as
provided in this paragraph, no payment in respect of the Bonds will be made by
mail to an address in the United States or by wire transfer to an account
maintained by the holder in the United States.
(c) Payments subject to fiscal laws
All payments are subject in all cases to any applicable fiscal or other
laws and regulations, but without prejudice to the provisions of Condition 7. No
commissions or expenses shall be charged to the holders in respect of such
payment.
(d) Redemption and surrender of unmatured Coupons
Each Bond should be presented for redemption together with all
unmatured Coupons relating to it, failing which the amount of any such missing
unmatured Coupon (or, in the case of payment not being made in full, that
proportion of the amount of such missing unmatured Coupon which the sum of
principal so paid bears to the total principal amount due) will be deducted from
the sum due for payment. Each amount of principal so deducted will be paid in
the manner mentioned above against presentation and surrender (or, in the case
of partial payment only, endorsement) of the relevant missing Coupon at any time
before the expiry of 10 years after the Relevant Date (as defined in Condition
7) in respect of the relevant Bond (whether or not the Coupon would otherwise
have become void pursuant to Condition 9) but not thereafter.
(e) Payments on Business Days
A Bond or Coupon may only be presented for payment on a day which is a
Business Day (as defined in paragraph (a) of Condition 4) in the place of
presentation and, in the case of
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payment by transfer to a U.S. dollar account, in New York City. No further
interest or other payment will be made as a consequence of the day on which the
relevant Bond or Coupon may be presented for payment under this paragraph
falling after the due date.
(f) Exchange of Talons
On and after the Interest Payment Date on which the final Coupon
comprised in any Coupon sheet matures, the Talon comprised in the Coupon sheet
may be surrendered at the specified office of any Paying Agent in exchange for a
further Coupon sheet, subject to the provisions of Condition 9. Each Talon
shall, for the purpose of these Conditions, be deemed to mature on the Interest
Payment Date on which the final Coupon comprised in the relevant Coupon sheet
matures.
(g) Paying Agents
The initial Paying Agents and their initial specified offices are
listed below. The Issuer and the Guarantor reserve the right at any time to vary
or terminate the appointment of any Paying Agent and appoint additional or other
Paying Agents, provided that they will maintain (i) a Fiscal Agent and (ii) at
least one Paying Agent (which may be the Fiscal Agent) having a specified office
in a major European city (which, so long as the Bonds are listed on the
Luxembourg Stock Exchange, shall be Luxembourg). In addition, the Issuer and the
Guarantor shall forthwith appoint a Paying Agent in New York City in the
circumstances described in paragraph (b) above (if there is no such Paying Agent
at the time) and shall after such circumstances arise maintain such a Paying
Agent. Notice of any change in the Paying Agents or their specified offices will
promptly be given to the holders in accordance with Condition 13.
7. Payment of Additional Amounts
(a) Switzerland
All payments of principal and interest in respect of the Bonds and the
Coupons (including amounts paid by the Guarantor) shall be made free and clear
of, and without withholding or deduction for, any taxes, duties, assessments or
governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by or within Switzerland or any authority therein or thereof having
power to tax, unless such withholding or deduction is required by law. In that
event the Issuer (or the Guarantor, as the case may be) shall pay such
additional amounts as will result in receipt by the holders of such amounts as
would have been received by them had no such withholding or deduction been
required, except that no such additional amounts shall be payable in respect of
any Bond or Coupon presented for payment:
(i) by or on behalf of a holder who is liable to such taxes,
duties, assessments or governmental charges in respect of such
Bond or Coupon by reason of his having some connection with
Switzerland other than the mere holding of the Bond or Coupon;
or
(ii) more than 30 days after the Relevant Date except to the extent
that the holder would have been entitled to such additional
amounts on presenting such Bond or Coupon for payment on the
last day of such period of 30 days.
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"Relevant Date" means whichever is the later of (i) the date on which
such payment first becomes due and (ii) if the full amount payable has not been
received by the Fiscal Agent on or prior to such due date, the date on which,
the full amount having been so received, notice to that effect shall have been
given to the Bondholders.
(b) United States
All payments of principal and interest in respect of the Bonds and the
Coupons (including amounts paid by the Guarantor) to any holder appertaining
thereto who is a United States Alien (as defined in paragraph (c) of Condition
5) shall be made free and clear of, and without withholding or deduction for,
any taxes, duties, assessments or governmental charges of whatever nature
imposed, levied, collected, withheld or assessed by or within the United States
or any authority therein or thereof having power to tax, unless such withholding
or deduction is required by law. In that event the Issuer (or the Guarantor, as
the case may be) shall pay such additional amounts as will result in receipt by
such holders of such amounts as would have been received by them had no such
withholding or deduction been required, except that no such additional amounts
shall be payable by the Issuer or any Guarantor to any such holder for or on
account of:
(i) any such tax, duty, assessment or other governmental charge
which would not have been so imposed but for (x) the existence
of any present or former connection between such holder (or
between a fiduciary, settlor, beneficiary, member or
shareholder of such holder, if such holder is an estate, a
trust, a partnership or a corporation) and the United States,
including, without limitation, such holder (or such fiduciary,
settlor, beneficiary, member or shareholder) being or having
been a citizen or resident thereof or being or having been
engaged in a trade or business or present therein or having,
or having had, a permanent establishment therein or (y) the
presentation by the holder of any such Bond or Coupon for
payment on a date more than 30 days after the Relevant Date,
except to the extent that the holder of it would have been
entitled to such additional amounts on presenting such Bond or
Coupon for payment on the last day of such period of 30 days;
(ii) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, duty, assessment or
governmental charge;
(iii) any tax, duty, assessment or other governmental charge imposed
by reason of such holder's past or present status as a
personal holding company or foreign personal holding company
or controlled foreign corporation or passive foreign
investment company with respect to the United States or as a
corporation which accumulates earnings to avoid United States
federal income tax or as a private foundation or other
tax-exempt organisation;
(iv) any tax, duty, assessment or other governmental charge which
is payable otherwise than by withholding from payment on or in
respect of any Bond or Coupon;
<PAGE>
(v) any tax, duty, assessment or other governmental charge
required to be withheld by any Paying Agent from any payment
of principal of, or interest on, any Bond, if such payment can
be made without such withholding by any other Paying Agent
outside the United States;
(vi) subject to Condition 5 above, any tax, duty, assessment or
other governmental charge which would not have been imposed
but for the failure to comply with certification, information
or other reporting requirements concerning the nationality,
residence or identity of the holder or beneficial owner of
such Bond or Coupon, if such compliance is required by statute
or by regulation of the United States or of any political
subdivision or taxing authority thereof or therein as a
precondition to relief or exemption from such tax, assessment
or other governmental charge;
(vii) any tax, duty, assessment or other governmental charge imposed
by reason of such holder's past or present status as the
actual or constructive owner of 10 per cent. or more of the
total combined voting power of all classes of stock entitled
to vote of the Guarantor or as a direct or indirect subsidiary
of the Guarantor; or
(viii) any combination of two or more of items (i) through (vii)
above;
nor shall any additional amounts be paid with respect to any payment on a Bond
or Coupon to a United States Alien who is a fiduciary or partnership or other
than the sole beneficial owner of such payment to the extent such payment would
be required by the laws of the United States (or any political subdivision
thereof) to be included in the income, for tax purposes, of a beneficiary or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner who would not have been entitled to additional amounts had such
beneficiary, settlor, member or beneficial owner been the holder of the Bonds or
Coupon.
Any reference in these Conditions to principal or interest shall be
deemed to include any additional amounts which may be payable under this
Condition 7.
8. Events of Default
If any of the following events (each an "Event of Default") occurs and
is continuing:
(a) Non-payment of interest
the Issuer fails to pay any interest on any of the Bonds when due and
such failure continues for a period of 22 days; or
(b) Non-payment of principal
the Issuer fails to pay the principal of any of the Bonds when due and
such failure continues for a period of 10 days; or
<PAGE>
(c) Insolvency
(i) the Issuer or the Guarantor is (or is, or could be, deemed by law
or a court to be) insolvent or bankrupt or unable to pay its debts,
stops, suspends or threatens to stop or suspend payment of all or a
material part of (or of a particular type of) its debts, proposes or
makes a general assignment or an arrangement or composition with or for
the benefit of the relevant creditors in respect of any of such debts
or a moratorium is agreed or declared in respect of or affecting all or
any part of (or of a particular type of) the debts of the Issuer or the
Guarantor; or (ii) the Issuer or the Guarantor commences a voluntary
case or proceeding under any applicable bankruptcy, insolvency,
reorganisation or similar law to be adjudicated insolvent or bankrupt,
or consents to the entry of a decree or order for relief in any
involuntary case or proceeding under any such law, or takes or consents
to any similar action; or
(d) Winding-up
an order is made or an effective resolution passed for the winding-up
or dissolution of the Issuer or the Guarantor, or the Issuer or the
Guarantor ceases or threatens to cease to carry on all or a material
part of its business or operations, except for the purpose of and
followed by a reconstruction, amalgamation, reorganisation, merger or
consolidation on terms approved by an Extraordinary Resolution of the
holders; or
(e) Guarantee
the Guarantee is not (or is claimed by the Guarantor not to be) in full
force and effect;
then any Bond may, by notice in writing given to the Fiscal Agent at its
specified office by the holder, be declared immediately due and payable
whereupon it shall become immediately due and payable at its principal amount
together with accrued interest without further formality unless such Event of
Default shall have been remedied prior to the receipt of such notice by the
Fiscal Agent.
9. Prescription
Claims in respect of Bonds and Coupons (which for this purpose shall
not include Talons) will become void unless presentation for payment is made as
required by Condition 6 within a period of 10 years in the case of Bonds and 5
years in the case of Coupons from the appropriate Relevant Date, subject to the
provisions of Condition 6.
There shall not be included in any Coupon sheet issued upon exchange of
a Talon any Coupon the claim for payment in respect of which would be void
pursuant to this Condition 9 or Condition 6.
10. Replacement of Bonds, Coupons and Talons
If any Bond, Coupon or Talon is lost, stolen, mutilated, defaced or
destroyed, it may be replaced at the specified office of the Fiscal Agent,
subject to all applicable laws and stock exchange requirements, upon payment by
the claimant of the expenses incurred in connection
<PAGE>
with such replacement and on such terms as to evidence, security, indemnity and
otherwise as the Issuer and the Guarantor may require (provided that the
requirement is reasonable in the light of prevailing market practice). Mutilated
or defaced Bonds, Coupons or Talons must be surrendered before replacements will
be issued.
11. Meetings of Bondholders and Modification of Fiscal Agency Agreement
(a) Meetings of Bondholders
The Fiscal Agency Agreement contains provisions for convening meetings
of Bondholders to consider matters affecting their interests, including the
sanctioning by Extraordinary Resolution of certain modifications of the Bonds,
the Coupons, the Guarantee or certain provisions of the Fiscal Agency Agreement.
Such a meeting may be convened by Bondholders holding not less than 10 per cent.
in principal amount of the Bonds for the time being outstanding. The quorum for
any meeting convened to consider an Extraordinary Resolution will be two or more
persons holding or representing a clear majority in principal amount of the
Bonds for the time being outstanding, or at any adjourned meeting two or more
persons being or representing Bondholders whatever the principal amount of the
Bonds held or represented, unless the business of such meeting includes
consideration of proposals, inter alia, (i) to modify the maturity of the Bonds
or the dates on which interest is payable in respect of the Bonds, (ii) to
reduce or cancel the principal amount of, or interest on, the Bonds, (iii) to
change the currency of payment of the Bonds or the Coupons, (iv) to modify the
provisions concerning the quorum required at any meeting of Bondholders or the
majority required to pass an Extraordinary Resolution or (v) to modify or cancel
the Guarantee, in which case the necessary quorum will be two or more persons
holding or representing not less than 75 per cent., or at any adjourned meeting
not less than 25 per cent., in principal amount of the Bonds for the time being
outstanding. Any Extraordinary Resolution duly passed shall be binding on
Bondholders (whether or not they were present at the meeting at which such
resolution was passed) and on all Couponholders.
(b) Modification of Fiscal Agency Agreement
The Issuer and the Guarantor shall only permit any modification of, or
any waiver or authorisation of any breach or proposed breach of or any failure
to comply with, the Fiscal Agency Agreement, if to do so could not reasonably be
expected to be prejudicial to the interests of the holders.
12. Further Issues
The Issuer may from time to time without the consent of the Bondholders
or Couponholders create and issue additional securities either having the same
terms and conditions as the Bonds in all respects (or in all respects except for
the first payment of interest on them) and so that such further issue shall be
consolidated and form a single series with the outstanding securities of any
series (including the Bonds) or upon such terms as the Issuer may determine at
the time of their issue. References in these Conditions to the Bonds include
(unless the context requires otherwise) any other securities issued pursuant to
this Condition and forming a single series with the Bonds.
<PAGE>
13. Notices
Notices to Bondholders will be valid if published in a leading
newspaper having general circulation in London (which is expected to be the
Financial Times) and (so long as the Bonds are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange so require) in a leading
newspaper having general circulation in Luxembourg (which is expected to be the
Luxemburger Wort) or, if such publication shall not be practicable, in an
English language newspaper of general circulation in Europe. Any such notice
shall be deemed to have been given on the date of such publication or, if
published more than once or on different dates, on the first date on which
publication is made. Couponholders will be deemed for all purposes to have
notice of the contents of any notice given to the Bondholders in accordance with
this Condition.
14. Currency Indemnity
U.S. dollars is the sole currency of account and payment for all sums
payable by the Issuer or the Guarantor under or in connection with the Bonds and
the Coupons, including damages. Any amount received or recovered in a currency
other than U.S. dollars (whether as a result of, or of the enforcement of, a
judgment or order of a court of any jurisdiction, in the winding-up or
dissolution of the Issuer or the Guarantor or otherwise) by any holder in
respect of any sum expressed to be due to it from the Issuer or Guarantor shall
only constitute a discharge to the Issuer and Guarantor to the extent of the
U.S. dollar 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 U.S. dollar amount
is less than the U.S. dollar amount expressed to be due to the recipient under
any Bond or Coupon, the Issuer (or the Guarantor, as the case may be) shall
indemnify it against any loss sustained by it as a result. In any event, the
Issuer (or the Guarantor, as the case may be) shall indemnify the recipient
against the cost of making any such purchase. For the purposes of this
Condition, it will be sufficient for the Bondholder or Couponholder, as the case
may be, to demonstrate that it would have suffered a loss had an actual purchase
been made. These indemnities constitute a separate and independent obligation
from the Issuer's and Guarantor's other obligations, shall give rise to a
separate and independent cause of action, shall apply irrespective of any
indulgence granted by any Bondholder or Couponholder and shall 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 Bond or Coupon or any
other judgment or order.
15. Governing Law
(a) Governing law
The Fiscal Agency Agreement, the Bonds and the Coupons are governed by
and shall be construed in accordance with the laws of the State of New York. The
Guarantee is governed by and shall be construed in accordance with Swiss law
without regard to its principles of conflicts of laws.
<PAGE>
(b) Jurisdiction
The Issuer agrees that any suit, action or proceeding against the
Issuer brought by holders arising out of or based upon the Bonds or Coupons may
be instituted in any of the United States federal or state courts located in the
State of New York, County of New York (each, a "New York Court"), waives any
objection, to the fullest extent permitted by applicable law, which it may now
or hereafter have to the jurisdiction or the laying of venue of any such
proceeding, and irrevocably submits to the non-exclusive jurisdiction of such
courts in any suit, action or proceeding. The Issuer appoints CT Corporation
System, 1633 Broadway, New York, New York 10019, as its authorised agent (the
"Authorised Agent") upon whom process may be served in any suit, action or
proceeding arising out of or based upon the Bonds or Coupons which may be
instituted in any New York Court by holders, and expressly accepts the
non-exclusive jurisdiction of any such court in respect of any such suit, action
or proceeding. The Issuer hereby represents and warrants that the Authorised
Agent has accepted such appointment and has agreed to act as said agent for
service of process, and the Issuer agrees to take any and all actions, including
the filing of any and all documents that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorised Agent shall be deemed, in every respect, effective service of process
upon the Issuer. Notwithstanding the foregoing, any action against the Issuer
arising out of or based upon the Bonds or Coupons may be instituted by holders
in any other court of competent jurisdiction.
Any suit, action or proceeding in respect of the Guarantee shall be
brought against the Guarantor exclusively in the ordinary courts of the Canton
of Zurich, the venue being Zurich 1, with the right to appeal to the Swiss
Federal Court of Justice in Lausanne in accordance with Swiss federal law, and
the Guarantor has, in the Guarantee, irrevocably submitted in respect of any
such action or proceedings to the exclusive jurisdiction of the aforesaid
courts.
(c) Jury trial
The Issuer hereby waives, and the holder hereof, by his acceptance of
the Bonds, waives the right to a jury trial with respect to any legal action,
suit or proceeding brought in any New York Court concerning the Bonds or the
Coupons.
