Smith & Nephew PLC 6-K, filed Oct 11, 2022
Smith & Nephew PLC (SNN)
About this 6-K
Smith & Nephew PLC filed this 6-K on October 11, 2022.
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For October 11, 2022
Commission File Number: 001-14978
Smith & Nephew plc
(Registrant’s name)
Building 5, Croxley Park Hatters Lane,
Watford Hertfordshire WD18 8YE
United Kingdom
(Address of registrant’s principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F __
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ______
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes __ No X
If “Yes” is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): 82-_____________
EXPLANATORY NOTE
In connection with the issuance by Smith & Nephew plc of €500,000,000 aggregate principal amount of 4.565% Notes due 2029 (the “Securities”), Smith & Nephew plc is filing the following documents solely for incorporation into the Registration Statement on Form F-3 (File No. 333-249255):
Exhibit List
Exhibit No. Description
| 4.1 | Officers’ Certificate of the Registrant pursuant to Section 2.07 of the Indenture setting forth the terms of the Securities, including the form of the global note for the 4.565% Notes due 2029. |
| 5.1 | Opinion of Davis Polk & Wardwell London LLP, English law counsel to Smith & Nephew plc. |
| 5.2 | Opinion of Davis Polk & Wardwell London LLP, US counsel to Smith & Nephew plc. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
SMITH & NEPHEW PLC |
||
| Date: October 11, 2022 | By: | Helen Barraclough |
Name: Title: |
Helen Barraclough Company Secretary |
|
Exhibit 4.1
SMITH &
NEPHEW PLC
OFFICERS’ CERTIFICATE
The undersigned, Anne-Françoise Nesmes and Helen Barraclough,, being a Director and the Company Secretary , respectively, of Smith & Nephew plc (the “Issuer”) in connection with the issuance of €500,000,000 aggregate principal amount of its 4.565% Notes due 2029 (the “Notes”) pursuant to the Indenture, dated as of October 14, 2020 (the “Indenture”), between the Issuer and The Bank of New York Mellon, London Branch as trustee (section references herein being to the Indenture), and pursuant to the authorization of the Board of Directors of the Issuer at its meetings held on July 27, 2022 and the authorization of the Issuer’s Notes Offering Committee by written resolution dated October 4, 2022, do hereby certify that the following form, terms and conditions of the Notes were established as required pursuant to Section 2.01 and Section 2.07 of the Indenture:
| Title of Notes | 500,000,000 4.565% Notes due 2029 |
| Initial Aggregate Principal Amount of Notes | €500,000,000 (the “Aggregate Principal Amount”) |
| Price to Public | 100.000% of the Aggregate Principal Amount of the Notes, plus accrued interest, if any, from October 11, 2022 |
| Issue Date | October 11, 2022 |
| Form of Notes | The Notes will be issued in book-entry form and will be represented by a global note deposited with, or on behalf of, a common depository for Clearstream Banking S.A. (“Clearstream”) and Euroclear Bank SA/NV (“Euroclear”), as operator of the Euroclear System, and registered in the name of the nominee of the common depository. Beneficial interests in the Notes will be shown on, and transfers will be effected only through, records maintained by Clearstream and Euroclear and their participants, and these beneficial interests may not be exchanged for certificated notes, except in limited circumstances. |
| Maturity Date | October 11, 2029 |
| Interest Rate for Notes | 4.565% per annum |
| Interest Periods for Notes | The first interest period for the Notes will be the period from and including the original issue date to, but excluding the first Interest Payment Date (as defined below). Thereafter, the interest periods for the Notes will be the periods from and including the Interest Payment Dates to but excluding the immediately succeeding Interest Payment Date (together with the first interest period, each an “Interest Period”). The final Interest Period will be the period from and including the Interest Payment Date immediately preceding the maturity date to but excluding the maturity date, or the redemption date. |
1
| Interest Payment Dates | Interest on the Notes shall be payable annually in arrears on October 11 of each year, commencing October 11, 2023 (each, an “Interest Payment Date”).
Notwithstanding the above, if an Interest Payment Date would fall on a day that is not a Business Day (as defined below), the Interest Payment Date will be postponed to the next succeeding day that is a Business Day, but no additional interest shall be paid unless the Issuer fails to make payment on such date. |
| Regular Record Dates for Interest | Interest shall be paid to the holder in whose name the Notes are registered at the close of business on the calendar day preceding each applicable Interest Payment Date, whether or not such day is a Business Day. |
| Business Day | Any day, other than a Saturday or Sunday, (1) which is not a day on which banking institutions in The City of New York or London are authorized or required by law, regulation or executive order to close and (2) on which the Trans-European Automated Real-time Gross Settlement Express Transfer system (the TARGET2 system), or any successor thereto, operates. |
| Place of Payment, Paying Agent | The Bank of New York Mellon,
London Branch London, E14 5AL United Kingdom |
| Trustee | The Bank of New York Mellon, London Branch |
| Notice and Demands to Issuer | Smith &Nephew Inc. 150 Minuteman Road Andover, Massachusetts 01810 Attention: Helen Barraclough Group General Counsel and Company Secretary Email: Company.Secretary@smith-nephew.com |
2
| Redemption Provisions | |
| Optional Tax Redemption | Optional, in whole but not in part, at the option of the Issuer, at any time in accordance with the terms set forth in the form of Notes set forth in Exhibit A hereto. |
| Optional Redemption | Optional, in whole or in part, at the option of the Issuer at any time and from time to time as follows: (i) prior to the Par Call Date (as defined below), at a redemption price equal to the greater of (A) 100% of the principal amount of the Notes to be redeemed, and (B) as determined by an independent investment bank selected by the Issuer, the sum of the present values of the remaining scheduled payments of principal and interest thereon up to and including the Par Call Date, calculated as if the Notes matured on the Par Call Date (exclusive of interest accrued to the date of redemption) discounted to the redemption date on an annual basis ( ACTUAL/ACTUAL (ICMA)) at the applicable Comparable Government Bond Rate (as defined below) plus the Spread (as defined below) for the Notes, in either instance, plus accrued and unpaid interest to, but excluding, the date of redemption and (ii) on or after the Par Call Date, at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus, accrued and unpaid interest to, but excluding, the date of redemption.
The Trustee shall have no obligation to calculate any redemption price or any component thereof in respect of the Notes and the Trustee shall be entitled to receive and conclusively rely upon an Officer’s Certificate delivered by the Company that specifies any redemption price. |
3
“Comparable Government Bond” means, with respect to the Notes to be redeemed prior to the Par Call Date in relation to any Comparable Government Bond Rate calculation, at the discretion of an independent investment bank selected by the Issuer, a bond that is a direct obligation of the Federal Republic of Germany (a “German government bond”) whose maturity is closest to the Par Call Date, or if such independent investment bank in its discretion considers that such similar bond is not in issue, such other German government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German government bonds selected by the Issuer, determine to be appropriate for determining the Comparable Government Bond Rate.
“Comparable Government Bond Rate” means, with respect to any redemption date, the yield (rounded to three decimal places, with 0.0005 being rounded upwards) of the Comparable Government Bond (as defined below) on the third Business Day prior to the date fixed for redemption, calculated on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such Business Day as determined by an independent investment bank and calculated in accordance with generally accepted market practice at such time.
“Par Call Date” means July 11, 2029.
“Spread” means 45 basis points. | ||
| Redemption Notices | Notice of any redemption will be given to Euroclear and Clearstream at least 10 days but not more than 60 days prior to the redemption date. Unless the Issuer defaults in payment of the Redemption Price, on and after the redemption date, interest will cease to accrue on the Notes or portions thereof called for redemption. | |
| Repurchase Upon Change of Control Repurchase Event | If a Change of Control Repurchase Event (as defined below) occurs, unless the Issuer has exercised its right to redeem all of the Notes, the Issuer will make an offer to purchase the Notes at a purchase price equal to 100% of its principal amount, plus accrued and unpaid interest, if any, to, but not including, the date of purchase unless the Notes have been previously redeemed or called for redemption. The Trustee shall have no obligation to determine whether a Change of Control Repurchase Event or any component thereof has occurred or is continuing. | |
4
“Below Investment Grade Ratings Event” means the Notes cease to be rated Investment Grade by both Rating Agencies on any date during the period commencing on the earlier of (i) the occurrence of a Change of Control and (ii) public notice of the occurrence of a Change of Control or the Issuer’s intention to effect a Change of Control, and ending 60 days after (which 60-day period will be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any Rating Agency) the consummation of a Change of Control. Notwithstanding the foregoing, a Below Investment Grade Ratings Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Ratings Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Ratings Event).
“Change of Control” means the occurrence of any of the following:
(i) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of consolidation, amalgamation or merger), in one or a series of related transactions, of all or substantially all of the Issuer’s assets and those of its Subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than to the Issuer or one of its Subsidiaries; (ii) the consummation of any transaction or series of related transactions (including, without limitation, any consolidation, amalgamation, or merger or other combination (including by way of a scheme of arrangement)) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the Issuer or one or more of its Subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the voting power of the Issuer’s total outstanding Voting Stock; or (iii) the adoption of a plan relating to the Issuer’s liquidation or dissolution. A transaction shall not constitute a “Change of Control” for the purposes of this definition if (i) the Issuer becomes a direct or indirect wholly-owned subsidiary of a holding company and (ii) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Issuer’s Voting Stock immediately prior to that transaction. |
5
“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Ratings Event.
“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s) or a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P); or the equivalent Investment Grade credit rating from any replacement Rating Agency or Rating Agencies selected by the Issuer.
“Moody’s” means Moody’s Investors Service Inc., a subsidiary of Moody’s Corporation, and its successors.
“Rating Agency” means (i) each of Moody’s and S&P and (ii) if any of Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act, selected by the Issuer as a replacement agency for Moody’s or S&P, or both of them, as the case may be.
“S&P” means S&P Global Ratings Inc., a division of S&P Global Inc., and its successors.
“Subsidiary” means, at any relevant time, any person of which the voting shares or other interests carrying more than 50% of the outstanding voting rights attached to all outstanding voting shares or other interests are owned, directly or indirectly, by or for the Issuer and/or one or more of its subsidiaries.
“Voting Stock” of any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person. |
6
| Defeasance and Discharge of the Notes (Section 9.03) | Applicable. Section 9.03(iii) of the Indenture, is amended and replaced with “the Issuer shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel each stating that all conditions precedent provided for relating to the defeasance, have been complied with and an Opinion of Counsel to the effect that the Holders of the debt securities of that series will not recognize gain or loss for U.S. federal income tax purposes as a result of the defeasance and will be subject to the same U.S. federal income tax as would be the case if the defeasance did not occur.” |
| Currency of Payment | All payments of interest, principal, including payments made upon any redemption of the Notes, and additional amounts as described below will be made in euro. If the euro is unavailable to the Issuer due to the imposition of exchange controls or other circumstances beyond the Issuer’s control or if the euro is no longer being used by the then member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments in respect of the Notes will be made in U.S. dollars until the euro is again available to the Issuer and so used. In such circumstances, the amount payable on any date in euro will be converted into U.S. dollars on the basis of the then most recently available market exchange rate for euro, as determined by the Issuer in the Issuer’s sole discretion. Any payment in respect of the Notes so made in U.S. dollars will not constitute an event of default under the Notes or the indenture governing the Notes.
Neither the Trustee nor the Paying Agent shall have any responsibility for any calculation or conversion in connection with the foregoing. |
| Further Issuances | The Issuer may, at its option, at any time and without the consent of the then existing holders of the Notes, reopen the Notes and issue additional Notes in one or more transactions after the date of the Prospectus Supplement (as defined below) with terms (other than the issue price, issuance date and, possibly, first interest Payment Date and original interest accrual date) identical to the original Notes. These additional Notes will be deemed to have been part of the original Notes and will provide the holders of these additional Notes the right to vote together with holders of the original Notes; provided, however, that if these additional Notes are not fungible with the original Notes for U.S. federal income tax purposes, these additional Notes will have a different Common Code, ISIN or other identifying number, as applicable. There is no limitation on the amount of Notes or other debt securities that the Issuer may issue under the Indenture. |
7
| Sinking Fund | None. |
| Additional Amounts | Pursuant to the form of Notes set forth in Exhibit A hereto, the Issuer may, subject to certain exceptions, be obligated to pay additional amounts. |
| Electronic Means | The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using Electronic Means (as defined below); provided, however, that the Issuer shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Issuer whenever a person is to be added or deleted from the listing. If the Issuer elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Issuer understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Issuer shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Issuer and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Issuer. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Issuer agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Issuer; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
"Electronic Means" shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder. |
8
| Electronic Execution | The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to the Indenture or any document to be signed in connection with the Indenture (including the certificate of authentication, certificate of the Trustee and the Securities (as defined in the Indenture)) shall be deemed to include electronic signatures (e.g., by DocuSign or Adobe Sign), deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper based recordkeeping system, as the case may be, and the parties hereto and thereto consent to conduct the transactions contemplated hereunder by electronic means. |
| Other Terms of the Notes | The other terms of the Notes shall be substantially as set forth in the Indenture and the form of Notes attached hereto as Exhibit A. |
9
Each of the undersigned hereby certifies that:
| 1. | He or she has read the provisions of the Indenture setting forth the covenants and conditions to the Trustee’s authentication and delivery of the Securities and the definitions in the Indenture relating thereto. |
| 2. | He or she has examined the resolutions of the Board of Directors and the Notes Offering Committee of the Issuer adopted prior to the date hereof relating to the authorization, issuance, authentication and delivery of the Notes, such other corporate records of the Issuer, as applicable, and such other documents deemed necessary as a basis for the opinion hereinafter expressed. |
| 3. | In his or her opinion, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not the covenants and conditions referred to above have been complied with. |
| 4. | He or she is of the opinion that the covenants and conditions referred to above have been complied with. |
10
IN WITNESS WHEREOF, each of the undersigned has hereunto signed his or her name.
Dated: October 11, 2022
| /s/ Anne-Françoise Nesmes | ||
| Name: | Anne-Françoise Nesmes | |
| Title: | Director | |
| /s/ Helen Barraclough | ||
| Name: | Helen Barraclough | |
| Title: | Company Secretary | |
[Signature Page – Officers’ Certificate Pursuant to the Indenture]
Exhibit A
THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITORY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SMITH & NEPHEW PLC
4.565% Notes due 2029
| No. | €500,000,000 |
ISIN: XS2532473555
Common Code: 253247355
SMITH & NEPHEW PLC, a public limited company incorporated under the laws of England and Wales (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to The Bank of New York DEPOSITORY (NOMINEEs) Limited, or registered assigns, upon presentation and surrender of this Security the principal sum of Five Hundred Million euros (€500,000,000) on October 11, 2029, and to pay interest thereon from October 11, 2023 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, annually in arrears on October 11 in each year, commencing October 11, 2023 (each an “Interest Payment Date”), at the rate of 4.565% per annum, until the principal hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest which shall be the calendar day preceding such Interest Payment Date (whether or not such day is a Business Day) (“Regular Record Date”), as the case may be. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a special record date (“Special Record Date”) for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.
A-1
The principal of (and premium, if any) and any such interest on this Security will be payable in euro; provided, however, that at the option of the Issuer payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. If the euro is unavailable to the Issuer due to the imposition of exchange controls or other circumstances beyond the Issuer’s control or if the euro is no longer being used by the then member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments in respect of the Notes will be made in U.S. dollars until the euro is again available to the Issuer and so used. In such circumstances, the amount payable on any date in euro will be converted into U.S. dollars on the basis of the then most recently available market exchange rate for euro, as determined by the Issuer in its sole discretion. Any payment in respect of the Notes so made in U.S. dollars will not constitute an event of default under the Notes or the indenture governing the Notes.
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, by manual or pdf or other electronically-imaged (including, without limitation, DocuSign or Adobe Sign) signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
A-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually, electronically or in facsimile.
Dated: October 11, 2022
| SMITH & NEPHEW PLC | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Smith & Nephew plc Global Registered Security]
A-3
This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.
Dated: October 11, 2022
THE BANK OF NEW YORK MELLON, LONDON BRANCH, as Trustee | ||
| By: | ||
| Authorized Officer | ||
[Signature Page to Smith & Nephew plc Global Registered Security]
A-4
This Security is one of a duly authorized issue of securities of the Issuer (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of October 14, 2020 (herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument), between the Issuer and The Bank of New York Mellon, London Branch, as Trustee (herein called the “Trustee”, which term includes any other successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof, limited in aggregate principal amount to €500,000,000.
The Securities of this series are subject to redemption, as a whole or in part, at any time and from time to time, at the election of the Issuer, upon not less than 10 days nor more than 60 days’ notice as follows (1) prior to July 11, 2029 (the “Par Call Date”) at a Redemption Price equal to the greater of (A) 100% of the principal amount of the Securities to be redeemed, and (B) as determined by an independent investment bank selected by the Issuer, the sum of the present values of the remaining scheduled payments of principal and interest thereon up to and including the Par Call Date, calculated as if the Notes matured on the Par Call Date (exclusive of interest accrued to the date of redemption) discounted to the redemption date on an annual basis (ACTUAL/ACTUAL ICMA) at the Comparable Government Bond Rate (as defined below) plus the Spread (as defined below) and (2) at any time on or after the Par Call Date, as a whole or in part, at the election of the Issuer, at a Redemption Price equal to 100% of the principal amount of the Securities being redeemed; plus, in each of cases (1) and (2) above, accrued and unpaid interest thereon to, but excluding, the date of redemption.
“Business Day” means, any day, other than a Saturday or Sunday, (1) which is not a day on which banking institutions in The City of New York or London are authorized or required by law, regulation or executive order to close and (2) on which the Trans-European Automated Real-time Gross Settlement Express Transfer system (the TARGET2 system), or any successor thereto, operates.
“Comparable Government Bond” means, with respect to the Notes to be redeemed prior to the Par Call Date in relation to any Comparable Government Bond Rate calculation, at the discretion of an independent investment bank selected by the Issuer, a bond that is a direct obligation of the Federal Republic of Germany (a “German government bond”) whose maturity is closest to the Par Call Date, or if such independent investment bank in its discretion considers that such similar bond is not in issue, such other German government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German government bonds selected by the Issuer, determine to be appropriate for determining the Comparable Government Bond Rate.
A-5
“Comparable Government Bond Rate” means, with respect to any redemption date, the yield (rounded to three decimal places, with 0.0005 being rounded upwards) of the Comparable Government Bond (as defined below) on the third Business Day prior to the date fixed for redemption, calculated on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such Business Day as determined by an independent investment bank selected by the Issuer and calculated in accordance with generally accepted market practice at such time.
“Par Call Date” means July 11, 2029.
“Spread” means 45 basis points.
The Indenture contains provisions to the effect that, in the event of various tax law changes and other limited circumstances that require the Issuer to pay additional amounts, the Issuer may redeem all, but not less than all, of the Securities of a series at a price equal to 100% of the principal amount of the Securities plus accrued interest thereon to but excluding the date of redemption, which provisions apply to this Security.
In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the entire indebtedness on this Security upon compliance by the Issuer with certain conditions set forth thereon, which provisions apply to this Security.
If any deduction or withholding for any present or future taxes, levies, duties, assessments, imposts or other governmental charges whatsoever imposed, assessed, levied by or collected or for the account of the United Kingdom (or any political subdivision or taxing authority thereof or therein) shall at any time be required by applicable law or regulation of the United Kingdom (or any such political subdivision or taxing authority) in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will (subject to what follows) pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts received by such Holder of such Security, after such deduction or withholding, shall be not less than the amounts to which such Holder would be entitled had such deduction or withholding not been so imposed, assessed, levied or collected; provided, however, that the Issuer shall not be required to make any payment of additional amounts for or on account of:
(1) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied or collected but for the fact that the Holder of the relevant Security (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) is or has been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business or maintaining or having maintained a permanent establishment or being or having been physically present in, the United Kingdom or any political subdivision or taxing authority thereof or therein or otherwise having or having had some connection with the United Kingdom or any political subdivision or taxing authority thereof or therein other than the holding or ownership of a Security, or the collection of principal of, and interest, if any, on, or the enforcement of, a Security;
A-6
(2) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required, the relevant Security was presented more than 30 days after the date on which such payment became due or was provided for, whichever is later;
(3) any estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
(4) any present or future tax, levy, impost or other governmental charge which is payable otherwise than by deduction or withholding from payments on or in respect of the relevant Security;
(5) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied, collected or withheld but for the failure to comply with any request addressed to the Holder for certification, identification or other information reporting concerning the nationality, residence, identity or connection with the United Kingdom or any political subdivision or taxing authority thereof or therein of the Holder or beneficial owner of the relevant Security, if compliance is required by treaty or by statute, regulation or administrative practice of the United Kingdom or any such political subdivision or taxing authority thereof or therein as a condition to relief or exemption from such tax, levy, impost or other governmental charge (which such Holder or beneficial owner is legally entitled to provide);
(6) any present or future tax, levy, impost or other governmental charge which a Holder would have been able to avoid by authorizing the paying agent to report information in accordance with the procedure laid down by the relevant tax authority or by producing, in the form requested by the relevant tax authority, a declaration, claim, certificate, document or other evidence establishing exemption therefrom which has been requested of such Holder and which it is legally entitled to provide;
(7) any present or future tax, levy, impost or other governmental change imposed by the United States of America or any political subdivision or taxing authority thereof or therein;
(8) any present or future tax, levy, impost or other governmental charge imposed, assessed, levied or collected in respect of a payment under or with respect to a Security to any Holder of the relevant Security that is a fiduciary, partnership or a person other than the sole beneficial owner of such payment or Security to the extent that the beneficiary or settlor with respect to the fiduciary, member of that partnership or beneficial owner would not have been entitled to the additional amounts or would not have been subject to such tax, levy, impost or charge, had that beneficiary, settlor, member or beneficial owner been the actual Holder of such Security; or
(9) any combination of items (1) through (8) above.
A-7
Nor shall additional amounts be paid in the event that the obligation to pay additional amounts is the result of the issuance of definitive Registered Securities to a Holder of a Predecessor Security at such Holder’s request upon the occurrence of an Event of Default and at the time payment is made definitive Registered Securities have not been issued in exchange for the entire principal amount of the Predecessor Securities. The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes, levies, duties, assessments, imposts or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein.
Upon the occurrence of a Change of Control Repurchase Event, unless the Issuer has exercised its right to redeem all of the Notes, the Issuer will make an offer to holders of the Notes to purchase all the Notes as described below (the “Change of Control Offer”), at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to, but not including, the date of purchase.
Within 30 days following the date upon which the Change of Control Repurchase Event occurred or, at the Issuer’s option, prior to the date upon which such Change of Control (as defined below) occurs but after the public announcement of the pending Change of Control, the Issuer will be required to provide a notice to each holder of Notes, with a copy to the Trustee, which notice will govern the terms of the Change of Control Offer. Such notice will state, among other things, the purchase date, which must be no earlier than 10 days nor later than 60 days from the date such notice is sent, other than as may be required by law (the “Change of Control Payment Date”). The notice, if sent prior to the date of consummation of the Change of Control, will state that the Change of Control Offer is conditioned on the Change of Control being consummated on or prior to the Change of Control Payment Date.
Holders of Notes electing to have Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to Euroclear Bank SA/NV and Clearstream Banking S.A. at the address specified in the notice, or transfer such Notes to the paying agent by book entry transfer pursuant to the applicable procedures of the paying agent, prior to the close of business on the third Business Day prior to the Change of Control Payment Date.
On the Change of Control Payment Date, the Issuer will, to the extent lawful (i) accept for payment all Notes or portions of Notes (in minimum denominations of €100,000 and integral multiples of €1,000 above that amount) validly tendered pursuant to the Change of Control Offer (“Tendered Notes”), (ii) deposit with the paying agent an amount equal to the aggregate purchase price in respect of Tendered Notes and (iii) deliver or cause to be delivered to the Trustee for cancellation the Tendered Notes, together with an officer’s certificate stating the aggregate principal amount of Notes being repurchased by the Issuer.
A-8
If the Change of Control Payment Date is on or after an interest record date and on or before the related Interest Payment Date, any accrued and unpaid interest to the Change of Control Payment Date will be paid on the relevant Interest Payment Date to the person in whose name a Note is registered at the close of business on such record date.
The Issuer will not be required to make a Change of Control Offer if (i) a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for such an offer made by the Issuer and such third party purchases all Notes validly tendered and not withdrawn under its offer or (ii) the Issuer has previously mailed a redemption notice with respect to all of the outstanding Notes.
The Issuer will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of the Indenture (including those related to a Change of Control Repurchase Event), the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue of the conflict.
Provisions under the Indenture relative to the Issuer’s obligation to make an offer to repurchase Notes as a result of a Change of Control may be waived or modified with the written consent of the holders of a majority in principal amount of the Notes.
The Change of Control Repurchase Event feature of the Notes may in certain circumstances make it more difficult or discourage a sale or takeover of the Issuer and, thus, the removal of incumbent management. Subject to certain limitations, the Issuer could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Notes, but that could increase the amount of indebtedness outstanding at such time or otherwise affect the Issuer’s capital structure or credit ratings on the Notes.
The Issuer may not have sufficient funds to repurchase all the Notes, or any other outstanding debt securities that the Issuer would be required to repurchase, upon a Change of Control Repurchase Event.
“Below Investment Grade Ratings Event” means the Notes cease to be rated Investment Grade by both Rating Agencies on any date during the period commencing on the earlier of (i) the occurrence of a Change of Control and (ii) public notice of the occurrence of a Change of Control or the Issuer’s intention to effect a Change of Control, and ending 60 days after (which 60 day period will be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any Rating Agency) the consummation of a Change of Control. Notwithstanding the foregoing, a Below Investment Grade Ratings Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Ratings Event for purposes of the definition of Change of Control Repurchase Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Ratings Event).
A-9
“Change of Control” means the occurrence of any of the following: (i) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of consolidation, amalgamation or merger), in one or a series of related transactions, of all or substantially all of the Issuer’s assets and those of its Subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than to the Issuer or one of its Subsidiaries; (ii) the consummation of any transaction or series of related transactions (including, without limitation, any consolidation, amalgamation, or merger or other combination (including by way of a scheme of arrangement)) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the Issuer or one or more of its Subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the voting power of the Issuer’s total outstanding Voting Stock; or (iii) the adoption of a plan relating to the Issuer’s liquidation or dissolution. A transaction shall not constitute a “Change of Control” for the purposes of this definition if (i) the Issuer becomes a direct or indirect wholly-owned subsidiary of a holding company and (ii) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Issuer’s Voting Stock immediately prior to that transaction.
“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Ratings Event.
“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s) or a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P); or the equivalent Investment Grade credit rating from any replacement Rating Agency or Rating Agencies selected by the Issuer.
“Moody’s” means Moody’s Investors Service Inc., a subsidiary of Moody’s Corporation, and its successors.
“Rating Agency” means (i) each of Moody’s and S&P and (ii) if any of Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act, selected by the Issuer as a replacement agency for Moody’s or S&P, or both of them, as the case may be.
A-10
“S&P” means S&P Global Ratings Inc., a division of S&P Global Inc., and its successors.
“Subsidiary” means, at any relevant time, any person of which the voting shares or other interests carrying more than 50% of the outstanding voting rights attached to all outstanding voting shares or other interests are owned, directly or indirectly, by or for the Issuer and/or one or more of its subsidiaries.
“Voting Stock” of any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series will have any right to institute any proceeding with respect to the Indenture, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered security and/or indemnity reasonably satisfactory to the Trustee, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal (and premium, if any) or any interest on this Security on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture.
A-11
The Securities of this series are issuable only in registered form without coupons in denominations of €100,000 and integral multiples of €1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of Registered Securities is registrable in the Security Register, upon surrender of a Registered Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on a Registered Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder thereof or his or her attorney duly authorized in writing, and thereupon one or more new Registered Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
No service charge shall be made for any such registration of transfer or exchange, but the Issuer or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentation of this Security for registration of transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither of the Issuer nor the Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
A-12
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount of this Security shall be €500,000,000. The following decreases/increases in the principal amount of this Security have been made:
Date of Decrease/Increase |
Decrease in Principal Amount |
Increase in Principal Amount |
Total Principal Amount Following such Decrease/Increase |
Notation Made by or on Behalf of Trustee |
A-13
[OPTION OF HOLDER TO ELECT PURCHASE]
The undersigned hereby irrevocably request(s) and instruct(s) the Company to repurchase the Notes (or portion thereof specified below), ISIN. __ and CUSIP No_____ pursuant to its terms at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest to the repayment date, to the undersigned, at
(Please print or type name and address of the undersigned).
For the Notes to be repurchased, the Trustee (or the Paying Agent on behalf of the Trustee) must receive at , or at such other place or places of which the Company shall from time to time notify the holder of the Notes, not more than 30 days following the date upon which the Change of Control Repurchase Event occurred as set forth in the Prospectus Supplement for the Notes, this “Option of Holder to Elect Purchase” form duly completed.
If less than the entire principal amount of the Notes is to be repaid, specify the portion thereof (which shall be in increments of the minimum denomination) which the holder elects to have repaid and specify the denomination or denominations (which shall be €100,000 or whole multiples of €1,000 in excess thereof) of the Notes to be issued to the holder for the portion not being repaid.
€
DATE
| NOTICE: The signature on this Option of Holder to Elect Purchase must correspond with the name as written upon the face of this Note in every particular, without alteration or enlargement or any change whatever. |
A-14
[FORM OF ASSIGNMENT]
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Insert assignee’s soc. sec. or tax I.D. no.)
| (Print or type assignee’s name, address and zip code) |
and irrevocably appoint
as agent for the transfer of this Security on the books of the Company. The agent may substitute another to act for him or her.
| Your Signature: | |||
| Date: | |||
(Sign exactl as your name appears on the other side of this Security) |
*Signature guaranteed by:
| By: |
* The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.
A-15
Exhibit 5.1
 |
Davis Polk & Wardwell London llp 5 Aldermanbury Square davispolk.com |
11 October 2022
Re: Smith & Nephew plc – Prospectus Supplement
|
Smith & Nephew plc Building 5 Croxley Park Hatters Lane Watford Hertfordshire WD18 8YE United Kingdom |
(the “Company”)
Dear Sir or Madam
We have acted as advisers as to English law to Smith & Nephew plc (the “Company”), a public limited company organised under the laws of England and Wales, in connection with its automatic shelf Registration Statement on Form-3 (the “Registration Statement”) filed with the United States Securities and Exchange Commission (the “SEC”) on 2 October 2020 as supplemented by the prospectus supplement dated 4 October 2022 (the “Prospectus Supplement”) for the purposes of registering, under the United States Securities Act of 1933, as amended (the “Securities Act”), the €500,000,000 aggregate principal amount of the Company’s 4.565% notes due 2029 to be issued pursuant to the Indenture referred to below (the “Notes” and the registration, offer and issue of such Notes being referred to herein as the “Transaction”).
For the purposes of this opinion, we have examined the documents listed in Schedule 1 to this opinion.
Capitalised terms used in this opinion shall, unless otherwise defined, have the meaning given to them in Schedule 1 to this opinion.
Davis
Polk & Wardwell London LLP is a limited liability partnership formed under the laws of the State of New York, USA and is authorised
and regulated by the Solicitors Regulation Authority with registration number 566321.
Davis Polk includes Davis Polk & Wardwell LLP and its associated entities
| | Smith & Nephew plc |
This opinion is confined to matters of English law as at the date of this opinion, and this opinion and any non-contractual obligations arising out of or in relation to it are governed by and shall be construed in accordance with English law. Accordingly, we express no opinion with regard to any system of law other than English law as currently applied by the English courts. To the extent that the laws of the State of New York or of any other jurisdiction may be relevant, we have made no independent investigation thereof and our opinion is subject to the effect of such laws.
By accepting this opinion you irrevocably agree and accept that the courts of England shall have exclusive jurisdiction to hear and determine any dispute or claim arising out of or in connection with this opinion or its formation, including without limitation, (i) the creation, effect or interpretation of, or the legal relationships established by, this opinion and (ii) any non-contractual obligations arising out of or in connection with this opinion.
We assume no obligation to notify you of any future changes in law, including any changes occurring as a result of the United Kingdom withdrawing from the European Union, which may affect the opinions expressed herein, or otherwise to update this opinion in any respect.
Opinions
On the basis of our examination of the documents listed in Schedule 1 to this opinion and the other matters referred to above, and subject to the assumptions set out in Schedule 2 to this opinion, the qualifications set out in Schedule 3 to this opinion and any matters not disclosed to us, we are of the opinion that:
| 1. | Corporate existence. The Company is a company that has been duly incorporated in Great Britain and registered in England and Wales as a public company limited by shares. |
| 2. | Corporate power. The Company had the requisite corporate capacity to enter into the Indenture and has the requisite corporate capacity to issue the Notes, and, in each case, to perform its obligations thereunder. |
| 3. | Corporate action. All corporate action required to be taken by the Company to authorise the execution by it of, and the performance of its obligations under, the Indenture, and to issue the Notes, has been duly taken and each of the Indenture and the Notes has been duly executed by or on behalf of the Company. |
This opinion is addressed to you for your own benefit for the purposes of the Prospectus Supplement to be filed under the Act. It may not be disclosed or furnished to, or used or relied upon by, any other person or used or relied upon by you for any other purpose without, in any such case, our prior written consent. We hereby give such consent to the filing of this opinion as an exhibit to a report on Form 6-K. In giving this consent, we do not admit that we come within the category of persons whose consent is required under section 7 of the Securities Act or the rules and regulations of the SEC thereunder.
|
Yours faithfully
/s/ Davis Polk & Wardwell London LLP |
| 11 October 2022 | 2 |
| | Smith & Nephew plc |
Schedule
1
DOCUMENTS EXAMINED
For the purposes of this opinion, we have examined the following documents:
| 1. | a copy of the New York law governed Indenture dated 14 October 2020 (the “Indenture”); |
| 2. | a copy of the executed Notes in global form; |
| 3. | a copy of the Registration Statement; |
| 4. | an officer’s certificate dated 11 October 2022 establishing the terms of the Notes pursuant to the Indenture; |
| 5. | a certificate from Helen Barraclough, in her capacity as Secretary of the Company, dated 11 October 2022 (the “Secretary’s Certificate”) having attached to it, inter alia: |
| (a) | a copy of the certificate of incorporation in respect of the Company certified to be a true and correct copy; |
| (b) | a copy of the certificate of incorporation on change of name in respect of the Company certified to be a true and correct copy; |
| (c) | a copy of the certificate of incorporation on re-registration as a public limited company in respect of the Company certified to be a true and correct copy; |
| (d) | a copy of the articles of association of the Company certified to be a true and correct copy as at: (i) the date of the meeting of the board of directors of the Company (the “Board”) held on 24 September 2020; and (ii) the date of the meeting of a committee of the Board held on 7 October 2020 (the “2020 Articles”); |
| (e) | a copy of the articles of association of the Company certified to be a true and correct copy as at: (i) the date of the meeting of the Board held on 27 July 2022; (ii) the date of the Committee Resolutions (defined below) and (iii) the date hereof (the “2022 Articles of Association”); |
| (f) | copies of extracts of the minutes of meetings of the Board held on 24 September 2020 and 27 July 2022 (together, the “Board Minutes”), each certified to be a true and correct copy; |
| (g) | a copy of the minutes of a meeting of a committee of the Board held on 7 October 2020 (the “Committee Minutes”), certified to be a true and correct copy; |
| (h) | a copy of the unanimous written resolutions of a committee of the Board dated 4 October 2022 (the “Committee Resolutions”), certified to be a true and correct copy; |
| (i) | a copy of the Prospectus Supplement; and |
| (j) | lists of persons duly appointed and existing as directors of the Company as at the dates of the Board Minutes referred to above, the Committee Minutes referred to above, the Committee Resolutions referred to above and each of the Issue Documents, each certified to be a true and correct copy, |
| 11 October 2022 | 3 |
| | Smith & Nephew plc |
and we have relied upon the statements as to factual matters contained in or made pursuant to each of the above-mentioned documents and the search results referenced in paragraphs 16 and 17 of Schedule 2. Except as stated above we have not examined any contracts, instruments or other documents or any corporate records of any party and have not made any other enquiries.
The Indenture, the Notes and the underwriting agreement and pricing agreement entered into by the Company in connection with the Notes are referred to in this opinion letter collectively as the “Issue Documents.”
| 11 October 2022 | 4 |
| | Smith & Nephew plc |
Schedule
2
ASSUMPTIONS
For the purposes of this opinion, we have assumed:
| 1. | all documents submitted to us as originals are authentic and complete; |
| 2. | all documents submitted to us as copies, whether in physical or electronic form, conform to authentic, complete originals and, where a document has been examined by us in draft or specimen form, it will be or has been executed in the form of that draft or specimen; |
| 3. | all signatures (whether in physical or electronic form), stamps and seals on all documents that we reviewed are genuine; and the person who affixed any signature (whether in physical or electronic form), or authorised the attachment and release of such signature, to any document is the person whose signature it purports to be or a person who had the authority of the person whose signature it purports to be to do so; |
| 4. | all signatures (whether in physical or electronic form) which purport to have been attested were made in the presence of the purported witness. Each of the Indenture and the Notes has been signed by a person or persons identified in the relevant Board Minutes or the Committee Minutes or the Committee Resolutions of the Company as a prospective signatory of the Indenture or of the Notes. Each signatory for whom an office or position or special authority is specified by his or her signature in fact held or holds the specified office or position or special authority; |
| 5. | each of the Issue Documents is valid and binding on each party thereto under the laws of the State of New York by which it is expressed to be governed, and that the words and phrases used in each of the Issue Documents has the same meaning and effect as they would have if it were governed by English law; |
| 6. | the Notes have been duly authenticated and issued in accordance with the provisions of the Indenture, and the name of each holder of a Note will be correctly registered in the register maintained for that purpose; |
| 7. | the Indenture has been duly authorised, executed and delivered by each of the parties thereto in accordance with all applicable laws (other than, in the case of the authorisation of the Indenture by the Company, the laws of England); |
| 8. | the Indenture and the Notes constitute, legal, valid and binding obligations of each of the parties thereto enforceable under all applicable laws; |
| 9. | the provisions of the articles of association of the Company which limit the directors’ authority to borrow and any other limitation on the Company duly and properly to issue the Notes have been and will be duly observed; |
| 10. | in relation to the Company: |
| (a) | the certificate of incorporation in the form referred to in paragraph 5(a) of Schedule 1 to this opinion, the certificate of incorporation on change of name in the form referred to in paragraph 5(b) of Schedule 1 to this opinion and the certificate of incorporation on re-registration as a public limited company in the form referred to in paragraph 5(c) of Schedule 1 are in force on the date hereof; |
| 11 October 2022 | 5 |
| | Smith & Nephew plc |
| (b) | the 2020 Articles, in the form referred to in paragraph 5(d) of Schedule 1 to this opinion, were in force at the date and time of authorisation and execution of the Indenture; |
| (c) | the 2022 Articles, in the form referred to in paragraph 5(e) of Schedule 1 to this opinion, were in force at the date and time of authorisation and execution of each of the Underwriting Agreement, the Pricing Agreement and the Notes and are in force on the date hereof; |
| (d) | that each of the Board Minutes, the Committee Minutes and the Committee Resolutions in the forms referred to in paragraphs 5(f), 5(g) and 5(h) of Schedule 1 to this opinion are complete and correct, and that no amendment has been made thereto; |
| (e) | (i) that each of the meetings of the Board and the meetings of a committee of the Board referred to in the Board Minutes and the Committee Minutes, respectively, were properly constituted and convened; (ii) that all relevant policies and procedures of the Company, including the terms of any delegation to the Committee were complied with; (iii) that a quorum of properly appointed directors of the Company (holding the necessary offices and meeting the other requirements for the purposes of forming a quorum) was present throughout and that the resolutions referred to therein were properly passed at such meetings and that all relevant provisions of the Companies Act 2006 and the articles of association of the Company were duly observed; and (iv) that such resolutions have not been amended, revoked or rescinded and are in full force and effect; and |
| (f) | that the Committee Resolutions were properly passed as written resolutions in accordance with the articles of association of the Company, that all eligible members of the committee (holding the necessary offices and being all the members of that committee who would have been entitled to vote on the matter had it been proposed as a resolution at a committee meeting (but excluding any member whose vote is not to be counted in respect of the particular matter)) have signed one or more copies of the Committee Resolutions or otherwise indicated agreement in writing to such Committee Resolutions, that all relevant policies and procedures of the Company were complied with, that all relevant provisions of the resolutions of the Board appointing the Committee, the Companies Act 2006 and the articles of association of the Company were duly observed, and that such resolutions have not been amended, revoked or rescinded and are in full force and effect; |
| 11. | each of the statements contained in the Secretary’s Certificate is true and correct as at the date thereof and as at the date hereof; |
| 12. | the directors of the Company and members of the committees appointed by the directors acted in good faith and in accordance with their duties under all applicable laws and the articles of association of the Company in authorising the execution of each of the Indenture and the Notes; |
| 13. | the execution and delivery of the Indenture has benefited and the issue of the Notes by the Company and the exercise of its rights and performance of its obligations under the Indenture and the Notes will sufficiently benefit, and are in the interests of, the Company; |
| 14. | the Indenture has been executed and delivered by each party thereto and is not subject to any escrow or other similar arrangement; |
| 11 October 2022 | 6 |
| | Smith & Nephew plc |
| 15. | the Indenture has been and the Notes will be performed in accordance with its or their terms and none of them will be amended or modified in any way, and there have been, are and will be no other arrangements nor any course of dealings which modify, supersede or otherwise affect any of the terms thereof, and there were and are no unknown facts or circumstances which are not apparent from the face of any document which may affect the conclusions in this opinion; |
| 16. | the information revealed by our search of the entries shown on the Companies House Direct online service on 13 October 2020 and the information revealed by our search at Companies House in England and Wales on 10 October 2022 (together, the “Company Searches”) (i) was accurate in all respects and has not since the time of our search on 10 October 2022 been altered, and (ii) was complete and included all relevant information which should properly have been submitted to the Registrar of Companies; |
| 17. | the information revealed by the results of a telephone search with the Companies Court in London of the Central Registry of Winding Up Petitions on 13 October 2020 and the information revealed by the results of a telephone search with the Insolvency and Companies List (formerly known as the Companies Court) in London of the Central Registry of Winding Up Petitions on 10 October 2022 (together, the “Central Registry Searches”) was accurate in all respects and has not since the time our enquiry on 10 October 2022 been altered; |
| 18. | the Company neither is nor was restricted by contract or any other arrangement binding on it from entering into the Indenture or issuing the Notes nor has the Company entered into any documents other than those referred to in this opinion or any other arrangements which could affect the validity of this opinion; |
| 19. | the Notes have been and will be offered and sold in accordance with the provisions of the Indenture and as described in the Registration Statement and Prospectus Supplement and there will be no provision in any other supplement relating to the Notes or any other document which would affect the content of this opinion; |
| 20. | the Indenture has at all times reflected, and reflects, and the Notes will reflect, the commercial intentions of the parties thereto and the Indenture was entered into and the Notes will be entered into in good faith on arm’s length terms, that each party made in the case of the Indenture and will make in the case of the Notes its own independent decision to enter into the Indenture and the Notes and that, in respect of any party to the Indenture and the Notes and its respective directors, employees, agents and advisers, there was and is no bad faith, fraud, coercion, duress or undue influence; |
| 21. | all statements made as to matters of fact and all representations and warranties given by the respective parties in the Indenture were and are true, accurate and complete; |
| 22. | the Company and each other person who is a party to the Indenture or otherwise involved in the issue of the Notes or the Transaction has complied with and will comply with all applicable provisions of Regulation (EU) No 596/2014 on market abuse, as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018, as amended (the “EUWA”) (“UK MAR”), Regulation (EU) 2017/1129, as it forms part of domestic law in the United Kingdom by virtue of the EUWA (the “UK Prospectus Regulation”), the Financial Services and Markets Act 2000, as amended (the “FSMA”) and the Financial Services Act 2012, as amended (the “FSA”) and any regulations made under any of UK MAR, the UK Prospectus Regulation, the FSMA and the FSA with respect to anything done or to be done by it in connection with the Indenture or the Transaction in, from, or otherwise involving the United Kingdom including, without limitation, Article 14 (prohibition of insider dealing etc.) and Article 15 (prohibition of market manipulation) of UK MAR, section 19 (the general prohibition) and section 21 (restrictions on financial promotion) of the FSMA and section 89 (misleading statements), section 90 (misleading impressions) and section 91 (misleading statements etc in relation to benchmarks) of the FSA; |
| 11 October 2022 | 7 |
| | Smith & Nephew plc |
| 23. | the Notes have not been and will not be offered in the United Kingdom to any “retail investor” within the meaning given to that term in Regulation (EU) No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPS) as it forms part of domestic law in the United Kingdom by virtue of the EUWA; and |
| 24. | each person who is involved in the Transaction (whether as a party to the Indenture or otherwise) has complied and will continue to comply with all applicable anti-corruption, anti-money laundering, anti-terrorism, sanctions and human rights laws and regulations and that the performance and enforcement of the Indenture is consistent therewith. |
| 11 October 2022 | 8 |
| | Smith & Nephew plc |
Schedule
3
QUALIFICATIONS
Our opinion is subject to the following qualifications:
| 1. | The Company Searches are not capable of revealing conclusively whether or not, inter alia, (i) a winding-up order has been made or a resolution passed for the winding up of a company; or (ii) an administration order has been made; or (iii) a receiver, administrative receiver, administrator or liquidator has been appointed; or (iv) a court order has been made under the Cross-Border Insolvency Regulations 2006, since notice of these matters may not be filed with the Registrar of Companies immediately and, when filed, may not be entered on the electronic records of the relevant company immediately. In addition, the Company Searches are not capable of revealing, prior to the making of the relevant order or the appointment of an administrator otherwise taking effect, whether or not a winding-up petition or an application for an administration order has been presented or notice of intention to appoint an administrator under paragraphs 14 or 22 of Schedule B1 to the Insolvency Act 1986 has been filed with the court. |
| 2. | The Central Registry Searches relate only to the presentation of (i) a petition for the making of a winding-up order or the making of a winding-up order by the Court; (ii) an application to the High Court of Justice in London for the making of an administration order and the making by such court of an administration order; and (iii) a notice of intention to appoint an administrator or a notice of appointment of an administrator filed at the High Court of Justice in London. They are not capable of revealing conclusively whether or not such a winding-up petition, application for an administration order, notice of intention or notice of appointment has been presented or winding-up or administration order granted. |
| 3. | This opinion is subject to all applicable laws relating to bankruptcy, insolvency, liquidation, administration, voluntary arrangement, scheme of arrangement, moratorium, reorganisation, rescheduling, fraudulent transfer, preference, transactions at undervalue or other laws of general application relating to or affecting the rights of creditors. |
| 4. | We express no opinion on whether the entry into of the Indenture or issuance of the Notes may have resulted or may result in the breach of any restrictions imposed on any of the parties by its constitutional documents or by any instrument to which any such person is a party or by which it may be bound. |
| 5. | We have not been responsible for investigating or verifying the accuracy of the facts, including the statements of foreign law or the reasonableness of any statement or opinion or intention contained in or relevant to the Registration Statement, Prospectus Supplement or any other document referred to therein, or that no material facts have been omitted therefrom. |
| 6. | We express no opinion as to whether the Registration Statement or Prospectus Supplement (or any part of either of them) contains all the information required to be contained in it or whether the persons responsible for the Registration Statement or Prospectus Supplement have discharged their obligations thereunder. |
| 11 October 2022 | 9 |
Exhibit 5.2
| |
Davis Polk & Wardwell London llp 5 Aldermanbury Square davispolk.com |
| October 11, 2022 |
Smith & Nephew plc
Building 5, Croxley Park
Hatters Lane, Watford
Hertfordshire WD18 8YE
England
Ladies and Gentlemen:
Smith & Nephew plc, a public limited company organized under the laws of England and Wales (the “Company”), has filed with the Securities and Exchange Commission a Registration Statement on Form F-3ASR (File No. 333-249255) (the “Registration Statement”) for the purpose of registering under the Securities Act of 1933, as amended (the “Securities Act”), certain securities, including €500,000,000 aggregate principal amount of the Company’s 4.565% Notes due 2029 (the “Notes”). The Notes are to be issued pursuant to the provisions of the Indenture dated as of October 14, 2020 (the “Indenture”) between the Company and The Bank of New York Mellon, London Branch, as trustee. The Securities are to be sold pursuant to an Underwriting Agreement dated as of October 4, 2022 (the “Base Underwriting Agreement”) among the Company and the several underwriters listed in Schedule I to the Pricing Agreement attached thereto (the “Underwriters”) and the Pricing Agreement dated as of October 4, 2022 (the "Pricing Agreement” and, together with the Shelf Underwriting Agreement, the "Underwriting Agreement”).
We, as your counsel, have examined originals or copies of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable for the purpose of rendering this opinion.
In rendering the opinions expressed herein, we have, without independent inquiry or investigation, assumed that (i) all documents submitted to us as originals are authentic and complete, (ii) all documents submitted to us as copies conform to authentic, complete originals, (iii) all signatures on all documents that we reviewed are genuine, (iv) all natural persons executing documents had and have the legal capacity to do so, (v) all statements in certificates of public officials and officers of the Company that we reviewed were and are accurate and (vi) all representations made by the Company as to matters of fact in the documents that we reviewed were and are accurate.
Based upon the foregoing, and subject to the additional assumptions and qualifications set forth below, we advise you that, in our opinion, assuming that the Notes have been duly executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement, the Notes will constitute valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability, and may be subject to possible judicial or regulatory actions giving effect to governmental actions or foreign laws affecting creditors’ rights, provided that we express no opinion as to the enforceability of any waiver of rights under any usury or stay law or the validity, legally binding effect or enforceability of any provision that permits holders to collect any portion of stated principal amount upon acceleration of the Notes to the extent determined to constitute unearned interest.
Davis
Polk & Wardwell London LLP is a limited liability partnership formed under the laws of the State of New York, USA and is authorised
and regulated by the Solicitors Regulation Authority with registration number 566321.
Davis Polk includes Davis Polk & Wardwell LLP and its associated entities
| |
Smith & Nephew plc |
In connection with the opinion expressed above, we have assumed that the Company is validly existing as a corporation under the laws of England and Wales. In addition, we have assumed that the Indenture and the Notes (collectively, the “Documents”) are valid, binding and enforceable agreements of each party thereto. We have also assumed that the execution, delivery and performance by each party to each Document to which it is a party (a) are within its corporate powers, (b) do not contravene, or constitute a default under, the certificate of incorporation or bylaws or other constitutive documents of such party, (c) require no action by or in respect of, or filing with, any governmental body, agency or official and (d) do not contravene, or constitute a default under, any provision of applicable law or public policy or regulation or any judgment, injunction, order or decree or any agreement or other instrument binding upon such party.
We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, except that we express no opinion as to any law, rule or regulation that is applicable to the Company or the Documents or the transactions contemplated thereby solely because such law, rule or regulation is part of a regulatory regime applicable to any party to any of the Documents or any of its affiliates due to the specific assets or business of such party or such affiliate. Insofar as the foregoing opinion involves matters governed by the laws of England and Wales, we have relied on the English law opinion of Davis Polk & Wardwell London LLP to be filed as an exhibit to a report on Form 6-K to be filed by the Company on the date hereof and our opinion is subject to the qualifications, assumptions and limitations set forth therein.
We hereby consent to the filing of this opinion as an exhibit to a report on Form 6-K to be filed by the Company on the date hereof and its incorporation by reference into the Registration Statement and further consent to the reference to our name under the caption “Legal Matters” in the prospectus supplement which is a part of the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Davis Polk & Wardwell London LLP
| October 11, 2022 | 2 |