<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
VIVRA INCORPORATED
(Name of Subject Company)
GAMBRO HEALTHCARE ACQUISITION CORP.
AND
INCENTIVE AB
(Bidder)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
92855M 10 4
(CUSIP Number of Class of Securities)
MATS WAHLSTROM
GAMBRO HEALTHCARE ACQUISITION CORP.
1185 OAK STREET
LAKEWOOD, COLORADO 80215
(303) 232-6800
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Bidder)
COPY TO:
PETER D. LYONS, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 848-4000
MAY 9, 1997
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION AMOUNT OF FILING FEE
<S> <C>
$1,531,688,527.72* $306,337.71
</TABLE>
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: ________________________________________________________
Form or Registration No.: ______________________________________________________
Filing Party: __________________________________________________________________
Date Filed: ____________________________________________________________________
* NOTE: The Transaction Value is calculated by multiplying $35.62, the per
share tender offer price, by 44,702,680, the sum of the number of
outstanding shares of Vivra Incorporated Common Stock and 2,711,133 shares
of Vivra Incorporated Common Stock underlying the outstanding options, less
the exercise price of the options.
<PAGE>
CUSIP NO. 92855M 10 4
<TABLE>
<S> <C> <C>
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Gambro Healthcare Acquisition Corp.
2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) / /
(b) / /
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to / /
Items 2(e) or 2(f)
6 Citizenship or Place of Organization
Delaware
7 Aggregate Amount Beneficially Owned by Each Reporting Person
None
8 Check if the Aggregate Amount in Row (7) Excludes Certain Shares / /
(See Instructions)
9 Percent of Class Represented by Amount in Row (7)
0%
10 Type of Reporting Person (See Instructions)
CO
</TABLE>
2
<PAGE>
CUSIP NO. 92855M 10 4
<TABLE>
<S> <C> <C>
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Incentive AB
2 Check the Appropriate Box if a Member of a Group (See Instructions) (a)/ /
(b)/ /
3 SEC Use Only
4 Source of Funds (See Instructions)
AF, BK
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to / /
Items 2(e) or 2(f)
6 Citizenship or Place of Organization
Sweden
7 Aggregate Amount Beneficially Owned by Each Reporting Person
None
8 Check if the Aggregate Amount in Row (7) Excludes Certain Shares / /
(See Instructions)
9 Percent of Class Represented by Amount in Row (7)
0%
10 Type of Reporting Person (See Instructions)
CO
</TABLE>
3
<PAGE>
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by Gambro Healthcare Acquisition Corp., a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of Incentive AB, a Swedish
corporation ("Parent"), to purchase all outstanding shares of Common Stock, par
value $.01 per share (the "Shares"), of Vivra Incorporated, a Delaware
corporation (the "Company"), at a price of $35.62 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth in Purchaser's
Offer to Purchase dated May 9, 1997 (the "Offer to Purchase") and in the related
Letter of Transmittal (which together constitute the "Offer"), copies of which
are attached hereto as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Vivra Incorporated, a Delaware
corporation (the "Company"), which has its principal executive offices at 1850
Gateway Drive, Suite 500, San Mateo, California 94404.
(b) The class of equity securities being sought is all the outstanding
shares of Common Stock, par value $.01 per share, of the Company. The
information set forth in the Introduction and Section 1 ("Terms of the Offer;
Expiration Date") of the Offer to Purchase is incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer
to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by Purchaser and Parent. The
information concerning the name, state or other place of organization, principal
business and address of the principal office of each of Purchaser and Parent,
and the information concerning the name, business address, present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment or occupation is
conducted, material occupations, positions, offices or employments during the
last five years and citizenship of each of the executive officers and directors
of Purchaser and Parent are set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent") and Schedule I of the Offer to
Purchase and are incorporated herein by reference.
(e) and (f) During the last five years, none of Purchaser or Parent, and, to
the best knowledge of Purchaser and Parent, none of the persons listed in
Schedule I of the Offer to Purchase has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in Section 8 ("Certain Information Concerning
Purchaser and Parent"), Section 11 ("Background of the Offer; Contacts with the
Company; the Merger Agreement and the Specialty Merger Agreement") of the Offer
to Purchase is incorporated herein by reference.
(b) The information set forth in the Introduction, Section 7 ("Certain
Information Concerning the Company"), Section 8 ("Certain Information Concerning
Purchaser and Parent"), Section 11 ("Background of the Offer; Contacts with the
Company; the Merger Agreement and the Specialty Merger Agreement") and Section
12 ("Purpose of the Offer; Plans for the Company After the Offer and the
Merger") of the Offer to Purchase is incorporated herein by reference.
4
<PAGE>
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in Section 10 ("Financing of the Offer and
the Merger") of the Offer to Purchase is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 11
("Background of the Offer; Contacts with the Company; the Merger Agreement and
the Specialty Merger Agreement") and Section 12 ("Purpose of the Offer; Plans
for the Company After the Offer and the Merger") of the Offer to Purchase is
incorporated herein by reference.
(f) and (g) The information set forth in Section 14 ("Effect of the Offer on
the Market for Shares, Exchange Listing and Exchange Act Registration") of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 8 ("Certain Information
Concerning Purchaser and Parent") of the Offer to Purchase and Schedule I of the
Offer to Purchase are incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE
SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent"), Section 11 ("Background of the
Offer; Contacts with the Company; the Merger Agreement and the Specialty Merger
Agreement") and Section 12 ("Purpose of the Offer; Plans for the Company After
the Offer and the Merger") of the Offer to Purchase is incorporated herein by
reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 8 ("Certain Information Concerning
Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(c) and (e) The information set forth in Section 16 ("Certain Legal
Matters and Regulatory Approvals") of the Offer to Purchase is incorporated
herein by reference.
(d) The information set forth in Section 14 ("Effect of the Offer on the
Market for the Shares, Exchange Listing and Exchange Act Registration") of the
Offer to Purchase is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase, Letter of
Transmittal and the Agreement and Plan of Merger, dated as of May 5, 1997, among
Parent, Purchaser and the Company, copies of which are attached hereto as
Exhibits (a)(1), (a)(2) and (c)(1), is incorporated herein by reference.
5
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase dated May 9, 1997.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Nominees.
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street Journal and The
New York Times on May 9, 1997.
(a)(8) Press Release issued by Parent on May 5, 1997.
(b)(1) Revolving Credit Facility Agreement, dated December 15, 1995, between
Gambro AB, BNP Capital Markets Limited (as Arranger), certain banks named
therein and Banque Nationale de Paris (as Agent).
(b)(2) Summary of Multicurrency Revolving Credit Facility Agreement, dated
as of May 7, 1997, between Incentive Treasury AB (as Borrower), Parent (as
Guarantor) and Skandinaviska Enskilda Banken AB.
(b)(3) Multicurrency Revolving Credit Facility Agreement, dated as of March
4, 1996, between Incentive Treasury AB (as Borrower), Parent (as Guarantor),
Deutsche Bank Luxembourg S.A. and Enskilda, Skandinaviska Enskilda Banken (as
Arrangers), Enskilda, Skandinaviska Banken (as Agent) and certain banks named
therein.
(b)(4) Multicurrency Revolving Credit Facility Agreement, dated as of May
24, 1995, and amended March 6, 1996, between Incentive Treasury AB (as
Borrower), Parent (as Guarantor), Deutsche Bank Luxembourg S.A. and Enskilda,
Skandinaviska Enskilda Banken AB (as Arrangers), Deutsche Bank Luxembourg S.A.
(as Agent) and certain banks named therein.
(b)(5) Revolving Credit Facility Agreement, dated as of September 1, 1994,
and amended December 2, 1994, April 24, 1995, October 26, 1995 and November 5,
1996, between Parent (as First Borrower and Guarantor), Incentive Treasury AB
(as Second Borrower) and Deutsche Bank Luxembourg S.A. (as Lender).
(b)(6) Summary of Multicurrency Credit Facility Agreement, dated as of
December 8, 1995, between Nordbanken AB (as Lender), Incentive Treasury AB (as
Borrower) and Parent (as Guarantor).
(c)(1) Agreement and Plan of Merger, dated as of May 5, 1997, among Parent,
Purchaser and the Company.
(c)(2) Agreement and Plan of Reorganization, dated as of May 5, 1997, by and
between VSP Holdings, Inc., VSP Holdings II, Inc., VSP Acquisition, Inc., Vivra
Specialty Partners, Inc. and the Company.
(c)(3) Sections 1 and 2 of the Services Agreement, effective as of May 5,
1997, between Vivra Specialty Partners, Inc. and the Company.
(d) None.
(e) Not applicable.
(f) None.
6
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
May 9, 1997
GAMBRO HEALTHCARE ACQUISITION CORP.
By: /s/ MATS L. WAHLSTROM
-----------------------------------
Name: Mats L. Wahlstrom
Title: President
7
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
May 9, 1997
INCENTIVE AB
By: /s/ SOREN MELLSTIG
------------------------------------
Name: Soren Mellstig
Title: Executive Vice President
By: /s/ SVERKER LUNDKVIST
------------------------------------
Name: Sverker Lundkvist
Title: Senior Vice President
8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE IN SEQUENTIAL
NO. NUMBERING SYSTEM
- --------- ------------------------------------------------------------------------------------------------
<S> <C> <C>
(a)(1) Form of Offer to Purchase dated May 9, 1997.....................................................
(a)(2) Form of Letter of Transmittal...................................................................
(a)(3) Form of Notice of Guaranteed Delivery...........................................................
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees..............
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Nominees to
Clients.........................................................................................
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9...
(a)(7) Summary Advertisement as published in The Wall Street Journal and The New York Times on May 9,
1997............................................................................................
(a)(8) Press Release issued by Parent on May 5, 1997...................................................
(b)(1) Revolving Credit Facility Agreement, dated December 15, 1995, between Gambro AB, BNP Capital
Markets Limited (as Arranger), certain banks named therein and Banque Nationale de Paris (as
Agent)..........................................................................................
(b)(2) Summary of Multicurrency Revolving Credit Facility Agreement, dated as of May 7, 1997, between
Incentive Treasury AB (as Borrower), Parent (as Guarantor) and Skandinaviska Enskilda Banken
AB..............................................................................................
(b)(3) Multicurrency Revolving Credit Facility Agreement, dated as of March 4, 1996, between Incentive
Treasury AB (as Borrower), Parent (as Guarantor), Deutsche Bank Luxembourg S.A. and Enskilda,
Skandinaviska Enskilda Banken (as Arrangers), Enskilda, Skandinaviska Enskilda Banken (as Agent)
and certain banks named therein.................................................................
(b)(4) Multicurrency Revolving Credit Facility Agreement, dated as of May 24, 1995, and amended March
6, 1996, between Incentive Treasury AB (as Borrower), Parent (as Guarantor), Deutsche Bank
Luxembourg S.A. and Enskilda, Skandinaviska Enskilda Banken AB (as Arrangers), Deutsche Bank
Luxembourg S.A. (as Agent) and certain banks named therein......................................
(b)(5) Revolving Credit Facility Agreement, dated as of September 1, 1994, and amended December 2,
1994, April 24, 1995, October 26, 1995 and November 5, 1996, between Parent (as First Borrower
and Guarantor), Incentive Treasury AB (as Second Borrower) and Deutsche Bank Luxembourg S.A. (as
Lender).........................................................................................
(b)(6) Summary of Multicurrency Credit Facility Agreement, dated as of December 8, 1995, between
Nordbanken AB (as Lender), Incentive Treasury AB (as Borrower) and Parent (as Guarantor)........
(c)(1) Agreement and Plan of Merger, dated as of May 5, 1997, among Parent, Purchaser and the
Company.........................................................................................
(c)(2) Agreement and Plan of Reorganization, dated as of May 5, 1997, by and between VSP Holdings,
Inc., VSP Holdings II, Inc., VSP Acquisition, Inc., Vivra Specialty Partners, Inc. and the
Company.........................................................................................
(c)(3) Sections 1 and 2 of the Services Agreement, effective as of May 5, 1997, between Vivra Specialty
Partners, Inc. and the Company..................................................................
</TABLE>
<PAGE>
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Vivra Incorporated
at
$35.62 Net Per Share
by
Gambro Healthcare Acquisition Corp.
an indirect wholly owned subsidiary of
Incentive AB
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JUNE 6, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A
MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS, (II) THE EXPIRATION
OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AND (III) THE CONSUMMATION OF THE SPECIALTY
MERGER TRANSACTION (AS DESCRIBED HEREIN) AND THE RECEIPT BY VIVRA INCORPORATED
(THE "COMPANY") OF CASH PROCEEDS THEREFOR, AFTER PROVIDING FOR ALL APPLICABLE
INCOME TAXES (USING AN ASSUMED INCOME TAX RATE OF 41%), OF NOT LESS THAN
$76,900,000. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS WHICH ARE
CONTAINED IN THIS OFFER TO PURCHASE. SEE "SECTION 15. CERTAIN CONDITIONS OF THE
OFFER".
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT EACH
OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY, AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
shares of Common Stock, par value $.01 per share (the "Shares"), of the Company
should either (1) complete and sign the Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
mail or deliver it together with the certificate(s) evidencing tendered Shares,
and any other required documents, to the Depositary or tender such Shares
pursuant to the procedure for book-entry transfer set forth in "Section 3.
Procedures for Accepting the Offer and Tendering Shares" or (2) request such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for such stockholder. Any stockholder whose Shares are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such broker, dealer, commercial bank, trust company
or other nominee if such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates evidencing
such Shares are not immediately available, or who cannot comply with the
procedure for book-entry transfer on a timely basis, may tender such Shares by
following the procedure for guaranteed delivery set forth in "Section 3.
Procedures for Accepting the Offer and Tendering Shares".
Questions or requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional copies
of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
------------------------
THE DEALER MANAGER FOR THE OFFER IS:
UBS Securities
May 9, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<C> <S> <C>
INTRODUCTION..................................................................................................... 1
1. Terms of the Offer; Expiration Date................................................................... 4
2. Acceptance for Payment and Payment for Shares......................................................... 5
3. Procedures for Accepting the Offer and Tendering Shares............................................... 7
4. Withdrawal Rights..................................................................................... 10
5. Certain Federal Income Tax Consequences............................................................... 11
6. Price Range of Shares; Dividends...................................................................... 12
7. Certain Information Concerning the Company............................................................ 13
8. Certain Information Concerning Purchaser and Parent................................................... 15
9. Effect on Convertible Notes........................................................................... 20
10. Financing of the Offer and the Merger................................................................. 21
11. Background of the Offer; Contacts with the Company; the Merger Agreement and the Specialty Merger
Agreement............................................................................................. 22
12. Purpose of the Offer; Plans for the Company After the Offer and the Merger............................ 33
13. Dividends and Distributions........................................................................... 35
14. Effect of the Offer on the Market for the Shares, Exchange Listing and Exchange Act Registration...... 36
15. Certain Conditions of the Offer....................................................................... 38
16. Certain Legal Matters and Regulatory Approvals........................................................ 40
17. Fees and Expenses..................................................................................... 43
18. Miscellaneous......................................................................................... 44
Schedule I. Directors and Executive Officers of Parent and Purchaser............................................. I-1
</TABLE>
<PAGE>
To the Holders of Common Stock of
Vivra Incorporated:
INTRODUCTION
Gambro Healthcare Acquisition Corp., a Delaware corporation ("Purchaser")
and an indirect wholly owned subsidiary of Incentive AB, a corporation organized
under the laws of Sweden ("Parent"), hereby offers to purchase all outstanding
shares of Common Stock, par value $.01 per share (the "Shares"), of Vivra
Incorporated, a Delaware corporation (the "Company"), at a price of $35.62 per
Share (such amount or any greater amount per Share paid pursuant to the Offer
(as defined below), being hereinafter referred to as the "Per Share Amount"),
net to the seller in cash, upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer. Purchaser will pay all charges and expenses of
UBS Securities LLC ("UBS"), which is acting as Dealer Manager for the Offer (in
such capacity, the "Dealer Manager"), The Bank of New York (the "Depositary")
and Georgeson & Company Inc. (the "Information Agent") incurred in connection
with the Offer. See "Section 17. Fees and Expenses".
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY HAS
DETERMINED THAT EACH OF THE OFFER AND THE MERGER (AS DEFINED BELOW) IS FAIR TO,
AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, AND RECOMMENDS
THAT STOCKHOLDERS ACCEPT AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A
MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS, (II) THE EXPIRATION
OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AND (III) THE CONSUMMATION OF THE SPECIALTY
MERGER TRANSACTION (AS DESCRIBED HEREIN) AND THE RECEIPT BY THE COMPANY OF CASH
PROCEEDS THEREFOR, AFTER PROVIDING FOR ALL APPLICABLE INCOME TAXES (USING AN
ASSUMED INCOME TAX RATE OF 41%), OF NOT LESS THAN $76,900,000. THE OFFER IS ALSO
SUBJECT TO OTHER TERMS AND CONDITIONS WHICH ARE CONTAINED IN THIS OFFER TO
PURCHASE. SEE "SECTION 15. CERTAIN CONDITIONS OF THE OFFER".
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of May 5, 1997 (the "Merger Agreement") among Parent, Purchaser and the Company.
The Merger Agreement provides that, among other things, as soon as practicable
after the purchase of Shares pursuant to the Offer and the satisfaction of the
other conditions set forth in the Merger Agreement and in accordance with the
relevant provisions of the General Corporation Law of the State of Delaware
("Delaware Law"), Purchaser will be merged with and into the Company (the
"Merger"). Following consummation of the Merger, the Company will continue as
the surviving corporation (the "Surviving Corporation") and will become an
indirect wholly owned subsidiary of Parent. At the effective time of the Merger
(the "Effective Time"), each Share issued and outstanding immediately prior to
the Effective Time (other than Shares held in the treasury of the Company or
owned by Purchaser, Parent or any direct or indirect wholly owned subsidiary of
Parent or of the Company, and other than Shares held by stockholders who shall
have demanded and perfected appraisal rights, if any, under Delaware Law) will
be cancelled and converted automatically into the right to receive $35.62 in
cash, or any higher price that may be paid per Share in the Offer, without
interest (the "Merger Consideration"). The Merger Agreement is more fully
described in "Section 11. Background of the Offer; Contacts with the Company;
the Merger Agreement and the Specialty Merger Agreement".
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to the
next whole number, on the Board as will give Purchaser representation on the
Board equal to the product of the number of directors on the Board multiplied by
the percentage that the aggregate number of Shares then beneficially owned by
Purchaser and its affiliates following such
<PAGE>
purchase bears to the total number of Shares then outstanding. In the Merger
Agreement, the Company has agreed to take all actions necessary to cause
Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Board or securing the resignations of incumbent
directors or both.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the approval and adoption of the Merger Agreement
by the requisite vote of the stockholders of the Company. See "Section 12.
Purpose of the Offer; Plans for the Company After the Offer and the Merger".
Under the Company's Certificate of Incorporation and Delaware Law, the
affirmative vote of the holders of a majority of the outstanding Shares is
required to approve and adopt the Merger Agreement and the Merger. Consequently,
if Purchaser acquires (pursuant to the Offer or otherwise) at least a majority
of the outstanding Shares, Purchaser will have sufficient voting power to
approve and adopt the Merger Agreement and the Merger without the vote of any
other stockholder.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, Purchaser will be able
to approve and adopt the Merger Agreement and the transactions contemplated
thereby, including the Merger, without a vote of the Company's stockholders. In
such event, Parent, Purchaser and the Company have agreed to take, at the
request of Purchaser, all necessary and appropriate action to cause the Merger
to become effective as soon as reasonably practicable after such acquisition,
without a meeting of the Company's stockholders. If, however, Purchaser does not
acquire at least 90% of the then outstanding Shares pursuant to the Offer or
otherwise and a vote of the Company's stockholders is required under Delaware
Law, a significantly longer period of time will be required to effect the
Merger. See "Section 12. Purpose of the Offer; Plans for the Company After the
Offer and the Merger".
The Company has advised Purchaser that as of May 5, 1997, 41,991,547 Shares
were issued and outstanding, 2,711,133 Shares were reserved for issuance
pursuant to outstanding stock options granted by the Company to employees and
directors and 4,261,963 Shares were reserved for issuance upon conversion of the
Company's 5% Convertible Subordinated Notes Due 2001 (the "Convertible Notes").
As a result, as of such date, the Minimum Condition would be satisfied if
Purchaser acquired 24,482,322 Shares.
Simultaneously with the execution of the Merger Agreement, the Company
entered into an Agreement and Plan of Reorganization (the "Specialty Merger
Agreement"), dated as of May 5, 1997, by and between VSP Holdings, Inc., a
Delaware corporation ("VSP Purchaser"), VSP Holdings II, Inc., a Delaware
corporation ("VSP Purchaser II"), VSP Acquisition, Inc., a Delaware corporation
and a wholly owned subsidiary of VSP Purchaser ("VSP Merger Sub" and, together
with VSP Purchaser and VSP Purchaser II, the "VSP Purchasers"), Vivra Specialty
Partners, Inc., a Nevada Corporation and a majority owned subsidiary of the
Company ("Specialty Partners"), and the Company. Pursuant to the Specialty
Merger Agreement, the Company will sell its interests in Specialty Partners and
in Vivra Heart Imaging, Inc., a Nevada corporation and a majority owned
subsidiary of the Company ("VHI") to the VSP Purchasers (the "Specialty Merger
Transaction").
Of the Per Share Amount, $1.72 represents the expected net after-tax
proceeds per Share to the Company from the Specialty Merger Transaction. Under
the Specialty Merger Agreement, the gross consideration allocated between
Specialty Partners and VHI will be $84,312,500. Of this amount, the Company
expects to receive sale proceeds of approximately $79,400,000. Assuming both a
pre-tax gain to the Company of approximately $5,400,000 and an income tax rate
of 41%, the Company will incur a tax liability of approximately $2,200,000 in
connection with the Specialty Merger Transaction. The net after-tax proceeds of
approximately $77,200,000 represents approximately $1.72 per Share on a fully
diluted basis. The receipt by the Company of not less than $76,900,000 of such
net after-tax proceeds is a condition to the purchase of the Shares in the
Offer. See "Section 15. Conditions of the Offer."
2
<PAGE>
THE OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED OF) ANY OF THE
CONVERTIBLE NOTES. Holders of Convertible Notes who wish to participate in the
Offer must first convert their Convertible Notes into Shares in accordance with
the terms of the Indenture dated as of July 8, 1996 (the "Indenture") between
the Company and State Street Bank and Trust Company, as trustee (the "Trustee"),
and tender the Shares issued upon such conversion pursuant to the Offer. Under
the Indenture, any holder of Convertible Notes may, at his option, convert the
principal amount thereof into that number of Shares obtained by dividing the
principal amount thereof by the conversion price of $37.20 (26.88 shares per
$1,000 principal amount of Convertible Notes), subject to adjustment under
certain circumstances. Holders of Convertible Notes who convert such Convertible
Notes into Shares will have no right under the Indenture to revoke an effective
conversion. Accordingly, if the Offer terminates or expires without the purchase
of Shares or if Shares tendered after conversion by a holder of Convertible
Notes are not purchased for any reason, the converting holder will no longer
have any rights under the Indenture. According to the Indenture, after
consummation of the Merger, each holder of a Convertible Note then outstanding
would be entitled to receive, upon conversion, the consideration receivable upon
consummation of the Merger by the holder of the number of Shares that would have
been deliverable upon conversion of such Convertible Notes immediately prior to
the Merger; or $957.47 per $1,000 principal amount of Convertible Notes.
Subject to the terms and conditions of the Indenture, upon the consummation
of the Offer, the holders of Convertible Notes, will have the right to require
the Company to repurchase their Convertible Notes at a purchase price equal to
the principal amount thereof plus accrued interest (up to and including the date
of repurchase). See "Section 9. Effect on Convertible Notes".
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of such extension or amendment), Purchaser will accept for
payment and pay for all Shares validly tendered prior to the Expiration Date (as
hereinafter defined) and not withdrawn as permitted by "Section 4. Withdrawal
Rights". The term "Expiration Date" means 12:00 midnight, New York City time, on
Friday, June 6, 1997, unless and until Purchaser, in its sole discretion (but
subject to the terms and conditions of the Merger Agreement), shall have
extended the period during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by Purchaser, shall expire.
Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from time
to time, to extend for any reason the period of time during which the Offer is
open, including the occurrence of any of the conditions specified in "Section
15. Certain Conditions of the Offer", by giving oral or written notice of such
extension to the Depositary. During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer, subject to the
rights of a tendering stockholder to withdraw such stockholder's shares. See
"Section 4. Withdrawal Rights".
Subject to the applicable regulations of the Securities and Exchange
Commission (the "Commission"), Purchaser also expressly reserves the right, in
its sole discretion (but subject to the terms and conditions of the Merger
Agreement), at any time and from time to time, (i) to delay acceptance for
payment of, or, regardless of whether such Shares were theretofore accepted for
payment, payment for, any Shares pending receipt of any regulatory approval
specified in "Section 16. Certain Legal Matters and Regulatory Approvals", (ii)
to terminate the Offer and not accept for payment any Shares upon the occurrence
of any of the conditions specified in "Section 15. Certain Conditions of the
Offer" and (iii) to waive any condition or otherwise amend the Offer in any
respect, by giving oral or written notice of such delay, termination, waiver or
amendment to the Depositary and by making a public announcement thereof. The
Merger Agreement provides that, without the consent of the Company, Purchaser
will not
3
<PAGE>
(i) decrease the price per Share payable pursuant to the Offer, (ii) reduce the
maximum number of Shares to be purchased in the Offer or (iii) impose conditions
to the Offer in addition to those set forth in "Section 15. Certain Conditions
of the Offer". Purchaser acknowledges that (i) Rule 14e-1(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires
Purchaser to pay the consideration offered or to return the Shares tendered
promptly after the termination or withdrawal of the Offer and (ii) Purchaser may
not delay acceptance for payment of, or payment for (except as provided in
clause (i) of the first sentence of this paragraph), any Shares upon the
occurrence of any of the conditions specified in "Section 15. Certain Conditions
of the Offer" without extending the period of time during which the Offer is
open.
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by public announcement thereof, such announcement in
the case of an extension to be made no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date. Subject
to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that material changes be promptly disseminated to stockholders in
a manner reasonably designed to inform them of such changes) and without
limiting the manner in which Purchaser may choose to make any public
announcement, Purchaser shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a press
release to the Dow Jones News Service.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules l4d-4(c)
and l4d-6(d) under the Exchange Act.
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Purchaser should decide to decrease the number of Shares being sought or
to increase or decrease the consideration being offered in the Offer, such
decrease in the number of Shares being sought or such increase or decrease in
the consideration being offered will be applicable to all stockholders whose
Shares are accepted for payment pursuant to the Offer and, if at the time notice
of any such decrease in the number of Shares being sought or such increase or
decrease in the consideration being offered is first published, sent or given to
holders of such Shares, the Offer is scheduled to expire at any time earlier
than the period ending on the tenth business day from and including the date
that such notice is first so published, sent or given, the Offer will be
extended at least until the expiration of such ten business day period. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or federal holiday and consists of the time period from 12:01 a.m.
through 12:00 midnight, New York City time.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished, for subsequent transmittal to beneficial
owners of Shares, to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and subject
to the conditions of the Offer (including, if the Offer is extended or amended,
the terms and conditions of any such extension or amendment), Purchaser will
accept for payment, and will pay for, all Shares validly tendered prior to the
Expiration Date and not properly withdrawn promptly after the later to occur of
(i) the Expiration Date, (ii) the expiration or termination of any applicable
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), and (iii) the satisfaction or waiver of the
conditions to the Offer set forth in "Section 15. Certain Conditions of the
Offer". Subject to applicable rules of the Commission, Purchaser expressly
reserves the right to delay acceptance for payment of, or payment for, Shares
pending receipt of any regulatory approvals specified in "Section 16.
4
<PAGE>
Certain Legal Matters and Regulatory Approvals" or in order to comply, in whole
or in part, with any other applicable law.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Shares (the "Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company
(each, a "Book-Entry Transfer Facility" and, collectively, the "Book-Entry
Transfer Facilities") pursuant to the procedures set forth in "Section 3.
Procedures for Accepting the Offer and Tendering Shares", (ii) the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees and (iii) any other documents required under
the Letter of Transmittal.
On May 9, 1997, Parent filed with the Federal Trade Commission (the "FTC")
and the Antitrust Division of the Department of Justice (the "Antitrust
Division") a Premerger Notification and Report Form under the HSR Act with
respect to the Offer. Accordingly, it is anticipated that the waiting period
under the HSR Act applicable to the Offer will expire at 11:59 p.m., New York
City time, on May 24, 1997. Prior to the expiration or termination of such
waiting period, the FTC or the Antitrust Division may extend such waiting period
by requesting additional information from Parent with respect to the Offer. If
such a request is made with respect to the purchase of Shares in the Offer, the
waiting period will expire at 11:59 p.m., New York City time, on the tenth
calendar day after substantial compliance by Parent with such a request.
Thereafter, the waiting period may only be extended by court order. The waiting
period under the HSR Act may be terminated prior to its expiration by the FTC
and the Antitrust Division. Parent has requested early termination of the
waiting period, although there can be no assurance that this request will be
granted. See "Section 16. Certain Legal Matters and Regulatory Approvals" for
additional information regarding the HSR Act.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to the
Offer. Upon the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from Purchaser and
transmitting such payments to tendering stockholders whose Shares have been
accepted for payment. Under no circumstances will interest on the purchase price
for Shares be paid, regardless of any delay in making such payment.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are submitted
evidencing more Shares than are tendered, Share Certificates evidencing
unpurchased Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares tendered by book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility pursuant to the procedure
set forth in "Section 3. Procedures for Accepting the Offer and Tendering
Shares", such Shares will be credited to an account maintained at such Book-
Entry Transfer Facility), as promptly as practicable following the expiration or
termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more of its affiliates, the right to purchase all or any
portion of the Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES. In order for a
holder of Shares validly to tender Shares pursuant to the Offer, the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
together with any required signature guarantees (or, in the case of a book-entry
5
<PAGE>
transfer, an Agent's Message in lieu of the Letter of Transmittal) and any other
documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase and either (i) the Share Certificates evidencing tendered Shares must
be received by the Depositary at such address or such Shares must be tendered
pursuant to the procedure for book-entry transfer described below and a
Book-Entry Confirmation must be received by the Depositary (including an Agent's
Message if the tendering stockholder has not delivered a Letter of Transmittal),
in each case prior to the Expiration Date, or (ii) the tendering stockholder
must comply with the guaranteed delivery procedures described below. The term
"Agent's Message" means a message, transmitted by a Book-Entry Transfer Facility
to, and received by, the Depositary and forming a part of a Book-Entry
Confirmation, which states that such Book-Entry Transfer Facility has received
an express acknowledgement from the participant in such Book-Entry Transfer
Facility tendering the Shares which are the subject of such book-entry
confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that Purchaser may enforce such agreement
against such participant.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facilities for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make a book-entry delivery of Shares by causing such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at such
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at a Book-Entry Transfer Facility,
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's Message
in lieu of the Letter of Transmittal, and any other required documents, must, in
any case, be received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase prior to the Expiration Date, or the
tendering stockholder must comply with the guaranteed delivery procedure
described below. Delivery of documents to a Book-Entry Transfer Facility does
not constitute delivery to the Depositary.
SIGNATURE GUARANTEES. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., or by a
commercial bank or trust company having an office or correspondent in the United
States (each of the foregoing being referred to as an "Eligible Institution"),
except in cases where Shares are tendered (i) by a registered holder of Shares
who has not completed either the box entitled "Special Payment Instructions" or
the box entitled "Special Delivery Instructions" on the Letter of Transmittal or
(ii) for the account of an Eligible Institution. If a Share Certificate is
registered in the name of a person other than the signer of the Letter of
Transmittal, or if payment is to be made, or a Share Certificate not accepted
for payment or not tendered is to be returned, to a person other than the
registered holder(s), then the Share Certificate must be endorsed or accompanied
by appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear on the Share Certificate, with the signature(s) on
such Share Certificate or stock powers guaranteed by an Eligible Institution.
See Instructions 1 and 5 of the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares are
not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to
6
<PAGE>
the Expiration Date, or such stockholder cannot complete the procedure for
delivery by book-entry transfer on a timely basis, such Shares may nevertheless
be tendered, provided that all the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by Purchaser, is received prior to the
Expiration Date by the Depositary as provided below; and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing all
tendered Shares, in proper form for transfer, in each case together with the
Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by the Letter of Transmittal are received by the Depositary within
three New York Stock Exchange, Inc. ("NYSE") trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram, telex or facsimile transmission to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in the
form of Notice of Guaranteed Delivery made available by Purchaser.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by the Letter of Transmittal.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by Purchaser in its sole discretion, which
determination shall be final and binding on all parties. Purchaser reserves the
absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may, in the opinion of its
counsel, be unlawful. Purchaser also reserves the absolute right to waive any
condition of the Offer or any defect or irregularity, in the tender of any
Shares of any particular stockholder, whether or not similar defects or
irregularities are waived in the case of other stockholders. No tender of Shares
will be deemed to have been validly made until all defects and irregularities
have been cured or waived. None of Purchaser, Parent, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. Purchaser's interpretation
of the terms and conditions of the Offer (including the Letter of Transmittal
and the instructions thereto) will be final and binding.
OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's proxies, each with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of such stockholder's
rights with respect to the Shares tendered by such stockholder and accepted for
payment by Purchaser (and with respect to any and all other Shares or other
securities issued or issuable in respect of such Shares on or after May 5,
1997). All such proxies shall be considered coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent
that, Purchaser accepts such Shares for payment. Upon such acceptance for
payment, all prior proxies given by such stockholder with respect to such Shares
(and such other Shares and securities) will be revoked without further action,
and no subsequent proxies may be given nor any subsequent written consent
executed by such stockholder (and, if given or executed, will not be deemed to
be effective) with respect thereto. The designees of Purchaser will, with
respect to the Shares for which the appointment is effective, be empowered to
exercise all voting and other rights of such stockholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
stockholders or any adjournment or postponement
7
<PAGE>
thereof, by written consent in lieu of any such meeting or otherwise. Purchaser
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon Purchaser's payment for such Shares, Purchaser must
be able to exercise full voting rights with respect to such Shares.
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the conditions
of the Offer.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT TO
CERTAIN STOCKHOLDERS OF THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE
OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S
CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH STOCKHOLDER IS NOT
SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE
FORM W-9 IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 10 OF THE LETTER OF
TRANSMITTAL.
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are
irrevocable except that such Shares may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by Purchaser
pursuant to the Offer, may also be withdrawn at any time after July 7, 1997. If
Purchaser extends the Offer, is delayed in its acceptance for payment of Shares
or is unable to accept Shares for payment pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as described in this "Section 4. Withdrawal
Rights". Any such delay will be by an extension of the Offer to the extent
required by law.
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover page of this Offer to Purchase.
Any such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of such Shares, if different from that of the person who
tendered such Shares. If Share Certificates evidencing Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such Share Certificates, the serial numbers shown on
such Share Certificates must be submitted to the Depositary and the signature(s)
on the notice of withdrawal must be guaranteed by an Eligible Institution,
unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in "Section 3. Procedures for Accepting the
Offer and Tendering Shares", any notice of withdrawal must specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Shares.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination will be final and binding. None of Purchaser, Parent, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in "Section 3. Procedures for Accepting the Offer and
Tendering Shares".
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash for Shares
pursuant to the Offer or in the Merger will be a taxable transaction for U.S.
federal income tax purposes under the Internal Revenue Code of 1986, as amended,
and may also be a taxable transaction under applicable state, local or foreign
tax laws. In general, a stockholder will recognize gain or loss for U.S. federal
income tax purposes
8
<PAGE>
equal to the difference between the amount of cash received in exchange for the
Shares sold and such stockholder's adjusted tax basis in such Shares. Assuming
the Shares constitute capital assets in the hands of the stockholder, such gain
or loss will be capital gain or loss and will be long term capital gain or loss
if the stockholder's holding period exceeds one year.
Legislative proposals have been under consideration that would reduce the
rate of federal income taxation of certain capital gains. Such legislation, if
enacted, might apply only to gain realized on sales occurring after a date
specified in the legislation. It cannot be predicted whether any such
legislation ultimately will be enacted and, if enacted, what its effective date
will be.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF
STOCKHOLDERS, INCLUDING STOCKHOLDERS WHO ACQUIRED SHARES PURSUANT TO THE
EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, INDIVIDUALS WHO
ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES AND FOREIGN CORPORATIONS.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and traded
principally on the NYSE under the symbol "V". The following table sets forth,
for the quarters indicated, the high and low sales prices per Share on the NYSE
as reported by the Dow Jones News Service.
<TABLE>
<CAPTION>
1995: HIGH LOW
- ---------------------------------------------------------------------- ---------- --------
<S> <C> <C> <C> <C>
First Quarter......................................................... $ 23 59/64 $ 18 1/2
Second Quarter........................................................ 22 11/64 18
Third Quarter......................................................... 22 37/64 17 3/4
Fourth Quarter........................................................ 25 5/8 21 5/64
<CAPTION>
1996:
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Quarter......................................................... $ 30 7/8 $ 24 3/4
Second Quarter........................................................ 35 3/8 27 3/8
Third Quarter......................................................... 33 1/4 27 5/8
Fourth Quarter........................................................ 36 1/8 24 5/8
<CAPTION>
1997:
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Quarter......................................................... $ 31 1/8 $ 24 5/8
Second Quarter (through May 8, 1997).................................. 35 1/4 24 1/2
</TABLE>
Although there is no legal or contractual restriction on the payment of
dividends by the Company, historically the Company has never declared or paid
dividends and has stated that it has no future plans to do so. The Company has
advised Purchaser that if the Offer and the Merger were not to be consummated,
it would expect to continue to retain any future earnings for the development of
its business.
On May 2, 1997, the last full trading day prior to the announcement of the
execution of the Merger Agreement and of Purchaser's intention to commence the
Offer, the closing price per Share as reported on the NYSE was $28 1/4. On May
8, 1997, the last full trading day prior to the commencement of the Offer, the
closing price per Share as reported on the NYSE was $34 3/4.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise set forth
herein, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company or
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Neither Purchaser nor Parent
assumes any
9
<PAGE>
responsibility for the accuracy or completeness of the information concerning
the Company furnished by the Company or contained in such documents and records
or for any failure by the Company to disclose events which may have occurred or
may affect the significance or accuracy of any such information but which are
unknown to Purchaser or Parent.
GENERAL. The Company is a Delaware corporation with its principal executive
offices located at 1850 Gateway Drive, Suite 500, San Mateo, California 94404.
According to the Company's Annual Report on Form 10-K for the fiscal year ended
November 30, 1996 (the "Form 10-K"), the Company is a specialty care company
with a business strategy to compete in specialties/disease states where it can
demonstrably deliver differentiated care to high-cost patient populations. The
Form 10-K states that the Company provides services through its Vivra Renal Care
("VRC") and Vivra Specialty Partners ("VSP") divisions, that VRC is the second
largest provider of dialysis services in the United States and that VSP provides
physician network and disease management services to entities responsible for
coordinating health care for a patient population, principally managed care
organizations.
FINANCIAL INFORMATION. Set forth below is certain selected consolidated
financial information relating to the Company and its subsidiaries which has
been excerpted or derived from the audited consolidated financial statements
contained in the Form 10-K and the unaudited consolidated financial statements
contained in the Company's Quarterly Report on Form 10-Q for the quarter ended
February 28, 1997 (the "Form 10-Q"). More comprehensive financial information is
included in the Form 10-K, the Form 10-Q and other documents filed by the
Company with the Commission. The financial information that follows is qualified
in its entirety by reference to such reports and other documents, including the
consolidated financial statements and related notes contained therein. Such
reports and other documents may be examined and copies may be obtained from the
offices of the Commission in the manner set forth below.
10
<PAGE>
VIVRA INCORPORATED
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30,
------------------------------------- FEBRUARY 29, FEBRUARY 28,
STATEMENT OF EARNINGS DATA: 1994 1995 1996 1996 1997
----------- ----------- ----------- ------------- -------------
Operating revenues.......................... $ 310,117 $ 380,826 $ 506,590 $ 110,075 $ 158,455
Operating costs............................. 207,779 260,838 360,500 79,110 114,138
General and administrative expense.......... 42,495 50,107 57,775 11,424 17,827
Depreciation expense........................ 9,953 11,280 14,170 3,202 4,550
Interest expense............................ 606 483 3,692 56 2,231
Earnings from continuing operations, before
income taxes.............................. 51,165 63,244 81,060 18,150 21,866
Net earnings from continuing operations..... 30,187 38,599 50,295 11,287 13,685
Net earnings................................ 30,884 38,599 50,295 11,287 13,685
Net earnings per share from continuing
operations................................ $ 0.92 $ 1.03 $ 1.27 $ 0.29 $ 0.34
Average number of common shares (fully
diluted).................................. 32,987 37,350 39,708 39,132 44,709
</TABLE>
<TABLE>
<CAPTION>
AT NOVEMBER 30, AT FEBRUARY
-------------------- 28,
BALANCE SHEET DATA: 1995 1996 1997
--------- --------- ------------
<S> <C> <C> <C>
Current assets.......................................... $ 189,481 $ 294,004 $ 277,349
Total assets............................................ 411,423 655,218 674,288
Working capital......................................... 133,704 214,414 192,750
Current liabilities..................................... 55,777 79,590 84,599
Long term debt - exclusive of current maturities........ 2,185 162,534 162,906
Total stockholders' equity.............................. 345,962 403,228 416,380
</TABLE>
In connection with Parent's review of the Company and in the course of the
negotiations between the Company and Parent described in "Section 11. Background
of the Offer; Contacts with the Company; the Merger Agreement and the Specialty
Merger Agreement", the Company provided Parent with certain business and
financial information which Parent and Purchaser believe is not publicly
available, including, among other things, certain financial forecasts for VRC
prepared by the Company for the Company's 1997 and 1998 fiscal years (the "VRC
Forecasts"). The VRC Forecasts indicate that operating revenues are forecasted
to be $559.8 million in 1997 and $788.5 million in 1998, which reflects an
assumed annual revenue growth rate of 36.1% and 40.9% in 1997 and 1998,
respectively, primarily due to assumed additions of new patients at existing
dialysis centers and assumed acquisitions of new dialysis centers and physician
practice groups. Also, the VRC Forecasts indicate that earnings from continuing
operations before interest and taxes ("EBIT") are forecasted to be $109.2
million in 1997 and $140.0 million in 1998, which reflects an assumed EBIT
margin of 19.5% and 17.8% in 1997 and 1998, respectively. The decrease in such
margin is due primarily to an increase in the number of global capitated
agreements as a percentage of VRC's revenues and additional amortization
resulting from acquisitions.
THE VRC FORECASTS ARE BASED UPON NUMEROUS ESTIMATES AND ASSUMPTIONS ABOUT
COMPLEX ECONOMIC AND OPERATING FACTORS WITH RESPECT TO INDUSTRY PERFORMANCE,
GENERAL BUSINESS AND ECONOMIC CONDITIONS AND OTHER MATTERS THAT CANNOT BE
PREDICTED ACCURATELY AND THAT ARE SUBJECT TO CONTINGENCIES OVER WHICH NEITHER
THE COMPANY, PARENT NOR PURCHASER HAVE CONTROL. ACCORDINGLY, THERE CAN BE NO
ASSURANCE THAT THE PROJECTED RESULTS ARE INDICATIVE OF FUTURE PERFORMANCE OR
THAT ACTUAL RESULTS WILL NOT BE MATERIALLY HIGHER OR LOWER THAN THOSE FORECAST.
THE VRC FORECASTS SHOULD NOT BE CONSIDERED A RELIABLE PREDICTOR OF FUTURE
RESULTS, AND THE INFORMATION CONTAINED THEREIN SHOULD NOT BE RELIED UPON AS
SUCH. IN ADDITION, THE VRC FORECASTS WERE NOT PREPARED WITH
11
<PAGE>
A VIEW TO PUBLIC DISCLOSURE OR IN COMPLIANCE WITH THE PUBLISHED GUIDELINES OF
THE COMMISSION OR THE GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS REGARDING FORECASTS OR PROJECTIONS. THE VRC
FORECASTS ARE ONLY BEING PROVIDED BECAUSE SUCH INFORMATION WAS PROVIDED TO
PARENT. NONE OF PARENT, PURCHASER, THE COMPANY OR ANY OTHER PARTY ASSUMES ANY
RESPONSIBILITY FOR THE ACCURACY OR VALIDITY OF THE FOREGOING PROJECTIONS.
ERNST & YOUNG LLP, INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY, HAS
NEITHER EXAMINED, REVIEWED NOR COMPILED THE VRC FORECASTS AND, CONSEQUENTLY,
DOES NOT EXPRESS AN OPINION OR ANY OTHER FORM OF ASSURANCE WITH RESPECT THERETO.
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Information as of particular
dates concerning the Company's directors and officers, their remuneration, stock
options granted to them, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company is
required to be disclosed in proxy statements distributed to the Company's
stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and also should be available for inspection at the
Commission's regional offices located at Seven World Trade Center, 13th Floor,
New York, New York 10048 and the Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, or may be obtained from the Commission's Internet
site on the World Wide Web at http:// www.sec.gov. Copies of such materials may
also be obtained by mail, upon payment of the Commission's customary fees, by
writing to its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. The information should also be available for inspection at the NYSE, 20
Broad Street, New York, New York 10005.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT. Purchaser, formerly
HH Acquisition Corp., is a newly incorporated Delaware corporation organized in
connection with the Offer and the Merger and has not carried on any activities
other than in connection with the Offer and the Merger. The principal offices of
Purchaser are located at 1185 Oak Street, Lakewood, Colorado 80215. Purchaser is
an indirect wholly owned subsidiary of Parent.
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.
Parent, Incentive AB (publ), is a corporation organized under the laws of
Sweden. Its principal offices are located at Hamngatan 2, Box 7373, S-10391,
Stockholm, Sweden. Parent is an international industrial group. Operations are
principally conducted in the medical technology, environment, materials handling
and development business areas. In addition, Parent has a substantial equity
interest in (i) ABB AB, which jointly with ABB AG, owns equal shares of ABB ASEA
Brown Boveri Ltd, a leading electrotechnical company with operations in a number
of business areas related to the production, distribution and utilization of
electrical power in electrical power generation, transmission and distribution,
industrial and building systems and rail transportation, and (ii) AB Electrolux,
one of the world's leading manufacturers of household appliances.
The name, citizenship, business address, principal occupation or employment,
and five-year employment history for each of the directors and executive
officers of Purchaser and Parent and certain other information are set forth in
Schedule I hereto.
12
<PAGE>
Parent is not subject to the information reporting requirements of the
Exchange Act, and, accordingly, does not file reports or other information with
the Commission relating to its business, financial condition and other matters.
Set forth below are certain selected consolidated financial information
relating to Parent and its subsidiaries for Parent's last three fiscal years.
The selected consolidated financial information has been prepared in Swedish
kronor in accordance with generally accepted accounting principles in Sweden
("Swedish GAAP"). Swedish GAAP differs in certain significant respects from
generally accepted accounting principles in the United States ("US GAAP"). A
summary of the significant differences between US GAAP and Swedish GAAP is set
forth below. Parent, however, believes that the differences are not material to
a decision by a holder of Shares whether to sell, tender or hold any Shares
because any such differences would not affect the ability of Parent to obtain
sufficient funds to pay for Shares to be acquired pursuant to the Offer and to
repay any funds which have been borrowed for such purpose. The amounts in the
table set forth below are in Swedish kronor unless otherwise indicated. The US
dollar amounts in the table set forth below for the year ended December 31, 1996
and the three months ended March 31, 1997 were determined by translating the
corresponding Swedish kronor amounts into US dollars using the noon buying rate
in New York City for cable transfers in Swedish kronor as certified for customs
purposes by the Federal Reserve Bank of New York on May 7, 1997 (the "Noon
Buying Rate"), which was SEK 7.7505 = $1.00. No representation is made that
Swedish kronor have been, could have been or could be, converted into US dollars
at that or any other rate.
INCENTIVE AB
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(SWEDISH KRONOR IN MILLIONS ("SEK"), EXCEPT WHERE OTHERWISE
INDICATED IN UNITED STATES DOLLARS IN MILLIONS ("$"),
AND EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
YEAR ENDED DECEMBER 31,
-------------------------------------------- ---------------------------------
1994 1995 1996 1996(1) 1996 1997 1997(1)
--------- --------- --------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
(SEK) (SEK) (SEK) ($) (SEK) (SEK) ($)
INCOME STATEMENT
Revenues..................................... 18,389 24,324 20,220 2,609 5,286 4,783 617
Operating earnings after depreciation........ 2,677 3,239 4,050 523 1,010 678 87
Operating earnings after financial items
incl. associated companies................. 3,832 4,653 5,228 675 1,174 828 107
excl. associated companies................. 2,078 2,624 3,442 444 826 473 61
Net income................................... 2,186 2,431 2,884 372 532 357 46
BALANCE SHEET
Total assets................................. 35,703 32,035 34,696 4,477 39,240 34,947 4,509
Net debt (2)................................. 10,366 6,738 10,324 1,332 -- 9,000 1,161
Shareholders' equity......................... 10,976 12,246 14,581 1,881 12,762 14,932 1,927
PER SHARE AMOUNTS
Shareholders' equity per share............... 161 179 213 27 187 218 28
Net asset value per share (3)................ 253 289 349 45 -- -- --
Dividend per share (4)....................... 8.00 9.00 10.00 1.29 -- -- --
</TABLE>
- ------------------------
(1) Translated, solely for the convenience of the reader at an exchange rate of
SEK 7.7505 = $1.00, the Noon Buying Rate on May 7, 1997.
(2) Not available for the three months ended March 31, 1996 and only available
as an approximation for the three months ended March 31, 1997.
(3) Shareholders' equity per share adjusted for surplus value (after deferred
tax) in exchange-listed shares in ABB AB, AB Electrolux and other associated
companies. Not available on a quarterly basis.
(4) Dividends paid annually.
13
<PAGE>
SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN US GAAP AND SWEDISH GAAP. The
following is a summary of certain significant differences in generally accepted
accounting practices in Sweden and the United States with respect to
consolidated financial statements. The summary is not to be regarded as a
complete list of all of the differences between Swedish GAAP and US GAAP and
does not include disclosure differences between Swedish GAAP and US GAAP.
ACCOUNTING FOR PENSIONS. According to Swedish GAAP, pension expenses are, in
general, recognized on the basis of funding requirements. In the United States,
FAS 87 (Employers' Accounting for Pensions) states that future salary increases,
inflation and other factors must be taken into account for computation of the
projected benefit obligation.
DEFERRED TAXES. Under Swedish GAAP, deferred taxes are calculated on untaxed
reserves using the liability method. Certain temporary differences and deferred
tax assets are not recorded. Under US GAAP, a reserve for deferred taxes under
the liability method is required for all temporary differences. Deferred tax
assets may be reported only if it is probable that the tax benefit will be
utilized.
CHANGES IN ACCOUNTING PRINCIPLES. According to Swedish GAAP, the accumulated
effect of changes in accounting principles is reported directly against equity.
According to US GAAP, the accumulated effect of changes in accounting principles
is reported in the income statement.
FOREIGN CURRENCY TRANSLATION. FINANCIAL STATEMENTS OF FOREIGN
SUBSIDIARIES. Swedish GAAP requires that all components of equity to be
classified either as restricted equity (share capital and restricted reserves)
or unrestricted equity. Cumulative currency translation adjustments are included
in restricted reserves or as retained earnings. Under US GAAP, cumulative
currency translation adjustments are required to be stated as a separate item
under stockholders' equity. In addition, assets and liabilities in foreign
currencies which are not designated as and effective as hedges are required to
be translated using the exchange rate at the balance sheet date and the
resulting gains or losses recognized in income.
RECEIVABLES AND PAYABLES IN FOREIGN CURRENCIES. With respect to the
valuation of outstanding forward exchanges contracts covering future flows of
foreign currencies, Swedish GAAP normally requires that provisions for
unrealized losses are made to the extent that such losses exceed unrealized
gains. Unrealized gains in excess of unrealized losses are not credited to
income. Under US GAAP, forward exchange contracts are valued at market price and
gains and losses arising therefrom are included in income.
LEASING. According to Swedish GAAP almost all leases are treated as
operating leases. According to US GAAP leases are treated as either operating or
financial leases.
CONSOLIDATED ACCOUNTS. The consolidated accounts are prepared in accordance
with the purchase method. For Gambro's acquisition of the Hospa Group, however,
the pooling method was used. US GAAP would require purchase accounting for this
acquisition.
GOODWILL. Acquired goodwill is amortized over ten years, or, in the event of
long-term strategic acquisitions, over a maximum of twenty years according to
Swedish GAAP. Under US GAAP, acquired goodwill is amortized over a maximum of
forty years.
Except as described in this Offer to Purchase, (i) none of Purchaser, Parent
nor, to the knowledge of Purchaser and Parent, any of the persons listed in
Schedule I to this Offer to Purchase or any associate or majority-owned
subsidiary of Purchaser, Parent or any of the persons so listed beneficially
owns or has any right to acquire, directly or indirectly, any Shares and (ii)
none of Purchaser, Parent nor, to the knowledge of Purchaser and Parent, any of
the persons or entities referred to above nor any director, executive officer or
subsidiary of any of the foregoing has effected any transaction in the Shares
during the past 60 days.
Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, none of Purchaser, Parent nor, to the knowledge of
Purchaser and Parent, any of the persons listed in Schedule I to this Offer to
Purchase, has any contract, arrangement, understanding or relationship with
14
<PAGE>
any other person with respect to any securities of the Company, including, but
not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or voting of such securities, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties against loss
or the giving or withholding of proxies. Except as set forth in this Offer to
Purchase, since December 1, 1993, neither Purchaser nor Parent nor, to the best
knowledge of Purchaser and Parent, any of the persons listed on Schedule I
hereto, has had any business relationship or transaction with the Company or any
of its executive officers, directors or affiliates that is required to be
reported under the rules and regulations of the Commission applicable to the
Offer. Except as set forth in this Offer to Purchase, since December 1, 1993,
there have been no contacts, negotiations or transactions between any of
Purchaser, Parent, or any of their respective subsidiaries or, to the best
knowledge of Purchaser and Parent, any of the persons listed in Schedule I to
this Offer to Purchase, on the one hand, and the Company or its affiliates, on
the other hand, concerning a merger, consolidation or acquisition, tender offer
or other acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.
9. EFFECT ON CONVERTIBLE NOTES. The Indenture provides that upon a "Change
of Control" of the Company the holders of the Convertible Notes have the right
to require the Company to purchase their Convertible Notes for 100% of the
principal amount thereof, plus accrued and unpaid interest (up to and including
the date of repurchase). The consummation of the Offer on the terms described
herein will constitute a Change of Control under the Indenture. However, the
consummation of the Offer shall not be deemed to be a Change of Control for
purposes of the Indenture if (i) immediately following the date upon which the
Offer is consummated, the aggregate market value of the Shares, excluding the
Shares beneficially owned by Parent and Purchaser is equal to or greater than
$700,000,000 or (ii) the closing price per share of the Shares for any five
trading days within the period of 10 consecutive trading days ending immediately
after the later of the consummation of the Offer or the public announcement
thereof shall equal or exceed 105% of the conversion price of the Convertible
Notes (currently 105% of $37.20 or $39.06) in effect on each such trading day.
According to the Indenture, within 30 days after the occurrence of such a
Change of Control, the Company will mail a written notice (the "Company Notice")
to the Trustee and to each holder of Convertible Notes and will cause a copy of
such notice to be published in a daily newspaper of national circulation. Such
notice will describe the Change of Control, the repurchase date, repurchase
price and the procedure for the holders to exercise their rights to require the
Company to repurchase their Convertible Notes. The date of repurchase of the
Convertible Notes will be designated by the Company so long as such date is not
less than 45 days nor more than 60 days after the date of the Company Notice.
According to the Form 10-K, at November 30, 1996, $158,545,000 aggregate
principal amount of the Convertible Notes was outstanding. The Offer is not
being made for (nor will tenders be accepted of) any of the Convertible Notes.
Holders of Convertible Notes who wish to participate in the Offer must first
convert their Convertible Notes into Shares in accordance with the terms of the
Indenture, and then tender the Shares issued upon such conversion pursuant to
the Offer. Under the Indenture, any holder of Convertible Notes may, at his
option, convert the principal amount thereof into that number of Shares obtained
by dividing the principal amount thereof by the conversion price of $37.20
(currently 26.88 shares per $1,000 principal amount of Notes), subject to
adjustment under certain circumstances. Holders of Convertible Notes who convert
such Convertible Notes into Shares will have no right under the Indenture to
revoke an effective conversion. Accordingly, if the Offer terminates or expires
without the purchase of any Shares or if any Shares tendered after conversion by
any holder of Convertible Notes are not purchased for any reason, the converting
holders will no longer have any rights under the Indenture.
Under the Indenture, after consummation of a merger, each holder of a
Convertible Note then outstanding would be entitled to receive, upon conversion,
the amount of shares of stock and other securities and property (including cash)
receivable upon such merger by the holder of the number of Shares which would
have been deliverable upon conversion of such Convertible Note immediately prior
15
<PAGE>
to such merger. Accordingly, assuming a conversion price of $37.20 for the
Convertible Notes, each $1,000 principal amount of Convertible Notes would be
convertible into $957.47 upon consummation of the Merger.
The Indenture requires that the Company, or the successor corporation,
execute and deliver to the Trustee, as a condition precedent to any such merger,
a supplemental indenture stating that holders of Convertible Notes shall have
the right to convert such Convertible Notes into the kind and amount of
consideration receivable if they had converted their Convertible Notes
immediately prior to the merger. In addition, the Indenture provides that the
Company may not consolidate with or merge into any corporation unless, among
other things, the acquiror is a US corporation and it expressly assumes (by a
supplemental indenture) the payment of principal and interest on the Convertible
Notes, as well as the Company's covenants under the Indenture.
10. FINANCING OF THE OFFER AND THE MERGER. The total amount of funds
required by Purchaser to consummate the Offer and the Merger, to repurchase the
Convertible Notes and to pay related fees and expenses is estimated to be
approximately $1.8 billion. Purchaser will obtain all of such funds from Parent
and its affiliates, including Gambro AB, a wholly owned subsidiary of Parent
("Gambro"). Gambro will provide to Purchaser to finance the Offer and the Merger
approximately $155 million from the Revolving Credit Facility, dated December
15, 1995 (the "Gambro Credit Facility"), between Gambro, BNP Capital Markets
Limited (as Arranger), certain banks named therein and Banque Nationale de Paris
(as Agent). Parent and Incentive Treasury AB, a subsidiary of Parent, will
provide to Purchaser to finance the Offer and the Merger (i) approximately $129
million from the Multicurrency Revolving Credit Facility, dated as of May 7,
1997 (the "1997 Credit Facility"), between Incentive Treasury AB (as Borrower),
Parent (as Guarantor) and Skandinaviska Enskilda Banken AB; (ii) approximately
$820 million from the Multicurrency Revolving Credit Facility, dated as of March
4, 1996 (the "1996 Credit Facility"), between Incentive Treasury AB (as
Borrower), Parent (as Guarantor), Deutsche Bank Luxembourg S.A. and Enskilda,
Skandinaviska Enskilda Banken (as Arrangers), Enskilda, Skandinaviska Enskilda
Banken (as Agent) and certain banks named therein; (iii) approximately $473
million from the Multicurrency Revolving Credit Facility, dated as of May 24,
1995, and amended March 4, 1996 (the "1995 Credit Facility"), between Incentive
Treasury AB (as Borrower), Parent (as Guarantor), Deutsche Bank Luxembourg S.A.
and Enskilda, Skandinaviska Enskilda Banken AB (as Arrangers) and Deutsche Bank
Luxembourg S.A. (as Agent) and certain banks named therein; (iv) approximately
$116 million from the Revolving Credit Facility, dated as of September 1, 1994,
and amended December 2, 1994, April 24, 1995, October 26, 1995 and November 5,
1996 (the "1994 Credit Facility"), between Parent (as First Borrower and
Guarantor), Incentive Treasury AB (as Second Borrower), Deutsche Bank Luxembourg
S.A. (as Lender); and (v) approximately $121 million from the Multicurrency
Credit Facility, dated as of March 6, 1996 (the "Nordbanken Credit Facility"),
between Nordbanken AB (as Lender), Incentive Treasury AB (as Borrower) and
Parent (as Guarantor).
Purchaser, Gambro and Parent anticipate that any indebtedness incurred
through borrowings under the foregoing credit facilities will be repaid from a
variety of sources, which may include, but may not be limited to, funds
generated internally by Gambro, Parent and their affiliates (including,
following the Merger, funds generated by the Surviving Corporation), bank
refinancing, and the public or private sale of debt or equity securities. No
decision has been made concerning the method Gambro and Parent will employ to
repay such indebtedness. Such decision will be made based on a review from time
to time of the advisability of particular actions, as well as on prevailing
interest rates and financial and other economic conditions and such factors as
Gambro and Parent may deem appropriate.
THE GAMBRO CREDIT FACILITY. Under the Gambro Credit Facility, Gambro and
its designated subsidiaries may borrow up to a total of $300 million from the
banks that are signatories thereto. All loans under this facility must be repaid
in full by December 15, 2002, but may also be voluntarily prepaid. The annual
rate of interest on loans made under this facility is the aggregate of the
following: (i) 0.20% per annum from December 15, 1995 until December 15, 2000,
and 0.225% per annum thereafter, (ii) LIBOR (as
16
<PAGE>
defined in this facility) in the case of loans not denominated in sterling or
EIBOR (as defined in this facility) in the case of loans denominated in
sterling, and (iii) MLA Costs (as defined in this facility) when applicable to
such loan. Loan obligations under this facility rank at least PARI PASSU with
all the obligor's other present and future unsecured and unsubordinated
obligations, except for obligations which are mandatorily preferred by law.
Subject to certain exceptions, an obligor under this facility may not create or
permit to subsist any security interest on any of its assets.
THE 1997 CREDIT FACILITY. Under the 1997 Credit Facility, Incentive
Treasury AB may borrow up to a total of 1 billion Swedish kronor from
Skandinaviska Enskilda Banken AB. Parent has guaranteed the obligations of
Incentive Treasury AB under this facility. Advances under this facility must be
repaid by May 5, 1998, and may be voluntarily prepaid only with the consent of
Skandinaviska Enskilda Banken AB. The annual rate of interest on loans made
under this facility is the aggregate of the following: (i) 0.10% per annum above
STIBOR (as defined in this facility) for loans in Swedish kronor and (ii) 0.10%
per annum above LIBOR (as defined in this facility) for loans in Eurocurrencies.
THE 1996 CREDIT FACILITY. Under the 1996 Credit Facility, Incentive
Treasury AB may borrow up to a total of $1 billion from the banks that are
signatories thereto. Parent has guaranteed the obligations of Incentive Treasury
AB under this facility. All loans under this facility must be repaid in full by
March 4, 2001. The annual rate of interest on loans made under this facility is
0.175% per annum over LIBOR (as defined in this facility). Loan obligations
under this facility rank at least PARI PASSU with the claims of obligor's other
unsecured creditors, except those whose claims are preferred by any bankruptcy,
insolvency, liquidation or other similar laws of general application. Subject to
certain exceptions, obligor may not create or permit to subsist any encumbrance
on any of its assets.
THE 1995 CREDIT FACILITY. Under the 1995 Credit Facility, Incentive
Treasury AB may borrow up to a total of $500 million from the banks that are
signatories thereto. Parent has guaranteed the obligations of Incentive Treasury
AB under the facility. All loans under this facility must be repaid in full by
May 24, 2002. The annual rate of interest on loans made under this facility is
the aggregate of the following: (i) 0.20% per annum from May 24, 1995 to May 24,
1999 and 0.25% per annum thereafter, (ii) the Associated Costs Rate (as defined
in this facility) in the case of loans denominated in sterling, and (iii) LIBOR
(as defined in this facility). Loan obligations under this facility rank at
least PARI PASSU with the claims of obligor's other unsecured creditors, except
those whose claims are preferred by any bankruptcy, insolvency, liquidation or
other similar laws of general application. Subject to certain exceptions,
obligor may not create or permit to subsist any encumbrance on any of its
assets.
THE 1994 CREDIT FACILITY. Under the 1994 Credit Facility, Deutsche Bank
Luxembourg S.A. has made available to Parent and Incentive Treasury AB a
revolving credit facility of 200 million German marks. Parent has guaranteed the
obligations of Incentive Treasury AB under this facility. Advances under this
facility must be repaid by October 28, 1997. The annual rate of interest on
loans made under this facility is 0.10% per annum above DM LIBOR (as defined in
this facility).
THE NORDBANKEN CREDIT FACILITY. Under the Nordbanken Credit Facility,
Incentive Treasury AB may borrow up to a total of 1 billion Swedish kronor from
Nordbanken AB. Parent has guaranteed the obligations of Incentive Treasury AB
under this facility. Advances under this facility must be repaid by December 8,
1997, and may be voluntarily prepaid. The annual rate of interest on loans made
under this facility is (i) 0.10% per annum above STIBOR (as defined in this
facility) for loans in Swedish kronor and (ii) 0.10% per annum above LIBOR (as
defined in this facility) for loans in Eurocurrencies. Loan obligations under
this facility rank at least PARI PASSU with other unsecured obligations, except
for obligations which are mandatorily preferred by law.
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11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT
AND THE SPECIALTY MERGER AGREEMENT.
BACKGROUND OF THE OFFER, CONTACTS WITH THE COMPANY
In late August and early September 1996, Mr. Thiry and Mr. Mats Wahlstrom,
President and Chief Executive Officer of Gambro Healthcare, Inc. ("Gambro
Healthcare"), a wholly owned subsidiary of Parent and Gambro, had discussions
concerning a possible strategic transaction between Parent and the Company.
Before and during September 1996, members of the Company's senior management,
including Mr. Thiry, Ms. Zumwalt and Stephen G. Pagliuca, a director of the
Company, interviewed various investment banking firms with respect to an
engagement to provide financial advice to the Company concerning its long-term
strategic direction and to potentially assist the Company in identifying an
acquiror for all or a portion of the Company's business. In September 1996, the
Company engaged Goldman Sachs to assist the Company in determining the proper
structure by which to achieve its objectives.
In September 1996, Goldman, Sachs & Co., financial advisor to the Company
("Goldman Sachs"), on behalf of the Company, contacted several companies
regarding a potential strategic relationship with the Company, including Parent
and Purchaser. On September 19, 1996, UBS Securities LLC ("UBS"), financial
advisor to Gambro, forwarded to the Company certain materials concerning a
possible transaction structure. On September 25, 1996, Mr. Thiry met with
representatives of Parent and Gambro, including Berthold Lindqvist, President
and Chief Executive Officer of Gambro, Mikael Lilius, President and Chief
Executive Officer of Parent and Mr. Wahlstrom to discuss a potential acquisition
of the Company by Parents.
On October 6, 1996, several representatives of Goldman Sachs met with
members of senior management of the Company to discuss potential transactions
and acquirors. On October 16, 1996, Mr. Thiry sent a letter to Parent and
Purchaser regarding certain structural issues involved in a potential
acquisition of the Company by Parent.
On November 1, 1996, Mr. Thiry met with representatives of Parent and Gambro
to discuss outstanding structural issues and the feasibility of combining the
Company and Gambro Healthcare. During November 1996, Mr. Thiry had discussions
with another company regarding a potential strategic relationship with the
Company. Also during November 1996, Goldman Sachs, on behalf of the Company, had
discussions with another company regarding a potential strategic relationship
with the Company.
On November 18, 1996, the Company formally engaged Goldman Sachs to serve as
its financial advisor in connection with a potential acquisition of the Company
by a third party.
On November 21, 1996, Mr. Wahlstrom, Herbert S. Lawson, Chief Financial
Officer of Gambro Healthcare, Mr. David Barry, President of the Company's Renal
division, and Ms. Zumwalt met in Colorado, together with representatives of
Goldman Sachs and UBS, to discuss certain financial data concerning Gambro and
the Company, including the operating synergies that might be expected from a
transaction.
On November 25, 1996, representatives of UBS and Morgan Stanley & Co.
Limited ("Morgan Stanley"), financial advisor to Parent, met with
representatives of Goldman Sachs and presented an initial proposal for the
acquisition of the Company. The Company responded that the proposed terms were
below the Company's expectations. Mr. Thiry confirmed that response during a
subsequent telephone conversation. During December, the Company advised Gambro
that the Company would shift its focus to considering a transaction involving
the sale of all or part of VSP (the "VSP Sale").
During December 1996, the Company had discussions with one company regarding
a potential strategic relationship with the Company. Also during December 1996,
Ms. Zumwalt met with representatives of a potential acquiror in connection with
the VSP Sale.
During February 1997, the Company had discussions with two companies
regarding a potential strategic relationship with the Company. On February 5,
1997, Mr. Lindqvist sent a letter to the Company
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indicating that Gambro would be prepared to make an offer to acquire all the
Shares for cash, or alternatively to acquire the Company's dialysis services and
renal care business. Mr. Lilius sent a letter contemporaneously to the Company
expressing Parent's support for Gambro's proposal.
On February 7, 1997, the Company's Board of Directors held a telephonic
meeting to review the history of the discussions to date with parent and Gambro
and to discuss in detail Gambro's letter. The Board of Directors requested
members of senior management and Goldman Sachs to contact Parent and its
financial advisor to better understand and evaluate the terms set forth in the
letter.
On February 21, 1997, Mr. Lindqvist sent Mr. Thiry another letter
reiterating Gambro's interest in the transaction with the Company. On the same
day, the Company's Board of Directors held a telephonic meeting to discuss the
status of the ongoing discussions with Parent and Gambro. During such telephonic
meeting, the Board of Directors named Mr. Thiry, Ms. Zumwalt and John M. Nehra,
a director of the Company, to a committee to consider the acquisition of the
Company by Gambro and Parent. On February 27, 1997, Mr. Lindqvist sent a letter
to Mr. Thiry and the Company's Board of Directors proposing to acquire only the
Company's renal care business.
On March 7, 1997, the Company's Board of Directors met to discuss Gambro's
offer and the status of ongoing discussions with one additional company
regarding a potential strategic relationship with the Company.
On March 21, 1997, the Company's Board of Directors held a telephonic
meeting to receive a report from Mr. Thiry, Ms. Zumwalt and Mr. Nehra regarding
the February 5, 1997 letter. The Board of Directors also established a Special
Committee consisting of Mr. Nehra and Richard B. Fontaine, a director of the
Company, for the purposes of investigating alternatives available to the Company
regarding VSP, including a possible sale of VSP (the "Special Committee").
On April 2, 1997, representatives of the Company and Goldman Sachs met with
representatives of Parent, Gambro, UBS and Morgan Stanley to discuss a possible
transaction in which Gambro would acquire the Company's dialysis services and
renal care business.
On April 6, 1997, Mr. Nehra, on behalf of the Special Committee, during a
telephone conversation with Messrs. Lilius, Lindqvist and Wahlstrom, indicated
that the Special Committee had met and was interested in moving forward on a
cash tender offer transaction for the Company's Vivra Renal Care business. Mr.
Nehra indicated that it would be appropriate for representatives of Parent to
conduct a due diligence review of the Company's business.
On April 8, 1997, several representatives of Parent and Gambro Healthcare,
together with representatives of Shearman & Sterling, representatives of UBS and
Morgan Stanley met with the Special Committee, together with representatives of
Brobeck, Phleger & Harrison LLP and representatives of Goldman Sachs to organize
legal and operational due diligence and to discuss the process and structure for
the VSP Sale. During April 1997, the Company held ongoing discussions with a
number of companies concerning the VSP Sale.
From April 10, 1997 through April 24, 1997, several representatives of
Parent and Gambro conducted a due diligence review of the Company. These
representatives met at length with the Company's executive officers concerning
the Company's historical and projected financial data. Certain of these meetings
also included a representative of Goldman Sachs. The representatives of Parent
and Gambro also reviewed numerous documents concerning the Company's business,
financial results and financial outlook, as well as the Company's standard
operating policies and procedures and related data.
On April 25, 1997, representatives of Parent and Gambro conducted an
additional due diligence meeting to obtain an update on due diligence matters,
recent financial results, updated financial projections and the status of the
VSP Sale and the interrelationships between the Company and VSP following such
VSP Sale.
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On April 22, 1997, representatives of Brobeck, Phleger & Harrison LLP and
Shearman & Sterling met in Washington, D.C. to negotiate the terms of the Merger
Agreement relating to the proposed transaction. On April 24, 1997, Brobeck,
Phleger & Harrison LLP and Shearman & Sterling met again in New York to continue
such negotiations.
On April 26, 1997, the Company's Board of Directors held a telephonic
meeting to discuss the continuing negotiations and current terms of the proposed
transaction with Parent and Gambro. On April 29, 1997, the parties and their
respective representatives met in Chicago to further negotiate the terms and
conditions of the Offer, the Merger and the Merger Agreement.
Representatives of Parent, Gambro and Purchaser and Shearman & Sterling met
with representatives of the Company and Brobek, Phleger & Harrison LLP on May 4
and May 5, 1997 to finalize negotiations of the terms and conditions of the
Offer, the Merger and the Merger Agreement.
On May 4, 1997 and May 5, 1997, the Board of Directors held a special
meeting to consider the acquisition proposal submitted by Purchaser. All of the
Company's directors participated in the meeting. At the meeting, the Board of
Directors reviewed the Merger Agreement, the Offer and the Merger with the
Company's executive officers, legal counsel and representatives of Goldman
Sachs. The Board of Directors heard presentations by its legal counsel with
respect to the terms of the proposed Offer and Merger and by representatives of
Goldman Sachs with respect to the financial terms of the proposed Offer and the
Merger. At the conclusion of their presentation, representatives of Goldman
Sachs delivered their oral opinion to the Board of Directors (subsequently
confirmed in writing) that, as of such date, the consideration proposed to be
received by the holders of the Shares in the Offer and in the Merger is fair to
the holders of the Shares from a financial point of view.
Based upon such discussions, presentations and opinion, the Board of
Directors unanimously (i) approved the Offer, the Merger and the execution of
the Merger Agreement substantially in the form presented to it, and (ii)
recommended that the Company's stockholders accept the Offer and tender their
Shares and approve the Merger and the Merger Agreement. On May 5, 1997,
representatives of the Company, Parent and Purchaser signed the Merger Agreement
and issued a joint press release to such effect.
THE MERGER AGREEMENT
A copy of the Merger Agreement is filed as an Exhibit to the Schedule 14D-1
and is incorporated by reference in this Offer to Purchase. Following is a
summary of the Merger Agreement which summary is qualified in its entirety by
reference to the Merger Agreement.
THE OFFER. The Merger Agreement provides for the commencement of the Offer
as promptly as practicable, but in no event later than five business days after
the initial public announcement of Purchaser's intention to commence the Offer.
The obligation of Purchaser to accept for payment and pay for the Shares
tendered pursuant to the Offer is subject to the satisfaction of (i) the Minimum
Condition prior to the expiration of the Offer and (ii) certain other conditions
described in "Section 15. Certain Conditions of the Offer". Purchaser may waive
any condition to the Offer, increase the price per Share payable in the Offer
and make any other changes to the Offer. However, no change may (i) decrease the
price per Share payable in the Offer, (ii) reduce the maximum number of Shares
to be purchased or (iii) impose conditions to the Offer other than those
described in "Section 15 Certain Conditions of the Offer". The Purchaser may,
without the consent of the Company, (i) extend the Offer beyond the scheduled
Expiration Date (the initial scheduled Expiration Date being June 6, 1997, if,
at the scheduled Expiration Date, any of the conditions to Purchaser's
obligation to accept for payment, and to pay for, the Shares, shall not be
satisfied or waived, (ii) extend the Offer for any period required by any rule,
regulation or interpretation of the Commission or the staff thereof applicable
to the Offer or (iii) extend the Offer for an aggregate period of not more than
10 business days beyond the latest applicable date that would otherwise be
permitted under clause (i) or (ii) of this sentence, if as of such date, all of
the
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conditions to Purchaser's obligations to accept for payment, and to pay for, the
Shares are satisfied or waived, but the number of Shares validly tendered and
not withdrawn pursuant to the Offer equals 80% or more, but less than 90%, of
the outstanding Shares on a fully diluted basis. However, (A) if, on the initial
scheduled Expiration Date of the Offer, the sole condition remaining unsatisfied
is (1) the failure of the waiting period under the HSR Act to have expired or
been terminated, or (2) the failure to consummate the Specialty Merger
Transaction and such transaction has not been consummated solely due to the
failure of the waiting period under the HSR Act to have expired or been
terminated, then, in either case, the Purchaser is required to extend the Offer
from time to time until five business days after the expiration or termination
of the applicable waiting period under the HSR Act and (B) if the sole condition
remaining unsatisfied on the initial scheduled Expiration Date of the Offer is
the condition described in (f) of "Section 15. Certain Conditions of the Offer",
Purchaser is required, so long as the breach can be cured and the Company is
vigorously attempting to cure such breach, to extend the Offer from time to time
until five business days after such breach is cured provided that Purchaser will
not be required to extend the Offer beyond 35 days after such initial scheduled
Expiration Date.
THE MERGER. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof and in accordance with Delaware Law, at the Effective
Time, Purchaser will be merged with and into the Company and the Company will
continue as the Surviving Corporation and will become an indirect wholly owned
subsidiary of Parent. Upon consummation of the Merger, each issued and
outstanding Share (other than any Shares held in the treasury of the Company, or
owned by Purchaser, Parent or any direct or indirect wholly owned subsidiary of
Parent or of the Company and any outstanding Shares which are held by
stockholders who have not voted in favor of the Merger or consented thereto in
writing and who shall have demanded properly in writing appraisal for such
Shares in accordance with Delaware Law) will be canceled and converted
automatically into the right to receive an amount equal to the Per Share Amount
(the "Merger Consideration"). Pursuant to the Merger Agreement, each share of
common stock, par value $.01 per share, of Purchaser issued and outstanding
immediately prior to the Effective Time will be converted into and exchanged for
one validly issued, fully paid and nonassessable share of common stock, par
value $.01 per share, of the Surviving Corporation.
CHARTER DOCUMENTS; INITIAL DIRECTORS AND OFFICERS. The Merger Agreement
provides that, at the Effective Time, the Certificate of Incorporation of
Purchaser, as in effect immediately prior to the Effective Time, will be the
Certificate of Incorporation of the Surviving Corporation; PROVIDED, HOWEVER,
that Article I of the Certificate of Incorporation of the Surviving Corporation
will be amended to read as follows: "The name of the corporation is Vivra
Incorporated." The Merger Agreement also provides that the By-laws of Purchaser,
as in effect immediately prior to the Effective Time, will be the By-laws of the
Surviving Corporation. Pursuant to the Merger Agreement, the directors of
Purchaser immediately prior to the Effective Time will be the initial directors
of the Surviving Corporation and the officers of the Purchaser immediately prior
to the Effective Time will be the initial officers of the Surviving Corporation.
STOCKHOLDERS MEETING. The Merger Agreement provides that, if required by
applicable law in order to consummate the Merger, the Company will, in
accordance with applicable law and its Certificate of Incorporation and By-Laws,
(i) convene and hold an annual or special meeting of its stockholders (the
"Company Stockholders Meeting") for the purpose of considering and taking action
on the Merger Agreement and the transactions contemplated thereby, and (ii)
except if the Board determines in good faith an alternative action to be
necessary in accordance with its fiduciary duties to the Company's stockholders
under applicable law as advised by outside legal counsel, use its reasonable
efforts to approve and adopt the Merger Agreement and the transactions
contemplated thereby. Parent and Purchaser will cause all Shares owned by them
and their subsidiaries to be voted in favor of the approval and adoption of the
Merger Agreement and the transactions contemplated thereby. If the Minimum
Condition is satisfied, Purchaser will have sufficient voting power to cause the
approval and adoption of the Merger without the affirmative vote of any other
stockholder. Under Delaware Law, if Purchaser
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acquires at least 90% of the outstanding Shares, Purchaser will be able to
approve the Merger without a vote of the Company's stockholders.
FILINGS. The Merger Agreement provides that the Company will, as soon as
reasonably practicable after the consummation of the Offer and if required by
applicable law, prepare and file the Proxy Statement with the Commission, and
will use all reasonable efforts to have the Proxy Statement cleared by the
Commission. The Company has agreed that, except if the Board determines in good
faith an alternative action to be necessary in accordance with its fiduciary
duties to the Company's stockholders under applicable law as advised by outside
legal counsel, the Proxy Statement will contain the unanimous recommendation of
the Board that the stockholders of the Company approve the Merger Agreement and
the transactions contemplated thereby.
CONDUCT OF DIALYSIS BUSINESS. Pursuant to the Merger Agreement, the Company
has covenanted and agreed that, between the date of the Merger Agreement and the
Effective Time, unless Parent or Purchaser will otherwise agree in writing, the
Company's dialysis, renal care or nephrologist practice management business or
the Company's business of contracting with payors on behalf of nephrologists
(the "Dialysis Business") will be conducted only in, and the Company and the
subsidiaries of the Company engaged in the Dialysis Business (the "Dialysis
Subsidiaries") will not take any action with respect to the Dialysis Business
except in the ordinary course of the Dialysis Business; and the Company and the
Dialysis Subsidiaries will use all reasonable commercial efforts to preserve
substantially intact the business organization of the Dialysis Business, to keep
available the services of the current officers, employees and consultants of the
Dialysis Business and to preserve the current relationships of the Company and
the Dialysis Subsidiaries with physicians, payors and other persons with which
the Company or any Dialysis Subsidiary has significant business relations. By
way of amplification and not limitation, the Merger Agreement provides that
neither the Company nor any Dialysis Subsidiary will, between the date of the
Merger Agreement and the Effective Time, directly or indirectly do, or propose
to do, any of the following without the prior written consent of Parent or
Purchaser:
(i) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents;
(ii) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares
of capital stock of the Company or any Dialysis Subsidiary, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest of the Company
or any Dialysis Subsidiary (except for the issuance of certain Shares
pursuant to outstanding options and Shares issuable upon conversion of the
Convertible Notes) or (ii) any assets of the Company or any Dialysis
Subsidiary, except as contemplated by the Specialty Merger Transaction or in
the ordinary course of the Dialysis Business;
(iii) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock;
(iv) reclassify, combine, split, subdivide or redeem any of its capital
stock, or purchase or otherwise acquire, directly or indirectly, any of its
capital stock or any capital stock of any other Subsidiary;
(v) acquire (including, without limitation, by merger, consolidation, or
acquisition of stock or assets) any interest in any corporation,
partnership, other business organization or any division thereof or any
material amount of assets, or authorize any capital expenditures, other than
acquisitions or capital expenditures in the ordinary course of the Dialysis
Business which, in the aggregate, do not exceed $10,000,000 in each of May
1997, June 1997 and July 1997;
(vi) increase the compensation payable or to become payable or the
benefits provided to its officers or employees, or grant any severance or
termination pay to, or enter into any employment or
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severance agreement with any director or officer or other key employee of
the Company or its subsidiaries, or establish, adopt, enter into or amend
any collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer or employee;
(vii) hire or retain any employee or consultant at an annual rate of
compensation in excess of $125,000;
(viii) grant options or other interests in the equity securities of any
subsidiary of the Company;
(ix) take any action, other than in the ordinary course of the Dialysis
Business, with respect to accounting policies or procedures (including,
without limitation, procedures with respect to the payment of accounts
payable and collection of accounts receivable);
(x) make any tax election or settle or compromise any material federal,
state, local or foreign income tax liability;
(xi) settle any litigation, suit, claim, action, proceeding or
investigation (an "Action") other than an Action relating solely to the
Company's business of providing specialty physician network and disease
management services to managed care and provider organizations, other than
such businesses included in the Dialysis Business (collectively, the
"Specialty Business");
(xii) amend, modify or consent to the termination of any Material
Contract or amend, modify or consent to the termination of the Company's or
any Dialysis Subsidiary's rights thereunder, other than in the ordinary
course of the Dialysis Business; or
(xiii) enter into any contract or agreement that would have been a
Material Contract if entered into prior to the date hereof, other than in
the ordinary course of the Dialysis Business.
CONDUCT OF SPECIALTY BUSINESS. The Merger Agreement provides that from the
date thereof until the earlier of the consummation of the Specialty Merger
Transaction and the termination of the Merger Agreement pursuant to its terms,
the Company will operate Specialty Partners and the subsidiaries of the Company
engaged in the Specialty Business (the "Specialty Subsidiaries") consistent with
Section 2 of the Services Agreement dated as of May 5, 1997 between the Company
and Specialty Partners and the Company and the Dialysis Subsidiaries will not
make any contribution, payment or other transfer to Specialty Partners or any
Specialty Subsidiary of cash, cash equivalents, marketable securities or any
other asset and Specialty Partners and the Specialty Subsidiaries shall not make
any contribution, payment or other transfer to the Company or any Dialysis
Subsidiary of cash, cash equivalents, marketable securities or any other asset.
DIRECTORS. The Merger Agreement provides that, promptly upon the purchase
by Purchaser of the Shares pursuant to the Offer, and from time to time
thereafter, Purchaser will be entitled to designate such number of directors,
rounded up to the next whole number, on the Board as will give Purchaser
representation on the Board equal to the product of the total number of
directors on the Board (giving effect to the directors elected pursuant to this
sentence) multiplied by the percentage that the aggregate number of Shares
beneficially owned by Purchaser or any of its affiliates following such purchase
bears to the number of Shares outstanding, and the Company will, at such time,
promptly take all actions necessary to cause Purchaser's designees to be elected
as directors of the Company, including increasing the size of the Board or
securing the resignation of incumbent directors or both. At such times, the
Company will, upon written request to Purchaser, use its reasonable efforts to
cause persons designated by Purchaser to constitute the same percentage as
persons designated by Purchaser will constitute of the Board of (i) each
committee of the Board, (ii) the board of directors of each domestic Dialysis
Subsidiary and (iii) each committee of each such board, to the extent permitted
by applicable law. Until the earlier of (i) the time Purchaser acquires a
majority of the then outstanding Shares on a fully diluted basis and
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(ii) the Effective Time, the Company is required to use its reasonable efforts
to ensure that all the members of the Board and each committee of the Board and
such boards and committees of the domestic Dialysis Subsidiaries of the Company
as of the date of the Merger Agreement who are not employees of the Company will
remain members of the Board and of such boards and committees, except for the
members not standing for re-election at the Company's 1997 annual meeting of
stockholders.
Pursuant to the Merger Agreement, after the election of designees of
Purchaser pursuant to the preceding paragraph and prior to the Effective Time,
any amendment of the Merger Agreement or the Certificate of Incorporation or
By-laws of the Company, any termination of the Merger Agreement by the Company,
any extension by the Company of the time for the performance of any of the
obligations or other acts of Parent or Purchaser or waiver of any of the
Company's rights hereunder will require the concurrence of a majority of the
directors of the Company then in office who neither were designated by Purchaser
nor are employees of the Company.
NO SOLICITATION. The Company has agreed that it will, and will direct and
use all reasonable efforts to cause its officers, directors, employees,
representatives and agents to immediately cease any discussions or negotiations
with any parties that may be ongoing with respect to any "Acquisition Proposal"
(as defined below). Except with respect to the Specialty Merger Transaction, the
Company will not, nor will it permit any of its subsidiaries to, nor will it
authorize or permit any officer, director or employee of, or any investment
banker, accountant, attorney or other advisor or representative of, the Company
or any of its subsidiaries to, directly or indirectly, (i) solicit or initiate,
or knowingly encourage the submission of, any Acquisition Proposal or (ii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
the making of any proposal that constitutes, or may reasonably be expected to
lead to, an Acquisition Proposal; PROVIDED, HOWEVER, that if and to the extent,
prior to the acceptance for payment of Shares pursuant to the Offer, the Board
determines in good faith it is necessary to do so in accordance with its
fiduciary duties to the Company's stockholders under applicable law as advised
by outside legal counsel, the Company may, in response to an unsolicited written
Acquisition Proposal, and subject to compliance with the notice requirements
described below, (x) furnish information with respect to the Company to any
persons pursuant to a customary confidentiality agreement on terms no less
favorable to the Company than those contained in the confidentiality agreement
dated October 7, 1996 between Parent and the Company and (y) participate in
discussions regarding and negotiate with respect to such Acquisition Proposal.
For purposes of the Merger Agreement, "ACQUISITION PROPOSAL" means any bona
fide proposal or offer from any person relating to any direct or indirect
acquisition or purchase of all or a substantial part of the assets of the
Company or any of the Dialysis Subsidiaries or of over 20% of any class of
equity securities of the Company or any of the Dialysis Subsidiaries, any tender
offer or exchange offer that if consummated would result in any person
beneficially owning 20% or more of any class of equity securities of the Company
or any of the Dialysis Subsidiaries, any merger, consolidation, business
combination, sale of all or substantially all of the assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
the Dialysis Subsidiaries, other than the transactions contemplated by the
Merger Agreement and the Specialty Merger Transaction, or any other transaction
the consummation of which would reasonably be expected to impede, interfere
with, prevent or materially delay the Offer or the Merger or which would
reasonably be expected to dilute materially the benefits to Parent of the
transactions contemplated by the Offer and the Merger.
The Merger Agreement also provides that neither the Board nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to the Parent, the approval or recommendation by the Board or any
such committee of the Offer, the Merger Agreement or the Merger, (ii) approve or
recommend, or propose to approve or recommend, any Acquisition Proposal or (iii)
enter into any agreement with respect to any Acquisition Proposal.
Notwithstanding the foregoing, in the event prior to the time of acceptance for
payment of Shares pursuant to the Offer the Board
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determines in good faith that it is necessary to do so in accordance with its
fiduciary duties to the Company's stockholders under applicable law as advised
by outside legal counsel, the Board may (x) withdraw or modify its approval or
recommendation of the Offer, the Merger and the Merger Agreement in order to
enter into a definitive agreement with respect to a Superior Proposal (as
defined below) and may terminate the Merger Agreement pursuant to the
termination provisions described below (and concurrently with or after such
termination may cause the Company to enter into any agreement with respect to
any Superior Proposal). For purposes of the Merger Agreement, a "SUPERIOR
PROPOSAL" means any bona fide proposal made by a third party to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
more than 50% of the combined voting power of the Shares then outstanding or all
or substantially all of the assets of the Company and otherwise on terms which
the Board determines in its good faith judgment (based on the advice of a
financial advisor of nationally recognized reputation) to be more favorable to
the Company's stockholders than the Offer and the Merger and for which
financing, to the extent required, is then committed.
The Merger Agreement provides that the Company will promptly advise Parent
orally and in writing of any request for information or of any Acquisition
Proposal, the material terms and conditions of such request or Acquisition
Proposal and the identity of the person making such request or Acquisition
Proposal.
DIRECTORS' AND OFFICERS' INDEMNIFICATION. The Merger Agreement requires
that the Certificate of Incorporation of the Surviving Corporation contain
provisions no less favorable with respect to indemnification than are set forth
in Article Eight of the Certificate of Incorporation of the Company, which
provisions will not be amended, repealed or otherwise modified for six years
after the Effective Time in any manner that would affect adversely the rights of
individuals who at the Effective Time were directors, officers, employees,
fiduciaries or agents of the Company, unless such modification is required by
law. To the extent that the obligations under such provisions are not fully
performed by the Surviving Corporation, Parent has agreed to perform fully the
obligations thereunder for the remaining period.
Parent or the Surviving Corporation will use its best efforts to maintain in
effect for a period not less than six years after the Effective Time the current
directors' and officers' liability insurance policies maintained by the Company
(provided that Parent or the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions which are
not materially less favorable to such directors and officers) with respect to
matters occurring prior to the Effective Time; PROVIDED, HOWEVER, that if the
existing policies expire, are terminated or cancelled during such period, Parent
or Surviving Corporation will use its best efforts to obtain substantially
similar policies. Notwithstanding the foregoing, the Merger Agreement provides
that in no event will Parent or the Surviving Corporation be required to pay
more than an amount per year equal to 150% of current annual premiums paid by
the Company for such insurance. If the Parent or the Surviving Corporation is
not able to obtain the amount of required insurance for such aggregate premium,
the Merger Agreement requires Parent or the Surviving Corporation to obtain as
much insurance as can be obtained for an annual premium of 150% of the Company's
current annual premiums.
OPTIONS PLANS. The Merger Agreement provides that immediately prior to the
Effective Time, the Company will take all such actions as shall be necessary to
cause all stock options (and any related alternative rights) to purchase shares
(the "EMPLOYEE STOCK OPTIONS") granted under the Company's stock option plans
which are outstanding immediately prior to the Effective Time (whether or not
then presently exercisable or vested), to be cancelled. In exchange for the
cancellation of such Employee Stock Option, the holder thereof will be entitled
to receive from the Surviving Corporation an amount in cash equal to the product
of the difference between the Per Share Amount and the per share exercise price
of such Employee Stock Option, and the number of shares of Company Common Stock
covered by such Employee Stock Option. All payments in respect of Employee Stock
Options will be made after the Effective Time and not later than 30 days
following the Effective Time, subject to the Company's collection of all
applicable withholding taxes. The Merger Agreement also provides that all
restricted
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stock under the Company's 1989 Stock Incentive Plan will be vested, and any
restrictions attached to such stock pursuant to such plan will lapse,
immediately prior to the Effective Time.
In addition, the Merger Agreement states that the Company Stock Option Plans
will terminate as of the Effective Time and thereafter the only rights of
participants therein will be the right to receive the consideration set forth in
the previous paragraph. Prior to the Effective Time, the Company will cause each
holder of an outstanding Employee Stock Option to consent to the cancellation of
the Employee Stock Options held by such holder in consideration for the payment
provided herein, and will take such other action as may be necessary to carry
out the terms of the foregoing.
RETENTION ARRANGEMENT. The Merger Agreement provides that, following the
Effective Time, the Company will maintain a retention bonus and deferred
compensation arrangement (the "Retention Arrangement") with substantially the
terms and conditions set forth therein. As set forth in the Merger Agreement,
the Retention Arrangement will provide certain executives and key employees of
the Company with bonuses which will be payable in installments of 20% one month
following the Effective Time and 40% on each of the first two anniversaries of
the Effective Time. The Retention Arrangement will permit participants to defer
all or a specified percentage of each installment of the bonus. Amounts so
deferred will be credited to a deferred compensation account established by the
Company on its books and records for each participant, credited with notional
interest and distributed to the participant commencing on the later to occur of
the participant's termination of employment with the Company or attainment of
age 60. As a condition to the receipt of payments pursuant to the Retention
Arrangement, participants will be required to enter into certain
non-competition, non-solicitation and non-disclosure agreements with the
Company.
The Retention Arrangement is subject to the consummation of the Merger, and
the Company will have no payment obligations under the Retention Arrangement in
the event that the Merger is not consummated.
CONVERTIBLE SUBORDINATED NOTES. Pursuant to the Merger Agreement, prior to
the Effective Time, the Company will, in accordance with the terms of the
Convertible Note Indenture, execute and deliver to the Trustee a supplemental
indenture providing that, after the Effective Time, each $1,000 principal amount
of the Convertible Notes will be convertible into an amount of cash equal to the
price payable per Share in the Offer multiplied by 26.88. The Company also
agreed that it will offer to repurchase the Convertible Notes at the option of
the holders thereof and will consummate such repurchase, in each case in
accordance with the Indenture.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company as to the absence of certain changes or events
concerning the Company's corporate organization and qualification,
capitalization, authority, filings with the Commission and other governmental
authorities, financial statements, litigation, employee benefit matters,
intellectual property, real property, taxes, insurance, environmental matters,
material contracts, compliance with law, and Board approval of amendments to the
Company's Amended and Restated Rights Agreement dated as of February 13, 1996
between the Company and the First National Bank of Boston.
CONDITIONS TO CONSUMMATION OF THE MERGER. The Merger Agreement provides
that the respective obligations of each party to effect the Merger is subject to
the following conditions: (i) the Merger Agreement, the Merger and the
transactions contemplated thereby will have been approved and adopted by the
affirmative vote of the stockholders of the Company to the extent required by
Delaware Law and the Certificate of Incorporation of the Company; (ii) any
waiting period (and any extension thereof) applicable to the consummation of the
Merger under the HSR Act will have expired or been terminated;
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(iii) no foreign, United States or state governmental authority or other agency
or commission or foreign, United States or state court of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any law, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is then in effect and has the effect
of making the acquisition of Shares by Parent or Purchaser or any affiliate of
either of them illegal or otherwise restricting, preventing or prohibiting
consummation of the transactions by the Merger Agreement or the Specialty Merger
Transaction; and (iv) Purchaser or its permitted assignee shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer; PROVIDED,
HOWEVER, that this condition shall not be applicable to the obligations of
Parent or Purchaser if, in breach of the Merger Agreement or the terms of the
Offer, Purchaser fails to purchase any Shares validly tendered and not withdrawn
pursuant to the Offer.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time by: (i) mutual written consent of Parent, Purchaser and the
Company duly authorized by their respective Boards of Directors; or (ii) either
Parent, Purchaser or the Company if (a) the Effective Time will not have
occurred on or before July 31, 1997; PROVIDED, HOWEVER, that if the waiting
period under the HSR Act shall not have expired or been terminated as of such
date or any Governmental Authority shall have caused to be issued as of such
date a temporary restraining order or a preliminary injunction prohibiting the
consummation of the Offer or the Merger and each of the parties to the Merger
Agreement are seeking the termination of such waiting period or contesting such
temporary restraining order or preliminary injunction, as the case may be, such
date shall be extended to the earlier of the date of expiration or termination
of such waiting period or the lifting of such injunction or order or October 31,
1997; PROVIDED, FURTHER, HOWEVER, that the right to terminate the Merger
Agreement pursuant to this sentence will not be available (1) to any party whose
failure to fulfill any obligation under the Merger Agreement has been the cause
of, or resulted in, the failure of the Effective Time to occur on or before such
date or (2) after Purchaser shall have purchased the Shares pursuant to the
Offer, or (b) any court of competent jurisdiction in the United States or the
Kingdom of Sweden or other governmental authority in the United States or the
Kingdom of Sweden will have issued an order, decree, ruling or taken any other
action restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action will have become final and nonappealable;
or (iii) Parent if due to an occurrence or circumstance, other than a breach by
Parent or Purchaser of their obligations under the Merger Agreement, that would
result in a failure to satisfy any condition described in "Section 15. Certain
Conditions of the Offer" (which failure cannot be cured or, if capable of being
cured, has not been cured in all material respects within 30 days after notice
to the Company of such occurrence or circumstance), Purchaser will have
terminated the Offer without having accepted any Shares for payment thereunder;
or (iv) the Company, upon approval of the Board, if (a) due to an occurrence or
circumstance that would result in a failure to satisfy any of the conditions in
"Section 15. Certain Conditions of the Offer", Purchaser will have terminated
the Offer without having accepted any Shares for payment thereunder or (b) prior
to the purchase of Shares pursuant to the Offer, in order to enter into a
definitive agreement with respect to a Superior Proposal, upon three days' prior
written notice to Parent, if the Company's Board of Directors determines in good
faith that it is necessary to do so in accordance with its fiduciary duties to
the Company's stockholders under applicable law as advised by outside legal
counsel; PROVIDED, HOWEVER, that any termination of the Merger Agreement
pursuant to this clause (iv)(b) will not be effective until the Company has made
full payment of all amounts as set forth in "-- Fees and Expenses" below, or (c)
if Parent or Purchaser will have failed to commence the Offer within five
business days following the date of the initial public announcement of the Offer
other than as a result of an occurrence or circumstance that would result in a
failure to satisfy any of the conditions described in "Section 15. Certain
Conditions of the Offer", or (d) if Parent or Purchaser shall have breached any
of their respective representations, warranties, covenants or other agreements
contained in the Merger Agreement in a manner that materially adversely affects
Parent's ability to consummate the Offer and the Merger and which cannot be
cured or, if capable of being cured, has not been cured in all material respects
within 30 days after notice to Parent of such occurrence or circumstance.
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FEES AND EXPENSES. The Merger Agreement provides that in the event that (i)
the Merger Agreement is terminated under clause (iv)(b) of the preceding
paragraph; or (ii) (a) an Acquisition Proposal is commenced, publicly proposed,
publicly disclosed or communicated to the Company or any representative or agent
thereof after the date of the Merger Agreement and prior to the date of its
termination, (b) the Merger Agreement is thereafter terminated pursuant to
clause (ii), (iii) or (iv)(a) of the preceding paragraph, and (c) within 12
months following such termination, an Acquisition Proposal is consummated or the
Company enters into an agreement relating thereto; then, in any such event, the
Company will pay Parent promptly a fee of $50,000,000 (the "Fee"), which amount
will be payable in immediately available funds, plus all Expenses (as defined
below); PROVIDED, HOWEVER, that no Fee shall be payable under clause (ii) of
this paragraph if, at the time of termination, Parent or Purchaser is in
material breach of their respective material covenants and agreements and their
respective representations and warranties, in each case contained in the Merger
Agreement.
If the Merger Agreement is terminated for any reason whatsoever and neither
Parent nor Purchaser is in material breach of their respective material
covenants and agreements or their respective representations and warranties, the
Company will, whether or not any payment is made pursuant to the preceding
paragraph, reimburse each of Parent, Purchaser and their respective stockholders
and affiliates for all actual and documented out-of-pocket expenses and fees up
to $4,000,000 in the aggregate (including, without limitation, fees and expenses
payable to all banks, investment banking firms, other financial institutions and
other persons and their respective agents and counsel, for arranging, committing
to provide or providing any financing for or the structuring of the transactions
contemplated by the Merger Agreement and the Specialty Merger Transaction and
all fees of counsel, accountants, experts and consultants to Parent, Purchaser
and their respective stockholders and affiliates, and all printing and
advertising expenses) actually incurred or accrued by either of them or on their
behalf in connection with the Offer, Merger and Specialty Merger Transactions,
including, without limitation, the financing thereof, and actually incurred or
accrued by banks, investment banking firms, other financial institutions and
other persons and assumed by Parent, Purchaser or their respective stockholders
or affiliates in connection with the negotiation, preparation, execution and
performance of the Merger Agreement, the structuring and financing of the
transactions contemplated by the Merger Agreement and any financing commitments
or agreements relating thereto (all of the foregoing being referred to herein
collectively as the "Expenses").
Except as set forth in the above paragraph, all costs and expenses incurred
in connection with the Merger Agreement, the transactions contemplated thereby
and the Specialty Merger Transaction will be paid by the party incurring such
expenses, whether or not such transactions are consummated.
THE SPECIALTY MERGER AGREEMENT
The following is a summary of certain provisions of the Specialty Merger
Agreement and is qualified in its entirety by reference to the Specialty Merger
Agreement which has been filed as Exhibit (c)(2) to this Schedule 14D-1 and is
incorporated herein by reference in its entirety.
Simultaneously with the execution of the Merger Agreement, the Company
entered into the Specialty Merger Agreement, pursuant to which the Company will
sell the Company's interests in Specialty Partners and in VHI to the VSP
Purchasers. Both Specialty Partners and VHI are engaged in the Company's
Specialty Business. Pursuant to the Specialty Merger Agreement, the gross
consideration allocated between Specialty Partners and VHI will be $84,312,500
(the "Gross Consideration"). Of this amount, the Company expects to receive sale
proceeds of approximately $79,387,500. Assuming both a pre-tax gain to the
Company of approximately $5,400,000 and an income tax rate of 41 percent, the
Company will incur a tax liability of approximately $2,200,000 in connection
with the Specialty Merger Transaction. The net after-tax proceeds of
approximately $77,200,00 represents approximately $1.72 per Share on a fully
diluted basis. The receipt by the Company of not less than $76,900,000 of such
net after-tax proceeds is a condition to the purchase of the Shares in the
Offer.
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Pursuant to the Specialty Merger Agreement, (i) VSP Merger Sub will be
merged with and into Specialty Partners, with Specialty Partners as the
surviving corporation, and (ii) VSP Purchaser II will obtain a majority interest
in VHI. The VSP Purchasers are corporations organized by certain private equity
investment funds for the purpose of acquiring the Company's interests in
Specialty Partners and VHI. Mr. Thiry, the Company's President and Chief
Executive Officer and Ms. Zumwalt, the Company's Chief Financial Officer, will
become the President and Chief Executive Officer and Chief Financial Officer,
respectively, of Specialty Partners following the completion of the transactions
contemplated by the Merger Agreement. Further, each of Mr. Thiry and Ms. Zumwalt
intends to make an equity investment in the VSP Purchasers.
Prior to consummation of the Specialty Merger Transaction, the Company and
Specialty Partners have agreed to, among other things: (a) conduct Specialty
Partners' business in the ordinary course, including preserving existing
relationships with customers and suppliers and maintaining existing material
contracts to which Specialty Partners is a party; (b) cause certain subsidiaries
of Specialty Partners (namely, Vivra Asthma Allergy Careamerica, Inc., Vivra
Heart Services, Inc., Vivra ENT, Inc., Vivra Health Advantage, Inc., Vivra
Orthopaedics, Inc. and Vivra OB-GYN Services, Inc.) to merge with and into
Specialty Partners; (c) transfer and assign certain assets and liabilities of
the Company to Specialty Partners; and (d) enter into an agreement pursuant to
which the Company will assign to Specialty Partners all of the Company's rights,
title and interest in and to the "Vivra" trademark, and other trademarks of the
Company incorporating the word "Vivra"; PROVIDED, HOWEVER, that simultaneously
with the closing of the Specialty Merger Transaction (the "VSP Closing"),
Specialty Partners will license to the Company use of the name "Vivra Renal
Care" for nine months following the VSP Closing and use of the name "Vivra" for
three months following the VSP Closing (collectively, the "VSP Covenants").
The obligations of the Purchasers to consummate the Specialty Merger
Transaction are subject to the satisfaction or waiver of certain conditions,
including: (a) that the representations and warranties made by Specialty
Partners and the Company will be true and correct as of the date of the VSP
Closing; (b) the VSP Covenants will have been performed by the Company and
Specialty Partners; (c) any waiting period (or any extension thereof) under the
HSR Act will have expired or been terminated; (d) a noncompetition agreement
between Specialty Partners and Parent will have been executed; (e) the Services
Agreement between Specialty Partners and the Company pursuant to which each of
the parties thereto provides certain administrative services to the other shall
be in full force and effect and there shall have been no breach thereunder; (f)
there will have been no change, circumstance or occurrence since the date of the
Specialty Merger Agreement which would have a material adverse effect on
Specialty Partners' business, operations, properties or condition; and (g)
Purchaser shall have advised the Company that it will purchase the Shares in the
Offer or the Purchaser or any other person or entity shall have acquired either
the (x) greater than 50% of the Shares or (y) all or substantially all of the
assets of the Company.
The Specialty Merger Agreement provides that, for a period of five years
from the VSP Closing, VSP Purchaser and Specialty Partners will indemnify the
Company from claims arising from the operation of the business of Specialty
Partners and the Company will indemnify VSP Purchaser and Specialty Partners
from claims arising from the operation of the business of the Company.
The Specialty Merger Agreement also provides that if the VSP Closing has not
occurred by June 30, 1997 solely as a result of the Offer not being consummated,
the VSP Purchasers may elect to consummate an alternative transaction pursuant
to which the VSP Purchasers would acquire 65% of the Company's interest in
Specialty Partners and 65% of the Company's interest in VHI, in exchange for 65%
of the Gross Consideration.
12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE
MERGER.
PURPOSE OF THE OFFER. The purpose of the Offer and the Merger is for Parent
to acquire control of, and the entire equity interest in, the Company. The
purpose of the Merger is for Parent to acquire all Shares not purchased pursuant
to the Offer. Upon consummation of the Merger, the Company will
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become an indirect wholly owned subsidiary of Parent. The Offer is being made
pursuant to the Merger Agreement.
PLANS FOR MERGER CONSUMMATION. Under Delaware Law, the approval of the
Board and the affirmative vote of the holders of a majority of the outstanding
Shares is required to approve and adopt the Merger Agreement and the
transactions contemplated thereby, including the Merger. The Board of Directors
of the Company has unanimously approved and adopted the Merger Agreement and the
transactions contemplated thereby, and, unless the Merger is consummated
pursuant to the short-form merger provisions under Delaware Law described below,
the only remaining required corporate action of the Company is the approval and
adoption of the Merger Agreement and the transactions contemplated thereby by
the affirmative vote of the holders of a majority of the Shares. Accordingly, if
the Minimum Condition is satisfied, Purchaser will have sufficient voting power
to cause the approval and adoption of the Merger Agreement and the transactions
contemplated thereby without the affirmative vote of any other stockholder.
In the Merger Agreement, the Company has agreed to take all action necessary
to convene a meeting of its stockholders as soon as practicable after the
consummation of the Offer for the purpose of considering and taking action on
the Merger Agreement and the transactions contemplated thereby, if such action
is required by Delaware Law.
If Purchaser purchases Shares pursuant to the Offer, the Merger Agreement
provides that Purchaser will be entitled to designate representatives to serve
on the Board in proportion to Purchaser's ownership of Shares following such
purchase. See "Section 11. Background of the Offer; Contacts with the Company;
the Merger Agreement and the Specialty Merger Agreement". Purchaser expects that
such representation would permit Purchaser to exert substantial influence over
the Company's conduct of its business and operations.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the outstanding Shares, Purchaser will be able to
approve the Merger without a vote of the Company's stockholders. In such event,
Parent, Purchaser and the Company have agreed in the Merger Agreement to take,
at the request of Purchaser, all necessary and appropriate action to cause the
Merger to become effective as soon as reasonably practicable after such
acquisition, without a meeting of the Company's stockholders. If, however,
Purchaser does not acquire at least 90% of the outstanding Shares pursuant to
the Offer or otherwise and a vote of the Company's stockholders is required
under Delaware Law, a significantly longer period of time would be required to
effect the Merger.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders will have certain
rights under Delaware Law to dissent and demand appraisal of, and to receive
payment in cash of the fair value of, their Shares. Such rights to dissent, if
the statutory procedures are complied with, could lead to a judicial
determination of the fair value of the Shares, as of the day prior to the date
on which the stockholders' vote was taken approving the Merger or similar
business combination (excluding any element of value arising from the
accomplishment or expectation of the Merger), required to be paid in cash to
such dissenting holders for their Shares. In addition, such dissenting
stockholders would be entitled to receive payment of a fair rate of interest
from the date of consummation of the Merger on the amount determined to be the
fair value of their Shares. In determining the fair value of the Shares, the
court is required to take into account all relevant factors. Accordingly, such
determination could be based upon considerations other than, or in addition to,
the market value of the Shares, including, among other things, asset values and
earning capacity. In WEINBERGER V. UOP, INC., the Delaware Supreme Court stated,
among other things, that "proof of value by any techniques or methods which are
generally considered acceptable in the financial community and otherwise
admissible in court" should be considered in an appraisal proceeding. Therefore,
the value so determined in any appraisal proceeding could be the same, more or
less than the purchase price per Share in the Offer or the Merger Consideration.
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In addition, several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has a
fiduciary duty to other stockholders which requires that the merger be fair to
such other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of consideration to be received by the stockholders and whether there was
fair dealing among the parties. The Delaware Supreme Court stated in WEINBERGER
and RABKIN V. PHILIP A. HUNT CHEMICAL CORP. that the remedy ordinarily available
to minority stockholders in a cash-out merger is the right to appraisal
described above. However, a damages remedy or injunctive relief may be available
if a merger is found to be the product of procedural unfairness, including
fraud, misrepresentation or other misconduct.
RULE 13E-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer in which
Purchaser seeks to acquire the remaining Shares not held by it. Purchaser
believes, however, that Rule 13e-3 will not be applicable to the Merger. Rule
13e-3 requires, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction, be filed with the Commission and disclosed to stockholders
prior to consummation of the transaction.
PLANS FOR THE COMPANY. It is expected that, initially following the
Merger, the business and operations of the Company will, except as set forth in
this Offer to Purchase, be continued by the Company substantially as they are
currently being conducted. Parent will continue to evaluate the business and
operations of the Company during the pendency of the Offer and after the
consummation of the Offer and the Merger, and will take such actions as it deems
appropriate under the circumstances then existing. Parent intends to seek
additional information about the Company during this period. Thereafter, Parent
intends to review such information as part of a comprehensive review of the
Company's business, operations, capitalization and management with a view to
optimizing exploitation of the Company's potential in conjunction with Parent's
businesses. It is expected that the business and operations of the Company would
be integrated with the dialysis and renal care operations of Gambro Healthcare.
Except as indicated in this Offer to Purchase, Parent does not have any
present plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any Subsidiary, a sale or transfer of a material amount
of assets of the Company or any Subsidiary or any material change in the
Company's capitalization or dividend policy or any other material changes in the
Company's corporate structure or business, or the composition of the Board or
the Company's management.
13. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that the
Company shall not, between the date of the Merger Agreement and the Effective
Time, without the prior written consent of Parent, (a) issue, sell, pledge,
dispose of, grant, encumber, or authorize the issuance, sale, pledge,
disposition, grant or encumbrance of any shares of capital stock of any class of
the Company or any Dialysis Subsidiary, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest (including, without limitation, any
phantom interest), of the Company or any Dialysis Subsidiary (except for the
issuance of Shares issuable pursuant to employee stock options outstanding on
the date hereof and Shares issuable pursuant to the conversion of the
Convertible Notes) or (b) reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its capital stock.
See "Section 11. Background of the Offer; Contacts with the Company; the Merger
Agreement and the Specialty Merger Agreement". If, however, the Company should,
during the pendency of the Offer, (i) split, combine or otherwise change the
Shares or its capitalization, (ii) acquire or otherwise cause a reduction in the
number of outstanding Shares or (iii) issue or sell any additional Shares,
shares of any other class or series of capital stock, other voting securities or
any securities convertible into, or options, rights, or warrants, conditional or
otherwise, to
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acquire, any of the foregoing, then, without prejudice to Purchaser's rights
under "Section 15. Certain Conditions of the Offer", Purchaser may (subject to
the provisions of the Merger Agreement) make such adjustments to the purchase
price and other terms of the Offer (including the number and type of securities
to be purchased) as it deems appropriate to reflect such split, combination or
other change.
If, on or after May 5, 1997, the Company should declare or pay any dividend
on the Shares or make any other distribution (including the issuance of
additional shares of capital stock pursuant to a stock dividend or stock split,
the issuance of other securities or the issuance of rights for the purchase of
any securities) with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer to the name of Purchaser
or its nominee or transferee on the Company's stock transfer records of the
Shares purchased pursuant to the Offer, then, without prejudice to Purchaser's
rights under "Section 15. Certain Conditions of the Offer", (i) the Per Share
Amount payable by Purchaser pursuant to the Offer will be reduced (subject to
the Merger Agreement) to the extent any such dividend or distribution is payable
in cash and (ii) any non-cash dividend, distribution or right shall be received
and held by the tendering stockholder for the account of Purchaser and will be
required to be promptly remitted and transferred by each tendering stockholder
to the Depositary for the account of Purchaser, accompanied by appropriate
documentation of transfer. Pending such remittance and subject to applicable
law, Purchaser will be entitled to all the rights and privileges as owner of any
such non-cash dividend, distribution or right and may withhold the entire
purchase price or deduct from the purchase price the amount or value thereof, as
determined by Purchaser in its sole discretion.
14. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, EXCHANGE LISTING AND
EXCHANGE ACT REGISTRATION. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the NYSE for continued listing and
may be delisted from the NYSE. Parent intends to seek the delisting of the
Shares by the NYSE following consummation of the Offer.
According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of at
least 100 Shares should fall below 1,200, the number of publicly held Shares
(exclusive of holdings of officers, directors and their families and other
concentrated holdings of 10% or more ("NYSE Excluded Holdings")) should fall
below 600,000 or the aggregate market value of publicly held Shares (exclusive
of NYSE Excluded Holdings) should fall below $5,000,000. The Company has advised
Purchaser that, as of May 5, 1997, there were 41,991,547 Shares outstanding,
held by approximately 1,800 holders of record. If, as a result of the purchase
of Shares pursuant to the Offer or otherwise, the Shares no longer meet the
requirements of the NYSE for continued listing and the listing of the Shares is
discontinued, the market for the Shares could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by such exchange or
through the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or other sources. The extent of the public market therefor and
the availability of such quotations would depend, however, upon such factors as
the number of stockholders and/or the aggregate market value of such securities
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration under the
Exchange Act as described below, and other factors. Purchaser cannot predict
whether the reduction in the number of Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for or
marketability of the Shares or whether it would cause future market prices to be
greater or less than the Merger Consideration.
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The Shares are currently "margin securities", as such term is defined under
the rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other things, of allowing brokers
to extend credit on the collateral of such securities. Depending upon factors
similar to those described above regarding listing and market quotations,
following the Offer it is possible that the Shares might no longer constitute
"margin securities" for purposes of the margin regulations of the Federal
Reserve Board, in which event such Shares could no longer be used as collateral
for loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if the Shares are not listed on a national securities exchange and there are
fewer than 300 record holders. The termination of the registration of the Shares
under the Exchange Act would substantially reduce the information required to be
furnished by the Company to holders of Shares and to the Commission and would
make certain provisions of the Exchange Act, such as the short-swing profit
recovery provisions of Section 16(b), the requirement of furnishing a proxy
statement in connection with stockholders' meetings and the requirements of Rule
13e-3 under the Exchange Act with respect to "going private" transactions, no
longer applicable to the Shares. In addition, "affiliates" of the Company and
persons holding "restricted securities" of the Company may be deprived of the
ability to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin securities"
or be eligible for NASDAQ reporting. Purchaser currently intends to seek to
cause the Company to terminate the registration of the Shares under the Exchange
Act as soon after consummation of the Offer as the requirements for termination
of registration are met.
15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of
the Offer, Purchaser will not be required to accept for payment or pay for any
Shares tendered pursuant to the Offer, and may terminate or amend the Offer
(subject to the provisions of the Merger Agreement) and may postpone the
acceptance for payment of (subject to any applicable rules and regulations of
the Commission, including Rule 14e-1(c) under the Exchange Act) and payment for
Shares tendered, if (i) the Minimum Condition will not have been satisfied, (ii)
any applicable waiting period under the HSR Act will not have expired or been
terminated prior to the expiration of the Offer, (iii) prior to the expiration
or termination of the Offer, the Company will not have consummated the Specialty
Merger Transaction and received aggregate cash proceeds therefor, after
providing for all applicable income taxes (using an assumed tax rate of 41%), of
not less than $76,900,000, or (iv) at any time on or after the date of the
Merger Agreement, and prior to the acceptance for payment of Shares, any of the
following conditions will exist:
(a) there will have been instituted by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, any
action or proceeding before any court or any governmental, administrative or
regulatory authority or agency, domestic or foreign (including such
authority or agency instituting or initiating such action or proceeding),
(i) challenging or seeking to make illegal, materially delay or otherwise
directly or indirectly restrain or prohibit the making of the Offer, the
acceptance for payment of, or payment for, any Shares by Parent, Purchaser
or any other affiliate of Parent, the consummation of any other transaction
contemplated by the Merger Agreement or the consummation of the Specialty
Merger Transaction or seeking to obtain material damages in connection with
any such transaction; (ii) seeking to prohibit or limit materially the
ownership or operation by the Company, Parent or any of their subsidiaries
of all or any material portion of the business or assets of the Company,
Parent or any of their subsidiaries, or to compel the Company, Parent or any
of their subsidiaries to dispose of or to hold separate all or any material
portion of the business or assets of the Company, Parent or any of their
subsidiaries, as a result of the transactions contemplated by the Merger
Agreement; (iii) seeking to impose or confirm limitations on the ability of
Parent, Purchaser or any other affiliate of Parent to exercise effectively
full rights of ownership of any Shares, including, without limitation, the
right to vote any Shares acquired by
33
<PAGE>
Purchaser pursuant to the Offer or otherwise on all matters properly
presented to the Company's stockholders, including, without limitation, the
approval and adoption of the Merger Agreement and the transactions
contemplated thereby; (iv) seeking to require divestiture by Parent,
Purchaser or any other affiliate of Parent of any Shares; or (v) which
otherwise causes or gives rise to any circumstance, change in or effect on
the Company, any Subsidiary or any circumstance, change in or effect on the
Dialysis Business that is, or is reasonably likely to be, materially adverse
to the value of the Dialysis Business or the Company and the Dialysis
Subsidiaries, taken as a whole, other than a change, condition, event or
development that results from (i) the announcement of the transactions
contemplated by the Merger Agreement or the Specialty Merger Transaction,
(ii) general economic conditions, (iii) conditions that are generally
applicable to the dialysis business, the renal care business or the
nephrologist practice management business, or (iv) actions, legislation or
initiatives that are generally applicable to the dialysis, renal care or
nephrologist practice management business, or any proposals thereof, of any
governmental authority or any announcement thereof ("Material Adverse
Effect");
(b) there will have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to (i) Parent, the Company or any subsidiary or affiliate of
Parent or the Company or (ii) any transaction contemplated by the Merger
Agreement, by any legislative body, court, government or governmental,
administrative or regulatory authority or agency, domestic or foreign, other
than the routine application of the waiting period provisions of the HSR Act
to the Offer or the Merger, which is reasonably likely to result, directly
or indirectly, in any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above;
(c) there will have occurred any change, condition, event or development
that has a Material Adverse Effect;
(d) there will have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange (excluding any coordinated trading halt triggered solely as a
result of a specified decrease in a market index), (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States or Sweden, (iii) any limitation (whether or not mandatory) by
any government or governmental, administrative or regulatory authority or
agency of the United States or Sweden on the extension of credit by banks or
other lending institutions such that Parent is not reasonably able to obtain
financing for the Offer on reasonable terms or (iv) a commencement of a war
or material armed hostilities or other national or international calamity
involving the United States or Sweden;
(e) (i) it will have been publicly disclosed or Purchaser will have
otherwise learned that beneficial ownership (determined for the purposes of
this paragraph as set forth in Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of the then outstanding Shares has been acquired by any
person, other than Parent or any of its affiliates or any other person not
required to file a Schedule 13D under the rules promulgated under the
Exchange Act or (ii) the Company's Board of Directors or any committee
thereof will have (A) withdrawn or modified in a manner adverse to Parent or
Purchaser the approval or recommendation of the Offer, the Merger or the
Merger Agreement, or approved or recommended any acquisition proposal or any
other acquisition of the Shares other than the Offer or the Merger or (B)
resolved to do any of the foregoing;
(f) (i) any representation or warranty which addresses matters as of a
particular date shall not be true and correct as of such date, or (ii) any
other representation or warranty shall not be true, as of the date of the
Merger Agreement and as of the expiration of the Offer, unless the
inaccuracies under all such representations and warranties together in their
entirety, would not, individually or in the aggregate, have a Material
Adverse Effect;
34
<PAGE>
(g) the Company will have failed to perform any obligation or to comply
with any agreement or covenant of the Company to be performed or complied
with by it under the Merger Agreement unless all such failures together in
their entirety, would not, individually or in the aggregate, have a Material
Adverse Effect;
(h) the Merger Agreement will have been terminated in accordance with
its terms; or
(i) Purchaser and the Company will have agreed that Purchaser will
terminate the Offer or postpone the acceptance for payment of or payment for
Shares thereunder.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or Parent in
whole or in part at any time and from time to time in their sole discretion,
subject in each case to the terms of the Merger Agreement. The failure by Parent
or Purchaser at any time to exercise any of the foregoing rights will not be
deemed a waiver of any such right; the waiver of any such right with respect to
particular facts and other circumstances will not be deemed a waiver with
respect to any other facts and circumstances; and each such right will be deemed
an ongoing right that may be asserted at any time and from time to time.
16. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
GENERAL. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to Parent and discussions of representatives of Parent with
representatives of the Company during Parent's investigation of the Company,
except to the extent the Merger will require the Company to obtain new Medicare,
Medicaid or third party provider numbers, licenses or similar permits (see
"Section 11. Background of the Offer; Contacts with the Company; the Merger
Agreement and the Specialty Agreement"), neither Purchaser nor Parent is aware
of any license or other regulatory permit that appears to be material to the
business of the Company and the Subsidiaries, taken as a whole, which might be
adversely affected by the acquisition of Shares by Purchaser pursuant to the
Offer or, except as set forth below, of any approval or other action by any
domestic (federal or state) or foreign governmental, administrative or
regulatory authority or agency which would be required prior to the acquisition
of Shares by Purchaser pursuant to the Offer. Should any such approval or other
action be required, it is Purchaser's present intention to seek such approval or
action. Purchaser does not currently intend, however, to delay the purchase of
Shares tendered pursuant to the Offer pending the outcome of any such action or
the receipt of any such approval (subject to Purchaser's right to decline to
purchase Shares if any of the conditions in "Section 15. Certain Conditions of
the Offer" shall have occurred). There can be no assurance that any such
approval or other action, if needed, would be obtained without substantial
conditions or that adverse consequences might not result to the business of the
Company, Purchaser or Parent or that certain parts of the businesses of the
Company, Purchaser or Parent might not have to be disposed of or held separate
or other substantial conditions complied with in order to obtain such approval
or other action or in the event that such approval was not obtained or such
other action was not taken. Purchaser's obligation under the Offer to accept for
payment and pay for Shares is subject to certain conditions, including
conditions relating to the legal matters discussed in this "Section 16. Certain
Legal Matters and Regulatory Approvals". See "Section 15. Certain Conditions of
the Offer".
STATE TAKEOVER LAWS. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of Delaware Law prevents an
"interested stockholder" (generally a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock, or an affiliate
or associate thereof) from engaging in a "business combination" (defined to
include mergers and certain other transactions) with a Delaware corporation for
a period of three years following the date such person became an interested
stockholder unless, among other things, prior to such date the board of
directors of the corporation approved either the business combination or the
transaction in which the interested stockholder became an interested
stockholder. On May 4, 1997, prior to the execution of the
35
<PAGE>
Merger Agreement, the Board of Directors of the Company, by unanimous vote of
all directors present at a meeting held on such date, approved the Merger
Agreement, determined that each of the Offer and the Merger is fair to, and in
the best interest of, the stockholders of the Company. Accordingly, Section 203
is inapplicable to the Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In EDGAR V. MITE CORP., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987, in
CTS CORP. V. DYNAMICS CORP. OF AMERICA,the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. Purchaser does not know whether any of these laws will, by their terms,
apply to the Offer or the Merger and has not complied with any such laws. Should
any person seek to apply any state takeover law, Purchaser will take such action
as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer, and the Merger. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See "Section 15. Certain
Conditions of the Offer".
ANTITRUST. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by Purchaser pursuant to the Offer are subject to such requirements.
See "Section 2. Acceptance for Payment and Payment for Shares".
Pursuant to the HSR Act, on May 9, 1997, Parent filed a Premerger
Notification and Report Form in connection with the purchase of Shares pursuant
to the Offer with the Antitrust Division and the FTC. Under the provisions of
the HSR Act applicable to the Offer, the purchase of Shares pursuant to the
Offer may not be consummated until the expiration of a 15-calendar day waiting
period following the filing by Parent. Accordingly, the waiting period under the
HSR Act applicable to the purchase of Shares pursuant to the Offer will expire
at 11:59 p.m., New York City time, on May 23, 1997, unless such waiting period
is earlier terminated by the FTC and the Antitrust Division or extended by a
request from the FTC or the Antitrust Division for additional information or
documentary material prior to the expiration of the waiting period. Pursuant to
the HSR Act, Parent has requested early termination of the waiting period
applicable to the Offer. There can be no assurance, however, that the 15-day HSR
Act waiting period will be terminated early. If either the FTC or the Antitrust
Division were to request additional information or documentary material from
Parent with respect to the Offer, the waiting period with respect to the Offer
would expire at 11:59 p.m., New York City time, on the tenth calendar day after
the date of substantial compliance by Parent with such request. Thereafter, the
waiting period could be extended only by court order. If the acquisition of
Shares is delayed pursuant to a request by the FTC or the Antitrust Division for
additional information or documentary material pursuant to the HSR Act, the
Offer may, but need not, be
36
<PAGE>
extended and, in any event, the purchase of and payment for Shares will be
deferred until 10 days after the request is substantially complied with, unless
the extended period expires on or before the date when the initial 15-day period
would otherwise have expired, or unless the waiting period is sooner terminated
by the FTC and the Antitrust Division. Only one extension of such waiting period
pursuant to a request for additional information is authorized by the HSR Act
and the rules promulgated thereunder, except by court order. Any such extension
of the waiting period will not give rise to any withdrawal rights not otherwise
provided for by applicable law. See "Section 4. Withdrawal Rights". It is a
condition to the Offer that the waiting period applicable under the HSR Act to
the Offer expire or be terminated. See "Section 2. Acceptance for Payment and
Payment for Shares" and "Section 15. Certain Conditions of the Offer".
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase of
Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust Division
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Parent, the Company or
their respective subsidiaries. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances. Based upon an examination of information available to Parent
relating to the businesses in which Parent, the Company and their respective
subsidiaries are engaged, Parent and Purchaser believe that the Offer will not
violate the antitrust laws. Nevertheless, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if such a
challenge is made, what the result would be. See "Section 15. Certain Conditions
of the Offer", for certain conditions to the Offer, including conditions with
respect to litigation.
17. FEES AND EXPENSES. Except as set forth below, Purchaser will not pay any
fees or commissions to any broker, dealer or other person for soliciting tenders
of Shares pursuant to the Offer.
UBS is acting as Dealer Manager in connection with the Offer and has
provided certain financial advisory services in connection with the acquisition
of the Company. Gambro has agreed to pay UBS a retainer fee of $150,000 and a
transaction fee (against which the foregoing retainer fee will be credited) of
$5,000,000, of which $1,500,000 will become payable upon commencement of the
Offer and the remainder of which will become payable at the closing of the
Merger. Gambro has also agreed to reimburse UBS for all reasonable out-of-pocket
expenses incurred by UBS, including the reasonable fees and expenses of legal
counsel, and to indemnify UBS against certain liabilities and expenses in
connection with its engagement, including certain liabilities under the federal
securities laws.
Purchaser and Parent have retained Georgeson & Company Inc., as the
Information Agent, and The Bank of New York, as the Depositary, in connection
with the Offer. The Information Agent may contact holders of Shares by mail,
telephone, telex, telecopy, telegraph and personal interview and may request
banks, brokers, dealers and other nominee stockholders to forward materials
relating to the Offer to beneficial owners.
As compensation for acting as Information Agent in connection with the
Offer, Georgeson & Company Inc. will be paid a fee of $12,500 and will also be
reimbursed for certain out-of-pocket expenses and may be indemnified against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws. Purchaser will pay the Depositary
reasonable and customary compensation for its services in connection with the
Offer, plus reimbursement for out-of-pocket expenses, and will indemnify the
Depositary against certain liabilities and expenses in connection therewith,
including under federal securities laws. Brokers, dealers, commercial banks and
trust companies will be reimbursed by Purchaser for customary handling and
mailing expenses incurred by them in forwarding material to their customers.
37
<PAGE>
18. MISCELLANEOUS. Purchaser is not aware of any jurisdiction where the
making of the Offer is prohibited by any administrative or judicial action
pursuant to any valid state statute. If Purchaser becomes aware of any valid
state statute prohibiting the making of the Offer or the acceptance of Shares
pursuant thereto, Purchaser will make a good faith effort to comply with any
such state statute. If, after such good faith effort, Purchaser cannot comply
with any such state statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by the Dealer Manager or by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR THE COMPANY NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Parent and Purchaser have filed with the Commission the Schedule
14D-1, together with exhibits, furnishing certain additional information with
respect to the Offer. The Schedule 14D-1 and any amendments thereto, including
exhibits, may be inspected at, and copies may be obtained from, the same places
and in the same manner as set forth in "Section 7. Certain Information
Concerning the Company" (except that they will not be available at the regional
offices of the Commission).
GAMBRO HEALTHCARE ACQUISITION CORP.
May 9, 1997
38
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years of each
director and executive officer of Parent. Unless otherwise indicated, the
current business address of each person is Incentive AB, Hamngatan 2, Box 7373,
S-10391 Stockholm, Sweden. Unless otherwise indicated, each such person is a
citizen of Sweden and has held his or her present position as set forth below
for the past five years and each such person does not beneficially own Shares.
Unless otherwise indicated, each occupation set forth opposite an individual's
name refers to employment with Parent.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Anders Scharp Chairman since 1992; Chairman of the Boards of:
Electrolux, S-105 45, Stockholm, Sweden since 1991;
Saab-Scania AB, S-581-88 Linkoping, Sweden from 1990 to
1995; Saab AB, S-581-88 Linkoping, Sweden since 1995;
Scania AB, S-151 87 Sodertalje, Sweden since 1995; SKF,
S-415 50 Gothenburg, Sweden since 1992; and Atlas Copco,
S-105 23 Stockholm, Sweden since 1996. Vice Chairman of
the Boards of Investor, S-103 32 Stockholm, Sweden since
1992 and Atlas Copco, S-105 23 Stockholm, Sweden from
1992 to 1996; Director of Email Ltd. (Australia),
Waterloo, NSW 2017, Australia since 1986; Chairman of
Swedish Employers' Confederation, S. blasieholmshamnen
4A, S-103 30 Stockholm, Sweden since 1996 and a director
from 1987 to 1996. Director of Federation of Swedish
Industries, Storgatan 19, S-114 85 Stockholm, Sweden
since 1992.
Casimir Ehrnrooth Director since 1991. Chairman of the Board of Nokia
(Finnish) Group, P.O. Box 226, FIN-00101 Heksinki, Finland since
1992; Director of UPM-Kymmene Corporation, P.O. Box 203,
FIN-00171 Helsinki, Finland since 1996; Director of
Merita Bank Ltd, Alek-Santerinkatu 30, FIN-00100
Helsinki, Finland since 1992; Director of Continental
AG, Postfach 169, D-3001 Hannover, Germany since 1995.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Mikael Lilius Director since 1991; President and Chief Executive
(Finnish) Officer since 1991; Chairman of Gambro, S-220 10 Lund,
Sweden since 1995; Chairman of Garphyttan Industrier,
P.O. Box 7200, S-103 88 from 1992 to 1996; Chairman of
Orrefors Kosta Boda, S-380 40 Orrefors, Sweden from 1991
to 1995. Director of the Boards of Huhtamaki Oy,
Elelaranta 8, SF-00130 Helsinki, Finland since prior to
1992; Perlos Oy, P.O. Box 9, FIN-01901 Nurmijjarvi,
Stockholm, Sweden since 1997; Westinghouse Air Brake
Company, Wilmerding, PA 15148, USA from 1995 to 1997.
Hakan Mogren Director since 1996. President and CEO of Astra, S-151
85 Sodertalje, Sweden since prior to 1992. Director of
the Boards of Astra, S-151 85 Sodertalje, Sweden since
prior to 1992; Investor, S-103 32 Stockholm, Sweden
since prior to 1992; STORA, S-791 80 Falun, Sweden since
prior to 1992 and the Federation of Swedish Industries
since prior to 1992.
Karl-Erik Sahlberg Director since 1995; Chairman of the Boards of Cardo,
P.O. Box 486, S-201 24 Malmo, Sweden since 1992; S-E
Bank Group, S-106 40 Stockholm, Sweden since 1996,
Vattenfall, S-162 87 Vallingby, Sweden since 1992 and
Lund Institute of Technology since prior to 1992. Vice
Chairman of Skoogs AB, S-205 70 Malmo, Sweden since
prior to 1990. Director of the Board of Tetra Laval
Group, S-221 86 Lund, Sweden since prior to 1992.
Bjorn Svedberg Director since 1997. Chairman of the Board of Ericsson,
S-126 25 Stockholm, Sweden since prior to 1992 and ABB
AB, S-103 91 Stockholm, Sweden since 1996. President and
CEO of Skandinaviska Enskilda Banken, S-104 60
Stockholm, Sweden from 1992 to 1997. Director of the
Boards of STORA, S-791 80 Falun, Sweden since prior to
1992 and Volvo, S-405 08 Goteborg, Sweden since prior to
1992.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Sven Soderberg Director since 1991. Chairman of Skandia, S-103 50
Stockholm, Sweden since prior to 1992; Chairman of
Ratos, P.O. Box 1661, S-111 96 Stockholm, Sweden since
1994; Director of ABB AB, S-103 91 Stockholm, Sweden
since 1992. Director of the Board of STORA, S-791 80
Falun, Sweden since prior to 1992; Counsel General of
Norway since prior to 1992.
Marcus Wallenberg Director since 1994; Executive Vice President of
Investor, S-103 32 Stockholm, Sweden since 1993; Vice
Chairman of Astra, S-151 85 Sodertalje, Sweden since
1993; Vice Chairman of Saab AB, S-581 88 Linkoping,
Sweden since 1993; Director of Investor, S-103 32
Stockholm, Sweden since 1990; Director of SKF, S-415 00,
Gothenburg, Sweden from 1993 to 1996. Director of Saab
Automobile, S-461 80 Trollhattan, Sweden from 1992 to
1996. Director of Scania AB, S-151 87 Sodertalje, Sweden
since 1994; Director of S-E Banken, S-106 40 Stockholm,
Sweden since 1995. Director of Ericsson, S-126 25
Stockholm, Sweden since 1996 and Director of the Knut
and Alice Wallenberg Foundation, S-104 60 Stockholm,
Sweden since prior to 1992.
Bengt-Ola Nygren Employee Representative on Board since 1991 (the Swedish
Confederation of Trade Unions); Employee of Munters
Component AB, P.O. Box 29, S-740 61 Tobo, since prior to
1992.
Nicolaus Malmgren Employee Representative on Board since 1996 (the Swedish
Confederation of Trade Unions); Employee of Gambro, P.O.
Box 10101, S-220 10 Lund, Sweden since prior to 1992.
Ann-Christine Adamsson Employee Representative on Board since 1996 (the Swedish
Confederation of Trade Unions); Employee of TA Control
AB, Fabriksvagen 1, S-137 37 V asterhaninge, Sweden
since prior to 1992.
Dan Nilsson Employee Representative on Board since 1991 (the Swedish
Federation of Salaried Employees in Industry and
Service), Employee of Hagglunds Vehicle AB, S-891 81
Ornskoldsvik, Sweden since prior to 1992.
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Stig Fristad Employee Representative on Board since 1996 (the Swedish
Federation of Salaried Employees in Industry and
Service); Employee of Munters Dry Air AB, S-191 24
Sollentuna, Sweden since prior to 1992.
Lars-Ake Johansson(*) Employee Representative on Board since 1995 (Swedish
Federation of Salaried Employees in Industry and
Services); Employee of Gambro AB, Box 10101 S-22010
Lund.
Lars Fahlen Senior Vice President Human Resources since 1992.
Anders Jagraeus Executive Vice President since 1995; President of AB
Carl Munters, P.O. Box 430, S-191 24 Sollentuna, Sweden
from 1991 to 1995; Director of Garphyttan Industries AB,
P.O. Box 7200, S-103 88 Stockholm, Sweden from 1995 to
1996.
Sverker Lundkvist Senior Vice President, Finance, since 1993; Executive
Vice President, Skandia International, S-103 50
Stockholm, Sweden from prior to 1992 to 1993.
Soren Mellstig Executive Vice President since 1997; Senior Vice
President, Corporate Control from 1994 to 1997; Director
and Controller of Akzo Nobel B.V. (Chemicals), Postbus
9300, NL-6800 SB Arnhem, the Netherlands since 1994;
Senior Vice President Nobel Industries (Chemicals), P.O.
Box 11500, S-100 61 Stockholm, Sweden from 1993 to 1994;
Senior Vice President EKA Nobel (chemicals), S-445 80
Bohus, Sweden prior to 1993. Director of Gambro, P.O.
Box 10101, S-220 10 Lund, Sweden since 1995.
Bengt Modeer Senior Vice President, Corporate Communications since
1991.
</TABLE>
- ------------------------
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, material occupations, positions, offices or
employments and business addresses thereof for the past five years, and
beneficial ownership interest, if any, in the Shares of each director and
executive officer of Purchaser. Unless otherwise indicated, the current business
address of each person is 1185 Oak Street, Lakewood, Colorado 80215. Unless
otherwise indicated, each such person is a citizen of the United States of
America, each occupation set forth opposite an individual's name refers to
employment with Purchaser, and each such person does not beneficially own
Shares.
I-4
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Mats L. Wahlstrom Mr. Wahlstrom has served on the Board of Directors and
as President of Purchaser since its incorporation in May
1997. He is the Chief Executive Officer and President of
Gambro Healthcare, Inc. and on its Board of Directors.
Mr. Wahlstrom has served in these capacities from
December 1990 to the present. Mr. Wahlstrom has served
as Director of Gambro Healthcare Patient Services, Inc.,
formerly known as REN-Corporation-USA, from May 1991 to
the present. He served as Chief Financial Officer of
Gambro, AB from 1985 until becoming its Executive Vice
President in March 1993. In June 1990, he was elected a
director of COBE and was appointed its Executive Vice
President; in May 1991 he became its President. Mr.
Wahlstrom beneficially owns 1,800 Shares, which
represents less than 1% of the issued and outstanding
Shares, based upon 41,991,547 Shares issued and
outstanding as of May 5, 1997, as advised by the
Company.
Herbert S. Lawson Mr. Lawson has been Vice President and Treasurer, as
well as a director of Purchaser since May 1997. Mr.
Lawson has served as Chief Financial Officer and
director of Gambro Healthcare, Inc. since 1996 and as a
director of Gambro Healthcare Patient Services, Inc.
since 1992. In 1996, he became an executive officer of
Gambro Healthcare Patient Services, Inc. From 1981 to
June 1992, he served as Director of Taxes of COBE and
from 1992 to the present Mr. Lawson has served as an
executive officer of COBE.
Lawrence J. Centella Mr. Centella was appointed the Vice President and a
director of Purchaser in May 1997. Mr. Centella has
served as an executive officer and director of Gambro
Healthcare, Inc. and as President and a director of
Gambro Healthcare Patient Services, Inc., formerly known
as REN-Corporation-USA, since July 1993. From July 1990
to July 1993, Mr. Centella was President of COBE Renal
Care, Inc., a subsidiary of COBE Laboratories, Inc. From
April 1989 to June 1990, Mr. Centella was President of
Gambro-Hospal, Inc., a manufacturer and distributor of
renal care products. For the ten years prior to April
1989, he was President of LADA International, Inc., a
distributor of specialty hospital equipment products.
</TABLE>
I-5
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Ralph Z. Levy, Jr. Mr. Levy has served as Vice President and Secretary of
Purchaser, as well as director since May 1997 and has
been Vice President & General Counsel to Gambro
Healthcare, Inc. since 1996. He has also been an
executive officer and director of COBE Laboratories,
Inc., Gambro Healthcare, Inc. and Gambro Healthcare
Patient Services, Inc. since 1996. Previously, Mr. Levy
served as REN-Corporation-USA's Executive Vice President
and General Counsel from 1992 to 1995. Prior to joining
REN-Corporation-USA, Mr. Levy was, from July 1978 to
October 1992, a partner with Wyatt, Tarrant & Combs, a
Nashville, Tennessee and Louisville, Kentucky based law
firm.
</TABLE>
I-6
<PAGE>
Facsimiles of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates evidencing Shares and any other required documents
should be sent or delivered by each stockholder or his broker, dealer,
commercial bank, trust company or other nominee to the Depositary at one of its
addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT COURIER:
Tender & Exchange (212) 815-6213 Tender & Exchange
Department Department
P.O. Box 11248 Confirm by Telephone: 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 1-800-507-9357 New York, New York 10286
10286-1248
</TABLE>
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent. A stockholder may also contact brokers, dealers, commercial
banks or trust companies for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
Toll Free: 1-800-223-2064
UNITED STATES:
Wall Street Plaza
New York, New York 10005
Bankers and Brokers call collect:
(212) 440-9800
EUROPE:
Georgeson & Company
17th Floor, Moor House
119 London Wall
London EC2Y 5ET
Telephone: 171-454-7100
or Call Collect (212) 440-9800
THE DEALER MANAGER FOR THE OFFER IS:
UBS SECURITIES
299 Park Avenue, 35th Floor
New York, New York 10171-0026
1-888-821-5176 (Toll Free)
<PAGE>
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
Vivra Incorporated
Pursuant to the Offer to Purchase
Dated May 9, 1997
of
Gambro Healthcare Acquisition Corp.
an indirect wholly owned subsidiary of
Incentive AB
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JUNE 6, 1997, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT COURIER:
<S> <C> <C>
Tender & Exchange (212) 815-6213 Tender & Exchange Department
Department Confirm by Telephone: 101 Barclay Street
P.O. Box 11248 1-800-507-9357 Receive and Delivery Window
Church Street Station New York, New York 10286
New York, New York
10286-1248
</TABLE>
Delivery of this Letter of Transmittal to an address other than as set forth
above or transmission of instructions via facsimile transmission or telex other
than as set forth above will not constitute a valid delivery.
The instructions accompanying this Letter of Transmittal should be read
carefully before this Letter of Transmittal is completed.
<PAGE>
This Letter of Transmittal is to be completed by stockholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company ("DTC"), the Midwest
Securities Trust Company ("MSTC") or the Philadelphia Depository Trust Company
("PDTC") (each a "Book-Entry Transfer Facility" and collectively, the
"Book-Entry Transfer Facilities") pursuant to the book-entry transfer procedure
described in "Section 3. Procedures for Accepting the Offer and Tendering
Shares" of the Offer to Purchase (as defined below). DELIVERY OF DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Stockholders whose certificates evidencing Shares ("Share Certificates") are
not immediately available or who cannot deliver their Share Certificates and all
other documents required hereby to the Depositary prior to the Expiration Date
(as defined in "Section 1. Terms of the Offer; Expiration Date" of the Offer to
Purchase) or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis and who wish to tender their Shares must do so
pursuant to the guaranteed delivery procedure described in "Section 3.
Procedures for Accepting the Offer and Tendering Shares" of the Offer to
Purchase. See Instruction 2.
<TABLE>
<S> <C>
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE) / / DTC / / MSTC / / PDTC
Account Number
Transaction Code Number
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY
SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
Window Ticket No. (if any)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution which Guaranteed Delivery
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
<CAPTION>
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY
AS NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
<S> <C> <C> <C>
<CAPTION>
TOTAL NUMBER OF
SHARE SHARES EVIDENCED BY NUMBER OF
CERTIFICATE SHARE SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
Total Shares..............................
* Need not be completed by stockholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate
delivered to the Depositary are being tendered hereby. See Instruction 4.
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH
IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Gambro Healthcare Acquisition Corp., a
Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of
Incentive AB, a corporation organized under the laws of Sweden, the
above-described shares of Common Stock, par value $.01 per share, of Vivra
Incorporated, a Delaware corporation (the "Company") (all shares of such Common
Stock from time to time outstanding being, collectively, the "Shares"), pursuant
to Purchaser's offer to purchase all Shares, at $35.62 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated May 9, 1997 (the "Offer to Purchase"), receipt of which
is hereby acknowledged, and in this Letter of Transmittal (which, together with
the Offer to Purchase, constitute the "Offer"). The undersigned understands that
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more of its affiliates, the right to purchase all or any
portion of the Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Purchaser all
right, title and interest in and to all the Shares that are being tendered
hereby and all dividends, distributions (including, without limitation,
distributions of additional Shares) and rights declared, paid or distributed in
respect of such Shares on or after May 5, 1997 (collectively, "Distributions")
and irrevocably appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares and all
Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
Share Certificates evidencing such Shares and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by a Book-Entry Transfer Facility, together, in either case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
Purchaser, (ii) present such Shares and all Distributions for transfer on the
books of the Company and (iii) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Mats L. Wahlstrom and Ralph Z.
Levy, Jr., and each of them, as the attorneys and proxies of the undersigned,
each with full power of substitution, to vote in such manner as each such
attorney and proxy or his substitute shall, in his sole discretion, deem proper
and otherwise act (by written consent or otherwise) with respect to all the
Shares tendered hereby which have been accepted for payment by Purchaser prior
to the time of such vote or other action and all Shares and other securities
issued in Distributions in respect of such Shares, which the undersigned is
entitled to vote at any meeting of stockholders of the Company (whether annual
or special and whether or not an adjourned or postponed meeting) or consent in
lieu of any such meeting or otherwise. This proxy and power of attorney is
coupled with an interest in the Shares tendered hereby, is irrevocable and is
granted in consideration of, and is effective upon, the acceptance for payment
of such Shares by Purchaser in
<PAGE>
accordance with other terms of the Offer. Such acceptance for payment shall
revoke all other proxies and powers of attorney granted by the undersigned at
any time with respect to such Shares (and all Shares and other securities issued
in Distributions in respect of such Shares), and no subsequent proxy or power of
attorney shall be given or written consent executed (and if given or executed,
shall not be effective) by the undersigned with respect thereto. The undersigned
understands that, in order for Shares to be deemed validly tendered, immediately
upon Purchaser's acceptance of such Shares for payment, Purchaser must be able
to exercise full voting and other rights with respect to such Shares, including,
without limitation, voting at any meeting of the Company's stockholders then
scheduled.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions, that when such Shares are accepted for payment by
Purchaser, Purchaser will acquire good, marketable and unencumbered title
thereto and to all Distributions, free and clear of all liens, restriction,
charges and encumbrances, and that none of such Shares and Distributions will be
subject to any adverse claim. The undersigned, upon request, shall execute and
deliver all additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby and all Distributions. In addition, the undersigned shall
remit and transfer promptly to the Depositary for the account of Purchaser all
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and pending such remittance and transfer
or appropriate assurance thereof, Purchaser shall be entitled to all rights and
privileges as owner of each such Distribution and may withhold the entire
purchase price of the Shares tendered hereby, or deduct from such purchase
price, the amount or value of such Distribution as determined by Purchaser in
its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in "Section 3. Procedures for Accepting the Offer and
Tendering Shares" of the Offer to Purchase and in the instructions hereto will
constitute the undersigned's acceptance of the terms and conditions of the
Offer. Purchaser's acceptance of such Shares for payment will constitute a
binding agreement between the undersigned and Purchaser upon the terms and
subject to the conditions of the Offer.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions", please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered". Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions", please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered". In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. Unless otherwise indicated herein in the box entitled
"Special Payment Instructions", please credit any Shares tendered hereby and
delivered by book-entry transfer, but which are not purchased by crediting the
account at the Book-Entry Transfer Facility designated above. The undersigned
recognizes that Purchaser has no obligation, pursuant to the Special Payment
Instructions, to
<PAGE>
transfer any Shares from the name of the registered holder(s) thereof if
Purchaser does not purchase any of the Shares tendered hereby.
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the To be completed ONLY if the check for the
purchase price of Shares purchased or Share purchase price of Shares purchased or Share
Certificates evidencing Shares not tendered or Certificates evidencing Shares not tendered or
not purchased are to be issued in the name of not purchased are to be mailed to someone other
someone other than the undersigned, or if Shares than the undersigned, or the undersigned at an
tendered hereby and delivered by book-entry address other than that shown under "Description
transfer which are not purchased are to be of Shares Tendered".
returned by credit to an account at one of the
Book-Entry Transfer Facilities other than that
designated above.
Issue / / check / / Share Certificate(s) to: Mail / / check / / Share Certificate(s) to:
Name Name
PLEASE PRINT PLEASE PRINT
Address Address
(ZIP CODE) (ZIP CODE)
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE) NUMBER) (SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
/ / Credit Shares delivered by book-entry
transfer and not purchased to the account set
forth below:
Check appropriate box:
/ / DTC / / MSTC / / PDTC
Account Number:
</TABLE>
<PAGE>
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
______________________________________________________________________________
______________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated: ______________ , 199__
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing by a person(s) authorized to
become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
Name(s): _____________________________________________________________________
PLEASE PRINT
Capacity (full title): _______________________________________________________
Address: _____________________________________________________________________
INCLUDE ZIP CODE
Area Code and Telephone No: __________________________________________________
Taxpayer Identification or Social Security No.: ______________________________
(SEE SUBSTITUTE FORM W-9 ON REVERSE
SIDE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
FINANCIAL INSTITUTIONS: PLACE MEDALLION
GUARANTEE IN SPACE BELOW.
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of the Medallion Signature
Guarantee Program, or by any other "eligible guarantor institution", as such
term is defined in Rule 17Ad-5 promulgated under the Securities Exchange Act of
1934, as amended (each of the foregoing being referred to as an "Eligible
Institution"), unless (i) this Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this document, shall
include any participant in a Book-Entry Transfer Facility whose name appears on
a security position listing as the owner of Shares) tendered hereby and such
holder(s) has (have) completed neither the box entitled "Special Payment
Instructions" nor the box entitled "Special Delivery Instructions" on the
reverse hereof or (ii) such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if Shares are to be delivered by book-entry transfer pursuant to the
procedure set forth in "Section 3. Procedures for Accepting the Offer and
Tendering Shares" of the Offer to Purchase. Share Certificates evidencing all
physically tendered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility of all Shares delivered
by book-entry transfer as well as a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the reverse hereof prior to the Expiration Date (as
defined in "Section 1. Terms of the Offer; Expiration Date" of the Offer to
Purchase). If Share Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal must
accompany each such delivery. Stockholders whose Share Certificates are not
immediately available, who cannot deliver their Share Certificates and all other
required documents to the Depositary prior to the Expiration Date or who cannot
complete the procedure for delivery by book-entry transfer on a timely basis may
tender their Shares pursuant to the guaranteed delivery procedure described in
"Section 3. Procedures for Accepting the Offer and Tendering Shares" of the
Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by
or through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form made available by
Purchaser, must be received by the Depositary prior to the Expiration Date; and
(iii) the Share Certificates evidencing all physically delivered Shares in
proper form for transfer by delivery, or a confirmation of a book-entry transfer
into the Depositary's account at a Book-Entry Transfer Facility of all Shares
delivered by book-entry transfer, in each case together with a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message (as defined in "Section 3. Procedures for Accepting the Offer
and Tendering Shares" of the Offer to Purchase)), and any other documents
required by this Letter of Transmittal, must be received by the Depositary
within three New York Stock Exchange ("NYSE") trading days after the date of
execution of such Notice of Guaranteed Delivery, all as described in "Section 3.
Procedures for Accepting the Offer and Tendering Shares" of the Offer to
Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering stockholders waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares which are to be tendered in the box entitled "Number of Shares
Tendered". In such cases, new Share Certificate(s) evidencing the remainder of
the Shares that were evidenced by the Share Certificates delivered to the
Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided
<PAGE>
in the box entitled "Special Delivery Instructions" on the reverse hereof, as
soon as practicable after the expiration or termination of the Offer. All Shares
evidenced by Share Certificates delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6,
Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to Purchaser of the payment of such taxes, or exemption
therefrom, is submitted. Except as provided in this Instruction 6, it will not
be necessary for transfer tax stamps to be affixed to the Share Certificates
evidencing the Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on the reverse hereof, the appropriate
boxes on the reverse of this Letter of Transmittal must be completed.
Stockholders delivering Shares tendered hereby by book-entry transfer may
request that Shares not purchased be credited to such account maintained at a
Book-Entry Transfer Facility as such stockholder may designate in the box
entitled "Special Payment Instructions" on the reverse hereof. If no such
instructions are given, all such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated on the
reverse hereof as the account from which such Shares were delivered.
8. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective addresses or telephone numbers set forth below.
Additional copies of the Offer to Purchase, this Letter of Transmittal and the
Notice of Guaranteed
<PAGE>
Delivery may be obtained from the Information Agent or from brokers, dealers,
commercial banks or trust companies.
9. SUBSTITUTE FORM W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such stockholder is not subject to backup withholding of federal income tax. If
a tendering stockholder has been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding, such stockholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
stockholder has since been notified by the Internal Revenue Service that such
stockholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
31% federal income tax withholding on the payment of the purchase price of all
Shares purchased from such stockholder. If the tendering stockholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such stockholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the purchase price to such stockholder until a TIN is provided to
the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN "SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE" OF THE OFFER TO
PURCHASE).
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is such stockholder's social security
number. If the Depositary is not provided with the correct TIN, the stockholder
may be subject to a $50 penalty imposed by the Internal Revenue Service and
payments that are made to such stockholder with respect to Shares purchased
pursuant to the Offer may be subject to backup withholding of 31%. In addition,
if a stockholder makes a false statement that results in no imposition of backup
withholding, and there was no reasonable basis for such statement, a $500
penalty may also be imposed by the Internal Revenue Service.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such statements
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions. A stockholder should consult his or her tax advisor as
to such stockholder's qualification for exemption from backup withholding and
the procedure for obtaining such exemption.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN) and (b) that
(i) such stockholder has not been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding as a result of a failure to
report all interest or dividends or (ii) the Internal Revenue Service has
notified such stockholder that such stockholder is no longer subject to backup
withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering stockholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the stockholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% of all payments of the purchase price to such
stockholder until a TIN is provided to the Depositary.
<PAGE>
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
SUBSTITUTE FORM W-9 PART I--Taxpayer Identification --------------------------------
Number--For all accounts, enter Social Security Number
your taxpayer identification
number in the box at right. (For OR
most individuals, this is your Taxpayer Identification
social security number. If you Number
do not have a number, see
Obtaining a Number in the (If awaiting TIN write
enclosed GUIDELINES.) Certify by "Applied For")
signing and dating below. Note:
If the account is in more than
one name, see the chart in the
enclosed GUIDELINES to determine
which number to give the payer.
PAYER'S REQUEST FOR TAXPAYER PART II--For Payees Exempt From Backup Withholding, see the
IDENTIFICATION NUMBER (TIN) enclosed GUIDELINES and complete as instructed therein.
</TABLE>
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service (the "IRS") that I am subject to
backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup
withholding.
CERTIFICATE INSTRUCTIONS--You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see instructions in the enclosed
GUIDELINES.)
SIGNATURE ____________________________________________ DATE _____________, 199_
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
Facsimiles of the Letter of Transmittal, properly completed and duly signed,
will be accepted. The Letter of Transmittal certificates evidencing Shares and
any other required documents should be sent or delivered by each stockholder to
such stockholder's broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
<PAGE>
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT COURIER:
Tender & Exchange (212) 815-6213 Tender & Exchange
Department Department
P.O. Box 11248 Confirm by Telephone: 101 Barclay Street
Church Street Station 1-800-507-9357 Receive and Delivery Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, this Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent. A stockholder may also contact brokers, dealers, commercial
banks or trust companies for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
Toll Free: 1-800-223-2064
<TABLE>
<S> <C>
UNITED STATES: EUROPE:
Wall Street Plaza Georgeson & Company
New York, New York 10005 17th Floor, Moor House
Banks and Brokers call collect: 119 London Wall
(212) 440-9800 London EC2Y 5ET
Telephone: 171-454-7100
</TABLE>
or Call Collect: (212) 440-9800
THE DEALER MANAGER FOR THE OFFER IS:
UBS SECURITIES
299 Park Avenue, 35th Floor
New York, New York 10171-0026
1-888-821-5176 (Toll Free)
<PAGE>
Notice of Guaranteed Delivery
for
Tender of Shares of Common Stock
of
Vivra Incorporated
(Not to Be Used for Signature Guarantees)
This Notice of Guaranteed Delivery, or one substantially in the form hereof,
must be used to accept the Offer (as defined below) (i) if certificates ("Share
Certificates") evidencing shares of Common Stock, par value $.01 per share (the
"Shares"), of Vivra Incorporated, a Delaware corporation (the "Company"), are
not immediately available, (ii) if Share Certificates and all other required
documents cannot be delivered to The Bank of New York, as Depositary (the
"Depositary"), prior to the Expiration Date (as defined in "Section 1. Terms of
the Offer; Expiration Date" of the Offer to Purchase (as defined below)) or
(iii) if the procedure for delivery by book-entry transfer cannot be completed
on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand
or mail or transmitted by telegram, telex or facsimile transmission to the
Depositary. See "Section 3. Procedures for Accepting the Offer and Tendering
Shares" of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT COURIER:
Tender & Exchange (212) 815-6213 Tender & Exchange
Department Department
P.O. Box 11248 Confirm by Telephone: 101 Barclay Street
Church Street Station 1-800-507-9357 Receive and Delivery Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OR
TELEX OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tender(s) to Gambro Healthcare Acquisition Corp., a
Delaware corporation and an indirect wholly owned subsidiary of Incentive AB, a
corporation organized under the laws of Sweden, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated May 9, 1997 (the "Offer
to Purchase"), and the related Letter of Transmittal (which, together with the
Offer to Purchase, constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares specified below pursuant to the guaranteed
delivery procedure described in "Section 3. Procedures for Accepting the Offer
and Tendering Shares" of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares:
Signature(s) of Holder(s)
Certificate Nos. (If Available):
Dated: , 1997
Name(s) of Holders:
Please Type or Print
Check one box if Shares will be delivered by Address
book-entry transfer:
/ / The Depository Trust Company Zip Code
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company Area Code and Telephone No.
Account No.
</TABLE>
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or which is a commercial bank or trust company having an office or correspondent
in the United States, guarantees to deliver to the Depositary, at one of its
addresses set forth above, Share Certificates evidencing the Shares tendered
hereby, in proper form for transfer, or confirmation of book-entry transfer of
such Shares into the Depositary's account at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company,
in either case with delivery of a Letter of Transmittal (or facsimile thereof)
properly completed and duly executed, and any other required documents, all
within three New York Stock Exchange ("NYSE") trading days of the date hereof.
<TABLE>
<S> <C>
Name of Firm Authorized Signature
Address Title
Name:
Zip Code Please Type or Print
Dated: , 1997
Area Code and Telephone No.
</TABLE>
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
[LOGO]
[LOGO]
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Vivra Incorporated
at
$35.62 Net Per Share
by
Gambro Healthcare Acquisition Corp.
an indirect wholly owned subsidiary of
Incentive AB
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JUNE 6, 1997, UNLESS THE OFFER IS EXTENDED.
May 9, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Gambro Healthcare Acquisition Corp., a Delaware
corporation ("Purchaser") and an indirect wholly owned subsidiary of Incentive
AB, a company organized under the laws of Sweden, to act as Dealer Manager in
connection with Purchaser's offer to purchase all outstanding shares of Common
Stock, par value $.01 per share (the "Shares"), of Vivra Incorporated, a
Delaware corporation (the "Company"), at a price of $35.62 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in
Purchaser's Offer to Purchase, dated May 9, 1997 (the "Offer to Purchase"), and
the related Letter of Transmittal (which, together with the Offer to Purchase,
constitute the "Offer") enclosed herewith. Please furnish copies of the enclosed
materials to those of your clients for whose accounts you hold Shares registered
in your name or in the name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A
MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS, (II) THE EXPIRATION
OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AND (III) THE CONSUMMATION OF THE SPECIALTY
MERGER TRANSACTION (AS DESCRIBED IN THE OFFER TO PURCHASE) AND THE RECEIPT BY
THE COMPANY OF CASH PROCEEDS THEREFOR, AFTER PROVIDING FOR ALL APPLICABLE INCOME
TAXES (USING AN ASSUMED TAX RATE OF 41%), OF NOT LESS THAN $76,900,000. THE
OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THE OFFER TO
PURCHASE.
<TABLE>
<S> <C>
299 Park Avenue
New York, NY 10171-0026
Member SIPC Telephone 212 821-4000
Member New York Stock Exchange www.ubs.com
and other Principal Exchanges A Subsidiary of Union Bank of Switzerland
</TABLE>
<PAGE>
Enclosed for your information and use are copies of the following documents:
1. Offer to Purchase, dated May 9, 1997;
2. Letter of Transmittal to be used by holders of Shares in accepting the
Offer and tendering Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or cannot
be delivered to The Bank of New York (the "Depositary") by the Expiration Date
(as defined in the Offer to Purchase) or if the procedure for book-entry
transfer cannot be completed by the Expiration Date;
4. A letter to stockholders of the Company from Kent J. Thiry, President and
Chief Executive Officer of the Company, together with a Solicitation/
Recommendation Statement on Schedule 14D-9 filed with the Securities and
Exchange Commission by the Company;
5. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominee, with space
provided for obtaining such clients' instructions with regard to the Offer;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JUNE 6, 1997, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates
evidencing such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (as defined in the Offer to Purchase)), a Letter of Transmittal (or
facsimile thereof) properly completed and duly executed and any other required
documents.
If holders of Shares wish to tender, but cannot deliver their certificates
or other required documents, or cannot comply with the procedure for book-entry
transfer, prior to the expiration of the Offer, a tender of Shares may be
effected by following the guaranteed delivery procedure described in "Section 3.
Procedures for Accepting the Offer and Tendering Shares" in the Offer to
Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Manager, the Depositary and the Information
Agent as described in the Offer) in connection with the solicitation of tenders
of Shares pursuant to the Offer. However, Purchaser will reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. Purchaser will pay or cause to be paid any
stock transfer taxes payable with respect to the transfer of Shares to it,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
UBS Securities LLC (in such capacity, the "Dealer Manager") or Georgeson &
Company Inc. (the "Information Agent") at their respective addresses and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent, at the address and telephone number set forth on the back
cover page of the Offer to Purchase.
Very truly yours,
UBS SECURITIES LLC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU,
OR ANY OTHER PERSON, THE AGENT OF PARENT, PURCHASER, THE COMPANY, THE DEALER
MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Vivra Incorporated
at
$35.62 Net Per Share
by
Gambro Healthcare Acquisition Corp.
an indirect wholly owned subsidiary of
Incentive AB
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JUNE 6, 1997, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated May 9, 1997
(the "Offer to Purchase"), and a related Letter of Transmittal in connection
with the offer by Gambro Healthcare Acquisition Corp., a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of Incentive AB, a
corporation organized under the laws of Sweden ("Parent"), to purchase all
outstanding shares of Common Stock, par value $.01 per share (the "Shares"), of
Vivra Incorporated, a Delaware corporation (the "Company"), at a price of $35.62
per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (which, together with the Offer to Purchase, constitute the
"Offer").
We are (or our nominee is) the holder of record of Shares held by us for
your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $35.62 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company unanimously has determined that
each of the Offer and the Merger (as defined in the Offer to Purchase) is fair
to, and in the best interests of, the stockholders of the Company, and
recommends that stockholders accept, and tender their Shares pursuant to, the
Offer.
4. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JUNE 6, 1997, UNLESS THE OFFER IS EXTENDED.
5. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the expiration of the Offer at least
a majority of the Shares outstanding on a fully diluted basis, (ii) the
expiration or termination of any applicable waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, and (iii) the consummation of the
Specialty Merger Transaction (as described in the Offer to Purchase) and the
receipt by the Company of cash proceeds therefor after providing for all
applicable income taxes (using an assumed income tax rate of 41%), of not less
than $76,900,000. The Offer is also subject to other terms and conditions
contained in the Offer to Purchase.
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
<PAGE>
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Purchaser is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will make a good faith effort to comply
with such state statute. If, after such good faith effort, Purchaser cannot
comply with such state statute, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by UBS Securities LLC or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
------------------------
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL
OUTSTANDING SHARES OF COMMON STOCK OF VIVRA INCORPORATED BY
GAMBRO HEALTHCARE ACQUISITION CORP.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated May 9, 1997, and the related Letter of Transmittal (which
together constitute the "Offer") in connection with the offer by Gambro
Healthcare Acquisition Corp., a Delaware corporation and an indirect wholly
owned subsidiary of Incentive AB, a corporation organized under the laws of
Sweden, to purchase all outstanding shares of Common Stock, par value $.01 per
share (the "Shares"), of Vivra Incorporated, a Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Dated: ____________, 1997
Number of Shares to be Tendered:
_________ Shares*
SIGN HERE
- -------------------------------------------
- -------------------------------------------
Signature(s)
- -------------------------------------------
- -------------------------------------------
Please type or print name(s)
- ------------------------------------------------------
- ------------------------------------------------------
Please type or print address
- ------------------------------------------------------
Area Code and Telephone Number
- ------------------------------------------------------
Taxpayer Identification or Social Security Number
- ------------------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
2
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- -----------------------------------------------------
<S> <C> <C>
1. An individual's The individual
account
2. Two or more The actual owner of
individuals (joint the account or, if
account) combined funds, any
one of the
individuals(1)
3. Husband and wife The actual owner of
(joint account) the account or, if
joint funds, either
person(1)
4. Custodian account of The minor(2)
a minor (Uniform
Gift to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor(1)
6. Account in the name The ward, minor, or
of guardian or incompetent
committee for a person(3)
designated ward,
minor, or
incompetent person
7. a. The usual The
revocable savings grantor-trustee(1)
trust account
(grantor is also
trustee)
b. So-called trust
account that is The actual owner(1)
not a legal or
valid trust under
State law
8. Sole proprietorship The owner(4)
account
- -----------------------------------------------------
<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
<S> <C> <C>
- -----------------------------------------------------
9. A valid trust, The legal entity (Do
estate, or pension not furnish the
trust identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account
title.)(5)
10. Corporate account The corporation
11. Religious, The organization
charitable, or
educational
organization account
12. Partnership account The partnership
held in the name of
the business
13. Association, club or The organization
other tax-exempt
organization
14. A broker or The broker or
registered nominee nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
</TABLE>
- ---------------------------------------------
- ---------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount renewed is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. NOTE: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding.
FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER,
WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE
PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE
FORM.
Certain payments other than interest, dividends and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045 and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES.
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure due to reasonable cause and not to willful
neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.-- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
- --------------------------------------------------------------------------------
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase (as defined below) dated May 9, 1997 and the restated
Letter of Transmittal, and is being made to all holders of Shares. Purchaser (as
defined below) is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will
make a good faith effort to comply with such state statute. If, after such good
faith effort, Purchaser cannot comply with such state statute, the Offer will
not be made to (nor will tenders be accepted from or on behalf of) the holders
of Shares in such state. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of Purchaser by UBS Securities LLC or
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Vivra Incorporated
at
$35.62 Net Per Share
by
Gambro Healthcare Acquisition Corp.
an indirect wholly owned subsidiary of
Incentive AB
Gambro Healthcare Acquisition Corp., a Delaware corporation ("Purchaser")
and an indirect wholly owned subsidiary of Incentive AB, a corporation organized
under the laws of Sweden ("Parent"), is offering to purchase all outstanding
shares of Common Stock, par value $.O1 per share (the "Shares"), of Vivra
Incorporated, a Delaware corporation (the "Company"), at a price of $35.62 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated May 9, 1997 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which together constitute the
"Offer"). Following the Offer, Purchaser intends to effect the Merger described
below.
-----------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JUNE 6,1997, UNLESS THE OFFER IS EXTENDED.
-----------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the expiration of the Offer at least a
majority of the Shares outstanding on a fully diluted basis, (ii) the expiration
or termination of any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, and (iii) the consummation of the Specialty
Merger Transaction (as described in the Offer to Purchase) and the receipt by
the Company of cash proceeds therefor, after providing for all applicable income
taxes (using an assumed income tax rate of 41%), of not less than $76,900,000.
The Offer is also subject to other terms and conditions contained in the Offer
to Purchase.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of May 5, 1997 (the "Merger Agreement") among Parent, Purchaser and the
Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement,
Purchaser will be merged with and into the Company (the "Merger"). Following
consummation of the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and will become a wholly owned
subsidiary of Parent. At the effective time of the Merger (the "Effective
Time"), each Share issued and outstanding immediately prior to the Effective
Time (other than Shares held in the treasury of the Company, or owned by
Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or
of the Company immediately prior to the Effective Time, and other than Shares
held by stockholders who shall have demanded and perfected appraisal rights)
will be cancelled and converted automatically into the right to receive $35.62
in cash, or any higher price that may be paid per Share in the Offer, without
interest.
The Board of Directors of the Company unanimously has determined that each
of the Offer and the Merger is fair to, and in the best interests of, the
stockholders of the Company, and recommends that stockholders accept the Offer
and tender their Shares pursuant to the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to The Bank of
New York (the "Depositary") of Purchaser's acceptance for payment of such Shares
pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payments
from Purchaser and transmitting such payments to tendering stockholders whose
Shares have been accepted for payment. Under no circumstances will interest on
the purchase price for Shares be paid, regardless of any extension of the Offer
or delay in making such payment. In all cases, payment for Shares tendered and
accented for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (1) the certificates evidencing such Shares (the
"Share Certificates") or timely confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (as defined in "Section 2. Acceptance for Payment and Payment for
Shares" of the Offer to Purchase) pursuant to the procedure set forth in
"Section 3. Procedures for Accepting the Offer and Tendering Shares" of the
Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message (as defined in
"Section 3. Procedures to Accepting the Offer and Tendering Shares" of the Offer
to Purchase) and (iii) any other documents required under the Letter of
Transmittal.
Purchaser expressly reserves the right, in its sole discretion (subject to
the terms and conditions of the Merger Agreement), at any time and from time to
time, to extend for any reason the period of time during which the Offer is
open, including the occurrence of any condition specified in "Section 15.
Certain Conditions of the Offer" of the Offer to Purchase, by giving oral or
written notice of such extension to the Depositary. Any such extension will be
followed as promptly as practicable by public announcement thereof, such
announcement to be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date (as defined below)
of the Offer. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the rights of a tendering
stockholder to withdraw his Shares.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Friday, June 6, 1997, unless and until Purchaser, in its sole discretion, shall
have extended the period of time during which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by Purchaser, will expire.
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer, may
also be withdrawn at any time after July 7,1997. For the withdrawal to be
effective, a written, telegraphic or facsimile transmission notice of withdrawal
must be timely received by the Depositary at one of its addresses set forth on
the back cover page of the Offer to Purchase. Any such notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder of such
Shares, if different from that of the person who tendered such Shares. If Share
Certificates evidencing Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such Share
Certificates, the serial numbers shown on such Share Certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in "Section 3.
Procedures for Accepting the Offer and Tendering Shares" of the Offer to
Purchase), unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in "Section 3. Procedures for Accepting the
Offer and Tendering Shares" of the Offer to Purchase, any notice of withdrawal
must specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares. All questions as to the form
and validity (including the time of receipt) of any notice of withdrawal will be
determined by Purchaser, in its sole discretion, whose determination will be
final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal contain
important information which should be read before any decision is made with
respect to the Offer.
Questions and requests for assistance or for additional copies of the
Offer to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or the Dealer Manager as set
forth below, and copies will be furnished promptly at Purchaser's expense. No
fees or commissions will be paid to brokers, dealers or other persons (other
than the Information Agent and the Dealer Manager) for soliciting tenders of
Shares pursuant to the Offer.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
------------
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect (212) 440-9800
Call Toll Free: 1-800-223-2064
The Dealer Manager for the Offer is:
UBS Securities
299 Park Avenue, 35th Floor
New York, New York 10171-0026
1-888-821-5176 (Toll Free)
May 9,1997
- --------------------------------------------------------------------------------
<PAGE>
Incentive's Gambro Group to acquire Vivra Incorporated
Stockholm (May 5, 1997). Incentive AB and Vivra Incorporated ("Vivra") announced
today that both companies have signed a definitive merger agreement under which
Incentive will acquire Vivra's Renal Care business ("VRC"), including its
nephrology disease management and nephrology physician practice management
operation. Incentive intends to merge VRC with the Gambro Group, its wholly
owned, worldwide, fully integrated dialysis and medical technology business.
Pursuant to the merger agreement, a cash tender offer will be commenced by
a wholly owned subsidiary of Incentive no later than May 9, 1997, to acquire all
of the outstanding shares of Vivra common stock for $35.62 per share or a total
cash consideration of $1,592 million, of which $33.90 represents Incentive's net
consideration for VRC, or a total cash consideration of $1,515 million. As part
of the transaction, Vivra has also signed a definitive agreement to sell Vivra
Specially Partners ("VSP"), its physician network and disease management
division, to a new company formed by Texas Pacific Group, Hellman & Freedman
Capital Partners III, LP. and Bain Capital for $85 million, representing net
after-tax proceeds of $77 million or approximately $1.72 per Vivra share. The
VSP sale agreement is subject to the expiration or termination of the waiting
periods under the Hart- Scott-Rodino Act and will close immediately prior to the
consummation of the Incentive tender offer.
The $35.62 per share cash price represents a premium of 38.1% over the
average closing price of Vivra shares of $25.80 over the last 20 business days.
The Board of Directors of Vivra has reviewed the merger agreement on
behalf of its stockholders and has recommended that such stockholders tender
their shares pursuant to the offer.
The tender offer shall be conditional upon the valid tender of Vivra
shares representing a majority of the voting power of Vivra, the expiration or
termination of the waiting periods under applicable antitrust and competition
laws, the receipt of proceeds from the sale of VSP, and certain other matters.
The tender offer is expected to be completed in early June. All shares not
purchased in the tender offer will be converted into the right to receive $35.62
per share in a second step merger following the tender offer.
The combination of VRC with Gambro will create a company with pro form
1996 worldwide revenues of $2.0 billion and earnings before interest, taxes,
depreciation and amortization ("EBITDA") of $410 million. The transaction is
expected to generate significant operating synergies. Together the companies
will serve approximately 26,000 dialysis patients in the United States.
<PAGE>
2
Mikael Lilius, President and Chief Executive Officer of Incentive said:
"This transaction represents a major strategic move for Incentive and continues
our strong thrust into the high growth health care sector. We have consistently
restructured and shifted our resources into this highly attractive area. The
acquisition of Vivra Renal Care is a logical next step in the development of
Incentive Group and demonstrates our strong commitment to shareholder value
creation".
Berthold Lindqvist, President and Chief Executive Officer of Gambro said:
"Vivra Renal Care is a well-managed company that fits well with Gambro. VRC will
strengthen our position as a global leader in renal care. We pioneered the
forward integration strategy in the United States and have distinguished
ourselves as high-quality care providers. With this merger, we will strengthen
Gambro's position as a leading, fully integrated, renal care management company
with multiregional presence; furthermore this transaction will generate
significant operating synergles, while allowing Gambro to continue to provide a
service of the highest quality".
As a result of the change in control, resulting from Incentive's purchase
of Vivra shares pursuant to the tender offer, Vivra will thereafter be required
to offer to purchase the 5% Convertible Subordinated Notes Due 2001 from each of
the holders for the principal amount thereof plus accrued and unpaid interest.
The impact of the acquisition is expected to be dilutive to Incentive's
earnings during both 1997 and 1998 due primarily to the goodwill charges
attributable to the transaction. The new goodwill will be amortized over twenty
years in accordance with Swedish GAAP. On a pro forma 1996 basis, the total
negative effect would have been SEK 7-8 per share. However, Incentive expects
the acquisition to enhance cash earnings growth (calculated before charges for
depreciation and goodwill amortisation), with an accretive impact in its first
full year and significant contributions thereafter.
Pro forma solidity (equity including minority interests divided by total
assets) of Incentive as at 31 December, 1996, will decrease from 42% to 31%.
Adjusted for market value in associated companies, the solidity will decrease
from 60% to 48%. Total assets will increase by approximately SEK 12 billion from
SEK 35 billion to SEK 47 billion. Incentive will continue to focus the group
healthcare and reduce the level of debt.
Vivra is the second largest provider of dialysis services in the United
States with approximately 15,800 patients at 262 centers in 28 states and the
District of Columbia. In fiscal 1996, Vivra had total revenues of $517 million
and EBITDA of approximately $105 million. During the same period, VRC
contributed operating revenues of $411 million and EBITDA in excess of $100
million. VSP provides physician network and disease management services to
managed care and provider organizations in the United States with approximately
1,500 affiliated network physicians.
<PAGE>
3
Gambro is a world leader in renal care, manufacturing high quality
dialysis products and providing dialysis services to 12,100 patients worldwide.
Gambro also manufactures products used in cardiopulmonary care and equipment in
the field of blood component technology.
Incentive is a leading international industrial group with core operations
in medical technology, materials handling, development and environment. In
addition, Incentive has a significant shareholding in ABB. The acquisition of
VRC represents a major step in the continued restructuring of Incentive and its
focus on the healthcare sector.
Press enquires:
Incentive AB Gambro AB Citigate Communications
Bengt Modeer Inger Larsson Raymond F. McNulty
(46-8) 613-6533 (46-46) 169-167 (212) 508-3522
Financial advisors:
Incentive AB Gambro AB
Morgan Stanley & Co. Limited UBS Securites LLC
<PAGE>
CONFORMED COPY
REVOLVING CREDIT FACILITY
DATED 15th December 1995
$300,000,000
BETWEEN
GAMBRO AB
as the Parent,
ARRANGED BY
BNP CAPITAL MARKETS LIMITED
as Arranger
and
THE BANKS
and
BANQUE NATIONALE DE PARIS
as Agent
ALLEN & OVERY
London
<PAGE>
INDEX
Clause Page No.
1. Interpretation....................................................... 1
2. Commitments and nature of obligations................................ 10
3. Purpose.............................................................. 12
4. Conditions precedent................................................. 12
5. Drawdown............................................................. 12
6. Repayment............................................................ 13
7. Prepayment and cancellation.......................................... 13
8. Interest periods..................................................... 14
9. Interest............................................................. 16
10. Selection of optional currencies..................................... 17
11. Amount of optional currencies........................................ 18
12. Payments............................................................. 20
13. Taxes................................................................ 22
14. Market disruption.................................................... 24
15. increased costs...................................................... 25
16. Illegality........................................................... 27
17. Mitigation........................................................... 27
18. Guarantee............................................................ 27
19. Representations and warranties....................................... 30
20. Undertakings......................................................... 32
21. Default.............................................................. 37
22. The agent and the arranger........................................... 43
23. Fees................................................................. 45
24. Expenses............................................................. 46
25. Stamp duties......................................................... 46
26. Indemnities.......................................................... 46
27. Evidence and calculations............................................ 48
28. Amendments and waivers............................................... 48
29. Changes to the parties............................................... 49
30. Disclosure of information............................................ 51
31. Set-off.............................................................. 52
32. Pro rata sharing..................................................... 52
33. Severability......................................................... 53
34. Counterparts......................................................... 53
35. Notices.............................................................. 53
36. Language............................................................. 55
37. Jurisdiction......................................................... 55
38. Governing law........................................................ 56
<PAGE>
SCHEDULES
1 - Banks and Commitments................................................. 57
2 - Conditions Precedent Documents........................................ 58
3 - Calculation of the MLA Cost........................................... 60
4 - Form of Request....................................................... 62
5 - Form of Novation Certificate.......................................... 63
6 - Form of Deed of Accession............................................. 65
7 - Approved Additional Borrowers......................................... 67
<PAGE>
THIS FACILITY AGREEMENT is dated 15th December 1995 between:
(1) GAMBRO AB (the "Parent");
(2) BNP CAPITAL MARKETS LIMITED as Arranger (in this capacity the
"Arranger");
(3) THE FINANCIAL INSTITUTIONS listed in Schedule 1 as banks (the
"Banks"); and
(4) BANQUE NATIONALE DE PARIS as agent (in this capacity the
"Agent").
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"Additional Borrower" means any entity that becomes an additional
borrower by virtue of Clauses 2.4 and 2.5.
"Affiliate" means a subsidiary or a holding company (in each case,
as defined in Section 736 of the Companies Act 1985 of England and Wales)
of a Bank or any other subsidiary of that holding company.
"Agent's Spot Rate of Exchange" means the Agent's spot rate of
exchange for the purchase of the relevant Optional Currency in the London
foreign exchange market with U.S. Dollars at or about 11.00 a.m. on a
particular day.
"Agreed Optional Currencies" means Deutschmarks, Dutch Guilders,
French Francs, Swiss Francs, Sterling and Yen.
"Applicable Margin" means 0.20 per cent. per annum from the date
hereof to the fifth anniversary of the date hereof and 0.225 per cent. per
annum thereafter.
"Borrowers" means the Parent and/or any Additional Borrower and, in
relation to any Loan, means the Borrower to whom that Loan is, or is to
be, made (each a "Borrower").
<PAGE>
2
"Borrower's Agent" means the Parent or such other person from time
to time nominated by the Borrowers to act on behalf of the Borrowers in
relation hereto and approved for such purpose by the Agent (whose approval
shall not be unreasonably withheld).
"Business Day" means a day (other than a Saturday or a Sunday) on
which banks are open for business in:
(a) London and Paris;
(b) (in relation to a transaction involving any payments in
Dollars) New York; and
(c) (in relation to a transaction involving any payment in an
Optional Currency) the principal financial center of the
country of that Optional Currency.
"COBE" means COBE Laboratories, Inc.
"Commitment Period" means, theamount in Dollars set opposite the
name of a Bank in Schedule 1 to the extent not cancelled or reduced under
this Agreement
"Commitment Period" means the period from the date of this Agreement
until the Final Repayment Date (inclusive).
"Consolidated Total Assets" means the total tangible assets of the
Group (excluding recorded goodwill but including all intellectual property
rights) as shown in its latest audited consolidated accounts.
"Deed of Accession" means a Deed of Accession in relation to an
Additional Borrower entered into pursuant to Clause 2.4.
"Default" means an Event of Default or an event which, with the
giving of notice under this Agreement, lapse of time specified in this
Agreement (or in the case of a grace period contained in any other
document which is referred to herein, specified in that document),
determination of materiality or fulfillment of any other applicable
condition (or any combination of the foregoing), would constitute an Event
of Default.
<PAGE>
3
"Deutschmarks" means the lawful currency for the time being of the
Federal Republic of Germany.
"Disclosure Letter" means a letter delivered by the Parent to the
Agent prior to the date hereof relating to Clause 19 (Representations and
Warranties).
"Dollars" or "$" means the lawful currency for the time being of the
United States of America.
"Drawdown Date" means the date of the advance of a Loan.
"Dutch Guilders" means the lawful currency for the time being of The
Netherlands.
"EIBOR" means, in relation to a Loan denominated in Sterling:
(a) the rate per annum of the offered quotation for deposits in
Sterling for a period comparable to the relevant Interest Period which
appears on Telerate Page 3750 at or about 11:00 a.m. on the Rate Fixing
Day; or
(b) if no such offered quotation appears on Telerate Page 3750
at or about such time, the arithmetic mean (rounded upwards, if
necessary, to four decimal places) of the offered quotations for
deposits in Sterling for a period comparable to the relevant
Interest Period which appears on the Reuters Screen LIBP at or about
11:00 a.m. on the Rate Fixing Day; or
(c) if no such offered quotation appears on the Telerate Page
3750 and one only or no such offered quotation appears on the LIBP
Page of the Reuters Screen at or about 11:00 a.m. on the Rate Fixing
Day (or if there is no LIBP Page on the Reuters Screen) or the Agent
determines, on the instruction of a Bank, that the rate determined
in accordance with paragraphs (a) and (b) above is not available for
deposits in Sterling domiciled outside the United Kingdom, the
arithmetic mean (rounded upwards, if necessary, to four decimal
places) of the per annum rates, as supplied to the Agent at its
request, quoted by each Reference Bank to leading banks at or about
11:00 a.m. on the Rate Fixing Day for the offering of deposits in
Sterling domiciled outside the United Kingdom in an amount
comparable to its participation in that Loan and for a period equal
to the relevant Interest Period.
For the purposes of this definition, "Telerate Page 3750"
means the display designated as "Page 3750", on the Telerate Service (or
such other page as may replace Page 3750 on that service or such other
service as may be nominated by the British Bankers' Association as the
<PAGE>
4
information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for Sterling
deposits).
"Event of Default" means an event specified as such in Clause 21.1
(Events of Default).
"Facility" means the revolving credit facility referred to in Clause
2.1 (Statement of Commitments).
"Facility Office" means the office(s) notified by a Bank to the
Agent
(a) on or before the date it becomes a Bank; or
(b) by not less than five Business Days' notice,
as the office(s) through which it will perform all or any of its
obligations under this Agreement.
"Fee Letters" means the two letters both dated the date of this
Agreement between the Agent or the Arranger and the Parent setting out the
amount of various fees referred to in Clause 23 (Fees).
"Final Repayment Date" means the seventh anniversary of the date of
this Agreement.
"Finance Document" means this Agreement, the Fee Letters, any Deed
of Accession or any other document designated as such by the Agent and the
Borrowers' Agent.
"Finance Party" means the Arranger, a Bank or the Agent.
"Financial Indebtedness" means (without double counting) any
indebtedness in respect of:
(a) moneys borrowed and debit balances at banks and other
financial institutions;
(b) any debenture, bond, note, loan stock or other security;
(c) any acceptance credit;
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5
(d) receivables sold or discounted to the extent that there is
recourse to the seller for non-payment by the relevant debtor;
(e) the acquisition cost of any asset to the extent payable
after the time of acquisition or possession by the party liable
where the deferred payment is arranged primarily as a method of
raising finance and the deferral is for a period in excess of 180
days (and, for the avoidance of doubt, this paragraph (e) shall not
include trade debt);
(f) leases (in relation to real estate, plant and machinery or
equipment), if and to the extent that the lessee is required under
standard accounting practices or principles applicable to it to
account for the value of the lease as an asset and the lease
payments as liability;
(g) currency swap or interest swap, cap or collar arrangements
or any derivative instruments relating to such arrangements so far
as it constitutes the aggregate net debt position in relation
thereto; and
(h) any guarantee, indemnity or similar legally binding
assurance against financial loss of any person in each case in
respect of any of the types of obligation referred to in paragraphs
(a) - (g) above.
"French Francs" means the lawful currency for the time being of
France.
"Group" means the Parent and its Subsidiaries.
"Interest Period" means each period determined in accordance with
Clause 8 (Interest Periods).
"LIBOR" means, in relation to a Loan denominated in a currency other
than Sterling:
(a) the rate per annum of the offered quotation for deposits
in the currency of that Loan for a period comparable to the relevant
Interest Period which appears on Telerate Page 3750 or Telerate Page
3740, as the case may be, at or about 11.00 a.m. on the Rate Fixing
Day; or
(b) if no such offered quotation appears on Telerate Page 3750
or Telerate Page 3740, as the case may be, at or about such time,
the arithmetic mean (rounded upwards, if necessary, to four decimal
places) of the offered quotations for deposits in the currency of
that Loan for a period comparable to the relevant Interest Period
which appears on the Reuters Screen LIBO (in the case of Dollars) or
the relevant page (if any) for any other currency at or about 11.00
a.m. on the Rate Fixing Day; or
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6
(c) if no such offered quotation appears on the Telerate Page
3750 or Telerate Page 3740, as the case may be, or one only or no
such offered quotation appears on the relevant Page of the Reuters
Screen at or about 11:00 a.m. on the Rate Fixing Day (or if there is
no relevant Page on the Reuters Screen), the arithmetic mean
(rounded upwards, if necessary, to four decimal places) of the per
annum rates, as supplied to the Agent at its request, quoted by each
Reference Bank to leading banks in the London interbank market at or
about 11.00 a.m. on the Rate Fixing Day for the offering of deposits
in the currency of that Loan in an amount comparable to its or its
Affiliate's participation in that Loan and for a period equal to the
relevant Interest Period.
For the purposes of this definition, "Telerate Page 3750"
means the display designated as "Page 3750", and "Telerate Page
3740" means the display designated as "Page 3740", on the Telerate
Service (or such other page as may replace Page 3750 or Page 3740,
as the case may be, on that service or such other service as may be
nominated by the British Bankers' Association as the information
vendor for the purpose of displaying British Bankers' Association
Interest Settlement Rates for deposits in the relevant currency).
"Loan" means, subject to Clauses 8 (Interest Periods) and 11 (Amount
of Optional Currencies), the principal amount of each borrowing by the
Borrowers under this Agreement or the principal amount outstanding of that
borrowing.
"Majority Banks" means, at any time, Banks:-
(a) whose participations in the Loans then outstanding
aggregate over 50 per cent. of all the Loans then outstanding; or
(b) if there are no Loans then outstanding, whose Commitments
then aggregate over 50 per cent. of the Total Commitments; or
(c) if there are no Loans then outstanding and the Total
Commitments have been reduced to nil, whose Commitments aggregated
over 50 per cent. of the Total Commitments immediately before the
reduction.
"Material Subsidiary" means, at any time:
(a) a member of the Group (i) whose total assets as shown in
its latest audited accounts (consolidated if it itself has
Subsidiaries) exceed ten percent of Consolidated Total Assets at
that time; and/or (ii) whose turnover as shown in its latest audited
accounts (consolidated if it itself has Subsidiaries) exceeds ten
percent of the turnover of the Group as shown in the Parent's latest
audited consolidated accounts adjusted to reflect the turnover of
any company which has since become or ceased to be a member of the
Group; and/or
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7
(b) any other Subsidiary designated as a Material Subsidiary
by the Parent (until such time as the Parent notifies the Agent in
writing that such Subsidiary shall no longer be a Material
Subsidiary).
PROVIDED THAT if, at any time, either
(i) the aggregate of the total assets of all the Material
Subsidiaries at that time is not at least 75 per cent. of Consolidated
Total Assets; or
(ii) the aggregate turnover of all the Material Subsidiaries
as shown in their latest audited accounts is not at least 75 per cent. of
the turnover of the Group as shown in the Parent's latest audited
consolidated accounts adjusted as aforesaid, then every member of the
Group shall be a Material Subsidiary.
"MLA Cost" means the cost imputed to a Bank whose Facility Office is
in the United Kingdom of the compliance with the Mandatory Liquid Assets
requirements of the Bank of England during an Interest Period for a Loan
maintained in Sterling, expressed as a rate per annum and determined in
accordance with Schedule 3.
"Novation Certificate" has the meaning given to it in Clause 29.3
(Procedure for novations).
"Obligor" means the Parent or any Borrower.
"Optional Currency" means the Agreed Optional Currencies and any
other currency with the exception of Dollars.
"Original Dollar Amount" in relation to a Loan, means:-
(a) if that Loan is denominated in Dollars, the amount of that
Loan; or
(b) if that Loan is denominated in an Optional Currency, the
equivalent in Dollars of the amount of that Loan if it had first
been drawn down and had remained denominated in Dollars.
"Original Group Accounts" means the audited consolidated accounts of
the Group for the year ended December, 1994 and the unaudited consolidated
income statements of the Group for the six months ended 30th June, 1995.
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8
"Party" means a party to this Agreement.
"Rate Fixing Day" means the second Business Day before the first day
of an Interest Period for a Loan.
"Reference Banks" means, subject to Clause 29.4 (Reference Banks),
the principal London offices of Banque Nationale de Paris, Enskilda,
Skandinaviska Enskilda Banken AB (publ), Commerzbank Aktiengesellschaft
and Union Bank of Switzerland.
"REN" means REN Corporation - USA.
"Request" means a request made by the Borrower for a Loan,
substantially in the form of Schedule 4.
"Security Interest" means any mortgage, pledge, lien, charge,
assignment by way of security, hypothecation or security interest or any
other agreement or arrangement having the effect of conferring security.
"Sterling" means the lawful currency for the time being of the
United Kingdom.
"Subsidiary" means a subsidiary within the meaning of the Swedish
Companies Act (1975:1385).
"Swiss Francs" means the lawful currency for the time being of
Switzerland.
"Tax on Overall Net Income" of a Bank shall be construed as a
reference to tax (other than tax deducted or withheld from any amounts
paid or payable hereunder)imposed on that Bank by the jurisdiction under
the laws of which it has been incorporated or in which its Facility Office
is located on (1) the net income, profits or gains of the Bank worldwide
or (2) such of the net income, profits or gains of that Bank as are
considered to arise in or to relate to or are taxable in that
jurisdiction.
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9
"Total Commitments" means, the aggregate for the time being of the
Commitments, being $300,000,000 at the date of the Agreement.
"Yen" means the lawful currency for the time being of Japan.
"1993 Agreement" means the Revolving Credit Facility Agreement dated
11th May 1993 between the Parent, and the Finance Parties (as defined
therein).
"1994 Agreement" means the Revolving Credit and Term Loan Facility
Agreement dated 30th November 1994 between the Parent and the Finance
Parties (as defined therein).
1.2 Construction
(a) In this Agreement, unless the contrary intention appears, a
reference to:
(i) "assets" includes properties, revenues and rights of every
description;
an "authorisation" includes an authorisation, consent,
approval, resolution, license, exemption, filing and
registration;
a "month" or a period of "months" is a reference to a period
starting on one day in a calendar month and ending on the
numerically corresponding day in the relevant later calendar
month, except that if there is no numerically corresponding
day in that later month, that period shall end on the last
Business Day in that calendar month;
a "regulation" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not, being of a kind with which it is
customary for companies within the relevant industry to
comply) of any governmental body, agency, department or
regulatory, self-regulatory or other authority or
organisation;
(ii) a provision of law is a reference to that provision as amended
or re-enacted;
(iii) a Clause or a Schedule is a reference to a clause of or a
schedule to this Agreement;
(iv) a person includes its successors and permitted transferees and
assigns;
(v) a Finance Document or another document is a reference to that
Finance Document or other document as amended, novated or supplemented;
and
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10
(vi) a time of day is a reference to London time.
(b) Unless the contrary intention appears, a term used in any other
Finance Document or in any notice given under or in connection with any Finance
Document has the same meaning in that Finance Document or notice as in this
Agreement.
(c) The index to and the headings in this Agreement are for
convenience only and are to be ignored in construing this Agreement.
(d) Words importing the singular shall include the plural and vice
versa.
2. COMMITMENTS AND NATURE OF OBLIGATIONS
2.1 Statement of Commitments
Subject to the terms of this Agreement, the Banks grant to the
Borrowers a committed multicurrency revolving advance facility under which the
Banks shall, when requested, make to Borrowers during the Commitment Period
Loans in Dollars or an Optional Currency up to an aggregate Original Dollar
Amount not exceeding, at any time, the Total Commitments at that time. No Bank
is obliged to lend more than its Commitment (save as provided in Clause 11.3(c)
(Same Optional Currency).)
2.2 Obligations several
The obligations of each Bank under this Agreement are several.
Failure of a Bank to carry out its obligations hereunder shall not relieve any
other party hereto of any of its obligations hereunder. No Bank shall be
responsible for the obligations of any other Bank hereunder.
2.3 Rights several
The obligations of the Borrower towards the Agent and the Banks
hereunder are given to each of them as separate and independent rights. Each
Bank may, except as otherwise stated in this Agreement, separately enforce its
rights hereunder.
2.4 Additional Borrowers
The Borrowers' Agent may, with the prior written consent of the
Majority Banks, at any time during the term of this Agreement, notify the Agent
that one of the Parent's Subsidiaries incorporated in Sweden, the United States
of America or Germany (or elsewhere, with the consent of all the Banks) is to be
designated as an Additional Borrower guaranteed by the Parent. Such notice shall
be in writing and signed on behalf of the Borrowers' Agent and on behalf of the
Subsidiary concerned and shall take effect in accordance with its terms provided
that:
(a) the Additional Borrower enters into a Deed of Accession with the
Agent on behalf of the Banks in the form of Schedule 6 together with such
amendments as the Agent, acting in accordance with the directions of the
Majority Banks, may reasonably require; and
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11
(b) the Additional Borrower, before entering into such a deed of
Accession, has fulfilled all appropriate conditions precedent as notified
to the Borrowers' Agent in the Banks' written consent to the satisfaction
of the Agent or as otherwise agreed by the Banks.
2.5 Approved Additional Borrowers
The Subsidiaries listed in Schedule 7 shall (subject to
subparagraphs (a) and (b) of Clause 2.4 (Additional Borrowers)) be deemed to be
approved by all the Banks as Additional Borrowers.
2.6 Borrowers' Agent
Each Borrower by its execution of this Agreement or, as the case may
be, of a Deed of Accession irrevocably authorises the Borrowers' Agent to give
all notices and instructions and make such agreements expressed to be capable of
being given or made by the Borrowers herein notwithstanding that they may affect
such Borrower without further reference to or the consent of such Borrower and
such Borrower shall, as regards the Agent and each Bank, be bound thereby as
though such Borrower itself had agreed such change or given such notice or made
such agreement.
2.7 Choice of Facility Office
Each Bank agrees (but without accepting any legal liability) that,
when selecting the Facility Office(s) through which it will perform all or any
of its obligations under this Agreement relating to an Additional Borrower, it
shall use reasonable efforts to minimise the taxation and other costs for the
Additional Borrower arising from such selection PROVIDED THAT such Bank shall
not be required to select a particular Facility Office or to take any other
steps if, in its bona fide opinion, such selection or such steps would or might
have an adverse effect upon its business, operations or financial condition.
2.8 Commitment of Union Bank of Switzerland and The Sanwa Bank,
Limited.
Notwithstanding any other provision of this Agreement the following
shall be considered to be one Bank with a single Commitment for the purpose of
this Agreement:
(i) Union Bank of Switzerland, London Branch and Union de Banques
Suisses (Luxembourg) S.A.; and
(ii) The Sanwa Bank Limited, London Branch and The Sanwa Bank,
Limited, Los Angeles Branch.
but Union Bank of Switzerland, London Branch and The Sanwa Bank, Limited, London
Branch shall be obliged to make Loans to any Borrower (other than any Additional
Borrower incorporated in the United States of America) and Union de Banques
Suisses (Luxembourg) S.A. and The Sanwa Bank, Limited, Los Angeles Branch shall
be obliged to make Loans to any Additional Borrower incorporated in the United
States of America, in all cases subject to the terms of this Agreement.
3. PURPOSE
The Borrower shall apply each Loan towards the refinancing of the
1993 Agreement and the 1994 Agreement and thereafter for general corporate
purposes. Without affecting the
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12
obligations of the Borrower in any way, no Finance Party is bound to monitor or
verify the application of any Loan.
4. CONDITIONS PRECEDENT
4.1 Documentary conditions precedent
The obligations of each Finance Party to any Obligor under this
Agreement are subject to the condition precedent that the Agent has notified the
parent and the Banks that it has received all of the documents set out in
Schedule 2 in form and substance satisfactory to the Agent. The Agent will give
the parent such notification promptly upon receipt of such documents.
4.2 Further conditions precedent
The obligations of each Bank to advance any amount under Clause 5.3
(Participations) or 11 (Amount of Optional Currencies) are (unless all of the
Banks otherwise agree in any particular case) subject to the further conditions
precedent that on both the date of the Request (if applicable) and the date on
which the relevant amount is to be advanced:
(a) the representations and warranties in Clause 19 (Representations
and warranties) to be repeated on those dates are correct and will be
correct immediately after the advance; and
(b) no Default is outstanding or would result from the advance or,
in the case where outstanding indebtedness of the Borrower under the 1993
Agreement and/or the 1994 Agreement is being refinanced by any Loan to be
made hereunder to that Borrower, no Event of Default has occurred and is
continuing.
5. DRAWDOWN
5.1 Commitment
Subject to the terms of this Agreement, Loans will be made to each
Borrower at any time during the Commitment Period when requested by the
Borrower. The Commitment of each Bank shall automatically be cancelled at close
of business in London on the last day of the Commitment Period.
5.2 Requests
Whenever a Borrower desires a Loan to be made available to it, it
shall give a Request in writing to the Agent, appropriately completed, to be
received not later than 10.00 a.m. (London time) on the third (in the case of a
Loan to be denominated in Dollars or an Agreed Optional Currency) or the fifth
(in the case of a Loan to be denominated in a currency other than Dollars or an
Agreed Option Currency) Business Day prior to the proposed Drawdown Date of such
Loan (or such other time as the Borrower may agree with the Banks), specifying
in respect of such Loan:
(a) the proposed Drawdown Date (being a Business Day falling within
the Commitment Period);
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13
(b) the Original Dollar Amount of such Loan which shall be in a
minimum amount of $5,000,000 and integral multiples of $1,000,000;
(c) the currency in which a Loan is to be denominated for the first
Interest Period determined in accordance with Clause 10 (Selection of
Optional Currencies);
(d) the first Interest Period for such Loan determined in accordance
with Clause 8 (Interest Periods);
(e) the payment instructions in compliance with Clause 12
(Payments).
Subject to the terms of this Agreement, each Request shall be irrevocable and
the Borrower shall be bound to accept the Loan in accordance with the Request.
The Agent shall promptly notify each Bank of each Request and, if the Loan is to
be denominated in an Agreed Optional Currency, the Optional Currency amounts
(and the applicable Agent's Spot Rate of Exchange) in accordance with Clause
11.1 (Amount of Optional Currencies - Drawdowns). No Borrower may serve a
Request until the Agent has confirmed to the Borrower and the Banks that the
conditions precedent set out in Clause 4.1 (Documentary conditions precedent)
have been satisfied. Loans may not be in more than six currencies at any one
time. Each Request must specify one Loan only, but the Borrower may, subject to
the other terms of this Agreement, deliver more than one Request on any one day.
5.3 Participations
Subject to the terms of this Agreement, each Bank shall on the
proposed Drawdown Date make available to the Agent the amount of its
participation in the Loan concerned in the proportion its Commitment bears to
the Total Commitments.
6. REPAYMENT
Subject to Clause 7 (Prepayment and Cancellation), the Borrower
shall repay each Loan in the currency in which it is denominated in full on the
Final Repayment Date.
7. PREPAYMENT AND CANCELLATION
7.1 Voluntary Prepayment
The Borrower may at any time, by giving not less than five Business
Days' prior written notice to the Agent, prepay any Loan in whole or in part
(but, if in part, in an integral multiple of an Original Dollar Amount of
$5,000,000), such prepayment to be without premium or penalty if made on the
last day of an Interest Period relative thereto but if made on a day other than
the last day of an Interest Period relative thereto the Parent shall indemnify
each Bank pursuant to Clause 26.2(c).
7.2 Voluntary Cancellation
The Borrower may, by giving not less than thirty days' prior written
notice to the Agent, cancel without premium or penalty in whole or in part the
undrawn amount of the Total Commitments (but, if in part, in an integral
multiple of an Original Dollar Amount of $5,000,000). Any cancellation in part
shall be applied against the Commitment of each Bank pro rata.
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14
7.3 Additional right of prepayment and cancellation
If:-
(a) the Borrower is required to pay to a Bank any additional amounts
under Clause 13 (Taxes); or
(b) the Borrower is required to pay to a Bank any amount under
Clause 15 (Increased costs); or
(c) interest on a Bank's participation in a Loan is being calculated
in accordance with Clause 14.4(c) (Alternative basis for outstanding
Loans),
then, without prejudice to the obligations of the Borrower under those Clauses,
the Borrower may, whilst the circumstances continue or within thirty days after
receipt of notice from that Bank or the Agent of the relevant event within
paragraph (a), (b) or (c) above (whichever is the later), serve a notice of
prepayment and cancellation on that Bank through the Agent. On the date falling
five Business Days after the date of service of the notice:
(i) the Borrower shall prepay that Bank's participation in all the
Loans to that Borrower; and
(ii) that Bank's undrawn Commitment in respect of that Borrower
shall be cancelled.
7.4 Miscellaneous provisions
(a) Any notice of prepayment and/or cancellation under this
Agreement is irrevocable. The Agent shall notify the Banks promptly of receipt
of any such notice.
(b) All prepayments under this Agreement shall be made together with
accrued interest on the amount prepaid and all other amounts due and payable
under this Agreement (including without limitation under Clause 26.2(c)).
(c) No prepayment or cancellation is permitted except in accordance
with the express terms of this Agreement.
(d) Any amount of any Loan prepaid under this Agreement may
subsequently be reborrowed. No amount of the Total Commitments cancelled under
this Agreement may subsequently be reinstated.
8. INTEREST PERIODS
8.1 Selection
(a) The Borrower may select an Interest Period for a Loan in either
the relevant Request or, if the Loan has been borrowed, a notice received by the
Agent not later than 10.00 a.m. on the third (in the case of a Loan to be
denominated in Dollars or an Agreed Optional Currency during that Interest
Period) or the fifth (in the case of a Loan to be denominated in a currency
other than Dollars or an Agreed Optional Currency during that Interest Period)
Business Day before the commencement of that Interest Period.
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15
Each Interest Period for a Loan will commence on its Drawdown Date or the expiry
of its preceding Interest Period.
(b) Subject to the following provisions of this Clause 8 (Interest
Periods), each Interest Period will be either an approved duration or an
optional duration as so selected under paragraph (a) above.
In this Clause 8 (Interest Periods):
"approved duration" means one, three or six months; and
"optional duration" means any period other than one, three or six
months agreed by the Banks.
(c) If the Borrower fails to select an Interest Period for an
outstanding Loan in accordance with paragraph (a) above, that Interest Period
will, subject to the other provisions of this Clause 8 (Interest Periods), be
three months.
(d) No more than six Interest Periods of one month's duration may be
selected in any calendar year.
8.2 Selection of an optional duration
(a) If the Borrower selects an Interest Period of an optional
duration, it may also select an Interest Period of an approved duration to apply
if the selection of an optional duration becomes ineffective in accordance with
paragraph (b) below.
(b) If:-
(i) the Borrower requests an Interest Period of an optional
duration; and
(ii) the Agent receives notice from a Bank not later than 3:00 p.m.
three Business Days prior to the commencement of the Interest Period that
matching deposits are not available to it in the ordinary course of
business in the relevant interbank market to fund its participation in the
Loan for that Interest Period,
the Interest Period for that Loan shall be the alternative period so specified
or, in the absence of any alternative selection and subject to the following
provisions of this Clause 8, three months. In this event, the Agent shall
promptly notify the Borrower and the Banks of the new Interest Period for the
Loan.
8.3 Non-Business Days
If an Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall instead end on the next Business Day in
that calendar month (if there is one) or the preceding Business Day (if there is
not).
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16
8.4 Consolidation and splitting
(a) The number of Interest Periods current hereunder at any time
with different expiry dates shall not exceed 10.
(b) If the number of Interest Periods current hereunder with
different expiry dates reaches 10, the first Interest Period for any additional
Loan must end on the same day as an existing Interest Period for another Loan
for the same Borrower and both such Loan shall thereafter (if in the same
currency and subject to paragraph (c) below) be consolidated.
(c) Subject to paragraph (a) above, the Borrower may, in any Request
or any notice given pursuant to Clause 8.1(a) above, split any Loan (including
any consolidated Loan) into two or more Loans (provided that the Original Dollar
Amount of each resulting Loan is a minimum of $5,000,000).
8.5 No overrunning
If an Interest Period in respect of a Loan would otherwise overrun
the Final Repayment Date, it shall be shortened so that it ends on the Final
Repayment Date.
8.6 Other adjustments
The Agent and the Borrowers' Agent may, with the consent of the
Banks, enter into such other arrangements as they may agree for the adjustment
of Interest Periods and the consolidation and/or splitting of Loans.
8.7 Notification
The Agent shall notify the Borrower, the Borrowers' Agent and the
Banks of the duration of each Interest Period promptly after ascertaining its
duration.
9. INTEREST
9.1 Interest Rate
The rate of interest on each Loan for each of its Interest Periods
is the rate per annum determined by the Agent to be the aggregate of:-
(a) Applicable Margin;
(b) (i) in the case of all Loans other than a Sterling Loan,
LIBOR; or
(ii) in the case of a Sterling Loan, EIBOR; and
(c) MLA Costs when applicable to such Loan.
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17
9.2 Due dates
Except as otherwise provided in this Agreement, accrued interest on
each Loan is payable by the Borrower on the last day of each Interest Period for
that Loan and also, if the Interest Period is longer than six months, at six
monthly intervals during that Interest Period.
9.3 Default interest
(a) If an Obligor fails to pay any amount payable by it under this
Agreement, it shall forthwith on demand by the Agent pay interest on the overdue
amount from the due date up to the date of actual payment, as well after as
before judgment, at a rate (the "default rate") determined by the Agent to be
one per cent. per annum above:
(i) if the overdue amount is of principal and an Interest Period
relative thereto is still current, the rate applicable to such overdue
amount under Clause 9.1 (Interest rate) during such Interest Period; and
(ii) in any other case, the rate which would have been payable if
the overdue amount had, during the period of non-payment constituted a
Loan in the currency of the overdue amount for such successive Interest
Periods not exceeding three months of such duration as the Agent may
determine (each a "Designated Interest Period").
(b) The default rate will be determined by the Agent on each
Business Day or the first day of, or two Business Days before the first day of,
the relevant Designated Interest Period, as appropriate.
(c) If the Agent determines that deposits in the currency of the
overdue amount are not at the relevant time being made available by the
Reference Banks to leading banks in the London interbank market, the default
rate will be determined by reference to the weighted average of the cost of
funds to the Banks from whatever sources they may select.
(d) Default interest will be compounded at the end of each
Designated Interest Period.
9.4 Notification
The Agent shall promptly notify the Borrower, the Borrower's Agent
and each Bank of the determination of a rate of interest under this Agreement.
10. SELECTION OF OPTIONAL CURRENCIES
10.1 Availability
A Borrower may not request that a Loan be denominated in an Optional
Currency (other than an Agreed Optional Currency) unless the Agent has confirmed
to that Borrower that the Optional Currency is readily available and freely
transferable in the London foreign exchange market.
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10.2 Selection
(a) The Borrower may select the currency of a Loan for an Interest
Period in either the relevant Request, or, if such Loan is outstanding, a notice
received by the Agent not later than 10.00 a.m. on the third (in the case of a
Loan to be denominated in Dollars or an Agreed Optional Currency during that
Interest Period) or the fifth (in the cases of a Loan to be denominated in a
currency other than Dollars or an Agreed Optional Currency during that Interest
Period) Business Day before the commencement of that Interest Period. The
Borrower may specify in any such notice whether that Loan is to be denominated
in more than one currency, and, if so, the amount in Dollars of each such
currency (being an integral multiple of an Original Dollar Amount of $5,000,000
or the balance of the Loan, if more).
(b) If the Borrower fails to give a notice in respect of an
outstanding Loan in accordance with paragraph (a) above, that Loan shall remain
denominated for its next Interest Period in the same currency in which it is
then denominated.
(c) Each part of a Loan which is to be denominated in a different
currency from any other part of that Loan shall be treated as a separate Loan.
(d) The Borrower may not choose a currency if as a result the Loans
would be denominated at any one time in more than six currencies.
(e) The Agent shall notify each Bank of the currency of each Loan
promptly after it is ascertained.
10.3 Revocation of currency
Notwithstanding Clause 10.1 (Availability), if before 10:00 a.m. on
the fourth Business Day before the commencement of an Interest Period, the Agent
receives notice from a Bank that:-
(a) it is impracticable for the Bank to fund or make its
participation in the Loan in the relevant Optional Currency (other than an
Agreed Optional Currency) during that Interest Period; or
(b) the use of the proposed Optional Currency (other than an Agreed
Optional Currency) might contravene any law or regulation,
the Agent shall give notice to the Borrower, the Borrowers' Agent and to the
Banks to that effect before 11:00 a.m. on that day and, unless the Borrower, the
Borrowers' Agent and the Banks agree otherwise, the Loan shall be denominated in
Dollars during that Interest Period.
11. AMOUNT OF OPTIONAL CURRENCIES
11.1 Drawdowns
If a Loan is to be drawn down in an Optional Currency, the amount of
each Bank's participation in that Loan will be determined by converting into
that Optional Currency the Bank's participation in the Original Dollar Amount of
that Loan on the basis of the Agent's Spot Rate of Exchange three Business Days
before its Drawdown Date.
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11.2 Change of currency
(a) If a Loan is to be continued during its next Interest Period in
a different currency (the "new currency") from that in which it is then
denominated, such Loan shall be repaid by the Borrower in full at the end of its
current Interest Period in the currency in which it is then denominated and,
subject to the terms of this Agreement, shall be re-advanced by the Banks
forthwith in the new currency.
(b) If the new currency is Dollars, the amount of each Bank's
participation in that Loan will be its participation in the Original Dollar
Amount of that Loan for that Interest Period.
(c) If the new currency is an Optional Currency, the amount of each
Bank's participation in that Loan will be determined by converting into the new
currency its participation in the Original Dollar Amount of that Loan on the
basis of the Agent's Spot Rate of Exchange three Business Days before the
commencement of that Interest Period.
11.3 Same Optional Currency
(a) If a Loan is to be continued during its next Interest Period in
the same Optional Currency as that in which it is denominated during its current
Interest Period, there shall be calculated the difference between the amount of
such Loan (in that Optional Currency) for the current Interest Period and for
the next Interest Period. The amount of such Loan for the next Interest Period
will be determined by notionally converting into that Optional Currency the
Original Dollar Amount of such Loan on the basis of the Agent's Spot Rate of
Exchange three Business Days before the commencement of that Interest Period.
(b) At the end of the current Interest Period (but subject always to
paragraph (c) below):-
(i) if the amount of such Loan for the next Interest Period is less
than for the preceding Interest Period, the Borrower shall repay the
difference; or
(ii) if the amount of such Loan for the next Interest Period is
greater, each Bank shall forthwith make available to the Agent for the
Borrower its participation in the difference.
(c) If the Agent's Spot Rate of Exchange for the next Interest
Period shows an appreciation or depreciation of the Optional Currency against
Dollars of less than five percent when compared with the Original Exchange Rate,
no amounts are payable in respect of the difference. In this Clause 11 (Amount
of Optional Currencies) "Original Exchange Rate" means the Agent's Spot Rate of
Exchange used for determining the amount of the Optional Currency for the
Interest Period which is the later of the following:-
(i) the Interest Period during which such Loan was first denominated
in that Optional Currency if such Loan has since then remained denominated
in that Optional Currency; and
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20
(ii) the most recent Interest Period immediately prior to which a
difference was required to be paid under this Clause 11.3.
11.4 Prepayments and Repayments
If a Loan is to be repaid or prepaid by reference to an Original
Dollar Amount, the amount actually to be repaid or prepaid in the relevant
Optional Currency shall be determined by applying to the relevant part of the
Original Dollar Amount to be repaid or prepaid the Agent's Spot Rate of Exchange
last used for determining the Optional Currency amount of that Loan under Clause
11 (amount of Optional Currencies) or, if applicable, the Original Exchange
Rate.
11.5 Notification
Except for Optional Currency amounts for a Loan to be drawn down in
an Agreed Optional Currency of which the Agent shall notify the Banks in
accordance with Clause 5.2 (Requests) the Agent shall notify the Banks, the
Borrower and the Borrowers' Agent of Optional Currency amounts (and the
applicable Agent's Spot Rate of Exchange) promptly after they are ascertained.
12. PAYMENTS
12.1 Place
All payments by an Obligor or a Bank under this Agreement shall be
made to the Agent to its account at such office or bank as it may, at least
three Business Days prior to the due date of such payment, notify to that
Obligor or Bank for this purpose.
12.2 Funds
Payments under this Agreement to the Agent shall be made for value
on the due date at such times and in such funds as are customary at the time for
the settlement of transactions in the relevant currency in the place for
payment.
12.3 Distribution
(a) Each payment received by the Agent under this Agreement for
another Party shall, subject to paragraphs (b) and (c) below, be made available
by the Agent to that Party by payment (on the date and in the currency and funds
of receipt) to its account with such office or bank in the principal financial
center of the country of the relevant currency as it may notify to the Agent for
this purpose by not less than five Business Days' prior notice.
(b) The Agent may apply any amount received by it for the Borrower
in or towards payment (on the date and in the currency and funds of receipt) of
any amount due from the Borrower under this Agreement or in or towards the
purchase of any amount of any currency to be so applied.
(c) Where a sum is to paid to the Agent under this Agreement for
another Party, the Agent is not obliged to pay that sum to that Party until it
has established that it has actually received that sum. The Agent may, however,
assume that the sum has been
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21
paid to it in accordance with this Agreement, and, in reliance on that
assumption, make available to that Party a corresponding amount. If the sum has
not been made available but the Agent has paid a corresponding amount to another
Part, that Party shall forthwith on demand by the Agent refund the corresponding
amount together with interest on that amount from the date of payment to the
date of receipt, calculated at a rate determined by the Agent to reflect its
cost of funds.
12.4 Currency
(a) A repayment of a Loan or any part of a Loan is payable in the
currency in which the Loan is denominated on its due date.
(b) Interest is payable in the currency in which the relevant amount
in respect of which it is payable is denominated.
(c) Amounts payable in respect of costs, expenses and taxes and the
like are payable in the currency in which they are incurred.
(d) Any other amount payable under this Agreement is, except as
otherwise provided in this Agreement, payable in Dollars.
12.5 Set-off and counterclaim
All payments made by an Obligor under this Agreement shall be made
without set-off or counterclaim.
12.6 Non-Business Days
(a) If a payment under this Agreement is due on a day which is not a
Business Day, the due date for that payment shall instead be the next Business
Day in the same calendar month (if there is one) or the preceding Business Day
(if there is not).
(b) During any extension of the due date for payment of any
principal under this Agreement interest is payable on that principal at the rate
payable on the original due date.
12.7 Partial payments
(a) If the Agent receives a payment insufficient to discharge all
the amounts then due and payable by the Obligors under this Agreement, the Agent
shall apply that payment towards the obligations of the Obligors under this
Agreement in the following order:
(i) first, in or towards payment pro rata of any unpaid costs and
expenses of the Agent under this Agreement;
(ii) secondly, in or towards payment pro rata of any accrued
interest due but unpaid under this Agreement;
(iii) thirdly, in or towards payment pro rata of any principal due
but unpaid under this Agreement; and
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22
(iv) fourthly, in or towards payment pro rata of any other sum due
but unpaid under this Agreement.
(b) The Agent shall, if so directed by all the Banks, vary the order
set out in sub-paragraphs (a)(ii) to (iv) above.
(c) Paragraphs (a) and (b) above shall override any appropriation
made by an Obligor.
13. TAXES
13.1 Gross-up
All payments by an Obligor under the Finance Documents shall be made
without any deduction and free and clear of and without deduction for or on
account of any taxes (other than Taxes on Overall Net Income), except to the
extent that the Obligor is required by law to make payment subject to any taxes.
If any tax or amounts in respect of tax must be deducted, or any other
deductions for or on account of any taxes must be made, from any amounts payable
or paid by an Obligor, or paid or payable by the Agent to a Bank under the
Finance Documents (other than Taxes on Overall Net Income), the Obligor shall
(subject to clause 13.2 (c)) pay such additional amounts as may be necessary to
ensure that the relevant Bank receives a net amount equal to the full amount
which it would have received had payment not been made subject to tax.
13.2 Forms
(a) To the extent that at that time any Bank is entitled to complete
or partial, as the case may be, exemption from deduction or withholding for or
on account of any taxes with respect to all payments to be made by any Obligor
under the Finance Documents merely by completing certain forms, that Bank
agrees, upon request by such Obligor, to execute and deliver to such Obligor,
such forms, if they are required by law or are such as the Obligor may
reasonably request. Further, if COBE and/or REN becomes an Additional Borrower,
each Bank which is organised under the laws of a jurisdiction outside the US
hereby agrees (insofar as it can lawfully do so):
(i) within 10 days after the date on which COBE and/or REN becomes
an Additional Borrower to deliver to COBE and/or REN (as the case may be)
and the Agent:-
(aa) for the office, if any, identified with such Bank's
signature which is located in the United States of America, two
accurate and complete, original signed copies of Internal Revenue
Service Form 4224 or any successor thereto ("Form 4224"); or
(bb) for the office, if any, identified with such Bank's
signature below which is located outside the United States of
America, two accurate and complete, original signed copies of
Internal Revenue Service Form 1001 or any successor thereto ("Form
1001"),
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23
in each case indicating that such Bank is on the date hereof
entitled to receive all payments under this Agreement through such office
free from withholding of US federal income tax; and
(ii) before or promptly after the occurrence of any event (including
the passage of time or designation of an Additional Borrower) requiring
the delivery of an additional or replacement Form 4224 or 1001 to deliver
to COBE and/or REN (as the case may be) and the Parent, upon the request
of COBE, and/or REN), the Parent or the Agent, (if delivery of the same be
lawful under then applicable law), two accurate and original signed copies
of Form 4224 or 1001 in addition to or replacement for the forms
previously delivered by such Bank claiming an exemption from withholding
tax or the greatest reduction of withholding tax available under then
applicable law.
(b) Each Bank agrees that, to the extent any form claiming or
otherwise establishing complete or partial exemption from withholding and
deduction of taxes delivered under this Agreement is incomplete or incorrect in
any material respect when delivered or thereafter, such Bank shall execute and
deliver complete and correct replacement forms.
(c) If a Bank fails to comply with paragraph (a) above, such Obligor
shall not be obliged to pay additional amounts under Clause 13.1 (Gross-up) in
respect of any deduction for or on account of taxes that would not have been
made had such Bank complied.
13.3 Tax receipts
All taxes required by law to be deducted or withheld by an Obligor
from any amounts paid or payable under the Finance Documents shall be paid by
the relevant Obligor when due and the Obligor shall, as soon as reasonably
practicable after the payment is made, deliver to the Agent for the relevant
Bank evidence satisfactory to that Bank (including all relevant tax receipts (or
similar evidence) or copies thereof) that the payment has been duly remitted to
the appropriate authority.
13.4 Tax credits
(a) If, following the payment by any Obligor of any additional
amounts under clause 13.1 (Gross-up), the Agent or any Bank shall determine that
it has received or been granted a credit against or remission for any taxes
payable by it, the Agent or such Bank shall reimburse such Obligor with such
amount as the Agent or such Bank shall in its absolute discretion certify to be
the proportion of such credit or remission (if any) as will leave the Agent or
such Bank (after such reimbursement) in no worse position than it would have
been in had the relevant deduction or withholding not been made. Such
reimbursement shall be made promptly upon the Agent or such Bank making any such
determination.
(b) Nothing in paragraph (a) above shall:
(i) require the Agent or any Bank to disclose to any Obligor any
details of its tax affairs;
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24
(ii) interfere with the right of the Agent or any Bank to arrange
its tax affairs in whatever manner it thinks fit; and
(iii) neither the Agent nor any Bank shall be under any obligation
to claim relief in respect of any payment under Clause 13.1 (Gross-up) in
priority to any other reliefs, claims or credits available to it.
14. MARKET DISRUPTION
14.1 Absence of quotations
If the Agent requests a quotation from the Reference Banks and a
Reference Bank does not supply an offered rate by 1.00 p.m. on a Rate Fixing
Day, the applicable LIBOR or EIBOR (as the case may be) shall, subject to Clause
14.2 (Market disruption), be determined on the basis of the quotation of the
other Reference Banks.
14.2 Market disruption
If, on or prior to a Rate Fixing Day:
(a) the Agent requests a quotation from the Reference Banks and two
Reference Banks do not supply an offered rate by 1.00 p.m. on a Rate
Fixing Day; or
(b) the Agent determines that adequate and fair means do not exist
for ascertaining LIBOR or EIBOR (as the case may be); or
(c) the Agent receives notification from Banks whose participations
in a Loan exceed 50 per cent of that Loan that, in their opinion:-
(i) matching deposits are not available to them in the
relevant interbank market in the ordinary course of business to fund
their participations in that Loan for the relevant Interest Period;
or
(ii) the cost to them of obtaining matching deposits in the
relevant interbank market would be in excess of LIBOR or EIBOR (as
the case may be) for the relevant Interest Period,
the Agent shall promptly notify the Borrower and the Banks of the fact and
that this Clause 14 (Market Disruption) is in operation.
For the purposes of this Clause, "relevant interbank market" means:
(1) in the case of all Loans other than a Sterling Loan,
London; and
(2) in the case of a Sterling Loan, such interbank market
outside the United Kingdom as a Bank may reasonably select for the
purpose of funding its participation.
14.3 Suspension of drawdowns
If a notification under Clause 14.2 (Market disruption) applies to a
Loan which has not been made, the Borrower's Agent may (by notice to the Agent)
elect that the Loan shall not be made.
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25
If the Borrowers' Agent does not so elect and such Loan is made,
Clause 14.4 (Alternative basis for outstanding Loans) shall apply thereto. If
the Borrowers' Agent does so elect, the Borrowers' Agent and the Agent shall,
within five Business Days of the relevant Rate Fixing Day, enter into
negotiations for a period of not more than 30 days with a view to agreeing an
alternative basis for the borrowing of that and any future Loan made while such
circumstances continue. Any alternative basis agreed shall be, with the prior
consent of all the Banks, binding on all the Parties.
14.4 Alternative basis for outstanding Loans
If a notification under Clause 14.2 (Market disruption) applies to a
Loan which is (or, by virtue of the Borrowers' Agent not making an election
under Clause 14.3 (Suspension of drawdowns), which has become) outstanding,
then, notwithstanding any other provision of this Agreement:-
(a) within five Business Days of receipt of the notification, the
Borrowers' Agent and the Agent shall enter into negotiations for a period
of not more than 30 days with a view to agreeing an alternative basis for
determining the rate of interest and/or funding applicable to that Loan
and/or any other Loans denominated or to be denominated in the currency of
that Loan;
(b) any alternative basis agreed under paragraph (a) above shall be,
with the prior consent of all the Banks, binding on all the Parties;
(c) if no alternative basis is agreed, each Bank shall (through the
Agent) certify on or before the last day of the Interest Period to which
the notification relates an alternative basis for maintaining its
participation in that Loan;
(d) any such alternative basis may include an alternative method of
fixing the interest rate, alternative Interest Periods or alternative
currencies but it must reflect the cost to the Bank of funding its
participation in the Loan from whatever sources it may reasonably select
plus the Applicable Margin plus any applicable MLA Costs; and
(e) each alternative basis so certified shall be binding on the
Borrower, the Borrowers' Agent and the certifying Bank and treated as part
of this Agreement.
(f) Any alternative basis for the borrowing of any Loan shall cease
as soon as reasonably practicable (as determined by the Agent) after the
relevant circumstances have ceased to apply and the normal provisions of
this Agreement shall apply thereafter.
15. INCREASED COSTS
15.1 Increased costs
(a) Subject to Clause 15.2 (Exceptions), the relevant Borrower or,
where the increased cost cannot be attributed to a particular Loan, the
Borrowers' Agent, shall within 5 Business Days of demand by a Finance Party to
the Borrowers' Agent pay to that Finance Party the amount of any increased cost
incurred by it as a result of:-
(i) any change after the date of this Agreement in, or in the
official interpretation or application of, any law or regulation; or
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26
(ii) compliance with any regulation made after the date of this
Agreement.
(including any law or regulation relating to reserve asset, special deposit,
cash ratio, liquidity or capital adequacy requirements or any other form of
banking or monetary control).
(b) In this Agreement "increased cost" means:-
(i) an additional cost incurred by a Finance Party as a result of it
having entered into, or performing, maintaining or funding its obligations
under, this Agreement; or
(ii) that portion of an additional cost incurred by a Finance Party
in making, funding or maintaining all or any advances comprised in a class
of advances formed by or including its participations in the Loans made or
to be made under this Agreement as is attributable to it making, funding
or maintaining those participations; or
(iii) a reduction in any amount payable to a Finance Party or in the
effective return to a Finance Party under this Agreement on its capital;
or
(iv) the amount of any payment made by a Finance Party, or the
amount of any interest or other return foregone by a Finance Party, on or
in relation to any amount received or receivable by that Finance Party
from the Agent or an Obligor under this Agreement.
(c) a Finance Party intending to make a claim under paragraph (a)
above shall, promptly upon its Facility Office becoming aware of an event by
reason of which it is entitled to do so and the possible results thereof, notify
the Agent, and the Agent shall promptly notify the Borrower and the Borrowers'
Agent of such event. For the purpose of this Clause 15.1 each Bank may in good
faith allocate or spread costs and/or losses among its assets and liabilities
(or any class thereof) on such basis as it considers appropriate.
15.2 Exceptions
Clause 15.1 (Increased costs) does not apply to any increased cost:-
(a) compensated for by the payment of any MLA Costs;
(b) provided for by the operation of Clause 13 (Taxes); or
(c) attributable to any change in the rate or basis of calculation
of Tax on Overall Net Income of a Bank (or tax on the overall net income
of a division or branch of the Bank); or
(d) incurred or suffered by a Bank as a consequence of the
implementation of the matters set out in the report of the Basle Committee
on Banking Regulations and Supervisory Practices dated July 1988 and
entitled "International Convergence of Capital Measurement and Capital
Standards" (as that report is in effect on the date of this Agreement).
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27
16. ILLEGALITY
If it becomes unlawful in any jurisdiction for a Bank to give effect
to any of its obligations as contemplated by this Agreement or to fund or
maintain its participation in any Loan, then:-
(a) that Bank may notify the Borrowers' Agent through the Agent
accordingly; and
(b) (i) if so requested by that Bank through the Agent, the Borrower
shall forthwith prepay that Bank's participation in all Loans made to it
together with all other amounts payable by it to that Bank under this
Agreement; and
(ii) the Bank's undrawn Commitment shall forthwith be cancelled.
17. MITIGATION
If, in respect of any Finance Party, circumstances arise which would
or would upon the giving of notice result in:
(i) the prepayment of its share of any outstanding Loans and the
cancellation of its Commitment pursuant to Clause 16 (Illegality); or
(ii) the payment of additional amounts for its account pursuant to
Clause 13.1 (Gross-up); or
(iii) a claim for payment pursuant to Clause 15.1 (Increased Costs),
or if payments are being made to a finance Party pursuant to Clauses 13.1
(Gross-up) and 15.1 (Increased Costs), then, without in any way limiting,
reducing or otherwise qualifying the Obligors' obligations hereunder (and, in
particular, the Borrowers' obligations under any of the Clauses referred to in
sub-paragraphs (i), (ii), and (iii) above), such Finance Party shall take such
steps as such Finance Party in its bona fide opinion considers appropriate to
mitigate the effects of such circumstances including (if such Bank considers it
so appropriate) the transfer of its Facility Office to another jurisdiction or
the transfer of its rights and obligations hereunder to another financial
institution willing to participate herein PROVIDED THAT such Finance Party shall
be under no obligation to take any such steps if, in its bona fide opinion, such
steps would have an adverse effect upon its business, operations or financial
condition.
18. GUARANTEE
18.1 Guarantee
The Parent irrevocably and unconditionally:-
(a) as principal obligor guarantees to each Finance Party prompt
payment by each Borrower (other than the Parent) of all amounts payable by
that Borrower under the Finance Documents;
(b) undertakes with each Finance Party that whenever a Borrower
(other than the Parent) does not pay any amount when due under or in
connection with any Finance Document, the Parent shall forthwith on demand
by the Agent pay that amount as if
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28
the Parent instead of the relevant Borrower were expressed to be the
principal obligor; and
(c) agrees to indemnify each Finance Party on demand against any
loss or liability suffered by it if any obligation guaranteed by the
Parent is or becomes unenforceable, invalid or illegal.
18.2 Continuing guarantee
This guarantee is a continuing guarantee and will extend to the
ultimate balance of all sums payable by the Borrowers (other than the Parent)
under the Finance Documents, regardless of any intermediate payment or discharge
in whole or in part.
18.3 Reinstatement
(a) Where any discharge (whether in respect of the obligations of
any Borrower or any security for those obligations or otherwise) is made in
whole or in part or any arrangement is made on the faith of any payment,
security or other disposition which is avoided or must be restored on
insolvency, liquidation or otherwise without limitation, the liability of the
Parent under this Clause 18 (Guarantee) shall continue as if the discharge or
arrangement had not occurred.
(b) Each Finance Party may concede or compromise any claim that any
payment, security or other dispositions liable to avoidance or restoration.
18.4 Waiver of defences
The obligations of the Parent under this Clause 18 (Guarantee) will
not be affected by any act, omission, matter or thing which, but for this
provision, would reduce release or prejudice any of its obligations under this
Clause 18 (Guarantee) or prejudice or diminish those obligations in whole or in
part, including (whether or not known to it or any Finance Party):-
(a) any time or waiver granted to, or composition with, any Borrower
(other than the Parent) or other person;
(b) the taking, variation, compromise, exchange, renewal or release
of, or refusal or neglect to perfect, take up or enforce, any rights
against, or security over assets of, any Borrower (other than the Parent)
or other person or any non-presentation or non-observance of any formality
or other requirement in respect of any instrument or any failure to
realise the full value of any security;
(c) any incapacity or lack of powers, authority or legal personality
of or dissolution or change in the members or status of a Borrower or any
other person;
(d) any variation (however fundamental) or replacement of a Finance
Document or any other document or security so that references to that
Finance Document in this Clause 18 (Guarantee) shall include each
variation or replacement;
(e) any unenforceability, illegality or invalidity of any obligation
of any person under any Finance Document or any other document or
security, to the intent that the Parent's obligations under this Clause 18
(Guarantee) shall remain in full force and its
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29
guarantee be construed accordingly, as if there were no unenforceability,
illegality or invalidity; or
(f) any postponement, discharge, reduction, non-provability or other
similar circumstance affecting any obligation of any Borrower (other than
the Parent) under a Finance Document resulting from any insolvency,
liquidation or dissolution proceedings or from any law, regulation or
order so that each such obligation shall for the purposes of the Parent's
obligations under this Clause 18 (Guarantee) be construed as if there were
no such circumstance.
18.5 Immediate recourse
The Parent waives any right it may have of first requiring any
Finance Party (or any trustee or agent on its behalf) to proceed against or
enforce any other rights or security or claim payment from any person before
claiming from the Parent under this Clause 18 (Guarantee).
18.6 Appropriations
Until all amounts which may be or become payable by the Borrowers
under or in connection with the Finance Documents have been irrevocably paid in
full, each Finance Party (or any trustee or agent on its behalf) may, after an
Event of Default which is continuing:-
(a) refrain from applying or enforcing any other moneys, security or
rights held or received by that Finance Party (or any trustee or agent on
its behalf) in respect of those amounts, or apply and enforce the same in
such manner and order as it sees fit (whether against those amounts or
otherwise) and neither the Parent nor any Borrower shall be entitled to
the benefit of the same; and
(b) hold in a suspense account any moneys received from the Parent
or on account of the Parent's liability under this Clause 18 (Guarantee),
which shall bear interest at such Finance Party's best rate for comparable
commercial deposits.
18.7 Non-competition
Until all amounts which may be or become payable by the Borrowers
under or in connection with the Finance Documents have been irrevocably paid in
full, the Parent shall not, by virtue of any payment or performance by it under
this Clause 18 (Guarantee):-
(a) exercise any right to be subrogated to any rights, security or
moneys held, received or receivable by any Finance Party (or any trustee
or agent on its behalf) or exercise any right of contribution or indemnity
in respect of any payment made or moneys received on account of the
Parent's liability under this Clause 18 (Guarantee);
(b) claim, rank, prove or vote as a creditor of any Borrower (other
than the Parent) or its estate in compensation with any Finance Party (or
any trustee or agent on its behalf); or
(c) receive or exercise the right to claim any payment, distribution
or security from or on account of any Borrower (other than the Parent), or
exercise any right of set-off as against any such Borrower.
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30
The Parent shall hold in trust for and forthwith pay or transfer to
the Agent for the Finance Parties any payment or distribution or benefit of
security received by it contrary to this Clause 18.7.
18.8 Additional security
This guarantee is in addition to and is not in any way prejudiced by
any other security now or subsequently held by any Finance Party.
19. REPRESENTATIONS AND WARRANTIES
19.1 Representations and warranties
Each Obligor makes the representations and warranties set out in
this Clause 19 (Representations and warranties) to each Finance Party (subject
in each case however, to any qualifications as to matters of law set out in any
legal opinion delivered pursuant to this Agreement).
19.2 Status
(a) It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation; and
(b) It has (as a matter of corporate capacity) the power to own its
assets and carry on its business as it is being conducted.
19.3 Powers and authority
It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and delivery of, the
Financial Documents to which it is or will be a party and the transactions
contemplated by those Finance Documents.
19.4 Legal validity
Each Finance Document to which it is or will be a party constitutes,
or when executed in accordance with its terms will constitute, its legal, valid
and binding obligation enforceable in accordance with its terms subject,
however, to any limitations due to bankruptcy, insolvency, liquidation,
re-organisation, limitation and other laws of general application regarding or
affecting the rights of creditors and to general equitable principles.
19.5 Non-conflict
The entry into and performance by it of, and the transactions
contemplated by, the Finance Documents do not and will not:-
(a) conflict with any law or regulation or judicial or official
order; or
(b) conflict with its Articles or Association; or
(c) conflict with any document which is, to a material extent,
binding upon it or any of its assets.
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31
19.6 No default
(a) No Default is outstanding or would result from the making of any
Loan; and
(b) no other event is outstanding which constitutes (or with the
giving of notice, lapse of time, determination of materiality or the fulfillment
of any other applicable condition or any combination of the foregoing, might
constitute) a default under any document which is binding on it or any of its
assets to an extent or in a manner which would be likely to have material
adverse effect on its ability to perform its obligations which (in the sole
opinion of the Majority Banks) are material under this Agreement or on the
business or financial condition of the Group as a whole.
19.7 Authorisations
All authorisations required in connection with the entry into,
performance validity and enforceability of, and the transactions contemplated
by, the Finance Documents have been obtained or effected (as appropriate) and
are in full force and effect.
19.8 Accounts
In the case of the Parent, the audited consolidated accounts of the
Group and the unaudited consolidated income statement of the Group most recently
delivered to the Agent (which, at the date of this Agreement, are the Original
Group Accounts):-
(i) have been prepared in accordance with accounting principles and
practices generally accepted in Sweden consistently applied and, in the
case of the audited consolidated accounts, audited by an internationally
recognised firm of accountants or by Swedish public authorised
accountants; and
(ii) fairly represent the consolidated financial condition of the
Group as at the date to which they were drawn up,
and there has been no material adverse change in the consolidated financial
condition of the Group, taken as a whole, since the date to which those accounts
were drawn up.
19.9 Litigation
Except as set out in the Disclosure Letter, no litigation,
arbitration or administrative proceedings (other than any frivolous or vexatious
claims which are being contested by appropriate proceedings) are current or to
its knowledge, pending or threatened, which would, if adversely determined, have
a material adverse effect on the ability of an Obligor to perform its
obligations under this Agreement or the business or financial condition of the
Group as a whole.
19.10 Times for making representations and warranties
The representations and warranties set out in this Clause 19
(Representations and warranties) are made by each Obligor or the Parent, as the
case may be, on the date of this Agreement and (with the exception of Clauses
19.6 (No default), 19.8 (Accounts) and 19.9 (Litigation)) are deemed to be
repeated by each Obligor on the date of each Request, each Drawdown Date and
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on the first day of each Interest Period and by each Additional Borrower, on the
date on which it enters into a Deed of Accession, with reference to the facts
and circumstances then existing.
20. UNDERTAKINGS
20.1 Duration
The undertakings in this Clause 20 (Undertakings) remain in force
from the date of this Agreement for so long as any amount is or may be
outstanding under this Agreement or any commitment is in force.
20.2 Financial Information
The Parent shall supply to the Agent in sufficient copies for all
the Banks:-
(a) as soon as the same are available (and in any event within 180
days of the end of each of its financial years), the audited consolidated
accounts of the Group for that financial year;
(b) as soon as the same are available (and in any event within 120
days of the end of the first half-year of each of its financial years),
the unaudited consolidated income statement of the group for that
half-year;
(c) together with the accounts specified in paragraphs (a) and (b)
above, a certificate signed by two of its senior officers on its behalf
setting out in reasonable detail computations establishing compliance with
Clause 20.12 (Financial covenants) as at the date to which those accounts
were drawn-up; and
(d) such a certificate stating which members of the Group are
Material Subsidiaries whenever there is a change in such Material
Subsidiaries and in any event at least once in each financial year
together with the accounts specified in paragraph (a) above.
20.3 Information - Miscellaneous
The Parent shall (save to the extent that it considers that to do so
would be in violation of the applicable rules or requirements of the Stockholm
Stock Exchange or any other exchange on which its equity or debt securities are
listed) supply to the Agent:-
(a) all documents despatched by it to its shareholders or creditors
generally at the same time as they are despatched;
(b) promptly upon becoming aware of them, reasonable details of any
litigation, arbitration or administrative proceedings (other than any
frivolous or vexatious claims, which are being contested by appropriate
proceedings) which are current, threatened or pending, and which would if
adversely determined, have a material adverse effect on the ability of any
Obligor to perform its obligations which (in the sole opinion of the
Majority Banks) are material under this Agreement or in the business or
financial condition of the Group as a whole; and
(c) promptly, such further information in the possession or control
of the Parent regarding its financial condition and operations (or the
financial condition and operations of any
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member of the Group) as the Agent, or any Bank through the Agent, may
reasonably request,
in sufficient copies for all of the Banks, if the Agent so requests.
20.4 Notification of Default
The Parent shall notify the Agent of any Default (and the steps, if
any, being taken to remedy it) promptly upon any Obligor becoming aware of the
same.
20.5 Compliance certificates
The Parent shall supply to the Agent:-
(a) together with the accounts specified in Clause 20.2 (a)
(Financial information); and
(b) promptly at any other time, if the Agent so reasonably requests,
a certificate signed by two of its senior officers on its behalf certifying that
no Default is outstanding or, if a Default is outstanding, specifying the
Default and the steps, if any, being taken to remedy it.
20.6 Authorisations
Each Obligor shall promptly obtain, maintain and comply with the
terms of any authorisation required under the law or regulation to enable it to
perform its obligations under, or for the validity or enforceability of, any
Finance Document.
20.7 Pari passu ranking
Each Obligor shall procure that its obligations under the Finance
Documents do and will rank at least pari passu with all its other present and
future unsecured and unsubordinated obligations, except for obligations which
are mandatorily preferred by law.
20.8 Negative pledge
(a) No Obligor shall, and the Parent shall procure that no other
member of the Group will, create or permit to subsist any Security Interest on
any of its assets.
(b) Paragraph (a) does not apply to:-
(i) any lien arising by operation of law in the ordinary course of
business and securing amounts not more than 60 days overdue or being
contested in good faith by appropriate proceedings;
(ii) any Security Interest created in connection with any loan or
credit granted, or guaranteed wholly or partially, by the Swedish Export
Credit Corporation or the Swedish Export Credit Board or any other export
credit or similar public institution;
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(iii) any Security Interest created in connection with any loan,
debt or other obligation (including an obligation under a guarantee) of a
member or the Group in respect of borrowed money where the borrowed money
is by its terms repayable not more than 12 months after the date on which
the member of the Group assumes liability in respect thereof and the
purpose of the borrowed money is to meet the funding requirements of that
company in the ordinary course of business;
(iv) any Security Interest over an asset acquired after the date
hereof which as not created in contemplation of such acquisition and so
long as the outstanding principal amount secured thereby is not increased
on or after the date of that acquisition;
(v) any Security Interest created prior to the date of its
acquisition by a company which becomes a member of the Group after the
date hereof provided that such Security Interest only secures Financial
Indebtedness up to a stated maximum principal amount and was not created
in contemplation of such acquisition and so long as the principal
committed amount (whether drawn or not) is not increased on or after the
date of that acquisition;
(vi) any Security Interest created in favour of persons providing
tender, performance, bid or similar bonds or guarantees relating to or
arising out of contracts undertaken in the normal course of business by
any members of the Group to secure amounts which may become payable by
those persons pursuant to those bonds or guarantees (but not where those
bonds or guarantees are issued to facilitate the incurrence of any
Financial Indebtedness);
(vii) any Security Interest created (a) in connection with any loan,
debt or other obligation (including an obligation under a guarantee but in
each case not having a maturity of longer than twelve months from the date
of its creation) of a member of the Group in order to take advantage of
interest arbitrage and hedging opportunities where the assets secured
comprise cash or debt securities or (b) in the ordinary course of business
over cash or debt securities provided as collateral to any bank, financial
institution, stock exchange or clearing house for back to back, foreign
exchange, swaps or other derivatives transactions;
(viii) an Security Interest created on any asset acquired or
developed by it after the date of this Agreement for the sole purpose of
financing that acquisition or development and securing principal monies
not exceeding the cost of that acquisition or development;
(ix) any Security Interest created pursuant to mandatory provisions
of Swedish law securing the payment of the purchase price by any member of
the Group in favour of minority shareholders of a company or corporation
the shares of which are subject to a compulsory sale ("tvangsinlosen") to
a member of the Group;
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35
(x) any Security Interest created in favour of a bank over any
clearing or current account in connection with a cash management agreement
entered into between that bank and a member of the Group;
(xi) any Security Interest created by any member of the Group
incorporated in Sweden in favour of the Swedish pension fund to which such
member of the Group makes contributions (the "Pension Fund") as security
in accordance with the Pension Fund's requirement for loans made according
to Swedish law by the Pension Fund to that member of the Group;
(xii) any Security Interest created in connection with any
refinancing and in substitution for any Security Interest otherwise
permitted under the terms of this Clause 20.8(b) to the extent that such
Security Interest relates to the same asset and the principal amount
secured by such Security Interest is not more than the principal amount of
the indebtedness being refinanced;
(xiii) any Security Interest disclosed to the Agent prior to the
date hereof so long as the maximum principal amount that could be secured
thereby was approved by the Agent and is not increased after the date
hereof;
(xiv) any Security Interest consented to by the Majority Banks;
(xv) any Security Interest created by a member of the Group in
favour of the Parent; and
(xvi) any Security Interest over an asset which does not fall within
sub-paragraphs (i) - (xv) above up to but not exceeding an aggregate
principal amount secured thereby of an amount equal to ten per cent of
Consolidated Total Assets at that time;
PROVIDED THAT the aggregate amount of all claims in respect of
indebtedness for a principal sum which are, at any time, outstanding and secured
by any Security Interest (other than a Security Interest created or existing in
reliance on sub- paragraphs (i), (vii), (x) or (xv) above) shall not exceed
twenty-five per cent of the Consolidated Total Assets at that time.
For the avoidance of doubt, any transaction which is permitted under
this Clause 20.8 shall be deemed not to be prohibited under Clause 20.9
(Transactions similar to security) or 20.10 (Disposals).
20.9 Transactions similar to security
(a) No Obligor shall, and the Parent shall procure that no other
member of the Group will, except with the prior written consent of the Majority
Banks, sell, transfer or otherwise dispose of any of its fixed assets on terms
whereby any such assets are or may be leased to or re-acquired or acquired by a
member of the Group or any of its related entities (other than in circumstances
where such transaction is not entered into primarily as a method of raising
finance).
(b) Paragraph (a) does not apply to any sales, transfers or
disposals:
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(i) by a member of the Group to another member of the Group, or
(ii) of fixed assets with a value not exceeding in aggregate three
per cent of the Consolidated Total Assets (calculated at the book value
net of depreciation and other similar allowances).
For the avoidance of doubt, any equipment produced and sold or
distributed as commercial agents in the ordinary course of business shall not be
regarded as fixed assets (notwithstanding that it is so classified in the
Group's financial statements) and any transaction which is permitted under this
Clause 20.9 shall be deemed not to be prohibited under Clause 20.8 (Negative
pledge) or 20.10 (Disposals).
20.10 Disposals
(a) No Obligor shall, and the Parent shall procure that no other
member of the Group will, except with the prior written consent of the Majority
Banks, either in a single transaction or in a series of transactions, whether
related or not and whether voluntarily or involuntarily, sell, transfer, grant
or lease or otherwise dispose of all or any substantial part of its assets.
(b) Paragraph (a) does not apply to:-
(i) any disposal made in the ordinary course of business (including
the sale with recourse of accounts receivable arising out of the sale of
such assets);
(ii) any disposal of obsolete plant or equipment;
(iii) any disposal by one member of the Group to another member of
the Group;
(iv) any disposal made on arm's length terms representing fair
market value (which shall if so requested by the Agent be confirmed by a
valuation carried out by a valuer agreed to by both the Parent and the
Agent) (or in default of such agreement appointed by the Agent; and
(v) any other disposal not within sub-paragraphs (i)-(iv) above
where the value of the asset disposed of (when aggregated with the value
of all other assets disposed of after the date hereof and for so long as
any Commitment or Loan is outstanding hereunder (not within sub-paragraphs
(i)-(iv) above)) does not exceed 40 per cent. of Consolidated Total Assets
(as measured in the latest published financial statements of the Group for
the period immediately preceding the disposal).
For the avoidance of doubt, for the purposes of paragraph (v), the
value of an asset shall be equal to its book value net of depreciation and other
similar allowances and any transaction which is permitted under this Clause
20.10 shall be deemed not to be prohibited under Clause 20.8 (Negative pledge)
or 20.9 (Transactions similar to security).
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20.11 Change of business
The Parent shall procure that no substantial change is made to the
general nature of the business of the Parent or the Group taken as a whole from
that carried on at the date of this Agreement.
20.12 Financial covenants
(a) In this Clause 20.12:-
"Net Interest Expense" means, in relation to any twelve month
period, consolidated interest expense less consolidated interest income
during that period.
"Operating Income" means, in relation to any twelve month period,
consolidated income before taxes, plus any extraordinary or exceptional
losses, less any extraordinary or exceptional gains, plus minority expense
less minority income, plus interest expense less interest income, plus
foreign exchange losses less foreign exchange gains, plus any other
financial costs less any other financial income during that period.
(b) (i) All the terms used in paragraph (a) above are to be
calculated in accordance with the accounting principles applied in
connection with the Original Group Accounts.
(ii) If there is a dispute as to any interpretation of or
computation for paragraph (a) above, the interpretation or computation of
the Parent's auditors prevails.
(c) The Parent shall procure that the ratio of Operating Income to
Net Interest Expense is not at the end of each half-year of each financial
year of the Group, less than 2.2 to 1.
20.13 Insurance
Provided that such insurance is available in the market and can be
purchased on reasonable terms and conditions, each Obligor shall maintain with
reputable insurance companies, funds or underwriters (reasonably believed by
each Obligor to be financially sound) adequate insurance of the kinds, covering
such risks and in such amounts and with such deductibles (including captive or
similar self-insuring arrangements) and exclusions as are consistent with
prudent business practice for an entity engaged in businesses similar to those
of the Obligors.
21. DEFAULT
21.1 Events of Default
Each of the events set out in Clauses 21.2 (Non-payment) to 21.15
(Material adverse change) (inclusive) is an Event of Default (whether or not
caused by any reason whatsoever outside the control of any Obligor or any other
person).
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21.2 Non-payment
Any Obligor does not pay any amount of principal payable by it under
the Finance Documents on the due date or any other amount payable by it under
the Finance Documents within three (or, if the reason therefor is technical or
administrative error, five) Business Days after the due date, in each case at
the place at and in the currency in which it is expressed to be payable.
21.3 Breach of other obligations
Any Obligor does not comply with any of its obligations under the
Finance Documents (other than those referred to in Clause 21.2 (Non-Payment) and
such non-compliance, if capable of remedy, continues unremedied for 30 days
after such Obligor received notice thereof from the Agent or, if not capable of
remedy, such non-compliance is materially prejudicial (in the sole opinion of
the Majority Banks), to the interests of the Banks.
21.4 Misrepresentation
A representation, warranty or statement made or repeated in or in
connection with any Finance Document or in any document delivered by or on
behalf of any Obligor under or in connection with any Finance Document is
incorrect in any material respect when made or deemed to be made or repeated.
21.5 Cross-default
(a) Any Financial Indebtedness of any Obligor or a Material
Subsidiary is not paid when due or after the expiry of any applicable grace
period (but this paragraph (a) shall not apply to non-payment by a member of the
Group under any performance or bid bond (or similar instrument) issued by it
where there is a bona fide dispute as to its liability); or
(b) an event of default howsoever described occurs under any
document relating to Financial Indebtedness of a member of the Group and
discussions with the relevant creditors are arranged with a view to rescheduling
or otherwise varying the terms of the Financial Indebtedness in question or
considering other remedial action; or
(c) any Financial Indebtedness of a member of the Group becomes
prematurely due and payable or is placed on demand as a result of an event of
default (howsoever described) under the document relating to that Financial
Indebtedness; or
(d) any commitment for, or underwriting of, any Financial
Indebtedness of a member of the Group is cancelled or suspended as a result of
an event of default (howsoever described) under the document relating to that
Financial Indebtedness; or
(e) steps are taken to enforce any Security Interest securing
Financial Indebtedness over any asset of a member of the Group following the
occurrence of an enforcement event howsoever described in any relevant document.
PROVIDED THAT there shall not be an Event of Default under this
clause 21.5 unless the aggregate of all amounts at any one time unpaid or in
default as a result of events referred to above exceed $15,000,000 (or its
equivalent).
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21.6 Insolvency
(a) Any Obligator or Material Subsidiary is, or is deemed for the
purposes of any law to be, unable to pay its debts as they fall due or to be
insolvent, or admits inability to pay its debts as they fall due (unless, in the
case of a Material Subsidiary, the Parent gives a support letter satisfactory to
the auditors so that no qualification is required to be made in relation to the
accounts of the Material Subsidiary concerned); or
(b) any Obligor or Material Subsidiary suspends making payments on
all or any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness; or
(c) any Obligor or Material Subsidiary, by reason of financial
difficulties, begins negotiations with its creditors generally with a view to
the readjustment or rescheduling of any of its indebtedness.
21.7 Insolvency proceedings
(a) Any step (including petition, proposal or convening a meeting)
is taken by any Obligor or Material Subsidiary with a view to a composition,
assignment or arrangement with any of its creditors; or
(b) a meeting of any Obligor or Material Subsidiary is convened for
the purpose of considering any resolution for (or to petition for) its
winding-up or its administration or any such resolution is passed (save where
such meeting is called on frivolous or vexatious grounds by a person other than
an Obligor or a Material Subsidiary); or
(c) any person presents a petition (other than a frivolous or
vexatious petition) for the bankruptcy, winding-up or for the administration of
any Obligor or Material Subsidiary unless the same is discharged within 45 days;
or
(d) any order for the bankruptcy, winding-up or administration of
any Obligor or Material Subsidiary is made; or
(e) any other step (including petition, proposal or convening a
meeting but excluding steps taken on frivolous or vexatious grounds or any step
taken by a person other than an Obligor or a Material Subsidiary which is
discharged within 45 days) is taken with a view to the rehabilitation,
administration, custodianship, bankruptcy, liquidation, winding-up or
dissolution of any Obligor or Material Subsidiary or any other insolvency
proceedings involving any Obligor or Material Subsidiary.
PROVIDED THAT the solvent winding-up of a Material Subsidiary on
terms approved by the Majority Banks (whose approval shall not be unreasonably
withheld) shall not be an Event of Default under this or any other Clause.
21.8 Appointment of receivers and managers
(a) Any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver, administrator or the like
is appointed in respect of any Obligor or Material Subsidiary or any substantial
part of its assets; or
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(b) the directors of any Obligor or Material Subsidiary request the
appointment of a liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver, administrator or the
like; or
(c) any other steps are taken to enforce any Security Interest over
any part of the assets of any Obligor or Material Subsidiary and are followed by
legal proceedings which are initiated and not discharged within 45 days.
21.9 Creditors process
Any attachment, sequestration, distress or execution affects any
asset of any Obligor or Material Subsidiary and its not discharged within 45
days.
21.10 Analogous proceedings
There occurs, in relation to any Obligor or Material Subsidiary, any
event in any relevant jurisdiction which in analogous to any of those mentioned
in Clauses 21.6 (Insolvency) to 21.9 (Creditors' process) (inclusive).
21.11 Cessation of business
Any Obligor or Material Subsidiary ceases, or threatens to cease, to
carry on all or a substantial part of its business where this would have a
material adverse effect on the business of financial condition of the Group as a
whole or on the ability of any Obligor to perform its obligations which (in the
sole opinion of the Majority Banks) are material under this Agreement.
21.12 Unlawness
It is or becomes unlawful for any Obligor to perform any of its
material obligations under the Finance Documents.
21.13 Guarantee
The guarantee of the Parent is not effective or is alleged by it to
be ineffective for any reason.
21.14 Ownership of the Borrowers
Any Borrowers (other than the Parent) is not or ceases to be a
Subsidiary of the Parent, unless the Majority Banks consent to the sale of such
Borrower.
21.15 Material adverse change
Any event or series of events occurs which would be likely to have a
material and adverse effect on the business or financial condition of the Group
taken as a whole or on the ability of any Obligor to comply with its obligations
which (in the sole opinion of the Majority Banks) are material under the Finance
Documents.
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21.16 Acceleration
On and at any time after the occurrence of an Event of Default (for
so long as such Event of Default is continuing) the Agent may, and shall if so
directed by the Majority Banks, by notice to the Parent:-
(a) cancel the Total Commitments; and/or
(b) demand that all or part of the Loans, together with accrued
interest, and all other amounts accrued under this Agreement be
immediately due and payable, whereupon they shall become immediately due
and payable; and/or
(c) demand that all or part of the Loans be payable on demand,
whereupon they shall immediately become payable on demand.
22. THE AGENT AND THE ARRANGER
22.1 Appointment and duties of the Agent
Each Finance Party (other than the Agent) irrevocably appoints the
Agent to act as its agent under and in connection with the Finance Documents,
and irrevocably authorises the Agent on its behalf to perform the duties and to
exercise the rights, powers and discretions that are specifically delegated to
it under or in connection with the Finance Documents, together with any other
incidental rights, powers and discretions. The Agent has only those duties which
are expressly specified in this Agreement, and those duties are solely of a
mechanical and administrative nature.
22.2 Role of the Arranger
Except as specifically provided in this Agreement, the Arranger has
no obligations of any kind to any other Party under or in connection with any
Finance Document.
22.3 Relationship
The Relationship between the Agent and the other Finance Parties is
that of agent and principal only. Nothing in this Agreement constitutes the
Agent as trustee or fiduciary for any other Party or any other person and the
Agent need not hold in trust any moneys paid to it for a Party or be liable to
account for interest on those moneys.
22.4 Majority Banks' directions
The Agent will be fully protected if it acts in accordance with the
instructions of the Majority Banks in connection with the exercise of any right,
power or discretion or any matter not expressly provided for in this Agreement.
Any such instructions given by the Majority Banks will be binding on all the
Banks. In the absence of such instructions, the Agent may act as it considers to
be in the best interests of all the Banks.
22.5 Delegation
The Agent may act under the Finance Documents through its personnel
and agents whose acts shall be binding upon it.
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22.6 Responsibility for documentation
Neither the Agent nor the Arranger is responsible to any other Party
for:-
(a) the execution genuineness, validity, enforceability or
sufficiency of any Fiance Document or any other documents;
(b) the collectability of amounts payable under any Finance
Document; or
(c) the accuracy of any statements (whether written or oral) made in
or in connection with any Finance Document.
22.7 Default
(a) The Agent is not obliged to monitor or enquire as to whether or
not a Default has occurred. The Agent will not be deemed to have knowledge of
the occurrence of a Default. However, if the Agent receives notice from a Party
referring to this Agreement, describing the Default and stating that the event
is a Default, or if the officers of the Agent actually engaged in carrying out
the agency function under this Agreement acquire actual knowledge of a Default,
it shall promptly notify the Banks.
(b) The Agency may require the receipt of security satisfactory to
it from any other Finance party, whether by way of payment in advance or
otherwise, against any liability or loss which it will or may incur in taking
any proceedings or action arising out of or in connection with any Finance
Document before it commences those proceedings or takes that action.
22.8 Exoneration
(a) Without limiting paragraph (b) below, the Agent will not be
liable to any other Party for any action taken or not taken by it under or in
connection with any Finance Document, unless directly caused by its gross
negligence or willful misconduct.
(b) No Party may take any proceedings against any officer, employee
or agent of the Agent in respect of any claim it might have against the Agent or
in respect of any act or omission of any kind (including gross negligence or
willful misconduct) by that officer, employee or agent in relation to any
Finance Document.
22.9 Reliance
The Agent may:-
(a) rely on any notice or document believed by it to be genuine and
correct and to have been signed by, or with the authority of, the proper
person:
(b) rely on any statement made by a director or employee of any
person regarding any matters which may reasonably be assumed to be within
his knowledge or within his power to verify; and
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(c) engage, pay for and rely on legal or other professional advisors
selected by it (including those in the Agent's employment and those
representing a Party other than the Agent).
22.10 Credit approval and appraisal
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance Document, each
Bank confirms that it:-
(a) has made its own independent investigation and assessment of the
financial condition and affairs of each Obligor and its related entities
in connection with its participation in this Agreement and has not relied
exclusively on any information provided to it by the Agent or the Arranger
in connection with any Finance Document; and
(b) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities while any amount
is or may be outstanding under the Finance Documents or any Commitment is
in force.
22.11 Information
(a) The Agent shall promptly forward to the person concerned the
original or a copy of any document which is delivered to the Agent by a Party
for that person.
(b) The Agent shall promptly supply a Bank with a copy of each
document received by the Agent under Clause 4 (Conditions Precedent) upon the
request and at the expense of that Bank.
(c) Except where this Agreement specifically provides otherwise, the
Agent is not obliged to review or check the accuracy or completeness of any
document it forwards to another Party.
(d) Except as provided above, the Agent has no duty:-
(i) either initially or on a continuing basis to provide any Bank
with any credit or other information concerning the financial condition or
affairs of any Obligor or any related entity of any Obligor whether coming
into its possession before, on or after the date of this Agreement; or
(ii) unless specifically requested to do so by a Bank in accordance
with this Agreement, to request any certificates or other documents from
any Obligor.
22.12 The Agent and the Arranger
(a) If it is also a Bank, each of the Agent and the Arranger has the
same rights and powers under this Agreement as any other Bank and may exercise
those rights and powers as though it were not the Agent or the Arranger.
(b) Each of the Agent and the Arranger may:-
(i) carry on any business with an Obligor or its related entities;
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(ii) act as agent or trustee for, or in relation to any financing
involving, an Obligor or its related entities; and
(iii) retain any profits or remuneration in connection with its
activities under this Agreement or in relation to any of the foregoing.
22.13 Indemnities
(a) Without limiting the liability of any Obligor under the Finance
Documents, each Bank shall forthwith on demand indemnify the Agent for its
proportion of any liability or loss incurred by the Agent in any way relating to
or arising out of its acting as the Agent, except to the extent that the
liability or loss arises directly from the Agent's gross negligence or willful
misconduct.
(b) A Bank's proportion of the liability set out in paragraph (a)
above will be the proportion which its participation in the Loans (if any) bears
to all the Loans on the date of the demand. If, however, there are no Loans
outstanding on the date of demand, then the proportion will be the proportion
which its Commitment bears to the Total Commitments at the date of demand or, if
the Total Commitments have then been cancelled, bore to the Total Commitments
immediately before being cancelled.
22.14 Compliance
(a) The Agent may refrain from doing anything which might, in its
opinion, constitute a breach of any law or regulation or be otherwise actionable
at the suit of any person, and may do anything which, in its opinion, is
necessary or desirable to comply with any law or regulation of any jurisdiction.
(b) Without limiting paragraph (a) above, the Agent need not
disclose any information relating to any Obligor or any of its related entities
if the disclosure might, in the opinion of the Agent, constitute a breach of any
law or regulation or any duty of secrecy or confidentiality or be otherwise
actionable at the suit of any person.
22.15 Resignation of the Agent
(a) Notwithstanding its irrevocable appointment, the Agent may
resign by giving notice to the Banks and the Obligors, in which case the Agent
may forthwith appoint one of its Affiliates as successor Agent or, failing that,
the Majority Banks may appoint a successor Agent.
(b) If the appointment of a successor Agent is to be made by the
Majority Banks but they have not, within 30 days after notice of resignation,
appointed a successor Agent which accepts the appointment, the Agent may appoint
a successor Agent.
(c) The resignation of the Agent and the appointment of any
successor Agent will both become effective only upon the successor Agent
notifying all the Parties that it accepts its appointment. On giving the
notification, the successor Agent will succeed to the position or the Agent and
the term "Agent" will mean the successor Agent.
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45
(d) The retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such assistance as the
successor Agent may reasonably request for the purposes of performing its
functions as the Agent under this Agreement.
(e) Upon its resignation becoming effective, this Clause 22 (The
Agent and the Arranger) shall continue to benefit the retiring Agent in respect
of any action taken or not taken by it under or in connection with the Finance
Documents while it was the Agent, and, subject to paragraph (d) above, it shall
have no further obligations under any Finance Document.
(f) Any successor Agent must be acceptable to the Borrower but the
Borrower may not unreasonably withhold his acceptance.
(g) If the Majority Banks so direct, the Agent shall resign and the
Majority Banks shall appoint a successor Agent.
22.16 Banks
The Agent may treat each Bank as a Bank, entitled to payments under
this Agreement and as acting through its Facility Office(s).
23. FEES
23.1 Management fee
The Parent shall pay to the Agent on the earlier of the first
Drawdown Date and the date 10 days after the date hereof a management fee in the
amount agreed in the relevant Fee Letter. The management fee shall be
distributed by the Agent among the Banks in its sole discretion.
23.2 Commitment fee
(a) The Parent shall pay to the Agent for each Bank a commitment fee
computed at the rate of 0.10 percent per annum during the period from the date
hereof until the fifth anniversary of the date hereof and thereafter 0.1125
percent per annum on the undrawn, uncancelled amount of the Total Commitments.
For this purpose, Loans are taken at their Original Dollar Amount.
(b) Accrued commitment fee is payable quarterly in arrear. Accrued
commitment fee is also payable to the Agent for the relevant Bank(s) on the
cancelled amount of its Commitment.
23.3 Agent's fee
The Parent shall pay to the Agent for its own account an agency fee
in the amount agreed in the relevant Fee Letter. The agency fee is payable
annually in advance. The first payment of this fee is payable on the date of
this Agreement and each subsequent payment is payable on each anniversary of the
date of this Agreement for so long as any amount is or may be outstanding under
this Agreement or any Commitment in is force.
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46
23.4 VAT
Any fee referred to in this Clause 23 (Fees) is exclusive of any
value added tax or any other tax which might be chargeable in connection with
that fee. If any value added tax or other tax is so chargeable, it shall be paid
by the Parent at the same time as it pays the relevant fee.
24. EXPENSES
24.1 Initial and special costs
The parent shall within 5 Business Days of demand pay the Agent and
the Arranger the amount of all reasonable out-of-pocket costs and expenses
(including legal fees) incurred by either of them in connection with:-
(a) the negotiation, preparation, printing and execution of:-
(i) this Agreement and any other documents (not being a
document referred to in Clause 29.2 (Transfer by Bank) or 29.3
(Procedure for novations) other than in circumstances where Clause
17 (Mitigation) applies) referred to in this Agreement; and
(ii) any other Finance Document executed after the date of
this Agreement; and
(b) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf of an Obligor
and relating to a Finance document or a document referred to in any
Finance Document.
24.2 Enforcement costs
Following a Default, the Parent shall forthwith on demand (or within
5 Business Days of demand in the case of preservation costs) pay to each Finance
Party the amount of all costs and expenses (including legal fees) properly
incurred by it in connection with the enforcement of, or the preservation of any
rights under, any Finance Document.
25. STAMP DUTIES
The Parent shall pay and forthwith on demand (in the case of
enforcement) (or otherwise within 5 Business days of demand) indemnify each
Finance Party against any liability it incurs in respect of any stamp,
registration and similar tax which is or becomes payable in connection with the
entry into, performance or enforcement of any Finance Document.
26. INDEMNITIES
26.1 Currency indemnity
(a) If a Finance Party receives an amount in respect of an Obligor's
liability under the Finance Document or if that liability is converted into a
claim, proof, judgment or order in a currency other than the currency (the
"contractual currency") in which the amount is expressed to be payable under the
relevant Finance Document:-
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47
(i) that Obligor shall indemnify that Finance Party as an
independent obligation against any loss or liability arising out of or as
a result of the conversion;
(ii) if the amount received by that Finance Party, when converted
into the contractual currency at a market rate in the usual course of its
business is less than the amount owed in the contractual currency, the
Obligor concerned shall forthwith on demand pay to that Finance Party an
amount in the contractual currency equal to the deficit; and
(iii) the Obligor shall pay to the Finance Party concerned forthwith
on demand any exchange costs and taxes payable in connection with any such
conversion.
(b) Each Obligor waives any right it may have in any jurisdiction to
pay any amount under Finance Document in a currency other than that in which it
is expressed to be payable.
26.2 Other indemnities
The Parent shall forthwith on receipt of a demand following a
default (or otherwise within 5 Business Days of demand) setting out reasonable
details of the relevant loss or liability indemnify each Finance Party against
any loss or liability which that Finance Party incurs as a consequence of:-
(a) the occurrence of any Default;
(b) the operation of Clause 21.16 (Acceleration);
(c) any payment of principal or an overdue amount being received
from any source otherwise than on the last day of a relevant Interest
Period or Designated Interest period (as defined in Clause 9.3 (Default
interest)) relative to the amount so received; or
(d) (other than by reason of negligence or default by a Finance
Party) a Loan not being made after the Borrower has delivered a Request or
a Loan (or part of a Loan) not being prepaid in accordance with a notice
of prepayment.
The Parent's liability in each case includes any loss of margin (in
the case of paragraph (a) or (b) above applying) or other loss or expense on
account of funds borrowed, contracted for or utilised to fund any amount payable
under any Finance Document, any amount repaid or prepaid or any Loan.
26.3 No restrictions on Obligors
Nothing in this Agreement shall prevent any Obligor from enforcing
any rights it may have against any Finance Party which fails to fulfill its
obligations hereunder.
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27. EVIDENCE AND CALCULATIONS
27.1 Accounts
Accounts maintained by a Finance Party in connection with this
Agreement are prima facie evidence of the matters to which they relate.
27.2 Certificates and determinations
Any certification or determination by a Finance Party of a rate or
amount under this Agreement is, in the absence of manifest error, conclusive
evidence of the matters to which it relates.
27.3 Calculations
Interest (including any applicable MLA Costs) and the fee payable
under Clause 23.3 (Commitment fee) accrue from day to day and are calculated on
the basis of the actual number of days elapsed and a year of 360 days, or, in
the case of interest payable on an amount denominated in Sterling only, 365
days.
28. AMENDMENTS AND WAIVERS
28.1 PROCEDURE
(a) Subject to Clause 28.3 (Exceptions), any term of the Finance
Documents may be amended or waived with the agreement of the Parent, the
Majority Banks and the Agent. The Agent may effect on behalf of the Majority
Banks, an amendment or waiver to which they have agreed.
(b) The Agent shall promptly notify the other Parties of any
amendment or waiver effected under paragraph (a) above, and any such amendment
or waiver shall be binding on all the Parties.
28.2 Exceptions
An amendment or waiver which relates to:-
(a) the definition of "Majority Banks" in Clause 1.1
(Interpretation);
(b) an extension of the date for, or a decrease in an amount or a
change in the currency of any payment under the Finance Documents;
(c) an increase in a Bank's Commitment;
(d) a term of a Finance Document which expressly requires the
consent of each Bank; or
(e) Clause 18 (Guarantee), Clause 29 (Changes to the Parties),
Clause 32 (Pro rata sharing) or this Clause 28 (Amendments and waivers),
may not be effected without the consent of each Bank.
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49
28.3 Waivers and Remedies Cumulative
The rights of each Finance Party under the Finance Documents:-
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the general
law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a
waiver of that right.
29. CHANGES TO THE PARTIES
29.1 Transfers by Obligors
No Obligor may assign, transfer, novate or dispose of any of, or any
interest in, its rights and/or obligations under this Agreement.
29.2 Transfers by Banks
(a) A Bank (the "Existing Bank") may, with the prior written consent
of the Borrowers' Agent (such consent not to be unreasonably withheld), at any
time assign, transfer or novate any of its rights and/or obligations under this
Agreement to another bank or financial institution (the "New Bank").
Provided that each Bank (so long as it remains a Bank hereunder)
shall, subject to the other terms of this Agreement, continue to maintain a
Commitment and/or participation in the Facility in an aggregate amount at least
equal to US$10,000,000 (or its equivalent) hereunder.
(b) A transfer of obligations will be effective only if either:-
(i) the obligations are novated in accordance with Clause 29.3
(Procedure for novations); or
(ii) the New Bank confirms to the Agent and the Obligors that it
undertakes to be bound by the terms of this Agreement as a Bank in form
and substance satisfactory to the Agent. On the transfer becoming
effective in this manner the Existing Bank shall be relieved of its
obligations under this Agreement to the extent that they are transferred
to the New Bank.
(c) Nothing in this Agreement restricts the ability of a Bank to
sub-contract an obligation if that Bank remains liable under this
Agreement for that obligation.
(d) On each occasion an Existing Bank assigns, transfer or novates
any of its rights and/or obligations under this Agreement, the New Bank
shall, on the date the assignment, transfer and/or novation takes effect,
pay to the Agent for its own account a fee of $500.
(e) An Existing Bank is not responsible to a New Bank for:-
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50
(i) the execution, genuineness, validity, enforceability or
sufficiency of any Finance Document or any other document;
(ii) the collectability of amounts payable under any Finance
Document; or
(iii) the accuracy of any statements (whether written or oral)
made in or in connection with any Finance Document.
(f) Each New Bank confirms to the Existing Bank and the other
Finance parties that it:-
(i) has made its own independent investigation and assessment
of the financial condition and affairs of each Obligor and its
related entities in connection with its participation in this
Agreement and has not relied exclusively on any information provided
to it by the Existing Bank in connection with any Finance Document;
and
(ii) will continue to make its own independent appraisal of
the creditworthiness of each Obligor and its related entities while
any amount is or may be outstanding under this Agreement or any
Commitment is in force.
(g) Nothing in any Finance Document obliges an Existing Bank to:-
(i) accept a re-transfer from a New Bank of any of the rights
and/or obligations assigned, transferred or novated under this
Clause; or
(ii) support any losses incurred by the New Bank by reason of
the non-performance by the Borrower of its obligations under this
Agreement or otherwise.
(h) Any reference in this Agreement to a Bank includes a New Bank
but excludes a Bank if no amount is or may be owed to or by it under this
Agreement and its Commitment has been cancelled or reduced to nil.
29.3 Procedure for novations
(a) A novation is effected if:-
(i) the Existing Bank and the New Bank deliver to the Agent a duly
completed certificate substantially in the form of Part I of Schedule 5
(a "Novation Certificate"); and
(ii) the Agent executes it.
(b) Each Party (other than the Existing Bank and the New Bank)
irrevocably authorises the Agent to execute any duly completed Novation
Certificate on its behalf.
(c) To the extent that they are expressed to be the subject of the
novation in the Novation Certificate:-
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51
(i) the Existing Bank and the other Parties (the "existing
Parties") will be released from their obligations to each other (the
"discharged obligations");
(ii) the New Bank and the existing Parties will assume
obligations towards each other which (subject to Clause 39.5 (No
extra cost) differ from the discharged obligations only insofar as
they are owed to or assumed by the New Bank instead of the Existing
Bank;
(iii) the rights of the Existing Bank against the existing
Parties and vice versa (the "discharged rights") will be cancelled;
and
(iv) the New Bank and the existing Parties will acquire rights
against each other which (subject to Clause 29.5 (No extra cost))
differ from the discharged rights only insofar as they are
exercisable by or against the New Bank instead of the Existing Bank,
all on the date of execution of the Novation Certificate by the Agent or, if
later, the date specified in the Novation Certificate.
29.4 Reference Banks
If a Reference Bank (or, if a Reference Bank is not a Bank, the Bank
of which it is an Affiliate) ceases to be a Bank, the Agent shall (in
consultation with the parent) appoint another Bank or an Affiliate of a Bank to
replace the Reference Bank.
29.5 No extra cost
If:-
(a) any assignment or transfer of all or any part of the rights or
obligations of a Bank pursuant to Clause 29; or
(b) any change in a Bank's Facility Office,
results, as a result of laws or regulations in force or the subject of a formal
government proposal at that time, in amounts becoming due at that time under
Clauses 13.1 (Gross-up) or 15 (Increased Costs), then the assignee, transferee,
New Bank or Bank, as the case may be, shall be entitled to receive those amounts
only to the extent that the assignor, transferor, Existing Bank or Bank, as the
case may be, would have been so entitled had there been no such assignment,
transfer, or change in Facility Office.
30. DISCLOSURE OF INFORMATION
(a) A Bank may disclose to one of its Affiliates or (subject to
prior notification to the Borrower of the identity of such person) any person
with whom it is proposing to enter, or has entered into, any kind of transfer,
participation or other agreement in relation to this Agreement:-
(i) a copy of any Finance Document; and
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52
(ii) any information which that Bank has acquired under or in
connection with any Finance Document.
(b) A Finance Party shall keep confidential any and all information
(except information which is publicly available or in respect of which
disclosure is required by law or regulation) relating to the Group or a member
of the Group which is disclosed to the Finance Paty for the purpose of or in
connection with any Finance Document.
31. SET-OFF
A Finance Party may set off any amount due and owed by an Obligor
under this Agreement (to the extent beneficially owned by that Finance Party)
against any obligation (whether or not matured) owed by that Finance Party to
that Obligor, regardless of the place of payment, booking branch or currency of
either obligation. If the obligations are in different currencies, the Finance
Party may convert either obligation at a market rate of exchange in its usual
course of business for the purpose of the set-off.
32. PRO RATA SHARING
32.1 Redistribution
If any amount owing by an Obligor under this Agreement to a Finance
Party (the "recovering Finance Party") is discharged by payment, set-off or any
other manner other than through the Agent in accordance with Clause 12
(Payments) ("recovery"), then:-
(a) the recovering Finance Party shall, within three Business Days,
notify details of the recovery to the Agent;
(b) the Agent shall determine whether the recovery is in excess of
the amount which the recovering Finance Party would have received had the
recovery been received by the Agent and distributed in accordance with
Clause 12 (Payments);
(c) subject to Clause 32.3 (Exception), the recovering Finance Party
shall within three Business Days of demand by the Agent pay to the Agent
an amount (the "redistribution") equal to the excess;
(d) the Agent shall treat the redistribution as if it were a payment
by the Obligor concerned under Clause 12 (Payments) and shall pay the
redistribution to the Finance Parties (other than the recovering Finance
Party) in accordance with Clause 12.7 (Partial payments); and
(e) after payment of the full redistribution, the recovering Finance
Party will be subrogated to the portion of the claims paid under paragraph
(d) above and that Obligor will owe the recovering Finance Party a debt
which is equal to the redistribution, immediately payable and of the type
originally discharged.
32.2 Reversal of redistribution
If under Clause 32.1 (Redistribution):-
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53
(a) a recovering Finance Party must subsequently return a recovery,
or an amount measured by reference to a recovery, to an Obligor; and
(b) the recovering Finance Party has paid a redistribution in
relation to that recovery,
each Finance Party shall, within three Business Days of demand by the recovering
Finance Party through the Agent, reimburse the recovering Finance Party all or
the appropriate portion of the redistribution paid to that Finance Party.
Thereupon, the subrogation in Clause 32.1(e) (Redistribution) will operate in
reverse to the extent of the reimbursement.
32.3 Exception
(a) A recovering Finance Party need not pay a redistribution to the
extent that it would not, after the payment, have a valid claim against the
Obligor concerned in the amount of the redistribution pursuant to Clause 32.1(e)
(Redistribution).
(b) A Finance Party is not entitled to participate in a
redistribution if the redistribution results from the proceeds of a judicial
enforcement order obtained by the recovering Finance Party and the other Finance
Party had adequate notice of and opportunity to participate in the proceedings
concerned but did not do so.
33. SEVERABILITY
If a provision of any Finance Document is or becomes illegal,
invalid or unenforceable in any jurisdiction that shall not affect:-
(a) the validity or enforceability in that jurisdiction of any other
provision of the Finance Documents; or
(b) the validity or enforceability in other jurisdictions of that or
any other provision of the Finance Documents.
34. COUNTERPARTS
This Agreement my be executed in any number of counterparts, and
this has the same effect as if the signatures on the counterparts were on a
single copy of this Agreement.
35. NOTICES
35.1 Giving of notices
All notices or other communications under or in connection with this
Agreement shall be given in writing or by telex (as between the Finance Parties
only) or facsimile. Any such notice will be deemed to be given as follows:-
(a) if in writing, when delivered;
(b) if by telex when dispatched, but only if, at the time of
transmission, the correct answerback appears at the start and at the end
of the sender's copy of the notice; and
(c) if by facsimile, when received.
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54
However, a notice given in accordance with the above but received on
a non-working day or after business hours in the place of receipt will only be
deemed to be given on the next working day in that place.
35.2 Addresses for notices
(a) The address, telex number and facsimile number of each Party
(other than the Agent and the Parent) for all notices under or in connection
with this Agreement are:-
(i) those notified by that Party for this purpose to the Agent on or
before the date it becomes a Party; or
(ii) any other notified by that Party for this purpose to the Agent
by not less than five Business Days' notice.
(b) The address, telex number and facsimile number of the Agent
are:-
Banque Nationale de Paris
59-61 Rue la Fayette
75009 Paris
France
Attention: COE Gestion Des Credits Financiers
Telex: 290 181
Facsimile: (33-1)40 14 77 85
or such other as the Agent may notify to the other Parties by not less than five
Business Days' notice.
(c) The address and facsimile number of the Parent are:
Gambro AB
P.O. Box 10101
S-220 10 Lund
Sweden
Attention: Messrs. Goran Anderberg/Christer Gustavsson
Facsimile: 46 46 16 96 99
or such other as the Parent may notify to the other Parties by not less than
five Business Days' notice.
(d) All notices from or to an Obligor shall be sent through the
Agent.
(e) The Agent shall promptly upon request from any Party, give to
that Party the address, telex number or fax number of any other Party applicable
at the time for the purposes of this Clause.
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55
36. LANGUAGE
(a) Any notice given under or in connection with any Financial
Document shall be in English.
(b) All other documents (other than the accounts and the
constitutional documents of each Obligor) provided under or in connection with
any Financial Document shall be:-
(i) in English; or
(ii) if not in English, accompanied by a certified English
translation and, in this case, the English translation shall prevail
unless the document is a statutory or other official document.
37. JURISDICTION
37.1 Submission to English Courts
For the benefit of each Finance Party, each Obligor irrevocably
agrees that the courts of England are to have jurisdiction to settle any
disputes which may arise out of or in connection with any Finance Document and
that, accordingly, any legal action or proceedings arising out of or in
connection with any Finance Document ("Proceedings") may be brought in those
courts and each Obligor irrevocably submits to the jurisdiction of those courts.
37.2 Submission to Swedish Courts
Without prejudice to Clause 37.1 (Submission to English Courts) each
Obligor further irrevocably agrees that any Proceedings may be brought in the
courts of Sweden and submits to the non-exclusive jurisdiction of such courts.
37.3 Service of process
Without prejudice to any other mode of service, each Obligor:-
(a) irrevocably appoints:
(i) Gambro Limited of 124 Station Road, Sidcup, Kent DA15 7AS
as its agent for service of process relating to any proceedings
before the English courts in connection with any Finance Document;
(ii) the Parent of Magistratsvagen 16, Box 10101, S-22010 Lund
as its agent for service of process relating to any proceedings
before the courts of the Kingdom of Sweden in connection with any
Finance Document;
except where an Obligor is incorporated in the relevant jurisdiction;
(b) agrees that failure by a process agent to notify the Obligors of
the process will not invalidate the proceedings concerned; and
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56
(c) consents to the service of process relating to any such
proceedings by prepaid posting of a copy of the process to its address for
the time being applying under Clause 35.2 (Addresses for notices).
37.4 Forum convenience and enforcement abroad
Each Obligor:-
(a) waives objection to the English and Swedish courts on grounds of
inconvenient forum or otherwise as regards proceedings in connection with
a Finance Document; and
(b) agrees that as a judgment or order, other than an interim
judgment or order, of an English or Swedish Court in connection with a
Finance Document is conclusive and binding on it and may be enforced
against it in the courts of any other jurisdiction in accordance with the
laws and procedures of that jurisdiction.
37.5 Non-exclusivity
Nothing in this Clause 37 (Jurisdiction) limits the right of a
Finance Party to bring proceedings against an Obligor in connection with any
Finance Document in any other court of competent jurisdiction.
38. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the
beginning of this Agreement.
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57
SCHEDULE 1
BANKS AND COMMITMENTS
Banks Commitments
$
Banque Nationale de Paris, London Branch 37,500,000
Commerzbank International S.A. 37,500,000
Enskilda, Skandinaviska Enskilda Banken AB (publ) 37,500,000
Nordbanken AB (publ) 37,500,000
The Sanwa Bank, Limited, London Branch/
The Sanwa Bank, Limited, Los Angeles Branch 37,500,000
Societe Generale 37,500,000
Svenska Handelsbanken 37,500,000
Union Bank of Switzerland/
Union de Banques Suisses (Luxembourg) S.A. 37,500,000
=================
Total Commitments U.S.$300,000,000
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SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
1. ALL OBLIGORS
A copy of the constitutional documents of each Obligor.
2. PARENT
(a) A copy of a resolution of the board of directors of the Parent:-
(i) approving the transactions contemplated by this Agreement and
resolving that it execute this Agreement;
(ii) authorising a specified person or persons to execute this
Agreement and the Fee Letter on its behalf; and
(iii) authorising a specified person or persons, on its behalf, to
sign and/or despatch all other documents and notices to be signed and/or
despatched by it under or in connection with this Agreement;
(b) a power of attorney executed on behalf of the Parent by a person
or persons authorised by the resolution referred to in paragraph (a) above;
(c) a specimen of the signature of each person authorised by the
resolution referred to in paragraph (a) above;
(d) a registration certificate not older than four months issued by
the Swedish Patent and Registration Office and certified by an offer of the
Parent to be a true copy; and
(e) a certificate of an authorised signatory of the Parent
certifying that each copy document specified in this Schedule 2 is correct,
complete and in full force and effect as at a date no earlier than the date of
this Agreement.
3. BORROWER (OTHER THAN THE PARENT)
(a) A copy of a resolution of the board of directors of each
Borrower:-
(i) approving the transactions contemplated by this Agreement and
resolving that it accedes to this Agreement;
(ii) authorising a specified person or persons to execute a Deed of
Accession on its behalf; and
(iii) authorising a specified person or persons, on its behalf, to
sign and/or despatch all other documents and notices to be signed and/or
despatched by it under or in connection with this Agreement;
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59
(b) a power of attorney executed on behalf of the Borrower by a
person or persons authorised by the resolution referred to in paragraph (a)
above;
(c) a specimen of the signature of each person authorised by the
resolution referred to in paragraph (a) above; and
(d) a legal opinion from a law firm in the jurisdiction of the
Borrower addressed to the Finance Parties.
4. PROCESS AGENTS
Evidence of acceptance by the process agents referred to in Clause
37.3 of their appointments of that Clause.
5. OTHER DOCUMENTS
A copy of any other authorisation or other document, opinion or
assurance which the Agent considers to be necessary or desirable in connection
with the entry into and performance of, and the transactions contemplated by,
any Finance Document or for the validity and enforceability of any Finance
Document.
6. LEGAL OPINION
(a) A legal opinion of Vinge, legal advisers in Sweden to the
Parent, addressed to the Finance Parties.
(b) A legal opinion of Allen & Overy, legal advisers to the Agent,
addressed to the Finance Parties.
7. PREPAYMENT/CANCELLATION, 1993 AGREEMENT AND 1994 AGREEMENT
Evidence in writing that a notice of the prepayment of the principal
amount of each borrowing outstanding and cancellation of the commitments under
the 1993 Agreement and the 1994 Agreement has been served on the appropriate
person in accordance with that Agreement that any such prepayment and
cancellation will take place contemporaneously with the drawdown of Loans under
this Agreement (so long as such amounts or commitment remain outstanding).
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SCHEDULE 3
CALCULATION OF THE MLA COST
(a) The MLA Cost for a Loan maintained in Sterling for each of its Interest
Periods is calculated in accordance with the following formula:-
[BY + L(Y-X) + S(Y-Z)]/[100 - (B + S)] % per annum = MLA Cost
where on the day of application of the formula:
B is the percentage of the Agent's eligible liabilities which the Bank of
England requires the Agent to hold on a non-interest-bearing deposit
account in accordance with its cash ratio requirements;
Y is the rate at which Sterling deposits are offered by the Agent to leading
banks in the London interbank market at or about 11.00 a.m. on that day
for the relevant period;
L is the percentage of eligible liabilities which the Bank of England
requires the Agent to maintain as secured money with members of the London
Discount Market Association and/or as secured call money with certain
money brokers and gilt-edged primary market makers;
X is the rate at which secured Sterling deposits may be placed by the Agent
with members of the London Discount Market Association and/or as secured
call money with certain money brokers and gilt-edged primary market makers
at or about 11.00 a.m. on that day for the relevant period;
S is the percentage of the Agent's eligible liabilities which the Bank of
England requires the Agent to place as a special deposit; and
Z is the interest rate per annum allowed by the Bank of England on special
deposits.
(b) For the purposes of this Schedule 3:-
(i) "eligible liabilities" and "special deposits" have the meanings
given to them at the time of application of the formula by the Bank of
England; and
(ii) "relevant period" in relation to each Interest Period, means:-
(A) if it is 3 months or less, that Interest Period; or
(B) if it is more than 3 months, each successive period of 3
months and any necessary shorter period comprised in that Interest
Period.
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(c) In the application of the formula, B, Y, L, X, S and Z are included in the
formula as figures and not as percentages, e.g., if B = 0.5% and Y = 15%, BY is
calculated as 0.5 x 15.
(d) (i) The formula is applied on the first day of each relevant period
comprised in the relevant Interest Period.
(ii) Each rate calculated in accordance with the formula is, if necessary,
rounded upward to four decimal places.
(e) If the Agent determines that a change in circumstances has rendered, or will
render, the formula inappropriate, the Agent (after consultation with the Banks
and the Borrower's Agent) shall notify the Banks and the Borrowers' Agent of the
manner in which the MLA Cost will subsequently be calculated. The manner of
calculation so notified by the Agent shall, in the absence of manifest error, be
binding on all the Parties.
<PAGE>
62
SCHEDULE 4
FORM OF REQUEST
To: BANQUE NATIONALE DE PARIS as Agent
From: [BORROWER]
Date: [ ]
GAMBRO AB
U.S.$300,000,000 Facility Agreement dated [DATE]
1. We wish to borrow a Loan as follows:
(a) Drawdown Date: [ ]
(b) Facility: [ ]
(c) Original Dollar Amount: [ ]
(d) Currency: [ ]
(e) First Interest Period(s): [ ]/
alternative Interest Period: [ ]*
(f) Payment Instructions: [ ].
2. We confirm that each condition specified in Clause 4.2 (Further conditions
precedent) is satisfied on the date of this Request.
By:
[BORROWER]
Authorised Signatory
* Complete only if the requested Interest Period is of an optional duration.
The splitting of Loans is dealt with in Clause 8.4.
<PAGE>
63
SCHEDULE 5
FORM OF NOVATION CERTIFICATE
To: BANQUE NATIONALE DE PARIS AS AGENT
From: [THE EXISTING BANK] and [THE NEW BANK]
Date: [ ]
GAMBRO AB
U.S.$300,000,000 Facility Agreement dated [DATE]
We refer to Clause 29.3 (Procedure for novations).
1. We [ ] (the "Existing Bank") and [ ] (the "New Bank") agree to the Existing
Bank and the New Bank novating all the Existing Bank's rights and obligations
referred to in the Schedule in accordance with Clause 29.3 (Procedure for
novations).
2. The specified date for the purposes of Clause 29.3(c) is [date of novation].
3. The Facility Office and the address for notices of the New Bank for the
purposes of Clause 35.2 (Addresses for notices) are set out in the Schedule.
4. This Novation Certificate is governed by English law.
<PAGE>
64
THE SCHEDULE
Rights and obligations to be novated
[Details of the rights and obligations of the Existing Bank to be novated].
[Existing Bank] [New Bank]
By: By:
Date: Date:
[New Bank]
[Facility Office Address for notices]
BANQUE NATIONALE DE PARIS
By:
Date:
<PAGE>
65
SCHEDULE 6
FORM OF DEED OF ACCESSION
THIS DEED OF ACCESSION dated [ ] and made between:-
(1) [ ] (the "Additional Borrower");
(2) BANQUE NATIONALE DE PARIS as agent (the "Agent") on behalf of
itself and the Banks (as defined in the Facility Agreement referred to
below);
is supplemental to the revolving credit facility agreement dated [ ], 1995 and
made between Gambro AB, BNP Capital Markets Limited as Arranger, the Banks
defined therein and the Agent (the "Facility Agreement").
NOW THIS DEED WITNESSETH:-
1. ACCESSION
In consideration of the Banks through the Agent agreeing to the
Additional Borrower becoming an additional borrower pursuant to Clause 2.4 of
the Facility Agreement, the Additional Borrower hereby affirms and ratifies the
Facility Agreement and by the execution of this Deed agrees to observe and be
bound by the terms and provisions of the Facility Agreement insofar as they
apply to Borrowers as if it were an original party to the Facility Agreement.
2. INTEGRATION
This Deed of Accession shall be read as one with the Facility
Agreement so that any reference therein to "this Agreement", "hereunder" and
similar shall include and be deed to include this Deed of Accession.
3. CONDITIONS PRECEDENT
The obligations of the Agent and each Bank hereunder are subject to
the condition that the Agent is satisfied that all appropriate conditions
precedent have been fulfilled by the Additional Borrower including, without
limitation, the delivery of documents equivalent to those referred to in
Schedule 2 to the Facility Agreement but relating to the Additional Borrower and
this Deed of Accession.
4. NOTICES
The Additional Borrower's address for notices and demands under the
Facility Agreement is [ ] (marked for the attention of [ ]) (Telex No. [ ])
(Facsimile No.: [ ]).
5. LAW
This Deed of Accession is governed by English law.
<PAGE>
66
IN WITNESS WHEREOF the parties hereto have caused this Deed of
Accession to be duly executed on the date first written above.
(SIGNED as a deed on behalf of [the )
Additional Borrower] a company )
incorporated in [overseas territory,] by [ ] )
and [ ], being persons who, in accordance )
with the laws of that territory are acting )
under the authority of the company. )
............ ............
BANQUE NATIONALE DE PARIS
for itself and as Agent for the Banks
By:.....................
<PAGE>
67
SCHEDULE 7
APPROVED ADDITIONAL BORROWERS
COBE Laboratories, Inc. (USA)
Gambro GmbH (Germany
Gambro SpA (Italy)
Gambro K.K. (Japan)
Gambro S.A. (France)
Hogamed S.A. (France)
Hospal Industrie S.A. (France)
Hospal Dasco SpA (Italy)
REN Corporation - USA
Sopamed AG (Switzerland)
<PAGE>
68
SIGNATORIES
The Parent
GAMBRO AB
By: J. Gustavsson Goran Anderberg
Arranger
BNP CAPITAL MARKETS LIMITED
By: B. Lavole
Agent
BANQUE NATIONALE DE PARIS
By: B. Lavole
Banks
BANQUE NATIONALE DE PARIS, LONDON BRANCH
By: K. Osgood
COMMERZBANK INTERNATIONAL S.A.
By: B. Lavole
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN AB (publ)
By: B. Lavole
<PAGE>
69
NORDBANKEN AB (publ)
By: P.J. Detmers-Blom
THE SANWA BANK, LIMITED, LONDON BRANCH
By: P.J. Detmers-Blom
THE SANWA BANK, LIMITED, LOS ANGELES BRANCH
By: Agnes Hosie-Lissac
SOCIETE GENERALE
By: Agnes Hosie-Lissac
SVENSKA HANDELSBANKEN
By: Agnes Hosie-Lissac
UNION BANK OF SWITZERLAND
By: Agnes Hosie-Lissac
UNION DE BANQUES SUISSES (LUXEMBOURG) S.A.
By: Agnes Hosie-Lissac
<PAGE>
Summary translation
of
SEK 1,000,000,000
Multicurrency Credit Facility
between
Skandinaviska Enskilda Banken AB (publ)
and
Incentive Treasury AB
guaranteed by
Incentive AB
<PAGE>
2
ss. 1
Definitions
" Facility amount" SEK 1,000,000,000.
"LIBOR" for any Eurocurreny the interest rate published
at or about 11:00 a.m. London time two banking
days prior to the disbursement date as published
by Telerate ("BBAIRS") page 3750.
"Floating rate" as regards disbursements in SEK STIBOR and as
regards disbursements in Eurocurrencies LIBOR.
"Margin" 0.10% per annum.
"SEK" Swedish kronor.
"STIBOR" the interest rate published at or about 11:00
a.m. two banking days prior to the disbursement
date on the Reuter system page "SIOR".
ss. 2
Credit facility
A. The Borrower has the right to utilize the facility by giving a drawdown
notice no later than 10:30 a.m. two banking days prior to the disbursement date.
B. Each tranche shall be for at least SEK 100,000,000 or the countervalue
thereof in any Eurocurrency.
C. The maximum amount outstanding may not exceed SEK 1,000,000,000 or the
countervalue thereof in any Eurocurrency.
<PAGE>
3
D. Drawdown shall be confirmed in writing.
E. The Borrower has the right to reduce the facility amount by SEK 100,000,000
or multiples thereof.
ss. 3
Conditions for disbursements
(1) the conditions in ss. 2A-C have been fulfilled;
(2) that the Bank has received a copy of the Guarantee;
(3) that the representations by the Borrower and the Guarantor are still
correct;
(4) that the Borrower and the Guarantor are not in breach of its obligations
under this Agreement or the Guarantee, respectively;
(5) that there is no Event of default as set out in ss. 13.
ss. 4
Currency
If the chosen Eurocurrency is not available for the Bank, the parties will agree
on another currency and if such agreement cannot be reached the disbursement
will be made in SEK.
ss. 5
Interest, Credit period, Alternative interest
A. On the repayment day for each tranche, the Borrower shall pay interest
corresponding to the aggregate of the Margin and the Floating Rate.
B. Each drawdown shall have a maturity of one month, three months or such other
period as have been agreed.
C. If STIBOR is not published, the interest rate shall be set according to the
Bank's funding costs.
<PAGE>
4
ss. 6
Repayment.
A. The Borrower shall repay the credit on the maturity date for each tranche.
B. If the total outstanding amount at any time exceeds 110% of the total
facility amount due to exchange fluctuations, the Borrower shall repay such
amount so that the outstanding amount is equal to the maximum facility amount.
C. The Borrower may only prepay the facility with the consent of the Bank.
ss. 7
Record
The Bank shall keep a record of the tranches outstanding.
ss. 8
Payments, Default interest
A. The Borrower shall pay to an account designated by the Bank.
B. In case of late payment, the Borrower shall pay default interest rate at
2.20% above the Bank's funding cost.
ss. 9
Costs
A. The Borrower shall pay a commission of 0.03% per annum of the part of the
total facility amount which is not utilized.
B. The Borrower shall pay the Bank's reasonable costs for enforcing the Bank's
rights under this Agreement.
ss. 10
Special representation
A. The Borrower confirms
<PAGE>
5
(1) that it may perform its obligations under this Agreement;
(2) that it has not provided security for any other loan granted to itself or
any other company within the Incentive group.
B. The term "loans" means loans issued on the commercial paper and bond market
in Sweden or abroad or other similar loans.
C. The conditions in ss. 10a(2) and ss. 11A shall not include mortgages of real
estate in connection with the acqusition of such real estate by a company within
the Incentive group.
ss. 11
Special undertaking
A. The Borrower will not:
(1) grant security for its own indebtedness;
(2) grant security for indebtedness of other companies.
B. The Borrower shall at the Bank's reasonable request provide information
regarding the Borrower to the Bank.
ss. 12
Change in circumstances; Increased costs
A. If it becomes illegal for the Bank to provide the facility, the Bank and the
Borrower shall renegotiate to find a solution where it will be possible for the
Bank to continue its commitment.
B. If the Bank due to changes in law incurs taxes or other costs, the Borrower
shall at the Bank's request compensate the Bank for such taxes and costs, and
the parties shall negotiate regarding alternative solutions to avoid such costs.
ss. 13
<PAGE>
6
Events of default
A. If any of the following circumstances occur, the Bank shall have the right to
terminate this Agreement:
(1) Nonpayment by the Borrower.
(2) Representations in ss. 10 are incorrect.
(3) Breach of undertaking in ss. 11.
(4) Cross default.
(5) Credit event upon merger in respect of the Borrower or the Guarantor.
(6) Insolvency events.
(7) Material adverse change in the Borrower's ability to fulfill its
obligations.
B. If the Bank terminates this Agreement due to circumstances mentioned in ss.
13A, the Bank shall have the right to declare all tranches outstanding
immediately due and payable.
ss. 14
Limitation of the Bank's responsibility
A. The Bank is not responsible in cases of force majeure.
B. Losses to the Borrower caused by the Bank in other circumstances shall not be
compensated if the Bank has acted with normal care. There will be no
compensation for indirect loss.
C. If there is force majeure on the Bank's side, the Bank may delay its actions
until such event has ceased to exist.
<PAGE>
7
ss. 15
Notices
ss. 16
Governing law
This Agreement shall be governed by Swedish law and shall be settled in the
first instance by the District Court of Stockholm.
ss. 17
Term of the Agreement
If not terminated earlier due to the provisions of ss. 12 and ss. 13, this
Agreement is valid until May 5, 1998.
------------------------------------
This Agreement has been made in two originals.
Stockholm May 7, 1997
INCENTIVE TREASURY AB
SKANDINAVISKA ENSKILDA BANKEN AB
<PAGE>
Schedule 1
GUARANTEE
Incentive AB guarantees the due fulfilment as a debt of its own of Incentive
Treasury AB's obligations under the SEK 1,000,000,000 Credit Facility with
Skandinaviska Enskilda Banken AB.
The Guarantor makes the same representation and makes the same undertakings as
the Borrower in the Loan Agreement.
Stockholm May 7, 1997
INCENTIVE AB
<PAGE>
CONFORMED COPY
U.S. $1,000,000,000
MULTICURRENCY REVOLVING CREDIT FACILITY AGREEMENT
between
INCENTIVE TREASURY AB (PUBL)
as borrower
INCENTIVE AB (PUBL)
as guarantor
DEUTSCHE BANK LUXEMBOURG S.A.
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
as arrangers
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
as agent
and
OTHERS
Clifford Chance
Frankfurt
<PAGE>
CONTENTS
Clause Page No.
Part 1
INTERPRETATION
1. Interpretation........................................... 1
Part 2
THE FACILITY
2. The Facility............................................. 9
3. Purpose.................................................. 9
4. Conditions Precedent..................................... 9
5. Nature of Banks' Obligations............................. 9
Part 3
UTILISATION OF THE FACILITY
6. Utilisation of the Facility.............................. 10
Part 4
INTEREST
7. Interest................................................. 13
8. Market Disruption and Alternative Interest Rates......... 13
Part 5
REPAYMENT AND CANCELLATION
9. Repayment................................................ 14
10. Cancellation............................................. 14
i
<PAGE>
Part 6
CHANGES IN CIRCUMSTANCES
11. Taxes.................................................... 15
12. Tax Receipts and Mitigation.............................. 16
13. Increased Costs.......................................... 16
14. Illegality............................................... 17
Part 7
REPRESENTATIONS, COVENANTS AND EVENTS OF DEFAULT
15. Representations.......................................... 19
16. Financial Information.................................... 22
17. Covenants................................................ 24
18. Events of Default........................................ 31
Part 8
GUARANTEE
19. Guarantee................................................ 34
20. Preservation of Rights................................... 34
Part 9
DEFAULT INTEREST AND INDEMNITY
21. Default Interest and Indemnity........................... 36
Part 10
PAYMENTS
22. Currency of Account and Payment.......................... 39
23. Payments................................................. 39
24. Set-Off.................................................. 41
25. Redistribution of Payments............................... 41
ii
<PAGE>
Part 11
FEES, COSTS AND EXPENSES
26. Fees..................................................... 43
27. Costs and Expenses....................................... 43
Part 12
AGENCY PROVISIONS
28. The Agent, the Arrangers and the Banks................... 44
Part 13
ASSIGNMENT'S AND TRANSFERS
29. Benefit of Agreement..................................... 48
30. Assignments and Transfers by the Obligors................ 48
31. Assignments and Transfers by Banks....................... 48
32. Disclosure of Information................................ 49
Part 14
MISCELLANEOUS
33. Calculations and Evidence of Debt........................ 50
34 Remedies and Waivers..................................... 51
35. Partial Invalidity....................................... 51
36. Notices.................................................. 51
Part 15
LAW AND JURISDICTION
37. Law...................................................... 52
38. Jurisdiction............................................. 52
iii
<PAGE>
THE SCHEDULES
THE FIRST SCHEDULE The Banks
THE SECOND SCHEDULE Form of Transfer Certificate
THE THIRD SCHEDULE Condition Precedent Documents
THE FOURTH SCHEDULE Notice of Drawdown
THE FIFTH SCHEDULE Opinion of the Borrower's and Guarantor's Swedish Counsel
THE SIXTH SCHEDULE Opinion of the Banks' Swedish Counsel
iv
<PAGE>
THIS AGREEMENT is made the 4th day of March 1996
BETWEEN
(1) INCENTIVE TREASURY AB (PUBL) (the "Borrower");
(2) INCENTIVE AB (PUBL) (the "Guarantor");
(3) DEUTSCHE BANK LUXEMBOURG S.A. and ENSKILDA, SKANDINAVISKA ENSKILDA
BANKEN AB (PUBL) (the "Arrangers");
(4) ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL) (the "Agent"); and
(5) THE FINANCIAL INSTITUTIONS named in the First Schedule (the "Banks").
NOW IT IS HEREBY AGREED as follows:
Part 1
INTERPRETATION
1. Interpretation
1.1 In this Agreement:
"Advance" means, save as otherwise provided herein, an advance made or to be
made by the Banks hereunder;
"ASEA AB Share Disposal" means the sale, transfer, grant, lease or other
disposal by a Permitted Owner other than to another Permitted Owner (including
as permitted under Clause 17.4 but excluding any ASEA AB Share Transaction) of
any of the shares or any of the voting rights in ASEA AB (other than as a result
of a re-organisation of the shares of ASEA AB pursuant to which such shares are
substituted by shares of equivalent value and representing the same assets);
"ASEA AB Share Transaction" means the entering into by a Permitted Owner of any
short term sale and repurchase transaction in respect of any of the shares or
any voting rights in ASEA AB (including any such transaction permitted under
Clause 17.4);
"ASEA AB Share Encumbrance" means the creation by a Permitted Owner of any
encumbrance over any of the shares or any of the voting rights in ASEA AB
(including any such encumbrance permitted under clause 17.3);
<PAGE>
"Available Commitment" means, in relation to a Bank at any time and save as
otherwise provided herein, its Commitment at such time less the aggregate of its
portions of the Dollar Amounts of the Advances which are then outstanding
Provided that such amount shall not be less then zero;
"Available Facility" means, at any time, the aggregate amount of the Available
Commitments at such time;
"Commitment" means, in relation to a Bank at any time and save as otherwise
provided herein, the amount set opposite its name in the First Schedule;
"Consolidated Relevant Total Assets" means the consolidated total assets of the
Group as shown in the latest audited consolidated accounts of the Guarantor less
(a) the Relevant Total Assets of any member of the Group which is listed
on a recognised Stock Exchange and which is not a Principal
Subsidiary;
(b) the Relevant Total Assets of WABCO at any time when WABCO is not a
Principal Subsidiary; and
(c) the value of all intangible assets (including goodwill),
in each case as such assets in (a), (b) or (c) are reflected in the latest
audited consolidated accounts of the Guarantor;
"Dollar Amount" means:
(i) in relation to any Advance, the amount thereof requested in
the Notice of Drawdown relating thereto (as the same may be
reduced pursuant to Clause 6.8); and
(ii) in relation to the Loan, the aggregate of the Dollar Amounts
of the outstanding Advances;
"Event of Default" means any of those events specified in Clause 18.1;
"Facility" means the multicurrency revolving credit facility granted to the
Borrower in this Agreement;
"Facility Office" means, in relation to the Agent or any Bank, the office
identified with its signature below (or, in the case of a Transferee, at the end
of the Transfer Certificate to which it is a party as Transferee) or such other
office as it may from time to time select;
"Final Maturity Date" means the day which is 60 months after the date hereof;
2
<PAGE>
"Financing Subsidiary" means a subsidiary of the Borrower the sole or principal
activity of which is to provide finance to the Group;
"Financial Indebtedness" means indebtedness for or in respect of money borrowed
or raised by whatever means including, without limitation, by means of
acceptances under any acceptance credit facility, the issue of loan stock and
any obligations evidenced by bonds, debentures, notes or other similar
instruments, any liability in respect of leases entered into for the purpose of
raising or obtaining finance or deposits, the entering into swaps or other
derivative instruments or any other transaction having the commercial effect of
borrowing;
"Gambro" means Gambro AB of Lund, Sweden;
"Group" means the Guarantor and its subsidiaries for the time being;
"Group Pension Fund" means the Arbetsmarknadsforsakringar
pensionsforsakringsaktiebolag;
"Information Memorandum" means the document concerning the Obligors which, at
their request and on their behalf, was prepared in relation to this transaction
and distributed by the Arrangers to selected banks during February 1996;
"Instructed Group" means:
(i) whilst no Advances are outstanding hereunder, a Bank or group
of Banks whose Commitments amount (or, if each Bank's
Commitment has been reduced to zero, did immediately before
such reduction to zero, amount) in aggregate to more than
fifty per cent. (50%) of the Total Commitments; or
(ii) whilst at least one Advance is outstanding hereunder, a Bank
or group of Banks to whom in aggregate more than fifty per
cent. (50%) of the Dollar Amount of the Loan is owed;
"LIBOR" means, in relation to any Advance or unpaid sum, the rate per annum
determined by the Agent to be equal to (a) the offered rates (if any) appearing
on page 3740 or, as applicable, 3750 of the Telerate screen which displays
British Bankers Association Interest Settlement Rates for deposits in the
currency in which such Advance or unpaid sum is to be or is denominated (or such
other page as may replace that page) for the specified period at 11:00 a.m.
London time on the Quotation Date for such period or, if no such rates are
quoted, (b) the arithmetic mean (rounded upwards, if not already such a
multiple, to the nearest whole multiple of one-sixteenth of one per cent.) of
the rates (as notified to the Agent) at which each of the Reference Banks was
offering to prime banks in the London Interbank Market deposits in the currency
in which such Advance or unpaid sum is to be denominated and for the specified
period at or about 11.00 a.m. London time on the Quotation Date for such period
and, for the purposes of this definition,
3
<PAGE>
"specified period" means the Term of such Advance or, as the case may be, the
period in respect of which LIBOR falls to be determined in relation to such
unpaid sum;
"Loan" means the aggregate principal amount for the time being outstanding
hereunder;
"Margin" means 0.175 per cent. per annum;
"Material Subsidiary" means the Borrower or any other subsidiary of the
Guarantor whose assets or revenues represent more than 10 per cent. of the
consolidated total assets or revenues of the Group as shown in the latest
audited consolidated accounts of the Guarantor;
"Notice of Drawdown" means a notice substantially in the form set out in the
Fourth Schedule;
"Obligors" means the Borrower and the Guarantor;
"Optional Currency" means any eurocurrency (other than dollars and excluding ECU
and sterling) which is freely transferable and freely convertible into dollars;
"Original Financial Statements" means:
(i) in relation to the Borrower, its audited financial statements
for its financial year ended December 31st, 1994; and
(ii) in relation to the Guarantor, its audited consolidated and
unconsolidated financial statements for its financial year
ended December 31st, 1994;
"Permitted Owner" means the Guarantor or one or more directly or indirectly
wholly owned subsidiaries of the Guarantor;
"Potential Event of Default" means any event which may become (with the passage
of time, the giving of notice, the making of any determination hereunder or any
combination thereof) an Event of Default;
"Principal Subsidiaries" means (a) the Borrower and its subsidiaries, (b) any
other subsidiary of the Guarantor in which the Guarantor holds directly or
indirectly more than 90 per cent. of the share capital or the voting rights and
which is not listed on a recognised Stock Exchange, (c) any other subsidiary of
the Guarantor in which the Guarantor holds directly or indirectly 95 per cent.
or more of the share capital and the voting rights and which is listed on a
recognised Stock Exchange, (d) at all times, Gambro and (e) any other subsidiary
of the Guarantor nominated as a Principal Subsidiary by the Guarantor (until
such time as the Guarantor notifies the Agent that such Subsidiary is no longer
to be a Principal Subsidiary), provided that the Guarantor shall at all times
ensure that Relevant Total Assets of the Guarantor and the Principal
Subsidiaries shall be at least 80 per cent. of Consolidated Relevant Total
Assets;
4
<PAGE>
"Proportion" means, in relation to a Bank:
(i) whilst no Advances are outstanding hereunder, the proportion
borne by its Commitment to the Total Commitments (or, if the
Total Commitments are then zero, by its Commitment to the
Total Commitments immediately prior to their reduction to
zero); or
(ii) whilst at least one Advance is outstanding hereunder, the
proportion borne by its share of the aggregate Dollar Amounts
of the Advance(s) to the aggregate Dollar Amounts of the
Advance(s);
"Quotation Date" means, in relation to any period for which an interest rate is
to be determined hereunder, the day on which quotations would ordinarily be
given by prime banks in the London interbank market for deposits in the currency
in relation to which such rate is to be determined for delivery on the first day
of that period Provided that, if for any such period quotations would ordinarily
be given on more than one date, the Quotation Date for that period shall be the
last of those dates;
"Reference Banks" means Deutsche Bank Luxembourg S.A. and the principal London
offices of Enskilda, Skandinaviska Enskilda Banken AB (publ) and Citibank
International Plc or such other bank or banks as may from time to time be agreed
between the Borrower and an Instructing Group;
"Relevant Total Assets" means in relation to any member of the Group its total
assets as shown in its latest audited unconsolidated accounts less
(i) the aggregate of all receivables due from other members of the
Group in each case as shown in its latest audited
unconsolidated accounts; and
(ii) the value of all intangible assets (including goodwill) in
each case as shown in its latest audited unconsolidated
accounts;
"Repayment Date" means, in relation to any Advance, the last day of the Term
thereof;
"Term" means, save as otherwise provided herein, in relation to any Advance, the
period for which such Advance is borrowed as specified in the Notice of Drawdown
relating thereto;
"Total Borrowings" means the aggregate of all Financial Indebtedness of the
Guarantor and the Principal Subsidiaries less
(i) any Financial Indebtedness between the Guarantor and the
Principal Subsidiaries or between Principal Subsidiaries;
5
<PAGE>
(ii) any Financial Indebtedness of the Guarantor or the Principal
Subsidiaries to a Group Pension Fund; and
(iii) any Financial Indebtedness of a Principal Subsidiary existing
on the date of it becoming a Principal Subsidiary (which was
not incurred in contemplation or in connection with it
becoming a Principal Subsidiary) until the first anniversary
of the date of it becoming a Principal Subsidiary;
"Total Commitments" means the aggregate for the time being of the Banks'
Commitments;
"Transfer Certificate" means a certificate substantially in the form set out in
the Second Schedule signed by a Bank and a Transferee whereby:
(i) such Bank seeks to procure the transfer to such Transferee of
all or a part of such Bank's rights and obligations hereunder
upon and subject to the terms and conditions set out in Clause
31; and
(ii) such Transferee undertakes to perform the obligations it will
assume as a result of delivery of such certificate to the
Agent as is contemplated in Clause 31.3;
"Transfer Date" means, in relation to any Transfer Certificate, the date for the
making of the transfer as specified in the schedule to such Transfer
Certificate;
"Transferee" means a bank or other financial institution to which a Bank seeks
to transfer all or part of such Bank's rights and obligations hereunder; and
"WABCO" means Westinghouse Air Brake Company (WABCO).
1.2 Any reference in this Agreement to:
the "Agent" or any "Bank" shall be construed so as to include its and any
subsequent successors, Transferees and assigns in accordance with their
respective interests;
"applicable tax" means any tax imposed by an Obligor's jurisdiction of
incorporation or any jurisdiction through which or from which any payment is
made;
a "business day" shall be construed as a reference to a day (other than a
Saturday or Sunday) on which banks are generally open for business in London,
Luxembourg and New York City and, if such reference relates to the date for the
payment or purchase of any sum denominated in any Optional Currency, a day on
which banks are generally open for business in the principal financial centre of
the country of such Optional Currency;
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a "Clause" shall, subject to any contrary indication, be construed as a
reference to a clause hereof;
an "encumbrance" shall be construed as a reference to a mortgage, charge,
pledge, lien or other encumbrance securing any obligation of any person or any
other type of preferential arrangement (including, without limitation, title
transfer and retention arrangements) having a similar effect;
the "equivalent" on any given date in one currency (the "first currency") of an
amount denominated in another currency (the "second currency") is a reference to
the amount of the first currency which could be purchased with the amount of the
second currency at the spot rate of exchange quoted by the Agent at or about
11:00 a.m. on such date for the purchase of the first currency with the second
currency;
a "holding company" of a company or corporation shall be construed as a
reference to any company or corporation of which the first-mentioned company or
corporation is a subsidiary;
"indebtedness" shall be construed so as to include any obligation (whether
incurred as principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
a "month" is a reference to a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next succeeding calendar
month save that, where any such period would otherwise end on a day which is not
a business day, it shall end on the next succeeding business day, unless that
day falls in the next calendar month, in which case it shall end on the
immediately preceding business day Provided that, if a period on the last
business day in calendar month or if there is no numerically corresponding day
in the month in which that period ends, that period shall end on the last
business day in that later month (and references to "months" shall be construed
accordingly);
a "Part" shall, subject to any contrary indication, be construed as a reference
to a part hereof;
a "person" shall be construed as a reference to any person, firm, company,
corporation, government, state or agency of a state or any associate or
partnership (whether or not having separate legal personality) of two or more of
the foregoing;
"recognised" in the context of "recognised Stock Exchange" means a body declared
to be a recognised investment exchange for purposes of the Financial Services
Act 1986 and which is based in a principal financial centre in Western Europe,
Japan or U.S.A.;
a "Schedule" shall, subject to any contrary indication, be construed as a
reference to a schedule hereof;
a "subsidiary" of a company or corporation shall be construed as a reference to
any company or corporation:
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(i) which is controlled, directly or indirectly, by the first-mentioned
company or corporation; or
(ii) more than half the issued share capital of which is beneficially
owned, directly or indirectly, by the first-mentioned company or
corporation; or
(iii) which is a subsidiary of another subsidiary of the first-mentioned
company or corporation
and, for these purposes, a company or corporation shall be treated as being
controlled by another if that other company or corporation is able to direct its
affairs and/or to control the composition of its board of directors or
equivalent body;
"tax" shall be construed so as to include any tax, levy, impost, duty or other
charge of a similar nature (including, without limitation, any penalty or
interest payable in connection with any failure to pay or any delay in paying
any of the same);
"VAT" shall be construed as a reference to value added tax including any similar
tax which may be imposed in place thereof from time to time; and
the "winding-up", "dissolution" or "administration" of a company or corporation
shall be construed so as to include any equivalent or analogous proceedings
under the law of the jurisdiction in which such company or corporation is
incorporated or any jurisdiction in which such company or corporation carries on
business including the seeking of liquidation, winding-up, reorganisation,
dissolution, administration, arrangement, adjustment, protection or relief of
debtors.
1.3 "$" and "dollars" denote lawful currency of the United States of America,
"sterling" denotes lawful currency of the United Kingdom, "ECU" denotes the unit
for account for the time being used in the European Union and "Swedish Kronor"
denotes lawful currency of the Kingdom of Sweden.
1.4 Save where the contrary is indicated, any reference in this Agreement to:
(i) this Agreement or any other agreement or document shall be construed
as a reference to this Agreement or, as the case may be, such other
agreement or document as the same may have been, or may from time to
time be, amended, varied, novated or supplemented;
(ii) a statute shall be construed as a reference to such statute as the
same may have been, or may from time to time be, amended or
re-enacted; and
(iii) a time of day shall, unless otherwise stated, be construed as a
reference to London time.
1.5 Clause, Part and Schedule headings are for ease of reference only.
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Part 2
THE FACILITY
2. The Facility
The Banks grant to the Borrower, upon the terms and subject to the conditions
hereof, a multicurrency revolving credit facility in an aggregate amount of
$1,000,000,000 or its equivalent from time to time in Optional Currencies.
3. Purpose
3.1 The Facility is intended to finance the purchase by the Borrower of the
publicly held B shares of Gambro and for general corporate purposes and,
accordingly the Borrower shall apply all amounts raised by it hereunder in or
towards satisfaction thereof
3.2 Neither the Agent, the Arrangers and the Banks nor any of them shall be
obliged to concern themselves with the application of amounts raised hereunder.
4. Conditions Precedent
Save as the Banks may otherwise agree, the Borrower may not deliver any Notice
of Drawdown hereunder unless the Agent has confirmed to the Borrower and the
Banks that it has received all of the documents listed in the Third Schedule and
that each is, in form and substance, satisfactory to the Agent.
5. Nature of Banks' Obligations
5.1 The obligations of each Bank hereunder are several.
5.2 The failure by a Bank to perform its obligations hereunder shall not affect
the obligations of the Borrower or the Guarantor towards any other party hereto
nor shall any other party be liable for the failure by such Bank to perform its
obligations hereunder.
5.3 The amounts outstanding at any time hereunder from the Borrower to any of
the other parties hereto shall be a separate and independent debt, and each such
party shall be entitled, subject to having given prior notice thereof to the
Agent, to protect and enforce its individual rights arising out this Agreement
independently of any other party, and it shall not be necessary for any party
hereto to be joined as an additional party in any proceedings for such purposes.
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Part 3
UTILISATION OF THE FACILITY
6. Utilisation of the Facility
6.1 Save as otherwise provided herein, the Borrower may from time to time
request the making of an Advance under the Facility by the delivery to the
Agent, not earlier than the tenth nor later than 10 a.m. on the fourth (10 a.m.
on the third in the case of an Advance to be denominated in dollars) business
day before the proposed date for the making of such Advance, of a duly completed
Notice of Drawdown therefor.
6.2 Each Notice of Drawdown delivered to the Agent pursuant to Clause 6.1 shall
be irrevocable and shall specify:
(i) the proposed date for the making of the Advance requested,
which shall be a business day falling one month or more before
the Final Maturity Date and which shall be at least five
business days after the date upon which the previous Advance
(if any) was made hereunder;
(ii) the currency of denomination of the Advance requested, which
shall be dollars or an Optional Currency Provided that, if the
Borrower selects an Optional Currency, the Borrower may also
select dollars to apply if its first selection becomes
ineffective pursuant to Clause 6.5;
(iii) the amount of the Advance requested, which shall be a minimum
Dollar Amount of $50,000,000 and an integral multiple of
$10,000,000 or an amount equal to the Available Facility and
the Dollar Amount of which shall not exceed the Available
Facility adjusted to take account of:
(a) any reduction in the Commitment of a Bank scheduled to
be made prior to the commencement of the Term in respect
of the proposed Advance; and
(b) the Dollar Amounts of any Advances which are scheduled
to be made or repaid on or before the date of drawdown
of the proposed Advance;
(iv) the proposed Term of the Advance requested, which shall be a
period of one, three or six months ending on or before the
Final Maturity Date; and
(v) the account to which the proceeds of the proposed drawdown are
to be paid.
6.3 The Agent shall, promptly after receipt by it of a Notice of Drawdown,
notify the Banks of its receipt of such Notice of Drawdown specifying:
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(i) the proposed date of drawdown;
(ii) the Dollar Amount, the currency and the Term of the proposed
Advance; and
(iii) the participation of the relevant Bank in such Advance
expressed in dollars and (where the proposed Advance is to be
denominated in an Optional Currency) not later than 2:00 p.m.
on the third business day preceding the first day of the Term
of such Advance, expressed in the relevant Optional Currency.
6.4 The Borrower may not request more than eight (8) Advances to be outstanding
at any time and may not request more than one Advance to be made on any one day
and may not deliver any Notice of Drawdown between the date of any other Notice
of Drawdown made hereunder and the proposed date of drawdown relating to such
other Notice of Drawdown.
6.5 If the Borrower requests that an Advance be denominated in an Optional
Currency and:
(i) no later than 12:00 noon on the third business day preceding
the first day of the Term of such Advance, any Bank notifies
the Agent that it does not agree to such request; or
(ii) no later than 11:00 a.m. on the Quotation Date for such
Advance, the Agent notifies the Borrower and the Banks that
the Agent is of the opinion that it is not feasible for such
Advance to be made in such Optional Currency; or
(iii) to give effect to such request would cause the Loan to be
denominated in more than six (6) different currencies,
then, unless the Borrower and the Banks otherwise agree, such Advance shall not
be made unless the Borrower specified in the Notice of Drawdown in respect of
such Advance that in such event such Advance should be denominated in dollars in
which case such Advance shall be made in dollars in an amount equal to the
Dollar Amount relating to such Notice of Drawdown.
6.6 If the Borrower requests an Advance in accordance with the preceding
provisions of this Clause 6 and, on the proposed date for the making of such
Advance:
(i) neither of the events mentioned in Clauses 8(i) and 8(ii)
shall have occurred;
(ii) the Dollar Amount of such Advance does not exceed the
Available Facility; and
(iii) either:
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(a) no Event of Default or Potential Event of Default has
occurred; and
(b) the representations set out in Clause 15 (except
sub-Clauses 15.2(v), (viii) and (xiv)) are true on and
as of the proposed date for the making of such Advance
or each of the Banks agrees (notwithstanding any matter
mentioned at (a) or (b) above) to participate in the
making of such Advance.
Except as otherwise provided herein, such Advance will be made in accordance
with the provisions [____________] in dollars in an amount equal to the Dollar
Amount requested or, if such Advance is to be denominated in an Optional
Currency, in an amount which is the equivalent in such Optional Currency of the
Dollar Amount requested, calculated as at the business day prior to the
Quotation [_________] such Advance (such equivalent amount to be notified by the
Agent to the Banks promptly [__________] determination).
Each Bank will participate through its Facility Office in each Advance made
pursuant to this [_________] in the proportion borne by its Available Commitment
to the Available Facility immediately [__________] the making of that Advance.
If a Bank's Commitment is reduced in accordance with the terms hereof after the
Agent has received the Notice of Drawdown for an Advance and such reduction was
not taken into account pursuant to Clause 6.2(iii)(a), then both the Dollar
Amount and the actual amount of that Advance will be reduced accordingly.
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Part 4
INTEREST
7. Interest
7.1 On the Repayment Date relating to each Advance the Borrower shall pay
accrued interest on that Advance.
7.2 The rate of interest applicable to an Advance from time to time during its
Term shall be the rate per annum which is the sum of the Margin and LIBOR
applicable to such Advance on the Quotation Date therefor.
8. Market Disruption and Alternative Interest Rates
If, in relation to any Advance:
(i) the Agent determines that at or about 11:00 a.m. on the
Quotation Date for the Term in respect of such Advance no
rates are quoted on page 3740 or, as applicable, page 3750 of
the Telerate screen for the relevant currency (or such other
page as may replace such page) and none or only one of the
Reference Banks was offering to prime banks in the London
Interbank Market deposits in dollars for the proposed duration
of such Term; or
(ii) before the close of business in London on the Quotation Date
for such Term the Agent has been notified by a Bank or each of
a group of Banks to whom in aggregate thirty-five per cent. or
more of the Dollar Amount of the Loan is (or, if an Advance
were then made, would be) owed that LIBOR as determined by the
Agent does not accurately reflect the cost to it of obtaining
such deposits,
then, notwithstanding the provisions of Clause 6:
(a) the Agent shall notify the other parties hereto of such event;
(b) such Advance shall not be made; and
(c) if the Agent or the Borrower so requires, within five days of
such notification the Agent and the Borrower shall enter into
negotiations with a view to agreeing a substitute basis for
determining the rates of interest which may be applicable to
Advances in the future and any such substitute basis that is
agreed shall take effect in accordance with its terms and be
binding on each party hereto Provided that the Agent may not
agree any such substitute basis without the prior consent of
each Bank.
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Part 5
REPAYMENT AND CANCELLATION
9. Repayment
9.1 The Borrower shall repay each Advance made to it in full on the Repayment
Date relating thereto.
9.2 The Borrower shall not repay all or any part of any Advance outstanding
hereunder except at the times and in the manner expressly provided herein but,
subject to the terms and conditions hereof, shall be entitled to reborrow any
amount repaid.
10. Cancellation
10.1 The Borrower may, by giving to the Agent not less that thirty (30) days'
prior written notice to that effect, cancel the whole or any part (being a
minimum amount of $50,000,000 and an integral multiple of $10,000,000 or an
amount equal to the Available Facility) of the Total Commitments. Any such
cancellation shall reduce the Commitment of each Bank rateably.
10.2 Any notice of cancellation given by the Borrower pursuant to Clause 10.1
shall be irrevocable and shall specify the date upon which such cancellation is
to be made and the amount of such cancellation.
10.3 If any Bank claims indemnification from the Borrower under Clause 11.2 or
Clause 13.1, the Borrower may, within thirty days thereafter and by not less
that fifteen days' prior written notice to the Agent (which notice shall be
irrevocable), cancel such Bank's Commitment whereupon such Bank shall cease to
be obliged to participate in further Advances and its Commitment shall be
reduced to zero.
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Part 6
CHANGES IN CIRCUMSTANCES
11. Taxes
11.1 All payments to be made by either of the Obligors to any person hereunder
shall be made free and clear of and without deduction for or on account of any
applicable tax unless such Obligor is required to make such a payment subject to
the deduction or withholding of tax, in which case the sum payable by such
Obligor in respect of which such deduction or withholding is required to be made
shall be increased to the extent necessary to ensure that, after the making of
the required deduction or withholding, such person receives and retains (free
from any liability in respect of any such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had no such
deduction or withholding been made or required to be made.
11.2 Without prejudice to the provisions of Clause 11.1, if any person or the
Agent on its behalf is required to make any payment on account of any applicable
tax (not being a tax imposed on the net income of its Facility Office by the
jurisdiction in which it is incorporated or in which its Facility Office is
located) or otherwise on or in relation to any sum received or receivable
hereunder by such person or the Agent on its behalf (including, without
limitation, any sum received or receivable under this Clause 11) or any
liability in respect of any such payment is asserted, imposed, levied or
assessed against such person or the Agent on its behalf, the Borrower shall,
upon demand of the Agent, promptly indemnify such person against such payment or
liability, together with any interest, penalties and expenses payable or
incurred in connection therewith.
11.3 A Bank intending to make a claim pursuant to Clause 11.2 shall notify the
Agent of the event by reason of which it is entitled to do so, whereupon the
Agent shall notify the Borrower thereof Provided that nothing herein shall
require such Bank to disclose any confidential information relating to the
organisation of its affairs.
11.4 If a Bank receives the benefit of a tax credit or an allowance resulting
from a payment which includes an additional amount paid by an Obligor under
Clause 11.1 or if it is otherwise left in a position which is more favourable to
it than would be the case if such withholding or deduction and resultant
additional payment by the Obligor had not been made, it shall (to the extent
that it can do so without prejudice to the retention of such credit or allowance
and to the extent that it is not unlawful or contrary to any official directive
for it so to do) pay to the relevant Obligor such part of that benefit as is, in
the sole opinion of that Bank, attributable to the withholding or deduction
giving rise to the payment of that additional amount, provided that such Bank
shall;
(a) be the sole judge of the amount of any such benefit to be so paid to
the relevant Obligor and of the date on which it is received;
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(b) have an absolute discretion as to the order and manner in which it
employs or claims tax credits and allowances to it or as to the
manner in which it arranges its tax affairs; and
(c) not be obliged to disclose to any Obligor or any other person any
information regarding its tax affairs or tax computations.
12. Tax Receipts and Mitigation
12.1 If, at any time, either of the Obligors is required by law to make any
deduction or withholding from any sum payable by it hereunder (or if thereafter
there is any change in the rates at which or the manner in which such deductions
or withholdings are calculated), such Obligor shall promptly notify the Agent.
12.2 If either of the Obligors makes any payment hereunder in respect of which
it is required to make any deduction or withholding, it shall pay the full
amount required to be deducted or withheld to the relevant taxation or other
authority within the time allowed for such payment under applicable law and
shall deliver to the Agent for each Bank, within thirty days after it has made
such payment to the applicable authority, and original receipt (or a certified
copy thereof) issued by such authority evidencing the payment to such authority
of all amounts so required to be deducted or withheld in respect of that Bank's
share of such payment.
12.3 If in respect of any Bank, circumstances arise which would or would upon
the giving of notice result in (i) an increase in the amount of any payment to
be made to it for its account pursuant to Clause 11.1 or (ii) a claim for
indemnification pursuant to Clause 11.2 then, without in any way limiting,
reducing or otherwise qualifying the obligations of the Obligors under this
Agreement, such Bank shall, promptly upon its Facility Office becoming aware of
the same and the possible results thereof, notify the Agent thereof and, in
consultation with the Agent and the Borrower, take such steps as such Bank in
its bona fide opinion considers appropriate to mitigate the effects of such
circumstance including the transfer of its Facility Office to another
jurisdiction or the transfer of its rights and obligations hereunder to another
bank willing to participate in the Facility Provided that such Bank shall be
under no obligation to take any such steps if, in the bona fide opinion of such
Bank, such steps would or might have an adverse effect upon its, or its holding
company's business, operations or financial condition or tax affairs.
13. Increased Costs
13.1 If, by reason of (i) any change in law after the date hereof or in its
interpretation or administration and/or (ii) compliance with any request from or
requirement (whether or not having the force of law) of any central bank or
other fiscal, monetary or other authority made or imposed after the date hereof
(including, without limitation, a request or requirement which affects the
manner in which a Bank or any holding company of such Bank is required to or
does maintain capital resources having regard to such Bank's obligations
hereunder and to amounts owing to it hereunder):
(a) a Bank or any holding company of such Bank incurs a cost as a result
of such Bank's having entered into and/or performing its obligations
under this
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Agreement and/or assuming or maintaining a commitment under this
Agreement and/or making one or more advances hereunder;
(b) a Bank or any holding company of such Bank is unable to obtain the
rate of return on its overall capital which it would have been able
to obtain for such Bank having entered into and/or performing its
obligations and/or assuming or maintaining a commitment under this
Agreement;
(c) there is any increase in the cost to a Bank or any holding company
of such Bank of funding or maintaining all or any of the advances
comprised in a class of advances formed by or including the advances
made or to be made by such Bank hereunder; or
(d) a Bank or any holding company of such Bank becomes liable to make
any payment on account of tax or otherwise (not being a tax imposed
on the net income of such Bank's Facility Office by the jurisdiction
in which it is incorporated or in which its Facility Office is
located) on or calculated by reference to the amount of the advances
made or to be made by such Bank hereunder and/or to any sum received
or receivable by it hereunder,
then the Borrower shall, from time to time on demand of the Agent, promptly pay
to the Agent for the account of that Bank amounts sufficient to indemnify that
Bank or any such holding company against, as the case may be, (1) such cost, (2)
such reduction in such rate of return (or such proportion of such reduction as
is, in the opinion of that Bank, attributable to its obligations hereunder), (3)
such increased cost (or such proportion of such increased cost as is, in the
opinion of that Bank, attributable to its funding or maintaining advances
hereunder), or (4) such liability.
13.2 A Bank intending to make a claim pursuant to Clause 13.1 shall no later
than 3 months after becoming aware of the event by reason of which it is
entitled to make such claim in relation to any payments notify the Agent and the
Borrower of the event by reason of which it is entitled to do so Provided that
nothing herein shall require such Bank to disclose any confidential information
relating to the organisation of its affairs.
14. Illegality
If, at any time, it is unlawful for a Bank to make, fund or allow to remain
outstanding all or any of the Advances made or to be made by it hereunder, then
that Bank shall, promptly after becoming aware of the same and where the
illegality has not yet occurred notify the Borrower through the Agent and that
Bank and the Agent shall negotiate in good faith with the Borrower with a view
to agreeing substitute terms for participating in the Facility on a lawful
basis. Where the illegality has occurred the relevant Bank shall deliver to the
Borrower through the Agent a certificate to that effect and:
(i) such Bank shall not thereafter be obliged to make advances
hereunder and the amount of its Commitment shall be
immediately reduced to zero; and
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(ii) if the Agent on behalf of such Bank so requires, the Borrower
shall on such date as the Agent shall have specified repay
such Bank's share of any outstanding Advances together with
accrued interest thereon and all other amounts owing to such
Bank hereunder.
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Part 7
REPRESENTATIONS, COVENANTS AND EVENTS OF DEFAULT
15. Representations
15.1 Each of the Obligors represents that:
(i) it is a corporation duly organised under the laws of Sweden
with power to enter into this Agreement and to exercise its
rights and perform its obligations hereunder and all corporate
and other action required to authorise its execution of this
Agreement and its performance of its obligations hereunder has
been duly taken;
(ii) under the laws of Sweden in force at the date hereof, it will
not be required to make any deduction or withholding from any
payment it may make hereunder;
(iii) under the laws of Sweden in force at the date hereof, the
claims of the Agent, the Arrangers and the Banks against such
Obligor under this Agreement will rank at least pari passu
with the claims of all its other unsecured creditors save
those whose claims are preferred solely by any bankruptcy,
insolvency, liquidation or other laws of general application;
(iv) in any proceedings taken in Sweden in relation to this
Agreement, it will not be entitled to claim for itself or any
of its assets immunity from suit, execution, attachment or
other legal process;
(v) in any proceedings taken in Sweden in relation to this
Agreement, the choice of English law as the governing law of
this Agreement will be recognised;
(vi) all acts, conditions and things required to be done, fulfilled
and performed in order (a) to enable it lawfully to enter
into, exercise its rights under and perform and comply with
the obligations expressed to be assumed by it in this
Agreement, (b) to ensure that the obligations expressed to be
assumed by it in this Agreement are legal, valid and binding
and (c) to make this Agreement admissible in evidence in
Sweden (save for a translation of the Agreement) have been
done, fulfilled and performed;
(vii) under the laws of Sweden in force at the date hereof, it is
not necessary that this Agreement be filed, recorded or
enrolled with any court or other authority in such
jurisdiction or that any stamp, registration or similar tax be
paid on or in relation to this Agreement;
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(viii) the obligations expressed to be assumed by either Obligor in
this Agreement are legal and valid obligations binding on it
enforceable in accordance with the terms hereof;
(ix) it is not necessary under the laws and constitution of Sweden
(a) in order to enable the Agent, the Arrangers and the Banks
or any of them to enforce their rights under the Facility
Agreement or (b) by reason of the execution of the Facility
Agreement or the performance by each of them of its
obligations thereunder, that any of them should be licensed,
qualified or otherwise entitled to carry on business in
Sweden; and
(x) neither the Agent nor any of the Arrangers or Banks is or will
be deemed to be resident, domiciled or carrying on business in
Sweden by reason only of the execution, performance and/or
enforcement of the Facility Agreement.
15.2 Each of the Obligors further represents that:
(i) no member of the Group has taken any corporate action nor have
any other steps been taken or legal proceedings been started
or (to the best of the Guarantor's knowledge and belief)
threatened against any member of the Group for its winding-up,
dissolution or administration or for the appointment of a
receiver, administrator, administrative receiver, trustee or
similar officer of it or of any or all of its assets or
revenues;
(ii) no member of the Group is in breach of or in default under any
agreement to which it is a party or which is binding on it or
any of its assets to an extent or in a manner which might have
a material adverse effect on the business or financial
condition of any member of the Group;
(iii) no action or administrative proceeding of or before any court
or agency which might have a material adverse effect on the
business or financial condition of any member of the Group has
been started or threatened;
(iv) the Original Financial Statements of the Borrower and the
Guarantor were prepared in accordance with accounting
principles generally accepted in Sweden and consistently
applied and give (in conjunction with the notes thereto) a
true and fair view of the financial condition of the Borrower,
the Guarantor or, as the case may be, the Group at the date as
of which they were prepared and the results of the Borrower's,
the Guarantor's or, as the case may be, the Group's operations
during the financial year then ended;
(v) at the date hereof amounts which are being or are capable of
being secured by any existing encumbrances do not in aggregate
exceed by
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more than 10 per cent. the amounts disclosed in the Original
Financial Statements of the Guarantor and stated therein as
being secured by any encumbrances;
(vi) since the date to which the Original Financial Statements of
the Borrower or the Guarantor relate, there has been no
material adverse change in the business, assets or financial
condition of either Obligor, which change would give
sufficient ground to conclude that either Obligor may not or
will be unable to, perform or observe its respective
obligations hereunder;
(vii) neither the Borrower nor any other member of the Group had, as
at the date as of which the Original Financial Statements of
the Borrower or, as the case may be, the Guarantor were
prepared, any liabilities (contingent or otherwise) which were
not disclosed thereby (or by the notes thereto) or reserved
against therein nor were there at that date any unrealised or
anticipated losses of the Borrower or, as the case may be, any
other member of the Group arising from commitments entered
into by it which were not so disclosed or reserved against;
(viii) the information contained in the Information Memorandum and
all of the other written information supplied by any member of
the Group to the Agent, the Arrangers and the Banks in
connection herewith is true, complete and accurate in all
material respects and it is not aware of any material facts or
circumstances that have not been disclosed to the Agent, the
Arrangers and the Banks and which might, if disclosed,
adversely affect the decision of a person considering whether
or not to provide finance to the Borrower or to provide such
finance against the security of a guarantee issued by the
Guarantor;
(ix) save as permitted by Clause 17.3, no encumbrance exists over
all or any of the present or future revenues or assets of the
Guarantor or the Principal Subsidiaries;
(x) the execution by each Obligor of this Agreement and such
Obligor's exercise of its rights and performance of its
obligations hereunder will not result in the existence of nor
oblige any member of the Group to create any encumbrance over
all or any of its present or future revenues or assets;
(xi) the execution by each Obligor of this Agreement and such
Obligor's exercise of its rights and performance of its
obligations hereunder do not and will not:
(a) conflict with any agreement, mortgage, bond or other
instrument or treaty to which such Obligor is a party or
which is binding upon it or any of its assets;
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(b) conflict with such Obligor's certificate of registration
and articles of association and internal rules and
regulations; or
(c) conflict with any applicable law, regulation or official
or judicial order;
(xii) the execution by each Obligor of this Agreement constitutes,
and such Obligor's exercise of its rights and performance of
its obligations hereunder will constitute, private and
commercial acts done and performed for private and commercial
purposes;
(xiii) each member of the Group maintains insurances on and in
relation to its business and assets with reputable
underwriters or insurance companies against such risks and to
such extent as is usual for companies carrying on a business
such as that carried on by such member of the Group whose
practice is not to self insure;
(xiv) a Permitted Owner is the legal and beneficial owner of, with
unencumbered title to, 25 per cent. of the shares and 32.9 per
cent. of the voting rights of ASEA AB; and
(xv) the Borrower is a wholly-owned subsidiary of the Guarantor.
15.3 The representations in Clauses 15.1 and 15.2 (except sub-Clauses 15.2 (v),
(viii) and (xiv)) shall be deemed to be repeated by each Obligor on each date on
which an Advance is made hereunder as if made with reference to the facts and
circumstances existing at each such date and as if references in sub-Clauses
15.2 (iv) and 15.2 (vii) were references to the most recent financial statements
delivered to the Agent.
16. Financial Information
16.1 Each of the Obligors shall:
(i) as soon as the same become available, but in any event within
150 days after the end of each of its financial years, deliver
to the Agent in sufficient copies for the Banks its financial
statements (including, in the case of the Guarantor, the
consolidated financial statements of the Group) for such
financial year together with a certificate issued by the
auditors and counter-signed by a duly authorised officer of
the Guarantor (a) setting out in reasonable detail the names
of the Principal Subsidiaries and the calculation of Relevant
Total Assets, Consolidated Relevant Total Assets and Total
Borrowings at the end of such financial year and (b)
confirming that the Guarantor has been in compliance with its
obligations under Clauses 17.7 and 17.8 (if applicable) during
such financial year;
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(ii) as soon as the same become available, but in any event within
90 days after the end of the first half of each of its
financial years, deliver to the Agent in sufficient copies for
the Banks its financial statements (including, in the case of
the Guarantor, the consolidated financial statements of the
Group) for such period together with certificates signed by a
duly authorised officer of the Guarantor (a) setting out in
reasonable detail the names of the Principal Subsidiaries and
the calculation of Relevant Total Assets, the Consolidated
Relevant Total Assets and Total Borrowings at the end of such
period and the amounts of Financial Indebtedness owed by the
Guarantor or a Principal Subsidiary and allowed pursuant to
Clause 17.5 (i) - (v) inclusive and (b) confirming that the
Guarantor has been in compliance with its obligations under
Clauses 17.7 and 17.8 (if applicable) during such financial
half year;
(iii) in the event of any ASEA AB Share Disposal, promptly notify
the Agent thereof or in the event of any ASEA AB Share
Transaction or ASEA AB Share Encumbrance, notify the Agent at
least 3 business days prior to any such ASEA AB Share
Transaction or ASEA AB Share Encumbrance and, in each case,
furnish the Agent (a) within 10 days of such ASEA AB Share
Disposal, ASEA AB Share Transaction or ASEA AB Share
Encumbrance with forecast figures setting out in reasonable
detail that for the period from the date of such ASEA AB Share
Disposal, ASEA AB Share Transaction or ASEA AB Share
Encumbrance until the end of the next full quarter of its
financial year, the Guarantor shall be in compliance with its
obligations under Clause 17.8 and (b) promptly at the end of
each financial quarter (excluding the quarter in which such
ASEA AB Share Disposal, ASEA AB Share Transaction or ASEA AB
Share Encumbrance has occurred) during the calendar year in
which such ASEA AB Share Disposal, ASEA AB Share Transaction
or ASEA AB Share Encumbrance has occurred with (x) financial
statements for such quarter and (y) a certificate signed by a
duly authorised officer of the Guarantor confirming that the
Guarantor has been in compliance with its obligations under
Clause 17.8 during such financial quarter year; and
(iv) from time to time on the request of the Agent, furnish the
Agent with such information about the business, assets,
operations or financial condition of the Group as the Agent or
any Bank through the Agent may reasonably require unless
furnishing such information violates any Swedish law or stock
exchange regulations.
16.2 Each of the Obligors shall ensure that:
(i) each set of financial statements delivered by it pursuant to
Clause 16.1 is prepared on the same basis as was used in the
preparation of its
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Original Financial Statements and in accordance with
accounting principles generally accepted in Sweden and
consistently applied;
(ii) each set of financial statements delivered by it pursuant to
Clause 16.1 is certified by a duly authorised officer of such
Obligor as giving a true and fair view of its financial
condition (including, in the case of financial statements of
the Guarantor, the financial condition of the Group) as at the
end of the period to which those financial statements relate
and of the results of its (or, as the case may be, the
Group's) operations during such period; and
(iii) each set of financial statements delivered by it pursuant to
paragraph (i) of Clause 16.1 has been audited by an
internationally recognised firm of independent auditors
licensed to practise in Sweden Provided that should the Agent
at any time following consultation with the Banks' Swedish
Counsel inform any Obligor that it is common practice or a
requirement for companies comparable to such Obligor to have
audited financial statements relating to the first half of
financial years, then the next following, and each subsequent,
set of financial statements delivered by such Obligor pursuant
to (ii) of Clause 16.1 shall also be audited by an
internationally recognised firm of independent auditors
licensed to practise in Sweden.
17. Covenants
17.1 Each of the Obligors shall:
(i) ensure that each Obligor shall obtain, comply with the terms
of and do all that is necessary to maintain in full force and
effect all authorisations, approvals, licenses and consents
required in or by the laws and regulations of its jurisdiction
of incorporation to enable it lawfully to enter into and
perform its obligations under this Agreement or to ensure the
legality, validity, enforceability or admissibility in
evidence in its jurisdiction of incorporation of this
Agreement;
(ii) after the delivery of any Notice of Drawdown and before the
proposed making of the Advance requested therein, notify the
Agent of the occurrence of any event which results in or may
reasonably be expected to result in any of the representations
contained in Clause 15 being untrue at or before the time of
the proposed making of such Advance;
(iii) ensure that each Obligor shall promptly inform the Agent of
the occurrence of any Event of Default or Potential Event of
Default (and of the steps, if any, being taken to remedy it)
and, upon receipt of a written request to that effect from the
Agent, confirm to the Agent that, save as previously notified
to the Agent or as notified in such
24
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confirmation, no Event of Default or Potential Event of
Default has occurred; and
(iv) ensure that at all times the claims of the Agent, the
Arrangers and the Banks against it under this Agreement rank
at least pari passu with the claims of all its other unsecured
creditors save those whose claim are preferred by any
bankruptcy, insolvency, liquidation or other similar laws of
general application.
17.2 Each of the Obligors shall ensure that
(i) (a) the Guarantor shall not merge with any person or cease
to carry on all or a substantial part of its current
business; or
(b) a Material Subsidiary shall not cease to carry on all or
substantially all of its current business
if such merger or cessation, as the case may be, would result
in a material change of circumstances which might adversely
affect the ability of either Obligor to perform its
obligations hereunder; and
(ii) neither the Guarantor nor a Principal Subsidiary shall (save
in the ordinary course of business) make any loans, grant any
credit or give any guarantee or indemnity, provide any other
financial assistance to or for the benefit of any member of
the Group which is not a Principal Subsidiary or otherwise
voluntarily assume any liability, whether actual or
contingent, in respect of any obligation of any member of the
Group which is not a Principal Subsidiary.
17.3 Each of the Obligors shall ensure that neither the Guarantor nor any
Principal Subsidiary shall, without the written prior consent of an Instructing
Group, at any time while any amounts remain outstanding from the Borrower or, as
the case may be, may be due from the Guarantor, create or permit to subsist any
encumbrance over all or any of its present or future revenues or assets as
security for any indebtedness of any person other than:
(i) any encumbrance existing prior to the date hereof provided
that the principal amount secured thereby may not be
subsequently increased;
(ii) any encumbrance arising solely by operation of law which
arises in the ordinary course of business and which is
discharged within 60 days of its creation;
(iii) any encumbrance on goods (including retention of title
arrangements) or related documents of title and/or other
related documents arising or created in the ordinary course of
business as security only for indebtedness directly relating
to such goods or documents of title and/or
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other related documents or services to be provided in
connection with such goods;
(iv) any encumbrance on goods, or related documents of title and/or
other related documents or other assets (in particular
receivables) arising or created in the ordinary course of
business as security only for indebtedness under export credit
or trade finance facilities relating to such goods and any
encumbrance securing advance payment guarantees created in the
ordinary course of business;
(v) any encumbrance over assets acquired or developed for fair
market value subsequent to the execution of this Agreement and
securing only such purchase price or development costs which
shall not exceed the fair market value of such assets;
(vi) in case of any company or corporation which becomes a
Principal Subsidiary of the Guarantor after the date of this
Agreement, (a) any encumbrance existing on or over its assets
when it becomes or, as the case my be, became a subsidiary and
not created in contemplation of or in connection with it
becoming a subsidiary and (b) any encumbrance existing on or
over its assets when it becomes a Principal Subsidiary which
was created after the date of it becoming a subsidiary but not
in contemplation of or in connection with it becoming a
Principal Subsidiary provided that any encumbrance permitted
under (b) hereof shall be discharged prior to the first
anniversary of the date on which it became a Principal
Subsidiary;
(vii) any encumbrance created in substitution for any encumbrance
existing or created under (i) - (vi) above provided that the
indebtedness so secured is not increased and the periods
referred to in (ii) and (vi) above are not extended;
(viii) any encumbrance created pursuant to mandatory provisions of
Swedish law, securing the payment of the purchase price by the
Guarantor or a Principal Subsidiary, in favour of minority
shareholders of a company or corporation the shares of which
are subject to a compulsory sale (tvangsinlosen) to the
Guarantor or a Principal Subsidiary;
(ix) any encumbrance created by the Guarantor or a Principal
Subsidiary which secures only indebtedness denominated in
Swedish Kronor and which arises out of borrowing by the
Guarantor or such Principal Subsidiary from the Group Pension
Fund in accordance with and subject to the provisions of
Clause 17.5 (iii) provided the Group Pension Fund requires
such encumbrance to be created and refuses to accept a
guarantee or other support from the Guarantor or the parent
company of the relevant Principal Subsidiary as applicable, in
order to make such borrowings available;
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(x) any encumbrance created as a result of short-term sale and
repurchase transactions entered into by the Borrower pursuant
to Clause 17.4 (ii) or any encumbrance over cash deposited
with any bank, financial institution, stock exchange or
clearinghouse with which the Guarantor or a Principal
Subsidiary enter into back to back, foreign exchange, swap or
derivative transactions in the ordinary course of business and
which cash has to be deposited in order for such transactions
to be entered into, provided that the amount of cash so
encumbered (a) does not at any time exceed 20 per cent. of the
aggregate exposure of the relevant counterparties to the
Guarantor or a Principal Subsidiary under such transactions at
such time or (b) does not at any time exceed 10 per cent. of
consolidated total assets of the Group as shown in the latest
audited consolidated accounts of the Guarantor; and
(xi) any other encumbrances other than those referred to in
sub-paragraphs (i) - (x) above, over or affecting assets the
aggregate book value of which is less than seven and a half
per cent, (7.5%) of the book value of the total assets of the
Group as shown in the most recent audited consolidated
financial statements of the Guarantor (adjusted from time to
time to take into account acquisitions and/or disposals after
the date to which such financial statements relate).
17.4 Each Obligor shall ensure that neither the Guarantor nor any Principal
Subsidiary shall, without the prior consent of an Instructing Group, either in a
single transaction or in a series of transactions, whether related or not and
whether voluntarily or involuntarily, sell, transfer, grant or lease or
otherwise dispose of all or any part of its assets, other than
(i) a disposal of assets on an arm's length basis for market
value;
(ii) a disposal under short term sale and repurchase transactions
with banks or other financial institutions which transact such
business on a regular basis on market terms and in respect of
marketable securities held for investment purposes;
(iii) a disposal of assets in any one financial year the aggregate
book value of which is less than 5% of the total assets of the
Group as shown in the then most recent audited consolidated
financial statements (adjusted from time to time to take into
account acquisitions and/or disposal after the date to which
such financial statements relate);
(iv) a disposal of assets from a Principal Subsidiary (other than
the Borrower) to another Principal Subsidiary; or
(v) a disposal of the ASEA AB shares under stocklending
transactions provided that such disposal is collateralised as
to 100% of the then market value of such ASEA AB shares by
cash cover or as to 120% of the then market value of such ASEA
AB shares by government
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securities rated at least Aa3 by Moody's Investors Service,
Inc. or AA-by Standard and Poor's Ratings Group, a division of
McGraw-Hill, Inc. and, in each case, such collateral is held
in a manner satisfactory to the Agent.
17.5 Each Obligor shall ensure that no Principal Subsidiary (other than the
Borrower and its Financing Subsidiaries) will incur or permit to subsist any
Financial Indebtedness with any bank or other institution providing banking
services other than
(i) Financial Indebtedness owing by a member of the Group to
another member of the Group; or
(ii) Financial Indebtedness not exceeding Swedish Kronor
2,000,000,000 of Nybrovikens Kraft AB to the National Pension
Insurance Fund in connection with the purchase by Nybrovikens
Kraft AB of hydropower assets from the National Pension
Insurance Fund; or
(iii) Financial Indebtedness of the Guarantor or a Principal
Subsidiary to the Group Pension Fund where such Financial
Indebtedness is in the form of re-borrowing from the Group
Pension Fund of pension funds deposited with the Group Pension
Fund and provided such Financial Indebtedness in aggregate in
respect of the Guarantor and the Principal Subsidiaries shall
not exceed Swedish Kronor 300,000,000; or
(iv) Financial Indebtedness of Gambro not exceeding the Swedish
Kronor equivalent of $300,000,000 above the level of
borrowings as at the date hereof (which shall include any
undrawn portion of the revolving credit facility dated 15
December 1995 between Gambro AB as borrower, Banque Nationale
de Paris as agent and the financial institutions named therein
as lenders) and as disclosed to the Agent in the letter from
the Borrower to the Agent dated February, 1996; or
(v) Financial Indebtedness (other than that referred to in
sub-paragraphs (i), (ii), (iii) or (iv) above) of subsidiaries
not exceeding in aggregate the higher of 20 per cent. of Total
Borrowings and Swedish Kronor 1,000,000,000
Provided that in the case of a company or corporation becoming a Principal
Subsidiary after the date hereof the above shall not apply in respect of
Financial Indebtedness existing on the date of such company or corporation
becoming a Principal Subsidiary (which was not incurred in contemplation or in
connection with it becoming a Principal Subsidiary) until the first anniversary
of such date.
17.6 Each Obligor shall ensure that so long as any one or more Permitted Owner
(other than the Guarantor) is the legal and beneficial owner of any of the
shares or any of the voting rights of ASEA AB such Permitted Owner will not
incur or permit to subsist any Financial Indebtedness other than Financial
Indebtedness to another member of the Group.
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17.7 Each Obligor shall ensure that at all times the consolidated financial
condition of the Guarantor as evidenced by the then latest financial statements
prepared on the same basis as was used in the preparation of the Original
Financial Statements of the Guarantor, shall be such that the ratio of
Consolidated Net Interest Bearing Debt to Consolidated Adjusted Equity shall not
exceed 1.0 : 1.0.
17.8 Each Obligor shall ensure that for each quarter of the financial year in
which any ASEA AB Share Disposal, ASEA AB Share Transaction or ASEA AB Share
Encumbrance occurs (other than in respect of the quarter in the financial year
in which such ASEA AB Share Disposal, ASEA AB Share Transaction or ASEA AB Share
Encumbrance occurs) and for each six monthly period ending 30 June or 31
December thereafter the consolidated financial condition of the Guarantor, as
evidenced by the then latest quarterly, half yearly or yearly financial
statements prepared on the same basis as was used in the preparation of the
Original Financial Statements of the Guarantor and as evidenced by the
certificate delivered pursuant to Clause 16.1(iii), shall be such that the ratio
of Consolidated Earnings before Financial Items plus Consolidated Interest
Income to Consolidated Interest Expenses shall not be less than 2.0 : 1.0.
17.9 In Clauses 17.7 and 17.8:
(i) "Consolidated Net Interest Bearing Debt" means at any time the
aggregate amount of Consolidated Interest Bearing Liabilities
less the amount of Consolidated Liquid Assets; and
(ii) "Consolidated Adjusted Equity" means at any time the aggregate
of the amounts paid up or credited as paid up on the issued
share capital of the Guarantor and the aggregate amount of
reserves including but not limited to:
(a) restricted reserves and unrestricted reserves;
(b) any balance standing to the credit of the income
statement;
(c) minority interest; and
(d) any surplus value in the Guarantor's consolidated share
portfolio (being the difference between the market value
of the shares and the bookvalue or the shares recorded
in the relevant financial statements)
but deducting:
(e) any debit balance on the income statement;
all as determined by reference to the Guarantor's then most
recent audited annual or, as the case may be, unaudited
semi-annual or quarterly consolidated financial statements
(adjusted in each case, as
29
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appropriate, to take account of any changes in circumstances
which occur after the date to which such consolidated
financial statements refer);
(iii) "Consolidated Earnings before Financial Items" means in any
relevant period the aggregate of revenues less (a) operating
expenses and (b) depreciation (including amortisation of
goodwill) according to plan, all as determined by reference to
the Guarantor's then most recent audited annual or, as the
case may be, unaudited semi-annual or quarterly consolidated
financial statements (adjusted in each case, as appropriate,
to take account of any changes in circumstances which occur
after the date to which such consolidated financial statements
refer);
(iv) "Consolidated Interest Expense" means in any relevant period
the aggregate, of all interest expense as determined by
reference to the Guarantor's then most recent audited annual
or, as the case may be, unaudited semi-annual or quarterly
consolidated financial statements (adjusted in each case, as
appropriate, to take account of any changes in circumstances
which occur after the date to which such consolidated
financial statements refer);
(v) "Consolidated Interest Income" means in any relevant period
the aggregate, of all interest income as determined by
reference to the Guarantor's then most recent audited annual
or, as the case may be, unaudited semi-annual or quarterly
consolidated financial statements (adjusted in each case, as
appropriate, to take account of any changes in circumstances
which occur after the date to which such consolidated
financial statements refer);
(vi) "Consolidated Interest Bearing Liabilities" means at any time
the aggregate of inter alia (a) long term loans, (b)
short-term loans and short-term part of long-term loans, (c)
utilised part of overdraft facility, (d) promissory note loans
and (e) any other liability on which interest is payable all
as determined by reference to the Guarantor's then most recent
audited annual or, as the case may be, unaudited semi-annual
or quarterly consolidated financial statements (adjusted in
each case, as appropriate, to take account of any changes in
circumstances which occur after the date to which such
consolidated financial statements refer); and
(vii) "Consolidated Liquid Assets" means at any time cash and
marketable securities as determined by reference to the
Guarantor's then most recent audited annual or, as the case
may be, unaudited semi-annual or quarterly consolidated
financial statements (adjusted in each case, as appropriate,
to take account of any changes in circumstances which
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occur after the date to which such consolidated financial
statements refer).
All expressions used in the definitions of this Clause 17.9 which are not
otherwise defined herein shall be construed in accordance with generally
accepted accounting principles in the Kingdom of Sweden consistently applied (as
used in the Guarantor's most recent audited annual consolidated financial
statements).
18. Events of Default
18.1 If:
(i) either of the Obligors shall fail to pay when due any sum
which shall have become due hereunder and, if the non-payment
is solely due to technical or administrative reasons the
non-payment continues unremedied for three business days from
the due date; or
(ii) any representation or statement made or deemed repeated by
either of the Obligors in this Agreement or in any notice or
other document, certificate or statement delivered by it
pursuant hereto or in connection herewith is or proves to have
been incorrect or misleading in any material respect when
made; or
(iii) either of the Obligors fails duly to perform or comply with
any of the obligations expressed to be assumed by it in Clause
16 or 17; or
(iv) either of the Obligors fails duly to perform or comply with
any other obligation expressed to be assumed by it in this
Agreement and such failure is not remedied (if capable of
remedy) within thirty days after the Agent has given notice
thereof to such Obligor; or
(v) (a) any material indebtedness of the Guarantor or any Material
Subsidiary is not paid when due after any applicable grace
period (expressly provided for in the instrument governing
such indebtedness) or if no grace period is provided in such
instrument and such non-payment is solely due to technical or
administrative reasons after three business days after the due
date, or (b) any material indebtedness of the Guarantor or any
Material Subsidiary is declared to be or otherwise becomes due
and payable prior to its specified maturity by reason of a
default or an event of default (however described), or (c) any
creditor or creditors of the Guarantor or any Material
Subsidiary become entitled to declare any material
indebtedness of the Guarantor or such Material Subsidiary due
and payable prior to its specified maturity (for the purpose
of this Clause 18.1(v), "material indebtedness" means any
indebtedness the aggregate amount of which exceeds US$
15,000,000 or equivalent) provided that any prepayment, or
right to call for prepayment, of the Swedish Kronor 750
million
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bonds dated 6th July, 1994 issued by the Borrower and
guaranteed by the Guarantor with a maturity of 6th July, 1999
or any right to call for prepayment of the Swedish Kronor 250
million floating rate notes dated 6th July, 1994 issued by the
Borrower and guaranteed by the Guarantor with a maturity of
16[h June, 1999 solely as a result of an ASEA AB Share
Disposal shall not constitute an Event of Default under sub-
paragraphs (b) or (c) of this Clause 18.1(v); or
(vi) the Guarantor or any Material Subsidiary is unable to pay its
debts as they fall due, commences negotiations with any one or
more of its creditors with a view to the general readjustment
or rescheduling of its indebtedness or makes a general
assignment for the benefit of or a composition with its
creditors; or
(vii) the Guarantor or any Material Subsidiary takes any corporate
action or other steps are taken or legal proceedings are
started for its winding-up, dissolution, administration or
re-organisation or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar
officer of it or of any or all of its revenues and assets; or
(viii) any execution or distress is levied and is not discharged
within 30 days of being levied against, or an encumbrancer
takes possession of the whole or any part of, the property,
undertaking or assets of the Guarantor or any Material
Subsidiary; or
(ix) by or under the authority of any government, (a) the
management of the Guarantor or any Material Subsidiary is
wholly or partially displaced or the authority of the
Guarantor or any Material Subsidiary in the conduct of its
business is wholly or partially curtailed or (b) all or a
majority of the issued shares of the Guarantor or any Material
Subsidiary or the whole or any part (the book value of which
is twenty per cent. or more of the book value of the whole) of
its revenues or assets is seized, nationalised, expropriated
or compulsorily acquired; or
(x) the Borrower ceases to be a wholly-owned subsidiary of the
Guarantor; or
(xi) either of the Obligors repudiates this Agreement or expresses
its intention to repudiate this Agreement; or
(xii) at any time any act, condition or thing required to be done,
fulfilled or performed in order (a) to enable either of the
Obligors lawfully to enter into, exercise its rights under and
perform the obligations expressed to be assumed by it in this
Agreement, (b) to ensure that the obligations expressed to be
assumed by either of the Obligors in this Agreement are legal,
valid and binding or (c) to make this Agreement admissible
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in evidence in each Obligor's jurisdiction of incorporation is
not done, fulfilled or performed; or
(xiii) at any time it is or becomes unlawful for either of the
Obligors to perform or comply with any or all of its
obligations hereunder or any of the obligations of either of
the Obligors hereunder are not or cease to be legal, valid and
binding; or
(xiv) a material adverse change occurs in the business, assets or
financial condition of either Obligor, which change gives, in
the reasonable opinion of an Instructing Group, sufficient
grounds to conclude that either Obligor may not, or will be
unable to, perform or observe its respective obligations
hereunder,
then, and in any such case and at any time thereafter, the Agent may (and, if so
instructed by an Instructing Group, shall) by written notice to the Borrower:
(a) declare the Advances to be immediately due and payable
(whereupon the same shall become so payable together with
accrued interest thereon and any other sums then owed by the
Borrower hereunder) or declare the Advances to be due and
payable on demand of the Agent, and/or
(b) declare that the Facility shall be cancelled, whereupon the
same shall be cancelled and the Commitment of each Bank shall
be reduced to zero.
18.2 If, pursuant to Clause 18.1, the Agent declares the Advances to be due and
payable on demand of the Agent, then, and at any time thereafter, the Agent may
(and, if so instructed by an Instructing Group, shall) by written notice to the
Borrower call for repayment of the Advances on such date as it may specify in
such notice (whereupon the same shall become due and payable on such date
together with accrued interest thereon and any other sums then owed by the
Borrower hereunder) or withdraw its declaration with effect from such date as it
may specify in such notice.
18.3 If, pursuant to Clause 18.1(a), the Agent declares the Advances to be due
and payable on demand, the Term in respect of any such Advance shall, if the
Agent subsequently demands payment before the scheduled Repayment Date in
respect of such Advance, be deemed (except for the purposes of Clause 21.4) to
be of such length that it ends on the date that such demand is made.
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Part 8
GUARANTEE
19. Guarantee
The Guarantor hereby irrevocably and unconditionally:
(i) guarantees to the Agent, the Arrangers and the Banks the due
and punctual observance and performance of all the terms,
conditions and covenants on the part of the Borrower contained
in this Agreement and agrees to pay to the Agent from time to
time on demand any and every sum or sums of money which the
Borrower shall at any time be liable to pay to the Agent, the
Arrangers and the Banks or any of them under or pursuant to
this Agreement and which shall not have been paid at the time
such demand is made; and
(ii) agrees as a primary obligation to indemnify the Agent, the
Arrangers and the Banks from time to time on demand by the
Agent from and against any loss incurred by the Agent, the
Arrangers and the Banks or any of them as a result of any of
the obligations of the Borrower under or pursuant to this
Agreement being or becoming void, voidable, unenforceable or
ineffective as against the Borrower for any reason whatsoever,
whether or not known to the Agent, the Arrangers and the Banks
or any of them or any other person, the amount of such loss
being the amount which the person or persons suffering it
would otherwise have been entitled to recover from the
Borrower.
20. Preservation of Rights
20.1 The obligations of the Guarantor herein contained shall be in addition to
and independent of every other security which the Agent, the Arrangers and the
Banks or any of them may at any time hold in respect of any of the Borrower's
obligations hereunder.
20.2 The obligations of the Guarantor herein contained shall constitute and be
continuing obligations notwithstanding any settlement of account or other matter
or thing whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of all or any
of the obligations of the Borrower under this Agreement and shall continue in
full force and effect until final payment in full of all amounts owing by the
Borrower hereunder and total satisfaction of all the Borrower's actual and
contingent obligations hereunder.
20.3 Neither the obligations of the Guarantor herein contained nor the rights,
powers and remedies conferred in respect of the Guarantor upon the Agent, the
Arrangers and the Banks or any of them by this Agreement or by law shall be
discharged, impaired or otherwise affected by:
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(i) the winding-up, dissolution, administration or re-organisation
of the Borrower or any other person or any change in its
status, function, control or ownership;
(ii) any of the obligations of the Borrower or any other person
hereunder or under any other security taken in respect of any
of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
(iii) time or other indulgence being granted or agreed to be granted
to the Borrower in respect of its obligations hereunder or
under any such other security;
(iv) any amendment to, or any variation, waiver or release of, any
obligation of the Borrower hereunder or under any such other
security;
(v) any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in respect
of the Borrower's obligations hereunder;
(vi) any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of the Borrower's obligations
hereunder; or
(vii) any other act, event or omission which, but for this Clause
20.3, might operate to discharge, impair or otherwise affect
any of the obligations of the Guarantor herein contained or
any of the rights, powers or remedies conferred upon the
Agent, the Arrangers and the Banks or any of them by this
Agreement or by law.
20.4 Any settlement or discharge between the Guarantor and the Agent, the
Arrangers and the Banks or any of them shall be conditional upon no security or
payment to the Agent, the Arrangers and the Banks or any of them by the Borrower
or the Guarantor or any other person on behalf of the Borrower or, as the case
may be, the Guarantor being avoided or reduced by virtue of any provisions or
enactments relating to bankruptcy, insolvency, liquidation or similar laws of
general application for the time being in force and, if any such security or
payment is so avoided or reduced, the Agent, the Arrangers and the Banks shall
each be entitled to recover the value or amount of such security or payment from
the Guarantor subsequently as if such settlement or discharge had not occurred.
20.5 Neither the Agent, the Arrangers and the Banks nor any of them shall be
obliged before exercising any of the rights, powers or remedies conferred upon
them in respect of the Guarantor by this Agreement or by law:
(i) to make any demand of the Borrower;
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(ii) to take any action or obtain judgment in any court against the
Borrower;
(iii) to make or file any claim or proof in a winding-up or
dissolution of the Borrower; or
(iv) to enforce or seek to enforce any other security taken in
respect of any of the obligations of the Borrower hereunder.
20.6 The Guarantor agrees that, so long as any amounts are or may be owed by the
Borrower hereunder or the Borrower is under any actual or contingent obligations
hereunder, the Guarantor shall not exercise any rights which the Guarantor may
at any time have by reason of performance by it of its obligations hereunder:
(i) to be indemnified by the Borrower; and/or
(ii) to claim any contribution from any other guarantor of the
Borrower's obligations hereunder; and/or
(iii) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Agent, the
Arrangers and the Banks hereunder or of any other security
taken pursuant to, or in connection with, this Agreement by
all or any of the Agent, the Arrangers and the Banks.
Part 9
DEFAULT INTEREST AND INDEMNITY
21. Default Interest and Indemnity
21.1 If any sum due and payable by either of the Obligors hereunder is not paid
on the due date therefor in accordance with the provisions of Clause 23 or if
any sum due and payable by either of the Obligors under any judgment of any
court in connection herewith is not paid on the date of such judgment, the
period beginning on such due date or, as the case may be, the date of such
judgment and ending on the date upon which the obligation of such Obligor to pay
such sum (the balance thereof for the time being unpaid being herein referred to
as an "unpaid sum") is discharged shall be divided into successive periods, each
of which (other than the first) shall start on the last day of the preceding
such period and the duration of each of which shall (except as otherwise
provided in this Clause 21) be selected by the Agent.
21.2 During each such period relating thereto as is mentioned in Clause 21.1 an
unpaid sum shall bear interest at the rate per annum which is the sum from time
to time of one per cent., the Margin and LIBOR on the Quotation Date therefor
Provided that:
(i) if, for any such period, LIBOR cannot be determined, the rate
of interest applicable to such unpaid sum shall be the sum
from time to
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time of one per cent., the Margin and the rate per annum
determined by the Agent to be the weighted arithmetic mean
(rounded upwards, if not already such a multiple, to the
nearest whole multiple of one-sixteenth of one per cent.) of
the rates notified by each Bank to the Agent before the last
day of such period to be those which express as a percentage
rate per annum the cost to it of funding from whatever source
it may select its portion of such unpaid sum for such period;
and
(ii) if such unpaid sum is all or part of an Advance which became
due and payable on a day other than the last day of the Term
thereof, the first such period applicable thereto shall be of
a duration equal to the unexpired portion of that Term and the
rate of interest applicable thereto from time to time during
such period shall be that which exceeds by one per cent. the
rate which would have been applicable to it had it not so
fallen due.
21.3 Any interest which shall have accrued under Clause 21.2 in respect of any
unpaid sum shall be due and payable and shall be paid by the Obligor owing such
unpaid sum at the end of the period by reference to which it is calculated or on
such other date or dates as the Agent may specify by written notice to such
Obligor.
21.4 If any Bank or the Agent on its behalf receives or recovers all or any part
of such Bank's share of an Advance otherwise than on the last day of the Term
thereof, the Borrower shall pay to the Agent on demand for account of such Bank
an amount equal to the amount (if any) by which (i) the additional interest
which would have been payable on the amount so received or recovered had it been
received or recovered on the last day of the Term thereof exceeds (ii) the
amount of interest which in the opinion of the Agent would have been payable to
the Agent on the last day of the Term thereof in respect of a deposit in the
currency of the amount so received or recovered equal to the amount so received
or recovered placed by it with a prime bank in London for a period starting on
the third business day following the date of such receipt or recovery and ending
on the last day of the Term thereof.
21.5 The Borrower undertakes to indemnify:
(i) each of the Agent, the Arrangers and the Banks against any
cost, claim, loss, expense (including legal fees) or liability
together with any VAT thereon, which any of them may sustain
or incur as a consequence of the occurrence of any Event of
Default or any default by the Borrower in the performance of
any of the obligations expressed to be assumed by it in this
Agreement;
(ii) the Agent against any loss it may suffer as a result of its
entering into, or performing, any foreign exchange contract
for the purposes of Part 10;
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(iii) each Bank against any loss it may suffer as a result of its
funding its portion of an Advance requested by the Borrower
hereunder but not made by reason of the operation of any one
or more of the provisions hereof; and
(iv) each Bank against any loss it may suffer as a result of an
Advance having been requested in an Optional Currency and such
Bank funding its portion of such Advance in such Optional
Currency but such Advance being denominated in dollars and
being made in dollars by reason of the provisions of Clause
6.5(ii).
21.6 Any unpaid sum shall (for the purposes of this Clause 21 and Clause 13.1)
be treated as an advance and accordingly in this Clause 21 the term "Advance"
includes any unpaid sum and "Term", in relation to an unpaid sum, includes each
such period relating thereto as is mentioned in Clause 21.1.
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Part 10
PAYMENTS
22. Currency of Account and Payment
22.1 The dollar is the currency of account and payment for each and every sum at
any time due from either the Obligors hereunder Provided that:
(i) each repayment of an Advance or a part thereof shall be made
in the currency in which such Advance is denominated at the
time of that repayment;
(ii) each payment of interest shall be made in the currency in
which the sum in respect of which such interest is payable is
denominated;
(iii) each payment in respect of costs and expenses shall be made in
the currency in which the same were incurred;
(iv) each payment pursuant to Clause 11.2 or Clause 13.1 shall be
made in the currency specified by the party claiming
thereunder; and
(v) any amount expressed to be payable in a currency other than
dollars shall be paid in that other currency.
22.2 If any sum due from either of the Obligors under this Agreement or any
order or judgment given or made in relation hereto has to be converted from the
currency (the "first currency") in which the same is payable hereunder or under
such order or judgment into another currency (the "second currency") for the
purpose of (i) making or filing a claim or proof against such Obligor, (ii)
obtaining an order or judgment in any court or other tribunal or (iii) enforcing
any order or judgment given or made in relation hereto, the Borrower shall
indemnify and hold harmless each of the persons to whom such sum is due from and
against any loss suffered as a result of any discrepancy between (a) the rate of
exchange used for such purpose to convert the sum in question from the first
currency into the second currency and (b) the rate or rates of exchange at which
such person may in the ordinary course of business purchase the first currency
with the second currency upon receipt of a sum paid to it in satisfaction, in
whole or in part, of any such order, judgment, claim or proof.
23. Payments
23.1 On each date on which this Agreement requires an amount to be paid by
either of the Obligors or any of the Banks hereunder, such Obligor or, as the
case may be, such Bank shall make the same available to the Agent:
(i) where such amount is denominated in dollars, by payment in
dollars and in same day funds (or in such other funds as may
for the time being be customary in New York City for the
settlement in New York
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City of international banking transactions in dollars) to the
Agent's account number 1110021 chips id: 269680 with
Skandinaviska Enskilda Banken, New York, N.Y. USA (or such
other account or bank as the Agent may have specified for this
purpose); or
(ii) where such amount is denominated in an Optional Currency, by
payment in such Optional Currency and in immediately
available, freely transferable, cleared funds to such account
with such bank in the principal financial centre of the
country of such Optional Currency as the Agent shall have
specified for this purpose.
23.2 If, at any time, it shall become impracticable (by reason of any action of
any governmental authority or any change in law, exchange control regulations or
any similar event) for either of the Obligors to make any payments hereunder in
the manner specified in Clause 23.1, then such Obligor may agree with each or
any of the Banks alternative arrangements for the payment direct to such Bank of
amounts due to such Bank hereunder Provided that, in the absence of any such
agreement with any Bank, such Obligor shall be obligated to make all payments
due to such Bank in the manner specified herein. Upon reaching such agreement
such Obligor and such Bank shall immediately notify the Agent thereof and shall
thereafter promptly notify the Agent of all payments made direct to such Bank.
23.3 Save as otherwise provided herein, each payment received by the Agent for
the account of another person pursuant to Clause 23.1 shall:
(i) in the case of a payment received for the account of the
Borrower, be made available by the Agent to the Borrower by
application:
(a) first, in or towards payment (on the date, and in the
currency and funds, of receipt) of any amount then due
from the Borrower hereunder to the person from whom the
amount was so received or in or towards the purchase of
any amount of any currency to be so applied; and
(b) secondly, in or towards payment (on the date, and in the
currency and funds, of receipt) to such account with
such bank in the principal financial centre of the
country of the currency of such payment as the Borrower
shall have previously notified to the Agent for this
purpose; and
(ii) in the case of any other payment, be made available by the
Agent to the person for whose account such payment was
received (in the case of a Bank, for the account of the
Facility Office) for value the same day by transfer to such
account of such person with such bank in the principal
financial centre of the country of the currency of such
payment as such person shall have previously notified to the
Agent.
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23.4 All payments required to be made by either of the Obligors hereunder shall
be calculated without reference to any set-off or counterclaim and shall be made
free and clear of and without any deduction for or on account of any set-off or
counterclaim.
23.5 All moneys received, recovered or realised by a Bank by virtue of Clause 19
may, in that Bank's discretion, be credited to a suspense or impersonal account
and may be held in such account for so long as such Bank thinks fit pending the
application from time to time (as such Bank may think fit) of such moneys in or
towards the payment and discharge of any amounts owing by either of the Obligors
to such Bank hereunder.
23.6 Where a sum is to be paid hereunder to the Agent for account of another
person, the Agent shall not be obliged to make the same available to that other
person or to enter into or perform any exchange contract in connection therewith
until it has been able to establish to its satisfaction that it has actually
received such sum, but if it does so and it proves to be the case that it had
not actually received such sum, then the person to whom such sum or the proceeds
of such exchange contract was so made available shall on request refund the same
to the Agent together with an amount sufficient to indemnify the Agent against
any cost or loss it may have suffered or incurred by reason of its having paid
out such sum or the proceeds of such exchange contract prior to its having
received such sum.
24. Set-Off
Each of the Obligors authorises each Bank to apply any credit balance to which
such Obligor is entitled on any account of such Obligor with that Bank in
satisfaction of any sum due and payable from such Obligor to such Bank hereunder
but unpaid; for this purpose, each Bank is authorised to purchase with the
moneys standing to the credit of any such account such other currencies as may
be necessary to effect such application. No Bank shall be obliged to exercise
any right given to it by this Clause 24.
25. Redistribution of Payments
25.1 If, at any time, the proportion which any Bank (a "Recovering Bank") has
received or recovered (whether by payment, the exercise of a right of set-off or
combination of accounts or otherwise) in respect of its portion of any payment
(a "relevant payment") to be made under this Agreement by either of the Obligors
for account of such Recovering Bank and one or more other Banks is greater (the
portion of such receipt or recovery giving rise to such excess proportion being
herein called an "excess amount") than the proportion thereof so received or
recovered by the Bank or Banks so receiving or recovering the smallest
proportion thereof, then:
(i) such Recovering Bank shall pay to the Agent an amount equal to
such excess amount;
(ii) there shall thereupon fall due from such Obligor to such
Recovering Bank an amount equal to the amount paid out by such
Recovering Bank pursuant to paragraph (i) above, the amount so
due being, for the
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purposes hereof, treated as if it were an unpaid part of such
Recovering Bank's portion of such relevant payment; and
(iii) the Agent shall treat the amount received by it from such
Recovering Bank pursuant to paragraph (i) above as if such
amount had been received by it from such Obligor in respect of
such relevant payment and shall pay the same to the persons
entitled thereto (including such Recovering Bank) pro rata to
their respective entitlements thereto,
Provided that to the extent that any excess amount is attributable to a payment
to a Bank pursuant to Clause 23.3(i)(a) such portion of such excess amount as is
so attributable shall not be required to be shared pursuant hereto.
25.2 If any sum (a "relevant sum") received or recovered by a Recovering Bank in
respect of any amount owing to it by either the Obligors becomes repayable and
is repaid by such Recovering Bank, then:
(i) each Bank which has received a share of such relevant sum by
reason of the implementation of Clause 25.1 shall, upon
request of the Agent, pay to the Agent for account of such
Recovering Bank an amount equal to its share of such relevant
sum together with its share of such amount (if any) as is
necessary to reimburse the Recovering Bank for any interest it
shall have been obliged to pay to either of the Obligors in
respect thereof when repaying such relevant sum to such
Obligor; and
(ii) there shall thereupon fall due from such Obligor to each such
Bank an amount equal to the amount paid out by it pursuant to
paragraph (i) above, the amount so due being, for the purposes
hereof, treated as if it were the sum payable to such Bank
against which such Bank's share of such relevant sum was
applied.
25.3 A Bank shall not be obliged to share any amount pursuant to clause 25.1 if
it has received or recovered such amount as a result of taking legal proceedings
with any other Bank which had an opportunity to participate in those legal
proceedings but did not do so and did not separately take equivalent legal
proceedings.
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Part 11
FEES, COSTS AND EXPENSES
26. Fees
26.1 The Borrower shall pay to the Agent for account of each Bank a commitment
commission on the amount of such Bank's Available Commitment from day to day
during the period beginning on the date hereof and ending on the Final Maturity
Date, such commitment commission to be calculated at the rate of 0.0875 per
cent. per annum and such commitment commission to be payable in arrear on the
last day of each successive period of three months which ends during such period
and on the Final Maturity Date.
26.2 The Borrower shall pay to the Agent the fees specified in the letter of
even date herewith from the Arrangers to the Borrower at the times, and in the
amounts, specified in such letter.
26.3 The Borrower shall pay to the Agent the agency fees specified in the letter
of even date herewith from the Agent to the Borrower at the times, and in the
amounts, specified in such letter.
27. Costs and Expenses
27.1 The Borrower shall, from time to time on demand of the Agent, reimburse the
Agent and the Arrangers for all reasonable costs and expenses (including legal
fees) together with any VAT thereon incurred by it in connection with the
negotiation, preparation and execution of this Agreement and the completion of
the transactions herein contemplated.
27.2 The Borrower shall, from time to time on demand of the Agent, reimburse the
Agent, the Arrangers and the Banks for all costs and expenses (including legal
fees) together with any VAT thereon incurred in or in connection with the
preservation and/or enforcement of any of the rights of the Agent, the Arrangers
and the Banks under this Agreement.
27.3 The Borrower shall pay all stamp, registration and other taxes to which
this Agreement or any judgment given in connection herewith is or at any time
may be subject and shall, from time to time on demand of the Agent, indemnify
the Agent, the Arrangers and the Banks against any liabilities, costs, claims
and expenses resulting from any failure to pay or any delay in paying any such
tax.
27.4 If the Borrower fails to perform any of its obligations under this Clause
27, each Bank shall, in its Proportion, indemnify each of the Agent and the
Arrangers against any loss incurred by any of them as a result of such failure
and the Borrower shall forthwith reimburse each Bank for any payment made by it
pursuant to this Clause 27.4.
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Part 12
AGENCY PROVISIONS
28. The Agent, the Arrangers and the Banks
28.1 Each Arranger and each Bank hereby appoints the Agent to act as its agent
in connection herewith and authorises the Agent to exercise such rights, powers,
authorities and discretions as are specifically delegated to the Agent by the
terms hereof together with all such rights, powers, authorities and discretions
as are reasonably incidental thereto.
28.2 The Agent may:
(i) assume that:
(a) any representation made by either of the Obligors in
connection herewith is true;
(b) no Event of Default or Potential Event of Default has
occurred:
(c) neither of the Obligors is in breach of or default under its
obligations hereunder; and
(d) any right, power, authority or discretion vested herein upon
an Instructing Group, the Banks or any other person or group
of persons has not been exercised,
unless it has, in its capacity as agent for the Banks, received
notice to the contrary from any other party hereto or (in case of a
payment default hereunder) gained actual acknowledge to the
contrary;
(ii) assume that the Facility Office of each Bank is that identified with
its signature below (or, in the case of a Transferee, at the end of
the Transfer Certificate to which it is a party as Transferee) until
it has received from such Bank a notice designating some other
office of such Bank to replace its Facility Office and act upon any
such notice until the same is superseded by a further such notice;
(iii) engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or services may
to it seem necessary, expedient or desirable and rely upon any
advice so obtained;
(iv) rely as to any matters of fact which might reasonably be expected to
be within the knowledge of either of the Obligors upon a certificate
signed by or on behalf of such Obligor;
(v) rely upon any communication or document believed by it to be
genuine;
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(vi) refrain from exercising any right, power or discretion vested in it
as agent hereunder unless and until instructed by an Instructing
Group as to whether or not such right, power or discretion is to be
exercised and, if it is to be exercised, as to the manner in which
it should be exercised;
(vii) refrain from beginning any legal action or proceeding in connection
with this Agreement on behalf of any Bank until such Bank has given
its written consent thereto;
(viii) refrain from acting in accordance with any instructions of an
Instructing Group to begin any legal action or proceeding arising
out of or in connection with this Agreement until it shall have
received such security as it may require (whether by way of payment
in advance or otherwise) for all costs, claims, losses, expenses
(including legal fees) and liabilities together with any VAT thereon
which it will or may expend or incur in complying with such
instructions; and
(ix) if it is unable to obtain instructions or communicate with a Bank
after making reasonable attempts to do so, either refrain from
acting as Agent on behalf of such Bank or take such action on behalf
of such Bank as it in its absolute discretion deems appropriate and
reasonable and shall not be liable to such Bank as a result of any
such action or inaction.
28.3 The Agent shall:
(i) promptly inform each Bank of the contents of any notice or document
received by it in its capacity as Agent from either of the Obligors
hereunder;
(ii) promptly notify each Bank of the occurrence of any Event of Default
or any default by either of the Obligors in the due performance of
or compliance with its obligations under this Agreement of which the
Agent, in its capacity as agent for the Banks, has received express
notice from any other party hereto or (in the case of a payment
default hereunder) gained actual knowledge,
(iii) save as otherwise provided herein, act as agent hereunder in
accordance with any instructions given to it by an Instructing
Group, which instructions shall be binding on all of the Arrangers
and the Banks; and
(iv) if so instructed by an Instructing Group, refrain exercising any
right, power or discretion vested in it as agent hereunder.
28.4 Notwithstanding anything to the contrary expressed or implied herein.
neither the Agent nor any of the Arrangers shall:
(i) be bound to enquire as to:
(a) whether or not any representation made by either of the
Obligors in connection herewith is true;
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(b) the occurrence or otherwise of any Event of Default or
Potential Event of Default;
(c) the performance by either of the Obligors of its obligations
hereunder; or
(d) any breach of or default by either of the Obligors of or under
its obligations hereunder;
(ii) be bound to account to any Bank for any sum or the profit element of
any sum received by it for its own account;
(iii) be bound to disclose to any other person any information relating to
any member of the Group if such disclosure would or might in its
opinion constitute a breach of any law or regulation or be otherwise
actionable at the suit of any person; or
(iv) be under any obligations other than those for which express
provision is made herein.
28.5 Each Bank shall, in its Proportion, from time to time on demand by the
Agent, indemnify the Agent (to the extent the Agent has not previously been
indemnified by the Borrower), against any and all costs, claims, losses,
expenses (including legal fees) and liabilities together with any VAT thereon
which the Agent may incur, otherwise than by reason of its own gross negligence
or wilful misconduct, in acting in its capacity as agent hereunder.
28.6 Neither the Agent and the Arrangers nor any of them accepts any
responsibility for the accuracy and/or completeness of the Information
Memorandum or any other information supplied by either of the Obligors in
connection herewith or for the legality, validity, effectiveness, adequacy or
enforceability of this Agreement and neither the Agent and the Arrangers nor any
of them shall be under any liability as a result of taking or omitting to take
any action in relation to this Agreement, save in the case of gross negligence
or wilful misconduct.
28.7 Each of the Banks agrees that it will not assert or seek to assert against
any director, officer or employee of the Agent or any Arranger any claim it
might have against any of them in respect of the matters referred to in Clause
28.6.
28.8 The Agent and each of the Arrangers may accept deposits from, lend money to
and generally engage in any kind of banking or other business with any member of
the Group.
28.9 The Agent may resign its appointment thereunder at any time without
assigning any reason therefor by giving not less than thirty days' prior written
notice to that effect to each of the other parties hereto or an Instructing
Group may at any time terminate the appointment of the Agent by giving not less
than sixty days' prior written notice to the Agent, copied to all parties
hereto. Provided that no such resignation or termination shall be
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effective until a successor for the Agent is appointed in accordance with the
succeeding provisions of this Clause 28.
28.10 If the Agent gives notice of its resignation, or its appointment is
terminated, pursuant to Clause 28.9, then any reputable and experienced bank or
other financial institution may be appointed as a successor to the Agent by an
Instructing Group during the period of such notice but, if no such successor is
so appointed, the Agent may appoint such a successor itself which shall be a
reputable and experienced bank or other financial institution.
28.11 If a successor to the Agent is appointed under the provisions of Clause
28.10, then (i) the retiring Agent shall be discharged from any further
obligation hereunder but shall remain entitled to the benefit of the provisions
of this Clause 28 and (ii) its successor and each of the other parties hereto
shall have the same rights and obligations amongst themselves as they would have
had if such successor had been a party hereto.
28.12 It is understood and agreed by each Bank that it has itself been, and will
continue to be, solely responsible for making its own independent appraisal of
and investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of each member of the Group and, accordingly, each
Bank warrants to the Agent and the Arrangers that it has not relied on and will
not hereafter rely on the Agent and the Arrangers nor any of them:
(i) to check or enquire on its behalf into the adequacy, accuracy
or completeness of any information provided by either of the
Obligors in connection with this Agreement or the transactions
herein contemplated (whether or not such information has been
or is hereafter circulated to such Bank by the Agent and the
Arrangers or any of them); or
(ii) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or
nature of any member of the Group.
28.13 In acting as Agent for the Banks, the Agent's agency division shall be
treated as a separate entity from any other of its divisions or departments and,
notwithstanding the foregoing provisions of this Clause 28, in the event that
the Agent should act for any member of the Group in any capacity in relation to
any other matter, any information given by such member of the Group to the Agent
in such other capacity may be treated as confidential by the Agent.
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Part 13
ASSIGNMENTS AND TRANSFERS
29. Benefit of Agreement
This Agreement shall be binding upon and enure to the benefit of each party
hereto and its or any subsequent successors, Transferees and assigns.
30. Assignments and Transfers by the Obligors
Neither of the Obligors shall be entitled to assign or transfer all or any of
its rights, benefits and obligations hereunder.
31. Assignments and Transfers by Banks
31.1 Any Bank may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 31.3 all or any of its rights,
benefits and obligations hereunder Provided that (i) no such assignment or
transfer (other than (i) to an affiliate of such Bank having its Facility Office
in a country in which another Bank has its Facility Office or (ii) to a Bank)
may be made without the prior written consent of the Borrower, such consent not
to be unreasonably withheld or delayed and to be deemed to have been given if a
response to a request for such consent is not received from the Borrower by such
Bank within fifteen business days of such request (incorporating such fifteen
business days deadline) being made, and (ii) no such transfer or assignment may
be made if the result thereof, at the time of such transfer or assignment or
immediately thereafter would be that either Obligor would be liable to pay an
additional amount or amounts pursuant to Clauses 11.1 or 13.1 which additional
amount or amounts would not have been payable had no such transfer or assignment
occurred unless the transferee or assignee accept responsibility to reimburse
such Obligor for any additional amount or amounts.
31.2 If any Bank assigns all or any of its rights and benefits hereunder in
accordance with Clause 31.1, then, unless and until the assignee has agreed with
the Agent, the Arrangers and the other Banks that it shall be under the same
obligations towards each of them as it would have been under if it had been an
original party hereto as a Bank, the Agent, the Arrangers and the other Banks
shall not be obliged to recognise such assignee as having the rights against
each of them which it would have had if it had been such a party hereto.
31.3 If any Bank wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 31.1, then such transfer may be
effected by the delivery to the Agent of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date specified
in such Transfer Certificate and the fifth business day after (or such earlier
business day endorsed by the Agent on such Transfer Certificate falling on or
after) the date of delivery of such Transfer Certificate to the Agent:
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(i) to the extent that in such Transfer Certificate the Bank party
thereto seeks to transfer its rights, benefits and obligations
hereunder, each of the Obligors and such Bank shall be
released from further obligations towards one another
hereunder and their respective rights against one another
shall be cancelled (such rights, benefits and obligations
being referred to in this Clause 31.3 as "discharged rights
and obligations");
(ii) each of the Obligors and the Transferee party thereto shall
assume obligations towards one another and/or acquire rights
against one another which differ from such discharged rights
and obligations only insofar as such Obligor and such
Transferee have assumed and/or acquired the same in place of
such Obligor and such Bank; and
(iii) the Agent, the Arrangers, such Transferee and the other Banks
shall acquire the same rights and benefits and assume the same
obligations between themselves as they would have acquired and
assumed had such Transferee been an original party hereto as a
Bank with the rights, benefits and/or obligations acquired or
assumed by it as a result of such transfer.
31.4 On the date upon which a transfer takes effect pursuant to Clause 31.3, the
Transferee in respect of such transfer shall pay to the Agent for its own
account a transfer fee of $800, payable under pre-advice, and notwithstanding
the provisions of Clause 31.3 such transfer shall not be effective until such
transfer fee is received by the Agent.
32. Disclosure of Information
Any Bank may disclose to any actual or potential assignee or Transferee or to
any person who may otherwise enter into contractual relations with such Bank in
relation to this Agreement such information about this Agreement or the Obligors
and the Group as such Bank shall consider appropriate.
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Part 14
MISCELLANEOUS
33. Calculations and Evidence of Debt
33.1 Interest and commitment commission shall accrue from day to day and shall
be calculated on the basis of a year of 360 days (or in any case where market
practice differs, in accordance with market practice) and the actual number of
days elapsed.
33.2 Any repayment of an Advance denominated in an Optional Currency shall
reduce the amount of such Advance by the amount of such Optional Currency repaid
and shall reduce the Dollar Amount of such Advance proportionately.
33.3 If on any occasion a Reference Bank or Bank fails to supply the Agent with
a quotation required of it under the foregoing provisions of this Agreement, the
rate for which such quotation was required shall be determined from those
quotations which are supplied to the Agent.
33.4 Each Bank shall maintain in accordance with its usual practice accounts
evidencing the amounts from time to time lent by and owing to it hereunder.
33.5 The Agent shall maintain on its books a control account or accounts in
which shall be recorded (i) the amount of any Advance made or arising hereunder
and each Bank's share therein, (ii) the amount of all principal, interest and
other sums due or to become due from either of the Obligors to any of the Banks
hereunder and each Bank's share therein and (iii) the amount of any sum received
or recovered by the Agent hereunder and each Bank's share therein.
33.6 In any legal action or proceeding arising out of or in connection with this
Agreement, the entries made in the accounts maintained pursuant to Clauses 33.4
and 33.5 shall in the absence of manifest error be conclusive evidence of the
existence and amounts of the obligations of the Obligors therein recorded.
33.7 A certificate of a Bank as to (i) the amount by which a sum payable to it
hereunder is to be increased under Clause 11.1 or (ii) the amount for the time
being required to indemnify it against any such cost, payment or liability as is
mentioned in Clause 11.2 or 13.1 shall, in the absence of manifest error, be
conclusive for the purposes of this Agreement.
33.8 A certificate of the Agent as to the amount at any time due from the
Borrower hereunder or the amount which, but for any of the obligations of the
Borrower hereunder being or becoming void, voidable, unenforceable or
ineffective, at any time would have been due from the Borrower hereunder shall,
in the absence of manifest error, be conclusive for the purposes of Part 8.
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34. Remedies and Waivers
No failure to exercise, nor any delay in exercising, on the part of the Agent,
the Arrangers and the Banks or any of them, any right or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right or remedy prevent any further or other exercise thereof or the exercise of
any other right or remedy. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
35. Partial Invalidity
If, at any time, any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction. neither the
legality, validity or enforceability of the remaining provisions hereof nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby.
36. Notices
36.1 Each communication to be made hereunder shall be made in writing but,
unless otherwise stated, may be made by telex, telefax or letter save that any
Notice of Drawdown or other communication of instructions for payment to be made
by one person to another hereunder shall be made by telex or letter.
36.2 Any communication or document to be made or delivered by one person to
another pursuant to this Agreement shall (unless that other person has by
fifteen days' written notice to the Agent specified another address) be made or
delivered to that other person at the address identified with its signature
below (or, in the case of a Transferee, at the end of the Transfer Certificate
to which it is a party as Transferee) and shall be deemed to have been made or
delivered when despatched (and the appropriate answerback received) (in the case
of any communication made by telex) or (in the case of any communication made by
letter) when left at that address or (as the case may be) ten days after being
deposited in the post postage prepaid in an envelope addressed to it at that
address or (in the case of any communication by telefax) when actually received
Provided that any communication or document to be made or delivered to the Agent
shall be effective only when received by the Agent and then only if the same is
expressly marked for the attention of the department identified with the Agent's
signature below (or such other department as the Agent shall from time to time
specify for this purpose) and provided further that if the time of receipt of
any communication or document is not a business day in the country of the
addressee or is not within working hours, such communication or document shall
be deemed to have been received at the opening of business on the next business
day.
36.3 Each communication and document (except for the documents set out in
paragraphs 1 and 2 of the Third Schedule) made or delivered by one party to
another pursuant to this Agreement shall be in the English language or
accompanied by a translation thereof into English certified (by an officer of
the person making delivering the same) as being a true and accurate translation
thereof and, in this case, the English translation shall be conclusive unless
the communication or document is a statutory or other official document.
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Part 15
LAW AND JURISDICTION
37. Law
This Agreement shall be governed by, and shall be construed in accordance with,
English law.
38. Jurisdiction
38.1 Each of the parties hereto irrevocably agrees for the benefit of each of
the Agent, the Arrangers and the Banks that the courts of England shall have
jurisdiction to hear and determine any suit, action or proceeding, and to settle
any disputes, which may arise out of or in connection with this Agreement and,
for such purposes, irrevocably submits to the jurisdiction of such courts.
38.2 Each of the Obligors irrevocably waives any objection which it might now or
hereafter have to the courts referred to in Clauses 38.1 being nominated as the
forum to hear and determine any suit, action or proceeding, and to settle any
disputes, which may arise out of or in connection with this Agreement and agrees
not to claim that any such court is not a convenient or appropriate forum.
38.3 Each of the Obligors agrees that the process by which any suit, action or
proceeding is begun may be served on it by being delivered in England, to
Incentive Group Limited, c/o Munters Ltd, Blackstone Road, Huntingdon, Cambs
PE18 6EP, England or other its principal place of business for the time being.
If the appointment of the person mentioned in this Clause 38.3 ceases to be
effective in respect of either or both Obligors, such Obligor or Obligors shall
immediately appoint a further person in England to accept service of process on
its behalf in England and, failing such appointment within 15 days, the Agent
shall be entitled to appoint such a person by notice to such Obligor or
Obligors. Nothing contained herein shall affect the right to serve process in
any other manner permitted by law.
38.4 The submission to the jurisdiction of the courts referred to in Clauses
38.1 shall not (and shall not be construed so as to) limit the right of the
Agent, the Arrangers and the Banks or any of them to take proceedings against
either of the Obligors in any other court of competent jurisdiction nor shall
the taking of proceedings in any one or more jurisdictions preclude the taking
of proceedings in any other jurisdiction (whether concurrently or not) if and to
the extent permitted by applicable law.
38.5 Each of the Obligors hereby consents generally in respect of any legal
action or proceeding arising out of or in connection with this Agreement to the
giving of any relief or the issue of any process in connection with such action
or proceeding including, without limitation, the making. enforcement or
execution against any property whatsoever (irrespective of its use or intended
use) of any order or judgment which may be made or given in such action or
proceeding.
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38.6 To the extent that either of the Obligors may in any jurisdiction claim for
itself or its assets immunity from suit, execution, attachment (whether in aid
of execution, before judgment or otherwise) or other legal process and to the
extent that in any such jurisdiction there may be attributed to itself or its
assets such immunity (whether or not claimed), such Obligor hereby irrevocably
agrees not to claim and hereby irrevocably waives such immunity to the full
extent by the laws of such jurisdiction.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
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THE FIRST SCHEDULE
The Banks
Bank Commitment (US$)
Deutsche Bank Luxembourg S.A. 75,000,000
Enskilda, Skandinaviska Enskilda Banken AB (publ) 75,000,000
Banque Nationale de Paris London Branch 60,000,000
Commerzbank International S.A. 60,000,000
Den Danske Bank Aktieselskab 60,000,000
Societe Generale 60,000,000
The Sumitomo Bank, Limited 60,000,000
Svenska Handelsbanken AB (publ) 60,000,000
Union Bank of Switzerland 60,000,000
Bayerische Landesbank Girozentrale 45,000,000
The Dai-Ichi Kangyo Bank, Limited 45,000,000
Dresdner Bank Luxembourg S.A. 45,000,000
Morgan Guaranty Trust Company of New York 45,000,000
Nordbanken AB (publ) 45,000,000
Swedbank - Sparbanken Sverige 45,000,000
ABN AMRO Bank N.V., Stockholm Branch 20,000,000
Banque et Caisse d'Epargne de L'Etat, Luxembourg 20,000,000
Barclays Bank PLC 20,000,000
Citibank International Plc, Sweden Branch 20,000,000
Credit Lyonnais Franch bankfilial 20,000,000
The Mitsubishi Bank, Limited 20,000,000
The Sanwa Bank, Limited 20,000,000
Scotiabank (Ireland) Limited 20,000,000
----------
Total 1,000,000,000
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THE SECOND SCHEDULE
Form of Transfer Certificate
To: Enskilda, Skandinaviska Enskilda Banken AB (publ) in its capacity as Agent
TRANSFER CERTIFICATE
relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "Facility Agreement") dated 4 March, 1996 whereby a
$1,000,000,000 multicurrency revolving credit facility was made available to
Incentive Treasury AB (publ) as borrower under the guarantee of Incentive AB
(publ) as guarantor by a group of banks on whose behalf Enskilda, Skandinaviska
Enskilda Banken AB (publ) acted as agent in connection therewith.
1. Terms defined in the Facility Agreement shall, subject to any contrary
indication, have the same meanings herein. The terms Bank and Transferee are
defined in the schedule hereto.
2. The Bank (i) confirms that the details in the schedule hereto under the
heading "Bank's Commitment" or "Advance(s)" accurately summarises its Commitment
and/or, as the case may be, its participation in, and the Term and Repayment
Date of, one or more existing Advances and (ii) requests the Transferee to
accept and procure the transfer to the Transferee of the portion specified in
the schedule hereto of, as the case may be, its Commitment and/or its
participation in such Advance(s) by counter-signing and delivering this Transfer
Certificate to the Agent at its address for the service of notices specified in
the Facility Agreement.
3. The Transferee hereby requests the Agent to accept this Transfer Certificate
as being delivered to the Agent pursuant to and for the purposes of Clause 31.3
of the Facility Agreement so as to take effect in accordance with the terms
thereof on the Transfer Date or on such later date as may be determined in
accordance with the terms thereof.
4. The Transferee confirms that it has received a copy of the Facility Agreement
together with such other information as it has required in connection with this
transaction and that it has not relied and will not hereafter rely on the Bank
to check or enquire on its behalf into the legality, validity, effectiveness,
adequacy, accuracy or completeness of any such information and further agrees
that it has not relied and will not rely on the Bank to assess or keep under
review on its behalf the financial condition, creditworthiness, condition,
affairs, status or nature of any member of the Group.
5. The Transferee hereby undertakes with the Bank and each of the other parties
to the Facility Agreement that it will perform in accordance with their terms
all those obligations which by the terms of the Facility Agreement will be
assumed by it after delivery of this Transfer Certificate to the Agent and
satisfaction of the conditions (if any) subject to which this Transfer
Certificate is expressed to take effect.
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6. The Bank makes no representation or warranty and assumes no responsibility
with respect to the legality, validity, effectiveness, adequacy or
enforceability of the Facility Agreement or any document relating thereto and
assumes no responsibility for the financial condition of any member of the Group
or for the performance and observance by the Borrower or the Guarantor of any of
its obligations under the Facility Agreement or any document relating thereto
and any and all such conditions and warranties, whether express or implied by
law or otherwise, are hereby excluded.
7. The Bank hereby gives notice that nothing herein or in the Facility Agreement
(or any document relating thereto) shall oblige the Bank to (i) accept a
re-transfer from the Transferee of the whole or any part of its rights, benefits
and/or obligations under the Facility Agreement transferred pursuant hereto or
(ii) support any losses directly or indirectly sustained or incurred by the
Transferee for any reason whatsoever including, without limitation, the
non-performance by the Borrower, the Guarantor or any other party to the
Facility Agreement (or any document relating thereto) of its obligations under
any such document. The Transferee hereby acknowledges the absence of any such
obligation as is referred to in (i) or (ii) above.
8. This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English law.
THE SCHEDULE
1. Bank:
2. Transferee:
3. Transfer Date:
4. Commitment:
Bank's Commitment Portion Transferred
5. Advance(s):
Amount of Term and
Bank's Participation Repayment Date Portion Transferred
[Transferor Bank] [Transferee Bank]
By: By:
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Date: Date:
57
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Administrative Details of Transferee
Address:
Contact Name:
Account for Payments
in dollars:
Telex:
Telephone:
Facsimile:
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THE THIRD SCHEDULE
Condition Precedent Documents
1. In relation to each of the Obligors:
(i) a copy, certified a true copy by a duly authorised officer of
such Obligor. of the certificate of registration, issued by
the Patent- and Registration Office, and the articles of
association of such Obligor; and
(ii) a copy, certified a true copy by a duly authorised officer of
such Obligor, of a Board Resolution of such Obligor approving
the execution, delivery and performance of this Agreement and
the terms and conditions hereof.
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2. An opinion of the Borrower's and Guarantor's Swedish Counsel dated on or
after the date of this Agreement and in substantially the form set out in the
Fifth Schedule.
3. An opinion of the Banks' Swedish Counsel dated on or after the date of this
Agreement and in substantially the form set out in the Sixth Schedule.
4. An opinion of Clifford Chance, solicitors to the Agent dated on or after the
date of this Agreement and, in substantially the form distributed to the Banks
prior to the execution hereof.
5. Evidence that Incentive Group Limited, c/o Munters Ltd. Blackstone Road,
Huntingdon, Cambs PE18 6EP, England has agreed to act as the agent of the
Obligors for the service of process in England.
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THE FOURTH SCHEDULE
Notice of Drawdown
From: Incentive Treasury AB (publ)
To: Enskilda, Skandinaviska Enskilda Banken AB (publ)
Dated:
Dear Sirs,
1. We refer to the agreement (as from time to time amended, varied, novated or
supplemented, the "Facility Agreement") dated 4 March, 1996 and made between
Incentive Treasury AB (publ) as borrower, Incentive AB (publ) as guarantor,
Deutsche Bank Luxembourg S.A. and Enskilda, Skandinaviska Enskilda Banken AB
(publ) as arrangers, Enskilda, Skandinaviska Enskilda Banken AB (publ) as agent
and the financial institutions named therein as banks. Terms defined in the
Facility Agreement shall have the same meaning in this notice.
2. We hereby give you notice that, pursuant to the Facility Agreement and upon
the terms and subject to the conditions contained therein, we wish an Advance to
be made to us as follows:
(i) Currency:
(ii) Dollar Amount:
(iii) Drawdown Date:
(iv) Term:
[3. If it is not possible, pursuant to Clause 6.5 Of the Facility Agreement, for
the Advance to be made in the currency specified, we would wish the Advance to
be denominated in dollars.]
[3/4.] We confirm that, at the date hereof, the representations set out in
Clause 15.1 and 15.2 (except sub-Clauses 15.2 (v), (viii) and (xiv)) of the
Facility Agreement are true and no Event of Default or Potential Event of
Default has occurred.
[4/5.] The proceeds of this drawdown should be credited to [insert account
details].
Yours faithfully
for and on behalf of
Incentive Treasury AB (publ)
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THE FIFTH SCHEDULE
Opinion of the Borrower's and Guarantor's Swedish Counsel
To: Enskilda, Skandinaviska Enskilda Banken AB (publ) as agent on its own
behalf and for and on behalf of the Arrangers and the Banks referred to in
the Facility Agreement mentioned below.
Dear Sirs,
1. We have acted on behalf of Incentive Treasury AB (publ) and Incentive AB
(publ) in connection with an agreement (the "Facility Agreement") dated 4 March,
1996 and made between Incentive Treasury AB (publ) as borrower, Incentive AB
(publ) as guarantor, Deutsche Bank Luxembourg S.A. and Enskilda, Skandinaviska
Enskilda Banken AB (publ) as arrangers, Enskilda, Skandinaviska Enskilda Banken
AB (publ) as agent and the financial institutions defined therein as Banks.
2. Terms defined in the Facility Agreement shall have the same meaning herein.
3. We have examined a signed copy of the Facility Agreement and such other
documents as we have considered it necessary or desirable to examine and, on the
assumption that the Facility Agreement is valid and legally binding under
English law (and subject as mentioned below), we are of the opinion that
(A) the statements set out in Clause 15.1 (i) - (x) of the Facility
Agreement are true insofar as the same relate to the Obligors; and
(B) a judgement obtained in a court in England is enforceable in Sweden
pursuant to the rules of the 1988 Lugano Convention on Jurisdiction
and the Enforcement of Judgements in Civil Matters (the "Lugano
Convention") as implemented in Sweden. If such judgment does not
satisfy the applicable enforcement provisions of the Lugano
Convention then, we believe, although there is no legislative
authority on the subject, that in view of the judicial developments
in Sweden that Swedish courts would give an enforceable Swedish
judgment on the basis of a judgment for money obtained in an English
court provided that such English judgment was given by a competent
court in England, had gained legal force according to the applicable
procedural rules in England and is not contrary to public policy in
Sweden.
4. This opinion is confined to matters of Swedish law and no opinion is
expressed as to the laws of any other jurisdiction.
5. We have assumed the following:
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1. The Facility Agreement is within the capacity and power of and has been
validly authorized, executed and delivered by and is binding on the
parties thereto, other than the Obligors, which matters we have not
independently verified; and
2. The genuineness of all signatures and the authenticity of all documents
submitted to us as originals and the conformity with the originals of all
documents submitted to us as copies thereof, and we have found nothing to
indicate that such assumptions are not fully justified.
The qualifications to which this opinion is subject are as follows:
1. The availability in Swedish courts of equitable remedies, such as
injunction and specific performance, is restricted under Swedish law.
2. Swedish courts may award judgments expressed in foreign currencies, but an
enforcement in Sweden by the execution authorities of a payment order in
the judgment can generally only be performed in Swedish Kronor.
Enforcement in Sweden of such judgments would, if implemented in Swedish
Kronor, be generally at the rate of exchange prevailing at the date of
enforcement rather than at the date of judgment.
3. Nothing in this opinion must be taken as indicating that obligations would
be specifically enforceable and an enforcement of any agreement or
instrument may be limited by bankruptcy, insolvency, liquidation,
reorganisation, limitation, and other laws of general application
regarding or affecting the rights or creditors.
4. Pursuant to the Swedish Contract Act, a contract term may be modified or
set aside if it is adjudged to be unreasonable. Where any party to an
agreement is vested with a discretion or may determine a matter in its
opinion, Swedish law may require that such discretion is exercised
reasonably or that such opinion is based on reasonable grounds and a
provision that a certain determination is conclusive and binding will not
prevent judicial enquiry into the merits of any claim by an aggrieved
party.
5. A Swedish court may reject the right to take proceedings in Sweden if
proceedings which may have or may lead to a judgment which is enforceable
in Sweden have already been taken in another court of competent
jurisdiction within or outside Sweden.
6. In giving the foregoing opinion, we have relied as to certain factual
matters upon certificates of officers of the Obligors and of public
officials.
7. This opinion is confirmed to and is given on the basis of Swedish law as
it exists at the date hereof. We have made no investigations of the laws
of England as a basis for this opinion and do not express or imply any
opinion thereon.
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8. This opinion is strictly limited to the matters stated herein and is not
to be read as extending by implication to any other matters in connection
with the Facility Agreement referred to herein or the transactions
contemplated by such agreement.
This opinion is addressed to you and, without our express consent, is not to be
transmitted to any other person, nor is it to be relied upon by any other person
or for any purpose.
Yours faithfully,
ADVOKATFIRMAN VINGE
Hans Wibom
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THE SIXTH SCHEDULE
Opinion of the Banks' Swedish Counsel
To: the Arrangers and the Banks
(each as defined in the Facility
Agreement referred to below)
and
Enskilda, Skandinaviska Enskilda Banken AB (publ)
as Agent
Stockholm, [ ] March, 1996
Dear Sirs,
Re: US $1,000,000,000 Multicurrency Revolving Credit Facility dated 4
March, 1996, (the "Facility Agreement") for Incentive Treasury AB (publ)
as Borrower and guaranteed by Incentive AB (publ) as Guarantor
1. We have acted as your legal advisers in Sweden in connection with the
Facility Agreement made between the Borrower, the Guarantor, the Arrangers, the
banks and other financial institutions listed on the signature pages of the
Facility Agreement as lenders participating in the Revolving Credit Facility and
the Agent.
2. For the purposes of this opinion, we have examined and relied upon:
(a) a conformed copy of the Facility Agreement;
(b) a copy of each of the Borrower's and the Guarantor's articles of
association;
(c) a copy of the registration certificate of the Borrower issued by the
Patent and Registration Office on [_________];
(d) a copy of the registration certificate of the Guarantor issued by
the Patent and Registration Office on [__________];
(e) a copy of a Board Resolution of the Borrower passed at a meeting of
its board of directors on [________] approving the entering into the
Facility Agreement;
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(f) a copy of a board resolution of the Guarantor passed at a meeting of
its board of directors held on [__________] approving the giving of
its guarantee under the Facility Agreement;
(g) a copy of the power of attorney dated [______], 1996 authorizing Mr.
[____________] and Mr. [_____________] jointly to sign the Facility
Agreement on behalf of the Borrower; and
(h) a copy of the power of attorney dated [__________], 1996 authorizing
Mr. [______] and Mr. [__________] jointly to sign the Facility
Agreement on behalf of the Guarantor.
3. We have assumed the following:
(A) the Facility Agreement is within the capacity and power of and has
been validly authorized, executed and delivered by and is binding on
the parties thereto, other than the Borrower and the Guarantor,
which matters we have nor independently verified;
(B) the Facility Agreement and the rights and obligations created
thereby are valid and legally binding under the laws of England, by
which they are expressed to be governed; and
(C) the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity with the
originals of all documents submitted to us as copies thereof;
and we have found nothing to indicate that such assumptions are not fully
justified.
Terms defined in the Facility Agreement shall, when used in this opinion, have
the same meanings herein as therein unless otherwise defined.
4. Based on the foregoing, we are of the opinion that:
(A) so far as the laws of Sweden are concerned that the statements set
out in Clause 15.1 of the Facility Agreement are true and correct as
far as they relate to each Obligor respectively; and
(B) a judgement obtained in a court in England is enforceable in Sweden
pursuant to the rules of the 1988 Lugano Convention on Jurisdiction
and the Enforcement of Judgments in Civil Matters (the "Lugano
Convention") as implemented in Sweden. If such judgment does not
satisfy the applicable enforcement provisions of the Lugano
Convention then, we believe, although there is no legislative
authority on the subject, that in view of the judicial developments
in Sweden that Swedish courts would give an enforceable Swedish
judgment on the basis of a judgment for money obtained in an English
court provided that such English judgment was given by a competent
court in
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England, had gained legal force according to the applicable
procedural rules in England and is not contrary to public policy in
Sweden.
5. The qualifications to which this opinion is subject are as follows:
(1) The availability in Swedish courts of equitable remedies, such as
injunction and specific performance, is restricted under Swedish
law.
(2) Swedish courts may award judgments expressed in foreign currencies
(including $), but an enforcement in Sweden by the execution
authorities of a payment order in the judgment can generally only be
performed in Swedish kronor ("SEK"). Enforcement in Sweden of such
judgments would, if implemented in SEK, be generally at the rate of
exchange ruling at the date of enforcement rather than at the date
of judgment.
(3) Nothing in this opinion must be taken as indicating that obligations
would be specifically enforceable and an enforcement of any
agreement or instrument may be limited by bankruptcy, insolvency,
liquidation, reorganisation, limitation, and other laws of general
application regarding or affecting the rights of creditors.
(4) Pursuant to the Swedish Contract Act, a contract term may be
modified or set aside if it is adjudged to be unreasonable. Where
any party to an agreement is vested with a discretion or may
determine a matter in its opinion, Swedish law may require that such
discretion is exercised reasonably or that such opinion is based on
reasonable grounds and a provision that a certain determination is
conclusive and binding will not prevent judicial enquiry into the
merits of any claim by an aggrieved party. Although the Facility
Agreement is subject to English law, we cannot express any opinion
whether a Swedish court would find such equitable rules of the
Swedish Contracts Act applicable either directly or by reason of
Swedish public policy. However, in our opinion, having regard to all
the relevant circumstances, even if such rules of the Swedish
Contracts Act did apply, neither the Facility Agreement nor the
terms thereof would be subject to modification or being set aside
pursuant to such rules.
(5) A Swedish court may reject the right to take proceedings in Sweden
if proceedings which have or may lead to a judgment which is
enforceable in Sweden have already been taken in another court of
competent jurisdiction within or outside Sweden.
(6) In giving the foregoing opinion, we have relied as to certain
factual matters upon certificates by officers of the Borrower, the
Guarantor and by public officials.
(7) This opinion is confined to and is given on the basis of Swedish law
as it exists at the date hereof. We have made no investigations of
the laws of
67
<PAGE>
England as a basis for this opinion and do not express or imply any
opinion thereon.
(8) This opinion is strictly limited to the matters stated herein and is
not to be read as extending by implication to any other matters in
connection with the Facility Agreement.
This opinion is addressed to you and, without our express consent, is not to be
transmitted to any other person, nor is it to be relied upon by any other person
(in each case other than your legal advisers) or for any purpose other than in
connection with the Facility Agreement.
Yours faithfully
Hellstrom & Partners
68
<PAGE>
The Borrower
INCENTIVE TREASURY AB (PUBL)
By: MIKAEL LILIUS ANDERS JAGRAEUS
Address: Hamngatan 2
P.O. Box 7594
S-103 93 Stockholm
SWEDEN
Tel: (++46 8) 613 6540
Fax: (++46 8) 679 75 06
The Guarantor
INCENTIVE AB (PUBL)
By: MIKAEL LILIUS ANDERS JAGRAEUS
Address: P.O. Box 7373
S-103 91 Stockholm
SWEDEN
Tel: (++46 8) 613 65 00
Fax: (++ 46 8) 611 28 30
The Arrangers
DEUTSCHE BANK LUXEMBOURG S.A.
By: A. P. KLUBER
Address: 2, boulevard Konrad Adenauer
L-1115 Luxembourg
GRAND DUCHY of LUXEMBOURG
Tele: (++352) 42 122 - 1
Fax: (++ 352) 42 122 - 287
Telex: 2772 DEUT LU
69
<PAGE>
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
By: OLA ROMNEY
Address: 2 Cannon Street
London EC4M 6XX
ENGLAND
Tel: (+44 171) 246 4000
Fax: (+44 171) 236 4178
Telex: 8950281
The Agent
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
By: OLA ROMNEY
Address: 2 Cannon Street
London EC4M 6XX
ENGLAND
Tel: (+44 171) 246 4000
Fax: (+44 171) 236 4178
Telex: 8950281
The Banks
DEUTSCHE BANK LUXEMBOURG S.A.
By: A. P. KLUBER
Address: 2, boulevard Konrad Adenauer
L-1115 Luxembourg
GRAND DUCHY of LUXEMBOURG
Tel: (++352) 42 122 - 1
Fax: (++ 352) 42 122 - 287
Telex: 2772 DEUT LU
70
<PAGE>
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
By: OLA ROMNEY
Address: 2 Cannon Street
London EC4M 6XX
ENGLAND
Tel: (+44 171) 246 4000
Fax: (+44 171) 236 4178
Telex: 8950281
BANQUE NATIONALE DE PARIS LONDON BRANCH
By: OLA ROMNEY
Address: 8/13 King William Street
London EC4N 7QJ
ENGLAND
Tel: (++44 171) 895 70 70
Fax: (++44 171) 929 0310
Telex: 883412 BNPLNY G
COMMERZBANK INTERNATIONAL S.A.
By: OLA ROMNEY
Address: 11, rue Notre-Dame
L-2240 Luxembourg
GRAND DUCHY of LUXEMBOURG
Tel: (++352) 477 911 1
Fax: (++352) 477 911 419
Telex: 1293 CBKLU LU
71
<PAGE>
DEN DANSKE BANK AKTIESELSKAB
By: OLA ROMNEY
Address: 75 King William Street
London EC4N 7DT
ENGLAND
Tel: (++44 171) 410 8000
Fax: (++44 171) 410 0031
Telex: 896229 / 896220
SOCIETE GENERALE
By: OLA ROMNEY
Address: ENTR/FIN/ING
Tour Societe Generale
92972 Paris-La Defense Cedex
FRANCE
Tel: (++33 1) 42 13 33 81
Fax: (++33 1) 42 13 68 21
Telex: 280730 SGMAR
THE SUMITOMO BANK, LIMITED
By: OLA ROMNEY
Address: Temple Court
11 Queen Victoria Street
London EC4N 4TA
ENGLAND
Tel: (++44 171) 786 1000
Fax: (++44 171) 236 0049
Telex: 887667
72
<PAGE>
SVENSKA HANDELSBANKEN AB (PUBL)
By: A. P. KLUBER
Address: Blasieholmstorg 11
S-106 70 Stockholm
SWEDEN
Tel: (++46 8) 701 1000
Fax: (++46 8) 701 1069
Telex: 11090 HANDST S
UNION BANK OF SWITZERLAND
By: A. P. KLUBER
Address: P.O. Box 428
100 Liverpool Street
London EC2M 2RH
ENGLAND
Tel: (++44 171) 901 3333
Fax: (++44 171) 901 3903
Telex: 941 3848/3944 UBS COR G
BAYERISCHE LANDESBANK GIROZENTRALE
By: A. P. KLUBER
Address: Brienner Strasse 20
D-80277 Munich
GERMANY
Tel: (++49 89) 2171 2628
Fax: (++49 89) 2171 2200
Telex: 528620 GZM D
73
<PAGE>
THE DAI-ICHI KANGYO BANK, LIMITED
By: A. P. KLUBER
Address: DKB House
24 King William Street
London EC4R 9DB
ENGLAND
Tel: (++44 171) 283 0929
Fax: (++44 171) 929 3197
Telex: 884042
DRESDNER BANK LUXEMBOURG S.A.
By: A. P. KLUBER
Address: 26, rue du Marche-aux-Herbes
L-2097 Luxembourg
GRAND DUCHY of LUXEMBOURG
Tel: (++352) 4760-1
Fax: (++352) 4760 565
Telex: 2558 DRES LU
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: A. P. KLUBER
Address: P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
ENGLAND
Tel: (++44 171) 325 1489
Fax: (++44 171) 325 8114
Telex: 896631 MGT G
74
<PAGE>
NORDBANKEN AB (PUBL)
By: P. MITCHELL
Address: International Finance, H64
S-105 71 Stockholm
SWEDEN
Tel: (++46 8) 614 7182
Fax: (++46 8) 614 7630
Telex: 12399 NBBANK S
SWEDBANK - SPARBANKEN SVERIGE AB (PUBL)
By: P. MITCHELL
Address: Swedbank Markets/Large Corporates
S-105 34 Stockholm
SWEDEN
Tel: (++46 8) 790 1000
Fax: (++46 8) 791 8634
Telex: 12701 SWECIA S
ABN AMRO BANK N.V., STOCKHOLM BRANCH
By: P. MITCHELL
Address: Box 7826
S-103 97 Stockholm
SWEDEN
Tel: (++46 8) 679 40 00
Fax: (++46 8) 679 40 90
Telex: 12101 ABNSTO S
75
<PAGE>
BANQUE ET CAISSE D'EPARGNE DE L'ETAT, LUXEMBOURG
By: P. MITCHELL
Address: 1-2 Place de Metz
L-2954 Luxembourg
GRAND DUCHY of LUXEMBOURG
Tel: (++352) 4015 4337/4344
Fax: (++352) 4015 4284
Telex: 3417 EPPDA LU
BARCLAYS BANK PLC
By: P. MITCHELL
Address: BZW Structured Finance
St. Mary's Court
100, Lower Thames Street
London EC3R 6JN
ENGLAND
Tel: (++44 171) 775 8713
Fax: (++ 44 171) 775 1077
Telex: 921763 BAREPO G
CITIBANK INTERNATIONAL PLC, SWEDEN BRANCH
By: P. MITCHELL
Address: Box 1422
Norrlandsgatan 15
S-111 84 Stockholm
SWEDEN
Tel: (++46 8) 723 34 00
Fax: (++46 8) 611 48 43
Telex 17542 CITIAB S
76
<PAGE>
CREDIT LYONNAIS FRANCE BANKFILIAL
By: P. MITCHELL
Address: P.O. Box 26149
S-100 41 Stockholm
SWEDEN
Tel: (++ 46 8) 614 26 00
Fax: (++ 46 8) 611 13 94
Telex: 12540 CRELYON S
THE MITSUBISHI BANK, LIMITED
By: P. MITCHELL
Address: 6 Broadgate, Second Floor
London EC2M 2SX
ENGLAND
Tel: (++44 171) 696 1135
Fax: (++44 171) 334 0140
Telex: 8958931 BISHBK G
THE SANWA BANK, LIMITED
By: P. MITCHELL
Address: P.O. Box 36
City Place House
55 Basinghall Street
London EC2V 5DL
ENGLAND
Tel: (++44 171) 330 5000
Fax: (++44 171) 330 5555
Telex: 888350
77
<PAGE>
SCOTIABANK (IRELAND) LIMITED
By: P. MITCHELL
Address: IFSC House
Custom House Quay
Dublin 1
IRELAND
Tel: (++353 1) 7902000
Fax: (++353 1) 6700684
Telex: 91861
78
<PAGE>
U.S.$ 500,000,000
MULTICURRENCY REVOLVING CREDIT FACILITY AGREEMENT
between
INCENTIVE TREASURY AB
as borrower
INCENTIVE AB
as guarantor
DEUTSCHE BANK LUXEMBOURG S.A.
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN
as arrangers
DEUTSCHE BANK LUXEMBOURG S.A.
as agent
and
OTHERS
Clifford Chance
Frankfurt
<PAGE>
CONTENTS
Clause Page No.
Part 1
INTERPRETATION
1. Interpretation................................................. 1
Part 2
THE FACILITY
2. The Facility................................................... 9
3. Purpose........................................................ 9
4. Conditions Precedent........................................... 9
5. Nature of Banks' Obligations................................... 9
Part 3
UTILISATION OF THE FACILITY
6. Utilisation of the Facility.................................... 10
Part 4
INTEREST
7. Interest....................................................... 13
8. Market Disruption and Alternative Interest Rates............... 13
Part 5
REPAYMENT AND CANCELLATION
9. Repayment...................................................... 14
10. Cancellation................................................... 14
Part 6
CHANGES IN CIRCUMSTANCES
11. Taxes.......................................................... 16
<PAGE>
ii
12. Tax Receipts and Mitigation.................................... 17
13. Increased Costs................................................ 17
14. Illegality..................................................... 18
Part 7
REPRESENTATIONS, COVENANTS AND EVENTS OF DEFAULT
15. Representations................................................ 19
16. Financial Information.......................................... 22
17. Covenants...................................................... 23
18. Events of Default.............................................. 28
Part 8
GUARANTEE
19. Guarantee...................................................... 31
20. Preservation of Rights......................................... 31
Part 9
DEFAULT INTEREST AND INDEMNITY
21. Default Interest and Indemnity................................. 34
Part 10
PAYMENTS
22. Currency of Account and Payment................................ 36
23. Payments....................................................... 37
24. Set-Off........................................................ 39
25. Redistribution of Payments..................................... 39
Part 11
FEES, COSTS AND EXPENSES
26. Fees.......................................................... 41
27. Costs and Expenses............................................ 41
Part 12
AGENCY PROVISIONS
28. The Agent, the Arrangers and the Banks........................ 43
<PAGE>
iii
Part 13
ASSIGNMENTS AND TRANSFERS
29. Benefit of Agreement........................................... 47
30. Assignments and Transfers by the Obligors...................... 47
31. Assignments and Transfers by Banks............................. 47
Part 15
LAW AND JURISDICTION
37. Law............................................................ 51
38. Jurisdiction................................................... 51
THE SCHEDULES
The First Schedule : The Banks
The Second Schedule : Form of Transfer Certificate
The Third Schedule : Condition Precedent Documents
The Fourth Schedule : Notice of Drawdown
The Fifth Schedule : European Currency Unit
The Sixth Schedule : Form of LC Notification
The Seventh Schedule : Opinion of the Borrower's and
Guarantor's Swedish Counsel
The Eighth Schedule : Opinion of the Banks' Swedish Counsel
The Ninth Schedule : Associated Costs Rate
<PAGE>
THIS AGREEMENT is made the 24th day of May 1995
BETWEEN
(1) INCENTIVE TREASURY AB (the "Borrower");
(2) INCENTIVE AB (the "Guarantor");
(3) DEUTSCHE BANK LUXEMBOURG S.A. and ENSKILDA,
SKANDINAVISKA ENSKILDA BANKEN (the "Arrangers"),
(4) DEUTSCHE BANK LUXEMBOURG S.A. (the "Agent"); and
(5) THE FINANCIAL INSTITUTIONS named in the First Schedule
(the "Banks").
NOW IT IS HEREBY AGREED as follows:
Part 1
INTERPRETATION
1. Interpretation
1.1 In this Agreement:
"Advance" means, save as otherwise provided herein, an advance made
or to be made by the Banks hereunder;
"Associated Costs Rate" means, in relation to any Advance or unpaid
sum denominated in sterling, the rate determined in accordance with the
Ninth Schedule;
"Available Commitment" means, in relation to a Bank at any time and
save as otherwise provided herein, its Commitment at such time less the
aggregate of its portions of the Dollar Amounts of the Advances which are
then outstanding Provided that such amount shall not be less than zero;
"Available Facility" means, at any time, the aggregate amount of the
Available Commitments at such time;
"Commitment" means, in relation to a Bank at any time and save as
otherwise provided herein (in particular in Clause 10.4), the amount set
opposite its name in the First Schedule;
"Consolidated Relevant Total Assets" means the consolidated total
assets of the Group as shown in the latest audited consolidated accounts
of the Guarantor less
<PAGE>
2
(a) the Relevant Total Assets of any member of the Group which
is listed an a recognised Stock Exchange and which is not a
Principal Subsidiary;
(b) the Relevant Total Assets of WABCO at any time when WABCO
is not a Principal Subsidiary; and
(c) the value of all intangible assets (including goodwill),
in each case as such assets in (a), (b) or (c) are reflected in the latest
audited consolidated accounts of the Guarantor;
"December 1994 Advance" means the advance in a principal amount of
$150,000,000 made to Incentive Treasury AB on 23 December 1994, under the
1994 Facility and having a repayment date on 26 June 1995;
"Dollar Amount" means:
(i) in relation to any Advance, the, amount thereof requested
in the Notice of Drawdown relating thereto (as the same may be
reduced pursuant to Clause 6.8);
(ii) in relation to the Loan, the aggregate of the Dollar
Amounts of the outstanding Advances; and
(iii) in relation to any Letter of Credit, the amount in
dollars thereof notified to the Agent in the LC Notification or, if
such Letter of Credit is not denominated in dollars, the equivalent
of such amount calculated as at the date of issue of such Letter of
Credit.
"Event of Default" means any of those events specified in Clause
18.1;
"Facility" means the multicurrency revolving credit facility granted
to the Borrower in this Agreement;
"Facility Office" means, in relation to the Agent or any Bank, the
office identified with its signature below (or, in the case of a
Transferee, at the end of the Transfer Certificate to which it is a party
as Transferee) or such other office as it may from time to time select;
"Final Maturity Date" means the day which is 84 months after the
date hereof;
"Financing Subsidiary" means a subsidiary of the Borrower the sole
or principal activity of which is to provide finance to the Group;
"Financial Indebtedness" means indebtedness for or in respect of
money borrowed or raised by whatever means including, without limitation,
by means of acceptances under any acceptance credit facility, the issue of
loan stock and any obligations evidenced by bonds, debentures, notes or
other similar instruments, any liability in respect of leases entered into
for the purpose of raising or
<PAGE>
3
obtaining finance or deposits, the entering into swaps or other derivative
instruments or any other transaction having the commercial effect of
borrowing;
"Gambro" means Gambro AB of Lund, Sweden;
"Group" means the Guarantor and its subsidiaries for the time being;
"Group Pension Fund" means Arbetsmarknadsforsakringar
Pensionsforsakringsaktlebolag;
"Instructing Group" means:
(i) whilst no Advances are outstanding hereunder, a Bank or
group of Banks whose Commitments amount (or, if each Bank's
Commitment has been reduced to zero, did immediately before such
reduction to zero, amount) in aggregate to more than fifty per cent.
(50%) of the Total Commitments; and
(ii) whilst at least one Advance is outstanding hereunder, a
Bank or group of Banks to whom in aggregate more than fifty per
cent. (50%) of the Dollar Amount of the Loan is owed;
"LC Agreement" means any agreement entered into by the Borrower and
a Bank or Banks pursuant to which such Bank or Banks agree(s) to issue a
Letter of Credit on terms agreed between the Borrower and such Bank or
Banks and in respect of which a LC Notification has been delivered to the
Agent and the Agent has reduced such Bank's or Banks' Available Commitment
pursuant to Clause 10.4;
"LC Notification" means a notice to be delivered pursuant to Clause
10.4 by the Borrower and a Bank to the Agent in the form or substantially
in the form set out in the Sixth Schedule;
"Letter of Credit" means a letter of credit issued or to be issued
by a Bank or Banks on behalf of the Borrower;
"LIBOR" means, in relation to any Advance or unpaid sum, the rate
per annum determined by the Agent to be equal to (a) the offered rates (if
any) appearing on page 3740 or, as applicable, 3750 of the Telerate screen
which displays British Bankers Association Interest Settlement Rates for
deposits in the currency in which such Advance or unpaid sum is to be or
is denominated (or such other page as may replace that page) for the
specified period at 11:00 a.m. London time (or Paris time, if the currency
is Eurosterling) on the Quotation Date for such period or, if no such
rates are quoted, (b) the arithmetic mean (rounded upwards, if not already
such a multiple, to the nearest whole multiple of one-sixteenth of one per
cent.) of the rates (as notified to the Agent) at which each of the
Reference Banks was offering to prime banks in the London Interbank Market
(or in the Paris Interbank Market, if the currency is Eurosterling)
deposits in the currency in which such Advance or unpaid sum is to be
denominated and for the specified period at or about 11:00 a.m. London
time (or Paris time, if the currency is Eurosterling) on the Quotation
Date for such period and, for the purposes of this definition, "specified
period" means the Term of such Advance or, as the case may be, the period
in respect of which LIBOR falls to be determined in relation to such
unpaid sum;
<PAGE>
4
"Loan" means the aggregate principal amount for the time being
outstanding hereunder;
"Margin" means for the period from the date hereof until the falling
48 months after the date hereof 0.20 per cent per annum and thereafter
0.25 per cent per annum;
"Material Subsidiary" means the Borrower or any other subsidiary of
the Guarantor whose assets or revenues represent more than 10 per cent. of
the consolidated total assets or revenues of the Group as shown in the
latest audited consolidated accounts of the Guarantor;
"1994 Facility" mean the Multicurrency Revolving Credit Facility
Agreement dated 17 June 1994 as amended and made between Incentive
Treasury AB as borrower, Incentive AB as guarantor, Deutsche Bank
Luxembourg S.A. and Enskilda Corporate, Skandinaviska Enskilda Banken as
arrangers, Deutsche Bank Luxembourg S.A. as agent and the financial
institutions defined therein as Banks;
"Notice of Drawdown" means a notice substantially in the form set
out in the Fourth Schedule;
"Obligors" means the Borrower and the Guarantor;
"Optional Currency" means any eurocurrency (other than dollars but
including ECU) which is freely transferable and freely convertible into
dollars;
"Original Financial Statements" means:
(i) in relation to the Borrower, its audited financial
statements for its financial year ended December 31st, 1994, and
(ii) in relation to the Guarantor, its audited consolidated
and unconsolidated financial statements for its financial year ended
December 31st, 1994;
"Potential Event of Default" means any event which may become (with
the passage of time, the giving of notice, the making of any determination
hereunder or any combination thereof) an Event of Default;
"Principal Subsidiaries" means (a) the Borrower and its
subsidiaries, (b) any other subsidiary of the Guarantor in which the
Guarantor holds directly or indirectly more than 90 per cent. of the share
capital or the voting rights and which is not listed on a recognised Stock
Exchange, (c) any other subsidiary of the Guarantor in which the Guarantor
holds directly or indirectly 95% or more of the share capital and the
voting rights and which is listed on a recognised Stock Exchange, (d) at
all times, Gambro and (e) any other subsidiary of the Guarantor nominated
as a Principal Subsidiary by the Guarantor (until such time as the
Guarantor notifies the Agent that such Subsidiary is no longer to be a
Principal Subsidiary), provided that the Guarantor shall at all times
ensure that Relevant Total Assets of the Guarantor and the Principal
Subsidiaries shall be at least 80 per cent. of Consolidated Relevant Total
Assets.
<PAGE>
5
"Proportion" means, in relation to a Bank:
(i) whilst no Advances are outstanding hereunder, the
proportion borne by its Commitment to the Total Commitments (or, if
the Total Commitments are then zero, by its Commitment to the Total
Commitments immediately prior to their reduction to zero); or
(ii) whilst at least one Advance is outstanding hereunder, the
proportion borne by its share of the aggregate Dollar Amounts of the
Advance(s) to the aggregate Dollar Amounts of the Advance(s);
"Quotation Date" means, in relation to any period for which an
interest rate is to be determined hereunder, the day on which quotations
would ordinarily be given by prime banks in the London Interbank Market
(or if the relevant currency is Eurosterling, the Paris Interbank Market)
for deposits in the currency in relation to which such rate is to be
determined for delivery on the first day of that period Provided that, if
for any such period quotations would ordinarily be given on more than one
date, the Quotation Date for that period shall be the last of those dates;
"Reference Banks" means Deutsche Bank Luxembourg S.A. and the
principal London (in the case of sterling. Paris) offices of Enskilda,
Skandinaviska Enskilda Banken and Citibank International Plc or such other
bank or banks as may from time to time be agreed between the Borrower and
an Instructing Group;
"Relevant Total Assets" means in relation to any member of the Group
its total assets as shown in its latest audited unconsolidated accounts
less
(i) the aggregate of all receivables due from other members of
the Group in each case as shown in its latest audited unconsolidated
accounts; and
(ii) the value of all intangible assets (including goodwill)
in each case as shown in its latest audited unconsolidated accounts;
"Repayment Date" means, in relation to any Advance, the last day of
the Term thereof;
"Supplemental Information Memorandum' means the document concerning
the Obligors which, at their request and on their behalf, was prepared in
relation to this transaction and distributed by the Arrangers to selected
banks during April 1995;
"Term" means, save as otherwise provided herein, in relation to any
Advance, the period for which such Advance is borrowed as specified in the
Notice of Drawdown relating thereto;
"Total Borrowings" means the aggregate of all Financial Indebtedness
of the Guarantor and the Principal Subsidiaries less
(i) any Financial Indebtedness between the Guarantor and the
Principal Subsidiaries or between Principal Subsidiaries;
<PAGE>
6
(ii) any Financial Indebtedness of the Guarantor or the
Principal Subsidiaries to a Group Pension Fund; and
(iii) any Financial Indebtedness of a Principal Subsidiary
existing on the date of it becoming a Principal Subsidiary (which
was not incurred in contemplation or in connection with it becoming
a Principal Subsidiary) until the first anniversary of the date of
it becoming a Principal Subsidiary;
"Total Commitments" means the aggregate for the time being of the
Banks' Commitments;
"Transfer Certificate" means a certificate substantially in the form
set out in the Second Schedule signed by a Bank and a Transferee whereby:
(i) such Bank seeks to procure the transfer to such Transferee
of all or a part of such Bank's rights and obligations hereunder
upon and subject to the term and conditions set out in Clause 31;
and
(ii) such Transferee undertakes to perform the obligations it
will assume as a result of delivery of such certificate to the Agent
as is contemplated in Clause 31.3;
"Transfer Date" means, in relation to any Transfer Certificate, the
date for the making of the transfer as specified in the schedule to such
Transfer Certificate;
"Transferee" means a bank or other financial institution to which a
Bank seeks to transfer all or part of such Bank's rights and obligations
hereunder; and
"WABCO" means Westinghouse Air Brake Company (WABCO).
1.2 Any reference in this Agreement to:
the "Agent" or any "Bank" shall be construed so as to include its
and any subsequent successors, Transferees and assigns in accordance with
their respective interests;
"applicable tax" means any tax imposed by an Obligor's jurisdiction
of incorporation or any jurisdiction through which or from which any
payment is made;
a "business day" shall be construed as a reference to a day (other
than a Saturday or Sunday) on which banks are generally open for business
in London, New York City and Luxembourg and, if such reference relates to
the date for the payment or purchase of any sum denominated in:
(i) any Optional Currency (other than ECU), a day on which
banks are generally open for business in the principal financial
centre of the country of such Optional Currency; or
<PAGE>
7
(ii) ECU, a day on which those banks which operate a clearing
system in ECU will generally clear payments in ECU through such
clearing system;
a "Clause" shall, subject to any contrary indication, be
construed as a reference to a clause hereof;
a "currency" includes, without limitation, ECU;
an "encumbrance" shall be construed as a reference to a mortgage,
charge, pledge, lien or other encumbrance securing any obligation of any
person or any other type of preferential arrangement (including, without
limitation, title transfer and retention arrangements) having a similar
effect;
the "equivalent" on any given date in one currency (the "first
currency") of an amount denominated in another currency (the "second
currency") is a reference to the amount of the first currency which could
be purchased with the amount of the second currency at the spot rate of
exchange quoted by the Agent at or about 11.00 a.m, on such date for the
purchase of the first currency with the second currency;
a "holding company" of a company or corporation shall be construed
as a reference to any company or corporation of which the first-mentioned
company or corporation is a subsidiary;
"indebtedness" shall be construed so as to include any obligation
(whether incurred as principal or as surety) for the payment or repayment
of money, whether present or future, actual or contingent;
a "month" is a reference to a period starting on one day in a
calendar month and ending on the numerically corresponding day in the next
succeeding calendar month save that, where any such period would otherwise
end on a day which is not a business day, it shall end on the next
succeeding business day, unless that day falls in the next calendar month,
in which case it shall end on the immediately preceding business day
Provided that, if a period starts on the last business day in a calendar
month or if there is no numerically corresponding day in the month in
which that period ends, that period shall end on the last business day in
that later month (and references to "months" shall be construed
accordingly);
a "Part" shall, subject to any contrary indication, be construed as
a reference to a part hereof;
a "person" shall be construed as a reference to any person, firm,
company, corporation, government, state or agency of a state or any
association or partnership (whether or not having separate legal
personality) of two or more of the foregoing;
"recognised" in the context of "recognised Stock Exchange" means a
body declared to be a recognised investment exchange for purposes of the
Financial Services Act 1986 and which is based in a principal financial
centre in Western Europe, Japan or U.S.A.;
a "Schedule" shall, subject to any contrary indication, be construed
as a reference to a schedule hereto;
a "subsidiary" of a company or corporation shall be construed as a
reference to any company or corporation:
<PAGE>
8
(i) which is controlled, directly or indirectly, by the
first-mentioned company or corporation; or
(ii) more than half the issued share capital of which is
beneficially owned, directly or indirectly, by the first-mentioned
company or corporation; or
(iii) which is a subsidiary of another subsidiary of the
first-mentioned company or corporation
and, for these purposes, a company or corporation shall be treated as
being controlled by another if that other company or corporation is able
to direct its affairs and/or to control the composition of its board of
directors or equivalent body;
"tax" shall be construed so as to include any tax, levy, impost,
duty or-other charge of a similar nature (including, without limitation,
any penalty or interest payable in connection with any failure to pay or
any delay in paying any of the same);
"VAT" shall be construed as a reference to value added tax including
any similar tax which may be imposed in place thereof from time to time;
and
the "winding-up", "dissolution" or "administration" of a company or
corporation shall be construed so as to include any equivalent or
analogous proceedings under the law of the jurisdiction in which such
company or corporation is incorporated or any jurisdiction in which such
company or corporation carries on business including the seeking of
liquidation, winding-up, reorganisation, dissolution, administration,
arrangement, adjustment, protection or relief of debtors.
1.3 "$" and "dollars" denote lawful currency of the United States of
America, "Swedish Kronor" denotes lawful currency of the Kingdom of Sweden and
"ECU" denotes the unit of account for the time being used in the European Union,
known as the European Currency Unit as defined in the Fifth Schedule.
1.4 Save where the contrary is indicated, any reference in this
Agreement to:
(i) this Agreement or any other agreement or document shall be
construed as a reference to this Agreement or, as the case may be, such
other agreement or document as the same may have been, or may from time to
time be, amended, varied, novated or supplemented;
(ii) a statute shall be construed as a reference to such statute as
the same may have been, or may from time to time be, amended or
re-enacted; and
(iii) a time of day shall, unless otherwise stated, be construed as
a reference to London time.
1.5 Clause, Part and Schedule headings are for ease of reference
only.
<PAGE>
9
Part 2
THE FACILITY
2. The Facility
The Banks grant to the Borrower, upon the terms and subject to the
conditions hereof, a multicurrency revolving credit facility in an aggregate
amount of $500,000,000 or its equivalent from time to time in Optional
Currencies.
3. Purpose
3.1 The Facility is intended for general corporate purposes and,
accordingly the Borrower shall apply all amounts raised by it hereunder in or
towards satisfaction thereof Provided that the proceeds of the first Advance
hereunder shall be applied towards repayment of the December 1994 Advance.
3.2 Neither the Agent, the Arrangers and the Banks nor any of them
shall be obliged to concern themselves with the application of amounts raised
hereunder
4. Conditions Precedent
Save as the Banks may otherwise agree, the Borrower may not deliver
any Notice of Drawdown hereunder unless the Agent has confirmed to the Borrower
and the Banks that
(i) it has received all of the documents listed in the Third
Schedule and that each is, in form and substance, satisfactory to the
Agent; and
(ii) all amounts (with the exception of the December 1994 Advance)
outstanding under the 1994 Facility have been repaid in full and the
Borrower and Guarantor (as defined therein) have satisfied all their
respective obligations thereunder (with the exception of those under the
December 1994 Advance) and the Agent is satisfied that the Total
Commitments (as defined therein) of the Banks have been cancelled and
reduced to zero.
5. Nature of Banks' Obligations
5.1 The obligations of each Bank hereunder are several.
5.2 The failure by a Bank to perform its obligations hereunder shall
not affect the obligations of the Borrower or the Guarantor towards any other
party hereto nor shall any other party be liable for the failure by such Bank to
perform its obligations hereunder.
5.3 The amounts outstanding at any time hereunder from the Borrower
to any of the other parties hereto shall be a separate and independent debt, and
each such party shall be entitled, subject to having given prior notice thereof
to the Agent, to protect and enforce its individual rights arising out of this
Agreement independently of any other party, and it shall not be necessary for
any party hereto to be joined as an additional party in any proceedings for such
purposes.
<PAGE>
10
Part 3
UTILISATION OF THE FACILITY
6. Utilisation of the Facility
6.1 Save as otherwise provided herein, the Borrower may from time to
time request the making of an Advance under the Facility by the delivery to the
Agent, not more than ten nor less than four business days before the proposed
date for the making of such Advance, of a duly completed Notice of Drawdown
therefor.
6.2 Each Notice of Drawdown delivered to the Agent pursuant to
Clause 6.1 shall be irrevocable and shall specify:
(i) the proposed date for the making of the Advance requested, which
shall be a business day falling one month or more before the Final
Maturity Date and which shall be at least five business days after the
date upon which the previous Advance (if any) was made hereunder;
(ii) the currency of denomination of the Advance requested, which
shall be dollars or an Optional Currency Provided that, if the Borrower
selects an Optional Currency, the Borrower may also select dollars to
apply if its first selection becomes ineffective pursuant to Clause 6.5;
(iii) the amount of the Advance requested, which shall be a minimum
Dollar Amount of $50,000,000 and integral multiple of $10,000,000 or an
amount equal to the Available Facility and the Dollar Amount of which
shall not exceed the Available Facility adjusted to take account of:
(a) any reduction in the Commitment of a Bank scheduled to be
made prior to the commencement of the Term in respect of the
proposed Advance; and
(b) the Dollar Amounts of any Advances which are scheduled to
be made or repaid on or before the date of drawdown of the proposed
Advance;
(iv) the proposed Term of the Advance requested, which shall be a
period of one, three or six months ending on or before the Final Maturity
Date; and
(v) the account to which the proceeds of the proposed drawdown are
to be paid.
6.3 The Agent shall, promptly after receipt by it of a Notice of
Drawdown, notify the Banks of its receipt of such Notice of Drawdown specifying:
(i) the proposed date of drawdown;
<PAGE>
11
(ii) the Dollar Amount, the currency and the Term of the proposed
Advance; and
(iii) the participation of the relevant Bank in such Advance.
6.4 The Borrower may not request more than six (6) Advances to be
outstanding at any time and may not request more than one Advance to be made on
any one day and may not deliver any Notice of Drawdown between the date of any
other Notice of Drawdown made hereunder and the proposed date of drawdown
relating to such other Notice of Drawdown.
6.5 If the Borrower requests that an Advance be denominated in an
Optional Currency and:
(i) no later than 12.00 noon on the third business day preceding the
first day of the Term of such Advance, any Bank notifies the Agent that it
does not agree to such request; or
(ii) no later than 11.00 a.m. on the Quotation Date for such
Advance, the Agent notices the Borrower and the Banks that the Agent is of
the opinion that it is not feasible for such Advance to be made in such
Optional Currency; or
(iii) to give effect to such request would cause the Loan to be
denominated in more than four (4) Optional Currencies,
then, unless the Borrower and the Banks otherwise agree, such Advance shall not
be made unless the Borrower specified in the Notice of Drawdown in respect of
such Advance that in such event such Advance should be denominated in dollars in
which case such Advance shall be made in dollars in an amount equal to the
Dollar Amount relating to such Notice of Drawdown.
6.6 If the Borrower requests an Advance in accordance with the
preceding provisions of this Clause 6 and, on the proposed date for the making
of such Advance:
(i) neither of the events mentioned in Clauses 8(i) and 8(ii) shall
have occurred;
(ii) the Dollar Amount of such Advance does not exceed the Available
Facility; and
(iii) either:
(a) no Event of Default or Potential Event of Default has
occurred; and
(b) the representations set out in Clause 15 (except
sub-Clauses 15.2(v) and (viii)) are true on and as of the proposed
date for the making of such Advance
or each of the Banks agrees (notwithstanding any matter mentioned at (a)
or (b) above) to participate in the making of such Advance,
<PAGE>
12
then, save as otherwise provided herein, such Advance will be made in accordance
with the provisions hereof either in dollars in an amount equal to the Dollar
Amount requested or, if such Advance is to be denominated in an Optional
Currency, in an amount which is the equivalent in such Optional Currency of the
Dollar Amount requested, calculated as at the business day prior to the
Quotation Date for such Advance (such equivalent amount to be notified by the
Agent to the Banks promptly after its determination).
6.7 Each Bank will participate through its Facility Office in each
Advance made pursuant to this Clause 6 in the proportion borne by its Available
Commitment to the Available Facility immediately prior to the making of that
Advance.
6.8 If a Bank's Commitment is reduced in accordance with the terms
hereof after the Agent has received the Notice of Drawdown for an Advance and
such reduction was not taken into account pursuant to Clause 6.2(iii)(a), then
both the Dollar Amount and the actual amount of that Advance shall be reduced
accordingly.
<PAGE>
13
Part 4
INTEREST
7. Interest
7.1 On the Repayment Date relating to each Advance the Borrower
shall pay accrued interest on that Advance.
7.2 The rate of interest applicable to an Advance from time to time
during its Term shall be the rate per annum which is the sum of the Margin (and,
in the case of sterling, the Associated Costs Rate in respect thereof at such
time) and LIBOR applicable to such Advance on the Quotation Date therefor.
8. Market Disruption and Alternative Interest Rates
If, in relation to any Advance:
(i) the Agent determines that at or about 11.00 a.m. on the
Quotation Date for the Term in respect of such Advance no rates are quoted
on page 3740 or, as applicable, page 3750 of the Telerate screen for the
relevant currency (or such other page as may replace such page) and none
or only one of the Reference Banks was offering to prime banks in the
London Interbank Market deposits in dollars for the proposed duration of
such Term; or
(ii) before the close of business in Luxembourg on the Quotation
Date for such Term the Agent has been noticed by a Bank or each of a group
of Banks to whom in aggregate thirty-five per cent. or more of the Dollar
Amount of the Loan is (or, if an Advance were then made, would be) owed
that LIBOR as determined by the Agent does not accurately reflect the cost
to it of obtaining such deposits,
then, notwithstanding the provisions of Clause 7:
(a) the Agent shall notify the other parties hereto of such event;
(b) such Advance shall not be made; and
(c) if the Agent or the Borrower so requires, within five days of
such notification the Agent and the Borrower shall enter into negotiations
with a view to agreeing a substitute basis for determining the rates of
interest which may be applicable to Advances in the future and any such
substitute basis that is agreed shall take effect in accordance with its
terms and be binding on each party hereto Provided that the Agent may not
agree any such substitute basis without the prior consent of each Bank.
<PAGE>
14
Part 5
REPAYMENT AND CANCELLATION
9. Repayment
9.1 The Borrower shall repay each Advance made to it in full on the
Repayment Date relating thereto.
9.2 The Borrower shall not repay all or any part of any Advance
outstanding hereunder, except, at the times and in the manner expressly provided
herein but, subject to the terms and conditions hereof, shall be entitled to
reborrow any amount repaid.
10. Cancellation
10.1 The Borrower may, by giving to the Agent not less than thirty
(30) days' prior notice to that effect, cancel the whole or any part (being a
minimum amount of $50,000,000 and integral multiple of $10,000,000 or an amount
equal to the Available Facility) of the Total Commitments. Any such cancellation
shall reduce the Commitment of each Bank rateably.
10.2 Any notice of cancellation given by the Borrower pursuant to
Clause 10.1 shall be irrevocable and shall specify the date upon which such
cancellation is to be made and the amount of such cancellation.
10.3 If any Bank claims indemnification from the Borrower under
Clause 11.2 or Clause 13.1, the Borrower may, within thirty days thereafter and
by not less than fifteen days' prior notice to the Agent (which notice shall be
irrevocable), cancel such Bank's Commitment whereupon such Bank shall cease to
be obliged to participate in further Advances and its Commitment shall be
reduced to zero.
10.4 The Borrower and a Bank or Banks may, by giving to the Agent
not less than thirty (30) days' notice to that effect, notify the Agent
(whereupon the Agent shall notify the other Banks) that such Bank or Banks has
or have entered into a LC Agreement with the Borrower by which such Bank or
Banks has or have agreed to issue a Letter of Credit on terms agreed between the
Borrower and such Bank or Banks and irrevocably request the Agent to reduce and
cancel such Bank's or Banks' Commitment by an amount equal to (its portion of)
the Dollar Amount of such Letter of Credit (the amount of each Bank's
participation in a Letter of Credit and the corresponding reduction and
cancellation of such Bank's Commitment to be rounded downwards to the nearest
$10,000,000). The Agent shall reduce and cancel the Commitment of such Bank by
such portion upon and subject to the following conditions:
(i) the proposed date of expiry of such Letter of Credit shall,
unless otherwise agreed by the Agent, be a day falling at least 24 months
after the issuance of such Letter of Credit;
(ii) the purpose of issuing such Letter of Credit is to secure
financial indebtedness for borrowed money (not otherwise secured) of
either Obligor;
<PAGE>
15
(iii) the proposed Dollar Amount of such Letter of Credit shall be a
minimum amount of $10,000,000 or integral multiple thereof, and
(iv) the aggregate Dollar Amount of Letters of Credit issued under
LC Agreements shall not exceed $150,000,000.
Provided that upon the date of expiry of such Letter of Credit which falls on a
date before the Final Maturity Date, such Bank's Commitment shall be reinstated
by an amount equal to (its portion of) the Dollar Amount of such Letter of
Credit, as adjusted to take account of any intervening cancellations of part of
the Total Commitments, and further provided that the Total Commitments have not
been cancelled pursuant to Clause 18
<PAGE>
16
Part 6
CHANGES IN CIRCUMSTANCES
11. Taxes
11.1 All payments to be made by either of the Obligors to any person
hereunder shall be made free and clear of and without deduction for or on
account of any applicable tax unless such Obligor is required to make such a
payment subject to the deduction or withholding of tax, in which case the sum
payable by such Obligor in respect of which such deduction or withholding is
required to be made shall be increased to the extent necessary to ensure that,
after the making of the required deduction or withholding, such person receives
and retains (free from any liability in respect of any such deduction or
withholding) a net sum equal to the sum which it would have received and so
retained had no such deduction or withholding been made or required to be made.
11.2 Without prejudice to the provisions of Clause 11.1, if any
person or the Agent on its behalf is required to make any payment on account of
any applicable tax (not being a tax imposed on the net income of its Facility
Office by the jurisdiction in which it is incorporated or in which its Facility
Office is located) or otherwise on or in relation to any sum received or
receivable hereunder by such person or the Agent on its behalf (including,
without limitation any sum received or receivable under this Clause 11) or any
liability in respect of any such payment is asserted, imposed, levied or
assessed against such person or the Agent on its behalf, the Borrower shall,
upon demand of the Agent, promptly indemnify such person against such payment or
liability, together with any interest, penalties and expenses payable or
incurred in connection therewith.
11.3 A Bank intending to make a claim pursuant to Clause 11.2 shall
notify the Agent of the event by reason of which it is entitled to do so,
whereupon the Agent shall notify the Borrower thereof Provided that nothing
herein shall require such Bank to disclose any confidential information relating
co the organisation of its affairs.
11.4 If a Bank receives the benefit of a tax credit or an allowance
resulting from a payment which includes an additional amount paid by an Obligor
under Clause 11.1 or if it is otherwise left in a position which is more
favourable to it than would be the case if such withholding or deduction and
resultant additional payment by the Obligor had not been made, it shall (to the
extent that it can do so without prejudice to the retention of such credit or
allowance and to the extent that it is not unlawful or contrary to any official
directive for it so to do) pay to the relevant Obligor such part of that benefit
as is, in the sole opinion of that Bank, attributable to the withholding or
deduction giving rise to the payment of that additional amount, provided that
such Bank shall:-
(a) be the sole judge of the amount of any such benefit to be so
paid to the relevant Obligor and of the date on which it is received;
(b) have an absolute discretion as to the order and manner in which
it employs or claims tax credits and allowances available to it as to
arrange its tax affairs; and
(c) not be obliged to disclose to any Obligor or any other person
any information regarding its tax affairs or tax computations.
<PAGE>
17
12. Tax Receipts and Mitigation
12.1 If, at any time, either of the Obligors is required by law to
make any deduction or withholding from any sum payable by it hereunder (or if
thereafter there is any change in the rates at which or the manner in which such
deductions or withholdings are calculated), such Obligor shall promptly notify
the Agent.
12.2 If either of the Obligors makes any payment hereunder in
respect of which it is required to make any deduction or withholding, it shall
pay the full amount required to be deducted or withheld to the relevant taxation
or other authority within the time allowed for such payment under applicable law
and shall deliver to the Agent for each Bank, within thirty days after it has
made such payment to the applicable authority, an original receipt (or a
certified copy thereof) issued by such authority evidencing the payment to such
authority of all amounts so required to be deducted or withheld in respect of
that Bank's share of such payment.
12.3 If in respect of any Bank, circumstances arise which would or
would upon the giving of notice result in (i) an increase in the amount of any
payment to be made to it for its account pursuant to Clause 11.1 or (ii) a claim
for indemnification pursuant to Clause 11.2 then, without in any way limiting,
reducing or otherwise qualifying the obligations of the Obligors under this
Agreement, such Bank shall, promptly upon its Facility Office becoming aware of
the same and the possible results thereof, notify the Agent thereof and, in
consultation with the Agent and the Borrower, take such steps as such Bank in
its bona fide opinion considers appropriate to mitigate the effects of such
circumstance including the transfer of its Facility Office to another
jurisdiction or the transfer of its rights and obligations hereunder to another
bank willing to participate in the Facility Provided that such Bank shall be
under no obligation to take any such steps if, in the bona fide opinion of such
Bank, such steps would or might have an adverse effect upon its, or its holding
company's business, operations or financial condition or tax affairs.
13. Increased Costs
13.1 if, by reason of (i) any change in law after the date hereof or
in its interpretation or administration and/or (ii) compliance with any request
from or requirement (whether or not having the force of law) of any central bank
(other than, save in the case of (e) below, the requirements of the Bank of
England reflected in the Associated Costs Rate) or other fiscal, monetary or
other authority made or imposed after the date hereof (including, without
limitation, a request or requirement which affects the manner in which a Bank or
any holding company of such Bank is required to or does maintain capital
resources having regard to such Bank's obligations hereunder and to amounts
owing to it hereunder):
(a) a Bank or any holding company of such Bank incurs a cost as a
result of such Bank's having entered into and/or performing its
obligations under this Agreement and/or assuming or maintaining a
commitment under this Agreement and/or making one or more advances
hereunder;
(b) a Bank or any holding company of such Bank is unable to obtain
the rate of return on its overall capital which it would have been able to
obtain but for such Bank
<PAGE>
18
having entered into and/or performing its obligations and/or assuming or
maintaining a commitment under this Agreement;
(c) there is any increase in the cost to a Bank or any holding
company of such Bank of funding or maintaining all or any of the advances
comprised in a class of advances formed by or including the advances made
or to be made by such Bank hereunder;
(d) a Bank or any holding company of such Bank becomes liable to
make any payment on account of tax or otherwise (not being a tax imposed
on the net income of such Bank's Facility Office by the jurisdiction in
which it is incorporated or in which its Facility Office is located) on or
calculated by reference to the amount of the advances made or to be made
by such Bank hereunder and/or to any sum received or receivable by it
hereunder; or
(e) the Associated Costs Rate, as calculated hereunder, does not
represent the cost to a Bank of complying with the requirements of the
Bank of England in relation to its funding or maintaining of advances
hereunder,
then the Borrower shall, from time to time on demand of the Agent, promptly pay
to the Agent for the account of that Bank amounts sufficient to indemnify that
Bank or any such holding company against, as the case may be, (1) such cost, (2)
such reduction in such rate of return (or such proportion of such reduction as
is, in the opinion of that Bank, attributable to its obligations hereunder), (3)
such increased cost (or such proportion of such increased cost as is, in the
opinion of that Bank, attributable to its funding or maintaining advances
hereunder), (4) such liability or (5) such portion of such cost as is not
represented by the Associated Costs Rate.
13.2 A Bank intending to make a claim pursuant to Clause 13.1 shall
no later than 3 months after becoming aware of the event by reason of which it
is entitled to make such claim in relation to any, payments notify the Agent and
the Borrower of the event by reason of which it is entitled to do so Provided
that nothing herein shall require such Bank to disclose any confidential
information relating to the organisation of its affairs.
14. Illegality
If, at any time, it is unlawful for a Bank to make, fund or allow to
remain outstanding all or any of the Advances made or to be made by it
hereunder, then that Bank shall, promptly after becoming aware of the same and
where the illegality has not yet occurred notify the Borrower through the Agent
and that Bank and the Agent shall negotiate in good faith with the Borrower with
a view to agreeing substitute terms for participating in the Facility on a
lawful basis. Where the illegality has occurred the relevant Bank shall deliver
to the Borrower through the Agent a certificate to that effect and:
(i) such Bank shall not thereafter be obliged to make advances
hereunder and the amount of its Commitment shall be immediately reduced to
zero; and
(ii) if the Agent on behalf of such Bank so requires, the Borrower
shall on such date as the Agent shall have specified repay such Bank's
share of any
<PAGE>
19
outstanding Advances together with accrued interest thereon and all other
amounts owing to such Bank hereunder.
Part 7
REPRESENTATIONS, COVENANTS AND EVENTS OF DEFAULT
15. Representations
15.1 Each of the Obligors represents that:
(i) it is a corporation duly organised under the laws of Sweden with
power to enter into this Agreement and to exercise its rights and perform
its obligations hereunder and all corporate and other action required to
authorise its execution of this Agreement and its performance of its
obligations hereunder has been duly taken;
(ii) under the laws of Sweden in force at the date hereof, it will
not be required to make any deduction or withholding from any payment it
may make hereunder;
(iii) under the laws of Sweden in force at the date hereof, the
claims of the Agent, the Arrangers and the Banks against such Obligor
under this Agreement will rank at least pari passu with the claims of all
its other unsecured creditors save those whose claims are preferred solely
by any bankruptcy, insolvency, liquidation or other laws of general
application;
(iv) in any proceedings taken in Sweden in relation to this
Agreement, it will not be entitled to claim for itself or any of its
assets immunity from suit, execution, attachment or other legal process;
(v) in any proceedings taken in Sweden in relation to this
Agreement, the choice of English law as the governing law of this
Agreement will be recognised;
(vi) all acts, conditions and things required to be done, fulfilled
and performed in order (a) to enable it lawfully to enter into, exercise
its rights under and perform and comply with the obligations expressed to
be assumed by it in this Agreement, (b) to ensure that the obligations
expressed to be assumed by it in this Agreement are legal, valid and
binding and (c) to make this Agreement admissible in evidence in Sweden
(save for a translation of the Agreement) have been done, fulfilled and
performed;
(vii) under the laws of Sweden in force at the date hereof, it is
not necessary that this Agreement be filed, recorded or enrolled with any
court or other authority in such jurisdiction or that any stamp,
registration or similar tax be paid on or in relation to this Agreement;
(viii) the obligations expressed to be assumed by either Obligor in
this Agreement are legal and valid obligations binding on it enforceable
in accordance with the terms hereof;
<PAGE>
20
(ix) it is not necessary under the laws and constitution of Sweden
(a) in order to enable the Agent, the Arrangers and the Banks or any of
them to enforce their rights under the Facility Agreement or (b) by reason
of the execution of the Facility Agreement or the performance by each of
them of its obligations thereunder, that any of them should be licensed,
qualified or otherwise entitled to carry on business in Sweden; and
(x) neither the Agent nor any of the Arrangers or Banks is or will
be deemed to be resident, domiciled or carrying on business in Sweden by
reason only of the execution, performance and/or enforcement of the
Facility Agreement.
15.2 Each of the Obligors further represents that:
(i) no member of the Group has taken any corporate action nor have
any other steps been taken or legal proceedings been started or (to the
best of the Guarantor's knowledge and belief) threatened against any
member of the Group for its winding-up, dissolution or administration or
for the appointment of a receiver, administrator, administrative receiver,
trustee or similar officer of it or of any or all of its assets or
revenues;
(ii) no member of the Group is in breach of or in default under any
agreement to which it is a party or which is binding on it or any of its
assets to an extent or in a manner which might have a material adverse
effect on the business or financial condition of any member of the Group;
(iii) no action or administrative proceeding of or before any court
or agency which might have a material adverse effect on the business or
financial condition of any member of the Group has been started or
threatened;
(iv) the Original Financial Statements of the Borrower and the
Guarantor were prepared in accordance with accounting principles generally
accepted in Sweden and consistently applied and give (in conjunction with
the notes thereto) a true and fair view of the financial condition of the
Borrower, the Guarantor or, as the case may be, the Group at the date as
of which they were prepared and the results of the Borrower's, the
Guarantor's or, as the case may be, the Group's operations during the
financial year then ended;
(v) at the date hereof amounts which are being or are capable of
being secured by any existing encumbrances do not in aggregate exceed by
more than 10 per cent. the amounts disclosed in the Original Financial
Statements of the Guarantor and stated therein as being secured by any
encumbrances;
(vi) since the date to which the Original Financial Statements of
the Borrower or the Guarantor relate, there has been no material adverse
change in the business, assets or financial condition of either Obligor,
which change would give sufficient ground to conclude that either Obligor
may not or will be unable to, perform or observe its respective
obligations hereunder;
<PAGE>
21
(vii) neither the Borrower nor any other member of the Group had, as
at the date as of which the Original Financial Statements of the Borrower
or, as the case may be, the Guarantor were prepared, any liabilities
(contingent or otherwise) which were not disclosed thereby (or by the
notes thereto) or reserved against therein nor were there at that date any
unrealised or anticipated losses of the Borrower or, as the case may be,
any other member of the Group arising from commitments entered into by it
which were not so disclosed or reserved against;
(viii) the information contained in the Supplemental Information
Memorandum and all of the other written information supplied by any member
of the Group to the Agent, the Arrangers and the Banks in connection
herewith is true, complete and accurate in all material respects and it is
not aware of any material facts or circumstances that have not been
disclosed to the Agent, the Arrangers and the Banks and which might, if
disclosed, adversely affect the decision of a person considering whether
or not to provide finance to the Borrower or to provide such finance
against the security of a guarantee issued by the Guarantor;
(ix) save as permitted by Clause 17.3, no encumbrance exists over
all or any of the present or future revenues or assets of the Guarantor or
the Principal Subsidiaries;
(x) the execution by each Obligor of this Agreement and such
Obligor's exercise of its rights and performance of its obligations
hereunder will not result in the existence of nor oblige any member of the
Group to create any encumbrance over all or any of its present or future
revenues or assets;
(xi) the execution by each Obligor of this Agreement and such
Obliger's exercise of its rights and performance of its obligations
hereunder do not and will not:
(a) conflict with any agreement, mortgage, bond or other
instrument or treaty to which such Obligor is a party or
which is binding upon it or any of its assets;
(b) conflict with such Obligor's certificate of registration
and articles of association and internal rules and
regulations; or
(c) conflict with any applicable law, regulation or official
or judicial order;
(xii) the execution by each Obligor of this Agreement constitutes,
and such Obligor's exercise of its rights and performance of its
obligations hereunder will constitute, private and commercial acts done
and performed for private and commercial purposes;
<PAGE>
22
(xiii) each member of the Group maintains insurances on and in
relation to its business and assets with reputable underwriters or
insurance companies against such risks and to such extent as is usual for
companies carrying on a business such as that carried on by such member of
the Group whose practice is not to self insure;
(xiv) the Guarantor or one or more directly or indirectly
wholly-owned subsidiaries of the Guarantor are the legal and beneficial
owner of, with unencumbered title to, 25 per cent. of the shares and 32.9
per cent. of the voting rights of Asea AB; and
(xv) the Borrower is a wholly-owned subsidiary of the Guarantor.
15.3 The representations in Clauses 15.1 and 15.2 (except
sub-Clauses 15.2 (v) and (viii) shall be deemed to be repeated by each Obligor
on each date on which an Advance is made hereunder as if made with reference to
the facts and circumstances existing at each such date and as if references in
sub-Clauses 15.2 (iv) and 15.2 (vii) were references to the most recent
financial statements delivered to the Agent.
16. Financial Information
16.1 Each of the Obligors shall:
(i) as soon as the same become available, but in any event within
150 days after the end of each of its financial years, deliver to the
Agent in sufficient copies for the Banks its financial statements
(including, in the case of the Guarantor, the consolidated financial
statements of the Group) for such financial year together with a
certificate issued by the auditors and counter-signed by a duly authorised
officer of the Borrower setting out in reasonable detail the names of the
Principal Subsidiaries and the calculation of Relevant Total Assets,
Consolidated Relevant Total Assets and Total Borrowings at the end of such
financial year;
(ii) as soon as the same become available, but in any event within
90 days after the end of the first half of each of its financial years,
deliver to the Agent in sufficient copies for the Banks its financial
statements (including, in the case of the Guarantor, the consolidated
financial statements of the Group) for such period together with
certificates signed by a duly authorised officer of the Borrower setting
out in reasonable detail (a) the names of the Principal Subsidiaries and
the calculation of Relevant Total Asset, the Consolidated Relevant Total
Assets and Total Borrowings at the end of such period and (b) the amounts
of Financial Indebtedness owed by the Guarantor or a Principal Subsidiary
and allowed pursuant to Clause 17.5 (i) - (v) inclusive; and
(iii) from time to time on the request of the Agent, furnish the
Agent with such information about the business, assets, operations or
financial condition of the Group as the Agent or any Bank through the
Agent may reasonably require
<PAGE>
23
unless furnishing such information violates any Swedish law or stock
exchange regulations.
16.2 Each of the Obligors shall ensure that:
(i) each set of financial statements delivered by it pursuant to
Clause 16.1 is prepared on the same basis as was used in the preparation
of its Original Financial Statements and in accordance with accounting
principles generally accepted in Sweden and consistently applied;
(ii) each set of financial statements delivered by it pursuant to
Clause 16.1 is certified by a duly authorised officer of such Obligor as
giving a true and fair view of its financial condition (including. in the
case of financial statements of the Guarantor, the financial condition of
the Group) is at the end of the period to which those financial statements
relate and of the results of its (or, as the case may be, the Group's)
operations during such period; and
(iii) each set of financial statements delivered by it pursuant to
paragraph (i) of Clause 16.1 has been audited by an internationally
recognized firm of independent auditors licensed to practice in Sweden
provided that should the Agent at any time following consultation with the
Banks' Swedish Counsel inform any Obligor that it is common practice or a
requirement for companies comparable to such Obligor to have audited
financial statements relating to the first half of financial years, then
the next following, and each subsequent, set of financial statements
delivered by such Obligor pursuant to (ii) of Clause 16.1 shall also be
audited by an internationally recognized firm of independent auditors
licensed to practice in Sweden.
17. Covenants
17.1 Each of the Obligors shall:
(i) ensure that each Obligor shall obtain, comply with the terms of
and do all that is necessary to maintain in full force and effect all
authorisations, approvals, licenses and consents required in or by the
laws and regulations of its jurisdiction of incorporation to enable it
lawfully to enter into and perform its obligations under this Agreement or
to ensure the legality, validity, enforceability or admissibility in
evidence in its jurisdiction of incorporation of this Agreement;
(ii) after the delivery of any Notice of Drawdown and before the
proposed making of the Advance requested therein, notify the Agent of the
occurrence of any event which results in or may reasonably be expected to
result in any of the representations contained in Clause 15 being untrue
at or before the time of the proposed making of such Advance;
<PAGE>
24
(iii) ensure that each Obligor shall promptly inform the Agent of
the occurrence of any Event of Default or Potential Event of Default and,
upon receipt of a written request to that effect from the Agent, confirm
to the Agent that, save as previously notified to the Agent or as notified
in such confirmation, no Event of Default or Potential Event of Default
has occurred; and
(iv) ensure that at all times the claims of the Agent, the Arrangers
and the Banks against it under this Agreement rank at least pari passu
with the claims of all its other unsecured creditors save those whose
claims are preferred by any bankruptcy, insolvency, liquidation or other
similar laws of general application.
17.2 Each of the Obligors shall ensure that
(i) (a) the Guarantor shall not merge with any person or cease
to carry on all or a substantial part of its current
business; or
(b) a Material Subsidiary shall not cease to carry on all or
substantially all of its current business
if such merger or cessation, as the case may be, would
result in a material change of circumstances which might
adversely affect the ability of either Obligor to
perform its obligations hereunder; or
(ii) neither the Guarantor nor a Principal Subsidiary shall (save in
the ordinary course of business) make any loans, grant any credit or give
any guarantee or indemnity, provide any other financial assistance to or
for the benefit of any member of the Group which is not a Principal
Subsidiary or otherwise voluntarily assume any liability, whether actual
or contingent, in respect of any obligation of any member of the Group
which is not a Principal Subsidiary.
17.3 Each of the Obligors shall ensure that neither the Guarantor
nor any Principal Subsidiary shall, without the prior consent of an Instructing
Group, at any time while any amounts remain outstanding from the Borrower or, as
the case may be, may be due from the Guarantor. create or permit to subsist any
encumbrance over all or any of its present or future revenues or assets as
security for any indebtedness of any person other than:
(i) any encumbrance existing prior to the date hereof provided that
the principal amount secured thereby may not be subsequently increased;
(ii) any encumbrance arising solely by operation of law which arises
in the ordinary course of business and which is discharged within 60 days
of its creation;
(iii) any encumbrance on goods (including retention of title
arrangements) or related documents of title and/or other related documents
arising or created
<PAGE>
25
in the ordinary course of business as security only for indebtedness
directly relating to such goods or documents of title and/or other related
documents or services to be provided in connection with such goods;
(iv) any encumbrance on goods, or related documents of title and/or
other related documents or other assets (in particular receivables)
arising or created in the ordinary course of business as security only for
indebtedness under export credit or trade finance facilities relating to
such goods and any encumbrance securing advance payment guarantees created
in the ordinary course of business;
(v) any encumbrance over assets acquired or developed for fair
market value subsequent to the execution of this Agreement and securing
only such purchase price or development costs which shall not exceed the
fair market value of such assets;
(vi) in case of any company or corporation which becomes a Principal
Subsidiary of the Guarantor after the date of this Agreement, (a) any
encumbrance existing on or over its assets when it becomes or, as the case
my be, became a subsidiary and not created in contemplation of or in
connection with it becoming a subsidiary and (b) any encumbrance existing
on or over its assets when it becomes a Principal Subsidiary which was
created after the date of it becoming a subsidiary but not in
contemplation of or in connection with it becoming a Principal Subsidiary
provided that any encumbrance permitted under (b) hereof shall be
discharged prior to the first anniversary of the date on which it became a
Principal Subsidiary;
(vii) any encumbrance created in substitution for any encumbrance
existing or created under (i) - (vi) above provided that the indebtedness
so secured is not increased and the periods referred to in (ii) and (vi)
above are not extended;
(viii) any encumbrance created pursuant to mandatory provisions of
Swedish law, securing the payment of the purchase price by the Guarantor
or a Principal Subsidiary, in favour of minority shareholders of a company
or corporation the shares of which are subject to a compulsory sale
(tvangsinlosen) to the Guarantor or a Principal Subsidiary;
(ix) any encumbrance created by the Guarantor or a Principal
Subsidiary which secures only indebtedness denominated in Swedish Kronor
and which arises out of borrowing by the Guarantor or such Principal
Subsidiary from a Group Pension Fund in accordance with and subject to the
provisions of Clause 17.5 (iii) provided such Group Pension Fund requires
such encumbrance to be created and refuses to accept a guarantee or other
support from the Guarantor or the parent company of the relevant Principal
Subsidiary as applicable, in order to make such borrowings available;
<PAGE>
26
(x) any encumbrance created as a result of short-term sale and
repurchase transactions entered into by the Borrower pursuant to Clause
17.4 (ii) or any encumbrance over cash deposited with any bank, financial
institution, stock exchange or clearinghouse with which the Guarantor or a
Principal Subsidiary enter into back to back, foreign exchange, swap or
derivative transactions in the ordinary course of business and which cash
has to be deposited in order for such transactions to be entered into,
provided that the amount of cash so encumbered (a) does not at any time
exceed 20 per cent. of the aggregate exposure of the relevant
counterparties to the Guarantor or a Principal Subsidiary under such
transactions at such time or (b) does not at any time exceed 10 per cent.
of consolidated total assets of the Group as shown in the latest audited
consolidated accounts of the Guarantor; and
(xi) any other encumbrances other than those referred to in
sub-paragraphs (i) - (x) above, over or affecting assets the aggregate
book value of which is less than five per cent. (5%) of the book value of
the total assets of the Group as shown in the most recent audited
consolidated financial statements of the Guarantor (adjusted from time to
time to take into account acquisitions and/or disposals after the date to
which such financial statements relate);
Provided that the Guarantor shall not create or permit to subsist and
shall procure that no permitted owner under Clause 15.2 (xiv) shall create
or permit to subsist (i) any encumbrance over the shares or over the
voting rights held by it in ASEA AB and (ii) any encumbrance securing any
indebtedness of any Obligor under a LC Agreement.
17.4 Each Obligor shall ensure that neither the Guarantor nor any
Principal Subsidiary shall, without the prior consent of an Instructing Group,
either in a single transaction or in a series of transactions, whether related
or not and whether voluntarily or involuntarily, sell, transfer, grant or lease
or other-wise dispose of all or any part of its assets, other than
(i) a disposal of assets on an arm's length basis for market value;
(ii) a disposal under short term sale and repurchase transactions by
the Borrower with banks or other financial institutions which transact
such business on a regular basis on market terms and in respect of
marketable securities (other than ASEA AB shares) held by the Borrower for
investment purposes;
(iii) a disposal of assets in any one financial year the aggregate
book value of which is less than 5 % of the total assets of the Group as
shown in the then most recent audited consolidated financial statements
(adjusted from time to time to take into account acquisitions and/or
disposal after the date to which such financial statements relate); or
(iv) a disposal of assets from a Principal Subsidiary (other than
the Borrower) to another Principal Subsidiary,
<PAGE>
27
Provided that the Guarantor shall not (unless to a permitted owner
under Clause 15.2 (xiv)) and shall procure that a permitted owner under Clause
15.2 (xiv) shall not without the consent of all the Banks sell, transfer, grant
or lease or otherwise dispose of any of the shares or any of the voting rights
in ASEA AB (at 25 per cent. and 32.9 per cent. respectively) unless such sale,
transfer, grant, lease or other disposal is on an arm's length basis and
sufficient proceeds thereof are remitted directly to the Agent and deposited
with the Agent in a blocked account (which shall be an account bearing interest
at the best available rate quoted by the Agent for such accounts at such time)
so that the amount standing to the credit of such blocked account together with
any other amounts deposited therein (if necessary) by the Borrower or the
Guarantor is at least equal to the Loan and any other amounts outstanding
hereunder; and
Provided further that promptly but in any case within 5 business
days of such remittance and deposit in the blocked account the Agent shall
notify each Bank thereof and within 30 business days of such notification by the
Agent each Bank shall irrevocably notify the Agent whether or not it wishes to
continue to participate in the Facility (which a Bank may decide in its sole
discretion). If a Bank (a "Retiring Bank") notifies the Agent that it no longer
wishes to continue to participate in the Facility, then the Agent shall promptly
cancel such Retiring Bank's Commitment and the Borrower shall within 30 business
days of such Retiring Bank's notification repay such Retiring Bank's share of
the Loan together with all other amounts outstanding hereunder to such Retiring
Bank (and the Agent shall apply, at the request of the Borrower, amounts
standing to the credit of the blocked account for the purpose of such
repayment). Upon cancellation and repayment of all Retiring Banks the Agent
shall release any remaining balance standing to the credit of the blocked
account to the Borrower; and
Provided further that an Advance shall not be made hereunder during
the period starting on the date of the remittance and deposit of sufficient
amounts in the blocked account and ending on the earlier of, 40 business days
thereafter or, the date upon which any remaining balance standing to the credit
of the blocked account is released by the Agent pursuant hereto.
17.5 Each Obligor shall ensure that no Principal Subsidiary (other
than the Borrower and its Financing Subsidiaries) will incur or permit to
subsist any Financial Indebtedness with any bank or other institution providing
banking services other than
(i) Financial Indebtedness owing by a member of the Group to another
member of the Group; or
(ii) Financial Indebtedness not exceeding Swedish Kronor
2,000,000,000 of Nybrovikens Kraft AB to the National Pension Insurance
Fund in connection with the purchase by Nybrovikens Kraft AB of hydropower
assets from the National Pension Insurance Fund; or
(iii) Financial Indebtedness of the Guarantor or a Principal
Subsidiary to a Group Pension Fund where such Financial Indebtedness is in
the form of reborrowing from such Group Pension of pension funds deposited
with such Group Pension Fund and provided such Financials Indebtedness in
aggregate in respect of the Guarantor and the Principal Subsidiaries shall
not exceed Swedish Kronor 300,000,000; or
(iv) Financial indebtedness of Gambro; or
<PAGE>
28
(v) Financial Indebtedness (other than that referred to in
sub-paragraphs (i), (ii), (iii) or (iv) above) of subsidiaries not
exceeding in aggregate the higher of 20 per cent. of Total Borrowings and
Swedish Kronor 1,000,000,000
Provided that in the case of a company or corporation becoming a
Principal Subsidiary after the date hereof the above shall not apply in respect
of Financial Indebtedness existing on the date of such company or corporation
becoming a Principal Subsidiary (which was not incurred in contemplation or in
connection with it becoming a Principal Subsidiary) until the first anniversary
of such date.
17.6 Each Obligor shall ensure that no permitted owner under clause
15.2 (xiv) (other than the Guarantor) of the shares or any of the voting rights
of ASEA AB will incur or permit to subsist any Financial Indebtedness other than
Financial Indebtedness to another member of the Group.
18. Events of Default
18.1 If:
(i) either of the Obligors shall fail to pay when due any sum which
shall have become due hereunder and, if the non-payment is solely due to
technical or administrative reasons the non-payment continues unremedied
for three business days from the due date; or
(ii) any representation or statement made or deemed repeated by
either of the Obligors in this Agreement or in any notice or other
document, certificate or statement delivered by it pursuant hereto or in
connection herewith is or proves to have been incorrect or misleading in
any material respect when made; or
(iii) either of the Obligors fails duly to perform or comply with
any of the obligations expressed to be assumed by it in Clause 16 or 17;
or
(iv) either of the Obligors fails duly to perform or comply with any
other obligation expressed to be assumed by it in this Agreement and such
failure is not remedied (if capable of remedy) within thirty days after
the Agent has given notice thereof to such Obligor; or
(v) any material indebtedness of the Guarantor or any Material
Subsidiary is not paid when due after any applicable grace period
(expressly provided for in the instrument governing such indebtedness) or
if no grace period is provided in such instrument and such non-payment is
solely due to technical or administrative reasons after three business
days after the due date, any material indebtedness of the Guarantor or any
Material Subsidiary is declared to be or otherwise becomes due and payable
prior to its specified maturity by reason of a default or an event of
default (however described) [or any creditor or creditors of the Guarantor
or any Material Subsidiary become entitled to declare any material
indebtedness of the Guarantor or such Material
<PAGE>
29
Subsidiary due and payable prior to its specified maturity]; for this
purpose "material indebtedness" means any indebtedness the aggregate
amount of which exceeds US$ 15,000,000 or equivalent; or
(vi) the Guarantor or any Material Subsidiary is unable to pay its
debts as a view to the general readjustment or rescheduling of its
indebtedness or they fall due, commences negotiations with any one or more
of its creditors with makes a general assignment for the benefit of or a
composition with its creditors; or
(vii) the Guarantor or any Material Subsidiary takes any corporate
action or other steps are taken or legal proceedings are started for its
winding-up, dissolution, administration or re-organisation or for the
appointment of a receiver, administrator, administrative receiver, trustee
or similar officer of it or of any or all of its revenues and assets; or
(viii) any execution or distress is levied and is not discharged
within 30 days of being levied against, or an encumbrancer takes
possession of the whole or any part of, the property, undertaking or
assets of the Guarantor or any Material Subsidiary; or
(ix) by or under the authority of any government, (a) the management
of the Guarantor or any Material Subsidiary is wholly or partially
displaced or the authority of the Guarantor or any Material Subsidiary in
the conduct of its business is wholly or partially curtailed or (b) all or
a majority of the issued shares of the Guarantor or any Material
Subsidiary or the whole or any part (the book value of which is twenty per
cent. or more of the book value of the whole) of its revenues or assets is
seized, nationalised, expropriated or compulsorily acquired; or
(x) the Borrower ceases to be a wholly-owned subsidiary of the
Guarantor; or
(xi) either of the Obligors repudiates this Agreement or expresses
its intention to repudiate this Agreement; or
(xii) at any time any act, condition or thing required to be done,
fulfilled or performed in order (a) to enable either of the Obligors
lawfully to enter into, exercise its rights under and perform the
obligations expressed to be assumed by it in this Agreement, (b) to ensure
that the obligations expressed to be assumed by either of the Obligors in
this Agreement are legal, valid and binding or (c) to make this Agreement
admissible in evidence in each Obligor's jurisdiction of incorporation is
not done, fulfilled or performed; or
(xiii) at any time it is or becomes unlawful for either of the
Obligors to perform or comply with any or all of its obligations hereunder
or any of the obligations of either of the Obligors hereunder are not or
cease to be legal, valid or binding; or
<PAGE>
30
(xiv) a material adverse change occurs in the business, assets or
financial condition of either Obligor, which change gives, in the
reasonable opinion of an Instructing Group, sufficient grounds to conclude
that either Obligor may not, or will be unable to, perform or observe its
respective obligations hereunder,
then, and in any such case and at any time thereafter, the Agent may (and, if so
instructed by an Instructing Group, shall) by written notice to the Borrower:
(a) declare the Advances to be immediately due and payable (whereupon
the same shall become so payable together with accrued interest
thereon and any other sums then owed by the Borrower hereunder) or
declare the Advances to be due and payable on demand of the Agent;
and/or
(b) declare that the Facility shall be cancelled, whereupon these shall
be cancelled and the Commitment of each Bank shall be reduced to
zero.
18.2 If, pursuant to Clause 18.1, the Agent declares the Advances to
be due and payable on demand of the Agent, then, and at any time thereafter, the
Agent may (and, if so instructed by in Instructing Group, shall) by written
notice to the Borrower call for repayment of the Advances on such date as it may
specify in such notice (whereupon the same shall become due and payable on such
date together with accrued interest thereon and any other sums then owed by the
Borrower hereunder) or withdraw its declaration with effect from such date as it
may specify in such notice.
18.3 If, pursuant to Clause l8.l(a), the Agent declares the Advances
to be due and payable on demand, the Term in respect of any such Advance shall,
if the Agent subsequently demands payment before the scheduled Repayment Date in
respect of such Advance, be deemed (except for the purposes of Clause 21.4) to
be of such length that it ends on the date that such demand is made.
<PAGE>
31
Part 8
GUARANTEE
19. Guarantee
The Guarantor hereby irrevocably and unconditionally:
(i) guarantees to the Agent, the Arrangers and the Banks the due and
punctual observance and performance of all the terms, conditions and
covenants on the part of the Borrower contained in this Agreement and
agrees to pay to the Agent from time to time on demand any and every sum
or sums of money which the Borrower shall at any time be liable to pay to
the Agent, the Arrangers and the Bank or any of them under or pursuant to
this Agreement and which shall not have been paid at the time such demand
is made; and
(ii) agrees as a primary obligation to indemnify the Agent, the
Arrangers and the Banks from time to time on demand by the Agent from and
against any loss incurred by the Agent, the Arrangers and the Banks or any
of them as a result of any of the obligations of the Borrower under or
pursuant to this Agreement being or becoming void, voidable, unenforceable
or ineffective as against the Borrower for any reason whatsoever, whether
or not known to the Agent, the Arrangers and the Banks or any of them or
any other person, the amount of such loss being the amount which the
person or persons suffering it would otherwise have been entitled to
recover from the Borrower.
20. Preservation of Rights
20.1 The obligations of the Guarantor herein contained shall be in
addition to and independent of every other security which the Agent, the
Arrangers and the Banks or any of them may at any time hold in respect of any of
the Borrower's obligations hereunder.
20.2 The obligations of the Guarantor herein contained shall
constitute and be continuing obligations notwithstanding any settlement of
account or other matter or thing whatsoever, and in particular but without
limitation, shall not be considered satisfied by any intermediate payment or
satisfaction of all or any of the obligations of the Borrower under this
Agreement and shall continue in full force and effect until final payment in
full of all amounts owing by the Borrower hereunder and total satisfaction of
all the Borrower's actual and contingent obligations hereunder.
20.3 Neither the obligations of the Guarantor herein contained nor
the rights, powers and remedies conferred in respect of the Guarantor upon the
Agent, the Arrangers and the Banks or any of them by this Agreement or by law
shall be discharged, impaired or otherwise affected by:
(i) the winding-up, dissolution, administration or re-organisation
of the Borrower or any other person or any change in its status, function,
control or ownership;
<PAGE>
32
(ii) any of the obligations of the Borrower or any other person
hereunder or under any other security taken in respect of any of its
obligations hereunder being or becoming illegal, invalid, unenforceable or
ineffective in any respect;
(iii) time or other indulgence being granted or agreed to be granted
to the Borrower in respect of its obligations hereunder or under any such
other security;
(iv) any amendment to, or any variation, waiver or release of, any
obligation of the Borrower hereunder or under any such other security;
(v) any failure to take, or fully to take, any security contemplated
hereby or otherwise agreed to be taken in respect of the Borrower's
obligations hereunder;
(vi) any failure to realise or fully to realise the value of, or any
release, discharge, exchange or substitution of, any security taken in
respect of the Borrower's obligations hereunder; or
(vii) any other act, event or omission which, but for this Clause
20.3, might operate to discharge, impair or otherwise affect any of the
obligations of the Guarantor herein contained or any of the rights, powers
or remedies conferred upon the Agent, the Arrangers and the Banks or any
of them by this Agreement or by law.
20.4 Any settlement or discharge between the Guarantor and the
Agent, the Arrangers and the Banks or any of them shall be conditional upon no
security or payment to the Agent, the Arrangers and the Banks or any of them by
the Borrower or the Guarantor or any other person on behalf of the Borrower or,
as the case may be, the Guarantor being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency, liquidation or
similar laws of general application for the time being in force and, if any such
security or payment is so voided or reduced, the Agent, the Arrangers and the
Banks shall each be entitled to recover the value or amount of such security or
payment from the Guarantor subsequently as if such settlement or discharge had
not occurred.
20.5 Neither the Agent, the Arrangers and the Banks nor, any of them
shall be obliged before exercising any of the rights, powers or remedies
conferred upon them in respect of the Guarantor by this Agreement or by law:
(i) to make any demand of the Borrower;
(ii) to take any action or obtain judgment in any court against the
Borrower;
(iii) to make or file any claim or proof in a winding-up or
dissolution of the Borrower; or
<PAGE>
33
(iv) to enforce or seek to enforce any other security taken in
respect of any of the obligations of the Borrower hereunder.
20.6 The Guarantor agrees that, so long as any amounts are or may be
owed by the Borrower hereunder or the Borrower is under any actual or contingent
obligations hereunder, the Guarantor shall not exercise any rights which the
Guarantor may at any time have by reason of performance by it of its obligations
hereunder:
(i) to be indemnified by the Borrower; and/or
(ii) to claim any contribution from any other guarantor of the
Borrower's obligations hereunder; and/or
(iii) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Agent, the Arrangers and
the Banks hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by all or any of the Agent, the Arrangers
and the Banks.
<PAGE>
34
Part 9
DEFAULT INTEREST AND INDEMNITY
21. Default Interest and Indemnity
21.1 If any sum due and payable by either of the Obligors hereunder
is not paid on the due date therefor in accordance with the provisions of Clause
23 or if any sum due and payable by either of the Obligors under any judgment of
any court in connection herewith is not paid on the date of such judgment, the
period beginning on such due date or, as the case may be, the date of such
judgment and ending on the date upon which the obligation of such Obligor to pay
such sum (the balance thereof for the time being unpaid being herein referred to
as an "unpaid sum") is discharged shall be divided into successive periods, each
of which (other than the first) shall start on the last day of the preceding
such period and the duration of each of which shall (except as otherwise
provided in this Clause 21) be selected by the Agent.
21.2 During each such period relating thereto as is mentioned in
Clause 21.1 an unpaid sum shall bear interest at the rate per annum which is the
sum from time to time of one per cent., the Margin (and, in the case of any such
sum denominated in sterling, the Associated Costs Rate in respect thereof at
such time) and LIBOR on the Quotation Date therefor Provided that:
(i) if, for any such period, LIBOR cannot be determined, the rate of
interest applicable to such unpaid sum shall be the sum from time to time
of one per cent., the Margin (and, in the case of any such sum denominated
in sterling, the Associated Costs Rate in respect thereof at such time)
and the rate per annum determined by the Agent to be the weighted
arithmetic mean (rounded upwards, if not already such a multiple, to the
nearest whole multiple of one-sixteenth of one per cent.) of the rates
notified by each Bank to the Agent before the last day of such period to
be those which express as a percentage rate per annum the cost to it of
funding from whatever source it may select its portion of such unpaid sum
for such period; and
(ii) if such unpaid sum is all or part of an Advance which became
due and payable on a day other than the last day of the Term thereof, the
first such period applicable thereto shall be of a duration equal to the
unexpired portion of that Term and the rate of interest applicable thereto
from time to time during such period shall be that which exceeds by one
per cent. the rate which would have been applicable to it had it not so
fallen due.
21.3 Any interest which shall have accrued under Clause 21.2 in
respect of an unpaid sum shall be due and payable and shall be paid by the
Obligor owing such unpaid sum at the end of the period by reference to which it
is calculated or on such other date or dates as the Agent may specify by written
notice to such Obligor.
21.4 If any Bank or the Agent on its behalf receives or recovers all
or any part of such Bank's share of an Advance otherwise than on the last day of
the Term thereof, the Borrower shall pay to the Agent on demand for account of
such Bank an amount equal to the amount (if any) by which (i)
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35
the additional interest which would have been payable on the amount so received
or recovered had it been received or recovered on the last day of the Term
thereof exceeds (ii) the amount of interest which in the opinion of the Agent
would have been payable to the Agent on the last day of the Term thereof in
respect of a deposit in the currency of the amount so received or recovered
equal to the amount so received or recovered placed by it with a prime bank in
London for a period starting on the third business day following the date of
such receipt or recovery and ending on the last day of the Term thereof.
21.5 The Borrower undertakes to indemnify:
(i) each of the Agent, the Arrangers and the Banks against any cost,
claim, loss, expense (including legal fees) or liability together with any
VAT thereon, which any of them may sustain or incur as a consequence of
the occurrence of any Event of Default or any default by the Borrower in
the performance of any of the obligations expressed to be assumed by it in
this Agreement;
(ii) the Agent against any loss it may suffer as a result of its
entering into, or performing, any foreign exchange contract for the
purposes of Part 10;
(iii) each Bank against any loss it may suffer as a result of its
funding its portion of an Advance requested by the Borrower hereunder but
not made by reason of the operation of any one or more of the provisions
hereof; and
(iv) each Bank against any loss it may suffer as a result of an
Advance having been requested in an Optional Currency and such Bank
funding its portion of such Advance in such Optional Currency but such
Advance being denominated in dollars and being made in dollars by reason
of the provisions of Clause 6.5(ii).
21.6 Any unpaid sum shall (for the purposes of this Clause 21,
Clause 13.1 and the Sixth Schedule) be treated as an advance and accordingly in
this Clause 21 and the Sixth Schedule the term "Advance" includes any unpaid sum
and "Term", in relation to an unpaid sum, includes each such period relating
thereto as is mentioned in Clause 21.1.
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36
Part 10
PAYMENTS
22. Currency of Account and Payment
22.1 The dollar is the currency of account and payment for each and
every sum at any time due from either of the Obligors hereunder Provided that:
(i) each repayment of an Advance or a part thereof shall be made in
the currency in which such Advance is denominated at the time of that
repayment;
(ii) each payment of interest shall be made in the currency in which
the sum in respect of which such interest is payable is denominated;
(iii) each payment in respect of costs and expenses shall be made in
the currency in which the same were incurred;
(iv) each payment pursuant to Clause 11.2 or Clause 13.1 shall be
made in the currency specified by the party claiming thereunder; and
(v) any amount expressed to be payable in a currency other than
dollars shall be paid in that other currency.
22.2 If the Agent at any time determines (after consultation with
the Reference Banks and the Banks) that:
(i) for reasons affecting the market in ECU generally, ECU are not
freely available in the International Interbank Market;
(ii) the ECU has ceased to be utilised as the basic accounting unit
of the European Union;
(iii) the ECU has ceased to be used in the European Monetary System;
or
(iv) it is illegal, impossible or impracticable for payments to be
made hereunder in ECU,
then the Agent may, in its discretion, but after consultation with the Borrower
and the Banks, declare (such declaration to be binding on all the parties
hereto) that the repayment of any Advance denominated in ECU and any payment of
interest thereon that is due and unpaid at the time of, or becomes due after,
such declaration shall be made in a specified component currency, in which case
the amount so to be paid in such component currency shall be computed on the
basis of the equivalent of the ECU in such component currency determined in
accordance with the provisions of the Fifth Schedule.
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37
22.3 If any sum due from either of the Obligors under this Agreement
or any order or judgment given or made in relation hereto has to be converted
from the currency (the "first currency') in which the same is payable hereunder
or under such order or judgment into another currency (the "second currency")
for the purpose of (i) making or filing a claim or proof against such Obligor,
(ii) obtaining an order or judgment in any court or other tribunal or (iii)
enforcing any order or judgment given or made in relation hereto, the Borrower
shall indemnify and hold harmless each of the persons to whom such sum is due
from and against any loss suffered as a result of any discrepancy between (a)
the rate of exchange used for such purpose to convert the sum in question from
the first currency into the second currency and (b) the rate or rates of
exchange at which such person may in the ordinary course of business purchase
the first currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof.
23. Payments
23.1 On each date on which this Agreement requires an amount to be
paid by either of the Obligors or any of the Banks hereunder, such Obligor or,
as the case may be, such Bank shall make the same available to the Agent:
(i) where such amount is denominated in dollars, by payment in
dollars and in same day funds (or in such other funds as may for the time
being be customary in New York City for the settlement in New York City of
international banking transactions in dollars) to the Agent's account
number 107 001 200 123 chips id: 132262 with Deutsche Bank AG, New York
Branch, P.0. Box 890, New York, N.Y. 10101-0890 U.S.A. (or such other
account or bank as the Agent may have specified for this purpose); or
(ii) where such amount is denominated in an Optional Currency, by
payment in such Optional Currency and in immediately available, freely
transferable, cleared funds to such account with such bank in the
principal financial centre of the country of such Optional Currency (or,
in the case of ECU, Frankfurt am Main) as the Agent shall have specified
for this purpose.
23.2 If, at any time, it shall become impracticable (by reason of
any action of any governmental authority or any change in law, exchange control
regulations or any similar event) for either of the Obligors to make any
payments hereunder in the manner specified in Clause 23.1. then such Obligor may
agree with each or any of the Banks alternative arrangements for the payment
direct to such Bank of amounts due to such Bank hereunder Provided that, in the
absence of any such agreement with any Bank, such Obligor shall be obliged to
make all payments due to such Bank in the manner specified herein. Upon reaching
such agreement such Obligor and such Bank shall immediately notify the Agent
thereof and shall thereafter promptly notify the Agent of all payments made
direct to such Bank.
23.3 Save as otherwise provided herein, each payment received by the
Agent for the account of another person pursuant to Clause 23.1 shall:
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38
(i) in the case of a payment received for the account of the
Borrower, be made available by the Agent to the Borrower by application:
(a) first, in or towards payment (on the date, and in the
currency and funds, of receipt) of any amount then due
from the Borrower hereunder to the person from whom the
amount was so received or in or towards the purchase of
any amount of any currency to be so applied; and
(b) secondly, in or towards payment (on the date, and in the
currency and funds, of receipt) to such account with
such bank in the principal financial centre of the
country of the currency of such payment (or, in the case
of ECU, Brussels) as the Borrower shall have previously
notified to the Agent for this purpose; and
(ii) in the case of any other payment, be made available by the
Agent to the person for whose account such payment was received (in the
case of a Bank, for the account of the Facility Office) for value the same
day by transfer to such account of such person with such bank in the
principal financial centre of the country of the currency of such payment
as such person shall have previously notified to the Agent or in the case
of ECU such financial centre for payment of ECU as such person shall have
previously notified to the Agent.
23.4 All payments required to be made by either of the Obligors
hereunder shall be calculated without reference to any set-off or counterclaim
and shall be made free and clear of and without any deduction for or on account
of any set-off or counterclaim.
23.5 All moneys received, recovered or realised by a Bank by virtue
of Clause 19 may, in that Bank's discretion, be credited to a suspense or
impersonal account and may be held in such account for so long as such Bank
thinks fit pending the application from time to time (as such Bank may think
fit) of such moneys in or towards the payment and discharge of any amounts owing
by either of the Obligors to such Bank hereunder.
23.6 Where a sum is to be paid hereunder to the Agent for account of
another person, the Agent shall not be obliged to make the same available to
that other person or to enter into or perform any exchange contract in
connection therewith until it has been able to establish to its satisfaction
that it has actually received such sum, but if it does so and it proves to be
the case that it had not actually received such sum, then the person to whom
such sum or the proceeds of such exchange contract was so made available shall
on request refund the same to the Agent together with an amount sufficient to
indemnify the Agent against any cost or loss it may have suffered or incurred by
reason of its having paid out such sum or the proceeds of such exchange contract
prior to its having received such sum.
<PAGE>
39
24. Set-Off
Each of the Obligors authorises each Bank to apply any credit
balance to which such Obligor is entitled on any account of such Obligor with
that Bank in satisfaction of any sum due and payable from such Obligor to such
Bank hereunder but unpaid; for this purpose, each Bank is authorised to purchase
with the moneys standing to the credit of any such account such other currencies
as may be necessary to effect such application. No Bank shall be obliged to
exercise any right given to it by this Clause 24.
25. Redistribution of Payments
25.1 If, at any time, the proportion which any Bank (a "Recovering
Bank") has received or recovered (whether by payment, the exercise of a right of
set-off or combination of accounts or otherwise) in respect of its portion of
any payment (a "relevant payment") to be made under this Agreement by either of
the Obligors for account of such Recovering Bank and one or more other Banks is
greater (the portion of such receipt or recovery giving rise to such excess
proportion being herein called an "excess amount") than the proportion thereof
so received or recovered by the Bank or Banks so receiving or recovering the
smallest proportion thereof, then:
(i) such Recovering Bank shall pay to the Agent an amount equal to
such excess amount;
(ii) there shall thereupon fall due from such Obligor to such
Recovering Bank an amount equal to the amount paid out by such Recovering
Bank pursuant to paragraph (i) above, the amount so due being, for the
purposes hereof, treated as if it were an unpaid part of such Recovering
Bank's portion of such relevant payment; and
(iii) the Agent shall treat the amount received by it from such
Recovering Bank pursuant to paragraph (i) above as if such amount had been
received by it from such Obligor in respect of such relevant payment and
shall pay the same to the persons entitled thereto (including such
Recovering Bank) pro rata to their respective entitlements thereto,
Provided that to the extent that any excess amount is attributable to a payment
to a Bank pursuant to Clause 23.3(i)(a) such portion of such excess amount as is
so attributable shall not be required to be shared pursuant hereto.
25.2 If any sum (a "relevant sum") received or recovered by a
Recovering Bank in respect of any amount owing to it by either of the Obligors
becomes repayable and is repaid by such Recovering Bank, then:
(i) each Bank which has received a share of such relevant sum by
reason of the implementation of Clause 25.1 shall, upon request of the
Agent, pay to the Agent for account of such Recovering Bank an amount
equal to its share of such relevant sum together with its share of such
amount (if any) as is necessary to reimburse the Recovering Bank for any
interest it shall have
<PAGE>
40
been obliged to pay to either of the Obligors in respect thereof when
repaying such relevant sum to such Obligor; and
(ii) there shall thereupon fall due from such Obligor to each such
Bank an amount equal to the amount paid out by it pursuant to paragraph
(i) above, the amount so due being, for the purposes hereof, treated as if
it were the sum payable to such Bank against which such Bank's share of
such relevant sum was applied.
25.3 A Bank shall not be obliged to share any amount pursuant to
clause 25.1 if it has received or recovered such amount as a result of any legal
proceedings with any other Bank which had an opportunity to participate in those
legal proceedings but did not do so and did not separately take equivalent legal
proceedings.
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41
Part 11
FEES, COSTS AND EXPENSES
26. Fees
26.1 The Borrower shall pay to the Agent for account of each Bank a
commitment commission on the amount of such Bank's Available Commitment from day
to day during the period beginning on the date hereof and ending on the Final
Maturity Date, such commitment commission to be calculated at the rate of 0.10
per cent. per annum for the period beginning on the date hereof and ending on
the date falling 48 months after the date hereof and thereafter at the rate of
0.125 per cent per annum and such commitment commission to be payable in arrear
on the last day of each successive period of three months which ends during such
period and on the Final Maturity Date.
26.2 The Borrower shall pay to the Agent the fees specified in the
letter of even date herewith from the Arrangers to the Borrower at the times,
and in the amounts specified in such letter.
26.3 The Borrower shall pay to the Agent for its own account the
agency fee specified in the letter of even date herewith from the Arrangers to
the Borrower at the times, and in the amounts specified in such letter.
26.4 The Borrower shall, in the event the Facility is utilised, pay
to the Agent for distribution among the Banks pro rata to their respective
Commitments, a utilisation fee in dollars computed on the total drawn amount of
the Total Commitments during the period from the date the Facility is first
utilised to and including the Final Maturity Date at the rate of 0.025 per cent.
per annum if the total drawn amount of the Total Commitments is equivalent to
between 33 per cent. and 67 per cent. (inclusive) of the Total Commitment and at
the rate of 0.05 per cent. per annum if the total drawn amount of the Total
Commitment exceeds 67 per cent. of the Total Commitments. Accrued utilisation
fee shall be payable quarterly in arrears and shall accrue from day to day and
be calculated on the basis of a year of 360 days and the actual number of days
elapsed.
27. Costs and Expenses
27.1 The Borrower shall, from time to time on demand of the Agent,
reimburse the Agent and the Arrangers for all reasonable costs and expenses
(including legal fees) together with any VAT thereon incurred by it in
connection with the negotiation, preparation and execution of this Agreement and
the completion of the transactions herein contemplated.
27.2 The Borrower shall, from time to time on demand of the Agent,
reimburse the Agent, the Arrangers and the Banks for all reasonable costs and
expenses (including legal fees) together with any VAT thereon incurred in or in
connection with the preservation and/or enforcement of any of the rights of the
Agent, the Arrangers and the Banks under this Agreement.
27.3 The Borrower shall pay all stamp registration and other taxes
to which this Agreement or any judgment given in connection herewith is or at
any time may be subject and shall, from time to time on demand of the Agent,
indemnify the Agent, the Arrangers and the Banks against any
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42
liabilities, costs, claims and expenses resulting from any failure to pay or any
delay in paying any such tax.
27.4 If the Borrower fails to perform any of its obligations under
this Clause 27, each Bank shall, in its Proportion, indemnify each of the Agent
and the Arrangers against any loss incurred by any of them as a result of such
failure and the Borrower shall forthwith reimburse each Bank for any payment
made by it pursuant to this Clause 27.4.
<PAGE>
43
Part 12
AGENCY PROVISIONS
28. The Agent, the Arrangers and the Banks
28.1 Each Arranger and each Bank hereby appoints the Agent to act as
its agent in connection herewith and authorises the Agent to exercise such
rights, powers, authorities and discretions as are specifically delegated to the
Agent by the terms hereof together with all such rights, powers, authorities and
discretions as are reasonably incidental thereto.
28.2 The Agent may:
(i) assume that:
(a) any representation made by either of the Obligors in
connection herewith is true;
(b) no Event of Default or Potential Event of Default
has occurred;
(c) neither of the Obligors is in breach of or default
under its obligations hereunder; and
(d) any right, power, authority or discretion vested
herein upon an Instructing Group, the Banks or any other
person or group of persons has not been exercised,
unless it has, in its capacity as agent for the Banks,
received notice to the contrary from any other party hereto or
(in case of a payment default hereunder) gained actual
acknowledge to the contrary;
(ii) assume that the Facility Office of each Bank is that
identified with its signature below (or, in the case of a
Transferee, at the end of the Transfer Certificate to which it is a
party as Transferee) until it has received from such Bank a notice
designating some other office of such Bank to replace its Facility
Office and act upon any such notice until the same is superseded by
a further such notice;
(iii) engage and pay for the advice or services of any
lawyers, accountants, surveyors or other experts whose advice or
services may to it seem necessary, expedient or desirable and rely
upon any advice so obtained;
(iv) rely as to any matters of fact which might reasonably be
expected to be within the knowledge of either of the Obligors upon a
certificate signed by or on behalf of such Obligor;
(v) rely upon any communication or document believed by it to
be genuine;
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44
(vi) refrain from exercising any right, power or discretion
vested in it as agent hereunder unless and until instructed by an
Instructing Group as to whether or not such right, power or
discretion is to be exercised and, if it is to be exercised, as to
the manner in which it should be exercised;
(vii) refrain from beginning any legal action or proceeding in
connection with this Agreement on behalf of any Bank until such Bank
has given its written consent thereto;
(viii) refrain from acting in accordance with any instructions
of an Instructing Group to begin any legal action or proceeding
arising out of or in connection with this Agreement until it shall
have received such security as it may require (whether by way of
payment in advance or otherwise) for all costs, claims, losses,
expenses (including legal fees) and liabilities together with any
VAT thereon which it will or may expend or incur in complying with
such instructions; and
(ix) if it is unable to obtain instructions or communicate
with a Bank after making reasonable attempts to do so, either
refrain from acting as Agent on behalf of such Bank or take such
action on behalf of such Bank as it in its absolute discretion deems
appropriate and reasonable and shall not be liable to such Bank as a
result of any such action or inaction.
28.3 The Agent shall:
(i) promptly inform each Bank of the contents of any notice or
document received by it in its capacity as Agent from either of the
Obligors hereunder;
(ii) promptly notify each Bank of the occurrence of any Event
of Default or any default by either of the Obligors in the due
performance of or compliance with its obligations under this
Agreement of which the Agent, in its capacity as agent for the
Banks, has received express notice from any other party hereto or
(in the case of a payment default hereunder) gained actual
knowledge;
(iii) save as otherwise provided herein, act as agent
hereunder in accordance with any instructions given to it by an
Instructing Group, which instructions shall be binding on all of the
Arrangers and the Banks; and
(iv) if so instructed by an Instructing Group, refrain from
exercising any right, power or discretion vested in it as agent
hereunder.
28.4 Notwithstanding anything to the contrary expressed or implied
herein, neither the Agent nor any of the Arrangers shall:
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45
(i) be bound to enquire as to:
(a) whether or not any representation made by either of
the Obligors in connection herewith is true;
(b) the occurrence or otherwise of any Event of Default
or Potential Event of Default;
(c) the performance by either of the Obligors of its
obligations hereunder; or
(d) any breach of or default by either of the Obligors
of or under its obligations hereunder;
(ii) be bound to account to any Bank for any sum or the profit
element of any sum received by it for its own account;
(iii) be bound to disclose to any other person any information
relating to any member of the Group if such disclosure would or
might in its opinion constitute a breach of any law or regulation or
be otherwise actionable at the suit of any person; or
(iv) be under any obligations other than those for which
express provision is made herein.
28.5 Each Bank shall, in its Proportion, from time to time on demand
by the Agent, indemnify the Agent (to the extent the Agent has not previously
been indemnified by the Borrower), against any and all costs, claims, losses,
expenses (including legal fees) and liabilities together with any VAT thereon
which the Agent may incur, otherwise than by reason of its own gross negligence
or wilful misconduct, in acting in its capacity as agent hereunder.
28.6 Neither the Agent and the Arrangers nor any of them accepts any
responsibility for the accuracy and/or completeness of the Supplemental
Information Memorandum or any other information supplied by either of the
Obligors in connection herewith or for the legality, validity, effectiveness,
adequacy or enforceability of this Agreement and neither the Agent and the
Arrangers nor any of them shall be under any liability as a result of taking or
omitting to take any action in relation to this Agreement, save in the case of
gross negligence or wilful misconduct.
28.7 Each of the Banks agree that it will not assert or seek to
assert against any director, officer or employee of the Agent or any Arranger
any claim it might have against any of them in respect of the matters referred
to in Clause 28.6.
28.8 The Agent and each of the Arrangers may accept deposits from,
lend money to and generally engage in any kind of banking or other business with
any member of the Group.
28.9 The Agent may resign its appointment hereunder at any time
without assigning any reason therefor by giving not less than thirty days' prior
written notice to that effect to each of the other
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46
parties hereto or an Instructing Group may at any time terminate the appointment
of the Agent by giving not less than sixty days' prior written notice to the
Agent, copied to all parties hereto, Provided that no such resignation or
termination shall be effective until a successor for the Agent is appointed in
accordance with the succeeding provisions of this Clause 28.
28.10 If the Agent gives notice of its resignation, or its
appointment is terminated, pursuant to Clause 28.9, then any reputable and
experienced bank or other financial institution may be appointed as a successor
to the Agent by an Instructing Group during the period of such notice but, if no
such successor is so appointed, the Agent may appoint such a successor itself
which shall be a reputable and experienced bank or other financial institution.
28.11 If a successor to the Agent is appointed under the provisions
of Clause 28.10, then (i) the retiring Agent shall be discharged from any
further obligation hereunder but shall remain entitled to the benefit of the
provisions of this Clause 28 and (ii) its successor and each of the other
parties hereto shall have the same rights and obligations amongst themselves as
they would have had if such successor had been a party hereto.
28.12 It is understood and agreed by each Bank that it has itself
been, and will continue to be, solely responsible for making its own independent
appraisal of and investigations into the financial condition, creditworthiness,
condition, affairs, status and nature of each member of the Group and,
accordingly, each Bank warrants to the Agent and the Arrangers that it has not
relied on and will not hereafter rely on the Agent and the Arrangers nor any of
them:
(i) to check or enquire on its behalf into the adequacy, accuracy or
completeness of any information provided by either of the Obligors in
connection with this Agreement or the transactions herein contemplated
(whether or not such information has been or is hereafter circulated to
such Bank by the Agent and the Arrangers or any of them); or
(ii) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of any
member of the Group.
28.13 In acting as Agent for the Banks, the Agent's agency division
shall be treated as a separate entity from any other of its divisions or
departments and, notwithstanding the foregoing provisions of this Clause 28, in
the event that the Agent should act for any member of the Group in any capacity
in relation to any other matter, any information given by such member of the
Group to the Agent in such other capacity may be treated as confidential by the
Agent.
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47
Part 13
ASSIGNMENTS AND TRANSFERS
29. Benefit of Agreement
This Agreement shall be binding upon and ensure to the benefit of
each party hereto and its or any subsequent successors, Transferees and assigns.
30. Assignments and Transfers by the Obligors
Neither of the Obligors shall be entitled to assign or transfer all
or any of its rights, benefits and obligations hereunder.
31. Assignments and Transfers by Banks
31.1. Any Bank may, at any time, assign all or any of its rights and
benefits hereunder or transfer in accordance with Clause 31.3 all or any of its
rights, benefits and obligations hereunder Provided that (i) no such assignment
or transfer (other than to an affiliate of such Bank having its Facility Office
in a country in which another Bank has its Facility Office) may be made without
the prior written consent of the Borrower, such consent not to be unreasonably
withheld or delayed and to be deemed to have been given if a response to a
request for such consent is not received from the Borrower by such Bank within
fifteen business days of such request (incorporating such fifteen business days
deadline) being made, and (ii) no such transfer or assignment may be made if the
result thereof, at the time of such transfer or assignment or immediately
thereafter would be that either Obligor would be liable to pay an additional
amount or amounts pursuant to Clauses 11.1 or 13.1 which additional amount or
amounts would not have been payable had no such transfer or assignment occurred
unless the transferee or assignee accept responsibility to reimburse such
Obligor for any additional amount or amounts.
31.2 If any Bank assigns all of any of its rights and benefits
hereunder in accordance with Clause 31.1, then, unless and until the assignee
has agreed with the Agent, the Arrangers and the other Banks that it shall be
under the same obligations towards each of them as it would have been under if
it had been an original party hereto as a Bank, the Agent, the Arrangers and the
other Banks shall not be obliged to recognise such assignee as having the rights
against each of them which it would have had if it had been such a party hereto.
31.3 If any Bank wishes to transfer all or any of its rights,
benefits and/or obligations hereunder as contemplated in Clause 31.1, then such
transfer may be effected by the delivery to the Agent of a duly completed and
duly executed Transfer Certificate in which event, on the later of the Transfer
Date specified in such Transfer Certificate and the fifth business day after (or
such earlier business day endorsed by the Agent on such Transfer Certificate
falling on or after) the date of delivery of such Transfer Certificate to the
Agent:
(i) to the extent that in such Transfer Certificate the Bank party
thereto seeks to transfer its rights, benefits and obligations hereunder,
each of the Obligors and such Bank shall be released from further
obligations towards one another
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48
hereunder and their respective rights against one another shall be
cancelled (such rights, benefits and obligations being referred to in this
Clause 31.3 as "discharged rights and obligations");
(ii) each of the Obligors and the Transferee party thereto shall
assume obligations towards one another and/or acquire rights against one
another which differ from such discharged rights and obligations only
insofar as such Obligor and such Tranferee have assumed and/or acquired
the same in place of such Obligor and such Bank; and
(iii) the Agent, the Arrangers, such Transferee and the other Banks
shall acquire the same rights and benefits and assume the same obligations
between themselves as they would have acquired and assumed had such
Transferee been an original party hereto as a Bank with the rights,
benefits and/or obligations acquired or assumed by it as a result of such
transfer.
31.4 On the date upon which a transfer takes effect pursuant to
Clause 31.3, the Transferee in respect of such transfer shall pay to the Agent
for its own account a transfer fee of $800, payable under pre-advice, and
notwithstanding the provisions of Clause 31.3 such transfer shall not be
effective until such transfer fee is received by the Agent.
32. Disclosure of Information
Any Bank may disclose to any actual or potential assignee or
Transferee or to any person who may otherwise enter into contractual relations
with such Bank in relation to this Agreement such information about this
Agreement or the Obligors and the Group as such Bank shall consider appropriate.
<PAGE>
49
Part 14
MISCELLANEOUS
33. Calculations and Evidence of Debt
33.1 Interest and commitment commission shall accrue from day to day
and shall be calculated on the basis of a year of 360 days (or, in the case of
any Advance denominated in sterling, 365 days or, in any case where market
practice differs, in accordance with market practice) and the actual number of
days elapsed.
33.2 Any repayment of an Advance denominated in an Optional Currency
shall reduce the amount of such Advance by the amount of such Optional Currency
repaid and shall reduce the Dollar Amount of such Advance proportionately.
33.3 If on any occasion a Reference Bank or Bank fails to supply the
Agent with a quotation required of it under the foregoing provisions of this
Agreement, the rate for which such quotation was required shall be determined
from those quotations which are supplied to the Agent.
33.4 Each Bank shall maintain in accordance with its usual practice
accounts evidencing the amounts from time to time lent by and owing to it
hereunder.
33.5 The Agent shall maintain on its books a control account or
accounts in which shall be recorded (i) the amount of any Advance made or
arising hereunder and each Bank's share therein, (ii) the amount of all
principal, interest and other sums due or to become due from either of the
Obligors to any of the Banks hereunder and each Bank's share therein and (iii)
the amount of any sum received or recovered by the Agent hereunder and each
Bank's share therein.
33.6 In any legal action or proceeding arising out of or in
connection with this Agreement, the entries made in the accounts maintained
pursuant to Clauses 33.4 and 33.5 shall in the absence of mainfest error be
conclusive evidence of the existence and amounts of the obligations of the
Obligors therein recorded.
33.7 A certificate of a Bank as to (i) the amount by which a sum
payable to it hereunder is to be increased under Clause 11.1 or (ii) the amount
for the time being required to indemnify it against any such cost, payment or
liability as is mentioned in Clause 11.2 or 13.1 shall, in the absence of
manifest error, be conclusive for the purposes of this Agreement.
33.8 A certificate of the Agent as to the amount as any time due
from the Borrower hereunder or the amount which, but for any of the obligations
of the Borrower hereunder being or becoming void, voidable, unenforceable or
ineffective, at any time would have been due from the Borrower hereunder shall,
in the absence of manifest error, be conclusive for the purposes of Part 8.
<PAGE>
50
34. Remedies and Waivers
No failure to exercise, nor any delay in exercising, on the part of
the Agent, the Arrangers and the Banks or any of them, any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy prevent any further or other exercise thereof or
the exercise of any other right or remedy. The rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies provided by
law.
35. Partial Invalidity
If, at any time, any provision hereof is or becomes illegal, invalid
or unenforceable in any respect under the law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions hereof nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby.
36. Notices
36.1 Each communication to be made hereunder shall be made in
writing but, unless otherwise stated, may be made by telex, telefax or letter
save that any Notice of Drawdown or other communication of instructions for
payment to be made by one person to another hereunder shall be made by telex or
letter.
36.2 Any communication or document to be made or delivered by one
person to another pursuant to this Agreement shall (unless that other person has
by fifteen days' written notice to the Agent specified another address) be made
or delivered to that other person at the address identified with its signature
below (or, in the case of a Transferee, at the end of the Transfer Certificate
to which it is a party as Transferee) and shall be deemed to have been made or
delivered when despatched (and the appropriate answerback received) (in the case
of any communication made by telex) or (in the case of any communication made by
letter) when left at that address or (as the case may be) ten days after being
deposited in the post postage prepaid in an envelope addressed to it at that
address or (in the case of any communication of telefax) when actually received
Provided that any communication or document to be made or delivered to the Agent
shall be effective only when received by the Agent and then only if the same is
expressly marked for the attention of the department identified with the Agent's
signature below (or such other department as the Agent shall from time to time
specify for this purpose) and provided further that if the time of receipt of
any communication or document is not a business day in the country of the
addressee or is not within working hours, such communication or document shall
be deemed to have been received at the opening of business on the next business
day.
36.3 Each communication and document (except for the documents set
out in paragraphs 1 and 2 of the Third Schedule) made or delivered by one party
to another pursuant to this Agreement shall be in the English language or
accompanied by a translation thereof in English certified (by an officer of the
person making or delivering the same) as being a true and accurate translation
thereof and, in this case, the English translation shall be conclusive unless
the communication or document is a statutory or other official document.
<PAGE>
51
Part 15
LAW AND JURISDICTION
37. Law
This Agreement shall be governed by, and shall be construed in
accordance with, English law.
38. Jurisdiction
38.1 Each of the parties hereto irrevocably agrees for the benefit
of each of the Agent, the Arrangers and the Banks that the courts of England
shall have jurisdiction to hear and determine any suit, action or proceeding,
and to settle any disputes, which may arise out of or in connection with this
Agreement and, for such purposes, irrevocably submits to the jurisdiction of
such courts.
38.2 Each of the Obligors irrevocably waives any objection which it
might now or hereafter have to the courts referred to in Clause 38.1 being
nominated as the forum to hear and determine any suit, action or proceeding, and
to settle any disputes, which may arise out of or in connection with this
Agreement and agrees not to claim that any such court is not a convenient or
appropriate forum.
38.3 Each of the Obligors agrees that the process by which any suit,
action or proceeding is begun may be served on it by being delivered in England,
to Incentive Group Limited, c/o Munters Ltd, Blackstone Road, Huntingdon, Cambs
PE18 6EP, England or other its principal place of business for the time being.
If the appointment of the person mentioned in this Clause 38.3 ceases to be
effective in respect of either or both Obligors, such Obligor or Obligors shall
immediately appoint a further person in England to accept service of process on
its behalf in England and, failing such appointment within 15 days, the Agent
shall be entitled to appoint such a person by notice to such Obligor or
Obligors. Nothing contained herein shall affect the right to serve process in
any other manner permitted by law.
38.4 The submission to the jurisdiction of the courts referred to in
Clause 38.1 shall not (and shall not be construed so as to) limit the right of
the Agent, the Arrangers and the Banks or any of them to take proceedings
against either of the Obligors in any other court of competent jurisdiction nor
shall the taking of proceedings in any one or more jurisdictions preclude the
taking of proceedings in any other jurisdiction (whether concurrently or not) if
and to the extent permitted by applicable law.
38.5 Each of the Obligors hereby consents generally in respect of
any legal action or proceeding arising out of or in connection with this
Agreement to the giving of any relief or the issue of any process in connection
with such action or proceeding including, without limitation, the making,
enforcement or execution against any property whatsoever (irrespective of its
use or intended use) of any order or judgement which may be made or given in
such action or proceeding.
38.6 To the extent that either of the Obligors may in any
jurisdiction claim for itself or its assets immunity from suit, execution,
attachment (whether in aid of execution, before judgement or otherwise) or other
legal process and to the extent that in any such jurisdiction there may be
attributed to itself or its assets such immunity (whether or not claimed), such
Obligor hereby irrevocably agrees
<PAGE>
52
not to claim and hereby irrevocably waives such immunity to the full extent
permitted by the laws of such jurisdiction.
AS WITNESS the hands of the duly authorised representatives of the
parties hereto the day and year first before written.
<PAGE>
53
THE FIRST SCHEDULE
The Banks
Bank Commitment (US$)
Deutsche Bank Luxembourg S.A. 50,000,000
Enskilda, Skandinaviska Enskilda Banken 44,000,000
Svenska Handelsbanken 44,000,000
Banque Nationale de Paris, London Branch 28,000,000
Citibank International Plc, Sweden Branch 28,000,000
Commerzbank International S.A. 28,000,000
Credit Lyonnais France Bankfilial 28,000,000
The Dai-Ichi Kangyo Bank, Limited 28,000,000
Den Danske Bank Aktieselskab 28,000,000
Dresdner Bank Luxembourg S.A. 28,000,000
The Mitsubishi Bank, Limited 28,000,000
RBC Finance B.V. 28,000,000
Societe Generale 28,000,000
The Sumitomo Bank, Limited 28,000,000
ABN AMRO Bank N.V., Stockholm
Branch 18,000,000
Midland Bank plc 18,000,000
Standard Chartered Bank 18,000,000
----------
Total 500,000,000
<PAGE>
54
THE SECOND SCHEDULE
Form of Transfer Certificate
To: Deutsche Bank Luxembourg S.A.
TRANSFER CERTIFICATE
relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "Facility Agreement") dated 24 May, 1995 whereby a
U.S.$500,000,000 multicurrency revolving credit facility was made available to
Incentive Treasury AB as borrower under the guarantee of Incentive AB as
guarantor by a group of banks on whose behalf Deutsche Bank Luxembourg S.A.
acted as agent in connection therewith.
1. Terms defined in the Facility Agreement shall, subject to any
contrary indication, have the same meanings herein. The terms Bank and
Transferee are defined in the schedule hereto.
2. The Bank (i) confirms that the details in the schedule hereto
under the heading "Bank's Commitment" or "Advance(s)" accurately summarizes its
Commitment and/or, as the case may be, its participation in, and the Term and
Repayment Date of, one or more existing Advances and (ii) requests the
Transferee to accept and procure the transfer to the Transferee of the portion
specified in the schedule hereto of, as the case may be, its Commitment and/or
its participation in such Advance(s) by counter-signing and delivering this
Transfer Certificate to the Agent at its address for the service of notices
specified in the Facility Agreement.
3. The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the purposes of
Clause 31.3 of the Facility Agreement so as to take effect in accordance with
the terms thereof on the Transfer Date or on such later date as may be
determined in accordance with the terms thereof.
4. The Transferee confirms that it has received a copy of the
Facility Agreement together with such other information as it has required in
connection with this transaction and that it has not relied and will not
hereafter rely on the Bank to check or enquire on its behalf into the legality,
validity, effectiveness, adequacy, accuracy or completeness of any such
information and further agrees that it has not relied and will not rely on the
Bank to assess or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of any member of the
Group.
5. The Transferee hereby undertakes with the Bank and each of the
other parties to the Facility Agreement that it will perform in accordance with
their terms all those obligations which by the terms of the Facility Agreement
will be assumed by it after delivery of this Transfer Certificate to the Agent
and satisfaction of the conditions (if any) subject to which this Transfer
Certificate is expressed to take effect.
6. The Bank makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness, adequacy
or enforceability of the Facility Agreement or any
<PAGE>
55
document relating thereto and assumes no responsibility for the financial
condition of any member of the Group or for the performance and observance by
the Borrower or the Guarantor of any of its obligations under the Facility
Agreement or any document relating thereto and any and all such conditions and
warranties, whether express or implied by law or otherwise, are hereby excluded.
7. The Bank hereby gives notice that nothing herein or in the
Facility Agreement (or any document relating thereto) shall oblige the Bank to
(i) accept a re-transfer from the Transferee of the whole or any part of its
rights, benefits and/or obligations under the Facility Agreement transferred
pursuant hereto or (ii) support any losses directly or indirectly sustained or
incurred by the Transferee for any reason whatsoever including, without
limitation, the non-performance by the Borrower, the Guarantor or any other
party to the Facility Agreement (or any document relating thereto) of its
obligations under any such document. The Transferee hereby acknowledges the
absence of any such obligation as is referred to in (i) or (ii) above.
8. This Transfer Certificate and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with English
law.
THE SCHEDULE
1. Bank:
2. Transferee:
3. Transfer Date:
4. Commitment:
Bank's Commitment Portion Transferred
5. Advance(s):
Amount of Term and
Bank's Repayment Portion
Participation Date Transferred
[Transferor Bank] [Transferee Bank]
By: By:
Date: Date:
<PAGE>
56
Administrative Details of Transferee
Address:
Contact Name:
Account for Payments
in dollars:
Telex:
Telephone:
Facsimile:
<PAGE>
57
THE THIRD SCHEDULE
Condition Precedent Documents
1. In relation to each of the Obligors:
(i) a copy, certified a true copy by a duly authorised officer
of such Obligor, of the certificate of registration, issued by the
Patent- and Registration Office, and the articles of association of
such Obligor; and
(ii) a copy, certified a true copy by a duly authorised
officer of such Obligor, of a Board Resolution of such Obligor
approving the execution, delivery and performance of this Agreement
and the terms and conditions hereof.
2. An opinion of the Borrower's and Guarantor's Swedish Counsel
dated on or after the date of this Agreement and in substantially the form set
out in the Swedish Schedule.
3. An opinion of the Bank's Swedish Counsel dated on or after the
date of this Agreement and in substantially the form set out in the Eighth
Schedule.
4. An opinion of Clifford Chance, solicitors to the Agent dated on
or after the date of this Agreement and, in substantially the form distributed
to the Banks prior to the execution hereof.
5. Evidence that Incentive Group Limited, c/o Munters Ltd,
Blackstone Road, Huntingdon, Cambs PE18 6EP. England has agreed to act as the
agent of the Obligors for the service of process in England.
<PAGE>
58
THE FOURTH SCHEDULE
Notice of Drawdown
From: Incentive Treasury AB
To: Deutsche Bank Luxembourg S.A.
Dated:
Dear Sirs,
1. We refer to the agreement (as from time to time amended, varied,
novated or supplemented, the "Facility Agreement") dated 24 May, 1995, and made
between Incentive Treasury AB as borrower, Incentive AB as guarantor, Deutsche
Bank Luxembourg S.A. and Enskilda, Skandinaviska Enskilda Banken as arrangers,
Deutsche Bank Luxembourg S.A. as agent and the financial institutions named
therein as banks. Terms defined in the Facility Agreement shall have the same
meaning in this notice.
2. We hereby give you notice that, pursuant to the Facility
Agreement and upon the terms and subject to the conditions contained therein, we
wish an Advance to be made to us as follows:
(i) Currency:
(ii) Dollar Amount:
(iii) Drawdown Date:
(iv) Term:
[3. If it is not possible, pursuant to Clause 6.5 of the Facility
Agreement, for the Advance to be made in the currency specified, we would wish
the Advance to be denominated in dollars.]
[3/4.] We confirm that, at the date hereof, the representations set
out in Clause 15.1 and 15.2 (except sub-Clauses 15.2 (v) and (viii)) of the
Facility Agreement are true and no Event of Default or Potential Event of
Default has occurred.
[4/5.] The proceeds of this drawdown should be credited to [insert
account details].
Yours faithfully
for and on behalf of
[Incentive Treasury AB]
<PAGE>
59
THE FIFTH SCHEDULE
European Currency Unit
1. For the purposes of this Agreement and subject to paragraph 2
below, "ECU" means the unit of account known as the ECU that is at present used
in the European Monetary System. Pursuant to Council Regulation (EEC) No.
1971/89 of 19 June, 1989 and No. 3320/94 of 22 December, 1994 the ECU is at
present valued on the basis of specified amounts of the currencies of the member
states of the European Union as shown below:
0.6242 German Mark
0.08784 Pound Sterling-
1.332 French Francs
151.8 Italian Lire
0.2198 Dutch Guilder
3.301 Belgian Francs
0.130 Luxembourg Franc
0.1976 Danish Krone
1.44 Greek Drachma
0.008552 Irish Pound
6.885 Spanish Peseta
1.393 Portuguese Escudo
This basis may be changed by the European Union from time to time,
including changes in the components in which event the basis of valuation of the
ECU will change accordingly.
2. If the Agent makes a declaration pursuant to Clause 22.2 then the
equivalent of the ECU in each of the component currencies as of any day (the
"Day of Valuation") shall be determined by the Agent as follows:
The components of the ECU for this purpose (the "Components")
shall be the currency amounts that were components of the ECU when
the ECU was most recently used in the European Monetary System*;
provided, however, that, if the ECU is being used for the settlement
of transactions by public institutions of or within the European
Union or if it was so used after its most recent use in the European
Monetary System, the Components shall be:
(i) the currency amounts that are components of the ECU
as so used as of the Day of Valuation; or
(ii) the currency amounts that were components of the
ECU when it was most recently so used*, as the case may be.
The equivalent of the ECU in a component currency thereof
shall first be calculated as the sum of the dollar equivalents of
the Components, and the equivalent of the ECU in such component
currency shall then be calculated on the basis of the dollar
equivalent of the ECU,
<PAGE>
60
using the same rates as those used for determining the dollar
equivalents of the Components as set forth below.
Unless otherwise specified by the Agent, the dollar equivalent of
each of the Components shall be the arithmetic mean determined by the Agent on
the basis of the middle spot delivery quotations prevailing at 11.00 a.m. London
time in the London Foreign Exchange Market on the Day of Valuation, as obtained
by the Agent from the Reference Banks.**
Unless otherwise specified by the Agent, in the event that there is
more than one market for dealing in any component currency by reason of foreign
exchange regulations or for any other reason, the market to be referred to in
respect of such currency shall be that upon which a non-resident issuer of
securities denominated in such currency would purchase such currency in order to
make payments in respect of such securities.
* In the event that the official unit of any component currency of
the ECU is altered by way of combination or subdivision, the number
of units of that currency as a Component shall be divided or
multiplied in the same proportion. In the event that two or more
component currencies are consolidated into a single currency, the
amounts of those currencies as Components shall be replaced by an
amount in such single currency equal to the sum of the amounts of
the consolidated component currencies expressed in such single
currency. In the event that any component currency should be divided
into two or more currencies, the amount of that currency as a
Component shall be replaced by amounts of such two or more
currencies each of which shall be equal in the amount of the former
component currency divided by the number of currencies into which
that currency was divided.
** In the event no such direct quotations are available for a
component currency on a Day of Valuation from any of the Reference
Banks because foreign exchange markets are closed in the country of
issue of that currency or for any other reason, the most recent
direct quotations of the Reference Banks for that currency obtained
by the Agent shall be used in computing the equivalent of the ECU on
such Day of Valuation, provided, however, that such most recent
quotations may be used only if they were prevailing not more than
two business days in the country of issue before such Day of
Valuation. Beyond such period of two business days, the Agent shall
determine the dollar equivalent of such Component on the basis of
cross rates derived from middle spot delivery quotations for such
component currency and for dollars prevailing at 11.00 a.m. London
time on such Day of Valuation, as obtained by the Agent from two or
more major banks, as selected by the Agent. Within such period of
two business days, the Agent shall determine the dollar equivalent
of such Component on the basis of such cross rates if the Agent
judges that the equivalent so calculated is more representative than
the dollar equivalent calculated on the basis of such most recent
direct quotations.
3. All determinations made by the Agent shall be at its sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding upon the Borrower and the Guarantor.
<PAGE>
61
THE SIXTH SCHEDULE
Form of LC Notification
From: Incentive Treasury AB and relevant Bank or Banks
To: Deutsche Bank Luxembourg S.A.
Dear Sirs,
1. We refer to the agreement (as from time to time amended, varied,
novated or supplemented, the "Facility Agreement") dated 24 May, 1995, and made
between Incentive Treasury AB as borrower, Incentive AB as guarantor, Deutsche
Bank Luxembourg S.A. and Enskilda, Skandinaviska Enskilda Banken as arrangers,
Deutsche Bank Luxembourg S.A. as agent and the financial institutions named
therein as banks. Terms defined in the Facility Agreement shall have the same
meaning in this notice.
2. We hereby give you notice that we have entered into a LC
Agreement and hereby deliver this LC Notification to you pursuant to Clause 10.4
as follows:-
(i) Currency and Amount of Letter of Credit...............
(ii) Dollar Amount of Letter of Credit.....................
(iii) Issue Date of Letter of Credit........................
(iv) Expiry Date of Letter of Credit.......................
3. We hereby request that the Commitment of [Bank] be reduced by
[insert Dollar Amount set out in (ii) rounded down to the nearest $10,000,000]
with effect from [Issue Date].
Yours faithfully,
for and on behalf of [Bank] for and on behalf of Incentive
or [Banks] Treasury AB
<PAGE>
62
THE SEVENTH SCHEDULE
Opinion of the Borrower's and Guarantor's Swedish Counsel
To: Deutsche Bank Luxembourg S.A. as agent on its own behalf and for
and on behalf of the Arrangers and the Banks referred to in the Facility
Agreement mentioned below.
Dear Sirs,
1. We have acted on behalf of Incentive Treasury AB and Incentive AB
in connection with an agreement (the "Facility Agreement") date 24 May, 1995 and
made between Incentive Treasury AB as borrower, Incentive AB as guarantor,
Deutsche Bank Luxembourg S.A. and Enskilda, Skandinaviska Enskilda Banken as
arrangers, Deutsche Bank Luxembourg S.A. as agent and the financial institutions
defined therein as Banks.
2. Terms defined in the Facility Agreement shall have the same
meaning herein.
3. We have examined a signed copy of the Facility Agreement and such
other documents as we have considered it necessary or desirable to examine and,
on the assumption that the Facility Agreement is valid and legally binding under
English law (and subject as mentioned below), we are of the opinion that the
statements set out in Clause 15.1 (i) - (x) of the Facility Agreement are true
insofar as the same relate to the Obligors.
4. This opinion is confined to matters of Swedish law and no opinion
is expressed as to the laws of any other jurisdiction.
5. We have assumed the following:
1. the Facility Agreement is within the capacity and power of and
has been validly authorized, executed and delivered by and is binding on the
parties thereto, other than the Obligors, which matters we have not
independently verified; and
2. the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity with the originals of
all documents submitted to us as copies thereof, and we have found nothing to
indicate that such assumptions are not fully justified.
The qualifications to which this opinion is subject are as follows:
1. The availability in Swedish courts of equitable remedies, such as
injunction and specific performance, is restricted under Swedish law.
2. Swedish courts may award judgments expressed in foreign
currencies, but an enforcement in Sweden by the execution authorities of a
payment order in the judgement can generally only
<PAGE>
63
be performed in Swedish Kronor. Enforcement in Sweden of such judgments would,
if implemented in Swedish Kronor, be generally at the rate of exchange
prevailing at the date of enforcement rather than at the date of judgment.
3. Nothing in this opinion must be taken as indicating that
obligations would be specifically enforceable and an enforcement of any
agreement or instrument may be limited by bankruptcy, insolvency, liquidation,
reorganization, limitation, and other laws of general application regarding or
affecting the rights of creditors.
4. Pursuant to the Swedish Contract Act, a contract term may be
modified or set aside if it is adjudged to be unreasonable. Where any party to
an agreement is vested with a discretion or may determine a matter in its
opinion, Swedish law may require that such discretion is exercised reasonably or
that such opinion is based on reasonable grounds and a provision that a certain
determination is conclusive and binding will not prevent judicial enquiry into
the merits of any claim by an aggrieved party.
5. A Swedish court may reject the right to take proceedings in
Sweden if proceedings which have or may lead to a judgment which is enforceable
in Sweden have already been taken in another court of competent jurisdiction
within or outside Sweden.
6. In giving the foregoing opinion, we have relied as to certain
factual matters upon certificates of officers of the Obligors and of public
officials.
7. This opinion is confined to and is given on the basis of Swedish
law as it exists at the date hereof. We have made no investigations of the laws
of England as a basis for this opinion and do not express or imply any opinion
thereon.
8. This opinion is strictly limited to the matters stated herein and
is not to be read as extending by implication to any other matters in connection
with the Facility Agreement referred to herein or the transactions contemplated
by such agreement.
This opinion is addressed to you and, without our express consent,
is not to be transmitted to any other person, nor is it to be relied upon by any
other person or for any purpose.
Yours faithfully,
ADVOKATFIRMAN VINGE
Hans Wibom
<PAGE>
64
THE EIGHTH SCHEDULE
Opinion of the Banks' Swedish Counsel
To: the Arrangers and the Banks
(each as defined in the Facility
Agreement referred to below)
and
Deutsche Bank Luxembourg S. A.
as Agent
Stockholm, [ ], 1995
Dear Sirs,
Re: US $ 500,000,000 Multicurrency Revolving Credit Facility dated 24 May,
1995, (the "Facility Agreement") for Incentive Treasury AB as Borrower and
guaranteed by Incentive AB as Guarantor
1. We have acted as your legal advisers in Sweden in connection with
the Facility Agreement made between the Borrower, the Guarantor, the Arrangers,
the banks and other financial institutions listed on the signature pages of the
Facility Agreement as lenders participating in the Revolving Credit Facility and
the Agent.
2. For the purposes of this opinion, we have examined and relied
upon:
(a) a conformed copy of the Facility Agreement;
(b) a copy of each of the Borrower's and the Guarantor's articles of
association;
(c) a copy of the registration certificate of the Borrower issued by
the Parent and Registration Office on [ ];
(d) a copy of the registration certificate of the Guarantor issued
by the Patent and Registration Office on [ ];
(e) a copy of a Board Resolution of the Borrower passed at a meeting
of its board of directors on [ ] approving the entering into the
Facility Agreement;
(f) a copy of a board resolution of the Guarantor passed at a
meeting of its board of directors held on [ ] approving the giving of
its guarantee under the Facility Agreement;
<PAGE>
65
(g) a copy of the power of attorney dated [ ], 1995 authorizing
Mr. [ ] and Mr. [ ] jointly to sign the Facility Agreement on behalf
of the Borrower; and
(h) a copy of the power of attorney dated [ ], 1995 authorizing
Mr. [ ] and Mr. [ ] jointly to sign the Facility Agreement on behalf
of the Guarantor.
3. We have assumed the following:
(A) the Facility Agreement is within the capacity and power of and
has been validly authorized, executed and delivered by and is binding on
the parties thereto, other than the Borrower and the Guarantor, which
matters we have not independently verified;
(B) the Facility Agreement and the rights and obligations created
thereby are valid and legally binding under the laws of England, by which
they are expressed to be governed; and
(C) the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity with the
originals of all documents submitted to us as copies thereof;
and we have found nothing to indicate that such assumptions are not fully
justified.
Terms defined in the Facility Agreement shall, when used in this
opinion, have the same meanings herein as therein unless otherwise defined.
4. Based on the foregoing, we are of the opinion that, so far as the
laws of Sweden are concerned that the statements set out in Clause 15.1 of the
Facility Agreement are true and correct as far as they relate to each Obligor
respectively.
5. the qualifications to which this opinion is subject are as
follows:
(1) The availability in Swedish courts of equitable remedies, such
as injunction and specific performance, is restricted under Swedish law.
(2) Swedish courts may award judgments expressed in foreign
currencies (including $, sterling and ECU), but an enforcement in Sweden
by the execution authorities of a payment order in the judgment can
generally only be performed in Swedish kronor ("SEK"). Enforcement in
Sweden of such judgments would, if implemented in SEK, be generally at the
rate of exchange ruling at the date of enforcement rather than at the date
of judgment.
(3) Nothing in this opinion must be taken as indicating that
obligations would be specifically enforceable and an enforcement of any
agreement or instrument may be limited by bankruptcy, insolvency,
liquidation, reorganisation, limitation, and other laws of general
application regarding or affecting the rights of creditors.
(4) Pursuant to the Swedish Contract Act, a contract term may be
modified or set aside if it is adjudged to be unreasonable. Where any
party to an agreement is vested with a
<PAGE>
66
discretion or may determine a matter in its opinion, Swedish law may
require that such discretion is exercised reasonably or that such opinion
is based on reasonable grounds and a provision that a certain
determination is conclusive and binding will not prevent judicial enquiry
into the merits of any claim by an aggrieved party. Although the Facility
Agreement is subject to English law, we cannot express any opinion whether
a Swedish court would find such equitable rules of the Swedish Contracts
Act applicable either directly or by reason of Swedish public policy.
However, in our opinion, having regard to all the relevant circumstances,
even if such rules of the Swedish Contracts Act did apply, neither the
Facility Agreement nor the terms thereof would be subject to modification
or being set aside pursuant to such rules.
(5) A Swedish court may reject the right to take proceedings in
Sweden if proceedings which have or may lead to a judgment which is
enforceable in Sweden have already been taken in another court of
competent jurisdiction within or outside Sweden.
(6) In giving the foregoing opinion, we have relied as to certain
factual matters upon certificates by officers of the Borrower, the
Guarantor and by public officials.
(7) This opinion is confined to and is given on the basis of Swedish
law as it exists at the date hereof. We have made no investigations of the
laws of England as a basis for this opinion and do not express or imply
any opinion thereon.
(8) This opinion is strictly limited to the matters stated herein
and is not to be read as extending by implication to any other matters in
connection with the Facility Agreement.
This opinion is addressed to you and, without our express consent,
is not to be transmitted to any other person, nor is it to be relied upon by any
other person (in each case other than your legal advisers) or for any purpose
other than in connection with the Facility Agreement.
Yours faithfully
HELLSTROM & PARTNERS ADVOKATBYRA HB
Peter Sederowsky
<PAGE>
67
THE NINTH SCHEDULE
Associated Costs Rate
1. For the purposes of this Agreement, the cost of compliance with
existing requirements of the Bank of England in respect of Advances denominated
in sterling will be calculated by the Agent in relation to each Advance on the
basis of rates to be supplied by each of the Reference Banks by reference to the
circumstances existing on the first day of the Term in respect of such Advance
and, if such Term exceeds three months, at three calendar monthly intervals from
the first day of such Term during its duration in accordance with the following
formula:
AB + C(B - E) + D(B - F) per cent. per annum
------------------------
100 - (A + D)
Where:
A is the percentage of eligible liabilities which such Reference Bank
is from time to time required to maintain as an interest free cash
deposit with the Bank of England to comply with cash ratio
requirements;
B is the percentage rate per annum at which sterling deposits are
offered by such Reference Bank in accordance with its normal
practice, for a period equal to (i) the Term (or, as the case may
be, remainder of such Term) in respect of the relevant Advance or
(ii) three months, whichever is the shorter, to a leading bank in
the London Interbank Market at or about 11.00 a.m. in a sum
approximately equal to the amount of such Advance.
C is the percentage of eligible liabilities which such Reference Bank
is from time to time required by the Bank of England to maintain as
secured money with members of the London Discount Market Association
("LDMA") and/or as secured call money with money brokers and gilt
edged market makers.
D is the percentage of eligible liabilities which such Reference Bank
is required from time to time to maintain as interest bearing
special deposits with the Bank of England.
E is the percentage rate per annum at which members of the LDMA are
offered sterling deposits in a sum approximately equal to the amount
of the relevant Advance as a callable fixture from such Reference
Bank for such period as determined in accordance with B above at or
about 11.00 a.m.
F is the percentage rate per annum payable by the Bank of England to
such Reference Bank on interest bearing special deposits.
2. For the purposes of this Schedule "eligible liabilities" and
"special deposits" shall bear the meanings ascribed to them from time to time by
the Bank of England.
3. The percentages used in A, C and D above shall be those required
to be maintained on the first day of the relevant period as determined in
accordance with B above.
<PAGE>
68
4. In application of the above formula, A, B, C, D, E and F will be
included in the formula as figures and not as percentages e.g. if A is 0.5 per
cent. and B is 12 per cent., AB will be calculated as 0.5 x 12 and not as 0.5
per cent. x 12 per cent.
5. Calculations will be made on the basis of a 365 day year (or, if
market practice differs, in accordance with market practice).
6. A negative result obtained by subtracting E from B or F from B
shall be taken as zero.
7. The arithmetic mean of the resulting figures for each Reference
Bank shall be calculated and shall then be rounded upwards, if not already such
a multiple, to the nearest whole multiple of one-thirty-second of one per cent.
per annum.
8. Additional amounts calculated in accordance with this Schedule
are payable on the last day of the Term to which they relate.
9. The determination of the Associated Costs Rate in relation to any
period shall, in the absence of manifest error, be conclusive and binding on all
of the parties hereto.
10. The Agent may from time to time, after consultation with the
Borrower and the Banks, determine and notify to all the parties hereto any
amendments or variations which are required to be made to the formula set out
above in order to comply with any requirements from time to time imposed by the
Bank of England in relation to Advances denominated in sterling (including
without limitation, any requirements relating to sterling primary liquidity)
and, any such determination shall, in the absence of manifest error, be
conclusive and binding on all the parties hereto.
<PAGE>
69
The Borrower
INCENTIVE TREASURY AB
By:
Address: Hamngatan 2
P.O. Box 7594
S-103 93 Stockholm
SWEDEN
The Guarantor
INCENTIVE AB
By:
Address: P.O. Box 7373
S-103 91 Stockholm
SWEDEN
The Arrangers
DEUTSCHE BANK LUXEMBOURG S.A.
By:
Address: 2, boulevard Konrad Adenauer
L-1115 Luxembourg
GRAND DUCHY of LUXEMBOURG
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN
By:
Address: 2 Cannon Street
London EC4M 6XX
ENGLAND
<PAGE>
70
The Agent
DEUTSCHE BANK LUXEMBOURG S.A.
By:
Address: 2, boulevard Konrad Adenauer
L-1115 Luxembourg
GRAND DUCHY of LUXEMBOURG
Telefax: (+ + 352) 421 22 287
Attention: Loan Department, Swedish Desk
The Banks
DEUTSCHE BANK LUXEMBOURG S.A.
By:
Address: 2, boulevard Konrad Adenauer
L-1115 Luxembourg
GRAND DUCHY of LUXEMBOURG
Telefax: (+ + 352) 421 22 287
Attention: Loan Department, Swedish Desk
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN
By:
Address: 2 Cannon Street
London EC4M 6XX
ENGLAND
Telefax: (+ + 44 171) 638 24 98
Attention: Antoinnette Hennessy
<PAGE>
71
SVENSKA HANDELSBANKEN
By:
Address: Blasieholmstorg 11
S-106 70 Stockholm
SWEDEN
Telefax: (+ + 46 8) 701 20 58
Goran Helen
BANQUE NATIONALE DE PARIS, LONDON BRANCH
By:
Address: 8-13 King William Street
P.O. Box 416
London EC4P 4HS
ENGLAND
Telefax: (+ + 44 171) 929 0310
Attention: Keith Osgood, European Desk
Loan Administration Department -
Commitments Section
CITIBANK INTERNATIONAL PLC, SWEDEN BRANCH
By:
Address: Box 1422
Norrlandsgatan 15
S-111 84 Stockholm
SWEDEN
Telefax: (+ + 46 8) 611 48 43
Attention: Johan Sjogren
<PAGE>
72
COMMERZBANK INTERNATIONAL S.A.
By:
Address: 11, rue Notre-Dame
L-2240 Luxembourg
GRAND DUCHY OF LUXEMBOURG
Telefax: (+ + 352) 477911-419
Attention: Loan Department
CREDIT LYONNAIS SWEDEN
By:
Address: Norrlandsgatan 20
Box 26 149
S-100 41 Stockholm
SWEDEN
Telefax: (+ + 46 8) 611 13 94
Attention: James Gibson
THE DAI-ICHI KANGYO BANK, LIMITED
By:
Address: DKB House
24 King William Street
London EC4R 9DB
ENGLAND
Telefax: (+ + 44 171) 929 31 97
Attention: Jennifer A. Davies
<PAGE>
73
DEN DANSKE BANK AKTIESELSKAB, LONDON BRANCH
By:
Address: 75 King William Street
London EC4N 7DT
ENGLAND
Telefax: (+ + 44 171) 410 49 49
Attention: Corporate Loan Administration
DRESDNER BANK LUXEMBOURG S.A.
By:
Address: 26, rue du Marche-aux-Herbes
L-2097 Luxembourg
GRAND DUCHY OF LUXEMBOURG
Telefax: (+ + 352) 4760 565
Attention: Loan Department
THE MITSUBISHI BANK, LlMITED
By:
Address: 6 Broadgate
Second Floor
London EC2M 2SX
ENGLAND
Telefax: (+ + 44 171) 696 14 54
Attention: Guy Pashley
<PAGE>
74
RBC FINANCE B.V.
By:
Address: Keizersgracht 604
NL-1017 EP Amsterdam
THE NETHERLANDS
Telefax: (+ + 31 20) 626 21 96
Attention: I.S.M. Jacometti-Spoelder
SOCIETE GENERALE
By:
Address: 49, rue de Provence
F-75009 Paris
FRANCE
Telefax: (+ + 33 1) 42 13 68 21
Attention: Christopher Baines
MARC/FIN/Ing
THE SUMITOMO BANK, LIMITED
By:
Address: Temple Court
11 Queen Victoria Street
London EC4N 4TA
ENGLAND
Telefax: (+ + 44 171) 236 0049
Attention: A.S. Moses
<PAGE>
75
ABN AMRO BANK N.V., STOCKHOLM BRANCH
By:
Address: Box 7826
S-103 97 Stockholm
SWEDEN
Telefax: (+ + 46 8) 679 40 90
Attention: Anita Eriksson, Credit Administration
MIDLAND BANK PLC, STOCKHOLM BRANCH
By:
Address: Box 7615
S-103 94 Stockholm
SWEDEN
Telefax: (+ + 46 8) 454 54 54
Attention: Ann Kuller
STANDARD CHARTERED BANK
By:
Address: 1 Aldermanbury Square
London EC2V 75B
ENGLAND
Telefax: (+ + 44 171) 280 7791
Attention: Andy Mills
<PAGE>
AMENDMENT AGREEMENT
relating to
U.S.$ 500,000,000
MULTICURRENCY REVOLVING CREDIT FACILITY AGREEMENT
between
INCENTIVE TREASURY AB (PUBL)
as borrower
INCENTIVE AB (PUBL)
as guarantor
DEUTSCHE BANK LUXEMBOURG S.A.
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
as arrangers
DEUTSCHE BANK LUXEMBOURG S.A.
as agent
and
OTHERS
Clifford Chance
Frankfurt
<PAGE>
THIS AMENDMENT AGREEMENT is made the 4th day of March 1996
BETWEEN
(1) INCENTIVE TREASURY AB (PUBL) (the "Borrower");
(2) INCENTIVE AB (PUBL) (the "Guarantor");
(3) DEUTSCHE BANK LUXEMBOURG S.A. and ENSKILDA, SKANDINAVISKA
ENSKILDA BANKEN AB (PUBL) (the "Arrangers");
(4) DEUTSCHE BANK LUXEMBOURG S.A. (the "Agent"); and
(5) THE FINANCIAL INSTITUTIONS named on the signature pages hereto
(the "Banks").
WHEREAS
(A) By a multicurrency revolving credit facility agreement (the
"Original Facility Agreement") dated 24 May 1995 and made between the Borrower,
the Guarantor, the Arrangers, the Agent and the Banks, the Banks have agreed to
make available to the Borrower a multicurrency revolving credit facility up to a
maximum amount of $ 500,000,000 on the terms and subject to the conditions
therein set out.
(B) The Borrower and the Guarantor have requested that certain
amendments be made to the terms and conditions of the Original Facility
Agreement and the Arrangers, the Agent and the Banks have agreed to such
request.
(C) The Borrower, the Guarantor, the Arrangers, the Agent and the
Banks have agreed that the terms and conditions of the Original Facility
Agreement shall be amended as set out herein.
NOW IT IS HEREBY AGREED as follows:
1. Interpretation
1.1 In this Amendment Agreement "Effective Date" means the date upon
which the conditions precedent set out in Clause 3 are fulfilled.
1.2 All other terms and conditions used herein shall, unless the
context otherwise expressly requires, bear the meaning ascribed to them in the
Original Facility Agreement.
1.3 Subject to the amendments referred to herein, all the provisions
of the Original Facility Agreement shall remain in full force and effect in
accordance with their terms and all references in the Original Facility
Agreement, herein and in any other document or agreement to "Agreement",
"Facility Agreement" or to any similar derivative term shall, unless the context
otherwise requires, be taken as a reference to the Original Facility Agreement
as amended in accordance herewith.
<PAGE>
2
1.4 Clause headings are for ease of reference only.
2. Amendments and Effectiveness
With effect from and as of the Effective Date the Original Facility
Agreement shall be, and shall hereby be deemed to be, amended as follows:
(a) in Clause 1.1 thereof, the following new definitions shall be
inserted:
"ASEA AB Share Disposal" means the sale, transfer, grant, lease or
other disposal by a Permitted Owner other than to another Permitted Owner
(including as permitted under Clause 17.4 but excluding any ASEA AB Share
Transaction) of any of the shares or any of the voting rights in ASEA AB
(other than as a result of a re-organisation of the shares of ASEA AB
pursuant to which such shares an substituted by shares of equivalent value
and representing the same assets);
"ASEA AB Share Transaction" means the entering into by a Permitted
Owner of any short term sale and repurchase transaction in respect of any
of the shares or any voting rights in ASEA AB (including any such
transaction permitted under Clause 17.4);
"ASEA AB Share Encumbrance" means the creation by a Permitted Owner
of any encumbrance over any of the shares or any of the voting rights in
ASEA AB (including any such encumbrance permitted under Clause 17.3);
"Permitted Owner" means the Guarantor or one or more directly or
indirectly wholly owned subsidiaries of the Guarantor.
(b) in Clause 6.6 thereof, sub-Clause (iii)(b) shall be deleted and
the following shall be inserted:
(b) the representations set out in Clause 15 (except sub-Clauses
15.2 (v), (viii), and (xiv)) are true on and as of the proposed date for
the making of such Advance
(c) in Clause 15.2 thereof, sub-Clause (xiv) shall be deleted and
the following shall be inserted:
(xiv) a Permitted Owner is the legal and beneficial owner of, with
unencumbered title to, 25 per cent. of the shares and 32.9 per cent. of
the voting rights of ASEA AB; and
(d) in Clause 15.3 thereof, the words "(except sub-Clauses 15.2(v)
and (viii))" shall be deleted and the following words shall be inserted "(except
sub-Clauses 15.2(v), (viii) and (xiv))".
<PAGE>
3
(e) in Clause 16.1 thereof, sub-Clauses (i) - (iii) shall be deleted
and the following new sub-Clauses (i) - (iv) shall be inserted:
(i) as soon as the same become available, but in any event within
150 days after the end of each of its financial years, deliver to the
Agent in sufficient copies for the Banks its financial statements
(including, in the case of the Guarantor, the consolidated financial
statements of the Group) for such financial year together with a
certificate issued by the auditors and counter-signed by a duly authorised
officer of the Guarantor (a) setting out in reasonable detail the names of
the Principal Subsidiaries and the calculation of Relevant Total Assets,
Consolidated Relevant Total Assets and Total Borrowings at the end of such
financial year and (b) confirming that the Guarantor has been in
compliance with its obligations under Clauses 17.7 and 17.8 (if
applicable) during such financial year;
(ii) as soon as the same become available, but in any event within
90 days after the end of the first half of each of its financial years,
deliver to the Agent in sufficient copies for the Banks its financial
statements (including, in the case of the Guarantor, the consolidated
financial statements of the Group) for such period together with
certificates signed by a duly authorised officer of the Guarantor (a)
setting out in reasonable detail the names of the Principal Subsidiaries
and the calculation of Relevant Total Assets, the Consolidated Relevant
Total Assets and Total Borrowings at the end of such period and the
amounts of Financial Indebtedness owed by the Guarantor or a Principal
Subsidiary and allowed pursuant to Clause 17.5 (i) - (v) inclusive and (b)
confirming that the Guarantor has been in compliance with its obligations
under Clauses 17.7 and 17.8 (if applicable) during such financial half
year;
(iii) in the event of any ASEA AB Share Disposal, promptly notify
the Agent thereof or in the event of any ASEA AB Share Transaction or ASEA
AB Share Encumbrance, notify the Agent at least 3 business days prior to
any such ASEA AB Share Transaction or ASEA AB Share Encumbrance and, in
each case, furnish the Agent (a) within 10 days of such ASEA AB Share
Disposal, ASEA AB Share Transaction or ASEA AB Share Encumbrance with
forecast figures setting out in reasonable detail that for the period from
the date of such ASEA AB Share Disposal, ASEA AB Share Transaction or ASEA
AB Share Encumbrance until the end of the next full quarter of its
financial year, the Guarantor shall be in compliance with its obligations
under Clause 17.8 and (b) promptly at the end of each financial quarter
(excluding the quarter in which such ASEA AB Share Disposal, ASEA AB Share
Transaction or ASEA AB Share Encumbrance has occurred) during the calendar
year in which such ASEA AB Share Disposal, ASEA AB Share Transaction or
ASEA AB Share Encumbrance has occurred with (x) financial statements for
such quarter and (y) a certificate signed by a duly authorised officer of
the
<PAGE>
4
Guarantor confirming that the Guarantor has been in compliance with its
obligations under Clause 17.8 during such financial quarter year; and
(iv) from time to time on the request of the Agent, furnish the
Agent with such information about the business, assets, operations or
financial condition of the Group as the Agent or any Bank through the
Agent may reasonably require unless furnished such information violates
any Swedish law or stock regulations.
(f) in Clause 17.3 thereof, sub-Clauses (x) and (xi) shall be
deleted and the following sub-Clauses (x) and (xi) shall be inserted:
(x) any encumbrance created as a result of short-term sale and
repurchase transactions entered into by the Borrower pursuant to Clause
17.4 (ii) or any encumbrance over cash deposited with any bank, financial
institution, stock exchange or clearinghouse with which the Guarantor or a
Principal Subsidiary enter into back to back, foreign exchange, swap or
derivative transactions in the ordinary course of business and which cash
has to be deposited in order for such transactions to be entered into,
provided that the amount of cash so encumbered (a) does not at any time
exceed 20 per cent. of the aggregate exposure of the relevant
counterparties to the Guarantor or a Principal Subsidiary under such
transactions at such time or (b) does not at any time exceed 10 per cent.
of consolidated total assets of the Group as shown in the latest audited
consolidated accounts of the Guarantor; and
(xi) any other encumbrances other than those referred to in
subparagraphs (i) - (x) above, over or affecting assets the aggregate book
value of which is less than seven and a half per cent. (7.5%) of the book
value of the total assets of the Group as shown in the most recent audited
consolidated financial statements of the Guarantor (adjusted from time to
time to take into account acquisitions and/or disposals after the date to
which such financial statements relate).
(g) in Clause 17.3 thereof, the following words at the end shall be
deleted:
Provided that the Guarantor shall not create or permit to subsist and
procure that no permitted owner under Clause 15.2 (xiv) shall create or
permit to subsist (i) any encumbrance over the shares or over the voting
rights held by it in ASEA AB and (ii) any encumbrance securing any
indebtedness of any Obligor under a LC Agreement.
<PAGE>
5
(h) Clauses 17.4, 17.5 and 17.6 thereof shall be deleted and the
following new Clauses 17.4, 17.5, 17.6. 17.7, 17.8 and 17.9 shall be inserted:
17.4 Each Obligor shall ensure that neither the Guarantor nor any
Principal Subsidiary shall, without the prior consent of an Instructing
Group, either in a single transaction or in a series of transactions,
whether related or not and whether voluntarily or involuntarily, sell,
transfer, grant or lease or otherwise dispose of all or any part of its
assets, other than
(i) a disposal of assets on an arm's length basis for market
value;
(ii) a disposal under short term sale and repurchase
transactions with banks or other financial institutions which
transact such business on a regular basis on market terms and in
respect of marketable securities held for investment purposes;
(iii) a disposal of assets in any one financial year the
aggregate book value of which is less than 5 % of the total assets
of the Group as shown in the then most recent audited consolidated
financial statements (adjusted from time to time to take into
account acquisitions and/or disposal after the date to which such
financial statements relate);
(iv) a disposal of assets from a Principal Subsidiary (other
than the Borrower) to another Principal Subsidiary; or
(v) a disposal of the ASEA AB shares under stocklending
transactions provided that such disposal is collateralised as to 100
% of the then market value of such ASEA AB shares by cash cover or
as to 120 % of the then market value of such ASEA AB shares by
government securities rated at least Aa3 by Moody's Investors
Service, Inc. or AA- by Standard and Poor's Ratings Group, a
division of McGraw-Hill, Inc. and, in each case, such collateral is
held in a manner satisfactory to the Agent.
17.5 Each Obligor shall ensure that no Principal Subsidiary (other
than the Borrower and its Subsidiaries) will incur or permit to subsist
any Indebtedness with any bank or other institution providing banking
services other than
(i) Financial Indebtedness owing by a member of the Group to
another member of the Group; or
(ii) Financial Indebtedness not exceeding Swedish Kronor
2,000,000,000 of Nybrovikens Kraft AB to the National Pension
Insurance Fund in connection with the purchase by Nybrovikens Kraft
AB of hydropower assets from the National Pension Insurance Fund; or
<PAGE>
6
(iii) Financial Indebtedness of the Guarantor or a Principal
Subsidiary to the Group Pension Fund where such Financial
Indebtedness is in the form of re-borrowing from the Group Pension
fund of pension funds deposited with the Group Pension Fund and
provided such Financial Indebtedness in aggregate in respect of the
Guarantor and the Principal Subsidiaries shall not exceed Swedish
Kronor 300,000,000; or
(iv) Financial Indebtedness of Gambro not exceeding the
Swedish Kronor equivalent of $ 300,000,000 above the level of
borrowings as at the date hereof (which shall include any undrawn
portion of the revolving credit facility dated 15 December 1995
between Gambro AB as borrower, Banque Nationale de Paris as agent
and the financial institutions named therein as lenders) and as
disclosed to the Agent in the letter from the Borrower to the Agent
dated February, 1996; or
(v) Financial Indebtedness (other than that referred to in
subparagraphs (i), (ii), (iii) or (iv) above) of subsidiaries not
exceeding in aggregate the higher of 20 per cent. of Total
Borrowings and Swedish Kronor 1,000,000,000
Provided that in the case of a company or corporation becoming a Principal
Subsidiary after the date hereof the above shall not apply in respect of
Financial Indebtedness existing on the date of such company or corporation
becoming a Principal Subsidiary (which was not incurred in contemplation
or in connection with it becoming a Principal Subsidiary) until the
anniversary of such date.
17.6 Each Obligor shall ensure that so long as any one or more
Permitted Owner (other than the Guarantor) is the legal and beneficial
owner of any of the shares or any of the voting rights of ASEA AB such
Permitted Owner will not incur or permit to subsist any Financial
Indebtedness other than Financial Indebtedness to another member of the
Group.
17.7 Each Obligor shall ensure that at all times the consolidated
financial condition of the Guarantor as evidenced by the then latest
financial statements prepared on the same basis as was used in the
preparation of the Original Financial Statements of the Guarantor, shall
be such that the ratio of Consolidated Net interest Bearing Debt to
Consolidated Adjusted Equity shall not exceed 1.0 : 1.0.
17.8 Each Obligor shall ensure that for each quarter of the
financial year in which any ASEA AB Share Disposal, ASEA AB Share
Transaction or ASEA AB Share Encumbrance occurs (other than in respect of
the quarter in the financial year in which such ASEA AB Share Disposal,
ASEA AB Share Transaction or ASEA AB Share Encumbrance occurs) and for
each six monthly period ending 30 June or 31 December thereafter the
consolidated financial
<PAGE>
7
condition of the Guarantor, as evidenced by the then latest quarterly,
half yearly or yearly financial statements prepared on the same basis as
was used in the preparation of the Original Financial Statements of the
Guarantor and as evidenced by the certificate delivered pursuant to Clause
16.1(iii), shall be such that the ratio of Consolidated Earnings before
Financial Items plus Consolidated Interest Income to Consolidated Interest
Expenses shall not be less than 2.0 : 1.0.
17.9 In Clauses 17.7 and 17.8:
(i) "Consolidated Net Interest Bearing Debt" means at any time
the aggregate amount of Consolidated Interest Bearing Liabilities
less the amount of Consolidated Liquid Assets; and
(ii) "Consolidated Adjusted Equity" means at any time the
aggregate of the amounts paid up or credited as paid up on the
issued share capital of the Guarantor and the aggregate amount of
reserves including but not limited to:
(a) restricted reserves and unrestricted reserves;
(b) any balance standing to the credit of the income
statement;
(c) minority interest; and
(d) any surplus value in the Guarantor's consolidated
share portfolio (being the difference between the market value
of the shares and the bookvalue of the shares recorded in the
relevant financial statements)
but deducting:
(e) any debit balance on the income statement;
all as determined by reference to the Guarantor's then most
recent audited annual or, as the case may be, unaudited
semi-annual or quarterly consolidated financial statements
(adjusted in each case, as appropriate, to take account of any
changes in circumstances which occur after the date to which
such consolidated financial Statements refer);
(iii) "Consolidated Earnings before Financial Items" means in
any relevant period the aggregate of revenues less (a) operating
expenses and (b) depreciation (including amortisation of goodwill)
according to plan, all as determined by reference to the Guarantor's
then most recent audited annual or, as the case may be, unaudited
semi-annual or quarterly consolidated financial
<PAGE>
8
statements (adjusted in each case, as appropriate, to take account
of any changes in circumstances which occur after the date to which
such consolidated financial statements refer);
(iv) "Consolidated Interest Expense" means in any relevant
period the aggregate, of all interest expense as determined by
reference to the Guarantor's then most recent audited annual or, as
the case may be, unaudited semi-annual or quarterly consolidated
financial statements (adjusted in each case, as appropriate, to take
account of any changes in circumstances which occur after the date
to which such consolidated financial statements refer);
(v) "Consolidated Interest Income" means in any relevant
period the aggregate, of all interest income as determined by
reference to the Guarantor's then most recent audited annual or, as
the case may be, unaudited semi-annual or quarterly consolidated
financial statements (adjusted in each case, as appropriate, to take
account of any changes in circumstances which occur after the date
to which such consolidated financial statements refer);
(vi) "Consolidated Interest Bearing Liabilities" means at any
time the aggregate of inter alia (a) long term loans, (b) short-term
loans and short-term part of long-term loans, (c) utilised part of
overdraft facility, (d) promissory note loans and (e) any other
liability on which interest is payable all as determined by
reference to the Guarantor's then most recent audited annual or, as
the case may be, unaudited semiannual or quarterly consolidated
financial statements (adjusted in each case, as appropriate, to take
account of any changes in circumstances which occur after the date
to which such consolidated financial statements refer); and
(vii) "Consolidated Liquid Assets" means at any time cash and
marketable securities as determined by reference to the Guarantor's
then most recent audited annual or, as the case may be, unaudited
semi-annual or quarterly consolidated financial statements (adjusted
in each case, as appropriate to take account of any changes in
circumstances which occur after the date to which such consolidated
financial statements refer).
All expressions used in the definitions of this Clause 17.9 which
are not otherwise defined herein shall be construed in accordance with
generally accepted accounting principles in the Kingdom of Sweden
consistently applied (as used in the Guarantor's most recent audited
annual consolidated financial statements).
<PAGE>
9
(i) in Clause 18.1 thereof, sub-Clause (v) shall be deleted and the
following new sub-Clause (v) shall be inserted:
(v) (a) my material indebtedness of the Guarantor or any Material
Subsidiary is not paid when due after any applicable grace period
(expressly provided for in the instrument governing such indebtedness) or
if no grace period is provided in such instrument and such nonpayment is
solely due to technical or administrative reasons after three business
days after the due date, or (b) any material indebtedness of the Guarantor
or any Material Subsidiary is declared to be or otherwise becomes due and
payable prior to its specified maturity by reason of a default or an event
of default (however described), or (c) any creditor or creditors of the
Guarantor or any Material Subsidiary become entitled to declare any
material indebtedness of the Guarantor or such Material Subsidiary due and
payable prior to its specified maturity (for the purpose of this Clause
18.1(v), "material indebtedness" means any indebtedness the aggregate
amount of which exceeds US$ 15,000,000 or equivalent) provided that any
prepayment, or right to call for prepayment, of the Swedish Kronor 750
million bonds dated 6th July, 1994 issued by the Borrower and guaranteed
by the Guarantor with a maturity of 6th July, 1999 or any right to call
for prepayment of the Swedish Kroner 250 million floating rate notes dated
6th July, 1994 issued by the Borrower and guaranteed by the Guarantor with
a maturity date of 16th June, 1999 solely as a result of an ASEA AB Share
Disposal shall not constitute an Event of Default under sub-paragraphs (b)
or (c) of this Clause 18.1(v); or
3. Conditions Precedent
3.1 The agreement of the Arrangers, the Agent and the Banks to the
amendments to the Original Facility Agreement contemplated by this Amendment
Agreement shall be subject to the condition that the Agent shall have received
the following documents and evidence in all respects satisfactory to the Agent:-
(i) an opinion of the Borrower's and Guarantor's Swedish Counsel as
to such matters relating to Swedish law as the Agent shall require; and
(ii) such other documents or evidence deemed necessary by the Banks'
Swedish Counsel.
3.2 Upon receipt by the Agent of the conditions precedent in all
respects satisfactory to the Agent, the Agent shall promptly notify the Banks to
that effect confirming that the Effective Date has occurred.
4. Representations
4.1 Each of the Borrower and the Guarantor represents to each of the
Agent, the Arrangers and the Banks on the same terms mutatis mutandis as set out
in Clauses 15.1 and 15.2 of the
<PAGE>
10
Original Facility Agreement in each case by reference to the facts and
circumstances as at the date hereof and as if references therein to "Agreement"
and any derivative terms were references to (a) the Original Facility Agreement
as the same shall be amended by this Amendment Agreement on the Effective Date
and, (b) separately, to this Amendment Agreement. All such representations shall
be deemed to be repeated by each respective party on the Effective Date by
reference to the facts and circumstances then existing.
4.2 On the date hereof and on the Effective Date each of the
Borrower and the Guarantor warrants, represents and confirms to each of the
Agent, the Arrangers and the Banks that no Event of Default or Potential Event
of Default has occurred under the Original Facility Agreement.
5. Guarantee
The Guarantor hereby accepts and confirms that its obligations as
Guarantor under the Original Facility Agreement shall not be affected in any way
whatsoever by the entering into of this Amendment Agreement nor the consummation
of the transactions contemplated herein and that following the Effective Date it
continues to guarantee the obligations of the Borrower as Borrower under the
Facility Agreement in accordance with Clauses 19 and 20 thereof.
6. Miscellaneous
Clauses 34 (Remedies and Waivers), 35 (Partial Invalidity) and 36
(Notices) of the Facility Agreement shall be deemed to be incorporated herein
with reference to this Amendment Agreement as though set out herein mutatis
mutandis.
7. Costs and Expenses
7.1 The Borrower and the Guarantor shall, from time to time on
demand of the Agent, reimburse the Agent and the Arrangers for all reasonable
costs and expenses (including legal fees), together with any VAT thereon
incurred by them in connection with the negotiation, preparation and execution
of this Amendment Agreement and the completion of the transactions herein
contemplated.
7.2 The Borrower and the Guarantor shall, from time to time on
demand of the Agent reimburse the Agent, the Arrangers and the Banks for all
reasonable costs and expenses (including legal fees) together with any VAT
thereon incurred in or in connection with the preservation and/or enforcement of
any of the rights of the Agent, the Arrangers and the Banks under this Amendment
Agreement.
7.3 The Borrower and the Guarantor shall pay all stamp, registration
and other taxes to which this Amendment Agreement or any judgement given in
connection herewith is or at any time may be subject to and shall, from time to
time on demand of the Agent, indemnify the Agent, the Arrangers and the Banks
against any liabilities, costs, claims and expenses resulting from any failure
to pay or any delay in paying any such tax.
<PAGE>
11
8. Counterparts
This Amendment Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts each of
which, when executed and delivered, shall constitute an original but all the
counterparts together shall constitute but one and the same instrument.
9. Law and Jurisdiction
9.1 This Amendment Agreement shall be governed by, and shall be
construed in accordance with, English law.
9.2 Clause 38 (Jurisdiction) of the Facility Agreement shall be
deemed to be incorporated herein with reference to this Amendment Agreement as
though set out herein mutatis mutandis.
AS WITNESS the hands of the duly authorised representatives of the
parties hereto the day and year first before written.
<PAGE>
12
The Borrower
INCENTIVE TREASURY AB (PUBL)
By:
The Guarantor
INCENTIVE AB (PUBL)
By:
The Arrangers
DEUTSCHE BANK LUXEMBOURG S.A.
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
By:
The Agent
DEUTSCHE BANK LUXEMBOURG S.A.
By:
The Banks
DEUTSCHE BANK LUXEMBOURG S.A.
ENSKILDA, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
SVENSKA HANDELSBANKEN AB (PUBL)
BANQUE NATIONALE DE PARIS, LONDON BRANCH
CITIBANK INTERNATIONAL PLC, SWEDEN BRANCH
COMMERZBANK INTERNATIONAL S.A.
CREDIT LYONNAIS FRANCE BANKFILIAL
<PAGE>
13
THE DAI-ICHI KANGYO BANK, LIMITED
DEN DANSKE BANK AKTIESELSKAB, LONDON BRANCH
DRESDNER BANK LUXEMBOURG S.A.
THE MITSUBISHI BANK, LIMITED
RBC FINANCE B.V.
SOCIETE GENERALE
THE SUMITOMO BANK, LIMITED
ABN AMRO BANK N.V. STOCKHOLM BRANCH
MIDLAND BANK PLC, STOCKHOLM BRANCH
STANDARD CHARTERED BANK
For and on behalf of each of the Banks individually under power of attorney by:
<PAGE>
Deutsche Bank Luxembourg S.A.
Direction Bona postele: 888
L-2015 Luxembourg
Telephone: (003521) 42122-1
Incentive AB
P.O. Box 7373 26 August 1994
S-10391 Stockholm
Attn: Mr. Sverker Lundkvist
Senior Vice President-Group Treasurer
DM 200,000,000 Revolving Credit Facility
Dear Sirs,
Referring to your recent discussions with representatives of Deutsche Bank AG,
Frankfurt am Main, we are pleased to offer to you a Revolving Credit Facility in
the amount of DM 200,000,000 upon the terms and conditions as specified below.
Instrument: Revolving Credit Facility.
Borrower: Incentive AB, or Incentive Treasury AB under the
guarantee of Incentive AB.
Facility Amount: DM 200,000,000
(in words: Deutsche Marks two hundred million).
Lender: Deutsche Bank Luxembourg S.A.
Availability: The Facility may be used upon three business days' prior
written notice, which shall be irrevocable, to the
Lender in minimum amounts of DM 30 million and, if more,
in integral multiples of DM 10 million or the remainder
of the Facility Amount during the lifetime of the
Facility.
Final Maturity Date: April 28, 1995.
<PAGE>
2
Repayment: Each advance will be repaid at the end of its relevant
interest period, but at the latest on the Final Maturity
Date. Amounts repaid may be reborrowed.
Rate of Interest: 0.1875% per annum above the London Interbank Offered
Rate as determined by the Lender for, at the option of
the Borrower, one, two or three months' DM deposits ("DM
LIBOR").
Interest is calculated on the basis of the actual number
of days elapsed and a year of 360 days and is payable at
the end of each interest period.
Commitment Fee: 0.08% per annum on the undrawn part of the Facility.
The Commitment Fee will be calculated on the basis of
the actual number of days elapsed and a year of 360 days
and is payable quarterly in arrears and on the Final
Maturity Date.
Payments: All payments to be made under this Facility by the
Borrower and shall be made to the account no. 9380890 of
the Lender with Deutsche Bank AG, Frankfurt am Main.
Taxes and other
Deductions: All payments to be made under this Agreement by the
Borrower shall be made without set-off or counterclaim
and free of all taxes, withholdings, charges and
deductions. Any such taxes or other deductions shall be
payable for the account of the Lender by the Borrower
(which shall furnish to the Lender certificates
evidencing the payment of such taxes or deductions) in
such a way that the Borrower shall pay such additional
amounts as will result in the immediate receipt by the
Lender of a net amount that is equal to the full amount
which would have been receivable hereunder had no such
deduction been required.
Conditions Precedent: The first drawing of the Facility hereunder shall be
conditional upon delivery to the Lender ten days prior
to the first drawing of, (i) a short form Swedish legal
opinion for Advokatfirman Vinge KB (details to be
discussed) and (ii) in case of Incentive Treasury AB
being the Borrower (a) a Guarantee of Incentive AB which
is in form and substance satisfactory to the Lender, (b)
a Swedish legal opinion from Advokatfirman Vinge KB
satisfactory to the Lender.
<PAGE>
3
Expenses: The Borrower shall reimburse the Lender for all costs
and expenses (including legal fees and value added or
similar tax) incurred in connection with the
negotiation, execution, preservation and/or enforcement
of its rights under the Facility.
Governing Law
and Jurisdiction: Laws of the Federal Republic of Germany. Non-exclusive
place of jurisdiction: Frankfurt am Main.
If you agree with the foregoing please sign and return to us the fax version as
well as the hard copy of this Agreement, which you will receive by mail. Please
note that this Agreement shall only be binding on us upon receipt of the signed
fax version of this Agreement by at the latest September 12, 1994.
Yours faithfully,
Deutsche Bank Luxembourg S.A.
/s/ E. Storck /s/ R.J. Muller
(E. Storck) (R.J. Muller)
Agreed:
Date: 1/9/94
Incentive AB
and, if applicable, for and on behalf of
Incentive Treasury AB
<PAGE>
AMENDMENT AGREEMENT
relating to
DM 200,000,000
REVOLVING CREDIT FACILITY AGREEMENT
between
INCENTIVE AB
as first borrower
AB CRAHFTERE INVEST
(Swedish Company Registration No. 556000-4557,
to be renamed Incentive Treasury AB)
as new second borrower
INCENTIVE TREASURY AB (Swedish Company Registration
No. 556079-9859, to be renamed incentive Financial Services AB)
as old second borrower
and
DEUTSCHE BANK LUXEMBOURG S.A.
as lender
<PAGE>
2
THIS AMENDMENT AGREEMENT is made as of the 2nd day of December 1994
BETWEEN
(1) Incentive AB (the "First Borrower");
(2) AB Crahftere Invest (Swedish Company Registration No. 556000-4557, to be
renamed Incentive Treasury AB) (the "New Second Borrower");
(3) Incentive Treasury AB (Swedish Company Registration No. 556079-9859, to be
renamed Incentive Financial Services AB) (the "Old Second Borrower"); and
(4) Deutsche Bank Luxembourg S.A. (the "Lender").
WHEREAS
(A) By a revolving credit facility agreement (the "Facility Agreement") dated
1 September 1994 and made between the First Borrower, the Old Second
Borrower and the Lender, the Lender has agreed to make available to the
First Borrower or, as the case may be, the Old Second Borrower under the
guarantee of the First Borrower (in such capacity hereinafter referred to
as the "Guarantor") a revolving credit facility up to a maximum amount of
DM 200,000,000 on the terms and subject to the conditions therein set out.
(B) The First Borrower and the Old Second Borrower have requested that the Old
Second Borrower be replaced with the New Second Borrower as a borrower
under the Facility Agreement, and the Lender has agreed to such request.
(C) The First Borrower, the New Second Borrower, the Old Second Borrower and
the Lender have agreed that the terms and conditions of the Facility
Agreement shall be amended as set out herein.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Amendment Agreement "Effective Date" means the date upon which the
conditions precedent set out in Clause 3 are fulfilled.
1.2 All other terms and conditions used herein shall, unless the context
otherwise expressly requires, bear the meaning ascribed to them in the
Facility Agreement.
1.3 Subject to the amendments referred to herein, all the provisions of the
Facility Agreement shall remain in full force and effect in accordance
with their terms and all references in the Facility Agreement, herein and
in any other document or agreement to "Agreement", "Facility", "Revolving
Credit Facility" or to any similar derivative term shall, unless the
context otherwise requires, be taken as a reference to the Facility
Agreement as amended in accordance herewith.
<PAGE>
3
1.4 Clause headings are for ease of reference only.
2. AMENDMENTS AND EFFECTIVENESS
With effect from and as of the Effective Date the Facility Agreement shall be,
and shall hereby be deemed to be, amended by replacing throughout the Facility
Agreement "Incentive Treasury AB" with "AB Crahftere Invest (to be renamed
Incentive Treasury AB)" and by construing references throughout the Facility
Agreement to the "Borrower" insofar as the Old Second Borrower has used or shall
use the Facility as if the same referred to the New Second Borrower and from and
as of the Effective Date the Facility Agreement shall thenceforth be read and
construed as if the New Second Borrower were a party thereto having all the
rights and obligations of the Old Second Borrower.
3. CONDITIONS PRECEDENT
The agreement of the Lender to the amendments to the Facility Agreement
contemplated by this Amendment Agreement shall be subject to the condition that
the Lender shall have received the following documents and evidence in all
respects satisfactory to it:-
(i) a certified copy of the Change of Name Certificate (or equivalent
document) filed at the Swedish Company Register in respect of the Old
Second Borrower;
(ii) a certified copy of the Change of Name Certificate (or equivalent
document) filed at the Swedish Company Register in respect of the New
Second Borrower;
(iii) a confirmation from the Guarantor in the form of the Annex hereto; and
(iv) an opinion of the New Second Borrower's and Guarantor's Swedish Counsel
satisfactory to the Lender.
4. LAW AND JURISDICTION
4.1 This Amendment Agreement shall be governed by, and shall be construed in
accordance with, German law.
4.2 Non-exclusive place of jurisdiction shall be Frankfurt am Main.
<PAGE>
4
The First Borrower
Incentive AB
By: /s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
Address: P.O. Box 7373
S-103 91 Stockholm
Sweden
The New Second Borrower
AB Crahftere Invest
(Swedish Company Registration No. 556000-4557, to be renamed Incentive Treasury
AB)
By: /s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
Address: Hamngatan 2
P.O. Box 7594
S-103 93 Stockholm
Sweden
The Old Second Borrower
Incentive Treasury AB
(Swedish Company Registration No. 556079-9859, to be renamed Incentive Financial
Services AB)
By: /s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
Address: Hamngatan 2
P.O. Box 7594
S-103 93 Stockholm
Sweden
<PAGE>
5
The Lender
Deutsch Bank Luxembourg S.A.
By: /s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
Address 2, boulevard Konrad Adenauer
L-1115 Luxembourg
Grand Duchy of Luxembourg
<PAGE>
6
ANNEX
From: Incentive AB
To: Deutsche Bank Luxembourg S.A.
CONFIRMATION
Reference is made to our guarantee dated 27 September 1994 (the "Guarantee") in
connection with an agreement dated 1 September 1994 (the "Facility Agreement")
under which you have agreed to make available to ourselves or, under our
guarantee, to Incentive Treasury AB as borrower a revolving credit facility up
to a maximum amount of DM 200,000,000.
We are aware that by an amendment agreement dated as of 2nd December 1994 (the
"Amendment Agreement") Incentive Treasury AB (Swedish Company Registration No.
556079-9859, to be renamed Incentive Financial Services AB) (the "Old Second
Borrower") has been replaced by AB Crahftere Invest (Swedish Company
Registration No. 556000-4557, to be renamed Incentive Treasury AB) (the "New
Second Borrower").
Terms defined in the Facility Agreement or, as the case may be, the Amendment
Agreement shall have the same meaning herein.
We hereby confirm that our obligations as guarantor under the Guarantee shall
not be affected in any way whatsoever by the entering into of the Amendment
Agreement nor the consummation of the transactions contemplated therein and that
following the Effective Date of the Amendment Agreement we continue to guarantee
the obligations of the New Second Borrower as borrower under the Facility
Agreement in accordance with the terms and conditions of the Guarantee.
<PAGE>
Deutsche Bank Luxembourg S.A. [LOGO]
Incentive Treasury AB Siege social:
P.O. Box 7373 2, Boulevard Konrad Adensuer, Luxembourg
S-10391 Stockholm Adresse postale.
Bona postale 688 L-2016 Luxembourg
Attn: Mr. Sverker Lundkvist Telephone: (00352) 4 21 22-1
Mr. Kenth Sund Telefax: (00352) 4 21 22-449
Telex: 60109 deutb lu
S.W.I.F.T. DEUTLULL
Nos Vos references et
references votre letre du Date
j:\Guntzer\Schweden\Ince_112 10.04.1995
Incentive AB/Incentive Treasury AB
DM 200,000,000 Revolving Credit Facility Agreement dated September 1, 1994 as
amended by the Amendment Agreement dated December 2, 1994 (the "Agreement")
Dear Sirs,
Referring to our letter dated March 31, 1995 and your subsequent discussions
with representatives of Deutsche Bank AG, Frankfurt am Main, we are pleased to
offer to you those changes to the Agreement as set out below. Capitalized terms
used in this letter shall, where the context so permits, have the meanings given
to them in the Agreement.
1. The lifetime of the Agreement shall be extended for further six months and
the Final Maturity Date of April 28, 1995 consequently be substituted to
read as follows:
Final Maturity Date: October 31, 1995
2. As of April 28, 1995 the margin shall be reduced from 0.1875% per annum
and the first paragraph of Rate of Interest consequently be substituted to
read as follows:
Rate of Interest: 0.125 % per annum above the London Interbank Offered
Rate as determined by the Lender for, at the option of
the Borrower, one, two or three months' DM deposits ("DM
LIBOR").
3. As of April 28, 1995 the Commitment Fee shall be reduced from 0.08 % per
annum and the first paragraph of Commitment Fee consequently be
substituted to read as follows:
Commitment Fee: 0.0625 % per annum on the undrawn part of the Facility.
<PAGE>
- 2 -
[LOGO]
Except as specifically amended by this letter, all other terms and conditions of
the Agreement shall remain unchanged and continue in full force and effect. The
Agreement and this letter shall be read and construed as one document.
Please confirm your agreement and acceptance to the above by countersigning this
letter where indicated below and returning it to us thereafter.
Looking forward to a further good cooperation we remain
yours faithfully,
Deutsche Bank Luxembourg S.A.
/s/ M. Gaab /s/ T. Weber
(M. Gaab) (T. Weber)
Agreed and accepted
Date: 24/4/95
Incentive AB Incentive Treasury AB
as First Borrower as New Second Borrower
By: /s/ Mikael Lilius /s/ Sverker Lundkvist
Mikael Lilius Sverker Lundkvist
By: /s/ Sverker Lundkvist /s/ Lars Fahlen
Sverker Lundkvist Lars Fahlen
Incentive AB
Consented and confirmed that the Guarantee by Incentive AB dated September 27,
1994 continues in full force and effect with regard to this amendment letter.
By: /s/ Mikael Lilius /s/ Sverker Lundkvist
Mikael Lilius Sverker Lundkvist
<PAGE>
Deutsche Bank Luxembourg S.A. [LOGO]
Incentive Treasury AB Siege social:
P.O. Box 7373 2, Boulevard Konrad Adensuer, Luxembourg
S-10391 Stockholm Adresse postale.
Bona postale 688 L-2016 Luxembourg
Attn: Mr. Sverker Lundkvist Telephone: (00352) 4 21 22-1
Mr. Kenth Sund Telefax: (00352) 4 21 22-449
Telex: 60109 deutb lu
S.W.I.F.T. DEUTLULL
Nos Vos references et
references votre letre du Date
j:\Guntzer\Schweden\Ince_112 October 18, 1995
Incentive AB/Incentive Treasury AB
DM 200,000,000 Revolving Credit Facility Agreement dated September 1, 1994 as
amended by the Amendment Agreement dated December 2, 1994 and the Amendment
Letter dated April 10/24, 1995 (the "Agreement")
Dear Sirs,
Referring to your discussions with representatives of Deutsche Bank AG,
Frankfurt am Main, we are pleased to offer to you those changes to the Agreement
as set out below. Capitalized terms used in this letter shall, where the context
so permits, have the meanings given to them in the Agreement.
1. The lifetime of the Agreement shall be extended for further 364 days and
the Final Maturity Date of October 31, 1995 consequently be substituted to
read as follows:
Final Maturity Date: October 29, 1996
2. As of October 31, 1995 the margin shall be reduced form 0.125% per annum
and the first paragraph of Rate of Interest consequently be substituted to
read as follows:
Rate of Interest: 0.10% per anum above the London Interbank Offered Rate
as determined by the Lender for, at the option of the
Borrower, one, two or three months' DM deposits ("DM
LIBOR").
3. As of October 31, 1995 the Commitment Fee shall be reduced from 0.0625%
per annum and the first paragraph of Commitment Fee consequently be
substituted to read as follows:
Commitment Fee: 0.04% per annum on the undrawn part of the Facility.
<PAGE>
- 2 -
Except as specifically amended by this letter, all other terms and conditions of
the Agreement shall remain unchanged and continue in full force and effect. The
Agreement and this letter shall be read and construed as one document.
Please confirm your agreement and acceptance to the above by countersigning
these letters where indicated below and returning one original to us thereafter.
Looking forward to a further good cooperation we remain
yours faithfully,
Deutsche Bank Luxembourg S.A.
/s/ M. Gaab /s/ R.J. Muller
(M. Gaab) (R.J. Muller)
Agreed and accepted
Date: 26 October, 1995
Incentive AB Incentive Treasury AB
as First Borrower as New Second Borrower
By: /s/ Mikael Lilius /s/ Sverker Lundkvist
Mikael Lilius Sverker Lundkvist
By: /s/ Sverker Lundkvist /s/ Soren Mellstig
Sverker Lundkvist Soren Mellstig
Incentive AB
Consented and confirmed that the Guarantee by Incentive AB dated September 27,
1994 continues in full force and effect with regard to this amendment letter.
By: /s/ Mikael Lilius /s/ Sverker Lundkvist
Mikael Lilius Sverker Lundkvist
<PAGE>
Deutsche Morgan Grenfell [LOGO]
Structured Finance Deutsche Bank AG
Taunusanlage 12
60262 Franfurt am Main
Telephone (49) 69-910-33259
Incentive AB Telefax (49) 69-910-38793
Attn.: Sverker Lundkvist, Senior Vice
President & Group Treasurer Michael Jakob
Kenth Sund
Chief Dealer October 28th, 1996
P.O. Box 7373
S-103 91 Stockholm
Sweden
DM 200,000,000 Revolving Credit Facility Agreement, dd. Sept. 1, 1994
Dear Sverker, Dear Kenth
Further to our recent conversations in regards to the DM 200,000,000 Revolving
Credit Facility, it is our pleasure to refer the enclosed Amendment Agreement to
you. As discussed with you, the Commitment Fee has been adjusted to 3 bp.
In order to formalise the matter, we would appreciate if you could sign the
Agreement and send it back to Deutsche Bank Luxembourg S.A. as specified in the
agreement.
We are looking forward to continuing our good cooperation and remain,
yours sincerely
/s/ Achim P. Kluber /s/ Michael Jakob
(Achim P. Kluber) (Michael Jakob)
(Enclosure)
<PAGE>
Deutsche Bank Luxembourg S.A. [LOGO]
Incentive Treasury AB Siege social:
P.O. Box 7373 2, Boulevard Konrad Adensuer, Luxembourg
S-10391 Stockholm Adresse postale.
Bona postale 688 L-2016 Luxembourg
Attn: Mr. Sverker Lundkvist Telephone: (00352) 4 21 22-1
Mr. Kenth Sund Telefax: (00352) 4 21 22-449
Telex: 60109 deutb lu
S.W.I.F.T. DEUTLULL
Nos Vos references et
references votre letre du Date
j:\Guntzer\Schweden\Ince_112 October 22, 1996
Incentive AB/Incentive Treasury AB
DM 200,000,000 Revolving Credit Facility Agreement dated September 1, 1994 as
amended by the Amendment Agreement dated December 2, 1994, the Amendment Letter
dated April 10/24, 1995 and October 18/26, 1995 (the "Agreement")
Dear Sirs,
Referring to your discussions with representatives of Deutsche Bank AG,
Frankfurt am Main, we are pleased to offer to you those changes to the Agreement
as set out below. Capitalized terms used in this letter shall, where the context
so permits, have the meanings given to them in the Agreement.
1. The credit facility is hereby granted to the Borrower with effect from
October 29, 1996, for 364 days until October 28, 1997. Consequently the
term "Final Maturity Date" shall be substituted as follows:
Final Maturity Date: October 28, 1997
2. As of October 29, 1996 the Commitment Fee shall be reduced from 0.04% per
annum and the first paragraph of Commitment Fee consequently be
substituted to read as follows:
Commitment Fee: 0.03% per annum on the undrawn part of the Facility.
Except a specifically amended by this letter, all other terms and conditions of
the Agreement shall remain unchanged and continue in full force and effect. The
Agreement and this letter shall be read and construed as one document.
<PAGE>
- 2 -
[LOGO]
Please confirm your agreement and acceptance to the above by countersigning
these letters where indicated below and returning one original to us thereafter.
Looking forward to a further good cooperation we remain
yours faithfully,
Deutsche Bank Luxembourg S.A.
/s/ M. Gaab /s/ R.J. Muller
(M. Gaab) (R.J. Muller)
Agreed and accepted
Date: 5/11/1996
Incentive AB Incentive Treasury AB
as First Borrower as New Second Borrower
By: /s/ Soren Mellstig /s/ Sverker Lundkvist
Soren Mellstig Sverker Lundkvist
By: /s/ Sverker Lundkvist /s/ Lars Granlof
Sverker Lundkvist Lars Granlof
Incentive AB
Consented and confirmed that the Guarantee by Incentive AB dated September 27,
1994 continues in full force and effect with regard to this amendment letter.
By:
/s/ Soren Mellstig /s/ Sverker Lundkvist
Soren Mellstig Sverker Lundkvist
<PAGE>
Summary translation
of
SEK 1,000,000,000
Multicurrency Credit Facility
between
Nordbanken AB (publ)
and
Incentive Treasury AB
guaranteed by
Incentive AB
<PAGE>
2
- ----------
ss. 1
Definitions
"Eurocurrency" CHF, DEM, FRF, GBP, NLG, USD and any other freely
convertible currency as may be agreed between the
parties and is available for the Bank on the European
market.
"Drawdown period" Each drawdown shall have a maturity of one week, one
month, three months, six months or such other period as
has been agreed.
"Interest base" For drawings in SEK
the interest rate published at or about 11:00 a.m.
Stockholm time two banking days prior to the
disbursement date on the Reuter system page "SIOR".
For drawings in Eurocurrency
the interest rate published at or about 11:00 a.m.
London time two banking days prior to the disbursement
date on the Reuter system page "ISDA".
"Margin" 0.10% per annum.
"SEK" Swedish kronor.
- ----------
ss. 2
Conditions
2.1 This Agreement is effective when the Bank has received the respective
corporate documents from the Borrower and the Guarantor.
<PAGE>
3
2.2 The Borrower and the Guarantor shall inform the Bank of changes in the
corporate documents and provide the Bank with any new such corporate documents.
ss.3
The Facility and its utilization
3.1 SEK 1,000,000. Loans outstanding in a currency other than SEK may in their
aggregate not exceed an amount equivalent to SEK 500,000,000.
3.2. The Borrower has the right to utilize the facility by giving a drawdown
notice, in writing or over telephone, no later than 10:00 a.m. Stockholm time
two banking days prior to the disbursement date specifying:
- - the amount which shall be for at least SEK 100,000,000 or the countervalue
thereof in any Eurocurrency
- - the currency
- - the disbursement date
- - the drawdown period, etc.
3.3 Drawdown notices over telephone shall be confirmed in writing.
3.4 Each tranche shall be repaid on the last banking day of the relevant
drawdown period.
3.5 If the total outstanding amount of Eurocurrencies at any time, due to
exchange fluctuations, exceeds the Facility amount pertaining to Eurocurrencies,
the Borrower shall repay such amount within 5 banking days.
ss. 4
Interest
4.1 On the repayment day for each tranche, the Borrower shall pay interest
corresponding to the aggregate of the Margin and the Interest base.
4.2 In case of late payment, the Borrower shall pay default interest rate at
4.00% plus the Margin above the Bank's funding cost.
<PAGE>
4
ss. 5
Commitment fee
0.04% per annum of the unutilized Facility payable quarterly in arrear.
ss. 6
Payments
6.1 The Bank may set off payment from the Borrower's account (if specified) with
the Bank.
6.2 The Borower may not set off.
6.3 Modified following business day convention.
6.4 Payments shall be applied in the following order: (1) costs, expenses, etc.,
(2) default interest, (3) interest and fees, (4) principal.
ss. 7
Undertakings
7.1 The Borrower and the Guarantor undertake to:
(a) provide financial information.
(b) provide further information at the Bank request.
(c) inform the Bank of material changes in owner structure, etc.
(d) immediately inform the bank of the occurrence of any of the events specified
in ss.8 occurs.
(e) pari passu covenant.
7.2 The Borrower and the Guarantor undertake to:
(a) Not to merge or dispose of their respective businesses if it would
materially affect the due fulfilment of the Agreement.
(b) Neither the Guarantor nor any of its material subsidiaries may provide
loans, security, etc. unless in the ordinary course of their respective
businesses. Carve out of USD 500,000,000 for the Guarantor.
7.3 The Borrower and the Guarantor may not change their respective business.
<PAGE>
5
ss. 8
Events of default
If any of the following circumstances occur, the Bank shall have the right to
terminate this Agreement declare all tranches outstanding immediately due and
payable:
(a) Nonpayment by the Borrower and the Guarantor.
(b) Breach of other undertakings and obligations.
(c) Cross default.
(d) Material adverse change in the Borrower's or the Guarantor's ability to
fulfill their obligations.
ss. 9
Prepayment
9.1 Prepayment on an interest payment date will not incur any costs for the
Borrower. If paid on another date than an interest payment date, the Borrower
shall reimburse the Lender for any broken funding costs.
9.2 The Facility amount will be decreased with an amount equivalent to the
amount of principal prepaid.
ss. 10
Costs
The Borrower shall pay the Bank's reasonable costs for enforcing the Bank's
rights under this Agreement.
ss. 11
Change in circumstances; Increased costs
11.1. If it becomes illegal for the Bank to provide the facility, the Bank and
the Borrower shall renegotiate to find a solution where it will be possible for
the Bank to continue its commitment. If the parties do not come to an agreement,
the Bank may terminate this Agreement.
<PAGE>
6
11.2. If the Bank due to changes in law incurs taxes or other costs, the
Borrower shall at the Bank's request compensate the Bank for such taxes and
costs and the parties shall negotiate regarding alternative solutions to avoid
such costs.
ss. 12
Guarantee
Incentive AB guarantees the due fulfilment as a debt of its own of Incentive
Treasury AB's obligations under the SEK 1,000,000,000 Credit Facility with
Skandinaviska Enskilda Banken AB.
ss. 13
Limitation of the Bank's responsiblity
The Bank is not responsible in cases of force majeure.
Losses to the Borrower caused by the Bank in other circumstances shall not be
compensated if the Bank has acted with normal care. There will be no
compensation for indirect loss.
If there exist force majeure on the Bank's side, the Bank may delay its actions
until such event has ceased to exist.
No default interest is payable if the Bank due to a force majeure event was not
able to receive a payment hereunder.
ss. 14
Assignment
The Bank has the right to assign its rights and transfer its obligation to
another company within the Nordbanken group.
ss. 15
Notices
Standard wording/provisions.
<PAGE>
7
ss. 16
Term of the Agreement
During the facility period the Borrower may terminate this Agreement with a
3-month notice period.
ss. 17
Miscellaneous
This Agreement shall be governed by Swedish law.
------------------------------------
This Agreement has been made in three originals.
Stockholm December 8, 1995
INCENTIVE TREASURY AB
INCENTIVE AB (publ)
NORDBANKEN AB (publ)
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
Among
INCENTIVE AB
HH ACQUISITION CORP.
and
VIVRA INCORPORATED
Dated as of May 5, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
THE OFFER
SECTION 1.01. The Offer................................................. 2
SECTION 1.02. Company Action............................................ 3
ARTICLE II
THE MERGER
SECTION 2.01. The Merger................................................. 4
SECTION 2.02. Effective Time............................................ 5
SECTION 2.03. Effect of the Merger...................................... 5
SECTION 2.04. Certificate of Incorporation; By-laws..................... 5
SECTION 2.05. Directors and Officers.................................... 5
SECTION 2.06. Conversion of Securities.................................. 5
SECTION 2.07. Employee Stock Options.................................... 6
SECTION 2.08. Dissenting Shares......................................... 6
SECTION 2.09. Surrender of Shares; Stock Transfer Books................. 7
SECTION 2.10. Convertible Subordinated Notes............................ 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualification; Subsidiaries............. 8
SECTION 3.02. Certificate of Incorporation and By-laws................. 10
SECTION 3.03. Capitalization........................................... 10
SECTION 3.04. Authority Relative to this Agreement and the Specialty
Merger Agreement......................................... 11
SECTION 3.05. No Conflict; Required Filings and Consents............... 11
SECTION 3.06. Permits; Compliance...................................... 12
SECTION 3.07. SEC Filings; Financial Statements........................ 12
SECTION 3.08. Absence of Certain Changes or Events..................... 13
SECTION 3.09. Absence of Litigation.................................... 14
SECTION 3.10. Employee Benefit Plans; Labor Matters.................... 14
SECTION 3.11. Offer Documents; Schedule 14D-9; Proxy Statement......... 16
SECTION 3.12. Property................................................. 17
-i-
<PAGE>
SECTION 3.13. Trademarks, Patents and Copyrights....................... 17
SECTION 3.14. Taxes.................................................... 17
SECTION 3.15. Environmental Matters.................................... 18
SECTION 3.16. Material Contracts....................................... 19
SECTION 3.17. Benefits and Payments.................................... 20
SECTION 3.18. Amendment to Rights Agreement............................ 21
SECTION 3.19. Brokers.................................................. 21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 4.01. Corporate Organization................................... 21
SECTION 4.02. Authority Relative to this Agreement..................... 22
SECTION 4.03. No Conflict; Required Filings and Consents............... 22
SECTION 4.04. Offer Documents; Proxy Statement......................... 23
SECTION 4.05. Financing................................................ 23
SECTION 4.06. Interim Operations of Purchaser.......................... 23
SECTION 4.07. Ownership of Company Capital Stock....................... 23
SECTION 4.08. Brokers.................................................. 23
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business Pending the Merger................... 24
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholders' Meeting.................................... 26
SECTION 6.02. Proxy Statement.......................................... 26
SECTION 6.03. Company Board Representation; Section 14(f).............. 27
SECTION 6.04. Access to Information; Confidentiality................... 28
SECTION 6.05. No Solicitation.......................................... 28
SECTION 6.06. Employee Stock Options and Other Employee Benefits....... 30
SECTION 6.07. Specialty Merger Agreement............................... 31
SECTION 6.08. Directors' and Officers' Indemnification and Insurance... 31
SECTION 6.09. Rights Plan.............................................. 32
SECTION 6.10. Conduct of Specialty Business............................ 32
SECTION 6.11. Notification of Certain Matters.......................... 32
-ii-
<PAGE>
SECTION 6.12. Further Action; Reasonable Efforts....................... 32
SECTION 6.13. Public Announcements..................................... 33
SECTION 6.14. Confidentiality Agreement................................ 33
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Merger................................. 33
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination.............................................. 34
SECTION 8.02. Effect of Termination.................................... 35
SECTION 8.03. Fees and Expenses........................................ 36
SECTION 8.04. Amendment................................................ 37
SECTION 8.05. Waiver................................................... 37
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements............................................... 37
SECTION 9.02. Notices.................................................. 38
SECTION 9.03. Certain Definitions...................................... 39
SECTION 9.04. Severability............................................. 40
SECTION 9.05. Entire Agreement; Assignment............................. 40
SECTION 9.06. Parties in Interest...................................... 41
SECTION 9.07. Specific Performance..................................... 41
SECTION 9.08. Governing Law............................................ 41
SECTION 9.09. Headings................................................. 41
SECTION 9.10. Counterparts............................................. 41
ANNEX A Conditions to the Offer
ANNEX B Retention and Deferred Compensation Arrangement
-iii-
<PAGE>
Glossary of Defined Terms
Defined Term Location of Definition
Action Section 3.09
acquisition proposal Section 6.05(a)
affiliate Section 9.03(a)
Agreement Preamble
beneficial owner Section 9.03(b)
Blue Sky Laws Section 3.05(b)
Board Recitals
business day Section 9.03(c)
Certificate of Merger Section 2.02
Certificates Section 2.09(b)
Code Section 3.10(a)
Company Preamble
Company Common Stock Recitals
Company Disclosure Schedule Article III
Company Options Section 3.03
Company Preferred Stock Section 3.03
Company Rights Section 3.03
Company Stock Option Plans Section 3.03
Competing Proposal Section 8.03(a)(ii)
Confidentiality Agreement Section 6.04(b)
control Section 9.03(d)
Current Premiums Section 6.08(b)
Delaware Law Recitals
Dialysis Business Section 3.01
Dialysis Subsidiaries Section 3.01
Dissenting Shares Section 2.08(a)
Effective Time Section 2.02
Employee Stock Options Section 6.06(a)
Employment Contracts Section 6.06(b)
Environmental Laws Section 3.15(a)
ERISA Section 3.10(a)
Exchange Act Section 1.02(b)
Expenses Section 8.03(b)
Fee Section 8.03(a)
5% Notes Section 2.10
-iv-
<PAGE>
Defined Term Location of Definition
GAAP Section 3.07(b)
Goldman Sachs Section 1.02(a)
Governmental Authority Section 3.05(b)
Hazardous Substances Section 3.15(a)
HSR Act Section 1.01(a)
Indenture Section 2.10
IRS Section 3.10(a)
knowledge of the Company Section 9.03(e)
Law Section 3.05(a)
Material Adverse Effect Section 3.01
Material Contracts Section 3.16(a)
Merger Recitals
Merger Consideration Section 2.06(a)
Minimum Condition Section 1.01(a)
Multiemployer Plan Section 3.10(b)
Multiple Employer Plan Section 3.10(b)
NYSE Section 3.05(b)
Offer Recitals
Offer Documents Section 1.01(b)
Offer to Purchase Section 1.01(b)
Order Section 6.12(b)
Parent Preamble
Paying Agent Section 2.09(a)
Per Share Amount Recitals
Permits Section 3.06
person Section 9.03(f)
Plans Section 3.10(a)
Proxy Statement Section 3.11
Purchaser Preamble
Rights Agreement Section 3.03
Schedule 14D-9 Section 1.02(b)
Schedule 14D-1 Section 1.01(b)
SEC Section 1.01(a)
SEC Reports Section 3.07(a)
Securities Act Section 3.07(a)
Shares Recitals
Specialty Business Section 3.01
Specialty Merger Agreement Recitals
-vi-
<PAGE>
Defined Term Location of Definition
Specialty Partners Recitals
Specialty Subsidiaries Section 3.01
Stockholders' Meeting Section 6.01(a)
Subsidiary Section 3.01
subsidiary Section 9.03(g)
Superior Proposal Section 6.05(b)
Surviving Corporation Section 2.01
Tax/Taxes Section 3.14(b)
Tax Return Section 3.14(c)
Transactions Section 3.04
Trustee Section 2.10
WARN Section 3.10(f)
vii
<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of May 5,1997 (this
"AGREEMENT"), among INCENTIVE AB, a corporation organized under the laws of
Sweden ("PARENT"), HH ACQUISITION CORP., a Delaware corporation and an indirect
wholly owned subsidiary of Parent ("PURCHASER"), and VIVRA INCORPORATED, a
Delaware corporation (the "COMPANY").
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company
have each determined that it is in the best interests of their respective
stockholders for Parent to acquire the Company upon the terms and subject to the
conditions set forth herein;
WHEREAS, in furtherance of such acquisition, it is proposed that
Purchaser shall make a cash tender offer (the "OFFER") to acquire all of the
issued and outstanding shares of Common Stock, par value $0.01 per share, of the
Company ("COMPANY COMMON STOCK") (such shares of Company Common Stock being
hereinafter collectively referred to herein as "SHARES") for $35.62 per Share
(such amount, or any greater amount per Share paid pursuant to the Offer, being
hereinafter referred to as the "PER SHARE AMOUNT") net to the seller in cash,
upon the terms and subject to the conditions of this Agreement and the Offer;
WHEREAS, the Board of Directors of the Company (the "BOARD") has
unanimously consented to the making of the Offer by Purchaser and resolved and
agreed to recommend that holders of Shares tender their Shares pursuant to the
Offer;
WHEREAS, also in furtherance of such acquisition, the Boards of
Directors of Parent, Purchaser and the Company have each approved the merger
(the "MERGER") of Purchaser with and into the Company in accordance with the
General Corporation Law of the State of Delaware ("DELAWARE LAW") following the
consummation of the Offer and upon the terms and subject to the conditions set
forth herein; and
WHEREAS, as an inducement to Parent to enter this Agreement, the
Company has entered into an Agreement and Plan of Reorganization in the form
attached hereto as Exhibit I (the "SPECIALTY MERGER AGREEMENT") pursuant to
which the Company has agreed that VSP Acquisition, Inc., a Delaware corporation
and a wholly owned subsidiary of VSP Holdings, Inc., a Delaware corporation,
shall merge with and into Vivra Specialty Partners, Inc., a Nevada corporation
and a majority-owned subsidiary of the Company ("SPECIALTY PARTNERS") (the
"SPECIALTY MERGER TRANSACTION").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Purchaser and the Company hereby agree as follows:
<PAGE>
ARTICLE I
THE OFFER
SECTION 1.01. THE OFFER. (a) Provided that this Agreement shall not
have been terminated in accordance with Section 8.01 and none of the events set
forth in Annex A hereto shall have occurred or be existing, Purchaser shall
commence the Offer as promptly as reasonably practicable after the date hereof,
but in no event later than five business days after the initial public
announcement of Purchaser's intention to commence the Offer. The obligation of
Purchaser to accept for payment and pay for Shares tendered pursuant to the
Offer shall be subject to the condition (the "MINIMUM CONDITION") that at least
the number of Shares that when added to the Shares already owned by Parent and
its affiliates shall constitute a majority of the then outstanding Shares on a
fully diluted basis (including, without limitation, all Shares issuable upon the
conversion of any outstanding convertible securities or upon the exercise of any
outstanding options, warrants or rights (other than the Company Rights (as
defined in Section 3.03))) shall have been validly tendered and not withdrawn
prior to the expiration of the Offer and also shall be subject to the
satisfaction of the other conditions set forth in Annex A hereto. Purchaser
expressly reserves the right to waive any such condition, to increase the price
per Share payable in the Offer, and to make any other changes in the terms and
conditions of the Offer; PROVIDED, HOWEVER, that no change may be made which
decreases the price per Share payable in the Offer or which reduces the maximum
number of Shares to be purchased in the Offer or which imposes conditions to the
Offer other than those set forth in Annex A hereto. Notwithstanding the
foregoing, Purchaser may, without the consent of the Company, (i) extend the
Offer beyond the scheduled expiration date (the initial scheduled expiration
date being 20 business days following the commencement of the Offer) if, at the
scheduled expiration date of the Offer, any of the conditions to Purchaser's
obligation to accept for payment, and to pay for, the Shares, shall not be
satisfied or waived, (ii) extend the Offer for any period required by any rule,
regulation or interpretation of the Securities and Exchange Commission (the
"SEC") or the staff thereof applicable to the Offer, or (iii) extend the Offer
for an aggregate period of not more than 10 business days beyond the latest
applicable date that would otherwise be permitted under clause (i) or (ii) of
this sentence, if as of such date, all of the conditions to Purchaser's
obligations to accept for payment, and to pay for, the Shares are satisfied or
waived, but the number of Shares validly tendered and not withdrawn pursuant to
the Offer equals 80 percent or more, but less than 90 percent, of the
outstanding Shares on a fully diluted basis; PROVIDED, HOWEVER, that (A) if, on
the initial scheduled expiration date of the Offer, the sole condition remaining
unsatisfied is (1) the failure of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), to have expired
or been terminated or (2) the failure to consummate the Specialty Merger
Transaction and such transaction has not been consummated solely due to the
failure of the waiting period under the HSR Act to have expired or been
terminated, then, in either case, Purchaser shall extend the Offer from time to
time until five business days after the
2
<PAGE>
expiration or termination of the applicable waiting period under the HSR Act and
(B) if the sole condition remaining unsatisfied on the initial scheduled
expiration date of the Offer is the condition set forth in (f) of Annex A, the
Purchaser shall, so long as the breach can be cured and the Company is
vigorously attempting to cure such breach, extend the Offer from time to time
until five business days after such breach is cured (provided that Purchaser
shall not be required to extend the Offer beyond 35 days after such initial
scheduled expiration date). The Per Share Amount shall, subject to applicable
withholding of taxes, be net to the seller in cash, upon the terms and subject
to the conditions of the Offer. Subject to the terms and conditions of the
Offer, Purchaser shall, promptly after expiration of the Offer, pay for all
Shares validly tendered and not withdrawn.
(b) As soon as practicable on the date of commencement of the Offer,
Purchaser shall file with the SEC a Tender Offer Statement on Schedule 14D-1
(together with all amendments and supplements thereto, the "SCHEDULE 14D-1")
with respect to the Offer. The Schedule 14D-1 shall contain or shall
incorporate by reference an offer to purchase (the "OFFER TO PURCHASE") and
forms of the related letter of transmittal and any related summary advertisement
(the Schedule 14D-1, the Offer to Purchase and such other documents, together
with all supplements and amendments thereto, being referred to herein
collectively as the "OFFER DOCUMENTS"). Parent, Purchaser and the Company agree
to correct promptly any information provided by any of them for use in the Offer
Documents which shall have become false or misleading, and Parent and Purchaser
further agree to take all steps necessary to cause the Schedule 14D-1 as so
corrected to be filed with the SEC and the other Offer Documents as so corrected
to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws.
SECTION 1.02. COMPANY ACTION. (a) The Company hereby consents to
the Offer and represents that (i) the Board, at a meeting duly called and held
on May 4, 1997, has unanimously (A) determined that this Agreement and the
transactions contemplated hereby, including each of the Offer and the Merger,
are in the best interests of the holders of Shares, (B) approved and adopted
this Agreement and the transactions contemplated hereby and (C) resolved to
recommend that the stockholders of the Company accept the Offer and approve and
adopt this Agreement and the transactions contemplated hereby, and (ii) Goldman,
Sachs & Co. ("GOLDMAN SACHS") has delivered to the Board its opinion that the
consideration to be received by the holders of Shares pursuant to each of the
Offer and the Merger is fair to the holders of Shares. The Company hereby
consents to the inclusion in the Offer Documents of the recommendation of the
Board described in the immediately preceding sentence. The Company has been
advised by each of its directors and executive officers that they intend to
tender all Shares beneficially owned by them to Purchaser pursuant to the Offer.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on
3
<PAGE>
Schedule 14D-9 (together with all amendments and supplements thereto, the
"SCHEDULE 14D-9") containing the recommendation of the Board described in
Section 1.02(a), except if the Board determines in good faith that an
alternative recommendation to be necessary in accordance with its fiduciary
duties to the Company's stockholders under applicable law as advised by outside
legal counsel, and shall disseminate the Schedule 14D-9 to the extent required
by Rule 14d-9 promulgated under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), and any other applicable federal securities laws. The
Company, Parent and Purchaser each agree to correct promptly any information
provided by any of them for use in the Schedule 14D-9 which shall have become
false or misleading, and the Company further agrees to take all steps necessary
to cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws.
(c) The Company shall promptly furnish Purchaser with mailing labels
containing the names and addresses of all record holders of Shares and with
security position listings of Shares held in stock depositories, each as of a
recent date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
beneficial owners of Shares. The Company shall furnish Purchaser with such
additional information, including, without limitation, updated listings and
computer files of stockholders, mailing labels and security position listings,
and such other assistance as Parent, Purchaser or their agents may reasonably
request. Subject to the requirements of applicable law, and except for such
steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer or the Merger, Parent and Purchaser
shall hold in confidence the information contained in such labels, listings and
files, shall use such information solely in connection with the Offer and the
Merger, and, if this Agreement shall be terminated in accordance with
Section 8.01 or if the Offer is otherwise terminated, shall promptly deliver to
the Company all copies of such information and any information derived therefrom
then in their possession or the possession of their agents and representatives.
ARTICLE II
THE MERGER
SECTION 2.01. THE MERGER. Upon the terms and subject to the
conditions set forth in Article VII, and in accordance with Delaware Law, at the
Effective Time (as hereinafter defined) Purchaser shall be merged with and into
the Company. As a result of the Merger, the separate corporate existence of
Purchaser shall cease and the Company shall continue as the surviving
corporation of the Merger (the "SURVIVING CORPORATION").
4
<PAGE>
SECTION 2.02. EFFECTIVE TIME. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be consummated by
filing this Agreement or a certificate of merger or certificate of ownership and
merger (in any of such cases, the "CERTIFICATE OF MERGER") with the Secretary of
State of the State of Delaware, in such form as is required by, and executed in
accordance with the relevant provisions of, Delaware Law (the date and time of
such filing being the "EFFECTIVE TIME").
SECTION 2.03. EFFECT OF THE MERGER. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of
Delaware Law.
SECTION 2.04. CERTIFICATE OF INCORPORATION; BY-LAWS. (a) At the
Effective Time the Certificate of Incorporation of Purchaser, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation; PROVIDED, HOWEVER, that, at the
Effective Time, Article I of the Certificate of Incorporation of the Surviving
Corporation shall be amended to read as follows: "The name of the corporation
is Vivra Incorporated."
(b) The By-laws of Purchaser, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such By-laws.
SECTION 2.05. DIRECTORS AND OFFICERS. The directors of Purchaser
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation and Delaware Law, and the
officers of the Purchaser immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified in accordance
with the Certificate of Incorporation and By-laws of the Surviving Corporation
and Delaware Law.
SECTION 2.06. CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be cancelled pursuant to
Section 2.06(b) and any Dissenting Shares (as hereinafter defined)) shall
be cancelled and shall be converted automatically into the right to receive
an amount equal to the Per Share Amount in cash (the "MERGER
CONSIDERATION") payable, without interest, to the holder
5
<PAGE>
of such Share, upon surrender, in the manner provided in Section 2.09, of
the certificate that formerly evidenced such Share;
(b) Each Share held in the treasury of the Company and each
Share owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company immediately prior to the Effective
Time shall be cancelled without any conversion thereof and no payment or
distribution shall be made with respect thereto; and
(c) Each share of Common Stock, par value $0.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of Common Stock, par value $0.01 per share, of the
Surviving Corporation.
SECTION 2.07. EMPLOYEE STOCK OPTIONS. All outstanding Employee Stock
Options (as defined in Section 6.06(a)) will be cancelled immediately prior to
the Effective Time and, in consideration of such cancellation, the Surviving
Corporation will pay each holder of an Employee Stock Option the cash amount
determined in accordance with Section 6.06(a). All restricted stock under the
Company's 1989 Stock Incentive Plan will be vested, and any restrictions
attached thereto pursuant to such plan will lapse, immediately prior to the
Effective Time.
SECTION 2.08. DISSENTING SHARES. (a) Notwithstanding any provision
of this Agreement to the contrary, Shares that are outstanding immediately prior
to the Effective Time and which are held by stockholders who shall have not
voted in favor of the Merger or consented thereto in writing and who shall have
demanded properly in writing appraisal for such Shares in accordance with
Section 262 of Delaware Law (collectively, the "DISSENTING SHARES") shall not be
converted into or represent the right to receive the Merger Consideration. Such
stockholders shall be entitled to receive payment of the appraised value of such
Shares held by them in accordance with the provisions of such Section 262,
except that all Dissenting Shares held by stockholders who shall have failed to
perfect or who effectively shall have withdrawn or lost their rights to
appraisal of such Shares under such Section 262 shall thereupon be deemed to
have been converted into and to have become exchangeable for, as of the
Effective Time, the right to receive the Merger Consideration, without any
interest thereon, upon surrender, in the manner provided in Section 2.09, of the
certificate or certificates that formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any demands
for appraisal received by the Company, withdrawals of such demands, and any
other instruments served pursuant to Delaware Law and received by the Company
and (ii) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal under Delaware Law. The Company shall not, except with
the prior written consent of Parent, make any
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payment with respect to any demands for appraisal or offer to settle or settle
any such demands.
SECTION 2.09. SURRENDER OF SHARES; STOCK TRANSFER BOOKS. (a) Prior
to the Effective Time, Purchaser shall designate a bank or trust company to act
as agent (the "PAYING AGENT") for the holders of Shares in connection with the
Merger to receive the funds to which holders of Shares shall become entitled
pursuant to Section 2.06(a). Such funds shall be invested by the Paying Agent
as directed by the Surviving Corporation.
(b) Promptly after the Effective Time, the Surviving Corporation
shall cause to be mailed to each person who was, at the Effective Time, a holder
of record of Shares entitled to receive the Merger Consideration pursuant to
Section 2.06(a)(i) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "CERTIFICATES") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and (ii) instructions for use
in effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as reasonably may be
required pursuant to such instructions, the holder of such Certificate shall be
entitled to receive in exchange therefor the Merger Consideration for each Share
formerly evidenced by such Certificate, and such Certificate shall then be
cancelled. No interest shall accrue or be paid on the Merger Consideration
payable upon the surrender of any Certificate for the benefit of the holder of
such Certificate. If payment of the Merger Consideration is to be made to a
person other than the person in whose name the surrendered Certificate is
registered on the stock transfer books of the Company, it shall be a condition
of payment that the Certificate so surrendered shall be endorsed properly or
otherwise be in proper form for transfer and that the person requesting such
payment shall have paid all transfer and other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder
of the Certificate surrendered or shall have established to the satisfaction of
the Surviving Corporation that such taxes either have been paid or are not
applicable.
(c) At any time following the sixth month after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it), and thereafter such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Merger Consideration
that may be payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a
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Share for any Merger Consideration delivered in respect of such Share to a
public official pursuant to any abandoned property, escheat or other similar
law.
(d) At the close of business on the day of the Effective Time, the
stock transfer books of the Company shall be closed and thereafter there shall
be no further registration of transfers of Shares on the records of the
Company. From and after the Effective Time, the holders of Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares except as otherwise provided herein or by applicable law.
SECTION 2.10. CONVERTIBLE SUBORDINATED NOTES. (a) Prior to the
Effective Time, the Company shall, in accordance with the terms of the indenture
dated as of July 8, 1996 (the "INDENTURE") between the Company and State Street
Bank and Trust Company, as trustee (the "TRUSTEE"), execute and deliver to the
Trustee a supplemental indenture (which shall conform to the Trust Indenture Act
of 1939, as amended, as in force at the date of execution of such supplemental
indenture) providing that from and after the Effective Time, by virtue of the
Merger and without any further action on the part of the Company, each $1,000
principal amount of the Company's 5% Convertible Subordinated Notes Due 2001
(the "5% NOTES") shall be convertible into an amount of cash equal to the Per
Share Amount multiplied by 26.88. The Company shall promptly cause notice of
the execution and delivery of such supplemental indenture to be mailed to each
holder of the 5% Notes in accordance with the Indenture and shall take such
other actions as may be appropriate or required by the Indenture, or otherwise,
to implement the terms of the Indenture, as supplemented as provided herein.
(b) The Company agrees that it shall offer to repurchase the Notes at
the option of the holders thereof and shall consummate such repurchase, in each
case in accordance with the terms and conditions of Section 3.8 through Section
3.13, inclusive, of the Indenture.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered by the
Company to Parent concurrently with the execution of this Agreement (the
"COMPANY DISCLOSURE SCHEDULE"), which shall identify exceptions by specific
Section references, the Company hereby represents and warrants to Parent and
Purchaser that:
SECTION 3.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of
the Company and each subsidiary of the Company (a "SUBSIDIARY") is a corporation
duly
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incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing or in good standing or to have such power,
authority and governmental approvals would not prevent or materially delay
consummation of the Merger or the other Transactions, or otherwise prevent the
Company from performing its material obligations under this Agreement, and would
not, individually or in the aggregate, have a Material Adverse Effect (as
defined below). The Company and each Subsidiary is duly qualified or licensed
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that would not prevent or materially delay consummation of the Merger
or the other Transactions, or otherwise prevent the Company from performing its
material obligations under this Agreement, and would not, individually or in the
aggregate, have a Material Adverse Effect. When used in connection with the
Company or any Subsidiary, the term "MATERIAL ADVERSE EFFECT" means any
circumstance, change in or effect on the Company, any Subsidiary or any
circumstance, change in or effect on the Company's dialysis, renal care,
nephrology disease management, or nephrologist practice management business or
the Company's business of contracting with payors on behalf of nephrologists
(collectively, the "DIALYSIS BUSINESS") that is, or is reasonably likely to be,
materially adverse to the value of the Dialysis Business or the Company and the
Dialysis Subsidiaries (not including the Specialty Business (as defined below)),
taken as a whole, other than a change, condition, event or development that
results from (i) the announcement of the Transactions, (ii) general economic
conditions, (iii) conditions that are generally applicable to the dialysis
business, the renal care business or the nephrologist practice management
business, or (iv) actions, legislation or initiatives that are generally
applicable to the dialysis business, the renal care business or the nephrologist
practice management business, or any proposals thereof, of any Governmental
Authority or any announcement thereof. Section 3.01 of the Company Disclosure
Schedule sets forth, as of the date of this Agreement, a true and complete list
of all of the Subsidiaries (which list indicates those Subsidiaries (the
"DIALYSIS SUBSIDIARIES") that are engaged in the Dialysis Business and those
Subsidiaries (the "SPECIALTY SUBSIDIARIES") that are engaged, in whole or in
part, in the business of providing specialty physician network and disease
management services to managed care and provider organizations, other than such
businesses included in the Dialysis Business (collectively, the "SPECIALTY
BUSINESS")), together with the jurisdiction of incorporation of each Subsidiary
and the percentage of each Subsidiary's outstanding capital stock or other
equity interests owned by the Company and Subsidiaries, as the case may be.
There are no partnerships or joint venture arrangements or other business
entities in which the Company or any Subsidiary owns an equity interest. The
Dialysis Business is conducted through the Company and the Dialysis
Subsidiaries, and all the assets and services predominantly used in the Dialysis
Business as presently conducted are owned or leased by the Company and the
Dialysis
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Subsidiaries. Neither Specialty Partners nor any Specialty Subsidiary is
engaged, in any material respect, in the Dialysis Business.
SECTION 3.02. CERTIFICATE OF INCORPORATION AND BY-LAWS. The Company
has heretofore made available to Parent a complete and correct copy of the
Certificate of Incorporation and the By-laws (or equivalent organizational
documents), each as amended to date, of the Company and each Subsidiary. Such
Certificates of Incorporation, By-laws or equivalent organizational documents
are in full force and effect. The Company and each Subsidiary are not in
violation of any of the provisions of their respective Certificates of
Incorporation or By-laws (or equivalent organizational documents).
SECTION 3.03. CAPITALIZATION. The authorized capital stock of the
Company consists of 80,000,000 Shares and 10,000,000 shares of Preferred Stock,
par value $.01 per share ("COMPANY PREFERRED STOCK"). As of the date hereof,
(i) 41,991,547 Shares are issued and outstanding, all of which are validly
issued, fully paid and nonassessable, (ii) no Shares are held in the treasury of
the Company, (iii) no Shares are held by the Subsidiaries, (iv) 2,711,133 Shares
are reserved for future issuance pursuant to employee stock options (the
"COMPANY OPTIONS") granted under the Company's Revised 1989 Stock Incentive
Plan, 1989 Transition Consultants' Stock Option Plan or any other plan or
arrangement of the Company (collectively, the "COMPANY STOCK OPTION PLANS"), and
(v) 4,261,963 Shares are reserved for issuance pursuant to the conversion of the
5% Notes. As of the date hereof, no shares of Company Preferred Stock are
issued and outstanding. Except for (i) Company Options granted pursuant to the
Company Stock Option Plans or options or restricted stock to be granted pursuant
to automatic grants under Company Stock Option Plans, (ii) options granted
pursuant to Subsidiary stock option plans described in Section 3.03 of the
Disclosure Schedule, (iii) the 5% Notes and (iv) the rights (the "COMPANY
RIGHTS") issued pursuant to the Amended and Restated Rights Agreement, dated as
of February 13, 1996 (the "RIGHTS AGREEMENT"), between the Company and The First
National Bank of Boston, as Rights Agent, there are no options, warrants or
other rights, agreements, arrangements or commitments of any character relating
to the issued or unissued capital stock of the Company or any Dialysis
Subsidiary or obligating the Company or any Dialysis Subsidiary to issue or sell
any shares of capital stock of, or other equity interests in, the Company or any
Dialysis Subsidiary. All Shares subject to issuance as aforesaid, upon issuance
on the terms and conditions specified in the instruments pursuant to which they
are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding contractual obligations of the Company
or any Dialysis Subsidiary to repurchase, redeem or otherwise acquire any Shares
or any capital stock of any Subsidiary. Each outstanding share of capital stock
of each Dialysis Subsidiary is duly authorized, validly issued, fully paid and
nonassessable and each such share owned by the Company or another Dialysis
Subsidiary is free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on the Company's or
such other Dialysis Subsidiary's voting rights, charges and other encumbrances
of any nature whatsoever. There are no material
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outstanding contractual obligations of the Company or any Dialysis Subsidiary to
provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, Specialty Partners, any other Subsidiary or any
other person.
SECTION 3.04. AUTHORITY RELATIVE TO THIS AGREEMENT AND THE SPECIALTY
MERGER AGREEMENT. The Company has all necessary power and authority to execute
and deliver this Agreement and the Specialty Merger Agreement, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby (the "TRANSACTIONS"). The execution and
delivery of this Agreement and the Specialty Merger Agreement by the Company and
the consummation by the Company of the Transactions have been duly and validly
authorized by all necessary corporate action, and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or the
Specialty Merger Agreement or to consummate the Transactions (other than, with
respect to the Specialty Merger Transaction, the reorganization of Specialty
Partners as contemplated in the Specialty Merger Agreement, and other than, with
respect to the Merger, the approval and adoption of this Agreement by the
holders of a majority of the then outstanding Shares if and to the extent
required by applicable law, and the filing and recordation of appropriate merger
documents as required by Delaware Law). As an amplification and not in
limitation of the immediately preceding sentence, the Board has taken all
actions required to render inapplicable to the Transactions the restrictions on
business combinations contained in Section 203 of the Delaware Law and Article 9
and Article 10 of the Certificate of Incorporation of the Company. This
Agreement and the Specialty Merger Agreement each have been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Parent and Purchaser, constitute a legal, valid and
binding obligation of the Company.
SECTION 3.05. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement and the Specialty Merger Agreement by
the Company do not, and the performance of this Agreement and the Specialty
Merger Agreement by the Company will not, (i) conflict with or violate the
Certificate of Incorporation or By-laws or equivalent organizational documents
of the Company or any Subsidiary, (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 3.05(b) have been made,
conflict with or violate any foreign or domestic law, statute, ordinance, rule,
regulation, order, judgment or decree ("LAW") applicable to the Company or any
Subsidiary or by which any property or asset of the Company or any Subsidiary is
bound, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on any property or
asset of the Company or any Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clauses (ii) and
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(iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would not, individually or in the aggregate, have a Material
Adverse Effect.
(b) The execution and delivery of this Agreement and the Specialty
Merger Agreement by the Company do not, and the performance of this Agreement
and the Specialty Merger Agreement by the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign ("GOVERNMENTAL
AUTHORITY"), except (i) for applicable requirements, if any, of the Exchange
Act, state securities or "blue sky" laws ("BLUE SKY LAWS"), the New York Stock
Exchange (the "NYSE"), state takeover laws, the pre-merger notification
requirements of the HSR Act and filing and recordation of appropriate merger
documents as required by Delaware Law, (ii) except to the extent that the Merger
will require the Company to obtain new Medicare, Medicaid or third party
provider numbers, licenses or similar permits, and (iii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay consummation of the Offer,
the Merger or the Specialty Merger Transaction, or otherwise prevent the Company
from performing its obligations under this Agreement or the Specialty Merger
Agreement, and would not, individually or in the aggregate, have a Material
Adverse Effect.
SECTION 3.06. PERMITS; COMPLIANCE. The Company and each of the
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Authority necessary for the Company or
each Dialysis Subsidiary to own, lease and operate its properties or to carry on
the Dialysis Business as it is now being conducted (the "PERMITS"), except where
the failure to have, or the suspension or cancellation of, any of the Permits
would not, individually or in the aggregate, have a Material Adverse Effect,
and, as of the date hereof, no suspension or cancellation of any of the Permits
is pending or, to the knowledge of the Company, threatened, except where the
failure to have, or the suspension or cancellation of, any of the Permits would
not, individually or in the aggregate, have a Material Adverse Effect. Neither
the Company nor any Dialysis Subsidiary is in conflict with, or in default or
violation of, (i) any Law applicable to the Company or any Dialysis Subsidiary
or by which any property or asset of the Company or any Dialysis Subsidiary is
bound or affected, (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any Dialysis Subsidiary is a party or by which the
Company or any Dialysis Subsidiary or any property or asset of the Company or
any Dialysis Subsidiary is bound or affected or (iii) any Permits, except for
any such conflicts, defaults or violations that would not, individually or in
the aggregate, have a Material Adverse Effect.
SECTION 3.07. SEC FILINGS; FINANCIAL STATEMENTS. (a) The Company
has filed all forms, reports and documents required to be filed by it with the
SEC since
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November 30, 1993 through the date of this Agreement (collectively, the "SEC
REPORTS"). The SEC Reports (i) complied as to form in all material respects
with the requirements of the Securities Act of 1933, as amended (the "SECURITIES
ACT"), or the Exchange Act, as the case may be, and the applicable rules and
regulations thereunder and (ii) did not, at the time they were filed, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No Dialysis Subsidiary is required to file any form, report or
other document with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the SEC Reports was prepared in accordance
with United States generally accepted accounting principles ("GAAP") applied on
a consistent basis throughout the periods indicated (except as may be indicated
in the notes thereto) and each fairly presented the consolidated financial
position, results of operations and cash flows of the Company and the
consolidated Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein except as otherwise noted therein (subject,
in the case of unaudited statements, to normal and recurring year-end
adjustments which did not and are not expected to, individually or in the
aggregate, have a Material Adverse Effect).
SECTION 3.08. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since November
30, 1996, except as contemplated by or as disclosed in this Agreement or as
disclosed in any SEC Report filed since November 30, 1996, the Company and the
Dialysis Subsidiaries have conducted the Dialysis Business only in the ordinary
course of the Dialysis Business and, since such date, there has not been (a) any
Material Adverse Effect, (b) any material change by the Company in its
accounting methods, principles or practices, including without limitation, those
used in the calculation of contractual adjustments or bad debts, (c) any
revaluation by the Company of any material assets (including, without
limitation, any writing down of the value of inventory, writing off of notes or
accounts receivable), other than in the ordinary course of the Dialysis
Business, (d) any entry by the Company or any Dialysis Subsidiary into any
commitment or transaction material to the Dialysis Business, (e) except as
specifically contemplated hereby, any declaration, setting aside or payment of
any dividend or distribution in respect of the Shares or any redemption,
purchase or other acquisition of any of its securities or (f) any increase in,
or establishment of, any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in the compensation payable or to
become payable to any officers or key employees of the Company or any
Subsidiary, except increases in the salaries of employees, payment of profit
sharing and bonuses, and granting of stock options in the ordinary course of
business consistent with past practice.
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SECTION 3.09. ABSENCE OF LITIGATION. There is no litigation, suit,
claim, action, proceeding or investigation (an "ACTION") pending or, to the
knowledge of the Company, threatened against the Company or any Subsidiary, or
any property or asset of the Company or any Subsidiary, before any court,
arbitrator or Governmental Authority, which (i) individually or in the
aggregate, reasonably would be expected to have a Material Adverse Effect or
(ii) seeks to delay or prevent the consummation of any Transaction. Neither the
Company nor any Subsidiary nor any property or asset of the Company or any
Subsidiary is subject to any continuing order of, consent decree, settlement
agreement or other similar written agreement with, or, to the knowledge of the
Company, continuing investigation by, any Governmental Authority, or any order,
writ, judgment, injunction, decree, determination or award of any Governmental
Authority or arbitrator having, individually or in the aggregate, a Material
Adverse Effect.
SECTION 3.10. EMPLOYEE BENEFIT PLANS; LABOR MATTERS. (a)
Section 3.10 of the Disclosure Schedule contains a true and complete list of all
employee benefit plans (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus,
stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements, and all employment,
termination, severance or other contracts or agreements to which the Company or
any Subsidiary is a party, with respect to which the Company or any Subsidiary
has any obligation or which are maintained, contributed to or sponsored by the
Company or any Subsidiary for the benefit of any current or former employee,
officer or director of the Company or any Subsidiary (collectively, the
"PLANS"). Each Plan is in writing and the Company has previously furnished or
made available to Parent a true and complete copy of each Plan and a true and
complete copy of each material document prepared in connection with each such
Plan, including, without limitation, (i) a copy of each trust or other funding
arrangement, (ii) each summary plan description and summary of material
modifications, (iii) the most recently filed Internal Revenue Service ("IRS")
Form 5500, (iv) the most recently received IRS determination letter for each
such Plan, and (v) the most recently prepared actuarial report and financial
statement in connection with each such Plan. Neither the Company nor any
Subsidiary has any express or implied commitment (i) to create, incur liability
with respect to or cause to exist any other employee benefit plan, program or
arrangement, (ii) to enter into any contract or agreement to provide
compensation or benefits to any individual or (iii) to modify, change or
terminate any Plan, other than with respect to a modification, change or
termination required by ERISA or the Internal Revenue Code of 1986, as amended
(the "CODE").
(b) None of the Plans is a multiemployer plan, within the meaning of
Section 3(37) or 4001(a)(3) of ERISA (a "MULTIEMPLOYER PLAN"), or a single
employer pension plan, within the meaning of Section 4001(a)(15) of ERISA, for
which the Company or any Subsidiary could incur liability under Section 4063 or
4064 of ERISA (a "MULTIPLE
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EMPLOYER PLAN"). None of the Plans is "defined benefit plan" within the meaning
of Section 3(35) of ERISA. None of the Plans (i) provides for the payment of
separation, severance, termination or similar-type benefits to any person,
(ii) obligates the Company or any Subsidiary to pay separation, severance,
termination or other benefits as a result of any Transaction or (iii) obligates
the Company or any Subsidiary to make any payment or provide any benefit that
could be subject to a tax under Section 4999 of the Code. None of the Plans
provides for or promises retiree medical, disability or life insurance benefits
to any current or former employee, officer or director of the Company or any
Subsidiary, except for continued healthcare coverage under COBRA.
(c) Each Plan which is intended to be qualified under Section 401(a)
of the Code has received a favorable determination letter from the IRS that such
Plan is so qualified, and each trust established in connection with any Plan
which is intended to be exempt from federal income taxation under Section 501(a)
of the Code has received a determination letter from the IRS that such trust is
so exempt. No fact or event has occurred since the date of any such
determination letter from the IRS that could adversely affect the qualified
status of any such Plan or the exempt status of any such trust. Each trust
maintained or contributed to by the Company or any Subsidiary which is intended
to be qualified as a voluntary employees' beneficiary association exempt from
federal income taxation under Sections 501(a) and 501(c)(9) of the Code has
received a favorable determination letter from the IRS that it is so qualified
and so exempt, and no fact or event has occurred since the date of such
determination by the IRS that could adversely affect such qualified or exempt
status.
(d) There has been no prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan.
Neither the Company nor any Subsidiary is currently liable or has previously
incurred any liability for any tax or penalty arising under Section 4971, 4972,
4979, 4980 or 4980B of the Code or Section 502(c) of ERISA, and no fact or event
exists which could give rise to any such liability. Neither the Company nor any
subsidiary has incurred any liability under, or by operation of, Title IV of
ERISA and no fact or event exists which could give rise to any such liability.
(e) Each Plan is now and has been operated in all respects in
accordance with the requirements of all applicable laws, including, without
limitation, ERISA and the Code, and the Company and each Subsidiary have
performed all obligations required to be performed by them under, are not in any
respect in default under or in violation of any Plan. The audited consolidated
balance sheet of the Company for the fiscal year ended November 30, 1996
reflects an accrual of all amounts of employer contributions and premiums
accrued but unpaid with respect to the Plans.
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(f) The Company and the Subsidiaries have not incurred any liability
under, and have complied in all respects with, the Worker Adjustment Retraining
Notification Act and the regulations promulgated thereunder ("WARN") and do not
reasonably expect to incur any such liability as a result of actions taken or
not taken prior to the Effective Time.
(g) Except as set forth in Section 3.10(g) of the Disclosure
Schedule, (i) there are no claims or actions pending or, to the knowledge of the
Company, threatened between the Company or any Subsidiary and any of their
respective employees, which controversies have a Material Adverse Effect;
(ii) neither the Company nor any Subsidiary is a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by the Company or any Subsidiary, nor, to the knowledge of the Company,
are there any activities or proceedings of any labor union to organize any such
employees; (iii) neither the Company nor any Subsidiary has breached or
otherwise failed to comply with any provision of any such agreement or contract
and there are no grievances outstanding against the Company or any Subsidiary
under any such agreement or contract; (iv) there are no unfair labor practice
complaints pending against the Company or any Subsidiary before the National
Labor Relations Board or any current union representation questions involving
employees of the Company or any Subsidiary; and (v) there is no strike,
slowdown, work stoppage or lockout, or, to the knowledge of the Company, threat
thereof, by or with respect to any employees of the Company or any Subsidiary.
SECTION 3.11. OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT.
Neither the Schedule 14D-9 nor any information supplied by the Company for
inclusion in the Offer Documents shall, at the respective times the
Schedule 14D-9, the Offer Documents or any amendments or supplements thereto are
filed with the SEC or are first published, sent or given to stockholders of the
Company, as the case may be, shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they are made, not misleading. Neither the proxy
statement to be sent to the stockholders of the Company in connection with the
Stockholders' Meeting (as hereinafter defined) nor the information statement to
be sent to such stockholders, as appropriate (such proxy statement or
information statement, as amended or supplemented, being referred to herein as
the "PROXY STATEMENT"), shall, at the date the Proxy Statement (or any amendment
or supplement thereto) is first mailed to stockholders of the Company, at the
time of the Stockholders' Meeting and at the Effective Time, contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Stockholders' Meeting which shall have
become false or misleading. Notwithstanding the foregoing, no representation or
warranty is made by the Company with respect to statements therein based on
information supplied by
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Parent or Purchaser or any of their representatives which is contained in the
Schedule 14D-9, the Offer Documents, the Proxy Statement or any amendment or
supplement thereto. The Schedule 14D-9 and the Proxy Statement shall comply in
all material respects as to form with the requirements of the Exchange Act and
the applicable rules and regulations thereunder.
SECTION 3.12. PROPERTY. The Company and the Dialysis Subsidiaries
have sufficient title to, or right to use, all their properties and assets
necessary to conduct their respective businesses as currently conducted or as
contemplated to be conducted, with only such exceptions as, individually or in
the aggregate, would not have a Material Adverse Effect.
SECTION 3.13. TRADEMARKS, PATENTS AND COPYRIGHTS. To the knowledge
of the Company, the Company and the Dialysis Subsidiaries own or possess
adequate licenses or other valid rights to use all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, copyrights,
servicemarks, trade secrets, applications for trademarks and for servicemarks,
know-how and other proprietary rights and information used or held for use in
connection with the Dialysis Business as currently conducted or as contemplated
to be conducted, and the Company is unaware of any assertion or claim
challenging the validity of any of the foregoing which, individually or in the
aggregate, would have a Material Adverse Effect. To the knowledge of the
Company, the conduct of the Dialysis Business as currently conducted does not
and will not infringe upon any patent, patent right, license, trademark,
trademark right, trade name, trade name right, servicemark or copyright of any
third party that, individually or in the aggregate, would have a Material
Adverse Effect. To the knowledge of the Company, there are no infringements of
any propriety rights owned by or licensed by or to the Company or any Dialysis
Subsidiary which, individually or in the aggregate, would have a Material
Adverse Effect.
SECTION 3.14. TAXES. (a) The Company and the Subsidiaries have
timely filed all Tax Returns and reports required to be filed by them, or
extensions of time for such filings have been filed, and such returns and
reports are in all material respects true, complete and correct. The Company
and the Subsidiaries have paid and discharged within the time and in the manner
prescribed by the law all Taxes that are due and payable, other than such
payments as are being contested in good faith by appropriate proceedings. The
accruals and reserves for Taxes reflected in the Company's audited consolidated
balance sheet for the fiscal year ended November 30, 1996 are adequate to cover
all Taxes accruable through such date (including interest and penalties, if any,
thereon) in accordance with GAAP. Neither the IRS nor any other taxing
authority or agency, domestic or foreign, is now asserting or, to the knowledge
of the Company, threatening to assert against the Company or any Subsidiary any
deficiency or claim for additional Taxes or interest thereon or penalties in
connection therewith. Neither the Company nor any Subsidiary has granted any
waiver of any statute of limitations with respect to, or any extension of a
period for the
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assessment of, any income Tax. The statute of limitations for the assessment of
any federal income Taxes has expired for all income Tax Returns of the Company
and each of the Subsidiaries or such income Tax Returns of the Company and each
of the Subsidiaries have been examined by the IRS for all periods. There are no
Tax liens upon the assets of the Company or any Subsidiaries except for
statutory liens for current Taxes not yet due. No audits or other
administrative proceeding or court proceedings are presently pending with regard
to any Taxes or Tax Returns of the Company or any of the Subsidiaries. Neither
the Company nor any Subsidiary is a party to any agreement relating to
allocating or sharing of Taxes which has not been disclosed on its Tax Returns.
No consent under Section 341(f) of the Code has been filed with respect to the
Company or any Subsidiary. Neither the Company nor any of the Subsidiaries has
received a written ruling relating from, or entered into a written and legally
binding agreement with, a taxing authority relating to Taxes.
(b) "TAX" or "TAXES" means any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added or gains taxes;
license, registration and documentation fees; and customs' duties, tariffs, and
similar charges.
(c) "TAX RETURN" means any report, return, information statement,
payee statement or other information required to be provided to any federal,
state, local or foreign government or taxing authority, or otherwise retained,
with respect to Taxes.
SECTION 3.15. ENVIRONMENTAL MATTERS. (a) For purposes of this
Agreement, the following terms shall have the following meanings:
(i) "HAZARDOUS SUBSTANCES" means (A) those substances defined in or regulated
under the following federal statutes and their state counterparts, as each may
be amended from time to time, and all regulations thereunder: the Hazardous
Materials Transportation Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Clean
Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (B) petroleum
and petroleum products including crude oil and any fractions thereof;
(C) natural gas, synthetic gas, and any mixtures thereof; (D) radon; (E) any
other contaminant; and (F) any substance with respect to which a federal, state
or local agency requires environmental investigation, monitoring, reporting or
remediation; and (ii) "ENVIRONMENTAL LAWS" means any federal, state or local law
relating to (A) releases or threatened releases of Hazardous Substances or
materials containing Hazardous Substances; (B) the manufacture, handling,
transport, use, treatment, storage or disposal of Hazardous
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Substances or materials containing Hazardous Substances; or (C) otherwise
relating to pollution of the environment or the protection of human health.
(b) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, to the knowledge of the Company: (i) the Company and
the Subsidiaries have not violated and are not in violation of any Environmental
Law; (ii) none of the properties owned or leased by the Company or the
Subsidiaries (including, without limitation, soils and surface and ground
waters) are contaminated with any Hazardous Substance at levels which exceed
standards established by applicable Governmental Authorities; (iii) the Company
and each of the Subsidiaries are not actually or reasonably likely to be liable
for any off-site contamination; and (iv) the Company and each of the
Subsidiaries are not actually or reasonably likely to be liable under any
Environmental Law.
SECTION 3.16. MATERIAL CONTRACTS. (a) Subsections (i) through (vi)
of Section 3.16 of the Company Disclosure Schedule contain a list of the
following types of contracts and agreements to which the Company or any Dialysis
Subsidiary is a party (such contracts, agreements and arrangements as are
required to be set forth in Section 3.16(a) of the Company Disclosure Schedule
being referred to herein collectively as the "MATERIAL CONTRACTS"):
(i) all contracts with medical directors or agreements regarding the
provision of acute dialysis services;
(ii) the ten largest contracts between or among the Company or any
Dialysis Subsidiary and any health maintenance organization, physician
provider organization or any other discounted fee for service payor for
dialysis services, which contracts cover in the aggregate more than 50% of
the total patients covered by the Dialysis Business with private insurance;
(iii) all contracts and agreements (excluding routine checking
account overdraft agreements involving petty cash amounts) under which the
Company or any Dialysis Subsidiary has created, incurred, assumed or
guaranteed (or may create, incur, assume or guarantee) indebtedness (as
defined under GAAP) or under which the Company or any Dialysis Subsidiary
has imposed (or may impose) a security interest or lien on any of its
assets, whether tangible or intangible, to secure indebtedness, other than
contracts or agreements relating to indebtedness (as defined under GAAP),
or security interests securing such indebtedness, not exceeding $5,000,000
in the aggregate;
(iv) all contracts and agreements that limit the ability of the
Company or any Dialysis Subsidiary or, after the purchase of the Shares
pursuant to the Offer, Parent or any of its affiliates, to compete in any
line of business or with any person
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or in any geographic area or during any period of time, or to solicit any
customer or client;
(v) all contracts and agreements between or among the Company or any
Dialysis Subsidiary, on the one hand, and any affiliate of the Company
(other than a wholly owned subsidiary), on the other hand;
(vi) all contracts and agreements between the Company or any Dialysis
Subsidiary, on the one hand, and Specialty Partners or any Specialty
Subsidiary, on the other hand;
(vii) all agreements regarding laboratory services or the
provision or receipt of laboratory services, whether by the Company or any
Dialysis Subsidiary involving amounts in excess of $100,000 over the term
of the agreement;
(viii) all agreements for the purchase or sale of supplies used in
the Dialysis Business that require the payment or receipt of consideration
in excess of $500,000; and
(ix) all contracts and agreements not otherwise listed above (A) which
are material to the Dialysis Business in its entirety or (B) the
termination of which would have a Material Adverse Effect.
(b) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, each contract referred to in paragraphs (i) through
(ix) above is a legal, valid and binding agreement, and none of the Material
Contracts is in default by its terms or has been cancelled by the other party;
and the Company and the Dialysis Subsidiaries are not in receipt of any claim of
default under any such agreement. The Company has furnished or made available
to Parent true and complete copies of all Material Contracts.
SECTION 3.17. BENEFITS AND PAYMENTS. The Company and the
Subsidiaries have not engaged in any activities which are prohibited under 42
U.S.C. Section 1320a-7b, or the regulations promulgated thereunder, or under any
related state or local statutes or regulations, or which are prohibited by any
rules of professional conduct, including, without limitation: (i) knowingly and
willfully making or causing to be made a false statement or representation of a
material fact in any application for any benefit or payment; (ii) knowingly and
willfully making or causing to be made any false statement or representation of
a material fact for use in determining rights to any benefit or payment; (iii)
failure to disclose knowledge as a claimant of the occurrence of any event
affecting the initial or continued right to any benefit or payment on its own
behalf or on behalf of another, with intent to secure fraudulently such benefit
or payment; and (iv) knowingly and willfully soliciting or receiving any
remuneration (including any kickback, bribe or rebate), directly or indirectly,
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overtly or covertly, in cash or in kind or offering to pay or receive such
remuneration (a) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare or Medicaid, or (b) in
return for purchasing, leasing, or ordering or arranging for or recommending
purchasing, leasing or ordering any good, facility, service, or item for which
payment may be made in whole or in part by Medicare or Medicaid.
SECTION 3.18. AMENDMENT TO RIGHTS AGREEMENT. The Board has taken all
necessary action to approve the amendment of the Rights Agreement so that (a)
none of the execution or delivery of this Agreement, the making of the Offer,
the acceptance for payment or payment for Shares by Purchaser pursuant to the
Offer or the consummation of the Merger or any other Transaction will result in
(i) the occurrence of the "flip-in event" described under Section 11 of the
Rights Agreement, (ii) the occurrence of the "flip-over event" described in
Section 13 of the Rights Agreement, or (iii) the Company Rights becoming
evidenced by, and transferable pursuant to, certificates separate from the
certificates representing Company Common Stock and (b) the Company Rights will
expire pursuant to the terms of the Rights Agreement at the Effective Time.
SECTION 3.19. BROKERS. No broker, finder or investment banker (other
than Goldman Sachs) is entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of the Company. The Company has heretofore made available to
Parent a complete and correct copy of all agreements between the Company and
Goldman Sachs pursuant to which such firm would be entitled to any payment
relating to the Transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby jointly and severally represent and
warrant to Company that:
SECTION 4.01. CORPORATE ORGANIZATION. Each of Parent and Purchaser
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not prevent or materially
delay consummation of the Merger or the other Transactions, or otherwise prevent
Parent or Purchaser from performing its material obligations under this
Agreement.
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SECTION 4.02. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent
and Purchaser has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Transactions. The execution and delivery of this Agreement by Parent and
Purchaser and the consummation by Parent and Purchaser of the Transactions have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Parent or Purchaser are necessary to
authorize this Agreement or to consummate the Transactions (other than, with
respect to the Merger, the filing and recordation of appropriate merger
documents as required by Delaware Law). This Agreement has been duly and
validly executed and delivered by Parent and Purchaser and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of each of Parent and Purchaser enforceable against each
of Parent and Purchaser in accordance with its terms.
SECTION 4.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by Parent and Purchaser do not, and the
performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the Certificate of Incorporation or By-laws (or equivalent
organizational documents) of either Parent or Purchaser, (ii) assuming that all
consents, approvals, authorizations and other actions described in Section
4.03(b) have been obtained and all filings and obligations described in
subsection (b) have been made, conflict with or violate any Law applicable to
Parent or Purchaser or by which any property or asset of either of them is bound
or affected, or (iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of Parent or Purchaser pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clauses (ii) and (iii), for
any such conflicts, violations, breaches, defaults, or other occurrences which
would not prevent or materially delay consummation of the Merger or the other
Transactions, or otherwise prevent Parent or Purchaser from performing its
material obligations under this Agreement.
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, Blue Sky Laws, the NYSE, state
takeover laws, the pre-merger notification requirements of the HSR Act and
filing and recordation of appropriate merger documents as required by Delaware
Law and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or delay consummation of the Offer or the Merger, or otherwise prevent
Parent or Purchaser from performing their respective obligations under this
Agreement.
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SECTION 4.04. OFFER DOCUMENTS; PROXY STATEMENT. The Offer Documents
will not, at the time the Offer Documents are filed with the SEC or are first
published, sent or given to stockholders of the Company, as the case may be,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they are made, not
misleading. The information supplied by Parent for inclusion in the Proxy
Statement will not, on the date the Proxy Statement (or any amendment or
supplement thereto) is first mailed to stockholders of the Company, at the time
of the Stockholders' Meeting and at the Effective Time, contain any statement
which, at such time and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein not false or misleading or necessary to correct any statement
in any earlier communication with respect to the solicitation of proxies for the
Stockholders' Meeting which shall have become false or misleading.
Notwithstanding the foregoing, Parent and Purchaser make no representation or
warranty with respect to any information supplied by the Company or any of its
representatives which is contained in any of the Offer Documents, the Proxy
Statement or any amendment or supplement thereto. The Offer Documents shall
comply in all material respects as to form with the requirements of the Exchange
Act and the rules and regulations thereunder.
SECTION 4.05. FINANCING. Parent and Purchaser will have available
all of the funds necessary for the acquisition of all the outstanding Shares
pursuant to the Offer and the Merger, as the case may be, and to perform their
respective obligations under this Agreement.
SECTION 4.06. INTERIM OPERATIONS OF PURCHASER. Purchaser was formed
solely for the purpose of engaging in the Transactions and has not engaged in
any business activities or conducted any operations other than in connection
with the Transactions.
SECTION 4.07. OWNERSHIP OF COMPANY CAPITAL STOCK. As of the date of
this Agreement, neither Parent, Purchaser nor any of their affiliates is the
beneficial owner of any shares of capital stock of the Company.
SECTION 4.08. BROKERS. No broker, finder or investment banker (other
than UBS Securities LLC and Morgan Stanley & Co. Incorporated) is entitled to
any brokerage, finder's or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Parent or
Purchaser.
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ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. CONDUCT OF BUSINESS PENDING THE MERGER. The Company
covenants and agrees that, between the date of this Agreement and the Effective
Time, except as set forth in Section 5.01 of the Company Disclosure Schedule or
as contemplated by any other provision of this Agreement, unless Parent or
Purchaser shall otherwise agree in writing, the Dialysis Business shall be
conducted only in, and the Company and the Dialysis Subsidiaries shall not take
any action with respect to the Dialysis Business except in, the ordinary course
of the Dialysis Business; and the Company and the Dialysis Subsidiaries shall
use all reasonable commercial efforts to preserve substantially intact the
business organization of the Dialysis Business, to keep available the services
of the current officers, employees and consultants of the Dialysis Business and
to preserve the current relationships of the Company and the Dialysis
Subsidiaries with physicians, payors and other persons with which the Company or
any Dialysis Subsidiary has significant business relations. By way of
amplification and not limitation, except as contemplated by this Agreement,
neither the Company nor any Dialysis Subsidiary shall, between the date of this
Agreement and the Effective Time, directly or indirectly do, or propose to do,
any of the following without the prior written consent of Parent or Purchaser:
(a) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any
shares of capital stock of the Company or any Dialysis Subsidiary, or any
options, warrants, convertible securities or other rights of any kind to
acquire any shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of the Company or
any Dialysis Subsidiary (except for the issuance of a Shares issuable
pursuant to Company Options outstanding on the date hereof and the Shares
issuable upon the conversion of the 5% Notes) or (ii) any assets of the
Company or any Dialysis Subsidiary, except as contemplated by the Specialty
Merger Transaction or in the ordinary course of the Dialysis Business;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem any of its
capital stock, or purchase or otherwise acquire, directly or indirectly,
any of its capital stock or any capital stock of any other Subsidiary;
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(e) acquire (including, without limitation, by merger, consolidation,
or acquisition of stock or assets) any interest in any corporation,
partnership, other business organization or any division thereof or any
material amount of assets, or authorize any capital expenditures, other
than acquisitions or capital expenditures in the ordinary course of the
Dialysis Business which, in the aggregate, do not exceed $10,000,000 in
each of May 1997, June 1997 and July 1997;
(f) increase the compensation payable or to become payable or the
benefits provided to its officers or employees, or grant any severance or
termination pay to, or enter into any employment or severance agreement
with any director or officer or other key employee of the Company or any
Subsidiary, or establish, adopt, enter into or amend any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee;
(g) hire or retain any employee or consultant at an annual rate of
compensation in excess of $125,000;
(h) grant options or other interests in the equity securities of any
Subsidiary;
(i) take any action, other than in the ordinary course of the
Dialysis Business, with respect to accounting policies or procedures
(including, without limitation, procedures with respect to the payment of
accounts payable and collection of accounts receivable);
(j) make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability;
(k) settle any Action other than an Action relating solely to the
Specialty Business;
(l) amend, modify or consent to the termination of any Material
Contract or amend, modify or consent to the termination of the Company's or
any Dialysis Subsidiary's rights thereunder, other than in the ordinary
course of the Dialysis Business; or
(m) enter into any contract or agreement that would have been a
Material Contract if entered into prior to the date hereof, other than in
the ordinary course of the Dialysis Business.
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ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. STOCKHOLDERS' MEETING. (a) If required by applicable
law in order to consummate the Merger, the Company, acting through the Board,
shall, in accordance with applicable law and the Company's Certificate of
Incorporation and By-laws, (i) duly call, give notice of, convene and hold an
annual or special meeting of its stockholders as soon as practicable following
consummation of the Offer for the purpose of considering and taking action on
this Agreement and the transactions contemplated hereby (the "STOCKHOLDERS'
MEETING") and (ii) except if the Board determines in good faith an alternative
action to be necessary in accordance with its fiduciary duties to the Company's
stockholders under applicable law as advised by outside legal counsel,
(A) include in the Proxy Statement the unanimous recommendation of the Board
that the holders of the Shares approve and adopt this Agreement and the
Transactions and (B) use its reasonable efforts to obtain such approval and
adoption of the holders of Shares. At the Stockholders' Meeting, Parent and
Purchaser shall cause all Shares then owned by them and their subsidiaries to be
voted in favor of the approval and adoption of this Agreement and the
transactions contemplated hereby.
(b) Notwithstanding the foregoing, in the event that Purchaser shall
acquire at least 90 percent of the then outstanding Shares, the parties hereto
agree, at the request of Purchaser, subject to Article VII, to take all
necessary and appropriate action to cause the Merger to become effective, in
accordance with Section 253 of Delaware Law, as soon as reasonably practicable
after such acquisition, without a meeting of the stockholders of the Company.
SECTION 6.02. PROXY STATEMENT. If required by applicable law, as
soon as reasonably practicable following consummation of the Offer, the Company
shall file the Proxy Statement with the SEC under the Exchange Act, and shall
use its reasonable efforts to have the Proxy Statement cleared by the SEC.
Parent, Purchaser and the Company shall cooperate with each other in the
preparation of the Proxy Statement, and the Company shall notify Parent of the
receipt of any comments of the SEC with respect to the Proxy Statement and of
any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide to Parent promptly copies of all
correspondence between the Company or any representative of the Company and the
SEC. The Company shall give Parent and its counsel the reasonable opportunity
to review the Proxy Statement prior to its being filed with the SEC and shall
give Parent and its counsel the opportunity to review all amendments and
supplements to the Proxy Statement and all responses to requests for additional
information and replies to comments prior to their being filed with, or sent to,
the SEC. Each of the Company, Parent and Purchaser agrees to use its reasonable
efforts, after consultation with the other parties hereto, to respond promptly
to all such comments of and
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requests by the SEC and to cause the Proxy Statement and all required amendments
and supplements thereto to be mailed to the holders of Shares entitled to vote
at the Stockholders' Meeting at the earliest practicable time.
SECTION 6.03. COMPANY BOARD REPRESENTATION; SECTION 14(F). (a)
Promptly upon the purchase by Purchaser of Shares pursuant to the Offer, and
from time to time thereafter, Purchaser shall be entitled to designate up to
such number of directors, rounded up to the next whole number, on the Board as
shall give Purchaser representation on the Board equal to the product of the
total number of directors on the Board (giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Purchaser or any affiliate of Purchaser
following such purchase bears to the total number of Shares then outstanding,
and the Company shall, at such time, promptly take all actions necessary to
cause Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Board or securing the resignations of incumbent
directors or both. At such times, the Company shall, upon the written request
of Purchaser, use its reasonable efforts to cause persons designated by
Purchaser to constitute the same percentage as persons designated by Purchaser
shall constitute of the Board of (i) each committee of the Board, (ii) each
board of directors of each domestic Dialysis Subsidiary and (iii) each committee
of each such board, in each case only to the extent permitted by applicable law.
Notwithstanding the foregoing, until the earlier of (i) the time Purchaser
acquires a majority of the then outstanding Shares on a fully diluted basis and
(ii) the Effective Time, the Company shall use its reasonable efforts to ensure
that all the members of the Board and each committee of the Board and such
boards and committees of the domestic Dialysis Subsidiaries as of the date
hereof who are not employees of the Company shall remain members of the Board
and of such boards and committees, except for the members not standing for
re-election at the Company's 1997 annual meeting of stockholders.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 6.03 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Parent or Purchaser shall supply to the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election of designees of Purchaser pursuant to this
Section 6.03, prior to the Effective Time, any amendment of this Agreement or
the Certificate of Incorporation or By-laws of the Company, any termination of
this Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Purchaser or
waiver of any of the Company's rights
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hereunder shall require the concurrence of a majority of the directors of the
Company then in office who neither were designated by Purchaser nor are
employees of the Company.
SECTION 6.04. ACCESS TO INFORMATION; CONFIDENTIALITY. (a) From the
date hereof to the Effective Time, upon reasonable notice, the Company shall,
and shall cause the Dialysis Subsidiaries and the officers, directors,
employees, auditors and agents of the Company and the Dialysis Subsidiaries to,
afford the officers, employees and agents of Parent and Purchaser complete
access during normal business hours to the officers, employees, agents,
properties, offices, plants and other facilities, books and records of the
Company and each Dialysis Subsidiary, and shall furnish Parent and Purchaser
with all financial, operating and other data and information as Parent or
Purchaser, through its officers, employees or agents, may reasonably request.
Parent and Purchaser shall make all reasonable efforts to minimize any
disruption to the Dialysis Business which may result from the requests for data
and information hereunder.
(b) All information obtained by Parent or Purchaser pursuant to this
Section 6.04 shall be kept confidential in accordance with the confidentiality
agreement, dated October 7, 1996 (the "CONFIDENTIALITY AGREEMENT"), between
Parent and the Company.
(c) No investigation pursuant to this Section 6.04 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
SECTION 6.05. NO SOLICITATION. (a) The Company shall, and shall
direct and use all reasonable efforts to cause its officers, directors,
employees, representatives and agents to immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to any
"acquisition proposal" (as defined below in this Section 6.05(a)). Except with
respect to the Specialty Merger Transaction, the Company shall not, nor shall it
permit any of its subsidiaries to, nor shall it authorize or permit any officer,
director or employee of, or any investment banker, accountant, attorney or other
advisor or representative of, the Company or any of its subsidiaries to,
directly or indirectly, (i) solicit or initiate, or knowingly encourage the
submission of, any acquisition proposal or (ii) participate in any discussions
or negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate the making of any proposal that
constitutes, or may reasonably be expected to lead to, an acquisition proposal;
PROVIDED, HOWEVER, that if and to the extent, prior to the acceptance for
payment of Shares pursuant to the Offer, the Board determines in good faith that
it is necessary to do so in accordance with its fiduciary duties to the
Company's stockholders under applicable law as advised by outside legal counsel,
the Company may, in response to an unsolicited acquisition proposal, and subject
to compliance with Section 6.05(c), (x) furnish information with respect to the
Company to any persons pursuant to a customary confidentiality agreement on
terms no less favorable to the Company than those contained in the
Confidentiality Agreement and (y)
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participate in negotiations regarding such acquisition proposal. For purposes
of this Agreement, "ACQUISITION PROPOSAL" means any bona fide proposal or offer
from any person relating to any direct or indirect acquisition or purchase of
all or a substantial part of the assets of the Company or any of the Dialysis
Subsidiaries or of over 20% of any class of equity securities of the Company or
any of the Dialysis Subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 20% or more of any
class of equity securities of the Company or any of the Dialysis Subsidiaries,
any merger, consolidation, business combination, sale of all or substantially
all of the assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of the Dialysis Subsidiaries, other
than the Transactions, or any other transaction the consummation of which would
reasonably be expected to impede, interfere with, prevent or materially delay
the Offer or the Merger or which would reasonably be expected to dilute
materially the benefits to Parent of the Offer or Merger.
(b) Except as set forth in this Section 6.05, neither the Board nor
any committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent, the approval or recommendation by the
Board or any such committee of the Offer, this Agreement or the Merger, (ii)
approve or recommend, or propose to approve or recommend, any acquisition
proposal or (iii) enter into any agreement with respect to any acquisition
proposal. Notwithstanding the foregoing, in the event prior to the time of
acceptance for payment of Shares pursuant to the Offer the Board determines in
good faith that it is necessary to do so in accordance with its fiduciary duties
to the Company's stockholders under applicable law as advised by outside legal
counsel, the Board may withdraw or modify its approval or recommendation of the
Offer, the Merger or this Agreement in order to enter into a definitive
agreement with respect to a Superior Proposal (as defined below) and may
terminate this Agreement pursuant to Section 8.01(d)(ii) (and concurrently with
or after such termination may cause the Company to enter into any agreement with
respect to any Superior Proposal). For purposes of this Agreement, a "SUPERIOR
PROPOSAL" means any bona fide proposal made by a third party to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
more than 50% of the combined voting power of the Shares then outstanding or all
or substantially all the assets of the Company and otherwise on terms which the
Board determines in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation) to be more favorable to the
Company's stockholders than the Offer and the Merger and for which financing, to
the extent required, is then committed.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.05, the Company shall promptly advise
Parent orally and in writing of any request for information or of any
acquisition proposal, the material terms and conditions of such request or
acquisition proposal and the identity of the person making such request or
acquisition proposal.
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(d) Nothing contained in this Section 6.05 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure
to the Company's stockholders if the Board determines in good faith that it is
necessary to do so in accordance with its fiduciary duties to the Company's
stockholders under applicable law as advised by outside legal counsel, PROVIDED,
HOWEVER, neither the Company nor the Board nor any committee thereof shall,
except as permitted by Section 6.05(b), withdraw or modify, or propose publicly
to withdraw or modify, its position with respect to the Offer, this Agreement or
the Merger or to approve or recommend, or propose publicly to approve or
recommend, an acquisition proposal.
(e) The Company agrees not to release any third party from, or waive
any provision of, any confidentiality or standstill agreement to which the
Company is a party.
SECTION 6.06. EMPLOYEE STOCK OPTIONS AND OTHER EMPLOYEE BENEFITS.
(a) Immediately prior to the Effective Time, the Company shall take all such
actions as shall be necessary to cause all stock options (and any related
alternative rights) to purchase shares of Company Common Stock (the "EMPLOYEE
STOCK OPTIONS") granted under the Company Stock Option Plans (including those
granted to current or former employees, consultants and directors of the Company
or any of its Subsidiaries), which Employee Stock Options are outstanding
immediately prior to the Effective Time (whether or not then presently
exercisable or vested), to be cancelled. In exchange for the cancellation of
such Employee Stock Option, the holder thereof shall be entitled to receive from
the Surviving Corporation an amount in cash equal to the product of the
difference between the Per Share Amount and the per share exercise price of such
Employee Stock Option, and the number of shares of Company Common Stock covered
by such Employee Stock Option. All payments in respect of Employee Stock
Options shall be made after the Effective Time and not later than thirty days
following the Effective Time, subject to the Company's collection of all
applicable withholding taxes. The Company Stock Option Plans shall terminate as
of the Effective Time and thereafter the only rights of participants therein
shall be the right to receive the consideration set forth in the previous
sentence. Prior to the Effective Time, the Company shall cause each holder of
an outstanding Employee Stock Option to consent to the cancellation of the
Employee Stock Options held by such holder in consideration for the payment
provided herein, and shall take such other action as may be necessary to carry
out the terms of this Section 6.06(a).
(b) Section 6.06(b) of the Disclosure Schedule contains a list of
each employee of the Company or any Dialysis Subsidiary who has a written
employment agreement that provides for the payment of severance or similar-type
payments or benefits to such employee following such employee's termination of
employment with the Company and its Dialysis Subsidiaries (the "EMPLOYMENT
CONTRACTS").
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(c) Following the Effective Time the Company will maintain for
eligible participants other than employees who will be employed by Specialty
Partners after the date of the Specialty Merger Transaction a retention bonus
and deferred compensation arrangement substantially in the form of Annex B to
this Agreement.
SECTION 6.07. SPECIALTY MERGER AGREEMENT. The Company shall use
reasonable commercial efforts to perform its obligations under the Specialty
Merger Agreement and to consummate the Specialty Merger Transaction on the terms
and conditions set forth in the Specialty Merger Agreement. The Company will
not amend or modify any material provision of, or waive any of its rights under
the Specialty Merger Agreement.
SECTION 6.08. DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) The Certificate of Incorporation of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in Article Eight of the Certificate of Incorporation of the Company, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would affect adversely the
rights thereunder of individuals who at the Effective Time were directors,
officers, employees, fiduciaries or agents of the Company, unless such
modification shall be required by law. To the extent that the obligations under
such provisions are not fully performed by the Surviving Corporation, Parent
agrees to perform fully the obligations thereunder for the remaining period.
(b) Parent or the Surviving Corporation shall use its best efforts to
maintain in effect for a period of not less than six years from the Effective
Time the current directors' and officers' liability insurance policies
maintained by the Company (provided that Parent or the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions which are not materially less favorable to such directors and
officers) with respect to matters occurring prior to the Effective Time;
PROVIDED, HOWEVER, that if the existing policies expire, are terminated or
cancelled during such period, Parent or Surviving Corporation will use its best
efforts to obtain substantially similar policies. Notwithstanding the
foregoing, in no event shall Parent or the Surviving Corporation be required to
expend pursuant to this Section 6.08(b) more than an amount per year equal to
150% of current annual premiums (the "CURRENT PREMIUMS") paid by the Company for
such insurance (which premiums the Company represents and warrants to be
$180,000 in the aggregate); and, PROVIDED, FURTHER, that if the Parent or the
Surviving Corporation is not able to obtain the amount of insurance required by
this Section 6.08(b) for such aggregate premium, Parent or the Surviving
Corporation shall obtain as much insurance as can be obtained for an annual
premium of 150% of the Current Premiums.
(c) In the event the Company, the Surviving Corporation or the Parent
or any of their respective successors or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or surviving corporation
or entity of such
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consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Company, the
Surviving Corporation or the Parent, as the case may be, shall assume the
obligations set forth in this Section 6.08.
SECTION 6.09. RIGHTS PLAN. The Company shall not redeem the Company
Rights prior to the Effective Time unless required to do so by order of a court
of competent jurisdiction. The Board shall take, or cause to be taken, such
action as is necessary to effect the amendments to the Rights Plan as approved
by the Board and described in Section 3.18.
SECTION 6.10. CONDUCT OF SPECIALTY BUSINESS. From the date hereof
until the earlier of the consummation of the Specialty Merger Transaction and
the termination of this Agreement pursuant to Section 8.01, the Company shall
operate Specialty Partners, the Specialty Subsidiaries, and the Specialty
Business consistent with Section 2 of the Services Agreement dated as of the
date hereof between the Company and Specialty Partners and the Company and the
Dialysis Subsidiaries shall not make any contribution, payment or other transfer
to Specialty Partners or any Specialty Subsidiary of cash, cash equivalents,
marketable securities or any other asset, and Specialty Partners and the
Specialty Subsidiaries shall not make any contribution, payment or other
transfer to the Company or any Dialysis Subsidiary of cash, cash equivalents,
marketable securities or any other asset.
SECTION 6.11. NOTIFICATION OF CERTAIN MATTERS. The Company shall
give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which would cause any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material respect when made
and (ii) any material failure of the Company, Parent or Purchaser, as the case
may be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; PROVIDED, HOWEVER, that the delivery
of any notice pursuant to this Section 6.11 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
SECTION 6.12. FURTHER ACTION; REASONABLE EFFORTS. (a) Upon the terms
and subject to the conditions hereof, each of the parties hereto shall (i) make
promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act with respect to the Transactions and (ii) use its
reasonable efforts to take, or cause to be taken, all appropriate action, and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
Transactions, including, without limitation, using its reasonable efforts to
obtain all licenses, permits (including, without limitation, Environmental
Permits), consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with the Company and the
Subsidiaries as are necessary for the consummation of the Transactions and to
fulfill the conditions to the Offer and the Merger. In case at any time
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after the Effective Time any further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers and directors of each
party to this Agreement shall use their reasonable efforts to take all such
action.
(b) Each of the parties hereto agree to cooperate and use their
reasonable efforts vigorously to contest and resist any action, including
administrative or judicial action, and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order (whether temporary,
preliminary or permanent) (an "ORDER") that is in effect and that restricts,
prevents or prohibits the consummation of the Offer, the Merger or any other
Transactions, including, without limitation, by vigorously pursuing all
available avenues of administrative and judicial appeal.
SECTION 6.13. PUBLIC ANNOUNCEMENTS. Unless otherwise required by
applicable law or stock exchange requirements applicable to any party hereto,
Parent and the Company shall consult with each other before issuing any press
release or otherwise making any public statements with respect to this Agreement
or any Transaction and shall not issue any such press release or make any such
public statement prior to such consultation.
SECTION 6.14. CONFIDENTIALITY AGREEMENT. The Company hereby waives
the provisions of the Confidentiality Agreement as and to the extent necessary
to permit the consummation of each Transaction. Upon the acceptance for payment
of Shares pursuant to the Offer, the Confidentiality Agreement shall be deemed
to have terminated without further action by the parties thereto.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. CONDITIONS TO THE MERGER. The respective obligations
of each party to effect the Merger shall be subject to the satisfaction at or
prior to the Effective Time of the following conditions:
(a) STOCKHOLDER APPROVAL. This Agreement, the Merger and the
transactions contemplated hereby shall have been approved and adopted by
the affirmative vote of the stockholders of the Company to the extent
required by Delaware Law and the Certificate of Incorporation of the
Company;
(b) HSR ACT. Any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated;
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(c) NO ORDER. No foreign, United States or state governmental
authority or other agency or commission or foreign, United States or state
court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent)
which is then in effect and has the effect of making the acquisition of
Shares by Parent or Purchaser or any affiliate of either of them illegal or
otherwise restricting, preventing or prohibiting consummation of the Offer
or Merger; and
(d) OFFER. Purchaser or its permitted assignee shall have
purchased all Shares validly tendered and not withdrawn pursuant to the
Offer; PROVIDED, HOWEVER, that this condition shall not be applicable to
the obligations of Parent or Purchaser if, in breach of this Agreement or
the terms of the Offer, Purchaser fails to purchase any Shares validly
tendered and not withdrawn pursuant to the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. TERMINATION. This Agreement may be terminated and the
Merger and the other Transactions may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the transactions contemplated hereby by the stockholders of the
Company:
(a) By mutual written consent of Parent, Purchaser and the
Company duly authorized by the Boards of Directors of Parent, Purchaser and
the Company; or
(b) By either Parent, Purchaser or the Company if (i) the
Effective Time shall not have occurred on or before July 31, 1997;
PROVIDED, HOWEVER, that if the waiting period under the HSR Act shall not
have expired or been terminated as of such date or any Governmental
Authority shall have caused to be issued as of such date a temporary
restraining order or a preliminary injunction prohibiting the consummation
of the Offer or the Merger and each of the parties hereto, in either case,
are seeking the termination of such waiting period or contesting such
temporary restraining order or preliminary injunction, as the case may be,
such date shall be extended to the earlier of the date of expiration or
termination of such waiting period or the lifting of such injunction or
order or October 31, 1997; PROVIDED, FURTHER, HOWEVER, that the right to
terminate this Agreement under this Section 8.01(b) shall not be available
(A) to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the
Effective Time to
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occur on or before such date or (B) after Purchaser shall have purchased
the Shares pursuant to the Offer, or (ii) any court of competent
jurisdiction in the United States or the Kingdom of Sweden or other
governmental authority in the United States or the Kingdom of Sweden shall
have issued an order, decree, ruling or taken any other action restraining,
enjoining or otherwise prohibiting the Merger and such order, decree,
ruling or other action shall have become final and nonappealable; or
(c) By Parent if due to an occurrence or circumstance, other
than a breach by Parent or Purchaser of their obligations hereunder, that
would result in a failure to satisfy any condition set forth in Annex A
hereto (which failure cannot be cured or, if capable of being cured, has
not been cured in all material respects within 30 days after notice to the
Company of such occurrence or circumstance), Purchaser shall have
terminated the Offer without having accepted any Shares for payment
thereunder; or
(d) By the Company, upon approval of the Board, if (i) due to an
occurrence or circumstance that would result in a failure to satisfy any of
the conditions set forth in Annex A hereto, Purchaser shall have terminated
the Offer without having accepted any Shares for payment thereunder or
(ii) prior to the purchase of Shares pursuant to the Offer, in order to
enter into a definitive agreement with respect to a Superior Proposal, upon
three days' prior written notice to Parent setting forth, in reasonable
detail, the identity of the person making the Superior Proposal and the
final terms and conditions of such Superior Proposal, if the Board
determines, after giving effect to any concessions that may be offered by
Parent, in good faith that it is necessary to do so in accordance with its
fiduciary duties to the Company's stockholders under applicable law as
advised by outside legal counsel; PROVIDED, HOWEVER, that any termination
of this Agreement pursuant to this Section 8.01(d)(ii) shall not be
effective until the Company has made full payment of all amounts provided
under Section 8.03, or (iii) if Parent or Purchaser shall have failed to
commence the Offer within five business days following the date of the
initial public announcement of the Offer other than as a result of an
occurrence or circumstance that would result in a failure to satisfy any of
the conditions set forth in Annex A hereto, or (iv) if Parent or Purchaser
shall have breached any of their respective representations, warranties,
covenants or other agreements contained herein in a manner that materially
adversely affects Parent's ability to consummate the Offer and the Merger
and which cannot be cured or, if capable of being cured, has not been cured
in all material respects within 30 days after notice to Parent of such
occurrence or circumstance.
SECTION 8.02. EFFECT OF TERMINATION. In the event of the termination
of this Agreement pursuant to Section 8.01, this Agreement shall forthwith
become void, and there shall be no liability on the part of any party hereto,
except (i) as set forth in
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Sections 8.03 and 9.01 and (ii) nothing herein shall relieve any party from
liability for any breach hereof.
SECTION 8.03. FEES AND EXPENSES. (a) In the event that
(i) this Agreement is terminated pursuant to
Section 8.01(d)(ii); or
(ii) (x) an acquisition proposal is commenced, publicly
proposed, publicly disclosed or communicated to the Company or any
representative or agent thereof after the date of this Agreement and prior
to the date of termination of this Agreement, (y) this Agreement is
thereafter terminated pursuant to Section 8.01(b), 8.01(c) or 8.01(d)(i),
and (z) within 12 months following such termination, an acquisition
proposal is consummated or the Company enters into an agreement relating
thereto;
then, in any such event, the Company shall pay Parent promptly (but in no event
later than one business day after the first of such events shall have occurred)
a fee of $50,000,000 (the "FEE"), which amount shall be payable in immediately
available funds, plus all Expenses (as hereinafter defined); PROVIDED, HOWEVER,
that no Fee shall be payable under Section 8.03(ii) if, at the time of
termination under Section 8.01, Parent or Purchaser is in material breach of
their respective material covenants and agreements contained in this Agreement
or their respective representations and warranties contained herein.
(b) If this Agreement is terminated for any reason whatsoever and
neither Parent nor Purchaser is in material breach of their respective material
covenants and agreements contained in this Agreement or their respective
representations and warranties contained in this Agreement, the Company shall,
whether or not any payment is made pursuant to Section 8.03(a), reimburse each
of Parent, Purchaser and their respective stockholders and affiliates (not later
than one business day after submission of statements therefor) for all actual
and documented out-of-pocket expenses and fees up to $4,000,000 in the aggregate
(including, without limitation, fees and expenses payable to all banks,
investment banking firms, other financial institutions and other persons and
their respective agents and counsel, for arranging, committing to provide or
providing any financing for the Transactions or structuring the Transactions and
all fees of counsel, accountants, experts and consultants to Parent, Purchaser
and their respective stockholders and affiliates, and all printing and
advertising expenses) actually incurred or accrued by either of them or on their
behalf in connection with the Transactions, including, without limitation, the
financing thereof, and actually incurred or accrued by banks, investment banking
firms, other financial institutions and other persons and assumed by Parent,
Purchaser or their respective stockholders or affiliates in connection with the
negotiation, preparation, execution and performance of this Agreement, the
structuring and financing of the Transactions and any
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financing commitments or agreements relating thereto (all of the foregoing being
referred to herein collectively as the "EXPENSES").
(c) Except as set forth in this Section 8.03, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, whether or not any Transaction is
consummated.
(d) In the event that the Company shall fail to pay the Fee or any
Expenses when due, the term "Expenses" shall be deemed to include the costs and
expenses actually incurred or accrued by Parent, Purchaser and their respective
stockholders and affiliates (including, without limitation, fees and expenses of
counsel) in connection with the collection under and enforcement of this
Section 8.03, together with interest on such unpaid Fee and Expenses, commencing
on the date that the Fee or such Expenses became due, at a rate equal to the
rate of interest publicly announced by Citibank, N.A., from time to time, in The
City of New York, as such bank's Prime Rate plus 2.00%.
SECTION 8.04. AMENDMENT. Subject to Section 6.03 and applicable law,
this Agreement may be amended by the parties hereto by action taken by or on
behalf of their respective Boards of Directors at any time prior to the
Effective Time; PROVIDED, HOWEVER, that, after the approval and adoption of this
Agreement and the transactions contemplated hereby by the stockholders of the
Company, no amendment may be made which would reduce the amount or change the
type of consideration into which each Share shall be converted upon consummation
of the Merger. This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.
SECTION 8.05. WAIVER. At any time prior to the Effective Time, any
party hereto may (i) extend the time for the performance of any obligation or
other act of any other party hereto, (ii) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any agreement or condition
contained herein. Any such extension or waiver shall be valid if set forth in
an instrument in writing signed by the party or parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.01, as the case may be, except that the agreements set
forth in Articles II and IX
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and Sections 6.06 and 6.08 shall survive the Effective Time indefinitely and
those set forth in Sections 6.04 and 8.03 shall survive termination
indefinitely.
SECTION 9.02. NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) or nationally recognized courier services such as
Federal Express, to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 9.02):
if to Parent or Purchaser:
Incentive AB
Hamngatan 2
P.O. Box 7373
SE-103 91
Stockholm, Sweden
Telecopier: 011-46-86-11-8161
Attention: Mikael Lilius
and
HH Acquisition Corp.
1185 Oak Street
Lakewood, Colorado 80215
Telecopier: (303) 231-4914
Attention: Mats L. Wahlstr m
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telecopier: (212) 848-7179
Attention: Peter D. Lyons, Esq.
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if to the Company:
Vivra Incorporated
1850 Gateway Drive
Suite 500
San Mateo, California 94404
Telecopier: (415) 345-0486
Attention: Kent J. Thiry
with a copy to:
Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, California 94303
Telecopier: (415) 496-2777
Attention: John W. Larson, Esq.
SECTION 9.03. CERTAIN DEFINITIONS. For purposes of this Agreement,
the term:
(a) "AFFILIATE" of a specified person means a person who
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such specified person;
(b) "BENEFICIAL OWNER" with respect to any Shares means a person
who shall be deemed to be the beneficial owner of such Shares (i) which
such person or any of its affiliates or associates (as such term is defined
in Rule 12b-2 promulgated under the Exchange Act) beneficially owns,
directly or indirectly, (ii) which such person or any of its affiliates or
associates has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding or upon the
exercise of consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement, arrangement
or understanding or (iii) which are beneficially owned, directly or
indirectly, by any other persons with whom such person or any of its
affiliates or associates or person with whom such person or any of its
affiliates or associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any Shares;
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(c) "BUSINESS DAY" means any day on which the principal offices
of the SEC in Washington, D.C. are open to accept filings, or, in the case
of determining a date when any payment is due, any day on which banks are
not required or authorized to close in The City of New York;
(d) "CONTROL" (including the terms "CONTROLLED BY" and "UNDER
COMMON CONTROL WITH") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(e) "KNOWLEDGE OF THE COMPANY" means the actual knowledge of the
executive officers of the Company, without having made any independent
investigation in connection with the execution of this Agreement;
(f) "PERSON" means an individual, corporation, partnership,
limited partnership, syndicate, person (including, without limitation, a
"person" as defined in Section 13(d)(3) of the Exchange Act), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government; and
(g) "SUBSIDIARY" or "SUBSIDIARIES" of the Company, the Surviving
Corporation, Parent or any other person means an affiliate controlled by
such person, directly or indirectly, through one or more intermediaries.
SECTION 9.04. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 9.05. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes, except as set forth in Sections 6.04 and 6.14, all
prior agreements and undertakings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof. This Agreement shall
not be assigned by operation of law or otherwise, except that Parent and
Purchaser may assign all or any of their rights and obligations hereunder to any
affiliate of Parent provided that no such assignment shall relieve the assigning
party of its obligations hereunder if such assignee does not perform such
40
<PAGE>
obligations. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
SECTION 9.06. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, other than Section 6.06 (which is intended to be for the
benefit of the persons covered thereby and may be enforced by such persons).
SECTION 9.07. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 9.08. GOVERNING LAW. Except to the extent that the laws of
Delaware are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed in that State. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined in any Delaware state or federal court.
SECTION 9.09. HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.10. COUNTERPARTS. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
41
<PAGE>
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
INCENTIVE AB
By /s/ Mikael Lilius
-----------------------------------
Name: Mikael Lilius
Title: President and
Chief Executive Officer
By /s/ Soren Mellstig
-----------------------------------
Name: Soren Mellstig
Title: Executive Vice President,
Corporate Control
HH ACQUISITION CORP.
By /s/ Mats L. Wahlstrom
-----------------------------------
Name: Mats L. Wahlstrom
Title: President
VIVRA INCORPORATED
By /s/ Kent J. Thiry
-----------------------------------
Name: Kent J. Thiry
Title: President and
Chief Executive Officer
<PAGE>
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall not
be required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer (subject to the provisions of the
Merger Agreement) and may postpone the acceptance for payment of (subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act) and payment for Shares tendered, if (i) the Minimum Condition
shall not have been satisfied, (ii) any applicable waiting period under the HSR
Act shall not have expired or been terminated prior to the expiration of the
Offer, (iii) prior to the expiration or termination of the Offer, the Company
shall not have consummated the Specialty Merger Transaction and received
aggregate cash proceeds therefor after providing for all applicable income taxes
(using an assumed income tax rate of 41%) of not less than $76,900,000, or
(iv) at any time on or after the date of this Agreement, and prior to the
acceptance for payment of Shares, any of the following conditions shall exist:
(a) there shall have been instituted by any government or
governmental, administrative or regulatory authority or agency, domestic or
foreign, any action or proceeding before any court or any governmental,
administrative or regulatory authority or agency, domestic or foreign
(including such authority or agency instituting or initiating such action
or proceeding), (i) challenging or seeking to make illegal, materially
delay or otherwise directly or indirectly restrain or prohibit the making
of the Offer, the acceptance for payment of, or payment for, any Shares by
Parent, Purchaser or any other affiliate of Parent, or the consummation of
any other Transaction, or seeking to obtain material damages in connection
with any Transaction; (ii) seeking to prohibit or limit materially the
ownership or operation by the Company, Parent or any of their subsidiaries
of all or any material portion of the business or assets of the Company,
Parent or any of their subsidiaries, or to compel the Company, Parent or
any of their subsidiaries to dispose of or to hold separate all or any
material portion of the business or assets of the Company, Parent or any of
their subsidiaries, as a result of the Transactions; (iii) seeking to
impose or confirm limitations on the ability of Parent, Purchaser or any
other affiliate of Parent to exercise effectively full rights of ownership
of any Shares, including, without limitation, the right to vote any Shares
acquired by Purchaser pursuant to the Offer or otherwise on all matters
properly presented to the Company's stockholders, including, without
limitation, the approval and adoption of this Agreement and the
transactions contemplated hereby; (iv) seeking to require divestiture by
Parent, Purchaser or any
<PAGE>
other affiliate of Parent of any Shares; or (v) which otherwise has a
Material Adverse Effect;
(b) there shall have been any action taken, or any statute,
rule, regulation, legislation, interpretation, judgment, order or
injunction enacted, entered, enforced, promulgated, amended, issued or
deemed applicable to (i) Parent, the Company or any subsidiary or affiliate
of Parent or the Company or (ii) any Transaction, by any legislative body,
court, government or governmental, administrative or regulatory authority
or agency, domestic or foreign, other than the routine application of the
waiting period provisions of the HSR Act to the Offer or the Merger, which
is reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
(c) there shall have occurred any change, condition, event or
development that has a Material Adverse Effect;
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange (excluding any coordinated trading halt triggered solely as a
result of a specified decrease in a market index), (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States or Sweden, (iii) any limitation (whether or not mandatory) by
any government or governmental, administrative or regulatory authority or
agency of the United States or Sweden on the extension of credit by banks
or other lending institutions such that Parent is not reasonably able to
obtain financing for the Offer on reasonable terms or (iv) a commencement
of a war or material armed hostilities or other national or international
calamity involving the United States or Sweden;
(e) (i) it shall have been publicly disclosed or Purchaser shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the then outstanding Shares has been
acquired by any person, other than Parent or any of its affiliates or any
other person not required to file a Schedule 13D under the rules
promulgated under the Exchange Act or (ii) (A) the Board or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent or
Purchaser the approval or recommendation of the Offer, the Merger or the
Agreement, or approved or recommended any acquisition proposal or any other
acquisition of Shares other than the Offer or the Merger or (B) the Board
or any committee thereof shall have resolved to do any of the foregoing;
(f) (i) any representation or warranty of the Company which
addresses matters as of a particular date shall not be true and correct as
of such date,
A-2
<PAGE>
or (ii) any other representation or warranty shall not be true, as of the
date of this Agreement and as of the expiration of the Offer, unless the
inaccuracies under all such representations and warranties together in
their entirety, would not, individually or in the aggregate, have a
Material Adverse Effect;
(g) the Company shall have failed to perform any obligation or
to comply with any agreement or covenant of the Company to be performed or
complied with by it under the Agreement unless all such failures together
in their entirety, would not, individually or in the aggregate, have a
Material Adverse Effect;
(h) the Agreement shall have been terminated in accordance with
its terms; or
(i) Purchaser and the Company shall have agreed that Purchaser
shall terminate the Offer or postpone the acceptance for payment of or
payment for Shares thereunder.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Purchaser or
Parent in whole or in part at any time and from time to time in their sole
discretion, subject in each case to the terms of the Agreement. The failure by
Parent or Purchaser at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right; the waiver of any such right with
respect to particular facts and other circumstances shall not be deemed a waiver
with respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
A-3
<PAGE>
ANNEX B
RETENTION AND DEFERRED COMPENSATION ARRANGEMENT
Purpose: To provide certain executives and key employees of the
Company an incentive to stay in the employ of the Company
following the Merger. The arrangement provides for the
payment of stay bonuses and deferred compensation to Tier 1
Participants and stay bonuses to Tier 2 Participants.
Participants: TIER 1 PARTICIPANTS: The president, regional vice
presidents and other designated key employees.
TIER 2 PARTICIPANTS: All participants other than Tier 1
Participants.
Stay Bonuses
to Tier 1
Participants: On each Payment Date, each Tier 1 Participant will receive a
cash lump sum payment equal to the percentage specified
below of the Tier 1 Participant's Maximum Target Bonus,
provided the participant is employed by the Company on such
date.
PAYMENT DATE PERCENTAGE OF MAXIMUM TARGET BONUS
One Month after
Closing 20%
First Anniversary
of Closing 40%
Second Anniversary
of Closing 40%
Stay Bonuses
to Tier 2
Participants: On each Payment Date, each Tier 2 Participant will receive a
cash lump sum payment equal to the percentage specified
below of the Tier 2 Participant's Maximum Target Bonus,
provided the participant is employed by the Company on such
date.
<PAGE>
PAYMENT DATE PERCENTAGE OF MAXIMUM TARGET BONUS
One Month after
Closing 20%
First Anniversary
of Closing 40%
Second Anniversary
of Closing 40%
Maximum Target
Bonus: The Maximum Target Bonus for each Tier 1 Participant and
Tier 2 Participant will be an amount previously disclosed in
writing to Parent and agreed to by Parent. In addition, any
amount payable under the Plan which is not allocated as of
the closing date of the Merger may thereafter be allocated
as agreed by David Barry and a designated officer of Parent.
Such amount shall not exceed $300,000.
Deferred
Compensation
for Tier 1
Participants: The Company shall establish on its books and records a
deferred compensation account for each Tier 1 Participant.
Each Tier 1 Participant shall have a one-time election to
defer some or all of the stay bonus payable to such
participant. Amounts deferred will be credited to the Tier I
Participant's deferred compensation account. Amounts
credited to the account will be credited with notional
interest at a to-be-determined rate from the date of
crediting to the time of payment.
Subject to the forfeiture provisions set forth below,
amounts held in a Tier 1 Participant's deferred compensation
account will be paid to the participant in three equal
annual installments beginning on the LATER to occur of (i)
the first day of the month following the participant's
termination of employment with the Company and (ii) the
first day of the month following the month the participant
attains age 60.
Effect of
Termination
of Employment: CAUSE. If a Tier 1 Participant or a Tier 2 Participant (a
"Participant") is terminated for cause (to be defined), the
Participant will not be eligible for any future cash
payments of
B-2
<PAGE>
stay bonus and all amounts in the deferred compensation
account, if any, will be immediately forfeited.
VOLUNTARY RESIGNATION. If a Participant voluntarily
resigns, the Participant will not be eligible for any future
cash payments of stay bonus and will not be eligible for any
future credits to the deferred compensation account. The
balance of the deferred compensation account will be paid in
the manner set forth above.
TERMINATION WITHOUT CAUSE. If a Participant's employment is
terminated by the Company without Cause, the balance of
payments of the stay bonus and the balance of credits to the
deferred compensation account will be made in the manner
contemplated above. The balance of the deferred
compensation account will be paid in the manner set forth
above.
DEATH OR DISABILITY. If a Participant's employment is
terminated due to death or disability, all payments of the
stay bonus and credits to the deferred compensation account
will be accelerated and the balance of the deferred
compensation account will be paid to the Participant or the
Participant's estate, as applicable, within 90 days.
Protective
Covenants: As a condition to the payments above, Participants will
agree as follows:
Each Participant whose Maximum Target Bonus equals or
exceeds $200,000 will agree not to compete with the Company
while employed and for the one-year period following
termination of employment, but in no event longer than
three years from the Effective Time.
All Participants will agree not to solicit the customers or
employees of the Company while employed and for the one-year
period following termination of employment.
All Participants will agree not to disclose any confidential
or proprietary information at any time.
Breach by a Participant of any of these protective covenants
will result in immediate forfeiture of any right to future
payment of stay bonus and immediate forfeiture of amounts
credited to the
B-3
<PAGE>
deferred compensation account. The Company shall also be
entitled to appropriate equitable relief to enjoin any such
breach.
Excluded
Employees: No individual who is or becomes an employee of Specialty
Partners shall be eligible to participate in the
arrangement.
Agreements: Each Participant shall sign an agreement agreeing to the
terms above.
Governing Law: New York.
B-4
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
by and between
VSP HOLDINGS, INC.,
VSP HOLDINGS II, INC.,
VSP ACQUISITION, INC.,
VIVRA SPECIALTY PARTNERS, INC.
and
VIVRA INCORPORATED
Dated as of May 5, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
-----
ARTICLE I. THE MERGER 2
1.01 The Merger 2
1.02 VHI Acquisition 2
1.03 Closing 2
1.04 Effective Time 2
1.05 Effect of the Merger 2
1.06 Certificate of Incorporation; Bylaws 2
1.07 Directors and Officers 2
1.08 Conversion of Shares 3
1.09 Stock Options 3
1.10 Dissenting Shares 3
1.11 Surrender of Common Stock and Stock Options 4
1.12 Alternative Transaction 5
1.13 Consideration 5
ARTICLE II. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
COMPANY 6
2.01 Corporate Existence 6
2.02 Corporate Power and Authority 6
2.03 Reorganization 6
2.04 Conflicts 7
2.05 Capitalization 7
2.06 Financial Statements 8
2.07 Properties 8
2.08 Subsidiaries and Partnerships 8
2.09 Contracts 9
2.10 Proprietary Rights 9
2.11 Rights to Use Assets and Property 9
2.12 Compliance With Laws 9
2.13 Litigation 9
2.14 Labor Matters 9
2.15 Absence of Certain Changes 10
2.16 Brokers' Fees 10
2.17 Books and Records 10
ARTICLE III. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
PARENT 11
3.01 Corporate Existence 11
3.02 Corporate Power and Authority 11
3.03 Conflicts 11
i
<PAGE>
PAGE
-----
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR,
ACQUIROR II AND MERGER SUB 12
4.01 Corporate Existence 12
4.02 Corporate Power and Authority 12
4.03 Conflicts 12
4.04 Capitalization 13
4.05 Litigation 13
4.06 Brokers Fees 13
4.07 Financing 13
ARTICLE V. COVENANTS OF THE COMPANY 13
5.01 Conduct of Business in Ordinary Course 13
5.02 Preservation of Business and Relationships 13
5.03 New Transactions 14
5.04 Dividends, Distributions, Acquisitions of Stock,
Issuance of Stock 14
5.05 Payment of Liabilities and Waiver of Claims 14
5.06 Material Contracts. 14
5.07 The Acquiror's and Merger Sub's Access to Premises
and Information 14
5.08 Reorganization 14
5.09 Certain Exchange Transactions 15
5.10 Conversion of Company Preferred Stock 15
5.11 Employee Benefits Matters 15
5.12 Trademark Assignment and License 15
5.13 Intercompany Transactions 16
ARTICLE VI. TAX COVENANTS 16
6.01 Definitions. 16
6.02 Tax Allocation. 17
6.03 Tax Indemnity. 17
6.04 Filing of Tax Returns. 18
6.05 Control of Audits. 18
6.06 Cooperation 19
6.07 Tax Refund 19
6.08 Effect of Payment 19
6.09 Tax Elections 19
ARTICLE VII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIROR
AND MERGER SUB 20
7.01 Representations True 20
7.02 Covenants Performed 20
7.03 No Prohibition 20
7.04 Authorizations, Consents and Approvals 20
7.05 Services Agreement 21
7.06 Non-Competition Agreement 21
7.07 Legal Opinion 21
7.08 Reorganization 21
ii
<PAGE>
PAGE
-----
7.09 Assignment of Trademark 21
7.10 Conversion of Preferred Stock 21
7.11 Material Adverse Change 21
ARTICLE VIII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY 21
8.01 Representations True 22
8.02 Covenants Performed 22
8.03 No Prohibition 22
8.04 Authorizations, Consents, and Approvals 22
8.05 Legal Opinion 22
8.06 License Agreement 22
8.07 Services Agreement 22
8.08 The Offer 22
ARTICLE IX. INDEMNIFICATION 22
9.01 Indemnification by Acquiror 22
9.02 Indemnification by Parent 23
9.03 Notice and Right to Defend Third Party Claims 23
9.04 Survival of Indemnification 24
ARTICLE X. GENERAL PROVISIONS 24
10.01 Each Party to Bear Own Costs 24
10.02 Entire Agreement; Amendment; Waivers 24
10.03 Public Announcements 24
10.04 Assignment 24
10.05 Survival 25
10.06 Termination 25
10.07 Confidentiality; Record Retention 25
10.08 Cooperation and Assignments; Further Assurances 25
10.09 Notices 25
10.10 Governing Law 26
10.11 Duplicate Originals 26
iii
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is entered
into as of this 5th day of May, 1997, by and among VSP Holdings, Inc., a
Delaware corporation (the "Acquiror"), VSP Acquisition, Inc., a Delaware
corporation and a wholly owned subsidiary of Acquiror (the "Merger Sub"), VSP
Holdings II, Inc., a Delaware corporation ("Acquiror II"), Vivra Specialty
Partners, Inc., a Nevada corporation (the "Company"), and Vivra Incorporated,
a Delaware corporation (the "Parent").
RECITALS
A. Acquiror, Merger Sub, the Company and the Parent have each determined
to engage in the transactions contemplated hereby, pursuant to which (i)
Merger Sub will merge with and into the Company (the "Merger") and (ii)
except in certain specified circumstances, (a) each share of the Company's
Class A common stock, $0.01 par value per share (the "Class A Common Stock"),
and each share of the Company's Class B common stock, $0.01 par value per
share (the "Class B Common Stock," and, together with the Class A Common
Stock, the "Common Stock") shall be converted into rights to receive cash
consideration in the manner herein described, and (b) each outstanding option
granted by the Company to purchase shares of Common Stock shall be converted
into the right to receive options to purchase shares of Acquiror's Class B
common stock, $0.01 par value per share (the "Acquiror Class B Common Stock").
B. The respective Boards of Directors of the Company and Parent have each
approved the Merger and this Agreement. The holders of a majority of the
issued and outstanding shares of Common Stock have approved the Merger and
this Agreement.
C. The respective Boards of Directors of Acquiror and Merger Sub have
each approved the Merger and this Agreement. Acquiror, as the sole
stockholder of Merger Sub, has approved the Merger and this Agreement.
D. The parties may make an election under Section 338(h)(10) of the
Internal Revenue Code of 1986, as amended (the "Code") with respect to such
transactions.
E. Reference is made to that certain Agreement and Plan of Merger (the
"Vivra Agreement"), dated as of May 5, 1997, among Incentive AB, a
corporation organized under the laws of Sweden ("Incentive"), HH Acquisition
Corp., a Delaware corporation (the "Purchaser"), and Parent, pursuant to
which Purchaser shall make a cash tender offer (the "Offer") to acquire all
of the issued and outstanding shares of common stock of Parent (the "Parent
Shares") and shall merge with and into the Parent, subject to certain terms
and conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
<PAGE>
ARTICLE I.
THE MERGER
Section 1.01 The Merger. Subject to the terms and conditions of this
Agreement, Merger Sub shall be merged with and into the Company in accordance
with the General Corporation Law of the State of Nevada ("Nevada Law") and the
General Corporation Law of the State of Delaware ("Delaware Law"), whereupon the
separate existence of Merger Sub shall cease, and the Company shall be the
surviving corporation (the "Surviving Corporation").
Section 1.02 VHI Acquisition. Subject to any adjustment to such terms
pursuant to Section 1.12, simultaneously with the consummation of the Merger,
Parent will sell and transfer to Acquiror II all of the outstanding capital
stock of Vivra Heart Imaging, Inc., a Nevada corporation ("VHI"), owned by
Parent in exchange for a payment in cash by Acquiror II to Parent of the VHI
Consideration (as defined in Section 1.13) (such transaction being hereinafter
referred to as the "VHI Acquisition" and, together with the Merger, the
"Transactions").
Section 1.03 Closing. The closing of the Transactions or the Alternative
Transaction (as hereinafter defined in Section 1.12), as the case may be (the
"Closing"), shall take place as soon as practicable on the first business day
after satisfaction or waiver of the conditions set forth herein, at the offices
of Brobeck, Phleger & Harrison LLP, Spear Street Tower, One Market, San
Francisco, California 94105, or at such other time and place as the parties
shall designate in writing (the "Closing Date").
Section 1.04 Effective Time. Concurrent with the Closing, the Company
and Merger Sub shall file this Agreement or a certificate of merger or a
certificate of ownership and merger (the "Certificate of Merger") with the
Offices of the Secretary of State of the states of Nevada and Delaware in
accordance with Nevada Law and Delaware Law, respectively. The Merger shall
become effective at such time as the Certificate of Merger is duly filed (the
date of such filing being hereinafter referred to as the "Effective Date" and
the time of such filing being hereinafter referred to as the "Effective Time").
It is the intention of the parties that this Agreement shall constitute an
agreement of merger under Section 92A.120 of Nevada Law and under Section 252 of
Delaware Law.
Section 1.05 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Nevada Law and
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and
franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities, obligations, restrictions, disabilities
and duties of the Company and Merger Sub shall become the debts, liabilities,
obligations, restrictions, disabilities and duties of the Surviving Corporation.
Section 1.06 Certificate of Incorporation; Bylaws. At the Effective
Time, the Certificate of Incorporation and Bylaws of Merger Sub, each as in
effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation and Bylaws of the Surviving Corporation until thereafter amended
as provided by Nevada Law, the Certificate of Incorporation and the Bylaws.
Section 1.07 Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation, and the officers of
Merger Sub immediately prior to the Effective Time shall be the initial officers
of the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
2
<PAGE>
Section 1.08 Conversion of Shares. Subject to any adjustment to such
terms pursuant to Section 1.12, at the Effective Time, (a) each share of Common
Stock outstanding immediately prior to the Effective Time (other than any
Dissenting Shares (as hereinafter defined) and any shares of Common Stock held
by Acquiror) shall automatically and without any action on the part of the
holder thereof, upon surrender of the certificate that formally evidenced such
Common Stock in the manner provided herein, be cancelled and shall be converted
automatically into the right to receive an amount payable in cash, without
interest, determined by dividing the Adjusted VSP Consideration (as defined
below) by the number of shares of Common Stock outstanding immediately prior to
the Effective Time other than those held by Acquiror (such amount payable per
share in the Merger being referred to herein as the "Merger Consideration"), (b)
each share of Common Stock outstanding immediately prior to the Effective Time
held by Acquiror shall be cancelled for no consideration, and (c) each share of
common stock, $0.01 par value per share, of Acquiror shall be converted into one
share of common stock of the Surviving Corporation. For the purposes of the
preceding sentence, "Adjusted VSP Consideration" shall mean the product obtained
by multiplying the VSP Consideration (as defined in Section 1.13) times the
percentage obtained by subtracting (i) the percentage of the Company's
outstanding Common Stock exchanged for Acquiror Class B Common Stock pursuant to
Section 5.09(a) (assuming, for the purpose of determining such percentage, that
all of Parent's Preferred Stock has been converted into Common Stock at the time
of such exchange) from (ii) 100 percent.
Section 1.09 Stock Options.
(a) Each stock option (and any related rights) to purchase capital
stock of any of the VSP Entities (as hereinafter defined) granted under stock
option plans of the VSP Entities outstanding prior to the consummation of the
Reorganization (as hereinafter defined) (each, a "VSP Entity Option") shall be
converted into a stock option to purchase shares of Class A Common Stock under
the Company's Stock Option Plans (the "Company Stock Option Plan") prior to the
Closing Date on the terms and conditions described in Schedule 2.05(b) pursuant
to the Reorganization (as hereinafter defined).
(b) Each stock option (and any related alternative rights) to
purchase one share of Common Stock (the "Stock Options") granted under the
Company's Stock Option Plan (including those granted to current or former
employees, consultants and directors of the Company or the VSP Entities and
including those stock options granted pursuant to Section 1.09(a) above), which
Stock Options are outstanding at the Effective Time (whether or not then
presently exercisable), other than those that will expire by their terms in
connection with or as a result of the Merger, will be converted at the Effective
Time into an option to purchase a number of shares of Acquiror Class B Common
Stock as would provide such optionholder the right to acquire substantially the
same percentage ownership of the capital stock of Acquiror immediately following
the Effective Time as such optionholders would have been entitled to acquire in
the Company immediately prior to the Effective Time at a price per share equal
to (i) the aggregate exercise price for the shares of Common Stock subject to
such Stock Option divided by (ii) the number of full shares of Acquiror Class B
Common Stock deemed purchasable pursuant to each such Stock Option issued
pursuant to this Section 1.08 (the "Option Consideration"). The Company Stock
Option Plan shall terminate as of the Effective Time and thereafter the only
rights of participants therein shall be the right to receive the consideration
set forth in this Section 1.09. Prior to the Effective Time, the Company shall
use its reasonable efforts to cause each holder of outstanding Stock Options to
consent to the conversion of the Stock Options held by such holder in
consideration for the Option Consideration, and shall take such other action as
may be necessary to carry out the terms of this Section 1.09.
Section 1.10 Dissenting Shares. Notwithstanding any provision in this
Agreement to the contrary, to the extent that appraisal rights are available
under Nevada Law, Common Stock outstanding
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immediately prior to the Effective Time and held by a holder who has not
consented thereto in writing and who has demanded appraisal for such Common
Stock in accordance with such law shall not be converted into or represent
the right to receive the Merger Consideration, but shall be entitled to
receive such consideration as shall be determined pursuant to Section
92A.300, et. seq. of the Nevada Law, provided, however, that, if such holder
shall have failed to perfect or shall have effectively withdrawn or lost his
or her right to appraisal and payment under the Nevada Law, such holder's
shares of Common Stock shall thereupon be deemed to have been converted into
and to have become exchangeable for, as of the Effective Time, the right to
receive the Merger Consideration, without any interest thereon, in accordance
with Section 1.08, and such shares shall no longer be Dissenting Shares (the
"Dissenting Shares"). The Company shall give Acquiror prompt notice of any
demands received by the Company for appraisal of Common Stock, and Acquiror
shall have the right to participate in all negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior
written consent of Acquiror, make any payment with respect to, or settle or
offer to settle, any such demands.
Section 1.11 Surrender of Common Stock and Stock Options.
(a) At the Closing, each Company stockholder of record shall
deliver to Merger Sub a stock certificate ("Certificate") which, immediately
prior to the Effective Time, represents all of such holders's shares of
Common Stock, for conversion and exchange into the Merger Consideration
pursuant to this Section 1.11. At the Closing, Merger Sub shall deliver to
each such stockholder who delivered his Certificate in exchange therefor an
amount equal to the product of the Merger Consideration multiplied by the
number of shares of Common Stock so surrendered by the holder thereof. Each
share of Common Stock so converted shall, by virtue of the Merger and without
any action on the part of the holders thereof, cease to be outstanding, be
cancelled and retired and cease to exist. In the event of a transfer of
ownership of Common Stock which is not registered in the transfer records of
the Company, the Merger Consideration may be delivered to a transferee if the
Certificate representing such Common Stock is presented to the Acquiror and
accompanied by all documents required to evidence and effect such transfer
and to evidence that any applicable stock transfer taxes have been paid.
Until surrendered as contemplated by this Section 1.11, each holder of a
Certificate shall thereafter cease to possess any rights with respect to such
Common Stock, except the right to receive upon such surrender the Merger
Consideration as provided herein and by the provisions of Nevada Law.
(b) At the Closing, each holder of Stock Options shall deliver to
Merger Sub a stock option agreement or other agreement evidencing the grant of
Stock Option to the holder thereof (each an "Option Agreement") which, at the
Effective Time, represented all of such holder's Stock Options, for conversion
and exchange into the Option Consideration pursuant to this Section 1.11. At
the Closing, Acquiror shall deliver, and Acquiror and each holder of a Stock
Option shall enter into, a stock option agreement, in form acceptable to
Acquiror, providing for the Option Consideration to be received by each such
optionholder (a "Replacement Option Agreement"). Following the Effective Time
and until the holder shall have executed and delivered a Replacement Option
Agreement and surrendered his or her Stock Options as contemplated by this
Section 1.11, each holder of a Stock Option shall cease to possess any rights
with respect to such Stock Option, except the right to receive upon such
surrender and execution the Option Consideration as provided herein and the
provisions of Nevada Law.
(c) All consideration delivered upon the surrender of the Common
Stock and Stock Options in accordance with the terms hereof to the former
stockholders and optionholders of the Company shall be deemed to have been
delivered in full satisfaction of all rights pertaining to such Common Stock and
Stock Options, respectively. After the Effective Time, there shall be no
further registration of transfers on the stock transfer books of the Company of
the shares of Common Stock that were outstanding immediately prior to the
Effective Time, and the Company shall not issue any shares of
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Common Stock upon the exercise of any Stock Options. If, after the Effective
Time, Certificates or Stock Options are presented for any reason, they shall
be cancelled and exchanged as provided in this Section 1.11.
(d) In the event the Alternative Transaction is consummated, all
references in this Section 1.11 to Common Stock shall be interpreted to mean
references to Common Stock and Preferred Stock, and all references to Merger
Consideration shall be interpreted to mean the consideration to be received per
share of Common Stock and Preferred Stock in the Merger pursuant to
Section 1.12.
Section 1.12 Alternative Transaction.
(a) In the event that the Closing shall not have occurred as of
June 30, 1997 solely as a result of the failure of the condition to Closing
contained in Section 8.08 to be satisfied, Acquiror, Acquiror II and Merger
Sub may, at their sole option, elect to consummate the Merger and the VHI
Acquisition notwithstanding the non-satisfaction of such condition subject to
the following adjustments to the terms of the Merger and the VHI Acquisition
(as so adjusted, the "Alternative Transaction"): (a) in the Merger, (i) all
of the shares of Preferred Stock outstanding immediately prior to the
Effective Time shall be converted in the aggregate into an amount, payable in
cash without interest, equal to 65% of the VSP Consideration and (ii) all of
the shares of Common Stock outstanding immediately prior to the Effective
Time (other than any Dissenting Shares) shall be converted in the aggregate
into a number of shares of Class B Common Stock of Acquiror as would
represent substantially the same percentage ownership of the capital stock of
Acquiror immediately following the Effective Time as the percentage such
shares of Common Stock represented in the Company immediately prior to the
Effective Time and (b) in the VHI Acquisition, Acquiror II shall acquire 65%
of the outstanding capital stock of VHI owned by Parent in exchange for a
payment in cash by Acquiror II of an amount equal to 65% of the VHI
Consideration.
(b) If the Closing shall be effectuated as an Alternative
Transaction pursuant to Section 1.12, Parent shall have the right to
purchase, upon the issuance by the Acquiror of any of its equity securities
("New Stock"), a pro rata portion of such New Stock such that Parent may
maintain its percentage ownership in the capital stock of the Acquiror.
Notwithstanding the foregoing, Parent shall have no preemptive rights with
respect to the issuance of New Stock (i) pursuant to Acquiror's stock option
plan, (ii) in the Merger and in the exchange transaction and as contemplated
by Section 5.09, (iii) issuable upon the conversion or exercise of any
securities outstanding on the date hereof, or (iv) issuable in connection
with acquisitions that may be consummated by Acquiror or any of its
subsidiaries. The preemptive rights granted under this Section 1.12 shall
expire upon the earlier to occur of (i) the date upon which Parent shall own
capital stock of Acquiror representing less than 20% of the aggregate voting
power with respect to matters generally requiring shareholder approval, and
(ii) the date upon which upon an initial public offering of Acquiror's
capital stock is consummated. The terms of the preemptive rights granted
hereunder shall be more specifically set forth in the securityholders
agreement of Acquiror.
Section 1.13 Consideration. The total of the consideration for the
Transaction (the consideration allocated to the Merger is hereinafter referred
to as the "VSP Consideration", and the consideration allocated to the VHI
Acquisition is hereinafter referred to as the "VHI Consideration") shall be
equal to $84,312,500.00 (the "Gross Consideration"). Between the date hereof
and the Closing, Acquiror and Acquiror II shall determine the allocation of the
Gross Consideration among the VSP Consideration and the VHI Consideration
(provided that Acquiror and Acquiror II shall not be entitled to allocate in
excess of $1,500,000 to the VHI consideration), and Acquiror and Acquiror II
shall notify the Company and Parent in writing of such determination not later
than five (5) days prior to the Closing.
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If, and to the extent that, all of the VSP Consideration is not paid to the
stockholders of the Company pursuant to the provisions of Section 1.08, such
unpaid portion shall be retained by Acquiror.
ARTICLE II.
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS OF THE COMPANY
The Company hereby represents, warrants and agrees with the Acquiror and
Merger Sub that, except as set forth on the Schedules attached hereto:
Section 2.01 Corporate Existence. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Nevada. Each
of the entities listed on Schedule 2.01 is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation (each, a "VSP Entity" and collectively, the "VSP Entities"). Each
of the Company and the VSP Entities has full corporate power to carry on its
business as now being conducted and to own and operate the property and assets
now owned and operated by it, and is duly qualified to transact business and is
in good standing in each jurisdiction where the ownership of its properties or
the conduct of its business requires such qualification and the failure to be so
qualified would have a material adverse effect on the business, operations,
properties or condition (financial or otherwise) of the Company and the VSP
Entities taken as a whole (a "Company Material Adverse Effect"). As used in
this Agreement, "to the Company's knowledge" means the actual knowledge of the
executive officers of the Company, without having made any independent
investigation in connection with the execution of this Agreement.
Section 2.02 Corporate Power and Authority. The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and each other agreement, document, or instrument or certificate contemplated by
this Agreement to be executed by the Company in connection with the consummation
of the transactions contemplated hereby (together with this Agreement, the
"Company Documents"), and to consummate the transactions contemplated hereby and
thereby. All corporate action necessary to authorize the execution, delivery
and performance of each of the Company Documents has been duly taken by the
Company. This Agreement has been, and each of the Company Documents will be at
or prior to the Closing, duly and validly executed and delivered by the Company
and (assuming the due authorization, execution and delivery by the other parties
hereto and thereto) this Agreement constitutes, and each of the Company
Documents when so executed and delivered will constitute, legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
Section 2.03 Reorganization. Each of the Company and the VSP Entities
has all requisite corporate power and authority to consummate the Reorganization
(as hereinafter defined) and to execute and deliver each of the agreements,
documents, instruments or certificates contemplated by the Reorganization or be
executed by the Company or any of the VSP Entities in connection with the
Reorganization (the "Reorganization Documents"), and to consummate the
transactions contemplated thereby. All corporate action necessary to authorize
the execution, delivery and performance of each of the Reorganization Documents
has been duly taken by each of the Company and the VSP Entities. The
Reorganization Documents have been duly and validly executed and delivered by
each of the Company and VSP Entities (assuming the due authorization, execution
and delivery by the other parties thereto) and constitute legal, valid and
binding obligations of each of the Company and the VSP Entities,
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enforceable against each of the Company and the VSP Entities in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles
of equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding at
law or in equity).
Section 2.04 Conflicts. None of the execution and delivery by the
Company of this Agreement and the other Company Documents, the consummation of
the transactions contemplated hereby or thereby, including, without limitation,
the Reorganization (as hereinafter defined), or compliance by the Company and
the VSP Entities with any of the provisions hereof or thereof will (i) violate
any provision of the certificate of incorporation or by-laws of the Company or
the VSP Entities; (ii) conflict with, violate, result in the breach or
termination of, or constitute a default under any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which the
Company or any VSP Entity is a party or by which its properties or assets are
bound; (iii) violate any statute, rule, regulation, order or decree of any
governmental body or authority by which the Company or any VSP Entity is bound;
or (iv) result in the creation of any lien, pledge, mortgage, deed of trust,
security interest, claim, lease, charge, encumbrance or any other restriction or
limitation whatsoever upon the properties or assets of the Company or any VSP
Entity except, in case of clauses (ii), (iii) and (iv), for such conflicts,
violations, breaches or defaults as would not have a Company Material Adverse
Effect.
Section 2.05 Capitalization. (a) The authorized capital stock of the
Company consists of 80,000,000 shares of Preferred Stock, $0.01 per share (the
"Preferred Stock"), 100,000,000 shares of Class B Common Stock and
20,000,000 shares of Class A Common Stock. The issued and outstanding shares of
Preferred Stock, Class A Common Stock and Class B Common Stock (such issued
shares are collectively referred to herein as the "Capital Stock"), as of the
date hereof and as adjusted to give effect to the Reorganization (as hereinafter
defined), are as set forth on Schedule 2.05(a). All of the shares of Capital
Stock have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in Schedule 2.05(b) hereto or as
contemplated herein, there are no subscriptions, options, warrants, conversion
rights, rights of exchange, or other rights, plans, agreements or commitments of
any nature whatsoever (including, without limitation, conversion or preemptive
rights) providing for the purchase, issuance, transaction, registration or sale
of any shares of the Company's Capital Stock or any securities convertible into
or exchangeable for any shares of the Company's Capital Stock (collectively, the
"Company Derivative Securities"). None of the Company Derivative Securities are
entitled to be accelerated as a result of the Merger. All of the Company
Derivative Securities have been issued, and all of the Company Derivative
Securities to be issued in the Reorganization will be issued, pursuant to valid
exemptions from registration under all Federal and state securities laws, except
where the failure to have such exemptions would not have a Company Material
Adverse Affect, and there are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any of the Company Derivative
Securities.
(b) The authorized and outstanding capital stock of each VSP
Entity, as of the date hereof and as adjusted to give effect to the
Reorganization (as hereinafter defined), is as set forth on Schedule 2.05(c)
hereto (such issued shares are collectively referred to as the "VSP Entities'
Capital Stock"). All such shares of VSP Entities' Capital Stock have been
duly authorized and validly issued and are fully paid and nonassessable.
Except as set forth on Schedules 2.05(b) or 2.05(d) hereto or as contemplated
herein, there are no subscriptions, options, warrants, concession rights,
rights of exchange, or other rights, plans, agreements or commitments of any
nature whatsoever (including, without limitation, conversion or preemptive
rights) providing for the purchase, issuance, transaction, registration or
sale of any shares of VSP Entities' Capital Stock or any securities
convertible into, or exchangeable for, any shares of VSP Entities' Capital
Stock (the "VSP Entity Derivative Securities"). None of the VSP
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Entity Derivative Securities are entitled to be accelerated as a result of
the Merger. All of the VSP Derivative Securities have been issued, and all
of the VSP Derivative Securities, if any, to be issued in the Reorganization
will be issued, pursuant to valid exemptions from registration under all
Federal and State securities laws, except where the failure to have such
exemption would not have a Company Material Adverse Effect, and there are no
outstanding obligations of any of the VSP Entities or the Company to
repurchase, redeem or otherwise acquire any of the VSP Derivative Securities.
Section 2.06 Financial Statements. The Company has furnished the
Acquiror with an audited (based upon agreed upon procedures) balance sheet and
related statement of income for the Company at and for the fiscal year ended
November 30, 1996 (collectively, the "November Financial Statements"). The
Company has also furnished the Acquiror with the unaudited balance sheet as of
February 28, 1997, pro forma to give effect to the separation of (i) the Parent,
on the one hand, and (ii) the Company and VSP Entities, on the other hand, and
the Reorganization (the "February 28 Balance Sheet" and, collectively with the
November Financial Statements, the "Financial Statements"). Except as set forth
on Schedule 2.06, the Financial Statements (i) have been prepared from the books
and records of the Company in accordance with accounting practices consistently
applied with prior periods, (ii) are complete and correct in all material
respects and fairly present the financial condition and results of operations,
as applicable, of the Company as of the dates and for the periods indicated
thereon, and (iii) to the Company's knowledge, contain and reflect adequate
reserves for all liabilities or obligations of any nature, whether absolute,
contingent or otherwise, as may be required under generally accepted accounting
principles. To the Company's knowledge, neither the Company nor any of the VSP
Entities has any liability that is not reflected in the February 28 Balance
Sheet, other than liabilities incurred in the ordinary course of business since
the date of the February 28 Balance Sheet.
Section 2.07 Properties. The following Schedules set forth the
information indicated as of the dates noted on such Schedules:
(a) Schedule 2.07(a) sets forth a list of all of the interests in
real property and all material improvements thereto held by each of the Company
and the VSP Entities (collectively, the "Real Property"); and
(b) Schedule 2.07(b) sets forth a list of all of the machinery,
equipment, leasehold improvements, tooling, furniture, fixtures, supplies,
repair and maintenance parts, fuel and other personal property held by each of
the Company and the VSP Entities (collectively, the "Personal Property") having
an original purchase price or current book value of at least One Hundred
Thousand Dollars ($100,000.00).
Each of the Company and the VSP Entities has good and marketable title to
all Real Property and Personal Property listed on Schedules 2.07(a) and
2.07(b) or has valid leasehold interests in all leased Real Property and
Personal Property listed on such Schedules as leased by each of the Company
and the VSP Entities, except such as shall have been disposed of in the
ordinary course of business since the date of such Schedules. To the
Company's knowledge, such properties and assets are subject to no liens,
mortgages, pledges, encumbrances or charges of any kind except liens for real
property taxes not delinquent or being contested in good faith and for which
adequate provision has been made, statutory mechanics and materialman's
liens, liens and encumbrances disclosed on the public record, or which would
not have a Company Material Adverse Effect.
Section 2.08 Subsidiaries and Partnerships. Except as set forth on
Schedules 2.01 or 2.08, each of the Company and the VSP Entities has no
subsidiaries or investments in other corporations, partnerships or joint
ventures.
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Section 2.09 Contracts. There is set forth on Schedule 2.09 a list of
all outstanding contracts to which each of the Company and the VSP Entities is a
party, except: (i) the leases and other agreements listed in Schedules 2.07(a)
and (b); (ii) any contract which does not involve the possible payment or
incurrence of liabilities or rendering of services after the date of this
Agreement in an amount of more than One Hundred Thousand Dollars ($100,000.00)
and does not have a term extending beyond twelve months from the date of this
Agreement; and (iii) any contract pursuant to which a physician provides
services to the Company or the VSP Entities (a "Physician Contract")
(collectively, the "Material Contracts"). Schedule 2.09 also identifies all
contracts of the Company in which its officers or directors (or any person, firm
or corporation affiliated with such persons, excluding any contracts with
Parent) have a material interest. Except as would not individually or in the
aggregate, have a Company Material Adverse Effect, each Material Contract and
each Physician Contract is a legal, valid and binding agreement, and none of the
Material Contracts is in default by its terms or has been cancelled by the other
party, and neither the Company nor the VSP Entities is in receipt of any claim
of default under any such Material Contract.
Section 2.10 Proprietary Rights. Schedule 2.10 sets forth a list of all
patents, trademarks, service marks, copyrights, and pending applications
therefor, the loss of which would reasonably be likely to have a Company
Material Adverse Effect (the "Proprietary Rights"). Except as disclosed on
Schedule 2.10, the Company is not bound by or a party to any options, licenses
or agreements of any kind with respect to the Proprietary Rights except those
that would not have a Company Material Adverse Effect. Except as disclosed on
Schedule 2.10, the Company has not been informed of any claims or suits pending
or threatened against the Company or any of the VSP Entities claiming an
infringement by the Company or any of the VSP Entities of any patents,
copyrights, licenses, trademarks, service marks or trade names of others.
Section 2.11 Rights to Use Assets and Property. The Company and the VSP
Entities, together, own (and as of the Closing will own), or have rights to use
(and as of the Closing will have rights to use), all of the assets and property,
both tangible and intangible, necessary for the operation of the businesses of
the Company and the VSP Entities as currently conducted, except where the
failure to own or have such rights would not have a Company Material Adverse
Effect.
Section 2.12 Compliance With Laws. To the knowledge of the Company, each
of the Company and the VSP Entities is in compliance with all applicable laws,
regulations, orders, judgments, ordinances or decrees of any Federal, state or
local court or any governmental authority, the non-compliance with which would
have a Company Material Adverse Effect.
Section 2.13 Litigation. There is no litigation, proceeding or
controversy pending or, to the Company's knowledge, threatened, by or against
the Company or the VSP Entities before any court, government agency or any other
administrative body that would reasonably be expected to have a Company Material
Adverse Effect or prohibit or restrain the ability of the Company to enter into
this Agreement or to consummate the transactions contemplated hereby.
Section 2.14 Labor Matters. Schedule 2.14 lists the collective
bargaining agreements or other labor union contracts and employee benefit plans
applicable to employees which are employed by the Company or any of the VSP
Entities, and, to the Company's knowledge, the Company and the VSP Entities are
as of the date of this Agreement in full compliance with the terms and
conditions of such agreements and contracts, except where the failure to be in
compliance would not have a Company Material Adverse Effect. Except as set
forth on Schedule 2.14, and to the Company's knowledge, (i) there are no charges
or allegations of unfair labor practices pending or threatened under Federal or
state labor laws; (ii) there are no pending arbitration matters or grievance
procedures under any of the
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agreements listed in Schedule 2.09; (iii) there are no facts or conditions
existing which upon the giving of notice, or lapse of time, will result in a
breach under any collective bargaining agreement or under any of the other
foregoing agreements, which would have a Company Material Adverse Effect; and
(iv) there is no pending or threatened labor dispute, strike or work stoppage
which would have a Company Material Adverse Effect.
Section 2.15 Absence of Certain Changes. Except for the Reorganization
and except as disclosed on Schedule 2.15 hereto, since November 30, 1996, each
of the Company and the VSP Entities has operated its business only in the
ordinary course and there has not occurred:
(a) Any event that has had a Company Material Adverse Effect;
(b) Any declaration or payment of any dividends or distributions by
the Company or the VSP Entities, any acquisition or redemption by the Company or
the VSP Entities of any of its or their equity securities or any loan by the
Company or the VSP Entities to any of its or their security holders; or
(c) Any agreement to, or any authorization by the Company, its
officers or its directors, to any of the things described in the preceding
subsections of this Section 2.15.
Section 2.16 Brokers' Fees. Neither the Company nor any of the VSP
Entities has incurred any liability for brokerage fees, finders' fees, agents'
commissions or other similar forms of compensation in connection with this
Agreement and the transactions contemplated hereby for which the Acquiror or
Merger Sub would be responsible.
Section 2.17 Books and Records. To the Company's knowledge, the books
and records of the Company to which the Acquiror and Merger Sub have been given
access and to which they will be given access on or prior to the Closing Date
are the true books and records of the Company and truly and accurately reflect
the underlying facts and transactions in all material respects.
Section 2.18 Required Filings and Consents. The execution and delivery
of this Agreement by the Company and Parent does not, and the performance of
this Agreement by the Company will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, except (i) for applicable
requirements, if any, of the pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act") and filing and recordation of
appropriate merger documents as required by Nevada Law and Delaware Law and (ii)
where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not prevent or delay
consummation of the Merger or otherwise prevent the Company from performing its
obligations under this Agreement, and would not, individually or in the
aggregate, have a Company Material Adverse Effect. The execution and delivery
of the transactions and documents contemplated by the Reorganization (as
hereinafter defined) do not require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority, domestic or authority except (i) as where such consents, approvals,
authorizations or permits have been obtained, or such filings or notifications
have been made or (ii) where the failure to obtain such consents, approvals,
authorizations or permits or to make such filings or notifications, would not,
individually or in the aggregate, have a Company Material Adverse Change.
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ARTICLE III.
REPRESENTATIONS, WARRANTIES AND
AGREEMENTS OF THE PARENT
The Parent hereby represents, warrants and agrees with the Acquiror and
Merger Sub that:
Section 3.01 Corporate Existence. The Parent is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
The Parent has full corporate power to carry on its business as now being
conducted and to own and operate the property and assets now owned and operated
by it, and is duly qualified to transact business and is in good standing in
each jurisdiction where the ownership of its properties or the conduct of its
business requires such qualification and the failure to be so qualified would
have a material adverse effect on the business, operations, properties or
condition (financial or otherwise) of the Parent and its subsidiaries, taken as
a whole (a "Parent Material Adverse Effect") of the Parent.
Section 3.02 Corporate Power and Authority. The Parent has all requisite
corporate power and authority to execute and deliver this Agreement and each
other agreement, document, or instrument or certificate contemplated by this
Agreement to be executed by the Parent in connection with the consummation of
the transactions contemplated hereby, including, without limitation, the
Reorganization (as hereinafter defined) to the extent the Parent is a party to
any component of the Reorganization (together with this Agreement, the "Parent
Documents"), and to consummate the transactions contemplated hereby and thereby.
All corporate action necessary to authorize the execution, delivery and
performance of each of the Parent Documents has been duly taken by the Parent.
This Agreement has been, and each of the Parent Documents will be at or prior to
the Closing, duly and validly executed and delivered by the Parent and (assuming
the due authorization, execution and delivery by the other parties hereto and
thereto) this Agreement constitutes, and each of the Parent Documents when so
executed and delivered will constitute, legal, valid and binding obligations of
the Parent, enforceable against the Parent in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
Section 3.03 Conflicts. None of the execution and delivery by the Parent
of this Agreement and the other Parent Documents, the consummation of the
transactions contemplated hereby or thereby, including, without limitation, the
Reorganization (as hereinafter defined), to the extent the Parent is a party to
any component of the Reorganization, or compliance by the Parent with any of the
provisions hereof or thereof will (i) violate any provision of the certificate
of incorporation or by-laws of the Parent; (ii) conflict with, violate, result
in the breach or termination of, or constitute a default under any note, bond,
mortgage, indenture, license, agreement or other instrument or obligation to
which the Parent is a party or by which its properties or assets are bound;
(iii) violate any statute, rule, regulation, order or decree of any governmental
body or authority by which the Parent is bound; or (iv) result in the creation
of any lien, pledge, mortgage, deed of trust, security interest, claim, lease,
charge, encumbrance or any other restriction or limitation whatsoever upon
the properties or assets of the Parent except, in case of clauses (ii), (iii)
and (iv), for such conflicts, violations, breaches or defaults as would not have
a Parent Material Adverse Effect.
Section 3.04 Ownership of Capital Stock. Except as set forth on
Schedule 2.05(a), all of the shares of Capital Stock of the Company outstanding
as of the Effective Time will be owned by the Parent.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
OF THE ACQUIROR, ACQUIROR II AND MERGER SUB
The Acquiror, Acquiror II and Merger Sub hereby jointly and severally
represent, warrant and agree with the Company that, except as set forth on the
Schedules attached hereto:
Section 4.01 Corporate Existence. Each of the Acquiror, Acquiror II and
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, with full
corporate power to carry on its business as now being conducted and to own and
operate the property and assets now owned and operated by it, and is duly
qualified to transact business and is in good standing in each jurisdiction
where the ownership of its properties or the conduct of its business requires
such qualification and the failure to be so qualified would have a material
adverse effect on the business, operations or condition (financial or otherwise)
of the Acquiror, Acquiror II and Merger Sub taken as a whole (an "Acquiror
Material Adverse Effect").
Section 4.02 Corporate Power and Authority. Each of the Acquiror,
Acquiror II and Merger Sub has all requisite corporate power and authority to
execute and deliver this Agreement and each other agreement, document, or
instrument or certificate contemplated by this Agreement or to be executed by
the Acquiror, Acquiror II or Merger Sub in connection with the consummation of
the transactions contemplated hereby (together with this Agreement, the
"Acquiror Documents"), and to consummate the transactions contemplated hereby
and thereby. All corporate action necessary to authorize the execution,
delivery and performance of this Agreement and each of the other Acquiror
Documents has been duly taken by the Acquiror, Acquiror II and Merger Sub. This
Agreement has been, and each of the Acquiror Documents will be at or prior to
the Closing, duly and validly executed and delivered by the Acquiror,
Acquiror II and Merger Sub and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes,
and each of the Acquiror Documents when so executed and delivered will
constitute, legal, valid and binding obligations of the Acquiror, Acquiror II
and Merger Sub, enforceable against each of the Acquiror, Acquiror II and Merger
Sub in accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
Section 4.03 Conflicts. None of the execution and delivery by the
Acquiror, Acquiror II or Merger Sub of this Agreement and the Acquiror
Documents, the consummation of the transactions contemplated hereby or thereby,
or compliance by the Acquiror, Acquiror II or Merger Sub with any of the
provisions hereof or thereof will (i) violate any provision of the certificate
of incorporation or bylaws of the Acquiror, Acquiror II or Merger Sub;
(ii) conflict with, violate, result in the breach or termination of, or
constitute a default under any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which the Acquiror, Acquiror II
or Merger Sub is a party or by which their respective properties or assets are
bound; (iii) violate any statute, rule, regulation, order or decree of any
governmental body or authority by which the Acquiror, Acquiror II or Merger Sub
is bound; or (iv) result in the creation of any lien, pledge, mortgage, deed of
trust, security interest, claim, lease, charge, encumbrance or any other
restriction or limitation whatsoever upon the properties or assets of the
Acquiror, Acquiror II or Merger Sub except, in case of clauses (ii), (iii) and
(iv), for such conflicts, violations, breaches or defaults as would not have an
Acquiror Material Adverse Effect.
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Section 4.04 Capitalization. The authorized Capital Stock of the
Acquiror consists of 1,000,000 shares of Class A common stock, $0.01 par value
per share (the "Acquiror Class A Common Stock"), of which no shares are
presently issued and outstanding, 200,000,000 shares of Acquiror Class B Common
Stock, of which 1,000 shares are outstanding, and 1,000,000 shares of preferred
stock, $0.01 par value per share, of which no shares are presently issued and
outstanding. The authorized capital stock of Merger Sub consists of
1,000 shares of common stock, $0.01 par value per share, of which 1,000 shares
have been issued to Acquiror and are presently outstanding (the "Merger Sub
Common Stock"), and 100 shares of preferred stock, $0.01 par value per share, of
which no shares are issued and outstanding. The authorized capital stock of
Acquiror II consists of 1,000 shares of common stock, $0.01 par value per share,
of which 100 shares are presently issued and outstanding (the "Acquiror II
Common Stock"), and 100 shares of preferred stock, $0.01 par value per share, of
which no shares are presently issued and outstanding. All of the outstanding
shares of Acquiror Class A Common Stock, Acquiror II Common Stock and Merger Sub
Common Stock have been duly authorized and validly issued and are fully paid and
nonassessable.
Section 4.05 Litigation. There is no litigation, proceeding or
controversy pending or, to the Acquiror's, Acquiror II's and Merger Sub's
knowledge, threatened, by or against the Acquiror, Acquiror II or Merger Sub
before any court, government agency or any other administrative body that would
be reasonably likely to prohibit or restrain the ability of the Acquiror,
Acquiror II or Merger Sub to enter into this Agreement or to consummate the
transactions contemplated hereby.
Section 4.06 Brokers Fees. Neither Acquiror, Acquiror II nor Merger Sub
has incurred any liability for brokerage fees, finders' fees, agents'
commissions or other similar forms of compensation in connection with this
Agreement and the transactions contemplated hereby for which the Company would
be responsible.
Section 4.07 Financing. The Acquiror, Acquiror II and Merger Sub have
available all of the funds necessary to perform its obligations hereunder and
under the Acquiror Documents.
ARTICLE V.
COVENANTS OF THE COMPANY
The Company covenants that from the date of this Agreement until the
Closing:
Section 5.01 Conduct of Business in Ordinary Course. The Company will,
and will cause each of the VSP Entities to, carry on its or their business in
the ordinary course, and it or they shall not, nor permit any of the VSP
Entities to, make or institute any unusual or novel methods of purchase, sale,
lease, management, accounting or operation that will vary materially from those
methods used by it prior to the date of this Agreement. The Company will not,
and will cause the VSP Entities not to, sell, lease or dispose of, or agree to
sell, lease or dispose of, any of the assets or properties of the Company or the
VSP Entities other than in the ordinary course of business, or pursuant to any
existing plan, agreement or practice.
Section 5.02 Preservation of Business and Relationships. The Company
will, and will cause the VSP Entities to, use its or their reasonable efforts to
preserve its or their business intact and to maintain its or their present
material relationships with customers, suppliers, employees and others having
business relationships with it or them. The Company will not, and will cause
the VSP Entities not to, amend its or their certificate of incorporation,
by-laws or similar governing document.
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Section 5.03 New Transactions. Except as otherwise provided in this
Agreement, the Company will not, and will cause the VSP Entities not to, enter
into any material contract, commitment or transaction not in the ordinary course
of its or their business.
Section 5.04 Dividends, Distributions, Acquisitions of Stock, Issuance of
Stock. Except in connection with the transactions contemplated by this
Agreement and the Reorganization (as hereinafter defined), the Company will not,
and will cause each of the VSP Entities not to: (i) declare, set aside or pay
any dividend or make any distribution in respect of its capital stock;
(ii) directly or indirectly purchase, redeem or otherwise acquire any shares of
its capital stock; or (iii) issue any shares of common stock or stock options or
any other capital stock or right or option to acquire capital stock of the
Company (other than issuances of capital stock under stock options currently
outstanding); or (iv) enter into any agreement obligating it to do any of the
foregoing prohibited acts.
Section 5.05 Payment of Liabilities and Waiver of Claims. The Company
will not do, or agree to do, and will cause each of the VSP Entities not to, or
agree to, any of the following acts: (i) pay any material obligation or
material liability, fixed or contingent, other than current liabilities and
other obligations incurred in the ordinary course of business; (ii) waive or
compromise any material right or claim; or (iii) except for the delinquency
charge imposed, from time to time, by the Company or a VSP Entity, as the case
may be, on overdue accounts receivable, cancel, without full payment, any note,
loan or other obligation owing to it.
Section 5.06 Material Contracts. Except as otherwise provided in this
Agreement, the Company will not, and will cause the VSP Entities not to, modify
or amend in any material manner or cancel or terminate any existing Material
Contract or Physician Contract other than in the ordinary course of its or their
business.
Section 5.07 The Acquiror's and Merger Sub's Access to Premises and
Information. The Acquiror and Merger Sub and its counsel, accountants and other
representatives shall have reasonable access during normal business hours to all
properties, books, accounts, records, contracts and documents of or relating to
the Company or the VSP Entities.
Section 5.08 Reorganization. Prior to the Closing, Parent and the
Company will consummate, or cause to be consummated, the following
transactions (collectively, the "Reorganization"):
(a) Each of Vivra Asthma Allergy Careamerica, Inc., Vivra Heart
Services, Inc., Vivra ENT, Inc., Vivra Health Advantage, Inc., Vivra
Orthopaedics, Inc., and Vivra OB-GYN Services, Inc. will be merged with and into
the Company, and, in connection therewith, each VSP Entity Option shall be
converted into an option to purchase shares of Common Stock under the Company
Stock Option Plan as reflected on Schedule 2.05(b). In connection therewith,
the Company will use reasonable efforts (without the requirement of paying any
money or making any financial concession) to cause each holder of VSP Entity
Options to execute and deliver an option exchange agreement, in form and
substance satisfactory to the Company and Acquiror, pursuant to which each
holder of VSP Entity Options will agree, among other things, (i) to convert his
or her VSP Entity Options into options to acquire Common Stock and, upon the
Merger, into options to acquire Acquiror Class B Common Stock, (ii) to enter
into a stockholders' agreement, in form and substance satisfactory to the
Company and Acquiror, upon the exercise of any options to acquire Acquiror
Class B Common Stock following the Closing, and (iii) to terminate the existing
stockholders agreement relating to the shares of capital stock of the VSP Entity
issuable upon the exercise of such holder's VSP Entity Options.
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(b) Immediately prior to the Closing, Parent will convey, transfer
and assign to the Company all of the assets of Parent listed on Schedule 5.08(b)
and the Company will assume and agree to perform all of the liabilities and
obligations of Parent listed on Schedule 5.08(b) hereto; provided, however, that
if the Closing shall be effectuated as the Alternative Transaction pursuant to
Section 1.12 hereof, Parent shall have no obligation to assign to the Company,
and the Company shall have no obligation to assume, any of Parent's rights,
duties or obligations under the Gateway Lease (as defined in Schedule 2.07(a)
hereto).
Section 5.09 Certain Exchange Transactions.
(a) Prior to the Closing, Parent and the Company will use reasonable
efforts (without the requirement of paying any money or making any financial
concession) to cause each holder of capital stock of the Company other than
Parent to enter into an agreement with Acquiror, (i) to exchange such shares of
capital stock immediately prior for shares of Acquiror Class B Common Stock
(providing such holder with approximately the same percentage ownership of
Acquiror as of the time of such exchange as such holder held with respect to the
Company immediately prior to the exchange), (ii) to terminate the stockholders
agreements, dated as of May 1, 1996, by and between the Company and certain of
its stockholders and optionholders, and (iii) to enter into a new stockholders'
agreement, in form and substance satisfactory to Acquiror and the Company,
relating to such holder's shares of Acquiror Class B Common Stock.
(b) Prior to the Closing, Parent and the Company will use reasonable
efforts (without the requirement of paying any money or making any financial
concession) to cause each holder of capital stock of VHI other than Parent to
enter into an agreement with Acquiror II (i) to exchange such shares of capital
stock for shares of capital stock of Acquiror II (providing such holder with
approximately the same percentage ownership of Acquiror II as of the time of
such exchange as such holder held with respect to VHI immediately prior to the
exchange), (ii) to cancel and terminate any stockholder agreement to which such
holder is a party relating to such shares of VHI capital stock, and (iii) to
enter into a new stockholders' agreement, in form and substance satisfactory to
Acquiror II and the Company, relating to such holder's shares of capital stock
of Acquiror II.
Section 5.10 Conversion of Company Preferred Stock. Immediately prior to
the Effective Time, Parent shall cause all of its shares of Preferred Stock of
the Company to be converted into Class B Common Stock on the terms and
conditions provided for in the Company's certificate of incorporation; provided,
however, that if the Closing shall be effectuated as the Alternative Transaction
pursuant to Section 1.12 hereof, Parent shall be obligated under this Section
5.10, immediately prior to the Effective Time, to convert into Class B Common
Stock that number of shares of Preferred Stock (and no more and no less) as will
result in Parent's remaining shares of Preferred Stock representing 65% of the
aggregate voting power of all outstanding shares of capital stock of the Company
with respect to the election of directors of the Company immediately prior to
the Effective Time.
Section 5.11 Employee Benefits Matters. Parent and the Company shall
cause interests of employees of the Company in Parent's 401(k) plan to become
distributable pursuant to Internal Revenue Code Section 401(k)(10)(A)(iii) and
any amounts distributed to such employees may be rolled over pursuant to
Internal Revenue Code Section 402 to a comparable plan maintained by Acquiror.
Section 5.12 Trademark Assignment and License. Prior to the Closing,
Parent will assign to the Company all of its rights, title and interest in and
to the "Vivra" trademark, and any other trademarks of Parent incorporating or
including the word "Vivra". In connection with such assignment, Parent shall
execute, deliver and cause to be filed such trademark assignments, notices of
transfer or other
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filings as are necessary in order to secure for the Company all right, title
and interest in such marks. Simultaneously with the Closing, the Company and
Parent will enter into a license agreement, containing customary terms and
conditions, providing for (i) the royalty free license by the Company to
Parent of the right to use the name "Vivra Renal Care" in connection with the
operation of Parent's business for a period of nine (9) months following the
Closing; (ii) the royalty free license by the Company to Parent of the right
to use the name "Vivra" in connection with the operation of Parent's business
for a period of three (3) months following the Closing; provided however that
Parent shall use all reasonable efforts to cause its executives to
immediately cease the promotion of the names "Vivra Renal Care" and "Vivra"
and that Parent shall use reasonable efforts to effectuate the transition
from its use of "Vivra" and "Vivra Renal Care" to the use of its new name.
Notwithstanding the foregoing provision of this Section 5.12, if the Closing
shall be effectuated as an Alternative Transaction pursuant to Section 1.12,
Parent's obligations under this Section 5.12 shall be limited to the
obligation to grant to the Company a perpetual worldwide royalty free license
to use the name "Vivra" and the Company shall not be required to grant any
license to Parent.
Section 5.13 Intercompany Transactions. Between the date hereof and the
Closing Date, Parent, on the one hand, and the Company and the VSP Entities on
the other hand, shall not engage in any transactions or make any payments or
advances to one another or enter into any commitments to provide services or to
transfer assets or liabilities to or from one another, except as contemplated by
the Reorganization and except as provided for in the Services Agreement, dated
as of the date hereof, between the Company and Parent (the "Services
Agreement"), a copy of which is attached hereto as Exhibit 5.13.
ARTICLE VI.
TAX COVENANTS
The parties covenant that:
Section 6.01 Definitions.
(a) "Pre-Closing Partial Period" shall mean, with respect to any
Tax period beginning before the Closing Date and ending after the Closing
Date, the portion of such period up to and including the Closing Date.
(b) "Post-Closing Partial Period" shall mean, with respect to
any Tax period beginning before the Closing Date and ending after the Closing
Date, the portion of such period after the Closing Date.
(c) "Tax" or "Taxes" means any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net work; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes;
license, registration and documentation fees; and customs duties, tariffs, and
similar charges.
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Section 6.02 Tax Allocation.
(a) Parent shall pay, and be liable for, any and all Taxes for
which the Company or any of the VSP Entities may become liable with respect
to (i) all periods ending on or prior to the Closing Date and (ii) any
Pre-Closing Partial Period (hereinafter, any and all such Taxes referred to
as "Parent's Potential Tax Liability"); provided, however, that Parent's
Potential Tax Liability shall not include (i) any such Taxes to the extent
there is a reserve established therefor as of the Closing Date, and (ii) any
Taxes relating to any activities or transactions occurring on the Closing
Date, but after the Closing, imposed on the Company or any of the VSP
Entities that are not in the ordinary course of business. Parent's Potential
Tax Liability shall include but not be limited to any Tax liability arising
pursuant to the federal consolidated return rules, including the deferred
income rules under Treas. Reg Section 1.1502-13 and Section 1.1502-14, the
excess loss account rules under Treas. Reg Section 1.1502-19 and any Tax
asserted under Treas. Reg. Section 1.1502-6. Notwithstanding anything to the
contrary above, Parent's Potential Tax Liability shall not include any
liability for Taxes owing as a result of any deemed sale of assets pursuant
to Section 338 (or any corresponding rules under state, local, or other Tax
laws) with respect to the Company or any of the VSP Entities to the extent
such Taxes exceed the Tax liability that Parent would have incurred upon the
Transactions or the Alternate Transaction in the absence of such deemed sale
of assets pursuant to Section 338.
(b) Acquiror shall pay, and be liable for, any and all Taxes
imposed on or allocable to the Company or any of the VSP Entities with
respect to the operations, business, activities or assets of the Company and
the VSP Entities for which Parent is not liable pursuant to the provisions of
Section 6.02(a) (hereinafter, any and all such Taxes referred to as
"Acquiror's Potential Tax Liability").
(c) Any Taxes for any period that begins before and ends after the
Closing Date and that are imposed on a periodic basis with respect to the assets
of the Company or any VSP Entity, or otherwise measured by the level of any
item, shall be apportioned between the Post-Closing Period and the Pre-Closing
Period by taking the amount of such Taxes for the entire period (or, in the case
of such Taxes determined on an arrears basis the amount of such Taxes for the
immediately preceding period), multiplied by a fraction the numerator of which
is the number of calendar days in the period ending on the Closing Date and the
denominator of which is the number of calendar days in the entire period. No
election under Treas. Reg Section 1.1502-76(b)(2)(ii)(D) (dealing with a
pro-rata allocation) shall be made in connection with the Transactions.
(d) Parent shall not change its current policies and practices with
respect to the sharing of Taxes within its affiliated group until the Closing
Date. All Tax sharing agreements or similar agreements with respect to or
involving the Company or any of the VSP Entities shall be terminated as of the
Closing Date and, after the Closing Date, the Company and the VSP Entities shall
not be bound thereby or have any liability thereunder.
Section 6.03 Tax Indemnity.
(a) Parent shall indemnify, save and hold harmless Acquiror, Merger
Sub and the Company, all of the VSP Entities and each of their respective
subsidiaries, affiliates, directors, stockholders, officers, employees, agents,
consultants, successors, transferees and assignees and their respective
representatives from and against any and all losses incurred in connection with,
arising out of, resulting from or relating to any Parent's Potential Tax
Liability.
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(b) Acquiror shall indemnify, save and hold harmless Parent and
each of its respective subsidiaries, affiliates, directors, stockholders,
officers, employees, agents, consultants, successors, transferees and
assignees and their respective representatives from and against any and all
losses incurred in connection with, arising out of, resulting from or
relating to any Acquiror's Potential Tax Liability.
(c) Parent shall promptly pay to Acquiror (or other indemnitee)
after receipt of notice from Acquiror or other indemnitee (together with
appropriate calculations), and after a final determination of the amount of
any Taxes paid or to be paid by Acquiror (or other indemnitee) for which
Parent is liable under Section 6.03(a), an amount equal to such Taxes.
(d) Acquiror shall promptly pay to Parent (or other indemnitee)
after receipt of notice from Parent or other indemnitee (together with
appropriate calculations), and after a final determination of the amount of
any Taxes paid or to be paid by Parent (or other indemnitee) for which
Acquiror is liable under Section 6.03(b), an amount equal to such Taxes.
Section 6.04 Filing of Tax Returns.
(a) Parent shall file, on behalf of the group for which Parent
is the common parent, all federal consolidated Tax returns and any state or
local consolidated or combined Tax returns which have not been filed by the
Closing Date and which Tax returns properly include the Company or any VSP
Entity in Parent's consolidated or combined group. Parent will include the
income of the Company and such includable VSP Entities on such Tax returns
for all periods through the Closing Date and pay any Taxes attributable to
such income. Acquiror shall provide Parent with funds to make such payments
to the extent required by Sections 6.03(b) and 6.09. If there is any
material change in the manner in which such Tax returns are prepared and if
such material change has any adverse impact on the Company for periods (or
portions thereof) after the Closing Date, such material change shall be
subject to Acquiror's review and consent. Parent shall also file all other
Tax returns that have not been filed as of the Closing Date that are for any
Taxable periods ending on or before the Closing Date.
(b) Except as provided by Section 6.04(a), Acquiror shall cause the
Company to prepare and file Tax returns with respect to Taxes which are required
to be filed by the Company that are for periods after the Closing Date
(excluding any federal consolidated returns and any state or local consolidated
or combined Tax returns to be filed by Parent on behalf of the group for which
Parent is the common parent and which return properly includes the Company or
any of the VSP Entities.) All Tax returns for any Taxable periods that include
the Closing Date shall be prepared in a manner consistent with the Company's
prior practice (including elections), unless otherwise required by law,
provided, however, that Parent shall control the contents of the Tax returns to
the extent they relate to periods prior to the Closing Date or Pre-Closing
Partial Periods. Acquiror shall provide Parent with copies of such Tax returns
at least 20 days prior to the due date thereof for Parent's review.
Section 6.05 Control of Audits.
(a) Upon receipt by Acquiror or the Company of any notice or other
communication that there are any pending or threatened Tax audits or assessments
against the Company or any of the VSP Entities involving a Parent's Potential
Tax Liability, Acquiror shall promptly give written notice thereof to Parent.
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(b) Subject to paragraph (d) of this Section 6.05, Parent shall
have the sole right, exercisable at any time, to elect to represent the
Company's interest or the interest of any of the VSP Entities in any Tax
audit or administrative or court proceeding relating to Parent's Potential
Tax Liability, to employ counsel of its choice at its expense, and to control
the conduct of such audit or proceeding, including settlement or other
disposition thereof. If Parent elects to so represent the Company's interest
or the interest of any of the VSP Entities, it shall notify Acquiror of its
intent to do so, and shall reasonably and in good faith consult with Acquiror
with respect to the defense against or compromise of any such Parent's
Potential Tax Liability.
(c) If Parent elects not to represent the Company's interests or
the interest of any of the VSP Entities pursuant to paragraph (b) of this
Section 6.05, Acquiror shall, at the request of Parent, cause the Company to
defend against such Parent's Potential Tax Liabilities and shall keep Parent
fully advised of the process of such defense, it being understood that Parent
shall not be excused from its obligations to pay Parent's Potential Tax
Liabilities by reason of such election. If Parent notifies Acquiror of
Parent's desire to further contest the Parent's Potential Tax Liability,
Parent shall be entitled to do so at Parent's expense by way of petition in
the United States Tax Court, claim for refund, suit for refund, appeals, writ
of certiorari or other procedures permitted under federal, state, local or
foreign law.
(d) Notwithstanding paragraphs (b) and (c) of this Section 6.05,
Parent may not settle, compromise, or otherwise dispose of any such Parent's
Potential Tax Liability without the consent of Acquiror (which consent shall not
be unreasonably withheld), if such settlement, compromise, or other disposition
could have a material adverse effect on the Tax liabilities of the Company, the
VSP Entities or Acquiror for any period (or a portion thereof) after the
Closing.
Section 6.06 Cooperation. Parent and Acquiror agree to furnish or cause
to be furnished to each other, at no cost and upon request, as promptly as
practicable, such information and assistance (including access to books and
records) relating to the Company and the VSP Entities as are reasonably
necessary for preparation of any return, claim for refund or audit, and the
prosecution or defense of any claim, suit or proceeding relating to any Parent's
Potential Tax Liability. Acquiror shall execute or cause to be executed and
deliver or cause to be delivered any powers of attorney and other documents
reasonably necessary to enable Parent (or its advisors) to take all actions in
connection with audits which Parent has right to control pursuant to Article 6
hereof.
Section 6.07 Tax Refund. Parent shall be entitled to retain, and
Acquiror or the Company shall pay to Parent within 10 days after the receipt,
any refund of Taxes or credit relating to the Company or any VSP Entity with
respect to a period ending on or prior to the Closing Date or a Pre-Closing
Partial Period.
Section 6.08 Effect of Payment. An indemnity payment by Parent pursuant
to this Article shall be treated as a reduction in the Merger Consideration.
Section 6.09 Tax Elections.
(a) At Acquiror's election, Acquiror and Parent agree to make the
election provided for by Section 338(h)(10) of the Code (and any corresponding
election or deemed election under state, local or foreign Tax law)
(collectively, the "Election") with respect to the Company or the other VSP
Entities and to provide one another with all necessary information to permit the
Election to be made. Parent and Acquiror shall, as promptly as practicable
following the Closing Date, take all actions necessary and appropriate
(including filing such form, returns, elections, schedules and other documents
as may be required) to effect and preserve a timely Election.
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(b) In connection with any Election, prior to the due date for such
Election, Parent and Acquiror shall act together in good faith to (i) determine
and agree upon the amount of the "adjusted grossed-up basis" of assets of the
Company or any of the VSP Entities subject to the Election (within the meaning
of Treas. Reg. Section 1.338(h)(10)-1(e)(5)) and (ii) agree upon the proper
allocations (the "Allocations") of such "adjusted grossed-up basis" among the
assets of the Company in accordance with Section 338(b)(5) of the Code and the
Treasury regulations promulgated thereunder. Parent and Acquiror shall not, and
Acquiror shall cause the Company, and the other VSP Entities, not to, take any
position inconsistent with the Allocations in any Tax return or otherwise.
(c) The parties agree that any and all Taxes payable by Parent
arising from the deemed sale of assets pursuant to Section 338 or otherwise of
the Code with respect to the Company or any of the VSP Entities (or any
corresponding election or deemed election under state, local, or foreign Tax
law), to the extent such Taxes exceed the Tax liability that Parent would have
incurred upon the Transactions in the absence of such Election, shall be borne
by Acquiror. Acquiror shall pay to Parent, within ten (10) days after receipt
of notice from Parent (together with appropriate calculations), an amount equal
to the amount of any Taxes paid or to be paid by Parent for which Acquiror is
liable under the preceding sentence of this Section 6.09(c), together with any
Taxes paid or to be paid by Parent on amounts payable under this
Section 6.09(c).
ARTICLE VII.
CONDITIONS PRECEDENT TO OBLIGATIONS
OF THE ACQUIROR AND MERGER SUB
The obligations of the Acquiror and Merger Sub to consummate the Merger and
the obligation of Acquiror II to consummate the VHI Acquisition contemplated by
this Agreement are subject to the satisfaction or waiver, at or before the
Closing Date, of each of the following conditions:
Section 7.01 Representations True. All representations and warranties by
the Company and the Parent in this Agreement in Article II and Article III shall
be true in all material respects on and as of the Closing Date, as if made on
and as of the Closing Date, and there shall be delivered to the Acquiror and
Merger Sub a certificate of the Company, signed by its President or Chief
Financial Officer, to such effect.
Section 7.02 Covenants Performed. The Company shall have complied in all
material respects with all covenants, agreements, and conditions required by
this Agreement to be complied with by it on or before the Closing Date, except
any failures to comply which do not have any Company Material Adverse Effect.
Section 7.03 No Prohibition. No statute, rule or regulation or order of
any court or administrative agency shall be in effect which prohibits the
Company or the Acquiror and Merger Sub from consummating the transactions
contemplated hereby.
Section 7.04 Authorizations, Consents and Approvals. All governmental
authorizations, consents and approvals necessary for the consummation of the
transactions contemplated hereby shall have been obtained prior to the Closing,
including, without limitation, the filing of any required notice under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any
waiting period (and any extension thereof) applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
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Section 7.05 Services Agreement. Parent shall have executed and
delivered to the Company the Services Agreement and the Services Agreement shall
be in full force and effect and there shall have been no material breach
thereof.
Section 7.06 Non-Competition Agreement. The Company and the Parent shall
have executed a non-competition agreement containing the provisions set forth in
Exhibit 7.06 hereto.
Section 7.07 Legal Opinion. Brobeck, Phleger & Harrison LLP, special
counsel to the Company, shall deliver a legal opinion with respect to matters as
set forth in Sections 2.01, 2.02, 2.03, 2.04, 3.01, 3.02 and 3.03, provided that
with respect to matters governed by Nevada Law, such counsel may rely solely on
certificates and filings with state officials and a review of corporate
documents and provided further that the opinions with respect to the matters
covered in Section 2.04(ii) and (iv) and Section 3.03(ii) and (iv) need only
address the impact of the Transaction and the Reorganization upon Material
Contracts.
Section 7.08 Reorganization. The Reorganization described in
Section 5.08 shall have been consummated, and the Company shall have delivered
to Acquiror documentation evidencing the same; provided however, that if the
Closing shall be effectuated as the Alternative Transaction pursuant to Section
1.12 hereof, the assignment by Parent to the Company of, and the assumption by
the Company of, the Gateway Lease (as defined in Schedule 2.07(a) hereto) shall
not be a condition to the Closing.
Section 7.09 Assignment of Trademark. The assignment of trademarks
contemplated by Section 5.12 shall have been consummated, and the Company shall
have delivered to Acquiror documentation evidencing the same; provided, however,
that, if the Closing shall be effectuated as an Alternative Transaction pursuant
to Section 1.12, it shall only be a condition to Closing under this Section 7.09
that Parent shall have granted to the Company a perpetual worldwide royalty free
license to use the name "Vivra."
Section 7.10 Conversion of Preferred Stock. All of the Company's
outstanding Preferred Stock shall have been converted into Class B Common Stock
as contemplated in Section 5.10, and the Company shall have delivered to
Acquiror documentation evidencing the same; provided however, that if the
Closing shall be effectuated as the Alternative Transaction pursuant to Section
1.12 hereof, it shall be a condition to Closing that Parent shall have converted
into Class B Common Stock that number of shares of Preferred Stock (and no more
and no less) as will result in Parent's remaining shares of Preferred Stock
representing 65% of the aggregate voting power of all outstanding shares of
capital stock of the Company with respect to the election of directors of the
Company immediately prior to the Effective Time.
Section 7.11 Material Adverse Change. There shall have been no change,
circumstance or occurrence since the date of this Agreement except for a change,
circumstance or occurrence that has not had or would not have a Company Material
Adverse Effect.
ARTICLE VIII.
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to consummate the transactions contemplated
by this Agreement are subject to the satisfaction or waiver, at or before the
Closing Date, of each of the following conditions:
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Section 8.01 Representations True. All representations and warranties by
the Acquiror and Merger Sub contained in this Agreement shall be true in all
material respects on and as of the Closing Date, as if made on and as of the
Closing Date, and there shall be delivered to the Company a certificate of the
Acquiror, signed by its President or Chief Financial Officer, to such effect.
Section 8.02 Covenants Performed. The Acquiror and Merger Sub shall have
complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be complied with by it on or before Closing Date
and there shall be delivered to the Company a certificate of the Acquiror,
signed by its President or Chief Financial Officer, to such effect.
Section 8.03 No Prohibition. No statute, rule or regulation or order of
any court or administrative agency shall be in effect which prohibits the
Company or the Acquiror and Merger Sub from consummating the transactions
contemplated hereby.
Section 8.04 Authorizations, Consents, and Approvals. All
authorizations, consents and approvals necessary for the consummation of the
transactions contemplated hereby shall have been obtained prior to the Closing,
including, without limitation, the filing of any required notice under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the lapse
of all applicable time periods without there being any continuing objection
thereto.
Section 8.05 Legal Opinion. Gibson, Dunn & Crutcher LLP shall deliver a
legal opinion with respect to the matters set forth in Sections 4.01, 4.02 and
4.03.
Section 8.06 License Agreement. The Company and Parent shall have
entered into the license agreement contemplated by Section 5.12; provided,
however, that, if the Closing shall be effectuated as an Alternative Transaction
pursuant to Section 1.12, this condition shall not apply.
Section 8.07 Services Agreement. Acquiror shall have executed and
delivered to Parent the Services Agreement, and the Services Agreement shall be
in full force and effect.
Section 8.08 The Offer. Purchaser shall have advised Parent that it will
purchase the Parent Shares in the Offer hereto or the Purchaser or any other
person or entity shall have acquired either (i) greater than fifty percent (50%)
of the outstanding capital stock of Parent or (ii) all or substantially all of
the assets of Parent, in either case by way of merger, purchase of stock,
purchase of assets or otherwise.
ARTICLE IX.
INDEMNIFICATION
Section 9.01 Indemnification by Acquiror. The Acquiror and Merger Sub,
shall, and, from and after the Effective Time, the Surviving Corporation shall,
indemnify, defend and hold harmless the Parent and its successors, affiliates,
stockholders, officers and employees from and against any and all claims,
demands, actions, losses, damages, liabilities, costs and expenses (including
reasonable attorneys' fees and expenses) which arise out of or in connection
with the operation of the business of the Company and the VSP Entities,
including, without limitation, any liabilities of Parent and its affiliates
(other than the Company and the VSP Entities) arising out of the provision of
specialty physician network and disease management services to managed care and
provider organizations (other than such businesses included within the Dialysis
Business (as hereinafter defined)), including, without limitation all
liabilities
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arising under the agreements set forth on Schedule 9.01, other than those
liabilities and obligations that Parent has agreed to pay pursuant to the
Services Agreement (collectively, the "VSP Liabilities").
Section 9.02 Indemnification by Parent. The Parent and its successors
shall indemnify, defend and hold harmless the Acquiror and Merger Sub, and from
and after the Effective Time, the Surviving Corporation, and their successors,
affiliates, stockholders, officers and employees from and against any and all
claims, demands, actions, losses, damages, liabilities, costs and expenses
(including reasonable attorneys' fees and expenses) which arise out of or in
connection with the operation of the of Parent (other than the VSP Liabilities)
and Vivra Renal Care, Inc. ("VRC") and the Dialysis Subsidiaries (as defined in
the Vivra Agreement), including without limitation, any liabilities of the
Company and the VSP Entities arising out of the provision of dialysis, renal
care, nephrology, disease management or, nephrologist practice management
businesses or the business of contracting with payors on behalf of nephrologists
(the "Dialysis Business").
Section 9.03 Notice and Right to Defend Third Party Claims. Upon receipt
of written notice of any claim, demand or assessment, or the commencement of any
suit, action or proceeding in respect of which indemnity may be sought on
account Section 9.01 or 9.02 of this Agreement, the party seeking
indemnification (the "Indemnitee") shall promptly, but in no event later than
twenty (20) days prior to the date a response or answer thereto is due (unless a
response or answer is due within fewer than twenty (20) days from the date the
Indemnitee's receipt of notice thereof), inform the party against whom
indemnification is sought (the "Indemnitor") in writing thereof. The failure,
refusal or neglect of such Indemnitee to notify the Indemnitor within the time
period specified above of any such claim or action shall relieve such Indemnitor
from any liability which it may have to such Indemnitee in connection therewith,
if the effect of such failure, refusal or neglect is to prejudice materially the
rights of the Indemnitor in defending against the claim or action. In case any
claim, demand or assessment shall be asserted or any suit, action or proceeding
is commenced against an Indemnitee, and such Indemnitee shall have timely and
property notified the Indemnitor of the commencement thereof, the Indemnitor
will be entitled to participate therein, and, to the extent that it may wish, to
assume the defense, conduct or settlement thereof, with counsel selected by the
Indemnitor. After notice from the Indemnitor to the Indemnitee of its election
to assume the defense, conduct or settlement thereof, the Indemnitor will not be
liable to the Indemnitee for expenses incurred in connection with the defense,
conduct or settlement thereof, except for such expenses as may be reasonably
required to enable the Indemnitor to take over such defense, conduct or
settlement. The Indemnitee will at its own expense cooperate with the
Indemnitor in connection with any such claim, make personnel, witnesses, books
and records relevant to the claim available to the Indemnitor at no cost, and
grant such authorizations or powers of attorney to the agents, representatives
and counsel of the Indemnitor as the Indemnitor may reasonably request in
connection with the defense or settlement of any such claim; provided that,
before settling any claim hereunder, the Indemnitor shall give ten (10) days
notice to the Indemnitee to provide the Indemnitee with the opportunity to
reject the settlement, and in the case of any rejection of any settlement that
would have released Indemnitee of any liability, Indemnitee shall thereafter
defend the claim at its own expense. In the event that the Indemnitor does not
wish to assume the defense, conduct or settlement of any claim, demand or
assessment, the Indemnitee shall have the exclusive right to prosecute, defend,
compromise, settle or pay the claim in its sole discretion and pursue its rights
under this Agreement; provided that, before settling any claim hereunder, the
Indemnitee shall give ten (10) days' notice to the Indemnitor to provide the
Indemnitor with the opportunity to reject the settlement, and in the case of any
rejection of any settlement that would have released Indemnitor of any
liability, Indemnitor shall thereafter, at Indemnitee's election, defend the
claim at Indemnitor's own expense. Notwithstanding the foregoing, the
Indemnitee shall have the right to employ separate counsel in any such action,
claim or proceeding and to participate in the defense thereof, but the fees and
expense of such counsel shall be paid by the Indemnitee unless (a) the
Indemnitor has agreed in writing to pay such fees and expenses, (b) the
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Indemnitor has failed to assume the defense of such action, claim or proceeding
or (c) the named parties to any such action, claim or proceeding (including any
impleaded parties) include both the Indemnitor and the Indemnitee and the
Indemnitee reasonably determines that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Indemnitor (in which case, if Indemnitee informs the Indemnitor in writing that
it elects to employ separate counsel at the expense of the Indemnitor, the
Indemnitor shall not have the right to assume the defense of such action, claim
or proceeding on behalf of the Indemnitee, it being understood, however, that
the Indemnitor shall not, in connection with any one such action, claim or
proceeding or separate but substantially similar or related actions, claims or
proceeding in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for the Indemnitee, which firm shall
be designated in writing by the Indemnitee).
Section 9.04 Survival of Indemnification. The right to make a claim for
indemnification pursuant to Sections 9.01 and 9.02 of this Agreement shall
survive the Closing Date until the fifth anniversary of the Closing Date.
Further, the provisions of this Article VIII are intended to be for the benefit
of, and shall be enforceable by and binding on, each indemnified party and their
respective successors and assigns.
ARTICLE X.
GENERAL PROVISIONS
Section 10.01 Each Party to Bear Own Costs. Except as provided below,
each of the parties shall pay all costs and expenses incurred or to be incurred
by it in negotiating and preparing this Agreement and in closing and carrying
out the transactions contemplated by this Agreement. The fees and expenses of
the Acquiror's and Merger Sub's investment bankers shall be borne solely by the
Acquiror and Merger Sub. The fees and expenses of the Company incurred or to be
incurred by it in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement shall be borne
solely by the Parent.
Section 10.02 Entire Agreement; Amendment; Waivers. This Agreement and
the Schedules hereto constitute the entire agreement and understanding between
the parties pertaining to the subject matter hereof and supersede all prior or
contemporaneous agreements, representations and understandings of the parties.
No supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by all the parties. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
Section 10.03 Public Announcements. No party hereto shall issue any press
release or public announcement or otherwise disclose the existence of this
Agreement or the transactions contemplated hereby without the prior approval of
the other parties hereto, except as and to the extent that the parties hereto in
writing jointly agree or that such party shall be obligated by law, rule or
regulation of any governmental or regulatory body, in which case the parties
shall in good faith agree on the content of any such press release, public
announcement or disclosure.
Section 10.04 Assignment. This Agreement is not assignable by any party,
but shall be binding upon and inure to the benefit of each party and its
successors (by operation of law or otherwise).
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Section 10.05 Survival. The representations and warranties made in this
Agreement or in any certificate or other document delivered pursuant hereto or
in connection herewith and the covenants and agreements contained herein to be
performed or complied with at or prior to the Closing Date shall not survive
beyond the Closing Date.
Section 10.06 Termination. This Agreement may be terminated by the
Acquiror, Merger Sub or by the Company without liability to any party (i) if the
Closing has not occurred by October 31, 1997, or (ii) by any party hereto if any
court of competent jurisdiction in the United States or other United States
governmental body shall have issued an order, decree or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and nonappealable.
Section 10.07 Confidentiality; Record Retention. Each of the Acquiror and
Merger Sub acknowledges that its designated representatives have been given
access to confidential files, documents, agreements, books and records of
accounts (the "Books and Records") of the Company, and that in the event of
termination of this Agreement, any of such Books and Records in the possession
of the Acquiror and Merger Sub, and all copies thereof, will be returned to the
Company and that the contents thereof or any confidential information gained
therefrom, or from other sources of the Company will not be disclosed to third
parties or used for the Acquiror's and Merger Sub's benefit.
In the event this Agreement is consummated, such Books and Records will be
retained by the Acquiror and Merger Sub in accordance with the Company's
ordinary practice for retention of records after the Closing Date and for such
further time as may reasonably be requested, and that during such time such
Books and Records shall be open to inspection and examination by the Company at
all reasonable times.
After the Closing Date, the Acquiror, Merger Sub and the Company shall make
available to each other, as reasonably requested, and to any taxing authority,
all information, records or documents relating to tax liabilities or potential
tax liabilities of the Company for all periods prior to or including the Closing
Date and shall preserve all such information, records and documents until the
expiration of any applicable statute of limitations or extensions thereof.
Section 10.08 Cooperation and Assignments; Further Assurances. The
parties hereto will use their reasonable efforts, and will cooperate with one
another to secure all necessary consents, approvals, authorizations, exemptions
and waivers from third parties as shall be required in order to consummate the
transactions contemplated hereby, and will otherwise use its reasonable efforts
to cause such transactions to be consummated in accordance with the terms and
conditions hereof; provided, however, that the failure to obtain any consents
required under any agreement, contract, lease, license or other instrument
assigned and assumed hereunder shall not constitute a breach or nonfulfillment
of the foregoing covenant or a condition of Closing. At any time or from time
to time after the Closing Date, each party agrees that it shall, at the request
of any other party hereto and at the expense of such requesting party, execute
and deliver any further instruments or documents and take all such further
action as such requesting party may reasonably request in order to consummate
the transactions contemplated by this Agreement.
Section 10.09 Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, or on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed as follows:
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To Acquiror, Acquiror II and Merger Sub at:
VSP Holdings, Inc.
1850 Gateway Drive, Suite 500
San Mateo, CA
Telecopier: 415-345-0486
Attention: President
With a copy to:
Andrew E. Bogen, Esq.
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, CA 90071
Telecopier: 213-234-7520
Mats Wahlstrom
Gambro Healthcare
1185 Oak Street
Lakewood, CO 80215-4498
Telecopier: 303-231-4950
To the Parent or Company at:
Vivra Incorporated
1850 Gateway Drive, Suite 500
San Mateo, CA
Telecopier: 415-345-0486
Attention: General Counsel
With copies to:
John W. Larson, Esq.
Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, CA 94304
Telecopier: 415-496-2777
Any party may change its address for purposes of this paragraph by giving
notice of the new address to each of the other parties in the manner set
forth above.
Section 10.10 Governing Law. The terms of this Agreement shall be
governed by the laws of the State of California, without regard to principles of
conflicts or choice of law.
Section 10.11 Duplicate Originals. This Agreement may be executed in as
many duplicate originals as may be deemed necessary and convenient, each of
which, when so executed, shall be deemed an original but all such duplicate
originals shall constitute but one and the same instrument.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
VSP HOLDINGS, INC.
By: /s/ Justin Chang
------------------------------------------
Name: Justin Chang
------------------------------------------
Title:
------------------------------------------
VSP HOLDINGS II, INC.
By: /s/ Justin Chang
------------------------------------------
Name: Justin Chang
------------------------------------------
Title:
------------------------------------------
VSP ACQUISITION, INC.
By: /s/ Justin Chang
------------------------------------------
Name: Justin Chang
------------------------------------------
Title:
------------------------------------------
VIVRA SPECIALTY PARTNERS, INC.
By: /s/ John Nehra
------------------------------------------
Name: John Nehra
------------------------------------------
Title:
------------------------------------------
VIVRA INCORPORATED
By: /s/ Kent J. Thirg
------------------------------------------
Name: Kent J. Thirg
------------------------------------------
Title:
------------------------------------------
27
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SERVICES AGREEMENT
1. Services.
(a) Pursuant to the terms of this Agreement, the Company shall provide, or
shall cause any of its affiliates to provide, for the benefit of VSP, and VSP
shall provide, or shall cause any of its affiliates to provide, for the benefit
of the Company, the services described in Schedule A hereto (the "Services"),
which schedule may be amended from time to time as provided in Section 14. The
Company shall perform the Services in good faith in a commercially reasonable
manner and in accordance with applicable law and the express terms of this
Agreement. Specifically, the Company shall provide the Services with that degree
of skill, attention and care that the Company exercises with respect to
furnishing comparable services to itself. The Services shall be provided to VSP
at those locations most convenient to the Company, other than such services the
nature of which requires they be performed at VSP's locations. All employees of
the Company performing Services hereunder for VSP shall be under the exclusive
direction and control of the Company. The Company shall be an independent
contractor as to VSP in performing Services hereunder and shall have exclusive
authority to control and direct the performance of any and all Services
performed by the Company for VSP.
(b) VSP shall provide all data and information required by the Company in
connection with the performance of the Services in the time and in the manner
which the Company reasonably requests.
2. Capital Contribution; Cash Management and Accounting
In connection with the execution of the Merger Agreement and the Vivra
Agreement, on the date hereof the Company will make a capital contribution to
VSP in cash or VSP shall distribute cash to the Company to the extent required
in order that VSP and the VSP Entities shall hold cash and cash equivalents that
would represent $25,000,000 in "Cash" as of the date hereof on a consolidated
balance sheet of VSP and the VSP Entities prepared in accordance with GAAP. The
Company and VSP estimate that, in order to satisfy the foregoing requirement,
the Company will be required to contribute $2,350,000 in cash to VSP as of the
date hereof, and the parties hereto agree that, after the date hereof, the
Company shall reimburse VSP or VSP shall reimburse the Company to the extent
necessary to ensure that the requirement provided for in the preceding sentence
is achieved. From and after the date hereof, the Company shall cease to pay the
costs and expenses incurred by VSP in the operation of its business and VSP
shall be solely responsible for all costs and expenses arising out of the
business of VSP and VSP Entities; provided that (a) the Company shall continue
to pay and be responsible for checks and drafts issued in respect of VSP
business prior to the date hereof that are presented for payment on or after the
date hereof, (b) the Company shall retain all obligations and liabilities under
all medical, dental and disability plans and any worker's compensation insurance
arrangements covering employees of VSP and VSP Entities for claims or premiums
to the extent accrued on or prior to the date hereof, (c) the Company shall
retain all obligations and liabilities to Kent Thirty and LeAnne Zumwalt under
any employment agreement or severance or change of control agreement to which
they are parties on the date and all liabilities of the Company to employees of
the Company, VSP and/or the VSP Entities under the Retention Plan adopted by the
Board of Directors of the Company on May 5, 1997, and (d) the Company shall,
from the date hereof until the Closing, retain all obligations and liabilities
for salary and benefits payable to Company corporate employees who provide
services to both the Company and VSP.
