Exhibit (b)(1)
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 Pound Sterling 250,000,000 7.00 per cent. Guaranteed Bonds
due 2020 (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"). 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
"Couponholders", 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
Pound Sterling 1,000, Pound Sterling 10,000 and Pound Sterling 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 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.
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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.
(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.
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4. Interest
The Bonds bear interest from, and including, 5th October, 2000 at the rate
of 7.00 per cent. per annum, payable annually in arrear on 5th October in each
year (each an "Interest Payment Date"), the first Interest Payment Date being
5th October, 2001. 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 at such
rate (both before and after judgment) until whichever is the earlier of (a) the
day on which all sums due in respect of such Note 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 Noteholders of receipt of all sums due in respect of all the
Notes up to that seventh day (except to the extent that there is failure in the
subsequent payment to the relevant holders under these Conditions). If interest
is required to be calculated for a period of less than one year, it will be
calculated on the basis of a 360-day year consisting of 12 months of 30 days
each.
5. Redemption and Purchase
(a) Final redemption
Unless previously redeemed, or purchased and cancelled, the Bonds will be
redeemed at their principal amount on 5th October, 2020. The Bonds may not be
redeemed at the option of the Issuer other than in accordance with this
Condition.
(b) 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 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
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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 recognised
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 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.
(c) 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 (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.
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(d) 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.
(e) 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 (d) above (together with all unmatured Coupons cancelled therewith)
shall be forwarded to the Fiscal Agent and cannot be reissued or resold.
6. Payments
(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 may be) at the specified office of any Paying
Agent outside the United States, by a sterling cheque or by credit or transfer
to a sterling account (or any other account to which sterling may be credited or
transferred) specified 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. Notwithstanding
the foregoing, 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.
(b) 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.
(c) 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.
(d) Payments on Business Days
A Bond or Coupon may only be presented for payment on a day which is a
Business Day in the place of presentation and in London. 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.
"Business Day" means a day on which commercial banks and foreign exchange
markets are open in the relevant city.
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(e) 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 outside the United States, 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). 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.
"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 (b) 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;
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(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;
(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
(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
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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 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.
10. Replacement of Bonds and Coupons
If any Bond or Coupon 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 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 or Coupons 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
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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.
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. Redenomination
The Issuer may, without the consent of holders, on giving prior notice to
the Fiscal Agent and at least 30 days' prior notice to holders in accordance
with Condition 13, elect that, with effect from the Redenomination Date
specified in the notice, the Bonds shall be redenominated in Euro.
The election will have effect as follows:
(i) the Bonds shall be deemed to be redenominated into Euro in the
denomination of Euro 0.01 with a principal amount for each Bond
equal to the principal amount of that Bond in sterling, converted
into Euro at the Established Rate, provided that, if the Issuer
determines, with the agreement of the Fiscal Agent, that the then
market practice in respect of the redenomination into Euro of
internationally offered securities is different from the provisions
specified above, such provisions shall be deemed to be amended so as
to comply with such market practice and the Issuer shall promptly
notify the Bondholders, the stock exchange (if any) on which the
Bonds may be listed and the Paying Agents of such deemed amendments;
(ii) save to the extent that an Exchange Notice has been given in
accordance with paragraph (iv) below, the amount of interest due in
respect of the Bonds will be calculated by reference to the
aggregate principal amount of Bonds presented (or, as the case may
be, in respect of which Coupons are presented) for payment by the
relevant holder and the amount of such payment shall be rounded down
to the nearest Euro 0.01;
(iii) if definitive Bonds are required to be issued after the
Redenomination Date, they shall be issued at the expense of the
Issuer in the denominations of Euro 1,000, Euro 10,000, Euro 100,000
and (but only to the extent of any remaining amounts less than Euro
1,000 or such smaller
<PAGE>
denominations as the Fiscal Agent may approve) Euro 0.01 and such
other denominations as the Fiscal Agent shall determine and notify
to the Bondholders;
(iv) if issued prior to the Redenomination Date, all unmatured Coupons
denominated in sterling (whether or not attached to the Bonds) will
become void with effect from the date on which the Issuer gives
notice (the "Exchange Notice") that replacement Euro-denominated
Bonds and Coupons are available for exchange (provided that such
securities are so available) and no payments will be made in respect
of them. The payment obligations contained in any Bonds so issued
will also become void on that date although those Bonds will
continue to constitute valid exchange obligations of the Issuer. New
Euro-denominated Bonds and Coupons will be issued in exchange for
Bonds and Coupons denominated in sterling in such manner as the
Fiscal Agent may specify and as shall be notified to the Bondholders
in the Exchange Notice. No Exchange Notice may be given less than 15
days prior to any date for payment of principal or interest on the
Bonds;
(v) after the Redenomination Date, all payments in respect of the Bonds
and the Coupons, other than payments of interest in respect of
periods commencing before the Redenomination Date, will be made
solely in Euro as though references in the Bonds to sterling were to
Euro. Payments will be made in Euro by credit or transfer to a Euro
account (or any other account to which Euro may be credited or
transferred) specified by the payee or, at the option of the payee,
by a Euro cheque; and
(vi) such other changes shall be made to this Condition as the Issuer may
decide, after consultation with the Fiscal Agent, and as may be
specified in the notice, to conform it to conventions then
applicable to instruments denominated in Euro.
"Established Rate" means the rate for the conversion of sterling (including
compliance with rules relating to roundings in accordance with applicable
European Community regulations) into Euro established by the Council of the
European Union pursuant to Article 123 of the Treaty establishing the European
Community, as amended by the Treaty on European Union and as amended by the
Treaty of Amsterdam, and "Redenomination Date" means any date for payment of
interest under the Bonds specified by the Issuer in the notice given to the
Bondholders pursuant to the above and which falls on or after the date on which
the United Kingdom first participates in the third stage of European economic
and monetary union.
15. Currency Indemnity
Subject to Condition 14, sterling 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 sterling (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 sterling 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 sterling
amount is less than the sterling 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.
<PAGE>
16. 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.
(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.
