Smith & Nephew PLC F-3ASR, filed Oct 2, 2020
Smith & Nephew PLC (SNN)
As filed with the Securities and Exchange Commission on October 2, 2020
Registration No. 333-______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SMITH & NEPHEW PLC
(Exact Name of Registrant as Specified in Its Charter)
| England and Wales | 98-0224867 | |
| (State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification Number) | |
| Building 5, Croxley Park Hatters Lane, Watford Hertfordshire WD18 8YE United Kingdom Tel.: +44(0)1923-477-100 |
||
| (Address and Telephone Number of Registrant’s Principal Executive Offices) | ||
Smith & Nephew Inc.
150 Minuteman Road
Andover, Massachusetts 01810
United States of America
Tel.: +1 (978) 749-1000
(Address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Reuven Young, Esq.
Davis Polk & Wardwell London LLP
5 Aldermanbury Square
London EC2V 7HR
United Kingdom
Tel.: +44-20-7418-1300
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☒
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with US GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 7(a)(2)(B) of the Securities Act . ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
| CALCULATION OF REGISTRATION FEE | ||||
| Title of Securities to be Registered |
Amount to be Registered |
Proposed Maximum Aggregate Price Per Unit | Proposed Maximum Aggregate Offering Price | Amount of Registration Fee |
| Debt Securities | (1)(2)(3) | (1)(2) | (1)(2) | (3) |
(1) Not applicable pursuant to Form F-3 General Instruction II.F.
(2) There are being registered under this Registration Statement an indeterminate amount of debt securities as may from time to time be issued at indeterminate prices, in one or more currencies, currency units or composite currencies.
(3) Deferred in reliance upon Rules 456(b) and 457(r).
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PROSPECTUS
SMITH & NEPHEW PLC
Debt Securities
By this prospectus, we may offer and sell from time to time debt securities.
This prospectus provides you with a general description of the debt securities we may offer.
Each time securities are sold using this prospectus, we will provide a supplement to this prospectus that contains specific information about the offering. The supplement may also add, update or change information contained in this prospectus. You should read this prospectus and any supplement carefully before you invest.
The securities will be offered and sold directly to purchasers, through underwriters, dealers or agents, or through any combination of these methods, on a continuous or delayed basis. The supplements to this prospectus will provide the specific terms of the plan of distribution.
The applicable prospectus supplement will contain information, where applicable, as to any listing on any securities exchange of the securities covered by the prospectus supplement.
Our American Depositary Shares, representing our ordinary shares, are listed on the New York Stock Exchange under the ticker symbol “SNN”. Our ordinary shares are admitted to trading on the London Stock Exchange under the ticker symbol “SN”. You can consult reports and other information about us that we file pursuant to the rules of the US Securities and Exchange Commission (the “SEC”), the New York Stock Exchange and the London Stock Exchange at such exchanges.
See “Risk Factors” beginning on page 6 for a discussion of certain risks of investing in these securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Prospectus dated October 2, 2020
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This prospectus is part of a registration statement that we filed with the SEC utilizing a “shelf” registration process. Under this shelf process, we may sell the securities described in this prospectus in one or more offerings.
This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with the additional information described under the heading “Where You Can Find More Information About Us”. We have filed or incorporated by reference exhibits to the registration statement of which this prospectus forms a part. You should read the exhibits carefully for provisions that may be important to you.
Unless otherwise stated in this prospectus or unless the context otherwise requires, references in this prospectus to:
| · | the “Company”, “we”, “our” and “us” are to Smith & Nephew plc; |
| · | the “Exchange Act” is to the Securities Exchange Act of 1934, as amended; |
| · | the “Group” is to Smith & Nephew plc and its subsidiaries; and |
| · | the “Securities Act” is to the Securities Act of 1933, as amended. |
We are a leading portfolio medical technology company operating through three global franchises: Orthopaedics, Sports Medicine & ENT and Advanced Wound Management. Orthopaedics includes an innovative range of hip and knee implants used to replace diseased, damaged or worn joints, robotics-assisted enabling technologies that empower surgeons, and trauma products used to stabilise severe fractures and correct bone deformities. Our Sports Medicine & ENT (Ear, Nose and Throat) businesses offer advanced products and instruments that enable surgeons to perform minimally invasive surgery of the joints, and which are used to repair or remove soft tissue. Our Advanced Wound Management portfolio provides an extensive set of products to meet broad and complex clinical needs, and help healthcare professionals reduce the human and economic consequences of wounds. We operate on a worldwide basis and have distribution channels in over 100 countries.
We have a history dating back more than 160 years. As of December 31, 2019, we employed approximately 17,500 employees supporting customers in over 100 countries. Our principal executive office is located at Building 5, Croxley Park, Hatters Lane, Watford, Hertfordshire WD18 8YE and our telephone number is +44 (0)1923 477 100.
The foregoing information about us is only a general summary and is not intended to be comprehensive. For additional information about us, you should refer to the information described under the caption “Where You Can Find More Information About Us”.
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Investing in the securities offered using this prospectus involves risk. You should consider carefully the risks described below, together with the risks described in the documents incorporated by reference into this prospectus, and any risk factors included in any prospectus supplement, before you decide to buy our securities. If any of these risks actually occur, our business, financial condition and results of operations could suffer, and the trading price and liquidity of the debt securities offered using this prospectus could decline, in which case you may lose all or part of your investment.
Risk Relating to our Business
You should read “Risk Factors” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2019, which is incorporated by reference in this prospectus, or similar sections in subsequent filings incorporated by reference in this prospectus, for information relating to risk factors affecting our business.
Risks Relating to the Debt Securities
Because we are a holding company and currently conduct our operations through subsidiaries, your right to receive payments on our debt securities is structurally subordinated to the liabilities of our subsidiaries.
We are organized as a holding company, and substantially all of our operations are carried on through subsidiaries. Our ability to meet our financial obligations is dependent upon the availability of cash flows from our domestic and foreign subsidiaries and affiliated companies through dividends, intercompany advances, management fees and other payments. Our subsidiaries are not guarantors of the debt securities we may offer. Moreover, these subsidiaries and affiliated companies are not required and may not be able to pay us dividends or otherwise distribute or advance cash to us, which could limit the amount of funds available to meet payment obligations under the debt securities.
In addition, claims of the creditors of our subsidiaries have priority as to the assets of such subsidiaries over our rights as shareholders of such subsidiaries. The terms and conditions of the debt securities and the indenture by which they are governed do not limit the amount of liabilities that our subsidiaries may incur. Consequently, in the event of our insolvency, the claims of holders of debt securities issued by us would be structurally subordinated to the prior claims of the creditors of our subsidiaries.
Because the debt securities are unsecured, your right to receive payments may be adversely affected.
The debt securities that we are offering will be unsecured. To the extent that we grant security over our assets in favor of holders of our other indebtedness, holders of debt securities will be effectively subordinated to the other indebtedness to the extent of the value of those assets. If we default on the debt securities, or in the event of bankruptcy, liquidation or reorganization, then, to the extent that we have granted security over our assets, the assets that secure these debts will be used to satisfy the obligations under that secured debt before we can make payment on the debt securities. As a result, there may be only limited assets available to make payments on the debt securities. If there are not enough assets to satisfy the obligations of the secured debt, then the remaining amounts on the secured debt would share equally with all unsubordinated unsecured indebtedness, including the debt securities offered hereby, in the remaining assets.
Your rights as a holder of debt securities may be inferior to the rights of holders of debt securities issued under a different series pursuant to the indenture.
The debt securities are governed by a document called an indenture, described later under “Description of Debt Securities”. We may issue as many distinct series of debt securities under this indenture as we wish. We may also issue a series of debt securities under this indenture that provides holders with rights superior to the rights already granted or that may be granted in the future to holders of another series. You should read carefully the specific terms of any particular series of debt securities which will be contained in the prospectus supplement relating to such debt securities.
We are not restricted in our ability to dispose of our assets by the terms of the debt securities.
We and our subsidiaries are generally permitted to sell or otherwise dispose of our assets to another corporation or entity under the terms of the debt securities and the indenture, without consent of holders of the debt securities. If any such assets are disposed of, you will not be entitled to declare an acceleration of
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the maturity of the debt securities and, except in the case of a sale or transfer of all or substantially all of our assets where the applicable successor entity must assume our obligations under the debt securities (as described under “Description of Debt Securities – Mergers and Similar Events” below), the disposed assets will no longer be available to support the debt securities.
Our credit ratings may not reflect all risks of an investment in the debt securities.
The credit ratings ascribed to any of our debt securities from time to time are intended to reflect our ability to meet our payment obligations in respect of our debt securities, and may not reflect the potential impact of all risks related to an investment in the debt securities or other factors relating to the value of the debt securities. In addition, actual or anticipated changes in our credit ratings may affect the market value of the debt securities.
Should we default on our debt securities your right to receive payments on such debt securities may be adversely affected by UK insolvency laws.
We are incorporated under the laws of England and Wales. Accordingly, insolvency proceedings with respect to us are likely to proceed primarily under, and to be governed primarily by, UK insolvency law. The procedural and substantive provisions of such insolvency laws are, in certain cases, more favorable to secured creditors than comparable provisions of US law.
These provisions afford debtors and unsecured creditors only limited protection from the claims of secured creditors and it may not be possible for us or other unsecured creditors to prevent or delay the secured creditors from enforcing their security to repay the debts due to them under the terms that such security was granted.
The debt securities lack a developed trading market, and such a market may never develop.
We may issue debt securities in different series with different terms in amounts that are to be determined. These debt securities may be listed on the New York Stock Exchange or another recognized stock exchange, or may not be listed on any exchanges. However, there can be no assurance that an active trading market will develop for any series of debt securities even if we list the series on a securities exchange. There can also be no assurance regarding the ability of holders of our debt securities to sell their debt securities or the price at which such holders may be able to sell their debt securities. If a trading market were to develop, the debt securities could trade at prices that may be higher or lower than the initial offering price and this may result in a return that is greater or less than the interest rate on the debt security, depending on many factors, including, among other things, prevailing interest rates, our financial results, any decline in our credit-worthiness and the market for similar securities.
Any underwriters, broker-dealers or agents that participate in the distribution of the debt securities may make a market in the debt securities as permitted by applicable laws and regulations but will have no obligation to do so, and any such market-making activities may be discontinued at any time. Therefore, there can be no assurance as to the liquidity of any trading for the debt securities or that an active public market for the debt securities will develop.
An investment in debt securities denominated in a non-US dollar currency involves currency-related risks.
An investment in debt securities denominated in a non-US dollar currency entails significant risks that are not associated with a similar investment in debt securities that are payable solely in US dollars and where settlement value is not otherwise based on a non-US dollar currency. These risks include the possibility of significant changes in rates of exchange between the US dollar and the various non-US dollar currencies or composite currencies and the possibility of the imposition or modification of foreign exchange controls or other conditions by either the United States or non-US governments. These risks generally depend on factors over which we have no control, such as economic and political events and the supply of and demand for the relevant currencies in the global markets.
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Rates of exchange between the US dollar and many other currencies have been highly volatile, and this volatility may continue and perhaps spread to other currencies in the future. Fluctuations in currency exchange rates could adversely affect an investment in debt securities denominated in, or whose value is otherwise linked to, a specified currency other than US dollars. Depreciation of the specified currency against the US dollar could result in a decrease in the US dollar-equivalent value of payments on the debt securities, including the principal payable at maturity or settlement value payable upon exercise. That in turn could cause the market value of the debt securities to fall. Deprecation of the specified currency against the US dollar could result in a loss to the investor on a US dollar basis.
An increase in interest rates could result in a decrease in the relative value of any fixed rate notes.
In general, as market interest rates rise, notes bearing interest at a fixed rate generally decline in value because the premium, if any, over market interest rates will decline. Consequently, if you purchase fixed rate notes and market interest rates increase, the market value of your fixed rate notes may decline. We cannot predict the future level of market interest rates. Investors should consider these matters when making their investment decision with respect to fixed rate notes.
As a foreign private issuer in the United States, we are exempt from a number of rules under the Exchange Act and are permitted to file less information with the SEC.
As a foreign private issuer, we are exempt from certain rules under the Exchange Act that impose certain governance, executive compensation, proxy statement and other disclosure obligations on US registrants. In addition, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as US companies whose securities are registered under the Exchange Act. Accordingly, there may be less publicly available information concerning us than there is for US public companies.
We may be able to incur substantially more debt in the future.
We may be able to incur substantial additional indebtedness in the future, including in connection with future acquisitions, some of which may be secured by some or all of our assets. The terms of the debt securities will not limit the amount of indebtedness we may incur. Any such incurrence of additional indebtedness could exacerbate the related risks that we now face.
Additional risks, if any, specific to particular debt securities issued under this prospectus will be detailed in the applicable prospectus supplement.
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The Group’s reports filed with, or furnished to, the SEC, including this prospectus and supplements thereto, and written information released, or oral statements made, to the public in the future by or on behalf of the Group, may contain ‘forward-looking statements’ within the meaning of the US Private Securities Litigation Reform Act of 1995, that may or may not prove accurate. For example, statements regarding expected revenue growth, trading profit margins, market trends and our product pipeline are forward-looking statements. Phrases such as ‘aim’, ‘plan’, ‘intend’, ‘anticipate’, ‘well-placed’, ‘believe’, ‘estimate’, ‘expect’, ‘target’, ‘consider’ and similar expressions are generally intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Accordingly, you should not unduly rely on any forward-looking statements.
Factors that may cause future results and outcomes to differ for us include:
| · | risks related to the impact of the COVID-19 pandemic, such as the depth and longevity of its impact, government actions and other restrictive measures taken in response, material delays and cancellations of elective procedures, reduced procedure capacity at medical facilities, restricted access for sales representatives to medical facilities, or our ability to execute business continuity plans as a result of the COVID-19 pandemic; |
| · | economic and financial conditions in the markets we serve, especially those affecting healthcare providers, payers and customers (including, without limitation, as a result of the COVID-19 pandemic); |
| · | price levels for established and innovative medical devices; |
| · | developments in medical technology; |
| · | regulatory approvals, reimbursement decisions or other government actions; |
| · | product defects or recalls or other problems with quality management systems or failure to comply with related regulations; |
| · | litigation relating to patent or other claims; |
| · | legal compliance risks and related investigative, remedial or enforcement actions; |
| · | disruption to our supply chain or operations or those of our suppliers (including, without limitation, as a result of the COVID-19 pandemic); |
| · | competition for qualified personnel; |
| · | strategic actions, including acquisitions and dispositions and our success in performing due diligence, valuing and integrating acquired businesses; |
| · | disruption that may result from transactions or other changes we make in our business plans or organisation to adapt to market developments; |
| · | relationships with healthcare professionals; |
| · | reliance on information technology and cybersecurity; |
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| · | numerous other matters that affect us or our markets, including those of a political, economic, business, competitive or reputational nature; and |
| · | other factors discussed under “Risk Factors” in our most recent annual report on Form 20-F and in this document, and elsewhere in this document (including the documents incorporated by reference herein). |
Other factors could also adversely affect our results or the accuracy of forward-looking statements in this prospectus, and you should not consider the factors discussed here or in our most recent annual report on Form 20-F, or other documents incorporated by reference herein, to be a complete set of all potential risks or uncertainties.
The forward-looking statements made in this prospectus speak only as of the date of this prospectus. We do not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or expectations. You should, however, consult any further disclosures we make in other documents filed with the SEC that are incorporated by reference into this prospectus. This discussion is provided as permitted by the US Private Securities Litigation Reform Act of 1995.
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Enforceability of Certain Civil Liabilities
We are a public limited company incorporated under the laws of England and Wales. A significant number of our directors and officers, and some of the experts named in this document, reside outside the United States. In addition, a significant portion of our assets, and the assets of such persons, are located outside the United States. Therefore, you may not be able to effect service of process within the United States upon us or these persons so that you may enforce judgments of US courts against us or these persons based on the civil liability provisions of the US federal securities laws. There is doubt as to how the courts of England and Wales would deal with an original action relying on civil liabilities solely based on the US federal securities laws and how the courts of England and Wales would enforce judgments of US courts, of civil liabilities solely based on the US federal securities laws.
Where You Can Find More Information About Us
This prospectus is part of a registration statement that we filed with the SEC. The registration statement, including the attached exhibits, contains additional relevant information about us. The rules and regulations of the SEC allow us to omit some of the information included in the registration statement from this prospectus. In addition, we are subject to the registration requirements of the Exchange Act and, in accordance with this act, we file reports and other information with the SEC.
The SEC also maintains an Internet web site that contains reports and other information regarding issuers, like us, that file electronically with the SEC. The address of that site is http://www.sec.gov.
We maintain a website at www.smith-nephew.com. The contents of our website are not and shall not be deemed to be part of this prospectus or registration statement.
Incorporation of Documents by Reference
The SEC allows us to “incorporate by reference” the information we file with or furnish to them. This means that we can disclose important information to you by referring you to those documents. Each document incorporated by reference is current only as of the date of such document, and the incorporation by reference of such documents shall not create any implication that there has been no change in our affairs since the date thereof or that the information contained therein is current as of any time subsequent to its date. The information incorporated by reference is considered to be a part of this prospectus and should be read with the same care. When we update the information contained in documents that have been incorporated by reference by making future filings with the SEC, the information incorporated by reference in this prospectus is considered to be automatically updated and superseded. In other words, in the case of a conflict or inconsistency between information contained in this prospectus and information incorporated by reference into this prospectus, you should rely on the information contained in the document that was filed later.
We incorporate by reference the documents listed below and any documents filed with the SEC in the future under Sections 13(a), 13(c) and 15(d) of the Exchange Act until the offerings made under this prospectus are completed:
| · | Our Annual Report on Form 20-F for the year ended December 31, 2019 filed with the SEC on March 2, 2020 (File No. 001-14978). |
| · | Our Report on Form 6-K furnished to the SEC on July 29, 2020, which includes our condensed consolidated interim financial statements for the six-month period ended June 27, 2020 (File No. 001-14978). |
| · | Amendment No. 1 to our Annual Report on Form 20-F for the year ended December 31, 2019, filed with the SEC on September 25, 2020 (File No. 001-14978). |
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| · | All other documents we file pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of this prospectus and prior to the termination of the offering of the securities and, to the extent designated therein, reports furnished to the SEC on Form 6-K, in each case with effect from the date that such document or report is so filed or furnished. |
Our Form 20-F contains a summary description of our business, audited consolidated financial statements with a report thereon by our independent auditors, and management’s assessment of internal control over financial reporting with a report on the effectiveness of internal control over financial reporting by our independent auditors. The financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”) and IFRS as issued by the International Accounting Standards Board (“IASB”). IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB. However, the differences had no impact on our audited consolidated financial statements as of and for the years ended December 31, 2019, 2018, 2017, 2016 and 2015.
We will provide without charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon his or her written or oral request, a copy of any or all documents referred to above which have been or may be incorporated by reference into this prospectus other than exhibits which are not specifically incorporated by reference into those documents. You can request those documents from either of the below:
|
Smith & Nephew plc Hatters Lane, Watford Hertfordshire WD18 8YE |
Smith & Nephew plc Hatters Lane, Watford Hertfordshire WD18 8YE |
We have not authorized any other person to provide you with any information other than the information contained in this prospectus and the documents incorporated by reference herein. We do not take responsibility for, or provide any assurance as to the reliability of, any different or additional information. We are not making an offer to sell any securities in any jurisdiction where the offer or sale is not permitted. You should assume the information appearing in this prospectus and the documents incorporated by reference herein are accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates.
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Unless otherwise indicated in an accompanying
prospectus supplement, the net proceeds from the sale of securities will be used for our general corporate purposes.
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The following table sets forth our cash and cash equivalents and capitalization as of June 27, 2020. The amounts shown below are unaudited. You should read the information in this table together with our audited consolidated financial statements including the notes thereto in our Annual Report on Form 20-F for the fiscal year ended December 31, 2019 and our unaudited condensed consolidated interim financial statements including the notes thereto in our Report on Form 6-K dated July 29, 2020 for the six month period ended June 27, 2020, each of which is incorporated by reference into this prospectus.
| As of June 27, 2020 | ||||
| (Unaudited, in $ millions) | ||||
| Cash and cash equivalents | 347 | |||
| Indebtedness(1)(2) | ||||
| Bank overdrafts, borrowings and loans due within one year | 113 | |||
| Long-term borrowings | 2,328 | |||
| Total | 2,441 | |||
Equity | ||||
| Share capital | 177 | |||
| Share premium | 611 | |||
| Capital redemption reserve | 18 | |||
| Treasury shares | (177 | ) | ||
| Other reserves | (412 | ) | ||
| Retained earnings | 4,743 | |||
| Total | 4,960 | |||
Total capitalization(3) | 7,401 | |||
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(1) | As of June 27, 2020, we had no unsecured indebtedness outstanding and our subsidiaries had $31 million aggregate principal amount of indebtedness outstanding. |
| (2) | Indebtedness as presented: (i) includes bank overdrafts of $21 million and (ii) does not include IFRS 16 lease liabilities of $198 million or net hedging exposure (through derivatives) of $4 million. |
| (3) | Total capitalization is the sum of total indebtedness and total equity. |
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Street Name and Other Indirect Holders
Investors who hold securities in accounts at banks or brokers will generally not be recognized as the legal holders of securities. This is called holding in street name. If you hold securities in street name, we will recognize only the bank or broker or the financial institution the bank or broker uses to hold its securities as the legal holder. These intermediary banks, brokers and other financial institutions pass along principal, interest and other payments on the securities, either because they agree to do so in their customer agreements or because they are legally required to do so. If you hold securities in street name, you should check with your own institution to find out:
| · | how it handles securities payments and notices; |
| · | whether it imposes fees or charges; |
| · | how it would handle voting if it were ever required; |
| · | whether and how you can instruct it to send you securities registered in your own name so you can be a direct holder as described below; and |
| · | how it would pursue rights under the securities if there were a default or other event triggering the need for holders to act to protect their interests. |
Direct Holders
Our obligations, as well as the obligations of the trustee and those of any third parties employed by us or the trustee, extend only to the registered holders of securities. The holder of any certificate representing securities, including global securities, is the person or entity in whose name the certificate is registered. As noted above, we do not have obligations to you if you hold in street name or any other indirect means, either because you choose to hold securities in that manner or because the securities are issued in the form of global securities as described below. For example, once we make payment to the registered holder, we have no further responsibility for the payment even if that holder is legally required to pass the payment along to you as a street name customer but does not do so.
Global Securities
Global security. A global security is a special type of indirectly held security. It will be issued in registered form. If we choose to issue securities in the form of global securities, the ultimate beneficial owners of global securities can only be indirect holders, as described above. We require that the global security be registered in the name of or held by a financial institution we select.
We also require that the securities included in the global security not be transferred to the name of any other direct holder unless the special circumstances described below occur. The financial institution that acts as the sole direct holder of the global security is called the depositary. Any person wishing to own a security must do so indirectly by virtue of an account with a broker, bank or other financial institution which in turn has an account with the depositary. The prospectus supplement relating to an offering of a series of securities will indicate whether the series will be issued only in the form of global securities.
Special investor considerations for global securities. As an indirect holder, an investor’s rights in a global security will be governed by the account rules of the investor’s financial institution and of the depositary, as well as general laws relating to securities transfers. We do not recognize this type of investor as a holder of securities and instead deal only with the depositary that holds the global security.
If you are an investor in securities issued only in the form of global securities, you should be aware that:
| · | you cannot have securities registered in your own name; |
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| · | you cannot receive physical certificates for your interest in the securities; |
| · | you will be a street name holder and must look to your own bank or broker for payments on the securities and protection of your legal rights relating to the securities, as explained earlier under “— Street Name and Other Indirect Holders”; |
| · | you may not be able to sell interests in the securities to some insurance companies and other institutions required by law to own securities in the form of physical certificates; |
| · | the depositary’s policies will govern payments, transfers, exchange and other matters relating to your interest in the global security. We and the trustee have no responsibility for any aspect of the depositary’s actions or for its records of ownership interests in the global security. We and the trustee also do not supervise the depositary in any way; and |
| · | the depositary will require that interests in a global security be purchased or sold within its system using same-day funds. |
Special situations when the global security will be terminated. In a few special situations described below, the global security will terminate and interests in it will be exchanged for physical certificates representing securities. After that exchange, the choice of whether to hold securities directly or in street name will be up to the investor. Investors must consult their own banks or brokers to find out how to have their interests in securities transferred to their own name so that they will be direct holders. The rights of street name investors and direct holders in the securities have been previously described in the subsections “— Street Name and Other Indirect Holders” and “— Direct Holders”.
A permanent global debt security may only be transferred as a whole between the depositary and a nominee of the depositary or to a successor depositary or nominee.
Owners of beneficial interests in a permanent global debt security are not entitled to receive physical delivery of securities in definitive form unless:
| · | the depositary notifies us that it is unwilling or unable to continue as depositary, or if the depositary is no longer qualified as a clearing agency under applicable law and we have not appointed a successor depositary; |
| · | we decide at any time and in our sole discretion not to have any of the securities represented by registered securities in global form; |
| · | an event of default on the securities has occurred and has not been cured; or |
| · | any other circumstances for terminating a global security as described in the applicable prospectus supplement have occurred. |
When a global security terminates, the
depositary, and not we or the trustee, is responsible for deciding the names of the institutions that will be the initial direct
holders.
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Description of Debt Securities
We may issue debt securities using this prospectus. As required by US federal law for all publicly offered corporate bonds and notes, the debt securities are governed by a document called an indenture. The indenture relating to the debt securities issued by us is a contract to be entered into among Smith & Nephew plc, The Bank of New York Mellon, London Branch, as trustee, and The Bank of New York Mellon, as security registrar. See “— The Trustee” below.
In this description “you” means direct holders and not street name or other indirect holders of securities. Indirect holders should read the section “Legal Ownership — Street Name and Other Indirect Holders” above.
General
This section summarizes the material provisions of the indenture and the debt securities. Because it is a summary, it does not describe every aspect of the indenture or the debt securities. This summary is subject to and qualified in its entirety by reference to all of the indenture provisions, including some of the terms used and defined in the indenture. We describe the meaning of only the more important terms in this prospectus. We also include references in parentheses to some sections of the indenture. Whenever we refer to particular sections or defined terms of the indenture in this prospectus or in the applicable prospectus supplement, those sections or defined terms are incorporated by reference here or in the prospectus supplement. This summary is also subject to and qualified by reference to the description of the particular terms of your series of debt securities described in the prospectus supplement.
The indenture and its associated documents contain the full legal text of the matters described in this section. The indenture and the debt securities will be subject to and governed by the Trust Indenture Act of 1939, as amended, and will be construed in accordance with and governed by New York law. The indenture is an exhibit incorporated by reference into this prospectus. See “Where You Can Find More Information About Us” for information on how to obtain a copy.
The debt securities are unsecured obligations of Smith & Nephew plc. The debt securities will rank equally in right of payment with all of our other unsecured and unsubordinated indebtedness except for indebtedness that is preferred under applicable law.
Unless otherwise indicated in the applicable prospectus supplement, the debt securities will be denominated in United States dollars.
The Trustee
The Bank of New York Mellon, London Branch, is the trustee under the indenture. As trustee, it has two main roles:
| · | first, it can enforce your rights against us if we default on debt securities issued under the indenture. There are some limitations on the extent to which the trustee may act on your behalf, described under “Defaults and Related Matters — Remedies if an event of default occurs” below; and |
| · | second, the trustee performs administrative duties for us, such as sending you interest payments and notices. |
Types of Debt Securities
The indenture does not limit the amount of debt securities that we can issue. It provides that debt securities may be issued in one or more series up to the aggregate principal amount as we authorize from time to time. All debt securities of one series need not be issued at the same time and we may reopen any series, without the consent of a holder of that series, to issue additional debt securities of the same series. Any additional debt securities of a relevant series will have a separate CUSIP, ISIN, Common Code or other identifying number from the debt securities originally issued of such series, unless the additional debt securities are fungible with the originally issued debt securities of the same series, as applicable, for US federal income tax purposes.
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The prospectus supplement relating to a series of debt securities will describe the following terms of the series:
| · | the title of the series of debt securities; |
| · | the aggregate principal amount of debt securities and any limit on the aggregate principal amount of the series of debt securities; |
| · | any stock exchange on which we will list the debt securities; |
| · | the date or dates on which we will repay the principal amount of the series of debt securities or the method by which the date or dates will be determined; |
| · | any rate or rates at which the series of debt securities will bear interest or the method by which the interest rate or rates will be determined; |
| · | the date or dates from which any interest on the series of debt securities will accrue, the dates on which interest will be payable and the record dates for interest payments or the method by which such date or dates will be determined and the method by which interest will be calculated if different to a 360-day year of twelve 30-day months; |
| · | the place or places where the principal and any interest on debt securities will be payable if other than the corporate trust office of the security registrar in New York, New York, United States of America; |
| · | the price or prices at which, the period or periods within which, the currency or currencies, currency unit or composite currency in which, and the terms and conditions upon which we may redeem the series of debt securities in whole or in part; |
| · | any right or obligation to redeem, repay or purchase the debt securities as a result of any sinking fund or similar provisions, or at the option of the holder of the debt securities and the period or periods within which, the price or prices at which and every other term and condition upon which the debt securities will be redeemed, repaid or purchased; |
| · | the denominations in which debt securities of the series are issuable, if other than denominations of $2,000 and any whole multiple of $1,000 in excess thereof; |
| · | the portion of the principal amount of the series of debt securities payable if an acceleration of the maturity of the debt securities is declared, if other than the principal amount; |
| · | the currency, including any composite currency, of payment of the principal, premium, if any, and interest on the series of debt securities if other than US dollars; |
| · | whether we or a holder of debt securities may elect to have the principal, premium, if any, or interest on the series of debt securities paid in a currency or composite currency other than the currency in which the debt securities are stated to be payable, and if so, any election period and the terms and conditions governing such an election; |
| · | whether we will be required to pay additional amounts for withholding taxes or other governmental charges and, if applicable, a related right to an optional tax redemption for such a series; |
| · | any index used to determine the amount of payment of principal, premium, if any, and interest on the series of debt securities and how these amounts will be determined if they are not fixed when the debt securities are issued; |
| · | the forms of the series of debt securities; |
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| · | the applicability of the provisions described later under “— Satisfaction, Discharge and Defeasance”; |
| · | any authenticating or paying agents, transfer agents or registrars or any other agents acting in connection with the debt securities other than the trustee; |
| · | if applicable, a discussion of any additional or alternative material US federal income and UK tax considerations; and |
| · | any other special features of the series of debt securities. |
We may issue the debt securities as original issue discount securities, which are debt securities offered and sold at a substantial discount to their stated principal amount. (Section 1.01)
Overview of the Remainder of this Description
The remainder of this description summarizes:
| · | Additional mechanics relevant to the debt securities under normal circumstances, such as how you transfer ownership and where we make payments. |
| · | Your right to receive payment of additional amounts due to changes in the tax withholding requirements of various jurisdictions. |
| · | Your rights under several special situations, such as if we merge with another company or if we want to redeem the debt securities for tax reasons. |
| · | Covenants contained in the indenture that restrict our ability to incur liens and undertake Sale and Leaseback Transactions (as defined in “Covenants— Limitation on Sale and Leaseback Transactions” below). A particular series of debt securities may have different covenants. |
| · | Your rights if we default. |
| · | Your rights if we want to modify the indenture. |
| · | Our relationship with the trustee. |
Additional Mechanics
Exchange and Transfer
Unless otherwise specified in the applicable prospectus supplement, the debt securities will be issued only in fully registered form without interest coupons in denominations of $2,000 or whole multiples of $1,000 in excess thereof. You may have your debt securities broken into more debt securities of smaller denominations of whole multiples of $1,000 (but not less than a minimum denomination of $2,000 or such other minimum denomination as specified in the applicable prospectus supplement) or combined into fewer debt securities of larger denominations of whole multiples of $1,000, as long as the total principal amount is not changed. (Section 2.07) This is called an exchange.
You may exchange or transfer registered debt securities at the corporate trust office of The Bank of New York Mellon, as security registrar, in New York, New York, at 240 Greenwich Street, New York, New York 10286, United States of America. The security registrar acts as our agent for registering debt securities in the names of holders and for transferring registered debt securities. We may change this appointment to another entity or perform the service ourselves. The entity performing the role of maintaining the list of registered holders is called the security registrar. It will also register transfers of the registered debt securities. (Section 3.03)
You may not exchange your registered debt securities for bearer securities.
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There will be no service charge for any exchange or registration of transfer of the debt securities, but we may require payment of an amount sufficient to cover any tax or other governmental charge imposed in connection with any exchange or registration of transfer. (Section 2.12)
The transfer or exchange of a registered debt security may be made only if the security registrar is satisfied with your proof of ownership.
If the debt securities are redeemable and we redeem less than all of the debt securities of a particular series, we may block the transfer or exchange of debt securities during a specified period of time in order to freeze the list of holders to prepare the mailing. The period begins 15 days before the day we first mail the notice of redemption and ends on the day of that mailing. We may also refuse to register transfers or exchanges of debt securities selected or called for redemption. However, we will continue to permit transfers and exchanges of the unredeemed portion of any security being partially redeemed. (Section 2.12)
Payment and Paying Agents
We will pay interest to you if you are a direct holder of debt securities at the close of business on a particular day in advance of each due date for interest, even if you no longer own the security on the interest due date. That particular day, usually about two weeks in advance of the interest due date, is called the record date and is stated in the applicable prospectus supplement. (Section 2.11)
Unless provided otherwise in the applicable prospectus supplement, we will pay interest, principal and any other money due on debt securities in registered form at the corporate trust office of The Bank of New York Mellon in the Borough of Manhattan, The City and State of New York as paying agent for the debt securities. That office is currently located at The Bank of New York Mellon, 240 Greenwich Street, New York, New York 10286, United States of America. At our option, we may pay interest on any debt securities by check mailed to the registered holders. (Sections 3.01, 3.02 and 3.03)
Some of the debt securities may be denominated, and payments may be made, in currencies other than US dollars or in composite currencies. A summary of any special considerations which apply to these debt securities is in the applicable prospectus supplement, including, to the extent applicable, the location of any paying agent in respect of such debt securities.
Street name and other indirect holders should consult their banks or brokers for information on how they will receive payments.
We may arrange for additional payment offices, or may cancel or change these offices, including our use of the security registrar’s corporate trust office. These offices are called paying agents. We may also choose to act as our own paying agent, but must always maintain a paying agency in the Borough of Manhattan, The City and State of New York, United States of America. Whenever there are changes in the paying agents for any particular series of debt securities we must notify the trustee. (Sections 3.03 and 3.04)
Payment of Additional Amounts
Unless provided otherwise in the applicable prospectus supplement, we agree that any amounts to be paid by us under any series of debt securities of principal, premium and interest in respect of the debt securities will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (presently the United Kingdom) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, we will (subject to compliance by you with any relevant administrative requirements) pay such additional amounts as will result in the receipt of such amounts as would have been received by the holder had no such withholding or deduction been required.
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The indenture provides that we will not have to pay additional amounts in certain specified circumstances, and that those circumstances may be modified or supplemented for different series of debt securities. Unless the applicable prospectus supplement for a series of debt securities provides otherwise, debt securities issued using this prospectus will provide that we will not have to pay additional amounts if:
| · | the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s (or beneficial owners’) connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the debt security or by receiving principal, premium, if any, or interest, if any, on the debt security, or enforcing the debt security. These connections include where the holder or beneficial owner: |
| · | is or has been a domiciliary, national or resident of such jurisdiction; |
| · | is or has been engaged in a trade or business in such jurisdiction; |
| · | has or had a permanent establishment in such jurisdiction; or |
| · | is or has been physically present in such jurisdiction. |
| · | the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the debt security for payment, if presentation is required, more than 30 days after the security became due or payment was provided for; |
| · | the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge; |
| · | the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant debt security; |
| · | the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner to comply with any request addressed to the holder for certification, identification or other information reporting concerning the nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, as required by any treaty, statute, regulation or administrative practice of such jurisdiction 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); |
| · | the holder would have been able to avoid such withholding or deduction 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 required by the relevant tax authority, a declarative, claim, certificate, document or other evidence establishing exemption therefrom, which has been requested of such holder and which it is legally entitled to provide; |
| · | the tax, levy, impost or other governmental charge is imposed by the United States or any political subdivision or taxing authority thereof or therein; |
| · | the holder of the debt security is a fiduciary, partnership or a person other than the sole beneficial owner of any payment that would be required, by the laws of the jurisdiction in which we are resident for tax purposes, to be included in income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, partner or beneficial owner been the holder; or |
| · | any combination of the exceptions listed above. (Section 3.02) |
At least 30 days prior to each date on which any payment under or with respect to any debt securities is due and payable (unless such obligation to pay additional amounts arises after the 30th day prior to the date on which payment under or with respect to the debt securities is due and payable, in which case it will be promptly thereafter), if we will be obligated to pay additional amounts with respect to such payment, we will deliver to the trustee an officer’s certificate stating that such additional amounts will be payable and the amounts so payable and setting forth such other information as is necessary to enable the trustee to pay such additional amounts to the holders of such debt securities on the payment date.
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Mergers and Similar Events
Under the indenture, we are generally permitted to consolidate or merge with another company or other entity that is organized under the laws of the United Kingdom, the United States or any other country which is a member of the Organization for Economic Cooperation and Development. We are also generally permitted to sell or convey all or substantially all of the assets of us and our subsidiaries taken as a whole to such other entity. Our ability to take some of these actions is restricted in the following ways:
| · | any entity succeeding us must assume our obligations in relation to the debt securities and under the indenture; and |
| · | if the succeeding entity is not organized under the laws of the United Kingdom or a State of the United States, the succeeding entity’s assumption of our obligations in relation to the debt securities and under the indenture must include the obligation to pay any additional amounts as described under “— Payment of Additional Amounts”. (Section 8.01) |
It is possible that the merger, sale, or lease of all or substantially all of our assets would cause a Principal Property of ours or of a Restricted Subsidiary of ours or shares of stock or indebtedness of any of our restricted subsidiaries to become subject to a lien giving other lenders preferential rights in that property over holders of debt securities. We have promised to limit these preferential rights on our property, called liens, as discussed under “— Limitation on Liens”. If a merger or other transaction would create any impermissible liens on our property, we must grant an equivalent or higher-ranking lien on the same property to you and the other direct holders of the debt securities. (Section 8.02)
Optional Tax Redemption
Unless provided otherwise in the applicable prospectus supplement, we have the option to redeem the debt securities in the two situations described below. The redemption price for the debt securities, other than original issue discount debt securities, will be equal to the principal amount of the debt securities being redeemed plus accrued interest and any additional amounts due on the date fixed for redemption. (Section 11.06) The redemption price for original issue discount debt securities will be specified in the applicable prospectus supplement. We must give you between 10 and 60 days’ notice before redeeming the debt securities. (Section 11.02)
The first situation is where, as a result of a change or amendment to any law or related regulation or ruling of the jurisdiction in which we are resident for tax purposes, or any change in an application or interpretation of such laws, regulations or rulings, or any change in application or interpretation of, or any execution of an amendment to, any treaty, we would have to pay additional amounts as described under “— Payment of Additional Amounts”.
This first situation applies only in the case of changes, amendments, applications, interpretations or executions that occur on or after the date specified in the prospectus supplement for the applicable series of debt securities (or if no such date is specified, the first date on which debt securities of such series were issued). If we are succeeded by another entity that is a non-United Kingdom tax resident entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes, and the applicable date will be the date such entity became successor, rather than the date specified in the preceding sentence.
The second situation is where our independent legal advisor has advised us that, as a result of action taken by a taxation authority of, or any action brought in a court of competent jurisdiction in, the jurisdiction in which we are resident for tax purposes, after the date specified in the prospectus supplement for the applicable series of debt securities, we would have to pay additional amounts as described under “— Payment of Additional Amounts” and the payment of such additional amounts cannot be avoided by the use of reasonable measures available to us. (Section 11.06) If we are succeeded by another entity that is a non-United Kingdom tax resident entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes and the applicable date will be the date such entity became our successor.
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Covenants
Limitation on Liens
Some of our property and the property of our subsidiaries may be subject to a mortgage, pledge, assignment, charge or other legal mechanism that gives a lender preferential rights in that property over other lenders, including you and the other direct holders of the debt securities, or over our general creditors if we fail to repay them. These preferential rights are generally called liens.
We undertake that we and certain of our subsidiaries, which we refer to as “restricted subsidiaries”, will not become obligated on any new debt for borrowed money that is secured by a lien on any Principal Property or on any shares of stock or indebtedness of any of our restricted subsidiaries unless we grant an equivalent or higher-ranking lien on the same property to you and the other direct holders of the debt securities. (Section 3.09)
| · | “Restricted Subsidiary” means any of our wholly-owned subsidiaries: |
| · | with substantially all of its property located within the United Kingdom or the United States; and |
| · | which owns a Principal Property; |
but does not include any Wholly-Owned Subsidiary principally engaged in leasing or in financing installment receivables or principally engaged in financing the operations of us and our consolidated subsidiaries.
| · | A “Wholly-Owned Subsidiary” means any corporation in which control, directly or indirectly, of all of the stock with ordinary voting power to elect the board of directors of that corporation is owned by us, or by one or more of our wholly-owned subsidiaries or by us and one or more of our wholly-owned subsidiaries. |
| · | A “Subsidiary”, with respect to any person, is any corporation in which that person owns or controls directly or indirectly at least a majority of stock with ordinary voting power to elect a majority of the board of directors. |
| · | “Principal Property” means any manufacturing plant or facility or any research facility owned by us or any Restricted Subsidiary. A Principal Property must also be located within the United Kingdom or the United States and have a gross book value (before deducting any depreciation reserve) exceeding 2% of our Consolidated Net Tangible Assets as set forth in our consolidated financial statements contained in our latest annual report to our shareholders. Principal Property does not include: |
| · | any plant or facility or research facility which in the opinion of our board of directors is not materially important to the total business conducted by us and our subsidiaries; or |
| · | any portion of a property described above which, in the opinion of our board of directors, is not materially important to the use or operation of the property. (Section 1.01) |
We do not need to comply with this restriction if the amount of all debt that would be secured by liens on our principal properties and the shares of stock or indebtedness of our restricted subsidiaries is no more than 15% of our Consolidated Net Tangible Assets as set forth in our consolidated financial statements contained in our latest annual report to our shareholders. (Section 3.09)
| · | Our “Consolidated Net Tangible Assets” means Smith & Nephew plc’s aggregate amount of consolidated total assets, after deducting therefrom: |
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| · | all liabilities due within one year (other than short-term borrowings and long-term debt due within one year); and |
| · | all goodwill, trade names, trademarks and patents that have not been developed by Smith & Nephew plc or its subsidiaries, and other similar types of intangible assets as shown on the audited consolidated balance sheet contained in the latest annual report to our shareholders. (Section 1.01) |
In addition, this restriction on liens does not apply to debt secured by a number of different types of liens. These types of liens include the following:
| · | any lien on property, shares of stock or indebtedness of any corporation existing at the time the corporation becomes a Restricted Subsidiary provided that such lien was not created in contemplation of such corporation becoming a Restricted Subsidiary; |
| · | any lien on property or shares of stock existing at the time of acquisition of that property or those shares of stock, or to secure the payment of all or any part of the purchase price of that property or those shares of stock, or to secure any debt incurred before, at the time of, or within twelve months after, in the case of shares of stock, the acquisition of the shares of stock and, in the case of property, the later of the acquisition, completion of construction (including any improvements on an existing property) or commencement of the commercial operation of the property, where the debt is incurred to finance all or any part of the purchase price; |
| · | any lien securing debt owed to us or to any of our restricted subsidiaries by us or any of our restricted subsidiaries; |
| · | any lien existing at the date of the indenture; |
| · | any lien on a Principal Property to secure debt incurred to finance all or part of the cost of improving, constructing, altering or repairing any building, equipment or facilities or of any other improvements on all or any part of that Principal Property, if the debt is incurred before, during, or within twelve months after completing the improvement, construction, alteration or repair; |
| · | any lien on property owned or held by any corporation or on shares of stock or indebtedness of any corporation, where the lien existed either at the time the corporation is merged, consolidated or amalgamated with either us or a Restricted Subsidiary or at the time of a sale, lease or other disposition of all or substantially all of the property of a corporation to us or a Restricted Subsidiary provided that such lien was not created in contemplation of such corporation (i) merging, consolidating or amalgamating with us or a Restricted Subsidiary or (ii) selling, leasing or otherwise disposing of all or substantially all of its property to us or a Restricted Subsidiary; |
| · | any lien arising by operation of law and not securing amounts more than 90 days overdue or otherwise being contested in good faith; |
| · | any lien arising by operation of law over any credit balance or cash held in any account with a financial institution; |
| · | any rights of financial institutions to offset credit balances in connection with the operation of cash management programs established for our benefit and/or the benefit of any Restricted Subsidiary; |
| · | any lien incurred or deposits made in the ordinary course of business, including but not limited to: |
| · | any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other similar liens; |
| · | any liens securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security; and |
| · | any easements, rights-of-way, restrictions and other similar charges; |
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| · | any liens incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return of money bonds and other obligations of a similar nature incurred in the ordinary course of business; |
| · | any lien securing taxes or assessments or other applicable governmental charges or levies; |
| · | any extension, renewal or replacement or successive extensions, renewals or replacements, in whole or in part, of any lien included in the preceding paragraphs or of any of the debt secured under the preceding paragraphs, so long as the principal amount of debt secured does not exceed the principal amount of debt secured at the time of the extension, renewal or replacement, and that the extension, renewal or replacement lien is limited to all or any part of the same property or shares of stock that secured the lien extended, renewed or replaced (including improvements on that property), or property received or shares of stock issued in substitution or exchange; and |
| · | any lien in favor of us or any Subsidiary of ours. |
The following types of transactions will not be deemed to create debt secured by a lien and, therefore, will also not be subject to the restriction on liens:
| · | any liens on property of ours or a Restricted Subsidiary in favor of the United States or any State of the United States, or the United Kingdom, or any other country, or any political subdivision of, or any department, agency or instrumentality of, these countries or states, to secure partial, progress, advance or other payments under provisions of any contract or statute including, but not limited to, liens to secure debt of pollution control or industrial revenue bond type, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of construction of the property subject to these liens. (Section 3.09) |
Limitation on Sale and Leaseback Transactions
Neither we nor any of our Restricted Subsidiaries will enter into any Sale and Leaseback Transaction involving a Principal Property without complying with this covenant.
We and our Restricted Subsidiaries may enter into Sale and Leaseback Transactions provided that the total amount of Attributable Debt attributable to all Sale and Leaseback Transactions plus other debt of ours or any of our Restricted Subsidiaries that is secured by liens on a Principal Property (but excluding debt secured by liens on property that we or a Restricted Subsidiary would be entitled to incur, assume or guarantee without equally and ratably securing the Notes as described under “— Limitation on Liens” above) does not exceed 15% of our Consolidated Net Tangible Assets.
This restriction does not apply to any Sale and Leaseback Transaction if:
| · | we or the Restricted Subsidiary seeking to enter into the Sale and Leaseback Transaction could incur, assume or guarantee debt secured by a lien on the Principal Property to be leased without equally and ratably securing the Notes as a result of one or more of the exceptions to the limitation on liens as described under “— Limitation on Liens” above; |
| · | within 12 months before or after the sale or transfer, regardless of whether the sale or transfer may have been made by us or a Restricted Subsidiary, we apply an amount equal to the net proceeds of the sale or transfer (in the case of a sale or transfer for cash), or an amount equal to the fair value of the Principal Property so leased at the time of entering into the sale or transfer as determined by our board of directors (in the case of a sale or transfer otherwise than for cash), to: |
| · | the retirement of indebtedness for money borrowed, incurred or assumed by us or any Restricted Subsidiary which matures at, or is extendible or renewable at the option of the obligor to, a date more than 12 months after the date of incurring, assuming or guaranteeing such debt; provided that such debt is either pari passu or senior to the Notes; or |
| · | investment in any Principal Property or Principal Properties; or |
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| · | the Sale and Leaseback Transaction is between us and a Restricted Subsidiary or between Restricted Subsidiaries. |
The following terms have the meanings given to them below:
“Attributable Debt” means the present value (discounted at a rate equal to the weighted average of the rate of interest on all securities then issued and outstanding under the Indenture, compounded semi-annually) of our or a Restricted Subsidiary’s obligation for rental payments for the remaining term of any lease in a Sale and Leaseback Transaction.
“Sale and Leaseback Transaction” means an arrangement between us or a Restricted Subsidiary and any person in which we or the Restricted Subsidiary leases back for a term of more than three years a Principal Property that we or the Restricted Subsidiary has sold or transferred to that person.
Default and Related Matters
Events of Default
A holder of debt securities of a particular series will have special rights if any event of default occurs with respect to that series and is not cured, as described later in this subsection.
What is an event of default? An event of default means any of the following:
| · | Interest — default for 30 days in the payment of any installment of interest on the series of debt securities; |
| · | Principal — default in the payment of all or any part of the principal of the series of debt securities when such principal becomes due and payable either at maturity, upon redemption, by acceleration or otherwise; |
| · | Covenant — breach or default by us in the performance of a covenant or warranty in respect of the debt securities of the relevant series which has not been remedied for 90 days after we receive written notice of the default from the trustee or we and the trustee receive written notice of the default from the holders of at least 25% of the principal amount of the debt securities of all affected series; |
| · | Bankruptcy — certain events of bankruptcy, insolvency or reorganization affecting us; |
| · | Cross-Default — (i) any indebtedness for borrowed money of Smith & Nephew plc or any of its subsidiaries not being paid when due or within any originally applicable grace period; or (ii) any such indebtedness for borrowed money of Smith & Nephew plc or any of its subsidiaries becoming due and payable prior to its stated maturity by reason of an event of default; provided that no cross-default will occur if (a) the indebtedness is of any person acquired by Smith & Nephew plc or one of its subsidiaries which is incurred under the arrangements in existence at the date of acquisition and the event of default in respect thereof is no longer continuing after one month after the acquisition; or (b) the amount of indebtedness referred to in clauses (i) and/or (ii) above individually or in the aggregate is less than $50,000,000 (or its equivalent in any other currency or currencies); or |
| · | Other — any other event of default provided in any supplemental indenture or resolution of our board of directors under which a particular series is issued or in the form of security for such series. |
No event of default described in the provisions above with respect to a particular series of debt securities will necessarily constitute an event of default with respect to any other series of debt securities and the events of default for any specific series may be modified as described in the applicable prospectus supplement.
Remedies if an event of default occurs. If an event of default, other than a “Bankruptcy” default, has occurred (but only if, in the case of a “Covenant” default, the default has occurred for less than all series of debt securities then issued under the indenture and outstanding) and has not been cured, the trustee or the holders of at least 25% of the principal amount of debt securities of the affected series (each affected series voting as a separate class) may declare the principal amount (or, if the debt
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securities of a series are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all the debt securities of that series, together with any accrued interest, to be due and payable immediately. If an event of default has occurred under “Covenant” default with respect to all of the series of debt securities then issued under the indenture and outstanding, or under “Bankruptcy” default, and has not been cured, the trustee or the holders of at least 25% of the principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class) may declare the principal (or, if any debt securities are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all debt securities then issued under the indenture and outstanding, together with any accrued interest, to be due and payable immediately. This is called a declaration of acceleration of maturity. A declaration of acceleration of maturity may be canceled by the holders of at least a majority in principal amount of the debt securities of the affected series or by at least a majority in principal amount of all the debt securities then issued under the indenture and outstanding (voting as one class), as the case may be, if certain conditions are met. (Section 4.01)
Before a declaration of acceleration of maturity, past “Covenant” defaults that do not affect all series of debt securities then issued under the indenture and outstanding may be waived by the holders of a majority in principal amount of the debt securities then outstanding of each affected series (each such series voting as a separate class). Past “Covenant” defaults that affect all series of debt securities then issued under the indenture and outstanding and past “Bankruptcy” defaults may be waived by the holders of a majority in principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class). (Section 4.10)
Except in cases of default, where the trustee has some special duties, the trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the trustee protection from expenses and liability satisfactory to the trustee. This protection is called an indemnity. (Section 5.02) If such indemnity is provided, the holders of a majority in principal amount of the outstanding debt securities of the relevant series may, subject to certain limitations and conditions, direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority holders may also, subject to certain limitations and conditions, direct the trustee in performing any other action under the indenture. (Section 4.09)
Before you bypass the trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect your interests relating to the debt securities, the following must occur:
| · | you must give the trustee written notice that an event of default has occurred and remains uncured; |
| · | the holders of 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default, and must offer indemnity and/or security satisfactory to the trustee against the cost and other liabilities of taking that action; and |
| · | the trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity and the trustee has not received an inconsistent direction from the holders of a majority in principal amount of all outstanding debt securities of the relevant series during that period. (Section 4.06) |
These limitations do not apply to a suit instituted by you for the enforcement of payment of the principal or interest on a debt security on or after the respective due dates.
We will file annually with the trustee on or before March 31 in each year a written statement of certain of our officers certifying that, to their knowledge, we have not defaulted on our covenants under the indenture or else specifying any default that exists. (Section 3.06)
For any series of debt securities that is a series of original issue discount securities the applicable prospectus supplement will contain provisions for the acceleration of the maturity of a portion of the principal amount of such original issue discount securities.
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Modification of the Indenture and Waiver
There are three types of changes we can make to the indenture and any series of the debt securities.
Changes not requiring approval. The first type of change does not require any vote by holders of debt securities. Your consent is not required to do any of the following:
| · | to transfer or pledge any property or assets to the trustee as security for any series of the debt securities; |
| · | to evidence the succession of any successor corporation to us as described under “Mergers and Similar Events” above; |
| · | to evidence the succession of any successor trustee under the indenture or to add to or change any provisions of the indenture as necessary to provide for the appointment of an additional trustee or trustees; |
| · | to add to our covenants or to add additional events of default for the benefit of the holders of any series of the debt securities; |
| · | to cure any ambiguity or to correct or supplement any provision of the indenture that may be defective or inconsistent with any other provision of the indenture; or |
| · | to make any other provisions with respect to matters or questions arising under the indenture as our board of directors may deem necessary or desirable and that shall not adversely affect the interests of holders of any series of the debt securities in any material respect. (Section 7.01) |
Changes requiring the approval of a majority of holders. The second type of change to the indenture and the debt securities requires the consent of holders of debt securities owning at least a majority of the principal amount of all series of debt securities then outstanding and affected by such charge (each affected series voting as a separate class). In this manner, any provision of the indenture or any series of debt securities may be changed or eliminated unless the provision relates to a matter that requires the consent of each affected holder as discussed below. (Section 7.02)
Changes requiring your approval. Third, there are changes that cannot be made to your debt securities without the specific approval of each affected holder. Your consent is required before we could do any of the following:
| · | extend the final maturity of a debt security; |
| · | reduce the principal amount of a debt security; |
| · | reduce the rate or extend the time of payment of any interest on a debt security; |
| · | reduce any amount payable on redemption of a debt security; |
| · | reduce the amount of principal due and payable upon an acceleration of the maturity or provable in bankruptcy of a debt security issued at an original issue discount; |
| · | impair your right to sue for payment; |
| · | impair any right of repayment at the option of the holder; |
| · | reduce the percentage of holders of debt securities whose consent is needed to modify or amend the indenture; or |
| · | change in any manner adverse to the holders of the debt securities our obligations relating to the payment of principal and interest, and sinking fund payments. (Section 7.02) |
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Satisfaction, Discharge and Defeasance
We may terminate our repayment and obligations on the debt securities, when:
| · | we have paid or caused to be paid the principal of and interest, if any, then due and payable on all outstanding debt securities of any series; or |
| · | we have delivered to the trustee for cancellation all outstanding debt securities of any series; or |
| · | all the outstanding debt securities of the series that have not been delivered to the trustee for cancellation have become or will become due and payable within one year and we have made arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name; and |
| · | we have deposited with the trustee sufficient funds to pay and discharge the entire indebtedness on the series of debt securities to pay principal and interest, if any, and paid all other sums payable under the indenture. (Section 9.01) |
We may legally release ourselves from any payment or other obligations on the debt securities, except for various obligations described below, if we, in addition to other actions, put in place the following arrangements for you:
| · | we must deposit in trust for your benefit and the benefit of all other direct holders of the debt securities a combination of money and government obligations that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates; and |
| · | we must deliver to the trustee a legal opinion of our 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. (Section 9.03) |
However, even if we take these actions, a number of our obligations relating to the debt securities will remain. These include the following obligations:
| · | to register the transfer and exchange of debt securities and our right of optional redemption, if any; |
| · | to replace mutilated, defaced, destroyed, lost or stolen debt securities; |
| · | to pay principal and interest, if any, on the original stated due dates and any remaining rights of the holders to receive sinking fund payments, if any, from funds deposited with the trustee; |
| · | immunities and indemnities of the trustee; and |
| · | to hold money for payment in trust. (Section 9.01) |
Government obligation means securities that are:
| · | direct obligations of the United States, the United Kingdom or any government of any member state of the European Union which has the euro as its currency (“European Government”) for the payment of which is pledged by the full faith and credit of the United States, the United Kingdom or any such European Government; or |
| · | obligations of an entity controlled or supervised by and acting as an agency or instrumentality of the United States, the United Kingdom or any European Government the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, the United Kingdom or any such European Government; |
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and are not callable or redeemable at the option of the issuer. Government obligation also includes:
| · | a depositary receipt issued by a bank or trust company as custodian for these government obligations, or specific payment of interest on or principal of these government obligations, held by such custodian for the account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deductions from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of these government obligations, or the specific payment of interest on or principal of these government obligations, evidenced by such depositary receipt. (Section 1.01) |
Notices
We and the trustee will send notices only to direct holders, using their addresses registered in the trustee’s records. (Section 10.04)
Regardless of who acts as paying agent, all money that we pay to a paying agent that remains unclaimed at the end of two years after the amount is due to direct holders of debt securities will be repaid to us. After that two-year period, you may look only to us for payment and not to the trustee, any other paying agent or anyone else. (Section 9.05)
Consent to Service
We have initially designated Smith & Nephew Inc. as our authorized agent for service of process in any related proceeding arising out of or relating to the performance of our obligations under the indenture and the debt securities brought in any state or federal court in the Borough of Manhattan, the City of New York, and will irrevocably submit (but for these purposes only) to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding. (Section 10.11)
Governing Law
The debt securities and the indenture will be governed by and construed in accordance with the laws of the State of New York. (Section 10.08)
Concerning the Trustee
The Bank of New York Mellon, London Branch, acts as the trustee with respect to certain debt securities of certain of our subsidiaries.
If an event of default occurs, or an event occurs that would be an event of default if the requirements for either giving us notice or our default having to exist for a specified time period were disregarded, the trustee may be considered to have a conflicting interest with respect to the debt securities or the indenture for purposes of the Trust Indenture Act of 1939. In that case, the trustee may be required to resign as trustee under the applicable indenture and we would be required to appoint a successor trustee.
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Securities we issue may be held through one or more international and domestic clearing systems. The principal clearing systems we will use are the book-entry systems operated by The Depository Trust Company (“DTC”) in the United States, Clearstream Banking S.A. (“Clearstream, Luxembourg”) in Luxembourg, and Euroclear Bank SA/NV (“Euroclear”) in Brussels, Belgium. These systems have established electronic securities and payment transfer, processing, depositary and custodial links among themselves and others, either directly or through custodians and depositories. These links allow securities to be issued, held and transferred among the clearing systems without the physical transfer of certificates.
Special procedures to facilitate clearance and settlement have been established among these clearing systems to trade securities across borders in the secondary market. Where payments for securities we issue in global form will be made in US dollars, these procedures can be used for cross-market transfers and the securities will be cleared and settled on a delivery against payment basis.
Cross-market transfers of securities that are not in global form may be cleared and settled in accordance with other procedures that may be established among the clearing systems for these securities. Investors in securities that are issued outside of the United States, its territories and possessions must initially hold their interests through Euroclear, Clearstream, Luxembourg or the clearance system that is described in the applicable prospectus supplement.
The policies of DTC, Clearstream, Luxembourg, and Euroclear will govern payments, transfers, exchange and other matters relating to the investor’s interest in securities held by them. This is also true for any other clearance system that may be named in a prospectus supplement.
We have no responsibility for any aspect of the actions of DTC, Clearstream, Luxembourg or Euroclear or any of their direct or indirect participants. We have no responsibility for any aspect of the records kept by DTC, Clearstream, Luxembourg or Euroclear or any of their direct or indirect participants. We also do not supervise these systems in any way. This is also true for any other clearing system indicated in a prospectus supplement.
DTC, Clearstream, Luxembourg, Euroclear and their participants perform these clearance and settlement functions under agreements they have made with one another or with their customers. You should be aware that they are not obligated to perform these procedures and may modify them or discontinue them at any time.
The description of the clearing systems in this section reflects our understanding of the rules and procedures of DTC, Clearstream, Luxembourg and Euroclear as they are currently in effect. Those systems could change their rules and procedures at any time.
The Clearing Systems
DTC
DTC has advised us as follows:
| · | DTC is a limited-purpose trust company organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. |
| · | DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic computerized book-entry changes in the accounts of its participants. This eliminates the need for physical movement of certificates. |
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| · | Participants in DTC include securities brokers and dealers, banks, trust companies and clearing corporations and may include certain other organizations. DTC is partially owned by some of these participants or their representatives. |
| · | Access to DTC’s book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. |
| · | The rules applicable to DTC and its participants are on file with the SEC. |
Clearstream, Luxembourg
Clearstream, Luxembourg has advised us as follows:
| · | Clearstream, Luxembourg is a duly licensed bank incorporated as a société anonyme under the laws of Luxembourg and is subject to regulation by the Luxembourg Commission for the Supervision of the Financial Sector (Commission de Surveillance du Secteur Financier). |
| · | Clearstream, Luxembourg holds securities for its customers and facilitates the clearance and settlement of securities transactions among them through electronic book-entry transfers between their accounts, thereby eliminating the need for physical movement of securities. |
| · | Clearstream, Luxembourg provides other services to its customers, including safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. |
| · | Clearstream, Luxembourg interfaces with domestic securities markets in over 30 countries through established depositary and custodial relationships. |
| · | Clearstream, Luxembourg’s customers are worldwide financial institutions, including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. Clearstream’s US customers are limited to securities brokers and dealers and banks. |
| · | Indirect access to Clearstream, Luxembourg is also available to other institutions such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Clearstream, Luxembourg customer. |
Euroclear
Euroclear has advised us as follows:
| · | Euroclear is incorporated under the laws of Belgium as a bank and is subject to regulation by the Belgian Banking, Finance and Insurance Commission (Commission Bancaire et Financière et des Assurances) and the National Bank of Belgium (Banque Nationale de Belgique). |
| · | Euroclear holds securities for its participants and facilitates the clearance and settlement of securities transactions among them. It does so through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates. |
| · | Euroclear provides various other services, including credit, custody, lending and borrowing of securities and tri-party collateral management. It interfaces with domestic markets in several countries. |
| · | Euroclear participants include banks, including central banks, securities brokers and dealers and other professional financial intermediaries. |
| · | Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly. |
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| · | All securities in Euroclear are held on a fungible basis. This means that specific certificates are not matched to specific securities clearance accounts. |
Other Clearing Systems
We may choose any other clearing system for a particular series of securities. The clearance and settlement procedures for the clearing system we choose will be described in the applicable prospectus supplement.
Primary Distribution
The distribution of the securities will be cleared through one or more of the clearing systems that we have described above or any other clearing system that is specified in the applicable prospectus supplement. Payment for securities will be made on a delivery versus payment or free delivery basis. These payment procedures will be more fully described in the applicable prospectus supplement.
Clearance and settlement procedures may vary from one series of securities to another according to the currency that is chosen for the specific series of securities. Customary clearance and settlement procedures are described below.
We will submit applications to the relevant system or systems for the securities to be accepted for clearance. The clearance numbers that are applicable to each clearance system will be specified in the prospectus supplement.
Clearance and Settlement Procedures — DTC
DTC participants that hold securities through DTC on behalf of investors will follow the settlement practices applicable to US corporate debt obligations in DTC’s Same-Day Funds Settlement System, or such other procedures as are applicable for other securities.
Securities will be credited to the securities custody accounts of these DTC participants against payment in same-day funds, for payments in US dollars, on the settlement date. For payments in a currency other than US dollars, securities will be credited free of payment on the settlement date.
Clearance and Settlement Procedures — Euroclear and Clearstream, Luxembourg
We understand that investors that hold their securities through Euroclear or Clearstream, Luxembourg accounts will follow the settlement procedures that are applicable to conventional Eurobonds in registered form for debt securities, or such other procedures as are applicable for other securities.
Securities will be credited to the securities custody accounts of Euroclear and Clearstream, Luxembourg participants on the business day following the settlement date, for value on the settlement date. They will be credited either free of payment or against payment for value on the settlement date.
Secondary Market Trading
Trading between DTC Participants
Secondary market trading between DTC participants will occur in the ordinary way in accordance with DTC’s rules. Secondary market trading will be settled using procedures applicable to US corporate debt obligations in DTC’s Same-Day Funds Settlement System for debt securities, or such other procedures as are applicable for other securities.
If payment is made in US dollars, settlement will be in same-day funds. If payment is made in a currency other than US dollars, settlement will be free of payment. If payment is made other than in US dollars, separate payment arrangements outside of the DTC system must be made between the DTC participants involved.
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Trading between Euroclear and/or Clearstream, Luxembourg Participants
We understand that secondary market trading between Euroclear and/or Clearstream, Luxembourg participants will occur in the ordinary way following the applicable rules and operating procedures of Euroclear and Clearstream, Luxembourg. Secondary market trading will be settled using procedures applicable to conventional Eurobonds in registered form for debt securities, or such other procedures as are applicable for other securities.
Trading between a DTC Seller and a Euroclear or Clearstream, Luxembourg Purchaser
A purchaser of securities that are held in the account of a DTC participant must send instructions to Euroclear or Clearstream, Luxembourg at least one business day prior to settlement. The instructions will provide for the transfer of the securities from the selling DTC participant’s account to the account of the purchasing Euroclear or Clearstream, Luxembourg participant. Euroclear or Clearstream, Luxembourg, as the case may be, will then instruct the common depositary for Euroclear and Clearstream, Luxembourg to receive the securities either against payment or free of payment.
The interests in the securities will be credited to the respective clearing system. The clearing system will then credit the account of the participant, following its usual procedures. Credit for the securities will appear on the next day, European time. Cash debit will be back-valued to, and the interest on the securities will accrue from, the value date, which would be the preceding day, when settlement occurs in New York. If the trade fails and settlement is not completed on the intended date, the Euroclear or Clearstream, Luxembourg cash debit will be valued as of the actual settlement date instead.
Euroclear participants or Clearstream, Luxembourg participants will need the funds necessary to process same-day funds settlement. The most direct means of doing this is to preposition funds for settlement, either from cash or from existing lines of credit, as for any settlement occurring within Euroclear or Clearstream, Luxembourg. Under this approach, participants may take on credit exposure to Euroclear or Clearstream, Luxembourg until the securities are credited to their accounts one business day later.
As an alternative, if Euroclear or Clearstream, Luxembourg has extended a line of credit to them, participants can choose not to preposition funds and will instead allow that credit line to be drawn upon to finance settlement. Under this procedure, Euroclear participants or Clearstream, Luxembourg participants purchasing securities would incur overdraft charges for one business day (assuming they cleared the overdraft as soon as the securities were credited to their accounts). However, interest on the securities would accrue from the value date. Therefore, in many cases, the investment income on securities that is earned during that one business day period may substantially reduce or offset the amount of the overdraft charges. This result will, however, depend on each participant’s particular cost of funds.
Because the settlement will take place during New York business hours, DTC participants will use their usual procedures to deliver securities to the depositary on behalf of Euroclear participants or Clearstream, Luxembourg participants. The sale proceeds will be available to the DTC seller on the settlement date. For the DTC participants, then, a cross-market transaction will settle no differently than a trade between two DTC participants.
Special Timing Considerations
You should be aware that investors will only be able to make and receive deliveries, payments and other communications involving the securities through Clearstream, Luxembourg and Euroclear on days when those systems are open for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for business in the United States.
In addition, because of time-zone differences, there may be problems with completing transactions involving Clearstream, Luxembourg and Euroclear on the same business day as in the United States. US investors who wish to transfer their interests in the securities, or to receive or make a payment or delivery of the securities, on a particular day, may find that the transactions will not be performed until the next business day in Luxembourg or Brussels, depending on whether Clearstream, Luxembourg or Euroclear is used.
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Certain United Kingdom and United States Federal Tax Considerations
UNITED KINGDOM TAXATION
The following summary is of a general nature and describes certain UK tax considerations that relate to the debt securities and is based on current UK law and the published practice of H.M. Revenue and Customs (“HMRC”). It is not tax advice. The comments relate only to the position of persons who are the absolute beneficial owners of their debt securities and any payments in respect of such debt securities and may not apply to certain classes of persons such as dealers and holders who are connected with us for relevant tax purposes. The comments do not relate to the position of investment trusts, venture capital trusts, authorized unit trusts, open ended investment companies or corporate trustees. This section offers general guidance only and in particular does not discuss the UK tax treatment relevant to convertible or exchangeable securities, asset linked securities or securities issued at anything other than no discount or a fixed discount to their redemption amount.
Please consult your own tax advisor concerning the consequences of owning these debt securities in your particular circumstances under UK law and the laws of any other taxing jurisdiction.
Interest Payments
Payments of interest on debt securities issued by the Company will not be subject to withholding or deduction for or on account of UK taxation so long as the debt securities are treated as “quoted Eurobonds” within the meaning of section 987 of the Income Tax Act 2007 (the “Act”). This will be the case so long as they are listed on a “recognised stock exchange” within the meaning of Section 1005 of the Act or admitted to trading on a “multilateral trading facility” operated by an EEA- or UK-regulated recognised stock exchange. The New York Stock Exchange will be a “recognised stock exchange” so long as it is registered with the SEC as a national securities exchange.
Even if the debt securities do not qualify as “quoted Eurobonds”, the withholding obligation is disapplied in respect of payments to holders who the Company reasonably believes are either a UK resident company or a non-UK resident company carrying on a trade in the United Kingdom through a UK permanent establishment which is within the charge to corporation tax in respect of the relevant payment of interest, or fall within various categories enjoying a special tax status (including charities and pension funds), or are partnerships consisting of such persons (unless HMRC directs otherwise in accordance with section 931 of the Act).
In all other cases, payments of interest will generally be made after deduction of income tax at the basic rate, which is currently 20%. Certain holders of debt securities who are resident in the United States may be entitled to receive payments free of deductions for or on account of UK tax under the UK — US double taxation treaty and may therefore be able to obtain a direction to that effect from HMRC. Holders of debt securities who are resident in other jurisdictions may also be able to receive payment free of deductions or subject to a lower rate of deduction under an appropriate double taxation treaty and may be able to obtain a direction to that effect. However, such a direction will, in either case, only be issued on prior application to the relevant tax authorities by the holder in question. If such a direction is not in place at the time a payment of interest is made, the person making the payment will be required to withhold tax, although a holder of debt securities resident in another jurisdiction who is entitled to relief may subsequently claim the amount, or a proportion of the amount, as appropriate, withheld, from HMRC.
The interest on debt securities issued by the Company will have a UK source for tax purposes and, as such, may be subject to income tax by direct assessment even where paid without withholding. However, interest with a UK source received without deduction or withholding on account of UK income tax will effectively not be chargeable to UK tax on income in the hands of a person who is not resident for tax purposes in the United Kingdom unless that person carries on a trade, profession or vocation in the United Kingdom through a branch or agency (or, in the case of a company, a permanent establishment) in the United Kingdom in connection with which the interest is received or to which the debt securities are attributable. There are certain other limitations on the scope of UK income tax on interest with a UK source (which is received without deduction or withholding on account of UK income tax) for holders who are non-resident companies including where the interest is disregarded savings and investment income or arising from a transaction carried out by certain categories of agents such as some brokers and investment managers, and the application of UK income tax with respect to such non-resident companies may be further limited by any applicable double taxation treaty.
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If debt securities are issued with a redemption premium, then any such premium may constitute interest for UK tax purposes and so be treated in the manner described below. References to “interest” in this section mean interest as understood in UK tax law. The statements above do not take account of any different definitions of interest which may prevail under any other law or which may be created by the terms and conditions of the debt securities or any related documentation.
Optional Tax Redemption
In the earlier section entitled “Description of Debt Securities — Optional Tax Redemption” we set out situations in which the Company may redeem any debt securities.
Disposal (including Redemption)
A holder of debt securities who is resident in a jurisdiction outside the United Kingdom will not generally be liable to UK taxation in respect of a disposal (including redemption) of a debt security, any gain accrued in respect of a debt security or any change in the value of a debt security, unless, at the time of the disposal, the holder carries on a trade, profession or vocation in the United Kingdom through a branch or agency (or, for corporate holders, a permanent establishment) and the debt security was used in or for the purposes of that trade, profession or vocation or acquired for the use by or for the purposes of the branch or agency or permanent establishment or used or held for the purposes of the branch or agency or permanent establishment.
A holder who is an individual and who ceases to be resident for tax purposes in the United Kingdom for a period of five years or less and who disposes of debt securities during that period may be liable to UK taxation on chargeable gains arising during the period of absence, subject to any available exemption or relief.
In general holders which are within the charge to UK corporation tax will be treated for tax purposes as realising profits, gains or losses in respect of the debt securities on a basis which is broadly in accordance with their statutory accounting treatment so long as the accounting treatment is in accordance with generally accepted accounting practice as that term is defined for tax purposes. Such profits, gains and losses (or, where the holder’s functional currency is not sterling, then the sterling equivalent of such profits, gains and losses as computed in the holder’s functional currency) will be taken into account in computing taxable income for corporation tax purposes.
If the holder is an individual resident in the United Kingdom, he or she may have to account for capital gains tax in respect of any gains arising on a disposal of a debt security, unless the debt securities are “qualifying corporate bonds” within the meaning of section 117 of the Taxation of Chargeable Gains Act 1992. If this is the case, neither chargeable gains nor allowable losses will arise on a disposal of the debt securities for the purposes of taxation of chargeable gains. Any capital gains would be calculated by comparing the sterling values on purchase and disposal of the securities, so a liability to tax could arise where the non-sterling amount received on a disposal was less than or the same as the amount paid for the debt securities.
The provisions of the accrued income scheme (the “Scheme”) may apply to certain holders who are not subject to corporation tax, in relation to a transfer of the debt securities. On a transfer of securities with accrued interest the Scheme usually applies to deem the transferor to receive an amount of income equal to the accrued interest and to treat the deemed or actual interest subsequently received by the transferee as reduced by a corresponding amount. Generally, persons who are not resident in the United Kingdom and who do not carry on a trade in the United Kingdom through a branch or agency to which the debt securities are attributable will not be subject to the provisions of these rules.
For individual holders who are resident for tax purposes in the United Kingdom or who carry on a trade, profession or vocation in the United Kingdom through a branch or agency to which the debt securities are attributable, if the debt security was issued at a deep discount to its redemption amount then it may still be a “qualifying corporate bond” but all profits and losses on its disposal would be taxed as income. A deep discount means more than 15% of the redemption amount or, if 15% or under, more than 1/2% of the redemption amount multiplied by the number of years to redemption.
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Stamp Duty and Stamp Duty Reserve Tax (“SDRT”)
No liability for UK stamp duty or SDRT will arise on a transfer of, or an agreement to transfer, debt securities unless such securities carry:
| · | a right of conversion (exercisable then or later) into shares or other securities or to the acquisition of shares or other securities (including securities of the same description); |
| · | a right to interest, the amount of which is or was determined to any extent by reference to the results of, or of any part of, a business or to the value of any property (save for interest which (i) reduces in the event of the results of a business or part of a business improving, or the value of any property increasing, or (ii) increases in the event of results of a business or part of a business deteriorating, or the value of any property diminishing); |
| · | a right to interest the amount of which exceeds a reasonable commercial return on the nominal amount of the capital; or |
| · | a right on repayment to an amount which exceeds the nominal amount of the capital and is not reasonably comparable with what is generally repayable (in respect of a similar nominal amount of capital) under the terms of issue of loan capital listed on the Official List of the London Stock Exchange. |
UNITED STATES FEDERAL INCOME TAXATION
The following are certain material US federal income tax consequences of ownership and disposition of the debt securities. This discussion applies only to debt securities that are:
| · | purchased by US Holders (as described below) at the initial offering at the “issue price”, which for debt securities of any series will equal the first price to the public (not including bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers) at which a substantial amount of the debt securities of that series are sold for money; and |
| · | held as capital assets. |
This discussion does not describe all of the tax consequences that may be relevant to a US Holder in light of such person’s particular circumstances, including alternative minimum tax or Medicare contribution tax considerations, any special tax accounting rules under Section 451 of the Internal Revenue Code of 1986, as amended (the “Code”) or consequences that may apply to persons subject to special rules, such as:
| · | certain financial institutions; |
| · | insurance companies; |
| · | dealers or traders in securities or foreign currencies that use a mark-to-market method of tax accounting; |
| · | persons holding debt securities as part of a straddle or integrated transaction; |
| · | persons whose functional currency is not the US dollar; |
| · | partnerships or other entities classified as partnerships for US federal income tax purposes; |
| · | tax-exempt organizations, “individual retirement accounts” or “Roth IRAs”; or |
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| · | persons holding debt securities in connection with a trade or business outside the United States. |
If a partnership holds debt securities, the US federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding debt securities and their partners should consult their tax advisors with regard to the US federal income tax treatment of an investment in the debt securities.
This summary is based on the Code, administrative pronouncements, judicial decisions and final, temporary and proposed Treasury Regulations, all as of the date hereof, changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. Persons considering the purchase of debt securities are urged to consult their tax advisors with regard to the application of the US federal income and other tax laws to their particular situations as well as any tax consequences arising under the laws of any state, local or non-US taxing jurisdiction.
The discussion below applies only to debt securities that are treated as debt for US federal income tax purposes and are not “contingent payment debt instruments” for those purposes. The applicable prospectus supplement may include additional or alternative US federal income tax considerations that are not described herein and could be relevant to a particular series of debt securities.
As used herein, the term “US Holder” means a person that for US federal income tax purposes is a beneficial owner of debt securities and:
| · | a citizen or resident of the United States; |
| · | a corporation, or other entity taxable as a corporation for US federal income tax purposes, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or |
| · | an estate or trust the income of which is subject to US federal income taxation regardless of its source. |
Interest
Interest, if any, paid on a debt security (which, for these purposes, include UK tax withheld from the interest payment and any additional amounts paid with respect thereto) will be taxable to a US Holder as ordinary income at the time it accrues or is received in accordance with the US Holder’s method of accounting for US federal income tax purposes provided that the interest is “qualified stated interest” (as defined below). Interest income earned by a US Holder with respect to a debt security will constitute foreign source income for US federal income tax purposes, which may be relevant to a US Holder in calculating such person’s foreign tax credit limitation. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. Special rules governing the treatment of interest paid with respect to original issue discount debt securities and certain foreign currency debt securities, are described under “Original Issue Discount” and “Foreign Currency Debt Securities” below.
Original Issue Discount
A debt security that is issued at an issue price less than its “stated redemption price at maturity” will be considered to have been issued with original issue discount for US federal income tax purposes (an “original issue discount debt security”) unless the debt security satisfies a de minimis threshold (as described below). The “stated redemption price at maturity” of a debt security will equal the sum of all payments required under the debt security other than payments of “qualified stated interest.” “Qualified stated interest” is stated interest that is unconditionally payable (other than in debt instruments issued by us) at least annually during the entire term of the debt security and equal to the outstanding principal balance of the debt security multiplied by a single fixed rate or, subject to certain conditions, a floating rate of a type described in the succeeding paragraph.
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Floating rate debt securities providing for one or more “qualified floating rates” of interest, a single fixed rate and one or more qualified floating rates, an “objective rate”, or a single fixed rate and a single objective rate that is a “qualified inverse floating rate” will generally have qualified stated interest if interest is unconditionally payable (other than in debt instruments issued by us) at least annually during the term of the debt security at the floating rate’s current value (within the meaning of the applicable US Treasury Regulations); provided that the issue price of the debt security does not exceed the total noncontingent principal payments due under the debt security by more than an amount equal to the lesser of (x) 0.015, generally multiplied by the product of the total noncontingent principal payments and the number of complete years to maturity from the issue date and (y) 15% of the total noncontingent principal payments. Unless otherwise provided in the applicable supplement to this Registration Statement, it is expected, and this discussion assumes, that a floating rate debt security will satisfy the requirements of this paragraph.
If a floating rate debt security provides for two or more qualified floating rates that can reasonably be expected to have approximately the same values throughout the term of the debt security, the qualified floating rates together constitute a single qualified floating rate. If interest on a debt instrument is stated at a fixed rate for an initial period of one year or less followed by a variable rate that is either a qualified floating rate or an objective rate for a subsequent period, and the value of the variable rate on the issue date is intended to approximate the fixed rate, the fixed rate and the variable rate together constitute a single qualified floating rate or objective rate. Two or more rates will be conclusively presumed to meet the requirements of the preceding two sentences if the values of the applicable rates on the issue date are within 1/4 of 1 percent of each other. In general, a qualified floating rate is any variable rate where variations in the value of such rate can reasonably be expected to measure contemporaneous variations in the cost of newly borrowed funds in the currency in which the floating rate note is denominated. A rate described in the preceding sentence that is either: (i) multiplied by a fixed multiple that is greater than 0.65 but not more than 1.35 or (ii) multiplied by a fixed multiple greater than 0.65 but not more than 1.35, and then increased or decreased by a fixed rate will also be a qualified floating rate for these purposes. In general, an objective rate is a rate that is not itself a qualified floating rate but which is determined using a single fixed formula that is based on objective financial or economic information. A qualified inverse floating rate is any objective rate where such rate is equal to a fixed rate minus a qualified floating rate, as long as variations in the rate can reasonably be expected to inversely reflect contemporaneous variations in the qualified floating rate. A US Holder considering purchasing a floating rate debt security should carefully examine the applicable prospectus supplement and should consult its tax advisor since the tax consequences to such US Holder of owning the floating rate debt security will depend, in part, on the particular terms of such floating rate debt security. The applicable prospectus supplement will describe the US federal income tax treatment of floating rate debt securities that provide for multiple floating rates.
If the difference between a debt security’s stated redemption price at maturity and its issue price is less than a prescribed de minimis amount (generally 1/4 of 1 percent of the stated redemption price at maturity multiplied by the number of complete years to maturity), then the debt security will not be considered to have original issue discount.
As described in “—Interest” above, a US Holder of original issue discount debt securities will be required to include any qualified stated interest payments in income in accordance with the US Holder’s method of accounting for US federal income tax purposes. In addition, US Holders of original issue discount debt securities that mature more than one year from their date of issuance will be required to include original issue discount in income (as ordinary income) for federal income tax purposes as it accrues, in accordance with a constant yield method based on a compounding of interest, before the receipt of cash payments attributable to this income. Under this method, US Holders of original issue discount debt securities generally will be required to include in income increasingly greater amounts of original issue discount in successive accrual periods.
A US Holder may make an election to include in gross income all interest that accrues on any debt security (including stated interest, original issue discount and de minimis original issue discount, as adjusted by any amortizable bond premium) in accordance with a constant yield method based on the compounding of interest (a “constant yield election”).
A debt security that matures one year or less from its date of issuance taking into account the last possible date that the debt security could be outstanding under its terms (a “short-term debt security”) will be treated as being issued at a discount and none of the interest paid on the debt security will be treated as qualified stated interest.
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In general, a US Holder of a short-term debt security that uses the cash method of tax accounting is not required to accrue the discount for US federal income tax purposes unless it elects to do so. US Holders that so elect and certain other US Holders, including those that report income on the accrual method of accounting for federal income tax purposes, are required to include the discount in income as it accrues on a straight line basis, unless another election is made to accrue the discount according to a constant yield method based on daily compounding. In the case of a US Holder that is not required and that does not elect to include the discount in income currently, any gain realized on the sale, exchange or retirement of the short-term debt security will be ordinary income to the extent of the discount accrued on a straight line basis (or, if elected, according to a constant yield method based on daily compounding) through the date of sale, exchange or retirement. In addition, such US Holders will be required to defer deductions for any interest paid on indebtedness incurred to purchase or carry short-term debt securities in an amount not exceeding the accrued discount until the accrued discount is included in income.
Under applicable regulations, if Smith & Nephew plc has an unconditional option to redeem a debt security prior to its stated maturity date, for purposes of determining the yield and maturity of the debt security this option will be presumed to be exercised if, by utilizing any date on which the debt security may be redeemed as the maturity date and the amount payable upon redemption as the amount otherwise payable at maturity, the yield on the debt security would be lower than its yield to the stated maturity. If a US Holder has an unconditional option to require redemption of a debt security prior to its stated maturity, the option is presumed exercised if, by utilizing any date on which the debt security may be redeemed as the maturity date and the amount payable upon redemption as the amount otherwise payable at maturity, the yield on the debt security would be higher than its yield to the stated maturity. If an option is not in fact exercised, the debt security would be treated solely for purposes of calculating original issue discount as if it were redeemed, and a new debt security were issued, on the presumed exercise date for an amount equal to the debt security’s adjusted issue price on that date. If a debt security provides for conditional options to redeem (or otherwise calls for alternative payment schedules if a contingency occurs) and the timing and amount of the redemption price (or alternative payments) is known as of the issue date, the payment schedule that is significantly more likely than not to occur is used to determine the yield and maturity of the debt security.
Amortizable Bond Premium
If a US Holder purchases a debt security for an amount that is greater than the sum of all amounts payable on the debt security other than qualified stated interest, the US Holder will be considered to have purchased the debt security with amortizable bond premium equal to such excess and the US Holder may elect to amortize this premium, using a constant yield method, over the remaining term of the debt security. Special rules may limit the amounts that could be amortized during certain accrual periods in the case of debt securities that are subject to optional redemption. A US Holder may generally use the amortizable bond premium allocable to an accrual period to offset qualified stated interest otherwise required to be included in such person’s income with respect to the debt security in that accrual period. A US Holder that elects to amortize bond premium must reduce its tax basis in the debt security by the amount of the premium amortized in any year. An election to amortize bond premium applies to all taxable debt obligations then owned and thereafter acquired by the US Holder and may be revoked only with the consent of the Internal Revenue Service (the “IRS”).
If a US Holder makes a constant yield election (as described under “—Original Issue Discount” above) for a debt security with amortizable bond premium, such election will result in a deemed election to amortize bond premium for all of the US Holder’s debt instruments with amortizable bond premium and may be revoked only with the permission of the IRS.
Sale, Exchange or Retirement of the Debt Securities
Upon the sale, exchange or retirement of a debt security, a US Holder will recognize gain or loss equal to the difference between the amount realized on the sale, exchange or retirement and the US Holder’s adjusted tax basis in the debt security. Gain or loss, if any, will generally be US source for purposes of computing a US Holder’s foreign tax credit limitation. For these purposes, the amount realized (other than with respect to a short-term debt security) generally does not include any amount attributable to accrued interest. Amounts attributable to accrued interest are generally treated as interest
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as described under “—Interest” above. A US Holder’s adjusted tax basis in a debt security will generally be equal to such US Holder’s cost for that debt security, increased by any original issue discount, or any discount with respect to a short-term debt security, that such US Holder previously included in income, and reduced by any amortized premium and any cash payments previously received on the debt security other than payments of qualified stated interest.
Gain or loss realized on the sale, exchange or retirement of a debt security will generally be capital gain or loss and will be long-term capital gain or loss if at the time of sale, exchange or retirement the debt security has been held for more than one year. Exceptions to this general rule apply in the case of a short-term debt security, to the extent of any accrued discount not previously included in the US Holder’s taxable income (see “—Original Issue Discount” above) and in the case of foreign currency debt securities (see “—Foreign Currency Debt Securities” below). The deductibility of capital losses is subject to limitations.
Foreign Currency Debt Securities
The rules applicable to debt securities that are denominated in a currency or currency unit other than the US dollar (“foreign currency debt securities”) are complex and their application may depend on the US Holder’s particular US federal income tax situation. For example, various elections are available under these rules, and whether a US Holder should make any of these elections may depend on such person’s particular US federal income tax situation. US Holders are urged to consult their tax advisors regarding the US federal income tax consequences of the ownership and disposition of foreign currency debt securities.
A US Holder that uses the cash method of tax accounting and who receives a payment of qualified stated interest in a foreign currency (or who receives proceeds from a sale, exchange or other disposition attributable to accrued qualified stated interest) with respect to a foreign currency debt security will be required to include in income the US dollar value of the foreign currency payment (determined based on a spot rate on the date the payment is received) regardless of whether the payment is in fact converted to US dollars at that time, and this US dollar value will be the US Holder’s tax basis in the foreign currency.
In the case of a US Holder that uses the accrual method of tax accounting, the US Holder will be required to include in income the US dollar value of the amount of interest income (including original issue discount, but reduced by any amortizable bond premium) that has accrued and is otherwise required to be taken into account with respect to a foreign currency debt security during an accrual period. The US dollar value of the accrued income will be determined by translating the income at the average rate of exchange for the accrual period or, with respect to an accrual period that spans two taxable years, at the average rate for the partial period within the taxable year. Alternatively, a US Holder may elect to translate interest income (including original issue discount) into US dollars at the spot rate on the last day of the interest accrual period (or, in the case of a partial accrual period, the spot rate on the last day of the taxable year) or, if the date of receipt is within five business days of the last day of the interest accrual period, the spot rate on the date of receipt. A US Holder that makes this election must apply it consistently to all debt instruments from year to year and cannot change the election without the consent of the IRS. In either case, the US Holder will recognize, as ordinary income or loss, foreign currency gain or loss with respect to accrued interest income on the date the interest payment, or proceeds from the sale, exchange or other disposition attributable to accrued interest, is actually received. The amount of foreign currency gain or loss recognized as ordinary income will equal the difference between the US dollar value of the foreign currency payment received (determined based on a spot rate on the date the payment is received) in respect of the accrual period and the US dollar value of interest income that has accrued during the accrual period (as determined above). Rules similar to these rules apply in the case of a cash method taxpayer required to accrue original issue discount.
Original issue discount and amortizable bond premium on a foreign currency debt security will be determined in the relevant foreign currency. If an election to amortize bond premium is made, amortizable bond premium taken into account on a current basis will reduce interest income in units of the relevant foreign currency.
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Foreign currency gain or loss will be realized on amortized bond premium with respect to any period by treating the bond premium amortized in the period in the same manner as on the sale, exchange or retirement of the foreign currency debt security, as described below. Any foreign currency gain or loss will generally be ordinary income or loss. If the election to amortize bond premium is not made, any loss realized on the sale, exchange or retirement of a foreign currency debt security with amortizable bond premium by a US Holder will be a capital loss to the extent of the bond premium.
A US Holder’s tax basis in a foreign currency debt security, and the amount of any subsequent adjustment to the holder’s tax basis, will be the US dollar value of the foreign currency amount paid for such foreign currency debt security, or of the foreign currency amount of the adjustment, determined on the date of the purchase (or in the case of a debt security traded on an established securities market, on the settlement date in the case of a US Holder that is a cash method taxpayer or an electing accrual-method taxpayer) or adjustment. A US Holder who purchases a foreign currency debt security with previously owned foreign currency will recognize as US source ordinary income foreign currency gain or loss in an amount equal to the difference, if any, between such US Holder’s tax basis in the foreign currency and the US dollar fair market value of the foreign currency debt security on the date of purchase.
Upon the sale, exchange or retirement of a foreign currency debt security, the amount realized will be the US dollar value of the consideration (other than amounts attributable to accrued interest), translated at the spot rate on the date of sale or disposition (or in the case of a foreign currency debt security traded on an established securities market, the spot rate on the settlement date in the case of a US holder that is a cash method taxpayer or an electing accrual-method taxpayer). Gain or loss realized upon the sale, exchange or retirement of a foreign currency debt security that is attributable to fluctuations in currency exchange rates will be recognized as ordinary income or loss, which will not be treated as interest income or expense. Gain or loss attributable to fluctuations in exchange rates will equal the difference between the US dollar value of the purchase price of the debt security (i) on the date the payment is received or the debt security is disposed of and (ii) on the date the US Holder acquired the debt security. Payments received attributable to accrued interest will be treated in accordance with the rules applicable to payments of interest on foreign currency debt securities described above. The foreign currency gain or loss will be recognized only to the extent of the total gain or loss realized by a US Holder on the sale, exchange or retirement of the foreign currency debt security. Any gain or loss realized by US Holders in excess of the foreign currency gain or loss will be capital gain or loss (except in the case of a short-term debt security, to the extent of any discount not previously included in the US Holder’s income).
Any recognized foreign currency gain or loss will generally be US source.
A US Holder may be required to file a reportable transaction disclosure statement with such person’s US federal income tax return, if the US Holder realizes a loss on the sale, exchange or other disposition of a foreign currency debt security and such loss is greater than applicable threshold limits, which differ depending on the status of the holder. A US Holder that claims a loss deduction with respect to a foreign currency debt security should consult its own tax advisor regarding the need to file a reportable transaction disclosure statement.
Foreign Financial Asset Reporting
Certain US Holders who are individuals (and certain specified entities) may be required to report information relating to non-US financial accounts through which they may hold debt securities. US Holders should consult their tax advisors regarding their reporting obligations with respect the debt securities.
Backup Withholding and Information Reporting
Information returns may be filed with the
IRS in connection with payments on the debt securities and the proceeds from a sale or other disposition of the debt securities.
A US Holder may be subject to US backup withholding on these payments if the US Holder fails to provide a correct taxpayer identification
number to the payor and comply with certain certification procedures or otherwise establish an exemption from backup withholding.
The amount of any backup withholding from a payment to a US Holder will be allowed as a credit against the US Holder’s US
federal income tax liability and may entitle the US Holder to a refund, provided that the required information is timely furnished
to the IRS.
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We may sell the securities offered by this prospectus:
| · | through underwriters; |
| · | through dealers; |
| · | through agents; or |
| · | directly to other purchasers. |
The prospectus supplement relating to any offering will identify or describe:
| · | any underwriter, dealers or agents; |
| · | their compensation; |
| · | the net proceeds to us; |
| · | the purchase price of the securities; |
| · | the initial public offering price of the securities; and |
| · | any exchange on which the securities will be listed. |
Underwriters
If we use underwriters in the sale, they will acquire the securities for their own account and may resell the securities from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Unless provided otherwise in the applicable prospectus supplement, various conditions to the underwriters’ obligation to purchase the securities apply, and the underwriters will be obligated to purchase all of the securities contemplated in an offering if they purchase any of the securities. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.
Dealers
If we use dealers in the sale, unless provided otherwise in the applicable prospectus supplement, we will sell securities to the dealers as principals. The dealers may then resell the securities to the public at varying prices that the dealers may determine at the time of resale.
Agents and Direct Sales
We may sell securities directly or through agents that we designate, at a fixed price or prices, which may be changed, or at varying prices determined at the time of sale. Any such agent may be deemed to be an underwriter as that term is defined in the Securities Act. The prospectus supplement will name any agent involved in the offering and sale and will state any commissions we will pay to that agent. Unless provided otherwise in the applicable prospectus supplement, any agent is acting on a best efforts basis for the period of its appointment.
Contracts with Institutional Investors for Delayed Delivery
If we indicate in the applicable prospectus supplement, we will authorize underwriters, dealers or agents to solicit offers from various institutional investors to purchase securities from it pursuant to contracts providing for payment and delivery on a future date that the prospectus supplement specifies. The underwriters, dealers or agents may impose limitations on the minimum amount that the institutional investor can purchase. They may also impose limitations on the portion of the aggregate amount of the securities that they may sell. These institutional investors include:
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| · | commercial and savings banks; |
| · | insurance companies; |
| · | pension funds; |
| · | investment companies; |
| · | educational and charitable institutions; and |
| · | other similar institutions as we may approve. |
The obligations of any of these purchasers pursuant to delayed delivery and payment arrangements will not be subject to any conditions. However, one exception applies. An institution’s purchase of the particular securities cannot at the time of delivery be prohibited under the laws of any jurisdiction that governs:
| · | the validity of the arrangements; or |
| · | the performance by us or the institutional investor. |
Indemnification
Agreements that we enter into with underwriters, dealers or agents may entitle them to indemnification by us against various civil liabilities. These include liabilities under the Securities Act. The agreements may also entitle them to contribution for payments which they may be required to make as a result of these liabilities. Underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, us in the ordinary course of business.
Market Making
Unless provided otherwise in the applicable prospectus supplement, each series of securities will be a new issue of securities without an established trading market. Various broker-dealers may make a market in the debt securities, but will have no obligation to do so, and may discontinue any market making at any time without notice. Consequently, it may be the case that no broker-dealer will make a market in securities of any series or that the liquidity of the trading market for the securities will be limited.
Expenses
The expenses of any offering of debt securities will be detailed in the applicable prospectus supplement.
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Davis Polk & Wardwell London LLP, our US and English law counsel, will pass upon the validity of the offered securities with respect to US Federal law, New York State law and English law.
The Group’s consolidated financial statements as of December 31, 2019 and 2018, and for each of the years in the three-year period ended December 31, 2019, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2019 have been incorporated by reference herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in auditing and accounting.
The audit report on the effectiveness of internal control over financial reporting as of December 31, 2019, contains an explanatory paragraph that states the Group acquired Osiris Therapeutics, Inc. during 2019, and management excluded from its assessment of the effectiveness of the Group’s internal control over financial reporting as of December 31, 2019, Osiris Therapeutics, Inc.’s internal control over financial reporting associated with 2% of the Group’s revenue and less than 1% of the Group’s total assets, included in the consolidated financial statements of the Group as of and for the year ended December 31, 2019. The audit of internal control over financial reporting of the Group also excluded an evaluation of the internal control over financial reporting of Osiris Therapeutics, Inc.
Also, the audit report covering the December 31, 2019 consolidated financial statements refers to a change to the method of accounting for leases as of January 1, 2019 due to the adoption of IFRS 16 Leases.
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PART II OF FORM F-3
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
Except as hereinafter set forth, there is no provision of the Articles of Association of Smith & Nephew plc (which may be referred to as the “Company” in this Item 8) or any contract, arrangement or statute under which any director or officer of the Company is insured or indemnified in any manner against any liability that he may incur in his capacity as such.
Deed of Indemnity
The Company has entered into Deeds of Indemnity with the directors of the Company that, subject to certain conditions precedent and limitations, in consideration for such director or officer continuing in, retiring, or accepting, office as a director or officer of (i) the Company or (ii) any of the Company’s subsidiaries, the Company will indemnify and hold the director harmless in respect of all claims, liabilities, costs, charges, expenses or losses (“Liability”) made against him/her or which he/she may suffer or incur as a consequence of, or which relate to or arise from, directly or indirectly, the actual or purported execution or discharge of his/her duties or responsibilities or the exercise or purported exercise of his/her powers or discretions as a director or officer of the Company or any Associated Company (which shall have the meaning given to it in section 256 of the Companies Act 2006) or otherwise in relation thereto or in connection therewith, including (but without limitation) any Liability reasonably suffered or incurred by the Director in disputing, defending, investigating or providing evidence in connection with any actual or threatened or alleged claims, demands, investigations or proceedings (whether civil or criminal) (“Claims”) (and alleged claims, demands, investigations or proceedings shall include any allegations made formally or informally by reports in the press, public statement or other media) and any Liability reasonably incurred or suffered in relation to any reasonable settlement in respect of any Claim, or in connection with any application under section 1157 of the Companies Act 2006.
Article 89.2 of Smith & Nephew plc’s Articles of Association provides:
Without prejudice to any other provisions of these Articles, the Board may exercise all the powers of the Company to purchase and maintain insurance for or for the benefit of any persons who are or were at any time directors of the Company, or of any other body (whether or not incorporated) which is or was its parent undertaking or subsidiary undertaking or another subsidiary undertaking of any such parent undertaking (together “Group Companies”) or otherwise associated with the Company or any Group Company or in which the Company or any such Group Company has or had any interest, whether direct or indirect, or of any predecessor in business of any of the foregoing, or who are or were at any time trustees of (or directors of trustees of) any pension, superannuation or similar fund, trust or scheme or any employees’ share scheme or other scheme or arrangement in which any employees of the Company or of any such other body are interested, including (without prejudice to the generality of the foregoing) insurance against any costs, charges, expenses, losses or liabilities suffered or incurred by such persons in respect of any act or omission in the actual or purported execution and/or discharge of their duties and/or the actual or purported exercise of their powers and discretions and/or otherwise in relation to or in connection with their duties, powers or offices in relation to the Company or any such other body, fund, trust, scheme or arrangement.
Article 146 of Smith & Nephew plc’s Articles of Association provides:
Subject to the provisions of the Statutes (but so that this Article does not extend to any matter insofar as it would cause this Article or any part of it to be void under the Statutes) but without prejudice to any indemnity to which the person concerned may otherwise be entitled, every person who is or was at any time a director of the Company or any Group Company (as defined in Article 89.2) may be indemnified out of the assets of the Company against all costs, charges, expenses, losses or liabilities (together "Liabilities") which he or she may sustain or incur in or about the actual or purported execution and/or discharge of his or her duties (including those duties, powers and discretions in relation to any Group Company or any company that is a trustee of an occupational pension scheme (as defined in section 235(6) of the 2006 Act)) and/or the actual or purported exercise
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of his or her powers or discretions and/or otherwise in relation thereto or in connection therewith, including (without prejudice to the generality of the foregoing) any Liability suffered or incurred by him or her in disputing, defending, investigating or providing evidence in connection with any actual or threatened or alleged claims, demands, investigations, or proceedings, whether civil, criminal, or regulatory or in connection with any application under section 661(3) or (4) or section 1157 of the 2006 Act.
Article 147 of Smith & Nephew plc’s Articles of Association provides:
The Company may also provide funds to any director of the Company or of any Group Company (as defined in Article 89.2) to meet, or do anything to enable a director of the Company or any Group Company to avoid incurring expenditure to the extent permitted by the Statutes.
Article 148 of Smith & Nephew plc’s Articles of Association provides:
The liability of the Members is limited to the amount, if any, unpaid on the shares in the Company respectively held by them.
Sections 661(3) and (4) of the Companies Act provide:
(3) If in proceedings for the recovery of an amount under subsection (2) it appears to the court that the subscriber or director—
| (a) | has acted honestly and reasonably, and |
| (b) | having regard to all the circumstances of the case, ought fairly to be relieved from liability, |
the court may relieve him, either wholly or in part, from his liability on such terms as the court thinks fit.
(4) If a subscriber to a company’s memorandum or a director of a company has reason to apprehend that a claim will or might be made for the recovery of any such amount from him—
| (c) | he may apply to the court for relief, and |
| (d) | the court has the same power to relieve him as it would have had in proceedings for recovery of that amount. |
Section 232 of the Companies Act 2006 provides:
(1) Any provision that purports to exempt a director of a company (to any extent) from any liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.
(2) Any provision by which a company directly or indirectly provides an indemnity (to any extent) for a director of the company, or of an associated company, against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a director is void, except as permitted by—
(a) section 233 (provision of insurance),
(b) section 234 (qualifying third party indemnity provision), or
(c) section 235 (qualifying pension scheme indemnity provision).
(3) This section applies to any provision, whether contained in a company’s articles or in any contract with the company or otherwise.
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(4) Nothing in this section prevents a company’s articles from making such provision as has previously been lawful for dealing with conflicts of interest.
Section 234 of the Companies Act 2006 provides:
(1) Section 232(2) (voidness of provisions for indemnifying directors) does not apply to qualifying third party indemnity provision.
(2) Third party indemnity provision means provision for indemnity against liability incurred by the director to a person other than the company or an associated company.
Such provision is qualifying third party indemnity provision if the following requirements are met.
(3) The provision must not provide any indemnity against:
(a) any liability of the director to pay:
(i) a fine imposed in criminal proceedings, or
(ii) a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising); or
(b) any liability incurred by the director:
(i) in defending criminal proceedings in which he is convicted, or
(ii) in defending civil proceedings brought by the company, or an associated company, in which judgment is given against him, or
(iii) in connection with an application for relief (see subsection (6)) in which the court refuses to grant him relief.
(4) The references in subsection (3)(b) to a conviction, judgment or refusal of relief are to the final decision in the proceedings.
(5) For this purpose:
(a) a conviction, judgment or refusal of relief becomes final:
(i) if not appealed against, at the end of the period for bringing an appeal, or
(ii) if appealed against, at the time when the appeal (or any further appeal) is disposed of; and
(b) an appeal is disposed of:
(i) if it is determined and the period for bringing any further appeal has ended, or
(ii) if it is abandoned or otherwise ceases to have effect.
(6) The reference in subsection (3)(b)(iii) to an application for relief is to an application for relief under:
section 661(3) or (4) (power of court to grant relief in case of acquisition of shares by innocent nominee), or
section 1157 (general power of court to grant relief in case of honest and reasonable conduct).
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Section 256 of the Companies Act 2006 provides:
For the purposes of this Part–
| (a) | bodies corporate are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate, and |
| (b) | companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate. |
Section 1157 of the Companies Act 2006 provides:
(1) If in proceedings for negligence, default, breach of duty or breach of trust against:
(a) an officer of a company, or
(b) a person employed by a company as auditor (whether he is or is not an officer of the company),
it appears to the court hearing the case that the officer or person is or may be liable but that he acted honestly and reasonably, and that having regard to all the circumstances of the case (including those connected with his appointment) he ought fairly to be excused, the court may relieve him, either wholly or in part, from his liability on such terms as it thinks fit.
(2) If any such officer or person has reason to apprehend that a claim will or might be made against him in respect of negligence, default, breach of duty or breach of trust—
(a) he may apply to the court for relief, and
(b) the court has the same power to relieve him as it would have had if it had been a court before which proceedings against him for negligence, default, breach of duty or breach of trust had been brought.
(3) Where a case to which subsection (1) applies is being tried by a judge with a jury, the judge, after hearing the evidence, may, if he is satisfied that the defendant (in Scotland, the defender) ought in pursuance of that subsection to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case from the jury and forthwith direct judgment to be entered for the defendant (in Scotland, grant decree of absolvitor) on such terms as to costs (in Scotland, expenses) or otherwise as the judge may think proper.
Smith & Nephew plc maintains directors’ and officers’ liability insurance which, subject to policy terms and limitations, provides insurance cover against the personal liabilities which directors and officers may incur by reason of their duties. The authorized representative is also entitled to the benefit of the same directors’ and officers’ liability insurance.
The form of underwriting agreement to be
filed as an exhibit to this registration statement will provide that each underwriter, severally, will indemnify Smith & Nephew
plc and each of its directors and officers who signed the Registration Statement and each person, if any, who controls Smith &
Nephew plc within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against certain civil
liabilities.
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Item 9. Exhibits
|
Exhibit |
Description of Document |
| 1.1 | Form of Underwriting Agreement for Debt Securities |
| 4.1 | Form of Indenture to be entered into between Smith & Nephew plc and The Bank of New York Mellon, London Branch, including forms of debt securities relating thereto |
| 4.2 | Form of Securities of Smith & Nephew plc relating thereto (included in Exhibit 4.1) |
| 5.1 | Opinion of Davis Polk & Wardwell London LLP, English law counsel to Smith & Nephew plc, as to the validity of the debt securities |
| 5.2 | Opinion of Davis Polk & Wardwell London LLP, US counsel to Smith & Nephew plc, as to the validity of the debt securities |
| 8.1 | Opinion of Davis Polk & Wardwell London LLP, English law counsel to Smith & Nephew plc, as to certain matters of UK taxation (included in Exhibit 5.1) |
| 23.1 | Consent of KPMG LLP |
| 23.2 | Consent of Davis Polk & Wardwell London LLP, English law counsel to Smith & Nephew plc (included in Exhibit 5.1) |
| 23.3 | Consent of Davis Polk & Wardwell London LLP, US counsel to Smith & Nephew plc (included in Exhibit 5.2) |
| 24.1 | Powers of attorney (included on signature page) |
| 25.1 | Statement of eligibility of Trustee on Form T-1 with respect to Exhibit 4.1 above |
Item 10. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (i), (ii) and (iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the registration statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act or Item 8.A of Form 20-F if such financial statements and information are contained in periodic reports filed with or furnished to the SEC by the registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the registration statement.
(5) That, for the purpose of determining liability under the Securities Act to any purchaser:
(i) each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(6) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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(7) That, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(8) To file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the SEC under section 305(b)(2) of the Trust Indenture Act.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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53
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Smith & Nephew plc certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hertfordshire, United Kingdom on October 2, 2020.
| Smith & Nephew plc | ||
| By: | /s/ Roland Diggelmann | |
| Name: | Roland Diggelmann | |
| Title: | Chief Executive Officer | |
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears below hereby constitutes and appoints each of Susan Swabey, Company Secretary and Anne-Francoise Nesmes, Chief Financial Officer (with full power to each of them to act alone), as such person’s true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in such person’s name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission any and all amendments and post-effective amendments to this registration statement, with exhibits thereto and any and all other documents that may be required in connection therewith, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as might or could do in person, hereby ratifying and confirming all that each said attorney-in-fact and agent, or any substitutes therefor, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities indicated on October 2, 2020.
|
Signature |
Title |
Date |
| /s/ Roberto Quarta | Chair of the Board of Directors | October 2, 2020 |
| Roberto Quarta | ||
| /s/ Roland Diggelmann | Executive Director and Chief Executive Officer | October 2, 2020 |
| Roland Diggelmann | (Principal Executive Officer) | |
| /s/ Anne-Francoise Nesmes | Executive Director and Chief Financial Officer | October 2, 2020 |
| Anne-Francoise Nesmes | (Principal Financial Officer) | |
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|
Signature |
Title |
Date |
| /s/ Vinita Bali | Independent Non-Executive Director | October 2, 2020 |
| Vinita Bali | ||
| /s/ Virginia Bottomley | Independent Non-Executive Director | October 2, 2020 |
| The Rt. Hon Baroness Virginia Bottomley of Nettlestone DL | ||
| Independent Non-Executive Director | ||
| Erik Engstrom | ||
| /s/ Rick Medlock | Independent Non-Executive Director | October 2, 2020 |
| Rick Medlock | ||
| Independent Non-Executive Director | ||
| Robin Freestone | ||
| Independent Non-Executive Director | ||
| Marc Owen | ||
| /s/ Angie Risley | Independent Non-Executive Director | October 2, 2020 |
| Angie Risley | ||
| /s/ Bob White | Independent Non-Executive Director | October 2, 2020 |
| Bob White |
Authorized Representative
| /s/ Catheryn O’Rourke | October 2, 2020 | |
| Catheryn O’Rourke, as duly authorized representative of Smith & Nephew plc in the United States |
| |
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Exhibit 1.1
SMITH & NEPHEW PLC
Debt Securities
FORM OF UNDERWRITING AGREEMENT
[Date]
[Name(s) of Representatives]
As representatives of the several Underwriters
c/o [name and address]
[or]
[To the Representatives
of the several Underwriters
named from time to time in Schedule I to the applicable
Pricing Agreement]
Ladies and Gentlemen:
Smith & Nephew plc, a company organized under the laws of England and Wales (the “Company”), proposes to enter into a Pricing Agreement (“Pricing Agreement”), substantially in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and subject to the terms and conditions stated herein, to issue and sell to the firms named in Schedule I to the Pricing Agreement (such firms constituting the “Underwriters” with respect to such Pricing Agreement and the securities specified therein), certain of its debt securities (the “Securities”) specified in Schedule II to the Pricing Agreement (with respect to such Pricing Agreement, the “Designated Securities”).
The terms and rights of the Designated Securities shall be as specified in the Pricing Agreement and pursuant to the Indenture, dated as of September [•], 2020, as amended or supplemented from time to time (the “Indenture”), between the Company and The Bank of New York Mellon, as Trustee (the “Trustee”)1.
This underwriting agreement (the “Agreement”) supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any Underwriter, with respect to the subject matter hereof.
| 1. | Particular sales of Designated Securities may be made from time to time to the Underwriters of such Securities, for whom [you][the firm(s) designated as representative(s) of the Underwriters of such securities in the Pricing Agreement relating thereto] will act as representatives (the “Representatives”). The term “Representatives” also refers to the firm(s) acting as Underwriters and to Underwriters who act without any firm being designated as their representative. This Underwriting Agreement shall not be construed as an obligation of the Company to sell any of the Securities or as an obligation of any of the Underwriters to purchase the Securities. The obligation of the Company to issue and sell any of the Securities and the obligation of |
____________________
1 This form also includes the option to issue Designated Securities in U.S. dollars or another currency. Where any
Designated Securities are denominated in euro, additional provisions will be needed as set forth in Annex II.
any of the Underwriters to purchase any of the Securities shall be evidenced by the Pricing Agreement with respect to the Designated Securities specified therein. The Pricing Agreement shall specify the aggregate principal amount of such Designated Securities, the initial public offering price of such Designated Securities, the purchase price to the Underwriters of such Designated Securities, the names of the Underwriters of such Designated Securities, the names of the Representatives of such Underwriters and the principal amount of such Designated Securities to be purchased by each Underwriter and shall set forth the date, time and manner of delivery of such Designated Securities and payment therefor. The Pricing Agreement shall also specify the terms of such Designated Securities. The Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic or electronic communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint.
| 2. | The Company represents and warrants to, and agrees with, each of the Underwriters that: |
| (a) | The registration statement on Form F-3 (Registration No. 333-[•]) in respect of the Securities has been filed with the Securities and Exchange Commission (the “Commission”); such registration statement and any amendments thereto filed prior to the date of the applicable Pricing Agreement, excluding exhibits to such registration statement, but including all documents incorporated by reference in the prospectus contained therein, became effective on filing with the Commission in such form; the base prospectus filed as part of such registration statement, in the form in which it has most recently been filed with the Commission on or prior to the date of the applicable Pricing Agreement, is hereafter called the “Basic Prospectus”; any preliminary prospectus relating to the Designated Securities (including any preliminary prospectus supplement) included in such registration statement or filed with the Commission pursuant to Rule 424(b) of the rules and regulations of the Commission under the Securities Act of l933, as amended (the “Act”), being hereinafter called a “Preliminary Prospectus”; the various parts of such registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in such registration statement, at the time such parts became effective, but excluding Form T-1 and including any prospectus supplement relating to the Designated Securities that is filed with the Commission and deemed by virtue of Rule 430B under the Act to be part of such registration statement, each as amended at the time such part of the registration statement became effective being hereinafter called the “Registration Statement”; “Applicable Time” is the time specified as such in the applicable Pricing Agreement; “Effective Date” shall mean each date and time that the Registration Statement and any post-effective amendments or amendments thereto became or becomes effective; any reference herein to the Basic Prospectus, any Preliminary Prospectus or the Prospectus (as defined below) shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 6 of Form F-3 under the Act, as of the date of such Basic Prospectus, any Preliminary Prospectus or Prospectus, as the case |
2
may be, and any post-effective amendments to the Registration Statement; any reference to any amendment or supplement to the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Basic Prospectus, any Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated by reference in such Basic Prospectus, any Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the Effective Date of the Registration Statement that is incorporated by reference in the Registration Statement; the Basic Prospectus, as supplemented by the prospectus supplement specifically relating to the Designated Securities filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof, including any documents incorporated by reference therein as of the date of such filing, is hereinafter called the “Prospectus”; and no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission and no order preventing or suspending the use of the Basic Prospectus, any Preliminary Prospectus, the Prospectus or the Pricing Disclosure Package (as defined below) together with any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Designated Securities (an “Issuer Free Writing Prospectus”) has been issued and no proceeding for that purpose has been initiated or threatened by the Commission;
| (b) | The documents incorporated by reference in the Pricing Disclosure Package and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the applicable rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Pricing Disclosure Package or the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Pricing Disclosure Package or the Prospectus as amended or supplemented relating to such Securities; and no such documents will have been filed with the Commission following the Commission's close of business on the business day immediately prior to the date of the applicable Pricing Agreement |
3
and prior to the execution of the applicable Pricing Agreement, except as set forth on Schedule III to the applicable Pricing Agreement;
| (c) | The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects, to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the rules and regulations of the Commission thereunder; the Registration Statement and any amendment thereto do not and will not, as of the applicable Effective Date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, not misleading; and the Prospectus and any amendment or supplement thereto do not and will not, as of its date and as of the Time of Delivery (as defined below), contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to (i) any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Registration Statement or the Prospectus as amended or supplemented relating to such Securities or (ii) that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act; |
| (d) | The (i) Basic Prospectus, the Preliminary Prospectus, if any, used most recently prior to the Applicable Time, as supplemented by the final term sheet prepared and filed pursuant to Section 5(a) hereof as of the Applicable Time and listed on Schedule IV to the applicable Pricing Agreement together with the Issuer Free Writing Prospectus listed in Schedule III (if any) to the applicable Pricing Agreement and any other free writing prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Pricing Disclosure Package (collectively, the “Pricing Disclosure Package”) and (ii) each electronic road show, if any, when taken together as a whole with the Pricing Disclosure Package, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus listed on Schedule III (if any) to the applicable Pricing Agreement will not conflict with the information contained in the Registration Statement, the Basic Prospectus, the Preliminary Prospectus, if any, used most recently prior to the Applicable Time or the Prospectus; provided, however, that this representation and warranty shall not apply to (i) any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in any such Issuer Free Writing Prospectus or the Pricing Disclosure Package or (ii) that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act; |
4
| (e) | Each of the Company and its Significant Subsidiaries (as defined in Regulation S-X under the Exchange Act) has been duly incorporated and is validly existing under the law of the jurisdiction of its incorporation, with power and authority (corporate and other) to own, lease and operate its properties and conduct its business as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The Company is not, and at the time of the Pricing Agreement, will not be an “ineligible issuer,” as defined in Rule 405 under the Act; |
| (f) | The Designated Securities have been duly authorized and, when executed and authenticated in accordance with the Indenture and delivered to and paid for by the Underwriters, will constitute valid and binding obligations of the Company entitled to the benefits provided by the Indenture; each of this Agreement, the Pricing Agreement and the Indenture2 has been or will be duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the Trustee, the Indenture will constitute a valid and binding obligation of the Company, enforceable in accordance with its terms, subject to the effects of applicable bankruptcy, insolvency and similar laws affecting the enforcement of creditors' rights generally and equitable principles of general applicability; the Indenture has been duly qualified under the Trust Indenture Act; and the Designated Securities conform in all material respects to the description thereof contained in the Pricing Disclosure Package and the Prospectus as amended or supplemented; |
| (g) | The issue and sale of the Designated Securities and the compliance by the Company with the Indenture, this Agreement and the Pricing Agreement relating to the Designated Securities and the consummation by the Company of the transactions contemplated herein and therein will not contravene (i) any of the terms or provisions of any indenture, mortgage, deed of trust, loan agreement or other similar agreement or instrument to which the Company is a party or by which the Company is bound (collectively, “Agreements and Instruments”), or (ii) the memorandum or articles of association of the Company (the “Charter”), or (iii) any statute of the United States or the United Kingdom or any political subdivision thereof, or any order, rule or regulation known to the Company of any court or of any governmental agency or body in the United States or the United Kingdom or any political subdivision thereof (collectively, “Governmental Requirements”), except in the case of clause (i) above for such contraventions which would not, singly or in the aggregate, (A) affect the validity or binding nature of the Designated Securities or (B) have a material adverse effect on the financial position, shareholders’ equity or results of operations of the Company and its consolidated subsidiaries considered as a whole (clauses (A) and (B) together, a “Material Adverse Effect”); the Company is not in violation of (i) any Agreements and Instruments, or (ii) its Charter, or (iii) any Governmental Requirements, except for such violations as would not, singly or in the aggregate, have a Material Adverse Effect; |
____________________
2 In connection with the issuance of Designated Securities denominated in euro, add appropriate representation with respect to any Agency Agreement.
5
| (h) | No consent, approval, authorization, order, registration or qualification of or with any court or any governmental agency or body described in (g) above is required for the issue and sale of the Designated Securities by the Company in the manner contemplated herein or the consummation of the other transactions contemplated by this Agreement, the Pricing Agreement or the Indenture except as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Designated Securities; |
| (i) | The Company is not, and after giving effect to the offering and sale of the Designated Securities and the application of the proceeds thereof as described in the Pricing Disclosure Package and the Prospectus will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended; |
| (j) | KPMG LLP, which has audited the financial statements of the Company and its subsidiaries and the Company's internal controls over financial reporting as specified under the heading “Experts” in the Registration Statement, the Pricing Disclosure Package and the Prospectus is an independent registered public accounting firm with respect to the Company as required by the Act and the applicable rules and regulations of the Commission thereunder; |
| (k) | The financial statements of the Company included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the results of operations, shareholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with International Financial Reporting Standards as adopted by the European Union (“IFRS-EU”) and International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS-IASB”) applied on a consistent basis throughout the periods involved. IFRS-EU differs in certain respects from IFRS-IASB, however, the differences have no impact for the periods specified. [The pro forma financial statements and the related notes thereto included in the Registration Statement, the Pricing Disclosure Package and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.]3 Except as included or incorporated by reference therein, no historical or pro forma financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package or the Prospectus under the Act, the Exchange Act or the rules and regulations of the Commission thereunder. All disclosures contained or incorporated by reference in the |
____________________
3 Applicable if the Registration Statement, the Pricing Disclosure Package and/or the Prospectus relating to a future issuance of Designated Securities include pro forma financial statements.
6
Registration Statement, the Pricing Disclosure Package or the Prospectus, if any, regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G under the Exchange Act, to the extent applicable, in all material respects;
| (l) | The Company maintains a system of internal controls over financial reporting (as defined under Rule 13a-15 and Rule 15d-15 under the Exchange Act) sufficient to provide reasonable assurances that: (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS-EU, IFRS-IASB or applicable local generally accepted accounting principles and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, at the end of the Company’s most recent audited fiscal year, there was (1) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (2) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company maintains an effective system of disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) that is designed to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure; |
| (m) | Since the date of the most recent consolidated financial statements included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there has not been any material adverse change in the consolidated shareholders’ equity or consolidated long-term debt of the Company and its subsidiaries taken as a whole, or any material adverse change, or any development reasonably likely to result in a prospective material adverse change in or affecting the financial position, shareholders’ equity or results of operations of the Company and its consolidated subsidiaries considered as a whole, otherwise than as set forth therein; |
| (n) | The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with, in all material respects, applicable financial recordkeeping and reporting requirements, money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), insofar as they apply, and no action, suit or proceeding by or before any court or governmental agency, |
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authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened;
| (o) | None of the Company or any of its subsidiaries or, to the knowledge of the Company, any director, officer or employee of the Company or any of its subsidiaries is currently subject to any sanctions administered by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company or any of its subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions that broadly prohibits dealings with that country or territory (each, a “Sanctioned Country”); and the Company will not directly or, knowingly, indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country (except, in the case of (i) or (ii), to the extent permissible for a person required to comply with Sanctions) or (iii) in any other manner that will result in a violation by any person participating in the transaction, whether as underwriter, initial purchaser, advisor, investor or otherwise of Sanctions. It is acknowledged and agreed that the representations and warranties in this clause (o) are only sought and given to the extent that to do so would not result in a violation of, or conflict with, Regulation (EC) 2271/96 or any implementing measures, or any related or associated regulation implemented in the United Kingdom; |
| (p) | For the past five years, none of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer or employee of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation in any material respect by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), the U.K. Bribery Act 2010 (the “Bribery Act”), the U.K. Criminal Finances Act 2017 (the “Criminal Finances Act”) or any other applicable anti-bribery or anti-corruption law or regulation; the Company, its subsidiaries and, to the knowledge of the Company, its other affiliates have conducted their businesses in compliance with the FCPA, the Bribery Act, the Criminal Finances Act and such applicable laws and regulations and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith in all material respects; |
| (q) | Other than as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no legal or governmental or regulatory proceedings pending or threatened to which the Company or any of its |
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subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject that are required to be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus and are not so described and there are no statutes or regulations that are required to be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus and are not so described;
| (r) | The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict, if the subject of an unfavorable decision, ruling or finding, or invalidity or inadequacy, could, singly or in the aggregate have a Material Adverse Effect; |
| (s) | The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate governmental entities necessary to conduct the business now operated by them, except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect. The Company and its subsidiaries are in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any Governmental Licenses which, if the subject of an unfavorable decision, ruling or finding, would, singly or in the aggregate, result in a Material Adverse Effect; |
| (t) | To the best of the Company’s knowledge, there has been no material security breach or incident, unauthorized access or disclosure, or other compromise of or relating to the Company’s or its subsidiaries’ information technology and computer systems, networks, hardware, software, data and databases (including the data and information of their respective customers, employees, suppliers, vendors and any third party data maintained, processed or stored by the Company and its subsidiaries, and any such data processed or stored by third parties on behalf of the Company and its subsidiaries), equipment or technology (collectively, “IT Systems and Data”); (ii) neither the Company nor any of its subsidiaries have been notified of, and have no knowledge of any event or |
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condition that could result in, any security breach or incident, unauthorized access or disclosure or other compromise to their IT Systems and Data; and (iii) the Company and its subsidiaries have implemented appropriate controls, policies, procedures, and technological safeguards to maintain and protect the integrity, continuous operation, redundancy and security of their IT Systems and Data reasonably consistent with industry standards and practices, or as required by applicable regulatory standards;
| (u) | Assuming the Designated Securities are listed on a recognised stock exchange (as defined in Section 1005 of the United Kingdom Income Tax Act 2007 (the “ITA”)) at the relevant time, all payments of principal, premium, if any, and interest on the Designated Securities may be made free and clear of and without withholding taxes or deduction on account of taxes in the United Kingdom4; no stamp or other issuance or transfer taxes or similar duties are payable by or on behalf of the Underwriters in the United Kingdom (or to any political subdivision thereof) in connection with the initial issuance, initial sale and delivery of the Designated Securities in the manner contemplated herein (provided that no election is made by DTC (as defined below) or any other relevant clearance service under section 97A of the Finance Act 1986). |
| 3. | Upon the execution of the Pricing Agreement applicable to any Designated Securities and authorization by the Representatives of the release of such Designated Securities, the several Underwriters propose to offer such Designated Securities for sale upon the terms and conditions set forth in the Prospectus as amended or supplemented. |
| 4. | Designated Securities to be purchased by each Underwriter pursuant to the Pricing Agreement relating thereto, in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours' prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriter at the office of [insert name and address of Underwriters’ counsel], against payment by such Underwriter or on its behalf of the purchase price therefor in same day funds, payable to the order of the Company in the funds specified in such Pricing Agreement, all at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the “Time of Delivery” for such Securities. The Securities will be delivered by the Company to the Representatives in the form of one or more global Securities, representing all of the Securities, which will be registered in the name of a nominee for The Depository Trust Company (“DTC”) and deposited on behalf of the Underwriters with Cede & Co. as custodian for DTC,5 for credit to the respective participant accounts of the Underwriters unless otherwise directed by you. Such global |
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4 This form of Underwriting Agreement assumes a listing will be needed for both U.S. dollar and euro-denominated Designated Securities.
5 In connection with the issuance of Designated Securities denominated in euro, refer to Annex II.
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Securities will be made available for checking at least twenty-four hours prior to the Time of Delivery.
| 5. | The Company agrees with each of the Underwriters of any Designated Securities: |
| (a) | To prepare in consultation with the Representatives the Prospectus, as amended and supplemented in relation to the applicable Designated Securities, in a form approved by the Representatives, which approval the Representatives agree they will not unreasonably withhold, and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of the Pricing Agreement relating to the applicable Designated Securities or, if applicable, such earlier time as may be required by Rule 424(b); to make no further amendment or any supplement to the Registration Statement, the Pricing Disclosure Package or Prospectus (as each may have been amended or supplemented) after the date of the Pricing Agreement relating to such Designated Securities and prior to the Time of Delivery without prior consultation with the Representatives for such Designated Securities; to advise the Representatives promptly of any such amendment or supplement after such Time of Delivery and furnish the Representatives with copies thereof; if requested by the Representatives prior to the Applicable Time, to prepare a final term sheet, containing solely a description of the Designated Securities, in a form substantially as set forth in Schedule V to the applicable Pricing Agreement and which shall be attached to the applicable Pricing Agreement and approved by the Representatives, and to file such term sheet pursuant to Rule 433(d) under the Act within the time required by such Rule; to file promptly all other material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required in connection with the offering or sale of such Designated Securities, and during such same period to advise the Representatives, promptly after the Company receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of such Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Securities or suspending any such qualification, to use promptly its reasonable best efforts to obtain its withdrawal; |
| (b) | Promptly from time to time to use its reasonable best efforts to qualify such Securities for offering and sale under the securities laws of such jurisdictions as |
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the Representatives may reasonably request and to pay all expenses (including reasonable fees and disbursements of counsel to the Underwriters) in connection with such qualification and in connection with the determination of the eligibility of such Securities for investment under the laws of such jurisdictions as the Representatives may designate and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of such Securities; provided, however, that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction or to take any other action which would subject it to service of process in suits in any jurisdiction or subject it to taxation in any jurisdiction other than those arising out of the offering or sale of the Designated Securities in such jurisdiction;
| (c) | To furnish the Underwriters, without charge, with a copy of the Registration Statement, with copies of the Prospectus as amended or supplemented, including the exhibits and materials, if any, incorporated by reference therein, in such quantities as the Representatives may from time to time reasonably request, and, if the delivery of a prospectus is required (or, in lieu thereof, the notice referred to in Rule 173(a) under the Act) at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Designated Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify the Representatives and upon their request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; provided, however, if any Underwriter is required to deliver a prospectus in connection with sales of any of the Designated Securities at any time nine months or more after the time of issue of the Prospectus, upon their request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as the Representatives may request of an amended or supplemented Prospectus complying with Section 10(a) (3) of the Act; |
| (d) | To make generally available to the Company's security holders and to the Representatives as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the |
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rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158); and
| (e) | During the period beginning from the date of the Pricing Agreement for such Designated Securities and continuing to and including the completion of the distribution of such Designated Securities, as notified to the Company by the Representatives, not to offer, sell, contract to sell or otherwise dispose of any debt securities of the Company which mature more than one year after the Time of Delivery and which are denominated in U.S. dollars6 and substantially similar to such Designated Securities, without the prior written consent of the Representatives, which consent shall not be unreasonably withheld. |
| (f) | To pay on behalf of the Underwriters (on an after-tax basis) the amount of all stamp, issue, registration, documentary and other similar taxes payable in the United Kingdom upon or in connection with the creation, issue, offering and initial resale of the Designated Securities in the manner contemplated herein and the execution and delivery of this Agreement and to reimburse the Underwriters (on an after-tax basis, including any interest or penalties) the amount of all stamp, issue, registration, documentary and other similar taxes paid by the Underwriters in any jurisdiction upon or in connection with the creation, issue, offering and initial resale of the Designated Securities and the execution and delivery of this Agreement and the Company agrees to indemnify the Underwriters against any claim, demand, action, liability, damages, cost, loss or expense (including, without limitation, legal and other advisory fees (and any value added tax thereon)) which the Underwriters may incur as a result of or arising out of or in relation to any failure to pay or delay in paying any of the same. |
| (g) | To use its reasonable best efforts to (i) list the Designated Securities, and ensure the Designated Securities remain listed, on the New York Stock Exchange (or another “recognised stock exchange” as defined in Section 1005 of the ITA) (the “Relevant Stock Exchange”) as promptly as practicable, but, in any event, prior to the first interest payment date in relation to such Designated Securities. |
| (h) | To ensure that neither the Company nor any of its affiliates will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Designed Securities. |
| (i) | To cooperate with the Representatives and use its reasonable best efforts to permit the Designated Securities to be eligible for clearance and settlement through DTC7. |
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6 Where the Designated Securities are denominated in euro, replace with “euro”.
7 In connection with the issuance of Designated Securities denominated in euro, refer to Annex II.
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| 6. | (a) | Each Underwriter represents and agrees that it shall not use, refer to or distribute any “free writing prospectus” (as defined in Rule 405 under the Act, a “Free Writing Prospectus”) except: |
| (i) | a Free Writing Prospectus that (1) is not an Issuer Free Writing Prospectus, and (2) contains only information describing the preliminary terms of the Securities or their offering or otherwise permitted under Rule 134 under the Act; |
| (ii) | a Free Writing Prospectus as shall be agreed in writing with the Company that is not distributed, used or referenced by such Underwriter in a manner reasonably designed to lead to its broad unrestricted dissemination (including any electronic road show) unless the Company consents to such dissemination and such Free Writing Prospectus is listed on Schedule VI to the applicable Pricing Agreement; provided that an Underwriters' internal communications with its own sales force shall not be covered by this clause (ii); and |
| (b) | Notwithstanding Section 6(a) above, the Company hereby agrees that the Underwriters may distribute to investors one or more Free Writing Prospectuses that contain only the final terms of the Designated Securities (including, for the avoidance of doubt, in the format of Bloomberg communications) substantially in the form set forth in Schedule V to the applicable Pricing Agreement and that any such Free Writing Prospectus substantially in the form set forth in Schedule V to the applicable Pricing Agreement will be filed by the Company in accordance with Rule 433(d) under the Act and shall be considered an Issuer Free Writing Prospectus for purposes of this Agreement. |
| (c) | The Company agrees that, unless it has obtained or will obtain the prior written consent of the Representatives, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 under the Act) required to be filed by the Company with the Commission or retained by the Company under Rule 433 under the Act, provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the free writing prospectus included in Schedule III to the applicable Pricing Agreement. Any such free writing prospectus consented to by the Representatives is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus (including the final terms of the Designated Securities as set forth in Schedule V to the applicable Pricing Agreement) as an Issuer Free Writing Prospectus and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 under the Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping. |
| (d) | The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer |
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Free Writing Prospectus would conflict with the information in the Registration Statement, the Pricing Disclosure Package or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representatives and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives expressly for use therein.
| 7. | The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) except as provided in the proviso contained in Section 5(c) hereof, the fees, disbursements and expenses of counsel and accountants of the Company in connection with the registration of the Designated Securities under the Act and the qualification of any indenture related to the Designated Securities under the Trust Indenture Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Prospectus and amendments and supplements thereto, the Pricing Disclosure Package and any Issuer Free Writing Prospectus and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the Pricing Disclosure Package, the Indenture8 and any other documents in connection with the offering, purchase, sale and delivery of the Designated Securities; (iii) all expenses in connection with the qualification of the Designated Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the reasonable fees, disbursements and expenses of counsel for the Underwriters in connection with such qualification and in connection with any Blue Sky and legal investment surveys; (iv) any fees charged by securities rating services for rating the Designated Securities; (v) any filing fees incident to any required review by the Financial Industry Regulatory Authority of the terms of the sale of the Designated Securities; (vi) the cost of preparing the Securities and of the delivery of the Designated Securities to the Underwriters, excluding any stamp, issue, registration, documentary or other similar taxes compensated for by Section 5(f); (vii) the fees and expenses of any Trustee and any agent of any Trustee and the fees and disbursements of counsel for any Trustee in connection with any Indenture and the Securities; (viii) the fees and expenses incurred in connection with listing of the Securities on the Relevant Stock Exchange; (ix) except as provided in the proviso contained in Section 5(c) hereof all reasonable other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section; and (x) to the extent any of the aforementioned costs, fees and expenses are reimbursed to the Underwriters, such reimbursement shall be on an after-tax basis and include the amount of any applicable irrecoverable value added tax. It is understood, however, that, except as provided in this Section 7, Section 9 and Section 13 hereof, the Underwriters will pay all of their own |
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8 In connection with the issuance of Designated Securities denominated in euro, add appropriate references to any Agency Agreement.
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costs and expenses, including the fees of their counsel and transfer taxes on any resale, other than initial resale, of any of the Designated Securities by them.
| 8. | The obligations of the Underwriters of any Designated Securities under the Pricing Agreement relating to such Designated Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties and other statements of the Company in or incorporated by reference in the Pricing Agreement relating to such Designated Securities are, at and as of the Time of Delivery for such Designated Securities, true and correct, the condition that the Company shall have performed all, of its obligations hereunder theretofore to be performed, and the following additional conditions: |
| (a) | The final term sheet contemplated by Section 5(a) hereof in relation to the applicable Designated Securities, and any other material required to be filed pursuant to Rule 433 under the Act in relation to the applicable Designated Securities shall have been filed within the applicable time period prescribed for such filings by Rule 433 under the Act and the Prospectus as amended or supplemented in relation to the applicable Designated Securities shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission and no order suspending or preventing the use of the Basic Prospectus, any Preliminary Prospectus, any documents which are part of the Pricing Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives' reasonable satisfaction; |
| (b) | [Insert Underwriters’ counsel], United States counsel for the Underwriters, shall have furnished to the Representatives such opinion or opinions, dated the Time of Delivery for such Designated Securities, with respect to the validity of the Indenture, the Designated Securities, the Registration Statement, the Pricing Disclosure Package, the Prospectus as amended or supplemented and other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters (such counsel being entitled to state that they have assumed that any document referred to in their opinion and executed by the Company has been duly authorized, executed and delivered pursuant to English law and, as to all matters of English law, their opinion is given in reliance upon, and is subject to the qualifications set forth in, the opinion of counsel for the Company required by subsection (c) of this Section 8); |
| (c) | Davis Polk & Wardwell London LLP, English solicitors for the Company shall have furnished to the Representatives a written opinion, dated the Time of Delivery for such Designated Securities, in form and substance reasonably |
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satisfactory to the Representatives.
| (d) | The Chief Legal and Compliance Officer of the Company shall have furnished to the Representatives a written opinion, dated the Time of Delivery for such Designated Securities, in form and substance reasonably satisfactory to the Representatives. |
| (e) | Davis Polk & Wardwell London LLP, United States counsel for the Company, shall have furnished to the Representatives their written opinion and disclosure letter, dated the Time of Delivery for such Designated Securities, in form and substance reasonably satisfactory to the Representatives. |
| (f) | On the date of the applicable Pricing Agreement and at the Time of Delivery for such Designated Securities, KPMG LLP, the independent registered public accountants of the Company, which has audited the financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement as specified under the heading “Experts” in the Registration Statement, shall have furnished to the Representatives a letter or letters, dated as of each such date and in form and substance satisfactory to the Representatives, containing statements and information of the type ordinarily included in accountants' “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus as amended or supplemented and as to such other matters as the Representatives may reasonably request; and |
| (g) | The Company shall have furnished or caused to be furnished to the Representatives a certificate or certificates, dated the Time of Delivery for the Designated Securities, of officers of the Company satisfactory to the Representatives as to the accuracy of the representations and warranties of the Company in this Agreement and the Pricing Agreement at and as of the Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed prior to such Time of Delivery, and as to the matters set forth in Sections 8(a) and 12(i) hereof. |
| 9. | (a) | The Company agrees to indemnify and hold harmless each Underwriter from and against any and all losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (including without limitation, legal fees and other expenses reasonably incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred) that arise out of, or are based upon, (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Basic Prospectus, any Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto, the Pricing Disclosure Package, any Issuer Free Writing Prospectus or any “issuer information” filed |
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or required to be filed pursuant to Rule 433(d) under the Act, including the information in the final term sheet filed in accordance with Section 5(a) of this Agreement and any other prospectus relating to the Securities, or any amendment or supplement thereto, or the omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except to the extent that any such loss, claim, damage or liability arises out of or is based upon written information furnished to the Company by any Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities.
| (b) | Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company to the same extent as the indemnity to each Underwriter set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or alleged untrue statement or omission or alleged omission in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto, the Pricing Disclosure Package, or any Issuer Free Writing Prospectus and any other prospectus relating to the Securities, or any amendment or supplement made in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use therein. The Company acknowledges that [the names of the Underwriters and the information set forth [in paragraph l on page S-l] of the Prospectus under the caption “Underwriting”] is the only information which has been so provided by the Underwriters. |
| (c) | Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, promptly notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection, except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure. In case any such action shall be brought or asserted against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall retain counsel reasonably satisfactory to the indemnified party (who shall not, without the consent of the indemnified party, be counsel to the indemnifying party) to represent the indemnified party and any others entitled to indemnification pursuant to this Section that the indemnifying party may designate in such proceedings and shall pay the fees and expenses of such proceeding, as incurred. In any such proceeding, any indemnified person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified person unless (i) the indemnifying person and indemnified person shall have mutually agreed to the contrary; (ii) the indemnifying person has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified person; (iii) the |
18
indemnified person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the indemnifying person; or (iv) the named parties in such proceeding (including any impleaded parties) include both the indemnifying person and the indemnified person and representation of both parties by the same counsel would be inappropriate due to actually or potential differing interests between them. It is understood and agreed that the indemnifying person shall not, in connection with any suit, action or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all indemnified persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for any Underwriter and any related indemnified person shall be designated in writing by the Representatives and any such separate firm for the Company and any other related indemnified person shall be designated in writing by the Company. The indemnifying person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be any final judgment for the plaintiff, the indemnifying person agrees to indemnify each indemnified person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified person shall have requested that an indemnifying person reimburse the indemnified person for fees and expenses of counsel as contemplated by this paragraph, the indemnifying person shall be liable for any settlement of any proceeding affected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the indemnifying person of such request and (ii) the indemnifying person shall not have reimbursed the indemnified person in accordance with such request prior to the date of such settlement. No indemnifying person shall, without the written consent of the indemnified person, effect any settlement of any pending or threatened claim in respect of which any indemnified person is or could have been a party and indemnification could have been sought hereunder by such indemnified person, unless such settlement(x) includes an unconditional release of such indemnified person, in form and substance reasonably satisfactory to such indemnified person, from all liability arising out of such actions or claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of indemnified person.
| (d) | To the extent that the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters of the Designated Securities on the other from the offering of the Designated Securities to which loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount |
19
paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters of the Designated Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Underwriters on the other shall be deemed to be in the same respective proportions as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by such Underwriters, in each case as set forth in the table on the cover page of the Prospectus as amended and supplemented. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Designated Securities underwritten by it exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Designated Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint.
| (e) | The obligations of the Company under this Section 9 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act and to the Underwriters' affiliates, directors and officers; and the obligations of the Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company, the duly authorized representative of the Company in the United States, and to each person, if any, who controls the Company within the meaning of the Act or the Exchange Act. To the extent any of the aforementioned costs, fees and expenses are reimbursed to the Underwriters or |
20
any related indemnified person, such reimbursement shall be on an after tax basis and include the amount of any applicable irrecoverable value added tax.
| 10. | (a) | If any Underwriter shall default in its obligation to purchase the Designated Securities which it has agreed to purchase under the Pricing Agreement relating to such Designated Securities, the Representatives may in their discretion arrange for themselves or another party or other parties to purchase such Designated Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Representatives do not arrange for the purchase of such Designated Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties reasonably satisfactory to the Representatives to purchase such Designated Securities on such terms. In the event that, within the respective prescribed period, the Representatives notify the Company that the Representatives have so arranged for the purchase of such Designated Securities, or the Company notifies the Representatives that it has so arranged for the purchase of such Designated Securities, the Representatives or the Company shall have the right to postpone the Time of Delivery for such Designated Securities for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus as amended or supplemented, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion of the Representatives may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to the Pricing Agreement with respect to such Designated Securities. |
| (b) | If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives, the Company as provided in subsection (a) above, the aggregate principal amount of such Designated Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of the Designated Securities, then the Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Designated Securities which such Underwriter agreed to purchase under the Pricing Agreement relating to such Designated Securities and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of Designated Securities which such Underwriter agreed to purchase under such Pricing Agreement) of the Designated Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. |
| (c) | If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in subsection (a) above, the aggregate principal amount of the Designated Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of the Designated Securities, as referred to in subsection (b) above, or if the Company shall not exercise the right |
21
described in subsection (b) above to require non-defaulting Underwriters to purchase Designated Securities of a defaulting Underwriter or Underwriters, then the Pricing Agreement relating to such Designated Securities shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
| 11. | The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter or the Company, the duly authorized representative of the Company in the United States or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Designated Securities. |
| 12. | Any Pricing Agreement shall be subject to termination in the absolute discretion of the Representatives, after consultation with the Company, if, since the respective dates as of which information is given in the Pricing Disclosure Package in the case of clause (i) below, or subsequent to the Applicable Time and prior to the Time of Delivery of the Designated Securities, in the case of clauses (ii) through (vii) below, (i) there shall have been a material adverse change, or any development which could reasonably be expected to result in a material adverse change, in the business, properties or financial condition of the Company and its consolidated subsidiaries considered as a whole, otherwise than as set forth or contemplated in the Pricing Disclosure Package; (ii) there shall have occurred a downgrading in the rating accorded the Company's senior debt securities by Moody's Investor Services, Inc. (“Moody's”) or Standard & Poor's Corporation (“S&P”) or, in the event that the Company's senior debt securities are not rated by either Moody's or S&P, by another “nationally recognized statistical rating organization” as such term is defined by the Commission for purposes of Section 3(a)(62) of the Exchange Act; (iii) such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Securities or of any other senior debt securities or preferred stock of or guaranteed by the Company (other than an announcement with positive implications of a possible upgrading); (iv) there shall have been a change or development involving a prospective change in United States or United Kingdom taxation affecting the Designated Securities or the imposition of exchange controls by the United States or the United Kingdom affecting the Designated Securities or the transfer thereof, otherwise than as set forth or contemplated in the Pricing Disclosure Package; (v) trading in any securities of the Company or trading in securities generally on the New York Stock Exchange or the London Stock Exchange or any other exchange where the Designated Securities are listed or intended to be listed shall have been suspended or materially limited; (vi) a general moratorium on commercial banking activities in the State of New York shall have been declared by either U.S. Federal or New York State authorities or a general moratorium on commercial banking activities in the United Kingdom shall have been declared by authorities in the United Kingdom; (vii) there shall have occurred the outbreak or escalation of hostilities involving the United States or the United Kingdom or the declaration by the United States or the |
22
United Kingdom of a national emergency or war; or (viii) there shall have occurred any change in financial markets or other national or international calamity or crisis of such magnitude and severity in its effect on the financial markets, as, in any such case described in clauses (i) through (viii) above, in the judgment of the Representatives, after consultation with the Company, to make it impracticable to proceed with the public offering or the delivery of the Designated Securities on the terms and in the manner contemplated in the Pricing Disclosure Package and the Prospectus, as amended or supplemented relating to such Securities.
| 13. | If any Pricing Agreement shall be terminated by the Underwriters of the Designated Securities pursuant to clause (i) of Section 12 hereof or because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of the Pricing Agreement, or if for any reason the Company shall be unable to perform its obligations under the Pricing Agreement, the Company will reimburse the Underwriters of such Securities for all out-of-pocket expenses (including the fees and disbursements of counsel) reasonably incurred by the Underwriters in connection with the Designated Securities. |
Notwithstanding the termination of any Pricing Agreement, the provisions of Section 9, Section 10 and Section 11 hereof shall remain in effect.
| 14. | In all dealings hereunder, the Representatives of the Underwriters of Designated Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement. |
All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, e-mail or facsimile transmission as directed in the applicable Pricing Agreement; and if to the Company shall be delivered or sent by mail, e-mail or facsimile transmission to its address set forth in the Registration Statement, Attention: Company Secretary, or such other address as the Company shall notify in writing to the Representatives; provided, however, that any notice to an Underwriter of Designated Securities pursuant to Section 9(c) hereof shall be delivered or sent by mail, e-mail or facsimile transmission to such Underwriter at its address set forth in its Underwriters' questionnaire, or e-mail constituting such questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the underwriters to properly identify their respective clients.
| 15. | This Agreement and each Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Section 9 |
23
and Section 11 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any such Pricing Agreement. No purchaser of any of the Designated Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.
| 16. | The Company acknowledges and agrees that (i) the purchase and sale of any Designated Securities pursuant to this Agreement is an arm's-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction each Underwriter is acting solely as principal and not as an agent or fiduciary of the Company, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (iv) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto. |
| 17. | (a) | In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States. |
| (b) | In the event that any Underwriter that is a Covered Entity or a Covered Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. |
“Covered Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following:
| (i) | a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); |
| (ii) | a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or |
24
| (iii) | a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). |
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime” means each of (i) the U.S. Federal Deposit Insurance Act, as amended and the regulations promulgated thereunder and (ii) Title II of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended and the regulations promulgated thereunder9.
| 18. | The Company agrees that any suit, action or proceeding arising out of or relating to this Agreement or the Pricing Agreement or the transactions contemplated hereby or thereby may be instituted in the courts of the State of New York in The City and County of New York and of the United States for the Southern District of New York, and waives to the fullest extent it may do so any objection which it may now or hereafter have to the laying of venue or any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. The Company hereby appoints [Smith & Nephew Inc., 150 Minuteman Road, Andover, Massachusetts 01810] as its authorized agent (the “Authorized Agent”) upon which process may be served in any suit, action or proceeding based on this Agreement or the Pricing Agreement which may be instituted in any such court by any Underwriter, the directors, officers, employees, affiliates and agents of any Underwriter, or any person who controls any Underwriter. Such appointment shall be irrevocable so long as any of the Designated Securities remain outstanding unless and until a successor Authorized Agent shall be appointed and such successor shall accept such appointment. The Company will take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment or appointments in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Company (mailed or delivered as aforesaid) shall be deemed, in every respect, effective service of process upon the Company. Notwithstanding the foregoing, any action based on this Agreement or any Pricing Agreement may be instituted by any Underwriter against the Company in any competent court in the United Kingdom. |
| 19. | Each reference in this Agreement and any Pricing Agreement to U.S. dollars10 (the “relevant currency”), including by use of the symbol “$”, is of the essence. To the fullest extent permitted by law, the obligation of each party in respect of any amount due under this Agreement or any Pricing Agreement will, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the relevant currency that the party entitled to receive such payment may, in accordance with its normal procedures, purchase with the sum paid in such other currency (after any premium and costs of exchange) on the business day immediately following the day on which such party receives such payment. If the amount in the relevant currency that may be so purchased for any reason falls short of the amount originally due, the applicable party will pay such additional amounts, in the relevant currency, as may be necessary to compensate for the shortfall. Any obligation |
____________________
9 In the case of Designated Securities denominated in euro, refer to Annex II.
10 In the case of any Designated Securities denominated in euro, replace with “euro”
25
of the applicable party not discharged by such payment will, to the fullest extent permitted by applicable law, be due as a separate and independent obligation and, until discharged as provided herein, will continue in full force and effect.
| 20. | To the extent the Company has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment in aid or otherwise) with respect to itself or any of its property, to the fullest extent permitted by applicable law, the Company hereby irrevocably waives and agrees not to plead or claim such immunity in respect of its obligations under this Agreement or any Pricing Agreement. |
| 21. | Time shall be of the essence of each Pricing Agreement. As used herein, the term “business day” shall mean any day when the Commission's office in Washington, D.C. is open for business. |
| 22. | This Agreement and each Pricing Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its CHOICE of law provisions. Each of the Company and the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or any Pricing Agreement or the transactions contemplated hereby or thereby. |
| 23. | This Agreement and each Pricing Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. |
[Refer to Annex II for Sections 24, 25 and 26 to be included where Designated Securities are denominated in euro.]
26
ANNEX
I
Pricing Agreement
[Name(s) of Representatives]
As representatives of the several Underwriters
c/o [name and address]
[or]
[Name(s)
of Representative(s),]
As Representatives of the several
Underwriters named in Schedule I hereto,
Ladies and Gentlemen:
Smith & Nephew plc (the “Company”) proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement dated [ ], a copy of which is attached hereto as Annex A (the “Underwriting Agreement”), to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”) the Securities specified in Schedule II hereto (the “Designated Securities”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Basic Prospectus, Pricing Disclosure Package or the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Basic Prospectus (as defined therein) as amended or supplemented as of the date of the Underwriting Agreement and also a representation and warranty as of the date of this Pricing Agreement in relation to the Basic Prospectus, Pricing Disclosure Package or the Prospectus, as amended or supplemented, relating to the Designated Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of each of the Underwriters of the Designated Securities pursuant to Section 14 of the Underwriting Agreement and the address of the Representatives referred to in such Section 14 are set forth at the end of Schedule II hereto. Schedule III sets forth each Issuer Free Writing Prospectus that is part of the Pricing Disclosure Package and any additional documents incorporated by reference that were filed with the Commission subsequent to the Commission's close of business on the business day immediately prior to the date of the execution of this Pricing Agreement. Schedule IV sets forth all documents that the Company and the Representatives agree are to be included in the Pricing Disclosure Package. The final term sheets prepared in accordance with Section 5(a) of the Underwriting Agreement are attached hereto as Schedule V.
The “Applicable Time” means [•] p.m. [New York time] [London time] on the date hereof.
AI-1
An amendment of the Registration Statement, or a supplement to the Basic Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the principal amount of Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, e-mail or facsimile transmission to [•], Attention: [•], Tel: [•], Fax: [•]; and if to the Company shall be delivered or sent by mail, e-mail or facsimile transmission to its address set forth in the Registration Statement, Attention: Company Secretary, or such other address as the Company shall notify in writing to [•]; provided, however, that any notice to an Underwriter of Designated Securities pursuant to Section 9(c) of the Underwriting Agreement shall be delivered or sent by mail, e-mail or facsimile transmission to such Underwriter at its address set forth in its Underwriters' questionnaire, or e-mail constituting such questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
If the foregoing is in accordance with your understanding, please sign and return to us [One for the Company and [each of] the Representatives plus one for each counsel] counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof.
| Very truly yours, | |||
| SMITH & NEPHEW PLC | |||
| By: | |||
| Title: | |||
| Name: | |||
Accepted as of the date hereof:
On behalf of each of the Underwriters
AI-2
Annex
II
Supplemental Provisions for Euro-Denominated Securities
Preamable:
In connection with the issuance of Designated Securities denominated in euro, a Paying Agency Agreement with a paying agent in London may be required. In such case, insert the following: “In connection with the issuance of the Designated Securities, the Company will enter into a Paying Agency Agreement (the “Agency Agreement”), to be dated as of [•], between the Company and [•] as a paying agent (in such capacity, the “Paying Agent”)”
Section 4:
Replace the bracketed language with the following: “[•] as the common depositary for Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking S.A. (“Clearstream”)”
Section 6(g):
Replace the bracketed language with the following: “Euroclear and Clearstream”.
Section 17:
To the extent applicable, in the case of Designated Securities denominated in euro, the following provision should be inserted:
“Notwithstanding and to the exclusion of any other term of this Agreement or any other agreements, arrangements, or understandings between the Underwriters and the Company, the Company acknowledges and accepts that a BRRD Liability arising under this Agreement may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts and agrees to be bound by:
| (a) | the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of an Underwriter to the Company under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof; |
| (b) | the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon; |
| (c) | the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the relevant Underwriter or another person, and the issue to, or conferral on, the Company of such shares, securities or obligations; |
| (d) | the cancellation of the BRRD Liability; or |
| (e) | the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and |
AII-1
| (f) | the variation of the terms of this Agreement, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority. |
For purposes of this Section [l], the following terms shall have the respective meanings set out below:
“Bail-in Legislation” shall mean, in relation to the United Kingdom and a member state of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the EU Bail-in Legislation Schedule from time to time.
“Bail-in Powers” shall mean any Write-down and Conversion Powers as defined in the EU Bail-in Legislation Schedule, in relation to the relevant Bail-in Legislation.
“BRRD” shall mean Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
“BRRD Liability” shall mean a liability in respect of which the relevant Write-down and Conversion Powers in the applicable Bail-in Legislation may be exercised.
“EU Bail-in Legislation Schedule” shall mean the document described as such, then in effect, and published by the Loan Market Association (or any successor person) from time to time at http://www.lma.eu.com/.
“Relevant Resolution Authority” shall mean the resolution authority with the ability to exercise any Bail-in Powers in relation to any of the Underwriters.”
Sections 24-26:
In the case of Designated Securities denominated in euro, the following sections should be added:
| 24. | “The execution of this Agreement on behalf of all parties hereto will constitute the acceptance by each Underwriter of the International Capital Market Association Standard Form Agreement Among Managers Version 1/ New York Law Schedule (the “AAM”) as amended herein and the Underwriters further agree that references in the AAM to the “Managers” shall mean the Underwriters, references to “Lead Managers” shall mean the Representatives, references to the “Settlement Lead Manager” shall mean [•], references to the “Stabilising Manager” shall mean [•] and references to the “Subscription Agreement” shall mean this Agreement. As applicable to the Underwriters, Clause 3 of the AAM shall be deemed to be deleted in its entirety and replaced with Section [•] of this Agreement. |
| 25. | The Company hereby authorizes [•] in its role as stabilizing manager (the “Stabilizing Manager”) to make adequate public disclosure regarding stabilization of the information required in relation to such stabilization by Commission Delegated Regulation (EU) 2016/1052 of 8 March 2016. The Stabilizing Manager for its own account may, to the extent permitted by applicable laws and directives, over-allot and effect transactions with a view to supporting the market price of the Securities at a level |
AII-2
higher than that which might otherwise prevail, but in doing so the Stabilizing Manager shall act as principal and not as agent of the Company and any loss resulting from over-allotment and stabilization shall be borne, and any profit arising therefrom shall be beneficially retained, by the Stabilizing Manager. However, there is no assurance that the Stabilizing Manager (or persons acting on behalf of the Stabilizing Manager) will undertake any stabilization action. Any stabilizing action may begin on or after the date on which adequate public disclosure of the terms of the Designated Securities takes place and, if begun, may be discontinued at any time, but must end no later than the earlier of 30 days after the issue date of the Designated Securities and 60 days after the date of the allotment of the Designated Securities. Nothing contained in this paragraph shall be construed so as to require the Company to issue in excess of the aggregate principal amount of Designated Securities specified in Schedule I hereto. Such stabilization, if commenced, may be discontinued at any time and shall be conducted by the Stabilizing Manager in accordance with all applicable laws and directives.
| 26. | Solely for the purposes of the requirements of Article 9(8) of the MiFID Product Governance rules under EU Delegated Directive 2017/593, as amended (the “Product Governance Rules”) regarding the mutual responsibilities of manufacturers under the Product Governance Rules: |
| (a) | each of [•] (each a “Manufacturer” and together, the “Manufacturers”) acknowledges to each other Manufacturer that it understands the responsibilities conferred upon it under the Product Governance Rules relating to each of the product approval process, the target market and the proposed distribution channels as applying to the Designated Securities and the related information set out in the Prospectus in connection with the Designated Securities; and |
| (b) | the Company notes the application of the Product Governance Rules and acknowledges the target market and distribution channels identified as applying to the Designated Securities by the Manufacturers and the related information set out in the final prospectus supplement in connection with the Designated Securities.” |
AII-3
Schedule I
Principal Amount of Designated Securities to be Purchased | |
| [Name(s) of Representative(s)] | [$] [€] |
| [Names of other Underwriters] | |
| Total | [$] [€] |
I-1
Schedule II
Title of Designated Securities:
[[•]%] [Floating Rate] [Zero Coupon] [Notes] [Debentures] due
Aggregate principal amount
[$] [€]
Price to Public:
% of the principal amount of the Designated Securities, plus accrued interest from [•] to [•] [and accrued amortization, if any, from [•]to [•]]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued interest from [•] to [•] [and accrued amortization, if any, from [•] to [•]]
Expenses:
Specified funds for payment of purchase price:
[New York] [London] Clearing House funds
Indenture:
Indenture dated as of September [•], 2020, between the Company and [•]
[Agency Agreement:
Agency Agreement dated as of September [•], 2020, between the Company and [•]11]
Maturity:
Interest Rate:
[[•]%] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Date:
[months and dates]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the sinking fund, in whole or in part at the option of the Company, in the amount of [$][€][•] or an integral multiple
____________________
11 Applicable where Designated Securities are denominated in euro.
II-1
thereof, [on or after [•], [•] at the following redemption prices (expressed in percentages of principal amount). If [redeemed on or before [•], [•]%, and if] redeemed during the 12- month period beginning [•],
Year |
Redemption Price | |
and thereafter at 100% of their principal amount, together in each case with accrued interest to the redemption date.] [on any interest payment date falling in or after [•], [•], at the election of the Company, at a redemption price equal to the principal amount thereof, plus accrued interest to the date of redemption].
[Other possible redemption provisions, such as mandatory redemption upon occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to retire [$][€][•] principal amount of Designated Securities on [•] in each of the years [•] through [•] at 100% of their principal amount plus accrued interest] [, together with [cumulative] [noncumulative] redemptions at the option of the Company to retire an additional [$][€][•] principal amount of Designated Securities in the years [•] through [•] at 100% of their principal amount plus accrued interest].
[If Securities are extendable debt Securities, insert —]
Floating Rate provisions:
Initial annual interest rate will be [•]% through [•] [and thereafter will be adjusted [monthly] [on each [•], [•], [•] and [•] ] [to an annual rate of [•]% above the average rate for [•]-year [month] [securities] [certificates of deposit] issued by [•] and [•] [insert names of banks].] [and the annual interest rate [thereafter] [from [•] through [•]] will be the interest yield equivalent of the weekly average per annum market discount rate for [•]-month Treasury bills plus [•]% of Interest Differential (the excess, if any, of (i) then currently weekly average per annum secondary market yield for [•]-month certificates of deposit over (ii) then current interest yield equivalent of the weekly average per annum market discount rate for [•]-month Treasury bills); [from [•] and thereafter the rate will be the then current interest yield equivalent plus [•]% of Interest Differential].]
Defeasance provisions:
Time of Delivery:
Closing Location for Delivery of Securities:
II-2
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]*
* A description of particular tax, accounting or other unusual features (such as the addition of event risk language) of the Securities should be set forth, or referenced to an attached and accompanying description, if necessary to ensure agreement as to the terms of the Securities to be purchased and sold. Such a description might appropriately be in the form in which such features will be described in the Prospectus Supplement for the offering.
II-3
Schedule III
| (a) | Issuer Free Writing Prospectus, if any: |
| (b) | Additional Documents Incorporated by Reference, if any: |
III-1
Schedule IV
Pricing Disclosure Package:
IV-1
Schedule
V
Final Term Sheets
V-1
Schedule VI
| (a) | Free Writing Prospectus: |
[Electronic road show]
VI-1
Exhibit 4.1
Smith &
Nephew plc, as Issuer
and
The Bank of New York Mellon, London Branch, as Trustee
Indenture
Dated as of [·], 2020
SMITH & NEPHEW PLC
Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and Indenture, dated [·], 2020.
Trust
Indenture |
Indenture Section |
| ss.310(a)(1) | 5.08 |
| (a)(2) | 5.08 |
| (a)(3) | Not Applicable |
| (a)(4) | Not Applicable |
| (b) | 5.09 |
| (c) | Not Applicable |
| ss.311(a) | 5.05 |
| (b) | 5.05 |
| (c) | Not Applicable |
| ss.312(a) | 3.07 |
| (b) | 3.08 |
| (c) | 3.08 |
| ss.313(a) | 3.12 |
| (b) | 3.12 |
| (c) | 3.12 |
| (d) | 3.12 |
| ss.314(a) | 3.11 |
| (b) | Not Applicable |
| (c)(1) | 3.03/10.05 |
| (c)(2) | 3.03/10.05 |
| (c)(3) | Not Applicable |
| (d) | Not Applicable |
| (e) | 3.03/10.05 |
| (f) | Not Applicable |
| ss.315(a) | 5.01 |
| (b) | 4.11 |
| (c) | 5.01 |
| (d)(1) | 5.01 |
| (d)(2) | 5.01 |
| (d)(3) | 5.01 |
| (e) | 5.01 |
| ss.316(a)(1)(A) | 4.09 |
| (a)(1)(B) | 4.10 |
| (a)(2) | Not Applicable |
| (b) | 4.07 |
| (b) | 6.02 |
| ss.317(a)(1) | 4.02 |
Trust
Indenture |
Indenture Section |
| (a)(2) | 4.02 |
| (b) | 3.05 |
| ss.318(a) | 10.07 |
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
TABLE OF CONTENTS
_______________________
Page
Article 1 Definitions | |
| Section 1.01. Certain Terms Defined | 1 |
Article 2 Securities | |
| Section 2.01. Forms Generally | 8 |
| Section 2.02. Form of Global Security. | 8 |
| Section 2.03. Form of Registered Security. | 20 |
| Section 2.04. Form of Coupon. | 31 |
| Section 2.05. Form of Legend for Global Registered Securities. | 33 |
| Section 2.06. Form of Trustee’s Certificate of Authentication | 33 |
| Section 2.07. Amount Unlimited; Issuable in Series | 34 |
| Section 2.08. Authentication and Delivery of Securities | 35 |
| Section 2.09. Execution of Securities | 37 |
| Section 2.10. Certificate of Authentication | 37 |
| Section 2.11. Denomination and Date of Securities; Payments of Interest | 37 |
| Section 2.12. Registration, Transfer And Exchange. | 38 |
| Section 2.13. Mutilated, Defaced, Destroyed, Lost and Stolen Securities | 42 |
| Section 2.14. Cancellation of Securities; Destruction Thereof | 43 |
| Section 2.15. Temporary Securities | 43 |
| Section 2.16. CUSIP Numbers | 44 |
Article 3 Covenants Of The Issuer And The Trustee | |
| Section 3.01. Payment of Principal and Interest | 44 |
| Section 3.02. Additional Amounts | 44 |
| Section 3.03. Offices for Payments, etc. | 46 |
| Section 3.04. Appointment to Fill a Vacancy in Office of Trustee | 47 |
| Section 3.05. Payment Agents | 47 |
| Section 3.06. Compliance Certificates from the Issuer | 48 |
| Section 3.07. Securityholders Lists | 48 |
| Section 3.08. Preservation of Information; Communication to Holders | 49 |
| Section 3.09. Limitation on Liens | 49 |
| Section 3.10. Limitation on Sale and Lease-back. | 52 |
| Section 3.11. Reports by the Issuer | 53 |
| Section 3.12. Reports by the Trustee | 53 |
i
Article 4 Remedies Of The Trustee And Securityholders On Event Of Default | |
| Section 4.01. Event of Default Defined; Acceleration of Maturity; Waiver of Default | 53 |
| Section 4.02. Collection of Indebtedness by Trustee; Trustee May Prove Debt | 56 |
| Section 4.03. Application of Proceeds | 58 |
| Section 4.04. Suits for Enforcement | 59 |
| Section 4.05. Restoration of Rights on Abandonment of Proceedings | 60 |
| Section 4.06. Limitations on suits by Securityholders | 60 |
| Section 4.07. Unconditional Right of Securityholders to Institute Certain Suits | 60 |
| Section 4.08. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default | 61 |
| Section 4.09. Control by Securityholders | 61 |
| Section 4.10. Waiver of Past Defaults | 62 |
| Section 4.11. Trustee to Give Notice of Default, but May Withhold in Certain Circumstances | 62 |
| Section 4.12. Right of Court to Require Filing of Undertaking to Pay Costs | 62 |
Article 5 Concerning The Trustee. | |
| Section 5.01. Duties and Responsibilities of the Trustee; During Default; Prior to Default. | 63 |
| Section 5.02. Certain Rights of the Trustee | 64 |
| Section 5.03. Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof | 67 |
| Section 5.04. Trustee and Agents May Hold Securities; Collections, Etc | 67 |
| Section 5.05. Moneys Held by Trustee | 67 |
| Section 5.06. Compensation and Indemnification of Trustee and its Prior Claim | 68 |
| Section 5.07. Right of Trustee to Rely on Officers’ Certificate, Etc | 69 |
| Section 5.08. Persons Eligible for Appointment as Trustee | 69 |
| Section 5.09. Resignation and Removal; Appointment of Successor Trustee | 70 |
| Section 5.10. Acceptance of Appointment by Successor Trustee | 71 |
| Section 5.11. Merger, Conversion, Consolidation or Succession to Business of Trustee | 72 |
Article 6 Concerning The Securityholders | |
| Section 6.01. Evidence of Action Taken by Securityholders | 73 |
| Section 6.02. Proof of Execution of Instruments and of Holding of Securities; Record Date | 73 |
| Section 6.03. Holders to be Treated as Owners | 73 |
ii
| Section 6.04. Securities Owned by Issuer Deemed Not Outstanding | 74 |
| Section 6.05. Right of Revocation of Action Taken | 74 |
Article 7 Supplemental Indentures | |
| Section 7.01. Supplemental Indentures Without Consent of Securityholders | 75 |
| Section 7.02. Supplemental Indentures with Consent of Securityholders | 77 |
| Section 7.03. Effect of Supplemental Indentures | 78 |
| Section 7.04. Documents to be Given to Trustee | 78 |
| Section 7.05. Notation on Securities in Respect of Supplemental Indentures | 78 |
| Section 7.06. Conformity with Trust Indenture Act | 79 |
Article 8 Consolidation, Merger, Sale Or Conveyance | |
| Section 8.01. Issuer May Consolidate, Etc., on Certain Terms | 79 |
| Section 8.02. Securities to be Secured in Certain Events | 81 |
| Section 8.03. Successor Corporation to be Substituted for Issuer | 81 |
| Section 8.04. Opinion of Counsel to Trustee | 81 |
Article 9 Satisfaction And Discharge Of Indenture; Unclaimed Moneys | |
| Section 9.01. Satisfaction and Discharge of Indenture | 82 |
| Section 9.02. Application by Trustee of Funds Deposited for Payment of Securities | 83 |
| Section 9.03. Defeasance upon Deposit of Moneys or Government Obligations | 83 |
| Section 9.04. Repayment of Moneys Held by Paying Agent | 84 |
| Section 9.05. Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years | 84 |
| Section 9.06. Reinstatement | 85 |
Article 10 Miscellaneous Provisions | |
| Section 10.01. Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual Liability | 85 |
| Section 10.02. Provisions of Indenture for the Sole Benefit of Parties and Securityholders | 85 |
| Section 10.03. Successors and Assigns of Issuer Bound by Indenture | 86 |
| Section 10.04. Notices and Demands on Issuer, Trustee and Securityholders | 86 |
| Section 10.05. Officers’ Certificates and Opinions of Counsel; Statements to be Contained Therein | 87 |
| Section 10.06. Payments Due on Saturdays, Sundays and Holidays | 88 |
iii
| Section 10.07. Conflict of any Provision of Indenture with Trust Indenture Act of 1939 | 88 |
| Section 10.08. New York Law to Govern | 88 |
| Section 10.09. Counterparts | 89 |
| Section 10.10. Effect of Headings | 89 |
| Section 10.11. Submission to Jurisdiction | 89 |
| Section 10.12. Waiver of Jury Trial | 90 |
| Section 10.13. Severability | 90 |
Article 11 Redemption Of Securities And Sinking Funds | |
| Section 11.01. Applicability of Article | 90 |
| Section 11.02. Notice of Redemption; Partial Redemptions | 90 |
| Section 11.03. Payment of Securities Called for Redemption | 92 |
| Section 11.04. Exclusion of Certain Securities from Eligibility for Selection for Redemption | 92 |
| Section 11.05. Mandatory and Optional Sinking Funds | 93 |
| Section 11.06. Optional Redemption Due to Changes in Tax Treatment | 95 |
iv
THIS INDENTURE, dated as of [·], 2020, between Smith & Nephew plc, an English public limited company (the “Issuer”), and The Bank of New York Mellon, London Branch, as trustee (the “Trustee”),
W I T N E S S E T H:
WHEREAS, the Issuer may issue from time to time in one or more series its unsecured debentures, notes or other evidences of indebtedness (the “Securities”) represented by one or more Global Securities (as defined herein) represented by definitive Securities in registered form without coupons for payments, up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture and to provide, among other things, for the authentication, delivery and administration thereof, the Issuer has duly authorized the execution and delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done;
NOW, THEREFORE, in consideration of the premises and the purchases of the Securities by the Holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective Holders (as defined herein) from time to time of the Securities as follows:
Article
1
Definitions
Section 1.01. Certain Terms Defined. The following terms (except as otherwise expressly provided or unless the context otherwise clearly requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. All other terms used in this Indenture that are defined in the Trust Indenture Act (as defined herein) or the definitions of which in the Securities Act of 1933, as amended (the “Securities Act”) are referred to in the Trust Indenture Act, including terms defined therein by reference to the Securities Act (except as herein otherwise expressly provided or unless the context otherwise clearly requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture. All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally accepted accounting principles, and the term “generally accepted accounting principles” means such accounting principles as are applicable to the Person (as defined herein) in question and generally accepted at the time of any computation. The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article 1 have the
meanings assigned to them in this Article 1 and include the plural as well as the singular.
“Agent Member” means a member of, or participant in, a Depository.
“Attributable Debt” in respect of a Sale and Lease-Back Transaction means, as of any particular time, the present value (discounted at a rate equal to the weighted average of the rate of interest of the Securities Outstanding hereunder which in the case of Original Issue Discount Securities shall be the Yield to Maturity of such Securities (such average being weighted by the principal amount of the Securities of each series Outstanding or, in the case of Original Issue Discount Securities, such amount to be determined as provided in the definition of “Outstanding”) compounded semi-annually) of the obligation of the Issuer or a Restricted Subsidiary for rental payments during the remaining term of any lease in respect of a Sale and Lease-Back Transaction, including, in each case, any period for which any such lease has been extended. Such rental payments shall not include amounts payable by or on behalf of the lessee for maintenance and repairs, insurance, taxes, assessments, water rates and similar charges.
“Board of Directors” when used with reference to the Issuer, means either the Board of Directors or any committee or member of such Board duly authorized to act hereunder of the Issuer.
“Board Resolution”, when used with reference to the Issuer, means a copy of one or more resolutions, certified by the Secretary or an Assistant Secretary of the Issuer, to have been duly adopted by the Board of Directors of the Issuer or a committee designated by the Board of Directors of the Issuer and to be in full force and effect, and delivered to the Trustee.
“Business Day” means, with respect to any Security, a day other than a Saturday or Sunday that (a) in the city (or in any of the cities, if more than one) in which amounts are payable, as specified in the form of such Security, is not a day on which banking institutions are authorized by law, regulation or executive order to close and (b) if the Security is denominated in a currency other than U.S. dollars (i) is not a day on which banking institutions are required by law or regulation to close in the financial center or centers (where applicable) of the country issuing the currency and (ii) is a day on which banking institutions in such financial center or centers (where applicable) are carrying out transactions in such currency.
“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act (as defined herein), or if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date.
2
“Company Order” means a written statement, request or order signed in the name of the Issuer by any director or any other Person duly authorized thereto by Board Resolution.
“Consolidated Net Tangible Assets” means the aggregate amount of consolidated total assets of the Issuer, after deducting therefrom (a) all liabilities due within one year (other than (x) short-term borrowings and (y) long-term debt due within one year) and (b) all goodwill, trade names, trademarks and patents that have not been developed by the Issuer or its Subsidiaries, and other similar types of intangible assets, as shown on the audited consolidated balance sheet contained in the latest annual report to shareholders of the Issuer.
“Debt” has the meaning specified in Section 3.09.
“Depository” means, with respect to Securities issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depository by the Issuer pursuant to Section 2.07 hereof which must be a clearing agency registered under the Exchange Act (or a successor Depository), and if at any time there is more than one such Person, “Depository” as used with respect to the Securities shall mean the respective Depository with respect to particular Securities.
“Event of Default” means any event or condition specified as such in Section 4.01.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, as amended.
“Global Security” means a global certificate evidencing all or part of a series of Securities, authenticated and delivered to the Depository and registered in the name of the Depository or its nominee.
“Government Obligations” means securities that are (i) direct obligations of the United States of America, the United Kingdom or any government of any member state of the European Union which has the euro as its currency (“European Government”) for the payment of which its full faith and credit is pledged or (ii) obligations of an entity controlled or supervised by and acting as an agency or instrumentality of the United States of America, the United Kingdom or any European Government, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, the United Kingdom or any such European Government, as the case may be, which, in either case under clauses (i) or (ii) are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such government obligation or specific payment of interest on or principal of any such government obligation held by such custodian for the account of the holder of a depositary
3
receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the government obligation or the specific payment of interest on or principal of the government obligation evidenced by such depositary receipt.
“Holder”, “Holder of Securities”, “Securityholder” or other similar terms mean the registered holder of any Security.
“Indenture” means this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or supplemented or both, including, for all purposes of this instrument, any supplemental or amended indenture, the provisions of the Trust Indenture Act that are deemed to be a part of, and govern this instrument, and any supplemental or amended indenture. The term “Indenture” shall also include the forms and terms of particular series of Securities established as contemplated hereunder.
“Interest” means, when used with respect to non-interest bearing Securities, interest payable after maturity.
“Issuer” means Smith & Nephew plc, an English public limited company and, subject to Article 8, its successors and assigns.
“Officers’ Certificate” means a certificate delivered by the Issuer to the Trustee and signed by any director or the treasurer or any deputy treasurer or any assistant treasurer and the secretary or any assistant secretary of the Issuer. Each such certificate shall comply with Section 314 of the Trust Indenture Act and include the statements provided for in Section 10.05.
“Opinion of Counsel” means an opinion in writing signed by legal counsel who may be an employee of or counsel to the Issuer and who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture Act and include the statements provided for in Section 10.05 if and to the extent required hereby.
“original issue date” of any Security (or portion thereof) means the earlier of (a) the date of such Security or (b) the date of any Security (or portion thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution.
“Original Issue Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 4.01.
“Outstanding”, when used with reference to Securities, shall, subject to the provisions of Section 6.04, mean, as of any particular time, all Securities authenticated and delivered by the Trustee under this Indenture, except:
4
(a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Issuer) or shall have been set aside, segregated and held in trust by the Issuer for the Holders of such Securities (if the Issuer shall act as its own paying agent), provided that if such Securities, or portions thereof, are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as herein provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and
(c) Securities in substitution for which other Securities shall have been authenticated and delivered, or which shall have been paid, pursuant to the terms of Section 2.08 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security is held by a person in whose hands such Security is a legal, valid and binding obligation of the Issuer).
In determining whether the Holders of the requisite principal amount of Outstanding Securities of any or all series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 4.01 and (ii) the principal amount of a security denominated in one or more foreign currencies or currency units shall be the U.S. dollar equivalent determined in the manner provided or contemplated by Article 1 on the date of original issuance of such Security of the principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar equivalent on the date of original issuance of such Security of the amount determined as provided in (i) above) of such Security.
“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.13 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security or a Security to which a mutilated, destroyed, lost or stolen coupon appertains shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security or the Security to which the mutilated, destroyed, lost or stolen coupon appertains, as the case may be.
5
“principal” whenever used with reference to the Securities or any Security or any portion thereof, shall be deemed to include “and premium, if any”.
“Principal Property” means any manufacturing plant or facility or any research facility owned by the Issuer or any Restricted Subsidiary which is located within the United Kingdom or the United States of America the gross book value (without deduction of any depreciation reserve) of which on the date as of which the determination is being made exceeds 2% of Consolidated Net Tangible Assets as set forth in the consolidated financial statements contained in the latest annual report to shareholders of the Issuer, except (i) any such plant or facility or research facility which, in the opinion of the Board of Directors of the Issuer, is not of material importance to the total business conducted by the Issuer and its Subsidiaries considered as a whole or (ii) any portion of any such property which, in the opinion of the Board of Directors of the Issuer, is not of material importance to the use or operation of such property.
“Responsible Officer” when used with respect to the Trustee means any officer assigned to the Corporate Trust Division (or any successor division) of the Trustee located at the Trustee Corporate Trust Office, who shall have direct responsibility for the administration of this Indenture, and for the purposes of Section 4.11 and Section 5.01(c)(ii) shall also include any other officer of the Trustee to whom any corporate trust matter is referred because of such officer’s knowledge of and familiarity with the particular subject.
“Restricted Subsidiary” means any Wholly Owned Subsidiary of the Issuer (i) substantially all the property of which is located within the United Kingdom or the United States of America and (ii) which owns a Principal Property; provided, however, that the term “Restricted Subsidiary” shall not include any Wholly Owned Subsidiary which is principally engaged in (x) leasing or in financing installment receivables or (y) financing the operations of the Issuer and its consolidated Subsidiaries.
“Sale and Lease-Back Transaction” has the meaning specified in Section 3.10.
“Security” or “Securities” has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities that have been authenticated and delivered under this Indenture.
“Security Register” and “Security Registrar” have the meanings specified in Section 2.12(b).
“Security Registrar Corporate Trust Office” means the office of the Security Registrar at which the corporate trust business of the Security Registrar shall, at any particular time, be principally administered, which office is, at the date as of which this Indenture is dated, located at 240 Greenwich Street, New York, New York 10286, United States of America, or such other address as the
6
Security Registrar may designate from time to time by notice to the Issuer, or the principal corporate trust office of any successor Security Registrar (or such other address as such successor Security Registrar may designate from time to time by notice to the Issuer).
“Subsidiary” means, with respect to any Person, any corporation at least a majority of the outstanding stock of which having by the terms thereof ordinary voting power (not dependent upon the happening of a contingency) to elect a majority of the board of directors of such corporation is at the time owned or controlled, directly or indirectly, by such Person.
“Trustee” means the Person identified as “Trustee” in the first paragraph hereof and, subject to the provisions of Article 5, shall also include any successor trustee.
“Trustee Corporate Trust Office” means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date as of which this Indenture is dated, located at One Canada Square, London E14 5AL, United Kingdom, or such other address as the Trustee may designate from time to time by notice to the Issuer, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Issuer).
“Trust Indenture Act” (except as otherwise provided in Sections 7.01 and 7.02) means the Trust Indenture Act of 1939, as amended.
“Wholly Owned Subsidiary” means any corporation of which all of the outstanding stock (other than directors’ qualifying shares, if any) having by the terms thereof ordinary voting power (not dependent upon the happening of a contingency) to elect the board of directors of such corporation is at the time owned or controlled, directly or indirectly, by (x) the Issuer, (y) one or more Wholly Owned Subsidiaries or (z) the Issuer and one or more Wholly Owned Subsidiaries.
“Yield to Maturity” means the yield to maturity on any series of Original Issue Discount Securities, calculated at the time of issuance of such series, or, if applicable, at the most recent redetermination of interest on such series, and calculated in accordance with either the constant interest method or such other accepted financial practice as is specified in the terms of such series established pursuant to Section 2.07.
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Article
2
Securities
Section 2.01. Forms Generally. The Securities of each series shall be substantially in such form (not inconsistent with this Indenture) as shall be established by or pursuant to a resolution of the Board of Directors of the Issuer (and set forth in a Board Resolution and, to the extent established pursuant to (rather than in) such resolutions, in an Officers’ Certificate detailing such establishment), or in one or more indentures supplemental hereto, in each case with such insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules of any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities, as evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.
Section 2.02. Form of Global Security.
8
[Form of Face of Global Security]
[Insert any legend required by the Internal Revenue Code and the regulations thereunder.]
SMITH & NEPHEW PLC
[Title of Security]
| No. _______________ | CUSIP NO. _____ |
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 _____________________ [If applicable – insert – as nominee for [insert name]], or registered assigns upon presentation and surrender of this Security the principal sum of _________________ on ______________________ [if the Security is to bear interest prior to Maturity, insert -, and to pay interest thereon from _____________, 20__ or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on ____________ and _____________ in each year] [annually in arrears on __________________ in each year], commencing ______________, 20__, at the rate of ___% per annum, until the principal hereof is paid or made available for payment [if applicable, insert -; provided that any principal and premium, and any such instalment of interest, which is overdue shall bear interest at the rate of __% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand].
[If the Security is not to bear interest prior to Maturity, insert - The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity, and in such case the overdue principal and any overdue premium shall bear interest at the rate of __% per annum (to the extent that the payment of such interest shall be legally enforceable), from the date such amounts are due until they are paid or made available for payment. Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal or premium which is not so paid on demand shall bear interest at the rate of __% per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment. Interest on overdue interest shall be payable on demand.]
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[The Trustee shall act as Paying Agent with respect to the Securities of this series.]
[Title to this Security shall pass by delivery.]
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, directly or through an Authenticating Agent, 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.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually, electronically or in facsimile.
Dated:
| SMITH & NEPHEW PLC | |
| By: | |
| Name: | |
| Title: Director | |
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[Form of Reverse of Global Security]
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 ________, 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 U.S.$ [/ €] ________________].
[If applicable, insert – The Securities of this series are subject to redemption upon not less than [insert minimum notice requirement] nor more than [insert maximum notice requirement] days’ notice by mail [if applicable, insert – (1) on __________ in any year commencing with the year ______ and ending with the year __________ through operation of the sinking fund for this series at a Redemption Price equal to [insert formula for determining amount] (with the amount in excess of 100% of the principal amount being additional interest), and (2)] at any time [if applicable, insert – on or after ___________, 20__], as a whole or in part, at the election of the Issuer, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert – on or before _________, __%, and if redeemed] during the 12-month period beginning ___________ of the years indicated,
Year |
Redemption Price |
Year |
Redemption Price |
and thereafter at a Redemption Price equal to ____% of the principal amount, together in the case of any such redemption [if applicable, insert – (whether through operation of the sinking fund or otherwise)] with accrued interest and any additional amounts due on the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable only upon presentation and surrender of this Security (at an office or agency located in The City and State of New York, United States of America, except as herein provided otherwise).]
[If applicable, insert – The Securities of this series are subject to redemption upon not less than [insert minimum notice requirement] nor more than [insert maximum notice requirement] days’ notice by mail (1) on ___________ in
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any year commencing with the year ____ and ending with the year_____, through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert – on or after ________, 20__], as a whole or in part, at the election of the Issuer, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount, with the amount in excess of 100% of the principal amount being additional interest) set forth in the table below: If redeemed during the 12-month period beginning __________ of the years indicated,
Year |
Redemption
Price |
Redemption
Price |
and thereafter at a Redemption Price equal to _______% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest and any additional amounts due on the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert – Notwithstanding the foregoing, the Issuer may not, prior to _____________, redeem any Securities of this series as contemplated by [If applicable, insert – Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Issuer (calculated in accordance with generally accepted financial practice) of less than ______% per annum.]
[If applicable, insert – The sinking fund for this series provides for the redemption on ______________ in each year beginning with the year ________ and ending with the year ____________ of [if applicable, insert – not less than U.S.$ [/ €] ______________ (“mandatory sinking fund”) and not more than U.S.$ [/ €]_______] aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Issuer otherwise than through [if applicable, insert – mandatory] sinking fund payments may be credited against subsequent [if applicable, insert – mandatory] sinking fund payments otherwise
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required to be made [if applicable, insert – in the inverse order in which they become due].]
[If applicable, insert – The Securities may be redeemed at the option of the Issuer, in whole but not in part, upon not less than 10 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest and any additional amounts due on the date fixed for redemption if (a) as a result of a change in or any amendment to the laws or any regulations or rulings promulgated thereunder of the United Kingdom (or of any political subdivision or taxing authority thereof or therein) (or in the case of a successor Person to the Issuer of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) affecting taxation or any change in an application or interpretation of such laws, regulations or rulings, or any change in an application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which the United Kingdom or any political subdivision or taxing authority thereof or therein (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, amendment application, interpretation or execution becomes effective on or after _____________ (or, in the case of a successor Person to the Issuer that is a non-United Kingdom entity, the date on which such successor Person became such pursuant to the applicable provision of the Indenture) or (b) as a result of any delivery or of any requirement to deliver definitive Registered Securities (having used all reasonable efforts to avoid having to issue such definitive Registered Securities), (i) the Issuer (or such successor Person) is or would be required to pay additional amounts with respect to the Securities, on the next succeeding Interest Payment Date as set forth below or (ii) any Subsidiary of the Issuer is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment of principal or interest in respect of the Securities and, in each case, the payment of such additional amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer or the Subsidiary.]
[If applicable, insert – The Securities may also be redeemed in whole but not in part upon not less than 10 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest and any additional amounts due on the date fixed for redemption if the Person formed by a consolidation of the Issuer or into which the Issuer is merged or to which the Issuer conveys, transfers or leases all or substantially all of its assets and the assets of its Subsidiaries, taken as a whole, is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease.]
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[If applicable, insert – the Redemption Price of the Securities shall be equal to the applicable percentage of the principal amount at Stated Maturity set forth below:
14
If
Redemption During the |
Redemption Price |
together with, in each case (except if the Redemption Date shall be a ________), an amount equal to the applicable Redemption Price multiplied by a fraction the numerator of which is the number of days from but not including the preceding __________________ to and including the Redemption Date multiplied by the difference between the Redemption Price applicable during the 12 months beginning on the ________________ following the Redemption Price (or, in the case of a Redemption Date after _____________, 100%) and the Redemption Price applicable on the Redemption Date and the denominator of which is the total number of days from but not including the ______________ preceding the Redemption Date to and including the next succeeding ___________. The Issuer will also pay to each eligible Holder, or make available for payment to each such Holder, on the Redemption Date any additional interest (as set forth on the face hereof) resulting from the payment of such Redemption Price.]
[If applicable, insert – The Redemption Price of the Securities either in the event of certain changes in the tax treatment or in an event of default would include, in addition to the face amount of the Security, an amount equal to the Original Issue Discount accrued since the issue date. Original Issue Discount (the difference between the Issue Price and the Principal Amount at Maturity of the Security), in the period during which a Security remains outstanding, shall accrue at _______% per annum, on a semiannual bond equivalent basis using a 360-day year composed of 12 30-day months, commencing on the Issue Date of this Security.]
[If applicable, insert – Notice of redemption will be given by mail to Holders of Securities, not less than 10 nor more than 60 days prior to the date fixed redemption, all as provided in the Indenture.]
[If the Security is subject to redemption of any kind, insert – 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.]
[If applicable, insert – 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 applicable, insert – Subject to and upon compliance with the provisions of the Indenture, the Holder of this Security is entitled at his or her option, at any time after ____________________, to convert this Security into [Describe Securities and conversion mechanics].]
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[If applicable, insert – In the event of conversion of this Security in part only, a new Security or Securities of this series and of like tenor for the unconverted portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security, insert – If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert – If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to – insert [formula for determining the amount]. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the applicable Issuer’s obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.]
[If not applicable, delete – If any deduction or withholding for any present or future taxes, levies, duties, assessments, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by 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
16
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;
(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
17
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.
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.]
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
18
any) or any interest on this Security on or after the respective due dates expressed herein [If applicable, insert – or to a suit instituted by the Holder hereof for the enforcement of the right to convert this Security in accordance with the Indenture].
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.
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.
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.
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SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount of this Security shall be $ [/€] ________________. The following decreases/increases in the principal amount of this Security have been made:
Date
of |
Decrease
in |
Total Principal Increase in Principal Amount |
Amount Following such Decrease/Increase |
Made by on Behalf of Trustee |
Section 2.03. Form of Registered Security.
[Form of Face of Registered Security]
[Insert any legend required by the Internal Revenue Code and the regulations thereunder.]
SMITH & NEPHEW PLC
[Title of Security]
| No. _______________ | CUSIP NO. _____ |
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 _____________________ [If applicable – insert – as nominee for [insert name]], or registered assigns, the principal sum of _______________ on ___________________ [if the Security is to bear interest prior to Maturity, insert –, and to pay interest thereon from __________, 20 ____ or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on ______________ and ______________ in each year] [annually in arrears on ____________ in each year], commencing ___________________, 20____, at the rate of _______% per
20
annum, until the principal hereof is paid or made available for payment [if applicable, insert –; provided that any principal and premium, and any such instalment of interest, which is overdue shall bear interest at the rate of _____% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand.] The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such 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 ______ [or _________] (whether or not a Business Day)[, as the case may be,] next preceding such Interest Payment Date. 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 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].
[If the Security is not to bear interest prior to Maturity, insert – The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity, and in such case the overdue principal and any overdue premium shall bear interest at the rate of _________% per annum (to the extent that the payment of such interest shall be legally enforceable), from the date such amounts are due until they are paid or made available for payment. Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal or premium which is not so paid on demand shall bear interest at the rate of ____% per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment. Interest on overdue interest shall be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable, insert – any such] interest on this Security will be made at the office or agency of the Issuer maintained for that purpose in ________, in [such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts] [If Security is denominated and payable in United States dollars insert currency and method of payment] [if applicable, insert –; provided, however, that a 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].
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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.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually, electronically or in facsimile.
Dated:
| SMITH & NEPHEW PLC | |
| By: | |
| Name: | |
| Title: Director | |
22
[Form of Reverse of Registered Security]
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 _______________, 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 U.S.$ [/ €]________________].
[If applicable, insert – The Securities of this series are subject to redemption upon not less than [insert minimum notice requirement] nor more than [insert maximum notice requirement] days’ notice by mail, [if applicable, insert – (1) on _______________ in any year commencing with the year _______ and ending with the year _________ through operation of the sinking fund for this series at a Redemption Price equal to [insert formula for determining amount] (with the amount in excess of 100% of the principal amount being additional interest), and (2)] at any time [if applicable, insert – on or after _________________, 20_____], as a whole or in part, at the election of the Issuer, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert – on or before _____________, _______%, and if redeemed] during the 12-month period beginning __________________ of the years indicated,
Year |
Redemption Price |
Year |
Redemption Price |
and thereafter at a Redemption Price equal to ________% of the principal amount, together in the case of any such redemption [if applicable, insert – (whether through operation of the sinking fund or otherwise)] with accrued interest and any additional amounts due on the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert – The Securities of this series are subject to redemption upon not less than [insert minimum notice requirement] nor more than [insert maximum notice requirement] days’ notice by mail, (1) on ____________
23
in any year commencing with the year __________ and ending with the year _____, through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert – on or after ________________, 20_____], as a whole or in part, at the election of the Issuer, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount, with the amount in excess of 100% of the principal amount being additional interest) set forth in the table below: If redeemed during the 12-month period beginning __________________ of the years indicated,
Year |
Redemption Price For Redemption Through Operation of the Sinking Fund |
Redemption Price For Redemption Otherwise Than Through Operation of the Sinking Fund |
and thereafter at a Redemption Price equal to _______% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest and any additional amounts due on the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert – Notwithstanding the foregoing, the Issuer may not, prior to _____________, redeem any Securities of this series as contemplated by [If applicable, insert – Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Issuer (calculated in accordance with generally accepted financial practice) of less than ______% per annum.]
[If applicable, insert – The sinking fund for this series provides for the redemption on ______________ in each year beginning with the year ________ and ending with the year ____________ of [if applicable, insert – not less than U.S.$ [/ €]______________ (“mandatory sinking fund”) and not more than U.S.$ [/ €]_______] aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Issuer otherwise than through [if applicable, insert – mandatory] sinking fund payments may be credited against subsequent [if applicable, insert – mandatory] sinking fund payments otherwise required to be made [if applicable, insert – in the inverse order in which they become due].]
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[If applicable, insert – The Securities may be redeemed at the option of the Issuer, in whole but not in part, upon not less than 10 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest and any additional amounts due on the date fixed for redemption if (a) as a result of a change in or any amendment to the laws or any regulations or rulings promulgated thereunder of the United Kingdom (or of any political subdivision or taxing authority thereof or therein) (or in the case of a successor Person to the Issuer of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) affecting taxation or any change in an application or interpretation of such laws, regulations or rulings, or any change in an application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which the United Kingdom or any political subdivision or taxing authority thereof or therein (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, amendment application, interpretation or execution becomes effective on or after _____________ (or, in the case of a successor Person to the Issuer that is a non-United Kingdom entity, the date on which such successor Person became such pursuant to the applicable provision of the Indenture) or (b) as a result of any delivery or of any requirement to deliver definitive Registered Securities (having used all reasonable efforts to avoid having to issue such definitive Registered Securities), (i) the Issuer (or such successor Person) is or would be required to pay additional amounts with respect to the Securities, on the next succeeding Interest Payment Date as set forth below or (ii) any Subsidiary of the Issuer is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment of principal or interest in respect of the Securities and, in each case, the payment of such additional amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer or the Subsidiary.]
[If applicable, insert – The Securities may also be redeemed in whole but not in part upon not less than 10 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest and any additional amounts due on the date fixed for redemption if the Person formed by a consolidation of the Issuer or into which the Issuer is merged or to which the Issuer conveys, transfers or leases all or substantially all of its assets and the assets of its Subsidiaries, taken as a whole is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease.]
[If applicable, insert – the Redemption Price of the Securities shall be equal to the applicable percentage of the principal amount at Stated Maturity set forth below:
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| If Redemption During the 12-Month Period Commencing | Redemption Price |
together with, in each case (except if the Redemption Date shall be a __________), an amount equal to the applicable Redemption Price multiplied by a fraction the numerator of which is the number of days from but not including the preceding __________________ to and including the Redemption Date multiplied by the difference between the Redemption Price applicable during the 12 months beginning on the ________________ following the Redemption Price (or, in the case of a Redemption Date after _____________, 100%) and the Redemption Price applicable on the Redemption Date and the denominator of which is the total number of days from but not including the ______________ preceding the Redemption Date to and including the next succeeding ___________. The Issuer will also pay to each eligible Holder, or make available for payment to each such Holder, on the Redemption Date any additional interest (as set forth on the face hereof) resulting from the payment of such Redemption Price.]
[If applicable, insert – The Redemption Price of the Securities either in the event of certain changes in the tax treatment or in an event of default would include, in addition to the face amount of the Security, an amount equal to the Original Issue Discount accrued since the issue date. Original Issue Discount (the difference between the Issue Price and the Principal Amount at Maturity of the Security), in the period during which a Security remains outstanding, shall accrue at _______% per annum, on a semiannual bond equivalent basis using a 360-day year composed of 12 30-day months, commencing on the Issue Date of this Security.]
[If applicable, insert – Notice of redemption will be given by mail to Holders of Securities, not less than 10 nor more than 60 days prior to the date fixed redemption, all as provided in the Indenture.]
[If the Security is subject to redemption of any kind, insert – 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.]
[If applicable, insert – 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 applicable, insert – Subject to and upon compliance with the provisions of the Indenture, the Holder of this Security is entitled at his or her option, at any
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time after ____________________, to convert this Security into [Describe Securities and conversion mechanics].]
[If applicable, insert – In the event of conversion of this Security in part only, a new Security or Securities of this series and of like tenor for the unconverted portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security, insert – If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert – If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to – [insert formula for determining the amount]. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the applicable Issuer’s obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.]
[If not applicable, delete – 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
27
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;
(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,
28
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.
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.]
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
29
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 [If applicable, insert – or to a suit instituted by the Holder hereof for the enforcement of the right to convert this Security in accordance with the Indenture].
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.
[Insert if only Registered Securities may be issued – The Securities of this series are issuable only in registered form without coupons in denominations of __________________ and any integral multiple 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.
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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.
Section 2.04. Form of Coupon.
[Form of Face of Coupon]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
[Insert any other legend required by the Internal Revenue Code and the regulations thereunder.]
Smith & Nephew plc
[Title of Security]
[R ]*
No. _______________
Unless the Security to which this coupon appertains shall have been called for previous redemption and payment thereof duly provided for on the date set forth hereon, Smith & Nephew plc (hereinafter called the “Issuer”) will pay to Holder, upon surrender hereof, the amount shown hereon (together with any additional amounts in respect thereof which the Issuer may be required to pay according to the terms of said Security and the Indenture referred to therein) at the Paying Agents set out on the reverse hereof or at such other offices or agencies
_______________
*Insert if redeemable.
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(which, except as otherwise provided in the Security to which this coupon appertains, shall be located inside the United States of America (including the States and the District of Columbia), and its possessions (including Puerto Rico, the U.S. Virgin Islands, Guam American Samoa Wake Island and the Northern Mariana Islands) (the “United States”)) as the Issuer may designate from time to time, at the option of the Holder, [by United States dollar check drawn on a bank in The City of New York or by transfer of United States dollars to an account maintained by the payee with a bank located outside the United States] [If Security is denominated and payable other than in United States dollars insert currency and method of payment], being [one year’s] interest then payable on said Security.
| SMITH & NEPHEW PLC | |
| By: | |
| Name: | |
| Title: Director | |
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[Reverse of Coupon]*
Section 2.05. Form of Legend for Global Registered Securities.
Unless otherwise specified as contemplated by Section 3.01 for the Securities evidenced thereby, every Global Registered Security authenticated and delivered hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY 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 DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
Section 2.06. Form of Trustee’s Certificate of Authentication. The Trustee’s certificate of authentication on all Securities shall be in substantially the following form:
This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.
| The Bank of New York Mellon, London Branch, as Trustee | |
| By: | |
| Authorized Officer: | |
____________________
*Insert names and addresses of initial Paying Agents located inside the United States.
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Section 2.07. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established in or pursuant to one or more resolutions of the Board of Directors of the Issuer or a committee designated by the Board of Directors of the Issuer (and set forth in a Board Resolution or, to the extent established pursuant to (rather than in) such resolutions, in an Officers’ Certificate detailing such establishment), and/or established in one or more indentures supplemental hereto, prior to the initial issuance of Securities of any series,
(a) the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities);
(b) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.12, 2.13, 2.15, 8.03 or 11.03);
(c) the date or dates on which the principal of the Securities of the series is payable;
(d) the rate or rates at which the Securities of the series shall bear interest, if any, or, if other than on the basis of a 360-day year of 12 30-day months, the method by which such rate shall be determined, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable and the record dates for the determination of Holders to whom interest is payable;
(e) the place or places where the principal of and any interest on Securities of the series shall be payable (if other than as provided in Section 3.03);
(f) the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Issuer, pursuant to any sinking fund or otherwise, including the date referred to in Section 11.06;
(g) the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;
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(h) if other than denominations of $2,000 or whole multiples of $1,000 in excess thereof, the denominations in which Securities of the series shall be issuable;
(i) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 4.01 or provable in bankruptcy pursuant to Section 4.02;
(j) if other than such coin or currency of the United States of America as at the time of payment is legal tender for payment of public or private debts, the coin or currency (including any composite currency) in which payment of the principal and interest on the Securities of the series shall be denominated or payable, the method pursuant to which payment shall be made and the manner of determining the equivalent thereof in the currency of the United States of America for purposes of the definition of “Outstanding” in Article 1.
(k) if the principal of or interest on the Securities of the series are to be payable, at the election of the Issuer or a Holder thereof, in a coin or currency (including any composite currency) other than that in which the Securities are stated to be payable, the period or periods within which, and the terms and conditions upon which, such election may be made;
(l) if the amounts of payments of principal or interest, if any, on the Securities of the series may be determined with reference to an index or are otherwise not fixed on the original issue date thereof, the manner in which such amounts shall be determined;
(m) the forms of the Securities of the series;
(n) any trustees, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the Securities of such series;
(o) whether the Securities of the series will be issued in whole or in part in the form of one or more Global Securities and, in such case, the Depositary with respect to such Global Security or Securities; and
(p) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such resolution of the Board of Directors of the Issuer or in any such indenture supplemental hereto.
Section 2.08. Authentication and Delivery of Securities. At any time and from time to time after the execution and delivery of this Indenture, the Issuer
35
may deliver Securities of any series executed by the Issuer to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver such Securities to or upon the written order of the Issuer contained in a Company Order. In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities the Trustee shall be entitled to receive, and (subject to Section 5.01) shall be fully protected in relying upon:
(a) any Board Resolution, Officers’ Certificate and/or executed supplemental indenture referred to in Sections 2.01 and 2.07 by or pursuant to which the terms of the Securities were established;
(b) an Officers’ Certificates of the Issuer certifying the form and terms of the Securities, stating that the form and terms of the Securities have been established as required pursuant to Sections 2.01 and 2.07 and comply with the Indenture;
(c) one or more Opinions of Counsel, prepared in accordance with Section 10.05, to the effect that
(i) the form or forms and terms of such Securities have been established as required pursuant to Section 2.07 in conformity with the provisions of this Indenture; and
(ii) such Securities, when authenticated and delivered by the Trustee and issued by the Issuer in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Issuer enforceable against the Issuer in accordance with its terms.
(d) if the Securities being issued are Original Issue Discount Securities, an Officers’ Certificate of the Issuer setting forth the Yield to Maturity for the Securities and any other facts required to compute amounts due on acceleration, unless such Yield to Maturity and other facts are specified in the form of the Securities. Any additional debt securities will have a separate CUSIP, ISIN, Common Code or other identifying number from the debt securities originally issued of such series, unless the additional debt securities are fungible with the originally issued debt securities of the same series for U.S. federal income tax purposes.
The Trustee shall have the right to decline to authenticate and deliver any Securities under this Section 2.08 if the Trustee, being advised by counsel, determines that such action may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees, executive committee, or a trust committee of directors or trustees or Responsible Officers shall determine that such action would expose the Trustee to personal liability to existing Holders.
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Section 2.09. Execution of Securities. The Securities shall be signed on behalf of the Issuer by any two directors or by one director and its secretary or any assistant secretary. Such signatures may be the manual or pdf or other electronically-imaged (including, without limitation, DocuSign or Adobe Sign) or facsimile signatures of the present or any future such officers. Typographical and other minor errors or defects in any such reproduction of any such signature shall not affect the validity or enforceability of any Security that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the Securities shall cease to be such officer before the Security so signed shall be authenticated and delivered by the Trustee or disposed of by the Issuer, such Security nevertheless may be authenticated and delivered or disposed of as though the person who signed such Security had not ceased to be such officer of the Issuer; and any Security may be signed on behalf of the Issuer by such persons as, at the actual date of the execution of such Security, shall be the proper officers of the Issuer, although at the date of the execution and delivery of this Indenture any such person was not such an officer.
Section 2.10. Certificate of Authentication. Only such Securities as shall bear thereon a certificate of authentication substantially in the form hereinbefore recited, executed by the Trustee by the manual or pdf or other electronically-imaged (including, without limitation, DocuSign or Adobe Sign) or facsimile signature of one of its authorized officers, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee upon any Security executed by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture.
Section 2.11. Denomination and Date of Securities; Payments of Interest. The Securities shall be issuable as registered securities without coupons and in denominations as shall be specified as contemplated by Section 2.07. In the absence of any such specification with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $2,000 or whole multiples of $1,000 in excess thereof. The Securities shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with such plan as the officers of the Issuer executing the same may determine with the approval of the Trustee as evidenced by the execution and authentication thereof.
Each Security shall be dated the date of its authentication, shall bear interest, if any, from the date and shall be payable on the dates, in each case, which shall be specified as contemplated by Section 2.07.
The person in whose name any Security of any series is registered at the close of business on any record date applicable to a particular series with respect to any interest payment date for such series shall be entitled to receive the interest,
37
if any, payable on such interest payment date notwithstanding any transfer or exchange of such Security subsequent to the record date and prior to such interest payment date, except if and to the extent the Issuer shall default in the payment of the interest due on such interest payment date for such series, in which case such defaulted interest shall be paid to the persons in whose names Outstanding Securities for such series are registered at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment of such defaulted interest) established by notice given by mail by or on behalf of the Issuer to the Holders of Securities not less than 15 days preceding such subsequent record date. The term “record date” as used with respect to any interest payment date (except a date for payment of defaulted interest) shall mean the date specified as such in the terms of the Securities of any particular series, or, if no such date is so specified, if such interest payment date is the first day of a calendar month, the fifteenth day of the next preceding calendar month or, if such interest payment date is the fifteenth day of a calendar month, the first day of such calendar month, whether or not such record date is a Business Day.
Section 2.12. Registration, Transfer And Exchange.
(a) Global Securities. This Section 2.12(a) shall apply only to Global Securities deposited with the Depository unless otherwise provided as contemplated by Section 2.07.
Unless the Global Security is presented by an authorized representative of the Depository to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of a nominee of the Depository and any payment is made to such nominee, any transfer, pledge or other use of the Global Security in registered form for value or otherwise shall be wrongful since the registered owner of such Global Security, the nominee of the Depository, has an interest in such Global Security.
Except as otherwise specified as contemplated by Section 2.07 hereof, any Global Security shall be exchangeable for definitive Securities only as provided in this paragraph. A Global Security shall be exchangeable pursuant to this Section 2.12 only if (a) the Depository notifies the Issuer that it is unwilling or unable to continue to hold such Global Security or if at any time the Depository ceases to be a clearing agency registered under the Exchange Act and a successor Depository is not appointed by the Issuer, (b) there shall have occurred and be continuing an Event of Default with respect to the Securities, or (c) at any time if the Issuer in its sole discretion determines that the Global Securities or any of them should be exchanged for definitive Securities. The Issuer shall notify the Trustee in writing that such exchange has taken place and that the Depository is no longer the Holder of such Global Security, in whole or in part. Unless and until such notice is received by the Trustee, the Trustee shall be entitled to assume that no such exchange of Global Security for definitive Securities has occurred, and shall have no liability with respect to any payment in reliance thereon. Any Global Security
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that is exchangeable pursuant to this Section 2.12 shall be exchangeable for definitive Securities in registered form, bearing interest (if any) at the same rate or pursuant to the same formula, having the same date of issuance, redemption provisions, if any, specified currency and other terms and of differing denominations aggregating a like amount as the Global Security so exchangeable. Definitive Securities shall be registered in the names of the owners of the beneficial interests in such Global Security as such names are from time to time provided by the relevant Agent Member holding interests in such Global Security (as such Agent Member is identified from time to time by the Depository).
No Global Security may be transferred except as a whole by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor of the Depository or a nominee of such successor. Except as provided above, owners solely of beneficial interests in a Global Security shall not be entitled to receive physical delivery of Securities in definitive form and will not be considered the holders thereof for any purpose under this Indenture.
In the event that a Global Security is surrendered for redemption in part pursuant to Section 11.02 the Issuer shall execute, and the Trustee shall authenticate and deliver to the Depository for such Global Security, without service charge, a new Global Security, in a denomination equal to the unredeemed portion of the principal of the Global Security so surrendered.
None of the Trustee, any Paying Agent and any Security Registrar shall have any responsibility or obligation to any beneficial owner in a Global Security, an Agent Member or other Person with respect to (i) the accuracy of the records of the Depositary or its nominee or of any Agent Member, with respect to any ownership interest in the Securities, (ii) the delivery to any Agent Member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption) or (iii) the payment of any amount, under or with respect to such Securities. All notices and communications to be given to the Securityholders and all payments to be made to Securityholders under the Securities and this Indenture shall be given or made only to or upon the order of the Holders (which shall be the Depositary or its nominee in the case of the Global Security). The rights of beneficial owners in the Global Security shall be exercised only through the Depositary subject to the applicable procedures. The Trustee, any Paying Agent and any Security Registrar shall be entitled to rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners. The Trustee, any Paying Agent and any Security Registrar shall be entitled to deal with the Depositary, and any nominee thereof, that is the Holder of any Global Security for all purposes of this Indenture relating to such Global Security (including the payment of principal, premium, if any, and interest and additional amounts, if any, and the giving of instructions or directions by or to the owner or holder of a beneficial ownership interest in such Global Security) as the sole holder of such
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Global Security and shall have no obligations to the beneficial owners thereof. None of the Trustee, any Paying Agent and any Security Registrar shall have any responsibility or liability for any acts or omissions of the Depositary with respect to such Global Security, for the records of any such Depositary, including records in respect of beneficial ownership interests in respect of any such Global Security, for any transactions between the Depositary and any Agent Member or between or among the Depositary, any such Agent Member and/or any holder or owner of a beneficial interest in such Global Security, or for any transfers of beneficial interests in any such Global Security.
The Agent Members shall have no rights under this Indenture with respect to any Global Security held on their behalf by a Depository, and such Depository may be treated by the Issuer, the Trustee, and any agent of the Issuer, or the Trustee as the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee, or any agent of the Issuer, or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by a Depository or impair, as between a Depository (or its nominee) and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any Security, including without limitation the granting of proxies or other authorization of participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under this Indenture.
In connection with any exchange of interests in a Global Security for definitive Securities, as provided in this subsection (a), then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Issuer shall deliver to the Trustee definitive Securities, in aggregate principal amount equal to the principal amount of such Global Security executed by the Issuer. On or after the earliest date on which such interests may be so exchanged, such Global Security shall be surrendered by the Depository to the Trustee, as the Issuer’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Securities without charge and the Trustee shall authenticate and deliver, in exchange for each portion of such Global Security, an equal aggregate principal amount of definitive Securities of authorized denominations as the portion of such Global Security to be exchanged. Any Global Security that is exchangeable pursuant to this Section 2.12 shall be exchangeable for Securities issuable in the denominations specified as contemplated by Section 2.07 and registered in such names as the Depository that is the Holder of such Global Security shall direct. If a definitive Security is issued in exchange for any portion of a Global Security after the close of business at the office or agency where such exchange occurs on any record date and before the opening of business at such office or agency on the relevant payment date, interest payments will not be payable on such payment date in respect of such definitive Security, but will be payable on such payment date only to the person to whom interest payments in respect of such portion of such Global Security are payable.
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The Depository may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture with respect to the Securities.
None of the Trustee, any Paying Agent and any Security Registrar shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
(b) The Issuer will keep or cause to be kept at each office or agency to be maintained for the purpose as provided in Section 3.03 a register or registers (the register or registers maintained in any such office or agency being herein referred to collectively as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, it will register, and will register the transfer of, Securities as provided for in this Article 2. Such register shall be in written form in the English language or in any other form capable of being converted into such form within a reasonable time. At all reasonable times the Security Register shall be open for inspection by the Trustee.
The Issuer initially appoints The Bank of New York Mellon at 240 Greenwich Street, New York, New York 10286, United States of America as Security Registrar (the “Security Registrar”) for each series of Securities.
Upon due presentation for registration of transfer of any Security of any series at any such office or agency to be maintained for the purpose as provided in Section 3.03, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Security or Securities of the same series in authorized denominations for a like aggregate principal amount.
Any Security or Securities of any series may be exchanged for a Security or Securities of the same series in other authorized denominations, in an equal aggregate principal amount. Securities of any series to be exchanged shall be surrendered at any office or agency to be maintained by the Issuer for the purpose as provided in Section 3.03, and the Issuer shall execute and the Trustee shall authenticate and deliver in exchange therefor the Security or Securities of the same series which the Securityholder making the exchange shall be entitled to receive and bearing numbers not contemporaneously outstanding.
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All Securities presented for registration of transfer, exchange, redemption or payment shall (if so required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder or his or her attorney duly authorized in writing.
The Issuer or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any exchange or registration of transfer of Securities. No service charge shall be made for any such transaction.
The Issuer shall not be required to exchange or register a transfer of (a) any Securities of any series for a period of 15 days next preceding the first mailing of notice of redemption of Securities of such series to be redeemed, or (b) any Securities selected, called or being called for redemption except, in the case of any Security where public notice has been given that such Security is to be redeemed in part, the portion thereof not so to be redeemed.
All Securities issued upon any registration of transfer or exchange of Securities shall be valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Section 2.13. Mutilated, Defaced, Destroyed, Lost and Stolen Securities. In case any temporary or definitive Security (including any Global Security) shall become mutilated, defaced or be destroyed, lost or stolen, the Issuer in its discretion may execute, and upon the written request of any officer of the Issuer, the Trustee shall authenticate and deliver, a new Security of the same series and bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated or defaced Security, or in lieu of and substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substitute Security shall furnish to the Issuer and to the Trustee and any agent of the Issuer, or the Trustee such security or indemnity as may be required by them to indemnify and defend and to save each of them harmless and, in every case of destruction, loss or theft, evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof.
Upon the issuance of any substitute Security, the Issuer or the Trustee may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
In case any Security which has matured or is about to mature or has been called for redemption in full shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of
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a mutilated or defaced Security), if the applicant for such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as any of them may require to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Issuer and the Trustee and any agent of the Issuer, or the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the provisions of this Section 2.13 by virtue of the fact that any such Security is destroyed, lost or stolen shall constitute an additional contractual obligation of the Issuer whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone and shall be entitled to all the benefits of (but shall be subject to all the limitations of rights set forth in) this Indenture equally and proportionately with any and all other Securities of such series duly authenticated and delivered hereunder. All Securities shall be held and owned upon the express condition that, to the extent permitted by law, the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, defaced or destroyed, lost or stolen Securities and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.
Section 2.14. Cancellation of Securities; Destruction Thereof. All Securities surrendered for payment, redemption, registration of transfer or exchange, or for credit against any payment in respect of a sinking or analogous fund, if surrendered to the Issuer, or any agent of the Issuer, or the Trustee, shall be delivered to the Trustee for cancellation or, if surrendered to the Trustee, shall be cancelled by it in accordance with its customary procedures; and no Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall, subject to the record retention requirements of the Exchange Act, dispose of cancelled Securities held by it and upon written request of the Issuer deliver a certificate of disposal to the Issuer. If the Issuer shall acquire any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation.
Section 2.15. Temporary Securities. Pending the preparation of definitive Securities for any series, the Issuer may execute and the Trustee shall authenticate and deliver temporary Securities for such series, having endorsed thereon Securities duly executed by the Issuer (printed, lithographed, typewritten or otherwise reproduced, in each case in form satisfactory to the Trustee). Temporary Securities of any series shall be issuable as registered Securities without coupons, of any authorized denomination, and substantially in the form of the definitive Securities of such series but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be
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determined by the Issuer with the concurrence of the Trustee. Temporary Securities may contain such reference to any provisions of this Indenture as may be appropriate. Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities. Without unreasonable delay the Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary Securities of such series may be surrendered in exchange therefor without charge at each office or agency to be maintained by the Issuer for that purpose pursuant to Section 3.03, and the Trustee shall authenticate and deliver in exchange for such temporary Securities of such series a like aggregate principal amount of definitive Securities of the same series of authorized denominations. Until so exchanged, the temporary Securities of any series shall be entitled to the same benefits under this Indenture as definitive Securities of such series.
Section 2.16. CUSIPs, ISINs and Common Codes. The Issuer in issuing any series of the Securities may use a CUSIP, ISIN, Common Code or other similar numbers, if then generally in use, and thereafter with respect to such series, the Trustee may use such numbers in any notice of redemption with respect to such series. The Issuer shall promptly notify the Trustee in writing of any change in the CUSIP, ISIN, Common Code or other similar numbers.
Article
3
Covenants Of The Issuer And The Trustee
As to the Issuer:
Section 3.01. Payment of Principal and Interest. The Issuer covenants and agrees for the benefit of the Holders of each series of Securities that it will duly and punctually pay or cause to be paid the principal of, and interest, if any, on, each of the Securities of such series at the place or places, at the respective times and in the manner provided in such Securities. Each installment of interest on the Securities of any series may be paid by mailing checks for such interest payable to or upon the written order of the Holders of Securities entitled thereto as they shall appear on the registry books of the Issuer.
Section 3.02. Additional Amounts. Unless otherwise specified in any Board Resolution or Officers’ Certificate, as applicable, establishing the terms of Securities of a series in accordance with Section 2.07, all amounts of principal, and interest, if any, on any series of Securities will be paid by the Issuer without deducting or withholding for, or on account of, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatsoever imposed, assessed, levied or collected by or for the account of the United Kingdom or any political subdivision or taxing authority thereof or therein or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by applicable law or
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regulation of the United Kingdom or any such subdivision or authority, the Issuer will (subject to what follows) pay such additional amounts in respect of principal, interest, if any, and sinking fund payments as may be necessary in order that the net amounts received by the Holders of the Securities or the Trustee under this Indenture, as the case may be, pursuant to the Securities, after such deduction or withholding, shall equal the respective amounts of principal, interest, if any, and sinking fund payments, as specified in the Securities, to which such Holders or the Trustee would be entitled had such deduction or withholding not been so imposed, assessed, levied or collected; provided, however, that the foregoing shall not apply to (i) 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, (ii) 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, (iii) any estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge, (iv) 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, (v) 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), (vi) 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
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to provide (vii) any present or future tax, levy, impost or other governmental charge imposed by the United States of America or any political subdivision or taxing authority thereof or therein, (viii) 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 (ix) any combination of items (i) through (viii) above.
At least 30 days prior to each date on which any payment under or with respect to any debt securities is due and payable (unless such obligation to pay additional amounts arises after the 30th day prior to the date on which payment under or with respect to the debt securities is due and payable, in which case it will be promptly thereafter), if we will be obligated to pay additional amounts with respect to such payment, we will deliver to the Trustee an Officers’ Certificate stating that such additional amounts will be payable and the amounts so payable and setting forth such other information as is necessary to enable the trustee to pay such additional amounts to the holders of such debt securities on the payment date.
Section 3.03. Offices for Payments, etc. So long as any of the Securities of any series remain Outstanding, the Issuer will maintain in the Borough of Manhattan, The City and State of New York, United States of America the following for the Securities of such series (unless otherwise provided for in the Securities of such series): an office or agency (a) where the Securities of such series may be presented for payment, (b) where the Securities may be presented for registration of transfer and for exchange as provided for in this Indenture and (c) where notices and demands to or upon the Issuer in respect of the Securities or of this Indenture may be served. The Issuer will give to the Trustee written notice of the location of any such office or agency and of any change of location thereof.
Unless otherwise specified in accordance with Section 2.07, the Issuer hereby initially designates the Security Registrar Corporate Trust Office as the office to be maintained by it for each such purpose. In case the Issuer shall fail to so designate or maintain any such office or agency or shall fail to give such notice of the location or of any change in the location thereof, presentations and demands may be made and notices may be served at the Security Registrar Corporate Trust Office.
The Issuer may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes or where such notices or demands may
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be served and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of any obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for Securities of any series for such purposes.
The Issuer will give written notice to the Trustee of any such designation or rescission and of any such change in the location of any other office or agency.
Section 3.04. Appointment to Fill a Vacancy in Office of Trustee. The Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 5.09, a Trustee, so that there shall at all times be a Trustee with respect to each series of Securities hereunder.
Section 3.05. Payment Agents. Whenever the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities of any series, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 3.05,
(a) that it will comply with the provisions of the Trust Indenture Act applicable to it as a paying agent,
(b) that it will hold all sums received by it as such agent for the payment of the principal of or interest, if any, on the Securities of such series (whether such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the Holders of the Securities of such series or of the Trustee,
(c) that it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to make any payment of the principal of or interest on the Securities of such series when the same shall be due and payable, and
(d) that it will pay any such sums so held in trust by it to the Trustee upon the Trustee’s written request at any time during the continuance of the failure referred to in clause (c) above.
The Issuer will, on the Business Day prior to each due date of the principal of or interest, if any, on the Securities of such series, deposit with the paying agent a sum sufficient to pay such principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer will promptly notify the Trustee in writing of any failure to take such action.
If the Issuer shall act as paying agent with respect to the Securities of any series, it will, on or before each due date of the principal of or interest, if any, on the Securities of such series, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series a sum sufficient to pay such
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principal or interest so becoming due. The Issuer will promptly notify the Trustee in writing of any failure to take such action.
Anything in this Section 3.05 to the contrary notwithstanding, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section 3.05, such sums to be held by the Trustee upon the trusts herein contained.
Anything in this Section 3.05 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 3.05 is subject to the provisions of Sections 9.04 and 9.05.
Section 3.06. Compliance Certificates from the Issuer. The Issuer will furnish to the Trustee on or before March 31 in each year (beginning with March 31, 2021), if Securities are then Outstanding, a brief certificate (which need not comply with Section 10.05) from the principal executive, financial or accounting officer of the Issuer as to his or her knowledge of the Issuer’s compliance with all conditions and covenants under the Indenture (such compliance to be determined without regard to any period of grace or requirement of notice provided under the Indenture) and if the Issuer shall not be in compliance, specifying such non-compliance and the nature and status thereof of which such signatory may have knowledge.
The Issuer will deliver to the Trustee, promptly upon becoming aware of (i) any default in the performance or observance of any covenant, agreement or condition contained in this Indenture, or (ii) any default or Event of Default, an Officers’ Certificate specifying with particularity such default or Event of Default and further stating what action the Issuer has taken, is taking or proposes to take with respect thereto.
Any notice required to be given under this Section 3.06 shall be delivered to a Responsible Officer of the Trustee at the Trustee Corporate Trust Office.
Section 3.07. Securityholders Lists. If and so long as the Trustee shall not be the Security Registrar for the Securities of any series, the Issuer will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and addresses of the Holders of the Securities of such series pursuant to Section 312 of the Trust Indenture Act (a) semi-annually not more than 15 days after each record date for the payment of interest on such Securities, as hereinabove specified, as of such record date and on dates to be determined pursuant to Section 2.07 for non-interest bearing securities in each year, and (b) at such other times as the Trustee may request in writing, within 30 days after receipt by the Issuer of any such request as of a date not more than 15 days prior to the time such information is furnished.
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Section 3.08. Preservation of Information; Communication to Holders. The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 3.07 and the names and addresses of Holders received by the Trustee. The Trustee may destroy any list furnished to it as provided in Section 3.07 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.
Every Holder, by receiving and holding Securities, agrees with the Issuer and the Trustee that neither the Issuer nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.
Section 3.09. Limitation on Liens. (a) Nothing contained in this Indenture or in the Securities shall in any way restrict or prevent the Issuer or any Subsidiary of the Issuer from incurring, assuming or guaranteeing any indebtedness; provided that the Issuer will not itself, and will not permit any of its Restricted Subsidiaries to, incur, assume or guarantee indebtedness for money borrowed (hereinafter in this Article 3 referred to as “Debt”), secured by a mortgage, pledge, security interest or lien (mortgages, pledges, security interests and liens being hereinafter in this Article 3 referred to as a “mortgage” or “mortgages”) upon any Principal Property or upon any shares of stock of or indebtedness of any Restricted Subsidiary, without effectively providing that the Securities (together with, if the Issuer shall so determine, any other Debt of the Issuer or such Restricted Subsidiary then existing or thereafter created ranking equally with the Securities) shall be secured equally and ratably with (or prior to) such Debt, so long as such Debt shall be so secured. This Section 3.09(a) shall not apply to Debt secured by:
(i) mortgages on property, shares of stock or indebtedness of any corporation existing at the time such corporation becomes a Restricted Subsidiary of the Issuer; provided that such mortgages were not created in contemplation of such corporation becoming a Restricted Subsidiary;
(ii) mortgages on property or shares of stock existing at the time of acquisition thereof or to secure the payment of all or any part of the purchase price thereof or to secure any Debt incurred prior to, at the time of, or within 12 months after, in the case of shares of stock, the acquisition of such shares and, in the case of property, the later of the acquisition, the completion of construction (including any improvements on an existing property) or the commencement of commercial operation of such property, which Debt is incurred for the purpose of financing all or any part of the purchase price thereof;
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(iii) mortgages which secure Debt owing to the Issuer or to any of its Restricted Subsidiaries by any of the Issuer’s Restricted Subsidiaries or the Issuer;
(iv) mortgages existing at the date of this Indenture;
(v) mortgages on any Principal Property to secure Debt incurred to finance all or part of the cost of the improvement, construction, alteration or repair of any building, equipment or facilities or of any other improvements on, all or any part of such Principal Property, if such Debt is incurred prior to, during, or within 12 months after completion of, such improvement, construction, alteration or repair;
(vi) mortgages on property owned or held by any corporation or on shares of stock or indebtedness of any corporation, in either case existing at the time such corporation is merged into or consolidated or amalgamated with either the Issuer or a Restricted Subsidiary or at the time of a sale, lease or other disposition of all or substantially all of the property of a corporation to the Issuer or a Restricted Subsidiary; provided that such mortgages were not created in contemplation of such corporation (x) merging, consolidating or amalgamating with the Issuer or a Restricted Subsidiary, or (y) selling, leasing or otherwise disposing of all of substantially all of its property to the Issuer or a Restricted Subsidiary;
(vii) mortgages arising by operation of law and not securing amounts more than 90 days overdue or otherwise being contested in good faith;
(viii) mortgages arising solely by operation of law over any credit balance or cash held in any account with a financial institution;
(ix) rights of financial institutions to offset credit balances in connection with the operation of cash management programs established for the benefit of the Issuer and/or any Restricted Subsidiary;
(x) mortgages incurred or deposits made in the ordinary course of business, including, but not limited to, (a) any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other like mortgages, (b) any mortgages securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security, and (c) any easements, rights-of-way, restrictions and other similar charges;
(xi) mortgages incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of like nature incurred in the ordinary course of business;
(xii) mortgages securing taxes or assessments or other applicable governmental charges or levies;
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(xiii) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any mortgage permitted under the foregoing clauses (i) to (xii), inclusive, or of any Debt secured thereby; provided that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement mortgage shall be limited to all or any part of the same property or shares of stock that secured the mortgage extended, renewed or replaced (plus improvements on such property), or property received or shares of stock issued in substitution or exchange therefor; and
(xiv) mortgages in favor of the Issuer or any Subsidiary of the Issuer.
The following types of transactions shall not be deemed to create Debt secured by a mortgage within the meaning of those terms as defined above:
(i) mortgages of property of the Issuer or any of its Restricted Subsidiaries in favor of the United States of America or any State thereof or the District of Columbia, or the United Kingdom, or any other country, or any political subdivision of any of the foregoing, or any department, agency or instrumentality of any of the foregoing, to secure partial, progress, advance or other payments pursuant to the provisions of any contract or statute including, without limitation, mortgages to secure Debt of the pollution control or industrial revenue bond type, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of construction of the property subject to such mortgages.
(b) Notwithstanding the provisions of clause (a) of this Section 3.09, the Issuer or any of its Restricted Subsidiaries may incur, assume or guarantee Debt secured by a mortgage or mortgages which would otherwise be subject to the foregoing restrictions in an aggregate amount which, together with all other such Debt of the Issuer and its Restricted Subsidiaries and their Attributable Debt in respect of Sale and Lease-Back Transactions existing at such time (other than Attributable Debt in respect of Sale and Lease-Back Transactions permitted because the Issuer or any Restricted Subsidiary would be entitled to incur, assume or guarantee such Debt secured by a mortgage on the property to be leased without equally and ratably securing the Securities pursuant to clause (a) of this Section 3.09 and other than Sale and Lease-Back Transactions, the proceeds of which have been applied in accordance with clause (2) of Section 3.09) does not at the time exceed 15% of Consolidated Net Tangible Assets as set forth in the consolidated financial statements contained in the latest annual report to the shareholders of the Issuer.
(c) The Trustee, subject to Sections 5.01 and 5.02 shall receive an Opinion of Counsel as conclusive evidence that any transaction complies with the
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provisions of this Section 3.09. The foregoing is not intended to limit the generality of Section 5.02(c).
Section 3.10. Limitation on Sale and Lease-back. (a) The Issuer will not itself, and it will not permit any of its Restricted Subsidiaries to, enter into any arrangement with any Person providing for the leasing by the Issuer or such Restricted Subsidiary of any Principal Property (except a lease for a temporary period not to exceed three years and except for leases between the Issuer and a Restricted Subsidiary or between Restricted Subsidiaries) which has been or is to be sold or transferred by the Issuer or such Restricted Subsidiary to such Person (herein referred to as a “Sale and Lease-Back Transaction”) unless, after giving effect thereto, the aggregate amount of all Attributable Debt with respect to all such Sale and Lease-Back Transactions plus all Debt of the Issuer or any of its Restricted Subsidiaries incurred, assumed or guaranteed and secured by a mortgage or mortgages (with the exception of Debt secured by a mortgage or mortgages on property that the Issuer or a Restricted Subsidiary would be entitled to incur, assume or guarantee without equally and ratably securing the Securities pursuant to Section 3.09(a)) does not exceed 15% of Consolidated Net Tangible Assets. This Section 3.10 shall not apply to any Sale and Lease-Back Transaction if:
(i) the Issuer or such Restricted Subsidiary would be entitled to incur, assume or guarantee Debt secured by a mortgage or mortgages on the Principal Property to be leased without equally and ratably securing the Securities pursuant to Section 3.09(a); or
(ii) the Issuer within the 12 months preceding the sale or transfer or the 12 months following the sale or transfer, regardless of whether such sale or transfer may have been made by the Issuer or by any of its Restricted Subsidiaries, applies, in the case of the sale or transfer for cash, an amount equal to the net proceeds thereof and, in the case of a sale or transfer otherwise than for cash, an amount equal to the fair value of the Principal Property so leased at the time of entering into such arrangement (as determined by the Board of Directors of the Issuer), (x) to the retirement (other than any retirement of Debt owed to the Issuer or any of its Restricted Subsidiaries or any retirement of Debt subordinated to the Securities) of indebtedness for money borrowed, incurred or assumed by the Issuer or any Restricted Subsidiary which by its terms matures at, or is extendible or renewable at the option of the obligor to, a date more than 12 months after the date of incurring, assuming or guaranteeing such Debt or (y) to investment in any Principal Property or Principal Properties.
(b) The Trustee, subject to Sections 5.01 and 5.02, shall receive an Opinion of Counsel as conclusive evidence that any transaction complies with the provisions of this Section 3.09. The foregoing is not intended to limit the generality of Section 5.02(c).
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Section 3.11. Reports by the Issuer. The Issuer covenants to file with the Trustee, within 15 days after the Issuer is required to file the same with the Commission, copies of the annual reports and of the information, documents, and other reports which the Issuer may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act.
Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such reports shall not constitute actual or constructive knowledge or notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).
Section 3.12. Reports by the Trustee. The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.
Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than July 15 in each calendar year following the date hereof, so long as any Securities are Outstanding hereunder, and shall be dated as of a date convenient to the Trustee no more than 60 nor less than 45 days thereto.
A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Issuer. The Issuer will notify the Trustee when any Securities are listed on any stock exchange.
Article
4
Remedies Of The Trustee And Securityholders On Event Of Default
Section 4.01. Event of Default Defined; Acceleration of Maturity; Waiver of Default. “Event of Default” with respect to Securities of any series wherever used herein, means each one of the following events which shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest upon any of the Securities of such series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or
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(b) default in the payment of all or any part of the principal on any of the Securities of such series as and when the same shall become due and payable either at maturity, upon redemption, by declaration or otherwise; or
(c) default in the performance or breach of any covenant or warranty of the Issuer in respect of the Securities of such series (other than a covenant or warranty in respect of the Securities of such series a default in whose performance or whose breach is elsewhere in this Section 4.01 specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of all series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or
(d) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part of the property of the Issuer or (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) ordering the winding up or liquidation of the Issuer’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or
(e) the Issuer shall institute proceedings to be adjudicated a bankrupt or insolvent, or the Issuer shall consent to the institution of bankruptcy or insolvency proceedings against itself or (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) the passing of a resolution that the Issuer be wound up or the filing of a petition or answer or consent seeking reorganization or relief under any applicable bankruptcy, insolvency or similar law of the United States of America or the United Kingdom, or the consent by the Issuer to the filing of such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Issuer’s property, or make any general assignment for the benefit of creditors; or
(f) (i) any indebtedness for borrowed money of the Issuer or any of its Subsidiaries is not paid when due or within any originally applicable grace period or (ii) any such indebtedness for borrowed money of the Issuer or any of its Subsidiaries becoming due and payable prior to its stated maturity by reason of an Event of Default; provided that no cross-default will occur if (x) the indebtedness is of any Person acquired by the Issuer or one of its Subsidiaries which is incurred under the arrangements in existence at the date of acquisition and the Event of Default in respect thereof is no longer continuing one month after the acquisition or (y) the amount of indebtedness referred to in clauses (i) and/or (ii) above
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individually or in the aggregate is less than $50,000,000 (or its equivalent in any other currency or currencies); or
(g) any other Event of Default provided in the supplemental indenture or resolution of the Board of Directors of the Issuer under which such series of Securities is issued or in the form of Security for such series.
If an Event of Default described in clauses (a), (b), (c) or (f) (if the Event of Default under clause (c) is with respect to less than all series of Securities then Outstanding) or (g) above occurs and is continuing with respect to a series of Securities, then, and in each and every such case, unless the principal of all of the Securities of such series shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding hereunder (each such series voting as a separate class) by notice in writing to the Issuer (and to the Trustee if given by Securityholders), may declare the entire principal (or, if the Securities of such series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) of all Securities of such series and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If an Event of Default described in clause (c) (if the Event of Default under clause (c), is with respect to all series of Securities then Outstanding), (d) or (e) occurs and is continuing, then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities then Outstanding hereunder (treated as one class), by notice in writing to the Issuer (and to the Trustee if given by Securityholders), may declare the entire principal (or, if any Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of all the Securities then Outstanding and interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that if, at any time after the principal (or, if the Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of the Securities of any series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of such series (or of all the Securities, as the case may be) and the principal of any and all Securities of such series (or of all the Securities, as the case may be) which shall have become due otherwise than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the same rate as the rate of interest or Yield to
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Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series (or at the respective rates of interest or Yields to Maturity of all the Securities, as the case may be) to the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of negligence or bad faith, and if any and all Events of Default under the Indenture, other than the non-payment of the principal of Securities which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein, then and in every such case the Holders of a majority in aggregate principal amount of all the Securities of such series, each series voting as a separate class (or of all the Securities, as the case may be, voting as a single class), then Outstanding, by written notice to the Issuer and to the Trustee, may waive all defaults with respect to such series (or with respect to all the Securities, as the case may be) and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.
Section 4.02. Collection of Indebtedness by Trustee; Trustee May Prove Debt. The Issuer covenants that (a) in case default shall be made in the payment of any installment of interest on any of the Securities of any series when such interest shall have become due and payable, and such default shall have continued for a period of 30 days or (b) in case default shall be made in the payment of all or any part of the principal of any of the Securities of any series when the same shall have become due and payable, whether upon maturity of the Securities of such series or upon any redemption or by declaration or otherwise, then upon demand of the Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of the Securities of such series the whole amount that then shall have become due and payable on all Securities of such series for principal or interest, as the case may be (with interest to the date of such payment upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series); and in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable
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compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and any expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the principal of and interest on the Securities of any series to the Holders, whether or not the principal of and interest on the Securities of such series shall be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against the Issuer or other obligor upon such Securities and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Securities, wherever situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or any other obligor upon the Securities under any applicable bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or such other obligor on the property of the Issuer or such other obligor, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer or such other obligor, the Trustee, irrespective of whether the principal of any Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 4.02 shall be entitled and empowered, by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of principal and interest (or, if the Securities of any series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) owing and unpaid in respect of the Securities of any series, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer, or such other obligor,
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(b) unless prohibited by applicable law and regulations, to vote on behalf of the Holders of the Securities of any series in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver, or liquidator, custodian or other similar official is hereby authorized by each of the Securityholders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith and all other amounts due to the Trustee or any predecessor Trustee pursuant to Section 5.06.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture, or under any of the Securities, may be enforced by the Trustee without the possession of any of the Securities or the production thereof on any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Securities in respect of which such action was taken.
In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the Holders of the Securities in respect of which such action was taken, and it shall not be necessary to make any Holders of such Securities parties to any such proceedings.
Section 4.03. Application of Proceeds. Any moneys collected by the Trustee pursuant to this Article 4 or, after an Event of Default, any money or other property distributable in respect of the Issuer’s obligations under this
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Indenture in respect of any series of Securities shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys or property on account of principal or interest, upon presentation of the several Securities in respect of which moneys have been collected and stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities of like series if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due to the Trustee (including each predecessor trustee) under Section 5.06;
SECOND: In case the principal of the Securities of such series in respect of which moneys or other property has been collected shall not have become and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such series in respect of which moneys or other property has been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal and interest, with interest upon the overdue principal, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series; and in case such moneys or other property shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal and interest or yield to maturity, without preference or priority of principal over interest or yield to maturity, or of interest or Yield to Maturity over principal, or of any installment of interest over any other installment of interest, or of any Security of such series over any other Security of such series, ratably to the aggregate of such principal and accrued and unpaid interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the Issuer or any other person lawfully entitled thereto.
Section 4.04. Suits for Enforcement. In case an Event of Default has occurred, has not been waived and is continuing, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy
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or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Section 4.05. Restoration of Rights on Abandonment of Proceedings. In case the Trustee or any Holder shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee or such Holder, then and in every such case the Issuer, the Trustee and such Holder shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders shall continue as though no such proceedings had been taken.
Section 4.06. Limitations on suits by Securityholders. No Holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of default and of the continuance thereof, as hereinbefore provided, and unless also the Holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action or proceedings in its own name as trustee hereunder and shall have offered to the Trustee such indemnity and/or security reasonably satisfactory to the Trustee as it may require against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity and/or security shall have failed to institute any such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 4.09; it being understood and intended, and being expressly covenanted by the taker and Holder of every Security with every other taker and Holder and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities of the applicable series. For the protection and enforcement of the provisions of this Section 4.06, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.
Section 4.07. Unconditional Right of Securityholders to Institute Certain Suits. Notwithstanding any other provision in this Indenture and any provision of any Security, the right of any Holder of any Security to receive payment of the principal of and interest, if any, on such Security on or after the respective due
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dates expressed in such Security, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
Section 4.08. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default. Except as provided in Section 4.06 no right or remedy herein conferred upon or reserved to the Trustee or to the Securityholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Securityholder to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and, subject to Section 4.06 every power and remedy given by this Indenture or by law to the Trustee or to the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.
Section 4.09. Control by Securityholders. The Holders of a majority in aggregate principal amount of the Securities of each series affected (with each series voting as a separate class) at the time Outstanding shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Securities of such series by this Indenture; provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and provided further that (subject to the provisions of Section 5.01) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors, the executive committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability or if the Trustee in good faith shall so determine that the actions or forebearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities of all series so affected not joining in the giving of said direction, it being understood that (subject to Section 5.01) the Trustee shall have no duty to ascertain whether or not such actions or forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such direction or directions by Securityholders.
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Section 4.10. Waiver of Past Defaults. Prior to the declaration of the acceleration of the maturity of the Securities of any series as provided in Section 4.01, the Holders of a majority in aggregate principal amount of the Securities of such series at the time Outstanding may on behalf of the Holders of all the Securities of such series waive any past default or Event of Default described in clause (g) of Section 4.01, or, in the case of an event specified in clause (c) of Section 4.01 (if the Event of Default under clause (c) relates to less than all series of Securities then Outstanding), the Holders of a majority in aggregate principal amount of the Securities of each series then Outstanding affected thereby (each series voting as a separate class) may waive any such default or Event of Default, or, in the case of an event specified in clause (c) (if the Event of Default under clause (c) relates to all series of Securities then Outstanding), (d) or (e) of Section 4.01 the Holders of Securities of a majority in principal amount of all the Securities then Outstanding (voting as one class) may waive any such default or Event of Default, and its consequences, except a default in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Security affected. In the case of any such waiver, the Issuer, the Trustee and the Holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively, and such default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.
Section 4.11. Trustee to Give Notice of Default, but May Withhold in Certain Circumstances. The Trustee shall give to the Securityholders of any series, as the names and addresses of such Holders appear on the registry books, notice by mail of all defaults known to the Trustee which have occurred with respect to such series, such notice to be transmitted within 90 days after the occurrence thereof, unless such defaults shall have been cured before the giving of such notice (the term “default” or “defaults” for the purposes of this Section 4.11 being hereby defined to mean any event or condition which is, or with notice or lapse of time or both would become, an Event of Default); provided that, except in the case of default in the payment of the principal of or interest on any of the Securities of such series, or in the payment of any sinking or purchase fund installment with respect to the Securities of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or trustees and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders of such series.
Section 4.12. Right of Court to Require Filing of Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Security by his or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under
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this Indenture or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 4.12 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the Securities of such series, or, in the case of any suit relating to or arising under Section 4.01(c) (if the suit relates to Securities of more than one but less than all series), 10% in aggregate principal amount of Securities Outstanding affected thereby, or in the case of any suit relating to or arising under clauses (c) (if the suit relates to all the Securities then Outstanding), (d) or (e) of Section 4.01 10% in aggregate principal amount of all Securities Outstanding, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of or interest, if any, on any Security on or after the due date expressed in such Security.
Article
5
Concerning The Trustee.
Section 5.01. Duties and Responsibilities of the Trustee; During Default; Prior to Default.
(a) Prior to the occurrence of an Event of Default with respect to the Securities of any series and after the curing or waiving of all such Events of Default with respect to such series which may have occurred:
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such statements, certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts, statements, opinions or conclusions stated therein).
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(b) In case an Event of Default with respect to the Securities of a series has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture with respect to such series, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(i) this Subsection (c) shall not be construed to limit the effect of Subsections (a) and (d) of this Section 5.01;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders pursuant to Section 4.09 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture.
(d) None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there shall be reasonable ground for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 5.01.
(f) The provisions of this Section 5.01 are in furtherance of and subject to Sections 315 and 316 of the Trust Indenture Act.
Section 5.02. Certain Rights of the Trustee. Subject to the provisions of Section 5.01:
(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, Officers’ Certificate or any other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, security, other evidence of indebtedness or other
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paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officers’ Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors of the Issuer may be evidenced to the Trustee by a Board Resolution;
(c) the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in reliance thereon;
(d) the Trustee shall be under no obligation to exercise any of the rights, trusts or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee security and/or indemnity satisfactory to the Trustee, against the costs, expenses and liabilities which might be incurred by it in compliance with such request, order or direction;
(e) the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture;
(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, note, coupon, security, or other paper or document unless requested in writing so to do by the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected then Outstanding; provided that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable security and/or indemnity against such expenses or liabilities as a condition to proceeding; the reasonable expenses of every such investigation shall be paid by the Issuer or, if paid by the Trustee or any predecessor trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder.
(h) the Trustee shall not be deemed to have notice or be charged with knowledge of any default or Event of Default unless written notice of such default
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or Event of Default from the Issuer or any Holder of a Security is received by a Responsible Officer of the Trustee at the Trustee Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture;
(i) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder;
(j) the Trustee may request that the Issuer deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded;
(k) anything in this Indenture notwithstanding, in no event shall the Trustee be liable for special, indirect, punitive or consequential or other similar loss or damage of any kind whatsoever (including but not limited to loss of profit), even if the Trustee has been advised as to the likelihood of such loss or damage and regardless of the form of action;
(l) the Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its control, including, without limitation, any provision of any law or regulation or any act of any governmental authority, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority and governmental action;
(m) no provision of this Indenture shall be deemed to impose any duty or obligation on the Trustee to perform any act or acts, receive or obtain any interest in property or exercise any interest in property, or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, to receive or obtain any such interest in property or to exercise any such right, power, duty or obligation; and no permissive or discretionary power or authority available to the Trustee shall be construed to be a duty;
(n) Notwithstanding any other provision of this Agreement, the Trustee shall be entitled to make a deduction or withholding from any payment which it makes under this Indenture for or on account of any present or future taxes, duties or charges if and to the extent so required by any applicable law and any current or future regulations or agreements thereunder or official interpretations thereof or
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any law implementing an intergovernmental approach thereto or by virtue of the relevant holder failing to satisfy any certification or other requirements in respect of the Securities, in which event the Trustee shall make such payment after such withholding or deduction has been made and shall account to the relevant authorities for the amount so withheld or deducted and shall have no obligation to gross up any payment hereunder or pay any additional amount as a result of such withholding tax.
The
Issuer hereby covenants with the Trustee that it will provide the Trustee with sufficient information so as to enable the Trustee to
determine whether or not the Trustee is obliged, in respect of any payments to be made by it pursuant to this Indenture, to make
any withholding or deduction pursuant to an agreement described in Section 1471(b) of the U.S. Internal Revenue Code of 1986,
as amended (the “Code”) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code and any regulations,
or agreements thereunder or official interpretations thereof or any intergovernmental agreement between the United States of America
and another jurisdiction facilitating the implementation thereof (or any law implementing such an intergovernmental agreement);
and
(o) the permissive rights of the Trustee enumerated herein shall not be construed as duties.
Section 5.03. Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof. The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Issuer of any of the Securities or of the proceeds thereof. The Trustee shall not be responsible to make any calculation with respect to any matter under this Indenture. The Trustee shall have no duty to monitor or investigate the Issuers’ compliance with or the breach of, or cause to be performed or observed, any representation, warranty, or covenant, or agreement of any Person, other than the Trustee, made in this Indenture.
Section 5.04. Trustee and Agents May Hold Securities; Collections, Etc. The Trustee or any agent of the Issuer, or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not the Trustee or such agent and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it would have if it were not the Trustee or such agent.
Section 5.05. Moneys Held by Trustee. Subject to the provisions of Sections 9.04 and 10.04 hereof, all moneys received by the Trustee or any paying agent shall, until used or applied as herein provided, be held in trust for the
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purposes for which they were received, but need not be segregated from other funds except to the extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall be under any liability for interest on any moneys received by it hereunder. If and when the Trustee shall be or become a creditor of the Issuer (or any other obligor on the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Issuer (or any such other obligor).
Section 5.06. Compensation and Indemnification of Trustee and its Prior Claim. The Issuer covenants and agrees:
(a) to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(b) to pay or reimburse the Trustee and each predecessor Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and other Persons not regularly in its employ) except to the extent any such expense, disbursement or advance may arise from its negligence or bad faith; and
(c) to indemnify the Trustee and each predecessor Trustee for, and to hold it harmless against, any loss, liability, damage, claim or expense, including fees and expenses of counsel, including taxes (other than taxes based upon, measured by or determined by the income of the Trustee), arising out of or in connection with the acceptance or administration of this Indenture or the trust or trusts hereunder and the performance of its duties hereunder, including the costs and expenses of defending itself against or investigating any claim (whether asserted by the Issuer, or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, or in connection with enforcing the provisions of this Section 5.06, except to the extent such loss, liability, damage, claim or expense is due to the negligence or willful misconduct of the Trustee or such predecessor Trustee.
The obligations of the Issuer under this Section 5.06 to compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the resignation or removal of the Trustee, the satisfaction and discharge of this Indenture and the termination for any reason of this Indenture.
As security for the performance of the obligations of the Issuer under this Section 5.06 the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for
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the benefit of the Holders of particular Securities, and the Securities are hereby subordinated to such senior claim.
In addition to, but without prejudice to its other rights under this Indenture, when the Trustee incurs any expenses or renders any services in connection with an Event of Default specified in Section 4.01(d) or 4.01(e), such expenses (including the reasonable charges and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under the United States Bankruptcy Code (Title 11 of the United States Code) or any federal or state bankruptcy, insolvency or other similar law.
“Trustee” for purposes of this Section 5.06 shall include any predecessor Trustee; provided, however, that the negligence, willful misconduct or bad faith of any Trustee hereunder shall not affect the rights of any other Trustee hereunder.
Section 5.07. Right of Trustee to Rely on Officers’ Certificate, Etc. Subject to Sections 5.01 and 5.02, whenever in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate delivered to the Trustee, and such certificate, in the absence of bad faith on the part of the Trustee, shall be a full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof.
Section 5.08. Persons Eligible for Appointment as Trustee. The Trustee for each series of Securities hereunder shall at all times be a Person organized and doing business under the laws of the United States of America or of any State thereof or the District of Columbia having a combined capital and surplus of at least $50,000,000, and which is eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of a Federal, State or District of Columbia supervising or examining authority, then for the purposes of this Section 5.08, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 5.08, the Trustee shall resign immediately in the manner and with the effect specified in Section 5.09.
The Trustee shall comply with Section 310(b) of the Trust Indenture Act; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the Trust Indenture Act any indenture or indentures under which other securities or certificates of interest or participation in other securities of the
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Issuer are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are met.
Section 5.09. Resignation and Removal; Appointment of Successor Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign with respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and by mailing notice thereof by first class mail to Holders of the applicable series of Securities at their last addresses as they shall appear on the Security Register. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees with respect to the applicable series by written instrument in duplicate, executed by authority of the Board of Directors of the Issuer, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor trustee shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for at least six months may, subject to the provisions of Section 4.11, on behalf of himself or herself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act with respect to any series of Securities after written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act and shall fail to resign after written request therefor by the Issuer or by any Securityholder;
(iii) the Trustee shall become incapable of acting with respect to any series of Securities, or shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; or
(iv) the Trustee shall fail to perform its obligations to the Issuer under the Indenture in any material respect;
then, in any such case, the Issuer may remove the Trustee with respect to any or all series of Securities and appoint a successor trustee for such series by written
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instrument, in duplicate, executed by order of the Board of Directors of the Issuer, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, other than in the case of paragraph (b)(iv) above and subject to Section 315(e) of the Trust Indenture Act, any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for at least six months may on behalf of himself or herself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee with respect to such series. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the Securities of each series at the time Outstanding may at any time remove the Trustee with respect to Securities of such series and appoint a successor trustee with respect to the Securities of such series by delivering to the Trustee so removed, to the successor trustee so appointed and to the Issuer the evidence provided for in Section 6.01 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee with respect to any series and any appointment of a successor trustee with respect to such series pursuant to any of the provisions of this Section 5.09(b) shall become effective upon acceptance of appointment by the successor trustee as provided in Section 5.10.
Section 5.10. Acceptance of Appointment by Successor Trustee. Any successor trustee appointed as provided in Section 5.09 shall execute and deliver to the Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee with respect to all or any applicable series shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with respect to such series of its predecessor hereunder, with like effect as if originally named as trustee for such series hereunder; but, nevertheless, on the written request of the Issuer or of the successor trustee, upon payment of any amounts due to it pursuant to Section 5.06, the trustee ceasing to act shall, subject to Section 9.04 pay over to the successor trustee all moneys at the time held by it hereunder and shall execute and deliver an instrument transferring to such successor trustee all such rights, powers, duties and obligations. Upon request of any such successor trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a prior lien upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 5.06.
If a successor trustee is appointed with respect to the Securities of one or more (but not all) series, the Issuer, the predecessor trustee and each successor
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trustee with respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor trustee with respect to the Securities of any series as to which the predecessor trustee is not retiring shall continue to be vested in the predecessor trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust or trusts under separate indentures.
No successor trustee with respect to any series of Securities shall accept appointment as provided in this Section 5.10 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 5.08.
Upon acceptance of appointment by any successor trustee as provided in this Section 5.10, the Issuer shall mail notice thereof by first-class mail to the Holders of Securities of any series for which such successor trustee is acting as trustee at their last addresses as they shall appear in the Security Register. If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with the notice called for by Section 5.09. If the Issuer fails to mail such notice within 10 days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Issuer.
Section 5.11. Merger, Conversion, Consolidation or Succession to Business of Trustee. Any Person into which the Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be eligible under the provisions of Section 5.08 without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Securities of any series shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee and deliver such Securities so authenticated; and, in case at that time any of the Securities of any series shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificate shall have the full force which it is, anywhere in the Securities of such series or in this Indenture, provided that the certificate of the Trustee shall have; provided, that the right to adopt the
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certificate of authentication of any predecessor Trustee or to authenticate Securities of any series in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.
Article
6
Concerning The Securityholders
Section 6.01. Evidence of Action Taken by Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by a specified percentage in principal amount of the Securityholders of any or all series of the Securities may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such specified percentage of Securityholders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Sections 5.01 and 5.02) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Article 6.
Section 6.02. Proof of Execution of Instruments and of Holding of Securities; Record Date. Subject to Sections 5.01 and 5.02, the execution of any instrument by a Securityholder or his or her agent or proxy may be proved in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The holding of Securities shall be proved by the Security Register or by a certificate of the registrar thereof. The Issuer may, but shall not be obligated to, set a record date for purposes of determining the identity of Securityholders of any series entitled to vote or consent to any action referred to in Section 6.01, which record date may be set at any time or from time to time by notice to the Trustee. If a record date is fixed, then notwithstanding Section 6.01 and Section 6.05, those persons who were Securityholders at such record date (or their duly designated proxies), and only those persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such persons continue to be Securityholders after such record date. No such consent shall be valid or effective for more than 90 days after such record date.
Section 6.03. Holders to be Treated as Owners. The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem and treat the person in whose name any Security shall be registered upon the Security Register for such series as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the principal of and, subject to the provisions of this Indenture, interest on such Security and for all other purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary. All such payments
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so made to any such person, or upon his or her order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Security.
Section 6.04. Securities Owned by Issuer Deemed Not Outstanding. In determining whether the Holders of the requisite aggregate principal amount of Outstanding Securities of any or all series have concurred in any request, demand, authorization, direction, notice, consent, waiver or other action by Securityholders under this Indenture, Securities which are owned by the Issuer or any other obligor on the Securities with respect to which such determination is being made or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities with respect to which such determination is being made shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such action only Securities which a Responsible Officer the Trustee knows are so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities. In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee in accordance with such advice. Upon request of the Trustee, the Issuer shall promptly furnish to the Trustee Officers’ Certificates listing and identifying all Securities, if any, known by the Issuer to be owned or held by or for the account of any of the above-described persons; and, subject to Sections 5.01 and 5.02, the Trustee shall be entitled to accept such Officers’ Certificates as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are Outstanding for the purpose of any such determination.
Section 6.05. Right of Revocation of Action Taken. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 6.01, of the taking of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action, any Holder of a Security the serial number or other distinguishing symbol of which is shown by the evidence to be included among the serial numbers or other distinguishing symbols of the Securities the Holders of which have consented to such action may, by filing written notice at the Trustee Corporate Trust Office and upon proof of holding as provided in this Article 6, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the Holder of any Security shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Security and of any Securities issued in exchange or substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in
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regard thereto is made upon any such Security. Any action taken by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding upon the Issuer, the Trustee and the Holders of all the Securities affected by such action.
Article
7
Supplemental Indentures
Section 7.01. Supplemental Indentures Without Consent of Securityholders. The Issuer when authorized by a resolution of its Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as in force on the date of the execution thereof) for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another corporation to the Issuer, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Issuer, as the case may be, pursuant to Article 8;
(c) to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 5.10;
(d) to add to the covenants of the Issuer such further covenants, restrictions, conditions or provisions (and if such further covenants, restrictions, conditions or provisions are to be for the benefit of less than all series of Securities, stating that such covenants, restrictions, conditions or provisions are expressly being included solely for the benefit of such series) as the Board of Directors of the Issuer and the Trustee shall consider to be for the protection of the Holders of Securities, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of
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Default or may limit the right of the Holders of a majority in aggregate principal amount of the Securities of such series to waive such an Event of Default;
(e) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture; or to make such other provisions in regard to matters or questions arising under this Indenture or under any supplemental indenture as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests of the Holders of the Securities in any material respect;
(f) to establish the form or terms of Securities of any series as permitted by Section 2.01 and Section 2.07;
(g) to add or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in uncertificated form, provided that any such action shall not adversely affect the interests of the Holders of Securities of any series in any material respect; and
(h) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no Security Outstanding.
The Trustee is hereby authorized to join with the Issuer in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 7.01 may be executed without the consent of the Holders of any of the Securities at the time outstanding, notwithstanding any of the provisions of Section 7.02.
Promptly after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to the provisions of this Section 7.01, the Issuer shall mail a notice thereof by first class mail to the Holders of Securities of each series affected thereby at their addresses as they shall appear on the Security Register setting forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.
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Section 7.02. Supplemental Indentures with Consent of Securityholders. With the consent (evidenced as provided in Article 6) of the Holders of not less than majority in aggregate principal amount of the Securities at the time Outstanding of all series affected by such supplemental indenture (each affected series voting as a separate class), the Issuer when authorized by a resolution of its Board of Directors, and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture of 1939 as in force at the date of execution thereof) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Securities of each such series; provided, that no such supplemental indenture shall (a) extend the final maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest, if any, thereon, or reduce any amount payable on redemption thereof or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof pursuant to Section 4.01 or the amount thereof provable in bankruptcy pursuant to Section 4.02, or impair or affect the right of any Securityholder to institute suit for the payment thereof or, if the Securities provide therefor, any right of repayment at the option of the Securityholder without the consent of the Holder of each Security so affected, (b) reduce the aforesaid percentage of Securities of any series, the consent of the Holders of which is required for any such supplemental indenture, without the consent of the Holders of each Security so affected or (c) change in any manner adverse to the Holders of the Securities the terms and conditions of the obligations of the Issuer in respect of the due and punctual payment of the principal thereof and interest thereon or any sinking fund payments provided in respect thereof, without the consent of the Holder of each Security so affected.
A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
Upon the request of the Issuer accompanied by a copy of a resolution of the Board of Directors certified by the secretary or an assistant secretary of the Issuer authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders as aforesaid and other documents, if any, required by Section 6.01 the Trustee shall join with the Issuer in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.
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It shall not be necessary for the consent of the Securityholders under this Section 7.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to the provisions of this Section 7.02, the Issuer shall mail a notice thereof by first class mail to the Holders of Securities of each series affected thereby at their addresses as they shall appear on the Security Register setting forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.
Section 7.03. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of each series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 7.04. Documents to be Given to Trustee. The Trustee, subject to the provisions of Sections 5.01 and 5.02, shall receive Officers’ Certificates and Opinions of Counsel, as appropriate, as conclusive evidence that any supplemental indenture executed pursuant to this Article 7 is authorized and permitted by this Indenture and complies with the applicable provisions of this Indenture and an Opinion of Counsel to the effect that such supplemental indenture is enforceable against the Issuer in accordance with its terms, subject to then customary exceptions.
Section 7.05. Notation on Securities in Respect of Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article 7 may bear a notation in form approved by the Trustee for such series as to any matter provided for by such supplemental indenture. If the Issuer or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Boards of Directors of the Issuer, to any modification of this Indenture contained in any such supplemental indenture may be prepared and executed by the Issuer, authenticated by the Trustee and delivered in exchange for the Securities of such series then Outstanding.
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Section 7.06. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article 7 shall conform to the requirements of the Trust Indenture Act.
Article
8
Consolidation, Merger, Sale Or Conveyance
Section 8.01. Issuer May Consolidate, Etc., on Certain Terms. Nothing contained in this Indenture or in any of the Securities shall prevent any amalgamation, reconstruction, consolidation or merger of the Issuer with or into any other corporation or corporations (whether or not affiliated with the Issuer), or successive amalgamations, reconstructions, consolidations or mergers in which the Issuer or its successor or successors shall be a party or parties, or shall prevent any sale or conveyance of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole, to any other corporation (whether or not affiliated with the Issuer) authorized to acquire and operate the same; provided, however, that the corporation formed by such amalgamation, restructuring or consolidation, or into which the Issuer shall merge, or which shall acquire such property is organized and validly existing under the laws of the United States of America, the United Kingdom or another jurisdiction that is a member country of the Organization for Economic Cooperation and Development (or any successor thereto) and provided further and the Issuer hereby covenants and agrees that, upon any such amalgamation, reconstruction, consolidation, merger, sale or conveyance, (i) the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by the Issuer (including, if applicable, submission to jurisdiction), shall be expressly assumed by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by the corporation formed by such amalgamation, reconstruction or consolidation, or into which the Issuer shall have been merged, or by the corporation which shall have acquired such property, and (ii) if the corporation formed by such amalgamation, reconstruction or consolidation, or into which the Issuer shall have been merged, or which shall have acquired such property, is incorporated under the laws of any jurisdiction other than the United Kingdom or any State of the United States of America or the District of Columbia, such corporation shall, in such supplemental indenture, agree that any amounts to be paid by the Issuer under the Securities shall be paid without deduction or withholding for any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of such jurisdiction or any political subdivision or taxing authority thereof or therein or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by such jurisdiction or any such subdivision or authority, such corporation will (subject to what follows) pay such additional amounts in respect of principal, interest, if any, and sinking fund payments as may be necessary in order that the net amounts received by the Holders of the
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Securities or the Trustee under this Indenture, as the case may be, pursuant to the Securities, after such deduction or withholding, shall equal the respective amounts of principal, interest, if any, and sinking fund payments, as specified in the Securities, to which such Holders or the Trustee would be entitled had such deduction or withholding not been so imposed, assessed, levied or collected; provided, however, that the foregoing shall not apply to (i) 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, such jurisdiction or such political subdivision or otherwise having or having had some connection with such jurisdiction or such political subdivision 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, (ii) 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, (iii) any estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge, (iv) 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, (v) 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 such jurisdiction or any political subdivision thereof of the Holder or beneficial owner of the relevant Security, if compliance is required by treaty or by statute, regulation or administrative practice of such jurisdiction or such political subdivision 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), (vi) 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 (vii) any present or future tax, levy, impost or other governmental charge imposed by the United States of America or any political subdivision or taxing authority thereof or therein, (viii) 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
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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 (ix) any combination of items (i) through (viii) above.
Section 8.02. Securities to be Secured in Certain Events. If, upon any such amalgamation, reconstruction, consolidation or merger of the Issuer with or into any other corporation, or upon any sale or conveyance of all or substantially all of the property of the Issuer to any other corporation, any Principal Property of the Issuer or of any of its Restricted Subsidiaries or any shares of stock or indebtedness of any such Restricted Subsidiary would thereupon become subject to any mortgage, pledge or lien which would be prohibited by Section 3.08, the Issuer, prior to such amalgamation, reconstruction, consolidation, merger, sale or conveyance, will secure the Securities, equally and ratably with any other obligations of the Issuer then entitled thereto, by a direct lien on all such property equally and ratably with all such mortgages, pledges or liens.
Section 8.03. Successor Corporation to be Substituted for Issuer. In case of any such amalgamation, reconstruction, consolidation, merger, sale or conveyance (other than by way of a temporary lease in the ordinary course of business) and following such an assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Issuer, with the same effect as if it had been named herein and the Issuer shall be relieved of all obligations and covenants under this Indenture and the Securities. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of the Issuer, all of the Securities issuable hereunder which theretofore shall not have been signed by the Issuer and delivered to the Trustee. All the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof.
In case of any such amalgamation, reconstruction, consolidation, merger, sale or conveyance such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.
Section 8.04. Opinion of Counsel to Trustee. The Trustee, subject to the provisions of Sections 5.01 and 5.02, shall receive an Officers’ Certificate and an Opinion of Counsel, prepared in accordance with Section 10.05, as conclusive evidence that any such consolidation, merger, sale, lease or conveyance, and any such assumption, and any such liquidation or dissolution and such supplemental indenture, complies with this Article 8 and that all conditions precedent herein provided for relating to such transaction have been complied with.
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Article
9
Satisfaction And Discharge Of Indenture; Unclaimed Moneys
Section 9.01. Satisfaction and Discharge of Indenture. If at any time (a) the Issuer shall have paid or caused to be paid the principal of and interest, if any, on all the Securities of any series Outstanding hereunder as and when the same shall have become due and payable, or (b) the Issuer shall have delivered to the Trustee for cancellation all Outstanding Securities of any series theretofore authenticated or (c)(i) all the Securities of such series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and (ii) the Issuer shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee or any paying agent to the Issuer in accordance with Section 9.05) or Government Obligations, maturing as to principal and interest in such amounts and at such times as will insure the availability of cash, sufficient, without reinvestment, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Outstanding Securities of such series not theretofore delivered to the Trustee for cancellation, including principal and interest, if any, due or to become due on or prior to such date of maturity as the case may be, and if, in any such case, the Issuer shall also pay or cause to be paid all other sums payable hereunder by the Issuer with respect to Securities of such series, then this Indenture shall cease to be of further effect with respect to Securities of such series (except as to (i) rights of registration of transfer and exchange of Securities of such series, and the Issuer’s right of optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities, (iii) rights of Holders to receive payments of principal thereof and interest, if any, thereon, upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the Holders to receive mandatory sinking fund payments, if any, from funds deposited with the Trustee, (iv) the rights, obligations, immunities and indemnities of the Trustee hereunder and (v) the rights of the Securityholders of such series as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them), and the Trustee, on demand of the Issuer accompanied by an Officers’ Certificate and an Opinion of Counsel and at the cost and expense of the Issuer, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture with respect to such series; provided, that the rights of Holders of the Securities to receive amounts in respect of principal of and interest, if any, on the Securities held by them shall not be delayed longer than required by then-applicable mandatory rules or policies of any securities exchange upon which the Securities are listed. The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any
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services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities of such series.
Section 9.02. Application by Trustee of Funds Deposited for Payment of Securities. Subject to Sections 9.04 and 9.05, all moneys deposited with the Trustee pursuant to Section 9.01 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Issuer acting as paying agent), to the Holders of the particular Securities of such series for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest, if any; but such money need not be segregated from other funds except to the extent required by law.
Section 9.03. Defeasance upon Deposit of Moneys or Government Obligations. At the Issuer’s option, either (a) the Issuer shall be deemed to have been Discharged (as defined below) from its obligations with respect to any series of Securities on the 91st day after the applicable conditions set forth below have been satisfied or (b) the Issuer shall cease to be under any obligation to comply with any term, provision or condition set forth in Sections 3.08, 3.09, 3.10, and, insofar as such Sections require compliance with Sections 3.08, 3.09 or 3.10, Sections 8.01, 8.02 and 8.03 and non-compliance with such Sections shall not give rise to any Event of Default under Section 4.01(c), with respect to any series of Securities at any time after the applicable conditions set forth below have been satisfied:
(i) the Issuer shall have deposited or caused to be deposited irrevocably with the Trustee or its agent as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of such series money in an amount, or Government Obligations of the government in the currency of which the Securities of such series are denominated which through the payment of interest thereon and principal thereof in accordance with their terms will provide, not later than the due date of any payment, money in an amount, or a combination thereof, sufficient, without reinvestment, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge each installment of principal (including mandatory sinking fund payments) of, and interest on, the outstanding Securities of such series on the dates such installments of interest or principal are due or to and including the redemption date irrevocably designated by the Issuer pursuant to subparagraph (v) hereof;
(ii) no Event of Default or event which with notice or lapse of time would become an Event of Default under Section 4.01(d) or (e) with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit;
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(iii) in the case of the Securities of such series being discharged pursuant to clause (a) only, the Issuer shall have delivered to the Trustee either (i) an Opinion of Counsel to the effect that Holders of the Securities of such series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the exercise of the option under clause (a) above and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised, or (ii) a ruling to that effect received from or published by the United States Internal Revenue Service;
(iv) if the Issuer has deposited or caused to be deposited money or Government Obligations to pay or discharge the principal of and interest on the Outstanding Securities of a series to and including a redemption date pursuant to subparagraph (i) hereof, such redemption date shall be irrevocably designated by a Board Resolution delivered to the Trustee on or prior to the date of deposit of such money or Government Obligations, and such Board Resolution shall be accompanied by an irrevocable Company Order that the Trustee give notice of such redemption in the name and at the expense of the Issuer not less than 30 nor more than 60 days prior to such redemption date in accordance with Section 11.02; and
(v) 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.
“Discharged” means that the Issuer shall be deemed to have paid and discharged the entire indebtedness represented by, and obligations under, the Securities of such series and to have satisfied all the obligations under this Indenture relating to the Securities of such series (and the Trustee, at the expense of the Issuer, shall execute proper instruments acknowledging the same), except (A) the rights of Holders of Securities of such series to receive, from the trust fund described in clause (1) above, payment of the principal of and the interest on such Securities when such payments are due; (B) the Issuer’s obligations, as the case may be, with respect to such Securities under Sections 2.12, 2.13, 3.03 and 3.05; and (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder, including, without limitation, Section 5.06 of this Indenture.
Section 9.04. Repayment of Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to Securities of any series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such series of Securities shall, upon demand of the Issuer, be repaid to the Issuer or paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys.
Section 9.05. Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or
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any paying agent for the payment of the principal of or interest, if any, on any Security of any series and not applied but remaining unclaimed for two years after the date upon which such principal or interest shall have become due and payable, shall, upon the written request of the Issuer and unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for such series or such paying agent, and the Holder of the Security of such series shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only to the Issuer for any payment which such Holder may be entitled to collect, and all liability of the Trustee or any paying agent with respect to such moneys shall thereupon cease.
Section 9.06. Reinstatement. If the Trustee is unable to apply any money or Government Obligations in accordance with Section 9.03 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 9.03, until such time as the Trustee or Paying Agent is permitted to apply all such money or Government Obligations in accordance with Section 9.03; provided that, if the Issuer has made any payment of principal of or interest on the Securities of any series because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or Government Obligations held by the Trustee or Paying Agent.
Article
10
Miscellaneous Provisions
Section 10.01. Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual Liability. No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Security, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such, or against any past, present or future stockholder, officer or director, as such, of the Issuer or of any successor of the Issuer, either directly or through the Issuer or any successor of the Issuer, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities by the Holders thereof and as part of the consideration for the issue of the Securities. Nothing in this Section 10.01 shall be deemed to alter the obligations of the Issuer under the Securities.
Section 10.02. Provisions of Indenture for the Sole Benefit of Parties and Securityholders. Nothing in this Indenture or in the Securities, expressed or implied, shall give or be construed to give to any Person, other than the parties hereto and their successors and the Holders of the Securities, any legal or
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equitable right, remedy or claim under this Indenture or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors and of the Holders of the Securities.
Section 10.03. Successors and Assigns of Issuer Bound by Indenture. All the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the Issuer shall bind its respective successors and assigns, whether so expressed or not.
Section 10.04. Notices and Demands on Issuer, Trustee and Securityholders. Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders of Securities to or on the Issuer may be given or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until another address of the Issuer is filed by the Issuer with the Trustee) to Smith & Nephew plc, Building 5, Croxley Park, Hatters Lane, Hertfordshire WD18 8YE, England in the case of the Issuer. Any notice, direction, request or demand by the Issuer or any Securityholder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made at the Trustee Corporate Trust Office. If a notice or communication is mailed or delivered in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, except in the case of notices or communications given to the Trustee, which shall be effective only upon actual receipt by the Trustee at the Trustee Corporate Trust Office.
Where this Indenture provides for notice to Holders, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder entitled thereto, at his or her last address as it appears in the Security Register. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. For so long as the Securities of any series are represented by Global Securities, notices with respect to such series shall be delivered to the Depository.
In case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice to the Issuer and Securityholders when such notice is required to be given pursuant to any provision of this
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Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.
The Trustee shall have the right, but shall not be required, to rely upon and comply with notices, instructions, directions or other communications sent by e-mail, facsimile and other similar unsecured electronic methods by Persons believed by the Trustee to be authorized to give instructions and directions on behalf of the Issuer. The Trustee shall have no duty or obligation to verify or confirm that the Person who sent such instructions or directions is, in fact, a Person authorized to give instructions or directions on behalf of the Issuer; and the Trustee shall have no liability for any losses, liabilities, costs or expenses incurred or sustained by the Issuer as a result of such reliance upon or compliance with such notices, instructions, directions or other communications. The Issuer agrees to assume all risks arising out of the use of such electronic methods to submit notices, instructions, directions or other communications 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. The Issuer shall use all reasonable endeavors to ensure that any such notices, instructions, directions or other communications transmitted to the Trustee pursuant to this Indenture are complete and correct. Any such notices, instructions, directions or other communications shall be conclusively deemed to be valid instructions from the Issuer to the Trustee for the purposes of this Indenture.
Section 10.05. Officers’ Certificates and Opinions of Counsel; Statements to be Contained Therein. Upon any application or demand by the Issuer to the Trustee to take any action under any of the provisions of this Indenture, the Issuer shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel such action is authorized or permitted by the Indenture and that all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition, (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based, (c) a statement that, in the opinion of such person, 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 such covenant or condition has been complied with and (d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.
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Any certificate, statement or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his or her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar as it relates to factual matters, information with respect to which is in the possession of the Issuer, upon the certificate, statement or opinion of or representations by an officer or officers of the Issuer, unless such counsel knows that the certificate, statement or opinion or representations with respect to the matters upon which his or her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representations by an accountant or firm of accountants in the employ of the Issuer, unless such officer or counsel, as the case may be, knows that the certificate or opinion or representations with respect to the accounting matters upon which his or her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants filed with the Trustee shall contain a statement that such firm is independent.
Section 10.06. Payments Due on Saturdays, Sundays and Holidays. If the date of maturity of interest on or principal of the Securities of any series or the date fixed for redemption or repayment of any such Security shall not be a Business Day, then payment of interest or principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date.
Section 10.07. Conflict of any Provision of Indenture with Trust Indenture Act. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture by operation of Sections 310 to 317, inclusive, of the Trust Indenture Act (an “incorporated provision”), such incorporated provision shall control.
Section 10.08. New York Law to Govern. This Indenture and each Security shall be governed by the laws of the State of New York, and for all purposes shall be construed in accordance with the laws of such State, except as may otherwise be required by mandatory provisions of law.
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Section 10.09. Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.
The exchange of copies of this Indenture and of signature pages that are executed by manual signatures that are scanned, photocopied or faxed or by other electronic signing created on an electronic platform (such as DocuSign) or by digital signing (such as Adobe Sign) shall constitute effective execution and delivery of this Indenture for all purposes. Signatures of the parties hereto that are executed by manual signatures that are scanned, photocopied or faxed or by other electronic signing created on an electronic platform (such as DocuSign) or by digital signing (such as Adobe Sign) shall be deemed to be their original signatures for all purposes of this Indenture as to the parties hereto and may be used in lieu of the original.
Anything in this Indenture or the Securities to the contrary notwithstanding, for the purposes of the transactions contemplated by this Indenture, the Securities and any document to be signed in connection with the Indenture or the Securities (including the Securities and amendments, supplements, waivers, consents and other modifications, Officers’ Certificates, Company Orders and Opinions of Counsel and other issuance, authentication and delivery documents) or the transactions contemplated hereby may be signed by manual signatures that are scanned, photocopied or faxed or other electronic signatures created on an electronic platform (such as DocuSign) or by digital signature (such as Adobe Sign) and contract formations on electronic platforms, and the keeping of records in electronic form, are hereby authorized, and each shall be of the same legal effect, validity or enforceability as a manually executed signature in ink or the use of a paper-based recordkeeping system, as the case may be.
Section 10.10. Effect of Headings. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
Section 10.11. Submission to Jurisdiction. The Issuer agrees that any legal suit, action or proceeding arising out of or relating to the Indenture or the Securities may be instituted in any state or federal court in the State and City of New York, Borough of Manhattan, United States of America, waives to the extent it may effectively do so, any objection which it may have now or hereafter to the laying of the venue of any such suit, action or proceeding, and irrevocably submits to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding. The Issuer hereby designates Smith & Nephew Inc. as the Issuer’s authorized agent to accept and acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any such court and agrees that service of process upon said agent at its office at 150
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Minuteman Road, Andover, Massachusetts 01810, (or at such other address as such agent may designate by written notice to the Issuer and the Trustee), and written notice of said service to the Issuer, mailed or delivered to it, at Building 5, Croxley Park, Hatters Lane, Hertfordshire WD18 8YE, England, attention of the Company Secretary, (until another address of the Issuer is filed by the Issuer with the Trustee) shall be deemed in every respect effective service of process upon the Issuer in any such suit, action or proceeding and shall be taken and held to be valid personal service upon the Issuer, whether or not the Issuer shall then be doing, or at any time shall have done, business within the State of New York, and that any such service of process shall be of the same force and validity as if service were made upon it according to the laws governing the validity and requirements of such service in such state, and waives all claim of error by reason of any such service. Said designation and appointment shall be irrevocable until the Indenture shall have been satisfied and discharged in accordance with Article 9.
Section 10.12. Waiver of Jury Trial. EACH OF THE ISSUER AND THE TRUSTEE, AND EACH HOLDER OF A SECURITY BY ITS ACCEPTANCE THEREOF, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 10.13. Severability. If any provision contained in this Indenture or in any Security shall for any reason be held or deemed to be or shall, in fact, be invalid, illegal, inoperative or unenforceable in any respect, the same shall not affect any other provision or provisions of this Indenture or of such Security or render the same invalid, inoperative or unenforceable to any extent whatsoever.
Article
11
Redemption Of Securities And Sinking Funds
Section 11.01. Applicability of Article. The provisions of this Article 11 shall be applicable to the Securities of any series which are redeemable before their maturity or to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 2.07 for Securities of such series.
Section 11.02. Notice of Redemption; Partial Redemptions. Notice of redemption to the Holders of Securities of any series to be redeemed as a whole or in part at the option of the Issuer shall be given by mailing notice of such redemption by first class mail, postage prepaid, at least 10 days and not more than
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60 days prior to the date fixed for redemption to such Holders of Securities of such series at their last addresses as they shall appear upon the registry books. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Failure to give notice by mail, or any defect in the notice to the Holder of any Security of a series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify the principal amount of each Security of such series held by such Holder to be redeemed, the date fixed for redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of such Securities, that such redemption is pursuant to the mandatory or optional sinking fund, or both, if such be the case, or that such redemption is pursuant to Section 11.06(a) or Section 11.06(b) of the Indenture, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue. In case any Security of a series is to be redeemed in part only the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Security, a new Security or Securities of such series, in principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at the option of the Issuer shall be given by the Issuer or, at the Issuer’s request, by the Trustee in the name and at the expense of the Issuer.
At least one Business Day prior to the redemption date specified in the notice of redemption given as provided in this Section 11.02, the Issuer will deposit with the Trustee or with one or more paying agents (or, if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided in Section 3.05) an amount of money sufficient to redeem on the redemption date all the Securities of such series so called for redemption at the appropriate redemption price, together with accrued interest and any additional amounts due on the date fixed for redemption. If less than all the outstanding Securities of a series are to be redeemed, the Issuer will deliver to the Trustee at least 30 days prior to the date fixed for redemption (unless a shorter period shall be satisfactory to the Trustee) an Officers’ Certificate stating the aggregate principal amount of Securities to be redeemed.
If fewer than all the Securities of a series are to be redeemed, the Trustee shall select the Securities of such series to be redeemed in whole or in part by lot or by any other method the Trustee considers fair and appropriate, subject to any stock exchange requirements. Securities may be redeemed in part in principal amounts equal to the minimum authorized denomination for Securities of such
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series or any multiple thereof. The Trustee shall promptly notify the Issuer in writing of the Securities of such series selected for redemption and, in the case of any Securities of such series selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities of any series shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.
Section 11.03. Payment of Securities Called for Redemption. If notice of redemption has been given as provided above, the Securities or portions of Securities specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after said date (unless the Issuer shall default in the payment of such Securities at the redemption price, together with interest accrued, if any, to said date) interest on the Securities or portions of Securities so called for redemption shall cease to accrue and, except as provided in Sections 5.05 and 9.05, such Securities shall cease from and after the date fixed for redemption to be entitled to any benefit or security under this Indenture, and the Holders thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof and unpaid interest and any additional amounts due on the date fixed for redemption. On presentation and surrender of such Securities at a place of payment specified in said notice, said Securities or the specified portions thereof shall be paid and redeemed by the Issuer at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption; provided that any semiannual payment of interest becoming due on the date fixed for redemption shall be payable to the Holders of such Securities registered as such on the relevant record date subject to the terms and provisions of Section 2.08 hereof.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security) borne by the Security.
Upon presentation of any Security redeemed in part only, the Issuer shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Issuer, a new Security or Securities of such series, of authorized denominations, in principal amount equal to the unredeemed portion of the Security so presented.
Section 11.04. Exclusion of Certain Securities from Eligibility for Selection for Redemption. Securities shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in a written statement signed by an authorized officer of the Issuer and
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delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such written statement as directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer.
Section 11.05. Mandatory and Optional Sinking Funds. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”. The date on which a sinking fund payment is to be made is herein referred to as the “sinking fund payment date”.
In lieu of making all or any part of any mandatory sinking fund payment with respect to any series of Securities in cash, the Issuer may at its option (a) deliver to the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Issuer or receive credit for Securities of such series (not previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant to Section 2.14, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section 11.05, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the Issuer through any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund redemption price specified in such Securities.
On or before the sixtieth day next preceding each sinking fund payment date for any series, the Issuer will deliver to the Trustee a written statement (which need not contain the statements required by Section 10.05) signed by an authorized officer of the Issuer (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash and the portion to be satisfied by credit of Securities of such series, (b) stating that none of the Securities of such series has theretofore been so credited, (c) stating that no defaults in the payment of interest, if any, or Events of Default with respect to such series have occurred (which have not been waived or cured) and are continuing and (d) stating whether or not the Issuer intends to exercise its right to make an optional sinking fund payment with respect to such series and, if so, specifying the amount of such optional sinking fund payment which the Issuer intends to pay on or before the next succeeding sinking fund payment date. Any Securities of such series to be credited and required to be delivered to the Trustee in order for the Issuer to be entitled to credit therefor as aforesaid which have not theretofore been delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.14 to the Trustee with such written statement (or reasonably promptly thereafter if acceptable to the Trustee). Such written statement shall be irrevocable and upon
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its receipt by the Trustee the Issuer shall become unconditionally obligated to make all the cash payments or payments therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Issuer, on or before any such sixtieth day, to deliver such written statement and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Issuer (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof and (ii) that the Issuer will make no optional sinking fund payment with respect to such series as provided in this Section 11.05.
If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or a lesser sum if the Issuer shall so request) with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest and any additional amounts due on the date fixed for redemption. If such amount shall be $50,000 or less and the Issuer makes no such request then it shall be carried over until a sum in excess of $50,000 is available. The Trustee shall select, in the manner provided in Sections 11.02 and 11.04, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such series to absorb said cash, as nearly as may be, and shall (if requested in writing by the Issuer) inform the Issuer of the serial numbers of the Securities of such series (or portions thereof) so selected. The Trustee, in the name and at the expense of the Issuer (or the Issuer, if it shall so request the Trustee in writing) shall cause notice of redemption of the Securities of such series to be given in substantially the manner provided in Section 11.02 (and with the effect provided in Section 11.03) for the redemption of Securities of such series in part at the option of the Issuer. The amount of any sinking fund payments not so applied or allocated to the redemption of Securities of such series shall be added to the next cash sinking fund payment for such series and, together with such payment, shall be applied in accordance with the provisions of this Section 11.05. Any and all sinking fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated), which are not held for the payment or redemption of particular Securities of such series shall be applied, together with other moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such series at maturity.
At least one Business Day before each sinking fund payment date, the Issuer shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date fixed for redemption on Securities to be redeemed on the next following sinking fund payment date. The Trustee shall not redeem or cause to be redeemed any Securities of a series with sinking fund
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moneys or mail any notice of redemption of Securities for such series by operation of the sinking fund during the continuance of a default in payment of interest on such Securities or of any Event of Default except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Issuer a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Event of Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or Event of Default, be deemed to have been collected under Article 4 and held for the payment of all such Securities. In case such Event of Default shall have been waived as provided in Section 4.10 or the default cured on or before the sixtieth day preceding the sinking fund payment date in any year, such moneys shall thereafter be applied on the next succeeding sinking fund payment date in accordance with this Section to the redemption of such Securities.
Section 11.06. Optional Redemption Due to Changes in Tax Treatment. (a) Unless otherwise provided in the Securities of any series, if as the result of any change in or any amendment to the laws or any regulations or rulings thereunder of the United Kingdom or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in an application or interpretation of such laws, regulations or rulings, or any change in an application or interpretation of, or any execution of an amendment to, any treaty or treaties affecting taxation to which the United Kingdom or any political subdivision or taxing authority thereof or therein is a party, which change, amendment, application, interpretation or execution becomes effective on or after the date specified for such series pursuant to Section 2.07, it is determined by the Issuer that (i) the Issuer would be required to make additional payments in respect of principal, interest, if any, or sinking fund payments on the next succeeding date for the payment thereof or (ii) based upon an opinion of independent counsel to the Issuer, as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in, the United Kingdom or any political subdivision thereof (whether or not such action was taken or brought with respect to the Issuer), which action is taken or brought on or after the date specified for such series pursuant to Section 2.07, the circumstances described in clause (i) would exist, and the payment of such additional amounts in the case of (i) above or the imposition of such tax in the case of (i) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Issuer may, at its option, redeem such series of Securities in whole at any time (except in the case of a series having a variable rate of interest, which may be redeemed on any interest payment date) at a redemption price equal to 100 per cent of the principal amount thereof plus accrued interest and any additional amounts due on the date fixed for redemption (except in the case of Outstanding Original Issue Discount Securities which may be redeemed at the redemption price specified by the terms of each series of such Securities). Prior to any redemption of such a series of Securities pursuant to this Section 11.06(a), the Issuer shall provide the Trustee with an Opinion of Counsel
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that the conditions precedent to the right of the Issuer to redeem such Securities pursuant to this Section 11.06(a) have occurred. Such Opinion of Counsel shall be based on the laws in effect on the date of such opinion or to become effective on or before the next succeeding date for payment of principal or interest.
(b) Unless otherwise provided in the Securities of any series, if (1) there has been an amalgamation, reconstruction, consolidation, merger or other transaction concerning the Issuer permitted by Section 8.01 and (2) as the result of any change in or any amendment to the laws or any regulations or rulings thereunder of the jurisdiction in which such successor Issuer is incorporated or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in an application or interpretation of such laws, regulations or rulings, or any change in an application or interpretation of, or any execution of an amendment to, any treaty or treaties affecting taxation to which such jurisdiction or any political subdivision or taxing authority thereof or therein is a party which change, amendment, application, interpretation or execution becomes effective on or after the date of such transaction or assumption, it is determined by the successor Issuer that (i) the successor Issuer would be required to make additional payments in respect of principal or interest, if any, on the next succeeding date for payment thereof pursuant to an agreement made by such successor Issuer in a supplemental indenture in accordance with Section 8.03 or (ii) based upon an opinion of independent counsel to the successor Issuer, as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in such jurisdiction or any political subdivision thereof (whether or not such action was taken or brought with respect to the successor Issuer), which action is taken or brought on or after the date of such transaction or assumption, the circumstances described in clause (i) would exist, and, the payment of such additional amounts in the case of (i) above or the imposition of such tax in the case of (i) above cannot be avoided by the use of any reasonable measures available to the successor Issuer, the successor Issuer may, at its option, redeem such series of Securities in whole at any time (except in the case of a series having a variable rate of interest, which may be redeemed on any interest payment date) at a redemption price equal to 100 per cent of the principal amount thereof plus accrued interest and any additional amounts due on the date fixed for redemption (except in the case of Outstanding Original Issue Discount Securities which may be redeemed at the redemption price specified by the terms of each series of such Securities). Prior to any redemption of such a series of Securities pursuant to this Section 11.06(b), the successor Issuer shall provide the Trustee with an Opinion of Counsel that the conditions precedent to the right of the successor Issuer to redeem such Securities pursuant to this Section 11.06(b) have occurred. Such Opinion of Counsel shall be based on the laws in effect on the date of such opinion or to become effective on or before the next succeeding date for payment of principal or interest.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of [·], 2020.
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| Smith & Nephew plc | |
| By: | |
| Name: | |
| Title: Company Secretary | |
THE BANK OF NEW YORK MELLON, LONDON BRANCH | |
| By: | |
| Name: | |
| Title: | |
97
Exhibit 5.1
| New York Northern California Washington DC São Paulo London |
Paris Madrid Tokyo Beijing Hong Kong |
Davis Polk & Wardwell London LLP 5 Aldermanbury Square |
020 7418 1300 tel 020 7418 1400 fax |
2 October 2020
Smith & Nephew plc
Building 5
Croxley Park
Hatters Lane
Watford
Hertfordshire
WD18 8YE
United Kingdom
(the “Company”)
Dear Sirs
Smith & Nephew plc - Registration Statement on Form F-3
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 for the purposes of registering, under the United States Securities Act of 1933, as amended (the “Securities Act”), the Notes to be issued, from time to time, 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.
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. In particular, we express no opinion on European Union law as it applies to any jurisdiction other than England
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 | 2 | 2 October 2020 |
and Wales. 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 noncontractual 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 has the requisite corporate capacity to enter into the Indenture and to issue the Notes, and, in each case, to perform its obligations thereunder. |
| 3. | Corporate action. When the Indenture has been finalised, approved and executed, and the issuance of any Notes to be offered pursuant thereto has been approved and such Notes have been authorised and executed in accordance with the Indenture, in each case as provided for in the Board Minutes, the Company will have duly authorised and executed such Notes. |
This opinion is addressed to you for your own benefit for the purposes of the Registration Statement 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 the Registration Statement. 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 |
| Smith & Nephew plc | 3 | 2 October 2020 |
Schedule
1
DOCUMENTS EXAMINED
For the purposes of this opinion, we have examined the following documents:
| 1. | a copy of the form of the New York law governed Indenture scheduled to the Registration Statement (the “Indenture”); |
| 2. | a copy of the Registration Statement; |
| 3. | a certificate from Susan Swabey, in her capacity as Secretary of the Company, dated 2 October 2020 (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 each 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 referred to below and (ii) the date hereof; and |
| (e) | a copy of the minutes (the “Board Minutes”) of a meeting of the Board of Directors of the Company held on 24 September 2020 (the “Board Meeting”), certified to be a true and correct copy; |
| 4. | the results of an on-line search of the entries shown on the Companies House Direct online service on 1 October 2020 with respect to the Company (the "Company Search"); and |
| 5. | the results of a telephone search with the Companies Court in London of the Central Index of Winding Up Petitions on 1 October 2020 with respect to the Company (the "Central Registry Search"), |
and we have relied upon the statements as to factual matters contained in or made pursuant to each of the above-mentioned documents and search results.
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.
| Smith & Nephew plc | 4 | 2 October 2020 |
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; |
| 4. | the Indenture, when duly executed, will be valid and binding on each party to it 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 the Indenture have the same meaning and effect as they would have if it were governed by English law; |
| 5. | the Notes of each issue will be duly authorised, executed, authenticated and issued in accordance with the provisions of the Indenture, including, for the avoidance of doubt, the agreement as to the terms of the Notes, and the name of each holder of a Note will be correctly registered in the register maintained for that purpose; |
| 6. | the Indenture has been or will be 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); |
| 7. | the Indenture, when duly executed, and the Notes, when duly executed, authenticated and issued, will constitute, legal, valid and binding obligations of each of the parties thereto enforceable under all applicable laws; |
| 8. | the provisions of article 108 of the articles of association of the Company (which limit the director’s authority to borrow) and any other limitation on the Company duly and properly to issue the Notes have been and will be duly observed; |
| 9. | in relation to the Company: |
| (a) | each of the certificate of incorporation in the form referred to in paragraph 4(a) of Schedule 1 to this opinion, the certificates of incorporation on change of name in the form referred to in paragraph 4(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 4(c) of Schedule 1 are in force on the date hereof; |
| (b) | the articles of association of the Company, in the form referred to in paragraph 4(d) of Schedule 1 to this opinion, were in force at the date and time of authorisation of the Indenture, are in force on the date hereof and will be in force at the date and time of execution of the Indenture; |
| (c) | the Board Minutes in the form referred to in paragraph 4(e) of Schedule 1 to this opinion are complete and correct, and that no amendment has been made thereto; |
| Smith & Nephew plc | 5 | 2 October 2020 |
| (d) | the Board Meeting was properly constituted and convened; that all relevant policies and procedures of the Company were complied with; 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; that all relevant provisions of 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; and |
| (e) | the directors of the Company, or any duly authorised and constituted committee thereof, in approving the issue of any Notes and entry into of any related indenture, will exercise their powers in accordance with their duties under all applicable laws and the articles of association of the Company in force at the relevant time (which shall in all material respects be in the same form as referred to in paragraph 4(d) of Schedule 1) and that all such further meetings of the board of directors of the Company or any duly authorised and constituted committee thereof which may be required in order to validly approve the terms and the issue of any Notes or the entry into of any related indenture will be duly convened and held and the requisite resolutions to give effect thereto will be duly passed; |
| 10. | 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; |
| 11. | the directors of the Company will act 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; |
| 12. | the execution and delivery of the Indenture and 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; |
| 13. | the Indenture will be executed and delivered by each party thereto and not subject to any escrow or other similar arrangement; |
| 14. | the Indenture, when duly executed, and the Notes, when duly executed, authenticated and issued, will be performed in accordance with its or their terms and none of them will be amended or modified in any way, and there 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 are no unknown facts or circumstances which are not apparent from the face of any document which may affect the conclusions in this opinion; |
| 15. | the information revealed by the Company Search (i) is accurate in all respects and has not since the time of such search been altered, and (ii) is complete and included all relevant information which should properly have been submitted to the Registrar of Companies; |
| 16. | the information revealed by the Central Registry Search with respect to the Company was accurate in all respects and has not since the time of such enquiry been altered; |
| 17. | the Company is not restricted by contract or any other arrangement binding on it from entering into the Indenture or issuing any 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; |
| Smith & Nephew plc | 6 | 2 October 2020 |
18. | the Notes of a particular issuance will be offered and sold in accordance with the provisions of the Indenture and as described in the Registration Statement and there will be no provision in any supplement relating to the Notes or any other document which would affect the content of this opinion; |
| 19. | the Indenture will reflect the commercial intentions of the parties thereto and will be entered into in good faith on arm’s length terms, that each party will have made its own independent decision to enter into the Indenture to which it is a party and that, in respect of any party to the Indenture and its respective directors, employees, agents and advisers, there is and will be no bad faith, fraud, coercion, duress or undue influence; |
| 20. | all statements made as to matters of fact and all representations and warranties given by the respective parties in the Indenture will at all times be true, accurate and complete; |
| 21. | the Company and each other person who is a party to the Indenture or otherwise involved in the Transaction has complied with and will comply with all applicable provisions of Regulation (EU) No 596/2014 on market abuse (“MAR”), Regulation (EU) 2017/1129 (the “Prospectus Regulation”), the Financial Services and Markets Act 2000 (the “FSMA”) and the Financial Services Act 2012 (the “FSA”) and any regulations made under any of MAR, the 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 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. |
| 22. | no Notes will be offered in the European Economic Area or 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); |
| 23. | 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. |
| Smith & Nephew plc | 7 | 2 October 2020 |
Schedule
3
QUALIFICATIONS
Our opinion is subject to the following qualifications:
| 1. | The Company Search is 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 Search is 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 Search relates 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. It is 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 Indenture 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 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 any part of it) contains all the information required to be contained in it or whether the persons responsible for the Registration Statement have discharged their obligations thereunder. |
Exhibit 5.2
| New York Northern California Washington DC São Paulo London |
Paris Madrid Tokyo Beijing Hong Kong |
Davis Polk & Wardwell London LLP 5 Aldermanbury Square |
020 7418 1300 tel 020 7418 1400 fax |
October 2, 2020
Smith & Nephew plc
Building 5, Croxley Park
Hatters Lane, Watford
Hertfordshire WD18 8YE
England
Ladies and Gentlemen:
We are acting as special United States counsel to Smith & Nephew plc, a public limited company organized under the laws of England and Wales (the “Company”), in connection with the Company’s filing with the Securities and Exchange Commission (the “Commission”) of a Registration Statement on Form F-3 (the “Registration Statement”) and the related Prospectus (the “Prospectus”) for the purpose of registering under the Securities Act of 1933, as amended (the “Securities Act”), the Company’s senior debt securities (the “Debt Securities”), which may be issued pursuant to the Indenture to be entered into between the Company and The Bank of New York Mellon, as trustee (the “Trustee”) (the “Indenture”).
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 documents filed as exhibits to the Registration Statement that have not been executed will conform to the forms thereof, (iv) all signatures on all documents that we reviewed are genuine, (v) all natural persons executing documents had and have the legal capacity to do so, (vi) all statements in certificates of public officials and officers of the Company that we reviewed were and are accurate and (vii) all representations made by the Company as to matters of fact in the documents that we reviewed were and are accurate.
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 | 2 | October 2, 2020 |
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 Indenture and any supplemental indenture to be entered into in connection with the issuance of any Debt Securities have been duly authorized, executed and delivered by the Trustee and the Company; the specific terms of a particular series of Debt Securities have been duly authorized and established in accordance with the Indenture and any supplemental indenture; and such Debt Securities have been duly authorized, executed, authenticated, issued and delivered in accordance with the Indenture and any supplemental indenture and the applicable underwriting or other agreement against payment therefor, such Debt Securities 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 Debt Securities to the extent determined to constitute unearned interest.
In connection with the opinions expressed above, we have assumed that, at or prior to the time of the delivery of any such Debt Security, (i) the Board of Directors of the Company shall have duly established the terms of such Debt Security and duly authorized the issuance and sale of such Debt Security and such authorization shall not have been modified or rescinded; (ii) the Company is, and shall remain, validly existing as a corporation under the laws of England and Wales; (iii) the Registration Statement shall have become effective and such effectiveness shall not have been terminated or rescinded; (iv) the Indenture and the Debt Securities, and any supplemental indenture in connection therewith, are each valid, binding and enforceable agreements of each party thereto; and (v) there shall not have occurred any change in law affecting the validity or enforceability of such security. We have also assumed that the execution, delivery and performance by the Company of any Debt Security whose terms are established subsequent to the date hereof and the terms thereof (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 the Company, (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 the Company.
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 and the federal laws of the United States. 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, filed by the Company with the Commission on the date hereof as exhibit 5.1 to the Registration Statement, and our opinion is subject to the qualifications, assumptions and limitations set forth therein.
| Smith & Nephew plc | 3 | October 2, 2020 |
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement referred to above and further consent to the reference to our name under the caption “Legal Matters” in the Prospectus. 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
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Smith & Nephew plc:
We consent to the use of our report with respect to the consolidated financial statements and the effectiveness of internal control over financial reporting of Smith & Nephew plc and its subsidiaries (the ‘Group’) incorporated by reference herein and to the reference to our firm under the heading “Experts” in the prospectus.
Our report dated 20 February 2020, on the effectiveness of internal control over financial reporting as of 31 December 2019, contains an explanatory paragraph that states the Group acquired Osiris Therapeutics, Inc. during 2019, and management excluded from its assessment of the effectiveness of the Group’s internal control over financial reporting as of 31 December 2019, Osiris Therapeutics, Inc.’s internal control over financial reporting associated with 2% of the Group’s revenue and less than 1% of Group’s total assets, included in the consolidated financial statements of the Group as of and for the year ended 31 December 2019. Our audit of internal control over financial reporting of the Group also excluded an evaluation of the internal control over financial reporting of Osiris Therapeutics, Inc.
Also, our audit report refers to a change to the method of accounting for leases as of 1 January 2019 due to the adoption of IFRS 16, Leases.
/s/ KPMG LLP
KPMG LLP
London, United Kingdom
2 October 2020
Exhibit 25.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
|
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ¨
|
THE BANK OF NEW YORK MELLON
(Exact name of trustee as specified in its charter)
| New York | 13-5160382 | |
|
(Jurisdiction of incorporation if not a U.S. national bank) |
(I.R.S. Employer Identification No.) | |
|
240 Greenwich Street New York, New York |
10286 | |
| (Address of principal executive offices) | (Zip code) | |
Legal Department
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
(212) 635-1270
(Name, address and telephone number of agent for service)
SMITH & NEPHEW PLC
(Exact name of obligor as specified in its charter)
|
England and Wales (State or other jurisdiction of incorporation or organization) |
98-0224867 (I.R.S. Employer Identification No.) |
|
Building 5, Croxley Park Hatters Lane, Watford Hertfordshire WD18 8YE (Address of principal executive offices) |
N.A. (Zip code)
|
Debt Securities
(Title of the indenture securities)
| Item 1. | General Information. |
Furnish the following information as to the Trustee:
| (a) | Name and address of each examining or supervising authority to which it is subject. |
|
Superintendent of Financial Services of the State of New York Federal Reserve Bank of New York Federal Deposit Insurance Corporation New York Clearing House Association |
One State Street, New York, N.Y. 10004-1417 and Albany, N.Y. 12203 33 Liberty Plaza, New York, N.Y. 10045 550 17th Street, N.W., Washington, D.C. 20429 New York, N.Y. 10005 |
| (b) | Whether it is authorized to exercise corporate trust powers. |
Yes.
| Item 2. | Affiliations with Obligor. |
If the obligor is an affiliate of the trustee, describe each such affiliation.
None.
| Item 16. | List of Exhibits. |
Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the “Act”) and 17 C.F.R. 229.10(d).
| 1. | - | A copy of the Organization Certificate of The Bank of New York Mellon (formerly The Bank of New York (formerly Irving Trust Company)) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637, Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152735.) | ||
| 4. | - | A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 with Registration Statement No. 333-207042.) | ||
| 6. | - | The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-188382.) | ||
| 7. | - | A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. | ||
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York Mellon, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the city of London, England, on the 2nd day of October, 2020.
|
THE BANK OF NEW YORK MELLON
|
|||||
| By: |
/s/ Melissa Laidley |
||||
| Name: | Melissa Laidley | ||||
| Title: | Vice President | ||||
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK MELLON
of 240 Greenwich
Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 2020, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
ASSETS |
Dollar amounts in thousands |
| Cash and balances due from depository institutions: | |
| Noninterest-bearing balances and currency and coin | 3,962,000 |
| Interest-bearing balances | 129,364,000 |
| Securities: | |
| Held-to-maturity securities | 43,910,000 |
| Available-for-sale securities | 106,742,000 |
| Equity securities with readily determinable fair values not held for trading | 63,000 |
| Federal funds sold and securities purchased under agreements to resell: | |
| Federal funds sold in domestic offices | 0 |
| Securities purchased under agreements to resell | 14,823,000 |
| Loans and lease financing receivables: | |
| Loans and leases held for sale | 0 |
| Loans and leases held for investment | 27,370,000 |
| LESS: Allowance for
loan and lease losses |
272,000 |
| Loans and leases held for investment, net of allowance | 27,098,000 |
| Trading assets | 5,353,000 |
| Premises and fixed assets (including capitalized leases) | 3,058,000 |
| Other real estate owned | 2,000 |
| Investments in unconsolidated subsidiaries and associated companies | 1,683,000 |
| Direct and indirect investments in real estate ventures | 0 |
| Intangible assets: | 6,967,000 |
| Other assets | 14,936,000 |
| Total assets | 357,961,000 |
i
| LIABILITIES |
|
| Deposits: | |
| In domestic offices | 191,267,000 |
| Noninterest-bearing | 75,420,000 |
| Interest-bearing | 115,847,000 |
| In foreign offices, Edge and Agreement subsidiaries, and IBFs | 117,087,000 |
| Noninterest-bearing | 5,988,000 |
| Interest-bearing | 111,099,000 |
| Federal funds purchased and securities sold under agreements to repurchase: | |
| Federal funds purchased in domestic offices | 2,352,000 |
Securities sold under agreements to repurchase |
3,229,000 |
| Trading liabilities | 2,904,000 |
| Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases) |
2,295,000 |
| Not applicable | |
| Not applicable | |
| Subordinated notes and debentures | 0 |
| Other liabilities | 10,297,000 |
| Total liabilities | 329,431,000 |
| EQUITY CAPITAL | |
| Perpetual preferred stock
and related surplus |
0 |
| Common stock | 1,135,000 |
| Surplus (exclude all surplus related to preferred stock) | 11,520,000 |
| Retained earnings | 16,474,000 |
| Accumulated other comprehensive income | -599,000 |
| Other equity capital components | 0 |
| Total bank equity capital | 28,530,000 |
| Noncontrolling (minority)
interests in consolidated subsidiaries |
0 |
| Total equity capital | 28,530,000 |
| Total liabilities and equity capital | 357,961,000 |
ii
I, Emily Portney, Chief Financial Officer of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.
Emily
Portney
Chief Financial Officer
We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.
| Thomas P. Gibbons Samuel C. Scott Joseph J. Echevarria |
Directors |
iii