UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 20-F
¨ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended: March 31, 2014
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
¨ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report:
For the transition period from: to
Commission file number: 001-10086
VODAFONE GROUP PUBLIC LIMITED COMPANY
(Exact name of Registrant as specified in its charter)
England
(Jurisdiction of incorporation or organization)
Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England
(Address of principal executive offices)
Rosemary Martin (Group General Counsel and Company Secretary)
tel +44 (0) 1635 33251, fax +44 (0) 1635 580 857
Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class |
Name of each exchange on which registered | |
See Schedule A | See Schedule A |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.
Ordinary Shares of 20 20/21 US cents each |
26,439,960,221 | |||
7% Cumulative Fixed Rate Shares of £1 each |
50,000 |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act
Yes þ No ¨
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ¨ No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ¨ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ | Accelerated filer ¨ | Non-accelerated filer ¨ |
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
US GAAP ¨ | International Financial Reporting þ | Other ¨ | ||
Standards as issued by the | ||||
International Accounting | ||||
Standards Board |
If Other has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow
Item 17 ¨ Item 18 ¨
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No þ
SCHEDULE A
Title of each class |
Name of each exchange | |
Ordinary shares of 20 20/21 US cents each |
NASDAQ Global Select Market* | |
American Depositary Shares (evidenced by American Depositary Receipts) each representing ten ordinary shares |
NASDAQ Global Select Market | |
Floating rate Notes due February 2016 |
New York Stock Exchange | |
5.625% Notes due February 2017 |
New York Stock Exchange | |
1.625% Notes due March 2017 |
New York Stock Exchange | |
1.25% Notes due September 2017 |
New York Stock Exchange | |
1.5% Notes due February 2018 |
New York Stock Exchange | |
4.625% Notes due July 2018 |
New York Stock Exchange | |
5.450% Notes due June 2019 |
New York Stock Exchange | |
4.375% Notes due March 2021 |
New York Stock Exchange | |
2.5% Notes due September 2022 |
New York Stock Exchange | |
2.95% Notes due February 2023 |
New York Stock Exchange | |
2.95% Notes due February 2023 |
New York Stock Exchange | |
7.875% Notes due February 2030 |
New York Stock Exchange | |
6.25% Notes due November 2032 |
New York Stock Exchange | |
6.15% Notes due February 2037 |
New York Stock Exchange | |
4.375% Notes due February 2043 |
New York Stock Exchange |
* | Listed, not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission. |
Empowering everybody to be confidently connected Vodafone group plc annual report on form 20-f 2014
Vodafone Group Plc
Annual Report on Form 20-F 2014
The following sections constitute the strategic report: |
Overview In this section: An introduction to the report covering who we are, the Chairmans reflections on the year, notable events, and a snapshot of where and how we do business. |
1
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About us | ||||||||||
2
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Chairmans statement | |||||||||||
3
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Financial highlights | |||||||||||
4
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Our year | |||||||||||
8
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Where we do business | |||||||||||
10 | How we do business | |||||||||||
Strategy review In this section: A summary of the changing landscape we operate in, and how that has shaped our strategy and financial position. Plus a review of performance against our goals and our approach to running a sustainable business. |
12
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Chief Executives review | 21 | Our strategy | ||||||||
14
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Crystallising value from Verizon Wireless | 22 | Consumer Europe | |||||||||
16
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Key performance indicators | 24 | Unified Communications | |||||||||
18
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Market overview | 26 | Consumer Emerging Markets | |||||||||
28
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Enterprise | |||||||||||
30
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Network | |||||||||||
32
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Operations | |||||||||||
34
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Sustainable business | |||||||||||
36 | Our people | |||||||||||
Performance In this section: Commentary on operating performance for the Group, the key operating segments Europe and AMAP (Africa, Middle East and Asia Pacific), and a summary of key risks. |
38
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Chief Financial Officers review | ||||||||||
40
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Operating results | |||||||||||
46
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Risk summary | |||||||||||
Governance In this section: The governance framework, including the role and effectiveness of the Board and the alignment of the interests of management with long-term value creation. |
49
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Chairmans overview | ||||||||||
50
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Board of directors and Group management | |||||||||||
54
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Corporate governance | |||||||||||
69
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Directors remuneration | |||||||||||
86
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Directors report | |||||||||||
Financials In this section: The statutory financial statements of both the Group and the Company and associated audit report. |
87
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Contents | 92 | Report of Independent Registered Public | ||||||||
88
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Directors statement of responsibility | Accounting Firm on the consolidated | ||||||||||
90
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Risk mitigation | financial statements | ||||||||||
91
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Report of Independent Registered Public | 96 | Consolidated financial statements and | |||||||||
Accounting Firm on internal control over | financial commentary | |||||||||||
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176 | This page is intentionally left blank | ||||||||||
Additional information In this section: Find out about our shares, history and development, regulatory matters impacting our business, an assessment of potential risks to the Company, and other statutory financial information. |
182
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Shareholder information | 211 | Definition of terms | ||||||||
190
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History and development | 213 | Selected financial data | |||||||||
191
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Regulation | Exhibit 1.1 | Exhibit 4.31 | Exhibit 7 | ||||||||
196
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Principal risk factors and uncertainties | Exhibit 2.3 | Exhibit 4.32 | Exhibit 12 | ||||||||
201
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Non-GAAP information | Exhibit 4.5 | Exhibit 4.33 | Exhibit 13 | ||||||||
206
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Form 20-F cross reference guide | Exhibit 4.6 | Exhibit 4.34 | Exhibit 15.1 | ||||||||
209 | Forward-looking statements | Exhibit 4.30 | Exhibit 4.35 | Exhibit 15.2 | ||||||||
This constitutes the annual report on Form 20-F of Vodafone Group Plc (the Company) in accordance with the requirements of the US Securities and Exchange Commission (the SEC) for the year ended 31 March 2014 and is dated 10 June 2014. This document contains certain information set out within the Companys annual report in accordance with International Financial Reporting Standards (IFRS) and with those parts of the UK Companies Act 2006 applicable to companies reporting under IFRS, dated 20 May 2014, as updated or supplemented if necessary. The content of the Groups website (www.vodafone.com) should not be considered to form part of this annual report on Form 20-F.
Unless otherwise stated references to year or 2014 mean the financial year ended 31 March 2014, to 2013 or previous year mean the financial year ended 31 March 2013, and to the fourth quarter or Q4 are to the quarter ended 31 March 2014. For other references please refer to page 45.
All amounts marked with an * represent organic growth, which excludes the impact of foreign currency movements, acquisitions and disposals and certain other items, see definition on page 212. Definitions of terms used throughout the report can be found on pages 211 and 212.
The terms Vodafone, the Group, we, our and us refer to the Company and, as applicable, its subsidiaries and/or interests in joint ventures and associates.
Website references are for information only and are not incorporated by reference into our Annual Report on Form 20-F.
About us
Weve come a long
way since making the first ever While we expect these actions to improve our mobile call in the UK on 1 January 1985. In 30 years, business performance over time, we recognise that a small mobile operator in Newbury has grown financial results
alone are not enough. A commitment into a global business and one of the most valuable to improve our social impact and behave ethically telecoms brands in the world. We now have mobile and responsibly at all times is integral to ensuring the
operations in 27 countries and partner with mobile long-term sustainability of our businesses. networks in 48 more. Today, we have 434 million mobile customers around the world. And because Our business is constantly evolving to adapt to
changes we now do more than just mobile, were able to provide in customer behaviour, technology, regulation and fixed broadband services in 17 markets, and 9 million the competitive landscape. Our strategy is our customers use us for
their fixed broadband needs. response to these changes, while ensuring we operate in a responsible way.
Our core purpose is to empower our customers to be confidently
connected whether at home, As youll see in this years report, during the daily commute, in the office, or abroad we are making great strides wherever and however they choose. We want everyone towards our strategic goals, to
be confidently connected to their friends, families, as we begin to realise our vision and customers, and to always have access to the of empowering everybody content and information they choose.
to be confidently connected
Were aiming to differentiate ourselves from our competitors, by having the
best network, providing
the best customer experience and having the best This years report contains a new strategic report on pages integrated worry-free solutions.
1 to 47, which includes an analysis of our performance and position, a review of the business during the year, and outlines the principal risks and uncertainties we face. The strategic report was approved by the Board and signed on its behalf
by the Chief Executive and Chief Financial Officer.
Vittorio Colao Nick Read
Chief Executive
Chief Financial Officer
Chairmans statement
Reflections on the year
It has been a momentous year for Vodafone and our shareholders. We have completed the second biggest transaction in corporate history, with the sale of our interest in Verizon Wireless;
progressed our unified communications strategy with the acquisition of leading cable companies; and delivered the biggest ever return to shareholders, of US$85 billion (Ł51 billion).
Three pillars of success
Three distinct elements sum up why Vodafone has had such a strong track record of
shareholder value creation over recent years. First, in response to the increasing demand for data we have formulated a clear strategy of becoming a leading unified communications provider and to strengthen further our network and service
differentiation, through investments in mobile and fixed capabilities. Second, we have made significant progress in executing our strategy. We have actively managed our portfolio, particularly disposing of our non-controlling interests, and used
part of the proceeds to accelerate the roll-out of 3G and 4G mobile capability and the deployment of next-generation fixed line operations in a number of key markets. To accelerate our strategy further we acquired Kabel Deutschland in Germany and
agreed the purchase of Ono in Spain two leading cable companies in their respective markets. Finally, we have extended our very strong track record of balancing the long-term needs of the business with significant returns to shareholders. We
ended the year in a strong financial position and with a clear strategy for long-term growth.
Our role in society and protection of customer data
Telecommunications technology has a significant positive impact on economic development and individual wellbeing. We remain committed to enhancing the positive social impact of mobile
our networks and services are used to address everything from illiteracy to supporting the local healthcare infrastructure and realising the potential of budding entrepreneurs.
Our technology helps people to connect and share information. In this context data protection is critical. However, this year there have been a number of troubling allegations about the
activities of security agencies in accessing customer data. As a trusted communications service provider, we view our customers privacy as absolutely key.
As a
demonstration of our commitment to transparency in this regard, our latest sustainability report includes a section on law enforcement disclosure. This explains the nature and extent of government powers to order our assistance, together with
information about agency and authority demands in countries where statistical data can lawfully be disclosed.
We are dependent on government policies and regulatory
frameworks.
While this applies to all our operations, it is critical for the development of a globally competitive and healthy telecom industry in Europe. Europe needs to
find the right balance between protecting consumer interests and the consumers long-term interest in investment in next-generation telecom infrastructure and innovation, that will enable future growth and prosperity for its citizens. So far
that balance in our opinion has not been found in the proposals for reform of the digital single market currently under consideration in Brussels.
Alignment with
shareholders
Our remuneration policies continue to ensure that management is strongly aligned with shareholders, with a focus on rewarding long-term value creation. After
the return of value arising from the sale of our Verizon Wireless stake, Vittorio, and other members of the Executive Committee reinvested a significant proportion of their net proceeds back into Vodafone shares to demonstrate their commitment to
the business and the strength of that alignment. The Board continues to consider the ordinary dividend to be the core element of shareholder returns, and believes in a consistent dividend policy. This year we raised the dividend per share by 8%, and
as a reflection of our confidence in our future performance, we intend to raise it annually hereafter.
Changes to the Board
During the year, Andy Halford informed the Board of his intention to step down as Group CFO. I would like to thank him for his outstanding contribution to Vodafone during his eight year
tenure as CFO and in his previous roles. He has brought an invaluable rigour and clarity to our financial reporting and investor communication, while consistently driving significant improvements to our organisational efficiency. I am confident that
Nick Read, who joined the Board as CFO on 1 April 2014, will be a worthy successor. During the year there were a number of changes to the non-executive team and these are set out in my Governance statement on page 49. My medium-term ambitions
for the composition of the Board are to bring in further marketing expertise, and achieve a greater gender balance. By September we will have three female directors and we will be well on our way to our goal of 25% of Board members being women by
2015.
Mixed performance financial
Our financial performance this year
reflects the combination of good performance in emerging markets and challenging conditions in Europe.
38,
Read more 40
Ł38.3bn +0.8% Ł59.4bn N/A Ł12.1bn +5.7%
Revenue Profit for the financial year Cash generated by operations
Revenues increased by 0.8% as growth in our
AMAP Profit for the financial year increased by Ł58.8 billion Cash generated by operations increased by 5.7%, region and from business acquisitions offset revenue primarily due to a pre-tax gain on disposal of our interest primarily as a result
of higher working capital related declines in Europe. in Verizon Wireless of Ł45.0 billion and recognition cash flows. of deferred tax assets of Ł19.3 billion.
17.54p -12.8% Ł6.3bn +19.3% Ł4.2bn -24.0%
Adjusted earnings per share Capital
expenditure1 Free cash flow1
Adjusted earnings per share was down 12.8% mainly Cash capital expenditure increased by Ł1.0 billion driven Free cash flow declined by
24.0%, reflecting the fall reflecting both lower adjusted EBITDA and higher by the acquisition of Kabel Deutschland, the fibre roll-out in adjusted EBITDA, increased capital expenditure depreciation and amortisation. in Spain, and initial Project
Spring investment in India and the impact of weaker exchange rates in our and Germany. emerging markets.
Our year
A with year activity bursting
April
Expanding Vodafone Red
We
expanded Vodafone Red our customer proposition offering unlimited calls and texts with generous data allowances to 14 markets.
By March 2014 we reached 20
markets.
April
M-Pesa in India
We launched M-Pesa, our money-transfer service in India. The initial launch included over 8,000 agents in the eastern areas of India, covering around 220 million people, and we have
expanded the service nationwide throughout the year.
June
Kabel Deutschland
We announced plans to acquire Kabel Deutschland, Germanys largest cable operator, for €10.7 billion (Ł9.1 billion). This helps us create a leading unified communications
operator in Germany offering combined fixed and mobile services. The transaction closed in October 2013.
August
4G
We launched 4G in two more markets the UK and the Netherlands. In the UK the service includes Sky Sports or Spotify. We also launched 4G in Australia, the Czech Republic, Ireland,
Malta and Spain during the year.
September
in Sale Verizon of our Wireless interest
We announced an agreement to sell our
45% interest in Verizon Wireless to Verizon for US$130
billion (Ł79 billion). This was the second largest corporate deal in history when it completed on 21 February 2014.
As part of this transaction we increased our
ownership of Vodafone Italy from 77% to 100%. See page 14 for more information.
November
Project
Spring
We announced details of our Project Spring strategy to increase our organic investment over two years to deliver network and service differentiation compared to our
competitors. See page 13 for more information on Project Spring.
November
Vodafone Foundation
Instant Network
Two Instant Networks, which each pack into four cases, were deployed 24 hours after Typhoon
Haiyan, to establish a temporary replacement mobile network where permanent infrastructure was destroyed. In just 29 days, it enabled people to send over 1.4 million texts and make over 443,200 calls.
December
M-Pesa Text to Treatment programme
The Vodafone Foundation announced a partnership with Kick4Life in Lesotho, a country where almost 1 in 4 live with HIV/AIDS, to accelerate the number of children being tested and treated for
the virus. The initiative aims to get a generation of young people on antiretrovirals via our M-Pesa Text to Treatment programme.
January
New brand strategy Vodafone Firsts
We launched our Firsts programme, inspiring people to do something
remarkable for the first time using mobile technology. This new global brand engagement strategy will be launching across all our markets in 2014.
February
New spectrum in India
We acquired and renewed spectrum in auctions held in India for Ł1.9 billion to provide customers with enhanced mobile voice and data services.
March
The single largest return of value to shareholders
Following the sale of our interest in
Verizon Wireless, we completed the return of US$85 billion (Ł51
billion) to shareholders the single largest in history.
March
Ono
We announced plans to acquire Ono,
Spains largest cable operator, for €7.2 billion (Ł6.0 billion).
This, combined with our fibre deployment, will create a leading unified communications provider in Spain.
Breadth of services scale and globle reach
over 1 trillion 337 billion
9.3 million 544 petabytes
Assets
Networks
We aim to have the best mobile network in each of our markets, combined with competitive fixed networks in our main markets. This means giving our customers far-reaching coverage, a very
reliable connection, and increasing speeds and data capacity. We believe that over time, offering a superior network experience will enable us to secure a premium positioning in most of our markets. We combine our ongoing high level of network
investment with a commitment to securing the best possible portfolio of spectrum. For more information on our network strategy see page 30.
Distribution and customer service
We reach our customers through around 14,500 exclusive branded stores including franchises, a broad network of distribution partners and third party retailers. The Internet,
whether accessed through a mobile device or PC, is becoming an increasingly important channel for both sales and after sales service. Our call centres are available 24 hours a day, seven days a week in all our European markets.
Supplier relationships
In the last financial year we spent around Ł16 billion buying equipment, devices and
services. Given our large scale and global reach, we tend to be a key strategic partner for many of our suppliers. We work closely with them to build robust networks, develop innovative services and offer the widest range of the latest devices.
People
During the year we employed an average of nearly 93,000 people. We support, train and
encourage our employees, ensuring they have the right capabilities, commitment and enthusiasm to achieve our targets and build on our success in delivering an outstanding experience to all our customers. We are working hard to build a more diverse
workforce that is more representative of our customer base. For more information on our people see page 36.
Brand
Today, Vodafone is the UKs most valuable brand with an attributed worth of US$30 billion (Source: 2014 Brand Finance Global 500). The strength of our brand raises the profile of our
distribution channels and is a major driver of purchasing decisions for consumers and enterprise customers alike.
Customers
With 434 million customers globally, we are one of the biggest mobile operators in the world. Over 90% of our mobile customers are individuals and the rest are enterprise customers
ranging from large multinationals, to small and medium sized businesses, down to the owner of the local corner shop. The majority and the growing share of our mobile customers are in emerging markets. We also have over nine million fixed broadband
customers, and most of these are in Europe in fact we are the fourth largest provider of fixed broadband services in Western Europe and will become the third following the pending acquisition of Ono in Spain.
Revenue
Mobile consumers pay for our services either via contracts (typically up to two years in length) or
through buying their airtime in advance (prepaid). Enterprise customers often have longer contracts. Fixed customers typically pay via one to two year contracts. On a management basis we have a diverse service revenue stream with 51% from mobile
services in Europe, 30% from mobile operations in AMAP, 15% from fixed services and the remainder from other items such as MVNO agreements. On a management basis within our mobile business, 51% of annual service revenue arises from consumers
monthly price plans, which we call in-bundled revenue. In-bundled revenue is an increasing proportion of our business and is relatively stable compared to out-of-bundle revenue, which is much more vulnerable to competitive and economic pressure.
Cash flow
Our track record of converting revenue into cash flow is strong with some
Ł16 billion generated on a management basis over the last three years. We achieve this by operating efficient networks where we seek to minimise costs, thus supporting our gross margin. We also have strong market share positions as we
are typically the first or second largest mobile operator out of three or four in each market. This provides economies of scale and is a key driver of cost efficiencies and adjusted EBITDA margin, which in turn provides healthy cash flow. See page
32 for more details of our plans to improve our operating efficiency.
Shareholder returns
The
cash generated from operations allows us to sustain a generous shareholder returns programme while also investing in the future prosperity of the business with almost Ł23 billion returned to shareholders over the last three years,
excluding the Verizon Wireless return of value. With our strong financial foundation, and as a sign of our confidence in our future performance, we intend to grow the annual dividend per share each year going forward.
Reinvestment
We have maintained a high and consistent level of capex in recent years, to support wider coverage,
higher speeds and greater capacity in our networks. Through our IT investment we are enhancing our customer relationship capability and providing new customer billing services.
In addition, we have continued to invest in our stores, our internet and social media presence and spectrum licences to support future services and growth.
To boost our investment even more we started Project Spring, our organic investment programme, which aims to accelerate and extend our current strategy, and thereby strengthen further our
network and service differentiation. We expect total investments, including Project Spring, to be around Ł19 billion over the next two years. See page 13 for more details.
A for defining the Group
year
Our
emerging markets are performing well, although our mature European markets continue to face challenging conditions. However, we have continued to make good progress in delivering our long-term strategy, by building firm foundations for the
future with our substantial investments in Vodafone Red, Project Spring and unified communications.
Review of the year
It has been a year of substantial strategic progress. The sale of our Verizon Wireless stake has rewarded shareholders for their support, and enabled the acceleration of our strategy through
the acquisition of Kabel Deutschland, the pending acquisition of Ono and our Project Spring investment programme.
Our operational performance has been mixed. The
Groups emerging markets businesses have performed strongly throughout the year: we have executed our strategy well and have successfully positioned ourselves for the rapid growth in data we are now witnessing. In Europe, where we continue to
face competitive, regulatory and macroeconomic pressures, we have taken steps to improve our commercial performance, particularly in Germany and Italy, and are beginning to see encouraging early signs.
Verizon Wireless transaction
The sale of our 45% interest in Verizon Wireless, the leading mobile operator in the
United States, was the culmination of a highly successful 14 year investment which began when Verizon and Vodafone entered into a partnership to create Verizon Wireless in 2000.
We had been very happy to stay invested in the business over the years, despite our minority position, because of the strong growth and returns generated, and the attractiveness of the US
market. However, the Board viewed the offer of US$130 billion as a very attractive price at which to exit. The completion of the transaction enabled us to return a record
US$85 billion to our shareholders, while retaining ample financial flexibility to pursue our own strategy both organically and through targeted acquisitions. See page 14 for
more information.
Strategic progress
We have made very substantial progress on our strategy in
the past year, despite the significant challenges faced in Europe. With the acquisition of Kabel Deutschland in Germany and the planned purchase of Ono in Spain, our continued fibre build in Portugal and Spain, and our fibre plans in Italy, allied
to last years acquisition of Cable & Wireless Worldwide in the UK, we are becoming a leader in unified communications across Europe. This enables us to access a large and growing fixed revenue pool where our market share is currently
much lower than in mobile, while also helping us defend our mobile business from converged offers.
We continue to provide a market-leading network experience in most of our
markets, and now have 4.7 million 4G customers across
14 countries all our major European markets, as well as South Africa, Australia and New Zealand. Early
experience from 4G shows us that customers use roughly twice as much data compared to 3G data usage, driven principally by video streaming.
Smartphone adoption continues to
grow strongly in all markets and the increased availability of mobile applications and low cost devices is driving significant growth in data usage. Data traffic in India increased by 125% year-on-year, and at the end of the year we had
52 million data customers in India alone, with seven million of these being 3G data customers. Data adoption is becoming truly mass market.
Our Vodafone Red plans are
now available in 20 markets, with 12 million customers at the year end. The footprint of our money transfer service, M-Pesa, continues to grow and we expanded the service with launches in the year in India, Egypt, Mozambique, Lesotho, and our
first European market Romania. In India the service is now nationwide.
Enterprise now represents 27% of Group service revenue on a management basis. The creation of a
discrete Enterprise unit is also beginning to bear fruit, as we focus on a smaller number of products with the potential for global application. Our strategic focus areas
Vodafone Global Enterprise, serving our biggest multi-national accounts and our machine-to-machine unit, where we are a global leader, delivered further growth. We continue to develop
Vodafone One Net to provide converged services for small- and medium-sized companies.
Where we aim to be five years from now
Consumer Europe Communications
Unified Emerging Consumer Markets Enterprise
A leading mobile data provider Converged services in all A strong leader and first Major enterprise provider key European
markets choice for data with full service offering
Supported by:
An excellent network experience
A simplified and cost-efficient business model and operations
Project Spring accelerates and extends our strategic priorities through investment in mobile and fixed
networks, products and services and our retail platform, to strengthen further our network and service differentiation.
Read more about our strategy
21
Project Spring
Project Spring is
our organic investment programme which will allow us to accelerate and extend our strategic priorities through investment in mobile and fixed networks, products and services, and our retail platform. Announced alongside the Verizon transaction in
September
2013, Project Spring will strengthen further our network and service differentiation. The transition to 4G and unified communications, coupled with an improved
economic outlook for Europe, lead us to believe Vodafone has a unique opportunity to invest now. We expect total investments, including Project Spring, to be around Ł19 billion over the next two years. The main elements of our investment are:
4G in Europe: we aim to reach 91% population coverage by March 2016; 3G in emerging markets: with 95% population coverage in targeted urban areas in India by March 2016;
next-generation fixed line infrastructure: laying fibre to more base stations and deep into residential areas across Europe and in selected emerging market urban areas; development of enterprise products and services: extending our M2M reach to 75
countries and rolling out hosting and IP-VPN services internationally; and investment in our retail estate: modernising 8,000 of our stores to improve the customer experience.
Outlook
In the short term, we continue to face competitive, macroeconomic and regulatory
pressures, particularly in Europe, and still need to secure our recovery in some key markets. While we are therefore heavily focused on the successful execution of our significant capital investment programme, we are also absolutely committed to
operational efficiency and standard operating models across all markets. We anticipate that our investments will begin to translate into clearly improved network performance and customer satisfaction in the coming year. In the medium term, this will
become more evident in key operational metrics such as churn and average revenue per user (ARPU); and subsequently into revenue, profitability and cash flow.
I
am confident about the future of the business given the growth prospects in data, emerging markets, enterprise and unified communications. We have commenced our Project Spring two-year investment programme which will accelerate our plans to
establish stronger network and service differentiation for our customers. I expect the first signs of this to become evident later this year, with wider 4G coverage in Europe and 3G coverage in emerging markets, improved network performance and
increased customer advocacy. While cash flow will be depressed during this investment phase, our intention to continue to grow dividends per share annually demonstrates our confidence in strong future cash flow generation.
Crystallising value from Verizon Wireless
Opening chapter in the the
next history of Vodafone
On 2 September 2013, we announced our agreement with Verizon to sell our US group, whose principal asset was its 45% interest in Verizon
Wireless, for US$130 billion, mainly in cash and Verizon shares. We chose to return around 71% of the net proceeds to shareholders amounting to around US$85 billion. This is the largest ever single return to shareholders in history and rewards our
shareholders for their long-term support of our US strategy. This also represents the opening of an important new chapter in our history by leaving us in a strong financial position and well positioned to execute our strategy.
A big deal! Vodafone Italy
This was the second biggest transaction ever As part of the transaction we also agreed
and the return of US$85 billion (£51 billion) to acquire Verizons 23% stake in Vodafone is the equivalent of around 90% of the total Italy, in which we owned 77%, thereby dividends paid by all the other FTSE 100 securing full ownership.
companies in the whole of 2013.
Why sell our stake? This will amount to the largest and fastest period of investment in our history. We have used the retained proceeds to reduce
our net debt We have had a very successful 14 year investment in Verizon significantly and as a result the Company is much more resilient
Wireless. During this time its
service revenue has quadrupled going forwards. to US$69 billion, its adjusted EBITDA has grown from US$6 billion in 2001 to US$34 billion in 2013, and we received nearly US$16 billion of income dividends. This investment has clearly created a great
deal Whats the shareholder return? of value for Vodafone shareholders. The sale not only crystallised We have a track record of making significant returns to shareholders the value of this significant asset, it has also enabled us
to realise that with almost Ł23 billion returned in the last three years alone in the form value at a very attractive price, representing around nine times Verizon of dividends and share buybacks. Consistent with that track record,
Wireless adjusted EBITDA and 13 times operational cash flow. we also returned a large proportion of the net proceeds from the sale of our interest in Verizon Wireless 71% or US$85 billion (Ł51 billion)
What will the sale enable us to do? comprising Ł37 billion worth of Verizon shares and Ł14 billion of cash, during the year. As part of the transaction, we also consolidated our
We carefully considered how to make best use of the sale proceeds shares exchanging every eleven old Vodafone shares for six new and we decided to retain a proportion
of the cash received to allow Vodafone shares. us to invest in the business and to reduce net debt, and we returned US$85 billion to shareholders. Overall, we believe we have struck the right balance between investing in the future of the Company
and rewarding our shareholders for their
Project Spring, our new investment programme, will improve the quality long-term support of our US strategy. Following the sale we
have of our networks, products and services in our major markets, relative reduced debt and established a bigger gap between our cash flow and to our competitors. Project Spring is in addition to our existing capital ordinary dividends paid. As a
result, and as a sign of confidence in the expenditure programme and will bring total investment over the next future, we intend to continue to grow the dividend per share annually two years to around Ł19 billion. going forward.
Monitoring and performance our progress
We track our performance
against 12 key financial, operational and commercial metrics which we judge to be the best indicators of how we are doing. The pressures we have faced in Europe are reflected in the decline in service revenue on a management basis and adjusted
EBITDA margin and the loss of market position. Despite this we met our financial guidance and increased our dividend per share and we have made clear progress in our operational and commercial KPIs.
Organic service revenue growth on a management basis More work to do
Growth in the top line demonstrates our 2012
+1.5%* We were unable to grow our service revenue ability to grow our customer base and this year, as the competitive, regulatory and stabilise or increase ARPU. It also helps 2013 -1.9%* macroeconomic pressures in Europe seen last to maintain
margins. We aim to return year continued. to service revenue growth. 2014 -4.3%*
Adjusted EBITDA margin1 on a management basis
More work to do
Growth in our adjusted EBITDA margin 2012 31.2% As expected, competitive, regulatory and magnifies
the impact of revenue growth macroeconomic pressures in Europe on the profitability of our business. 2013 30.5% offset improvements in AMAP and our We expected this years margin to be lower margin declined. than last years. 2014
29.4%
Adjusted operating profit (AOP)1 on a management basis
Achieved
AOP includes the impact of depreciation 2012 Ł11.9bn The fall in AOP reflects the disposal of Verizon and amortisation and includes the results Wireless during the year, the decline in
adjusted of our non-controlling interests. 2013 Ł12.6bn EBITDA and higher depreciation and amortisation.
We gave guidance of around Ł5 billion for On a guidance
basis, AOP was Ł4.9 billion the year on a pro forma basis, see page 39. 2014 Ł7.9bn (see page 39 for details).
Free cash flow on a management basis Achieved
Maintaining a high level of cash 2012 Ł6.1bn Free cash flow fell in the year as a result generation is key to delivering strong of exchange rate movements in some of
our shareholder returns. 2013 Ł5.6bn emerging markets and lower adjusted EBITDA.
We gave guidance of Ł4.5Ł5 billion for On a guidance basis, free cash
flow was the year on a pro forma basis, see page 39. 2014 Ł4.4bn Ł4.8 billion (see page 39 for details).
% of European mobile service revenue in-bundle2 on a
management basis
Achieved
Our strategic push towards bundling 2012 Data not available We continue
to make great progress in this voice, text and data allows us to defend area, helped by the rapid adoption of our our revenue base from substitution, 2013 51% Vodafone Red plans (see page 22). and to monetise future data demand growth. We aim to
increase this proportion 2014 58% each year.
Smartphone penetration (March 2014, Europe2) on a management basis
Achieved
Smartphones are key to giving our 2012 28% Our customers increasingly want customers access to data; the
more our smartphones as data becomes more and customers have them, the bigger our data 2013 38% more crucial to everyday life. We are on course opportunity becomes. We aim to increase to meet our target of half of our European penetration to over
50% by 2015. 2014 45% customers using smartphones by next year.
See pages 22 and 23 for more information.
KPIs achieved Want to find out more?
All KPIs are shown on a
management See how these targets are used with the basis incentive plans for senior management
03 69
Mobile network performance floor (Europe2)
Achieved
We continuously improve the speed 2012 75% at least 400Kbps We achieved our 2015 target this year. of our European network to create the Our new target is for 90% of data sessions
best data experience for our customers 2013 75% at least 1Mbps in Europe to be at least 3Mbps by March and had a target of 75% of smartphone 2016. See page 30 for more detail on our data sessions to be at least 3Mbps by 2015. 2014 75% at
least 3Mbps Network strategy.
Relative mobile market share performance More work to do
We track
our relative performance 2012 11 out of 17 markets We lost share in the majority of our European by measuring the change in our revenue markets over the year but gained share market share against our key competitors. 2013 9 out of 17 markets in some
of our key emerging markets,
We aim to gain or hold revenue market including India, South Africa and Turkey. share in most of our markets. 2014 7 out of 17 markets
Ordinary dividend per share Achieved
The ordinary dividend remains the primary 2012 9.52p The
Verizon Wireless transaction enabled method of shareholder return and we have us to increase the dividend per share an outstanding record of growth here. 2013 10.19p by 8% to 11.00 pence and we now expect to increase it annually.
Our target was to maintain the dividend per share at its 2013 level. 2014 11.00p
Consumer net promoter score
(NPS) Achieved
We use NPS to measure the extent 2012 11 out of 21 markets This year we increased the number of markets to which our customers would where we are
ranked number one but the recommend us to friends and family. 2013 8 out of 21 markets total of nine markets remains too low. We aim We aim to increase or maintain the number to improve our position over the coming year. of markets where we are
ranked number 2014 9 out of 21 markets one by NPS.
Employee engagement Achieved
The employee
engagement score 2012 77 Our employee engagement score remains measures employees level of broadly stable and we retained a top quartile engagement a combination of pride, 2013 78 position. More information can be found loyalty and
motivation. Our goal here on page 36. is to retain our top quartile position. 2014 77
% of women in the senior leadership team Achieved
Diversity increases the range of skills 2012 19% Gender diversity is a key area of our global and styles in our senior leadership diversity strategy and we have continued team, our 223 most
senior managers. 2013 20% to make progress in this area. We also Increased female representation is one increased the number of women on both measure of diversity. Our goal is simple, 2014 22% the Executive Committee and the Board. to increase the
proportion each year. See page 36 for more details.
Notes: 1 Adjusted EBITDA and AOP have been redefined to exclude restructuring costs. AOP has also be redefined to
exclude amortisation of customer bases and brand intangible assets. Comparatives have been restated.
2 | Europe now excludes Turkey. |
Market overview
industry The
telecommunications today
The fixed and mobile telecommunications industry is a large and important sector, generating around US$1.5 trillion of revenue. Today there are
seven billion mobile users and over 650 million fixed customers.
The global mobile market The global fixed market
Scale and structure The fixed communications market is valued at around US$500 billion.
The mobile industry alone
has seven billion users, generating over Over the last three years, revenue from voice services has declined
US$960 billion of annual service revenue every year. The
majority as the demand for traditional fixed line calls has remained static of revenue comes from traditional calls and texts (for example, last at around one billion users. In contrast, revenue from fixed broadband year 7,800 billion texts were
sent around the world last year). However, or internet usage on the PC is growing with an estimated 650 million over the last few years the demand for data services, such as internet customers worldwide an increase of nearly 30% over the
last three browsing on a smartphone, has accelerated, and today around 28% years. This growth has been spread across all forms of broadband of mobile revenue is from data, up from 13% in 2009. DSL (copper), cable and fibre, and within
this, there is a growing preference for the high speed capability provided by cable and fibre. Around 74% of mobile users are in emerging markets, such as India and
Africa,
reflecting the typical combination of large populations and the lack of fixed line infrastructure. The remaining users are from wealthier mature markets, such as Europe. However, the proportion of the population with a phone or mobile
penetration tends to be higher in mature markets (usually over 100%) and lower in emerging markets, particularly in rural areas, due mainly to lower incomes and less Telecommunications revenue US$ billion network coverage.
1,500 209 217
Growth 184 197
170 298
277
The demand for mobile services continues to grow strongly. In the last 362 340 319 three years the number of users increased by an average of 9% each 1,000
940 963
year. In 2009 global mobile penetration was only 69%, and by 2013 862 902
822
it had risen to 98%. Most of the increase in users has been from emerging markets due to favourable growth
drivers young and 500 expanding populations, faster economic growth, low but rising mobile penetration, and less fixed line infrastructure. The other key area 0 2009 2010 2011 2012 2013 of growth is data, which is being driven by
increasing smartphone and
n Mobile n Fixed voice n Fixed broadband
tablet penetration, better
mobile networks, and an increased choice of internet content and applications (apps). Mobile users by market 2013: 7.0 billion (2012: 6.4 billion)
Competition
North America: 6%
The mobile industry is highly competitive, with many alternative China: 18%
providers, giving customers a wide choice of supplier. In each country Europe: 17% there are typically at least three to four mobile network operators
(MNOs),
such as Vodafone. In addition, there can be numerous mobile virtual network operators (MVNOs) suppliers that rent capacity India: 14% Mature Asia: 4% from mobile operators to sell on to their customers. There can also be
competition from internet-based companies and software providers
South America: 10%
that offer
alternative communication services such as voice over internet protocol (VoIP) or instant messaging services. Emerging Asia: 15%
Africa: 11%
Regulation Middle East: 5%
The mobile industry is very heavily regulated by national and n Mature markets n
Emerging markets supranational authorities. Regulators continue to lower mobile
Mobile phone penetration by market % termination rates (MTRs) which are the fees
mobile companies charge for calls received from other companies networks, and to limit 150 141 the amount that operators can charge for mobile roaming services. 138 These two areas represent around 12% of service revenue for Vodafone. 112
100
Revenue trends 93
In an environment of intense competition and significant 78 74 regulatory pressures, the price of mobile services has tended 50 to reduce over time. However, with
both more mobile phone users, mainly in emerging markets, and more data usage, global mobile revenue remains on a positive trend and expanded by 2% in 2013. 0 Germany UK US Turkey India Kenya
n Mature markets n Emerging markets
Note: The industry data on this page is sourced from Strategy Analytics,
Analysys Mason and Ovum.
Supporting access to mobile
to Overcoming mobile ownership barriers
for emerging women markets in
Our Connected Women report looked at the gender gap in mobile phone ownership in emerging economies and the social and economic impact of
extending womens access to mobile phones.
Vodafone Turkey launched the Vodafone Women First programme in 2013, which combines promotional offers with services that
help women to increase their income, use mobile technology and acquire new skills.
Launched in 2013, it attracted 75,000 women customers in its first nine months, of which
15% were new customers for Vodafone.
Want to find out more?
See sustainable business See the full
Connected Women report
34 vodafone.com/connectedwomen
Where is heading the industry
The pace of change in the industry over
the last few years has been significant and is expected to continue with new revenue streams, new users, new services, major improvements to networks, and the convergence of fixed and mobile services.
Growing importance of data and other new revenue areas Regulation will continue to have a significant impact
Mobile voice and texts, our traditional revenue sources, have reached The industry is expected to see continued downward revenue pressure maturity in a number of markets. To
deliver future growth opportunities, from regulation. For example the Europe Commission is seeking the we are investing in newer revenue areas such as data. It is estimated removal of all roaming surcharges after 2016 (for Vodafone roaming that
between 2013 and 2017 data revenue for the telecommunications accounts for around 6% of European service revenue). In contrast, sector is set to grow by US$128 billion, compared to a US$38 billion Commission proposals to harmonise the speed at which
Member States decline in voice revenue over the same period. The demand for data will roll out spectrum and the duration of contracts, should encourage continue to be driven by rising smartphone and tablet penetration and investment. In our largest
emerging market, India, the regulatory usage, and improvements in mobile network capability. As the demand framework is becoming clearer. for data grows, mobile networks have to be reconfigured to data, while
Improving economic environment in Europe still meeting the need for traditional texts and calls. Already 91% of the
The economic recession in Europe over the last two years has been worlds total traffic on mobile networks is data. The data services most a key driver of the declining
revenue trends in Europe for many used are video streaming and internet browsing which require high operators. However, we have started to see early signs of economic speed networks. Therefore, we are investing in ultrafast 4G with average recovery
in Europe, with a return to GDP growth in 2013 in Northern download speeds of over 75Mbps today, and the expectation of faster Europe and an expected recovery in 2014 in Southern Europe. speeds, of up to 300Mbps, by the end of calendar 2014.
New applications for mobile services are being developed by the industry to extend the use of mobile beyond everyday communication and deliver new revenue streams, such as
mobile payments via a handset or machine-to-machine services, including the location Industry mobile service revenue by type % monitoring of vehicles, through a SIM card embedded in the vehicle.
100 28 31 34 36 39
Convergence of fixed and mobile into unified communications
We expect a continued trend towards unified communications such 80
72 69
as bundled mobile, fixed and TV services. These provide a range 66 64
60 61
of benefits for the user, including simplicity, flexibility and cost savings.
The demand for these services is
already established among enterprise 40 customers and it is now becoming more visible in the consumer market, particularly in southern European markets, such as Spain. We believe 20 that this demand, combined with technological advances delivering
0 2013 2014e 2015e 2016e 2017e
easier connection of multiple data devices, will support strong
data Data
n Voice and texts n
growth in future, and that this will need to be managed by access
to next-generation fixed networks, principally cable or fibre, to support Industry mobile phone users by market % increased speed and capacity demands.
100 74 75 76 77 77
Strong demand from emerging markets
Emerging markets have the most potential for future mobile
customer 80 and revenue growth driven by rising populations, strong economic growth, lower mobile penetration and a lack of alternative fixed line 60 infrastructure. According to industry analysts, by 2017 there will be 1.7 billion new mobile
users across the globe, and most will be from 40 emerging markets. As a result by 2017, 77% of the worlds mobile users 26 25 24 23 23 will be from these markets. 20
Increasing range of competitors 0 2013 2014e 2015e 2016e 2017e
The high level of competition
among established MNOs is expected n Mature markets n Emerging markets to continue. However, there is also a wider pool of new competitors. % of new mobile customers taking converged services in Spain
Alternative communication technologies, such as instant messaging services which use data, rather than traditional voice and text, 60 51% 51%
49% 49% 57%
are increasingly used by mobile consumers. In response, operators 44%
50
have begun to replace per unit charges for voice and text services with unlimited bundles, and combine this
with a fixed fee for data 40 usage. Meanwhile MVNOs which offer low prices, but have little 30 capital invested, have in recent periods taken share from established 20 24% capital intensive operators. However, the move to 4G and unified
communications presents an opportunity for the major operators 10 to differentiate the quality of their networks and services.
0 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13
Feb 13
Note: The industry data on this page is sourced from Strategy Analytics, Analysys Mason and Ovum.
Accelerating our strategy
As the demand for
ubiquitous data grows rapidly, we are transforming
our business to become a leading unified communications company,
and to strengthen further our network and service differentiation against
our peers.
Our strategy is shaped by the following industry trends:
Growing importance Increasing demand Strong demand from
Increasing range Improving economic
of data and other for unified emerging markets of competitors environment in Europe
new revenue areas communications
for both enterprises
and consumers
In light of these expected industry trends our strategic goals
are focused on four key growth areas and targets:
Consumer Europe Unified Communications Consumer Emerging Markets
Enterprise
A leading mobile data provider Converged services in all A strong leader and first Major enterprise provider
key European markets choice for data with full service offering
Supported by:
An excellent network experience A simplified and cost-efficient
business model and operations
Project Spring accelerates and extends our strategic priorities
through investment in mobile and fixed networks,
products
and services, and our retail platform, to strengthen further our
network and service
differentiation.
What we want to achieve for our customers:
Always best connected Unmatched
customer experience Integrated worry-free solutions
Best mobile voice and data Number one in customer experience Simplest connectivity and price plans
(coverage and quality) 4G/3G in store, online, on the phone
Converged enterprise product suite
Competitive in fixed and best Consistent execution across markets
Innovator in new services, such
converged experience
as mobile payments
Read more: Consumer Europe Unified Consumer Enterprise Network Operations
Communications Emerging
Markets
22 24 26 28 30 32
Consumer Europe
While voice and messaging
remain important for European consumers, demand for data is rapidly accelerating. We are focused on providing the best data experience both in mobile and fixed matched by outstanding customer service combined with a range of worry-free
price plans and additional services.
Context Where we are going
a Nearly half our European
customers now use a smartphone, a We are enabling worry-free usage through our Red and with more and more also using tablets. roaming plans. a The average data usage per customer is also increasing rapidly. a We are improving our customer
experience across all Customers want simplicity and worry-free contact points. a bills and they demand the best in customer service. a We are pushing the adoption of smartphones and are encouraging bundling of fixed and mobile for residential our
customers to use more and more data. a The products customers is becoming increasingly common across Europe and a We are becoming a leading unified communications provider we expect this trend to continue. across Europe. a Aggressive price
competition continues in many of our markets. a We are innovating in mobile payments.
Vodafone Red enabling worry-free usage 4G driving increased data usage and engagement
Vodafone Red offers unlimited calls and texts with generous data Although most of our customers are using 2G and 3G services, we are allowances enabling our customers
to use their smartphones seeing increased demand for 4G services, with 4.7 million customers worry-free. We already have 12 million users across 20 markets and across 14 markets. 4G is attractive because it offers much faster speeds 37% of
new contract customers join on Red plans. Our research shows and a better user experience and as a result our 4G customers use that Red customers are more likely to recommend us to their friends on average twice as much data as our 3G users. and
family and we are seeing early signs that they are less likely to leave By adding attractive content such as music and sport packages with 4G us for another operator. Red also helps us protect our revenue, with 58% plans we believe we can drive
growth in both data usage and revenue. of our European mobile service revenue on a management basis now
In the UK for example, 4G plans are generating 18% more
ARPU versus in-bundle compared to 51% a year ago, and it reduces the risk to our comparable 3G plans and customers are using 2.3 times more data. business from over?the?top services.
We have launched Red family plans, with 0.8 million customers, Mobile devices driving data adoption and have combined Red plans with fixed broadband in some markets. The growing
popularity of smartphones is supporting data adoption, accounting for 78% of the handsets we sold in Europe last year.
Simple, worry-free roaming offer
This has helped European smartphone penetration grow to 45%.
As people travel they want to use their phones and roam abroad,
We sold 2.2 million Vodafone branded smartphones in Europe and therefore we developed an offer that lets customers use their home beyond during the year, instrumental in stimulating
data adoption allowance for a small daily fee, removing any worries about their bills. in low-end contract and prepaid segments.
These plans are now available in 15 markets
and 14 million customers have registered to use these services, accounting for 26% of consumer Fixed and unified communications contract roamers. Customers on these offers use their phone more and Consumers increasingly want unified
communications as they benefit generate higher roaming ARPUs than those on standard tariffs. from one plan that includes their fixed and mobile connections and in some cases TV package as well. We already have over 8.5 million
Delivering an unmatched customer experience fixed broadband customers in Europe and we are increasingly offering We are modernising around 8,000 of our stores to a new format that mobile and
fixed services together. We expect unified communications enables customers to interact with us in a more engaging way and to become more and more important over time see page 24 for details these stores have been seen to increase
transactions by more than 5%. on our strategy.
We have already upgraded over 1,100 stores and Project Spring will accelerate our plans to modernise the remaining stores by
March 2016. Innovating in mobile payments
We are also upgrading our customer service, with all of our call centres As part of our drive for innovation we are developing
services which across Europe now offering 24/7 service and we have expanded our allow our customers to use their smartphones to pay for goods and self-care solutions online and on mobile. services, using our secure network.
During the year we launched Vodafone Wallet in Germany and Spain.
European smartphone penetration % % of European mobile service revenue in-bundle %
45 45 60 58
38 51
30 40 28
15 20 data not available
0 2012 2013 2014 0 2012 2013 2014
500MB per month compared to around 350MB a year ago1
Transforming the retail experience
We are updating our stores into a common and consistent store concept. Each of our transformed stores now have a simple design allowing each store to run different promotions and host a
top 10 table with live devices, on-site Tech Expert support who can transfer customers data from their old phones to their new ones. At the same time we are retraining our staff to better serve customers.
An easier way to pay
Contactless payments are becoming an increasingly popular way to pay for small
value transactions. We have created the Vodafone Wallet to leverage this opportunity, which allows you to pay for anything with your phone. It digitises everything in your wallet: payment cards, loyalty cards, tickets or coupons. We launched the
first commercial wallet in Spain, ahead of our competitors and built the first mobile wallet in Europe, based entirely on industry standards.
Extending our reach through
partner markets
Through relationships with other mobile operators around the world we have extended our reach to a further 48 countries stretching from Chile to Russia,
Iceland to Brazil. These markets extend our mobile reach beyond our own mobile operations and support the global access to our services which our customers have come to expect from us.
Note:
1 | Android and iOS devices. |
Unified Communications
Our roots are in
mobile services, and these still represent the majority of our revenues. However, more and more businesses and individual consumers are seeking unified communications, or converged fixed and mobile services, and we are changing the shape of our
Company to meet this demand. What is unified communications? However, unified communications is also a threat, particularly in the residential market, as historically we have not owned or had access
As customer demand for ubiquitous data and content grows rapidly
to next?generation fixed line infrastructure such
as fibre or cable.
over the coming years, the most successful communications providers
This could
allow cable operators with MVNO platforms, or integrated
will be the ones who can provide seamless high speed connectivity
fixed and mobile incumbents, to take share in the market with
at home, at work, at play and anywhere in between.
This will require the
aggressively discounted offers.
integration of multiple technologies
3G, 4G, WiFi, cable and fibre into
a single meshed network offering the best, uninterrupted experience
what we call unified communications. Progressing our strategy
Our goal is to secure access to
next?generation fixed line infrastructure
Unified communications for enterprise in all our major European markets. Our approach is market-by-market,
based on the cost of building our own fibre, the openness of the
Combined fixed and mobile services have been a
feature of the
incumbent provider to reasonable wholesale terms, the speed of market
enterprise
market, particularly for small- and medium-sized companies,
development, and the availability of good quality businesses to acquire.
for several years. We have been a market leader with products such
The table below shows the progress we have made
this year. We have
as Vodafone One Net, which provides integrated fixed and mobile
made
significant strides in most of our major markets, through three
services which create significant business efficiencies for customers.
routes to market wholesaling (or renting), our own fibre deployment,
This year we have evolved One Net as
an application that can also serve
or acquisitions. In particular, the acquisition of Kabel Deutschland and
the needs of larger national corporates as well.
the proposed purchase of Ono will significantly strengthen our
position
With the acquisition of Cable & Wireless Worldwide in 2012, we have in Germany and Spain respectively. At the year end, we had nine million
made a step change in our ability to offer unified communications fixed broadband customers, and the proposed acquisition of Ono will
services to customers in the UK and gained an extensive international increase this to 11 million.
footprint.
After successfully integrating sales forces this year, we are now
Outside Europe, we acquired TelstraClear in New Zealand, the second
beginning to build a strong pipeline of new business.
largest fixed operator, in 2012 to strengthen our portfolio
of fixed
Unified communications for consumers products and services and create a leading total communications
Over the last few years, we have seen a significant move towards company. We also intend to expand selectively high speed fibre services
bundling of fixed and mobile products for residential customers, often to urban areas in emerging markets to enable converged services
including television in the package as well. Of our markets, Spain in key business areas. And our subsidiary, Vodacom, proposes to acquire
and Portugal are the most advanced in this regard, but we expect Neotel, the second largest provider of fixed telecommunications
it to become prevalent in all our major European markets. This presents services in South Africa, for a total cash consideration of ZAR 7.0 billion
us with a clear opportunity, as our share of fixed services in our (Ł0.4 billion) to accelerate its growth in unified communications
European markets is under 10%, whereas our share of the mobile products and services.
market is well over 25%. In
addition, mobile customer churn is typically
three times higher than that of customers taking combined fixed and
mobile services.
Making good progress on unified communications strategy
Our strategic approach to next-generation fixed access Our recent acquisitions
Wholesale Fibre deployment
Acquisitions Data to March 2014 Kabel Ono (proposed)
Deutschland
Italy Italy Spain Market
position Largest cable Largest cable
(2013) (planned for 2014) Ono (proposed 2014) operator in Germany operator in Spain
Germany Spain Germany Purchase price €10.7bn €7.2bn
(2013) (2014) Kabel Deutschland
(2013) Annual revenue €1.9bn €1.6bn
Netherlands Portugal UK Homes passed 15.2m 7.2m
(2013) (2010) Cable & Wireless Total customers 8.3m 1.9m
Worldwide (2012)
New Zealand Fixed broadband 2.3m 1.6m
TelstraClear (2012) customers
UnifiedCommunications
Our unified market-leading communications
solution in Portugal
In Portugal we have developed a market?leading unified communications solution by combining our fibre?based fixed broadband, advanced internet
TV (with full cloud catch-up TV and multi-screen option tablet, PC, smartphone) and our mobile offers. As a result we are the operator with the highest mobile net
promoter score.
As part of our Project Spring programme we are accelerating the deployment of high speed fibre, which offers up to 300Mbps, to reach 1.5 million homes
by mid?2015.
Consumer Emerging Markets
Its easy to
think of Vodafone as simply a European company, with its headquarters in the UK, but the reality is that one third of our revenue comes from countries outside Europe and most of this is in fast-growing emerging markets where data demand is taking
off.
Context Where we are going
a Our main emerging markets are India, South Africa, Turkey, We
are aiming to drive continued growth in emerging markets Egypt, Ghana, Kenya, Qatar, Tanzania and several other southern through a differentiation-based strategy of being the best, by: African countries. a increasing and enhancing our
base stations sites to improve voice a They provide strong growth opportunities due to fast economic and data quality and coverage; growth, young and rising populations, and low and increasing a extending fibre to enterprise customers to meet the
expected mobile penetration. demand for unified communications services; a The demand for mobile data in emerging markets is beginning a expanding the branded store footprint to enhance customer to take off, in part due to the lack of alternative
fixed service; and broadband infrastructure. a expanding our leading money transfer service, M-Pesa. The goal a There is significant scope for newer revenue streams, such is for it to deliver a growing proportion of our emerging market as mobile
money transfer as many people in these markets have service revenue. little or no access to banking services.
Driving the mobile penetration opportunity Enhancing
distribution
The number of customers in our emerging markets has grown steadily Our distribution footprint in emerging markets consists of a range and rapidly from
185 million, 57% of the Group total three years ago, of branded stores, franchised shops and small independent retail to around 302 million, representing 70% of the total today. This has been recharging units. We have modernised over 250
stores in these markets driven by fast economic growth and rising populations. In our largest and we are targeting to reach over 2,300 by 2016. Our branded stores emerging market, India, the proportion of the 1.2 billion population with are very
attractive to customers wanting higher end smartphones a mobile, commonly known as mobile penetration, is still only 78%, or monthly contract plans. In Egypt 95% of new contract customers so we expect to see a lot more growth going forward. come to
us through branded stores. In India we have the largest footprint of 1.7 million point of sale sites for top?ups, significantly more We have invested significantly in our emerging markets to support and than our nearest competitor, and to cater
for our female customers drive this growth opportunity. We have expanded network coverage we are opening a number of new Angel stores, which are run and by 8% to 161,500 base station sites, providing us with significant scale managed
exclusively by women. and broad coverage. We have increased the range of low cost Vodafone branded devices, enabling more people on low incomes to access Increasing access to mobile financial services mobile services. We have also lowered the cost
of calls, with prices as low as one US cent per minute in India, which, along with greater Our Vodafone money transfer service, or M-Pesa as it is more network coverage, has helped drive growth in both the number users commonly known, enables people
who have a standard mobile and mobile usage. phone, but with limited or no access to a bank account, to send and receive money person to person, top-up airtime, make bill payments, The data opportunity and in conjunction with the Commercial Bank of
Africa to save and also receive short-term loans.
While mobile data usage to browse the internet or watch videos is increasingly common in Europe, it is still at an early
stage in emerging We now have over 17 million active M-Pesa customers, an increase markets. However, it is expanding quickly due to the growth of 18% over last year. During the year we launched in several new in customers and also the greater
range and affordability of handsets. emerging markets India, Egypt, Lesotho and Mozambique. In India In India, for example, the number of data users increased by 13 million the service has now launched nationwide. Across the M-Pesa
footprint, to 52 million over the course of last year. In Turkey, we now have we have over 200,000 active agents and M-Pesa processed 2.8 billion 6.5 million smartphone users, up from 3.1 million only two years transactions (up 27%
year-on-year). The service is expected to deliver ago. Outside South Africa, in our smaller southern African markets a growing proportion of our emerging market revenue over the next few of Tanzania, Lesotho, Mozambique and the DRC, the number of
data years. Besides providing additional revenue streams, M-Pesa also keeps customers increased 86% to 7.7 million taking the total active data customers on our networks, which reduces the proportion of customers customer base to 30% of total
customers. that leave, commonly known as churn.
We continue to innovate M-Pesa, with the introduction of services such as Lipa Na M-Pesa, a retail payment proposition for
consumers, and the expansion of international money transfer propositions. In March 2014 we launched the service in our first European market, Romania.
Mobile customers % Data users in emerging markets million
100
92
Europe: 29% 75
68
50
AMAP Australia and AMAP emerging 26 New Zealand: 1% markets: 70% 25
0 2012 2013 2014
m 14 million in 2013
M-Pesa in Tanzania
The cost of travel prevents many people seeking the medical care they need. A local NGO, the
Comprehensive Community Based Rehabilitation in Tanzania (CCBRT), is working with the Vodafone Foundation to address this by integrating M-Pesa into its referral process, to ensure patients suffering from obstetric fistula get to
hospital.
In 2013, 70% of CCBRTs fistula patients came via the M-Pesa Text to Treatment initiative. This project is one of the worlds largest
fistula repair programmes.
Data usage in South Africa
In South Africa were investing in
newer revenue streams such as data by driving smartphone adoption and enhancing the network. During the year we supported a 24% increase in the number of active smartphones and tablets, taking the total to eight million devices. Average monthly
smartphone usage increased 82% to 253MB per device and grew 25% to 743MB on tablets. We supported this growth by investing in our market-leading data network. 74% of our base stations are fitted with high capacity fibre transmission, and we can
now provide 3G services to 92% of the population. Were also ready for the future, with 4G coverage of 20% of the population today.
Egypts literacy programme
Vodafone Egypt Foundation launched an accredited mobile literacy app in 2013, which forms part of its Knowledge is Power initiative, supporting national efforts to tackle
adult illiteracy. The app uses pictures and a talkback function to make learning easier and more flexible. The Knowledge is Power programme uses classroom and mobile learning to improve literacy skills to date 187,000 people
have enrolled.
Enterprise
We want to build on our core strength in mobile to become
the leading communications provider for businesses across the world, whether large or small. We are focused on providing a range of mobile, fixed, hosting, cloud and other business services that are simple to use, worry-free and
cost-effective.
Context Where we are going
a Mobility increasingly sits at the heart of how
organisations function, a We are building on our core strength in mobile and increasing how they maximise their employee productivity and how they capability in fixed to develop a portfolio of products and interact with their customers, suppliers
and partners. services, based on converged fixed and mobile solutions,
Customers increasingly want more than just mobile solutions. to sell to businesses across the
globe. a
Demand for unified communications and full service offerings, a Our strategy and investment is focused on: three high-growth machine-to-machine and cloud and
hosting is increasing, providing product areas unified communications, cloud and hosting exciting new growth opportunities. and machine-to-machine; and three market segments small- and medium-sized enterprises (SMEs), large
and multinational corporates and carriers.
Mobile and unified communications Machine-to-Machine (M2M)
While the majority of our revenue still comes from mobile, we are M2M technology connects things to the internet, transforming them increasingly providing unified communications
services. The recent into intelligent devices that exchange real time information in effect acquisitions of Cable & Wireless Worldwide (CWW) and TelstraClear, enabling machines to talk. combined with our existing fixed
assets, enabled us to accelerate growth
Our M2M business serves customers across all market sectors, with of our fixed and converged services, with 23% of our Enterprise
revenue specific focus on the key growth sectors of automotive, smart metering on a management basis coming from fixed services, an increase and consumer electronic products. M2M is growing rapidly and we have of 12 percentage points over the
year. increased M2M connections from 12.0 million to 16.2 million in the year.
Vodafone One Net, our flagship converged offer which combines fixed
Connections in the global M2M market are expected to grow and mobile services, is available to businesses of all sizes, from both 1 at an average of 24% per year between 2013 and 2018 .
We continue small and medium up to global multinational companies and is live to be ranked as the market leader by a number of market analysts, in ten markets. including Analysys Mason and Machina Research.
Vodafone Global Enterprise (VGE) Cloud and Hosting
VGE delivers total communications services to some
of the
Bringing together mobile, fixed, cloud and hosting services, worlds largest multinational companies. We currently serve around we help organisations move their
data and applications to the cloud, 1,700 companies and provide services in over 100 countries. transforming the way they do business. Our capabilities mean we are VGE simplifies operations for our customers by providing them with well placed to
capitalise on the global growth of cloud computing and a single account and service team, a single multi-country contract, the increasing technology and procurement link between hosting, single pricing structures and a single portfolio of products
and services. cloud and connectivity.
These are underpinned by our fully integrated fixed and mobile network,
With the successful integration of our CWW operations, our Cloud and cloud-based hosting platforms, machine-to-machine capability and Hosting Services business now serves more than 1,200
public sector other business services. and enterprise customers in multiple regions. Our 14 data centres in the Carrier Services UK, Ireland and South Africa are complemented by a partner network of data centre facilities that allow us to serve
multinational customers Our Carrier Services division manages the commercial relationships globally. Our services include co-location, managed hosting, private and with other operators to support, in particular, international voice and public cloud
services, messaging and software-as-a-service applications. data services. We are the second largest international voice carrier in the world, carrying 50 billion international voice minutes annually. We are one of the worlds largest investors
in submarine cables that reach more than 100 countries. We offer a broad portfolio of carrier voice and data products and work with over 1,000 communication service providers globally.
Vodafone enterprise service revenue on Share of Group service revenue on a management basis % a management basis 2014 %
30
27 27 Fixed: 23% 23 20
10 Mobile:
77%
0 2012 2013 2014
t basis in the UK and New Zealand now from enterprise customers
M2M services for automotive customers
We will provide automotive connectivity in new Volkswagen and Audi vehicles
in Europe from next year, using an embedded SIM to provide customers with high-speed internet access on the road. We worked closely with Volkswagen to design the activation and service processes to their specific requirements.
Vodafone One Net Business
Vodafone One Net Business has helped ICT Networks in the UK reduce costs and free up its
technicians time by providing a simple and reliable virtual desk phone via their mobile allowing technicians who are travelling and working remotely to be more accessible and responsive to customers and colleagues.
Cloud and hosting
We will provide cloud and hosting services to global software provider Synchronoss across
Europe, with the ability to expand into the
Middle East and the Asia Pacific region. Our solution leverages assets and knowledge acquired from CWW to help them deploy secure
applications on a global scale.
Network
We aim to have the best mobile
network in all our markets, be competitive in fixed services and provide the best converged fixed and mobile services to support the growing demand for unified communications. We are aiming to provide our customers with a perfect voice
call experience, and provide both high quality and broad data coverage.
Context Where we are going
a The telecoms industry continues to experience a rapid increase Our strategy is focused upon delivering a clearly differentiated, in the demand for data services, such as video streaming
and market-leading network position. We will do this through: internet browsing on smartphones and tablets. a the provision of the best mobile voice and data service, by the a Across the Group data traffic increased by 64% over the last year rapid
and widespread deployment of 3G and 4G, and upgrades and data now accounts for 81% of our total traffic including voice. to network backhaul infrastructure; and a Mobile and fixed network technology is continuing to evolve being competitive in the
fixed market and delivering leading a providing faster data speeds and the capability to carry more data. unified communication solutions, by acquiring access a Customers are also increasingly seeking fixed and mobile to an effective mix of
high speed next?generation fixed converged or unified communications propositions. network cable and fibre infrastructure.
Mobile network Europe During the year we
acquired Kabel Deutschland in Germany and announced the acquisition of Ono in Spain, both of which provide Across Europe data has become an increasingly important driver of total us with high quality cable network infrastructure. The integration of
traffic on our network. In the last year European data traffic increased Cable & Wireless Worldwide in the UK and TelstraClear in New Zealand by 44%, compared to 4% for voice. Video streaming and web browsing remains on track and we
have made good progress on our fibre build are the most popular data applications accounting for nearly 75% programmes in Spain and Portugal with a target to reach three million of data usage. 3G accounts for most of our data traffic, so
its a key area and 1.5 million homes passed respectively by 2015. for investment. This is why today around two thirds of our European 3G network can now deliver peak downlink speeds of 43.2Mbps and the latest smartphone drive trials
showed that we had the best or co-best Spectrum 3G data network in 15 out of 20 markets. The faster speeds offered Radio spectrum is the key raw material for our mobile business. by 4G make this increasingly attractive to our customers, shown During
the year we acquired and renewed spectrum for Ł2.2 billion by a significant rise in the number of users last year to 4.7 million. in India, Romania, New Zealand and the Czech Republic, with a cash
The increasing take-up of 4G means that this now represents 18% cost of Ł0.9 billion during the year. The purchases in India will enable of total European data traffic. the provision of
enhanced voice and data services including 2G, 3G and 4G across the country. We have a strong portfolio of spectrum assets Mobile network emerging markets to support the rapid deployment of 4G, with 800/900MHz frequency spectrum for deep indoor
coverage and 1800/2600MHz for capacity Nearly 40% of Group mobile data is now carried across our AMAP and performance. See page 194 for more details. network, which includes our emerging markets, and by the end of the year India became the greatest
data user by volume of any country within Vodafone. The scope for further data growth remains significant Project Spring with only 52 million of our 167 million customers in India having The largest part of Project Spring will be
significant additional access to data, of which only seven million are 3G users. 3G usage investment in our mobile and fixed networks over the next two years is already averaging in excess of nearly 750MB per month compared to both
accelerate and clearly differentiate our network position in all to around 500MB in Europe. To meet this rapid growth in data traffic, of our markets. This is the largest network investment programme we have rolled out more than 10,500 3G and over
9,700 2G sites in India in our history. supported by more than 13,000 kilometres of fibre in the last two years.
In our European mobile networks, this will enable us to
deliver Investing in fixed networks for unified communications perfect voice which means a call success rate of over 99%. We will As demand for unified communications and data grows we are also deliver the best 4G data experience with
over 90% outdoor increasing our access to next?generation fixed line infrastructure population coverage and 90% of customer data sessions on high to support this. Through a combination of wholesale agreements, speed smartphones will be above 3Mbps.
This will be supported self-build programmes and targeted acquisitions we now have by a future proofed network with over 98% of sites covered with high access to fixed line infrastructure in 17 markets (with data speeds capacity backhaul. In
emerging markets, we will also deliver perfect of up to 300Mbps in some) and we offer combined fixed and mobile voice and will grow our 3G coverage to 95% in targeted urban areas propositions in 12 countries. in India. For our fixed
customers, we will deploy fibre in Italy passing 6.4 million households, extend our fibre roll?out in Portugal to more households and build fibre coverage to support 15,000 enterprises in South Africa.
obile operators in the world
Expanding our 4G network
Our 4G journey continues to go from strength to strength. In the last year, we launched 4G services in a further seven markets, including the UK, bringing the total to 14. 17% of the
smartphones on our European network are 4G capable, and our 4G network enables customers to upload and download content two to three times faster than over 3G. This allows users to stream video content and browse the internet with less delay. By
2016 we expect to expand our 4G network to cover over
90% of the European population.
Portable network supports victims of typhoon
In November 2013, the Vodafone Foundation deployed
two Instant Network to support relief efforts following Typhoon Haiyan, in the Philippines. These portable networks pack into four cases, each weighing less than 100kg. Over 29 days the networks enabled 1.4 million SMS and 443,200 calls to be
made.
In February 2014, the Vodafone Foundation launched the Instant Network Mini a network in a backpack weighing just 11kg, which can be deployed
in ten minutes.
Network innovation
We work very closely with our network suppliers to continually
develop innovative new solutions to help improve our customers network experience, deliver efficiencies and enable us to differentiate. During this year, we began testing and deploying several solutions, which will be available in the near
future. For example, 4G carrier aggregation, bonds together multiple spectrum blocks to increase peak data downloads speeds up to 300Mbps; and 4G Broadcast enables an unlimited number of smartphone users, with compatible
devices, to watch TV channels without putting additional load on the
4G network. We were the first operator to trial this service in Europe in February 2014.
Operations
We are using the benefits of our
global reach and scale to standardise and simplify the way we do business across the Group. This will both improve cost efficiency and reduce the time to launch new services and products to our customers.
Context Where we are going
a The challenging economic, regulatory and competitive We aim to improve operational
efficiency, and to speed up and environment we face in Europe has led to declining revenues in our co-ordinate our time to market for new propositions and services, by: European businesses. a using our centralised functions more; a Inflationary
pressure in emerging markets is putting upward pressure on our cost base. a driving standardisation and simplification of our business to maximise the benefits of our scale; a The trend towards greater data usage significantly increases the traffic
on our network. a offshoring more business functions to shared service centres; a applying new technology to improve efficiency; and a Against this background, to protect our level of profitability, we must continue to find ways to improve operating
efficiency and a reducing non-customer facing cost. simplify and standardise processes for customers.
Using our centralised functions more Offshoring functions to shared
The Vodafone Procurement Company (VPC) in Luxembourg centrally service centres of expertise manages the strategic procurement of the majority of our overall
spend. Our business depends on having simple and effective operations This allows us to leverage scale and achieve better prices and terms that leverage the benefits of shared service centres to support our and conditions. During the year the spend
managed through the VPC operations across the globe. increased to €10.2 billion which represents around 50% of our spend, Over the past three years we have expanded the scope of shared service up from €6.9 billion in the prior year.
centres in Egypt, India and Europe to provide financial, administrative,
By utilising the VPC we also learn how to apply best practice across IT, customer operations and
human resource services for all of our different spend categories. For example, by applying techniques from markets. In 2012, we had just 9,5001 shared centre employees and this how we manage the software licences for our data centres under has now
risen to over 13,300, and has expanded to cover commercial a single contract to how we buy software for our network operations, activities for our Enterprise business and customers. Our shared services we have achieved a 30% reduction in prices
compared to what our are delivering cash cost savings at an annualised run-rate of about markets were achieving in isolation. Ł180 million. We expect to have around 16,000 employees in shared
Standardisation and simplification services by 2016.
In the UK, we completed the first phase of a programme to
simplify Applying new technology to improve efficiency our organisation and improve all of our IT systems for billing, customer We have been at the forefront of Single RAN (Radio Access relationship management, and online and retail services. All
prepaid Network) technology that enables the combination of 2G, 3G and customers services have migrated from legacy IT systems to one new 4G technologies into the same radio equipment. This has a number integrated platform. This has resulted in
simplification of our tariffs and of cost benefits including reduced floor space requirements on?site improved end-to-end order processing times. We have also upgraded which reduces our site rentals, and efficient power technology provides all
our retail points of sale to make the sales and logistics processes savings our energy bill. Single RAN units are now present in 45% of our simpler for our staff. All of this means a better experience for customers. sites and we plan to expand this
to 69% by 2016.
We have reduced the number of ways of returning a handset to eight, and through our rationalisation programme we are reducing our Reducing non-customer
facing costs consumer price plans from nearly 5,000 to under 500.
While we continue to expand our employee base in customer facing positions, we have been able to make
savings across administrative support positions in Europe. On balance this has led to a decrease in the number of employees in Europe (excluding our acquisitions of Kabel Deutschland and the minority stake in Vodafone Italy) and an increase in the
number of employees in AMAP.
Deploying Single Radio Access Network sites % of total Moving employees to shared services helps reduce costs to reduce costs
60 15,000
13,300
10,700
40 45 10,000 9,500 34
20 24 5,000
0
2012 2013 2014 0 2012 2013 2014
ons operating ex
Sharing network sites to reduce costs
Nearly three quarters of the new radio sites deployed across the Group during the year were shared with other mobile operators, which reduces the cost of renting or building
new sites by about 20% compared to non-shared units. During the year we entered into new sharing arrangements in three markets Greece, Romania and Italy.
Virtualising our network
We are increasingly looking at ways to virtualise our network through
cloud computing. This requires us to move our existing network capabilities from dedicated hardware onto virtualised applications running over the cloud. As a result we are able to simplify our network architecture and reduce costs. Virtualised
networks are more scalable and resilient, and enable the faster deployment of new services. With this capability, we have started rolling out new features such as a messaging platform for our M2M products, and many more are planned.
Helping our customers cut costs
We estimated that our products and services in smart metering and logistics, fleet
management, call conferencing, and cloud and hosting services, could save our customers 2.29 million tonnes of carbon dioxide equivalent (CO2e) almost equal to our total emissions last year.
Contributing economic improvement to social and
Telecommunications technology has the power to transform peoples lives. Ensuring that we continue to connect more people to essential services, while expanding the reach of our
network, is the best way we can support that improvement.
Telecommunications technology can be used to tackle some of the The issue of government surveillance has come under
increased most pressing challenges faced by society today. Our products and scrutiny. For the first time we have published a Law Enforcement services provide access to a range of solutions to these challenges Disclosure report, which sets out our
approach to responding to law in areas including financial services, healthcare and education. enforcement demands for access to customer information, together
We remain
determined to continue to contribute to the social and with information about intelligence agency and authority demands economic development of all our customers and particularly our on a country-by-country basis, where statistical data can lawfully
302 million customers who live in emerging markets, while ensuring be disclosed. we continue to fulfil our strategic business goals.
Vodafone is a member of the
Telecommunications Industry Dialogue How we achieve our goals is integral to the long-term success of the on Freedom and Privacy of Expression, which in March 2013 launched business. We remain fully committed to operating ethically and a two-year
collaboration with the Global Network Initiative (GNI) responsibly in everything we do. This includes ensuring we respect and a set of Guiding Principles, which address the issues of privacy and our customers human rights,
improving ethical and environmental freedom of expression as they relate to the telecommunications sector. standards in our supply chain and managing our energy use, while remaining proactive in our response to emerging sustainability risks.
Supporting ethical practices in the supply chain This report highlights our progress in four critical areas. We continue to work with our suppliers and others in our industry to raise ethical, labour and environmental standards in our supply
Connecting people to vital services chain, through an enhanced code of ethical purchasing. In 2014, we conducted 30 rigorous audits of both new and existing suppliers and
Mobile money continues to be a driver of financial inclusion, offering
38 through the Joint Audit
Co-operation (JAC), in collaboration with people access to payments and financial services beyond the nine other telecommunications operators. reach of traditional institutions. Our platform, M-Pesa, expanded its geographical reach
in 2014, launching recently in Mozambique, This year, we published our first Conflict Minerals report in response
Lesotho, Egypt, Romania and India. to US Securities and
Exchange Commission requirements. Our policy requires our suppliers to take steps to ensure that minerals used M-Pesa now has 17 million active users who can access a wide range to finance conflict in the Democratic Republic of Congo
(DRC) of services that enhance their ability to improve their livelihoods, or neighbouring countries do not end up in our products and we are including the ability to pay bills and even be paid their salary via M-Pesa. working through
industry initiatives to continue to tackle this issue. A new savings and loan product, launched in conjunction with the Commercial Bank of Africa, enables M-Pesa users to save and access Saving energy and cutting carbon loans, often for the very
first time.
We are a top-rated global communications service provider for the The M-Pesa platform supports our efforts in many other areas, including machine-to-machine
(M2M) industry. Using our M2M solutions helps our aim to increase productivity and improve the lives of 500,000 our enterprise customers to cut carbon emissions and generate cost smallholder farmers in Africa, through the Connected
Farmer Alliance savings. We estimated the carbon savings we deliver for customers from initiative. Our first formal partnership with Kilombero Plantations our M2M products and services, call conferencing and cloud and hosting, Limited, in Tanzania,
tested how mobile technology could support the to be a total of 2.29 million tonnes of carbon dioxide equivalent (CO2e) Companys engagement with smallholder rice farmers. We are also in 2013 almost equal to our total
emissions. By March 2014, we had piloting our solution with a dairy cooperative in Kenya, to help them run contracts to provide nearly 14 million M2M connections with carbon-more efficiently, increasing productivity and incomes for the members
reducing potential in smart metering, fleet management and logistics. who supply the cooperative with milk.
Though we continue to extend the reach of our network to more
Protecting our customers information customers, who are using increasing amounts of data, our own carbon and respecting their privacy footprint has remained almost stable and we remain committed to reduce it as far as possible through energy
efficiency measures.
The amount of data and personal information transmitted over our
The
efficiency of our operations has greatly improved with emissions per networks is increasing, as our customers use their mobile and other base station now at ten tonnes CO2e, almost 40% lower than in 2007. connected devices more and more. Our
commitment to protect that Our total carbon emissions in 2014 were 2.55 million tonnes of CO2e, information and respect their right to privacy and freedom of expression a slight increase on 2013 due to newly acquired operations. remains
critical in retaining their trust.
We can only ensure our customers privacy if we first ensure the security of their information and communications. Cyber security
threats Want to find out more? continue to proliferate, so Vodafones Global Security Operations Centre Read our sustainability report 201314, for more information monitors our IT systems 24 hours a day, seven days a week, to anticipate
on Vodafones contribution to social and economic development. or detect attacks and minimise their impact. vodafone.com/sustainability/report2014
Energy use 20141,2 GWh Carbon emissions2 Millions of tonnes CO2e
3 |
2.55
2.36 2.23
2 |
Network: 4,690
1 |
0 2012 2013 2014
n Scope 1 (direct greenhouse gas (GHG) emissions) n Scope 2 (indirect GHG emissions)
Notes:
1 | Energy use does not include fuel use for transport. |
2 | Calculated using local market actual or estimated data sourced from invoices, purchasing requisitions, direct data measurement and estimations. Carbon emissions calculated in line with DEFRA guidance and Greenhouse Gas Protocol. For full methodology see our sustainability report 2014. CWW and TelstraClear data included for 2014 only and data for 2014 acquisitions excluded. |
e Foundations in 2013 including Ł5.9 million towards its operating costs. Since its
inception, Vodafone has donated over Ł475 million to the charitable programmes led by our Foundations.
Connected Women
Vodafones Connected Women Summit focused on the impact of mobile technology on the lives of women around the world. New research, commissioned by the Vodafone Foundation, looked at the
social and economic impact of extending womens access to mobile phones. The Connected Women report found that stabilising the gender gap in our markets could have an economic benefit for women and society of more than US$22.3 billion annually
from 2020.
Supporting victims of domestic violence
TecSOS, from the Vodafone Foundation, rapidly
connects victims of domestic violence to emergency services. Now available in six European markets, it has helped more than 31,900 victims. In the UK, TecSOS is used by over 50% of police forces it won the
Metropolitan Police Commissioners Award for Best Use of Technology and was granted a Secured by Design licence, which recognises TecSOS as a high quality service to be used
by the police.
Instant Education
The Vodafone Foundation opened the first Instant Network
School in the DRC in 2013, in partnership with Italian NGO, Don Bosco. The Vodafone Foundations Instant Network Schools programme is supported by the Qatar Foundations Educate a Child initiative. The school, in Goma, is
enabling 400500 children aged 717 to access online educational content via tablets provided through the Instant Network mobile education programme.
One company, local roots
We believe our
people are fundamental to our success thats why we want to attract and retain exceptional employees. Were committed to providing an inclusive workplace where we offer great opportunities for our people to build their skills and
careers.
We continue to develop our people to ensure that they have the right skills and experience to deliver an outstanding experience to our customers.
During the year we employed an average of 92,812 people Creating a lean and effective organisation and had 97,721 employees as of March 2014. The number
We continue to make our business more efficient, simplifying processes of our people increased during the year following our acquisition across our markets and sharing best practice. We
continue to move of Kabel Deutschland in Germany and the move to full ownership transactional and back office activities to our shared service centres of Vodafone Italy. in Egypt, India and Europe. In the last year we undertook an exercise The
following sections highlight our progress in the key areas behind to reduce our non-customer facing support functions, as discussed our people strategy. on page 32.
We aim
to treat all employees fairly, consulting with those affected Increasing employee engagement by change and clearly communicating developments. We support Every year all our employees participate in our global People Survey employees through
organisational changes, finding people new jobs which allows us to measure engagement levels, compare ourselves in the company or arranging for them to work for a partner company to other large companies and helps us identify ways to improve how
where possible. We also help those whose roles are made redundant we do things. search for new jobs, offering them training on job applications and interview skills, and advice on how to start their own business. Our employee engagement index
measures how committed our employees are, their desire to continue working for us and their During the year we completed the integration of employees from Cable willingness to recommend Vodafone as an employer. The index & Wireless
Worldwide and we established single product management remained broadly stable at 77 points this year compared to 78 last year. teams for consumer and enterprise.
Crucially
we retained our top quartile position. Our employee turnover rate also remained broadly stable at 15%. Strengthening capabilities
We want people to grow their careers at
Vodafone and develop the skills Embedding The Vodafone Way and talent needed to grow our business. We do this through formal The Vodafone Way is about ensuring our employees work with speed, training, on the job experience and regular coaching from
managers. simplicity and trust so that we can be customer-obsessed, ambitious We conduct an annual analysis of learning needs to identify priorities and competitive, innovation-hungry and work as one company with and ensure that learning plans
support our business strategy. Every local roots. employee also has a formal review once a year with their manager For the third consecutive year we have run development workshops to review their performance and set clear goals and development plans
for all senior employees with a particular focus on ensuring we provide for the year ahead. a superior experience to all our customers.
Our global learning academies in
marketing, technology, sales, retail,
Building a diverse and inclusive culture finance and supply chain enable people to develop the critical skills
We believe that a diverse team is crucial to our success, helping us better they need to excel in their functions. We work with leading business understand and meet the needs of our
customers. Our Group-wide schools and accredited external providers to develop and deliver the diversity and inclusion strategy aims to create a working environment training. Last year, around 180,000 online courses were completed and which values,
celebrates and makes the most of individual differences. we trained around 18,000 people in our Technology Academy and over 10,000 people in our Retail and Sales academies.
We do not condone unfair treatment of any kind and offer equal We conduct regular talent reviews to identify high-potential future opportunities in all aspects of employment
and advancement leaders and accelerate the progress of high-potential managers through regardless of race, nationality, gender, age, marital status, sexual our Inspire programme, which offers development and executive orientation,
disability, and religious or political beliefs. This also applies coaching over an 18 month period and may include an assignment to agency workers, the self-employed and contract workers who work to another Vodafone market or function. for us. We
promote an open culture that encourages people to raise Our Discover programme for graduates accelerates the careers of high issues to ensure that any behaviour which excludes or discriminates performing graduates and we recruited 596
people from 20 countries against individuals does not go unchallenged. This years People Survey onto this programme during the year. We also have an international showed that 89% of employees believe that Vodafone treats people assignment
programme, Columbus, with 35 graduates from fairly, regardless of their gender, background, age or beliefs. 16 different markets taking part this year.
Valuing diversity
At the end of the year we had 61,848 (63%) male
and 35,873 (37%) female employees and we have increased female representation at all levels of the business, particularly within more senior roles. Women now make up 22% of our senior leadership team (our 223 most senior managers) an
improvement on last year but we still have work to do. We also increased the number of women on our Executive Committee to two.
Recognising performance Creating a safe place
to work
We maintained our approach of rewarding people based on their Driving a culture where safety is an integral part of every business performance, potential and
contribution to our success. We benchmark decision is critical to our vision of preventing any incidents that could roles regularly to ensure competitive, fair remuneration in every country affect the health and safety of our people. We continue to
work hard in which we operate. We also offer competitive retirement and other to ensure employees and contractors know how to identify and manage benefit provisions which vary depending on conditions and practices risks and take personal
responsibility for their own safety and the safety in local markets. of those around them.
Global short-term incentive plans are offered to a large percentage We have a wide
range of programmes and systems to tackle our key of employees and global long-term incentive plans are offered to our risks, often tailored to the particular needs of each market. Despite this, senior managers. Individual and company performance
measures we greatly regret to report that 12 people died while undertaking work are attached to these plans which give employees the opportunity on behalf of Vodafone last year. Strengthening programmes to target to be rewarded for exceptional
performance as well as ensuring that occupational road risk one of our biggest risks and the main cause we do not reward poor performance. of these fatalities remains a major focus for all local markets.
Doing whats right Through increased awareness and a strong focus on managing our top five safety risks, our injury rates have continued to decline in 2014.
We have a Code of Conduct that sets out our business principles and The safety culture in Vodafone continues to mature our latest what we expect from employees to ensure
they protect themselves People Survey showed that 89% of employees believe that our as well as the Companys reputation and assets. We actively promoted Absolute Rules, which help employees follow best practice for safety, our Code
of Conduct throughout the year via our global Doing are taken seriously.
Whats Right campaign. The aim was to improve understanding of and engagement with
key topics including health and safety, anti-bribery, privacy, security and competition law to ensure that people know whats expected of them and managers know what is expected of their teams.
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Chief Financial Officers review
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Operating results (continued)
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Operating results (continued)
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Identifying and managing our risks We have a clear framework for identifying and managing risk, both at an operational and strategic level. Our risk identification and mitigation processes have been designed to be responsive to the ever-changing environments in which we operate.
47 | ||
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Governance
49 Chairmans overview
50 Board of directors and Group management
54 Corporate governance
69 Directors remuneration
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Corporate governance (continued)
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Corporate governance (continued)
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Corporate governance (continued)
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Corporate governance (continued)
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Corporate governance (continued)
|
With effect from 28 July 2014, Philip Yea will step down from the Remuneration Committee and Valerie Gooding will be appointed to the
Committee.
Key objective:
to assess and make recommendations to the Board on the policies for
executive remuneration and packages for the individual executive directors.
Responsibilities:
determining, on behalf of the Board, the policy on the remuneration of the Chairman of the Board, the executive directors and the senior management team;
determining the total remuneration packages for these individuals including any compensation on termination of office;
operating within recognised principles of good governance; and
preparing an annual report on directors
remuneration.
Committee meetings
No one other than a member of the Committee is entitled to be
present at its meetings. The Chairman of the Board and Chief Executive may attend the Committees meetings by invitation but they do not attend when their individual remuneration is discussed. No director is involved in deciding his or her own
remuneration. The Committee met five times during the year.
Main activities of the Committee during the year
A detailed report to shareholders from the Committee on behalf of the Board in which, amongst other things, I have included a description of the Committees activities during the year,
is contained in Directors remuneration on pages 69 to 85.
Executive Committee
The Committee meets 11 times a year under the chairmanship of the Chief Executive. Topics covered by the Committee include:
Chief Executive update on the business and business environment;
regional chief executives updates;
Group function heads updates;
substantial business developments and projects;
talent;
presentations from various function heads, for example, the Group Financial Controller, the Group Audit
Director and the Group Compliance Director;
competitor analysis; and
strategy.
Annually, the Executive Committee, together with the chief executives of the major operating companies, conduct a strategy review to identify key strategic issues to be presented to the
Board. The agreed strategy is then used as a basis for developing the upcoming budget and three year operating plans.
The Committee members biographical details are
set out on pages 52 and 53 and at vodafone.com/exco.
Policy and Compliance Committee
This is a
sub-committee of the Executive Committee comprising three Executive Committee members. It is appointed to assist the Executive Committee to fulfil its accountabilities with regard to policy compliance. In particular, the Committee approves changes
to policies, does deep dives into particular policies to assess whether they are effective and maintains an overview of the status of compliance throughout Vodafone so clear and accurate reports can be made to the Audit and Risk Committee twice a
year. Deep dives this year covered the policies relating to radio frequency electromagnetic fields (EMF), competition law, protecting customer information, anti-money laundering and fraud.
Disclosure Committee
The Disclosure Committee, appointed by the Chief Executive and Chief Financial Officer to
ensure the accuracy and timeliness of Company disclosures, oversees and approves controls and procedures in relation to the public disclosure of financial information and other information material to shareholders. It is composed of the Group
General Counsel and Company Secretary (the Chair), Regional Chief Financial Officers, the Group Financial Controller, the Group Investor Relations Director, the Group Strategy and Business Development Director, and the Group External Affairs
Director.
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Corporate governance (continued)
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Corporate governance (continued)
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Directors remuneration (continued)
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Directors remuneration (continued)
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Directors remuneration (continued)
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Directors remuneration (continued)
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Directors remuneration (continued)
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Directors remuneration (continued)
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Directors remuneration (continued)
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Directors remuneration (continued)
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Directors statement of responsibility
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Report of Independent Registered Public Accounting Firm on internal control over financial reporting |
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Report of Independent Registered Public Accounting Firm on the consolidated financial statements |
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for the years ended 31 March
|
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Commentary on the consolidated income statement and statement of comprehensive income
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Consolidated statement of financial position at 31 March
|
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Commentary on the consolidated statement of financial position
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Consolidated statement of changes in equity for the years ended 31 March
|
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Commentary on the consolidated statement of changes in equity
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Consolidated statement of cash flows for the years ended 31 March
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Commentary on the consolidated statement of cash flows
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Notes to the consolidated financial statements
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Notes to the consolidated financial statements (continued)
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Other unaudited financial information
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Other unaudited financial information (continued)
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Other unaudited financial information (continued)
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Shareholder information (continued)
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Shareholder information (continued)
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Shareholder information (continued)
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Regulation (continued)
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Regulation (continued)
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Principal risk factors and uncertainties
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Principal risk factors and uncertainties (continued)
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Principal risk factors and uncertainties (continued)
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Non-GAAP information (continued)
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Non-GAAP information (continued)
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Form 20-F cross reference guide
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Form 20-F cross reference guide (continued)
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Forward-looking statements (continued)
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Definition of terms (continued)
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|
(d/b/a Verizon Wireless)
Report of Independent Registered Public Accounting Firm
Consolidated Financial Statements
For the years ended
December 31, 2013, 2012 and 2011
B-1
Cellco Partnership (d/b/a Verizon Wireless)
B-3 | ||||
For the years ended December 31, 2013, 2012 and 2011 |
B-4 | |||
For the years ended December 31, 2013, 2012 and 2011 |
B-5 | |||
As of December 31, 2013 and 2012 |
B-6 | |||
For the years ended December 31, 2013, 2012 and 2011 |
B-7 | |||
For the years ended December 31, 2013, 2012 and 2011 |
B-8 | |||
B-9 to B-28 |
B-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Representatives of
Cellco Partnership d/b/a Verizon Wireless:
We have audited the accompanying consolidated balance sheets of Cellco Partnership and subsidiaries d/b/a Verizon Wireless (the Partnership) as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, cash flows and changes in partners capital for each of the three years in the period ended December 31, 2013. These financial statements are the responsibility of the Partnerships management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnerships internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
New York, New York
February 27, 2014
B-3
Consolidated Statements of Income
Cellco Partnership (d/b/a Verizon Wireless)
Years Ended December 31, | ||||||||||||
(dollars in millions) | 2013 | 2012 | 2011 | |||||||||
Operating Revenue (including $102, $83 and $87 from affiliates) |
| |||||||||||
Service revenue |
$ | 69,033 | $ | 63,733 | $ | 59,157 | ||||||
Equipment and other |
11,990 | 12,135 | 10,997 | |||||||||
Total operating revenue |
81,023 | 75,868 | 70,154 | |||||||||
Operating Costs and Expenses (including $2,295, $1,949 and $1,708 from affiliates) |
||||||||||||
Cost of service (exclusive of items shown below) |
7,295 | 7,711 | 7,994 | |||||||||
Cost of equipment |
16,353 | 16,779 | 16,092 | |||||||||
Selling, general and administrative |
22,663 | 21,696 | 19,655 | |||||||||
Depreciation and amortization |
8,202 | 7,960 | 7,962 | |||||||||
Total operating costs and expenses |
54,513 | 54,146 | 51,703 | |||||||||
Operating Income |
26,510 | 21,722 | 18,451 | |||||||||
Other Income (Expenses) |
||||||||||||
Interest expense, net |
(65 | ) | (442 | ) | (610 | ) | ||||||
Other income, net |
40 | 96 | 56 | |||||||||
Income Before Provision for Income Taxes |
26,485 | 21,376 | 17,897 | |||||||||
Provision for income taxes |
(150 | ) | (201 | ) | (947 | ) | ||||||
Net Income |
$ | 26,335 | $ | 21,175 | $ | 16,950 | ||||||
Net income attributable to noncontrolling interests |
$ | 422 | $ | 304 | $ | 280 | ||||||
Net income attributable to Cellco Partnership |
25,913 | 20,871 | 16,670 | |||||||||
Net Income |
$ | 26,335 | $ | 21,175 | $ | 16,950 | ||||||
See Notes to Consolidated Financial Statements.
B-4
Consolidated Statements of Comprehensive Income
Cellco Partnership (d/b/a/ Verizon Wireless)
Years Ended December 31, | ||||||||||||
(dollars in millions) | 2013 | 2012 | 2011 | |||||||||
Net Income |
$ | 26,335 | $ | 21,175 | $ | 16,950 | ||||||
Other comprehensive income (loss), net of taxes |
||||||||||||
Unrealized gain (loss) on cash flow hedges |
(32 | ) | 21 | 3 | ||||||||
Defined benefit pension and postretirement plans |
| | (1 | ) | ||||||||
Other comprehensive income (loss) attributable to Cellco Partnership |
(32 | ) | 21 | 2 | ||||||||
Total Comprehensive Income |
$ | 26,303 | $ | 21,196 | $ | 16,952 | ||||||
Comprehensive income attributable to noncontrolling interests |
$ | 422 | $ | 304 | $ | 280 | ||||||
Comprehensive income attributable to Cellco Partnership |
25,881 | 20,892 | 16,672 | |||||||||
Total Comprehensive Income |
$ | 26,303 | $ | 21,196 | $ | 16,952 | ||||||
See Notes to Consolidated Financial Statements.
B-5
Cellco Partnership (d/b/a Verizon Wireless)
As of December 31, | ||||||||
(dollars in millions) | 2013 | 2012 | ||||||
Assets | ||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 4,005 | $ | 1,354 | ||||
Receivables, net of allowances of $399 and $350 |
7,204 | 6,657 | ||||||
Due from affiliates, net |
245 | 106 | ||||||
Inventories, net |
990 | 1,044 | ||||||
Prepaid expenses and other current assets |
1,459 | 525 | ||||||
Total current assets |
13,903 | 9,686 | ||||||
Plant, property and equipment, net |
35,932 | 34,546 | ||||||
Wireless licenses |
75,796 | 77,642 | ||||||
Goodwill |
17,941 | 17,737 | ||||||
Other intangibles and other assets, net |
2,249 | 2,102 | ||||||
Total assets |
$ | 145,821 | $ | 141,713 | ||||
Liabilities and Partners Capital | ||||||||
Current liabilities |
||||||||
Short-term debt, including current maturities |
$ | 41 | $ | 1,448 | ||||
Accounts payable and accrued liabilities |
7,012 | 7,534 | ||||||
Advance billings |
2,750 | 2,550 | ||||||
Other current liabilities |
337 | 274 | ||||||
Total current liabilities |
10,140 | 11,806 | ||||||
Long-term debt |
5,231 | 8,665 | ||||||
Deferred tax liabilities, net |
11,001 | 10,939 | ||||||
Other non-current liabilities |
2,139 | 2,056 | ||||||
Partners capital |
||||||||
Capital |
114,979 | 106,119 | ||||||
Accumulated other comprehensive income |
52 | 84 | ||||||
Noncontrolling interests |
2,279 | 2,044 | ||||||
Total Partners capital |
117,310 | 108,247 | ||||||
Total liabilities and Partners capital |
$ | 145,821 | $ | 141,713 | ||||
See Notes to Consolidated Financial Statements.
B-6
Consolidated Statements of Cash Flows
Cellco Partnership (d/b/a Verizon Wireless)
Years Ended December 31, | ||||||||||||
(dollars in millions) | 2013 | 2012 | 2011 | |||||||||
Cash Flows from Operating Activities | ||||||||||||
Net income | $ | 26,335 | $ | 21,175 | $ | 16,950 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization |
8,202 | 7,960 | 7,962 | |||||||||
Provision for uncollectible receivables |
703 | 634 | 689 | |||||||||
Provision for deferred income taxes |
72 | 123 | 368 | |||||||||
Changes in current assets and liabilities, net of the effects of acquisition/disposition of businesses: |
||||||||||||
Receivables |
(1,371 | ) | (1,238 | ) | (624 | ) | ||||||
Inventories, net |
54 | (137 | ) | 166 | ||||||||
Prepaid expenses and other current assets |
(35 | ) | (107 | ) | 124 | |||||||
Accounts payable and accrued liabilities |
(120 | ) | 674 | (728 | ) | |||||||
Other operating activities, net |
(487 | ) | (419 | ) | 371 | |||||||
Net cash provided by operating activities | 33,353 | 28,665 | 25,278 | |||||||||
Cash Flows from Investing Activities | ||||||||||||
Capital expenditures (including capitalized software) | (9,425 | ) | (8,857 | ) | (8,973 | ) | ||||||
Acquisitions of investments and businesses, net of cash acquired | (52 | ) | (188 | ) | (144 | ) | ||||||
Acquisitions of wireless licenses | (14 | ) | (4,287 | ) | (26 | ) | ||||||
Proceeds from dispositions of wireless licenses | 2,111 | | | |||||||||
Other investing activities, net |
(873 | ) | 843 | (490 | ) | |||||||
Net cash used in investing activities |
(8,253 | ) | (12,489 | ) | (9,633 | ) | ||||||
Cash Flows from Financing Activities | ||||||||||||
Repayments of long-term debt and capital lease obligations | (4,960 | ) | (1,569 | ) | (4,862 | ) | ||||||
Distributions to partners | (17,046 | ) | (25,681 | ) | (3,082 | ) | ||||||
Other financing activities, net | (443 | ) | (328 | ) | (276 | ) | ||||||
Net cash used in financing activities |
(22,449 | ) | (27,578 | ) | (8,220 | ) | ||||||
Increase (decrease) in cash and cash equivalents | 2,651 | (11,402 | ) | 7,425 | ||||||||
Cash and cash equivalents, beginning of year |
1,354 | 12,756 | 5,331 | |||||||||
Cash and cash equivalents, end of year |
$ | 4,005 | $ | 1,354 | $ | 12,756 | ||||||
See Notes to Consolidated Financial Statements.
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Consolidated Statements of Changes in Partners Capital
Cellco Partnership (d/b/a/ Verizon Wireless)
Years Ended December 31, | ||||||||||||
(dollars in millions) | 2013 | 2012 | 2011 | |||||||||
Partners Capital | ||||||||||||
Balance at beginning of year | $ | 106,119 | $ | 100,961 | $ | 97,399 | ||||||
Net income attributable to Cellco Partnership | 25,913 | 20,871 | 16,670 | |||||||||
Contributed capital | (7) | (32) | (26) | |||||||||
Distributions declared to partners | (17,046) | (15,681) | (13,082) | |||||||||
|
||||||||||||
Balance at end of year | 114,979 | 106,119 | 100,961 | |||||||||
|
||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||
Balance at beginning of year | 84 | 63 | 61 | |||||||||
Unrealized gain (loss) on cash flow hedges | (32) | 21 | 3 | |||||||||
Defined benefit pension and postretirement plans | | | (1) | |||||||||
|
||||||||||||
Other comprehensive income (loss) |
(32) | 21 | 2 | |||||||||
|
||||||||||||
Balance at end of year |
52 | 84 | 63 | |||||||||
|
||||||||||||
Total Partners Capital Attributable to Cellco Partnership |
115,031 | 106,203 | 101,024 | |||||||||
|
||||||||||||
Noncontrolling Interests | ||||||||||||
Balance at beginning of year |
2,044 | 1,952 | 1,962 | |||||||||
Net income attributable to noncontrolling interests |
422 | 304 | 280 | |||||||||
Distributions |
(403) | (342) | (280) | |||||||||
Other |
216 | 130 | (10) | |||||||||
|
||||||||||||
Balance at end of year |
2,279 | 2,044 | 1,952 | |||||||||
|
||||||||||||
Total Partners Capital | $ | 117,310 | $ | 108,247 | $ | 102,976 | ||||||
|
See Notes to Consolidated Financial Statements.
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Notes to Consolidated Financial Statements
Cellco Partnership (d/b/a Verizon Wireless)
1. Description of Business and Summary of Significant Accounting Policies
Description of Business
Cellco Partnership (the Partnership), a Delaware general partnership doing business as Verizon Wireless, provides wireless communication services across one of the most extensive wireless networks in the United States (U.S.) and has the largest fourth-generation (4G) Long-Term Evolution (LTE) technology and third-generation (3G) Evolution-Data Optimized (EV-DO) networks of any U.S. wireless service provider. The Partnership has one segment and operates domestically only. References to the Partners refers to Verizon Communications, and its subsidiaries (Verizon) and Vodafone Group Plc, and its subsidiaries (Vodafone). At December 31, 2013 Verizon owned 55% of the Partnership and Vodafone owned 45% of the Partnership. On February 21, 2014, Verizon acquired Vodafones interest in the Partnership and now owns 100% of the Partnership.
These consolidated financial statements include transactions between the Partnership and Verizon and Vodafone (Affiliates) for the provision of services and financing pursuant to various agreements (see Notes 5 and 11).
Consolidated Financial Statements and Basis of Presentation
The consolidated financial statements of the Partnership include the accounts of its majority-owned subsidiaries and the partnerships in which the Partnership exercises control. Investments in businesses and partnerships which the Partnership does not control, but has the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method of accounting. Investments and partnerships which the Partnership does not have the ability to exercise significant influence over operating and financial policies are accounted for under the cost method of accounting. Equity and cost method investments are included in Other intangibles and other assets, net in the Partnerships consolidated balance sheets. All significant intercompany accounts and transactions have been eliminated.
The Partnership has reclassified prior year amounts to conform to current year presentation.
The Partnership has evaluated subsequent events through February 27, 2014, the date these consolidated financial statements were available to be issued.
Use of Estimates
The Partnership prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates.
Examples of significant estimates include: the allowances for doubtful accounts, the recoverability of plant, property and equipment, the recoverability of intangible assets and other long-lived assets, unbilled revenues, fair values of financial instruments, unrecognized tax benefits, valuation allowances on tax assets, accrued expenses, contingencies and allocation of purchase prices in connection with business combinations.
Revenue Recognition
The Partnership offers products and services to its customers through bundled arrangements. These arrangements involve multiple deliverables which may include products, services, or a combination of products and services.
The Partnership earns revenue primarily by providing access to and usage of its network. In general, access revenue is billed one month in advance and recognized when earned; the unearned portion is classified in Advance billings in the consolidated balance sheets. Usage revenue is generally billed in arrears and recognized when service is rendered and included in unbilled revenue, within Receivables, net in the consolidated balance sheets. Equipment sales revenue associated with the sale of wireless handsets and accessories is recognized when the products are
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delivered to and accepted by the customer, as this is considered to be a separate earnings process from providing wireless services. For agreements involving the resale of third-party services in which the Partnership is considered the primary obligor in the arrangements, the Partnership records revenue gross at the time of sale. For equipment sales, the Partnership generally subsidizes the cost of wireless devices. The amount of this subsidy is generally contingent on the arrangement and terms selected by the customer. In multiple deliverable arrangements which involve the sale of equipment and a service contract, the equipment revenue is recognized up to the amount collected when the wireless device is sold.
The Partnership reports taxes imposed by governmental authorities on revenue-producing transactions between the Partnership and its customers on a net basis.
Advertising Costs
Costs for advertising products and services as well as other promotional and sponsorship costs are charged to Selling, general and administrative expense in the periods in which they are incurred (see Note 9).
Vendor Rebates and Discounts
The Partnership recognizes vendor rebates or discounts for purchases of wireless devices from a vendor as a reduction of Cost of equipment when the related wireless devices are sold. Vendor rebates or discounts that have been earned as a result of completing the required performance under the terms of the underlying agreements but for which the wireless devices have not yet been sold are recognized as a reduction of inventory cost. Advertising credits are granted by a vendor to the Partnership as reimbursement of specific, incremental, identifiable advertising costs incurred by the Partnership in selling the vendors wireless devices. These advertising credits are restricted based upon a marketing plan agreed to by the vendor and the Partnership, and accordingly, advertising credits received are recorded as a reduction of those advertising costs when recognized in the Partnerships consolidated statements of income.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments with a maturity of 90 days or less when purchased to be cash equivalents. Cash equivalents are stated at cost, which approximates quoted market value, and includes approximately $3.5 billion and $0.7 billion at December 31, 2013 and 2012, respectively, held in money market funds that are considered cash equivalents.
Inventory
Inventory consists primarily of wireless equipment held for sale, which is carried at the lower of cost (determined using a first-in, first-out method) or market. The Partnership maintained inventory valuation reserves which were not significant as of December 31, 2013 and 2012.
Capitalized Software
Capitalized software consists primarily of direct costs incurred for professional services provided by third parties and compensation costs of employees which relate to software developed for internal use either during the application stage or for upgrades and enhancements that increase functionality. Costs are capitalized and amortized on a straight-line basis over their estimated useful lives. Costs incurred in the preliminary project stage of development and maintenance are expensed as incurred. For a discussion of the Partnerships impairment policy for capitalized software costs, see Valuation of Assets below. Also see Note 3 for additional detail of internal-use non-network software reflected in the Partnerships consolidated balance sheets.
Plant, Property and Equipment
Plant, property and equipment primarily represents costs incurred to construct and expand capacity and network coverage on Mobile Telephone Switching Offices and cell sites. The cost of plant, property and equipment is depreciated on a straight-line basis over its estimated useful life. Periodic reviews are performed to identify any
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category or group of assets within plant, property and equipment where events or circumstances may change the remaining estimated economic life. This principally includes changes in the Partnerships plans regarding technology upgrades, enhancements, and planned retirements. Changes in these estimates resulted in an increase of $0.4 billion for the year ended December 31, 2011. Major improvements to existing plant and equipment are capitalized. Routine maintenance and repairs that do not extend the life of the plant and equipment are charged to expense as incurred. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the related lease.
Upon the sale or retirement of plant, property and equipment, the cost and related accumulated depreciation or amortization is deducted from the plant accounts and any gains or losses on disposition are recognized in income.
Interest expense and network engineering costs incurred during the construction phase of the Partnerships network and real estate properties under development are capitalized as part of plant, property and equipment and recorded as construction in progress until the projects are completed and placed into service.
Valuation of Assets
Long-lived assets, including plant, property and equipment and intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset.
Wireless Licenses
The Partnerships principal intangible assets are licenses, which provide the Partnership with the exclusive right to utilize designated radio frequency spectrum to provide wireless communication services. While licenses are issued for only a fixed time, generally ten years, such licenses are subject to renewal by the Federal Communications Commission (FCC). License renewals have occurred routinely and at nominal costs, which are expensed as incurred. Moreover, the Partnership has determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful life of the Partnerships wireless licenses. As a result, the wireless licenses are treated as an indefinite lived intangible asset, and are not amortized. The Partnership reevaluates the useful life determination for wireless licenses at least annually to determine whether events and circumstances continue to support an indefinite useful life.
The Partnership tests its wireless licenses for potential impairment annually. In 2013, the Partnership performed a qualitative assessment to determine whether it is more likely than not that the fair value of its wireless licenses was less than the carrying amount. As part of the assessment, the Partnership considered several qualitative factors including the business enterprise value of the Partnership, macroeconomic conditions (including changes in interest rates and discount rates), industry and market considerations (including industry revenue and EBITDA (Earnings before interest, taxes, depreciation and amortization) margin projections), the projected financial performance of the Partnership, as well as other factors. Based on our assessment in 2013, we qualitatively concluded that it was more likely than not that the fair value of our wireless licenses significantly exceeded their carrying value and therefore, did not result in an impairment. In 2012, the Partnerships quantitative assessment consisted of comparing the estimated fair value of the Partnerships wireless licenses to the aggregated carrying amount as of the test date. Using the quantitative assessment, the Partnership evaluated its licenses on an aggregate basis using a direct value approach. The direct value approach estimates fair value using a discounted cash flow analysis to estimate what a marketplace participant would be willing to pay to purchase the aggregated wireless licenses as of the valuation date. If the fair value of the aggregated wireless licenses is less than the aggregated carrying amount of the licenses, an impairment is recognized. The Partnerships annual quantitative impairment test for 2012 indicated that the fair value significantly exceeded the carrying value and, therefore, did not result in an impairment. The Partnership evaluated its wireless licenses for potential impairment as of December 15, 2013 and 2012.
Interest expense incurred while qualifying activities are performed to ready wireless licenses for their intended use is capitalized as part of wireless licenses. The capitalization period ends when a license is substantially complete and the license is ready for its intended use.
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Goodwill
Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired. Impairment testing for goodwill is performed annually in the fourth fiscal quarter or more frequently if impairment indicators are present. The Partnership has the option to perform a qualitative assessment to determine if the fair value of the entity is less than its carrying value. However, the Partnership may elect to perform an impairment test even if no indications of a potential impairment exist. The impairment test for goodwill uses a two-step approach, which is performed for the Partnerships one reporting unit. Step one compares the fair value of the reporting unit (calculated using a market approach and/or a discounted cash flow method) to its carrying value. If the carrying value exceeds the fair value, there is a potential impairment and step two must be performed. Step two compares the carrying value of the reporting units goodwill to its implied fair value (i.e., fair value of reporting unit less the fair value of the units assets and liabilities, including identifiable intangible assets). If the implied fair value of goodwill is less than the carrying amount of goodwill, an impairment is recognized. The Partnership completed its goodwill impairment test as of December 15, 2013 and 2012. The Partnerships annual impairment tests for 2013 and 2012 indicated that the fair value significantly exceeded the carrying value and, therefore, did not result in an impairment.
Fair Value Measurements
Fair value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:
Level 1 Quoted prices in active markets for identical assets or liabilities
Level 2 Observable inputs other than quoted prices in active markets for identical assets and liabilities
Level 3 No observable pricing inputs in the market
Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The Partnerships assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.
See Note 4 for further details on the Partnerships fair value measurements.
Foreign Currency Translation
The functional currency for all of the Partnerships operations is the U.S. dollar. However, the Partnership has transactions denominated in a currency other than the local currency, principally debt denominated in Euros and British Pounds Sterling. Gains and losses resulting from exchange-rate changes in transactions denominated in a foreign currency are included in earnings.
Derivative Instruments
The Partnership uses derivatives from time to time to manage the Partnerships exposure to fluctuations in the cash flows of certain transactions. The Partnership measures all derivatives at fair value and recognizes them as either assets or liabilities on its consolidated balance sheets. The Partnerships derivative instruments are valued primarily using models based on readily observable market parameters for all substantial terms of the Partnerships derivative contracts and thus are classified as Level 2. Changes in the fair values of derivative instruments not qualifying as hedges or any ineffective portion of hedges are recognized in earnings in the current period. Changes in the fair values of derivative instruments used effectively as fair value hedges are recognized in earnings, along with changes in the fair value of the hedged item. Changes in the fair value of the effective portions of cash flow hedges are reported in Other comprehensive income (loss) and recognized in earnings when the hedged item is recognized in earnings.
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Employee Benefit Plans
The Partnership maintains a defined contribution plan, the Verizon Wireless Savings and Retirement Plan (the Savings and Retirement Plan), for the benefit of its employees. The Savings and Retirement Plan includes both an employee savings and profit sharing component. Under the employee savings component, employees may contribute a percentage of eligible compensation to the Savings and Retirement Plan. Up to the first 6% of an employees eligible compensation contributed to the Savings and Retirement Plan is matched 100% by the Partnership. Under the profit sharing component, the Partnership may elect, at the sole discretion of the Human Resources Committee of the Board of Representatives, to contribute an additional amount in the form of a profit sharing contribution to the accounts of eligible employees (see Note 9).
Long-Term Incentive Compensation
The Partnership measures compensation expense for all stock-based compensation awards made to employees and directors based on estimated fair values (see Note 6).
Income Taxes
The Partnership is not a taxable entity for federal income tax purposes. Any federal taxable income or loss is included in the respective partners consolidated federal return. Certain states, however, impose taxes at the partnership level and such taxes are the responsibility of the Partnership and are included in the Partnerships tax provision. The consolidated financial statements also include provisions for federal and state income taxes, prepared on a stand-alone basis, for all corporate entities within the Partnership. Deferred income taxes are recorded using enacted tax law and rates for the years in which the taxes are expected to be paid or refunds received. Deferred income taxes are provided for items when there is a temporary difference in recording such items for financial reporting and income tax reporting.
The Partnership uses a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return. The first step is recognition: the Partnership determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Partnership presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. The second step is measurement: a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in one or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax asset, or an increase in a deferred tax liability.
The Partnership recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense.
Concentrations
The Partnership relies on local and long-distance telephone companies, some of whom are related parties (see Note 11), and other companies to provide certain communication services. Although management believes alternative telecommunications facilities could be found in a timely manner, any disruption of these services could potentially have an adverse impact on the Partnerships business, results of operations and financial condition.
No single customer receivable is large enough to present a significant financial risk to the Partnership.
Recently Adopted Accounting Standards
During the first quarter of 2013, the Partnership adopted the accounting standard update regarding testing of intangible assets for impairment. This standard update allows companies the option to perform a qualitative
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assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not the asset is impaired. The adoption of this standard update did not have an impact on the Partnerships consolidated financial statements.
During the first quarter of 2013, the Partnership adopted the accounting standard update regarding reclassifications out of Accumulated other comprehensive income. This standard update requires companies to report the effect of significant reclassifications out of Accumulated other comprehensive income on the respective line items in the Partnerships consolidated statements of income if the amount being reclassified is required to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference to other required disclosures that provide additional detail about those amounts. See Note 12 for additional details.
During the third quarter of 2013, the Partnership adopted the accounting standard update regarding the ability to use the Federal Funds Effective Swap Rate as a U.S. benchmark interest rate for hedge accounting purposes. Previously the interest rates on direct Treasury obligations of the U.S. government and the London Interbank Offered Rate (LIBOR) were considered to be the only benchmark interest rates. The adoption of this standard update did not have a significant impact on the Partnerships consolidated financial statements.
Recent Accounting Standards
In July 2013, the accounting standard update relating to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists was issued. The standard update provides that a liability related to an unrecognized tax benefit should be offset against same jurisdiction deferred tax assets for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. The Partnership will adopt this standard update during the first quarter of 2014. The Partnership is currently evaluating the consolidated balance sheet impact related to this standard update.
2. Acquisitions and Divestitures
Wireless Transaction
On September 2, 2013, Verizon entered into a stock purchase agreement (the Stock Purchase Agreement) with Vodafone and Vodafone 4 Limited (Seller), pursuant to which Verizon agreed to acquire Vodafones indirect 45% interest in the Partnership, (and such interest, the Vodafone Interest) for aggregate consideration of approximately $130 billion.
On February 21, 2014, pursuant to the terms and subject to the conditions set forth in the Stock Purchase Agreement, Verizon acquired (the Wireless Transaction) from Seller all of the issued and outstanding capital stock (the Transferred Shares) of Vodafone Americas Finance 1 Inc., a subsidiary of Seller (VF1 Inc.), which indirectly through certain subsidiaries (together with VF1 Inc., the Purchased Entities) owned the Vodafone Interest. In consideration for the Transferred Shares, upon completion of the Wireless Transaction, Verizon (i) paid approximately $58.89 billion in cash, (ii) issued approximately $60.15 billion of Verizons common stock, par value $0.10 per share (the Stock Consideration), (iii) issued senior unsecured Verizon notes in an aggregate principal amount of $5.0 billion (the Verizon Notes), (iv) sold Verizons indirectly owned 23.1% interest in Vodafone Omnitel N.V. (Omnitel, and such interest, the Omnitel Interest), valued at $3.5 billion and (v) provided other consideration of approximately $2.5 billion. As a result of the Wireless Transaction, Verizon issued approximately 1.27 billion shares. The total cash paid to Vodafone and the other costs of the Wireless Transaction, including financing, legal and bank fees, were financed through the incurrence of third-party indebtedness.
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Spectrum License Transactions
Since 2012, the Partnership has entered into several strategic spectrum transactions including:
| During the third quarter of 2012, after receiving the required regulatory approvals, the Partnership completed the following previously announced transactions in which the Partnership acquired wireless spectrum that will be used to deploy additional 4G LTE capacity: |
| The Partnership acquired Advanced Wireless Services (AWS) spectrum in separate transactions with SpectrumCo, LLC (SpectrumCo) and Cox TMI Wireless, LLC for which it paid an aggregate of $3.9 billion at the time of the closings. The Partnership has also recorded a liability of $0.4 billion related to a three-year service obligation to SpectrumCos members pursuant to commercial agreements executed concurrently with the SpectrumCo transaction. |
| The Partnership completed license purchase and exchange transactions with Leap Wireless, Savary Island Wireless, which is majority owned by Leap Wireless, and a subsidiary of T-Mobile USA, Inc. (T-Mobile USA). As a result of these transactions, the Partnership received an aggregate $2.6 billion of AWS and Personal Communication Services (PCS) licenses at fair value and net cash proceeds of $0.2 billion, transferred certain AWS licenses to T-Mobile USA and a 700 megahertz (MHz) lower A block license to Leap Wireless, and recorded an immaterial gain. |
| During the first quarter of 2013, the Partnership completed license exchange transactions with T-Mobile License LLC and Cricket License Company, LLC, a subsidiary of Leap Wireless, to exchange certain AWS licenses. These non-cash exchanges include a number of intra-market swaps that the Partnership expects will enable it to make more efficient use of the AWS band. As a result of these exchanges, the Partnership received an aggregate $0.5 billion of AWS licenses at fair value and recorded an immaterial gain. |
| During the third quarter of 2013, after receiving the required regulatory approvals, the Partnership sold 39 lower 700 MHz B block spectrum licenses to AT&T Inc. (AT&T) in exchange for a payment of $1.9 billion and the transfer by AT&T to the Partnership of AWS (10 MHz) licenses in certain markets in the western United States. The Partnership also sold certain lower 700 MHz B block spectrum licenses to an investment firm for a payment of $0.2 billion. As a result, the Partnership received $0.5 billion of AWS licenses at fair value and the Partnership recorded a pre-tax gain of approximately $0.4 billion in Selling, general and administrative expense on its consolidated statement of income for the year ended December 31, 2013. |
| During the fourth quarter of 2013, the Partnership entered into license exchange agreements with T-Mobile USA to exchange certain AWS and PCS licenses. These non-cash exchanges, which are subject to approval by the FCC and other customary closing conditions, are expected to close in the first half of 2014. The exchange includes a number of swaps that the Partnership expects will result in more efficient use of the AWS and PCS bands. As a result of these agreements, $0.9 billion of Wireless licenses are classified as held for sale and included in Prepaid expenses and other current assets on the Partnerships consolidated balance sheet at December 31, 2013. Upon completion of the transaction, the Partnership expects to record an immaterial gain. |
| Subsequent to the transaction with T-Mobile USA in the fourth quarter of 2013, on January 6, 2014, the Partnership announced two agreements with T-Mobile USA with respect to its remaining 700 MHz A block spectrum licenses. Under one agreement, the Partnership will sell certain of these licenses to T-Mobile USA in exchange for cash consideration of approximately $2.4 billion, and under the second agreement the Partnership will exchange the remainder of these licenses for AWS and PCS spectrum licenses. These transactions are subject to the approval of the FCC as well as other customary closing conditions. These transactions are expected to close in the middle of 2014. |
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Other
During 2013, the Partnership acquired various other wireless licenses and markets for cash consideration that was not significant. Additionally, the Partnership obtained control of previously unconsolidated wireless partnerships, which were previously accounted for under the equity method and are now consolidated, which resulted in an immaterial gain. The Partnership recorded $0.2 billion of goodwill as a result of these transactions.
During 2012, the Partnership acquired various other wireless licenses and markets for cash consideration that was not significant and recorded $0.2 billion of goodwill as a result of these transactions.
3. Wireless Licenses, Goodwill and Other Intangibles, Net
Wireless Licenses
Changes in the carrying amount of Wireless licenses are as follows:
(dollars in millions) |
||||
Balance as of January 1, 2012 |
$ | 73,097 | ||
Acquisitions (Note 2) |
4,544 | |||
Capitalized interest on wireless licenses |
205 | |||
Reclassifications, adjustments and other |
(204 | ) | ||
|
|
|||
Balance as of December 31, 2012 |
77,642 | |||
Acquisitions (Note 2) |
579 | |||
Dispositions (Note 2) |
(2,195 | ) | ||
Capitalized interest on wireless licenses |
540 | |||
Reclassifications, adjustments and other |
(770 | ) | ||
|
|
|||
Balance as of December 31, 2013 |
$ | 75,796 | ||
|
|
Reclassifications, adjustments and other includes $0.9 billion of Wireless licenses that are classified as held for sale and included in Prepaid expenses and other current assets on the Partnerships consolidated balance sheet at December 31, 2013 as well as the exchanges of wireless licenses in 2013 and 2012. See Note 2 for additional details.
At December 31, 2013 and 2012, approximately $7.7 billion and $7.3 billion, respectively, of wireless licenses were under development for commercial service for which the Partnership was capitalizing interest costs.
The average remaining renewal period of the Partnerships wireless license portfolio was 5.1 years as of December 31, 2013. See Note 1 for additional details.
Goodwill
Changes in the carrying amount of Goodwill are as follows:
(dollars in millions) |
||||
Balance at January 1, 2012 |
$ | 17,528 | ||
Acquisitions (Note 2) |
209 | |||
|
|
|||
Balance at December 31, 2012 |
17,737 | |||
Acquisitions (Note 2) |
204 | |||
|
|
|||
Balance at December 31, 2013 |
$ | 17,941 | ||
|
|
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Other Intangibles, net
Other intangibles, net are included in Other intangibles and other assets, net and consist of the following:
At December 31, 2013 | At December 31, 2012 | |||||||||||||||||||||||
(dollars in millions) | Gross Amount |
Accumulated Amortization |
Net Amount |
Gross Amount |
Accumulated Amortization |
Net Amount |
||||||||||||||||||
Customer lists (6 to 8 years) | $ | 2,232 | $ | (1,803) | $ | 429 | $ | 2,187 | $ | (1,550) | $ | 637 | ||||||||||||
Non-network internal-use software |
1,897 | (802) | 1,095 | 1,462 | (589) | 873 | ||||||||||||||||||
Other (2 to 3 years) | 7 | (1) | 6 | 26 | (21) | 5 | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total | $ | 4,136 | $ | (2,606) | $ | 1,530 | $ | 3,675 | $ | (2,160) | $ | 1,515 | ||||||||||||
|
|
The amortization expense for other intangible assets was as follows:
Years | (dollars in millions) | |||
2013 |
$ 476 | |||
2012 |
465 | |||
2011 |
513 |
Estimated annual amortization expense for other intangible assets is as follows:
Years | (dollars in millions) | |||
2014 |
$ 434 | |||
2015 |
360 | |||
2016 |
279 | |||
2017 |
192 | |||
2018 |
146 |
4. Fair Value Measurements and Financial Instruments
The following table presents the balances of assets measured at fair value on a recurring basis as of December 31, 2013:
(dollars in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | ||||||||||||||||
Other intangibles and other assets, net: | ||||||||||||||||
Derivative contractsCross currency swaps (Non-current) |
$ | | $ | 166 | $ | | $ | 166 |
Derivative contracts are valued using models based on readily observable market parameters for all substantial terms of the Partnerships derivative contracts and thus are classified within Level 2. The Partnership uses mid-market pricing for fair value measurements of its derivative instruments. The Partnerships derivative instruments are recorded on a gross basis.
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The Partnership recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the fair value hierarchy during 2013.
Fair Value of Short-term and Long-term Debt
The fair value of the Partnerships debt is determined using various methods, including quoted market prices for identical terms and maturities, which is a Level 1 measurement, as well as quoted prices for similar terms and maturities in inactive markets and future cash flows discounted at current rates, which are Level 2 measurements. The fair value of the Partnerships short-term and long-term debt, excluding capital leases, was as follows:
At December 31, 2013 | At December 31, 2012 | |||||||||||||||
(dollars in millions) | Carrying Value |
Fair Value |
Carrying Value |
Fair Value |
||||||||||||
Short- and long-term debt, excluding capital leases | $ | 5,211 | $ | 6,386 | $ | 10,105 | $ | 12,235 |
Derivative Instruments
The Partnership has entered into derivative transactions to manage its exposure to fluctuations in foreign currency exchange rates and interest rates. The Partnership employs risk management strategies which may include the use of a variety of derivatives including cross currency swaps agreements. The Partnership does not hold derivatives for trading purposes.
Cross Currency Swaps
The Partnership previously entered into cross currency swaps designated as cash flow hedges to exchange approximately $1.6 billion of British Pound Sterling and Euro-denominated debt into U.S. dollars and to fix its future interest and principal payments in U.S. dollars, as well as to mitigate the impact of foreign currency transaction gains or losses. A portion of the gains and losses recognized in Other comprehensive income (loss) was reclassified to Other income, net to offset the related pretax foreign currency transaction gain or loss on the underlying debt obligations. The fair value of the outstanding swaps was not material at December 31, 2013 or December 31, 2012. During 2013 and 2012, the gains with respect to these swaps were not material.
Concentrations of Credit Risk
Financial instruments that subject us to concentrations of credit risk consist primarily of temporary cash investments, trade receivables and derivative contracts. The Partnerships policy is to deposit its temporary cash investments with major financial institutions. Counterparties to the Partnerships derivative contracts are also major financial institutions. The financial institutions have all been accorded high ratings by primary rating agencies. The Partnership limits the dollar amount of contracts entered into with any one financial institution and monitors its counterparties credit ratings. The Partnership generally does not give or receive collateral on swap agreements due to its credit rating and those of its counterparties. While the Partnership may be exposed to credit losses due to the nonperformance of its counterparties, the Partnership considers the risk remote and does not expect the settlement of these transactions to have a material effect on its results of operations or financial condition.
B-18
5. Debt
Changes to debt during 2013 are as follows:
(dollars in millions) | Debt Maturing within One Year |
Long-term Debt |
Total | |||||||
Balance at January 1, 2013 | $ | 1,448 | $ | 8,665 | $10,113 | |||||
Repayments of long-term borrowings and capital lease obligations |
(1,460 | ) | (3,500 | ) | (4,960) | |||||
Other |
53 | 66 | 119 | |||||||
|
| |||||||||
Balance at December 31, 2013 | $ | 41 | $ | 5,231 | $5,272 | |||||
|
|
Outstanding long-term debt obligations are as follows:
(dollars in millions) | ||||||||||||
At December 31, | Interest Rates % | Maturities | 2013 | 2012 | ||||||||
Notes payable | 8.5 - 8.88 | 2015 - 2018 | $ | 3,931 | $ | 8,635 | ||||||
Alltel assumed notes | 6.80 - 7.88 | 2016 - 2032 | 1,300 | 1,500 | ||||||||
Capital lease obligations (average rate of 4.4% and 1.2% in 2013 and 2012, respectively) |
61 | 8 | ||||||||||
Unamortized discount, net of premium | (20 | ) | (30 | ) | ||||||||
Total long-term debt, including current maturities | 5,272 | 10,113 | ||||||||||
Less long-term debt maturing within one year | 41 | 1,448 | ||||||||||
Total long-term debt | $ | 5,231 | $ | 8,665 |
Verizon Wireless Capital LLC, a wholly-owned subsidiary of the Partnership, is a limited liability company formed under the laws of Delaware on December 7, 2001 as a special purpose finance subsidiary to facilitate the offering of debt securities of the Partnership by acting as co-issuer. Other than the financing activities as a co-issuer of the Partnerships indebtedness, Verizon Wireless Capital LLC has no material assets, operations or revenues. The Partnership is jointly and severally liable with Verizon Wireless Capital LLC for co-issued notes.
Discounts, premiums, and capitalized debt issuance costs are amortized using the effective interest method.
2013
During November 2013, $1.25 billion of 7.375% Notes and $0.2 billion of 6.50% Notes matured and were repaid. Also during November 2013, the Partnership redeemed $3.5 billion of 5.55% Notes, due February 1, 2014 at a redemption price of 101% of the principal amount of the notes. Any accrued and unpaid interest was paid to the date of redemption.
2012
During February 2012, $0.8 billion of 5.25% Notes matured and were repaid. During July 2012, $0.8 billion of 7.0% Notes matured and were repaid.
Term Notes Payable to Affiliate
Under the terms of a fixed rate promissory note with Verizon Financial Services LLC (VFSL), a wholly-owned subsidiary of Verizon, the Partnership may borrow, repay and re-borrow up to a maximum principal amount of $0.8 billion. During July 2013, the maturity date of this note was extended to August 1, 2016 and the interest rate decreased from 5.8% to 4.5% per annum. As of December 31, 2013, outstanding borrowings under this note, included within Other current liabilities on the consolidated balance sheet, were immaterial.
B-19
Debt Covenants
As of December 31, 2013, the Partnership is in compliance with all of its debt covenants.
Maturities of Long-Term Debt
Maturities of long-term debt outstanding at December 31, 2013 are as follows:
Years | (dollars in millions) | |||
2014 |
$ 41 | |||
2015 |
699 | |||
2016 |
299 | |||
2017 |
7 | |||
2018 |
3,226 | |||
Thereafter |
1,000 |
6. Long-Term Incentive Plan
Verizon Wireless Long-Term Incentive Plan (Wireless Plan)
The Wireless Plan provides compensation opportunities to eligible employees and other participating affiliates of the Partnership. The plan provides rewards that are tied to the long-term performance of the Partnership. Under the Wireless Plan, Value Appreciation Rights (VARs) were granted to eligible employees. As of December 31, 2013, all VARs were fully vested. The Partnership has not granted new VARs since 2004.
VARs reflect the change in the value of the Partnership, as defined in the Wireless Plan. Similar to stock options, the valuation is determined using a Black-Scholes model. Once VARs become vested, employees can exercise their VARs and receive a payment that is equal to the difference between the VAR price on the date of grant and the VAR price on the date of exercise, less applicable taxes. All outstanding VARs are fully exercisable and have a maximum term of 10 years. All VARs were granted at a price equal to the estimated fair value of the Partnership, as defined in the Wireless Plan, at the date of the grant.
The Partnership employs the income approach, a standard valuation technique, to arrive at the fair value of the Partnership on a quarterly basis using publicly available information. The income approach uses future net cash flows discounted at market rates of return to arrive at an estimate of fair value, as defined in the plan.
The following table summarizes the assumptions used in the Black-Scholes model for the year ended December 31, 2013:
2013 End of Period | ||
Risk-free rate |
0.11% | |
Expected term (in years) |
0.12 | |
Expected volatility |
43.27% |
The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the measurement date. Expected volatility was based on a blend of the historical and implied volatility of publicly traded peer companies for a period equal to the VARs expected life ending on the measurement date.
B-20
For the years ended December 31, 2013, 2012 and 2011, the intrinsic value of VARs exercised during the period was $0.1 billion, respectively.
Cash paid to settle VARs for the years ended December 31, 2013, 2012 and 2011 was $0.1 billion, respectively.
Awards outstanding at December 31, 2013, 2012 and 2011 under the Wireless Plan are summarized as follows:
Weighted-Average | ||||||||||||
Exercise Price | Vested | |||||||||||
(shares in thousands) | VARs(a) | of VARs(a) | VARs(a) | |||||||||
Outstanding, January 1, 2011 |
11,569 | $ | 13.11 | 11,569 | ||||||||
Exercised |
(3,303 | ) | 14.87 | |||||||||
Cancelled/Forfeited |
(52 | ) | 14.74 | |||||||||
|
|
|||||||||||
Outstanding, December 31, 2011 |
8,214 | 12.39 | 8,214 | |||||||||
Exercised |
(3,427 | ) | 10.30 | |||||||||
Cancelled/Forfeited |
(21 | ) | 11.10 | |||||||||
|
|
|||||||||||
Outstanding, December 31, 2012 |
4,766 | 13.89 | 4,766 | |||||||||
Exercised |
(1,916 | ) | 13.89 | |||||||||
Cancelled/Forfeited |
(3 | ) | 13.89 | |||||||||
|
|
|||||||||||
Outstanding, December 31, 2013 |
2,847 | $ | 13.89 | 2,847 | ||||||||
|
|
(a) | The weighted average exercise price is presented in dollars; VARs are presented in units. At December 31, 2013 all outstanding VARs had an exercise price of $13.89 and substantially all of the VARs expire in March 2014. |
As of December 31, 2013, the aggregate intrinsic value of VARs outstanding and vested was $0.1 billion.
Verizon Communications Inc. Long-Term Incentive Plan
The Verizon Communications Inc. Long-Term Incentive Plan (the Verizon Plan) permits the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units and other awards to Partnership employees. The maximum number of shares available for awards from the Verizon Plan is 119.6 million shares.
Restricted Stock Units
The Verizon Plan provides for grants of Restricted Stock Units (RSUs) that generally vest at the end of the third year after the grant. The RSUs are classified as equity awards because the RSUs will be paid in Verizon common stock upon vesting. The RSU equity awards are measured using the grant date fair value of Verizon common stock and are not remeasured at the end of each reporting period. Dividend equivalent units are also paid to participants at the time the RSU award is paid, and in the same proportion as the RSU award.
The Partnership had approximately 4.1 million and 4.7 million RSUs outstanding under the Verizon Plan as of December 31, 2013 and 2012, respectively.
Performance Stock Units
The Verizon Plan also provides for grants of Performance Stock Units (PSUs) that generally vest at the end of the third year after the grant. As defined by the Verizon Plan, the Human Resources Committee of the Board of Directors of Verizon determines the number of PSUs a participant earns based on the extent to which the corresponding performance goals have been achieved over the three-year performance cycle. The PSUs are classified as liability awards because the PSU awards are paid in cash upon vesting. The PSU award liability is measured at its fair value at the end of each reporting period and, therefore, will fluctuate based on the price of
B-21
Verizon common stock as well as performance relative to the targets. Dividend equivalent units are also paid to participants at the time that the PSU award is determined and paid, and in the same proportion as the PSU award.
The Partnership had approximately 6.0 million and 7.0 million PSUs outstanding under the Verizon Plans as of December 31, 2013 and 2012, respectively.
As of December 31, 2013, unrecognized compensation expense related to the unvested portion of the Partnerships RSUs and PSUs was approximately $0.1 billion and is expected to be recognized over a weighted-average period of approximately two years.
Stock-Based Compensation Expense
For each of the years ended December 31, 2013, 2012 and 2011, the Partnership recognized compensation expense for stock based compensation related to VARs, RSUs and PSUs of $0.2 billion, $0.3 billion and $0.2 billion, respectively.
7. Income Taxes
Provision for Income Taxes
The provision for income taxes consists of the following:
(dollars in millions) | ||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | |||||||||
Current tax provision: |
||||||||||||
Federal |
$ | 47 | $ | 106 | $ | 476 | ||||||
State and local |
31 | (28 | ) | 103 | ||||||||
|
|
|||||||||||
78 | 78 | 579 | ||||||||||
Deferred tax provision: |
||||||||||||
Federal |
60 | 35 | 369 | |||||||||
State and local |
12 | 88 | (1 | ) | ||||||||
|
|
|||||||||||
72 | 123 | 368 | ||||||||||
|
|
|||||||||||
Provision for income taxes |
$ | 150 | $ | 201 | $ | 947 | ||||||
|
|
A reconciliation of the income tax provision computed at the statutory tax rate to the Partnerships effective tax rate is as follows:
(dollars in millions) | ||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | |||||||||
|
||||||||||||
Income tax provision at the statutory rate | $ | 9,270 | $ | 7,481 | $ | 6,264 | ||||||
State and local income taxes, net of U.S. federal benefit | 45 | 47 | 57 | |||||||||
Other | (28 | ) | 3 | (7) | ||||||||
Partnership income not subject to federal or state income taxes | (9,137 | ) | (7,330 | ) | (5,367) | |||||||
|
|
|||||||||||
Provision for income tax | $ | 150 | $ | 201 | $ | 947 | ||||||
|
|
B-22
Deferred taxes arise because of differences in the book and tax bases of certain assets and liabilities. Significant components of the Partnerships deferred taxes are shown in the following table:
(dollars in millions) | ||||||||
At December 31, | 2013 | 2012 | ||||||
|
||||||||
Deferred tax assets: | ||||||||
Net operating loss carryforward | $ | 165 | $ | 122 | ||||
Valuation allowance | (89 | ) | (55) | |||||
Other | 207 | 134 | ||||||
|
|
|||||||
Total deferred tax assets | 283 | 201 | ||||||
|
|
|||||||
Deferred tax liabilities: | ||||||||
Intangible assets | 9,457 | 9,355 | ||||||
Plant, property and equipment | 1,407 | 1,445 | ||||||
Other | 354 | 264 | ||||||
|
|
|||||||
Total deferred tax liabilities | 11,218 | 11,064 | ||||||
|
|
|||||||
Net deferred tax asset-current(a) | 66 | 76 | ||||||
|
|
|||||||
Net deferred tax liability-non-current | $ | 11,001 | $ | 10,939 | ||||
|
|
(a) | Included in prepaid expenses and other current assets in the accompanying consolidated balance sheets. |
At December 31, 2013, the Partnership had state net operating loss carryforwards of $3.6 billion. These net operating loss carryforwards expire at various dates principally from December 31, 2018 through December 31, 2033.
Unrecognized Tax Benefits
A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows:
(dollars in millions) | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Balance as of January 1 |
$ | 306 | $ | 267 | $ | 393 | ||||||
Additions based on tax positions related to the current year |
16 | 13 | 10 | |||||||||
Additions for tax positions of prior years |
9 | 72 | 53 | |||||||||
Reductions for tax positions of prior years |
(48 | ) | (49 | ) | (187) | |||||||
Reductions due to lapse of applicable statute of limitations |
(73 | ) | | (2) | ||||||||
Settlements |
| 3 | | |||||||||
|
|
|||||||||||
Balance as of December 31 |
$ | 210 | $ | 306 | $ | 267 | ||||||
|
|
Included in the total unrecognized tax benefits balance is $0.1 billion, $0.2 billion and $0.2 billion as of December 31, 2013, 2012 and 2011, respectively, that, if recognized, would favorably affect the effective tax rate. The remaining unrecognized tax benefits relate to temporary items that would not affect the effective tax rate.
The after-tax accrual for the payment of interest and penalties in the balance sheet relating to the unrecognized tax benefits reflected above was not significant for the years ended December 31, 2013, 2012 and 2011.
B-23
The net after-tax benefits (expenses) related to interest in the provision for income taxes were not significant for the years ended December 31, 2013, 2012 and 2011.
The Partnership or its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and local jurisdictions. The Partnership is generally no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2003. The Internal Revenue Service (IRS) is currently examining some of the Partnerships subsidiaries. As a result of the anticipated resolution of various income tax matters within the next twelve months, the Partnership believes that it is reasonably possible that the unrecognized tax benefits may be adjusted. An estimate of the amount of the change attributable to any such settlement cannot be made until issues are further developed or examinations close.
8. Leases
As Lessee
The Partnership has entered into operating leases for facilities and equipment used in its operations. Lease contracts contain renewal options that include rent expense adjustments based on the Consumer Price Index as well as annual and end-of-lease term adjustments. Rent expense is recorded on a straight-line basis over the noncancelable lease term which is generally determined to be the initial lease term. Total rent expense under operating leases amounted to $2.0 billion in 2013, $1.8 billion in 2012 and $1.7 billion in 2011.
The aggregate future minimum rental commitments under noncancelable operating leases, excluding renewal options that are not reasonably assured for the periods shown at December 31, 2013, are as follows:
(dollars in millions) Years |
Operating Leases |
|||
2014 | $ | 1,689 | ||
2015 | 1,518 | |||
2016 | 1,290 | |||
2017 | 1,043 | |||
2018 | 822 | |||
Thereafter | 2,974 | |||
|
|
|||
Total minimum rental commitments | $ | 9,336 | ||
|
|
9. Supplementary Financial Information
Supplementary Balance Sheet Information
At December 31, | ||||||||
(dollars in millions) | 2013 | 2012 | ||||||
Receivables, Net: | ||||||||
Accounts receivable | $ | 6,228 | $ | 5,848 | ||||
Other receivables | 1,067 | 864 | ||||||
Unbilled revenue | 308 | 295 | ||||||
|
|
|||||||
7,603 | 7,007 | |||||||
Less: allowance for doubtful accounts | (399 | ) | (350 | ) | ||||
|
|
|||||||
Receivables, net | $ | 7,204 | $ | 6,657 | ||||
|
|
B-24
(dollars in millions) | ||||||||||
At December 31, | Lives (years) | 2013 | 2012 | |||||||
|
||||||||||
Plant, Property and Equipment, Net: | ||||||||||
Land | | $ | 244 | $ | 244 | |||||
Buildings | 20-45 | 11,742 | 10,855 | |||||||
Wireless plant and equipment | 3-15 | 60,550 | 54,867 | |||||||
Furniture, fixtures and equipment | 3-10 | 3,700 | 3,603 | |||||||
Leasehold improvements | 5 | 4,728 | 4,310 | |||||||
Construction-in-progress(b) | | 2,283 | 2,572 | |||||||
|
|
|||||||||
83,247 | 76,451 | |||||||||
Less: accumulated depreciation(c) | (47,315 | ) | (41,905 | ) | ||||||
|
|
|||||||||
Plant, property and equipment, net(a) | $ | 35,932 | $ | 34,546 | ||||||
|
|
(a) | Interest costs of $0.1 billion and network engineering costs of $0.5 billion and $0.4 billion were capitalized during the years ended December 31, 2013 and 2012, respectively. |
(b) | Construction-in-progress includes $0.9 billion and $1.2 billion of accrued but unpaid capital expenditures as of December 31, 2013 and 2012, respectively. |
(c) | Depreciation of plant, property and equipment was $7.7 billion, $7.5 billion and $7.4 billion, for the years ended December 31, 2013, 2012 and 2011, respectively. |
(dollars in millions) | ||||||||
At December 31, | 2013 | 2012 | ||||||
|
||||||||
Accounts Payable and Accrued Liabilities: | ||||||||
Accounts payable, accrued interest and accrued expenses | $ | 4,176 | $ | 4,538 | ||||
Accrued payroll and related employee benefits | 1,347 | 1,385 | ||||||
Taxes payable | 651 | 687 | ||||||
Accrued commissions | 838 | 924 | ||||||
|
|
|||||||
Accounts payable and accrued liabilities | $ | 7,012 | $ | 7,534 | ||||
|
|
Supplementary Statements of Income Information
(dollars in millions) | ||||||||||||
For the Years Ended December 31, | 2013 | 2012 | 2011 | |||||||||
Advertising and Promotional Cost: | $ | 1,856 | $ | 1,826 | $ | 1,925 | ||||||
Employee Benefit Plans: | ||||||||||||
Matching contribution expense |
$ | 251 | $ | 247 | $ | 231 | ||||||
Profit sharing expense |
152 | 60 | 82 | |||||||||
Interest Expense, Net: |
||||||||||||
Interest expense |
$ | (720) | $ | (776) | $ | (954) | ||||||
Capitalized interest |
655 | 334 | 344 | |||||||||
|
|
|||||||||||
Interest expense, net |
$ | (65) | $ | (442) | $ | (610) | ||||||
|
|
B-25
Supplementary Cash Flows Information
(dollars in millions) | ||||||||||||
For the Years Ended December 31, | 2013 | 2012 | 2011 | |||||||||
Net cash paid for income taxes |
$ | 179 | $ | 245 | $ | 505 | ||||||
Interest paid, net of amounts capitalized |
130 | 464 | 610 |
10. Noncontrolling Interests
Noncontrolling interests in equity of subsidiaries were as follows:
(dollars in millions) | ||||||||
At December 31, | 2013 | 2012 | ||||||
Verizon Wireless of the East LP |
$ | 1,179 | $ | 1,179 | ||||
Cellular partnerships - various |
1,100 | 865 | ||||||
|
|
|||||||
Noncontrolling interests |
$ | 2,279 | $ | 2,044 | ||||
|
|
Verizon Wireless of the East LP
Verizon Wireless of the East LP is a limited partnership formed in 2002 and is controlled and managed by the Partnership. Verizon held the noncontrolling interest of Verizon Wireless of the East LP at December 31, 2013 and 2012. As per the agreement between the Partnership and Verizon, Verizon has not been allocated any of the profits of Verizon Wireless of the East LP.
11. Other Transactions with Affiliates
In addition to transactions with Affiliates in Note 5, other significant transactions with Affiliates are summarized as follows:
(dollars in millions) | ||||||||||||
For the Years Ended December 31, | 2013 | 2012 | 2011 | |||||||||
Revenue related to transactions with affiliated companies |
$ | 102 | $ | 83 | $ | 87 | ||||||
Cost of service(a) |
1,378 | 1,365 | 1,396 | |||||||||
Selling, general and administrative expenses(b) |
917 | 584 | 312 |
(a) | Affiliate cost of service primarily represents charges for long distance, direct telecommunication and roaming services provided by affiliates. |
(b) | Affiliate selling, general and administrative expenses include charges from affiliates for services provided, including insurance, leases, office telecommunications, and billing and lockbox services, as well as services billed from Verizon Corporate Services, Verizon Sourcing LLC, Verizon Corporate Resources Group and Verizon Data Solutions for functions performed under service level agreements. |
B-26
Other Transactions with Affiliates
Accounts payable and accrued liabilities as of December 31, 2013 and 2012 include $68 million and $92 million, respectively, due to affiliates primarily comprised of costs associated with services provided in the normal course of business and roaming services.
Distributions to Partners
In May 2013, the Board of Representatives of the Partnership declared a distribution to its owners, which was paid in the second quarter of 2013 in proportion to their partnership interests on the payment date, in the aggregate amount of $7.0 billion. As a result, Vodafone received a cash payment of $3.15 billion and the remainder of the distribution was received by Verizon.
In November 2012, the Board of Representatives of the Partnership declared a distribution to its owners, which was paid in the fourth quarter of 2012 in proportion to their partnership interests on the payment date, in the aggregate amount of $8.5 billion. As a result, Vodafone received a cash payment of $3.8 billion and the remainder of the distribution was received by Verizon.
In July 2011, the Board of Representatives of the Partnership declared a distribution to its owners, which was paid in the first quarter of 2012 in proportion to their partnership interests on the payment date, in the aggregate amount of $10 billion. As a result, Vodafone received a cash payment of $4.5 billion and the remainder of the distribution was received by Verizon.
As required under the Partnership Agreement, the Partnership paid aggregate tax distributions of $10.0 billion, $7.2 billion and $3.1 billion to its Partners during the years ended December 31, 2013, 2012 and 2011, respectively. In addition to quarterly tax distributions to its Partners, its Partners have directed the Partnership to make supplemental tax distributions to them, subject to the Partnerships board of representatives right to reconsider these distributions based on significant changes in overall business and financial conditions. During the year ended December 31, 2013, the Partnership made supplemental tax distributions in the aggregate amount of $0.9 billion, which is included in the total distribution paid above.
During February 2014, the Partnership paid aggregate tax distributions of $1.8 billion to its Partners.
12. Accumulated Other Comprehensive Income
Comprehensive income consists of net income and other gains and losses affecting Partners capital that, under U.S. GAAP, are excluded from net income.
Accumulated Other Comprehensive Income
The changes in the balances of Accumulated other comprehensive income by component are as follows:
(dollars in millions) | Unrealized loss on cash flow hedges |
Defined benefit postretirement plans |
Total | |||||||||
Balance at January 1, 2013 |
$ | 80 | $ | 4 | 84 | |||||||
Other comprehensive income |
13 | | 13 | |||||||||
Amounts reclassified to net income |
(45 | ) | | (45 | ) | |||||||
|
|
|||||||||||
Net other comprehensive loss |
(32 | ) | | (32 | ) | |||||||
|
|
|||||||||||
Balance at December 31, 2013 |
$ | 48 | $ | 4 | 52 | |||||||
|
|
B-27
The amounts presented above in net other comprehensive loss are net of taxes and noncontrolling interests, which are not significant. For the year ended December 31, 2013, all other amounts reclassified to net income in the table above are included in Other income, net on the Partnerships consolidated statements of income.
13. Commitments and Contingencies
Bell Atlantic, now known as Verizon Communications, and Vodafone entered into an alliance agreement to create a wireless business composed of both companies U.S. wireless assets, as amended, which the Partnership refers to as the Alliance Agreement. The Alliance Agreement contains a provision, subject to specified limitations, that requires Verizon and Vodafone to indemnify the Partnership for certain contingencies, excluding PrimeCo Personal Communications L.P. contingencies, arising prior to the formation of the Partnership.
Where it is determined, in consultation with counsel based on litigation and settlement risks, that a loss is probable and estimable in a given matter, the Partnership establishes an accrual. In none of the currently pending matters is the amount of accrual material. An estimate of the reasonably possible loss or range of loss in excess of the amounts already accrued cannot be made at this time due to various factors typical in contested proceedings, including (1) uncertain damage theories and demands; (2) a less than complete factual record; (3) uncertainty concerning legal theories and their resolution by courts or regulators; and (4) the unpredictable nature of the opposing party and its demands. The Partnership continuously monitors these proceedings as they develop and adjusts any accrual or disclosure as needed. The Partnership does not expect that the ultimate resolution of any pending regulatory or legal matter in future periods will have a material effect on the Partnerships financial condition, but it could have a material effect on the Partnerships results of operations for a given reporting period.
Verizon has entered into reimbursement agreements with third-party lenders that permit these lenders to issue letters of credit to third parties on behalf of the Partnership and the Partnerships subsidiaries.
The Partnership has several commitments primarily to purchase handsets and peripherals, equipment, software, programming and network services, and marketing activities, which will be used or sold in the ordinary course of business, from a variety of suppliers totaling $15.6 billion. Of this total amount, $13.6 billion is attributable to 2014, $1.0 billion is attributable to 2015 through 2016, $0.5 billion is attributable to 2017 through 2018 and $0.5 billion is attributable to years thereafter. These amounts do not represent the Partnerships entire anticipated purchases in the future, but represent only those items that are the subject of contractual obligations. The Partnerships commitments are generally determined based on the noncancelable quantities or termination amounts. Purchases against the Partnerships commitments for 2013 totaled approximately $9.8 billion. The Partnership also purchases products and services as needed with no firm commitment.
B-28
20F Disclosure Description of American Depositary Shares (Item 12D)
Fees Payable By ADR Holders
The Bank of New York Mellon, the depositary, collects its fees for delivery and surrender of ADRs directly from investors depositing shares or surrendering ADRs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors, including in connection with the payment of dividends, by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.
Persons depositing or withdrawing shares must pay: |
For: | |||
$5.00 (or less) per 100 ADRs (or portion of 100 ADRs) | Issuance of ADRs, including issuances resulting from a distribution of shares or rights or other property
Cancellation of ADRs for the purpose of withdrawal, including if the deposit agreement terminates | |||
$.02 (or less) per ADR (or portion thereof). The current per ADR fee to be charged for an interim dividend is $0.01 per ADR and for a final dividend is $0.02 per ADR. |
Any cash distribution to ADR registered holders | |||
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADRs | Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADR registered holders | |||
Registration or transfer fees | Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares | |||
Expenses of the depositary | Cable, telex, facsimile transmissions and delivery expenses (when expressly provided in the deposit agreement)
Converting foreign currency to US dollars | |||
Taxes and other governmental charges the depositary or the custodian have to pay on any ADR or share underlying an ADR, for example, stock transfer taxes, stamp duty or withholding taxes |
As necessary | |||
Any charges incurred by the depositary or its agents for servicing the deposited securities | As necessary |
C-1
Fees Payable By The Depositary To The Issuer
As set out above, pursuant to the deposit agreement, the depositary may charge up to $0.02 per ADR in respect of dividends paid by us. We have agreed with the depositary that any dividend fee collected by it is paid to us, net of any dividend collection fee charged by it. For the year ended 31 March 2014, we agreed with the depositary that it will charge $0.01 per ADR in respect of any interim dividend and $0.02 per ADR in respect of any final dividend paid during that year.
As at 31 March 2014, we have received approximately $31.4 million arising out of fees charged in respect of dividends paid during the year. We also have an agreement with the depositary that it will absorb any of its out-of-pocket maintenance costs for servicing the holders of the ADRs up to $1,000,000 per calendar year. However, any of the depositarys out-of-pocket maintenance costs which exceed the $1,000,000 annual aggregate limits will be reimbursed by us.
C-2
SIGNATURE
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
VODAFONE GROUP PUBLIC LIMITED COMPANY (Registrant) |
||
/s/ R E S Martin | ||
|
||
Rosemary E S Martin Group General Counsel and Company Secretary |
Date: 10 June 2014
Index of Exhibits to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2014
1.1 | Articles of Association, as adopted on June 30, 1999 and including all amendments made on July 25, 2001, July 26, 2005, July 25, 2006, July 24, 2007, July 29, 2008, July 28, 2009, July 27, 2010 and January 28, 2014, of the Company. |
2.1 | Indenture, dated as of February 10, 2000, between the Company and Citibank, N.A., as Trustee, including forms of debt securities (incorporated by reference to Exhibit 4(a) of Post Effective Amendment No. 1 to the Companys Registration Statement on Form F-3, dated November 24, 2000). |
2.2 | Agreement of Resignation, Appointment and Acceptance dated as of July 24, 2007, among the Company, Citibank N.A. and The Bank of New York Mellon (incorporated by reference to Exhibit 2.2 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2008). |
2.3 | Eleventh Supplemental Trust Deed dated July 11, 2013, between the Company and the Law Debenture Trust Corporation p.l.c. further modifying the provisions of the Trust Deed dated July 16, 1999 relating to a 30,000,000,000 Euro Medium Term Note Programme. |
4.1 | Agreement for US$4,015,000,000 five year Revolving Credit Facility dated March 9, 2011, among the Company and various lenders, subsequently amended when the Company exercised an option to extend the agreement by one year (incorporated by reference to Exhibit 4.3 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2011). |
4.2 | Lender Accession Agreement with Bank of China Limited, London Branch, effective as of March 17, 2011 (incorporated by reference to Exhibit 4.4 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2011). |
4.3 | Agreement for 4,000,000,000 five year Revolving Credit Facility dated July 1, 2010 among the Company and various lenders (incorporated by reference to Exhibit 4.7 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2011). |
4.4 | Lender Accession Agreement with Bank of China Limited, London Branch, effective as of March 17, 2011 (incorporated by reference to Exhibit 4.8 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2011). |
4.5 | Notice of cancellation dated March 27, 2014 in respect of the 4,230,000,000 five year Revolving Credit Facility dated July 1, 2010. |
4.6 | Agreement for 3,860,000,000 five year Revolving Credit Facility dated March 28, 2014 among the Company and various lenders. |
4.7 | Vodafone Group 1999 Long Term Stock Incentive Plan (incorporated by reference to Exhibit 4.7 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2001). |
4.8 | Vodafone Group 2005 Global Incentive Plan (incorporated by reference to Exhibit 4.8 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2006). |
4.9 | Service Agreement of Andrew Halford (incorporated by reference to Exhibit 4.16 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2006). |
4.10 | Letter of Appointment of Dr. John Buchanan (incorporated by reference to Exhibit 4.11 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2003). |
4.11 | Letter of Appointment of Anne Lauvergeon (incorporated by reference to Exhibit 4.22 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2006). |
4.12 | Letter of Appointment of Luc Vandevelde (incorporated by reference to Exhibit 4.22 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2004). |
4.13 | Letter of Appointment of Anthony Watson (incorporated by reference to Exhibit 4.26 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2006). |
4.14 | Letter of Appointment of Philip Yea (incorporated by reference to Exhibit 4.27 to the Companys Annual Report for the financial year ended March 31, 2006). |
4.15 | Service Agreement of Vittorio Colao (incorporated by reference to Exhibit 4.22 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2009). |
4.16 | Letter of Appointment of Alan Jebson (incorporated by reference to Exhibit 4.23 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2007). |
4.17 | Letter of Appointment of Nick Land (incorporated by reference to Exhibit 4.24 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2007). |
4.18 | Letter of Appointment of Samuel Jonah (incorporated by reference to Exhibit 4.26 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2009). |
4.19 | Service Agreement of Michel Combes (incorporated by reference to Exhibit 4.27 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2009). |
4.20 | Service Agreement of Stephen Pusey (incorporated by reference to Exhibit 4.28 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2009). |
4.21 | Letter of Indemnification for Andrew Halford (incorporated by reference to Exhibit 4.25 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2010). |
4.22 | Letter of Indemnification for Michel Combes (incorporated by reference to Exhibit 4.26 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2010). |
4.23 | Letter of Indemnification for Steve Pusey (incorporated by reference to Exhibit 4.27 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2010). |
4.24 | Letter of Indemnification for Dr. John Buchanan (incorporated by reference to Exhibit 4.28 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2010). |
4.25 | Letter of Indemnification for Philip Yea (incorporated by reference to Exhibit 4.29 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2010). |
4.26 | Letter of Indemnification for Luc Vandevelde (incorporated by reference to Exhibit 4.30 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2010). |
4.27 | Letter of Appointment of Renee James (incorporated by reference to Exhibit 4.35 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2011). |
4.28 | Letter of Appointment of Gerard Kleisterlee (incorporated by reference to Exhibit 4.36 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2011). |
4.29 | Letter of Appointment of Omid Kordestani (incorporated by reference to Exhibit 4.28 to the Companys Annual Report on Form 20-F for the financial year ended March 31, 2013). |
4.30 | Letter of Appointment of Valerie Gooding. |
4.31 | Service Agreement of Nicholas Read. |
4.32 | Letter of Appointment of Sir Crispin Davis |
4.33 | Letter of Appointment of Dame Clara Furse |
4.34 | Stock Purchase Agreement dated September 2, 2013, by and among Verizon Communications Inc., Vodafone Group Plc and Vodafone 4 Limited. |
4.35 | First Amendment to Stock Purchase Agreement dated December 5, 2013 by and among Vodafone Group Plc, Vodafone 4 Limited and Verizon Communications Inc, amending the terms of the Stock Purchase Agreement dated September 2, 2013. |
7. | Unaudited Computation of Ratio of Earnings to Fixed Charges for the financial years ended March 31, 2014, 2013, 2012, 2011 and 2010. |
8. | The list of the Companys subsidiaries is incorporated by reference to Note 32 to the Consolidated Financial Statements included in the Annual Report on Form 20-F for the financial year ended March 31, 2014. |
12. | Rule 13a 14(a) Certifications. |
13. | Rule 13a 14(b) Certifications. These certifications are furnished only and are not filed as part of the Annual Report on Form 20-F for the financial year ended March 31, 2014. |
15.1 | Consent letter of Deloitte LLP, London. |
15.2 | Consent letter of Deloitte & Touche LLP, New York. |
Exhibit 1.1
Company Number: 1833679
The Companies Acts
Public Company Limited by Shares
ARTICLES OF ASSOCIATION
OF
VODAFONE GROUP PUBLIC LIMITED COMPANY
TABLE OF CONTENTS
Article No. | Page No. | |||
Preliminary Articles |
||||
Table A and other standard regulations do not apply |
1 | 1 | ||
The meaning of words and phrases used in the Articles |
2 | 1 | ||
Shareholders Liabilities |
3 | 7 | ||
Fixed Rate Shares |
||||
Right of Fixed Rate Shares to profits |
4 | 8 | ||
Right of Fixed Rate Shares to capital |
5 | 8 | ||
Voting rights of Fixed Rate Shares |
6 | 9 | ||
Varying the rights of Fixed Rate Shares |
7 | 9 | ||
Shares |
||||
Fractions of shares |
8 | 9 | ||
The power to reduce capital |
9 | 10 | ||
The special rights of new shares |
10 | 10 | ||
The directors power to deal with shares |
11 | 10 | ||
Power to pay commission and brokerage |
12 | 12 | ||
No trusts or similar interests recognised |
13 | 12 | ||
Shares in Uncertificated Form |
||||
Holding shares in uncertificated form and effect of the CREST Regulations |
14 | 12 | ||
Share Certificates |
||||
Certificates |
15 | 14 | ||
Replacement share certificates |
16 | 15 | ||
Calls on Shares |
||||
The directors can make calls on shares |
17 | 15 | ||
The liability for calls |
18 | 16 | ||
Interest and expenses on unpaid calls |
19 | 16 | ||
Sums which are payable when a share is allotted are treated as a call |
20 | 16 | ||
Calls can be for different amounts |
21 | 16 | ||
Paying calls early |
22 | 16 | ||
Forfeiting Shares |
||||
Notice following non-payment of a call |
23 | 17 | ||
Contents of the notice |
24 | 17 | ||
Forfeiture if the notice is not complied with |
25 | 17 | ||
Forfeiture will include unpaid dividends |
26 | 17 |
- i -
Article No. | Page No. | |||
Surrender |
27 | 17 | ||
Dealing with forfeited shares |
28 | 18 | ||
Cancelling forfeiture |
29 | 18 | ||
The position of shareholders after forfeiture |
30 | 18 | ||
Liens on Partly-Paid Shares |
||||
The Companys lien on shares |
31 | 18 | ||
Enforcing the lien by selling the shares |
32 | 19 | ||
Using the proceeds of the sale |
33 | 19 | ||
Evidence of forfeiture or enforcement of lien |
34 | 19 | ||
Changing Shares Rights |
||||
Changing the special rights of shares |
35 | 20 | ||
More about the special rights of shares |
36 | 20 | ||
Transferring Shares |
||||
Share transfers |
37 | 21 | ||
More about transfers of shares in certificated form |
38 | 21 | ||
The Company can refuse to register certain transfers |
39 | 21 | ||
Overseas branch registers |
40 | 22 | ||
Persons Automatically Entitled to Shares by Law |
||||
When a shareholder dies |
41 | 22 | ||
Registering personal representatives |
42 | 22 | ||
A person who wants to be registered must give notice |
43 | 22 | ||
Having another person registered |
44 | 23 | ||
The rights of people automatically entitled to shares by law |
45 | 23 | ||
Prior notices binding |
46 | 23 | ||
Shareholders Who Cannot Be Traced |
||||
Shareholders who cannot be traced |
47 | 23 | ||
General Meetings |
||||
The Annual General Meeting |
48 | 24 | ||
Calling a General Meeting |
49 | 25 | ||
Notice of General Meetings |
50 | 25 | ||
Proceedings at General Meetings |
||||
The chairman of a General Meeting |
51 | 25 | ||
Security, and other arrangements at General Meetings |
52 | 26 | ||
Overflow meeting rooms |
53 | 27 | ||
The quorum needed for General Meetings |
54 | 27 | ||
The procedure if there is no quorum |
55 | 27 | ||
Adjourning meetings |
56 | 27 | ||
Amending resolutions |
57 | 28 | ||
Satellite meeting places |
58 | 28 |
- ii -
Article No. | Page No. | |||
Voting Procedures |
||||
How votes are taken |
59 | 29 | ||
How a poll is taken |
60 | 30 | ||
Where there cannot be a poll |
61 | 30 | ||
A General Meeting continues after a poll is demanded |
62 | 30 | ||
Timing of a poll |
63 | 30 | ||
The effect of a declaration by the chairman |
64 | 31 | ||
Voting Rights |
||||
The votes of shareholders |
65 | 31 | ||
Shareholders who owe money to the Company |
66 | 31 | ||
Suspension of rights on non-disclosure of interest |
67 | 32 | ||
The votes of joint holders |
68 | 34 | ||
Proxies |
||||
Appointment of proxies |
69 | 34 | ||
Completing proxy forms |
70 | 34 | ||
Delivering proxy forms |
71 | 35 | ||
Cancellation of proxys authority |
72 | 36 | ||
Authority of proxies |
73 | 37 | ||
Representatives of companies |
74 | 37 | ||
Challenging votes |
75 | 37 | ||
Directors |
||||
The number of directors |
76 | 37 | ||
Qualification to be a director |
77 | 37 | ||
Directors fees and expenses |
78 | 38 | ||
Special pay |
79 | 38 | ||
Directors expenses |
80 | 38 | ||
Directors pensions and other benefits |
81 | 39 | ||
Appointing directors to various posts |
82 | 39 | ||
Changing Directors |
||||
Retiring directors |
83 | 39 | ||
Eligibility for re-election |
84 | 40 | ||
Re-electing a director who is retiring |
85 | 40 | ||
The power to fill vacancies and appoint extra directors |
86 | 40 | ||
Removing and appointing directors by an ordinary resolution |
87 | 40 | ||
When directors are disqualified |
88 | 40 | ||
Director ceasing to be a member of a committee |
89 | 41 | ||
Directors Meetings |
||||
Directors meetings |
90 | 41 | ||
Who can call directors meetings |
91 | 41 | ||
How directors meetings are called |
92 | 42 |
- iii -
Article No. | Page No. | |||
Quorum |
93 | 42 | ||
The Chairman of directors meetings |
94 | 42 | ||
Voting at directors meetings |
95 | 42 | ||
Directors can act even if there are vacancies |
96 | 42 | ||
Directors meetings by video conference and telephone |
97 | 43 | ||
Directors written resolutions |
98 | 43 | ||
The validity of directors actions |
99 | 44 | ||
Directors Interests |
||||
Authorisation of directors interests |
100 | 44 | ||
Directors may have interests |
101 | 45 | ||
Restrictions on quorum and voting |
102 | 46 | ||
Confidential information |
103 | 47 | ||
Directors interests general |
104 | 48 | ||
Directors Committees |
||||
Delegating powers to committees |
105 | 48 | ||
Committee procedure |
106 | 49 | ||
Directors Powers |
||||
The directors management powers |
107 | 49 | ||
Provision for employees on cessation or transfer of business |
108 | 49 | ||
The power to establish local boards |
109 | 49 | ||
The power to appoint attorneys |
110 | 50 | ||
Bank mandates |
111 | 50 | ||
Name |
112 | 51 | ||
Borrowing powers |
113 | 51 | ||
Borrowing restrictions |
114 | 51 | ||
Alternate Directors |
||||
Alternate directors |
115 | 52 | ||
The Secretary |
||||
The Secretary and deputy and assistant secretaries |
116 | 53 | ||
The Seal |
||||
The Seal |
117 | 54 | ||
Authenticating Documents |
||||
Establishing that documents are genuine |
118 | 55 | ||
Dividends |
||||
Final dividends |
119 | 55 | ||
Fixed and interim dividends |
120 | 55 | ||
Dividends not in cash |
121 | 56 | ||
Calculation and currency of dividends |
122 | 56 |
- iv -
Article No. | Page No. | |||
Deducting amounts owing from dividends and other money |
123 | 56 | ||
Payments to shareholders |
124 | 57 | ||
Record dates for payments and other matters |
125 | 58 | ||
No interest on dividends |
126 | 58 | ||
Retention of dividends |
127 | 58 | ||
Dividends which are not claimed |
128 | 58 | ||
Waiver of dividends |
129 | 59 | ||
Capitalising Reserves |
||||
Capitalising reserves |
130 | 59 | ||
Scrip Dividends |
||||
Ordinary Shareholders can be offered the right to receive extra shares instead of cash dividends |
131 | 60 | ||
Accounts |
||||
Accounting and other records |
132 | 62 | ||
Location and inspection of records |
133 | 62 | ||
Communications with Shareholders |
||||
Serving and delivering notices and other documents |
134 | 63 | ||
Notices to joint holders |
135 | 63 | ||
Notices for shareholders with foreign addresses |
136 | 63 | ||
When notices are served |
137 | 64 | ||
Serving notices and documents on shareholders who have died or are bankrupt |
138 | 64 | ||
If documents are accidentally not sent or the postal services are suspended |
139 | 65 | ||
When entitlement to notices stops |
140 | 65 | ||
Signature or authentication of documents sent electronically |
141 | 65 | ||
Minutes |
||||
Minutes |
142 | 66 | ||
Winding Up |
||||
Directors power to petition |
143 | 66 | ||
Destroying Documents |
||||
Destroying documents |
144 | 66 | ||
Directors Liabilities |
||||
Indemnity |
145 | 67 | ||
Insurance and defence funding |
146 | 68 | ||
Share Warrants |
||||
Issue of Share Warrants |
147 | 69 |
- v -
Article No. | Page No. | |||
Directors can accept a certificate instead of a Share Warrant |
148 | 70 | ||
Requesting a Share Warrant |
149 | 70 | ||
Replacing Share Warrants |
150 | 70 | ||
Rights of the Bearer |
151 | 71 | ||
Bearers of Share Warrants participating in securities offers |
152 | 71 | ||
Communications with Bearers of Share Warrants |
153 | 72 | ||
Issuing shares to which the Share Warrant relates |
154 | 72 | ||
ADR Depositary |
||||
ADR Depositary can appoint proxies |
155 | 73 | ||
The ADR Depositary must keep a Proxy Register |
156 | 73 | ||
Appointed Proxies can only attend General Meetings if properly appointed |
157 | 73 | ||
Rights of Appointed Proxies |
158 | 73 | ||
Sending information to an Appointed Proxy |
159 | 74 | ||
The Company can pay dividends to an Appointed Proxy |
160 | 74 | ||
The Proxy Register may be fixed at a certain date |
161 | 74 | ||
The nature of an Appointed Proxys interest |
162 | 75 | ||
Validity of the appointment of Appointed Proxies |
163 | 75 | ||
Approved Depositaries |
||||
Appointments |
164 | 75 | ||
Rights of Nominated Proxies |
165 | 76 | ||
Scheme Shares |
||||
Shares subject to the Scheme |
166 | 77 | ||
B and C Share Scheme |
||||
Defined terms in Articles 168 to 171 (inclusive) |
167 | 77 | ||
Rights and Restrictions Attached to B Shares |
168 | 77 | ||
Rights and Restrictions Attached to C Shares |
169 | 80 | ||
Rights and Restrictions Attached to Deferred Shares |
170 | 83 | ||
Rights and Restrictions Attached to Deferred B Shares |
171 | 85 | ||
Glossary |
88 |
- vi -
Company Number: 1833679
The Companies Acts
Company Limited by Shares
ARTICLES OF ASSOCIATION
Adopted on 27 July 2010 pursuant to a Special Resolution passed on 27 July 2010.
of
VODAFONE GROUP PUBLIC LIMITED COMPANY
PRELIMINARY ARTICLES
1 | Table A and other standard regulations do not apply |
The regulations in Table A of the Companies Act 1948, and any similar articles or regulations in the Companies Acts do not apply to the Company.
2 | The meaning of words and phrases used in the Articles |
2.1 | The following table gives the meaning of certain words and phrases as they are used in these Articles. However, the meaning given in the table does not apply if that is inconsistent with the context in which a word or phrase appears. After the Articles there is a glossary which explains various words and phrases. The glossary is not part of the Articles, and it does not affect their meaning. Throughout the Articles, those words and expressions explained in this Article 2.1 are printed in bold and those explained in the glossary are printed in italics. |
Words and Phrases | Meaning | |
Act | Any act of Parliament, enactment or statutory legislation. | |
Adjusted Total of Capital and Reserves | This is defined in Article 114.2. | |
ADR Depositary | A custodian or other person or persons approved by the directors who: | |
holds shares in the Company under arrangements where either the custodian or some other person issues American Depositary Receipts which evidence American Depositary Shares representing shares in the Company; and/or | ||
is appointed by or on behalf of the Company to hold Share Warrants. |
- 1 -
Words and Phrases | Meaning | |
alternate director | This is defined in Article 115.1. | |
American Depositary Receipts | These represent American Depositary Shares either physically or in the form of Direct Registration Receipts. | |
American Depositary Shares | These represent shares in the Company and are evidenced by American Depositary Receipts. | |
Appointed Number | The number of Depositary Shares to which each appointment as a Nominated Proxy relates. | |
Appointed Proxy | This is defined in Article 155.1. | |
Approved Depositary | Someone appointed: | |
to hold the shares in the Company or any rights or interests in any of the shares in the Company; and | ||
to issue securities, documents of title or other documents which evidence that the holder of them owns or is entitled to receive the shares, rights or interests held by the Approved Depositary. | ||
A nominee acting for someone appointed to do these things will also be treated as an Approved Depositary. The arrangements for the Approved Depositary to do the things described above must be approved by the directors. The trustees of any scheme or arrangements for or principally for the benefit of employees of the Group will also be treated as an Approved Depositary unless the directors decide otherwise. References in the Articles to an Approved Depositary or to shares held by it refer only to an Approved Depositary and to shares held by it in its capacity as an Approved Depositary. | ||
approved transfer | This is defined in Article 67.11, for the purposes of Article 67. | |
Articles | The Companys Articles of Association, including any changes made to them. | |
Associated Company | This is defined in Article 145.4, for the purposes of Article 145. | |
Bearer | This is defined in Article 147.1. | |
Borrowings | This is defined in Article 114.2, for the purposes of Article 114. | |
certificated form | This is defined in Article 2.18. | |
class meeting | This is defined in Article 35.1. | |
Common Seal | Any seal which the Company may have under the Companies Acts and which the Company may use to execute documents. |
- 2 -
Words and Phrases | Meaning | |
Companies Act 2006 | The company law provisions of the Companies Act 2006 (as defined therein), for the time being in force. | |
Companies Acts | The Companies Acts as defined in Section 2 of the Companies Act 2006 (where provisions are for the time being in force), the CREST Regulations and other legislation relating to companies and affecting the Company (including any orders, regulations or other subordinated legislation made under them) in force from time to time. | |
Company Communications Provisions | The meaning of company communications provisions is given in the Companies Acts. | |
company | Includes any company, corporate body and any corporation established anywhere in the world. | |
company representative | This is defined in Article 74. | |
the Company | Vodafone Group Public Limited Company. | |
CREST Regulations | The Uncertificated Securities Regulations 2001. | |
default shares | This is defined in Article 67.1, for the purposes of Article 67. | |
Depositary Shares | The total number of Ordinary Shares which are registered in the name of the Approved Depositary or its nominee at that time. | |
Direct Registration Receipt | An American Depositary Receipt in uncertificated form, the ownership of which is recorded in the Direct Registration System. | |
Direct Registration System | The system maintained by the ADR Depositary in which the ADR Depositary records the ownership of Direct Registration Receipts. | |
direction notice | This is defined in Article 67.3 for the purposes of Article 67. | |
elected shares | This is defined in Article 131.10. | |
electronic form | This is defined in Article 2.21. | |
electronic means | This is defined in Article 2.21. | |
Fixed Rate Shares | The 7 per cent cumulative fixed rate shares of £1 each in the Company. | |
General Meeting | Any general meeting of the Company, including any general meeting held as the Companys Annual General Meeting. | |
Group | This is defined in Article 114.2, for the purposes of Article 114. |
- 3 -
Words and Phrases | Meaning | |
London Stock Exchange | London Stock Exchange plc. | |
Nominated Proxy | Each person the Approved Depositary has appointed as a proxy under Article 164.1. | |
Nominated Proxy Register | This is defined in Article 164.2, for the purposes of Articles 164 and 165. | |
operator | Euroclear UK & Ireland Limited or any other operator of a relevant system under the CREST Regulations. | |
Ordinary Shareholder | A holder of the Companys Ordinary Shares. | |
Ordinary Shares | Ordinary shares of US$0.113 /71 each in the Company. | |
paid-up share or other security | Includes a share or other security which is treated or credited as paid-up. | |
pay | Includes any kind of reward or payment for services. | |
principal meeting place | This is defined in Article 58.2. | |
Procedural Resolution | A resolution or question put to the vote of a General Meeting of a procedural nature (such as a resolution on a simple clerical amendment to correct an obvious error in a Substantive Resolution, a resolution to adjourn a General Meeting or a resolution on the choice of chairman of a General Meeting). | |
proxy form | This includes any document, electronic form or website based form which appoints a proxy. | |
Proxy Register | This is defined in Article 156.1. | |
recognised clearing house | A clearing house granted recognition under the Financial Services and Markets Act 2000. | |
recognised investment exchange | An investment exchange granted recognition under the Financial Services and Markets Act 2000. | |
Record Date | This is defined in Article 161.1, for the purposes of Article 161. | |
Record Time | This is defined in Article 165.4, for the purposes of Article 165. | |
Register | The Companys register of members. | |
Registered Office | The Companys registered office or in the case of sending or supplying any document or information by electronic means or by means of a website in accordance with the Companies Acts and these Articles, the address stated for the purpose of receiving such document or information by electronic means or by means of a website. |
1 | To be amended pursuant to, and subject to the satisfaction of the conditions in, resolution 2 sub-paragraph 4 proposed at the General Meeting of the Company on 28 January 2013. |
- 4 -
Words and Phrases | Meaning | |
Relevant Company | This is defined in Article 101.5, for the purposes of Article 101. | |
relevant system | A relevant system under the CREST Regulations whose operator allows shares or other securities of the Company to be transferred using that system. | |
relevant value | This is defined in Article 131.5, for the purposes of Article 131. | |
rights of any share | The rights attached to a share when it is issued, or afterwards. | |
satellite chairman | This is defined in Article 58.7. | |
satellite meeting | This is defined in Article 58.2. | |
Secretary | Any person appointed by the directors to do work as the company secretary including where the context allows any assistant or deputy secretary. | |
securities offer | This is defined in Article 152.3, for the purposes of Article 152. | |
Securities Seal | A seal used to stamp the Companys securities as evidence that the Company has issued them. The Companys Securities Seal is a facsimile of the Companys Common Seal but with the addition of the word securities. | |
Share Warrant | A share warrant to bearer issued by the Company. | |
shareholder | A holder of the Companys shares. | |
shareholders meeting | A meeting of shareholders including both a General Meeting of the Company and a class meeting. | |
shares | Shares which are in issue at the relevant time. | |
sterling | The currency of the United Kingdom. | |
subsidiary | A subsidiary as defined in Section 1159 of the Companies Act 2006. | |
subsidiary undertaking | A subsidiary undertaking as defined in Section 1162 of the Companies Act 2006. | |
Substantive Resolution | Any resolution or question put to the vote of a General Meeting which is not a Procedural Resolution. | |
takeover offer | A takeover offer as defined in Section 974 of the Companies Act 2006. | |
terms of a share | The terms on which a share was issued. |
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Words and Phrases | Meaning | |
Transfer Office | The place where the Register is kept or in the case of sending or supplying any document or information by electronic means or by means of a website in accordance with the Companies Acts and these Articles, the address stated for the purpose of receiving such document or information by electronic means or by means of a website. | |
UK Listing Authority | The Financial Services Authority in its capacity as the competent authority for official listing under Part VI of the Financial Services and Markets Act 2000. | |
uncertificated form | This is defined in Article 2.19. | |
United Kingdom | Great Britain and Northern Ireland. | |
working day | A day on which banks in the United Kingdom are generally open for business, excluding Saturdays, Sundays and public holidays. |
2.2 | References to a debenture include debenture stock and references to a debenture holder include a debenture stockholder. |
2.3 | Where the Articles refer to a person who is automatically entitled to a share by law, this includes a person who is entitled to the share as a result of the death, or bankruptcy, of a shareholder. |
2.4 | Words which refer to a single number also refer to plural numbers, and the other way around. |
2.5 | Words which refer to males also refer to females and to other persons. |
2.6 | The words including and include and words of similar effect shall not be deemed to limit the general effect of the words which precede them. |
2.7 | References to a person or people include companies, unincorporated associations and so on. |
2.8 | References to officers include directors, managers and the Secretary, but not the Companys auditors. |
2.9 | References to the directors are to the board of directors unless the way in which directors is used does not allow this meaning. |
2.10 | Any headings in these Articles are only included for convenience. They do not affect the meaning of the Articles. References to an Article are to a numbered paragraph of these Articles. |
2.11 | When an Act or the Articles are referred to, the version which is current at any particular time will apply. |
2.12 | Where the Articles give any power or authority to anybody, this power or authority can be used on any number of occasions, unless the way in which the word is used does not allow this meaning. |
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2.13 | Any word or phrase which is defined in the Companies Acts (excluding any modification to them by a further Act which is not in force when these Articles are adopted) means the same in the Articles, unless the Articles define it differently, or the way in which the word or phrase is used is inconsistent with the definition given in the Companies Acts. |
2.14 | Where the Articles say that anything can be done by passing an ordinary resolution, this can also be done by passing a special resolution. |
2.15 | Where the Articles refer to any document being made effective this means being signed, sealed, authenticated or executed in some other legally valid way. |
2.16 | Where the Articles refer to months or years, these are calendar months or years. |
2.17 | Articles which apply to fully-paid shares can also apply to stock. References in those Articles to share or shareholder include stock or stockholder. |
2.18 | Where the Articles refer to shares in certificated form, this means that ownership of the shares can be transferred using a transfer document (rather than in accordance with the CREST Regulations) and that a share certificate is usually issued to the owner. |
2.19 | Where the Articles refer to shares in uncertificated form, this means that ownership of the shares can be transferred in accordance with the CREST Regulations without using a written transfer document and that no share certificate is issued to the owner. |
2.20 | Where the Articles refer to a period of clear days, the period does not include the date the notice is delivered, or treated as being delivered, nor the date of the General Meeting or other relevant event. |
2.21 | The expressions hard copy form, electronic form and electronic means shall have the same respective meanings as in the Company Communications Provisions. |
2.22 | The term address when used in relation to communications via electronic means or by means of a website includes any number or address used for the purposes of such communication. |
2.23 | Where the Articles refer to anything that should be in writing, this means it should be written or produced by any substitute for writing (including anything in electronic form) or partly one and partly another. |
2.24 | References to a person being present at a General Meeting include a person present by company representative. |
SHAREHOLDERS LIABILITIES
3 | Each shareholders liability (as a shareholder) is limited to the amount (if any) that is unpaid on the shares that he or she holds. |
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FIXED RATE SHARES
4 | Right of Fixed Rate Shares to profits |
4.1 | If the Company has profits which are available for distribution and the directors resolve that these should be distributed, the holders of the Fixed Rate Shares are entitled, before the holders of any other class of shares, to be paid in respect of each financial year or other accounting period of the Company a fixed cumulative preferential dividend (preferential dividend) at the rate of 7 per cent. per annum on the nominal value of the Fixed Rate Shares which is paid-up or treated as paid-up. |
4.2 | Subject to Article 4.3 below, the preferential dividend will be paid yearly, on 31 March in respect of each financial year ending on or before that date. If this date is not a working day, the payment will be made on the next working day. |
4.3 | When the Company has to calculate a dividend on the Fixed Rate Shares for a period other than a calendar year ending on 31 March (being another accounting period, the first dividend period arising for the Fixed Rate Shares or otherwise), the daily dividend rate will be worked out by dividing the yearly dividend rate by 365 days. This daily rate will then be multiplied by the actual number of days which have passed in the relevant period, but not including the date of payment, to give the amount payable for that period. |
4.4 | Except as provided in this Article, the Fixed Rate Shares do not have any other right to share in the Companys profits. |
5 | Right of Fixed Rate Shares to capital |
5.1 | If the Company is wound up (but in no other circumstances involving a repayment of capital or distribution of assets to shareholders whether by reduction of capital, redeeming or buying back shares or otherwise), the holders of the Fixed Rate Shares will be entitled, before the holders of any other class of shares to: |
| repayment of the amount paid-up or treated as paid-up on the nominal value of each Fixed Rate Share; |
| the amount of any dividend which is due for payment on, or after, the date the winding up commenced which is payable for a period ending on or before that date. This applies even if the dividend has not been declared or earned; |
| any dividend arrears on any Fixed Rate Shares held by them. This applies even if the dividend has not been declared or earned; and |
| a proportion of any dividend in respect of the financial year or other accounting period which began before the winding up commenced but ends after that date. The proportion will be the amount of the dividend that would otherwise have been payable for the period which ends on that date. This applies even if the dividend has not been declared or earned. |
5.2 | If there is a winding up to which Article 5.1 applies, and there is not enough to pay the amounts due on the Fixed Rate Shares, the holders of the Fixed Rate Shares will share what is available in proportion to the amounts to which they would otherwise be entitled. The holders of the Fixed Rate Shares will be given preference over the holders of other classes of shares which rank behind them in sharing in the Companys assets. |
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5.3 | Except as provided in this Article 5, the Fixed Rate Shares do not have any other right to share in the Companys surplus assets. |
6 | Voting rights of Fixed Rate Shares |
6.1 | The holders of the Fixed Rate Shares are only entitled to receive notice of General Meetings, or to attend, speak and vote at General Meetings, as set out below. |
| If a resolution is to be proposed at the General Meeting to wind up the Company, they are entitled to receive notice of the General Meeting and can attend, but are not entitled to speak or vote. |
| If a resolution is to be proposed at the General Meeting which would vary or abrogate the rights attached to the Fixed Rate Shares, they are entitled to receive notice of the General Meeting and are entitled to attend, speak and vote but only in respect of such resolution or any motion to adjourn the General Meeting before such resolution is voted on. |
6.2 | If the holders of the Fixed Rate Shares are entitled to vote at a General Meeting, each holder of a Fixed Rate Share present in person or by proxy has one vote on a show of hands and on a poll every holder of a Fixed Rate Share who is present in person or by proxy shall have one vote in respect of each fully-paid Fixed Rate Share. |
7 | Varying the rights of Fixed Rate Shares |
The rights of the holders of the Fixed Rate Shares will be regarded as being varied or abrogated if any resolution is passed for the reduction of the amount of capital paid-up on the Fixed Rate Shares but not for the repayment of the Fixed Rate Shares at par value.
Accordingly, this can only take place if:
| holders of at least three quarters in nominal value of the Fixed Rate Shares agree in writing; or |
| a special resolution is passed at a separate class meeting by the holders of the Fixed Rate Shares approving the proposal, |
in accordance with Article 35.
SHARES
8 | Fractions of shares |
8.1 | If any shares are consolidated or divided, the directors have the power to deal with any fractions of shares which result or any other difficulty that arises. Subject to Article 8.3, if the directors decide to sell any shares representing fractions, they must do so for the best price reasonably obtainable and distribute the net proceeds of sale among shareholders in proportion to their fractional entitlements in accordance with their rights and interests. The directors can sell to any person (including the Company, if the Companies Acts allow this) and can authorise any person to transfer those shares to the buyer or in accordance with the buyers instructions. The buyer does not need to take any steps to see how any |
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money he paid is used. Nor will his ownership of the shares be affected if the sale was irregular or invalid in any way. |
8.2 | So far as the Companies Acts allow, when shares are consolidated or divided, the directors can treat a shareholders shares which are held in certificated form and in uncertificated form as separate shareholdings. The directors can also arrange for any shares which result from a consolidation or division and which represent rights to fractions of shares to be entered in the Register as shares in certificated form where this makes it easier to sell them. |
8.3 | Where any shareholders entitlement to a portion of the proceeds of sale amounts to less than £3, that shareholders portion may at the directors discretion be distributed to an organisation which is a charity for the purposes of the laws of England and Wales. |
9 | The power to reduce capital |
The Companys shareholders can pass a special resolution to reduce in any way:
| the Companys share capital; or |
| any capital redemption reserve, share premium account or other undistributable reserve. |
This is subject to any restrictions under the Companies Acts.
10 | The special rights of new shares |
10.1 | If the Company issues new shares, the new shares can have any rights or restrictions attached to them. The rights can take priority over the rights of existing shares, or existing shares can take priority over them, or the new shares and the existing shares can rank equally. These rights and restrictions can apply to sharing in the Companys profits or assets. Other rights and restrictions can also apply, for example to the right to vote. |
10.2 | The powers conferred by Article 10.1 are subject to the provisions of Article 10.5. |
10.3 | The rights and restrictions referred to in Article 10.1 can be decided by an ordinary resolution passed by the shareholders. The directors can also take these decisions if they do not conflict with any resolution passed by the shareholders. |
10.4 | The rights of any new shares can include rights for the holder and/or the Company to have them redeemed. The directors may determine the terms, conditions and manner of redemption of any such shares. |
10.5 | The ability to attach particular rights and restrictions to new shares may be restricted by special rights previously given to holders of any existing shares. |
11 | The directors power to deal with shares |
11.1 | Subject to the provisions of the Companies Acts, these Articles and any resolution of the Company, the directors may allot shares in the Company and grant rights to subscribe for shares, or to convert any security into shares, to such persons, at such times and on such |
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terms, including as to the ability of such persons to assign their rights to be issued such shares, as they think proper. |
11.2 | The directors shall be generally and unconditionally authorised pursuant to and in accordance with Section 551 of the Companies Act 2006 to exercise for each Allotment Period all the powers of the Company to (i) allot shares; (ii) grant rights to subscribe for shares; and (iii) convert any security into shares, but only up to an aggregate nominal amount equal to the Section 551 Amount. By such authority the directors may, during the Allotment Period, make offers or agreements which would or might require shares to be allotted, or rights to be granted, after the expiry of such period. |
11.3 | During each Allotment Period the directors shall be empowered to allot equity securities wholly for cash pursuant to and within the terms of the authority in Article 11.2 and to sell treasury shares wholly for cash: |
| in connection with a pre-emptive offer; and |
| otherwise than in connection with a pre-emptive offer, up to an aggregate nominal amount equal to the Section 561 Amount, |
as if Section 561(1) of the Companies Act 2006 did not apply to any such allotment or sale. Under such power the directors may, during the Allotment Period, make offers or agreements which would or might require equity securities to be allotted after the expiry of such period.
11.4 | For the purposes of this Article: |
| Allotment Period means (i) the period from the date of adoption of these Articles until 30 September 2011 or, if sooner, the end of the next Annual General Meeting, or (ii) any period specified as such by the Relevant Ordinary Resolution; |
| Section 551 Amount means US$1 for the first Allotment Period and for any other Allotment Period means the amount specified as such by the Relevant Ordinary Resolution; |
| equity securities, ordinary shares and references to the allotment of equity securities shall have the same meanings as in Section 560 of the Companies Act 2006; |
| Section 561 Amount means US$1 for the first Allotment Period and for any other Allotment Period means the amount specified as such in the Relevant Special Resolution; |
| pre-emptive offer means an offer of equity securities open for acceptance for a period fixed by the directors to (a) holders (other than the Company) on the register on a record date fixed by the directors of ordinary shares in proportion to their respective holdings and (b) other persons so entitled by virtue of the rights attaching to any other equity securities held by them, but subject in both cases to such exclusions or other arrangements as the directors may deem necessary or expedient in relation to treasury shares, fractional entitlements, record dates or legal, regulatory or practical problems in, or under the laws of, any territory; |
| Relevant Ordinary Resolution means, at any time, the most recently passed resolution varying, renewing or further renewing the authority conferred by Article 11.2; |
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| Relevant Special Resolution means, at any time, the most recently passed special resolution renewing or further renewing the authority conferred by Article 11.3; |
| in the case of rights to subscribe for shares, or to convert any securities into shares, of the Company, the nominal value of such securities shall be taken to be the nominal value of the shares which may be allotted pursuant to such rights. |
12 | Power to pay commission and brokerage |
12.1 | The Company can use all the powers given by the Companies Acts to pay commission or brokerage to any person who: |
| applies, or agrees to apply, for any new shares; or |
| gets anybody else to apply, or agree to apply for, any new shares. |
12.2 | The rate per cent or amount of the commission paid, or agreed to be paid, must be disclosed as required by the Companies Acts and must not exceed 10 per cent of the price at which the shares in respect of which the commission is paid are issued (or an equivalent amount). The commission can be paid in cash or by the allotment of fully-paid shares, or any combination of the two, or in any other way allowed by the Companies Acts. |
13 | No trusts or similar interests recognised |
13.1 | The Company will only be affected by, or recognise, a current and absolute right to whole shares. The fact that any share, or any part of a share, may not be owned outright by the registered owner is not of any concern to the Company, for example if a share is held on any kind of trust. |
13.2 | The only exception to what is said in Article 13.1 is for any right: |
| which is expressly given by these Articles; or |
| which the Company has a legal duty to recognise. |
SHARES IN UNCERTIFICATED FORM
14 | Holding shares in uncertificated form and effect of the CREST Regulations |
14.1 | Subject to the Articles and so far as the Companies Acts allow this, the directors can decide that any class of shares can: |
| be held in uncertificated form and that title to such shares can be transferred using a relevant system; or |
| no longer be held and transferred in uncertificated form. |
14.2 | These Articles do not apply to shares of any class which are held in uncertificated form to the extent that the Articles are inconsistent with the: |
| holding of shares of that class in uncertificated form; |
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| transfer of title to shares of that class by means of a relevant system; or |
| CREST Regulations. |
14.3 | The directors can also lay down regulations which: |
| govern the issue, holding and transfer, and where appropriate, the mechanics of conversion and redemption, of these shares and securities; |
| govern the conversion of certificated shares into uncertificated shares and the conversion of uncertificated shares into certificated shares; |
| govern the mechanics for payments involving a relevant system; and |
| make any other provisions which they consider are necessary to ensure that these Articles are consistent with the CREST Regulations, and with any rules or guidance of an operator of a relevant system. |
These regulations will, if they say so, apply instead of the other provisions in the Articles relating to certificates, and the transfer, conversion and redemption of shares and other securities, and any other provisions which are not consistent with the CREST Regulations. If the directors do make any regulations under this Article 14.3, Article 14.2 will still apply to the Articles, read with those regulations.
14.4 | The Company may by notice to the holder of a share require that a share: |
| if it is in uncertificated form, be converted into certificated form; and |
| if it is in certificated form, be converted into uncertificated form, |
to enable it to be dealt with in accordance with the Articles.
14.5 | If: |
| the Articles give the directors power to take action, or require other persons to take action, in order to sell, transfer or otherwise dispose of shares; and |
| shares in uncertificated form are subject to that power, but the power is expressed in terms which assume the use of a certificate or other written instrument, |
the directors may take such action as is necessary or expedient to achieve the same results when exercising that power in relation to shares in uncertificated form.
14.6 | The directors may take such action as they consider appropriate to achieve the sale, transfer, disposal, forfeiture, re-allotment or surrender of a share in uncertificated form or otherwise to enforce a lien in respect of it. This may include converting such share to certificated form. |
14.7 | Unless the directors resolve otherwise, shares which a shareholder holds in uncertificated form must be treated as separate holdings from any shares which that shareholder holds in certificated form. |
14.8 | A class of shares must not be treated as two classes simply because some shares of that class are held in certificated form and others are held in uncertificated form. |
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SHARE CERTIFICATES
15 | Certificates |
15.1 | When a shareholder is first registered as the holder of any class of shares in certificated form, he is entitled to receive, free of charge, one certificate for all the shares in certificated form of that class which he holds. If he holds shares of more than one class in certificated form, he is entitled to receive a separate share certificate for each class. |
15.2 | The Company must also observe any requirements of the CREST Regulations when issuing share certificates. Where the Companies Acts allow, the Company does not need to issue share certificates. |
15.3 | If a shareholder receives more shares in certificated form of any class he is entitled, without charge, to another certificate for the additional shares. |
15.4 | If a shareholder transfers part of his shares covered by a certificate, he is entitled, free of charge, to a new certificate for the balance if the balance is also held in certificated form. The old certificate will be cancelled. |
15.5 | The Company does not have to issue more than one certificate for any share in certificated form, even if that share is held jointly. |
15.6 | When the Company delivers a certificate to one joint holder of shares in certificated form, this is treated as delivery to all of the joint shareholders. |
15.7 | If requested in writing to do so, the Company can deliver a certificate to a broker or agent who is acting for a person who is buying shares in certificated form, or who is having shares transferred to him in certificated form. |
15.8 | The directors can decide how share certificates are made effective. For example, they can be: |
| signed by two directors or one director and the Secretary; |
| signed by one director in the presence of a witness who attests to the signature; |
| sealed with the Common Seal or the Securities Seal (or in the case of shares on a branch Register, an official seal for use in the relevant territory); or |
| printed, in any way, with a copy of the signature of those directors and the Secretary. The copy can be made or produced mechanically, electronically or in any other way the directors approve so long as it complies with the Companies Acts. |
15.9 | A share certificate must state the number and class of shares to which it relates and the amount paid-up on those shares. It cannot be for shares of more than one class. |
15.10 | If all the issued shares of the Company, or a particular class of shares, are fully-paid and rank equally with each other for all purposes, none of those shares will (unless the directors pass a resolution to the contrary) have a distinguishing number as long as it remains fully-paid and ranks equally for all purposes with all the shares of the same class which are issued and fully-paid. |
15.11 | The time limit for the Company to prepare a share certificate for shares in certificated form is: |
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| two months after the allotment of a new share; |
| five working days after a valid transfer of fully-paid shares is presented for registration; |
| two months after a valid transfer of partly-paid shares is presented for registration; or |
| where a request relating to Share Warrants has been made in accordance with Article 154.1, as set out in Article 154.3. |
15.12 | Article 15.11 only applies to the extent that the terms of issue of shares do not provide otherwise. |
15.13 | Share certificates will also be prepared and sent earlier where either the London Stock Exchange or the UK Listing Authority requires it. |
16 | Replacement share certificates |
16.1 | If a shareholder has four or more share certificates for shares of the same class which are in certificated form, he can ask the Company for these to be cancelled and replaced by a single new certificate. The Company must comply with this request and the directors can require the shareholder to pay the Companys reasonable administrative expenses for doing so. |
16.2 | A shareholder can ask the Company to cancel and replace a single share certificate with two or more certificates, for the same total number of shares. The Company must comply with this request and the directors can require the shareholder to pay the Companys reasonable administrative expenses for doing so. |
16.3 | A shareholder can ask the Company for a new certificate if the original is: |
| damaged or defaced; or |
| lost, stolen, or destroyed. |
16.4 | If a certificate has been damaged or defaced, the Company can require satisfactory evidence and for the certificate to be delivered to it before issuing a replacement. If a certificate is lost, stolen or destroyed, the Company can require satisfactory evidence, together with an indemnity, before issuing a replacement. In each case the directors can impose such other terms as they think fit. |
16.5 | The directors can require the shareholder to pay the Companys exceptional out-of-pocket expenses for issuing any share certificates under Article 16.3. |
16.6 | Any one joint shareholder can request replacement certificates under this Article 16. |
CALLS ON SHARES
17 | The directors can make calls on shares |
The directors can call on shareholders to pay any money which has not yet been paid to the Company for their shares. This includes both the nominal value of the shares and any
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premium which may be payable. If the terms of issue of the shares allow this, the directors can:
| make calls as often, and whenever, they think fit; |
| decide when and where the money is to be paid; |
| decide that the money can be paid by instalments; or |
| wholly or partly revoke or postpone any call. |
A call is treated as having been made as soon as the directors pass a resolution authorising it.
18 | The liability for calls |
18.1 | A shareholder who has received at least 14 days notice giving details of the amount called, the time (or times) and place or address for payment must pay the call as required by the notice. Joint shareholders are liable jointly and severally to pay any money called for in respect of their shares. |
18.2 | A shareholder due to pay the amount called shall still have to pay the call even if, after the call was made, he transfers the shares to which the call related. |
19 | Interest and expenses on unpaid calls |
If a call is made and the money due remains unpaid, the shareholder is liable to pay interest on the money and any expenses incurred by the Company because of his failure to pay the call on time. The interest will run from the day the money is due until it has actually been paid. The yearly interest rate will be a reasonable rate fixed by the directors (or, where they do not fix a reasonable rate, 10 per cent). The directors can decide not to charge any or all of such expenses and interest.
20 | Sums which are payable when a share is allotted are treated as a call |
If the terms of a share require any money to be paid at the time the share is allotted, or at any fixed date (whether in relation to the nominal value of the shares or any premium which may apply), then the liability to pay the money will be treated in the same way as a liability for a valid call for money on shares which is due on the same date. If this money is not paid, everything in the Articles relating to non-payment of calls applies. This includes Articles which allow the Company to forfeit or sell shares and to claim interest.
21 | Calls can be for different amounts |
On an issue of shares, if the terms of such shares allow, the directors can decide that allottees or the subsequent holders of such shares can be called on to pay different amounts, or that they can be called on at different times.
22 | Paying calls early |
22.1 | The directors can accept payment in advance of some or all of the money due from a shareholder before he is called on to pay the money. Any payment accepted in advance of |
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a shareholder being called on shall, to the extent of such payment, extinguish the liability upon the shares in respect of which it is made. The Company can agree to pay interest on money paid in advance until it would otherwise be due to the Company at a rate (up to a maximum yearly interest rate of 10 per cent) agreed between the directors and the shareholder. |
22.2 | The money which is paid in advance in this way shall not be included in calculating the dividend payable on the shares in respect of which the money paid in advance has been paid. |
FORFEITING SHARES
23 | Notice following non-payment of a call |
Articles 23 to 34 apply if a shareholder fails to pay the whole amount of a call, or an instalment of a call, by the date on which it is due. The directors can serve a notice on him any time after the date on which the call or the instalment is due, if the whole amount immediately due has not been paid.
24 | Contents of the notice |
A notice served under Article 23 must:
| demand payment of the amount immediately payable, plus any interest and expenses incurred by the Company by reason of such non-payment; |
| give a date by when the total must be paid, but this must be at least 14 days after the notice is served on the shareholder; |
| state where the payment(s) must be made; and |
| state that if the full amount demanded is not paid by the time and at the place or address stated, the Company can forfeit the shares on which the call or instalment was due. |
25 | Forfeiture if the notice is not complied with |
If a notice served under Article 23 is not complied with, the shares to which it relates can be forfeited at any time while any amount (including interest) is still outstanding. This is done by the directors passing a resolution stating that the shares have been forfeited.
26 | Forfeiture will include unpaid dividends |
All dividends which are due on (and other money payable in respect of) the forfeited shares, but not yet paid, will also be forfeited.
27 | Surrender |
The directors may accept a surrender of any share liable to be forfeited pursuant to Article 25.
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28 | Dealing with forfeited shares |
28.1 | The directors can sell, dispose of or re-allot any forfeited or surrendered share on any terms and in any way that they decide. The Company may keep the consideration received from doing this. The directors can, if necessary, authorise any person to transfer a forfeited or surrendered share to any other person and may cause such other person to be registered as the holder of the share. |
28.2 | The new shareholders ownership of the share will not be affected if the steps taken to forfeit or surrender the share, or the sale or disposal of the share, were invalid or irregular, or if anything that should have been done was not done, and the new shareholder is not obliged to enquire as to how the purchase money (if any) is used. |
29 | Cancelling forfeiture |
29.1 | After a share has been forfeited or surrendered, the directors can cancel the forfeiture or surrender. But they can only do this before the share has been sold, re-allotted or disposed of. This can be on any terms that they decide. |
29.2 | If a share has not been sold or disposed of after three years from the date of forfeiture, the directors must cancel the share. |
30 | The position of shareholders after forfeiture |
30.1 | A shareholder loses all rights in connection with forfeited or surrendered shares and ceases to be a shareholder in respect of those shares. If the shares are in certificated form, he must surrender any certificate for those shares to the Company for cancellation. A person is still liable to pay calls which have been made, but not paid, before the forfeiture of his shares. He must also pay interest on the unpaid amount (at the rate of interest which was payable on the unpaid amount before the forfeiture) until it is paid. If no interest was payable before the forfeiture on the unpaid amount, the directors can fix the rate of interest on the unpaid amount, but it must not be more than 10 per cent a year, until it is paid. |
30.2 | The shareholder continues to be liable for all claims and demands which the Company could have made relating to the forfeited share. He is not entitled to any credit for the value of the share when it was forfeited or for money received by the Company under Article 28, unless the directors decide to allow credit for all or any of that value. The directors may also decide to waive any payment due either completely or in part. |
LIENS ON PARTLY-PAID SHARES
31 | The Companys lien on shares |
The Company has a lien on all partly-paid shares. This lien has priority over claims of others to the shares and extends to all dividends and other money payable on the shares or in respect of them. This lien is for any money owed to the Company for the shares. The directors can decide to give up any lien which has arisen or that any share for a specified period of time be entirely or partly exempt from this Article. They can also decide to suspend any lien which would otherwise apply to particular shares. Unless otherwise
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agreed, the registration of a transfer of any share over which the Company has a lien shall operate as a waiver of that lien. |
32 | Enforcing the lien by selling the shares |
32.1 | If the directors want to enforce the lien referred to in Article 31, they can sell some or all of the shares in any way they decide. The directors can authorise someone to transfer the shares sold. But they cannot sell the shares until all of the following conditions are met: |
| the money owed by the shareholder must be immediately payable; |
| the directors must have given a notice in writing to the shareholder. This notice must specify the shares concerned and say how much is due. It must also demand that this money is paid, and say that the shareholders shares can be sold by the Company if the money is not paid; |
| the notice in writing must have been sent to or served on the shareholder, or on any person who is automatically entitled to the shares by law; and |
| the money has not been paid by at least 14 days after the notice has been served. |
32.2 | The new shareholders ownership of the share will not be affected if the sale or disposal of the share was invalid or irregular, or if anything that should have been done was not done and is not obliged to enquire as to how the purchase money (if any) is used. |
33 | Using the proceeds of the sale |
If the directors sell any shares under Article 32, the net proceeds will first be used to pay off the amount which is then payable to the Company. The directors will pay any money left over to the former shareholder, or to any person who would otherwise be automatically entitled to the shares by law provided that the Companys lien will also apply to any money left over, to cover any money still due to the Company which is not yet payable: the Company has the same rights over this money as it had over the shares immediately before they were sold. If the shares are in certificated form, the Company need not pay over anything left under this Article until the certificate representing the shares sold has been delivered to the Company for cancellation.
34 | Evidence of forfeiture or enforcement of lien |
A director, or the Secretary, can make a statutory declaration declaring:
| that he is a director or the Secretary of the Company; |
| that a share has been properly forfeited or surrendered or sold to satisfy a lien under the Articles; and |
| when the share was forfeited or sold. |
This will be conclusive evidence of these facts which cannot be disputed as against all persons claiming to be entitled to the share. Such declaration shall constitute a good title to the share subject to compliance with any other transfer formalities required by law.
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CHANGING SHARE RIGHTS
35 | Changing the special rights of shares |
35.1 | If the Companys share capital is split into different classes of share, and if the Companies Acts allow this and unless the Articles or rights attached to any class of share say otherwise, the special rights which are attached to any of these classes of share can be varied or abrogated if this is approved by a special resolution in accordance with Articles 35 and 36. This must be passed at a separate meeting of the holders of the relevant class of shares. This is called a class meeting. Alternatively, the holders of at least three-quarters of the existing shares of the relevant class, excluding any shares held as treasury shares, (by nominal value) can give their consent in writing. |
35.2 | The special rights of a class of shares can be varied or abrogated while the Company is a going concern, or while the Company is being wound up, or if winding up is being considered. |
35.3 | All the Articles relating to General Meetings apply, with any necessary changes, to a class meeting, but with the following adjustments: |
| At least two people who hold (or who act as proxies for) at least one third of the total nominal value of the existing shares of the class are a quorum. However, if this quorum is not present at an adjourned class meeting, one person who holds shares of the class, or his proxy, is a quorum, regardless of the number of shares he holds. |
| Anybody who is personally present, or who is represented by a proxy, can demand a poll. |
| On a poll, the holders of shares will have one vote for every share of the class which they hold. |
| If a class meeting is adjourned for any reason including a lack of quorum, the adjourned meeting may be held less than 10 clear days after the original class meeting notwithstanding Article 55.1. |
35.4 | This Article also applies to the variation or abrogation of special rights of shares forming part of a class. Each part of the class which is being treated differently is viewed as a separate class in operating this Article. |
36 | More about the special rights of shares |
The special rights of shares or of any class of shares are not regarded as varied or abrogated if:
| new shares are created, or issued, which rank equally with or behind those shares or that class of shares in sharing in profits or assets of the Company; |
| the Company redeems or buys back its own shares. |
But this does not apply if the terms of the shares or class of shares expressly provide otherwise.
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TRANSFERRING SHARES
37 | Share transfers |
37.1 | Unless the Articles provide otherwise, any shareholder can transfer some or all of his shares to another person. |
37.2 | Every transfer of shares in certificated form must be in writing, and either in the usual standard form, or in any other form approved by the directors. |
37.3 | Transfers of uncertificated shares are to be carried out using a relevant system and must comply with the CREST Regulations. |
38 | More about transfers of shares in certificated form |
38.1 | The transfer form for shares in certificated form must be delivered to the Transfer Office (or any other place the directors may decide). The directors may refuse to recognise a transfer unless the transfer form: |
| has with it the share certificate for the shares to be transferred and any other evidence which the directors ask for to prove that the person wishing to make the transfer is entitled to do this; |
| is properly stamped (for payment of stamp duty) where this is required; |
| is being used to transfer only one class of shares; and |
| is in favour of not more than four joint holders. |
38.2 | If the share being transferred is a fully-paid-up share, a share transfer form must be signed by the person making the transfer. If the transfer is being made by a company, the share transfer form does not need to be under that companys seal. |
38.3 | If the share being transferred is not a fully-paid-up share a share transfer form must also be signed by the person to whom the share is being transferred. If the transfer is being made to a company, the transfer form does not need to be under that companys seal. |
38.4 | The person making a transfer of shares will be treated as continuing to be the shareholder until the name of the person to whom a share is being transferred is put on the Register for that share. |
38.5 | No fee is payable to the Company for transferring shares or registering changes relating to the ownership of shares. |
38.6 | If a share transfer is registered, or if the directors have any grounds for suspecting fraud, the Company can keep the share transfer form. Otherwise, if the directors refuse to register a transfer, the share transfer form will be returned, when notice of refusal is given, to the person lodging it. |
39 | The Company can refuse to register certain transfers |
39.1 | The directors can refuse to register a transfer of any shares: |
| in certificated form, if the relevant conditions in Article 38 are not satisfied; or |
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| where the Board is obliged or entitled to refuse to do so as a result of any failure to comply with a notice under Section 793 of the Companies Act 2006 (see Article 67.1). |
39.2 | If the directors decide not to register a transfer of a share in certificated form, they must notify in writing the person to whom such share was to be transferred and the person intending to transfer such share, of the decision not to register the transfer. Such notice shall give reasons for the decision to refuse registration. This must be done no later than two months after the Company receives the transfer. The directors do not have to give any reasons for refusing to register a transfer of any shares in uncertificated form. |
40 | Overseas branch registers |
If the Company transacts business in a country or territory referred to in Section 129 of the Companies Act 2006, it may arrange for a branch register of the shareholders resident in that country or territory to be kept there.
PERSONS AUTOMATICALLY ENTITLED TO SHARES BY LAW
41 | When a shareholder dies |
41.1 | When a sole shareholder dies (or a shareholder who is the last survivor of joint shareholders dies), his legal personal representatives will be the only people whom the Company will recognise as being entitled to his shares. |
41.2 | If a shareholder who is a joint shareholder dies, the remaining joint shareholder or shareholders will be the only people who the Company will recognise as being entitled to his shares. |
41.3 | This Article does not discharge the estate of any sole or joint shareholder from any liability. |
42 | Registering personal representatives |
A person who becomes automatically entitled to a share by law can either be registered as the shareholder or can select some other person to whom the share is to be transferred. The person who is automatically entitled by law must provide any evidence of his entitlement which is reasonably required by the directors.
43 | A person who wants to be registered must give notice |
If a person who is automatically entitled to shares by law wants to be registered as a shareholder, he must deliver or send a notice to the Company saying that he has made this decision. He must sign this notice, or authenticate it in accordance with Article 141, and it must be in the form which the directors require. This notice will be treated as a transfer form and all of the provisions of these Articles about registering transfers of shares apply to it. The directors have the same power to refuse to register the automatically entitled person as they would have had in deciding whether to register a transfer by the person who was previously entitled to the shares.
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44 | Having another person registered |
If a person who is automatically entitled to a share by law wants the share to be transferred to another person, he must do the following:
| for a share in certificated form sign a transfer form to the person he has selected; and |
| for a share in uncertificated form transfer such share using a relevant system. |
The directors have the same power to refuse to register the person selected as they would have had in deciding whether to register a transfer by the person who was previously entitled to the shares.
45 | The rights of people automatically entitled to shares by law |
45.1 | A person who is automatically entitled to a share by law is entitled to any dividends or other money relating to the share, upon supplying to the Company such evidence as the directors may reasonably require to show his title to the share, even though he is not registered as the holder of that share. However, if the directors have served a notice on any such person requesting him to choose between registering himself or transferring the share, and such person does not comply with the notice within 90 days, the directors can withhold the dividend and other money until the notice has been properly complied with. The directors can also withhold the dividend if the person who was previously entitled to the share could have had their dividend withheld. |
45.2 | Unless and until he is registered as a shareholder the person automatically entitled to a share by law is not entitled: |
| to receive notices of General Meetings, or to attend or vote at these meetings; and |
| (subject to Article 45.1) to any of the other rights and benefits of being a shareholder, |
unless the directors decide to allow this.
45.3 | A person entitled to a share who has elected for that share to be transferred to some other person pursuant to Article 44 shall cease to be entitled to any rights or advantages in relation to such share upon that other person being registered as the holder of that share. |
46 | Prior notices binding |
If a notice is given to a shareholder in respect of a share, a person entitled to that share is bound by the notice if it was given to the shareholder before the name of the person entitled was entered into the Register.
SHAREHOLDERS WHO CANNOT BE TRACED
47 | Shareholders who cannot be traced |
47.1 | The Company can sell any shares at the best price reasonably obtainable if: |
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| during the 12 years before the earliest of the advertisements referred to below, at least three dividends on the shares have been payable and none has been claimed; |
| after this 12-year period, the Company announces that it intends to sell the shares by placing an advertisement in a United Kingdom national newspaper and in a newspaper appearing in the area which includes the address held by the Company for serving notices relating to the shares; and |
| during this 12-year period, and for three months after the last advertisement appears in the newspapers, the Company has received no indication as to the whereabouts or existence of the shareholder or any person who is automatically entitled to the shares by law. |
47.2 | To sell any shares in this way, the Company can authorise any person to transfer the shares. This transfer will be just as effective as if it had been made by the registered holder of the shares, or by a person who is automatically entitled to the shares by law. The ownership of the person to whom the shares are transferred will not be affected even if the sale is irregular or invalid in any way. |
47.3 | The net sale proceeds belong to the Company until claimed under this Article, but it must pay these to the shareholder who could not be traced, or to the person who is automatically entitled to the shares by law, if that shareholder, or that other person, asks for it. |
47.4 | The Company must record the name of that shareholder, or the person who was automatically entitled to the shares by law, as a creditor for this money in its accounts. The money is not held on trust, and no interest is payable on the money. The Company can keep any money which it has earned on the net sale proceeds. The Company can use the money for its business, or it can invest the money in any way that the directors decide. However, the money cannot be invested in the Companys shares, or in the shares of any holding company of the Company. |
47.5 | In the case of uncertificated shares, this Article is subject to any restrictions which apply under the CREST Regulations. |
GENERAL MEETINGS
48 | The Annual General Meeting |
Except as provided in the Companies Acts, the Company must hold an Annual General Meeting once in each period of six months beginning with the day following the Companys accounting reference date, in addition to any other General Meetings which are held in the year. The notice calling the Annual General Meeting must say that the meeting is the Annual General Meeting. The Annual General Meeting must be held in accordance with the Companies Acts. The directors must decide when and where to hold the Annual General Meeting.
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49 | Calling a General Meeting |
The directors can decide to call a General Meeting at any time in accordance with the Companies Acts. General Meetings must also be called promptly in response to a requisition by shareholders under the Companies Acts. If a General Meeting is not called in response to such a request by shareholders, it can be called by the shareholders who requested the General Meeting in accordance with the Companies Acts. Any General Meeting requisitioned in this way by shareholders shall be called in the same manner as nearly as possible to that in which General Meetings are called by the directors. The directors must decide when and where to hold a General Meeting.
50 | Notice of General Meetings |
50.1 | Notices of General Meetings shall include all information required to be included by the Companies Acts. |
50.2 | Notices of General Meetings must be given to the shareholders, except in cases where the Articles or the rights attached to the shares state that the holders are not entitled to receive them from the Company. Notice must also be given to the Companys auditors. The day when the notice is served (see Article 137), or is treated as served, and the day of the General Meeting do not count towards the period of notice. In relation to any class of shares some of which are in uncertificated form the Company can decide that only people who are entered on the Register at the close of business on a particular day are entitled to receive such a notice. That day shall be a day chosen by the Company and falling not more than 21 days before the notice is sent. |
50.3 | For the purposes of determining which persons are entitled to attend a meeting, the Company may specify in the notice of the meeting a time by which a person must be entered on the Register in order to have the right to attend the meeting. For the purposes of determining which persons are entitled to vote at a meeting, and how many votes such persons may cast, the Company must specify in the notice of the meeting a time, not more than 48 hours before the time fixed for the meeting, by which a person must be entered on the Register in order to have the right to vote at the meeting. The directors may at their discretion resolve that, in calculating such period, no account shall be taken of any part of any day that is not a working day (within the meaning of Section 1173 of the Companies Act 2006). |
PROCEEDINGS AT GENERAL MEETINGS
51 | The chairman of a General Meeting |
51.1 | The Chairman of the directors will be the chairman at every General Meeting, if he is present and willing to take the chair. |
51.2 | If the Company does not have a Chairman, or if the Chairman is not present and willing to chair the General Meeting, a Deputy Chairman will chair the meeting if he is present and willing to take the chair. |
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51.3 | Where there is more than one Deputy Chairman at a General Meeting and there is more than one present, and the Chairman is not there, the Deputy Chairman to take the chair will be the longest serving Deputy Chairman present. |
51.4 | If the Company does not have a Chairman or a Deputy Chairman, or if neither the Chairman or any Deputy Chairman are present and willing to chair the General Meeting, after waiting ten minutes from the time that a meeting is due to start, the directors who are present will choose one of themselves to act as chairman. If there is only one director present, he will be chairman if he is willing. |
51.5 | If there is no director present and willing to be chairman, then a shareholder may be elected to be the chairman by a resolution of the Company passed at the General Meeting. A proxy, who is not also a director or shareholder, cannot be appointed as the chairman. |
51.6 | To avoid any doubt, nothing in these Articles restricts or excludes any of the powers or rights of a chairman of a meeting which are given by the general law. |
52 | Security, and other arrangements at General Meetings |
52.1 | The directors can put in place any arrangements or restrictions they think necessary to ensure the safety and security of people attending a General Meeting and the orderly conduct of the General Meeting, including requiring those attending to submit to searches. |
52.2 | Either the chairman of a General Meeting, or the Secretary, can take any action he considers necessary (including adjourning the General Meeting) for: |
| the safety of people attending a General Meeting (for example, if there is not enough room for the shareholders and proxies who want to attend the General Meeting); or |
| proper and orderly conduct at a General Meeting (for example, where the behaviour of someone present could prevent the business of the General Meeting being carried out in an orderly way); or |
| any other reason to make sure that the business of the General Meeting can be properly carried out. |
Where the chairman of a General Meeting or the Secretary decides to adjourn a General Meeting in this way, he can adjourn the General Meeting to a time, date and place he decides (or indefinitely). He does not need the agreement of those present at the General Meeting to do this.
52.3 | The directors may refuse entry to, or remove from, a General Meeting any shareholder, proxy or other person who fails to comply with such arrangements or restrictions. |
52.4 | If anyone has gained entry to a General Meeting and refuses to comply with any security arrangements or restrictions, or disrupts the proper and orderly conduct of the General Meeting, the chairman can at any time, without the consent of the General Meeting, order this person to leave or be removed from the General Meeting. |
52.5 | The chairman of a General Meeting can invite any person to attend and speak at the General Meeting who they consider has the knowledge or experience of the business of the Company to assist in the deliberations of the meeting. |
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52.6 | The chairmans decision on points of order, matters of procedure or matters arising incidentally out of the business of a General Meeting will be final, as will his decision, acting in good faith, on whether a point or matter is of this nature. |
53 | Overflow meeting rooms |
The directors can arrange for any people who they consider cannot be seated in the main meeting room, where the chairman will be, to attend and take part in a General Meeting in an overflow room or rooms. Any overflow room must have a live video and two way sound link with the main room for the General Meeting, where the chairman will be. The video and sound link must enable those in all the rooms to see and hear what is going on in the other rooms. The notice of the General Meeting does not have to give details of any arrangements under this Article. The directors can decide on how to divide people between the main room and any overflow room. If any overflow room is used, the General Meeting will be treated as being held, and taking place, in the main room.
54 | The quorum needed for General Meetings |
Before a General Meeting starts to conduct business, there must be a quorum present. If there is not, the meeting cannot carry out any business other than appointing a chairman. Unless other Articles say otherwise, a quorum for all purposes is two people who are entitled to vote. They can be personally present or proxies for shareholders or duly authorised company representatives or a combination of shareholders, duly authorised company representatives and proxies.
55 | The procedure if there is no quorum |
55.1 | This Article 55 applies if a quorum is not present either within 30 minutes of the time fixed for a General Meeting to start or within any longer period (being no longer than an hour from the time fixed for the General Meeting to start) on which the chairman may decide and if during the meeting a quorum ceases to be present. If the General Meeting was called by shareholders it is cancelled. Any other General Meeting is adjourned to another day, time and place stated in the notice of General Meeting or (if not so specified) as the directors may decide, provided that the adjourned meeting shall be held not less than 10 clear days after the original General Meeting. |
55.2 | If a quorum is not present within 15 minutes of the time fixed for the start of the adjourned meeting, the adjourned General Meeting shall be cancelled. |
56 | Adjourning meetings |
56.1 | Subject to Article 52, the chairman of a General Meeting can adjourn a meeting which has a quorum present, if this is agreed by those present at the General Meeting. This can be to a time, date and place proposed by the chairman or may be an indefinite adjournment. The chairman must adjourn the General Meeting if the General Meeting directs him to. In these circumstances the General Meeting will decide how long the adjournment will be, and where it will adjourn to. If a General Meeting is adjourned indefinitely, the directors will fix the time, date and place of the adjourned General Meeting. |
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56.2 | General Meetings can be adjourned more than once. But if a General Meeting is adjourned for more than 30 days or indefinitely, at least seven days notice must be given of the adjourned General Meeting in the same way as was required for the original General Meeting. If a General Meeting is adjourned for less than 30 days, there is no need to give notice of the adjourned General Meeting, or about the business to be considered there. |
56.3 | An adjourned General Meeting can only deal with business that could have been dealt with at the original General Meeting before it was adjourned. |
57 | Amending resolutions |
57.1 | A special resolution to be proposed at a General Meeting may be amended by ordinary resolution provided that no amendment may be made other than a mere clerical amendment to correct an obvious error. |
57.2 | An ordinary resolution to be proposed at a General Meeting may be amended by ordinary resolution provided that: |
| notice of the proposed amendment has been: |
| lodged in writing at the Registered Office; or |
| received electronically at the address specified for receiving notices in electronic form, |
at least two clear business days before the time appointed for holding the General Meeting or adjourned General Meeting at which the resolution is to be proposed;
| such notice has been given by a person entitled to vote at the General Meeting in question; and |
| the chairman of the General Meeting decides in good faith that the amendment is within the scope of the business of the meeting as described and does not impose further obligations on the Company. |
57.3 | If the chairman of a General Meeting, acting in good faith, rules an amendment to a resolution out of order, any error in that ruling will not affect the validity of a vote on the original resolution. |
58 | Satellite meeting places |
58.1 | To assist with the organisation and administration of any General Meeting, the directors may decide that the General Meeting will be held at more than one location. |
58.2 | For the purposes of these Articles, any General Meeting taking place at two or more locations will be treated as taking place where the chairman of the General Meeting is in attendance (to be known as the principal meeting place) and any other location where that meeting takes place is referred to in these Articles as a satellite meeting. |
58.3 | A shareholder present in person or by proxy at a satellite meeting may be counted in the quorum and can exercise all rights that they would have been able to exercise if they were present at the principal meeting place. |
58.4 | The directors can make and change such arrangements as they consider appropriate to: |
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| ensure that all shareholders and proxies for shareholders wanting to attend the meeting can do so; |
| ensure that all persons attending the meeting are able to take part in the business of the meeting and to see and hear anyone else addressing the meeting; |
| ensure the safety of persons attending the meeting and the orderly conduct of the meeting; and |
| restrict the numbers of shareholders and proxies at any one location to a number that can be safely and conveniently accommodated there. |
58.5 | Whether any shareholder or proxy is entitled to attend a satellite meeting will depend on any arrangements then in force and stated in the notice of General Meeting or adjourned General Meeting. |
58.6 | If the communication equipment fails or if any other arrangements fail for shareholders to take part in the meeting at more than one place, the chairman may adjourn the meeting under Article 56. Such an adjournment will not affect the validity of such meeting, or any business conducted at such meeting up to the point it is adjourned, or any action taken following such a meeting. |
58.7 | A person (known as a satellite chairman) may be appointed by the directors to preside at each satellite meeting. Every satellite chairman appointed: |
| will carry out all requests made by the chairman of the General Meeting; |
| can take whatever action they think necessary to maintain the proper and orderly conduct of the satellite meeting; and |
| will have all powers necessary or desirable to carry out these duties. |
VOTING PROCEDURES
59 | How votes are taken |
59.1 | All Substantive Resolutions will only be decided on a poll. All Procedural Resolutions will be decided by a show of hands, unless a poll is demanded before the resolution is put to the vote on a show of hands or on the result of the show of hands being declared by the chairman. A poll can be demanded by: |
| the chairman of the General Meeting; |
| at least five shareholders at the General Meeting (including proxies of shareholders entitled to vote) who are entitled to vote; |
| one or more shareholders at the General Meeting who are entitled to vote (including proxies of shareholders entitled to vote) and who have, between them, at least 10 per cent of the total votes of all shareholders who have the right to vote at the General Meeting (excluding the rights attaching to shares held as treasury shares); or |
| one or more shareholders who have shares which allow them to vote at the General Meeting (including proxies of shareholders entitled to vote), where the |
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total amount which has been paid-up on their shares is at least 10 per cent of the total sum paid-up on all shares which give the right to vote at the General Meeting. |
59.2 | A demand for a poll can be withdrawn if the chairman agrees to this. If a poll is demanded, and this demand is then withdrawn, any declaration by the chairman of the result of a vote on that resolution by a show of hands, which was made before the poll was demanded, will stand. |
60 | How a poll is taken |
60.1 | If a poll is demanded or held in the way allowed by the Articles, the chairman of the General Meeting can decide where, when and how it will be carried out. The result is treated as the decision of the General Meeting where the poll was demanded, even if the poll is carried out after the General Meeting. |
60.2 | The chairman can: |
| decide that a ballot, voting papers, tickets, or electronic means, or any such combination, will be used; |
| appoint one or more scrutineers (who need not be shareholders); |
| decide to adjourn the General Meeting to such day, time and place as he decides for the result of the poll to be declared. |
60.3 | If a poll is called, a shareholder can vote either personally or by his proxy. If a shareholder votes on a poll, he does not have to use all of his votes or cast all his votes in the same way. |
61 | Where there cannot be a poll |
Notwithstanding any other provision in these Articles, a poll is not allowed on a vote to elect a chairman of a General Meeting, nor is a poll allowed on a vote to adjourn a General Meeting, unless the chairman of the General Meeting demands a poll.
62 | A General Meeting continues after a poll is demanded |
A demand for a poll on a particular matter does not stop a General Meeting from continuing and dealing with matters other than the question on which the poll was demanded.
63 | Timing of a poll |
A poll on a resolution to adjourn the General Meeting must be taken immediately at the General Meeting. Any other poll can either be taken immediately at the General Meeting or within 30 days from the date it was demanded and at a time and place decided on by the chairman. No notice is required for a poll which is not taken immediately if the time and place at which it is to be taken are announced at the General Meeting at which it is demanded. In any other case, at least seven clear days notice must be given specifying the time and place at which the poll is to be taken.
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64 | The effect of a declaration by the chairman |
On a vote on a resolution at a General Meeting on a show of hands, a declaration by the chairman that the resolution:
| has or has not been passed; or |
| has or has not been passed with a particular majority, |
is conclusive evidence of that fact without proof of the number or proportion of the votes recorded in favour of or against the resolution. An entry in respect of such a declaration in minutes of the meeting recorded in accordance with the Companies Acts is also conclusive evidence of that fact without such proof. This Article does not have effect if a poll is demanded in respect of the resolution (and the demand is not subsequently withdrawn).
VOTING RIGHTS
65 | The votes of shareholders |
65.1 | At a General Meeting: |
(i) | on a show of hands every shareholder (who is entitled to be present and to vote) who is present in person and, subject to Article 65.1(ii), every proxy present (who has been duly appointed) shall have one vote; |
(ii) | on a show of hands, a proxy has one vote for and one vote against the resolution if the proxy has been duly appointed by more than one shareholder entitled to vote on the resolution, and the proxy has been instructed: |
| by one or more of those shareholders to vote for the resolution and by one or more other of those shareholders to vote against it; or |
| by one or more of those shareholders to vote either for or against the resolution and by one or more other of those shareholders to use his discretion as to how to vote; and |
(iii) | on a poll, every shareholder (who is entitled to be present and to vote) who is present in person or by proxy (who has been duly appointed) shall have one vote for every share which he holds. |
This is subject to Article 50.3 and any special rights or restrictions which are given to any class of shares by, or in accordance with, the Articles.
65.2 | A proxy shall not be entitled to vote on a show of hands or on a poll where the shareholder appointing the proxy would not have been entitled to vote on the resolution had he been present in person. |
66 | Shareholders who owe money to the Company |
Unless the Articles provide otherwise, the only people who are entitled to attend and/or vote at General Meetings or to exercise any other right conferred by being a shareholder in relation to General Meetings, are shareholders who have paid the Company all calls, and all other sums, relating to their shares which are due at the time of the General
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Meeting. This applies both to attending the General Meeting personally and to appointing a proxy.
67 | Suspension of rights on non-disclosure of interest |
67.1 | This Article applies if any shareholder, or any person appearing to be interested in shares (within the meaning of Part 22 of the Companies Act 2006) held by that shareholder, has been properly served with a notice under Section 793 of the Companies Act 2006, requiring information about interests in shares, and has failed for a period of 14 days from the date of the notice to supply to the Company the information required by that notice. Then (subject to the provisions of the Companies Acts and this Article, and unless the directors otherwise decide) the shareholder is not (for so long as the failure continues) entitled to attend or vote either personally or by proxy at a shareholders meeting or to exercise any other right in relation to a shareholders meeting as holder of: |
| the shares in relation to which the default occurred (called default shares); |
| any further shares which are issued in respect of default shares; and |
| any other shares held by the shareholder holding the default shares. |
67.2 | Any person who acquires shares subject to restrictions under Article 67.1 is subject to the same restrictions, unless: |
| the transfer was an approved transfer (see Article 67.11); or |
| the transfer was by a shareholder who was not himself in default in supplying the information required by the notice under Article 67.1 and a certificate in accordance with Article 67.3 is provided. |
67.3 | Where the default shares represent 0.25 per cent or more of the existing shares of a class, the directors can in their absolute discretion by notice in writing (a direction notice) to the shareholder direct that: |
| any dividend or part of a dividend or other money which would otherwise be payable on the default shares shall be retained by the Company (without any liability to pay interest when that dividend or money is finally paid to the shareholder); |
| the shareholder will not be allowed to choose to receive shares in place of dividends in accordance with Article 131; and/or |
| subject to Article 67.4, no transfer of any of the shares held by the shareholder will be registered unless: |
| either the transfer is an approved transfer (see Article 67.11); |
| or the shareholder is not himself in default as regards supplying the information required; and (in this case) |
| the transfer is of part only of his holding; and |
| when presented for registration, the transfer is accompanied by a certificate by the shareholder. This certificate must be in a form satisfactory to the directors and state that after due and careful |
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enquiry the shareholder is satisfied that none of the shares included in the transfer are default shares. |
67.4 | Any direction notice can treat shares of a shareholder in certificated and uncertificated form as separate shareholdings and either apply only to shares in certificated form or to shares in uncertificated form or apply differently to shares in certificated and uncertificated form. In the case of shares in uncertificated form the directors can only use their discretion to prevent a transfer if this is allowed by the CREST Regulations. |
67.5 | The Company must send a copy of the direction notice to each other person who appears to be interested in the shares covered by the notice, but if it fails to do so, this does not invalidate the direction notice. |
67.6 | A direction notice has the effect which it states while the default resulting in the notice continues. It then ceases to apply when the directors decide (which they must do within one week of the default being cured). The Company must give the shareholder notice in writing of the directors decision as soon as reasonably practicable. |
67.7 | A direction notice also ceases to apply to any shares which are transferred by a shareholder in a transfer permitted under Article 67.3 even where a direction notice restricts transfers. |
67.8 | Where a person who appears to be interested in shares has been served with a notice under Section 793 of the Companies Act 2006 and the shares in which he appears to be interested are held by an Approved Depositary, this Article shall be treated as applying only to the shares which are held by the Approved Depositary in which that person appears to be interested and not (so far as that persons apparent interest is concerned) to any other shares held by the Approved Depositary. |
67.9 | Where the shareholder on which a notice under Section 793 of the Companies Act 2006 is served is an Approved Depositary, the obligations of the Approved Depositary as a shareholder will be limited to disclosing to the Company any information relating to any person who appears to be interested in the shares held by it which has been recorded by it in accordance with the arrangement under which it was appointed as an Approved Depositary. |
67.10 | For the purposes of this Article a person is treated as appearing to be interested in any shares if the shareholder holding those shares has been served with a notice under Section 793 of the Companies Act 2006 and: |
| the shareholder has named that person as being so interested; or |
| (after taking into account the response of the shareholder to the notice and any other relevant information) the Company knows or reasonably believes that the person in question is or may be interested in the shares. |
67.11 | For the purposes of this Article a transfer of shares is an approved transfer if: |
| it is a transfer of shares to an offeror under an acceptance of a takeover offer; or |
| the directors are satisfied that the transfer is made in connection with a sale in good faith of the whole of the beneficial ownership of the shares to a person unconnected with the shareholder or with any person appearing to be interested in the shares. This includes such a sale made through a recognised investment |
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exchange or any other stock exchange outside the United Kingdom on which the Companys shares are normally traded. For this purpose any associate (as that word is defined in Section 435 of the Insolvency Act 1986) is included amongst the people who are connected with the shareholder or any person appearing to be interested in the shares. |
67.12 | Where a person who has an interest in American Depositary Shares receives a notice under this Article 67, that person is considered for the purposes of this Article 67 to have an interest in the number of shares represented by those American Depositary Shares which is specified in the notice and not in the remainder of the shares held by the ADR Depositary. |
67.13 | Where the ADR Depositary receives a notice under this Article 67, the ADR Depositary shall only be required to supply information relating to any person who has an interest in the shares held by the ADR Depositary which has been recorded by the ADR Depositary under the arrangements made with the Company (including in the Proxy Register maintained under Article 156) when it was appointed as the ADR Depositary. |
67.14 | This Article does not restrict in any way the provisions of the Companies Acts which apply to failures to comply with notices under Section 793 of that Companies Act 2006. |
68 | The votes of joint holders |
Where a share is held by joint shareholders any one joint shareholder can vote at any General Meeting (either personally or by proxy) in respect of such share as if he were the only shareholder. If more than one of the joint shareholders votes (either personally or by proxy), the only vote which will count is the vote of that one of them who is listed first on the Register for the share.
PROXIES
69 | Appointment of proxies |
69.1 | Any shareholder may appoint a proxy or (subject to Article 69.3) proxies to exercise all or any of his rights to attend or speak and vote at a General Meeting of the Company. A proxy need not be a shareholder. |
69.2 | Proxies may also be appointed to act at General Meetings in the circumstances, and in the manner, provided for in Articles 151.2, 155, 157, 158 and 161, and Articles 69 to 73 should be read subject to their terms. |
69.3 | A shareholder may appoint more than one proxy in relation to a General Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him or (as the case may be) a different £10, or multiple of £10, of stock held by him. |
70 | Completing proxy forms |
70.1 | A proxy form: |
| must be in writing; and |
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| can be in any form which is commonly used, or in any other form which the directors approve. |
70.2 | A proxy form given by: |
| an individual must be signed by the shareholder appointing the proxy, or by an agent who has been properly appointed in writing, or authenticated in accordance with Article 141; or |
| a company must be sealed with the companys seal or signed by an officer or agent who is authorised to act on behalf of the company, or authenticated in accordance with Article 141. |
Unless the contrary is shown, the directors are entitled to assume that where a proxy form purports to have been signed, or authenticated in accordance with Article 141, by an officer or agent on behalf of a company that such officer or agent was duly authorised by such company without requiring any further evidence. Signatures and authentications need not be witnessed.
70.3 | The proxy form must make provision for three-way voting on all resolutions intended to be proposed, other than resolutions which are merely procedural. |
70.4 | The accidental omission to send a proxy form, or make a proxy form available, to a shareholder entitled to it (or non receipt by him of the proxy form) will not invalidate any resolution passed or proceedings at the General Meeting to which the proxy form relates. |
71 | Delivering proxy forms |
71.1 | The appointment of a proxy must be received in the manner set out in, or by way of note to, or in any document accompanying, the notice convening the meeting (or if no address is so specified, at the Transfer Office): |
| in the case of a meeting or adjourned meeting, not less than 48 hours before the commencement of the meeting or adjourned meeting to which it relates; |
| in the case of a poll taken following the conclusion of a meeting or adjourned meeting, but not more than 48 hours after the poll was demanded, not less than 48 hours before the commencement of the meeting or adjourned meeting at which the poll was demanded; and |
| in the case of a poll taken more than 48 hours after it was demanded, not less than 24 hours before the time appointed for the taking of the poll, |
and in default shall not be treated as valid.
71.2 | The directors may at their discretion resolve that, in calculating the periods mentioned in Article 71.1, no account shall be taken of any part of any day that is not a working day (within the meaning of Section 1173 of the Companies Act 2006). |
71.3 | Directors can decide to accept proxies delivered by electronic means or by means of a website, subject to any limitations, restrictions or conditions they decide to apply. |
71.4 | In relation to any shares in uncertificated form, the directors can permit a proxy to be appointed by electronic means in the form of an uncertificated proxy instruction. They can also permit any supplement to, or amendment or withdrawal of, any uncertificated proxy |
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instruction by a further uncertificated proxy instruction. The directors can set out the method of determining when any uncertificated proxy instruction is to be treated as received by the Company. The directors can treat any uncertificated proxy instruction which appears or claims to be sent on behalf of the shareholder as sufficient evidence that the person sending the instruction is authorised to send it on behalf of that shareholder. |
71.5 | If a proxy form is signed, or authenticated in accordance with Article 141, by an agent, the power of attorney or other authority relied on to sign or authenticate it, or a copy which has been certified by a notary, or certified in some other way specified by the directors, must (if required by the Company) be delivered with the proxy form in accordance with the instructions for delivery of proxy forms which are set out in the notice of General Meeting or on the proxy form, unless the power of attorney or other form of authority has already been registered with the Company. |
71.6 | If this Article 71 is not complied with, the proxy will not be able to act for the person who appointed him. |
71.7 | A proxy form delivered by an Approved Depositary except in respect of a person appointed in accordance with Articles 164 and 165 may be delivered to the appropriate place or address referred to in Article 71.1 by electronic means or in any other way the directors decide. |
71.8 | Where two or more proxy forms are delivered for use by the same shares, the one which has been delivered last will be treated as replacing and revoking the others which have been delivered. |
71.9 | If a proxy form which relates to several General Meetings has been properly delivered for one General Meeting or adjourned General Meeting, it does not need to be delivered again for any later General Meeting which the proxy form covers. |
71.10 | Unless the proxy form says otherwise, it will be valid at an adjourned General Meeting as well as for the original General Meeting to which it relates. |
71.11 | A shareholder can attend and vote at a General Meeting on a show of hands or on a poll even if he has appointed a proxy to attend and vote at that meeting. However, if he votes in person on a resolution, then as regards that resolution his appointment of a proxy will not be valid. |
72 | Cancellation of proxys authority |
72.1 | Neither the death or insanity of a shareholder who has appointed a proxy, nor the revocation or termination by a shareholder of the appointment of a proxy (or of the authority under which the appointment was made), shall invalidate the proxy or the exercise of any of the rights of the proxy thereunder, unless notice of such death, insanity, revocation or termination shall have been received by the Company in accordance with Article 72.2. |
72.2 | Any such notice of death, insanity, revocation or termination must be received at the address or one of the addresses (if any) specified for receipt of proxies in, or by way of note to, or in any document accompanying, the notice convening the meeting to which the appointment of the proxy relates (or if no address is so specified, at the Transfer Office): |
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| in the case of a meeting or adjourned meeting, not less than one hour before the commencement of the meeting or adjourned meeting to which the proxy appointment relates; |
| in the case of a poll taken following the conclusion of a meeting or adjourned meeting, but not more than 48 hours after it was demanded, not less than one hour before the commencement of the meeting or adjourned meeting at which the poll was demanded; or |
| in the case of a poll taken more than 48 hours after it was demanded, not less than one hour before the time appointed for the taking of the poll. |
73 | Authority of proxies |
A proxy shall have the right to exercise all or any of the rights of his appointor, or (where more than one proxy is appointed) all or any of the rights attached to the shares in respect of which he is appointed the proxy to attend, and to speak and vote, at a General Meeting of the Company.
74 | Representatives of companies |
Subject to the Companies Acts, a company which is a shareholder can authorise any person or persons to act as its representative or representatives at any General Meeting which it is entitled to attend. Such person or persons are each called a company representative. The directors of that company must pass a resolution to appoint a company representative. If the governing body of that company is not a board of directors, the resolution can be passed by its governing body.
75 | Challenging votes |
Any objection to the right of any person to vote or the way in which the votes have been counted must be made at the General Meeting (or adjourned General Meeting) at which the vote is cast. If a vote is not disallowed at the General Meeting, it is valid for all purposes. Any such objection must be raised with the chairman of the General Meeting and will only change the decision of the General Meeting on any resolution if the chairman of the General Meeting decides that the vote cast may have affected the decision of the General Meeting. His decision on matters referred to him under this Article is final.
DIRECTORS
76 | The number of directors |
There must be at least three directors (other than alternate directors), but the shareholders can vary the number of directors by passing an ordinary resolution.
77 | Qualification to be a director |
A director need not be a shareholder, but a director who is not a shareholder is entitled to attend and speak at shareholders meetings.
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78 | Directors fees and expenses |
78.1 | Each of the directors shall be paid a fee for his services. The directors can decide on the amount, timing and manner of payment of directors fees, but the total of the fees paid to all of the directors (excluding amounts paid as special pay under Article 79, amounts paid as expenses under Article 80 and any payments under Article 81) must not exceed: |
| £1.5 million a year; or |
| any higher sum decided on by an ordinary resolution at a General Meeting. |
This remuneration shall accrue from day to day.
78.2 | Unless an ordinary resolution is passed which provides otherwise, the fees will be divided between some or all of the directors in the way that they decide. If they fail to decide, the fees will be shared equally by the directors, except that any director holding office as a director for only part of the period covered by the fee is only entitled to a pro rata share covering that broken period. |
79 | Special pay |
79.1 | The directors can award special pay if any director performs extra or special services of any kind including: |
| holding any executive post; |
| acting as chairman or deputy chairman (whether or not this office is executive or non-executive); |
| travelling or staying outside his main residence for any business or purposes of the Company; and |
| serving on any committee of the directors. |
79.2 | Special pay can take the form of salary, commission or other benefits or expenses or more than one of such forms or can be paid in some other way. This is decided on by the directors and may be a fixed sum or percentage of profits or otherwise. Such special pay can be either in addition to or instead of any other fees, expenses and other benefits a director may be entitled to receive. |
80 | Directors expenses |
In addition to any fees and expenses paid under Articles 78 and 79, the Company will repay to a director all expenses properly incurred in:
| attending and returning from shareholders meetings; |
| attending and returning from directors meetings; |
| attending and returning from meetings of committees of the directors; or |
| in or with a view to the performance of his duties. |
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81 | Directors pensions and other benefits |
81.1 | The directors may pay or provide: |
| pensions; |
| annual payments; |
| gratuities; or |
| other allowances or benefits |
to any person who is, or who was, a director who had a salary or place of profit with the Company or with any company which is or has been a subsidiary of the Company or a predecessor in business of the Company or any such subsidiary. The director can decide to extend these arrangements to any member of his family (including a spouse and a former spouse) or to any person who was or is dependent on him. The director can also decide to contribute (before as well as after he ceases to receive a salary or occupy a place of profit) to any scheme or fund or to pay premiums to a third party for these purposes.
81.2 | No director or former director is accountable to the Company or its shareholders for a benefit of any kind given in accordance with this Article. The receipt of a benefit of any kind given in accordance with this Article does not prevent a person from being or becoming a director. |
82 | Appointing directors to various posts |
82.1 | The directors can appoint any director as chairman, or a deputy chairman, or to any executive position on which they decide. So far as the Companies Acts allow, they can decide on how long these appointments will be for, and on their terms. Subject to the terms of any contract with the Company, they can also vary or end these appointments. |
82.2 | A director will automatically stop being chairman, deputy chairman, managing director, deputy managing director, joint managing director or assistant managing director if he is no longer a director. Other executive appointments will only stop if the contract or resolution appointing the director to a post says so. If a directors appointment ends because of this Article, this does not prejudice any claim for breach of contract against the Company which may otherwise apply. |
82.3 | The directors can delegate to a director appointed to an executive post any of the powers which they jointly have as directors. These powers can be delegated on such terms and conditions as decided by the directors either in parallel with, or in place of, the powers of the directors acting as a board. The directors can change the basis on which these powers are given or withdraw them from the executive. |
CHANGING DIRECTORS
83 | Retiring directors |
At each Annual General Meeting all those directors who were elected or last re-elected at or before the Annual General Meeting held in the third calendar year before the current year shall automatically retire.
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84 | Eligibility for re-election |
A retiring director is eligible for re-election, unless the directors resolve otherwise not later than the date of the notice of such Annual General Meeting.
85 | Re-electing a director who is retiring |
85.1 | At a General Meeting at which a director retires (whether at an Annual General Meeting or otherwise), he may be re-elected (as long as the director has not told the Company in writing that he does not wish to be re-elected) if the shareholders pass an ordinary resolution to re-elect him. |
85.2 | A director retiring at a General Meeting retires at the end of that meeting (or adjourned meeting), or if earlier, when a resolution at a General Meeting is passed to appoint some other person in his place. Where a retiring director is re-elected he continues as a director without a break. |
86 | The power to fill vacancies and appoint extra directors |
86.1 | The directors can appoint any person as an extra director or to fill a casual vacancy. Any director appointed in this way automatically retires at the next General Meeting after his appointment. At this General Meeting he can be elected by the shareholders as a director. |
86.2 | At a General Meeting the shareholders can also pass an ordinary resolution to fill a casual vacancy or to appoint an extra director. |
86.3 | Extra directors can only be appointed under this Article up to the limit (if any) on the total number of directors under the Articles (or any variation of the limit approved by the shareholders in accordance with the Articles). |
87 | Removing and appointing directors by an ordinary resolution |
87.1 | The shareholders can pass an ordinary resolution to remove a director, even though his time in office has not ended. This applies despite anything else in the Articles, or in any agreement between him and the Company. Special notice of the ordinary resolution must be given to the Company as required by the Companies Acts. But if a director is removed in this way, it will not affect any claim which he may have for damages for breach of any contract of service between him and the Company. |
87.2 | Subject to Article 86, the shareholders can pass an ordinary resolution to elect a person to replace a director who has been removed in the way described in Article 87.1. If no director is appointed under this Article, the vacancy can be filled under Article 86. |
87.3 | Any person appointed under Article 87.2 will be treated, for the purpose of determining the time at which he is to retire, as if he had become a director on the day on which the director he replaced was last elected. |
88 | When directors are disqualified |
Any director automatically ceases to be a director in any of the following circumstances if:
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| a bankruptcy order is made against him or any analogous event occurs in relation to him under any applicable laws; |
| he makes any arrangement or composition with his creditors or applies for an interim order under Section 253 of the Insolvency Act 1986 in connection with a voluntary arrangement under that Act or any analogous event occurs in relation to him under any applicable laws; |
| a court which claims jurisdiction to protect people who are unable to manage their own affairs has made an order detaining him or appointing a person to manage his property or affairs; |
| he has missed directors meetings for a continuous period of six months, without permission from the directors, and the directors have passed a resolution removing him from office; |
| he is prohibited from being a director by law or any power conferred on the directors or shareholders under these Articles or ceases to be a director by virtue of any provision of the Companies Act 2006; |
| except where his contract of service prevents him from resigning, he: |
(i) | delivers to the Company a resignation notice in writing, signed, or authenticated in accordance with Article 141, by him or on his behalf; or |
(ii) | offers in writing to resign and the directors pass a resolution accepting the offer; |
| all the other directors serve a notice in writing upon him requiring him to resign. He will cease to be a director when the notice is served on him. Such a notice can consist of several documents in the same form signed, or authenticated in accordance with Article 141, by one or more directors. |
89 | Director ceasing to be a member of a committee |
When a director stops being a director for any reason, he will also automatically cease to be a member of any committee. Removal from office will be without prejudice to any claim which he or the Company might bring in relation to any contract of service between him and the Company.
DIRECTORS MEETINGS
90 | Directors meetings |
The directors can decide when and where to have directors meetings and how they shall be conducted, and on the quorum. They can also adjourn their meetings.
91 | Who can call directors meetings |
A directors meeting can be called by any director. The Secretary must also call a directors meeting if a director asks him to.
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92 | How directors meetings are called |
Directors meetings are called by giving notice to all the directors. This notice may be given to a director personally, by word of mouth, by notice in writing (sent to him at his last known address) or by electronic means (sent to him at his last known electronic address or number). Any director can waive notice of any directors meeting, including one which has already taken place.
93 | Quorum |
93.1 | If no other quorum is fixed by the directors, three directors are a quorum. A directors meeting at which a quorum is present can exercise all the powers, authorities and discretions of the directors whether by or under these Articles or exercisable by the directors generally. |
93.2 | A person who holds office only as an alternate director shall, if his appointor is not present, be counted in the quorum. |
93.3 | A director who ceases to be a director at a directors meeting can continue to be present and act as a director and be counted in the quorum until the end of that meeting if no other director objects and a quorum would not otherwise be present. |
94 | The Chairman of directors meetings |
94.1 | The directors can elect any director as Chairman or as one or more Deputy Chairmen for such periods as the directors decide. If the Chairman is at a directors meeting, he will chair it. In his absence, the chair will be taken by a Deputy Chairman, if one is present. If there is no Chairman or Deputy Chairman present within five minutes of the time when the directors meeting is due to start, the directors who are present can choose which one of them will be the Chairman of the directors meeting. |
94.2 | Where there is more than one Deputy Chairman present at a meeting, and the Chairman is not there, the Deputy Chairman to take the chair will be the longest serving Deputy Chairman present. |
95 | Voting at directors meetings |
Matters for decision which arise at a directors meeting will be decided by a majority vote. The chairman of the meeting will not have a second, casting vote.
96 | Directors can act even if there are vacancies |
96.1 | The remaining directors can continue to act even if one or more of them ceases to be a director. But if and so long as the number of directors falls below the minimum which applies under Article 76 (including any variation of that minimum approved by an ordinary resolution of shareholders), the remaining director(s) can only: |
| either appoint further directors to make up the shortfall; or |
| call a General Meeting. |
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96.2 | If no director is willing or able to act under this Article, any two shareholders can call a General Meeting to appoint extra directors. |
97 | Directors meetings by video conference and telephone |
97.1 | Any or all of the directors, or members of a committee, can take part in a directors meeting of the directors or of a committee by way of a video or web conference or conference telephone, or similar equipment, designed to allow everybody to take part in the directors meeting. |
97.2 | Taking part in this way will be counted as being present at the directors meeting. A directors meeting which takes place by way of video or web conference, conference telephone or similar equipment will be treated as taking place where most of the participants are. If there is no largest group, directors meetings will be treated as taking place where the chairman of the meeting is. |
97.3 | A directors meeting held in the way described in Article 97.1 will be valid as long as in one single place, or in places connected by way of video or web conference, telephone conference, or similar equipment, a quorum is present. |
98 | Directors written resolutions |
98.1 | Any director may, and the Secretary at the request of a director shall, propose a written resolution by giving written notice to the other directors. |
98.2 | A directors written resolution is adopted when all the directors entitled to vote on such a resolution have signed one or more copies of it, or otherwise indicated their agreement to it in writing or electronically. |
98.3 | A directors written resolution is not adopted if the number of directors who have signed it or agreed to it in writing or electronically is less than the quorum for a directors meeting. |
98.4 | A directors written resolution signed or agreed to by an alternate director does not need also to be approved by his appointor. If the directors written resolution is signed or agreed to by a director who has appointed an alternate director, it does not need to be approved by the alternate director acting in that capacity. |
98.5 | Once a directors written resolution has been adopted, it must be treated as if it had been a resolution passed at a directors meeting in accordance with these Articles. |
98.6 | A directors written resolution will be valid at the time it is signed or agreed to by the last director. |
98.7 | The resolution can be: |
| in the form of letter; |
| in electronic form (as long as it is in writing); or |
| in any other way the directors may approve. |
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99 | The validity of directors actions |
Everything which is done by any directors meeting, or by a committee of the directors, or by a person acting as a director, or as a member of a committee, will, in favour of anyone dealing with the Company in good faith, be valid even though it is discovered later that any director, or person acting as a director, was not properly appointed or elected. This also applies if it is discovered later that anyone was disqualified from being a director, or had ceased to be a director, or was not entitled to vote. In any of these cases, in favour of anyone dealing with the Company in good faith, anything done will be as valid as if there was no defect or irregularity of the kind referred to in this Article.
DIRECTORS INTERESTS
100 | Authorisation of directors interests |
100.1 | For the purposes of Section 175 of the Companies Act 2006, the directors shall have the power to authorise any matter which would or might otherwise constitute or give rise to a breach of the duty of a director to avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company. |
100.2 | Authorisation of a matter under Article 100.1 shall be effective only if: |
| the matter in question shall have been proposed in writing for consideration at a meeting of the directors, in accordance with the board of directors normal procedures or in such other manner as the directors may determine; |
| any requirement as to the quorum at the meeting of the directors at which the matter is considered is met without counting the director in question and any other interested director (together the Interested Directors); and |
| the matter was agreed to without the Interested Directors voting or would have been agreed to if the votes of the Interested Directors had not been counted. |
100.3 | Any authorisation of a matter under Article 100.1 extends to any actual or potential conflict of interest which may reasonably be expected to arise out of the matter so authorised. |
100.4 | Any authorisation of a matter under Article 100.1 shall be subject to such conditions or limitations as the directors may determine, whether at the time such authorisation is given or subsequently, and may be terminated by the directors at any time. A director shall comply with any obligations imposed on him by the directors pursuant to any such authorisation. |
100.5 | Subject to any conditions or limitations imposed under Article 100.4, a director shall not, save as otherwise agreed by him, be accountable to the Company for any benefit which he (or a person connected with him) derives from any matter authorised by the directors under Article 100.1 and any contract, transaction, arrangement or proposal relating thereto shall not be liable to be avoided on the grounds of any such benefit. |
100.6 | This Article does not apply to a conflict of interest arising in relation to a transaction or arrangement with the Company. |
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101 | Directors may have interests |
101.1 | Subject to compliance with Article 101.2, a director, notwithstanding his office, may have an interest of the following kind: |
| where a director (or a person connected with him) is a director or other officer of, or employed by, or otherwise interested (including by the holding of shares) in any Relevant Company; |
| where a director (or a person connected with him) is a party to, or otherwise interested in, any contract, transaction, arrangement or proposal with a Relevant Company, or in which the Company is otherwise interested; |
| where the director (or a person connected with him) acts (or any firm of which he is a partner, employee or member acts) in a professional capacity for any Relevant Company (other than as auditor) whether or not he or it is remunerated therefor; |
| an interest which cannot reasonably be regarded as likely to give rise to a conflict of interest; |
| an interest, or a transaction, arrangement or proposal giving rise to an interest, of which the director is not aware; |
| any matter already authorised under Article 100.1; or |
| any other interest authorised by ordinary resolution. |
No authorisation under Article 100.1 shall be necessary in respect of any such interest.
101.2 | Subject to Sections 177 and 182 of the Companies Act 2006 the director shall declare the nature and extent of any interest permitted under Article 101.1, and not falling within Article 101.3, at a meeting of the directors, by written declaration to the Company or in such other manner as the directors may determine. |
101.3 | No declaration of an interest shall be required by a director in relation to an interest: |
| falling within the fourth, fifth and sixth bullet paragraph of Article 101.1; |
| if, or to the extent that, the other directors are already aware of such interest (and for this purpose the other directors are treated as being aware of anything of which they ought reasonably to be aware); or |
| if, or to the extent that, it concerns the terms of his service contract (as defined in Section 227 of the Companies Act 2006) that have been or are to be considered by a meeting of the directors, or by a committee of directors appointed for the purpose under these Articles. |
101.4 | A director shall not, save as otherwise agreed by him, be accountable to the Company for any benefit which he (or a person connected with him) derives from any interest referred to in Article 101.1, and no contract, transaction, arrangement or proposal shall be liable to be avoided on the grounds of any such interest. |
101.5 | For the purposes of this Article 101, Relevant Company shall mean the Company; a subsidiary undertaking of the Company; any holding company of the Company or a subsidiary undertaking of any such holding company; any body corporate promoted by the Company; or any body corporate in which the Company is otherwise interested. |
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102 | Restrictions on quorum and voting |
102.1 | Save as provided in this Article 102, and whether or not the interest is one which is authorised pursuant to Article 100.1 or permitted under Article 101.1, a director shall not be entitled to vote on any resolution in respect of any contract, transaction, arrangement or proposal, in which he (or a person connected with him) is interested. Any vote of a director in respect of a matter where he is not entitled to vote shall be disregarded. |
102.2 | A director shall not be counted in the quorum for a meeting of the directors in relation to any resolution on which he is not entitled to vote. |
102.3 | Subject to the provisions of the Companies Acts, a director shall (in the absence of some other interest than is set out below) be entitled to vote, and be counted in the quorum, in respect of any resolution concerning any contract, transaction, arrangement or proposal: |
| in which he has an interest of which he is not aware; |
| in which he has an interest which cannot reasonably be regarded as likely to give rise to a conflict of interest; |
| in which he has an interest only by virtue of interests in shares, debentures or other securities of the Company, or by reason of any other interest in or through the Company; |
| which involves the giving of any security, guarantee or indemnity to the director or any other person in respect of (i) money lent or obligations incurred by him or by any other person at the request of or for the benefit of the Company or any of its subsidiary undertakings; or (ii) a debt or other obligation of the Company or any of its subsidiary undertakings for which he himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security; |
| concerning an offer of shares or debentures or other securities of or by the Company or any of its subsidiary undertakings (i) in which offer he is or may be entitled to participate as a holder of securities; or (ii) in the underwriting or sub-underwriting of which he is to participate; |
| concerning any other body corporate in which he is interested, directly or indirectly and whether as an officer, shareholder, creditor, employee or otherwise, provided that he (together with persons connected with him) is not the holder of, or beneficially interested in, one per cent. or more of the issued equity share capital of any class of such body corporate or of the voting rights available to members of the relevant body corporate; |
| relating to an arrangement for the benefit of the employees or former employees of the Company or any of its subsidiary undertakings which does not award him any privilege or benefit not generally awarded to the employees or former employees to whom such arrangement relates; |
| concerning the purchase or maintenance by the Company of insurance for any liability for the benefit of directors or for the benefit of persons who include directors; |
| concerning the giving of indemnities in favour of directors; |
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| concerning the funding of expenditure by any director or directors on (i) defending criminal, civil or regulatory proceedings or actions against him or them, (ii) in connection with an application to the court for relief, or (iii) defending him or them in any regulatory investigations; |
| concerning the doing of anything to enable any director or directors to avoid incurring expenditure as described in the tenth bullet paragraph of this Article 102.3 immediately above; and |
| in respect of which his interest, or the interest of directors generally, has been authorised by ordinary resolution. |
102.4 | Where proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two or more directors to offices or employments with the Company (or any body corporate in which the Company is interested), the proposals may be divided and considered in relation to each director separately. In such case, each of the directors concerned (if not debarred from voting under the sixth bullet paragraph of Article 102.3) shall be entitled to vote, and be counted in the quorum, in respect of each resolution except that concerning his own appointment or the fixing or variation of the terms thereof. |
102.5 | If a question arises at any time as to whether any interest of a director prevents him from voting, or being counted in the quorum, under this Article 102, and such question is not resolved by his voluntarily agreeing to abstain from voting, such question shall be referred to the chairman of the meeting and his ruling in relation to any director other than himself shall be final and conclusive, except in a case where the nature or extent of the interest of such director has not been fairly disclosed. If any such question shall arise in respect of the chairman of the meeting, the question shall be decided by resolution of the directors and the resolution shall be conclusive except in a case where the nature or extent of the interest of the chairman of the meeting (so far as it is known to him) has not been fairly disclosed to the directors. |
103 | Confidential information |
103.1 | Subject to Article 103.2, if a director, otherwise than by virtue of his position as director, receives information in respect of which he owes a duty of confidentiality to a person other than the Company, he shall not be required to disclose such information to the Company or to the directors, or to any director, officer or employee of the Company, or otherwise use or apply such confidential information for the purpose of or in connection with the performance of his duties as a director. |
103.2 | Where such duty of confidentiality arises out of a situation in which the director has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company, Article 103.1 shall apply only if the conflict arises out of a matter which has been authorised under Article 100.1 above or falls within Article 100 above. |
103.3 | This Article 103 is without prejudice to any equitable principle or rule of law which may excuse or release the director from disclosing information, in circumstances where disclosure may otherwise be required under this Article 103. |
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104 | Directors interests general |
104.1 | For the purposes of Articles 100 to 103: |
| where the context permits, any reference to an interest includes a duty and any reference to a conflict of interest includes a conflict of interest and duty and a conflict of duties; |
| an interest of a person who is connected with a director shall be treated as an interest of the director; and |
| Section 252 of the Companies Act 2006 shall determine whether a person is connected with a director. |
104.2 | Where a director has an interest which can reasonably be regarded as likely to give rise to a conflict of interest, the director may, and shall if so requested by the directors, take such additional steps as may be necessary or desirable for the purpose of managing such conflict of interest, including compliance with any procedures laid down from time to time by the directors for the purpose of managing conflicts of interest generally and/or any specific procedures approved by the directors for the purpose of or in connection with the situation or matter in question, including without limitation: |
| absenting himself from any meeting or part of a meeting of the directors at which the relevant situation or matter falls to be considered; and |
| not reviewing documents or information made available to the directors generally in relation to such situation or matter and/or arranging for such documents or information to be reviewed by a professional adviser to ascertain the extent to which it might be appropriate for him to have access to such documents or information. |
104.3 | The Company may by ordinary resolution ratify any contract, transaction, arrangement or proposal, not properly authorised by reason of a contravention of any provisions of Articles 100 to 103. |
DIRECTORS COMMITTEES
105 | Delegating powers to committees |
The directors can delegate any of their powers, or discretions, to committees of one or more directors. This includes powers or discretions relating to directors pay or giving benefits to directors. If the directors have delegated any power or discretion to a committee, any references in these Articles to using that power or discretion include its use by the committee. Any such delegation may be either collaterally with or to the exclusion of their own powers and the directors may revoke or alter the terms of any such delegation. Any such person or committee shall, unless the directors otherwise resolve, have power to sub-delegate any of the powers or discretions delegated to them. Any committee must comply with any regulations laid down by the directors. These regulations can require or allow people who are not directors to be co-opted onto the committee, and can give voting rights to co-opted members. However:
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| there must be more directors on a committee than co-opted members; and |
| a resolution of the committee is only effective if a majority of the members of the committee present at the time of the resolution were directors. |
106 | Committee procedure |
If a committee includes two or more people, the Articles which regulate directors meetings and their procedure will also apply to committee meetings (if possible), unless these are inconsistent with any regulations for the committee which have been laid down under Article 105.
DIRECTORS POWERS
107 | The directors management powers |
107.1 | The Companys business will be managed by the directors. They can use all the Companys powers except where the Articles, or the Companies Acts, provide that powers can only be used by the shareholders voting to do so at a General Meeting. The general management powers under this Article are not limited in any way by specific powers given to the directors by other Articles. |
107.2 | The directors are, however, subject to: |
| the provisions of the Companies Acts; |
| the requirements of these Articles; and |
| any other requirements (whether or not consistent with these Articles) which are approved by the shareholders by passing a special resolution at a General Meeting. |
However, if any change is made to these Articles or if the shareholders approve a requirement relating to something which the directors have already done which was within their powers, this will not invalidate any prior act of the directors which would otherwise have been valid.
108 | Provision for employees on cessation or transfer of business |
The directors may make provision for the benefit of persons employed or formerly employed by the Company or any of its subsidiaries (other than a director, former director or shadow director) in connection with the cessation or transfer to any person of the whole or part of the undertaking of the Company or that subsidiary.
109 | The power to establish local boards |
109.1 | The directors can set up local committees, local boards or local agencies to manage any of the Companys business. These can be either in or outside the United Kingdom. The directors can appoint, remove and re-appoint anybody (who need not be a director) to be: |
| members of any local committee, board or agency; or |
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| managers or agents of the Company. |
109.2 | The directors can: |
| decide on the pay and other benefits of people appointed under this Article; |
| delegate any of their authority, powers or discretions to: |
(i) | any local board or committee; or |
(iii) | any manager, or agent of the Company; |
| allow local committees or boards, managers or agents to delegate to another person; |
| allow the members of local committees, boards or agencies to fill any vacancies on them; |
| allow the members of local committees, boards or agencies to continue to act even though there are vacancies on them; |
| remove any people they have appointed under this Article; and |
| cancel or change an appointment or delegation made under this Article, although this will not affect anybody who acts in good faith who has not had any notice of any cancellation or variation. |
Any appointment or delegation by the directors which is referred to in this Article can be on any terms and conditions decided on by the directors.
109.3 | A person who is employed by, or occupies an office with, the Company may be given a title which includes the words Associate Director. This will not imply that such person is a director of the Company or that he is entitled to act as a director or be deemed to be a director for the purposes of these Articles. |
110 | The power to appoint attorneys |
110.1 | The directors can appoint anyone (including the members of a group which changes over time) as the Companys attorney or attorneys by granting a power of attorney or by authorising him or them in some other way. The attorney or attorneys can either be appointed directly by the directors, or the directors can give someone else the power to select attorneys. The directors can decide on the purposes, powers, authorities and discretions of attorneys. |
110.2 | The directors can decide for how long a power of attorney will last and they can apply any terms and conditions to it. The power of attorney can also include any provisions which the directors decide on for the protection and convenience of anybody dealing with the attorney. The power of attorney can also allow the attorney to sub-delegate any or all of his power, authority or discretion to any other person. |
111 | Bank mandates |
The directors may by resolution authorise such person or persons as they think fit to act as signatories to any bank account of the Company and may amend or remove such authorisation from time to time by resolution.
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112 | Name |
The Company may change its name by resolution of the directors.
113 | Borrowing powers |
So far as the Companies Acts allow, the directors can exercise all the powers of the Company to:
| borrow money; |
| issue (subject to the provisions of the Companies Acts regarding authority to allot debentures convertible into shares) debentures and other securities; and |
| give any form of: |
| guarantee; and |
| security, either outright or as collateral and over all or any of the Companys undertaking, property and uncalled capital, |
for any debt, liability or obligation of the Company or of any third party.
114 | Borrowing restrictions |
114.1 | The directors must: |
| limit the Borrowings of the Company and |
| exercise all voting and other rights or powers of control exercisable by the Company in relation to its subsidiary undertakings |
to ensure that the total amount of all Borrowings by the Group outstanding at any time will not exceed 1.5 times the Adjusted Total of Capital and Reserves at such time.
This limitation on Borrowings will only affect subsidiary undertakings to the extent that the directors can restrict the borrowings of the subsidiary undertakings by exercising the rights or powers of control which the Company has over its subsidiary undertakings. The Company may consent in advance to exceeding the borrowing limit by passing an ordinary resolution at a General Meeting.
114.2 | In this Article: |
Group means the Company and its subsidiary undertakings for the time being;
Adjusted Total of Capital and Reserves means the aggregate of the share capital and reserves as shown in the latest audited consolidated balance sheet of the Group (including the amount paid-up or credited as paid-up on the issued share capital of the Company, the share premium account, capital redemption reserve, profit and loss account and other reserves included within the Groups equity shareholders funds) (the Reserves) but:
| adjusted as appropriate in respect of any variation to the paid-up share capital or reserves since the date of the latest audited consolidated balance sheet as recorded within the monthly management accounting records of the Group |
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prepared in accordance with the accounting bases and principles applied in the preparation of its latest audited consolidated balance sheet; |
| adding any amount which has been deducted at any time from the Reserves of the Group for goodwill arising on consolidation either by direct charge to Reserves or by charge to the Groups consolidated profit and loss account; and |
| making such other adjustments (if any) as the auditors of the Company consider appropriate. |
Borrowings means the aggregate amount of all liabilities and obligations of the Group which in accordance with the accounting bases and principles of the Group are treated as borrowings in the latest audited consolidated balance sheet of the Group but:
| adjusted as appropriate in respect of any variation to borrowings since the date of the latest audited consolidated balance sheet as recorded within the monthly management accounting records of the Group prepared in accordance with the accounting bases and principles applied in its latest audited consolidated balance sheet; |
| excluding any borrowings under finance or structured tax lease arrangements to the extent matched as part of those arrangements by deposits of cash or cash equivalent investments which are treated by the creditor concerned as available to reduce its net exposure; and |
| making such other adjustments (if any) as the auditors of the Company consider appropriate. |
114.3 | The determination of the Companys auditors as to the amount of the Adjusted Total of Capital and Reserves and the total amount of Borrowings at any time shall be conclusive and binding on all concerned and for the purposes of their computation the Companys auditors may at their discretion make such further or other adjustments (if any) or determinations as they think fit. Nevertheless the directors may act in reliance on a bona fide estimate of the amount of the Adjusted Total of Capital and Reserves and the total amount of Borrowings at any time and if in consequence the borrowing limit is inadvertently exceeded an amount of borrowings equal to the excess may be disregarded until the expiration of three months after the date on which by reason of a determination of the Companys auditors or otherwise the directors became aware that such a situation has or may have arisen. |
114.4 | No lender or other person dealing with the Group need be concerned whether the borrowing limit is observed. No debt incurred or security given in breach of the borrowing limit will be invalid or ineffective unless the lender or the recipient of the security had express notice at the time when the debt was incurred or security given, that the limit had been or would as a result be breached. |
ALTERNATE DIRECTORS
115 | Alternate directors |
115.1 | Any director may appoint any person (including another director) to act in his place (such person is called an alternate director). Such appointment requires the approval of the |
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directors, unless the proposed alternate director is another director. A director appoints an alternate director by delivering an appointment notice signed, or authenticated in accordance with Article 141, by him (or in any other manner which has been approved by the directors) to the Registered Office. An alternate director need not be a shareholder. |
115.2 | The appointment of an alternate director ends if the director appointing him ceases to be a director, unless that director retires at a General Meeting at which he is re-elected under Article 85.1. A director can also remove his alternate by delivering a notice signed, or authenticated in accordance with Article 141, by him (or doing something else which has been approved by the directors) delivered to the Registered Office. An alternate director can also be removed as an alternate by a resolution of the directors. |
115.3 | An alternate director is entitled to receive notices of directors meetings once he has given the Company an address to which notices may be served on him. He is entitled to attend and vote as a director at any such meeting at which the director appointing him is not personally present and generally at such meeting to perform all functions of the director appointing him as a director. If he is himself a director or attends any such meeting as an alternate for more than one director, he will have one vote for each director for whom he acts as an alternate, in addition to his own vote as a director. However, he may not be counted more than once for the purposes of the quorum. If his appointor is temporarily unable to act through ill health or disability his signature of or authentication of any directors written resolution is as effective as the signature or authentication of his appointor. |
115.4 | If the directors decide to allow this, Article 115.3 also applies in a similar fashion to any meeting of a committee of which his appointor is a member. |
115.5 | An alternate director shall be an officer of the Company and shall alone be responsible to the Company for his own actions and mistakes. Except as said in this Article 115, an alternate director: |
| does not have power to act as a director; |
| is not considered to be a director for the purposes of the Articles; |
| is not considered to be the agent of his appointor; and |
| cannot appoint an alternate director. |
115.6 | Subject to the Companies Acts, an alternate director is entitled to contract and be interested in and benefit from contracts or arrangements or transactions and to be repaid expenses and to be indemnified to the same extent as if he were a director. However, he is not entitled to receive from the Company as alternate director any pay, except only such part (if any) of the pay otherwise payable to his appointor as such appointor may direct the Company in writing to pay to his alternate. |
THE SECRETARY
116 | The Secretary and deputy and assistant secretaries |
116.1 | The Secretary is appointed by the directors. The directors decide on the terms and period of his appointment so long as allowed to do so by the Companies Acts. The directors can |
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also remove the Secretary, but this does not affect any claim for damages against the Company for breach of any contract between him and the Company. |
116.2 | The directors can also appoint one or more people to be deputy or assistant secretary. Anything which the Companies Acts allow to be done by or to the Secretary can, if there is no Secretary, or the Secretary is for any reason not capable of doing what is required of him, also be done by or to any deputy or assistant secretary. If there is no deputy or assistant secretary capable of acting, the directors can appoint any officer to do what would be required of the deputy or assistant secretary. |
THE SEAL
117 | The Seal |
117.1 | The directors are responsible for arranging for the Common Seal and any Securities Seal to be kept safely. The Common Seal and any Securities Seal can only be used with the authority of the directors or of a committee authorised by the directors to use it. The Securities Seal can be used only for sealing securities issued by the Company in certificated form and sealing documents creating or evidencing securities issued by the Company. |
117.2 | Subject to the provisions of these Articles which relate to share certificates, every document which is sealed using the Common Seal must be signed personally by: |
| one director and the Secretary; or |
| two directors; or |
| by a director or any other persons who are authorised to do so by the directors in the presence of a witness who attests to the signature. |
117.3 | Where a signature is required to witness the Common Seal, the directors may decide that the individual need not sign the document personally but that his signature may be printed on it mechanically, electronically or in any other way the directors approve. |
117.4 | Securities and documents which have the Securities Seal stamped on them do not need to be signed unless the directors or the Companies Acts require this. |
117.5 | The directors can use all the powers given by the Companies Acts relating to official seals for use abroad. |
117.6 | Certificates for debentures or other securities of the Company may be printed in any way and may be sealed and/or signed for in any manner allowed by these Articles. |
117.7 | As long as it is allowed by the Companies Acts, any document signed by: |
| one director and the Secretary; or |
| by two directors; or |
| one director in the presence of a witness who attests to the signature, |
and expressed to be entered into by the Company shall have the same effect as if it had been made effective by using the Common Seal.
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AUTHENTICATING DOCUMENTS
118 | Establishing that documents are genuine |
118.1 | Any director, or the Secretary, has power to identify as genuine any of the following and to certify copies or extracts from them as true copies or extracts: |
| any documents relating to the Companys constitution; |
| any resolutions passed by the shareholders or any class of shareholders, or by the directors or by a committee of the directors; and |
| any books, documents, records or accounts which relate to the Companys business. |
The directors can also delegate this power to other people.
118.2 | When any books, documents, records or accounts are not kept at the Registered Office, the officer of the Company who has custody of them is treated as a person who has been authorised by the directors to identify them as genuine and to provide certified copies or extracts from them. |
118.3 | A document which appears to be a copy of a resolution or an extract from the minutes of any meeting, and which is certified as a copy or extract as described in Article 118.1 or 118.2 is conclusive evidence for anyone who deals with the Company on the strength of the document that: |
| the resolution has been properly passed; or |
| the extract is a true and accurate record of the proceedings of a valid meeting. |
DIVIDENDS
119 | Final dividends |
The directors may recommend the amount of any final dividend. The shareholders can then declare dividends by passing an ordinary resolution, but the amount declared cannot exceed the amount recommended by the directors.
120 | Fixed and interim dividends |
120.1 | If the directors consider that the profits of the Company justify such payments, they can pay: |
| fixed dividends on any class of shares carrying a fixed dividend on the dates fixed for the payment of those dividends; and |
| interim dividends on shares of any class of any amounts and on any dates and for any period which they decide. |
120.2 | If the directors act in good faith, they are not liable to any shareholders for any loss they may suffer because a lawful dividend (whether fixed or interim) has been paid under this Article on other shares which rank equally with or behind their shares. |
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121 | Dividends not in cash |
If the directors recommend this, shareholders can pass an ordinary resolution to direct all or part of a dividend to be paid by distributing specific assets (and in particular paid-up shares or debentures of any other company) rather than cash. The directors must give effect to that resolution. Where any difficulty arises on the distribution and valuation of the assets, the directors can settle it as they decide. In particular, they can:
| issue fractional certificates; |
| value assets for distribution purposes; |
| pay cash of a similar value to adjust the rights of persons entitled to the dividend; and/or |
| transfer any assets to trustees for persons entitled to the dividend. |
122 | Calculation and currency of dividends |
122.1 | All dividends will be divided and paid in proportions based on the amounts which have been paid-up on the shares during any period for which the dividend is paid. Sums which have been paid-up in advance of calls do not count in calculating the amount of a dividend to be paid on a share. If the terms on which any share is issued provide that such share will be entitled to a dividend as if it were a fully-paid-up, or partly-paid-up, share from a particular date (in the past or the future), it will be entitled to a dividend on this basis. This Article applies unless the rights attached to any shares, or the terms of any shares, provide otherwise. |
122.2 | Unless the rights attached to any shares, or the terms of any shares, or the Articles provide otherwise, a dividend, or any other money payable in respect of any share, can be paid to a shareholder in whatever currency the directors decide, using an appropriate exchange rate selected by the directors for any currency conversions which are required. |
122.3 | The directors can decide that a particular Approved Depositary should be able to receive dividends in a currency other than the currency in which it is declared and can make arrangements accordingly. In particular, if an Approved Depositary has chosen or agreed to receive dividends in another currency, the directors can make arrangements with the Approved Depositary for payment to be made to the Approved Depositary for value on the date on which the relevant dividend is paid, or a later date decided on by the directors. |
123 | Deducting amounts owing from dividends and other money |
If a shareholder owes any money for calls on shares, or money relating in any other way to shares, the directors can deduct any of this money (as long as it is immediately payable) from:
| any dividend on any shares held by the shareholder; or |
| any other money payable by the Company in connection with the shares. |
Money deducted in this way can be used to pay amounts owed to the Company in connection with the shares.
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124 | Payments to shareholders |
124.1 | Any dividend or other money payable in connection with the shares must be paid to: |
| the holder of that share; |
| if the share is held by more than one person, whichever of the joint holders names appears first in the Register; |
| if the member is no longer entitled to the share, the person or persons who have become automatically entitled to the shares by law; or |
| such other person or persons as the member (or, in the case of joint holders of a share, all of them) may direct. |
124.2 | Any dividend or other money payable in cash (whether in sterling or foreign currency) relating to a share can be paid by such method as the directors, in their absolute discretion, may decide. Different methods of payment may apply to different shareholders or groups of shareholders (such as overseas shareholders). Without limiting any other method of payment which the Company may adopt, the directors may decide that payment can be made wholly or partly: |
| by inter-bank transfer, electronic form, electronic means or by such other means approved by the directors directly to an account (of a type approved by the directors) as instructed by the shareholder or the joint shareholders; or |
| by cheque or warrant or any other similar financial instrument made payable to the shareholder who is entitled to it and sent direct to his registered address or, in the case of joint shareholders, to the shareholder who is first named in the Register and sent direct to his registered address, or to someone else named in an instruction from the shareholder (or from all joint shareholders). |
124.3 | If the directors decide that payments will be made by electronic transfer to an account (of a type approved by the directors) nominated by a shareholder or joint shareholders, but no such account is nominated by the shareholder or joint shareholders or an electronic transfer into a nominated account is rejected or refunded, the Company may credit the amount payable to an account of the Company to be held until the shareholder nominates a valid account. |
124.4 | An amount credited to an account under Article 124.3 is to be treated as having been paid to the shareholder at the time it is credited to that account. The Company will not be a trustee of the money and no interest will accrue on the money. |
124.5 | The Company will not pay interest on any dividend or other money due to a shareholder in respect of his shares, unless the rights of the shares provide otherwise. |
124.6 | Payment by electronic transfer, cheque or warrant, or in any other way, is made at the risk of the people who are entitled to the money. The Company is treated as having paid a dividend if a payment using electronic or other means approved by the directors is made in accordance with instructions given by the Company or if such a cheque or warrant is cleared. The Company will not be responsible for a payment which is lost or delayed. |
124.7 | For joint shareholders, the Company can rely on a receipt for a dividend or other money paid on shares from any one of them. |
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125 | Record dates for payments and other matters |
Any dividend or distribution on shares of any class can be paid to the holder or holders of the shares shown on the Register, at the close of business on whatever day may be provided in the resolution declaring the dividend or providing for the distribution. The dividend or distribution will be based on the number of shares registered on that day. This Article applies whether what is being done is the result of a resolution of the directors or a resolution passed at a General Meeting. The date can be before any relevant resolution was passed. This Article does not affect the rights to the dividend or distribution as between past and present shareholders.
126 | No interest on dividends |
No interest is payable on any dividend or other money payable in connection with the shares unless the terms of issue of those shares or the provisions of any agreement between the Company and the shareholders provide otherwise.
127 | Retention of dividends |
127.1 | The directors may retain all or part of any dividend or other money payable in connection with the shares on which the Company has a lien in respect of which a notice has been issued following non-payment of a call in accordance with Article 23. |
127.2 | The Company must use any amounts retained under Article 127.1 towards satisfaction of the moneys payable to the Company in respect of that share. |
127.3 | The Company must notify the person otherwise entitled to payment of the sum that it has been retained and how the retained sum has been used. |
127.4 | The directors may retain the dividends payable upon shares: |
| in respect of which any person is entitled to become a member pursuant to Article 41 until such person shall become a member in respect of such shares; or |
| which any person is entitled to transfer pursuant to Article 44 until such person has transferred those shares. |
128 | Dividends which are not claimed |
128.1 | If an amount is held in an account pursuant to Article 124.3, or a payment made by cheque, warrant or any other written financial instrument for an amount payable under Article 124.2 has not been claimed, for one year after the passing of either the resolution passed at a General Meeting declaring that dividend or the resolution of the directors providing for payment of that dividend, the directors may invest the dividend or use it in some other way for the benefit of the Company until the dividend is claimed. If a dividend has not been claimed for 12 years after either the passing of the relevant resolution either declaring that dividend or providing for payment of that dividend, it will be forfeited and belong to the Company again. |
128.2 | If an amount is held in an account pursuant to Article 124.3, or a cheque, warrant or other written financial instrument for an amount payable under Article 124.2 has been sent back or is not cashed, for two dividends in a row, the Company can stop paying dividends. If the |
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shareholder or a person automatically entitled to the shares by law claims those dividends in writing (before they are forfeited under Article 128.1), the Company must start paying dividends by any payment method approved by the directors in accordance with Article 124. |
129 | Waiver of dividends |
Where a shareholder wants to waive his entitlement to all or any part of a dividend, he may do so by delivering a notice in writing to that effect, signed, or authenticated in accordance with Article 141, by him, to the Company. If appropriate, the notice in writing may be signed, or authenticated in accordance with Article 141, by whoever has become automatically entitled to the shares by law. For the waiver to be effective, the Company must accept the notice in writing and act on it. The Company may, however, decline to act on the notice in writing and continue to pay dividends to the shareholder accordingly.
CAPITALISING RESERVES
130 | Capitalising reserves2 |
130.1 | Subject to any special rights attaching to any class of shares, the shareholders can pass an ordinary resolution to allow the directors to change into capital any sum which: |
| is part of any of the Companys reserves (including premiums received when any shares were issued, capital redemption reserves or other undistributable reserves); or |
| the Company is holding as undistributed profits. |
130.2 | Unless the ordinary resolution states otherwise the directors will use the sum which is changed into capital for the Ordinary Shareholders on the Register at the close of business on the day the resolution is passed (or another date stated in the resolution or fixed as stated in the resolution). The sum set aside must be used to pay up in full shares of the Company and to allot such shares and distribute them to holders of Ordinary Shares as bonus shares in proportion to their holdings of Ordinary Shares at the time or, in connection with any arrangements and proposed transactions described in a circular to the shareholders, in such proportions as the directors determine to give effect to such arrangements and proposed transactions set out in that circular and to any valid elections made or deemed to be made by shareholders in respect of any of the arrangements or proposed transactions set out in the relevant circular. The shares to be allotted and distributed can be Ordinary Shares or, if the rights of other existing shares allow this, shares of some other class or of multiple classes. |
130.3 | The directors may generally do all acts and things required to give effect to an ordinary resolution passed by shareholders for the purposes of this Article 130. In particular, if any difficulty arises in operating this Article, the directors can, subject to the Companies Act 2006 and the CREST Regulations, resolve it in any way which they decide. For example they can deal with entitlements to fractions of a share. They can decide that the benefit of |
2 | Changes to Article 130 to be made pursuant to resolution 2 sub-paragraph 1(ii) proposed at the General Meeting of the Company on 28 January 2013, with effect from immediately prior to the commencement of the First Court Hearing. |
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fractions of a share belongs to the Company, or authorise their sale to any person, or that fractions of a share are ignored or deal with fractions of a share in some other way. |
130.4 | The directors can appoint any person to sign any contract with the Company on behalf of those who are entitled to shares under the resolution. Such a contract is binding on all concerned. |
SCRIP DIVIDENDS
131 | Ordinary Shareholders can be offered the right to receive extra shares instead of cash dividends |
131.1 | The directors can offer Ordinary Shareholders the right to choose to receive extra Ordinary Shares, which are credited as fully-paid shares instead of some or all of their cash dividend. Before they can do this, the shareholders must have passed an ordinary resolution authorising the directors to make this offer. |
131.2 | The ordinary resolution can apply to a particular dividend or dividends (whether declared or not). Alternatively, it can apply to some or all of the dividends which may be declared or paid in a specified period. The specified period must end no later than five years after the ordinary resolution is passed. The directors can (without the need for any further ordinary resolution) offer rights of election in respect of any dividend declared or proposed after the date these Articles are adopted and at, or prior to, the next Annual General Meeting. |
131.3 | The directors can offer Ordinary Shareholders or persons automatically entitled by operation of law the right to request new Ordinary Shares instead of cash for: |
| the next dividend proposed to be paid; or |
| in respect of that dividend or all future dividends (if shares are made available as an alternative to a cash dividend), until they tell the Company that they no longer wish to receive new Ordinary Shares, or the authority given under Article 131.1 expires and in not renewed (whichever happens earlier). |
The directors can also allow Ordinary Shareholders to choose between these alternatives.
131.4 | An Ordinary Shareholder opting for new shares is entitled to Ordinary Shares whose total relevant value is as near as possible to the cash dividend (disregarding any tax credit) he would have received, but no greater than such cash dividend. |
131.5 | The relevant value of an Ordinary Share is a value calculated in the manner set out in the ordinary resolution or, if the ordinary resolution does not set out how the relevant value of an Ordinary Share is to be calculated, then the relevant value of an Ordinary Share is the average value of the Ordinary Shares for the five dealing days starting from, and including, the day when the shares are first quoted ex dividend. This average value is worked out from the average middle market quotations for the Ordinary Shares on the London Stock Exchange, as published in its Daily Official List. A certificate or report from the Companys auditors as to the amount of the relevant value will be conclusive evidence of that amount. |
131.6 | After the directors have decided to apply this Article to a dividend, they must notify eligible Ordinary Shareholders in writing of their right to choose new Ordinary Shares. This |
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notice should also set out the procedure by which the Ordinary Shareholders must notify the Company if they wish to receive new Ordinary Shares. Where Ordinary Shareholders have already chosen to receive new Ordinary Shares in place of all cash future dividends, if new Ordinary Shares are available, the Company will not notify them of a right to receive new Ordinary Shares. Instead, the Company will remind them that they have already chosen to receive new Ordinary Shares and explain to them how to tell the Company if they wish to start receiving cash dividends again. |
131.7 | The directors can set a minimum number of Ordinary Shares in respect of which the right to choose new Ordinary Shares can be exercised. No Ordinary Shareholder or person who is automatically entitled to an Ordinary Share by law will receive a fraction of a share. The directors can decide how to deal with any fractions left over and the Company can, if the directors decide, receive the benefit of any or all of these. |
131.8 | The directors can exclude or restrict the right to choose new Ordinary Shares, or make any other arrangements where they decide that: |
| this is necessary or convenient to deal with any legal or practical problems in relation to holders of Ordinary Shares with registered addresses in any particular territory under the laws of any territory, or requirements of any recognised regulatory body or stock exchange in any territory; or |
| special formalities would otherwise apply in connection with the offer of new Ordinary Shares (including Ordinary Shares being represented by American Depositary Shares); or |
| it would be impractical or unduly onerous to give the right to any Ordinary Shareholder or that for some other reason the offer should not be made to them. |
131.9 | The directors can exclude or restrict the right to choose new Ordinary Shares in the case of any shareholder who is an Approved Depositary or a nominee for an Approved Depositary. They can do this if the offer or exercise of the right to or by the people on whose behalf the Approved Depositary holds the shares would suffer from legal or practical problems of the kind mentioned in Article 131.8. If other Ordinary Shareholders (other than those excluded under Article 131.8) have the right to choose new Ordinary Shares, the directors must be satisfied that an appropriate dividend reinvestment plan or similar arrangement is available to a substantial majority of the people on whose behalf the Approved Depositary holds shares or that such arrangements will be available promptly. The first sentence of this Article 131.9 does not apply until the directors are satisfied of this. |
131.10 | If an Ordinary Shareholder chooses to receive new Ordinary Shares, no dividend on the Ordinary Shares for which he has chosen to receive new Ordinary Shares (which are called the elected shares), will be declared or payable. Instead, new Ordinary Shares will be allotted on the basis set out earlier in this Article. To do this the directors will convert into capital a sum equal to the total nominal value of the new Ordinary Shares to be allotted. They will use this sum to pay up in full the appropriate number of new Ordinary Shares. These will then be allotted and distributed to the holders of the elected shares as set out above. The sum to be converted into capital can be taken from any amount which is then in any reserve or fund (including the share premium account, any capital redemption reserve and the profit and loss account). Article 130 applies to this process, so far as it is consistent with this Article 131. |
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131.11 | The new Ordinary Shares rank equally in all respects with the existing fully-paid-up Ordinary Shares at the time the new Ordinary Shares are allotted. The new Ordinary Shares are not entitled to share in the dividend from which they arose or any other dividend or distribution or other entitlement which has been declared, made or paid or is payable by reference to such record date or earlier record date. |
131.12 | Unless the directors decide otherwise or the CREST Regulations or the rules of a relevant system require otherwise, any new Ordinary Shares which an Ordinary Shareholder has chosen to receive instead of some or all of his cash dividend will be: |
| shares in uncertificated form if the corresponding elected shares were uncertificated shares on the record date for that dividend; and |
| shares in certificated form if the corresponding elected shares were shares in certificated form on the record date for that dividend. |
131.13 | The directors can decide that new Ordinary Shares will not be available in place of any cash dividend. They can decide this at any time before new Ordinary Shares are allotted in place of such dividend, whether before or after Ordinary Shareholders have chosen to receive new Ordinary Shares. |
131.14 | The directors have the power to do all acts and things they consider necessary to give effect to this Article. |
ACCOUNTS
132 | Accounting and other records |
132.1 | The directors must make sure that proper accounting records that comply with the Companies Acts are kept. These records must explain the Companys transactions and show its financial position at any time with reasonable accuracy. |
133 | Location and inspection of records |
133.1 | The accounting records must be kept: |
| at the Registered Office; or |
| at any other place which the Companies Acts allow and the directors decide on. |
133.2 | The Companys officers always have the right to inspect the accounting records. |
133.3 | No shareholder (other than a shareholder who is also an officer) has any right to inspect any books or papers of the Company unless: |
| the Companies Acts or a proper court order give him that right; or |
| the directors authorise him to do so; or |
| he is authorised by an ordinary resolution to do so. |
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COMMUNICATIONS WITH SHAREHOLDERS
134 | Serving and delivering notices and other documents |
134.1 | To the extent permitted and unless required otherwise by the Companies Acts, any other Act applying to the Company or these Articles, the Company can send, serve, supply or deliver any offer, notice, information or any other document, including a share certificate, on or to a shareholder: |
| personally; |
| by posting it in a letter (with postage paid) to the shareholders registered address or by causing it to be left at that address in some other way; or |
| by electronic means and/or by making such offers, notices, information or documents available on a website. |
134.2 | The Company Communication Provisions have effect, subject to the provisions of Articles 137, 138 and 141, for the purposes of any provisions of the Companies Acts or these Articles that authorise or requires offers, notices, information or any other documents to be sent, served, supplied or delivered by or to the Company. |
134.3 | Articles 134 to 141 do not affect any provision of the Companies Acts requiring offers, notices, information or documents to be sent, served, supplied or delivered in a particular way. |
135 | Notices to joint holders |
135.1 | Anything which needs to be agreed or specified by the joint holders of a share shall for all purposes be taken to be agreed or specified by all the joint holders where it has been agreed or specified by the joint holder whose name stands first in the Register in respect of the share. |
135.2 | If more than one joint holder gives instructions or notifications to the Company pursuant to these Articles then save where these Articles specifically provide otherwise, the Company shall only recognise the instructions or notifications of whichever of the joint holders names appears first in the Register. |
135.3 | Any offer, notice, information or any other document which is authorised or required to be sent or supplied to joint holders of a share may be sent or supplied to the joint holder whose name stands first in the Register in respect of the share, to the exclusion of the other joint holders. For such purpose, a joint holder having no registered address in the United Kingdom and not having supplied an address within the United Kingdom for the service of notices may, subject to any Act applying to the Company, be disregarded. |
135.4 | The provisions of this Article shall have effect, subject to the Companies Acts, in place of the Company Communications Provisions regarding notices to joint holders. |
136 | Notices for shareholders with foreign addresses |
Subject to the Companies Acts and any other Act applying to the Company, the Company shall not be required to send offers, notices, information or any other documents to a shareholder who (having no registered address within the United Kingdom) has not
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supplied to the Company a postal address within the United Kingdom for the service of notices. |
137 | When notices are served |
137.1 | If an offer, notice, information or any other document is delivered or served by hand, it is treated as being delivered or served at the time it is handed to the shareholder or left at his registered address. |
137.2 | If an offer, notice, information or any other document (including a share certificate) is sent or supplied by the Company in hard copy form, or in electronic form, but to be delivered other than by electronic means, and which is sent by pre-paid post and properly addressed shall be deemed to have been received by the intended recipient at the expiration of 24 hours after the time it was posted, and in proving such receipt it shall be sufficient to show that such offer, notice, information or other document was properly addressed, pre-paid and posted. |
137.3 | If an offer, notice, information or any other document is sent or supplied by the Company by electronic means it shall be deemed to have been received by the intended recipient two hours after it was transmitted, and in proving such receipt it shall be sufficient to show that such offer, notice, information or other document was properly addressed. |
137.4 | If an offer, notice, information or any other document is sent or supplied by the Company by means of a website it shall be deemed to have been received when the material was first made available on the website or, if later, when the recipient received (or is deemed to have received) notice of the fact that the material was available on the website. |
137.5 | This Article shall have effect, subject to any mandatory provision of the Companies Acts and any other Act applying to the Company, in place of the Company Communications Provisions relating to when offers, notices, information or any other documents are deemed delivered. |
138 | Serving notices and documents on shareholders who have died or are bankrupt |
138.1 | A person who claims to be entitled to a share in consequence of the death or bankruptcy of a shareholder or otherwise by operation of law shall supply to the Company: |
| such evidence as the directors may reasonably require to show his title to the share; and |
| an address within the United Kingdom for the service of notices, |
whereupon he shall be entitled to have served upon or delivered to him at such address any offer, notice, information or any other document to which the said shareholder would have been entitled, and such service or delivery shall for all purposes be deemed a sufficient service or delivery of such offer, notice, information or any other document on all persons interested (whether jointly with or claiming through or under him) in the share.
138.2 | Save as provided by Article 138.1, any offer, notice, information or any other document delivered or sent to the address of any shareholder in pursuance of these Articles shall, notwithstanding that such shareholder be then dead or bankrupt or in liquidation, and whether or not the Company has notice of his death or bankruptcy or liquidation, be |
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deemed to have been duly delivered or sent in respect of any share registered in the name of such shareholder as sole or first-named joint holder. |
138.3 | The provisions of this Article shall have effect in place of the Company Communications Provisions regarding the death or bankruptcy of a holder of shares in the Company. |
139 | If documents are accidentally not sent or the postal services are suspended |
139.1 | The accidental failure to send, or the non-receipt by any person entitled to any offer, notice, information or any other document relating to any meeting or other proceeding shall not invalidate the meeting or other proceeding. |
139.2 | If at any time by reason of the suspension or curtailment of postal services within the United Kingdom the Company is unable to give notice by post in hard copy form of a shareholders meeting, such notice shall be deemed to have been given to all shareholders entitled to receive such notice in hard copy form if such notice is advertised in at least one national newspaper and such notice shall be deemed to have been given on the day when the advertisement appears. In any such case, the Company shall (i) make such notice available on its website from the date of such advertisement until the conclusion of the meeting or any adjournment thereof and (ii) send confirmatory copies of the notice by post to such shareholders if at least seven days prior to the meeting the posting of notices again becomes practicable. |
140 | When entitlement to notices stops |
140.1 | If the Company sends a notice or other communication to a shareholder on two separate occasions during a 12-month period and each of them is returned undelivered or the Company receives notification that such notice or other communication has not been delivered in each case then that shareholder will not be entitled to receive notices or other communications from the Company. |
140.2 | A shareholder who has ceased to be entitled to receive notices or communications from the Company pursuant to Article 140.1 becomes entitled to receive a notice or communication again by supplying the Company with: |
| a new postal address; or |
| an electronic address, |
for the service of notices.
140.3 | For the purposes of this Article 140, references to a communication include references to any method of payment; but nothing in this Article 140 will entitle the Company to stop sending any dividend by any means, unless the Company is also entitled to do so under Article 128.2. |
141 | Signature or authentication of documents sent electronically |
141.1 | Where these Articles require an offer, notice, information or any other document to be signed or authenticated by a shareholder or any other person then any such offer, notice or other document sent or supplied in electronic form or by means of a website shall be |
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sufficiently authenticated in any manner authorised by the Company Communications Provisions or in such other manner approved by the directors. |
141.2 | The directors may determine procedures for validating offers, notices, information or any other documents sent or supplied in electronic form or by means of a website, and any offer, notice, information or any other document, not validated in accordance with such procedures shall be deemed not to have been received by the Company. |
MINUTES
142 | Minutes |
142.1 | The directors must ensure that minutes are entered in books kept for the purpose of: |
| all appointments of officers made by the directors; |
| the names of the directors present at each directors meeting and of any committee of the directors; |
| all resolutions and proceedings at all General Meetings of the Company, the holders of any class of shares in the Company, the directors and any committees of the directors. |
142.2 | If any such minute purports to be signed or authenticated by the chairman of the meeting at which the proceedings took place or by the chairman of the next succeeding meeting this shall be conclusive evidence of the proceedings. |
WINDING UP
143 | Directors power to petition |
The directors can present a petition to the Court in the name and on behalf of the Company for the Company to be wound up.
DESTROYING DOCUMENTS
144 | Destroying documents |
144.1 | The Company can destroy all: |
| forms of transfer of shares, and documents sent to support a transfer, and any other documents which were the basis for making an entry on the Register, after six years from the date of registration; |
| dividend payment instructions and notifications of a change of address or name, after two years from the date these were registered; |
| cancelled share certificates, one year after the date they were cancelled; and |
| proxy appointments from one year after the end of the meeting to which the appointment relates. |
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144.2 | A document destroyed in accordance with Article 144.1 is conclusively treated as having been a valid and effective document in accordance with the Companys records relating to the document. Any action of the Company in dealing with the document in accordance with its terms before it was destroyed is conclusively treated as properly taken. |
144.3 | Articles 144.1 and 144.2 only apply to documents which are destroyed in good faith and if the Company has not been informed that keeping the documents is relevant to any claim. |
144.4 | For documents relating to shares in uncertificated form, the Company must also comply with any rules (as defined in the CREST Regulations) which limit its ability to destroy these documents. |
144.5 | This Article does not make the Company liable if it: |
| destroys a document earlier than referred to in Article 144.1; or |
| would not be liable if this Article did not exist. |
144.6 | The Company can, subject to the Companies Acts, destroy a document earlier than the dates mentioned in Article 144.1 if the Company makes a permanent record (whether made electronically or by any other means) of that document before it is destroyed. |
144.7 | This Article applies whether a document is destroyed or disposed of in any other manner. |
DIRECTORS LIABILITIES
145 | Indemnity |
145.1 | Subject to the provisions of, and so far as may be permitted by and consistent with, the Companies Acts, rules made by the UK Listing Authority and local law as applicable, every director, Secretary and officer of the Company and of each Associated Company of the Company may be indemnified by the Company out of its own funds against: |
| any liability incurred by or attaching to him in connection with any negligence, default, breach of duty or breach of trust by him in relation to the Company or any Associated Company of the Company other than in the case of a director of the Company or any Associated Company: |
(i) | any liability to the Company or any Associated Company; and |
(ii) | any liability of the kind referred to in Section 234(3) of the Companies Act 2006; and |
| any other liability incurred by or attaching to him in the actual or purported execution and/or discharge of his duties and/or the exercise or purported exercise of his powers and/or otherwise in relation to or in connection with his duties, powers or office. |
145.2 | Subject to the provisions of, and so far as may be permitted by and consistent with, the Companies Acts, the rules of the UK Listing Authority and local law as applicable, every director, Secretary and officer of the Company and of each Associated Company of the Company may be indemnified by the Company out of its own funds against: |
| any liability incurred by or attaching to him in connection with any negligence, default, breach of duty or breach of trust by him in relation to the Company or any |
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Associated Company of the Company, if it is the trustee of an occupational pension scheme (within the meaning of Section 235(6) of the Companies Act 2006), in so far as such liability relates to the Companys or any such Associated Companies activities as trustee of such occupational pension scheme and other than in the case of a director of the Company or any Associated Company any liability of the kind referred to in Section 235(3) of the Companies Act 2006; and |
| any other liability incurred by or attaching to him in the actual or purported execution and/or discharge of his duties and/or the exercise or purported exercise of his powers and/or otherwise in relation to or in connection with his duties, powers or office. |
145.3 | Where a director, Secretary or officer is indemnified against any liability in accordance with this Article 145, such indemnity shall extend to all costs, charges, losses, expenses and liabilities incurred by him in relation thereto. |
145.4 | In this Article Associated Company shall have the meaning given by Section 256 of the Companies Act 2006. |
145.5 | So far as the Companies Acts allow, the Secretary and other officers, who are not directors of the Company or an Associated Company of the Company of the Company are exempted from any liability to the Company or any Associated Company of the Company where that liability would be covered by the indemnity in Article 145.1. |
146 | Insurance and defence funding |
146.1 | For the purpose of this Article each of the following is a Relevant Company: |
| the Company; |
| any holding company of the Company; |
| any company in which the Company or its holding company or any of the predecessors of the Company or of its holding company has or had any interest, whether direct or indirect; and |
| any company which is in any way allied to or associated with the Company, or any subsidiary undertaking of the Company or such other company. |
146.2 | Without limiting Article 145 in any way, the directors can arrange for the Company to purchase and maintain insurance for or for the benefit of any persons who are or were at any time: |
| directors, officers or employees of any Relevant Company; or |
| trustees of any pension fund or employees share scheme in which employees of any Relevant Company are interested. |
This includes, for example, insurance against any liability incurred by them for any act or omission:
| in performing or omitting to perform their duties; and/or |
| in exercising or omitting to exercise their powers; and/or |
| in claiming to do any of these things; and/or |
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| otherwise in relation to their duties, powers or offices. |
146.3 | Subject to the provisions of and so far as may be permitted by the Companies Act 2006, rules made by the UK Listing Authority and local law as applicable, the Company: |
| may provide a director, Secretary or officer of the Company or any Associated Company of the Company with funds to meet expenditure incurred or to be incurred by him in: |
(i) | defending any criminal or civil proceedings in connection with any negligence, default, breach of duty or breach of trust by him in relation to the Company or an Associated Company of the Company; or |
(ii) | in connection with any application for relief under the provisions mentioned in Section 205(5) of the Companies Act 2006; and |
| may do anything to enable any such director, Secretary or officer to avoid incurring such expenditure. |
146.4 | The terms set out in Section 205(2) of the Companies Act 2006 shall apply to any provision of funds or other things done under Article 146.3. |
146.5 | Subject to the provisions of and so far as may be permitted by the Companies Acts, rules made by the UK Listing Authority and local law as applicable, the Company: |
| may provide a director, Secretary or officer of the Company or any Associated Company of the Company with funds to meet expenditure incurred or to be incurred by him in defending himself in an investigation by a regulatory authority or against action proposed to be taken by a regulatory authority in connection with any alleged negligence, default, breach of duty or breach of trust by him in relation to the Company or any Associated Company of the Company; and |
| may do anything to enable any such director, Secretary or officer to avoid incurring such expenditure. |
146.6 | In this Article Associated Company shall have the meaning given thereto by Section 256 of the Companies Act 2006. |
SHARE WARRANTS
147 | Issue of Share Warrants |
147.1 | The Company can issue Share Warrants which state that the bearer of the Share Warrant (Bearer) is entitled to the shares specified in the Share Warrant. The Company can only do this in a way which is allowed under the Companies Acts and in Articles 147 to 154. Share Warrants can provide for the payment of future dividends and other distributions relating to the shares. Payment can be made by exchanging coupons which can be attached to the Share Warrants, or in any other way which the directors determine. |
147.2 | The Bearer of a Share Warrant is entitled to the number of shares which are specified in it. These shares can be transferred by one person delivering the Share Warrant to another. |
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147.3 | Subject to Article 147.2, the provisions of the Articles relating to share certificates and transferring shares do not apply to Share Warrants. |
147.4 | Each Share Warrant must be issued under the Seal. |
147.5 | The directors can decide on the language and form of, and the number of shares represented by, each Share Warrant. Subject to the Articles, the directors can vary the conditions of issue of any Share Warrant from time to time. |
148 | Directors can accept a certificate instead of a Share Warrant |
148.1 | The directors can accept a certificate from the persons referred to in Article 148.2 stating that they hold Share Warrants on behalf of someone named in the certificate as proof of matters set out in such certificate. The certificate will be in such form as the directors decide (including details of the number of shares to which the Share Warrant relates). |
148.2 | The only people who may deliver a certificate to the Company are the ADR Depositary or any bank or agent which has been appointed by the Company. For the purposes of Articles 147 to 153, the Company can treat the deposit of the certificate as though the Share Warrant itself had been deposited at the Transfer Office. |
148.3 | As long as the certificate is in a form agreed by the directors, the Company does not need to make any further enquiry into the accuracy of the information contained in the certificate. |
149 | Requesting a Share Warrant |
149.1 | A Share Warrant will only be issued if a shareholder requests in writing that a Share Warrant is issued for some or all of the shares which are registered in his name. |
149.2 | The request must be addressed to the directors at the Transfer Office. The directors can specify the form of the request, and can require that evidence is sent with the request to prove the identity of the person making the request and his right to the shares. The directors do not have to agree to this request. |
149.3 | Where a shareholder requests that Share Warrants are issued in relation to shares registered in his name, and there are share certificates in respect of those shares, a Share Warrant will only be issued once the share certificates have been delivered to the Transfer Office for cancellation. |
149.4 | A person who requests a Share Warrant (including a person requesting a Share Warrant in the circumstances described in Article 150) is responsible (and will re-imburse the Company) for all and any stamp duties, stamp duty reserve tax, bearer instrument duty, taxes, charges, fees, interest and penalties payable in connection with the issue of the Share Warrants. This Article 149.4 applies unless the person requesting the Share Warrant agrees otherwise with the Company. |
150 | Replacing Share Warrants |
150.1 | If a Share Warrant is damaged or defaced, the Bearer can request a new one, once he returns the damaged or defaced Share Warrant to the directors at the Transfer Office. Once any payments of the types described in Article 149.4 are made (if any), a new Share Warrant will be issued. |
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150.2 | If a Share Warrant is said to have been lost, stolen or destroyed, the directors can issue a replacement (although they do not have to do so). The directors can require satisfactory evidence of the loss, theft or destruction, an indemnity, the payment of any exceptional out of pocket expenses, and payments of the types described in Article 149.4 before issuing a replacement. |
150.3 | The Bearer can ask the directors to cancel his existing Share Warrant and replace it with two (or more) Share Warrants which together represent the same number of shares which the original single Share Warrant represented. The directors do not have to comply with this request. If they do, the Bearer will have to surrender his original Share Warrant and can be required by the directors to make any payments of the types described in Article 149.4 before the new Share Warrants are issued. |
151 | Rights of the Bearer |
151.1 | The Bearer (or a person who has deposited his Share Warrant in accordance with Article 151.2 or if the directors so decide, Article 148.2) shall be entitled to the same rights and be subject to the same obligations as those to which he would be entitled or subject if he were the registered holder of the shares to which the Share Warrant relates. This is subject to the provisions of Articles 147 to 154. |
151.2 | Where a Bearer deposits his Share Warrant, together with a declaration in writing giving his name and address, at the Transfer Office (or some other place specified by the directors) he has certain rights at any General Meeting provided that such Share Warrant is deposited at least 48 hours in advance of such meeting. For as long as the Share Warrant remains so deposited, the person who deposited it will have the following rights as if he were the registered holder from the time of deposit of the shares specified in the Share Warrant at a General Meeting: |
| the right to sign a form requiring a General Meeting; |
| the right to give notice of his intention to submit a resolution at a General Meeting; |
| the right to attend, speak and vote, appoint a proxy and exercise the other rights of a shareholder at a General Meeting. |
151.3 | Any Share Warrant which is deposited in accordance with Article 151.2 must remain deposited until the end of the General Meeting at which the person who deposited the Share Warrant desires to attend or be represented. |
151.4 | If a person presents a Share Warrant at the Transfer Office, the Company is entitled to assume that this person is the owner of the Share Warrant. The Company can pay dividends or moneys relating to the shares specified in the Share Warrant which are due to this person either to such person or to an account specified by him. If the Company does this, it shall have performed its obligation to pay that dividend or those moneys. |
152 | Bearers of Share Warrants participating in securities offers |
152.1 | In the case of a securities offer, there is no need to contact any Bearer individually. Instead, all the Company need do is advertise the details of the securities offer in a leading United Kingdom national daily newspaper (and any other newspapers the directors decide on). |
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152.2 | If, following the publication of the advertisement referred to above, the Bearer deposits the Share Warrant (or, if appropriate, the coupon attached to the Share Warrant) at the Transfer Office (or some other place mentioned in the advertisement), within the time limit set out in the securities offer, he shall have the same right to participate in the securities offer as if he were the registered holder of the shares specified in the Share Warrant. |
152.3 | For the purposes of this Article, a securities offer means an offer of shares, securities or debentures to shareholders or any class of shareholders, or a proposed issue of shares pursuant to Article 130. |
153 | Communications with Bearers of Share Warrants |
153.1 | In the case of any communication (for example, a notice of General Meeting, a circular or annual report) with shareholders, there is no need for the Company to contact any Bearer individually. Instead, all the Company need do is advertise the communication in a leading United Kingdom national daily newspaper (and any other newspapers the directors decide on), giving an address where copies of the communication may be obtained by the Bearer. |
153.2 | The Company must communicate with the Bearer in a different way, if the London Stock Exchange requires this. |
154 | Issuing shares to which the Share Warrant relates |
154.1 | The Bearer can ask to be registered as a shareholder (or that another person be so registered) in respect of all or any of the shares specified in the Share Warrant. In order to do so he must deposit at the Transfer Office (or another place specified by the directors): |
| the Share Warrant; and |
| a signed declaration in a form agreed by the directors which sets out the names and addresses of the persons, and the numbers of shares, in whose name he wishes such shares to be registered. |
154.2 | The Company will comply with a request made in accordance with Article 154.1 only upon the payment (or reimbursement) by the Bearer of all and any stamp duties, stamp duty reserve tax, bearer instrument duty, taxes, charges, fees, interest and penalties payable in connection with the issue of the shares. The Company may, however, agree that any such taxes or costs do not have to be paid by the Bearer. |
154.3 | If the Company complies with a request made in accordance with Article 154.1, the person named in the declaration will be entitled to have his name entered as a member in the Register in respect of the shares specified in the declaration and to receive a share certificate for them. The time limit for the Company to prepare a share certificate under this Article 154.3 is two months from the decision to comply with a request made in accordance with Article 154.1. |
154.4 | If the declaration does not deal with all the shares to which the Share Warrant relates, a new Share Warrant for the remaining shares will be issued, without charge, to the person who deposited the old Share Warrant. The new Share Warrant will only be issued upon the cancellation of the old Share Warrant. |
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ADR DEPOSITARY
155 | ADR Depositary can appoint proxies |
155.1 | The ADR Depositary can appoint more than one person to be its proxy. As long as the appointment complies with the requirements in Article 155.2, the appointment can be made in any way and on any terms which the ADR Depositary thinks fit. Each person appointed in this way is called an Appointed Proxy. |
155.2 | The appointment must set out the number of shares in relation to which an Appointed Proxy is appointed. This number is called the Appointed Number. The Appointed Number of all Appointed Proxies appointed by the ADR Depositary, when added together, must not be more than the number of Depositary Shares (as calculated in Article 155.3). |
155.3 | The Depositary Shares attributable to the ADR Depositary consist of the total of the number of shares: |
| registered in the name of the ADR Depositary; |
| represented by Share Warrants which have been deposited by the ADR Depositary with the Company in accordance with Article 151; and |
| represented by Share Warrants which are set out in a certificate from the ADR Depositary accepted by the directors in accordance with Article 148. |
156 | The ADR Depositary must keep a Proxy Register |
156.1 | The ADR Depositary must keep a register of the names and addresses of all the Appointed Proxies. This is called the Proxy Register. The Proxy Register will also set out the Appointed Number of shares of each Appointed Proxy. This can be shown by setting out the number of American Depositary Receipts which each Appointed Proxy holds and stating that the Appointed Number of shares can be ascertained by multiplying the said number of American Depositary Receipts by such number which for the time being is equal to the number of shares which any one American Depositary Receipt represents. |
156.2 | The ADR Depositary must let anyone whom the directors nominate inspect the Proxy Register during usual business hours on a working day. The ADR Depositary must also provide, as soon as possible, any information contained in the Proxy Register if it is demanded by the Company or its agents. |
157 | Appointed Proxies can only attend General Meetings if properly appointed |
An Appointed Proxy may only attend a General Meeting if he provides the Company with evidence in writing of his appointment by the ADR Depositary for that General Meeting. This must be in a form agreed between the directors and the ADR Depositary.
158 | Rights of Appointed Proxies |
Subject to the Companies Acts and these Articles and so long as the Depositary Shares are sufficient to include an Appointed Proxys Appointed Number:
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| at a General Meeting which an Appointed Proxy is entitled to attend, he is entitled to the same rights and has the same obligations in relation to his Appointed Number of shares as if the ADR Depositary was the registered holder of such shares and he had been validly appointed in accordance with Articles 69 to 71 by the ADR Depositary as its proxy in relation to those shares; and |
| an Appointed Proxy can himself appoint another person to be his proxy in relation to his Appointed Number of shares, as long as the appointment is made and deposited in accordance with Articles 69 to 71 and, if it is, the provisions of these Articles will apply to such an appointment as though the Appointed Proxy was the registered holder of such shares and the appointment was made by him in that capacity. |
159 | Sending information to an Appointed Proxy |
The Company can send to an Appointed Proxy at his address in the Proxy Register all the same documents which are sent to shareholders.
160 | The Company can pay dividends to an Appointed Proxy |
The Company can pay to an Appointed Proxy at his address in the Proxy Register all dividends or other moneys relating to the Appointed Proxys Appointed Number of shares instead of paying this amount to the ADR Depositary. If the Company does this, it will not have any obligation to make this payment to the ADR Depositary as well.
161 | The Proxy Register may be fixed at a certain date |
161.1 | In order to determine which persons are entitled as Appointed Proxies to: |
| exercise the rights conferred by Article 158; |
| receive documents sent pursuant to Article 159; and |
| be paid dividends pursuant to Article 160 |
and the Appointed Number of shares in respect of which a person is to be treated as having been appointed as an Appointed Proxy for such purpose, the ADR Depositary may determine that the Appointed Proxies who are entitled are the persons entered in the Proxy Register at the close of business on a date (a Record Date) determined by the ADR Depositary in consultation with the Company.
161.2 | When a Record Date is determined for a particular purpose: |
| the Appointed Number of shares in respect of an Appointed Proxy will be treated as the number appearing against his name in the Proxy Register as at the close of business on the Record Date; |
| this can be shown by setting out the number of American Depositary Receipts which each Appointed Proxy holds and stating that the number of shares can be ascertained by multiplying the said number of American Depositary Receipts by such number which for the time being is equal to the number of shares which any one American Depositary Receipt represents; and |
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| changes to entries in the Proxy Register after the close of business on the Record Date will be ignored in determining the entitlement of any person for the purpose concerned. |
162 | The nature of an Appointed Proxys interest |
Except as required by the Companies Acts, no Appointed Proxy will be recognised by the Company as holding any interest in shares upon any trust. Except for recognising the rights given in relation to General Meetings by appointments made by Appointed Proxies pursuant to Article 158, the Company is entitled to treat any person entered in the Proxy Register as an Appointed Proxy as the only person (other than the ADR Depositary) who has any interest in the shares in respect of which the Appointed Proxy has been appointed.
163 | Validity of the appointment of Appointed Proxies |
163.1 | If any question arises as to whether any particular person or persons has or have been validly appointed to vote (or exercise any other right) in respect of any shares (for example because the total number of shares in respect of which appointments are recorded in the Proxy Register is more than the number of Depositary Shares) this question will, if it arises at or in relation to a General Meeting be determined by the chairman of the General Meeting. His decision (which can include declining to recognise a particular appointment or appointments as valid) will, if made in good faith, be final and binding on all persons interested. |
163.2 | If a question of the type described in Article 163.1 arises in any circumstances other than at or in relation to a General Meeting, the question will be determined by the directors. Their decision (which can include declining to recognise a particular appointment or appointments as valid) will also, if made in good faith, be final and binding on all persons interested. |
Approved Depositaries
164 | Appointments |
164.1 | Subject to these Articles and the relevant Act or Acts, an Approved Depositary can appoint as its proxy or proxies in relation to any Ordinary Shares which it holds, anyone it thinks fit and can decide how and on what terms to appoint them. Each appointment must state the number of Ordinary Shares it relates to and the total number of Ordinary Shares in respect of which appointments exist at any time must not be more than the total number of Depositary Shares which are registered in the name of the Approved Depositary or its nominee at that time. |
164.2 | The Approved Depositary must keep a register (the Nominated Proxy Register) of each person it has appointed as a Nominated Proxy under Article 164.1 and the Appointed Number. The directors will decide what information about each Nominated Proxy is to be recorded in the Nominated Proxy Register. Any person authorised by the Company may inspect the Nominated Proxy Register during usual business hours and the Approved |
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Depositary will give such person any information which he requests as to the contents of the Nominated Proxy Register. |
165 | Rights of Nominated Proxies |
165.1 | A Nominated Proxy may only attend a General Meeting if he provides the Company with evidence in writing of his appointment as such. This must be in a form agreed between the directors and the Approved Depositary. |
165.2 | Subject to these Articles and the relevant Act or Acts, and so long as the Approved Depositary or a nominee of the Approved Depositary holds at least his Appointed Number of Ordinary Shares, a Nominated Proxy is entitled to attend a General Meeting which holders of Ordinary Shares are entitled to attend, and he is entitled to the same rights, and subject to the same obligations, in relation to his Appointed Number of Depositary Shares as if he had been validly appointed in accordance with Articles 69 to 73 by the registered holder of these shares as its proxy in relation to those shares. |
165.3 | A Nominated Proxy may appoint another person as his proxy for his Appointed Number of Depositary Shares, as long as the appointment is made and deposited in accordance with Articles 69 to 73, and these Articles apply to that appointment and to the person so appointed as though those Depositary Shares were registered in the name of the Nominated Proxy and the appointment was made by him in that capacity. The directors may require such evidence as they think appropriate to decide that such appointment is effective. |
165.4 | For the purposes of determining who is entitled as a Nominated Proxy to exercise the rights conferred by Articles 165.2 and 165.3 and the number of Depositary Shares in respect of which a person is to be treated as having been appointed as a Nominated Proxy for these purposes, the Approved Depositary can decide that the Nominated Proxies who are so entitled are the people entered in the Nominated Proxy Register at a time and on a date (a Record Time) agreed between the Approved Depositary and the Company. |
165.5 | When a Record Time is decided for a particular purpose:- |
| a Nominated Proxy is to be treated as having been appointed for that purpose for the number of shares appearing against his name in the Nominated Proxy Register as at the Record Time; and |
| changes to entries in the Nominated Proxy Register after the Record Time will be ignored for this purpose. |
165.6 | Except for recognising the rights given in relation to General Meetings by appointments made by Nominated Proxies pursuant to Article 165.3, the Company is entitled to treat any person entered in the Nominated Proxy Register as a Nominated Proxy as the only person (other than the Approved Depositary) who has any interest in the Depositary Shares in respect of which the Nominated Proxy has been appointed. |
165.7 | At a General Meeting the chairman of the General Meeting has the final decision as to whether any person has the right to vote or exercise any other right relating to any Depositary Shares. In any other situation, the directors have the final decision as to whether any person has the right to exercise any right relating to any Depositary Shares. |
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166 | Shares subject to the Scheme3 |
166.1 | Terms defined in the circular published on or around 10 December 2013 (the Circular) shall have the same meaning in this Article 166. |
166.2 | Notwithstanding any other provision of these Articles, any Ordinary Shares issued (if any) between the Voting Record Time and prior to the Distribution Record Time, shall be issued or shall be deemed to have been issued subject to the terms of the Scheme and the holder or holders of such Ordinary Shares shall be bound by the Scheme accordingly. |
166.3 | In the event that the Scheme is not sanctioned at the First Court Hearing or lapses, is withdrawn or does not become effective in accordance with its terms, this Article 166 shall (on the earlier of completion of termination of the VZW Transaction) automatically be, and shall be deemed to be, of no effect and shall be deleted and replaced with the wording Article 166 has been deleted; but the validity of anything done under Article 166 before that date shall not otherwise be affected and any actions taken under Article 166 before that date shall be conclusive and not be open to challenge on any grounds whatsoever. |
167 | Defined terms in Articles 168 to 171 (inclusive)4 |
(A) | General |
In Articles 168 to 171 (inclusive), the terms Business Day, Capital Reductions, Cash Entitlement, First Court Hearing, Reduction Court Order, Scheme, Second Court Hearing, Verizon, Verizon Consideration Share Entitlement, Verizon Consideration Shares and VZW Transaction shall each have the meaning given to them in the circular published on or around 10 December 2013 (the Circular); the term B Shares shall have the meaning set out in Article 168(A); the term C Shares shall have the meaning set out in Article 169(A); the term Deferred Shares shall have the meaning set out in Article 170(A); and the term Deferred B Shares shall have the meaning set out in Article 171(A).
(B) | Deletion of Article 167 when no B Shares, C Shares, Deferred Shares or Deferred B Shares in existence |
Article 167 shall remain in force until there are no longer any B Shares, C Shares, Deferred Shares or Deferred B Shares in existence, notwithstanding any provision in the Articles to the contrary. Thereafter Article 167 shall be, and shall be deemed to be, of no effect and shall be deleted and replaced with the wording Article 167 has been deleted.
168 | Rights and Restrictions Attached to B Shares |
(A) | General |
The preference B shares in the capital of the Company (the B Shares) shall have the rights, and be subject to the restrictions, attaching to shares set out in the Articles save that, in the event of a conflict between any provision in this Article 168 and any other provision in the Articles, the provisions in this Article 168 shall prevail.
3 | Article 166 is to be added pursuant to resolution 2 sub-paragraph 1(i) proposed at the General Meeting of the Company on 28 January 2013, with effect from the passing of resolution 2. |
4 | Articles 167 to 171 (inclusive) to be added pursuant to resolution 2 sub-paragraph 1(ii) proposed at the General Meeting of the Company on 28 January 2013, with effect from immediately prior to the commencement of the First Court Hearing. |
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(B) | Form of Election |
Together with the Circular, holders of Ordinary Shares in the capital of the Company who held such shares in certificated form were sent a form of election (Form of Election) relating to the B Shares and the C Shares proposed to be issued by the Company, as more fully described in the Circular. By way of the Form of Election or, where Ordinary Shareholders held such shares in uncertificated form, by following the instructions and taking the actions set out in the Circular, Ordinary Shareholders could (subject always to the directors determination as described in the Circular as to the number of B Shares and C Shares to be allotted and issued) make an election, on and subject to the terms set out in the Circular (an Election), inter alia, which would result in the issue to them of B Shares to be cancelled by the Cancellation Time (as defined in Article 168(G)(i) below) (the Capital Option).
(C) | Income |
The B Shares shall confer no right to participate in the profits of the Company.
(D) | Capital |
(i) | Except as provided in Article 168(F) below, on a return of capital on winding-up (excluding any intra-group reorganisation on a solvent basis), the holders of the B Shares shall be entitled, in priority to any payment to the holders of every other class of share in the capital of the Company (except the Fixed Rate Shares and the C Shares) but after any payment to the holders of Fixed Rate Shares and pari passu with any payment to the holders of C Shares, to repayment of an amount equal to the aggregate amount paid up or treated as paid up on the nominal value of each B Share held by them. |
(ii) | On a winding up, the holders of the B Shares shall not be entitled to any further right of participation in the profits or assets of the Company in excess of that specified in Article 168(D)(i) above. In the event that there is a winding-up to which Article 168(D)(i) applies and the amounts available for payment are insufficient to pay the amounts due on all the B Shares in full, the holders of the B Shares shall be entitled to their pro-rata proportion of the amounts to which they would otherwise be entitled. |
(iii) | The aggregate entitlement of each holder of B Shares on a winding-up in respect of all the B Shares held by him shall be rounded up to the nearest whole cent. |
(iv) | The holders of the B Shares shall not be entitled to any further right of participation in the profits or assets of the Company in their capacity as holders of B Shares. |
(E) | Attendance and voting at General Meetings |
(i) | The holders of the B Shares shall not be entitled, in their capacity as holders of such B Shares, to receive notice of any General Meeting of the Company nor to attend, speak or vote at any such General Meeting unless the business of the meeting includes the consideration of a resolution for the winding-up of the Company (excluding any intra group reorganisation on a solvent basis), in which case the holders of the B Shares shall have the right to attend the General Meeting and shall be entitled to speak and vote only on any such resolution. |
(ii) | If the holders of the B Shares are entitled to vote at a General Meeting of the Company in their capacity as holders of such B Shares, then, subject to any other provisions of these Articles, each holder thereof shall be entitled to vote at such General Meeting whether on a show of hands or on a poll as provided in the Companies Acts. For this |
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purpose, where a proxy is given discretion as to how to vote on a show of hands, this shall be treated as an instruction by the relevant holder of B Shares to vote in the way in which the proxy elects to exercise that discretion. |
(F) | Class rights |
(i) | The Company may from time to time create, allot and issue further shares, whether ranking pari passu with or in priority or subsequent to the B Shares. The creation, allotment or issue of any such further shares (whether or not ranking in any respect in priority to the B Shares) shall be treated as being in accordance with the rights attaching to the B Shares and shall not involve a variation of such rights for any purpose or require the consent of the holders of the B Shares. |
(ii) | A reduction by the Company of the capital paid up or credited as paid up on the B Shares and the cancellation of such shares shall be treated as being in accordance with the rights attaching to the B Shares and shall not involve a variation of such rights for any purpose or require the consent of the holders of the B Shares. |
(iii) | Without prejudice to the generality of the foregoing, the Company is authorised to reduce (or purchase shares in) its capital of any class or classes and such redemption (or purchase) shall not involve a variation of any rights attaching to the B Shares for any purpose or require the consent of the holders of the B Shares. |
(iv) | The directors shall be entitled, without the consent of holders of Ordinary Shares, B Shares, C Shares or Deferred Shares, to make any payments to which the holders of B Shares may be entitled in currencies other than US dollars and, in such circumstances, to make arrangements and adjustments in respect of the method of calculation and payment of any of the entitlements of holders of B Shares under the Articles as the directors consider necessary, fair and reasonable in the circumstances to give effect to the rights attaching to the B Shares. Any such arrangements and adjustments shall not involve a variation of any rights attaching to the B Shares for any purpose. |
(G) | Cancellation of B Shares |
Subject to the Capital Reductions being confirmed by the Court at the Second Court Hearing and to the Reduction Court Order being delivered to (or, if the Court so orders at the Second Court Hearing, registered with) the Registrar of Companies, the Company shall cancel the B Shares as follows:
(i) | The B Shares in respect of which a valid Election has been made, or is deemed to have been made, in accordance with the terms described in the Circular and (where applicable) the Form of Election shall be cancelled with effect at such time as the Reduction Court Order is delivered to (or, if the Court has so ordered at the Second Court Hearing, registered with) the Registrar of Companies (the Cancellation Time). |
(ii) | On cancellation of a B Share at the Cancellation Time, the Company shall become liable to distribute to each holder of B Shares an amount equal to the Cash Entitlement and the Verizon Consideration Share Entitlement for that B Share in accordance with the terms described in the Circular. The Companys liability to such holder of B Shares shall be satisfied by the Company paying to such holder the Cash Entitlement for each such B Share out of the capital available for distribution and by Verizon issuing to such holder the Verizon Share Consideration Entitlement for each such B Share, in each case in accordance with the Scheme. |
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(iii) | In the absence of bad faith or wilful default, neither the Company nor any of its directors, officers or employees shall have any liability to any person for any loss or damage arising as a result of the determination of the Cancellation Time in accordance with Article 168(G) (i) above. |
(H) | Form |
The B Shares shall not be listed or traded on any stock exchange nor shall any share certificates be issued in respect of such shares. The B Shares shall not be transferable except with the written consent of the directors.
(I) | Reclassification as Deferred B Shares. |
In the event that B Shares are issued pursuant to the terms of the Scheme but the Capital Reductions are not confirmed by the Court at the Second Court Hearing or the Reduction Court Order is not delivered to (or, if the Court so orders at the Second Court Hearing, registered with) the Registrar of Companies within 20 Business Days following the issue of the B Shares (or at such other time as the directors may determine), each B Share shall immediately thereupon be reclassified as a Deferred B Share and shall be subject to the rights and restrictions described in Article 171.
(J) | Deletion of Article 168 when no B Shares in existence |
Article 168 shall remain in force until the earlier of (i) if the Scheme is not sanctioned at the First Court Hearing or lapses, is withdrawn or does not become effective in accordance with its terms, the day immediately following the earlier of completion or termination of the VZW Transaction; or (ii) if the Scheme is sanctioned at the First Court Hearing and becomes effective in accordance with its terms, the date on which there are no longer any B Shares in existence, notwithstanding any provision in the Articles to the contrary. Thereafter Article 168 shall be, and shall be deemed to be, of no effect (save to the extent that the provisions of Article 168 are referred to in other Articles) and shall be deleted and replaced with the wording Article 168 has been deleted, and the separate register for the holders of B Shares shall no longer be required to be maintained by the Company; but the validity of anything done under Article 168 before that date shall not otherwise be affected and any actions taken under Article 168 before that date shall be conclusive and not be open to challenge on any grounds whatsoever.
169 | Rights and Restrictions Attached to C Shares |
(A) | General |
The preference shares of $0.00001 each in the capital of the Company (the C Shares) shall have the rights, and be subject to the restrictions, attaching to shares set out in the Articles save that in the event of a conflict between any provision in this Article 169 and any other provision in the Articles, the provisions in this Article 169 shall prevail.
(B) | Form of Election |
Together with the Circular, holders of Ordinary Shares in the capital of the Company who held such shares in certificated form were sent a Form of Election relating to the B Shares and C Shares proposed to be issued by the Company, as more fully described in the Circular. By way of the Form of Election or, where Ordinary Shareholders held such shares in uncertificated form, by following the instructions and taking the actions set out in the Circular, Ordinary Shareholders could make an Election, on and subject to the terms
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set out in the Circular, inter alia, which would result in the issue to them of C Shares in respect of which the C Share Dividend (as defined in Article 169(C)(i) below) would be paid.
(C) | Income |
(i) | Subject to the provisions of the Scheme, the Companies Acts, and the Articles, out of the profits of the Company available for distribution, a single dividend for an amount equal to the aggregate of the Cash Entitlement and the Verizon Consideration Share Entitlement for each C Share (the C Share Dividend) shall automatically become distributable (without the need for such dividend to be declared by the Company, the board or any other person and notwithstanding any provision to the contrary in these Articles) at the Cancellation Time to holders of C Shares in respect of which a valid Election to receive the C Share Dividend has been made, or is deemed to have been made, in accordance with the terms described in the Circular and (where applicable) the Form of Election. |
(ii) | The Companys liability to distribute the C Share Dividend to such holder of C Shares shall be satisfied by the Company paying to such holder the Cash Entitlement for each such C Share and by Verizon issuing to such holder the Verizon Share Consideration Entitlement for each such C Share, in each case in accordance with the Scheme. |
(iii) | Each C Share in respect of which the C Share Dividend becomes distributable shall immediately upon satisfaction of such C Share Dividend pursuant to Article 169(C)(ii) above be reclassified as a Deferred Share. |
(iv) | For the avoidance of doubt, the provisions of Article 128 (Dividends which are not claimed) shall apply to any amounts in respect of the Cash Entitlement or other cash payable pursuant to all C Share Dividends on or in respect of any C Shares which remain unclaimed. |
(v) | In the absence of fraud or wilful default, neither the Company nor any of its directors, officers or employees shall have any liability to any person for any loss or damage arising as a result of the determination of the Cancellation Time in accordance with Article 168(G)(i) above. |
(D) | Capital |
(i) | Except as provided in Article 169(F) below, on a return of capital on winding-up (excluding any intra-group reorganisation on a solvent basis), the holders of each C Share shall be entitled, in priority to any payment to the holders of every other class of share in the capital of the Company (except the B Shares and the Fixed Rate Shares) but after any payment to the holders of the Fixed Rate Shares and pari passu with any payment to the holders of B Shares, to the aggregate of the amount of the nominal capital paid up or credited as paid up on such C Share and an amount equal to the difference between the nominal value of a B Share and $0.00001, for each C Share held by them. |
(ii) | On a winding up, the holders of the C Shares shall not be entitled to any further right of participation in the profits or assets of the Company in excess of that specified in Article 169(D)(i) above. In the event that there is a winding-up to which Article 169(D)(i) applies and the amounts available for payment are insufficient to pay the amounts due on all the C Shares in full, the holders of the C Shares shall be entitled to their pro-rata proportion of the amounts to which they would otherwise be entitled. |
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(iii) | The aggregate entitlement of each holder of C Shares on a winding-up in respect of all the C Shares held by him shall be rounded up to the nearest whole cent. |
(iv) | The holders of the C Shares shall not be entitled to any further right of participation in the profits or assets of the Company in their capacity as holders of C Shares. |
(E) | Attendance and voting at General Meetings |
(i) | The holders of the C Shares shall not be entitled, in their capacity as holders of such C Shares, to receive notice of any General Meeting of the Company nor to attend, speak or vote at any such General Meeting unless the business of the meeting includes the consideration of a resolution for the winding-up of the Company (excluding any intra-group reorganisation on a solvent basis), in which case the holders of the C Shares shall have the right to attend the General Meeting and shall be entitled to speak and vote only on any such resolution. |
(ii) | If the holders of the C Shares are entitled to vote at a General Meeting of the Company in their capacity as holders of such C Shares, then, subject to any other provisions of the Articles, each holder thereof shall be entitled to vote at such General Meeting whether on a show of hands or on a poll as provided in the Companies Acts. For this purpose, where a proxy is given discretion as to how to vote on a show of hands, this shall be treated as an instruction by the relevant holder of C Shares to vote in the way in which the proxy elects to exercise that discretion. |
(F) | Class rights |
(i) | The Company may from time to time create, allot and issue further shares, whether ranking pari passu with or in priority or subsequent to the C Shares. The creation, allotment or issue of any such further shares (whether or not ranking in any respect in priority to the C Shares) shall be treated as being in accordance with the rights attaching to the C Shares and shall not involve a variation of such rights for any purpose or require the consent of the holders of the C Shares. |
(ii) | A reduction by the Company of the capital paid up or credited as paid up on the C Shares and the cancellation of such shares shall be treated as being in accordance with the rights attaching to the C Shares and shall not involve a variation of such rights for any purpose or require the consent of the holders of the C Shares. |
(iii) | Without prejudice to the generality of the foregoing, the Company is authorised to reduce (or purchase shares in) its capital of any class or classes and such redemption (or purchase) shall not involve a variation of any rights attaching to the C Shares, for any purpose or require the consent of the holders of the C Shares. |
(iv) | The directors shall be entitled, without the consent of holders of Ordinary Shares, B Shares, C Shares or Deferred Shares, to make any payments to which the holders of C Shares may be entitled in currencies other than US dollars and, in such circumstances, to make such arrangements and adjustments in respect of the method of calculation and payment of any of the entitlements of holders of C Shares under the Articles as the directors consider necessary, fair and reasonable in the circumstances to give effect to the rights attaching to the C Shares. Any such arrangements and adjustments shall not involve a variation of any rights attaching to the C Shares for any purpose. |
(G) | Form |
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The C Shares shall not be listed or traded on any stock exchange nor shall any share certificates be issued in respect of such shares. The C Shares shall not be transferable except with the written consent of the directors.
(H) | Reclassification as Deferred Shares |
In the event that C Shares are issued pursuant to the terms of the Scheme but the Capital Reductions are not confirmed by the Court at the Second Court Hearing or the Reduction Court Order is not delivered to (or, if the Court so orders at the Second Court Hearing, registered with) the Registrar of Companies within 20 Business Days following the issue of the C Shares (or at such other time as the directors may determine), each C Share shall immediately thereupon be reclassified as a Deferred Share.
(I) | Deletion of Article 169 when no C Shares in existence |
Article 169 shall remain in force until the earlier of (i) if the Scheme is not sanctioned at the First Court Hearing or lapses, is withdrawn or does not become effective in accordance with its terms, the day immediately following the earlier of completion or termination of the VZW Transaction; or (ii) if the Scheme is sanctioned at the First Court Hearing and becomes effective in accordance with its terms, the date on which there are no longer any C Shares in existence, notwithstanding any provision in the Articles to the contrary. Thereafter Article 169 shall be, and shall be deemed to be, of no effect (save to the extent that the provisions of Article 169 are referred to in other Articles) and shall be deleted and replaced with the wording Article 169 has been deleted, and the separate register for the holders of C Shares shall no longer be required to be maintained by the Company; but the validity of anything done under Article 169 before that date, and accrued rights in respect of the payment of dividends arising before that date, shall not otherwise be affected and any actions taken under Article 169 before that date shall be conclusive and not be open to challenge on any grounds whatsoever.
170 | Rights and Restrictions Attached to Deferred Shares |
(A) | General |
The deferred shares of $0.00001 in the capital of the Company (the Deferred Shares) shall have the rights, and be subject to the restrictions, attaching to shares set out in the Articles save that in the event of a conflict between any provision in this Article 170 and any other provision in the Articles, the provisions in this Article 170 shall prevail.
(B) | Income |
The Deferred Shares shall confer no right to participate in the profits of the Company.
(C) | Capital |
On a return of capital on a winding-up (excluding any intra-group reorganisation on a solvent basis), there shall be paid to the holders of the Deferred Shares, pari passu with any payment to the holders of Deferred B Shares (if any), the nominal capital paid up, or credited as paid up, on such Deferred Shares after: (i) firstly, paying to the holders of the Fixed Rate Shares the amounts they are entitled to receive on a winding-up in accordance with their terms; (ii) secondly, paying to the holders of the B Shares and the holders of the C Shares pari passu as if the same were consolidated as one class, the amounts they are entitled to receive on a winding-up in accordance with their terms; and (ii) thirdly, paying to the holders of the Ordinary Shares the nominal capital paid up or
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credited as paid up on the Ordinary Shares held by them respectively, together with the sum of £100,000,000,000 on each Ordinary Share. The holders of the Deferred Shares shall not be entitled to any further right of participation in the assets of the Company.
(D) | Attendance and voting at General Meetings |
The holders of the Deferred Shares shall not be entitled, in their capacity as holders of such shares, to receive notice of any General Meeting of the Company or to attend, speak or vote at any such meeting.
(E) | Class rights |
(i) | The Company may from time to time create, allot and issue further shares, whether ranking pari passu with or in priority to the Deferred Shares, and on such creation, allotment or issue any such further shares (whether or not ranking in any respect in priority to the Deferred Shares) shall be treated as being in accordance with the rights attaching to the Deferred Shares and shall not involve a variation of such rights for any purpose or require the consent of the holders of the Deferred Shares. |
(ii) | The reduction by the Company of the capital paid up on the Deferred Shares shall be in accordance with the rights attaching to the Deferred Shares and shall not involve a variation of such rights for any purpose and the Company shall be authorised at any time to reduce its capital (in accordance with the Companies Acts) without obtaining the consent of the holders of the Deferred Shares. |
(iii) | Without prejudice to the foregoing, the Company is authorised to reduce (or purchase shares in) its capital of any class or classes and such reduction (or purchase) shall not involve a variation of any rights attaching to the Deferred Shares for any purpose or require the consent of the holders of the Deferred Shares. |
(F) | Form |
The Deferred Shares shall not be listed or traded on any stock exchange nor shall any share certificates be issued in respect of such shares. The Deferred Shares shall not be transferable except in accordance with Article 170(G) below or with the written consent of the directors.
(G) | Transfer and purchase |
The Company may at any time (and from time to time) (subject to the provisions of the Companies Acts) without obtaining the sanction of the holder or holders of the Deferred Shares:
(i) | appoint any person to execute on behalf of any holder of Deferred Shares a transfer of (and/or an agreement to transfer) all or some only of the Deferred Shares to the Company or to such person as the directors may determine (whether or not an officer of the Company), in any case for not more than the aggregate amount of US$0.01 for all the Deferred Shares then being transferred, without such person having to account for such sum to the holder or holders of the Deferred Shares; and/or |
(ii) | cancel all or any of the Deferred Shares purchased or acquired by the Company in accordance with the Companies Acts. |
(H) | Deletion of Article 170 when no Deferred Shares in existence |
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Article 170 shall remain in force until the earlier of (i) if the Scheme is not sanctioned at the First Court Hearing or lapses, is withdrawn or does not become effective in accordance with its terms, the day immediately following the earlier of completion or termination of the VZW Transaction; or (ii) if the Scheme is sanctioned at the First Court Hearing and becomes effective in accordance with its terms, the date on which there are no longer any Deferred Shares in existence, notwithstanding any provision in the Articles to the contrary. Thereafter Article 170 shall be, and shall be deemed to be, of no effect (save to the extent that the provisions of Article 170 are referred to in other Articles) and shall be deleted and replaced with the wording Article 170 has been deleted, and the separate register for the holders of Deferred Shares shall no longer be required to be maintained by the Company; but the validity of anything done under Article 170 before that date shall not otherwise be affected and any actions taken under Article 170 before that date shall be conclusive and not be open to challenge on any grounds whatsoever.
171 | Rights and Restrictions Attached to Deferred B Shares |
(A) | General |
The deferred B shares in the capital of the Company (the Deferred B Shares) shall have the rights, and be subject to the restrictions, attaching to shares set out in the Articles save that in the event of a conflict between any provision in this Article 171 and any other provision in the Articles, the provisions in this Article 171 shall prevail.
(B) | Income |
The Deferred B Shares shall confer no right to participate in the profits of the Company.
(C) | Capital |
On a return of capital on a winding-up (excluding any intra-group reorganisation on a solvent basis), there shall be paid, pari passu with any payment to the holders of Deferred Shares (if any), to the holders of the Deferred B Shares the nominal capital paid up, or credited as paid up, on such Deferred B Shares after: (i) firstly, paying to the holders of the Fixed Rate Shares the amounts they are entitled to receive on a winding-up in accordance with their terms; (ii) secondly, paying to the holders of the B Shares and the holders of the C Shares pari passu as if the same were consolidated as one class, the amounts they are entitled to receive on a winding-up in accordance with their terms; and (ii) thirdly, paying to the holders of the Ordinary Shares the nominal capital paid up or credited as paid up on the Ordinary Shares held by them respectively, together with the sum of £100,000,000,000 on each Ordinary Share. The holders of the Deferred B Shares shall not be entitled to any further right of participation in the assets of the Company.
(D) | Attendance and voting at General Meetings |
The holders of the Deferred B Shares shall not be entitled, in their capacity as holders of such shares, to receive notice of any General Meeting of the Company or to attend, speak or vote at any such meeting.
(E) | Class rights |
(i) | The Company may from time to time create, allot and issue further shares, whether ranking pari passu with or in priority to the Deferred B Shares, and on such creation, allotment or issue any such further shares (whether or not ranking in any respect in priority |
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to the Deferred B Shares) shall be treated as being in accordance with the rights attaching to the Deferred B Shares and shall not involve a variation of such rights for any purpose or require the consent of the holders of the Deferred B Shares.
(ii) | The reduction by the Company of the capital paid up on the Deferred B Shares shall be in accordance with the rights attaching to the Deferred B Shares and shall not involve a variation of such rights for any purpose and the Company shall be authorised at any time to reduce its capital (in accordance with the Companies Acts) without obtaining the consent of the holders of the Deferred B Shares. |
(iii) | Without prejudice to the foregoing, the Company is authorised to reduce (or purchase shares in) its capital of any class or classes and such reduction (or purchase) shall not involve a variation of any rights attaching to the Deferred B Shares for any purpose or require the consent of the holders of the Deferred B Shares. |
(F) | Form |
The Deferred B Shares shall not be listed or traded on any stock exchange nor shall any share certificates be issued in respect of such shares. The Deferred B Shares shall not be transferable except in accordance with Article 171(G) below or with the written consent of the directors.
(G) | Transfer and purchase |
The Company may at any time (and from time to time) (subject to the provisions of the Companies Acts) without obtaining the sanction of the holder or holders of the Deferred B Shares:
(i) | appoint any person to execute on behalf of any holder of Deferred B Shares a transfer of (and/or an agreement to transfer) all or some only of the Deferred B Shares to the Company or to such person as the directors may determine (whether or not an officer of the Company), in any case for not more than the aggregate amount of US$0.01 for all the Deferred B Shares then being transferred, without such person having to account for such sum to the holder or holders of the Deferred B Shares; and/or |
(ii) | cancel all or any of the Deferred B Shares purchased or acquired by the Company in accordance with the Companies Acts. |
(H) | Deletion of Article 171 when no Deferred B Shares in existence |
Article 171 shall remain in force until the earlier of (i) if the Scheme is sanctioned and the Capital Reductions are confirmed at the Second Court Hearing, the date on which the Reduction Court Order is delivered to (or, if the Court has so ordered at the Second Court Hearing, registered with) the Registrar of Companies; (ii) if the Scheme is not sanctioned at the First Court Hearing or lapses, is withdrawn or does not become effective in accordance with its terms, the day immediately following the earlier of completion or termination of the VZW Transaction; and (iii) if the Scheme is sanctioned at the First Court Hearing and becomes effective in accordance with its terms, but the Capital Reductions are not confirmed within [20] Business Days thereof, the date on which there are no longer any Deferred B Shares in existence, notwithstanding any provision in the Articles to the contrary. Thereafter Article 171 shall be, and shall be deemed to be, of no effect (save to the extent that the provisions of Article 171 are referred to in other Articles) and shall be deleted and replaced with the wording Article 171 has been deleted, and the separate register for the holders of Deferred B Shares shall no
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longer be required to be maintained by the Company; but the validity of anything done under Article 171 before that date shall not otherwise be affected and any actions taken under Article 171 before that date shall be conclusive and not be open to challenge on any grounds whatsoever.
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Glossary
About the glossary
This glossary is to help readers understand the Companys Articles of Association. Words are explained as they are used in the Articlesthey might mean different things in other documents. The glossary is not legally part of the Articles, and it does not affect their meaning. The definitions are intended to be a general guidethey are not precise.
abrogate If the special rights of a share are abrogated, they are cancelled or withdrawn.
accrue If interest is accruing, it is running or mounting up, day by day.
adjourned In relation to a shareholders meeting, means that the meeting has come to an end for the time being, to be continued at a later time or day, at the same or a different place and adjourned and adjourn shall be construed accordingly.
agent A person who has been appointed to act for another person.
allot When new shares are allotted, they are set aside for the person they are intended for. This will normally be after the person has agreed to pay for a new share, or has become entitled to a new share for any other reason. As soon as a share is allotted, that person gets the right to have his name put on the register of shareholders. When he has been registered, the share has also been issued.
allottee A person to whom a share is allotted (see renunciation).
asset Any property of any description which is of any value to its owner.
attorney An attorney is a person who has been appointed to act for another person in a particular way. The person is appointed by a formal document, called a power of attorney.
automatically entitled to a share by law In some situations, a person will be entitled to have shares which are registered in somebody elses name registered in his own name. Or he can require the shares to be transferred to another person. When a shareholder dies, or the sole survivor of joint shareholders dies, his personal representatives have this right. If a shareholder is made bankrupt, his trustee in bankruptcy has the right.
beneficial interest A person on whose behalf or for whose benefit a trustee holds shares has a beneficial interest in those shares.
brokerage Commission which is paid to a broker by a company issuing shares, where the brokers clients have applied for shares.
call A call to pay money which is due on shares which has not yet been paid. This happens if the Company issues shares which are partly-paid, where money remains to be paid to the Company for the shares. The money which has not been paid can be called for. If all the money to be paid on a share has been paid, the share is called a fully-paid share.
capital redemption reserve A reserve of funds which a company may have to set up to ensure that the Companys capital base remains the same when shares are redeemed or bought back. It is equivalent to the amount by which the Companys issued share capital is reduced by the redemption or purchase.
casual vacancy A vacancy amongst the directors which occurs by reason of the death, resignation or disqualification of a director, or from the failure of an elected director to accept his
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appointment, or for any other reason except the retirement of a director in accordance with the Articles.
charge See lien and charge.
consolidate When shares are consolidated, they are combined with other shares. For example, every three £1 shares might be consolidated into one new £3 share.
cumulative dividends If a dividend which is cumulative cannot be paid in one year because the company does not have enough profits to cover the payment, the shareholder has the right to receive the dividend in a future year, when the company has enough profits to pay the dividend. Compare this with a non-cumulative dividend.
debenture A typical debenture is a type of long-term borrowing by a company. The loan usually has to be repaid at a fixed date in the future, and carries a fixed rate of interest.
declare Generally, when a final dividend is declared, it becomes due to be paid.
dividend arrears Any dividend arrears. This includes any dividends on shares with cumulative rights which could not be paid, but which have been carried forward.
documents of title The documents which show that a person owns something.
electronically Any document or information sent or supplied by electronic means.
executed A document is executed when it is signed, authenticated or sealed or made valid in some other way.
exercise When a power is exercised, it is put to use.
forfeit When a share is forfeited it is taken away from the shareholder and becomes the property of the Company which can do with it as it likes. This process is called forfeiture. This can happen if a call on a partly-paid share is not paid on time.
fully-paid shares When all of the money which is due to the Company for a share has been paid, a share is called a fully-paid share.
good title If a person has good title to a share, he owns it outright.
holding company A company which controls another company (for example by owning a majority of its shares) is called the holding company of that other company. The other company is the subsidiary of the holding company.
indemnity If a person gives another person an indemnity, he promises to make good any losses or damage which the other might suffer. The person who gives the indemnity is said to indemnify the other person.
in issue See issue.
instruments Formal legal documents.
issue When a share has been issued, everything has been done to make the shareholder the owner of the share. In particular, the shareholders name has been put on the Register of shareholders. Existing shares which have been issued are in issue.
liabilities Debts and other obligations.
liable jointly and severally Where more than one person is liable jointly and severally it means that any one of them may be sued, or they can all be sued together.
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lien and charge Where the Company has a lien and charge over shares, it can take the dividends, and any other payments relating to the shares which it has a charge over, or it can sell the shares, to repay the debt and so on.
members Are shareholders.
nominal value The nominal value of the share. The nominal value of the US$0.11 3/7 Ordinary Shares is US$0.11 3/7. This value is shown on the share certificate for a share, if there is one. When the Company issues new shares this can be for a price which is at a premium to the nominal value. When shares are bought and sold on the stock market this can be for more, or less, than the nominal value. The nominal value is sometimes also called the par value.
non-cumulative dividends If a dividend which is non-cumulative cannot be paid in one year because the Company does not have enough profits available to cover the payment, the shareholder does not have the right to receive the dividend in a future year. This is the opposite to a cumulative dividend.
ordinary resolution A decision reached by a simple majority of votesthat is by more than 50 per cent. of the votes cast.
par value See nominal value.
partly-paid shares If any money remains to be paid on a share, it is said to be partly-paid. The unpaid money can be called for.personal representatives A person who is entitled to deal with the property (the estate) of a person who has died. If the person who has died left a valid will, the will appoints executors who are personal representatives. If the person died without a will, the courts will appoint one or more administrators to be the personal representatives.
poll A poll vote is usually a card vote but to the extent permitted by the Companies Acts may be an electronic vote. On a poll vote, the number of votes which a shareholder has will depend on the number of shares which he owns. An Ordinary Shareholder has one vote for each share he owns. A poll vote is different to a show of hands vote, where each person who is entitled to vote has just one vote, however many shares he owns.
power of attorney A formal document which legally appoints one or more persons to act on behalf of another person.
pre-emption rights The right of some shareholders which is given by the Companies Acts to be offered a proportion of certain classes of newly issued shares and other securities before they are offered to anyone else. This offer must be made on terms which are at least as favourable as the terms offered to anyone else.
premium If the Company issues a new share for more than its nominal value (for example because the market value is more than the nominal value), the amount above the nominal value is the premium.
proxy A proxy is a person who is appointed by a shareholder to attend a shareholders meeting and vote for that shareholder. A proxy is appointed by using a proxy form. A proxy does not have to be a shareholder. At a shareholders meeting a proxy can exercise the rights of the shareholder that appointed him.
proxy form A form which a shareholder uses to appoint a proxy to attend a shareholders meeting and vote for him. The proxy form must be delivered to the Company before the meeting to which it relates.
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quorum The minimum number of shareholders or directors who must be present before a meeting can start. When this number is reached, the meeting is said to be quorate.
rank & ranking When either capital or income is distributed to shareholders, it is paid out according to the rank (or ranking) of the shares. For example, a share which ranks before (or ahead of) another share in sharing in the Companys income is entitled to have its dividends paid first, before any dividends are paid on shares which rank behind (or after) it. If there is not enough income to pay dividends on all shares, the available income must be used first to pay dividends on shares which rank ahead, and then to shares which rank behind. The same applies for repayments of capital. Capital must be paid first to shares which rank ahead in sharing in the Companys capital, and then to shares which rank behind. The Companys Fixed Rate Shares rank ahead of its Ordinary Shares. Where certain shares rank equally with other shares, both types of shares have the same rights as each other.
recognised investment exchange An investment exchange which has been officially recognised by the UK authorities. An investment exchange is a place where investments, such as shares, are traded. The London Stock Exchange is a recognised investment exchange.
redeem and redemption When a share is redeemed, it is effectively bought back by the Company in return for a sum of money (the redemption price) which was fixed before the share was issued. This process is called redemption. A share which can be redeemed is called a redeemable share.
relevant system This is a term used in the CREST Regulations for a computer-based system which allows shares without share certificates to be transferred without using transfer forms. The CREST system for paperless share dealing is a relevant system.
renunciation Where a share has been allotted, but no one has been entered on the share register as the holder of the share, it can be renounced by the allottee to another person. This transfers the right to be registered as the holder of the share to another person. This process is called renunciation.
requisition a meeting A formal process which shareholders can use to call a shareholders meeting. Generally speaking the shareholders who want to call a meeting must hold at least 10 per cent of the issued shares.
reserve fund or reserves A fund which has been set aside in the accounts of a company. Profits which are not paid out to shareholders as dividends, or used up in some other way, are held in a reserve fund by the company. The capital redemption reserve and share premium account are also reserve funds.
revoke To withdraw, or cancel.
securities All shares, bonds and other investment instruments issued by a company which entitle the holder to a share in the profits or assets of that company, to receive a cash payment from a company or to subscribe for such a security.
share premium account If a new share is issued by the Company for more than its nominal value (generally because the market value is more than the nominal value) then the amount above the nominal value is the premium, and the total of these premiums is held in a reserve fund (which cannot be used to pay dividends) called the share premium account.
show of hands A shareholder raises his hand to vote at a shareholders meeting (unless there is a poll). Each person who is entitled to vote has just one vote, however many shares he holds.
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special notice This term is defined in Companies Acts. Broadly, if special notice of a resolution is required by the Companies Acts, the resolution is not valid unless the Company has been told about the intention to propose it at least 28 days before the shareholders meeting at which it is proposed (although in certain circumstances the meeting can be on a date less than 28 days from the date of the notice).
special resolution A decision reached by a majority of at least 75 per cent of votes cast.
special rights These are the rights of a particular class of shares, as distinct from rights which apply to all shares generally. Typical examples of special rights are where the shares rank, their rights to sharing in income and assets and voting rights.
statutory declaration A formal way of declaring something in writing. Particular words and formalities must be usedthese are laid down by the Statutory Declarations Act of 1835.
stock When shares have been converted into stock the holders interest in the Company is expressed by reference to a sum of money divided into transferable units. For example, the interest of a shareholder with one hundred £1 shares might have been converted into £100 worth of stock transferable in units of £1 each.
stockholder A holder of stock.
subject to Where something else has priority, or prevails, or must be taken into account. When a statement is subject to another statement this means that the first statement must be read in the light of the other statement, which will prevail if there is any conflict.
subordinate Where a right or interest is subordinated to something else, it ranks behind it.
subsidiary This is a term used by the Companies Act 2006. A company which is controlled by another company (for example because the other Company owns a majority of its shares) is called a subsidiary of that company.
subsidiary undertaking This is a term used by the Companies Acts. It is a wider definition than subsidiary. Generally speaking it is a company which is controlled by another company because the other company:
| has a majority of the votes in the company either alone, or acting with others; |
| is a shareholder who can appoint or remove a majority of the directors; or |
| can exercise dominant influence over the company because of anything in the Companys Articles, or because of a certain kind of contract. |
treasury shares Where shares which are held by a company as treasury shares in line with Sections 724 to 726 of the Companies Act 2006.
trustees People who hold property of any kind for the benefit of one or more other people under a kind of arrangement which the law treats as a trust. The people whose property is held by the trustees are called the beneficiary.
uncertificated proxy instruction A properly authenticated instruction sent by means of a relevant system, in line with the rules of the relevant system to a person acting on the Companys behalf, on terms decided by the directors.
unincorporated associations Associations, partnerships, societies and other bodies which the law does not treat as a separate legal person to their members.
warrant See the definition of dividend warrant.
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wind up The formal process to put an end to a company. When a company is wound up its assets are distributed. The assets go first to creditors, and then to shareholders. Shares which rank first in sharing in the Companys assets will receive any funds which are left over before any shares which rank after (or behind) them.
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EXHIBIT 2.3
ELEVENTH SUPPLEMENTAL TRUST DEED
11 JULY 2013
VODAFONE GROUP PLC
and
THE LAW DEBENTURE TRUST CORPORATION p.l.c.
further modifying and restating the provisions of
the Trust Deed dated 16 July 1999
relating to a
30,000,000,000
Euro Medium Term Note Programme
THIS ELEVENTH SUPPLEMENTAL TRUST DEED is made on 11 July 2013
BETWEEN:
(1) | VODAFONE GROUP PLC, a company incorporated with limited liability in England and Wales with registered number 1833679, whose registered office is Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England (the Issuer); and |
(2) | THE LAW DEBENTURE TRUST CORPORATION p.l.c., a company incorporated with limited liability in England and Wales with registered number 1675231, whose registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX, England (the Trustee, which expression shall, wherever the context so admits, include such company and all other persons or companies for the time being the trustee or trustees of these presents) as trustee for the Noteholders and the Couponholders. |
WHEREAS:
(A) | This Eleventh Supplemental Trust Deed is supplemental to: |
(i) | the Trust Deed dated 16 July 1999 (hereinafter called the Principal Trust Deed) made between the Issuer and the Trustee and relating to the Euro Medium Term Note Programme (the Programme) established by the Issuer; |
(ii) | the First Supplemental Trust Deed dated 4 May 2000 (the First Supplemental Trust Deed) made between the Issuer and the Trustee modifying and restating the provisions of the Principal Trust Deed; |
(iii) | the Second Supplemental Trust Deed dated 31 May 2001 (the Second Supplemental Trust Deed) made between the Issuer and the Trustee further modifying and restating the provisions of the Principal Trust Deed; |
(iv) | the Third Supplemental Trust Deed dated 6 June 2002 (the Third Supplemental Trust Deed) made between the Issuer and the Trustee further modifying the provisions of the Principal Trust Deed; and |
(v) | the Fourth Supplemental Trust Deed dated 19 July 2005 (the Fourth Supplemental Trust Deed) made between the Issuer and the Trustee further modifying and restating the provisions of the Principal Trust Deed |
(vi) | the Fifth Supplemental Trust Deed dated 19 July 2006 (the Fifth Supplemental Trust Deed) made between the Issuer and the Trustee further modifying and restating the provisions of the Principal Trust Deed; |
(vii) | the Sixth Supplemental Trust Deed dated 1 August 2007 (the Sixth Supplemental Trust Deed) made between the Issuer and the Trustee further modifying the provisions of the Principal Trust Deed; |
(viii) | the Seventh Supplemental Trust Deed dated 14 July 2008 (the Seventh Supplemental Trust Deed) made between the Issuer and the Trustee further modifying the provisions of the Principal Trust Deed; |
1
(ix) | the Eighth Supplemental Trust Deed dated 10 July 2009 (the Eighth Supplemental Trust Deed) made between the Issuer and the Trustee further modifying the provisions of the Principal Trust Deed; |
(x) | the Ninth Supplemental Trust Deed dated 13 July 2010 (the Ninth Supplemental Trust Deed) made between the Issuer and the Trustee further modifying the provisions of the Principal Trust Deed; and |
(xi) | the Tenth Supplemental Trust Deed dated 8 July 2011 (the Tenth Supplemental Trust Deed, and, together with the Principal Trust Deed, the First Supplemental Trust Deed, the Second Supplemental Trust Deed, the Third Supplemental Trust Deed, the Fourth Supplemental Trust Deed, the Fifth Supplemental Trust Deed, the Sixth Supplemental Trust Deed, the Seventh Supplemental Trust Deed, the Eighth Supplemental Trust Deed and the Ninth Supplemental Trust Deed, the Subsisting Trust Deeds) made between the Issuer and the Trustee further modifying the provisions of the Principal Trust Deed. |
(B) | On 11 July 2013 the Issuer published a modified and updated Prospectus (the Prospectus) relating to the Programme. . |
NOW THIS ELEVENTH SUPPLEMENTAL TRUST DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED as follows:
1. | SUBJECT as hereinafter provided and unless there is something in the subject matter or context inconsistent therewith all words and expressions defined in the Principal Trust Deed (as modified and restated as aforesaid) shall have the same meanings in this Eleventh Supplemental Trust Deed. |
2. | SAVE: |
(a) | in relation to all Series of Notes the first Tranche of which was issued on or prior to the day last preceding the date of this Eleventh Supplemental Trust Deed; and |
(b) | for the purpose (where necessary) of construing the provisions of this Eleventh Supplemental Trust Deed, |
with effect on and from the date of this Eleventh Supplemental Trust Deed:
(i) | the Principal Trust Deed (as modified and/or restated as aforesaid) is further modified in such manner as would result in the Principal Trust Deed as so modified being in the form set out in the Schedule hereto; and |
(ii) | the provisions of the Principal Trust Deed (as modified and/or restated as aforesaid) insofar as the same still have effect shall cease to have effect and in lieu thereof the provisions of the Principal Trust Deed as so modified and restated (and being in the form set out in the Schedule hereto) shall have effect. |
3. | FOR the avoidance of doubt, the Principal Trust Deed (without the modifications made hereby but, where applicable, as modified and/or restated as aforesaid) shall continue to have effect in relation to all Series of Notes the first Tranche of which was issued on or prior to the day last preceding the date of this Eleventh Supplemental Trust Deed. |
4. | THE Subsisting Trust Deeds shall henceforth be read and construed as one document with this Eleventh Supplemental Trust Deed. |
2
5. | A Memorandum of the Eleventh Supplemental Trust Deed shall be endorsed by the Trustee on the Principal Trust Deed and by the Issuer on its duplicate thereof. |
IN WITNESS whereof this Eleventh Supplemental Trust Deed has been executed by the Issuer and the Trustee as a deed and delivered on the day and year first above written.
3
THE SCHEDULE
FORM OF MODIFIED PRINCIPAL TRUST DEED
TRUST DEED
16 JULY 1999
VODAFONE GROUP PLC
and
THE LAW DEBENTURE TRUST CORPORATION p.l.c.
relating to a
30,000,000,000
Euro Medium Term Note Programme
CONTENTS
Clause | Page | |||||
1. |
Definitions | 6 | ||||
2. |
Amount and issue of the Notes | 16 | ||||
3. |
Forms of the Notes | 19 | ||||
4. |
Fees, Duties and Taxes | 21 | ||||
5. |
Covenant of Compliance | 22 | ||||
6. |
Cancellation of Notes and Records | 22 | ||||
7. |
Enforcement | 23 | ||||
8. |
Proceedings, Action and Indemnification | 23 | ||||
9. |
Application of Moneys | 23 | ||||
10. |
Notice of Payments | 24 | ||||
11. |
Investment by Trustee | 24 | ||||
12. |
Partial Payments | 25 | ||||
13. |
Covenants | 25 | ||||
14. |
Remuneration and Indemnification of Trustee | 28 | ||||
15. |
Supplement to Trustee Acts | 29 | ||||
16. |
Trustees Liability | 33 | ||||
17. |
Trustee contracting with the Issuer | 33 | ||||
18. |
Waiver, Authorisation and Determination | 34 | ||||
19. |
Holder of Definitive Bearer Note assumed to be Couponholder | 34 | ||||
20. |
Substitution and consolidation merger, Conveyance, Transfer Or Lease | 35 | ||||
21. |
Currency Indemnity | 38 | ||||
22. |
New Trustee | 39 | ||||
23. |
Trustees Retirement and Removal | 39 | ||||
24. |
Trustees powers to be additional | 40 | ||||
25. |
Notices | 40 | ||||
26. |
Governing Law | 40 | ||||
27. |
Counterparts | 40 | ||||
28. |
Contracts (Rights of Third Parties) Act 1999 | 40 | ||||
Schedule |
||||||
1. |
Terms and Conditions of the Notes | 42 | ||||
2. |
Forms of Global and Definitive Notes, Certificates, Coupons and Talons | 73 | ||||
Part 1 Form of Temporary Global Note | 73 | |||||
Part 2 Form of Permanent Global Note | 83 | |||||
Part 3 Form of Regulation S Global Certificate | 93 | |||||
Part 4 Form of DTC Restricted Global Certificate | 98 | |||||
Part 5 Form of Definitive Note | 104 | |||||
Part 6 Form of Coupon | 108 | |||||
Part 7 Form of Talon | 109 | |||||
Part 8 Form of Regulation S Certificate | 111 | |||||
Part 9 Form of DTC Restricted Certificate | 116 | |||||
3. |
Provisions for Meetings of Noteholders | 121 | ||||
Signatories |
129 |
THIS TRUST DEED is made on 16 July 1999
BETWEEN:
(1) | VODAFONE GROUP PLC, a company incorporated with limited liability in England and Wales with registered number 1833679, whose registered office is Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England (the Issuer); and |
(2) | THE LAW DEBENTURE TRUST CORPORATION p.l.c., a company incorporated with limited liability in England and Wales with registered number 1675231, whose registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX, England (the Trustee, which expression shall, wherever the context so admits, include such company and all other persons or companies for the time being the trustee or trustees of these presents) as trustee for the Noteholders and the Couponholders (each as defined below). |
WHEREAS:
(1) | By a resolution of the Board of Directors of the Issuer passed on 24 May 1999 the Issuer has resolved to establish a Euro Medium Term Note Programme pursuant to which the Issuer may from time to time issue Notes as set out therein and herein. Notes up to a maximum nominal amount (calculated in accordance with Clause 3.5 of the Programme Agreement (as defined below)) from time to time outstanding of 30,000,000,000 (subject to increase as provided in the Programme Agreement) (the Programme Limit) may be issued pursuant to the said Programme. |
(2) | The Trustee has agreed to act as trustee of these presents for the benefit of the Noteholders and the Couponholders upon and subject to the terms and conditions of these presents. |
NOW THIS TRUST DEED WITNESSES AND IT IS AGREED AND DECLARED as follows:
1. DEFINITIONS
1.1 | In these presents unless there is anything in the subject or context inconsistent therewith the following expressions shall have the following meanings: |
Agents means, in relation to all or any Series of the Notes, the Issuing and Principal Paying Agent, the other Paying Agents, the Calculation Agent, the Registrar, the other Transfer Agents or any of them;
Agency Agreement means the amended and restated agency agreement dated 11 July 2013, as amended and/or supplemented and/or restated from time to time, pursuant to which the Issuer has appointed the Issuing and Principal Paying Agent and the other Agents in relation to all or any Series of the Notes and any other agreement for the time being in force appointing further or other Agents in relation to all or any Series of the Notes, or in connection with their duties, the terms of which have previously been approved in writing by the Trustee, together with any agreement for the time being in force amending or modifying with the prior written approval of the Trustee any of the aforesaid agreements;
Appointee means any attorney, manager, agent, delegate or other person appointed by the Trustee under these presents;
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Auditors means the auditors for the time being of the Issuer or, in the event of their being unable or unwilling promptly to carry out any action requested of them pursuant to the provisions of these presents, such other firm of accountants as may be nominated or approved by the Trustee for the purposes of these presents;
Bearer Note means a Note that is in bearer form;
Calculation Agency Agreement means in relation to all or any Series of the Notes an agreement in or substantially in the form of Schedule I to the Agency Agreement;
Calculation Agent means, in relation to all or any Series of the Notes, the person appointed as such from time to time pursuant to the provisions of the Calculation Agency Agreement or any Successor calculation agent in relation thereto;
Certificate means a Definitive or Global Certificate representing one or more Registered Notes of the same Series and, save as provided in the Conditions, comprising the entire holding by a Noteholder of his Registered Notes of that Series;
CGN means a Temporary Global Note or a Permanent Global Note and in either case in respect of which the applicable Final Terms do not specify that it is a New Global Note;
Clearstream, Luxembourg means Clearstream Banking, société anonyme;
Conditions means, in relation to the Notes of any Series, the terms and conditions endorsed on or incorporated by reference into the Note or Notes constituting or Certificate or certificates representing such Series, such terms and conditions being in or substantially in the form set out in the First Schedule or in such other form, having regard to the terms of issue of the Notes of the relevant Series, as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee and the relevant Dealer(s) as completed by the Final Terms applicable to the Notes of the relevant Series, in each case as from time to time modified in accordance with the provisions of these presents;
Coupon means an interest coupon appertaining to a Definitive Bearer Note (other than a Zero Coupon Note), such coupon being:
(a) | if appertaining to a Fixed Rate Note, in the form or substantially in the form set out in Part 6 A of the Second Schedule or in such other form, having regard to the terms of issue of the Notes of the relevant Series, as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee and the relevant Dealer(s); or |
(b) | if appertaining to a Floating Rate Note or an Inflation Linked Interest Note, in the form or substantially in the form set out in Part 6 B of the Second Schedule or in such other form, having regard to the terms of issue of the Notes of the relevant Series, as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee and the relevant Dealer(s); or |
(c) | if appertaining to a Definitive Note which is neither a Fixed Rate Note nor a Floating Rate Note nor an Inflation Linked Interest Note, in such form as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee and the relevant Dealer(s), |
and includes, where applicable, the Talon(s) appertaining thereto and any replacements for Coupons and Talons issued pursuant to Condition 11;
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Couponholders means the several persons who are for the time being holders of the Coupons and includes, where applicable, the holders of the Talons;
Dealers means the entities named as Dealers in the Programme Agreement and any other entity which the Issuer may appoint as a Dealer and notice of whose appointment has been given to the Agent and the Trustee by the Issuer in accordance with the provisions of the Programme Agreement but excluding any entity whose appointment has been terminated in accordance with the provisions of the Programme Agreement and notice of which termination has been given to the Issuing and Principal Paying Agent and the Trustee by the Issuer in accordance with the provisions of the Programme Agreement and references to a relevant Dealer or relevant Dealer(s) mean, in relation to any Tranche or Series of Notes, the Dealer or Dealers with whom the Issuer has agreed the issue of the Notes of such Tranche or Series and Dealer means any one of them;
Definitive Bearer Note means a bearer Note in definitive form issued or, as the case may require, to be issued by the Issuer in accordance with the provisions of the Programme Agreement or any other agreement between the Issuer and the relevant Dealer(s), the Agency Agreement and these presents in exchange for either a Temporary Global Note or part thereof or a Permanent Global Note (all as indicated in the applicable Final Terms), such bearer Note in definitive form being in the form or substantially in the form set out in Part 5 of the Second Schedule with such modifications (if any) as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee and the relevant Dealer(s) and having the Conditions endorsed thereon or, if permitted by the relevant Stock Exchange, incorporating the Conditions by reference (where applicable to this Trust Deed) as indicated in the applicable Final Terms and having the relevant information completing the Conditions appearing in the applicable Final Terms endorsed thereon or attached thereto and (except in the case of a Zero Coupon Note in bearer form) having Coupons and, where appropriate, Talons attached thereto on issue;
Definitive Certificate means a definitive Regulation S Certificate or DTC Restricted Certificate in or substantially in the form set out in Parts 8 and 9 of the Second Schedule, respectively with such modifications (if any) as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee, the Registrar and the relevant Dealer(s), representing one or more Regulation S Registered Notes or DTC Restricted Registered Notes, respectively of the same Series;
DTC means The Depository Trust Company;
DTC Restricted Certificate means a Definitive Certificate representing DTC Restricted Registered Notes in or substantially in the form set out in Part 9 of the Second Schedule, with such modifications (if any) as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee, the Registrar and the relevant Dealer(s), bearing the Rule 144A Legend and includes any replacement thereof issued pursuant to the Conditions and any DTC Restricted Global Certificate;
DTC Restricted Global Certificate means a Global Certificate in or substantially in the form set out in Part 4 of the Second Schedule with such modification (if any) as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee, the Registrar and the relevant Dealer(s), and bearing the Rule 144A Legend and the legends required by DTC;
DTC Restricted Registered Note means a Registered Note represented by a DTC Restricted Global Certificate or DTC Restricted Certificate, as the case may be;
Early Redemption Amount has the meaning ascribed thereto in Condition 7(e);
Early Termination Event has the meaning ascribed thereto in Condition 5(i)(ii)(E);
Euroclear means Euroclear Bank S.A./N.V.;
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Eurosystem-eligible NGN means a NGN which is intended to be held in a manner which would allow Eurosystem eligibility, as stated in the applicable Final Terms;
Event of Default means any of the conditions, events or acts provided in Condition 10(A) to be Events of Default (being events upon the happening of which the Notes of any Series would, subject only to declaration by the Trustee as therein provided, become immediately due and repayable);
Exchangeable Bearer Note means a Bearer Note that is exchangeable in accordance with its terms for a Registered Note;
Extraordinary Resolution has the meaning ascribed thereto in paragraph 20 of the Third Schedule in relation to any Series of Notes;
Final Terms has the meaning set out in the Programme Agreement;
Fixed Rate Note means a Note on which interest is calculated at a fixed rate payable in arrear on a fixed date or fixed dates in each year and on redemption or on such other dates as may be agreed between the Issuer and the relevant Dealer(s) (as indicated in the applicable Final Terms);
Floating Rate Note means a Note on which interest is calculated at a floating rate payable one-, two-, three-, six- or twelve-monthly or in respect of such other period or on such date(s) as may be agreed between the Issuer and the relevant Dealer(s) (as indicated in the applicable Final Terms);
Indexation Adviser has the meaning set out in Condition 5(a);
Global Certificate means a Regulation S Global Certificate or a DTC Restricted Global Certificate in or substantially in the forms set out in Part 3 and Part 4 of the Second Schedule, respectively, with such modifications (if any) as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee, the Registrar and the relevant Dealer(s), representing Regulation S Registered Notes or DTC Restricted Registered Notes, respectively, or one or more Tranches of the same Series that are registered in the name of a nominee for Euroclear, Clearstream, Luxembourg and/or DTC and/or any other clearing system;
Global Note means a Temporary Global Note and/or a Permanent Global Note, as the context may require;
Holding Company has the meaning ascribed thereto in Condition 15;
Inflation Linked Interest Note means a Note in respect of which the amount payable in respect of interest is calculated by reference to such index and/or formula or to changes in the prices of securities or commodities or to such other factors as the Issuer and the relevant Dealer(s) may agree (as indicated in the applicable Final Terms);
Inflation Linked Note means an Inflation Linked Interest Note and/or an Inflation Linked Redemption Amount Note, as applicable;
Inflation Linked Redemption Amount Note means a Note in respect of which the amount payable in respect of principal is calculated by reference to such index and/or formula or to changes in the prices of securities or commodities or to such other factors as the Issuer and the relevant Dealer(s) may agree (as indicated in the applicable Final Terms);
Interest Commencement Date means, in the case of interest-bearing Notes, the date specified in the applicable Final Terms from (and including) which such Notes bear interest, which may or may not be the Issue Date;
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Interest Payment Date means, in relation to any Floating Rate Note or Inflation Linked Interest Note, either:
(a) | the date which falls the number of months or other period specified as the Specified Period in the applicable Final Terms after the preceding Interest Payment Date or the Interest Commencement Date (in the case of the first Interest Payment Date); or |
(b) | such date or dates as are indicated in the applicable Final Terms; |
Issue Date means, in respect of any Note, the date of issue and purchase of such Note pursuant to and in accordance with the Programme Agreement or any other agreement between the Issuer and the relevant Dealer(s);
Issue Price means the price, generally expressed as a percentage of the nominal amount of the Notes, at which the Notes will be issued;
Issuing and Principal Paying Agent means, in relation to all or any Series of the Notes HSBC Bank plc at its office at 8 Canada Square, London E14 5HQ, England, or, if applicable, any Successor agent in relation thereto;
Liability means any loss, damage, cost, charge, claim, demand, expense, judgment, action, proceeding or other liability whatsoever (including, without limitation, in respect of taxes, duties, levies, imposts and other charges) and including any amount in respect of value added tax or similar tax charged or chargeable in respect thereof and legal fees and expenses on a full indemnity basis;
London Business Day has the meaning set out in Condition 4(b)(vii);
London Stock Exchange means the London Stock Exchange plc or such other body to which its functions have been transferred;
Market means the London Stock Exchanges regulated market which is a regulated market for the purposes of the Markets in Financial Instruments Directive;
Markets in Financial Instruments Directive means Directive 2004/39/EC;
Maturity Date means the date on which a Note is expressed to be redeemable;
NGN means a Temporary Global Note or a Permanent Global Note and in either case in respect of which the applicable Final Terms specify that the Global Note is a New Global Note;
Note means a note issued pursuant to the Programme and denominated in such currency or currencies as may be agreed between the Issuer and the relevant Dealer(s) which:
(a) | has such maturity as may be agreed between the Issuer and the relevant Dealer(s), subject to such minimum or maximum maturity as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the Issuer or the relevant currency; and |
(b) | has such denomination as may be agreed between the Issuer and the relevant Dealer(s), subject to such minimum denomination as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the relevant currency, |
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issued or to be issued by the Issuer pursuant to the Programme Agreement or any other agreement between the Issuer and the relevant Dealer(s), the Agency Agreement and these presents and which may be issued in bearer or registered form. Notes which are issued in bearer form shall initially be represented by, and comprised in, either (i) a Temporary Global Note which may (in accordance with the terms of such Temporary Global Note) be exchanged for Definitive Bearer Notes or Registered Notes or a Permanent Global Note, which Permanent Global Note may (in accordance with the terms of such Permanent Global Note) in turn be exchanged for Definitive Bearer Notes or Registered Notes or (ii) a Permanent Global Note which may (in accordance with the terms of such Permanent Global Note) be exchanged for Definitive Bearer Notes or Registered Notes and which shall, in the case of Registered Notes, initially be represented by, and comprised in, a Regulation S Global Certificate and/or a DTC Restricted Global Certificate each of which may, in accordance with their terms, in turn be exchanged for Definitive Certificates (all as indicated in the applicable Final Terms) and includes any replacements for a Note issued pursuant to Condition 11;
Noteholder and holder have the meaning given to them in the Conditions;
notice means, in respect of a notice to be given to Noteholders, a notice validly given pursuant to Condition 14;
NSS means the New Safekeeping Structure for registered global securities which are intended to constitute eligible collateral for Eurosystem monetary policy operations;
Official List has the meaning ascribed thereto in Section 103 of the Financial Services and Markets Act 2000;
outstanding in relation to the Notes, means all Notes issued other than:
(a) | those Notes which have been redeemed pursuant to these presents or the Conditions; |
(b) | those Notes in respect of which the date for redemption in accordance with the Conditions has occurred and the redemption moneys (including all interest payable thereon) have been duly paid to the Trustee or have been duly paid to the Issuing and Principal Paying Agent in the manner provided in the Agency Agreement (and where appropriate notice to that effect has been given to the relative Noteholders in accordance with Condition 14) and remain available for payment against presentation of the relevant Notes, Certificates and/or Coupons; |
(c) | those Notes which have been purchased and cancelled in accordance with Conditions 7(f) and (i); |
(d) | those Notes which have become void under Condition 9; |
(e) | those mutilated or defaced Bearer Notes which have been surrendered and cancelled and in respect of which replacements have been issued pursuant to Condition 11; |
(f) | (for the purpose only of ascertaining the nominal amount of the Notes outstanding and without prejudice to the status for any other purpose of the relevant Notes) those Bearer Notes which are alleged to have been lost, stolen or destroyed and in respect of which replacements have been issued pursuant to Condition 11; |
(g) | those Exchangeable Bearer Notes that have been exchanged for Registered Notes; and |
(h) | any Temporary Global Note to the extent that it shall have been exchanged for Definitive Bearer Notes or a Permanent Global Note and any Permanent Global Note to the extent that |
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it shall have been exchanged for Definitive Bearer Notes in each case pursuant to its provisions, the provisions of these presents and the Agency Agreement, |
PROVIDED THAT for each of the following purposes, namely:
(i) | the right to attend and vote at any meeting of the holders of the Notes of any Series; |
(j) | the determination of how many and which Notes of any Series are for the time being outstanding for the purposes of Clause 8.1, Conditions 10 and 15 and paragraphs 2, 5, 6 and 9 of the Third Schedule; |
(k) | any discretion, power or authority (whether contained in these presents or vested by operation of law) which the Trustee is required, expressly or impliedly, to exercise in or by reference to the interests of the holders of the Notes of any Series; and |
(l) | the determination by the Trustee whether any event, circumstance, matter or thing is, in its opinion, materially prejudicial to the interests of the holders of the Notes of any Series, |
those Notes of the relevant Series (if any) which are for the time being held by or on behalf of the Issuer, any Holding Company of the Issuer or any Subsidiary of the Issuer or such Holding Company, in each case as beneficial owner, shall (unless and until ceasing to be so held) be deemed not to remain outstanding. Save for the purposes of the proviso herein, in the case of each NGN, the Trustee shall rely on the records of Euroclear and Clearstream, Luxembourg in relation to any determination of the nominal amount outstanding of each NGN;
Paying Agents means, in relation to all or any Series of the Notes, the several institutions (including, where the context permits, the Issuing and Principal Paying Agent) at their respective specified offices initially appointed as paying agents in relation to such Notes by the Issuer pursuant to the Agency Agreement and/or, if applicable, any Successor paying agents in relation thereto;
Permanent Global Note means a global note in the form or substantially in the form set out in Part 2 of the Second Schedule with such modifications (if any) as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee and the relevant Dealer(s), together with the copy of the applicable Final Terms annexed thereto, comprising some or all of the Notes of the same Series, issued by the Issuer pursuant to the Programme Agreement or any other agreement between the Issuer and the relevant Dealer(s), the Agency Agreement and these presents;
Person means any individual, corporation, partnership, joint venture, trust, unincorporated organisation or government, or any agency or political sub-division thereof;
Potential Event of Default means any condition, event or act which, with the lapse of time and/or the giving of notice and/or the issue of any certificate, would constitute an Event of Default;
Programme means the Euro Medium Term Note Programme established by, or otherwise contemplated in, the Programme Agreement;
Programme Agreement means the agreement of even date herewith between the Issuer and the Dealers named therein concerning the purchase of Notes to be issued pursuant to the Programme together with any agreement for the time being in force amending, replacing, novating or modifying such agreement;
Reference Banks means, in relation to the Notes of any relevant Series, the several banks initially appointed as reference banks and/or, if applicable, any Successor reference banks in relation thereto;
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Register means the register maintained by the Registrar;
Registered Notes means those of the Notes which are for the time being in registered form and represented by a Certificate;
Registrar means, in relation to all or any Series of the Notes, HSBC Bank USA, National Association at its office at 452 Fifth Avenue, New York, NY 10018-2708, or, if applicable, any Successor Registrar in relation thereto;
Regulation S means Regulation S under the Securities Act;
Regulation S Certificate means a Definitive Certificate representing Regulation S Registered Notes in or substantially in the form set out in Part 8 of the Second Schedule, with such modifications (if any) as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee, the Registrar and the relevant Dealer(s), and includes any replacement thereof issued pursuant to the Conditions and any Regulation S Global Certificate;
Regulation S Global Certificate means a Global Certificate in or substantially in the form set out in Part 3 of the Second Schedule, with such modifications (if any) as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee, the Registrar and the relevant Dealer(s);
Regulation S Registered Note means a Registered Note represented by a Regulation S Certificate or a Regulation S Global Certificate, as the case may be;
Relevant Date has the meaning set out in Condition 8;
Relevant Jurisdiction has the meaning set out in Condition 8;
Renminbi Currency Event has the meaning set out in Condition 6(g);
Reorganisation means the conveyance, transfer or lease of the properties and assets of the Issuer substantially as an entirety to any Person that guarantees the Issuers obligations under these presents in accordance with this Clause;
repay, redeem and pay shall each include both the others and cognate expressions shall be construed accordingly;
Rule 144A Legend means the transfer restriction legend under the Securities Act set out in the form of DTC Restricted Certificate in Part 9 of the Second Schedule and the DTC Restricted Global Certificate in Part 4 of the Second Schedule;
Securities Act means the United States Securities Act of 1933, as amended;
Series means a Tranche of Notes together with any further Tranche or Tranches of Notes which are (a) expressed to be consolidated and form a single series and (b) identical in all respects (including as to listing) except for their respective Issue Dates, Interest Commencement Dates and/or Issue Prices and the expressions Notes of the relevant Series, holders of Notes of the relevant Series and related expressions shall be construed accordingly;
Stock Exchange means the London Stock Exchange or any other or further stock exchange(s) on which any Notes may from time to time be listed, and references in these presents to the relevant Stock Exchange shall, in relation to any Notes, be references to the Stock Exchange on which such Notes are, from time to time, or are intended to be, listed;
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Subsidiary means:
(a) | a subsidiary within the meaning of Section 736 of the Companies Act 1985, as amended by Section 144 of the Companies Act 1989; and |
(b) | unless the context otherwise requires, a subsidiary undertaking within the meaning of Section 1162 of the Companies Act 2006; |
Successor means, in relation to the Issuing and Principal Paying Agent, the other Paying Agents, the Reference Banks, the Calculation Agent, the Registrar and the Transfer Agents, any successor to any one or more of them in relation to the Notes which shall become such pursuant to the provisions of these presents and/or the Agency Agreement (as the case may be) and/or such other or further issuing and principal paying agent, paying agents, reference banks, calculation agent, registrar and transfer agents (as the case may be) in relation to the Notes as may (with the prior approval of, and on terms previously approved by, the Trustee in writing) from time to time be appointed as such, and/or, if applicable, such other or further specified offices (in the former case being within the same city as those for which they are substituted) as may from time to time be nominated, in each case by the Issuer and (except in the case of the initial appointments and specified offices made under and specified in the Conditions and/or the Agency Agreement, as the case may be) notice of whose appointment or, as the case may be, nomination has been given to the Noteholders;
Successor in Business means any company which, as the result of any amalgamation, merger or reconstruction the terms of which have previously been approved in writing by the Trustee:
(a) | owns beneficially the whole or substantially the whole of the undertaking, property and assets owned by the Issuer immediately prior thereto; and |
(b) | carries on, as successor to the Issuer, the whole or substantially the whole of the business carried on by the Issuer immediately prior thereto; |
Talons means the talons (if any) appertaining to, and exchangeable in accordance with the provisions therein contained for further Coupons appertaining to, the Definitive Bearer Notes (other than the Zero Coupon Notes), such talons being in the form or substantially in the form set out in Part 7 of the Second Schedule or in such other form as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee and the relevant Dealer(s) and includes any replacements for Talons issued pursuant to Condition 11;
TARGET2 System has the meaning set out in Condition 4(b)(i);
Temporary Global Note means a temporary global note in the form or substantially in the form set out in Part 1 of the Second Schedule with such modifications (if any) as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee and the relevant Dealer(s), together with the copy of the applicable Final Terms annexed thereto, comprising some or all of the Notes of the same Series, issued by the Issuer pursuant to the Programme Agreement or any other agreement between the Issuer and the relevant Dealer(s), the Agency Agreement and these presents;
these presents means this Trust Deed and the Schedules and any trust deed supplemental hereto and the Schedules (if any) thereto and the Notes, the Certificates, the Coupons, the Talons, the Conditions and, unless the context otherwise requires, the Final Terms, all as from time to time modified in accordance with the provisions herein or therein contained;
Tranche means all Notes which are identical in all respects (including as to listing);
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Transfer Agents means, in relation to all or any Series of the Notes, the several institutions at their respective specified offices initially appointed as transfer agents in relation to such Notes by the Issuer pursuant to the Agency Agreement and/or, if applicable, any Successor transfer agents in relation thereto;
Trust Corporation means a corporation entitled by rules made under the Public Trustee Act 1906 of Great Britain or entitled pursuant to any other comparable legislation applicable to a trustee in any other jurisdiction to carry out the functions of a custodian trustee;
Trustee Acts means the Trustee Act 1925 and the Trustee Act 2000;
UK Listing Authority means the Financial Service Authority in its capacity as competent authority under the Financial Services and Markets Act 2000;
United States has the meaning set out in Condition 8;
Zero Coupon Note means a Note on which no interest is payable;
words denoting the singular shall include the plural and vice versa;
words denoting one gender only shall include the other genders; and
words denoting persons only shall include firms and corporations and vice versa.
1.2 (a) | All references in these presents to principal and/or principal amount and/or interest in respect of the Notes or to any moneys payable by the Issuer under these presents shall, unless the context otherwise requires, be construed in accordance with Condition 7(e). |
(b) | All references in these presents to any statute or any provision of any statute shall be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under any such modification or re-enactment. |
(c) | All references in these presents to guarantees or to an obligation being guaranteed shall be deemed to include respectively references to indemnities or to an indemnity being given in respect thereof. |
(d) | All references in these presents to any action, remedy or method of proceeding for the enforcement of the rights of creditors shall be deemed to include, in respect of any jurisdiction other than England, references to such action, remedy or method of proceeding for the enforcement of the rights of creditors available or appropriate in such jurisdiction as shall most nearly approximate to such action, remedy or method of proceeding described or referred to in these presents. |
(e) | All references in these presents to Euroclear and/or Clearstream, Luxembourg and/or DTC shall, whenever the context so permits (but not in the case of any NGN or any Registered Global Note held under the NSS), be deemed to include references to any additional or alternative clearing system as is approved by the Issuer, the Issuing and Principal Paying Agent and the Trustee. |
(f) | Unless the context otherwise requires words or expressions used in these presents shall bear the same meanings as in the Companies Act 2006 of Great Britain. |
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(g) | In this Trust Deed references to Schedules, Clauses, subclauses, paragraphs and subparagraphs shall be construed as references to the Schedules to this Trust Deed and to the Clauses, subclauses, paragraphs and subparagraphs of this Trust Deed respectively. |
(h) | In these presents tables of contents and Clause headings are included for ease of reference and shall not affect the construction of these presents. |
(i) | All references in these presents involving compliance by the Trustee with a test of reasonableness shall be deemed to include a reference to a requirement that such reasonableness shall be determined by reference solely to the interests of the holders of the Notes of the relevant one or more series as a class. |
(j) | All references in these presents to the records of Euroclear and Clearstream, Luxembourg shall be to the records that each of Euroclear and Clearstream, Luxembourg holds for its customers which reflect the amount of such customers interest in the Notes. |
1.3 | Words and expressions defined in these presents or the Agency Agreement or used in the applicable Final Terms shall have the same meanings where used herein unless the context otherwise requires or unless otherwise stated and provided that, in the event of inconsistency between the Agency Agreement and these presents, these presents shall prevail and, in the event of inconsistency between the Agency Agreement or these presents and the applicable Final Terms, the applicable Final Terms shall prevail. |
1.4 | All references in these presents to the relevant currency shall be construed as references to the currency in which payments in respect of the Notes and/or Coupons of the relevant Series are to be made as indicated in the applicable Final Terms. |
1.5 | All references in these presents to Notes being listed or having a listing shall, in relation to the London Stock Exchange, be construed to mean that such Notes have been admitted to the Official List by the UK Listing Authority and to trading on the Market and all references in these presents to listing or listed shall include references to quotation and quoted respectively and, in relation to any other European Economic Area Stock Exchange, listed or having a listing shall be construed to mean that such Notes have been admitted to trading on a market with that jurisdiction which is a Market. |
1.6 | Wherever in these presents there is a requirement for the consent of, or a request from, the Noteholders, then, for so long as any of the Registered Notes is registered in the name of DTC or its nominee and represented by a DTC Restricted Global Certificate, DTC may send an omnibus proxy to the Issuer in accordance with and in the form used by DTC as part of its usual procedures from time to time. Such omnibus proxy shall assign the right to give such consent or, as the case may be, make such request to DTCs direct participants as of the record date specified therein any such assignee participant may give the relevant consent or, as the case may be make the relevant request in accordance with these presents. |
2. | AMOUNT AND ISSUE OF THE NOTES |
2.1 | Amount of the Notes, Final Terms and Legal Opinions |
The Notes will be issued in Series in an aggregate nominal amount from time to time outstanding not exceeding the Programme Limit from time to time and for the purpose of determining such aggregate nominal amount Clause 3(5) of the Programme Agreement shall apply.
By not later than 10.00 a.m. (London time) on the London Business Day preceding each proposed Issue Date, the Issuer shall deliver or cause to be delivered to the Trustee a draft of the applicable
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Final Terms and drafts of all legal opinions (if any) to be given in relation to the proposed issue and shall notify the Trustee in writing without delay of the relevant Issue Date and the nominal amount of the Notes to be issued and upon the issue of the relevant Notes shall deliver or cause to be delivered to the Trustee a copy of the final form of the applicable Final Terms. Upon the issue of the relevant Notes, such Notes shall become constituted by these presents without further formality.
Before the first issue of Notes occurring after each anniversary of this Trust Deed , and on such other occasions as the Trustee so requests (if (a) the Trustee considers it necessary in view of a change (or proposed change) in applicable law or regulations (or the interpretation or application thereof) affecting the Issuer, these presents, the Programme Agreement or the Agency Agreement, or (b) the Trustee has other reasonable grounds for such request), the Issuer will procure that a further legal opinion or further legal opinions in such form and with such content as the Trustee may require from the legal advisers specified in the Programme Agreement or such other legal advisers as the Trustee may require is/are delivered to the Trustee. Whenever such a request is made with respect to any Notes to be issued, the receipt of such opinion(s) in a form satisfactory to the Trustee shall be a further condition precedent to the issue of those Notes.
2.2 | Covenant to repay principal and to pay interest |
The Issuer covenants with the Trustee that it will, as and when the Notes of any Series or any of them becomes due to be redeemed in accordance with the Conditions, unconditionally pay or procure to be paid to or to the order of the Trustee, in the case of any relevant currency other than euro, in the principal financial centre for the relevant currency and, in the case of euro, in a city in which banks have access to the TARGET2 System in each case in immediately available funds the principal amount in respect of the Notes of such Series becoming due for redemption on that date and (except in the case of Zero Coupon Notes) shall (subject to the provisions of the Conditions) in the meantime and until redemption in full of the Notes of such Series (both before and after any judgment or other order of a court of competent jurisdiction) unconditionally pay or procure to be paid to or to the order of the Trustee as aforesaid interest (which shall accrue from day to day) on the nominal amount of the Notes outstanding of such Series at rates and/or in amounts calculated from time to time in accordance with, or specified in, and on the dates provided for in, the Conditions (subject to Clause 2.4) PROVIDED THAT:
(a) | every payment of principal or interest or other sum due in respect of the Notes made to or to the order of the Issuing and Principal Paying Agent in the manner provided in the Agency Agreement shall be in satisfaction pro tanto of the relative covenant by the Issuer in this Clause contained in relation to the Notes of such Series (including, in the case of Notes represented by a NGN, whether or not the corresponding entries have been made in the records of Euroclear and Clearstream, Luxembourg) except to the extent that there is a default in the subsequent payment thereof in accordance with the Conditions to the relevant Noteholders or Couponholders (as the case may be); |
(b) | in the case of any payment of principal made to the Trustee or the Issuing and Principal Paying Agent after the due date or on or after accelerated maturity following an Event of Default interest shall continue to accrue on the nominal amount of the relevant Notes (except in the case of Zero Coupon Notes to which the provisions of Condition 6(f) shall apply) (both before and after any judgment or other order of a court of competent jurisdiction) at the rates aforesaid (or, if higher, the rate of interest on judgment debts for the time being provided by English law) up to and including the date which the Trustee determines to be the date on and after which payment is to be made in respect thereof as stated in a notice given to the holders of such Notes (such date to be not later than 30 days after the day on which the whole of such principal amount, together with an amount equal to the interest which has accrued and is to accrue pursuant to this proviso up to and including that date, has been received by the Trustee or the Issuing and Principal Paying Agent); and |
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(c) | in any case where payment of the whole or any part of the principal amount of any Note is improperly withheld or refused upon due presentation thereof or of the Certificate in respect thereof (other than in circumstances contemplated by 2.2(b) above), interest shall accrue on the nominal amount of such Note (except in the case of Zero Coupon Notes to which the provisions of Condition 5(j) shall apply) payment of which has been so withheld or refused (both before and after any judgment or other order of a court of competent jurisdiction) at the rates aforesaid (or, if higher, the rate of interest on judgment debts for the time being provided by English law) from the date of such withholding or refusal until the date on which, upon further presentation of the relevant Note or Certificate, as the case may be, payment of the full amount (including interest as aforesaid) in the relevant currency payable in respect of such Note is made or (if earlier) the seventh day after notice is given to the relevant Noteholder(s) (whether individually or in accordance with Condition 14) that the full amount (including interest as aforesaid) in the relevant currency in respect of such Note is available for payment, provided that, upon further presentation thereof being duly made, such payment is made. |
The Trustee will hold the benefit of this covenant on trust for the Noteholders and the Couponholders and itself in accordance with these presents.
2.3 | Trustees requirements regarding Agents etc |
At any time after an Event of Default or a Potential Event of Default shall have occurred or the Trustee shall have received any money which it proposes to pay under Clause 9 to the relevant Noteholders and/or Couponholders, the Trustee may:
(a) | by notice in writing to the Issuer and the Agents require the Agents pursuant to the Agency Agreement: |
(i) | to act thereafter as Agents of the Trustee in relation to payments to be made by or on behalf of the Trustee under the terms of these presents mutatis mutandis on the terms provided in the Agency Agreement (save that the Trustees liability under any provisions thereof for the indemnification, remuneration and payment of out-of-pocket expenses of the Agents shall be limited to the amounts for the time being held by the Trustee on the trusts of these presents relating to the Notes of the relevant Series and the relative Certificates and Coupons and available for such purpose) and thereafter to hold all Notes and Coupons and all sums, documents and records held by them in respect of Notes, Certificates and Coupons on behalf of the Trustee; or |
(ii) | to deliver up all Notes, Certificates and Coupons and all sums, documents and records held by them in respect of Notes, Certificates and Coupons, in each case held by them in their capacity as Agent, to the Trustee or as the Trustee shall direct in such notice provided that such notice shall be deemed not to apply to any documents or records which the relevant Agent is obliged not to release by any law or regulation; and |
(b) | by notice in writing to the Issuer require it to make all subsequent payments in respect of the Notes and Coupons to or to the order of the Trustee and not to the Issuing and Principal Paying Agent and, with effect from the issue of any such notice to the Issuer and until such notice is withdrawn, proviso (i) to subclause 2.2 of this Clause relating to the Notes shall cease to have effect. |
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2.4 | Rate of interest after Notes due and repayable under Condition 10(A) |
If the Floating Rate Notes or Inflation Linked Interest Notes of any Series become immediately due and repayable under Condition 10(A) the rate and/or amount of interest payable in respect of them will be calculated at the same intervals as if such Notes had not become due and repayable, the first of which will commence on the expiry of the Interest Period during which the Notes of the relevant Series become so due and repayable mutatis mutandis in accordance with the provisions of Condition 4(b) except that the rates of interest need not be published.
2.5 | Currency of payments |
All payments in respect of, under and in connection with these presents and the Notes of any Series to the relevant Noteholders and Couponholders shall be made in the relevant currency.
2.6 | Further Notes |
The Issuer shall be at liberty from time to time (but subject always to the provisions of these presents) without the consent of the Noteholders or Couponholders to create and issue further Notes ranking pari passu in all respects (or in all respects save for the date from which interest thereon accrues and the amount of the first payment of interest on such further Notes) and so that the same shall be consolidated and form a single series with the outstanding Notes of a particular Series.
2.7 | Separate Series |
The Notes of each Series shall form a separate Series of Notes and accordingly, unless for any purpose the Trustee in its absolute discretion shall otherwise determine, the provisions of this Clause and of Clauses 3 to 21 (both inclusive) and 22.2 and the Third Schedule shall apply mutatis mutandis separately and independently to the Notes of each Series and in such Clauses and Schedule the expressions Notes, Noteholders, Coupons, Couponholders and Talons shall be construed accordingly.
3. | FORMS OF THE NOTES |
3.1 | Global Notes |
(a) | The Notes of each Tranche will initially be represented by either: |
(i) | in the case of Bearer Notes, a single Temporary Global Note which shall be exchangeable for either Definitive Bearer Notes together with, where applicable, (except in the case of Zero Coupon Notes) Coupons and, where applicable, Talons attached or a Permanent Global Note or (in the case of Exchangeable Bearer Notes) Registered Notes, in each case in accordance with the provisions of such Temporary Global Note. Each Permanent Global Note shall be exchangeable for Definitive Bearer Notes together with, where applicable, (except in the case of Zero Coupon Notes) Coupons and, where applicable, Talons attached or (in the case of Exchangeable Bearer Notes) Registered Notes, in accordance with the provisions of such Permanent Global Note; or |
(ii) | in the case of Bearer Notes, a single Permanent Global Note which shall be exchangeable for Definitive Bearer Notes together with, where applicable, (except in the case of Zero Coupon Notes) Coupons and, where applicable, Talons attached or (in the case of Exchangeable Bearer Notes) Registered Notes, in accordance with provisions of such Permanent Global Note; or |
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(iii) | in the case of Registered Notes which are sold outside the United States in offshore transactions within the meaning of Regulation S, a Regulation S Global Certificate which will be exchangeable for Regulation S Certificates and/or Notes represented by a DTC Restricted Global Certificate in accordance with the provisions of such Regulation S Global Certificates; or |
(iv) | in the case of Registered Notes which are sold in the United States, to qualified institutional buyers within the meaning of Rule 144A, a DTC Restricted Global Certificate which will be exchangeable for DTC Restricted Certificates and/or Notes represented by a Regulation S Global Certificate in accordance with the provisions of such DTC Restricted Global Certificate. |
All Global Notes shall be prepared, completed and delivered to a common depositary (in the case of a CGN) or common safekeeper (in the case of a NGN or Registered Notes held under the NSS) for Euroclear and Clearstream, Luxembourg, each Regulation S Global Certificate shall be prepared, completed and delivered to, and registered in the name of a nominee of, a common depositary or common safekeeper for Euroclear and Clearstream, Luxembourg and each DTC Restricted Global Certificate shall be prepared, completed and delivered to a custodian for and registered in the name of a nominee of DTC, in each case in accordance with the provisions of the Programme Agreement or to or with or in the name of another appropriate custodian, nominee or depositary in accordance with any other agreement between the Issuer and the relevant Dealer(s) and, in each case, the Agency Agreement.
(b) | Each Temporary Global Note shall be printed or typed in the form or substantially in the form set out in Part 1 of the Second Schedule and may be a facsimile. Each Temporary Global Note shall have annexed thereto a copy of the applicable Final Terms and shall be signed manually or in facsimile by a person duly authorised by the Issuer on behalf of the Issuer and shall be authenticated by or on behalf of the Issuing and Principal Paying Agent and shall, in the case of a Eurosystem-eligible NGN, be effectuated by the common safekeeper acting on the instructions of the Issuing and Principal Paying Agent. Each Temporary Global Note so executed and authenticated (and effectuated, if applicable) shall be a binding and valid obligation of the Issuer and title thereto shall pass by delivery. |
(c) | Each Permanent Global Note shall be printed or typed in the form or substantially in the form set out in Part 2 of the Second Schedule and may be a facsimile. Each Permanent Global Note shall have annexed thereto a copy of the applicable Final Terms and shall be signed manually or in facsimile by a person duly authorised by the Issuer on behalf of the Issuer and shall be authenticated by or on behalf of the Issuing and Principal Paying Agent and shall, in the case of a Eurosystem-eligible NGN, be effectuated by the common safekeeper acting on the instructions of the Issuing and Principal Paying Agent. Each Permanent Global Note so executed and authenticated (and effectuated, if applicable) shall be a binding and valid obligation of the Issuer and title thereto shall pass by delivery. |
(d) | Each Regulation S Global Certificate shall be printed or typed in the form or substantially in the form set out in Part 3 of the Second Schedule and may be a facsimile. Each Regulation S Global Certificate shall have annexed thereto a copy of the applicable Final Terms and shall be signed manually or in facsimile by a person duly authorised by the Issuer on behalf of the Issuer and shall be authenticated by or on behalf of the Registrar and shall, in the case of Notes intended to be held under the NSS, be effectuated by the common safekeeper acting on the instructions of the Issuer. Each Regulation S Global Certificate shall be valid evidence of binding and valid obligations of the Issuer and title thereto shall pass upon registration in the Register. |
(e) | Each DTC Restricted Global Certificate shall be printed or typed in the form or substantially in the form set out in Part 4 of the Second Schedule and may be a facsimile. Each DTC Restricted Global |
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Certificate shall have annexed thereto a copy of the applicable Final Terms and shall be signed manually or in facsimile by a person duly authorised by the Issuer on behalf of the Issuer and shall be authenticated by or on behalf of the Registrar. Each DTC Restricted Global Certificate shall be valid evidence of binding and valid obligations of the Issuer and title thereto shall pass upon registration in the Register.
3.2 | Definitive Bearer Notes |
(a) | The Definitive Bearer Notes, the Coupons and the Talons shall be to bearer in the respective forms or substantially in the respective forms set out in Parts 5, 6 and 7 respectively, of the Second Schedule. The Definitive Bearer Notes, the Coupons and the Talons shall be serially numbered and, if listed or quoted, shall be security printed in accordance with the requirements (if any) from time to time of the relevant Stock Exchange and the relevant Conditions shall be incorporated by reference (where applicable to these presents) into such Definitive Bearer Notes if permitted by the relevant Stock Exchange (if any), or, if not so permitted, the Definitive Bearer Notes shall be endorsed with or have attached thereto the relevant Conditions, and, in either such case, the Definitive Bearer Notes shall have endorsed thereon or attached thereto a copy of the applicable Final Terms (or the relevant provisions thereof). Title to the Definitive Bearer Notes, the Coupons and the Talons shall pass by delivery. |
(b) | The Definitive Bearer Notes shall be signed manually or in facsimile by a person duly authorised by the Issuer on behalf of the Issuer and shall be authenticated by or on behalf of the Issuing and Principal Paying Agent. The Definitive Bearer Notes so executed and authenticated, and the Coupons and Talons, upon execution and authentication of the relevant Definitive Bearer Notes, shall be binding and valid obligations of the Issuer. The Coupons and the Talons shall not be signed. No Definitive Bearer Note and none of the Coupons or Talons appertaining to such Definitive Bearer Note shall be binding or valid until such Definitive Bearer Note shall have been executed and authenticated as aforesaid. |
3.3 | Definitive Certificates |
(a) | The DTC Restricted Certificates and Regulation S Certificates shall be in the respective forms or substantially in the respective forms set out in Parts 8 and 9, respectively of the Second Schedule and shall be printed in accordance with applicable legal and stock exchange requirements. Title to such certificates shall pass upon registration in the Register. |
(b) | The DTC Restricted Certificates and Regulation S Certificates shall be signed manually or in facsimile by a person duly authorised by the Issuer on behalf of the Issuer and shall be authenticated by or on behalf of the Registrar. The DTC Restricted Certificates and Regulation S Certificates so executed and authenticated shall be valid evidence of binding and valid obligations of the Issuer. Title to such Certificates shall pass upon registration in the Register. |
3.4 | Facsimile signatures |
The Issuer may use the facsimile signature of any person who at the date such signature is affixed to a Global Note or a Definitive Bearer Note or a Certificate is duly authorised by the Issuer notwithstanding that at the time of issue of such Note or Certificate he may have ceased for any reason to be so authorised or to hold such office. |
4. | FEES, DUTIES AND TAXES |
The Issuer will pay any stamp, issue, registration, documentary and other fees, duties or taxes (if any), including interest and penalties, payable (a) in the United Kingdom, Belgium, Luxembourg and the United States of America on or in connection with (i) the execution and delivery of these |
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presents and (ii) the constitution and original issue of the Notes, the Certificates and the Coupons and (b) in any jurisdiction on or in connection with any action taken by or on behalf of the Trustee or (where permitted under these presents so to do) any Noteholder or Couponholder to enforce, or to resolve any doubt concerning, or for any other purpose in relation to, these presents. |
5. | COVENANT OF COMPLIANCE |
The Issuer covenants with the Trustee that it will comply with and perform and observe all the provisions of these presents which are expressed to be binding on it. The Notes and the Coupons shall be held subject to the provisions contained in these presents and the Conditions shall be binding on the Issuer, the Trustee, the Noteholders and the Couponholders and all persons claiming through or under them. The Trustee shall be entitled to enforce the obligations of the Issuer under the Notes, the Coupons and the Conditions in the manner therein provided as if the same were set out and contained in this Trust Deed, which shall be read and construed as one document with the Notes and the Coupons. The Trustee shall hold the benefit of this covenant upon trust for itself and the Noteholders and the Couponholders according to its and their respective interests.
6. | CANCELLATION OF NOTES AND RECORDS |
6.1 | The Issuer shall procure that all Notes issued by it (a) redeemed or (b) purchased for cancellation by or on behalf of the Issuer or any Subsidiary of the Issuer and surrendered for cancellation or (c) which, being Bearer Notes which have been mutilated or defaced, have been surrendered and replaced pursuant to Condition 11 or (d) exchanged as provided in these presents (together in each case, in the case of Definitive Bearer Notes, with all unmatured Coupons attached thereto or delivered therewith) and, in the case of Definitive Bearer Notes, all relative Coupons paid in accordance with the relevant Conditions or which, being mutilated or defaced, have been surrendered and replaced pursuant to Condition 11 shall forthwith be cancelled by or on behalf of the Issuer and a certificate stating: |
(a) | the aggregate nominal amount of Notes which have been redeemed and the amounts paid in respect thereof and the aggregate amounts in respect of Coupons which have been paid; |
(b) | the serial numbers of such Notes in definitive form or the Certificates representing Registered Notes; |
(c) | the total numbers (where applicable, of each denomination) by maturity date of such Coupons; |
(d) | the aggregate amount of interest paid (and the due dates of such payments) on Global Notes and Registered Notes; |
(e) | the aggregate nominal amount of Notes (if any) which have been purchased by or on behalf of the Issuer or any Subsidiary of the Issuer and cancelled and the serial numbers of such Notes in definitive form or of the Certificates representing Registered Notes and, in the case of Definitive Bearer Notes, the total number (where applicable, of each denomination) by maturity date of the Coupons and Talons attached thereto or surrendered therewith; |
(f) | the aggregate nominal amounts of Notes and the aggregate amounts in respect of Coupons which have been so exchanged or surrendered and replaced and the serial numbers of such Notes in definitive form or of the Certificates representing Registered Notes and the total number (where applicable, of each denomination) by maturity date of such Coupons and Talons; and |
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(g) | the total number (where applicable, of each denomination) by maturity date of Talons which have been exchanged for further Coupons |
shall be given to the Trustee by or on behalf of the Issuer as soon as possible and in any event within four months after the date of such redemption, purchase, payment, exchange or replacement (as the case may be). The Trustee may accept such certificate as conclusive evidence of redemption, purchase, exchange or replacement pro tanto of the Notes or payment of interest thereon or exchange of the relative Talons respectively and of cancellation of the relative Notes and Coupons.
6.2 | The Issuer shall procure (a) that the Issuing and Principal Paying Agent and/or the Registrar shall keep a full and complete record of all Notes, Coupons and Talons issued by it (other than serial numbers of Coupons) and of their redemption or purchase and cancellation and of all replacement notes, coupons or talons issued in substitution for lost, stolen, mutilated, defaced or destroyed Bearer Notes, Coupons or Talons and of all transfers and exchanges of Registered Notes (b) that the Agent and the Registrar shall, in respect of the Coupons of each maturity where the relevant Bearer Note is redeemed prior to its maturity date, retain until the expiry of 10 years from the Relevant Date in respect of such Coupons a list of the Coupons of that maturity still remaining unpaid or unexchanged and (c) that such records shall be made available to the Trustee during normal business hours. |
7. | ENFORCEMENT |
7.1 | The Trustee may at any time, at its discretion and without notice, take such proceedings and/or other action as it may think fit against or in relation to the Issuer to enforce its obligations under these presents. |
7.2 | Proof that as regards any specified Note or Coupon the Issuer has made default in paying any amount due in respect of such Note or Coupon shall (unless the contrary be proved) be sufficient evidence that the same default has been made as regards all other Notes or Coupons (as the case may be) in respect of which the relevant amount is due and payable. |
8. | PROCEEDINGS, ACTION AND INDEMNIFICATION |
8.1 | The Trustee shall not be bound to take any proceedings mentioned in Condition 10 or any other action in relation to these presents unless respectively directed or requested to do so (a) by an Extraordinary Resolution or (b) in writing by the holders of at least one-quarter in nominal amount of the Notes then outstanding and in either case then only if it shall be indemnified and/or secured and/or prefunded by the relevant Noteholders to its satisfaction against all proceedings, claims and demands to which it may be liable and against all costs, charges, liabilities and expenses which may be incurred by it in connection with such enforcement, including the costs of its managements time and/or other internal resources, calculated using its normal hourly rates in force from time to time. |
8.2 | Only the Trustee may enforce the provisions of these presents. No Noteholder or Couponholder shall be entitled to proceed directly against the Issuer to enforce the performance of any of the provisions of these presents unless the Trustee having become bound as aforesaid to take proceedings fails to do so within a reasonable period and such failure is continuing. |
9. | APPLICATION OF MONEYS |
All moneys received by the Trustee under these presents from the Issuer (including any moneys which represent principal or interest in respect of Notes or Coupons which have become void, or in respect of claims which have become prescribed, under Condition 9) shall, unless and to the extent attributable, in the opinion of the Trustee, to a particular Series of the Notes, be apportioned pari passu and rateably between each Series of the Notes, and all moneys received by the Trustee under these presents from the Issuer to the extent attributable in the opinion of the Trustee to a particular
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Series of the Notes or which are apportioned to such Series as aforesaid, be held by the Trustee upon trust to apply them (subject to Clause 11):
FIRST in payment or satisfaction of all amounts then due and unpaid under Clauses 14 and/or 15(j) to the Trustee and/or any Appointee;
SECONDLY in or towards payment pari passu and rateably of all principal and interest then due and unpaid in respect of the Notes of that Series;
THIRDLY in or towards payment pari passu and rateably of all principal and interest then due and unpaid in respect of the Notes of each other Series; and
FOURTHLY in payment of the balance (if any) to the Issuer (without prejudice to, or liability in respect of, any question as to how such payment to the Issuer shall be dealt with as between the Issuer and any other person),
PROVIDED ALWAYS that any payment required to be made by the Trustee pursuant to these presents shall only be made subject to any applicable laws and regulations.
10. | NOTICE OF PAYMENTS |
The Trustee shall give notice to the relevant Noteholders in accordance with Condition 14 of the day fixed for any payment to them under Clause 9. Such payment may be made in accordance with Condition 6 and any payment so made shall be a good discharge to the Trustee.
11. | INVESTMENT BY TRUSTEE |
11.1 | If the amount of the moneys at any time available for the payment of principal and interest in respect of the Notes issued by the Issuer under Clause 9 shall be less than 10% of the nominal amount of the Notes then outstanding the Trustee may at its discretion invest such moneys in some or one of the investments authorised below. The Trustee at its discretion may vary such investments and may accumulate such investments and the resulting income until the accumulations, together with any other funds for the time being under the control of the Trustee and available for such purpose, amount to at least 10% of the nominal amount of the Notes then outstanding and then such accumulations and funds shall be applied under Clause 9. |
11.2 | Any moneys which under the trusts of these presents ought to or may be invested by the Trustee may be invested in the name or under the control of the Trustee (or, if required to comply with applicable law a custodian, co-trustee or separate trustee appointed by it) in any investments for the time being authorised by law for the investment by trustees of trust moneys or in any other investments whether similar to the aforesaid or not which may be selected by the Trustee or by placing the same on deposit in the name or under the control of the Trustee (or, if required to comply with applicable law a custodian, co-trustee or separate trustee appointed by it) at such bank or other financial institution and in such currency as the Trustee may think fit. If that bank or institution is the Trustee or a Subsidiary, holding or associated company of the Trustee, it need only account for an amount of interest equal to the amount of interest which would, at then current rates, be payable by it on such a deposit to an independent customer. The Trustee may at any time vary any such investments for or into other investments or convert any moneys so deposited into any other currency and shall not be responsible for any loss resulting from any such investments or deposits, whether due to depreciation in value, fluctuations in exchange rates or otherwise. |
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12. | PARTIAL PAYMENTS |
Upon any payment under Clause 9 (other than payment in full against surrender of a Note, Certificate or Coupon) the Note, Certificate or Coupon in respect of which such payment is made shall (except in the case of a NGN or a Registered Global Note held under the NSS) be produced to the Trustee or the Paying Agent by or through whom such payment is made and the Trustee shall or shall cause such Paying Agent to enface thereon a memorandum of the amount and the date of payment but the Trustee may in any particular case dispense with such production and enfacement upon such indemnity being given as it shall think sufficient.
13. | COVENANTS |
The Issuer covenants with the Trustee that, so long as any of the Notes remains outstanding (or, in the case of paragraphs (f), (g), (i), (k) and (q), so long as any of the Notes or the relative Coupons remains liable to prescription or, in the case of subparagraph (m), until the expiry of a period of 30 days after the Relevant Date) it shall:
(a) | give or procure to be given to the Trustee such opinions, certificates and information as it shall reasonably require and in such form as it shall reasonably require (including without limitation the procurement of all such certificates called for by the Trustee pursuant to Clause 16.3 and advice of the Indexation Adviser pursuant to Condition 5) for the purpose of the discharge or exercise of the duties, trusts, powers, authorities and discretions vested in it under these presents or by operation of law; |
(b) | at all times keep and procure its Subsidiaries to keep proper books of account and, following the occurrence of an Event of Default or Potential Event of Default or if the Trustee reasonably considers that any such event is likely to occur, allow and procure its Subsidiaries to allow the Trustee and any person appointed by the Trustee to whom the Issuer or the relevant Subsidiary (as the case may be) shall have no reasonable objection free access to such books of account during normal business hours; |
(c) | send to the Trustee (in addition to any copies to which it may be entitled as a holder of any securities of the Issuer) two copies in English of every balance sheet, profit and loss account, report, circular and notice of general meeting and every other document (other than documents of a promotional, advertising or marketing nature only) issued or sent to its shareholders together with any of the foregoing, and every document issued or sent to holders of securities other than its shareholders (including the Noteholders) as soon as practicable after the issue or publication thereof; |
(d) | forthwith give notice in writing to the Trustee of the happening of any Event of Default or any Potential Event of Default, Renminbi Currency Event or Early Termination Event; |
(e) | give to the Trustee (i) within 14 days after demand by the Trustee therefor and (ii) (without the necessity for any such demand) promptly after the publication of its audited accounts in respect of each financial year commencing with the financial year ended 31 March 1999 and in any event not later than 180 days after the end of each such financial year a certificate signed by two Directors of the Issuer to the effect that, to the best of the knowledge, information and belief of the persons so certifying, they having made all reasonable enquiries, as at a date not more than seven days before delivering such certificate (the relevant certification date) there did not exist and had not existed since the relevant certification date of the previous certificate (or in the case of the first such certificate the date hereof) any Event of Default or any Potential Event of Default (or if such exists or existed specifying the same) and that during the period from and including the relevant certification date of the last such certificate (or in the case of the first such certificate the date hereof) to |
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and including the relevant certification date of such certificate the Issuer has complied with all its obligations contained in these presents or (if such is not the case) specifying the respects in which it has not complied; |
(f) | so far as permitted by law, at all times execute all such further documents and do all such acts and things as may in the opinion of the Trustee be necessary at any time or times to give effect to the terms and conditions of these presents; |
(g) | at all times maintain an Issuing and Principal Paying Agent, other Paying Agents, a Calculation Agent, Reference Banks, a Registrar and Transfer Agents in accordance with the Conditions; |
(h) | use all reasonable endeavours to procure the Issuing and Principal Paying Agent to notify the Trustee forthwith in the event that it does not, on or before the due date for any payment in respect of the Notes or any of them or any of the relative Coupons, receive unconditionally pursuant to the Agency Agreement payment of the full amount in the relevant currency of the moneys payable on such due date on all such Notes or Coupons as the case may be; |
(i) | in the event of the unconditional payment to the Issuing and Principal Paying Agent or the Trustee of any sum due in respect of the Notes or any of them or any of the relative Coupons being made after the due date for payment thereof forthwith give or procure to be given notice to the relevant Noteholders in accordance with Condition 14 that such payment has been made; |
(j) | if the applicable Final Terms indicates that the Notes are listed, use all reasonable endeavours to maintain the quotation or listing on the relevant Stock Exchange of those of the Notes which are quoted or listed on the relevant Stock Exchange or, if it is unable to do so having used all reasonable endeavours, use all reasonable endeavours to obtain and maintain a quotation or listing of such Notes on such other stock exchange or exchanges or securities market or markets as the Issuer may (with the prior written approval of the Trustee) decide and shall also upon obtaining a quotation or listing of such Notes on such other stock exchange or exchanges or securities market or markets enter into a trust deed supplemental to this Trust Deed to effect such consequential amendments to these presents as the Trustee may require or as shall be requisite to comply with the requirements of any such stock exchange or securities market; |
(k) | give notice to the Noteholders in accordance with Condition 14 of any appointment, resignation or removal of any Issuing and Principal Paying Agent, Calculation Agent, Reference Bank, other Paying Agent, Registrar or Transfer Agent (other than the appointment of the initial Issuing and Principal Paying Agent, Calculation Agent, Reference Banks, other Paying Agents, Registrar and Transfer Agents) after having obtained the prior written approval of the Trustee thereto or any change of any Paying Agents or Reference Banks or Registrars or Transfer Agents specified office and (except as provided by the Agency Agreement or the Conditions); PROVIDED ALWAYS THAT so long as any of the Notes or Coupons remains liable to prescription in the case of the termination of the appointment of the Issuing and Principal Paying Agent or the Calculation Agent or the Registrar no such termination shall take effect until a new Issuing and Principal Paying Agent or Calculation Agent or the Registrar (as the case may be) has been appointed on terms previously approved in writing by the Trustee; |
(l) | obtain the prior written approval of the Trustee to, and promptly give to the Trustee two copies of, the form of every notice given to the holders of any Notes issued by it in accordance with Condition 13 (such approval, unless so expressed, not to constitute approval |
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for the purposes of Section 21 of the Financial Services and Markets Act 2000 of Great Britain (the FSMA) of a communication within the meaning of Section 21 of the FSMA); |
(m) | if payments of principal or interest in respect of the Notes or the relative Coupons by the Issuer shall become subject generally to the taxing jurisdiction of any territory or any political sub-division or any authority therein or thereof having power to tax other than or in addition to the Relevant Jurisdiction or any political sub-division or any authority therein or thereof having power to tax, immediately upon becoming aware thereof notify the Trustee of such event and (unless the Trustee otherwise agrees) enter forthwith into a trust deed supplemental to this Trust Deed in form and manner satisfactory to the Trustee, such trust deed to modify Condition 8 (but not the proviso thereto) so that, in substitution for (or, as the case may be, addition to) the references therein to the Relevant Jurisdiction or any political sub-division thereof or any authority therein or thereof having power to tax, such Condition makes reference to that other or additional territory or any political sub-division thereof or any authority therein or thereof having power to tax to whose taxing jurisdiction such payments shall have become subject as aforesaid and Condition 7(b) shall be modified accordingly; |
(n) | comply with and perform all its obligations under the Agency Agreement and use all reasonable endeavours to procure that the Agents comply with and perform all their respective obligations thereunder and any notice given by the Trustee pursuant to Clause 2.3(a) and that the Calculation Agent complies with and performs all its obligations under the Calculation Agency Agreement and not make any amendment to the Agency Agreement or the Calculation Agency Agreement without the prior written approval of the Trustee; |
(o) | in order to enable the Trustee to ascertain the nominal amount of the Notes of each Series for the time being outstanding for any of the purposes referred to in the proviso to the definition of outstanding in Clause 1 deliver to the Trustee as soon as practicable upon being so requested in writing by the Trustee a certificate in writing signed by two Directors of the Issuer setting out the total number and aggregate nominal amount of the Notes of each Series issued by it which: |
(i) | up to and including the date of such certificate have been purchased by the Issuer, any Holding Company of the Issuer or any Subsidiary of the Issuer or such Holding Company and cancelled; and |
(ii) | are at the date of such certificate held by, for the benefit of, or on behalf of, the Issuer, any Holding Company of the Issuer or any Subsidiary of the Issuer or such Holding Company; |
(p) | if, in accordance with the provisions of the Conditions, interest in respect of the Notes becomes payable at the specified office of any Paying Agent in the United States of America promptly give notice thereof to the relative Noteholders in accordance with Condition 14; |
(q) | procure that each of its Subsidiaries observes the restrictions contained in Condition 7(f); |
(r) | give prior written notice to the Trustee of any proposed redemption pursuant to Condition 7(b) or (c) and, if it shall have given notice to the Noteholders of its intention to redeem any Notes pursuant to Condition 7(c), duly proceed to make drawings (if appropriate) and to redeem Notes accordingly; |
(s) | promptly provide the Trustee with copies of all supplements and/or amendments and/or restatements of the Programme Agreement; and |
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(t) | use all reasonable endeavours to procure that Euroclear and/or Clearstream, Luxembourg (as the case may be) issue(s) any record, certificate or other document requested by the Trustee under Clause 15(w) or otherwise as soon as practicable after such request. |
14. | REMUNERATION AND INDEMNIFICATION OF TRUSTEE |
14.1 | The Issuer shall pay to the Trustee remuneration for its services as trustee of these presents at such rate and on such dates as shall be agreed from time to time between the Issuer and the Trustee. Such remuneration shall accrue from day to day and be payable (in priority to payments to Noteholders and Couponholders) up to and including the date when, all the Notes having become due for redemption, the redemption moneys and interest thereon to the date of redemption have been paid to the Issuing and Principal Paying Agent or the Trustee PROVIDED THAT if upon due presentation of any Note or Coupon or any Certificate in respect thereof or any cheque payment of the moneys due in respect thereof is improperly withheld or refused, remuneration will commence again to accrue until payment to such Noteholder or Couponholder is duly made. |
14.2 | In the event of the occurrence of an Event of Default or a Potential Event of Default or the Trustee considering it expedient or necessary or being requested by the Issuer to undertake duties which the Trustee and the Issuer agree to be of an exceptional nature or otherwise outside the scope of the normal duties of the Trustee under these presents the Issuer shall pay to the Trustee such additional remuneration, which may be calculated at the Trustees normal hourly rates in force from time to time. |
14.3 | The Issuer shall in addition pay to the Trustee an amount equal to the amount (if any) of any value added tax or similar tax chargeable in respect of its remuneration under these presents. |
14.4 | In the event of the Trustee and the Issuer failing to agree: |
(a) | (in a case to which subclause 14.1 above applies) upon the amount of the remuneration; or |
(b) | (in a case to which subclause 14.2 above applies) upon whether such duties shall be of an exceptional nature or otherwise outside the scope of the normal duties of the Trustee under these presents, or upon such additional remuneration, |
such matters shall be determined by an investment bank or other person (acting as an expert and not as an arbitrator) selected by the Trustee and approved by the Issuer or, failing such approval, nominated (on the application of the Trustee) by the President for the time being of The Law Society of England and Wales (the expenses involved in such nomination and the fees of such investment bank being payable by the Issuer) and the determination of any such investment bank or other person shall be final and binding upon the Trustee and the Issuer.
14.5 | The Issuer shall also pay or discharge all Liabilities incurred by the Trustee in relation to the preparation and execution of, the exercise of its powers and the performance of its duties under, and in any other manner in relation to, these presents, including but not limited to legal and travelling expenses and any stamp, issue, registration, documentary and other taxes or duties paid or payable by the Trustee in connection with any action taken or contemplated by or on behalf of the Trustee for enforcing, or resolving any doubt concerning, or for any other purpose in relation to, these presents. |
14.6 | All amounts due and payable pursuant to subclause 14.5 above and/or Clause 15(j) shall be payable by the Issuer on the date specified in a written demand by the Trustee, such demand to specify the reason for such demand, and in the case of payments actually made by the Trustee prior to such demand shall (if not paid within 10 days after such demand and the Trustee so requires) carry interest from the date such payment was made or such later date as specified in such demand at the rate of the Trustees cost of funding, and in all other cases shall (if not paid on the date specified in |
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such demand or, if later, within 10 days after such demand and, in either case, the Trustee so requires) carry interest at such rate from the date specified in such demand. All remuneration payable to the Trustee shall carry interest at such rate from the due date therefor. |
14.7 | Unless otherwise specifically stated in any discharge of these presents the provisions of this Clause and Clause 15(j) shall continue in full force and effect notwithstanding such discharge. |
14.8 | The Trustee shall be entitled in its absolute discretion to determine in respect of which Series of Notes any Liabilities incurred under these presents have been incurred or to allocate any such Liabilities between the Notes of any Series. |
15. | SUPPLEMENT TO TRUSTEE ACTS |
Section 1 of the Trustee Act 2000 shall not apply to the duties of the Trustee in relation to the trusts constituted by these presents. Where there are any inconsistencies between the Trustee Acts and the provisions of these presents, the provisions of these presents shall, to the extent allowed by law, prevail and, in the case of any such inconsistency with the Trustee Act 2000, the provisions of these presents shall constitute a restriction or exclusion for the purposes of that Act. The Trustee shall have all the powers conferred upon trustees by the Trustee Act 1925 of England and Wales and by way of supplement thereto it is expressly declared as follows:
(a) | The Trustee may in relation to these presents act on the advice or opinion of or any information obtained from any lawyer, valuer, accountant, surveyor, banker, broker, auctioneer or other expert (including without limitation, an Indexation Adviser) whether obtained by the Issuer, the Trustee or otherwise and shall not be responsible for any Liability occasioned by so acting. |
(b) | Any such advice, opinion or information may be sent or obtained by letter, telegram, facsimile transmission or cable and the Trustee shall not be liable for acting on any advice, opinion or information purporting to be conveyed by any such letter, telegram, facsimile transmission or cable although the same shall contain some error or shall not be authentic. |
(c) | The Trustee may call for and shall be at liberty to accept as sufficient evidence of any fact or matter or the expediency of any transaction or thing a certificate signed by any two Directors of the Issuer, and the Trustee shall not be bound in any such case to call for further evidence or be responsible for any Liability that may be occasioned by it or any other person acting on such certificate. |
(d) | The Trustee shall be at liberty to hold or to place these presents and any other documents relating thereto or to deposit them in any part of the world with any banker or banking company or company whose business includes undertaking the safe custody of documents or lawyer or firm of lawyers considered by the Trustee to be of good repute and the Trustee shall not be responsible for or required to insure against any Liability incurred in connection with any such holding or deposit and may pay all sums required to be paid on account of or in respect of any such deposit. |
(e) | The Trustee shall not be responsible for the receipt or application of the proceeds of the issue of any of the Notes by the Issuer, the exchange of any Global Note or Certificate for another Global Note or Certificate or Definitive Bearer Notes or the delivery of any Global Note, Certificate or Definitive Notes to the person(s) entitled to it or them. |
(f) | The Trustee shall not be bound to give notice to any person of the execution of any documents comprised or referred to in these presents or to take any steps to ascertain whether any Early Termination Event, Renminbi Currency Event, Event of Default or any |
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Potential Event of Default has occurred and, until it shall have actual knowledge or express notice pursuant to these presents to the contrary, the Trustee shall be entitled to assume that no Early Termination Event, Renminbi Currency Event, Event of Default or Potential Event of Default has occurred and that the Issuer is observing and performing all its obligations under these presents. |
(g) | Save as expressly otherwise provided in these presents, the Trustee shall have absolute and uncontrolled discretion as to the exercise or non-exercise of its trusts, powers, authorities and discretions under these presents (the exercise or non-exercise of which as between the Trustee and the Noteholders and Couponholders shall be conclusive and binding on the Noteholders and Couponholders) and shall not be responsible for any Liability which may result from their exercise or non-exercise. |
(h) | The Trustee shall not be liable to any person by reason of having acted upon any Extraordinary Resolution in writing or any Extraordinary Resolution or other resolution purporting to have been passed at any meeting of the holders of Notes of all or any Series in respect whereof minutes have been made and signed even though subsequent to its acting it may be found that there was some defect in the constitution of the meeting or the passing of the resolution, (in the case of an Extraordinary Resolution in writing) that not all such holders had signed the Extraordinary Resolution or that for any reason the resolution was not valid or binding upon such holders and the relative and Couponholders. |
(i) | The Trustee shall not be liable to any person by reason of having accepted as valid or not having rejected any Note, Certificate or Coupon reasonably believed by it to be such and subsequently found to be forged or not authentic. |
(j) | Without prejudice to the right of indemnity by law given to trustees, the Issuer shall indemnify the Trustee and every Appointee and keep it or him indemnified against all Liabilities to which it or he may be or become subject or which may be properly incurred by it or him in the execution of any of its or his trusts, powers, authorities and discretions under these presents or its or his functions under any such appointment or in respect of any other matter or thing done or omitted in any way relating to these presents or any such appointment. |
(k) | Any consent or approval given by the Trustee for the purposes of these presents may be given on such terms and subject to such conditions (if any) as the Trustee thinks fit and notwithstanding anything to the contrary in these presents may be given retrospectively. |
(l) | The Trustee shall not (unless and to the extent ordered so to do by a court of competent jurisdiction) be required to disclose to any Noteholder or Couponholder any information (including, without limitation, information of a confidential, financial or price sensitive nature) made available to the Trustee by the Issuer or any other person in connection with the trusts of these presents and no Noteholder or Couponholder shall be entitled to take any action to obtain from the Trustee any such information. |
(m) | Where it is necessary or desirable for any purpose in connection with these presents to convert any sum from one currency to another it shall (unless otherwise provided by these presents or required by law) be converted at such rate or rates, in accordance with such method and as at such date for the determination of such rate of exchange, as may be agreed by the Trustee in consultation with the Issuer and any rate, method and date so agreed shall be binding on the Issuer, the Noteholders and the Couponholders. |
(n) | The Trustee may certify whether or not any of the conditions, events and acts set out in paragraphs (b), (c), (e) and (f) of Condition 10(A) (each of which conditions, events and acts |
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shall, unless in any case the Trustee in its absolute discretion shall otherwise determine, for all the purposes of these presents be deemed to include the circumstances resulting therein and the consequences resulting therefrom) is in its opinion materially prejudicial to the interests of the Holders and any such certificate shall be conclusive and binding upon the Issuer, the Noteholders and the Couponholders.
(o) | The Trustee as between itself and the Noteholders and the Couponholders may determine all questions and doubts arising in relation to any of the provisions of these presents. Every such determination, whether or not relating in whole or in part to the acts or proceedings of the Trustee, shall be conclusive and shall bind the Trustee and the Noteholders and the Couponholders. |
(p) | In connection with the exercise by it of any of its trusts, powers, authorities or discretions under these presents (including, without limitation, any modification, waiver, authorisation or determination), the Trustee shall have regard to the general interests of the Noteholders as a class but shall not have regard to any interests arising from circumstances particular to individual Noteholders or Couponholders (whatever their number) and, in particular but without limitation, shall not have regard to the consequences of such exercise for individual Noteholders or Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub-division thereof and the Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim, from the Issuer, the Trustee or any other person any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders except to the extent already provided for in Condition 8 and/or any undertaking given in addition thereto or in substitution therefor under these presents. |
(q) | The Trustee may whenever it thinks fit delegate by power of attorney or otherwise to any person or persons or fluctuating body of persons (whether being a joint trustee of these presents or not) all or any of its trusts, powers, authorities and discretions vested in the Trustee by these presents. Such delegation may be made upon such terms (including power to sub-delegate) and subject to such conditions and regulations as the Trustee may in the interests of the Noteholders think fit. Provided that the Trustee has taken reasonable care in selecting such delegate, it shall not be under any obligation to supervise the proceedings or acts of any such delegate or sub-delegate or be in any way responsible for any Liability incurred by reason of any misconduct or default on the part of any such delegate or sub-delegate. The Trustee shall within a reasonable time after any such delegation or any renewal, extension or termination thereof give notice thereof to the Issuer. |
(r) | The Trustee may in the conduct of the trusts of these presents instead of acting personally employ and pay an agent (whether being a lawyer or other professional person) to transact or conduct, or concur in transacting or conducting, any business and to do, or concur in doing, all acts required to be done in connection with these presents (including the receipt and payment of money). Provided that the Trustee has taken reasonable care in selecting such agent, it shall not be in any way responsible for any Liability incurred by reason of any misconduct or default on the part of any such agent or be bound to supervise the proceedings or acts of any such agent. |
(s) | The Trustee shall not be responsible for the execution, delivery, legality, effectiveness, adequacy, genuineness, validity, enforceability or admissibility in evidence of these presents or any other document relating or expressed to be supplemental thereto and shall not be liable for any failure to obtain any licence, consent or other authority for the execution, delivery, legality, effectiveness, adequacy, genuineness, validity, performance, |
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enforceability or admissibility in evidence of these presents or any other document relating or expressed to be supplemental thereto. |
(t) | The Trustee shall not be responsible to any person for failing to request, require or receive any legal opinion relating to any Notes or for checking or commenting upon the content of any such legal opinion. |
(u) | Any certificate or report of the Auditors or any other person called for by or provided to the Trustee in accordance with or for the purposes of the Notes may be relied upon by the Trustee as sufficient evidence of the facts stated therein whether or not such certificate or report is addressed to the Trustee and whether or not such certificate or report and/or any engagement letter or other document entered into by the Trustee in connection therewith contains a monetary or other limit on the liability of the Auditors (or such other expert or other person) in respect thereof. |
(v) | So long as any Global Note is, or any Registered Notes represented by a Global Certificate are, held on behalf of a clearing system, in considering the interests of Noteholders, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the identity (either individually or by category) of its accountholders or participants with entitlements to any such Global Note or the Registered Notes and may consider such interests on the basis that such accountholders or participants were the holder(s) thereof. |
(w) | The Trustee may call for and shall rely on any records, certificate or other document of or to be issued by Euroclear or Clearstream, Luxembourg in relation to any determination of the principal amount of Notes represented by a NGN. Any such records, certificate or other document shall be conclusive and binding for all purposes. The Trustee shall not be liable to any person by reason of having accepted as valid or not having rejected any such records, certificate or other document to such effect purporting to be issued by Euroclear or Clearstream, Luxembourg and subsequently found to be forged or not authentic. |
(x) | no provision of these presents shall require the Trustee to do anything which may in its opinion be illegal or contrary to applicable law or regulation. |
(y) | any trustee being a banker, lawyer, broker or other person engaged in any profession or business shall be entitled to charge and be paid all usual professional and other charges for business transacted and acts done by him or his partner or firm on matters arising in connection with the trusts of these presents and also his properly incurred charges in addition to disbursements for all other work and business done and all time spent by him or his partner or firm on matters arising in connection with these presents, including matters which might or should have been attended to in person by a trustee not being a banker, lawyer, broker or other professional person. |
(z) | nothing contained in these presents shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties or the exercise of any right, power, authority or discretion hereunder if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not assured to it. |
(aa) | The Trustee shall not be bound to take any steps to enforce the performance of any provisions of these presents, the Notes or the Coupons or to appoint an independent financial advisor pursuant to the Conditions unless it shall be indemnified and/or secured and/or prefunded by the relevant Noteholders and/or Couponholders to its satisfaction against all proceedings, claims and demands to which it may be liable and against all costs, charges, |
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liabilities and expenses which may be incurred by it in connection with such enforcement or appointment, including the cost of its managements time and/or other internal resources, calculated using its normal hourly rates in force from time to time.
(bb) | when determining whether an indemnity or any security is satisfactory to it, the Trustee shall be entitled to evaluate its risk in given circumstances by considering the worst-case scenario and, for this purpose, it may take into account, without limitation, the potential costs of defending or commencing proceedings in England or elsewhere and the risk however remote, of any award of damages against it in England or elsewhere. |
(cc) | the Trustee shall be entitled to require that any indemnity or security given to it by the Noteholders or any of them be given on a joint and several basis and be supported by evidence satisfactory to it as to the financial standing and creditworthiness of each counterparty and/or as to the value of the security and an opinion as to the capacity, power and authority of each counterparty and/or the validity and effectiveness of the security. |
16. | TRUSTEES LIABILITY |
Nothing in these presents shall in any case in which the Trustee has failed to show the degree of care and diligence required of it as trustee having regard to the provisions of these presents conferring on it any trusts, powers, authorities or discretions exempt the Trustee from or indemnify it against any liability for breach of trust of which it may be guilty in relation to its duties under these presents.
17. | TRUSTEE CONTRACTING WITH THE ISSUER |
Neither the Trustee (which for the purpose of this Clause shall include the Holding Company of any corporation acting as trustee hereof or any Subsidiary of such Holding Company) nor any director or officer or Holding Company, Subsidiary or associated company of a corporation acting as a trustee under these presents shall by reason of its or his fiduciary position be in any way precluded from:
(a) | entering into or being interested in any contract or financial or other transaction or arrangement with the Issuer or any person or body corporate associated with the Issuer (including without limitation any contract, transaction or arrangement of a banking or insurance nature or any contract, transaction or arrangement in relation to the making of loans or the provision of financial facilities or financial advice to, or the purchase, placing or underwriting of or the subscribing or procuring subscriptions for or otherwise acquiring, holding or dealing with, or acting as paying agent in respect of, the Notes or any other notes, bonds, stocks, shares, debenture stock, debentures or other securities of, the Issuer or any person or body corporate associated as aforesaid); or |
(b) | accepting or holding the trusteeship of any other trust deed constituting or securing any other securities issued by or relating to the Issuer or any such person or body corporate so associated or any other office of profit under the Issuer or any such person or body corporate so associated, |
and each shall be entitled to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such contract, transaction or arrangement as is referred to in 17(a) above or, as the case may be, any such trusteeship or office of profit as is referred to in 17(b) above without regard to the interests of the Noteholders and notwithstanding that the same may be contrary or prejudicial to the interests of the Noteholders and shall not be responsible for any Liability occasioned to the Noteholders thereby and shall be entitled to retain and shall not be in any way liable to account for any profit made or share of brokerage or commission or remuneration or other amount or benefit received thereby or in connection therewith.
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Where any Holding Company, Subsidiary or associated company of the Trustee or any director or officer of the Trustee acting other than in his capacity as such a director or officer has any information, the Trustee shall not thereby be deemed also to have knowledge of such information and, unless it shall have actual knowledge of such information, shall not be responsible for any loss suffered by Noteholders resulting from the Trustees failing to take such information into account in acting or refraining from acting under or in relation to these presents.
18. | WAIVER, AUTHORISATION AND DETERMINATION |
18.1 | The Trustee may without the consent or sanction of the Noteholders or the Couponholders and without prejudice to its rights in respect of any subsequent breach, Event of Default or Potential Event of Default from time to time and at any time but only if and in so far as in its opinion the interests of the Noteholders shall not be materially prejudiced thereby waive or authorise any breach or proposed breach by the Issuer of any of the covenants or provisions contained in these presents or any Condition or determine that any Event of Default or Potential Event of Default shall not be treated as such for the purposes of these presents or any Condition PROVIDED ALWAYS THAT the Trustee shall not exercise any powers conferred on it by this Clause in contravention of any express direction given by Extraordinary Resolution or by a request under Condition 10(A) but so that no such direction or request shall affect any waiver, authorisation or determination previously given or made. Any such waiver, authorisation or determination may be given or made on such terms and subject to such conditions (if any) as the Trustee may determine, shall be binding on the Noteholders and the Couponholders and, if, but only if, the Trustee shall so require, shall be notified by the Issuer to the Noteholders in accordance with Condition 14 as soon as practicable thereafter. |
MODIFICATION
18.2 | The Trustee may without the consent or sanction of the Noteholders or the Couponholders at any time and from time to time concur with the Issuer in making any modification (a) to these presents or any Condition which in the opinion of the Trustee it may be proper to make PROVIDED THAT the Trustee is of the opinion that such modification will not be materially prejudicial to the interests of the Noteholders or (b) to these presents or any Condition if in the opinion of the Trustee such modification is of a formal, minor or technical nature or to correct a manifest error or to comply with mandatory provisions of applicable law. Any such modification may be made on such terms and subject to such conditions (if any) as the Trustee may determine, shall be binding upon the Noteholders and the Couponholders and, unless the Trustee agrees otherwise, shall be notified by the Issuer to the Noteholders in accordance with Condition 14 as soon as practicable thereafter. |
BREACH
18.3 | Any breach of or failure to comply with any such terms and conditions as are referred to in subclauses 18.1 and 18.2 of this Clause shall constitute a default by the Issuer in the performance or observance of a covenant or provision binding on it under or pursuant to these presents. |
19. | HOLDER OF DEFINITIVE BEARER NOTE ASSUMED TO BE COUPONHOLDER |
19.1 | Wherever in these presents the Trustee is required or entitled to exercise a power, trust, authority or discretion under these presents, except as ordered by a court of competent jurisdiction or as required by applicable law, the Trustee shall, notwithstanding that it may have express notice to the contrary, assume that each holder of a Definitive Bearer Note is the holder of all Coupons appertaining to each Definitive Bearer Note of which he is the holder. |
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NO NOTICE TO COUPONHOLDERS
19.2 | Neither the Trustee nor the Issuer shall be required to give any notice to the Couponholders for any purpose under these presents and the Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the holders of Definitive Bearer Notes in accordance with Condition 14. |
20. | SUBSTITUTION AND CONSOLIDATION MERGER, CONVEYANCE, TRANSFER OR LEASE |
20.1 (a) | The Trustee may without the consent of the Noteholders or Couponholders at any time agree with the Issuer to the substitution in place of the Issuer (or of the previous substitute under this Clause) as the principal debtor under these presents and the Deed Poll of either (i) a Successor in Business to the Issuer or (ii) a Holding Company of the Issuer or (iii) any Subsidiary of the Issuer (such substituted company being hereinafter called the New Company) provided that in each case a trust deed is executed or some other form of undertaking is given by the New Company in form and manner reasonably satisfactory to the Trustee, agreeing to be bound by the provisions of these presents with any consequential amendments which the Trustee may deem appropriate as fully as if the New Company had been named in these presents as the principal debtor in place of the Issuer (or of the previous substitute under the Clause) and provided further that (save in the case of a substitution of a Successor in Business to the Issuer) the Issuer unconditionally and irrevocably guarantees all amounts payable under these presents to the satisfaction of the Trustee. |
(b) | The following further conditions shall apply to 20.1(a) above: |
(i) | the Issuer and the New Company shall comply with such other requirements as the Trustee may direct in order to ensure that the interests of the Noteholders are not materially prejudiced (and taking into account the proviso in paragraph 20.1(c) below); |
(ii) | undertakings or covenants shall be given by the New Company in terms corresponding to the provisions of Condition 8 and Condition 7(b) shall be modified accordingly; |
(iii) | without prejudice to the rights of reliance of the Trustee under the immediately following paragraph (iv), the Trustee is satisfied that the relevant transaction is not materially prejudicial to the interests of the Noteholders, provided that in determining such material prejudice the Trustee shall not take into account any prejudice to the interests of the Noteholders as a result of the New Company not being required pursuant to the undertakings or covenants given pursuant to the preceding paragraph (ii) to pay any additional amounts for or on account of any Taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein); and |
(iv) | if two Directors of the New Company (or other officers acceptable to the Trustee) shall certify that the New Company is solvent at the time at which the relevant transaction is proposed to be effected (which certificate the Trustee may rely upon absolutely) the Trustee shall not be under any duty to have regard to the financial condition, profits or prospects of the New Company or to compare the same with those of the Issuer or any previous substitute under this Clause as applicable. |
(c) | Any such trust deed or undertaking shall, if so expressed, operate to release the Issuer or the previous substitute as aforesaid from all of its obligations as principal debtor under these |
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presents. Not later than 14 days after the execution of such documents and compliance with such requirements, the New Company shall give notice thereof in a form previously approved by the Trustee to the Noteholders in the manner provided in Condition 14. Upon the execution of such documents and compliance with such requirements, the New Company shall be deemed to be named in these presents as the principal debtor in place of the Issuer (or in place of the previous substitute under this Clause) under these presents and these presents shall be deemed to be modified in such manner as shall be necessary to give effect to the above provisions and, without limitation, references in these presents to the Issuer shall, unless the context otherwise requires, be deemed to be or include references to the New Company.
20.2 (a) | The Issuer may consolidate with or merge (which term shall include for the avoidance of doubt a scheme of arrangement) into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and the Issuer may permit any Person to consolidate with or merge into the Issuer or convey, transfer or lease its properties and assets substantially as an entirety to the Issuer, provided that: |
(i) | if the Issuer shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Issuer is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Issuer substantially as an entirety shall be a corporation, partnership or trust, shall be organised and validly existing under the laws of any applicable jurisdiction and shall expressly assume (including, in the case of a Reorganisation, by way of a full and unconditional guarantee subject to the proviso to this subclause) by a trust deed supplemental hereto executed and delivered to the Trustee on behalf of the Noteholders in form reasonably satisfactory to the Trustee, the due and punctual payment of the principal of and interest on all the Notes and the performance or observance of every covenant of these presents on the part of the Issuer to be performed or observed; provided, however, that in the case of a Reorganisation; |
(A) | such assumption shall be effected by means of a supplemental trust deed executed by the guarantor in which: |
I. | the guarantor covenants to the Trustee to guarantee irrevocably and unconditionally the due and punctual payment of the principal of and interest on all the Notes, and all other amounts payable by the Issuer under these presents, which guarantee shall (inter alia) not be subject to any requirement for presentment or demand and shall not be affected, modified or impaired upon the happening from time to time of any event, including without limitation (x) the waiver, surrender, compromise, settlement, release, termination or modification of any or all of the obligations, covenants or agreements of the Issuer under these presents; (y) the bankruptcy or insolvency of the Issuer; and (z) to the extent permitted by law, the release or discharge by operation of law of the Issuer from the performance or observance of any obligation, covenant or agreement contained in these presents; and |
II. | the guarantor covenants to be bound by each and every obligation of the Issuer contained in these presents, including without limitation the obligation to pay additional amounts with respect to any payment made under the guarantee to the extent and subject to the |
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exceptions, mutatis mutandis, set out in Condition 8, and to be subject to each Event of Default specified in Condition 9(A) or in any Notes or Certificates in respect thereof and to each Potential Event of Default, as though in each case, each reference to the Issuer in connection with such obligations or Events of Default were to the guarantor; provided, however, that the reference to specific statutes in Condition 10(A)(e) shall be modified, if applicable, to reflect the laws of the jurisdiction of incorporation of the guarantor; and |
(B) | the Trustee shall have received an opinion of legal counsel (which may be an employee of the guarantor), in form and substance reasonably satisfactory to the Trustee to the effect that such guarantee is the valid, binding and enforceable obligation of the guarantor; |
(ii) | immediately prior to and after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Issuer as a result of such transaction as having been incurred by the Issuer at the time of such transaction, no Event of Default or Potential Event of Default shall have happened and be continuing; |
(iii) | the Person formed by such consolidation or into which the Issuer is merged or to whom the Issuer has conveyed, transferred or leased its properties or assets (if such Person is incorporated or organised and validly existing under the laws of a jurisdiction other than the United States, any State thereof, or the District of Columbia, or England and Wales) agrees to indemnify the Trustee and the holder of each Note and Coupon against (A) any tax, assessment or governmental charge imposed on the Trustee or any such holder or required to be withheld or deducted from any payment to the Trustee or such holder as a consequence of such consolidation, merger, conveyance, transfer or lease; and (B) any costs or expenses of the act of such consolidation, merger, conveyance, transfer or lease; |
(iv) | the Issuer (and, in the case of a guarantee as provided above, the guarantor) has delivered to the Trustee a Certificate signed by two of its Directors (or other officers acceptable to the Trustee) and an opinion of legal counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental trust deed is required in connection with such transaction, such supplemental trust deed complies with this Clause, that such supplemental trust deed is valid, binding and enforceable and that all conditions precedent herein provided for relating to such transaction have been complied with; |
(v) | undertakings or covenants shall be given by such Person in terms corresponding to the provisions of Condition 8 and Condition 7(b) shall be modified accordingly; |
(vi) | without prejudice to the rights of reliance of the Trustee under the immediately following paragraph (vii), the Trustee is satisfied that the relevant transaction is not materially prejudicial to the interests of the Noteholders, provided that in determining such material prejudice the Trustee shall not take into account any prejudice to the interests of the Noteholders as a result of the Person pursuant to the undertakings or covenants given pursuant to the preceding paragraph (v) not being required to pay any additional amounts for or on account of any Taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein); and |
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(vii) | if two Directors of the Person formed by such consolidation or into which the Issuer is merged or to whom the Issuer has conveyed, transferred or leased its properties or assets (or other officers acceptable to the Trustee) shall certify that such Person is solvent at the time at which the relevant transaction is proposed to be effected (which certificate the Trustee may rely upon absolutely) the Trustee shall not be under any duty to have regard to the financial condition, profits or prospects of such Person or to compare the same with those of the Issuer. |
(b) | Upon any consolidation of the Issuer with, or merger of the Issuer into, any other Person or any conveyance, transfer or lease of the properties and assets of the Issuer substantially as an entirety in accordance with paragraph (a) of this subclause 20.2, the successor Person formed by such consolidation or into which the Issuer is merged or to which such conveyance, transfer or lease is made shall succeed to and be substituted for, except in the case of an assumption by way of a full and unconditional guarantee made in accordance with paragraph (a) of this subclause 20.2 (in which event, the Issuer shall remain an obligor under these presents), and may exercise every right and power of, the Issuer under these presents with the same effect as if such successor Person had been named as the Issuer in these presents, as the case may be, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under these presents. |
(c) | Not later than 21 days after completion of the relevant transaction as referred to in paragraph (a) of this subclause 20.2 the Issuer or, as the case may be, the Person resulting from any such consolidation or merger shall give notice thereof in a form previously approved by the Trustee to the Noteholders in the manner provided in Condition 14. |
21. | CURRENCY INDEMNITY |
The Issuer shall severally indemnify the Trustee, every Appointee, the Noteholders and the Couponholders and keep them indemnified against:
(a) | any loss or damage incurred by any of them arising from the non-payment by the Issuer of any amount due to the Trustee or the holders of the Notes issued by the Issuer and the relative or Couponholders under these presents by reason of any variation in the rates of exchange between those used for the purposes of calculating the amount due under a judgment or order in respect thereof and those prevailing at the date of actual payment by the Issuer; and |
(b) | any deficiency arising or resulting from any variation in rates of exchange between (i) the date as of which the local currency equivalent of the amounts due or contingently due under these presents (other than this Clause) is calculated for the purposes of any bankruptcy, insolvency or liquidation of the Issuer and (ii) the final date for ascertaining the amount of claims in such bankruptcy, insolvency or liquidation. The amount of such deficiency shall be deemed not to be reduced by any variation in rates of exchange occurring between the said final date and the date of any distribution of assets in connection with any such bankruptcy, insolvency or liquidation. |
The above indemnities shall constitute obligations of the Issuer and separate and independent from its other obligations under the other provisions of these presents and shall apply irrespective of any indulgence granted by the Trustee or the Noteholders or the Couponholders from time to time and shall continue in full force and effect notwithstanding the judgment or filing of any proof or proofs in any bankruptcy, insolvency or liquidation of the Issuer for a liquidated sum or sums in respect of amounts due under these presents (other than this Clause). Any such deficiency as aforesaid shall be deemed to constitute a loss suffered by the Noteholders and the Couponholders and no proof or evidence of any actual loss shall be required by the Issuer or its liquidator or liquidators.
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22. | NEW TRUSTEE |
22.1 | The power to appoint a new trustee of these presents shall be vested in the Issuer but no person shall be appointed who shall not previously have been approved by an Extraordinary Resolution. One or more persons may hold office as trustee or trustees of these presents but such trustee or trustees shall be or include a Trust Corporation. Whenever there shall be more than two trustees of these presents the majority of such trustees shall be competent to execute and exercise all the duties, powers, trusts, authorities and discretions vested in the Trustee by these presents provided that a Trust Corporation shall be included in such majority. Any appointment of a new trustee of these presents shall as soon as practicable thereafter be notified by the Issuer to the Agent and in accordance with Condition 14 to the Noteholders. |
Separate and Co-Trustees
22.2 | Notwithstanding the provisions of subclause 22.1 above, the Trustee may, upon giving prior notice to the Issuer (but without the consent of the Issuer, the Noteholders or the Couponholders), appoint any person established or resident in any jurisdiction (whether a Trust Corporation or not) to act either as a separate trustee or as a co-trustee jointly with the Trustee: |
(a) | if the Trustee considers such appointment to be in the interests of the Noteholders; |
(b) | for the purposes of conforming to any legal requirements, restrictions or conditions in any jurisdiction in which any particular act or acts is or are to be performed; or |
(c) | for the purposes of obtaining a judgment in any jurisdiction or the enforcement in any jurisdiction of either a judgment already obtained or any of the provisions of these presents against the Issuer. |
The Issuer irrevocably appoints the Trustee to be its attorney in its name and on its behalf to execute any such instrument of appointment. Such a person shall (subject always to the provisions of these presents) have such trusts, powers, authorities and discretions (not exceeding those conferred on the Trustee by these presents) and such duties and obligations as shall be conferred or imposed by the instrument of appointment. The Trustee shall have power in like manner to remove any such person. Such reasonable remuneration as the Trustee may pay to any such person, together with any attributable costs, charges and expenses incurred by it in performing its function as such separate trustee or co-trustee, shall for the purposes of these presents be treated as costs, charges and expenses incurred by the Trustee.
23. | TRUSTEES RETIREMENT AND REMOVAL |
A trustee of these presents may retire at any time on giving not less than three months prior written notice to the Issuer without giving any reason and without being responsible for any Liabilities incurred by reason of such retirement. The Noteholders shall have the power exercisable by Extraordinary Resolution to remove any trustee or trustees for the time being of these presents. The Issuer undertakes that in the event of the only trustee of these presents which is a Trust Corporation giving notice under this Clause or being removed by Extraordinary Resolution it will use all reasonable endeavours to procure that a new trustee of these presents being a Trust Corporation is appointed as soon as reasonably practicable thereafter. The retirement or removal of any such trustee shall not become effective until a successor trustee being a Trust Corporation is appointed.
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24. | TRUSTEES POWERS TO BE ADDITIONAL |
The powers conferred upon the Trustee by these presents shall be in addition to any powers which may from time to time be vested in the Trustee by the general law or as a holder of any of the Notes or Coupons.
25. | NOTICES |
Any notice or demand to the Issuer or the Trustee required to be given, made or served for any purposes under these presents shall be given, made or served by sending the same by pre-paid post (first class if inland, first class airmail if overseas) or facsimile transmission or by delivering it by hand as follows:
to the Issuer: | Vodafone House | |||
The Connection | ||||
Newbury | ||||
Berkshire RG14 2FN | ||||
England | ||||
(Attention: the Director of Treasury) | ||||
Facsimile No.: 01635 676746 | ||||
to the Trustee: | Fifth Floor | |||
100 Wood Street | ||||
London EC2V 7EX | ||||
England | ||||
(Attention: the Manager, Commercial Trusts) | ||||
Facsimile No.: 020 7696 5261 |
or to such other address or facsimile number as shall have been notified (in accordance with this Clause) to the other party hereto and any notice or demand sent by post as aforesaid shall be deemed to have been given, made or served upon receipt. Any notice or demand sent by facsimile transmission as aforesaid shall be deemed to have been given, made or served upon receipt provided that in the case of a notice or demand given by facsimile transmission such notice or demand shall forthwith be confirmed by post.
26. | GOVERNING LAW |
The Trust Deed, the Notes, the Coupons, and any non-contractual obligations arising out of or in connection with them, are governed by, and shall be construed in accordance with, English law.
27. | COUNTERPARTS |
This Trust Deed and any trust deed supplemental hereto may be executed and delivered in counterparts, both of which, taken together, shall constitute one and the same deed and either party to this Trust Deed or any party to any trust deed supplemental hereto may enter into the same by executing and delivering a counterpart.
28. | CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 |
A person who is not a party to this Trust Deed or any trust deed supplemental hereto has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Trust Deed or any
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trust deed supplemental hereto, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.
IN WITNESS whereof this Trust Deed has been executed as a deed by the Issuer and the Trustee and delivered on the date stated on page 1.
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SCHEDULE 1
TERMS AND CONDITIONS OF THE NOTES
Notes issued by Vodafone Group Plc (formerly called Vodafone AirTouch Plc) (the Issuer) are constituted by a Trust Deed dated 16 July 1999 (such Trust Deed as modified and/or supplemented and/or restated from time to time, the Trust Deed) made between the Issuer and The Law Debenture Trust Corporation p.l.c. (the Trustee, which expression shall include any successor as trustee).
The Notes and the Coupons (as defined below) have the benefit of an amended and restated Agency Agreement dated 11 July 2013 (such Agency Agreement as amended and/or supplemented and/or restated from time to time, the Agency Agreement) made between the Issuer, HSBC Bank plc as issuing and principal paying agent and agent bank (the Issuing and Principal Paying Agent, which expression shall include any successor issuing and principal paying agent), the other paying agents named therein (together with the Issuing and Principal Paying Agent, the Paying Agents, which expression shall include any additional or successor paying agents), HSBC Bank USA, National Association as exchange agent (the Exchange Agent, which expression shall include any successor exchange agent) and HSBC Bank USA, National Association as registrar (the Registrar, which expression shall include any successor registrar) and a transfer agent and the other transfer agents named therein (together with the Registrar, the Transfer Agents, which expression shall include any additional or successor transfer agent) and the Trustee.
The Noteholders (as defined below) and the holders (the Couponholders) of the interest coupons (the Coupons) relating to interest bearing Notes in bearer form and, where applicable in the case of such Notes, talons for further Coupons (the Talons) are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and are deemed to have notice of those provisions applicable to them of the Agency Agreement. Any reference herein to Coupons or coupons shall, unless the context otherwise requires, be deemed to include a reference to Talons or talons.
The Final Terms for this Note (or the relevant provisions thereof) are attached to or endorsed on this Note. Part A of the Final Terms completes these Terms and Conditions for the purposes of this Note. References to the applicable Final Terms are to Part A of the Final Terms (or the relevant provisions thereof) attached to or endorsed on this Note.
The Trustee acts for the benefit of the Noteholders and the Couponholders, (which expression shall, unless the context otherwise requires, include the holders of the Talons), in accordance with the provisions of the Trust Deed.
As used herein, Tranche means Notes which are identical in all respects (including as to listing) and Series means a Tranche of Notes together with any further Tranche or Tranches of Notes which are (i) expressed to be consolidated and form a single series and (ii) identical in all respects (including as to listing) except for their respective Issue Dates, Interest Commencement Dates and/or Issue Prices.
Copies of the Trust Deed and the Agency Agreement are available for inspection during normal business hours at the registered office for the time being of the Trustee (being at Fifth Floor, 100 Wood Street, London EC2V 7EX, England) and at the specified office of each of the Paying Agents. In addition, Final Terms will be available for viewing on the website of the Regulatory News Service operated by the London Stock Exchange plc at www.londonstockexchange.com/exchange/news/market-news/market-news-home.html or otherwise published in accordance with Article 14 of Directive 2003/71/EC (which includes the amendments made by Directive 2010/73/EU to the extent that such amendments have been implemented in a relevant Member State of the European Economic Area). The Noteholders and the Couponholders are deemed to have notice of, and are entitled to the benefit of, all the provisions of the Trust Deed, the Agency Agreement and the applicable Final Terms which are applicable to them. The statements in these Terms and Conditions include summaries of, and are subject to, the detailed provisions of the Trust Deed. Words and expressions defined in the Trust Deed and/or the Agency Agreement or used in the applicable Final Terms shall have the same meanings where used in these Terms and Conditions unless the context otherwise requires or unless otherwise stated and provided that, in the event of inconsistency between the Agency Agreement and the Trust Deed, the Trust Deed shall prevail and, in the event of inconsistency between the Agency Agreement or the Trust Deed and the applicable Final Terms, the applicable Final Terms will prevail.
References herein to RMB Notes are to Notes denominated in Renminbi. References herein to Renminbi, RMB and CNY are to the lawful currency of the Peoples Republic of China (the PRC) which, for the purposes of the Conditions, excludes the Hong Kong Special Administrative Region of the Peoples Republic of China, the Macau Special Administrative Region of the Peoples Republic of China and Taiwan.
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1. | Form, Denomination and Title |
The Notes are issued in bearer form (Bearer Notes, which expression includes Notes that are specified to be Exchangeable Bearer Notes), in registered form (Registered Notes) or in bearer form exchangeable for Registered Notes (Exchangeable Bearer Notes) in each case in the Specified Denomination(s) shown hereon.
All Registered Notes shall have the same Specified Denomination. Where Exchangeable Bearer Notes are issued, the Registered Notes for which they are exchangeable shall have the same Specified Denomination as the lowest denomination of Exchangeable Bearer Notes.
The Notes may be Fixed Rate Notes, Floating Rate Notes, Zero Coupon Notes, Inflation Linked Interest Notes or a combination of any of the foregoing, depending upon the Interest Basis shown in the applicable Final Terms.
The Notes may be redeemable at par or may be Inflation Linked Redemption Notes, depending on the Redemption Basis shown in the applicable Final Terms.
Bearer Notes are serially numbered and are issued with Coupons attached, unless they are Zero Coupon Notes, in which case references to Coupons and Couponholders in these Terms and Conditions are not applicable.
Registered Notes are represented by registered certificates (Certificates) and, save as provided in Condition 2(c, each Certificate shall represent the entire holding of Registered Notes by the same holder.
Title to the Bearer Notes and Coupons will pass by delivery. Title to the Registered Notes will pass by registration in the register that the Issuer will procure to be kept by the Registrar in accordance with the provisions of the Agency Agreement (the Register). The Issuer, any Paying Agent, the Registrar, the Transfer Agents, the Exchange Agent and the Trustee may (to the fullest extent permitted by applicable laws) deem and treat the holder (as defined below) of any Note or Coupon as the absolute owner for all purposes (whether or not the Note or Coupon shall be overdue and notwithstanding any notice of ownership or writing on the Note or Coupon (or on the Certificate representing it) or any notice of previous loss or theft of the Note or Coupon (or that of the related Certificate) or of trust or any interest therein) and shall not be required to obtain any proof thereof or as to the identity of such holder and no person shall be liable for so treating the holder.
In these Terms and Conditions, Noteholder means the bearer of any Bearer Note or the person in whose name a Registered Note is registered (as the case may be), holder (in relation to a Note or Coupon) means the bearer of any Bearer Note or Coupon or the person in whose name a Registered Note is registered (as the case may be) and capitalised terms have the meanings given to them in the applicable Final Terms, the absence of any such meaning indicating that such term is not applicable to the Notes.
2. | Exchanges of Exchangeable Bearer Notes and Transfers of Registered Notes |
(a) | Exchange of Exchangeable Bearer Notes |
Subject as provided in Condition 2(f), Exchangeable Bearer Notes may be exchanged for the same nominal amount of Registered Notes at the request in writing of the relevant Noteholder (in substantially the same form set out in Schedule 3 of the Agency Agreement) and upon surrender of each Exchangeable Bearer Note to be exchanged, together with all unmatured Coupons relating to it, at the specified office of any Transfer Agent; provided, however, that where an Exchangeable Bearer Note is surrendered for exchange after the Record Date (as defined in Condition 6(c)) for any payment of interest, the Coupon in respect of that payment of interest need not be surrendered with it. Registered Notes may not be exchanged for Bearer Notes. Bearer Notes of one Specified Denomination may not be exchanged for Bearer Notes of another Specified Denomination. Bearer Notes that are not Exchangeable Bearer Notes may not be exchanged for Registered Notes.
(b) | Transfer of Registered Notes |
One or more Registered Notes may be transferred upon the surrender (at the specified office of the Registrar or any Transfer Agent) of the Certificate representing such Registered Notes to be transferred, together with the form of transfer endorsed on such Certificate, (or another form of transfer substantially in the same form and containing the same representations and certifications (if any), unless otherwise agreed by the issuer), duly completed and executed and any other evidence as the Registrar or Transfer Agent may reasonably require. In the case of a transfer of part only of a holding of Registered Notes represented by one Certificate, a new Certificate shall be issued to the
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transferee in respect of the part transferred and a further new Certificate in respect of the balance of the holding not transferred shall be issued to the transferor.
(c) | Partial Redemption in Respect of Registered Notes |
In the case of a partial redemption of a holding of Registered Notes represented by a single Certificate, a new Certificate shall be issued to the holder in respect of the balance of the holding not redeemed. New Certificates shall only be issued against surrender of the existing Certificates to the Registrar or any Transfer Agent. In the case of a transfer of Registered Notes to a person who is already a holder of Registered Notes, a new Certificate representing the enlarged holding shall only be issued against surrender of the Certificate representing the existing holding.
(d) | Delivery of New Certificates |
Each new Certificate to be issued pursuant to Conditions 2(a), (b) or (c) above shall only be available for delivery within three business days of receipt of the request for exchange, form of transfer or Put Notice (as defined in Condition 7(d)) and surrender of the Certificate for exchange. Delivery of the new Certificate(s) shall be made at the specified office of the Transfer Agent or of the Registrar (as the case may be) to whom delivery or surrender of such request for exchange, form of transfer, Put Notice or Certificate shall have been made or, at the option of the holder making such delivery or surrender as aforesaid and as specified in the relevant request for exchange, form of transfer, Put Notice or other in writing, be mailed by uninsured post at the risk of the holder entitled to the new Certificate to such address as may be so specified, unless such holder requests otherwise and pays in advance to the relevant Transfer Agent the costs of such other method of delivery and/or such insurance as it may specify. In this Condition (d), business day means a day, other than a Saturday or Sunday, on which banks are open for business in the place of the specified office of the relevant Transfer Agent or the Registrar (as the case may be).
(e) | Exchange or Transfer Free of Charge |
Exchange and transfer of Notes and Certificates on registration, transfer and exercise of an option or partial redemption shall be effected without charge by or on behalf of the Issuer, the Registrar or the Transfer Agents, but upon payment of any tax or other governmental charges that may be imposed in relation to it (or the giving of such indemnity as the Registrar or the relevant Transfer Agent may require).
(f) | Closed Periods |
No Noteholder may require the transfer of a Registered Note to be registered or an Exchangeable Bearer Note to be exchanged for one or more Registered Note(s) (i) during the period of 15 days prior to any date on which Notes may be called for redemption by the Issuer at its option pursuant to Condition 7(c), (ii) after any such Note has been called for redemption or (iii) during the period of seven days ending on (and including) any Record Date. An Exchangeable Bearer Note called for redemption may, however, be exchanged for one or more Registered Note(s) in respect of which the Certificate is simultaneously surrendered not later than the relevant Record Date.
3. | Status of the Notes |
The Notes and any relative Coupons are direct, unconditional and unsecured obligations of the Issuer and rank and will rank pari passu, without any preference among themselves, with all other, present and future, outstanding unsecured and unsubordinated obligations of the Issuer (other than obligations preferred by law).
4. | Interest |
(a) | Interest on Fixed Rate Notes |
Each Fixed Rate Note bears interest from (and including) the Interest Commencement Date at the rate(s) per annum equal to the Rate(s) of Interest. Interest will be payable in arrear on the Interest Payment Date(s) in each year and on the Maturity Date.
In the case of RMB Notes, if:
(i) | Interest Payment Date Adjustment is specified as applying in the applicable Final Terms; and |
(ii) | (x) there is no numerically corresponding day in the calendar month in which an Interest Payment Date should occur or (y) any Interest Payment Date would otherwise fall on a day which is not a Business Day, |
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then such Interest Payment Date shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event such Interest Payment Date shall be brought forward to the immediately preceding Business Day. |
For these purposes, Business Day has the meaning given to in Condition 4(b) below.
If the Notes are in definitive form, except as provided in the applicable Final Terms, the amount of interest payable on each Interest Payment Date in respect of the Fixed Interest Period ending on (but excluding) such date will amount to the Fixed Coupon Amount. Payments of interest on any Interest Payment Date will, if so specified in the applicable Final Terms, amount to the Broken Amount so specified.
As used in these Terms and Conditions, Fixed Interest Period means the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date.
Except in the case of Notes in definitive form where a Fixed Coupon Amount or Broken Amount is specified in the applicable Final Terms, interest shall be calculated in respect of any period by applying the Rate of Interest to:
(i) | in the case of Fixed Rate Notes which are represented by a Global Note, the aggregate outstanding nominal amount of the Fixed Rate Notes represented by such Global Note; or |
(ii) | in the case of Fixed Rate Notes in definitive form, the Calculation Amount; |
and, in each case, multiplying such sum by the applicable Fixed Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Fixed Rate Note in definitive form comprises more than one Calculation Amount, the amount of interest payable in respect of such Fixed Rate Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination without any further rounding.
In these Terms and Conditions:
Fixed Day Count Fraction means, in respect of the calculation of an amount of interest in accordance with this Condition 4(a):
(i) | if Actual/Actual (ICMA) is specified in the applicable Final Terms: |
(a) | in the case of Notes where the number of days in the relevant period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date (the Accrual Period) is equal to or shorter than the Determination Period during which the Accrual Period ends, the number of days in such Accrual Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Dates (as specified in the applicable Final Terms) that would occur in one calendar year; or |
(b) | in the case of Notes where the Accrual Period is longer than the Determination Period during which the Accrual Period ends, the sum of: |
(1) | the number of days in such Accrual Period falling in the Determination Period in which the Accrual Period begins divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Dates (as specified in the applicable Final Terms) that would occur in one calendar year; and |
(2) | the number of days in such Accrual Period falling in the next Determination Period divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Dates that would occur in one calendar year assuming interest was to be payable in respect of the whole of that year; |
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(ii) if 30/360 is specified in the applicable Final Terms, the number of days in the period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date (such number of days being calculated on the basis of a year of 360 days with 12 30-day months) divided by 360; and
(iii) if Actual/365 (Fixed) is specified in the applicable Final Terms, the actual number of days in the relevant period divided by 365.
In these Terms and Conditions:
Determination Period means each period from (and including) a Determination Date to (but excluding) the next Determination Date (including, where either the Interest Commencement Date or the final Interest Payment Date is not a Determination Date, the period commencing on the first Determination Date prior to, and ending on the first Determination Date falling after, such date); and
sub-unit means, with respect to any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, with respect to euro, means one cent.
(b) | Interest on Floating Rate Notes and Inflation Linked Interest Notes |
(i) | Interest Payment Dates |
Each Floating Rate Note and Inflation Linked Interest Note bears interest from (and including) the Interest Commencement Date and such interest will be payable in arrear on either:
(A) | the Specified Interest Payment Date(s) (each an Interest Payment Date) in each year specified in the applicable Final Terms; or |
(B) | if no Specified Interest Payment Date(s) is/are specified in the applicable Final Terms, each date (each an Interest Payment Date) which falls the number of months or other period specified as the Specified Period in the applicable Final Terms after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date. |
Such interest will be payable in respect of each Interest Period (which expression shall, in these Terms and Conditions, mean the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date).
If a Business Day Convention is specified in the applicable Final Terms and (x) if there is no numerically corresponding day in the calendar month in which an Interest Payment Date should occur or (y) if any Interest Payment Date would otherwise fall on a day which is not a Business Day, then, if the Business Day Convention specified is:
(1) | in any case where Specified Periods are specified in accordance with Condition 4(b)(i)(B), the Floating Rate Convention, such Interest Payment Date (i) in the case of (x) above, shall be the last day that is a Business Day in the relevant month and the provisions of (B) below shall apply mutatis mutandis or (ii) in the case of (y) above, shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event (A) such Interest Payment Date shall be brought forward to the immediately preceding Business Day and (B) each subsequent Interest Payment Date shall be the last Business Day in the month which falls the Specified Period after the preceding applicable Interest Payment Date occurred; or |
(2) | the Following Business Day Convention, such Interest Payment Date shall be postponed to the next day which is a Business Day; or |
(3) | the Modified Following Business Day Convention, such Interest Payment Date shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event such Interest Payment Date shall be brought forward to the immediately preceding Business Day; or |
(4) | the Preceding Business Day Convention, such Interest Payment Date shall be brought forward to the immediately preceding Business Day. |
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In these Terms and Conditions, Business Day means a day which is both:
(A) | a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in London and any Additional Business Centre specified in the applicable Final Terms; and |
(B) | either (1) in relation to any sum payable in a Specified Currency other than euro or Renminbi, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency (which, if the Specified Currency is Australian dollars or New Zealand dollars, shall be Sydney or Wellington, respectively), (2) in relation to any sum payable in euro, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET2) System (the TARGET2 System) is open or (3) in relation to any sum payable in Renminbi, a day (other than a Saturday, Sunday or public holiday) on which commercial banks and foreign exchange markets in Hong Kong are generally open for business and settlement for Renminbi payments in Hong Kong. |
(ii) | Rate of Interest for Floating Rate Notes |
The Rate of Interest payable from time to time in respect of Floating Rate Notes will be determined in the manner specified in the applicable Final Terms.
(A) | ISDA Determination for Floating Rate Notes |
Where ISDA Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be the relevant ISDA Rate plus or minus (as indicated in the applicable Final Terms) the Margin (if any). For the purposes of this sub-paragraph (A), ISDA Rate for an Interest Period means a rate equal to the Floating Rate that would be determined by the Issuing and Principal Paying Agent under an interest rate swap transaction if the Issuing and Principal Paying Agent were acting as Calculation Agent for that swap transaction under the terms of an agreement incorporating the 2006 ISDA Definitions (as published by the International Swaps and Derivatives Association, Inc. and amended and updated as at the Issue Date of the first Tranche of the Notes) (the ISDA Definitions) and under which:
(1) | the Floating Rate Option is as specified in the applicable Final Terms; |
(2) | the Designated Maturity is a period specified in the applicable Final Terms; and |
(3) | the relevant Reset Date is either (i) if the applicable Floating Rate Option is based on the London inter-bank offered rate (LIBOR) or on the Euro-zone inter-bank offered rate (EURIBOR) for a currency, the first day of that Interest Period or (ii) in any other case, as specified in the applicable Final Terms. |
For the purposes of this sub-paragraph (A), (i) Floating Rate, Calculation Agent, Floating Rate Option, Designated Maturity and Reset Date have the meanings given to those terms in the ISDA Definitions, (ii) the definition of Banking Day in the ISDA Definitions shall be amended to insert after the words are open for in the second line the word general and (iii) Euro-zone means the region comprised of Member States of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union.
(B) | Screen Rate Determination for Floating Rate Notes |
Where Screen Rate Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will, subject as provided below, be either:
(1) | the offered quotation; or |
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(2) | the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the offered quotations, |
(expressed as a percentage rate per annum) for the Reference Rate which appears or appear, as the case may be, on the Relevant Screen Page as at the Relevant Time on the Interest Determination Date in question plus or minus (as indicated in the applicable Final Terms) the Margin (if any), all as determined by the Issuing and Principal Paying Agent. If five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Issuing and Principal Paying Agent for the purpose of determining the arithmetic mean (rounded as provided above) of such offered quotations.
If the Relevant Screen Page is not available or if, in the case of Condition 4(b)(ii)(B)(1) above, no such offered quotation appears or, in the case of Condition 4(b)(ii)(B)(2) above, fewer than three such offered quotations appear, in each case as at the time specified in the preceding paragraph above, the Issuing and Principal Paying Agent shall request each of the Reference Banks to provide the Issuing and Principal Paying Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate, at approximately the Relevant Time, on the Interest Determination Date in question. If two or more of the Reference Banks provide the Issuing and Principal Paying Agent with such offered quotations, the Rate of Interest for such Interest Period shall be the arithmetic mean (rounded if necessary to the fifth decimal place with 0.000005 being rounded upwards) of such offered quotations plus or minus (as appropriate) the Margin (if any), all as determined by the Issuing and Principal Paying Agent.
If on any Interest Determination Date one only or none of the Reference Banks provides the Issuing and Principal Paying Agent with such offered quotations as provided in the preceding paragraph, the Rate of Interest for the relevant Interest Period shall be the rate per annum which the Issuing and Principal Paying Agent determines as being the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the rates, as communicated to (and at the request of) the Issuing and Principal Paying Agent by the Reference Banks or any two or more of them, at which such banks were offered, at approximately the Relevant Time, on the relevant Interest Determination Date, deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate by leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone inter-bank market or, if the Reference Rate is TIBOR, the Tokyo inter-bank market or, if the Reference Rate is CDOR, the Toronto inter-bank market or, if the Reference Rate is JIBAR, the Johannesburg inter-bank market, as the case may be, plus or minus (as appropriate) the Margin (if any) or, if fewer than two of the Reference Banks provide the Issuing and Principal Paying Agent with such offered rates, the offered rate for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, or the arithmetic mean (rounded as provided above) of the offered rates for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, at approximately the Relevant Time, on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Issuer suitable for such purpose) informs the Issuing and Principal Paying Agent it is quoting to leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone inter-bank market or, if the Reference Rate is TIBOR, the Tokyo inter-bank market or, if the Reference Rate is CDOR, the Toronto inter-bank market or, if the Reference Rate is JIBAR, the Johannesburg inter-bank market, as the case may be, plus or minus (as appropriate) the Margin (if any), provided that, if the Rate of Interest cannot be determined in accordance with the foregoing provisions of this paragraph, the Rate of Interest shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin relating to the relevant Interest Period, in place of the Margin relating to that last preceding Interest Period).In these Terms and Conditions:
Interest Determination Date means:
(i) | if the Reference Rate is LIBOR (other than Sterling or Euro LIBOR), the second London business day prior the start of each Interest Period; |
(ii) | if the Reference Rate is Sterling LIBOR, the first day of each Interest Period; |
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(iii) | if the Reference Rate is Euro LIBOR or EURIBOR, the second day on which the TARGET2 System is open prior to the start of each Interest Period; |
(iv) | if the Reference Rate is the Tokyo inter-bank offered rate (TIBOR), the second Tokyo Business Day prior to the start of each Interest Period; |
(v) | if the Reference Rate is the Canadian Dollar offered rate (CDOR), the first day of each Interest Period; and |
(vi) | if the Reference Rate is the Johannesburg inter-bank agreed rate (JIBAR), the first day of each Interest Period; |
Reference Banks means, in the case of a determination of LIBOR, the principal London office of four major banks in the London inter-bank market, in the case of a determination of EURIBOR, the principal office of four major banks in the Euro-zone inter-bank market, in the case of a determination of TIBOR, the principal Tokyo office of ten major banks in the Tokyo inter-bank market, in the case of a determination of CDOR, four major Canadian Schedule I chartered banks, in the case of a determination of JIBAR, the principal Johannesburg office of four major banks in the Johannesburg inter-bank market, in each case selected by the Issuing and Principal Paying Agent;
Reference Rate means (i) LIBOR, (ii) EURIBOR, (iii) TIBOR, (iv) CDOR or (v) JIBAR, in each case for the relevant period, as specified in the applicable Final Terms;
Relevant Financial Centre means (i) London, in the case of a determination of LIBOR, (ii) Brussels, in the case of a determination of EURIBOR, (iii) Tokyo, in the case of a determination of TIBOR, (iv) Toronto, in the case of a determination of CDOR and (v) Johannesburg, in the case of a determination of JIBAR; and
Relevant Time means (i) in the case of LIBOR, 11.00 a.m., (ii) in the case of EURIBOR, 11.00 a.m., (iii) in the case of TIBOR, 11.00 a.m., (iv) in the case of CDOR, 10.00 a.m. and (v) in the case of JIBAR, 11.00 a.m., in each case in the Relevant Financial Centre.
(iii) | Rate of Interest for Inflation Linked Interest Notes |
The Rate of Interest in respect of Inflation Linked Interest Notes for each Interest Period will be as specified in the applicable Final Terms. Amounts of interest payable in respect of Inflation Linked Interest Notes determined by reference to the applicable Rate of Interest shall be subject to adjustment in accordance with Condition 5.
(iv) | Minimum Rate of Interest and/or Maximum Rate of Interest |
If the applicable Final Terms specifies a Minimum Rate of Interest for any Interest Period, then, in the event that the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of sub-paragraph (ii) above is less than such Minimum Rate of Interest, the Rate of Interest for such Interest Period shall be such Minimum Rate of Interest.
If the applicable Final Terms specifies a Maximum Rate of Interest for any Interest Period, then, in the event that the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of sub-paragraph (ii) above is greater than such Maximum Rate of Interest, the Rate of Interest for such Interest Period shall be such Maximum Rate of Interest.
(v) | Determination of Rate of Interest and calculation of Interest Amounts |
The Issuing and Principal Paying Agent, in the case of Floating Rate Notes, and the Calculation Agent, in the case of Inflation Linked Interest Notes, will at or as soon as practicable after each time at which the Rate of Interest is to be determined, determine the Rate of Interest for the relevant Interest Period. In the case of Inflation Linked Interest Notes, the Calculation Agent will notify the Issuing and Principal Paying Agent of the Rate of Interest for the relevant Interest Period as soon as practicable after calculating the same.
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The Issuing and Principal Paying Agent will calculate the amount of interest (the Interest Amount) payable on the Floating Rate Notes or Inflation Linked Interest Notes for the relevant Interest Period by applying the Rate of Interest to:
(A) | in the case of Floating Rate Notes or Inflation Linked Interest Notes which are represented by a Global Note, the aggregate outstanding nominal amount of the Notes represented by such Global Note; or |
(B) | in the case of Floating Rate Notes or Inflation Linked Interest Notes in definitive form, the Calculation Amount; |
and, in each case, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Floating Rate Note or an Inflation Linked Interest Note in definitive form comprises more than one Calculation Amount, the Interest Amount payable in respect of such Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination without any further rounding
Day Count Fraction means, in respect of the calculation of an amount of interest for any Interest Period:
(i) | if Actual/Actual-ISDA or Actual/Actual is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365 (or, if any portion of that Interest Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Interest Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Interest Period falling in a non-leap year divided by 365); |
(ii) | if Actual/365 (Sterling) is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366; |
(iii) | if Actual/365 (Fixed) is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365; |
(iv) | if Actual/360 is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 360; |
(v) | if 30/360, 360/360 or Bond Basis is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows: |
where:
Y1 is the year, expressed as a number, in which the first day of the Interest Period falls;
Y2 is the year, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
M1 is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
M2 is the calendar month, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
D1 is the first calendar day, expressed as a number, of the Interest Period, unless such number is 31, in which case D1 will be 30; and
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D2 is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;
(vi) | if 30E/360 or Eurobond Basis is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows: |
where:
Y1 is the year, expressed as a number, in which the first day of the Interest Period falls;
Y2 is the year, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
M1 is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
M2 is the calendar month, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
D1 is the first calendar day, expressed as a number, of the Interest Period, unless such number would be 31, in which case D1 will be 30; and
D2 is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless such number would be 31, in which case D2 will be 30; and
(vii) | if 30E/360 (ISDA) is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows: |
where:
Y1 is the year, expressed as a number, in which the first day of the Interest Period falls;
Y2 is the year, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
M1 is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
M2 is the calendar month, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
D1 is the first calendar day, expressed as a number, of the Interest Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and
D2 is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D2 will be 30.
(vi) | Notification of Rate of Interest and Interest Amounts |
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The Issuing and Principal Paying Agent will cause the Rate of Interest and each Interest Amount for each Interest Period and the relevant Interest Payment Date to be notified to the Issuer and any stock exchange on which the relevant Floating Rate Notes or Inflation Linked Interest Notes are for the time being listed and notice thereof to be published in accordance with Condition 14 as soon as possible after their determination but in no event later than the fourth London Business Day thereafter. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without prior notice in the event of an extension or shortening of the Interest Period. Any such amendment will be promptly notified to each stock exchange on which the relevant Floating Rate Notes or Inflation Linked Interest Notes are for the time being listed and to the Noteholders in accordance with Condition 14. For the purposes of this paragraph, the expression London Business Day means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for business in London.
(vii) | Determination or Calculation by Trustee |
If for any reason at any relevant time the Issuing and Principal Paying Agent or, as the case may be, the Calculation Agent defaults in its obligation to determine the Rate of Interest or the Issuing and Principal Paying Agent defaults in its obligation to calculate any Interest Amount in accordance with sub-paragraph (ii)(A) or (B) above, as the case may be, and in each case in accordance with sub-paragraph (v) above, the Trustee or an agent appointed by the Trustee shall determine the Rate of Interest at such rate as, in its absolute discretion (having such regard as it shall think fit to the foregoing provisions of this Condition 4, but subject always to any Minimum or Maximum Rate of Interest specified in the applicable Final Terms), it shall deem fair and reasonable in all the circumstances or, as the case may be, the Trustee shall calculate the Interest Amount(s) in such manner as it shall deem fair and reasonable in all the circumstances and each such determination or calculation shall be deemed to have been made by the Issuing and Principal Paying Agent or the Calculation Agent, as applicable.
(viii) | Certificates to be final |
All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 4, whether by the Issuing and Principal Paying Agent or, if applicable, the Calculation Agent or the Trustee, shall (in the absence of wilful default, bad faith or manifest error) be binding on the Issuer, the Issuing and Principal Paying Agent, the Calculation Agent (if applicable), the other Paying Agents and all Noteholders and Couponholders and (in the absence as aforesaid) no liability to the Issuer, the Noteholders or the Couponholders shall attach to the Issuing and Principal Paying Agent or, if applicable, the Calculation Agent or the Trustee in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions.
(c) | Accrual of interest |
Each Note (or in the case of the redemption of part only of a Note, that part only of such Note) will cease to bear interest (if any) from the date for its redemption unless payment of principal is improperly withheld or refused. In such event, interest will continue to accrue as provided in the Trust Deed.
5. | Inflation Linked Notes |
This Condition 5 is applicable only if the applicable Final Terms specifies the Notes as Inflation Linked Interest Notes and/or Inflation Linked Redemption Notes (Inflation Linked Notes).
(a) | U.K. Retail Price Index |
Where RPI (as defined below) is specified as the Index in the applicable Final Terms, Conditions 5(a) to 5(f) will apply. For purposes of Conditions 5(a) to 5(f), unless the context otherwise requires, the following defined terms shall have the meanings set out below:
Base Index Figure means (subject to Condition 5(c)(i)) the base index figure as specified in the applicable Final Terms;
Calculation Agent means the person appointed by the Issuer as calculation agent in relation to a Series of Inflation Linked Notes and specified in the applicable Final Terms, and shall include any successor calculation agent appointed in respect of such Notes;
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Her Majestys Treasury means Her Majestys Treasury or any officially recognised party performing the function of a calculation agent (whatever such partys title), on its or its successors behalf, in respect of the Reference Gilt;
Index or Index Figure means, subject as provided in Condition 5(c)(i), the U.K. Retail Price Index (RPl) (for all items) published by the Office for National Statistics (January 1987 = 100) or any comparable index which may replace the U.K. Retail Price Index for the purpose of calculating the amount payable on repayment of the Reference Gilt (the RPI). Any reference to the Index Figure:
(i) | applicable to a particular month, shall, subject as provided in Conditions 5(c) and 5(e), be construed as a reference to the Index Figure published in the seventh month prior to that particular month and relating to the month before that of publication; or |
(ii) | applicable to the first calendar day of any month shall, subject as provided in Conditions 5(c) and 5(e), be construed as a reference to the Index Figure published in the second month prior to that particular month and relating to the month before that of publication; or |
(iii) | applicable to any other day in any month shall, subject as provided in Conditions 5(c) and 5(e), be calculated by linear interpolation between (x) the Index Figure applicable to the first calendar day of the month in which the day falls, calculated as specified in sub-paragraph (ii) above and (y) the Index Figure applicable to the first calendar day of the month following, calculated as specified in sub-paragraph (ii) above and rounded to the nearest fifth decimal place; |
Index Ratio applicable to any month or date, as the case may be, means the Index Figure applicable to such month or date, as the case may be, divided by the Base Index Figure and rounded to the nearest fifth decimal place;
Limited Index Ratio means (a) in respect of any month or date, as the case may be, prior to the relevant Issue Date, the Index Ratio for that month or date, as the case may be, (b) in respect of any Limited Indexation Date after the relevant Issue Date, the product of the Limited Indexation Factor for that month or date, as the case may be, and the Limited Index Ratio as previously calculated in respect of the month or date, as the case may be, twelve months prior thereto; and (c) in respect of any other month, the Limited Index Ratio as previously calculated in respect of the most recent Limited Indexation Month;
Limited Indexation Date means any date falling during the period specified in the applicable Final Terms for which a Limited Indexation Factor is to be calculated;
Limited Indexation Factor means, in respect of a Limited Indexation Month or Limited Indexation Date, as the case may be, the ratio of the Index Figure applicable to that month or date, as the case may be, divided by the Index Figure applicable to the month or date, as the case may be, twelve months prior thereto, provided that (a) if such ratio is greater than the Maximum Indexation Factor specified in the applicable Final Terms, it shall be deemed to be equal to such Maximum Indexation Factor and (b) if such ratio is less than the Minimum Indexation Factor specified in the applicable Final Terms, it shall be deemed to be equal to such Minimum Indexation Factor;
Limited Indexation Month means any month specified in the applicable Final Terms for which a Limited Indexation Factor is to be calculated;
Limited Index Linked Notes means Inflation Linked Notes to which a Maximum Indexation Factor and/or a Minimum Indexation Factor (as specified in the applicable Final Terms) applies; and
Reference Gilt means the index-linked Treasury Stock or Treasury Gilt specified as such in the applicable Final Terms for so long as such gilt is in issue, and thereafter such issue of index-linked Treasury Stock or Treasury Gilt determined to be appropriate by a gilt-edged market maker or other adviser selected by the Issuer (an Indexation Adviser).
(b) | Application of the Index Ratio |
Each payment of interest (in the case of Inflation Linked Interest Notes) and principal (in the case of Inflation Linked Redemption Notes) in respect of the Notes shall be the amount provided in, or determined in accordance with, these Terms and Conditions, multiplied by the Index Ratio or Limited Index Ratio in the case of Limited Index Linked Notes
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applicable to the month or date, as the case may be, on which such payment falls to be made and rounded in accordance with Condition 4(b)(v).
(c) | Changes in Circumstances Affecting the Index |
(i) | Change in base: If at any time and from time to time the Index is changed by the substitution of a new base therefor, then with effect from the month from and including that in which such substitution takes effect or the first date from and including that on which such substitution takes effect, as the case may be, (1) the definition of Index and Index Figure in Condition 5(a) shall be deemed to refer to the new date or month in substitution for January 1987 (or, as the case may be, to such other date or month as may have been substituted therefor), and (2) the new Base Index Figure shall be the product of the existing Base Index Figure and the Index Figure for the date on which such substitution takes effect, divided by the Index Figure for the date immediately preceding the date on which such substitution takes effect. |
(ii) | Delay in publication of Index if sub-paragraph (i) of the definition of Index Figure is applicable: If the Index Figure which is normally published in the seventh month and which relates to the eighth month (the relevant month) before the month in which a payment is due to be made is not published on or before the fourteenth business day before the date on which such payment is due (the date for payment), the Index Figure applicable to the month in which the date for payment falls shall be (1) such substitute index figure (if any) as the Trustee considers (acting solely on the advice of the Indexation Adviser) to have been published by the United Kingdom Debt Management Office or the Bank of England, as the case may be, for the purposes of indexation of payments on the Reference Gilt or, failing such publication, on any one or more issues of index-linked Treasury Stock selected by an Indexation Adviser (and approved by the Trustee (acting solely on the advice of the Indexation Adviser)) or (2) if no such determination is made by such Indexation Adviser within seven days, the Index Figure last published (or, if later, the substitute index figure last determined pursuant to Condition 5(c)(i)) before the date for payment. |
(iii) | Delay in publication of Index if sub-paragraph (ii) and/or (iii) of the definition of Index Figure is applicable: If the Index Figure relating to any month (the calculation month) which is required to be taken into account for the purposes of the determination of the Index Figure for any date is not published on or before the fourteenth business day before the date on which such payment is due (the date for payment), the Index Figure applicable for the relevant calculation month shall be (1) such substitute index figure (if any) as the Trustee considers (acting solely on the advice of the Indexation Adviser) to have been published by the United Kingdom Debt Management Office or the Bank of England, as the case may be, for the purposes of indexation of payments on the Reference Gilt or, failing such publication, on any one or more issues of index-linked Treasury Stock selected by an Indexation Adviser (and approved by the Trustee (acting solely on the advice of the Indexation Adviser)) or (2) if no such determination is made by such Indexation Adviser within seven days, the Index Figure last published (or, if later, the substitute index figure last determined pursuant to Condition 5(c)(i)) before the date for payment. |
(d) | Application of Changes |
Where the provisions of Condition 5c(ii) or Condition 5(c)(iii) apply, the determination of the Indexation Adviser as to the Index Figure applicable to the month in which the date for payment falls or the date for payment, as the case may be, shall be conclusive and binding. If, an Index Figure having been applied pursuant to Condition 5(c)(ii)(2) or Condition 5(c)(iii)(2), the Index Figure relating to the relevant month or relevant calculation month, as the case may be, is subsequently published while a Note is still outstanding, then:
(i) | in relation to a payment of interest (in the case of Inflation Linked Interest Notes) and/or principal (in the case of Inflation Linked Redemption Notes) in respect of such Note other than upon final redemption of such Note, the interest and/or principal (as the case may be) next payable after the date of such subsequent publication shall be increased or reduced, as the case may be, by an amount equal to the shortfall or excess, as the case may be, of the amount of the relevant payment |
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made on the basis of the Index Figure applicable by virtue of Condition 5(c)(ii)(2) or Condition 5(c)(iii)(2) below or above the amount of the relevant payment that would have been due if the Index Figure subsequently published had been published on or before the fourteenth business day before the date for payment; and |
(ii) | in relation to a payment of interest (in the case of Inflation Linked Interest Notes) and/or principal (in the case of Inflation Linked Redemption Notes) upon final redemption, no subsequent adjustment to amounts paid will be made. |
(e) | Material Changes or Cessation of the Index |
(i) | Material changes to the Index: If notice is published by Her Majestys Treasury, or on its behalf, following a change to the coverage or the basic calculation of the Index, then the Calculation Agent shall make any such adjustments to the Index consistent with any adjustments made to the Index as applied to the Reference Gilt. |
(ii) | Cessation of the Index: If the Trustee and the Issuer have been notified by the Calculation Agent that the Index has ceased to be published, or if Her Majestys Treasury, or a person acting on its behalf, announces that it will no longer continue to publish the Index, then the Calculation Agent shall determine a successor index in lieu of any previously applicable index (the Successor Index) by using the following methodology: |
(a) | if at any time a successor index has been designated by Her Majestys Treasury in respect of the Reference Gilt, such successor index shall be designated the Successor Index for the purposes of all subsequent Interest Payment Dates, notwithstanding that any other Successor Index may previously have been determined under paragraphs (b) or (c) below; or |
(b) | if a Successor Index has not been determined under paragraph (a) above, the Issuer and the Trustee (acting solely on the advice of the Indexation Adviser) together shall seek to agree for the purpose of the Notes one or more adjustments to the Index or a substitute index (with or without adjustments) with the intention that the same should leave the Issuer and the Noteholders in no better and no worse position than they would have been had the Index not ceased to be published; or |
(c) | if the Issuer and the Trustee (acting solely on the advice of the Indexation Adviser) fail to reach agreement as mentioned above within 20 business days following the giving of notice as mentioned in paragraph (ii), a bank or other person in London shall be appointed by the Issuer and the Trustee or, failing agreement on and the making of such appointment within 20 business days following the expiry of the 20 business day period referred to above, by the Trustee (acting solely on the advice of the Indexation Adviser) (in each case, such bank or other person so appointed being referred to as the Expert), to determine for the purpose of the Notes one or more adjustments to the Index or a substitute index (with or without adjustments) with the intention that the same should leave the Issuer and the Noteholders in no better and no worse position than they would have been had the Index not ceased to be published. Any Expert so appointed shall act as an expert and not as an arbitrator and all fees, costs and expenses of the Expert and of any Indexation Adviser and of any of the Issuer and the Trustee in connection with such appointment shall be borne by the Issuer. |
(iii) | Adjustment or replacement: The Index shall be adjusted or replaced by a substitute index pursuant to the foregoing paragraphs, as the case may be, and references in these Terms and Conditions to the Index and to any Index Figure shall be deemed amended in such manner as the Trustee (acting solely on the advice of the Indexation Adviser) and the Issuer agree are appropriate to give effect to such adjustment or replacement. Such amendments shall be effective from the date of such notification and binding upon the Issuer, the Trustee and the Noteholders, and the Issuer shall give notice to the Noteholders in accordance with Condition 14 of such amendments as promptly as practicable following such notification or adjustment. |
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(f) | Redemption for Index Reasons |
If either (i) the Index Figure for three consecutive months is required to be determined on the basis of an Index Figure previously published as provided in Condition 5(c)(ii)(2) and the Trustee has been notified by the Calculation Agent that publication of the Index has ceased or (ii) notice is published by Her Majestys Treasury, or on its behalf, following a change in relation to the Index, offering a right of redemption to the holders of the Reference Gilt, and (in either case) no amendment or substitution of the Index shall have been designated by Her Majestys Treasury in respect of the Reference Gilt and such circumstances are continuing, the Issuer may, upon giving not more than 60 nor less than 30 days notice to the Noteholders (or such other notice period as may be specified in the applicable Final Terms) in accordance with Condition 14, redeem all, but not some only, of the Notes at their Early Redemption Amount referred to in Condition 6 (f) below together (if appropriate) with interest accrued to (but excluding) the date of redemption (in each case adjusted in accordance with Condition 5(b)).
(g) | HICP |
Where HICP (as defined below) is specified as the Index in the applicable Final Terms, the Conditions 5(g) to 5(j) will apply. For purposes of Conditions 5(g) to 5(j), unless the context otherwise requires, the following defined terms shall have the meanings set out below:
Base Index Level means the base index level as specified in the applicable Final Terms;
Calculation Agent means the person appointed by the Issuer as calculation agent in relation to a Series of Inflation Linked Notes and specified in the applicable Final Terms, and shall include any successor calculation agent appointed in respect of such Notes;
Index or Index Level means (subject as provided in Condition 5(i) the non-revised Harmonised Index of Consumer Prices excluding tobacco or relevant Successor Index (as defined in Condition 5(i)(ii)), measuring the rate of inflation in the European Monetary Union excluding tobacco, expressed as an index and published by Eurostat (the HICP). The first publication or announcement of a level of such index for a calculation month (as defined in Condition 5(i)(i)(A)) shall be final and conclusive and later revisions to the level for such calculation month will not be used in any calculations. Any reference to the Index Level which is specified in these Conditions as applicable to any day (d) in any month (m) shall, subject as provided in Condition 5(i), be calculated as follows:
where:
Id is the Index Level for the day d
HICP m-2 is the level of HICP for month m-2
HICP m-3 is the level of HICP for month m-3
nbd is the actual number of days from and excluding the first day of month m to but including day d;
and
qm is the actual number of days in month m,
provided that if Condition 5(i) applies, the Index Level shall be the Substitute Index Level determined in accordance with such Condition.
Index Business Day means a day on which the TARGET System is operating;
Index Determination Date means in respect of any date for which the Index Level is required to be determined, the fifth Index Business Day prior to such date;
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Index Ratio applicable to any date means the Index Level applicable to the relevant Index Determination Date divided by the Base Index Level and rounded to the nearest fifth decimal place, 0.000005 being rounded upwards;
Related Instrument means an inflation-linked bond selected by the Calculation Agent that is a debt obligation of one of the governments (but not any government agency) of France, Italy, Germany or Spain and which pays a coupon or redemption amount which is calculated by reference to the level of inflation in the European Monetary Union with a maturity date which falls on (a) the same day as the Maturity Date or (b) the next longest maturity date after the Maturity Date or the next shortest maturity for the Maturity Date at its sole discretion, if there is no such bond maturing on the Maturity Date. The Calculation Agent will select the Related Instrument from such of those inflation-linked bonds issued on or before the relevant Issue Date and, if there is more than one such inflation-linked bond maturing on the same date, the Related Instrument shall be selected by the Calculation Agent from such bonds at its sole discretion. If the Related Instrument is redeemed the Calculation Agent will select a new Related Instrument on the same basis, but selected from all eligible bonds in issue at the time the originally selected Related Instrument is redeemed (including any bond for which the redeemed originally selected Related Instrument is exchanged).
(h) | Application of the Index Ratio |
Each payment of interest (in the case of Inflation Linked Interest Notes) and principal (in the case of Inflation Linked Redemption Notes) in respect of the Notes shall be the amount provided in, or determined in accordance with, these Terms and Conditions, multiplied by the Index Ratio applicable to the date on which such payment falls to be made and rounded in accordance with Condition 4(b)(v)
(i) | Changes in Circumstances Affecting the Index |
(i) | Delay in publication of Index |
(A) | If the Index Level relating to any month (the calculation month) which is required to be taken into account for the purposes of the determination of the Index Level for any date (the Relevant Level) has not been published or announced by the day that is five Business Days before the date on which such payment is due (the Affected Payment Date), the Calculation Agent shall determine a Substitute Index Level (as defined below) (in place of such Relevant Level) by using the following methodology: |
(1) | if applicable, the Calculation Agent will take the same action to determine the Substitute Index Level for the Affected Payment Date as that taken by the calculation agent (or any other party performing the function of a calculation agent (whatever such partys title)) pursuant to the terms and conditions of the Related Instrument; |
(2) | if (1) above does not result in a Substitute Index Level for the Affected Payment Date for any reason, then the Calculation Agent shall determine the Substitute Index Level as follows: |
Substitute Index Level = Base Level x (Latest Level / Reference Level)
Where:
Base Level means the level of the Index (excluding any flash estimates) published or announced by Eurostat (or any successor entity which publishes such index) in respect of the month which is 12 calendar months prior to the month for which the Substitute Index Level is being determined;
Latest Level means the latest level of the Index (excluding any flash estimates) published or announced by Eurostat (or any successor entity which publishes such index) prior to the month in respect of which the Substitute Index Level is being calculated; and
Reference Level means the level of the Index (excluding any flash estimates) published or announced by Eurostat (or any successor entity which publishes such index) in respect of the month that is 12 calendar months prior to the month referred to in Latest Level above.
(B) | If a Relevant Level is published or announced at any time after the day that is five Business Days prior to the next Interest Payment Date, such Relevant Level will not be used in any calculations. The Substitute Index Level so determined pursuant to this Condition 5(i) will be the definitive level for that calculation month. |
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(ii) | Cessation of publication: If the Index Level has not been published or announced for two consecutive months or Eurostat announces that it will no longer continue to publish or announce the Index then the Calculation Agent shall determine a successor index in lieu of any previously applicable Index (the Successor Index) by using the following methodology: |
(A) | if at any time (other than after an Early Termination Event (as defined below) has been designated by the Calculation Agent pursuant to paragraph (E) below) a successor index has been designated by the calculation agent (or any other party performing the function of a calculation agent (whatever such partys title)) pursuant to the terms and conditions of the Related Instrument, such successor index shall be designated the Successor Index for the purposes of all subsequent Interest Payment Dates, notwithstanding that any other Successor Index may previously have been determined under paragraphs (B), (C) or (D) below; or |
(B) | if a Successor Index has not been determined under paragraph (A) above (and there has been no designation of an Early Termination Event pursuant to paragraph (E) below), and a notice has been given or an announcement has been made by Eurostat (or any successor entity which publishes such index) specifying that the Index will be superseded by a replacement index specified by Eurostat (or any such successor), and the Calculation Agent determines that such replacement index is calculated using the same or substantially similar formula or method of calculation as used in the calculation of the previously applicable Index, such replacement index shall be the Index from the date that such replacement index comes into effect; or |
(C) | if a Successor Index has not been determined under paragraphs (A) or (B) above (and there has been no designation of an Early Termination Event pursuant to paragraph (E) below), the Calculation Agent shall ask five leading independent dealers to state what the replacement index for the Index should be. If four or five responses are received, and of those four or five responses, three or more leading independent dealers state the same index, this index will be deemed the Successor Index. If three responses are received, and two or more leading independent dealers state the same index, this index will be deemed the Successor Index. If fewer than three responses are received, the Calculation Agent will proceed to paragraph (D) below; |
(D) | if no Successor Index has been determined under paragraphs (A), (B) or (C) above on or before the fifth Index Business Day prior to the next Affected Payment Date the Calculation Agent will determine an appropriate alternative index for such Affected Payment Date, and such index will be deemed the Successor Index; |
(E) | if the Calculation Agent determines that there is no appropriate alternative index, the Issuer shall, in conjunction with the Calculation Agent, determine in good faith an appropriate alternative index. If the Issuer, in conjunction with the Calculation Agent, does not decide on an appropriate alternative index within a period of ten Business Days, then an Early Termination Event will be deemed to have occurred and the Issuer will redeem the Notes pursuant to Condition 5(j). |
(iii) | Rebasing of the Index: If the Calculation Agent determines that the Index has been or will be rebased at any time, the Index as so rebased (the Rebased Index) will be used for the purposes of determining each relevant Index Level from the date of such rebasing; provided, however, that the Calculation Agent shall make such adjustments as are made by the calculation agent (or any other party performing the function of a calculation agent (whatever such partys title)) pursuant to the terms and conditions of the Related Instrument to the levels of the Rebased Index so that the Rebased Index levels reflect the same rate of inflation as the Index before it was rebased. Any such rebasing shall not affect any prior payments made. |
(iv) | Material Modification Prior to Interest Payment Date: If, on or prior to the day that is five Business Days before an Interest Payment Date, Eurostat announces that it will make a material change to the Index then the Calculation Agent shall make any such adjustments to the Index consistent with adjustments made to the Related Instrument. |
(v) | Manifest Error in Publication: If, within thirty days of publication, the Calculation Agent determines that Eurostat (or any successor entity which publishes such index) has corrected the level of the Index to remedy a manifest error in its original publication, the Calculation Agent will notify the parties of (A) that correction, |
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(B) the amount that is payable, in respect of interest payments falling after such correction, as a result of that correction and (C) take such other action as it may deem necessary to give effect to such correction. |
(j) | Redemption for Index Reasons |
If an Early Termination Event as described under Condition 5(i)(ii)(E) is deemed to have occurred, the Issuer will, upon giving not more than 60 nor less than 30 days notice to the Noteholders (or such other notice period as may be specified in the applicable Final Terms) in accordance with Condition 14, redeem all, but not some only, of the Notes at their Early Redemption Amount referred to in Condition 6(f) below together (if appropriate) with interest accrued to (but excluding) the date of redemption (in each case adjusted in accordance with Condition 5(h)).
6. Payments
(a) | Method of payment |
Subject as provided below:
(i) | payments in a Specified Currency other than euro or Renminbi will be made by credit or transfer to an account in the relevant Specified Currency (which, in the case of a payment in Japanese yen to a non-resident of Japan, shall be a non-resident account) maintained by the payee with, or, at the option of the payee, by a cheque in such Specified Currency drawn on, a bank in the principal financial centre of the country of such Specified Currency (which, if the Specified Currency is Australian dollars or New Zealand dollars, shall be Sydney or Wellington, respectively); |
(ii) | payments in euro will be made by credit or transfer to a euro account (or to any other account to which euro may be credited or transferred) specified by the payee or, at the option of the payee, by a euro cheque; and |
(iii) | payments in Renminbi will be made by transfer to a Renminbi account maintained by or on behalf of the payee with a bank in Hong Kong |
Payments will be subject in all cases to (i) any fiscal or other laws and regulations applicable thereto in the place of payment, but without prejudice to the provisions of Condition 8, and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the U.S. Internal Revenue Code of 1986 (the Code) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof, or (without prejudice to the provisions of Condition 8) any law implementing an intergovernmental approach thereto.
(b) | Presentation of Bearer Notes and Coupons |
Payments of principal in respect of Bearer Notes will be made in the manner provided in paragraph (a) above only against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of Bearer Notes, and payments of interest in respect of Bearer Notes will (subject as provided below) be made as aforesaid only against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of Coupons, in each case at the specified office of any Paying Agent outside the United States (which expression, as used herein, means the United States of America (including the States and the District of Columbia and its possessions)).
Fixed Rate Notes in bearer form (other than Fixed Rate Notes which specify Interest Payment Date Adjustment as being applicable in the applicable Final Terms or Inflation Linked Notes) should be presented for payment together with all unmatured Coupons appertaining thereto (which expression shall for this purpose include Coupons falling to be issued on exchange of matured Talons), failing which the amount of any missing unmatured Coupon (or, in the case of payment not being made in full, the same proportion of the amount of such missing unmatured Coupon as the sum so paid bears to the sum due) will be deducted from the sum due for payment. Each amount of principal so deducted will be paid in the manner mentioned above against surrender of the relative missing Coupon at any time before the expiry of 10 years after the Relevant Date (as defined in Condition 8) in respect of such principal (whether or not such Coupon would otherwise have become void under Condition 9) or, if later, five years from the date on which such Coupon would otherwise have become due, but in no event thereafter.
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Upon any Fixed Rate Note in bearer form becoming due and repayable prior to its Maturity Date, all unmatured Talons (if any) appertaining thereto will become void and no further Coupons will be issued in respect thereof.
Upon the date on which any Floating Rate Note, Fixed Rate Note which specifies Interest Payment Date Adjustment as being applicable in the applicable Final Terms or Inflation Linked Interest Note in bearer form becomes due and repayable, unmatured Coupons and Talons (if any) relating thereto (whether or not attached) shall become void and no payment or, as the case may be, exchange for further Coupons shall be made in respect thereof.
If the due date for redemption of any definitive Bearer Note is not an Interest Payment Date, interest (if any) accrued in respect of such Note from (and including) the preceding Interest Payment Date or, as the case may be, the Interest Commencement Date shall be payable only against surrender of the relevant definitive Bearer Note.
(c) | Payments in respect of Registered Notes |
(i) | Payments of principal in respect of Registered Notes shall be made against presentation and surrender of the relevant Certificates at the specified office of any of the Transfer Agents or of the Registrar and in the manner provided in the sub-paragraph (ii) below. |
(ii) | Interest on Registered Notes shall be paid to the person shown on the Register at the close of business on the fifteenth day before the due date for payment thereof (the Record Date). Payments of interest on each Registered Note shall be made in the relevant currency by cheque drawn on a Bank and mailed to the holder (or to the first named of joint holders) of such Note at its address appearing in the Register on the Record Date. Upon application by the holder to the specified office of the Registrar or any Transfer Agent before the Record Date, such payment of interest may be made by transfer to an account in the relevant currency maintained by the payee with a Bank. |
(iii) | Payments of principal and interest in respect of Registered Notes registered in the name of, or in the name of a nominee for, The Depository Trust Company (DTC) and denominated in a Specified Currency other than U.S. dollars will be made or procured to be made by transfer by the Registrar to an account in the relevant Specified Currency of the Exchange Agent on behalf of DTC or its nominee in accordance with the following provisions. The amounts in such Specified Currency payable by the Registrar or its agent to DTC with respect to Registered Notes held by DTC or its nominee will be received from the Issuer by the Registrar who will make payments in such Specified Currency by wire transfer of same day funds to the designated bank account in such Specified Currency of those DTC participants entitled to receive the relevant payment who have made an irrevocable election to DTC, in the case of interest payments, on or prior to the third DTC Business Day after the Record Date for the relevant payment of interest and, in the case of payments of principal, at least 12 DTC Business Days prior to the relevant payment date, to receive that payment in such Specified Currency. The Registrar, after the Exchange Agent has converted amounts in such Specified Currency into U.S. dollars, will deliver such U.S. dollar amount in same day funds to DTC for payment through its settlement system to those DTC participants entitled to receive the relevant payment who did not elect to receive such payment in such Specified Currency. The Agency Agreement sets out the manner in which such conversions are to be made. For the purposes of this Condition 6(c), DTC Business Day means any day on which DTC is open for business. |
(d) | General provisions applicable to payments |
The holder of a Global Note or a Global Certificate shall be the only person entitled to receive payments in respect of Notes represented by such Global Note or Global Certificate and the Issuer will be discharged by payment to, or to the order of, the holder of such Global Note or Global Certificate in respect of each amount so paid. Each of the persons shown in the records of Euroclear, Clearstream, Luxembourg or DTC as the beneficial holder of a particular nominal amount of Notes represented by such Global Note or Global Certificate must look solely to Euroclear, Clearstream, Luxembourg or DTC, as the case may be, for his share of each payment so made by the Issuer to, or to the order of, the holder of such Global Note or Global Certificate.
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Notwithstanding the foregoing provisions of this Condition, if any amount of principal and/or interest in respect of Bearer Notes is payable in U.S. dollars, such U.S. dollar payments of principal and/or interest in respect of such Notes will be made at the specified office of a Paying Agent in the United States if:
(i) | the Issuer has appointed Paying Agents with specified offices outside the United States with the reasonable expectation that such Paying Agents would be able to make payment in U.S. dollars at such specified offices outside the United States of the full amount of principal and interest on the Notes in the manner provided above when due; and |
(ii) | payment of the full amount of such principal and interest at all such specified offices outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions on the full payment or receipt of principal and interest in U.S. dollars; and |
(iii) | such payment is then permitted under United States law without involving, in the opinion of the Issuer, adverse tax consequences to the Issuer. |
(e) | Payment Day |
If the date for payment of any amount in respect of any Note or Coupon is not a Payment Day, the holder thereof shall not be entitled to payment until the next following Payment Day in the relevant place and shall not be entitled to further interest or other payment in respect of such delay. For these purposes, Payment Day means any day which (subject to Condition 9) is:
(i) | a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in: |
(A) | in the case of Notes in definitive form only, the relevant place of presentation; |
(B) | any Additional Financial Centre specified in the applicable Final Terms; and |
(ii) | either (1) in relation to any sum payable in a Specified Currency other than euro or Renminbi, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency (which, if the Specified Currency is Australian dollars or New Zealand dollars, shall be Sydney or Wellington, respectively), (2) in relation to any sum payable in euro, a day on which the TARGET2 System is open or (3) in relation to any sum payable in Renminbi, a day (other than a Saturday, Sunday or public holiday) on which commercial banks and foreign exchange markets in Hong Kong are generally open for business and settlement for Renminbi payments in Hong Kong. |
(f) | Interpretation of principal and interest |
Any reference in these Terms and Conditions to principal in respect of the Notes shall be deemed to include, as applicable:
(i) | any additional amounts which may be payable with respect to principal under Condition 7 or under any undertakings given in addition thereto or in substitution therefor pursuant to the Trust Deed; |
(ii) | the Final Redemption Amount of the Notes; |
(iii) | the Early Redemption Amount of the Notes; |
(iv) | the Optional Redemption Amount(s) (if any) of the Notes; |
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(v) | in relation to Zero Coupon Notes, the Amortised Face Amount (as defined in Condition 7(e)); and |
(vi) | any premium and any other amounts (other than interest) which may be payable by the Issuer under or in respect of the Notes. |
Any reference in these Terms and Conditions to interest in respect of the Notes shall be deemed to include, as applicable, any additional amounts which may be payable with respect to interest under Condition 8 or any undertakings given in addition thereto or in substitution therefor pursuant to the Trust Deed.
(g) | Renminbi Currency Event |
If Renminbi Currency Event is specified as applying in the applicable Final Terms and a Renminbi Currency Event (as defined below) occurs, the Issuer, on giving not less than five nor more than thirty days irrevocable notice in accordance with Condition 14 to the Noteholders and the Trustee prior to any due date for payment, shall be entitled to satisfy its obligations in respect of such payment (in whole or in part) by making such payment in U.S. dollars on the basis of the Spot Rate for the relevant Determination Date as promptly notified to the Issuer, the Trustee and the Paying Agents by the Calculation Agent.
In such event, any payment of U.S. dollars will be made by transfer to a U.S. dollar denominated account maintained by the payee with, or by a U.S. dollar denominated cheque drawn on, a bank in New York City and the definition of Payment Day in Condition 6(e) shall mean any day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in: (A) in the case of Notes in definitive form only, the relevant place of presentation; and (B) London and New York City.
For the purpose of this Condition:
Determination Business Day means a day (other than a Saturday or Sunday) on which commercial banks are open for general business (including dealings in foreign exchange) in Hong Kong, London and New York City;
Determination Date means the day which is three Determination Business Days before the due date of the relevant payment under the Notes;
Government Authority means any de facto or de jure government (or any agency or instrumentality thereof), court, tribunal, administrative or other governmental authority or any other entity (private or public) charged with the regulation of the financial markets (including the central bank) of Hong Kong;
Local Time means the time of day in the jurisdiction in which the Calculation Agent, appointed in connection with the Notes, is located;
Renminbi Currency Event means any one of Renminbi Illiquidity, Renminbi Non-Transferability and Renminbi Inconvertibility;
Renminbi Dealer means an independent foreign exchange dealer of international repute active in the Renminbi exchange market in Hong Kong reasonably selected by the Issuer;
Renminbi Illiquidity means the general Renminbi exchange market in Hong Kong becomes illiquid as a result of which the Issuer cannot obtain sufficient Renminbi in order to satisfy its obligation to pay interest or principal (in whole or in part) in respect of the Notes, as determined by the Issuer acting in good faith and in a commercially reasonable manner following consultation with two Renminbi Dealers;
Renminbi Inconvertibility means the occurrence of any event that makes it impossible for the Issuer to convert any amount due in respect of the Notes into Renminbi in the general Renminbi exchange market in Hong Kong, other than where such impossibility is due solely to the failure of the Issuer to comply with any law, rule or regulation enacted by any Governmental Authority (unless such law, rule or regulation is enacted after the Issue Date of the first Tranche of the Notes and it is impossible for the Issuer, due to an event beyond its control, to comply with such law, rule or regulation);
Renminbi Non-Transferability means the occurrence of any event that makes it impossible for the Issuer to transfer Renminbi between accounts inside Hong Kong or from an account inside Hong Kong to an account outside Hong
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Kong (including where the Renminbi clearing and settlement system for participating banks in Hong Kong is disrupted or suspended), other than where such impossibility is due solely to the failure of the Issuer to comply with any law, rule or regulation enacted by any Governmental Authority (unless such law, rule or regulation is enacted after the Issue Date of the first Tranche of the Notes and it is impossible for the Issuer, due to an event beyond its control, to comply with such law, rule or regulation); and
Spot Rate means the spot CNY/U.S. dollar exchange rate for the purchase of U.S. dollars with Renminbi in the over-the-counter Renminbi exchange market in Hong Kong for settlement in three Determination Business Days, as determined by the Calculation Agent at or around 11.00 a.m. (Local Time) on the Determination Date, on a deliverable basis by reference to Reuters Screen Page TRADCNY3, or if no such rate is available, on a non-deliverable basis by reference to Reuters Screen Page TRADNDF. If neither rate is available, the Calculation Agent shall in good faith and in a commercially reasonable manner determine the Spot Rate at or around 11:00 a.m. (Local Time) on the Determination Date as the most recently available CNY/U.S. dollar official fixing rate for settlement in two Determination Business Days reported by the State Administration of Foreign Exchange of the PRC, which is reported on the Reuters Screen Page CNY=SAEC. Reference to a page on the Reuters Screen means the display page so designated on the Reuters Monitor Money Rates Service (or any successor service) or such other page as may replace that page for the purpose of displaying a comparable currency exchange rate.
If for any reason at any relevant time the Calculation Agent defaults in its obligation to determine the Spot Rate, the Trustee shall determine (or, at the expense of the Issuer, appoint an expert to determine) the Spot Rate in such manner as, in its absolute discretion (having such regard as it shall think fit to the foregoing provisions of this Condition), it shall deem fair and reasonable in all the circumstances and each such determination shall be deemed to have been made by the Calculation Agent.
All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 6(h), whether by the Calculation Agent or the Trustee, shall (in the absence of wilful default, bad faith or manifest error) be binding on the Issuer, the Issuing and Principal Paying Agent, the other Paying Agents and all Noteholders and Couponholders and (in the absence as aforesaid) no liability to the Issuer, the Noteholders or the Couponholders shall attach to the Calculation Agent or the Trustee in connection with the exercise or non-exercise by it if its powers, duties and discretions pursuant to such provision.
7. | Redemption and Purchase |
(a) | Redemption at maturity |
Unless previously redeemed or purchased and cancelled as specified below, each Note will be redeemed by the Issuer at its Final Redemption Amount specified in the applicable Final Terms in the relevant Specified Currency on the Maturity Date.
(b) | Redemption for tax reasons |
The Notes may be redeemed at the option of the Issuer in whole, but not in part, at any time (if this Note is neither a Floating Rate Note nor an Inflation Linked Interest Note) or on any Interest Payment Date (if this Note is either a Floating Rate Note or an Inflation Linked Interest Note), on giving not less than 30 nor more than 60 days notice to the Issuing and Principal Paying Agent and, in accordance with Condition 14, the Noteholders (which notice shall be irrevocable), if:
(i) | on the occasion of the next payment due in respect of the Notes, the Issuer would be required to pay additional amounts as provided or referred to in Condition 8 as a result of any change in, or amendment to, the laws or regulations of the Relevant Jurisdiction (as defined in Condition 8) (or any political subdivision or taxing authority thereof or therein), or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the date on which agreement is reached to issue the first Tranche of the Notes; and |
(ii) | such requirement cannot be avoided by the Issuer taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be required to pay such additional amounts were a payment in respect of the Notes then due. |
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Prior to the publication of any notice of redemption pursuant to this Condition, the Issuer shall deliver to the Trustee a certificate signed by two Directors of the Issuer stating that the requirement referred to in sub-paragraph (i) above will apply on the occasion of the next payment due in respect of the Notes and cannot be avoided by the Issuer taking reasonable measures available to it and the Trustee shall be entitled to accept the certificate as sufficient evidence of the satisfaction of the conditions precedent set out above, in which event it shall be conclusive and binding on the Noteholders and the Couponholders. Upon the expiry of any such notice as is referred to in this paragraph, the Issuer shall be bound to redeem the Notes in accordance with the provisions of this paragraph.
Notes redeemed pursuant to this Condition 7(b) will be redeemed at their Early Redemption Amount referred to in paragraph (e) below together (if appropriate) with interest accrued to (but excluding) the date of redemption.
(c) | Redemption at the option of the Issuer (Issuer Call) |
If Issuer Call is specified in the applicable Final Terms, the Issuer may, having given:
(i) | notice within the Issuer Call Period to the Noteholders in accordance with Condition 14; and |
(ii) | not less than 10 days before the giving of the notice referred to in sub-paragraph (i) above, notice to the Issuing and Principal Paying Agent and the Trustee. |
(which notices shall be irrevocable and shall specify the date fixed for redemption), redeem all or some only of the Notes then outstanding on any Optional Redemption Date and at the Optional Redemption Amount(s) specified in the applicable Final Terms together, if appropriate, with interest accrued to (but excluding) the relevant Optional Redemption Date. Any such redemption must be of a nominal amount equal to the Minimum Redemption Amount or a Higher Redemption Amount. In the case of a partial redemption of Notes, the Notes to be redeemed (Redeemed Notes) will be selected individually by lot, in the case of Redeemed Notes represented by definitive Notes, not more than 30 days prior to the date fixed for redemption (such date of selection being hereinafter called the Selection Date). In the case of Redeemed Notes represented by definitive Notes, a list of the serial numbers of such Redeemed Notes will be published in accordance with Condition 14 not less than 15 days prior to the date fixed for redemption.
(d) | Redemption at the option of the Noteholders (Investor Put) |
If Investor Put is specified in the applicable Final Terms, upon the holder of any Note giving to the Issuer in accordance with Condition 14 notice within the Investor Put Period the Issuer will, upon the expiry of such notice, redeem, subject to, and in accordance with, the terms specified in the applicable Final Terms, in whole (but not in part), such Note on the Optional Redemption Date and at the Optional Redemption Amount together, if appropriate, with interest accrued to (but excluding) the Optional Redemption Date.
To exercise this option the holder must deposit (in the case of Bearer Notes) such Note (together with all unmatured Coupons) with any Paying Agent or (in the case of Registered Notes) the Certificate representing such Note(s) with the Registrar or any Transfer Agent at its specified office, accompanied by a duly completed and signed notice of exercise (a Put Notice in the form (for the time being current) obtainable from any specified office of any Paying Agent, the Registrar or any Transfer Agent (as applicable) within the notice period and in which the holder must specify a bank account (or, if payment is required to be made by cheque, an address) to which payment is to be made under this Condition.
(e) | Early Redemption Amounts |
For the purpose of paragraph (b) and Condition 10, each Note will be redeemed at the Early Redemption Amount calculated as follows:
(i) | in the case of a Note (other than a Zero Coupon Note), at the amount specified in the applicable Final Terms or, if no such amount or manner is so specified in the applicable Final Terms, at its nominal amount; or |
(ii) | in the case of a Zero Coupon Note, at an amount (the Amortised Face Amount) calculated in accordance with the following formula: |
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where:
RP | means the Reference Price; |
AY | means the Accrual Yield expressed as a decimal; and |
y | is the Day Count Fraction specified in the applicable Final Terms which will be either (i) 30/360 (in which case the numerator will be equal to the number of days (calculated on the basis of a 360-day year consisting of 12 months of 30 days each) from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Note becomes due and repayable and the denominator will be 360) or (ii) Actual/360 (in which case the numerator will be equal to the actual number of days from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Note becomes due and repayable and the denominator will be 360) or (iii) Actual/365 (in which case the numerator will be equal to the actual number of days from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Note becomes due and repayable and the denominator will be 365) |
(f) | Purchases |
The Issuer or any Subsidiary (as defined in the Trust Deed) of the Issuer may at any time purchase Notes (provided that, in the case of Bearer Notes, all unmatured Coupons and Talons appertaining thereto are purchased therewith) at any price in the open market or otherwise.
(g) | Cancellation |
All Notes which are (a) redeemed or (b) purchased by or on behalf of the Issuer will forthwith be cancelled (together with all Certificates or unmatured Coupons and Talons attached thereto or surrendered therewith at the time of redemption) and accordingly may not be reissued or resold. Any Notes which are purchased by or on behalf of any of the Issuers Subsidiaries may, at the option of the purchaser, be held or resold or surrendered to a Paying Agent for cancellation.
(h) | Late payment on Zero Coupon Notes |
If the amount payable in respect of any Zero Coupon Note upon redemption of such Zero Coupon Note pursuant to paragraph (a), (b), (c) or (d) above or upon its becoming due and repayable as provided in Condition 10 is improperly withheld or refused, the amount due and repayable in respect of such Zero Coupon Note shall be the amount calculated as provided in paragraph e(ii) above as though the references therein to the date fixed for the redemption or the date upon which such Zero Coupon Note becomes due and payable were replaced by references to the date which is the earlier of:
(i) | the date on which all amounts due in respect of such Zero Coupon Note have been paid; and |
(ii) | five days after the date on which the full amount of the moneys payable in respect of such Zero Coupon Notes has been received by the Issuing and Principal Paying Agent or the Trustee and notice to that effect has been given to the Noteholders in accordance with Condition 14. |
8. | Taxation |
All payments in respect of the Notes and Coupons by the Issuer will be made without withholding or deduction for any present or future taxes, assessments or other governmental charges (Taxes) of the Issuers jurisdiction of incorporation (the Relevant Jurisdiction) (or any political subdivision or taxing authority thereof or therein), unless the withholding or deduction of the Taxes is required by law. In that event, the Issuer will pay such additional amounts as may be necessary in order that the net amount paid to each holder of any Note or Coupon who, with respect to any such Tax is not resident in the Relevant Jurisdiction, after such withholding or deduction shall be not less than the respective amount to which such holder would have been entitled in respect of such Note or Coupon, as the case may be, in the absence of the withholding or deduction; provided however that the Issuer shall not be required to pay any
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additional amounts (i) for or on account of any such Tax imposed by the United States (or any political subdivision or taxing authority thereof or therein) or (ii) for or on account of:
(a) | any Tax which would not have been imposed but for (i) the existence of any present or former connection between a holder (or between 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) and the Relevant Jurisdiction or any political subdivision or territory or possession thereof or area subject to its jurisdiction, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein or (ii) the presentation of such Note or Coupon (x) for payment on a date more than 30 days after the Relevant Date (as defined below) or (y) in the Relevant Jurisdiction |
(b) | any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge; |
(c) | any Tax which is payable otherwise than by withholding or deduction from payments of (or in respect of) principal of, or any interest on, such Note or Coupon; |
(d) | any Tax that is imposed or withheld by reason of the failure by the holder or any beneficial owner of such Note or Coupon to comply with a request of the Issuer given to the holder in accordance with Condition 14 (i) to provide information concerning the nationality, residence or identity of the holder or any beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirements, which, in the case of (i) or (ii), is required or imposed by a statute, treaty, regulation or administrative practice of the Relevant Jurisdiction as a precondition to exemption from all or part of such Tax; |
(e) | any Tax imposed on a payment to an individual which is required to be made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced in order to conform to, such Directive; |
(f) | any Tax payable with respect to a Note or Coupon presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Note or Coupon to another Paying Agent in a Member State of the European Union; or |
(g) | any combination of items (a), (a), (c), (d), (e) and (f) above, |
nor shall the Issuer be required to pay any additional amounts with respect to any payment of the principal of, or any interest on, any Note or Coupon to any holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the Relevant Jurisdiction (or any political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner which would not have been entitled to such additional amounts had it been the holder of such Note or Coupon.
As used herein:
Relevant Date means the date on which such payment first becomes due, except that, if the full amount of the moneys payable has not been duly received by the Issuing and Principal Paying Agent or the Trustee on or prior to such due date, it means the date on which, the full amount of such moneys having been so received, notice to that effect is duly given to the Noteholders in accordance with Condition 14; and
United States means 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).
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9. | Prescription |
The Notes and Coupons will become void unless a claim for payment is made within a period of 10 years (in the case of principal) and five years (in the case of interest) after the Relevant Date (as defined in Condition 8) therefor (subject to the provisions of Condition 6(b)).
There shall not be included in any Coupon sheet issued on exchange of a Talon any Coupon the claim for payment in respect of which would be void pursuant to this Condition or Condition 6(b) or any Talon which would be void pursuant to Condition 6(b).
10. | Events of Default and Enforcement |
(A) | Events of Default |
The Trustee at its discretion may, and if so requested in writing by the holders of at least one-quarter in nominal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution of the Noteholders shall (subject in each case to being indemnified to its satisfaction), give notice to the Issuer that the Notes are, and they shall accordingly forthwith become, immediately due and repayable at their Early Redemption Amount as referred to in Condition 7(e) together (if applicable) with accrued interest as provided in the Trust Deed, in any of the following events (Events of Default):
(a) | if default is made in the payment of any principal or any interest due in respect of the Notes or any of them and the default continues for a period of 14 days in the case of a payment of principal or 21 days in the case of a payment of interest; or |
(b) | if the Issuer fails to perform or observe any of its other obligations under these Terms and Conditions or the Trust Deed and (except in any case where the Trustee considers the failure to be incapable of remedy when no such continuation or notice as is hereinafter mentioned will be required) the failure continues for the period of 30 days (or such longer period as the Trustee may permit) next following the service by the Trustee on the Issuer of notice requiring the same to be remedied; or |
(c) | if any Indebtedness for Borrowed Money of the Issuer becomes due and repayable prematurely by reason of an event of default (however described) or the Issuer fails to make any payment in respect of any Indebtedness for Borrowed Money on the due date for payment (as extended by any originally applicable grace period) or any security given by the Issuer for any Indebtedness for Borrowed Money becomes enforceable by reason of default in relation thereto and steps are taken to enforce such security or if default is made by the Issuer in making any payment due under any guarantee and/or indemnity (at the expiry of any originally applicable grace period) given by it in relation to any Indebtedness for Borrowed Money of any other person, provided that no event shall constitute an Event of Default unless the Indebtedness for Borrowed Money or other relative liability either alone or when aggregated with other Indebtedness for Borrowed Money and/or other liabilities relative to all (if any) other events which shall have occurred equals or exceeds (i) £50,000,000 (or its equivalent in any other currency) in relation to any such event falling on or before 1 August 2014 and (ii) £150,000,000 (or its equivalent in any other currency) in relation to any such event falling after 1 August 2014; or |
(d) | if any order is made by any competent court or resolution passed for the winding up or dissolution of the Issuer, save for the purposes of a reorganisation on terms approved in writing by the Trustee; or |
(e) | if the Issuer stops payment of, or is unable to, or admits inability to, pay, its debts (or any class of its debts) as they fall due, or is deemed unable to pay its debts (within the meaning of section 123(1)(e) or (2) of the Insolvency Act 1986), or is adjudicated or found bankrupt or insolvent or shall enter into any composition or other similar arrangements with its creditors under section 1 of the Insolvency Act 1986; or |
(f) | if (i) an administrative or other receiver, manager, administrator or other similar official is appointed in relation to the Issuer or, as the case may be, in relation to the whole or a substantial part of the undertaking or assets of it, or an encumbrancer takes possession of the whole or a substantial part of the undertaking or assets of |
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it, or a distress, execution, attachment, sequestration or other process is levied, enforced upon, sued out or put in force against the whole or a substantial part of the undertaking or assets of it and (ii) in any case (other than the appointment of an administrator) is not discharged, removed or paid within 45 days; |
PROVIDED, in the case of any Event of Default other than those described in paragraphs (a) and (d) above, the Trustee shall have certified in writing to the Issuer that the Event of Default is, in its opinion, materially prejudicial to the interests of the Noteholders.
For the purposes of this Condition, Indebtedness for Borrowed Money means any present or future indebtedness (whether being principal, premium, interest or other amounts) for or in respect of (i) money borrowed, (ii) liabilities under or in respect of any acceptance or acceptance credit or (iii) any bonds, notes, debentures, debenture stock or loan stock.
(B) | Enforcement |
The Trustee may at any time, at its discretion and without notice, take such proceedings against the Issuer as it may think fit to enforce the provisions of the Trust Deed, the Notes and the Coupons, but it shall not be bound to take any such proceedings or any other action in relation to the Trust Deed, the Notes or the Coupons unless (i) it shall have been so directed by an Extraordinary Resolution of the relevant Noteholders or so requested in writing by the holders of at least one-quarter in nominal amount of the relevant Notes then outstanding, and (ii) it shall have been indemnified to its satisfaction.
Save as otherwise provided herein, no Noteholder or Couponholder shall be entitled to proceed directly against the Issuer unless the Trustee, having become bound so to proceed, fails so to do within a reasonable period and the failure shall be continuing.
11. | Replacement of Notes, Certificates, Coupons and Talons |
Should any Note, Certificate, Coupon or Talon be lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Issuing and Principal Paying Agent (in the case of Bearer Notes, Coupons or Talons) and of the Registrar (in the case of Certificates) upon payment by the claimant of such costs and expenses as may be incurred in connection therewith and on such terms as to evidence and indemnity as the Issuer may reasonably require. Mutilated or defaced Notes, Certificates, Coupons or Talons must be surrendered before replacements will be issued.
12. | Agents |
The names of the initial Issuing and Principal Paying Agent, the other Paying Agents, the Registrar and the Transfer Agents and their initial specified offices are set out below.
The Issuer is entitled, with the prior written approval of the Trustee, to vary or terminate the appointment of the Issuing and Principal Paying Agent, any other Paying Agent, the Registrar or any Transfer Agent and/or appoint additional or other Paying Agents or Transfer Agents or another Registrar and/or approve any change in the specified office through which any such agent acts, provided that:
(i) | there will at all times be an Issuing and Principal Paying Agent; |
(ii) | there will at all times be a Registrar and a Transfer Agent in relation to Registered Notes; |
(iii) | so long as the Notes are listed on any stock exchange, there will at all times be a Paying Agent with a specified office in such place as may be required by the rules and regulations of the relevant stock exchange or other relevant authority; |
(iv) | there will at all times be a Paying Agent with a specified office in a city approved by the Trustee outside the Relevant Jurisdiction; and |
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(v) | save where it may from time to time be otherwise agreed with the Trustee that it is unduly onerous or not current market practice at the relevant time to do so and save to the extent that the following requirement is not met by virtue of sub-paragraph (iii) above and there will at all times be a Paying Agent with a specified office in a European Union member state that is not obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced in order to conform to, such Directive. |
In addition, the Issuer shall forthwith appoint a Paying Agent having a specified office in New York City in the circumstances described in Condition 6(d).
Any variation, termination, appointment or change shall only take effect (other than in the case of insolvency, when it shall be of immediate effect) after not less than 30 nor more than 60 days prior notice thereof shall have been given to the Noteholders in accordance with Condition 14.
In acting under the Agency Agreement, the Issuing and Principal Paying Agent, the Paying Agents, the Registrar and the Transfer Agents act solely as agents of the Issuer and, in certain limited circumstances, of the Trustee and do not assume any obligation to, or relationship of agency or trust with, any Noteholders or Couponholders. The Agency Agreement contains provisions permitting any entity into which any Paying Agent or Registrar or Transfer Agent is merged or converted or with which it is consolidated or to which it transfers all or substantially all of its assets to become the successor paying agent, registrar or transfer agent, as the case may be.
13. | Exchange of Talons |
On and after the Interest Payment Date on which the final Coupon comprised in any Coupon sheet matures, the Talon (if any) forming part of such Coupon sheet may be surrendered at the specified office of the Issuing and Principal Paying Agent or any other Paying Agent in exchange for a further Coupon sheet including (if such further Coupon sheet does not include Coupons to (and including) the final date for the payment of interest due in respect of the Note to which it appertains) a further Talon, subject to the provisions of Condition 9.
14. | Notices |
Notices to the holders of Registered Notes shall be mailed to them at their respective addresses in the Register and deemed to have been given on the fourth weekday (being a day other than a Saturday or Sunday) after the date of mailing
Notices to the holders of Bearer Notes will be deemed to be validly given if published in a leading English language daily newspaper of general circulation in the United Kingdom. It is expected that such publication will be made in the Financial Times. The Issuer shall also ensure that notices are duly published in a manner which complies with the rules and regulations of any stock exchange or any other relevant authority on which the Notes are for the time being listed. Any such notice will be deemed to have been given on the date of the first publication.
Notices to be given by any Noteholder shall be in writing and given by lodging the same, together (in the case of any Note in definitive form) with the relative Note or Notes, with the Issuing and Principal Paying Agent (in the case of Bearer Notes) or the Registrar (in the case of Registered Notes). Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the holders of Bearer Notes in accordance with this Condition.
15. | Meeting of Noteholders, Modification, Authorisation, Waiver, Determination and Substitution |
(a) | Meetings |
The Trust Deed contains provisions for convening meetings of the Noteholders to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution of a modification of any of the provisions of these Terms and Conditions, the Notes, the Coupons or the Trust Deed. Such a meeting may be convened by the Issuer or by Noteholders holding not less than 10 per cent. in nominal amount of the Notes for the time being outstanding. The quorum at any such meeting for passing an Extraordinary Resolution will be one or more persons holding or representing a clear majority in nominal amount of the Notes for the time being outstanding, or at any adjourned meeting one or more persons being or representing Noteholders whatever the nominal amount of the Notes so held or represented. An Extraordinary Resolution passed at any meeting of the Noteholders shall be binding on all the Noteholders, whether or not they are present at the meeting, and on all and Couponholders.
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(b) | Modification, Authorisation, Waiver, Determination, Substitution etc. |
The Trustee may agree, without the consent of the Noteholders or the Couponholders, to any modification of, or to the waiver or authorisation of any breach or proposed breach of, any of these Terms and Conditions or any of the provisions of the Trust Deed or determine, without any such consent as aforesaid, that any Event of Default or Potential Event of Default (as defined in the Trust Deed) shall not be treated as such, which in any such case is not, in the opinion of the Trustee, materially prejudicial to the interests of the Noteholders or may agree, without any such consent as aforesaid, to any modification which is of a formal, minor or technical nature or to correct a manifest error.
In connection with the exercise by it of any of its trusts, powers, authorities and discretions (including, without limitation, any modification, waiver, authorisation, determination or substitution), the Trustee shall have regard to the general interests of the Noteholders as a class but shall not have regard to any interests arising from circumstances particular to individual Noteholders or Couponholders (whatever their number) and, in particular but without limitation, shall not have regard to the consequences of any such exercise for individual Noteholders or Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub-division thereof and the Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim, from the Issuer, the Trustee or any other person any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders except to the extent already provided for in Condition 8 and/or any undertaking given in addition to, or in substitution for, Condition 8 pursuant to the Trust Deed.
The Trustee may, without the consent of the Noteholders or Couponholders, agree with the Issuer to the substitution in place of the Issuer (or of any previous substitute under this Condition) as principal debtor in respect of the Notes and the Coupons and under the Trust Deed of either (i) a Successor in Business (as defined in the Trust Deed) to the Issuer or (ii) a Holding Company of the Issuer or (iii) a Subsidiary of the Issuer, in each case subject to the Trustee being satisfied that the interests of the Noteholders will not be materially prejudiced thereby provided that in determining such material prejudice the Trustee shall not take into account any prejudice to the interests of the Noteholders as a result of such substituted company not being required pursuant to proviso (i) to Condition 8 to pay any additional amounts for or on account of any Taxes imposed by the United States of America or any political subdivision or taxing authority thereof or therein and certain other conditions set out in the Trust Deed being complied with.
The Trust Deed contains provisions permitting the Issuer to consolidate with or merge into any other person or convey, transfer or lease its properties and assets substantially as an entirety to any person provided that (i) in the case of a consolidation or merger (except where the Issuer is the continuing entity) such person agrees to be bound by the terms of the Notes, the Coupons and the Trust Deed as principal debtor in place of the Issuer; (ii) in the case of a conveyance, transfer or lease, such person guarantees the obligations of the Issuer under the Notes, the Coupons and the Trust Deed and (iii) certain other conditions set out in the Trust Deed are complied with.
Any such modification, waiver, authorisation, determination or substitution shall be binding on the Noteholders and the Couponholders and, unless the Trustee otherwise agrees, any such modification or substitution shall be notified to the Noteholders in accordance with Condition 14 as soon as practicable thereafter.
For the purposes of this Condition Holding Company means, in relation to a person, an entity of which that person is a Subsidiary.
16. | Further Issues |
The Issuer shall be at liberty from time to time without the consent of the Noteholders or the Couponholders to create and issue further notes having terms and conditions the same as the Notes or the same in all respects save for the amount and date of the first payment of interest thereon and so that the same shall be consolidated and form a single Series with the outstanding Notes. The Trust Deed contains provisions for convening a single meeting of the Noteholders and the holders of notes of other Series in certain circumstances where the Trustee so decides.
17. | Indemnification of the Trustee and its Contracting with the Issuer |
The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility, including provisions relieving it from taking action unless indemnified to its satisfaction.
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The Trust Deed also contains provisions pursuant to which the Trustee is entitled, inter alia, (i) to enter into business transactions with the Issuer and/or any of its Subsidiaries and to act as trustee for the holders of any other securities issued or guaranteed by, or relating to, the Issuer and/or any of its Subsidiaries, (ii) to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such transactions or, as the case may be, any such trusteeship without regard to the interests of, or consequences for, the Noteholders or Couponholders, and (iii) to retain and not be liable to account for any profit made or any other amount or benefit received thereby or in connection therewith.
18. | Third Party Rights |
No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Notes, but this does not affect any right or remedy of any person which exists or is available apart from that Act.
19. | Governing Law |
The Trust Deed, the Notes and the Coupons, and any non-contractual obligations arising out of or in connection with any of them, are governed by and shall be construed in accordance with, English law. The Agency Agreement is governed by and shall be construed in accordance with English law.
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AGENT
HSBC Bank plc
8 Canada Square
London E14 5HQ
OTHER PAYING AGENTS
Credit Suisse First Boston | Banque Internationale à Luxembourg, | |
Uetlibergstrasse 231 | société anonyme | |
8045 Zurich | 69 route dEsch | |
L-2953 Luxembourg |
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SCHEDULE 2
FORMS OF GLOBAL AND DEFINITIVE NOTES, CERTIFICATES, COUPONS AND TALONS
PART 1
FORM OF TEMPORARY GLOBAL NOTE
[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.]1
VODAFONE GROUP PLC
(the Issuer)
(incorporated with limited liability in England and Wales)
TEMPORARY GLOBAL NOTE
This Note is a Temporary Global Note in respect of a duly authorised issue of Notes of the Issuer (the Notes) of the Nominal Amount, Specified Currency(ies) and Specified Denomination(s) as are specified in the Final Terms applicable to the Notes (the Final Terms), a copy of which is annexed hereto. References herein to the Conditions shall be to the Terms and Conditions of the Notes as set out in the Schedule 1 to the Trust Deed (as defined below) as completed by the Final Terms but, in the event of any conflict between the provisions of the Conditions and the information in the Final Terms, the Final Terms will prevail. Words and expressions defined in the Conditions shall bear the same meanings when used in this Global Note. This Global Note is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the Trust Deed) dated 16 July 1999 and made between the Issuer (under its then name of Vodafone AirTouch Plc) and The Law Debenture Trust Corporation p.l.c. as trustee for the holders of the Notes.
The Issuer, subject as hereinafter provided and subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the bearer hereof on the Maturity Date and/or on such earlier date(s) as all or any of the Notes represented by this Global Note may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable under the Conditions in respect of such Notes on each such date and to pay interest (if any) on the nominal amount of the Notes from time to time represented by this Global Note calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed, upon presentation and, at maturity, surrender of this Global Note to or to the order of the Issuing and Principal Paying Agent or any of the other Paying Agents located outside the United States, its territories and possessions (except as provided in the Conditions) from time to time appointed by the Issuer in respect of the Notes.
If the Final Terms indicates that this Global Note is intended to be a New Global Note, the nominal amount of Notes represented by this Global Note shall be the aggregate amount from time to time entered in the records of both Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, société anonyme (Clearstream, Luxembourg and together with Euroclear, the relevant Clearing Systems). The records of the relevant Clearing Systems (which expression in this Global Note means the records that each relevant Clearing System holds for its customers which reflect the amount of such customers interest in the Notes) shall be conclusive evidence of the nominal amount of Notes represented by this Global Note and, for these purposes, a statement issued by a relevant Clearing System (which statement shall be made available to the
1 | Include where the original maturity of the Notes is more than 365 days. |
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bearer upon request) stating the nominal amount of Notes represented by this Global Note at any time shall be conclusive evidence of the records of the relevant Clearing System at that time.
If the Final Terms indicates that this Global Note is not intended to be a New Global Note, the nominal amount of the Notes represented by this Global Note shall be the amount stated in the applicable Final Terms or, if lower, the nominal amount most recently entered by or on behalf of the Issuer in the relevant column in Part II, or III of Schedule One hereto or in Schedule Two hereto.
On any redemption of, or payment of interest being made in respect of, or purchase and cancellation of, any of the Notes represented by this Global Note the Issuer shall procure that:
(a) | if the Final Terms indicates that this Global Note is intended to be a New Global Note, details of such redemption, payment or purchase and cancellation (as the case may be) shall be entered pro rata in the records of the relevant Clearing Systems, and, upon any such entry being made, the nominal amount of the Notes recorded in the records of the relevant Clearing Systems and represented by this Global Note shall be reduced by the aggregate nominal amount of the Notes so redeemed or purchased and cancelled; or |
(b) | if the Final Terms indicates that this Global Note is not intended to be a New Global Note, details of such redemption, payment or purchase and cancellation (as the case may be) shall be entered by or on behalf of the Issuer in Schedule One hereto and the relevant space in Schedule One hereto recording any such redemption, payment or purchase and cancellation (as the case may be) shall be signed by or on behalf of the Issuer. Upon any such redemption or purchase and cancellation, the nominal amount of this Global Note and the Notes represented by this Global Note shall be reduced by the nominal amount of such Notes so redeemed or purchased and cancelled. |
Payments due in respect of Notes for the time being represented by this Global Note shall be made to the bearer of this Global Note and each payment so made will discharge the Issuers obligations in respect thereof. Any failure to make entries referred to above shall not affect such discharge.
Payments of principal and interest (if any) due prior to the Exchange Date (as defined below) will only be made to the bearer hereof to the extent that there is presented to the Agent by Clearstream, Luxembourg or Euroclear a certificate to the effect that it has received from or in respect of a person entitled to a beneficial interest in a particular nominal amount of the Notes represented by this Global Note (as shown by its records) a certificate of non-US beneficial ownership in the form required by it. The bearer of this Global Note will not (unless upon due presentation of this Global Note for exchange, delivery of the appropriate number of Definitive Bearer Notes (together, if applicable, with the Coupons and Talons appertaining thereto in or substantially in the forms set out in Parts 5, 6 and 7 of Schedule 2 to the Trust Deed) or, as the case may be, issue and delivery (or, as the case may be, endorsement) of the Permanent Global Note is improperly withheld or refused and such withholding or refusal is continuing at the relevant payment date) be entitled to receive any payment hereon due on or after the Exchange Date.
If this Temporary Global Note is an Exchangeable Bearer Note then, subject to Condition 2(f), this Temporary Global Note may be exchanged in whole or from time to time in part for one or more Registered Notes in accordance with the Conditions on or after the Issue Date but before its Exchange Date referred to below by its presentation to any Transfer Agent at its specified office. On or after the Exchange Date, the outstanding nominal amount of this Temporary Global Note may be exchanged for Definitive Bearer Notes and Registered Notes in accordance with the next paragraph.
On or after the date (the Exchange Date) which is the 40th day after the Issue Date, this Global Note may be exchanged (free of charge) in whole or in part for, as specified in the Final Terms, either (a) Definitive Bearer Notes and (if applicable) Coupons and/or Talons (on the basis that all the appropriate details have been included on the face of such Definitive Bearer Notes and (if applicable) Coupons and/or Talons and the relevant information completing the Conditions appearing in the Final Terms has been endorsed on or
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attached to such Definitive Bearer Notes) or (b) either (if the Final Terms indicates that this Global Note is intended to be a New Global Note) interests recorded in the records of the relevant Clearing Systems in a Permanent Global Note or (if the Final Terms indicates that this Global Note is not intended to be a New Global Note) a Permanent Global Note which, in either case, is in or substantially in the form set out in Part 2 of the Schedule 2 to the Trust Deed (together with the Final Terms attached thereto) or (if this Global Note is an Exchangeable Bearer Note) for Registered Notes upon notice being given by Euroclear and/or Clearstream, Luxembourg acting on the instructions of any holder of an interest in this Global Note and subject, in the case of Definitive Bearer Notes, to such notice period as is specified in the Final Terms.
If Definitive Bearer Notes and (if applicable) Coupons and/or Talons have already been issued in exchange for all the Notes represented for the time being by the Permanent Global Note, then this Global Note may only thereafter be exchanged for Definitive Bearer Notes and (if applicable) Coupons and/or Talons pursuant to the terms hereof. This Global Note may be exchanged by the bearer hereof on any day (other than a Saturday or Sunday) on which banks are open for general business in London.
The Issuer shall procure that Definitive Bearer Notes or (as the case may be) the Permanent Global Note shall be issued and delivered and (in the case of the Permanent Global Note where the Final Terms indicates that this Global Note is intended to be a New Global Note) interests in the Permanent Global Note shall be recorded in the records of the relevant Clearing Systems in exchange for only that portion of this Global Note in respect of which there shall have been presented to the Principal Paying Agent by Euroclear or Clearstream, Luxembourg a certificate to the effect that it has received from or in respect of a person entitled to a beneficial interest in a particular nominal amount of the Notes represented by this Global Note (as shown by its records) a certificate of non-US beneficial ownership in the form required by it.
On an exchange of the whole of this Global Note, this Global Note shall be surrendered to or to the order of the Principal Paying Agent. The Issuer shall procure that:
(a) | if the Final Terms indicates that this Global Note is intended to be a New Global Note, on an exchange of the whole or part only of this Global Note, details of such exchange shall be entered pro rata in the records of the relevant Clearing Systems such that the nominal amount of Notes represented by this Global Note shall be reduced by the nominal amount of this Global Note so exchanged; or |
(b) | if the Final Terms indicates that this Global Note is not intended to be a New Global Note, on an exchange of part only of this Global Note details of such exchange shall be entered by or on behalf of the Issuer in Schedule Two hereto and the relevant space in Schedule Two hereto recording such exchange shall be signed by or on behalf of the Issuer, whereupon the nominal amount of this Global Note and the Notes represented by this Global Note shall be reduced by the nominal amount of this Global Note so exchanged. On any exchange of this Global Note for a Permanent Global Note, details of such exchange shall be entered by or on behalf of the Issuer in Schedule Two to the Permanent Global Note and the relevant space in Schedule Two thereto recording such exchange shall be signed by or on behalf of the Issuer. |
Until the exchange of the whole of this Global Note as aforesaid, the bearer hereof shall in all respects be entitled to the same benefits as if he were the bearer of Definitive Bearer Notes and the relative Coupons and/or Talons (if any) in the form(s) set out in Part 5, Part 6 and Part 7 (as applicable) of the Schedule 2 to the Trust Deed.
The holder of this Global Note shall be treated at any meeting of the Noteholders as having one vote in respect of each Definitive Bearer Note for which this Global Note would be exchangeable.
In considering the interests of Noteholders while this Global Note is held on behalf of a clearing system, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the
75
identity (either individually or by category) of its accountholders with entitlements to this Global Note and may consider such interests as if such accountholders were the holder of this Global Note.
This Global Note does not confer on a third party any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Global Note, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.
This Global Note, and any non-contractual obligations arising out of or in connection with it, are governed by, and shall be construed in accordance with, English law.
This Global Note shall not be valid unless authenticated by HSBC Bank plc as Issuing and Principal Paying Agent and, if the Final Terms indicates that this Global Note is intended to be held in a manner which would allow Eurosystem eligibility, effectuated by the entity appointed as common safekeeper by the relevant Clearing Systems.
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IN WITNESS whereof the Issuer has caused this Global Note to be signed manually or in facsimile by a person duly authorised on its behalf.
Issued as of | ||
VODAFONE GROUP PLC | ||
By: |
| |
Duly Authorised | ||
Authenticated by HSBC Bank plc as Issuing and Principal Paying Agent. | ||
By: |
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Authorised Officer | ||
1Effectuated without recourse, warranty or liability by | ||
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as common safekeeper | ||
By: |
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1 | This should only be completed where the Final Terms indicates that this Global Note is intended to be held in a manner which would allow Eurosytem eligibility. |
77
Schedule One*
PART I
INTEREST PAYMENTS
Confirmation of | ||||||||
Interest Payment | Total amount of | Amount of interest | payment by or on | |||||
Date made | Date | interest payable | paid | behalf of the Issuer | ||||
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* | Schedule One should only be completed where the Final Terms indicates that this Global Note is not intended to be a New Global Note. |
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PART II
REDEMPTIONS
Remaining nominal | ||||||||
amount of this | Confirmation of | |||||||
Global Note | redemption by or | |||||||
Total amount of | Amount of | following such | on behalf of the | |||||
Date made | principal payable | principal paid | redemption* | Issuer | ||||
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* | See most recent entry in Part II or III of Schedule Two in order to determine this amount. |
79
PART III
PURCHASES AND CANCELLATIONS
Remaining nominal | ||||||
amount of this Global | Confirmation of | |||||
Part of nominal amount | Note following such | purchase and | ||||
of this Global Note | purchase and | cancellation by or on | ||||
Date made | purchased and cancelled | cancellation* | behalf of the Issuer | |||
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* | See most recent entry in Part II or III of Schedule Two in order to determine this amount. |
80
Schedule Two*
EXCHANGES
FOR DEFINITIVE BEARER NOTES, REGISTERED NOTES OR PERMANENT GLOBAL NOTE
The following exchanges of a part of this Global Note for Definitive Bearer Notes or Registered Notes or a part of a Permanent Global Note have been made:
Nominal amount of this | ||||||
Global Note exchanged | ||||||
for Definitive Bearer | ||||||
Notes, Registered Notes | Remaining nominal | |||||
or a part of a Permanent | amount of this Global | |||||
Global Note (stating | Note following such | Notation made by or on | ||||
Date made | which) | exchange* | behalf of the Issuer | |||
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* | Schedule Two should only be completed where the Final Terms indicates that this Global Note is not intended to be a New Global Note. |
* | See most recent entry in Part II or III of Schedule One or in this Schedule Two in order to determine this amount. |
81
ANNEX
[attach Final Terms that relate to this Global Note]
82
PART 2
FORM OF PERMANENT GLOBAL NOTE
[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.]1
VODAFONE GROUP PLC
(the Issuer)
(incorporated with limited liability in England and Wales)
PERMANENT GLOBAL NOTE
This Note is a Permanent Global Note in respect of a duly authorised issue of Notes of the Issuer (the Notes) of the Nominal Amount, Specified Currency(ies) and Specified Denomination(s) as are specified in the Final Terms applicable to the Notes (the Final Terms), a copy of which is annexed hereto. References herein to the Conditions shall be to the Terms and Conditions of the Notes as set out in the Schedule 1 to the Trust Deed (as defined below) as completed by the Final Terms but, in the event of any conflict between the provisions of the Conditions and the information in the Final Terms, the Final Terms will prevail. Words and expressions defined in the Conditions shall bear the same meanings when used in this Global Note. This Global Note is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the Trust Deed) dated 16 July 1999 and made between the Issuer (under its then name of Vodafone AirTouch Plc) and The Law Debenture Trust Corporation p.l.c. as trustee for the holders of the Notes.
The Issuer, subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the bearer hereof on the Maturity Date and/or on such earlier date(s) as all or any of the Notes represented by this Global Note may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable under the Conditions in respect of such Notes on each such date and to pay interest (if any) on the nominal amount of the Notes from time to time represented by this Global Note calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed, upon presentation and, at maturity, surrender of this Global Note at the specified office of the Issuing and Principal Paying Agent at 8 Canada Square, London EC2V 7EX, England or such other specified office as may be specified for this purpose in accordance with the Conditions or at the specified office of any of the other Paying Agents located outside the United States, its territories and possessions (except as provided in the Conditions) from time to time appointed by the Issuer in respect of the Notes.
If the Final Terms indicates that this Global Note is intended to be a New Global Note, the nominal amount of Notes represented by this Global Note shall be the aggregate amount from time to time entered in the records of both Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, société anonyme (Clearstream, Luxembourg and together with Euroclear, the relevant Clearing Systems). The records of the relevant Clearing Systems (which expression in this Global Note means the records that each relevant Clearing System holds for its customers which reflect the amount of such customers interest in the Notes) shall be conclusive evidence of the nominal amount of Notes represented by this Global Note and, for these purposes, a statement issued by a relevant Clearing System (which statement shall be made available to the bearer upon request) stating the nominal amount of Notes represented by this Global Note at any time shall be conclusive evidence of the records of the relevant Clearing System at that time.
1 | Include where the original maturity of the Notes is more than 365 days. |
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If the Final Terms indicates that this Global Note is not intended to be a New Global Note, the nominal amount of the Notes represented by this Global Note shall be the amount stated in the applicable Final Terms or, if lower, the nominal amount most recently entered by or on behalf of the Issuer in the relevant column in Part II or Part III of Schedule One hereto or in Schedule Two hereto.
On any redemption of, or payment of interest being made in respect of, or purchase and cancellation of, any of the Notes represented by this Global Note the Issuer shall procure that:
(a) | if the Final Terms indicates that this Global Note is intended to be a New Global Note, details of such redemption, payment or purchase and cancellation (as the case may be) shall be entered pro rata in the records of the relevant Clearing Systems and, upon any such entry being made, the nominal amount of the Notes recorded in the records of the relevant Clearing Systems and represented by this Global Note shall be reduced by the aggregate nominal amount of the Notes so redeemed or purchased and cancelled; or |
(b) | if the Final Terms indicates that this Global Note is not intended to be a New Global Note, details of such redemption, payment or purchase and cancellation (as the case may be) shall be entered by or on behalf of the Issuer in Schedule One hereto and the relevant space in Schedule One hereto recording any such redemption, payment or purchase and cancellation (as the case may be) shall be signed by or on behalf of the Issuer. Upon any such redemption or purchase and cancellation, the nominal amount of this Global Note and the Notes represented by this Global Note shall be reduced by the nominal amount of such Notes so redeemed or purchased and cancelled. |
Payments due in respect of Notes for the time being represented by this Global Note shall be made to the bearer of this Global Note and each payment so made will discharge the Issuers obligations in respect thereof and any failure to make entries referred to above shall not affect such discharge.
If the Notes represented by this Global Note were, on issue, represented by a Temporary Global Note then on any exchange of such Temporary Global Note for this Global Note or any part hereof, the Issuer shall procure that:
(a) | if the Final Terms indicates that this Global Note is intended to be a New Global Note, details of such exchange shall be entered in the records of the relevant Clearing Systems such that the nominal amount of Notes represented by this Global Note shall be increased by the nominal amount of the Temporary Global Note so exchanged; or |
(b) | if the Final Terms indicates that this Global Note is not intended to be a New Global Note, details of such exchange shall be entered by or on behalf of the Issuer in Schedule Two hereto and the relevant space in Schedule Two hereto recording such exchange shall be signed by or on behalf of the Issuer, whereupon the nominal amount of this Global Note and the Notes represented by this Global Note shall be increased by the nominal amount of the Temporary Global Note so exchanged. |
This Global Note may be exchanged (free of charge) in whole, but, except as provided below, not in part, for Definitive Bearer Notes and (if applicable) Coupons and/or Talons in or substantially in the forms set out in Part 5, Part 6 and Part 7 of the Schedule 2 to the Trust Deed (on the basis that all the appropriate details have been included on the face of such Definitive Bearer Notes and (if applicable) Coupons and/or Talons and the relevant information completing the Conditions appearing in the Final Terms has been endorsed on or attached to such Definitive Bearer Notes) or (if this Global Note is an Exchangeable Bearer Note) Registered Notes represented by the Certificates described in the Trust Deed:
(a) | if specified in the applicable Final Terms, upon not less than 60 days written notice being given to the Issuing and Principal Paying Agent by Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in this Global Note); or |
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(b) | if specified in the applicable Final Terms, only upon the occurrence of an Exchange Event; or |
(c) | if this Global Note is an Exchangeable Bearer Note then, subject to Condition 2(f), by the holder hereof giving notice to the Issuing and Principal Paying Agent of its election to exchange the whole or a part of this Global Note for Registered Notes. |
An Exchange Event means (unless otherwise specified in the applicable Final Terms):
(i) | an Event of Default has occurred and is continuing; |
(ii) | the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no alternative clearing system satisfactory to the Trustee is available; or |
(iii) | the Issuer has or will become obliged to pay additional amounts as provided for or referred to in Condition 8 which would not be required were the Bearer Notes in definitive form. |
Upon the occurrence of an Exchange Event:
(A) | the Issuer will promptly give notice to Noteholders in accordance with Condition 14 of the occurrence of such Exchange Event; and |
(B) | Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in this Global Note) or the Trustee may give notice to the Issuing and Principal Paying Agent requesting exchange and, in the event of the occurrence of an Exchange Event as described in (iii) above, the Issuer may also give notice to the Issuing and Principal Paying Agent requesting exchange. |
This Global Note is exchangeable in part only if this Global Note is an Exchangeable Bearer Note and the part thereof submitted for exchange is to be exchanged for Registered Notes.
Any such exchange shall occur on a date specified in the notice not later than 60 days (or, in the case of an exchange for Registered Notes, 5 days) after the date of receipt of the first relevant notice by the Issuing and Principal Paying Agent.
The first notice requesting exchange in accordance with the above provisions shall give rise to the issue of Definitive Bearer Notes for the total nominal amount of Notes represented by this Global Note.
Any such exchange as aforesaid will be made upon presentation of this Global Note by the bearer hereof on any day (other than a Saturday or Sunday) on which banks are open for business in London at the office of the Issuing and Principal Paying Agent specified above.
The aggregate nominal amount of Definitive Bearer Notes or Registered Notes issued upon an exchange of this Global Note will be equal to the aggregate nominal amount of this Global Note submitted for exchange. Upon exchange in full of this Global Note, the Issuing and Principal Paying Agent shall cancel it or procure that it is cancelled.
Certificates issued upon exchange for Registered Notes shall not be Global Certificates unless the holder so requests and certifies to the Issuing and Principal Paying Agent that it is, or is acting as, a nominee for Clearstream, Luxembourg or Euroclear.
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Until the exchange of the whole of this Global Note as aforesaid, the bearer hereof shall in all respects be entitled to the same benefits as if he were the bearer of Definitive Bearer Notes and the relative Coupons and/or Talons (if any) in the form(s) set out in Part 5, Part 6 and Part 7 (as applicable) of the Schedule 2 to the Trust Deed.
The holder of this Global Note shall be treated at any meeting of the Noteholders as having one vote in respect of each Definitive Bearer Note for which this Global Note would be exchangeable.
In considering the interests of Noteholders while this Global Note is held on behalf of a clearing system, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to this Global Note and may consider such interests as if such accountholders were the holder of this Global Note.
This Global Note does not confer on a third party any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Global Note, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.
This Global Note, and any non-contractual obligations arising out of or in connection with it, are governed by, and shall be construed in accordance with, English law.
This Global Note shall not be valid unless authenticated by HSBC Bank plc as Issuing and Principal Paying Agent and, if the Final Terms indicates that this Global Note is intended to be held in a manner which would allow Eurosystem eligibility, effectuated by the entity appointed as common safekeeper by the relevant Clearing Systems.
86
IN WITNESS whereof the Issuer has caused this Global Note to be signed manually or in facsimile by a person duly authorised on its behalf.
Issued as of | ||
VODAFONE GROUP PLC | ||
By: |
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Duly Authorised | ||
Authenticated by HSBC Bank plc as Issuing and Principal Paying Agent. | ||
By: |
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Authorised Officer | ||
1Effectuated without recourse, warranty or liability by | ||
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as common safekeeper | ||
By: |
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1 | This should only be completed where the Final Terms indicates that this Global Note is intended to be held in a manner which would allow Eurosytem eligibility. |
87
Schedule One*
PART I
INTEREST PAYMENTS
Confirmation of | ||||||||
Interest Payment | Total amount of | Amount of interest | payment by or on | |||||
Date made | Date | interest payable | paid | behalf of the Issuer | ||||
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* | Schedule One should only be completed where the Final Terms indicates that this Global Note is not intended to be a New Global Note. |
88
PART II
REDEMPTION
Remaining nominal | ||||||||
amount of this | Confirmation of | |||||||
Global Note | redemption by or | |||||||
Total amount of | Amount of | following such | on behalf of the | |||||
Date made | principal payable | principal paid | redemption* | Issuer | ||||
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* | See most recent entry in Part II or III of Schedule Two in order to determine this amount. |
89
PART III
PURCHASES AND CANCELLATIONS
Remaining nominal | ||||||
amount of this Global | Confirmation of | |||||
Part of nominal amount | Note following such | purchase and | ||||
of this Global Note | purchase and | cancellation by or on | ||||
Date made | purchased and cancelled | cancellation* | behalf of the Issuer | |||
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* | See most recent entry in Part II or III of Schedule Two in order to determine this amount. |
90
Schedule Two*
EXCHANGES
The following exchanges of a part of this the Temporary Global Note for a part of this Global Note or a part of this Global Note for Registered Notes have been made:
Nominal amount of | ||||||
Temporary Global Note | ||||||
exchanged for this | Increased/decreased | |||||
Global Note or of this | nominal amount of this | |||||
Global Note exchanged | Global Note following | Notation made by or on | ||||
Date made | for Registered Notes | such exchange* | behalf of the Issuer | |||
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* | See most recent entry in Part II or III of Schedule One or in this Schedule Two in order to determine this amount. |
* | Schedule Two should only be completed where the Final Terms indicates that this Global Note is not intended to be a New Global Note. |
91
ANNEX
[attach the Final Terms that relate to this Global Note]
92
PART 3
FORM OF REGULATION S GLOBAL CERTIFICATE
THE NOTES REPRESENTED BY THIS REGULATION S GLOBAL CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
VODAFONE GROUP PLC
(the Issuer)
(incorporated with limited liability in England and Wales)
REGULATION S GLOBAL CERTIFICATE
This Regulation S Global Certificate is issued in respect of a duly authorised issue of Notes of the Issuer (the Notes) of the Nominal Amount, Specified Currency(ies) and Specified Denomination(s) as are specified in the Final Terms applicable to the Notes (the Final Terms), a copy of which is annexed hereto. This Regulation S Global Certificate certifies that the person whose name is entered in the Register is the registered holder (the Registered Holder) of such nominal amount of the Notes specified in the Final Terms at the date hereof.
Interpretation and Definitions
References in this Regulation S Global Certificate to the Conditions are to the Terms and Conditions of the Notes as set out in the Schedule 1 to the Trust Deed (as defined below) as completed by the Final Terms but, in the event of any conflict between the provisions of the Conditions and the information in the Final Term; the Final Terms will prevail. Words and expressions defined in the Conditions shall bear the same meanings when used in this Regulation S Global Certificate. This Regulation S Global Certificate is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the Trust Deed) dated 16 July 1999 and made between the Issuer (under its then name of Vodafone AirTouch Plc) and The Law Debenture Trust Corporation p.l.c as Trustee for the holders of the Notes.
Promise to Pay
The Issuer, subject as hereinafter provided and subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the holder of the Notes represented by this Regulation S Global Certificate on the Maturity Date and/or on such earlier date(s) as all or any of the Notes represented by this Regulation S Global Certificate may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable under the Conditions in respect of such Notes on each such date and to pay interest (if any) on the nominal amount of the Notes from time to time represented by this Regulation S Global Certificate calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed.
For the purposes of this Regulation S Global Certificate, (a) the Issuer certifies that the Registered Holder is, at the date hereof, entered in the Register as the holder of the Notes represented by this Regulation S Global Certificate, (b) this Regulation S Global Certificate is evidence of entitlement only, (c) title to the Notes represented by this Regulation S Global Certificate passes only on due registration on the Register, (d) only the holder of the Notes, as on the immediately preceding Clearing System Business Day, represented by this
93
Regulation S Global Certificate is entitled to payments in respect of the Notes represented by this Regulation S Global Certificate, and (e) the nominal amount of Notes represented by this Regulation S Global Certificate from time to time shall be that amount shown in the Register as being registered in the name of the Registered Holder hereof at such time.
For the purposes hereof Clearing System Business Day means any day other than (i) Saturdays or Sundays and (ii) 1 January and 25 December.
Transfer of Notes represented by Regulation S Global Certificates
If the Final Terms state that the Notes are to be represented by a Regulation S Global Certificate on issue, transfers of the holding of Notes represented by this Regulation S Global Certificate pursuant to Condition 2(b) may only be made in part:
(a) | if the Notes represented by this Regulation S Global Certificate are held on behalf of Euroclear or Clearstream, Luxembourg or any other clearing system (an Alternative Clearing System) and any such clearing system is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so and no alternative clearing system satisfactory to the Trustee is available; or |
(b) | an Event of Default has occurred and is continuing; or |
(c) | with the consent of the Issuer, |
provided that, in the case of the first transfer of part of a holding pursuant to (a) or (b) above, the holder of the Notes represented by this Regulation S Global Certificate has given the Registrar not less than 30 days notice at its specified office of such holders intention to effect such transfer. Where the holding of Notes represented by this Regulation S Global Certificate is only transferable in its entirety, the Certificate issued to the transferee upon transfer of such holding shall be a Regulation S Global Certificate. Where transfers are permitted in part, Certificates issued to transferees shall not be Regulation S Global Certificates unless the transferee so requests and certifies to the Registrar that it is, or is acting as a nominee for, Clearstream, Luxembourg, Euroclear and/or an Alternative Clearing System.
Interests in a Regulation S Global Certificate will be exchangeable, free of charge to the holder, for definitive Regulation S Certificates only upon the occurrence of an Exchange Event. An Exchange Event means (unless otherwise specified in the applicable Final Terms) that:
(vi) | an Event of Default has occurred and is continuing; or |
(vii) | the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and, in any such case, no successor clearing system is available; or |
(viii) | the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Notes represented by definitive Regulation S Certificates. |
Upon the occurrence of an Exchange Event:
(A) | the Issuer will promptly give notice to Noteholders in accordance with Condition 14; and |
(B) | Euroclear and Clearstream, Luxembourg (acting on the instructions of any holder of an interest in such Regulation S Global Certificate) may give notice to the Registrar requesting |
94
exchange and, in the event of an Exchange Event as described in (iii) above, the Issuer many also give notice to the Registrar requesting exchange. |
Any such exchange shall occur not later than 10 days after the date of receipt of the first relevant notice by the Registrar.
Meetings
At any meeting of Noteholders, the holder of the Notes represented by this Regulation S Global Certificate shall be treated as having one vote in respect of each nominal amount of Notes equal to the minimum Specified Denomination of the Notes.
This Regulation S Global Certificate shall not become valid for any purpose until authenticated by or on behalf of the Registrar and, if the applicable Final Terms indicates that this Regulation S Global Certificate is intended to be held under the New Safekeeping Structure, effectuated by the entity appointed as common safekeeper by Euroclear or Clearstream, Luxembourg.
This Regulation S Global Certificate, and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with English law.
IN WITNESS whereof the Issuer has caused this Regulation S Global Certificate to be signed manually or in facsimile by a person duly authorised on its behalf.
Dated as of the Issue Date.
VODAFONE GROUP PLC | ||
By: | ||
| ||
Duly Authorised |
Authenticated
by HSBC Bank USA, National Association as Registrar
By: | ||
| ||
Authorised Officer | ||
1Effectuated without recourse, warranty or liability by | ||
| ||
as common safekeeper | ||
By: |
|
1 | This should only be completed where the Final Terms indicates that this Regulation S Global Certificate is intended to be held under the NSS. |
95
Form of Transfer
For value received the undersigned transfers to
|
|
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)
[] nominal amount of the Notes represented by this Regulation S Global Certificate, and all rights under them.
Dated |
|
|||||||
Signed |
|
Certifying Signature |
Notes:
(a) | The signature of the person effecting a transfer shall conform to a list of duly authorised specimen signatures supplied by the holder of the Notes represented by this Regulation S Global Certificate or (if such signature corresponds with the name as it appears on the face of this Regulation S Global Certificate) be certified by a notary public or a recognised bank or be supported by such other evidence as a Transfer Agent or the Registrar may reasonably require. |
(b) | A representative of the Noteholder should state the capacity in which he signs e.g. executor. |
96
ANNEX
[attach Final Terms that relate to this Global Certificate]
97
PART 4
FORM OF DTC RESTRICTED GLOBAL CERTIFICATE
THE NOTES REPRESENTED BY THIS DTC RESTRICTED GLOBAL CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT (RULE 144A) TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A QIB) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (REGULATION S) TO A NON-US PERSON (AS DEFINED IN THE REGULATIONS) OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) , IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALES OF THE NOTES REPRESENTED BY THIS DTC RESTRICTED CERTIFICATE.
Unless this DTC Restricted Global Certificate is presented by an authorised representative of The Depository Trust Company, a corporation incorporated under the laws of the State of New York (DTC), to the Issuer or its agent for registration of transfer, exchange or payment, and any definitive Note issued is registered in the name of Cede & Co. or such other name as is requested by an authorised representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorised representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.
VODAFONE GROUP PLC
(the Issuer)
(incorporated with limited liability in England and Wales)
DTC RESTRICTED GLOBAL CERTIFICATE
Registered Holder:
Address of Registered Holder:
Nominal amount of Notes
represented by this DTC Restricted Global
Certificate:
This DTC Restricted Global Certificate is issued in respect of a duly authorised issue of Notes of the Issuer (the Notes) of the Nominal Amount, Specified Currency(ies) and Specified Denomination(s) as are specified in the Final Terms applicable to the Notes (the Final Terms), a copy of which is annexed hereto. This DTC Restricted Global Certificate certifies that the Registered Holder (as defined above) is registered as the holder of such nominal amount of the Notes at the date hereof.
98
Interpretation and Definitions
References in this DTC Restricted Global Certificate to the Conditions are to the Terms and Conditions or the Notes as set out in the Schedule 1 to the Trust Deed (as defined below) as completed by the Final Terms but, in the event of any conflict between the provisions of the Conditions and the information in the Final Terms, the Final Terms will prevail. Words and expressions defined in the Conditions shall bear the same meanings when used in this DTC Restricted Global Certificate. This DTC Restricted Global Certificate is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the Trust Deed) dated 16 July 1999 and made between the Issuer (under its then name of Vodafone AirTouch Plc) and The Law Debenture Trust Corporation p.l.c as Trustee for the holders of the Notes.
Promise to Pay
The Issuer, subject as hereinafter provided and subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the holder of the Notes represented by this DTC Restricted Global Certificate on the Maturity Date and/or on such earlier date(s) as all or any of the Notes represented by this DTC Restricted Global Certificate may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable under the Conditions in respect of such Notes on each such date and to pay interest (if any) on the nominal amount of the Notes from time to time represented by this DTC Restricted Global Certificate calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed.
For the purposes of this DTC Restricted Global Certificate, (a) the Issuer certifies that the Registered Holder is, at the date hereof, entered in the Register as the holder of the Notes represented by this DTC Restricted Global Certificate, (b) this DTC Restricted Global Certificate is evidence of entitlement only, (c) title to the Notes represented by this DTC Restricted Global Certificate passes only on due registration on the Register, (d) only the holder of the Notes as on the immediately preceding Clearing System Business Day, represented by this DTC Restricted Global Certificate is entitled to payments in respect of the Notes represented by this DTC Restricted Global Certificate, and (e) the nominal amount of Notes represented by this DTC Restricted Global Certificate from time to time shall be that amount shown in the Register as being registered in the name of the Registered Holder hereof at such time.
For the purposes hereof Clearing System Business Day means any day other than (i) Saturdays or Sundays and (ii) 1 January and 25 December.
Transfer of Notes represented by DTC Restricted Global Certificates
If the Final Terms state that the Notes are to be represented by a DTC Restricted Global Certificate on issue, transfers of the holding of Notes represented by this DTC Restricted Global Certificate pursuant to Condition 2(b) may only be made in part:
(a) | if the Notes represented by this DTC Restricted Global Certificate are held on behalf of DTC or any other clearing system (an Alternative Clearing System) and any such clearing system is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so and no alternative clearing system satisfactory to the Trustee is available; or |
(b) | an Event of Default has occurred and is continuing; or |
(c) | with the consent of the Issuer |
provided that, in the case of the first transfer of part of a holding pursuant to (a) or (b) above, the holder of the Notes represented by this DTC Restricted Global Certificate has given the Registrar not less than 30 days
99
notice at its specified office of such holders intention to effect such transfer. Where the holding of Notes represented by this DTC Restricted Global Certificate is only transferable in its entirety, the Certificate issued to the transferee upon transfer of such holding shall be a DTC Restricted Global Certificate. Where transfers are permitted in part, Certificates issued to transferees shall not be DTC Restricted Global Certificates unless the transferee so requests and certifies to the Registrar that it is, or is acting as a nominee for, DTC and/or an Alternative Clearing System.
Interests in a DTC Restricted Global Certificate will be exchangeable, free of charge to the holder, for definitive DTC Restricted Certificates only upon the occurrence of an Exchange Event. An Exchange Event means (unless otherwise specified in the applicable Final Terms) that:
(i) | an Event of Default has occurred and is continuing; or |
(ii) | either DTC has notified the Issuer that it is unwilling or unable to continue to act as depositary for the Notes and no alternative clearing system is available or DTC has ceased to constitute a clearing agency registered under the Exchange Act; or |
(iii) | the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Notes represented by definitive DTC Restricted Certificates. |
Upon the occurrence of an Exchange Event:
(A) | the Issuer will promptly give notice to Noteholders in accordance with Condition 13; and |
(B) | DTC (acting on the instructions of any holder of an interest in such DTC Restricted Global Certificate) may give notice to the Registrar requesting exchange and, in the event of an Exchange Event as described in (iii) above, the Issuer many also give notice to the Registrar requesting exchange. |
Any such exchange shall occur not later than 10 days after the date of receipt of the first relevant notice by the Registrar.
Covenants
The statements set forth in the legend above are an integral part of the Notes in respect of which this DTC Restricted Global Certificate representing DTC Restricted Registered Notes is issued and by acceptance hereof each holder of such Notes agrees to be subject to and bound by the terms and provisions set forth in such legend.
Meetings
At any meeting of Noteholders, the holder of the Notes represented by this DTC Restricted Global Certificate shall be treated as having one vote in respect of each nominal amount of Notes equal to the minimum Specified Denomination of the Notes.
This DTC Restricted Global Certificate shall not become valid for any purpose until authenticated by or on behalf of the Registrar.
This DTC Restricted Global Certificate, and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with English law.
IN WITNESS whereof the Issuer has caused this DTC Restricted Global Certificate to be signed manually or in facsimile by a person duly authorised on its behalf.
100
Dated as of the Issue Date.
VODAFONE GROUP PLC | ||
By: | ||
| ||
Duly Authorised |
Authenticated
by HSBC Bank USA, National Association as Registrar
By: | ||
| ||
Authorised Officer |
101
Form of Transfer
For value received the undersigned transfers to
|
|
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)
[] nominal amount of the Notes represented by this DTC Restricted Global Certificate, and all rights under them.
Dated |
|
|||||||
Signed |
|
Certifying Signature |
Notes:
(a) | The signature of the person effecting a transfer shall conform to a list of duly authorised specimen signatures supplied by the holder of the Notes represented by this DTC Restricted Global Certificate or (if such signature corresponds with the name as it appears on the face of this DTC Restricted Global Certificate) be certified by a notary public or a recognised bank or be supported by such other evidence as a Transfer Agent or the Registrar may reasonably require. |
(b) | A representative of the Noteholder should state the capacity in which he signs e.g. executor. |
102
ANNEX
[attach Final Terms that relate to this Global Certificate]
103
PART 5
FORM OF DEFINITIVE NOTE
[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 UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED.]1
VODAFONE GROUP PLC
(the Issuer)
(incorporated with limited liability in England and Wales)
[Specified Currency and Nominal Amount of Tranche]
NOTES DUE
[Year of Maturity]
This Note is one of a Series of Notes of [Specified Currency(ies) and Specified Denomination(s)] each of the Issuer (Notes). References herein to the Conditions shall be to the Terms and Conditions [endorsed hereon/set out in the Schedule 1 to the Trust Deed (as defined below) which shall be incorporated by reference herein and have effect as if set out herein] as completed by the relevant information (appearing in the Final Terms (the Final Terms)) endorsed hereon but, in the event of any conflict between the provisions of the said Conditions and such information in the Final Terms, such information will prevail. Words and expressions defined in the Conditions shall bear the same meanings when used in this Note. This Note is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the Trust Deed) dated 16 July 1999 and made between the Issuer (under its then name of Vodafone AirTouch Plc) and The Law Debenture Trust Corporation p.l.c. as trustee for the holders of the Notes.
The Issuer, subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the bearer hereof on the Maturity Date or on such earlier date as this Note may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable on redemption of this Note and to pay interest (if any) on the nominal amount of this Note calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed.
This Note shall not be valid unless authenticated by HSBC Bank plc as Issuing and Principal Paying Agent.
1 | Include where the original maturity of the Notes is more than 365 days. |
104
IN WITNESS whereof this Note has been executed on behalf of the Issuer.
Issued as of | ||
VODAFONE GROUP PLC | ||
By: |
| |
Duly Authorised | ||
Authenticated by HSBC Bank plc as Issuing and Principal Paying Agent. | ||
By: |
| |
Authorised Officer |
105
[Conditions]
[Conditions to be as set out in the Schedule 1 to this Trust Deed or such other form as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Trustee and the relevant Dealer(s), but shall not be endorsed if not required by the relevant Stock Exchange]
106
Final Terms
[Here to be set out the text of the relevant information completing the Conditions which appears in the Final
Terms relating to the Notes]
107
PART 6
FORM OF COUPON
On the front:
VODAFONE GROUP PLC
[Specified Currency and Nominal Amount of Tranche]
NOTES DUE
[Year of Maturity]
Series No. [ ]
[Coupon appertaining to a Note in the denomination of [Specified Currency and Specified Denomination]].1
Part A
[For Fixed Rate Notes: | ||
This Coupon is payable to bearer, separately | Coupon for | |
negotiable and subject to the Terms and | [ ] | |
Conditions of the said Notes. | due on [ ], [ ]] |
Part B
[For Floating Rate Notes or Inflation Linked Interest Notes:
Coupon for the amount due in accordance with the Terms and Conditions endorsed on, attached to or incorporated by reference into the said Notes on [the Interest Payment Date falling in [ ] [ ]/[ ]].
This Coupon is payable to bearer, separately negotiable and subject to such Terms and Conditions, under which it may become void before its due date.]
[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 UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED.]2
1 | Delete where the Notes are all of the same denomination. |
2 | Include where the original maturity of the Notes is more than 365 days. |
108
PART 7
FORM OF TALON
On the front:
VODAFONE GROUP PLC
[Specified Currency and Nominal Amount of Tranche]
NOTES DUE
[Year of Maturity]
Series No. [ ]
[Talon appertaining to a Note in the denomination of [Specified Currency and Specified Denomination]].1
On and after [ ] further Coupons [and a further Talon]2 appertaining to the Note to which this Talon appertains will be issued at the specified office of any of the Paying Agents set out on the reverse hereof (and/or any other or further Paying Agents and/or specified offices as may from time to time be duly appointed and notified to the Noteholders) upon production and surrender of this Talon.
This Talon may, in certain circumstances, become void under the Terms and Conditions endorsed on the Note to which this Talon appertains.
[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 UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED.]3
1 | Delete where the Notes are all of the same denomination. |
2 | Not required on last Coupon sheet. |
3 | Include where the original maturity of the Notes is more than 365 days. |
109
On the back of Coupons and Talons:
ISSUING AND PRINCIPAL PAYING AGENT
HSBC Bank plc
8 Canada Square
London E14 5HQ
OTHER PAYING AGENTS
Credit Suisse First Boston | Banque Internationale à Luxembourg société | |
Uetlibergstrasse 231 | anonyme | |
8045 Zurich | 69 route dEsch | |
L-2953 Luxembourg |
110
PART 8
FORM OF REGULATION S CERTIFICATE
On the front:
THE NOTES REPRESENTED BY THIS REGULATION S GLOBAL CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
VODAFONE GROUP PLC
(the Issuer)
(incorporated with limited liability in England and Wales)
[Specified Currency and Nominal Amount of Tranche]
NOTES DUE
[Year of Maturity]
This Regulation S Certificate certifies that [] (the Registered Holder) is, as at the date hereof, registered as the holder of [nominal amount] of the Notes referred to above (the Notes) of the Issuer. References herein to the Conditions shall be to the Terms and Conditions [endorsed hereon/set out in the Schedule 1 to the Trust Deed (as defined below) which shall be incorporated by reference herein and have effect as if set out herein] as completed by the relevant information (appearing in the Final Terms (the Final Terms)) endorsed hereon but, in the event of any conflict between the provisions of the said Conditions and such information in the Final Terms, such information will prevail. Words and expressions defined in the Conditions shall bear the same meanings when used in this Certificate. This Certificate is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the Trust Deed) dated 16 July 1999 and made between the Issuer (under its then name of Vodafone AirTouch Plc) and The Law Debenture Trust Corporation p.l.c. as trustee for the holders of the Notes.
The Issuer, subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the Registered Holder hereof on the Maturity Date or on such earlier date as the Notes represented by this Certificate may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable on redemption of such Notes and to pay interest (if any) on the nominal amount of such Notes calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed.
For the purposes of this Regulation S Certificate, (a) the Issuer certifies that the Registered Holder is, at the date hereof, entered in the Register as the holder of the Note(s) represented by this Regulation S Certificate, (b) this Regulation S Certificate is evidence of entitlement only, (c) title to the Note(s) represented by this Regulation S Certificate passes only on due registration on the Register, and (d) only the holder of the Note(s) represented by this Regulation S Certificate is entitled to payments in respect of the Note(s) represented by this Regulation S Certificate.
This Regulation S Certificate shall not become valid for any purpose until authenticated by or on behalf of the Registrar.
111
This Regulation S Certificate, and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with English law.
IN WITNESS whereof this Regulation S Certificate has been executed on behalf of the Issuer.
Dated as of the Issue Date.
VODAFONE GROUP PLC | ||
By: |
| |
Duly Authorised |
Authenticated by HSBC Bank USA, National Association as Registrar.
By: |
| |
Authorised Officer |
112
On the back:
Terms and Conditions of the Notes
[Conditions to be as set out in the Schedule 1 to this Trust Deed or such other form as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Registrar, the Trustee and the relevant Dealer(s), but shall not be endorsed if not required by the relevant Stock Exchange.]
113
Final Terms
[Here to be set out the text of the relevant information completing the Conditions which appears in the Final Terms relating to the Notes].
114
Form of Transfer
For value received the undersigned transfers to
|
|
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)
[] nominal amount of the Notes represented by this Regulation S Certificate, and all rights under them.
Dated
| ||||||
Certifying Signature | ||||||
Signed |
Notes:
(c) | The signature of the person effecting a transfer shall conform to a list of duly authorised specimen signatures supplied by the holder of the Notes represented by this Regulation S Certificate or (if such signature corresponds with the name as it appears on the face of this Regulation S Certificate) be certified by a notary public or a recognised bank or be supported by such other evidence as a Transfer Agent or the Registrar may reasonably require. |
(d) | A representative of the Noteholder should state the capacity in which he signs. |
Unless the context otherwise requires capitalised terms used in this Form of Transfer have the same meaning as in the Trust Deed.
[TO BE COMPLETED BY TRANSFEREE:
[INSERT ANY REQUIRED TRANSFEREE REPRESENTATIONS, CERTIFICATIONS, ETC.]]
ISSUING AND PRINCIPAL PAYING AGENT, TRANSFER AGENT AND REGISTRAR
HSBC Bank plc
8 Canada Square
London E14 5HQ
PAYING AGENT AND TRANSFER AGENT
HSBC Bank USA, National Association
452 Fifth Avenue
New York
NY 10018-2708
115
PART 9
FORM OF DTC RESTRICTED CERTIFICATE
On the front:
THE NOTES REPRESENTED BY THIS DEFINITIVE REGISTERED NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT (RULE 144A) TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A QIB) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (REGULATION S) TO A NON-U.S. PERSION (AS SUCH TERM IS DEFINED UNDER REGULATION S) OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE NOTES REPRESENTED BY THIS DEFINITIVE REGISTERED NOTE.
[FOR PURPOSES OF SECTIONS 1271 ET. SEQ. OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS NOTE HAS ORIGINAL ISSUE DISCOUNT OF [currency][amount] PER EACH [currency][amount] OF PRINCIPAL AMOUNT OF THIS NOTE; THE ISSUE PRICE OF THIS NOTE IS [currency][amount]; THE ISSUE DATE IS [date]; AND THE YIELD TO MATURITY (COMPOUNDED [semi-annually]) IS [yield].]*
VODAFONE GROUP PLC
(the Issuer)
(incorporated with limited liability in England and Wales)
[Specified Currency and Nominal Amount of Tranche]
NOTES DUE
[Year of Maturity]
This DTC Restricted Certificate certifies that [] (the Registered Holder) is, as at the date hereof, registered as the holder of [nominal amount] of the Notes referred to above (the Notes) of the Issuer. References herein to the Conditions shall be to the Terms and Conditions [endorsed hereon/set out in Schedule 1 to the Trust Deed (as defined below) which shall be incorporated by reference herein and have effect as if set out herein] as completed by the relevant information (appearing in the Final Terms (the Final Terms)) endorsed hereon but, in the event of any conflict between the provisions of the said Conditions and such information in the Final Terms, such information will prevail. Words and expressions defined in the Conditions shall bear the same meanings when used in this DTC Restricted Certificate. This DTC Restricted Certificate is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the Trust Deed) dated 16 July 1999 and made between the Issuer (under its then name of Vodafone AirTouch Plc) and The Law Debenture Trust Corporation p.l.c. as trustee for the holders of the Notes.
* | Legend to be borne by any Definitive Certificate issued with original issue discount for U.S federal income tax purposes. |
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The Issuer, subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the Registered Holder hereof on the Maturity Date or on such earlier date as the Notes represented by this DTC Restricted Certificate may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable on redemption of such Notes and to pay interest (if any) on the nominal amount of such Notes calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed.
The statements set forth in the legend above are an integral part of the Notes in respect of which this DTC Restricted Certificate is issued and by acceptance hereof each holder of such Notes agrees to be subject to and bound by the terms and provisions set forth in such legend.
For so long as the Notes are outstanding, the Issuer will, during the period in which the Issuer is neither subject to Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended, nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder, provide to the holder hereof, or to any prospective purchaser hereof designated by such holder, upon request, the information required to be provided by Rule 144A(d)(4) under the U.S. Securities Act of 1933, as amended.
For the purposes of this DTC Restricted Certificate, (a) the Issuer certifies that the Registered Holder is, at the date hereof, entered in the Register as the holder of the Note(s) represented by this DTC Restricted Certificate, (b) this DTC Restricted Certificate is evidence of entitlement only, (c) title to the Note(s) represented by this DTC Restricted Certificate passes only on due registration on the Register, and (d) only the holder of the Note(s) represented by this DTC Restricted Certificate is entitled to payments in respect of the Note(s) represented by this DTC Restricted Certificate.
This DTC Restricted Certificate shall not become valid for any purpose until authenticated by or on behalf of the Registrar.
This DTC Restricted Certificate, and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with English law.
IN WITNESS whereof this DTC Restricted Certificate has been executed on behalf of the Issuer.
Dated as of the Issue Date.
VODAFONE GROUP PLC | ||
By: |
| |
Duly Authorised |
Authenticated by HSBC Bank USA, National Association as Registrar.
By: |
| |
Authorised Officer |
117
On the back:
Terms and Conditions of the Notes
[Conditions to be as set out in the Schedule 1 to this Trust Deed or such other form as may be agreed between the Issuer, the Issuing and Principal Paying Agent, the Registrar, the Trustee and the relevant Dealer(s), but shall not be endorsed if not required by the relevant Stock Exchange.]
118
Final Terms
[Here to be set out the text of the relevant information completing the Conditions which appears in the Final Terms relating to the Notes].
119
Form of Transfer
For value received the undersigned transfers to
|
|
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)
[] nominal amount of the Notes represented by this Regulation S Certificate, and all rights under them.
Dated
| ||||||
Certifying Signature | ||||||
Signed |
Notes:
(e) | The signature of the person effecting a transfer shall conform to a list of duly authorised specimen signatures supplied by the holder of the Notes represented by this DTC Restricted Certificate or (if such signature corresponds with the name as it appears on the face of this DTC Restricted Certificate) be certified by a notary public or a recognised bank or be supported by such other evidence as a Transfer Agent or the Registrar may reasonably require. |
(f) | A representative of the Noteholder should state the capacity in which he signs. |
Unless the context otherwise requires capitalised terms used in this Form of Transfer have the same meaning as in the Trust Deed.
[TO BE COMPLETED BY TRANSFEREE:
[INSERT ANY REQUIRED TRANSFEREE REPRESENTATIONS, CERTIFICATIONS, ETC.]]
ISSUING AND PRINCIPAL PAYING AGENT, TRANSFER AGENT AND REGISTRAR
HSBC Bank plc
8 Canada Square
London E14 5HQ
PAYING AGENT AND TRANSFER AGENT
HSBC Bank USA, National Association
452 Fifth Avenue
New York
NY 10018-2708
120
SCHEDULE 3
PROVISIONS FOR MEETINGS OF NOTEHOLDERS
1. (a) | As used in this Schedule the following expressions shall have the following meanings unless the context otherwise requires: |
(i) | voting certificate shall mean an English language certificate issued by a Paying Agent and dated in which it is stated: |
(A) | that on the date thereof Bearer Notes (whether in definitive form or represented by a Global Note and not being Bearer Notes in respect of which a block voting instruction has been issued and is outstanding in respect of the meeting specified in such voting certificate or any adjourned such meeting) were deposited with such Paying Agent or (to the satisfaction of such Paying Agent) were held to its order or under its control or blocked in an account with a clearing system and that no such Bearer Notes will cease to be so deposited or held or blocked until the first to occur of: |
I. | the conclusion of the meeting specified in such certificate or, if later, of any adjourned such meeting; and |
II. | the surrender of the certificate to the Paying Agent who issued the same; and |
(B) | that the bearer thereof is entitled to attend and vote at such meeting and any adjourned such meeting in respect of the Bearer Notes represented by such certificate; |
(ii) | block voting instruction shall mean an English language document issued by a Paying Agent and dated in which: |
(A) | it is certified that Bearer Notes (whether in definitive form or represented by a Global Note and not being Bearer Notes in respect of which a voting certificate has been issued and is outstanding in respect of the meeting specified in such block voting instruction and any adjourned such meeting) have been deposited with such Paying Agent or (to the satisfaction of such Paying Agent) were held to its order or under its control or blocked in an account with a clearing system and that no such Bearer Notes will cease to be so deposited or held or blocked until the first to occur of: |
I. | the conclusion of the meeting specified in such document or, if later, of any adjourned such meeting; and |
II. | the surrender to the Paying Agent not less than 48 hours before the time for which such meeting or any adjourned such meeting is convened of the receipt issued by such Paying Agent in respect of each such deposited Bearer Note which is to be released or (as the case may require) the Bearer Note or Bearer Notes ceasing with the agreement of the Paying Agent to be held to its order or under its control or so blocked and the giving of notice by the Paying Agent to the Issuer in accordance with paragraph 17 hereof of the necessary amendment to the block voting instruction; |
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(B) | it is certified that each holder of such Bearer Notes has instructed such Paying Agent that the vote(s) attributable to the Bearer Note or Bearer Notes so deposited or held or blocked should be cast in a particular way in relation to the resolution or resolutions to be put to such meeting or any adjourned such meeting and that all such instructions are during the period commencing 48 hours prior to the time for which such meeting or any adjourned such meeting is convened and ending at the conclusion or adjournment thereof neither revocable nor capable of amendment; |
(C) | the aggregate nominal amount of the Bearer Notes so deposited or held or blocked are listed distinguishing with regard to each such resolution between those in respect of which instructions have been given as aforesaid that the votes attributable thereto should be cast in favour of the resolution and those in respect of which instructions have been so given that the votes attributable thereto should be cast against the resolution; and |
(D) | one or more persons named in such document (each hereinafter called a proxy) is or are authorised and instructed by such Paying Agent to cast the votes attributable to the Bearer Notes so listed in accordance with the instructions referred to in (C) above as set out in such document; |
(iii) | 24 hours shall mean a period of 24 hours including all or part of a day upon which banks are open for business in both the place where the relevant meeting is to be held and in each of the places where the Paying Agents have their specified offices (disregarding for this purpose the day upon which such meeting is to be held) and such period shall be extended by one period or, to the extent necessary, more periods of 24 hours until there is included as aforesaid all or part of a day upon which banks are open for business in all of the places as aforesaid; and |
(iv) | 48 hours shall mean a period of 48 hours including all or part of two days upon which banks are open for business both in the place where the relevant meeting is to be held and in each of the places where the Paying Agents have their specified offices (disregarding for this purpose the day upon which such meeting is to be held) and such period shall be extended by one period or, to the extent necessary, more periods of 24 hours until there is included as aforesaid all or part of two days upon which banks are open for business in all of the places as aforesaid. |
(b) | A holder of a Bearer Note (whether in definitive form or represented by a Global Note) may obtain a voting certificate in respect of such Bearer Note from a Paying Agent or require a Paying Agent to issue a block voting instruction in respect of such Note by depositing such Bearer Note with such Paying Agent or (to the satisfaction of such Paying Agent) by such Bearer Note being held to its order or under its control or being blocked in an account with a clearing system, in each case not less than 48 hours before the time fixed for the relevant meeting and on the terms set out in sub-paragraph (a)(i)(A) or (a)(ii)(A) above (as the case may be), and (in the case of a block voting instruction) instructing such Paying Agent to the effect set out in sub-paragraph (a)(ii)(B) above. The holder of any voting certificate or the proxies named in any block voting instruction shall for all purposes in connection with the relevant meeting or adjourned meeting of Noteholders be deemed to be the holder of the Bearer Notes to which such voting certificate or block voting instruction relates and the Paying Agent with which such Bearer Notes have been deposited or the person holding the same to the order or under the control of such Paying Agent or the clearing system in which such Bearer Notes have been blocked shall be deemed for such purposes not to be the holder of those Bearer Notes. |
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(c) (i) | A holder of Registered Notes (whether in definitive form or represented by a Global Certificate (other than a Registered Note referred to in (iv) below)) may, by an instrument in writing in the English language (a form of proxy) signed by the holder or, in the case of a corporation, executed under its common seal or signed on its behalf by an attorney or a duly authorised officer of the corporation and delivered to the specified office of the Registrar not less than 48 hours before the time fixed for the relevant meeting, appoint any person (a proxy) to act on his or its behalf in connection with any meeting of the Noteholders and any adjourned such meeting. |
(ii) | Any holder of Registered Notes (whether in definitive form or represented by a Global Certificate) which is a corporation may by resolution of its directors or other governing body authorise any person to act as its representative (a representative) in connection with any meeting of the Noteholders and any adjourned such meeting. |
(iii) | Any proxy appointed pursuant to sub-paragraph (i) above or representative appointed pursuant to sub-paragraph (ii) above shall so long as such appointment remains in force be deemed, for all purposes in connection with the relevant meeting or adjourned meeting of the Noteholders, to be the holder of the Registered Notes to which such appointment relates and the holder of the Registered Notes shall be deemed for such purposes not to be the holder. |
(iv) | For so long as any of the Registered Notes is represented by a Global Certificate registered in the name of DTC or its nominee, DTC may mail an Omnibus Proxy to the relevant Issuer in accordance with and in the form used by DTC as part of its usual procedures from time to time in relation to meetings of Noteholders. Such Omnibus Proxy shall assign the voting rights in respect of the relevant meeting to DTCs direct participants as of the record date specified therein. Any such assignee participant may, by an instrument in writing in the English language signed by such assignee participant, or, in the case of a corporation, executed under its common seal or signed on its behalf by an attorney or a duly authorised officer of the corporation and delivered to the specified office of the Registrar or any Transfer Agent before the time fixed for the relevant meeting, appoint any person (a sub-proxy) to act on his or its behalf in connection with any meeting of Noteholders and any adjourned such meeting. All references to proxy or proxies in this Schedule other than in this paragraph shall be read so as to include references to sub-proxy or sub-proxies. |
2. | The Issuer or the Trustee may at any time and the Issuer shall upon a requisition in writing in the English language signed by the holders of not less than one-tenth in nominal amount of the Notes for the time being outstanding convene a meeting of the Noteholders and if the Issuer makes default for a period of seven days in convening such a meeting the same may be convened by the Trustee or the requisitionists. Every such meeting shall be held at such time and place as the Trustee may appoint or approve. |
3. | At least 21 days notice (exclusive of the day on which the notice is given and the day on which the meeting is to be held) specifying the place, day and hour of meeting shall be given to the holders of the relevant Notes prior to any meeting of such holders in the manner provided by Condition 14. Such notice, which shall be in the English language, shall state generally the nature of the business to be transacted at the meeting thereby convened but (except for an Extraordinary Resolution) it shall not be necessary to specify in such notice the terms of any resolution to be proposed. Such notice shall include statements, if applicable, to the effect that (i) Bearer Notes may, not less than 48 hours before the time fixed for the meeting, be deposited with Paying Agents or (to their satisfaction) held to their order or under their control or blocked in an account with a clearing system for the purpose of obtaining voting certificates or appointing proxies and (ii) the holders of Registered Notes may appoint proxies by executing and delivering a form of proxy in the English language to the specified |
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office of the Registrar not less than 48 hours before the time fixed for the meeting or, in the case of corporations, may appoint representatives by resolution of their directors or other governing body and delivering a certified copy thereof to the specified office of the Registrar. A copy of the notice shall be sent by post to the Trustee (unless the meeting is convened by the Trustee) and to the Issuer (unless the meeting is convened by the Issuer) and to each Agent (other than the Calculation Agent). |
4. | A person (who may but need not be a Noteholder) nominated in writing by the Trustee shall be entitled to take the chair at the relevant meeting or adjourned meeting but if no such nomination is made or if at any meeting or adjourned meeting the person nominated shall not be present within 15 minutes after the time appointed for holding the meeting or adjourned meeting the Noteholders present shall choose one of their number to be Chairman, failing which the Issuer may appoint a Chairman. The Chairman of an adjourned meeting need not be the same person as was Chairman of the meeting from which the adjournment took place. |
5. | At any such meeting one or more persons present holding Definitive Notes or voting certificates or being proxies or representatives and holding or representing in the aggregate not less than one-twentieth of the nominal amount of the Notes for the time being outstanding shall (except for the purpose of passing an Extraordinary Resolution) form a quorum for the transaction of business and no business (other than the choosing of a Chairman) shall be transacted at any meeting unless the requisite quorum be present at the commencement of the relevant business. The quorum at any such meeting for passing an Extraordinary Resolution shall (subject as provided below) be one or more persons present holding Definitive Notes or voting certificates or being proxies or representatives and holding or representing in the aggregate a clear majority in nominal amount of the Notes for the time being outstanding. |
6. | If within 15 minutes (or such longer period not exceeding 30 minutes as the Chairman may decide) after the time appointed for any such meeting a quorum is not present for the transaction of any particular business, then, subject and without prejudice to the transaction of the business (if any) for which a quorum is present, the meeting shall if convened upon the requisition of Noteholders be dissolved. In any other case it shall stand adjourned to the same day in the next week (or if such day is a public holiday the next succeeding business day) at the same time and place (except in the case of a meeting at which an Extraordinary Resolution is to be proposed in which case it shall stand adjourned for such period, being not less than 13 clear days nor more than 42 clear days, and to such place as may be appointed by the Chairman either at or subsequent to such meeting and approved by the Trustee). If within 15 minutes (or such longer period not exceeding 30 minutes as the Chairman may decide) after the time appointed for any adjourned meeting a quorum is not present for the transaction of any particular business, then, subject and without prejudice to the transaction of the business (if any) for which a quorum is present, the Chairman may either (with the approval of the Trustee) dissolve such meeting or adjourn the same for such period, being not less than 13 clear days (but without any maximum number of clear days), and to such place as may be appointed by the Chairman either at or subsequent to such adjourned meeting and approved by the Trustee, and the provisions of this sentence shall apply to all further adjourned such meetings. At any adjourned meeting one or more persons present holding Definitive Notes or voting certificates or being proxies or representatives (whatever the nominal amount of the Notes so held or represented by them) shall form a quorum and shall have power to pass any resolution and to decide upon all matters which could properly have been dealt with at the meeting from which the adjournment took place had the requisite quorum been present. |
7. | Notice of any adjourned meeting at which an Extraordinary Resolution is to be submitted shall be given in the same manner as notice of an original meeting but as if 10 were substituted for 21 in paragraph 3 above and such notice shall state the required quorum. Subject as aforesaid it shall not be necessary to give any notice of an adjourned meeting. |
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8. | Every question submitted to a meeting shall be decided in the first instance by a show of hands and in case of equality of votes the Chairman shall both on a show of hands and on a poll have a casting vote in addition to the vote or votes (if any) to which he may be entitled as a Noteholder or as a holder of a voting certificate or as a proxy or as a representative. |
9. | At any meeting unless a poll is (before or on the declaration of the result of the show of hands) demanded by the Chairman, the Issuer, the Trustee or any person present holding a Definitive Note of the relevant Series or a voting certificate or being a proxy or representative (whatever the nominal amount of the Notes so held or represented by him) a declaration by the Chairman that a resolution has been carried or carried by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution. |
10. | Subject to paragraph 12 below, if at any such meeting a poll is so demanded it shall be taken in such manner and subject as hereinafter provided either at once or after an adjournment as the Chairman directs and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded as at the date of the taking of the poll. The demand for a poll shall not prevent the continuance of the meeting for the transaction of any business other than the motion on which the poll has been demanded. |
11. | The Chairman may with the consent of (and shall if directed by) any such meeting adjourn the same from time to time and from place to place but no business shall be transacted at any adjourned meeting except business which might lawfully (but for lack of required quorum) have been transacted at the meeting from which the adjournment took place. |
12. | Any poll demanded at any such meeting on the election of a Chairman or on any question of adjournment shall be taken at the meeting without adjournment. |
13. | The Trustee and its lawyers and any director, officer or employee of a corporation being a trustee of these presents and any director or officer of the Issuer and its or their lawyers and any other person authorised so to do by the Trustee may attend and speak at any meeting. Save as aforesaid, but without prejudice to the proviso to the definition of outstanding in Clause 1, no person shall be entitled to attend and speak nor shall any person be entitled to vote at any meeting of Noteholders or join with others in requesting the convening of such a meeting or to exercise the rights conferred on Noteholders by Condition 11 unless he either produces the Definitive Bearer Note or Definitive Bearer Notes of which he is the holder or a voting certificate or is a proxy or a representative or is the holder of a Registered Note or Registered Notes in definitive form. No person shall be entitled to vote at any meeting in respect of Notes held by, for the benefit of, or on behalf of, the Issuer, any Holding Company of the Issuer or any Subsidiary of the Issuer or any such Holding Company. Nothing herein shall prevent any of the proxies named in any block voting instruction or form of Proxy from being a director, officer or representative of or otherwise connected with the Issuer. |
14. | Subject as provided in paragraph 13 hereof at any meeting: |
(a) | on a show of hands every person who is present in person and produces a Definitive Bearer Note or voting certificate or is a holder of a Registered Note in definitive form or is a proxy or representative shall have one vote; and |
(b) | on a poll every person who is so present shall have one vote in respect of each 1.00 or such other amount as the Trustee may in its absolute discretion stipulate (or, in the case of meetings of holders of Notes denominated in another currency, such amount in such other currency as the Trustee in its absolute discretion may stipulate) in nominal amount of the Definitive Bearer Notes so produced or represented by the voting certificate so produced or |
125
in respect of which he is a proxy or representative or in respect of which (being a Registered Note in definitive form) he is the registered holder. |
Without prejudice to the obligations of the proxies named in any block voting instruction or form of proxy any person entitled to more than one vote need not use all his votes or cast all the votes to which he is entitled in the same way.
15. | The proxies named in any block voting instruction or form of proxy need not be Noteholders. |
16. | Each block voting instruction together (if so requested by the Trustee) with proof satisfactory to the Trustee of its due execution on behalf of the relevant Paying Agent and each form of proxy or resolution appointing a representative shall be deposited by the relevant Paying Agent (or as the case may be) by the Registrar or the relevant Transfer Agent at such place as the Trustee shall approve not less than 24 hours before the time appointed for holding the meeting or adjourned meeting at which the proxies named in the block voting instruction or form of proxy propose to vote and in default the block voting instruction or form of proxy or resolution appointing a representative shall not be treated as valid unless the Chairman of the meeting decides otherwise before such meeting or adjourned meeting proceeds to business. A certified copy of each block voting instruction or form of proxy or resolution appointing a representative shall be deposited with the Trustee before the commencement of the meeting or adjourned meeting but the Trustee shall not thereby be obliged to investigate or be concerned with the validity of or the authority of the proxies named in any such block voting instruction or form of proxy or of the representative named in such resolution. |
17. | Any vote given in accordance with the terms of a block voting instruction or form of proxy or resolution appointing a representative shall be valid notwithstanding the previous revocation or amendment of the block voting instruction or form of proxy or of any of the relevant Noteholders instructions pursuant to which it was executed provided that no intimation in writing of such revocation or amendment shall have been received from the relevant Paying Agent or in the case of Registered Note from the holder thereof by the Issuer at its registered office (or such other place as may have been required or approved by the Trustee for the purpose) by the time being 24 hours before the time appointed for holding the meeting or adjourned meeting at which the block voting instruction or form of proxy is to be used. |
18. | A meeting of the Noteholders shall in addition to the powers hereinbefore given have the following powers exercisable only by Extraordinary Resolution (subject to the provisions relating to quorum contained in paragraphs 5 and 6 above) namely: |
(a) | Power to sanction any compromise or arrangement proposed to be made between the Issuer, the Trustee, any Appointee and the Noteholders and Couponholders or any of them. |
(b) | Power to sanction any abrogation, modification, compromise or arrangement in respect of the rights of the Trustee, any Appointee, the Noteholders, the Couponholders, the Issuer against any other or others of them or against any of their property whether such rights shall arise under these presents or otherwise. |
(c) | Power to assent to any modification of the provisions of these presents which shall be proposed by the Issuer, the Trustee or any Noteholder. |
(d) | Power to give any authority or sanction which under the provisions of these presents is required to be given by Extraordinary Resolution. |
(e) | Power to appoint any persons (whether Noteholders or not) as a committee or committees to represent the interests of the Noteholders and to confer upon such committee or committees |
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any powers or discretions which the Noteholders could themselves exercise by Extraordinary Resolution. |
(f) | Power to approve of a person to be appointed a trustee and power to remove any trustee or trustees for the time being of these presents. |
(g) | Power to discharge or exonerate the Trustee and/or any Appointee from all liability in respect of any act or omission for which the Trustee and/or such Appointee may have become responsible under these presents. |
(h) | Power to authorise the Trustee and/or any Appointee to concur in and execute and do all such deeds, instruments, acts and things as may be necessary to carry out and give effect to any Extraordinary Resolution. |
(i) | Power to sanction any scheme or proposal for the exchange or sale of the Notes for or the conversion of the Notes into or the cancellation of the Notes in consideration of shares, stock, notes, bonds, debentures, debenture stock and/or other obligations and/or securities of the Issuer or any other company formed or to be formed, or for or into or in consideration of cash, or partly for or into or in consideration of such shares, stock, notes, bonds, debentures, debenture stock and/or other obligations and/or securities as aforesaid and partly for or into or in consideration of cash and for the appointment of some person with the power on behalf of the Noteholders to execute an instrument of transfer of the Registered Notes held by them in favour of the persons with or to whom the Notes are to be exchanged or sold respectively. |
19. | Any resolution passed at a meeting of the Noteholders duly convened and held in accordance with these presents shall be binding upon all the Noteholders whether present or not present at such meeting and whether or not voting and upon all Couponholders and each of them shall be bound to give effect thereto accordingly and the passing of any such resolution shall be conclusive evidence that the circumstances justify the passing thereof. Notice of the result of the voting on any resolution duly considered by the Noteholders shall be published in accordance with Condition 13 by the Issuer within 14 days of such result being known PROVIDED THAT the non-publication of such notice shall not invalidate such result. |
20. | The expression Extraordinary Resolution when used in these presents means (a) a resolution passed at a meeting of the Noteholders duly convened and held in accordance with these presents by a majority consisting of not less than three-fourths of the persons voting thereat upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-fourths of the votes cast on such poll; or (b) a resolution in writing signed by or on behalf of all the Noteholders, which resolution in writing may be contained in one document or in several documents in like form each signed by or on behalf of one or more of the Noteholders. |
21. | Minutes of all resolutions and proceedings at every meeting of the Noteholders shall be made and entered in books to be from time to time provided for that purpose by the Issuer and any such minutes as aforesaid if purporting to be signed by the Chairman of the meeting at which such resolutions were passed or proceedings transacted shall be conclusive evidence of the matters therein contained and until the contrary is proved every such meeting in respect of the proceedings of which minutes have been made shall be deemed to have been duly held and convened and all resolutions passed or proceedings transacted thereat to have been duly passed or transacted. |
22. (a) | If and whenever the Issuer shall have issued and have outstanding Notes of more than one Series the foregoing provisions of this Schedule shall have effect subject to the following modifications: |
127
(i) | a resolution which in the opinion of the Trustee affects the Notes of only one Series shall be deemed to have been duly passed if passed at a separate meeting of the holders of the Notes of that Series; |
(ii) | a resolution which in the opinion of the Trustee affects the Notes of more than one Series but does not give rise to a conflict of interest between the holders of Notes of any of the Series so affected shall be deemed to have been duly passed if passed at a single meeting of the holders of the Notes of all the Series so affected; |
(iii) | a resolution which in the opinion of the Trustee affects the Notes of more than one Series and gives or may give rise to a conflict of interest between the holders of the Notes of one Series or group of Series so affected and the holders of the Notes of another Series or group of Series so affected shall be deemed to have been duly passed only if passed at separate meetings of the holders of the Notes of each Series or group of Series so affected; and |
(iv) | to all such meetings all the preceding provisions of this Schedule shall mutatis mutandis apply as though references therein to Notes and Noteholders were references to the Notes of the Series or group of Series in question or to the holders of such Notes, as the case may be. |
(b) | If the Issuer shall have issued and have outstanding Notes which are not denominated in euro, in the case of any meeting of holders of Notes of more than one currency, the nominal amount of such Notes shall (i) for the purposes of paragraph 2 above be the equivalent in euro at the spot rate of a bank nominated by the Trustee for the conversion of the relevant currency or currencies into euro on the seventh dealing day prior to the day on which the requisition in writing is received by the Issuer and (ii) for the purposes of paragraphs 5, 6 and 14 above (whether in respect of the meeting or any adjourned such meeting or any poll resulting therefrom) be the equivalent at such spot rate on the seventh dealing day prior to the day of such meeting. In such circumstances, on any poll each person present shall have one vote for each 1.00 (or such other euro amount as the Trustee may in its absolute discretion stipulate) in nominal amount of the Notes (converted as above) which he holds or represents. |
23. | Subject to all other provisions of these presents the Trustee may, without the consent of the Issuer, the Noteholders or the Couponholders, prescribe such further regulations regarding the requisitioning and/or the holding of meetings of Noteholders and attendance and voting thereat as the Trustee may in its sole discretion think fit. |
128
SIGNATORIES
THE COMMON SEAL of | ) | |
VODAFONE GROUP PLC | ) | |
was affixed to this deed in the presence | ) | |
of: | ) | |
Director | ||
Secretary | ||
THE COMMON SEAL of | ) | |
THE LAW DEBENTURE TRUST | ) | |
CORPORATION p.l.c. was affixed to this | ) | |
deed in the presence of: | ) | |
Director | ||
Authorised Signatory |
129
SIGNATORIES
EXECUTED as a DEED by | ) | |
for and on behalf of | ) | |
VODAFONE GROUP PLC | ) | |
in the presence of: | ) | |
Director /s/ ANDREW HALFORD | ||
Witness: | /s/ NEIL GARROD | |
Name: | ||
Address: | ||
THE COMMON SEAL of | ) | |
THE LAW DEBENTURE TRUST | ) | |
CORPORATION p.l.c. | ) | |
was affixed to this deed | ) | |
in the presence of: | ) | |
Director /s/ DENYSE ANDERSON | ||
Authorised Signatory /s/ CAROL MORRIS |
131
Exhibit 4.5
To: THE ROYAL BANK OF SCOTLAND PLC as Agent
From: VODAFONE GROUP PLC as Borrower
Date: 27 March 2014
Vodafone Group Plc - 4,230,000,000
Revolving Credit Agreement dated 1 July 2010 (the Facility Agreement)
Irrevocable notice of cancellation
1. | We refer to the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this cancellation notice. |
2. | Vodafone is currently in the process of replacing the Facility Agreement with a new 3,860,000,000 revolving credit agreement (the New Facility Agreement), which is due to be entered into on or about 27 March 2014. |
3. | At the date hereof, we confirm that there are no Revolving Credit Advances and/or Swingline Advances outstanding under the Facility Agreement. |
4. | Subject to the New Facility Agreement being entered into and having full force and effect, we hereby, pursuant to paragraph (a) of Clause 7.2 (Voluntary cancellation), give you irrevocable notice of the cancellation of the Total Commitments in full. |
5. | Please acknowledge receipt of this notice as soon as possible by returning a countersigned copy to us. |
Vodafone Group Plc | ||
/s/Andy Halford | ||
By: | Andy Halford | |
Its: | Chief Financial Officer |
FOR ACKNOWLEDGEMENT AND RECEIPT | ||
The Royal Bank of Scotland Plc | ||
/s/Bob Ottewill | ||
By: | Bob Ottewill | |
Its: | authorised representative | |
Date: | 27/3/ 2014 |
Vodafone Group Plc
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England. Registered in England No. 3802001
Exhibit 4.6
CONFORMED COPY
FACILITY AGREEMENT
DATED 28 March 2014
EURO 3,860,000,000
REVOLVING CREDIT FACILITY
for
VODAFONE GROUP PLC
ALLEN & OVERY
ALLEN & OVERY LLP
LONDON
CONTENTS
Clause | Page | |||||
1. |
Interpretation | 1 | ||||
2. |
The Facilities | 29 | ||||
3. |
Purpose | 33 | ||||
4. |
Conditions Precedent | 33 | ||||
5. |
Advances | 35 | ||||
6. |
Extension Options | 36 | ||||
7. |
Repayment | 37 | ||||
8. |
Prepayment and Cancellation | 39 | ||||
9. |
Interest | 41 | ||||
10. |
Payments | 44 | ||||
11. |
Taxes | 46 | ||||
12. |
Market Disruption | 52 | ||||
13. |
Increased Costs | 53 | ||||
14. |
Illegality and Mitigation | 55 | ||||
15. |
Guarantee | 56 | ||||
16. |
Representations and Warranties | 59 | ||||
17. |
Undertakings | 63 | ||||
18. |
Financial Covenant | 67 | ||||
19. |
Default | 68 | ||||
20. |
The Agents and the Arrangers | 72 | ||||
21. |
Fees | 78 | ||||
22. |
Expenses | 79 | ||||
23. |
Stamp Duties | 79 | ||||
24. |
Indemnities | 79 | ||||
25. |
Evidence and Calculations | 81 | ||||
26. |
Amendments and Waivers | 81 | ||||
27. |
Changes to the Parties | 83 | ||||
28. |
Disclosure of Information | 91 | ||||
29. |
Set-off | 94 | ||||
30. |
Pro Rata Sharing | 95 | ||||
31. |
Severability | 96 | ||||
32. |
Counterparts | 96 | ||||
33. |
Notices | 96 | ||||
34. |
Language | 98 | ||||
35. |
Jurisdiction | 98 | ||||
36. |
Governing Law | 99 | ||||
37. |
USA Patriot Act | 99 | ||||
38. |
Waiver of trial by jury | 99 |
Schedule | Page | |||||||
1. |
Lenders and Commitments | 101 | ||||||
Part 1 | Lenders and Commitments | 101 | ||||||
Part 2 | Swingline Lenders and Swingline Commitments | 103 | ||||||
Part 3 | Mandated Lead Arrangers | 104 | ||||||
Part 4 | Co-Arrangers | 105 | ||||||
2. |
Conditions Precedent Documents | 106 | ||||||
Part 1 | To be Delivered before the First Advance | 106 | ||||||
Part 2 | To be Delivered by an Additional Guarantor | 107 | ||||||
Part 3 | To be Delivered by an Additional Borrower | 109 | ||||||
3. |
Form of Request | 111 | ||||||
4. |
Forms of Accession Documents | 112 | ||||||
Part 1 | Novation Certificate | 112 | ||||||
Part 2 | Guarantor Accession Agreement | 114 | ||||||
Part 3 | Borrower Accession Agreement | 115 | ||||||
Part 4 | Lender Accession Agreement | 116 | ||||||
5. |
Form of Confidentiality Undertaking from New Lender | 117 | ||||||
6. |
Form of Additional Lenders Fee Letter | 120 | ||||||
7. |
Form of Increase Confirmation | 122 | ||||||
Signatories |
124 |
THIS AGREEMENT is dated 28 March 2014 and made BETWEEN:
(1) | VODAFONE GROUP PLC (registered number 1833679) as borrower (Vodafone); |
(2) | THE FINANCIAL INSTITUTIONS listed in Part 3 of Schedule 1 as Mandated Lead Arrangers; |
(3) | THE FINANCIAL INSTITUTIONS listed in Part 4 of Schedule 1 as Co Arrangers; |
(4) | THE FINANCIAL INSTITUTIONS listed in Part 1 of Schedule 1 as Original Lenders; |
(5) | THE ROYAL BANK OF SCOTLAND PLC as agent (in this capacity the Agent); and |
(6) | THE ROYAL BANK OF SCOTLAND PLC as euro swingline agent (in this capacity the Euro Swingline Agent). |
IT IS AGREED as follows:
1. | INTERPRETATION |
1.1 | Definitions |
In this Agreement:
Acceptable bank
means a bank or financial institution which has a rating for its long-term unsecured and non-credit enhanced debt obligations of A- or higher by S&P or Fitch or A3 or higher by Moodys or a comparable rating from an internationally recognised credit rating agency.
Acquisition
means the acquisition of any interest in the share capital (or equivalent) or in the business or undertaking of any company or other person (including, without limitation, any partnership or joint venture).
Additional Borrower
means any member of the Restricted Group which becomes an additional borrower pursuant to Clause 27.8 (Additional Borrowers) and which has not been released as a borrower in accordance with Clause 27.9 (Removal of Borrowers).
Additional Guarantor
means any member of the Consolidated Group which at such time has become a Guarantor in accordance with Clause 27.7 (Additional Guarantors) and has not been released in accordance with Clause 15.9 (Removal of Guarantors).
Additional Lender
means a financial institution or other entity which becomes an additional lender pursuant to Clause 2.8 (Additional Lenders) or a transferee, successor or permitted assignee of such financial institution or other entity which is for the time being participating in the Facility.
Adjusted Group Operating Cash Flow
means, without double counting, in relation to any period, a sum equal to the Consolidated Groups total operating profit or loss for continuing operations, acquisitions (as a component of continuing operations) and discontinued operations before taxation, interest and after:
(a) | adding depreciation; |
(b) | adding amortisation; |
(c) | deducting the profit or adding any loss on exceptional items which are included in the foregoing; |
(d) | deducting any gain or adding any loss on disposal of tangible or intangible fixed assets; |
(e) | adjusting for movements in working capital (being movements in stock, creditors, provision, and debtors); |
(f) | adding dividends or proceeds of a similar nature received from any entity not in the Consolidated Group; and |
(g) | excluding exceptional items, |
and for the avoidance of doubt excluding (other than as set out in paragraph (f) above) the results of any entity not in the Consolidated Group.
Advance
means a Revolving Credit Advance or a Swingline Advance.
Affected Lender
has the meaning given to it in Clause 2.2(c) (Overall facility limits).
Affiliate
means, in relation to a person, a Subsidiary or a Holding Company of that person and any other Subsidiary of that Holding Company.
Agents Spot Rate of Exchange
means the spot rate of exchange as determined by the Agent for the purchase of the relevant Optional Currency in the London foreign exchange market with euros at or about 11.00 a.m. on a particular day.
Agreed Percentage
means in relation to a Lender and a Swingline Advance, the amount of its Revolving Credit Commitment expressed as a percentage of the Total Commitments.
All Quoting Credit Rating Agencies
has the meaning given to it in Clause 9.5(a).
Arranger
means a financial institution or other entity listed in Part 3 or Part 4 of Schedule 1.
Asset Disposal
means any sale, transfer, grant, lease or other disposal of an asset (which for the avoidance of doubt does not include returns to shareholders) by any member of the Controlled Group to a person outside the Controlled Group made after the Signing Date.
Available Cash
means:
(a) | cash in hand and cash in deposits repayable on demand with any Qualifying Financial Institution; |
(b) | the marked to market position of in the money derivative contracts; and |
(c) | Liquid Resources, |
to the extent denominated in any freely convertible and transferable currencies, beneficially owned and unencumbered by any Security Interests other than Permitted Security Interests.
Available Commitment
means a Lenders Commitment minus:
(a) | the amount of its participation in any outstanding Advances (other than, in relation to any proposed Advance, that Lenders participation in any Advances that are due to be repaid or prepaid on or before the proposed Drawdown Date); and |
(b) | in relation to any proposed Advance, the amount of its participation in any Advances that are due to be made on or before the proposed Drawdown Date. |
Availability Period
means, subject to Clause 6 (Extension Option), the period from the Signing Date up to and including the date which is five years after the Signing Date or, if that day is not a Business Day, the preceding Business Day.
Back to Back Loan
means any Financial Indebtedness made available to a member of the Restricted Group to the extent that the economic exposure of the creditor in respect of that Financial Indebtedness (taking any related transactions together) is reduced by reason of that creditor:
(a) | having recourse directly or indirectly to a deposit of cash or cash equivalent investments beneficially owned by any member of the Restricted Group placed, as part of a related transaction, with that creditor (or an Affiliate of that creditor) or a financial institution approved by that creditor; or |
(b) | having granted a funded sub-participation or similar arrangement to a member of the Restricted Group. |
Base Currency
means euro.
Basel III
means:
(a) | the agreements on capital requirements, a leverage ratio and liquidity standards contained in Basel III: A global regulatory framework for more resilient banks and banking systems, Basel III: International framework for liquidity risk measurement, standards and monitoring and Guidance for national authorities operating the countercyclical capital buffer published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; |
(b) | the rules for global systemically important banks contained in Global systemically important banks: assessment methodology and the additional loss absorbency requirement Rules text published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and |
(c) | any further guidance or standards published by the Basel Committee on Banking Supervision relating to Basel III. |
Basel III Cost
means any increased cost attributable to the introduction, implementation or application of or compliance with or change in Basel III or CRD IV or any other law or regulation which implements Basel III or CRD IV.
Borrower
means Vodafone or an Additional Borrower.
Borrower Accession Agreement
means an agreement substantially in the form of Part 3 of Schedule 4 or with such amendments as the Agent may approve (such approval not to be unreasonably withheld or delayed) or may reasonably require.
Business Day
means a day (other than a Saturday or Sunday) on which banks and the interbank and foreign exchange markets are open for general business in London and:
(a) | if a payment is required in U.S. Dollars, New York; or |
(b) | if a payment is required in euro, a TARGET Day; or |
(c) | if a payment is required in any other currency, the principal financial centre of the country of that currency. |
Change of Control
has the meaning given to it in Clause 8.4 (Change of Control).
Code
means the US Internal Revenue Code of 1986.
Combined Commitments
means the aggregate of the Total Commitments under this Agreement and the Total Commitments under and as defined in the 2017 Facility.
Combined Swingline Commitments
means the aggregate of the Swingline Total Commitments under this Agreement and the Swingline Total Commitments under and as defined in the 2017 Facility.
Commitment
means a Revolving Credit Commitment or a Swingline Commitment, in each case to the extent not transferred, cancelled or reduced under or in accordance with this Agreement.
Consolidated Group
means Vodafone (or, following a Hive Up, NewTopco), its IFRS Consolidated Subsidiaries and Joint Ventures.
Contractual Currency
has the meaning given to it in Clause 24.1(a) (Currency indemnity).
Controlled Group
means Vodafone (or, following a Hive Up, NewTopco) and its Controlled Subsidiaries.
Controlled Subsidiaries
means, those Subsidiaries of Vodafone (or, following a Hive Up, NewTopco) in which Vodafone or NewTopco, as the case may be, controls more than 50% of such Subsidiaries voting rights and has recourse to the cash flows of the Subsidiary. Until the first certificate is given by Vodafone to the Agent in accordance with Clause 17.2(a)(iii) (Financial information) (in respect of the financial year ended 31 March 2014), the Controlled Subsidiaries include, without limitation, the following operating Subsidiaries: Vodafone AG & Co; Vodafone Romania S.A.; Vodafone Czech Republic A.S.; Vodafone Albania Sh.A; Vodafone GmbH; Vodafone Egypt Telecommunications S.A.E; Vodafone España S.A.; Vodafone India Limited; Vodafone Hungary Mobile Telecommunications Ltd; Vodafone Ireland Limited; Vodafone Libertel B.V.; Vodafone Limited; Vodafone Malta Limited; Vodafone New Zealand Limited; Vodafone Omnitel N.V.; Vodafone-Panafon Hellenic Telecommunications Company S.A.; Vodafone Telekomunikasyon A.S., Vodafone Portugal-Comunicações Pessoais S.A., Vodacom Group Limited; Ghana Telecommunication Company Limited; and Cable & Wireless Worldwide Plc.
Controlled USA Group
means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with any U.S. Obligor, are treated as a single employer under Section 414(b) or (c) of the Code.
Core Jurisdictions
are member states of the European Union as at 1 January 2014 (being Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK), Japan, United States, Australia, New Zealand, Canada and Switzerland and any other states which become members of the European Union after 1
January 2014 provided that Vodafone has notified the Agent in writing of its agreement to their inclusion in this definition of Core Jurisdictions.
CRD IV
means (A) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU No 648/2012) and (B) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.
CTA
means the Corporation Tax Act 2009.
Credit Rating Agency
has the meaning given to it in Clause 9.5 (Margin).
Default
means (a) an Event of Default or (b) an event which, with the expiry of any grace period or giving of any notice specified in Clause 19.2 (Non-payment), 19.3 (Breach of other obligations), 19.5 (Cross default), 19.6 (Winding up), 19.8 (Enforcement proceedings) or 19.10 (Similar proceedings) would constitute an Event of Default.
Default Margin
has the meaning given to it in Clause 9.3 (Default interest).
Default Rate
has the meaning given to it in Clause 9.3 (Default interest).
Defaulting Lender
means any Lender:
(a) | which has failed to make its participation in an Advance available or has notified the Agent that it will not make its participation in an Advance available by the Drawdown Date of that Advance in accordance with Clause 5.6 (Payment of proceeds); |
(b) | which has otherwise rescinded or repudiated a Finance Document; or |
(c) | with respect to which an Insolvency Event has occurred and is continuing, |
unless, in the case of paragraph (a) above:
(i) | its failure to pay is caused by: |
(A) | administrative or technical error and payment is made within three Business Days of its due date; or |
(B) | a Disruption Event and payment is made within eight Business Days of its due date; or |
(ii) | the Lender is disputing in good faith whether it is contractually obliged to make the payment in question. |
Designated Term
has the meaning given to it in Clause 9.3(a)(ii) (Default interest).
Discharged Obligations
has the meaning given to it in Clause 27.4(c)(i) (Procedure for novations).
Discharged Rights
has the meaning given to it in Clause 27.4(c)(iii) (Procedure for novations).
Disruption Event
means either or both of:
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the payment transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or |
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
Drawdown Date
means the date for the making of an Advance.
EONIA
means:
(a) | in relation to any day which is a TARGET Day: |
(i) | the EONIA Screen Rate for that day; or |
(ii) | (if no EONIA Screen Rate is available for that day) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Euro Swingline Agent at its request by the Reference Banks as the rate which is the weighted average of the lending rates applied to all overnight unsecured lending transactions in euro undertaken by the relevant Reference Bank in the European interbank market during that day; and |
(b) | in relation to any day which is not a TARGET Day, the rate (determined in accordance with paragraph (a), above) for the immediately preceding TARGET Day. |
EONIA Screen Rate
means the euro overnight index average administered by the Banking Federation of the European Union (or any other person which takes over the administration of the rate) displayed on page EONIA of the Reuters screen or any replacement Reuters screen (or any replacement Reuters page which displays the rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Euro Swingline Agent may specify another page or service displaying the relevant rate after consultation with Vodafone.
ERISA
means the U.S. Employee Retirement Income Security Act of 1974, as amended (or any successor legislation thereto), and any rule or regulation issued thereunder from time to time in effect.
EURIBOR
means in relation to any Advance or unpaid sum in euro:
(a) | the applicable Screen Rate; |
(b) | if no Screen Rate is available for the Required Period of that Advance or unpaid sum, the Interpolated Screen Rate for that Advance or unpaid sum; or |
(c) | if no Screen Rate is available for the Required Period of that Advance or unpaid sum and it is not possible to calculate an Interpolated Screen Rate for that Advance or unpaid sum, the Reference Bank Rate, |
as of, in the case of paragraphs (a) and (c) above, 11.00 a.m. (Brussels time) on the Rate Fixing Day for euro and (in each case) for a period in length equal to the Required Period, and for the purposes of this definition and the definition of Interpolated Screen Rate, Required Period means the Term of such Advance for Revolving Credit Advances, or the period in respect of which EURIBOR falls to be determined in relation to any unpaid sum.
Event of Default
means an event specified as such in Clause 19 (Default).
Existing Commitment
has the meaning given to it in Clause 17.8(a)(i) (Priority borrowing).
Existing Lender
has the meaning given to it in Clause 27.2(a) (Transfers by Lenders).
Existing Parties
has the meaning given to it in Clause 27.4(c)(i) (Procedure for novations).
Facility
means any of the facilities to draw Revolving Credit Advances, or Swingline Advances referred to in Clause 2.1 (Facilities).
Facility Office
means the office(s) notified by a Lender to the Agent:
(a) | on or before the date it becomes a Lender; or |
(b) | by not less than five Business Days notice, |
as the office(s) through which it will perform all or any of its obligations under this Agreement.
FATCA
means:
(a) | sections 1471 to 1474 of the Code, any associated regulations and other official guidance; |
(b) | any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the United States of America and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; and |
(c) | any agreement pursuant to the implementation of paragraphs (a) or (b) above with the United States Internal Revenue Service, the government of the United States of America or any governmental or taxation authority in any other jurisdiction. |
FATCA Application Date
means:
(a) | in relation to a withholdable payment described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the United States of America), 1 July 2014; |
(b) | in relation to a withholdable payment described in section 1473(1)(A)(ii) of the Code (which relates to gross proceeds from the disposition of property of a type that can produce interest from sources within the United States of America), 1 January 2017; or |
(c) | in relation to a passthru payment described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017, |
or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.
FATCA Deduction
means a deduction or withholding from a payment under a Finance Document required by FATCA.
FATCA Exempt Party
means a Party that is entitled to receive payments free from any FATCA Deduction.
Fee Letters
means each letter:
(a) | dated on or about the date of this Agreement between the Agent and Vodafone; and |
(b) | dated on or about the date of this Agreement between the Original Lenders as at the Signing Date and Vodafone; and |
(c) | (if applicable) entered into between an Additional Lender and Vodafone substantially in the form of Schedule 6, |
in each case setting out the amount of various fees referred to in Clause 21.3 (Agents fee) or 21.4 (Front-end fees).
Final Maturity Date
means the last day of the Availability Period.
Finance Document
means this Agreement, each Fee Letter, Novation Certificate, Borrower Accession Agreement, Guarantor Accession Agreement and Increase Confirmation and any other document agreed in writing as such by the Agent and Vodafone.
Finance Party
means an Arranger, a Lender, the Agent or the Euro Swingline Agent.
Financial Indebtedness
means any indebtedness in respect of:
(a) | moneys borrowed or raised by way of loan or redeemable preference shares or in the form of any debenture, bond, note, loan stock, commercial paper or similar instrument; |
(b) | any acceptance credit, bill-discounting, note purchase or documentary credit facility; |
(c) | any finance lease; |
(d) | any receivables purchase, factoring or discounting arrangement under which there is recourse in whole or in part to any member of the relevant group; |
(e) | any other transaction having the commercial effect of a borrowing; and |
(f) | any guarantees or other legally binding assurance against financial loss in respect of the indebtedness of any person arising under an obligation falling within (a) to (e) above (but, for the avoidance of doubt, excluding any guarantees in respect of indebtedness falling within (i) to (v) below), |
but without double counting and excluding (i) preference shares which are not accounted for as indebtedness under IFRS GAAP, (ii) any convertible or exchangeable debt which must or, at the option of the issuer, may be converted or exchanged without condition (other than the availability of sufficient authorised share capital of the issuer), prior to or upon the date any amount of principal would otherwise fall due in respect of that debt, into equity share capital or preference shares, which in each case are not redeemable on or before the Final Maturity Date, (iii) deferred consideration in
respect of the cost of Acquisitions, (iv) obligations of any member of the relevant group arising under any form of exchangeable, convertible, option or other similar instrument issued by that member of the relevant group in connection with a transaction the commercial effect of which is to effect the disposal by that member of the relevant group of shares or partnership or other ownership interests in any other person or entity (whether or not having a separate legal identity), provided that any such instrument may not, on or prior to the Final Maturity Date, be converted (whether by acceleration, maturity or otherwise) into cash or any other instrument constituting or evidencing Financial Indebtedness and (v) for the avoidance of doubt, derivatives primarily entered into to manage currency, credit or interest rate risks or to assist in purchasing or selling shares.
Fitch
means Fitch Investors Services Inc.
Funding Rate
means any rate notified to the Agent by a Lender pursuant to paragraph (b)(iii) of Clause 12.2 (Alternative rates).
Guarantor
means each of:
(a) | Vodafone; and |
(b) | each Additional Guarantor. |
Guarantor Accession Agreement
means a deed substantially in the form of Part 2 of Schedule 4 or with such amendments as the Agent may approve (such approval not to be unreasonably withheld or delayed) or may reasonably require.
Hive Up
means a reorganisation by way of a scheme of arrangement (other than in an insolvency) or otherwise under which Vodafone becomes a Subsidiary of NewTopco, NewTopco controls (directly or indirectly) all of the voting rights in Vodafone (other than any voting rights in Vodafone in respect of the 50,000 7 per cent. fixed rate shares issued in 1999 or any other voting rights in Vodafone held by holders of a class of capital issued by Vodafone, where such voting rights relate only to any variation in the rights attaching to that class of capital issued by Vodafone) and NewTopco becomes the listed ultimate Holding Company of the Consolidated Group.
Holding Company
means in relation to a person, an entity of which that person is a Subsidiary.
HMRC
means HM Revenue & Customs.
IFRS Consolidated Subsidiaries
means those Subsidiaries of Vodafone (or, following a Hive Up, NewTopco) which would be required to be fully consolidated (which excludes proportionate consolidation) in the consolidated accounts of Vodafone (or, following a Hive Up, NewTopco) in accordance with IFRS GAAP.
IFRS GAAP
means the generally accepted accounting principles applied in the preparation of the IFRS consolidated audited accounts of Vodafone for the year ended 31 March 2013 or later audited accounts, if notified by Vodafone in writing to the Agent within three months (or such longer period as may be agreed by the Agent) of publication of such audited accounts.
Impaired Agent
means the Agent or the Euro Swingline Agent at any time when:
(a) | it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment; |
(b) | the Agent or the Euro Swingline Agent otherwise rescinds or repudiates a Finance Document; |
(c) | (if the Agent or the Euro Swingline Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of Defaulting Lender; or |
(d) | an Insolvency Event has occurred and is continuing with respect to the Agent or the Euro Swingline Agent; |
Unless, in the case of paragraph (a) above:
(i) | its failure to pay is caused by: |
(A) | administrative or technical error and payment is made within three Business Days of its due date; or |
(B) | a Disruption Event and payment is made within eight Business Days of its due date; or |
(ii) | the Agent or the Euro Swingline Agent is disputing in good faith whether it is contractually obliged to make the payment in question. |
Increase Confirmation
means a confirmation substantially in the form set out in Schedule 7 (Form of Increase Confirmation).
Increase Lender
has the meaning given to that term in Clause 2.3 (Increase).
increased cost
has the meaning given to that term in Clause 13.1 (Increased costs)
Insolvency Event
in relation to a Finance Party means that the Finance Party:
(a) | is dissolved (other than pursuant to a consolidation, amalgamation or merger); |
(b) | becomes insolvent or is unable to pay its debts or fails or admits in writing its inability to pay its debts as they become due in each case under the laws of any relevant jurisdiction applicable to that Finance Party; |
(c) | makes a general assignment, arrangement or composition with or for the benefit of its creditors; |
(d) | has made against it a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors rights, or an order is made for its winding-up or liquidation; |
(e) | has an order made against it for a bank insolvency pursuant to Part 2 of the Banking Act 2009 or a bank administration pursuant to Part 3 of the Banking Act 2009; |
(f) | has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); |
(g) | seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets other than by way of Undisclosed Administration; |
(h) | has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; or |
(i) | causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above. |
Intermediate Holding Company
means in relation to Vodafone, an entity (other than NewTopco) which is a Subsidiary of NewTopco and of which Vodafone is a Subsidiary.
Interpolated Screen Rate
means, in relation to LIBOR or EURIBOR for any Advance or unpaid sum, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:
(a) | the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Required Period of that Advance or unpaid sum; and |
(b) | the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Required Period of that Advance or unpaid sum, |
each as of 11.00 a.m. (London time) in the case of LIBOR and 11.00 a.m. (Brussels time) in the case of EURIBOR on the Rate Fixing Day for the currency of that Advance.
ITA 2007
means the Income Tax Act 2007.
Joint Venture
means at any time an entity (which is not an IFRS Consolidated Subsidiary) in which any member of the Consolidated Group holds a long term interest and shares control under a contractual arrangement where each venturer has a veto over policy decisions and which is, or will be, accounted for on a proportionate basis in the consolidated accounts of Vodafone (or, following a Hive Up, NewTopco) for that time, and shall exclude any entity which is accounted for on an equity basis in those accounts (in each case, in accordance with the generally applicable accounting principles applied to those accounts).
Lender
means each Original Lender, each Additional Lender (if any) and each Increase Lender (if any).
Lender Accession Agreement
means an agreement substantially in the same form of Part 4 of Schedule 4 or with such amendments as the Agent may approve or may reasonably require.
LIBOR
means in relation to any Advance or unpaid sum in a currency other than euro:
(a) | the applicable Screen Rate; |
(b) | if no Screen Rate is available for the Required Period of that Advance or unpaid sum, the Interpolated Screen Rate for that Advance or unpaid sum; or |
(c) | if no Screen Rate is available for the currency of that Advance or the Required Period of that Advance or unpaid sum and it is not possible to calculate an Interpolated Screen Rate for that Advance or unpaid sum, the Reference Bank Rate, |
as of, in the case of paragraphs (a) and (c) above, 11.00 a.m. (London time) on the Rate Fixing Day for the currency of that Advance or unpaid sum and (in each case) for a period equal to the Required Period and for the purposes of this definition and the definition of Interpolated Screen Rate, Required Period means the Term of such Advance for Revolving Credit Advances or the period in respect of which LIBOR falls to be determined in relation to any unpaid sum.
Liquid Resources
means a current asset investment held as a readily disposable store of value which can be disposed of without curtailing or disrupting the business of the disposer and which is either:
(a) | readily convertible into a known amount of cash at or close to its carrying value; or |
(b) | traded in an active market. |
Long Term Credit Rating Assigned to Vodafone
has the meaning given to it in Clause 9.5(d) (Margin).
Majority Lenders
means, at any time:
(a) | Lenders whose Revolving Credit Commitments aggregate more than 60 per cent. of the Total Commitments; or |
(b) | if the Total Commitments have been reduced to zero, Lenders whose Revolving Credit Commitments aggregated more than 60 per cent. of the Total Commitments immediately before the reduction. |
Margin
in relation to an Advance at any time, means the percentage rate per annum determined to be the Margin applicable to that Advance in accordance with Clause 9.5 (Margin).
Maturity Date
means the last day of the Term of:
(a) | a Revolving Credit Advance; or |
(b) | a Swingline Advance. |
Moodys
means Moodys Investors Service, Inc.
Multi-employer Plan
means a multi-employer plan as defined in Section 4001(a)(3) of ERISA to which any U.S. Obligor or any member of the Controlled USA Group has an obligation to contribute.
Net Debt
means at any time, Total Gross Borrowings less Available Cash, both at that time. Net Debt for any Ratio Period will be calculated as the aggregate of Net Debt outstanding on the last day of each month during the relevant Ratio Period (as shown in Vodafones, or following a Hive Up, NewTopcos, consolidated management accounts prepared at the end of each month during the relevant Ratio Period) divided by the number of months during the relevant Ratio Period.
NewTopco
means a company used for the purposes of a Hive Up.
New Lender
has the meaning given to it in Clause 27.2(a) (Transfers by Lenders).
Novation Certificate
has the meaning given to it in Clause 27.4(a)(i) (Procedure for novations).
Obligor
means each Borrower and each Guarantor.
Operating Cash Flow
means, without double counting, total operating profit or loss for continuing operations before taxation, interest and after (i) adding depreciation, (ii) adding amortisation, (iii) deducting the profit or adding the loss on exceptional items which are included in the foregoing, (iv) deducting any gain or adding any loss on disposal of tangible or intangible fixed assets, (v) adjusting for movements in
working capital (being movements in stock, creditors, provisions and debtors) and (vi) excluding exceptional items.
Optional Currency
means, in relation to any Advance or proposed Advance, a currency (other than the Base Currency) which complies with the conditions set out in Clause 4.3 (Conditions relating to Optional Currencies).
Original Euro Amount
means:
(a) | the principal amount of an Advance denominated in euro; or |
(b) | the principal amount of an Advance denominated in any other currency, translated into euro on the basis of the Agents Spot Rate of Exchange on the date of receipt by the Agent of the Request for that Advance. |
Original Lender
means a financial institution or other entity listed in Part 1 or Part 2 of Schedule 1 or a transferee, successor or permitted assignee of such financial institution or other entity which is for the time being participating in the Facility.
Overdue Amount
has the meaning given to it in Clause 9.3(a) (Default interest).
Participating Member State
means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
Party
means a party to this Agreement.
PBGC
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA, or any successor.
Permitted Security Interest
means:
(a) | any Security Interest arising out of retention of title provisions or created or subsisting over documents of title, insurance policies (including any export credit agencies agreements) and sale contracts in relation to commercial goods in each case created or made in the ordinary course of business to secure the purchase price of such goods or loans to finance such purchase price; or |
(b) | any Security Interest over any assets acquired by a member of the Restricted Group after 1 February 2014 (and/or over the assets of any person that becomes a member of the Restricted Group after 1 February 2014) provided that: |
(i) | any such Security Interest is in existence before such acquisition or before such person becomes a member of the Restricted Group and is not created in contemplation of such acquisition or such person becoming a member of the Restricted Group; and |
(ii) | to the extent that the aggregate principal amount secured by such Security Interest upon such acquisition or such person becoming a member of the Restricted Group thereafter exceeds (measured in the same currency) the amount available to be drawn (assuming all drawdown conditions will be met) under the relevant commitment existing at the time of such acquisition or such person becoming a member of the Restricted Group, such Security Interest shall not fall within this paragraph (b); |
for the purposes of this paragraph (b) Restricted Group shall not include any companies which have become members of the Restricted Group due to the expansion of the definition of Core Jurisdiction to include any other states which become members of the European Union after 1 January 2014; or
(c) | any Security Interest created for the purpose of securing obligations of Vodafone (or, following a Hive Up, NewTopco) or any member of the Restricted Group under any agreement (including, without limitation, any agreement under Section 106 of the Town and Country Planning Act 1990 or Section 111 of the Local Government Act 1972) entered into with a local or other public authority and related to the development or maintenance of property owned by Vodafone (or, following a Hive Up, NewTopco) or any member of the Restricted Group; or |
(d) | any Security Interest created on or subsisting over any asset held in Clearstream Banking, société anonyme or Euroclear Bank S.A./N.V. as operator of the Euroclear System, or any other securities depository or any clearing house pursuant to the standard terms and procedures of the relevant clearing house applicable in the normal course of trading; or |
(e) | any Security Interest which arises in connection with any cash management, set-off or netting arrangements made between banks or financial institutions and any member(s) of the Restricted Group in the ordinary course of business; or |
(f) | any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as pre-judgment security for costs or expenses where any member of the Restricted Group is prosecuting or defending such action in the bona fide interest of the Controlled Group; or |
(g) | any Security Interest created pursuant to any order of attachment, distraint, garnishee order, arrestment, adjudication or injunction or interdict restraining disposal of assets or similar legal process arising in connection with pre-judgment court proceedings; or |
(h) | any Security Interest which arises by operation of law in the ordinary course of trading and securing an amount not more than 45 days overdue or which is being contested in good faith on the basis of favourable legal advice; or |
(i) | any Security Interest over shares in entities which are not members of the Restricted Group which do not secure Financial Indebtedness of the Restricted Group (or over shares and/or other ownership interests in and/or loans to entities which are Project Finance Subsidiaries to secure Project Finance Indebtedness); or |
(j) | to the extent they constitute Security Interests (or to the extent that the relevant transaction includes the creation of any Security Interest over the assets which are the subject of the finance lease), finance leases in respect of existing or future assets; or |
(k) | any Security Interest comprising a right of set-off which arises by agreement between parties providing mutual rights of set-off or operation of law or by agreement having substantially the same effect; or |
(l) | any Security Interest for taxes, assessments or charges not yet due or that are being contested in good faith by appropriate proceedings and (unless the amount thereof is not material to the Consolidated Groups financial condition) for which adequate reserves are being maintained (in accordance with generally accepted accounting principles); or |
(m) | deposits or pledges to secure obligations under workers compensation, social security or similar laws, or under unemployment insurance; or |
(n) | any Security Interest created with the prior written consent of the Majority Lenders; or |
(o) | any Security Interest over deposits of cash or cash equivalent investments securing (directly or indirectly) Financial Indebtedness under (i) finance or structured tax lease arrangements as described in paragraph (b) of Clause 17.8 (Priority borrowing) or (ii) Back to Back Loans; or |
(p) | any Security Interest securing Project Finance Indebtedness over the assets (or the income, cash flow or other proceeds deriving from the assets) which are the subject of that Project Finance Indebtedness; or |
(q) | any Security Interest (a Substitute Security Interest) which replaces any other Security Interest permitted under paragraphs (a) to (p) above inclusive and which secures an amount not exceeding the principal amount secured by such permitted Security Interest (or, in the case of paragraph (b) above, the amount available to be drawn, assuming all drawdown conditions will be met) at the time it is replaced together with any interest accruing on such amounts from the date such Substitute Security Interest is created or arises and any related fees or expenses provided that the existing Security Interest to be replaced is released and all amounts secured thereby are paid or otherwise discharged in full at or prior to the time of such Substitute Security Interest being created or arising; or |
(r) | any Security Interest over the shares or other interests as described in paragraph (iv) of the last paragraph of the definition of Financial Indebtedness securing indebtedness of a kind referred to in that paragraph; or |
(s) | any Security Interest created (i) between Obligors (including by an Obligor to a member of the Restricted Group which concurrently becomes an Obligor) or (ii) by a member of the Restricted Group which is not an Obligor in favour of an Obligor or to another member of the Restricted Group; or |
(t) | any Security Interest over Available Cash created in the ordinary course of business to secure obligations, liabilities or performance criteria in relation to any mobile telecommunications licence where such Security Interest is required to be in compliance with the requirements of the relevant telecommunications regulator or an associated governmental or regulatory body; or |
(u) | any Security Interest over Available Cash created to defease (directly or indirectly) Financial Indebtedness in the form of debentures, bonds, notes, loan stock, or other similar instruments issued by a Controlled Subsidiary where (A) such Financial Indebtedness was either in existence at the Signing Date or (B) if the Subsidiary became a Controlled |
Subsidiary after the Signing Date such Financial Indebtedness existed at the time that the Controlled Subsidiary became a part of the Controlled Group and was not created in contemplation of that Controlled Subsidiary becoming part of the Controlled Group; or |
(v) | any Security Interest over loan notes or other securities issued by Verizon Communications Inc. or any of its affiliates in connection with the acquisition of Vodafones interest in Verizon Wireless (the Verizon Notes), provided that: |
(i) | the maximum aggregate principal amount of Verizon Notes which may be subject to Security Interests pursuant to this paragraph (v) is U.S.$5,000,000,000; |
(ii) | the Security Interest is removed or discharged within 30 months from the date of issuance of the Verizon Notes; and |
(iii) | the Security Interest was created for the purpose of, or in contemplation of, an issuance by Vodafone of loan notes or other securities which are secured by that Security Interest (the Secured Notes), provided that any holders of the Secured Notes shall not have any recourse to Vodafone in respect of any amounts outstanding (other than interest payable) under or in connection with the Secured Notes; or |
(w) | any other Security Interest (in addition to those listed in (a) to (v) above) where the aggregate principal amount secured by all such Security Interests does not exceed 3,000,000,000 or its equivalent. |
Plan
means an employee benefit plan as defined in Section 3(3) of ERISA.
Principal Subsidiary
means, from the date that each notice is given by Vodafone to the Agent pursuant to Clause 17.2(a)(iii) (Financial Information) or, as the case may be, 17.2(a)(iv) (Financial Information) the four Controlled Subsidiaries which are members of the Restricted Group whose revenues are primarily generated by operations licensed by telecommunications authorities in Core Jurisdictions (excluding for this purpose any Subsidiaries whose principal activity is to act as a Holding Company of other Subsidiaries) that had the largest, if positive or smallest if negative Operating Cash Flow in the previous financial year of Vodafone or, following the Reorganisation Date, NewTopco.
Until the first notice is given by Vodafone to the Agent (in respect of the financial year ended 31 March 2014), the Principal Subsidiaries are Vodafone Limited, Vodafone GmbH, Vodafone Omnitel N.V. and Vodafone Libertel B.V. being Vodafones principal subsidiaries operating in UK, Germany, Italy and the Netherlands, respectively.
For the purposes of this definition, until such new notice is given by Vodafone to the Agent pursuant to Clause 17.2(a)(iii) (Financial Information) or, as the case may be, Clause 17.2(a)(iv) (Financial Information), if any Principal Subsidiary sells, transfers, merges into or with or otherwise disposes of the majority of its undertakings or assets whether by a single transaction or a number of related transactions (unless such Principal Subsidiary is the surviving entity following such merger) (the Seller) to any member of the Restricted Group (the Purchaser), then from the date of the relevant sale, transfer, merger or disposal the Purchaser shall be deemed to become a Principal Subsidiary and the Seller shall no longer be deemed to be a Principal Subsidiary.
On the date of each notice given by Vodafone (or as the case may be, NewTopco) to the Agent pursuant to Clause 17.2(a)(iii) (Financial Information) or, as the case may be, Clause 17.2(a)(iv) (Financial Information), any Subsidiary which is identified as a Principal Subsidiary in the relevant
notice, which was not identified as such in the immediately preceding notice, shall be deemed to immediately replace any Subsidiary which was a Principal Subsidiary immediately prior to the delivery of the notice and which is not named in such notice.
Project Finance Indebtedness
means any Financial Indebtedness which finances or otherwise relates to the acquisition, development, ownership and/or operation of an asset or combination of assets whether directly or indirectly, where the Financial Indebtedness is incurred pursuant to facilities available prior to the date the relevant entity becomes a member of the Controlled Group (and not created in contemplation of the acquisition):
(a) | which is incurred by a Project Finance Subsidiary; or |
(b) | in respect of which the person or persons to whom such borrowing is or may be owed by the relevant debtor (whether or not a member of the Controlled Group) has or have no recourse whatsoever to any member of the Controlled Group (other than to a Project Finance Subsidiary) for any payment or repayment in respect thereof other than: |
(i) | recourse to such debtor for amounts limited to the cash flow or net cash flow (other than historic cash flow or historic net cash flow) from such asset or assets; and/or |
(ii) | recourse to such debtor for the purpose only of enabling amounts to be claimed in respect of such Financial Indebtedness in an enforcement of any Security Interest given by such debtor over such asset or assets or the income, cash flow or other proceeds deriving from the asset (or given by any shareholder or the like in the debtor over its shares and/or other ownership interest in and/or loans to the debtor) to secure such Financial Indebtedness or any recourse referred to in paragraph (iii) below, provided that: |
(A) | the extent of such recourse to such debtor is limited solely to the amount of any recoveries made on any such enforcement; and |
(B) | such person or persons are not entitled, by virtue of any right or claim arising out of or in connection with such Financial Indebtedness, to commence proceedings for the winding up or dissolution of the debtor or to appoint or procure the appointment of any receiver, trustee or similar person or officer in respect of the debtor or any of its assets (save only for the assets the subject of that Security Interest); and/or |
(iii) | recourse: |
(A) | to such debtor generally, or directly or indirectly to a member of the Controlled Group, under any form of assurance, undertaking or support which recourse is limited to a claim for damages (other than liquidated damages and damages required to be calculated in a specific way) for breach of an obligation (not being a payment obligation or any obligation to procure payment by another or an indemnity in respect thereof or any obligation to comply or procure compliance by another with any financial ratios or other tests of financial condition) by the person against whom such recourse is available; and/or |
(B) | to shares and/or other ownership interest in and/or loans to and/or the assets of such debtor and/or any Project Finance Subsidiary owned by a member of the Controlled Group; or |
(c) | which the Majority Lenders have agreed in writing to treat as Project Finance Indebtedness. |
Project Finance Subsidiary
means any member of the Controlled Group:
(a) | whose principal assets and business are constituted by the ownership, acquisition, development and/or operation of any asset or combination of assets whether directly or indirectly; and |
(b) | none of whose Financial Indebtedness in respect of the financing of the ownership, acquisition, development and/or operation of any such asset benefits from any recourse whatsoever (including, without limitation, any obligation to subscribe for equity or provide loans) to any member of the Controlled Group (other than such person or another Project Finance Subsidiary) in respect of any payment or repayment in respect thereof, except as expressly referred to in paragraph (b)(iii) of the definition of Project Finance Indebtedness; and |
(c) | which has been designated as such by Vodafone by written notice to the Agent. |
Qualifying Financial Institution
means any bank or financial institution that as part of its business generally receives deposits or other repayable funds and grants credits for its own account.
Qualifying Lender
means a Lender which is beneficially entitled to interest payable to that Lender in respect of an Advance and is:
(a) | a Lender; |
(i) | which is a bank (as defined for the purpose of Section 879 of the ITA 2007) making an Advance under this Agreement; or |
(ii) | in respect of an Advance made under this Agreement by a person that was a bank (as defined for the purpose of Section 879 of the ITA 2007) at the time that Advance was made, |
and which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that Advance at the time payments are made (or in the case of sub-paragraph (i) above would be within such charge as respects such payments apart from section 18A of the CTA); or
(b) | a Treaty Lender. |
Rate Fixing Day
means:
(a) | the Drawdown Date for an Advance denominated in Sterling; or |
(b) | the second TARGET Day before the Drawdown Date for an Advance denominated in euro; or |
(c) | the second Business Day before the Drawdown Date for an Advance denominated in any other currency, |
or such other day as the Agent, after consultation with Vodafone and the Lenders, may designate as market practice in the Relevant Interbank Market for leading banks to give quotations in the relevant currency for delivery on the relevant Drawdown Date.
Ratio Period
has the meaning given to it in Clause 18.2 (Calculation times and periods).
Recovering Finance Party
has the meaning given to it in Clause 30.1 (Redistribution).
Recovery
has the meaning given to it in Clause 30.1 (Redistribution).
Redistribution
has the meaning given to it in Clause 30.1(c) (Redistribution).
Reference Banks
means, subject to Clause 27.10 (Reference Banks), the principal London offices of BNP Paribas, Barclays Bank PLC, JPMorgan Chase Bank, N.A. and The Royal Bank of Scotland plc.
Reference Bank Quotation
means any quotation supplied to the Agent by a Reference Bank.
Reference Bank Rate
means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks:
(a) | in relation to LIBOR, as the rate at which the relevant Reference Bank could borrow funds in the London interbank market; or |
(b) | in relation to EURIBOR, as the rate at which the relevant Reference Bank could borrow funds in the European interbank market, |
in the relevant currency and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period.
Reference Bond
has the meaning given to it in Clause 9.5(d) (Margin).
Relevant Interbank Market
means, in relation to euro, the European interbank market and, in relation to any other currency, the London interbank market.
Relevant Tax
means any tax imposed or levied by or in (or by any political sub-division or taxing authority of any of the following):
(a) | the UK; |
(b) | the United States; or |
(c) | any other jurisdiction in or through which any payment under the Finance Documents is made. |
Reportable Event
means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section with respect to a Plan, excluding, however, such events as to which the PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event, provided, however, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
Reorganisation Date
means the date NewTopco or any other Intermediate Holding Company acquires any shares or assets (other than the shares in Vodafone acquired pursuant to the Hive Up) in circumstances where the aggregate market value of the assets of Vodafone (as determined by Vodafone (acting reasonably)) immediately following the acquisition is an amount which represents 95 per cent. or less of the aggregate market value of the assets of NewTopco (as determined by Vodafone (acting reasonably)) at that time.
Request
means a request made by a Borrower to utilise a Facility, substantially in the form of Schedule 3 (or in such other form as may be agreed by the Agent and Vodafone).
Requested Amount
means the amount requested in a Request.
Restricted Group
means Vodafone, NewTopco (following the Reorganisation Date) and any Controlled Subsidiary (other than a Project Finance Subsidiary) of Vodafone or, following the Reorganisation Date, NewTopco:
(a) | whose principal operations or assets are located in a Core Jurisdiction; and/or |
(b) | whose revenues are primarily generated by operations licensed by telecommunications authorities in Core Jurisdictions, |
but excludes any Controlled Subsidiary whose principal business is satellite telecommunications.
Revolving Credit Advance
means an advance (other than a Swingline Advance) made to a Borrower by the Revolving Credit Lenders under the Revolving Credit Facility.
Revolving Credit Commitment
means:
(a) | in respect of an Original Lender, the amount in euro set opposite the name of that Lender in Part 1 of Schedule 1 (Lenders and Commitments) or assumed by it in accordance with Clause 2.3 (Increase); and |
(b) | in respect of an Additional Lender, the amount in euro set out as a Revolving Credit Commitment in the relevant Lender Accession Agreement or assumed by it in accordance with Clause 2.3 (Increase), |
in each case to the extent not transferred, cancelled or reduced under or in accordance with this Agreement.
Revolving Credit Facility
means the multicurrency revolving credit facility referred to in a Clause 2.1(a) (Facilities).
Revolving Credit Lender
means, subject to Clause 27.2 (Transfers by Lenders), a Lender listed in Part 1 of Schedule 1 (Lenders and Commitments) in its capacity as a participant in the Revolving Credit Facility and/or an Additional Lender.
Rollover Advance
means any Advance (other than a Swingline Advance) made during the Availability Period which is drawn down to refinance in whole or in part any outstanding Advance (other than a Swingline Advance) where, after making and applying the proceeds of that Advance, the aggregate principal amount outstanding under the Revolving Credit Facility is not greater than the aggregate amount outstanding under that Facility immediately prior to that Advance being made.
Screen Rate
means:
(a) | in relation to LIBOR, the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate); and |
(b) | in relation to EURIBOR, the euro interbank offered rate administered by the Banking Federation of the European Union (or any other person which takes over the administration of that rate) for the relevant period displayed on page EURIBOR01 of the Reuters screen (or any replacement Reuters page which displays that rate), |
or, in each case, on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with Vodafone.
S&P
means Standard & Poors Rating Services.
Security Interest
means any mortgage, charge, assignment by way of security, pledge, lien or other security interest securing any obligation of any person.
Separate Loan
has the meaning given to that term in Clause 7.3 (Separate Loans).
Signing Date
means the date of this Agreement.
Single Employer Plan
means a Plan which is maintained by any U.S. Obligor or any member of the Controlled USA Group for employees of Vodafone or any member of the Controlled USA Group.
Subsidiary
means:
(a) | a subsidiary within the meaning of section 1159 of the Companies Act 2006; and |
(b) | unless the context otherwise requires, a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006. |
Substitute Security Interest
has the meaning given to it in the definition of Permitted Security Interest, paragraph (q).
Swingline Advance
means an advance made to a Borrower by the Swingline Lenders under the Swingline Facility.
Swingline Affiliate
means, in relation to a Lender, any Swingline Lender that is an Affiliate of that Lender and which is notified to the Agent and the Euro Swingline Agent by that Lender in writing to be its Swingline Affiliate.
Swingline Commitment
means:
(a) | in respect of a Swingline Lender which is an Original Lender, the amount in euro set opposite its name under the heading Swingline Commitment in Part 2 of Schedule 1 (Swingline Lenders and Swingline Commitments) or assumed by it in accordance with Clause 2.3 (Increase); and |
(b) | in respect of a Swingline Lender which is an Additional Lender, the amount in euro set out as a Swingline Commitment in the relevant Lender Accession Agreement or assumed by it in accordance with Clause 2.3 (Increase), |
in each case to the extent not transferred, cancelled or reduced under or in accordance with this Agreement.
Swingline Facility
means the committed euro swingline facility referred to in Clause 2.1(b) (Facilities).
Swingline Lender
means, subject to Clause 27.2 (Transfers by Lenders), an Original Lender listed in Part 2 of Schedule 1 as a swingline lender or an Additional Lender in respect of which a Swingline Commitment is specified in the relevant Lender Accession Agreement.
Swingline Margin
means 0.50 per cent. per annum.
Swingline Rate
means, in relation to any day, the percentage rate per annum which is the aggregate of:
(a) | EONIA for that day; and |
(b) | the Swingline Margin. |
Swingline Total Commitments
means the aggregate for the time being of the Swingline Commitments, being 1,800,000,000 at the date of this Agreement or as may be increased pursuant to paragraph (b) of Clause 2.8 (Additional Lenders) up to a maximum of 2,550,000,000.
TARGET Day
means a day on which the Trans European Automated Real Time Gross Settlement Express Transfer (TARGET) payment system which utilises a single shared platform and which was launched on 19 November 2007 and is open for the settlement of payments in euro.
Tax Credit
has the meaning given to it in Clause 11.6 (Refund of Tax Credits).
Tax on Overall Net Income
in relation to a Finance Party, means any tax on the overall net income, profits or gains of that Finance Party or any of its Holding Companies (or the overall net income, profits or gains of a division or branch of that Finance Party or any of its Holding Companies).
Tax Payment
has the meaning given to it in Clause 11.6 (Refund of Tax Credits).
Taxes Act
means the Corporation Tax Act 2010.
Term
means the period selected by a Borrower in a Request for which the relevant Revolving Credit Advance or Swingline Advance is to be outstanding.
Total Commitments
means the aggregate for the time being of the Revolving Credit Commitments, being, at the date of this Agreement, 3,860,000,000 or as may be increased pursuant to paragraph (b) of Clause 2.8 (Additional Lenders) up to a maximum of 7,500,000,000 (including the Swingline Total Commitments but without double counting).
Total Gross Borrowings
means at any time, the aggregate outstanding principal amount of Financial Indebtedness of the Consolidated Group (including the marked to market position of out of the money derivative contracts).
Treaty Lender
means a Lender which is (i) resident (as such term is defined in the appropriate double taxation treaty) in a country with which the United Kingdom has an appropriate double taxation treaty under which residents of that country are entitled to complete exemption from United Kingdom tax on interest and is entitled to apply under the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 to have interest paid to its Facility Office without withholding or deduction for or on account of United Kingdom taxation; and (ii) does not carry on business in the United Kingdom through a permanent establishment with which the investments under this Agreement in respect of which the interest is paid are effectively connected; and for this purpose double taxation treaty means any convention or agreement between the government of the United Kingdom and any other government for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains.
UK or United Kingdom
means the United Kingdom of Great Britain and Northern Ireland (but excluding, for the avoidance of doubt, the Channel Islands).
Undisclosed Administration means in relation to a Lender the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the laws of the country where such Lender is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.
United States
means the United States of America.
U.S. Obligor
means any Obligor which is incorporated in the United States or any State thereof (including the District of Columbia).
U.S. Tax Obligor
means:
(a) | a Borrower which is resident for tax purposes in the United States of America; or |
(b) | an Obligor some or all of whose payments under the Finance Documents are from sources within the United States for United States federal income tax purposes. |
2015 Facility
means the 4,000,000,000 multi currency revolving five year facility dated 1 July 2010 with a capacity of 4,000,000,000 as at 1 July 2010 and made between, amongst others, Vodafone Group Plc, the Arrangers and Lenders identified therein and The Royal Bank of Scotland plc as Agent and Euro Swingline Agent and due 1 July 2015.
2017 Facility
means the U.S.$4,015,000,000 multicurrency revolving five year facility dated 9 March 2011 with a capacity of U.S.$4,015,000,000 as at 9 March 2011 and made between, amongst others, Vodafone Group Plc, the Arrangers and the Lenders identified therein and The Royal Bank of Scotland plc as Agent and U.S. Swingline Agent and due 9 March 2017.
1.2 | Construction |
(a) | In this Agreement, unless the contrary intention appears, a reference to: |
agreed form means, in relation to any document, such document in a form previously agreed in writing by or on behalf of the Agent and Vodafone;
assets of any person includes all or any part of that persons business, operations, undertaking, property, assets, revenues (including any right to receive revenues) and uncalled capital;
an authorisation includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration and notarisation;
a finance lease has the meaning given to it in IAS 17 as in effect at 1 April 2013;
indebtedness is a reference to any obligation for the payment or repayment of money, whether as principal or surety and whether present or future, actual or contingent;
a month is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that, if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that month;
a regulation includes any regulation, rule, official directive, request or guideline (in each case, whether or not having the force of law, but if not having the force of law, is generally complied with by the persons to whom it is addressed) of any governmental or supranational body, agency, department or regulatory, self-regulatory authority or organisation; and
U.S.$, USD and U.S. dollars denote the lawful currency of the United States of America. £, GBP and sterling denote the lawful currency of the United Kingdom. , EUR and euro denote the single currency of the Participating Member States;
(i) | a provision of a law is a reference to that provision as amended or re-enacted; |
(ii) | a Clause or a Schedule is a reference to a clause of or a schedule to this Agreement; |
(iii) | a person includes its successors, transferees and assigns; |
(iv) | words importing the plural shall include the singular and vice versa; |
(v) | a Finance Document or another document is a reference to that Finance Document or that other document as novated or, with the approval of Vodafone, amended or supplemented; |
(vi) | the term Affiliate, in relation to The Royal Bank of Scotland plc, shall not include (i) the UK government or any member or instrumentality thereof, including Her Majestys Treasury and UK Financial Investments Limited (or any directors, officers, employees or entities thereof) or (ii) any persons or entities controlled by or under common control with the UK government or any member or instrumentality thereof (including Her Majestys Treasury and UK Financial Investments Limited) and which are not part of The Royal Bank of Scotland Group plc and its subsidiaries or subsidiary undertakings; and |
(vii) | a time of day is a reference to London time. |
(b) | Unless the contrary intention appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement. |
(c) | The index to and the headings in this Agreement are for convenience only and are to be ignored in construing this Agreement. |
(d) |
(i) | Unless expressly provided to the contrary in a Finance Document, a person who is not a party to a Finance Document may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999. |
(ii) | Notwithstanding any term of any Finance Document, the consent of any third party is not required for any variation (including any release or compromise of any liability under) or termination of that Finance Document. |
2. | THE FACILITIES |
2.1 | Facilities |
Subject to the terms of this Agreement, the Lenders grant to the Borrowers:
(a) | a committed multicurrency revolving five year facility (subject to Clause 6 (Extension Option)), under which the Lenders will, when requested by a Borrower, make cash advances in euro or Optional Currencies to that Borrower on a revolving basis during the Availability Period already defined; and |
(b) | a committed euro swingline advance facility (which is a sub-division of the Revolving Credit Facility) under which the Swingline Lenders will, when requested by a Borrower, make to that Borrower Swingline Advances during the Availability Period. |
2.2 | Overall facility limits |
(a) | The Swingline Facility is not independent of the Revolving Credit Facility. The aggregate Original Euro Amount of all outstanding Advances (including Swingline Advances) under: |
(i) | the Revolving Credit Facility, shall not at any time exceed the Total Commitments at that time; and |
(ii) | the Swingline Facility, shall not at any time exceed the Swingline Total Commitments at that time. |
(b) | The aggregate Original Euro Amount of: |
(i) | the participations of a Lender in Revolving Credit Advances plus that Lenders and, if applicable, that Lenders Swingline Affiliates (if any), participations in outstanding Swingline Advances shall not at any time exceed that Lenders Revolving Credit Commitment at that time; and |
(ii) | the participations of a Swingline Lender in Swingline Advances shall not at any time exceed that Swingline Lenders Swingline Commitment at that time. |
(c) | If, in respect of any Revolving Credit Advance, the operation of Clause 5.4 (Amount of each Lenders participation in an Advance) would otherwise have caused a Lender (the Affected Lender) to breach sub-paragraph (b)(i) above then: |
(i) | each Affected Lender will participate in the relevant Revolving Credit Advance only to the extent that the Original Euro Amount of its participation in that Revolving Credit Advance (when aggregated with the Original Euro Amount of its and, if applicable, that Lenders Swingline Affiliates (if any), participations in other outstanding Revolving Credit Advances and Swingline Advances) will not exceed its Revolving Credit Commitment; and |
(ii) | each other non-Affected Lenders participation in that Revolving Credit Advance will be recalculated in accordance with Clause 5.4 (Amount of each Lenders participation in an Advance), but, for the purpose of the recalculation, the Affected Lenders Revolving Credit Commitments will be deducted from the Total Commitments and the amount of the Affected Lenders participations in that Revolving Credit Advance (if any) will be deducted from the requested amount of the Revolving Credit Advance. |
2.3 | Increase |
(a) | Vodafone may by giving prior notice to the Agent by no later than the date falling 60 Business Days after the effective date of a cancellation of: |
(i) | the Available Commitments of a Defaulting Lender in accordance with paragraph (c) of Clause 8.5 (Right of prepayment and cancellation); or |
(ii) | the Commitments of a Lender in accordance with Clause 14.1 (Illegality), |
request that the Total Commitments be increased (and the Total Commitments shall be so increased in an aggregate amount of up to the amount of the Available Commitments or Commitments so cancelled as follows:
(iii) | the increased Commitments will be assumed by one or more Lenders or other banks or financial institutions (each an Increase Lender) selected by Vodafone and which is further acceptable to the Agent (acting reasonably) and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender; |
(iv) | each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender; |
(v) | each Increase Lender shall become a Party as a Lender and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender; |
(vi) | the Commitments of the other Lenders shall continue in full force and effect; and |
(vii) | any increase in the Total Commitments shall take effect on the date specified by Vodafone in the notice referred to above or any later date on which the conditions set out in paragraph (b) below are satisfied. |
(b) | An increase in the Total Commitments will only be effective on: |
(i) | the execution by the Agent of an Increase Confirmation from the relevant Increase Lender; |
(ii) | in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase the performance by the Agent of all necessary know your customer or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Agent shall promptly notify to Vodafone and the Increase Lender. |
(c) | Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective. |
(d) | Unless the Agent otherwise agrees or the increased Commitment is assumed by an existing Lender, Vodafone shall, on the date upon which the increase takes effect, pay to the Agent (for its own account) a fee of 2,500 and Vodafone shall promptly on demand pay the Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this Clause 2.3. |
(e) | Vodafone may pay to the Increase Lender a fee in the amount and at the times agreed between Vodafone and the Increase Lender in a letter between Vodafone and the Increase Lender setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter referred to in this paragraph (e). |
(f) | Clause 27.2(f) to (j) inclusive (Transfers by Lenders) shall apply mutatis mutandis in this Clause 2.3 in relation to an Increase Lender as if references in that Clause to: |
(i) | an Existing Lender were references to all the Lenders immediately prior to the relevant increase; |
(ii) | the New Lender were references to that Increase Lender; and |
(iii) | a retransfer were references to a transfer. |
2.4 | Number of Requests |
Unless the Agent agrees otherwise, no more than one Request (other than Requests for Swingline Advances only) may be delivered on any one day but that Request may specify any number and type of Advances from the Revolving Credit Facility or the Swingline Facility or either of them.
2.5 | Nature of rights and obligations |
(a) | The obligations of a Finance Party and each Obligor under the Finance Documents are several. Failure of a Finance Party or an Obligor to carry out those obligations does not relieve any other Party of its obligations under the Finance Documents. No Finance Party or Obligor is responsible for the obligations of any other Finance Party or Obligor under the Finance Documents save and to the extent that the relevant obligations are guaranteed by another Obligor. |
(b) | The rights of a Finance Party under the Finance Documents are divided rights. A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce those rights. |
2.6 | Vodafone as Obligors agent |
Each Obligor:
(a) | irrevocably authorises and instructs Vodafone to give and receive as agent on its behalf all notices (including Requests) and sign all documents in connection with the Finance Documents on its behalf (including but not limited to amendments and variations and execution of any new Finance Documents) and take such other action as may be necessary or desirable under or in connection with the Finance Documents; and |
(b) | confirms that it will be bound by any action taken by Vodafone under or in connection with the Finance Documents. |
2.7 | Actions of Vodafone as Obligors agent |
The respective liabilities of each of the Obligors under the Finance Documents shall not be in any way affected by:
(a) | any irregularity (or purported irregularity) in any act done by or any failure (or purported failure) by Vodafone; or |
(b) | Vodafone acting (or purporting to act) in any respect outside any authority conferred upon it by any Obligor; or |
(c) | the failure (or purported failure) by or inability (or purported inability) of Vodafone to inform any Obligor of receipt by it of any notification under this Agreement. |
2.8 | Additional Lenders |
(a) | Any financial institution or other entity may, subject to the terms of this Agreement, become an Additional Lender. The relevant financial institution or other entity will become an Additional Lender on the date specified in a Lender Accession Agreement which has been delivered to the Agent duly completed and executed by that financial institution or other entity and countersigned by Vodafone on behalf of itself and each other Obligor. |
(b) | Upon the relevant financial institution or other entity becoming an Additional Lender, the Total Commitments shall be increased (subject to the Total Commitments being a maximum |
of 7,500,000,000 and the Combined Commitments being a maximum of 7,500,000,000 plus US$7,500,000,000 (or its equivalent in euros calculated at the Agents Spot Rate of Exchange)) by the amount set out in the relevant Lender Accession Agreement as that Additional Lenders Revolving Credit Commitment. If such Additional Lender so provides in the relevant Lender Accession Agreement, the Swingline Total Commitments shall be increased (subject to the Combined Swingline Commitments being a maximum of 2,550,000,000 plus US$7,500,000,000 (or its equivalent in euros calculated at the Agents Spot Rate of Exchange)) by the amount set out in the relevant Lender Accession Agreement as that Additional Lenders Swingline Commitment. |
(c) | Each Additional Lender will participate only in Advances with a Drawdown Date following the date on which it became an Additional Lender and only then if: |
(i) | it has become an Additional Lender in time to receive sufficient notice of the relevant Advance from the Agent pursuant to Clause 5.5 (Notification of the Lenders); and |
(ii) | immediately before such an Advance is to be made either (A) no Advances are or will be outstanding or (B) all outstanding Advances at that time are or will be immediately repaid or prepaid in full in accordance with the terms of this Agreement. |
(d) | On and from the Drawdown Date on which the Additional Lender makes an Advance under paragraph (c) above, the Additional Lender shall participate in each new Revolving Credit Advance or, as the case may be, Swingline Advance in accordance with Clause 5.4 (Amount of each Lenders participation in an Advance). |
(e) | The execution by Vodafone of a Lender Accession Agreement constitutes confirmation by each Guarantor that its obligations under Clause 15 (Guarantee) shall continue unaffected except that those obligations shall extend to the Total Commitments as increased by the addition of the relevant Additional Lenders Revolving Credit Commitment (including such Additional Lenders Swingline Commitment but without double counting) and shall be owed to each Finance Party including the relevant Additional Lender. |
3. | PURPOSE |
3.1 | Purpose |
Each Revolving Credit Advance will be used for the refinancing of the 2015 Facility, following which each Advance will be applied in or towards providing support for the Consolidated Groups continuing commercial paper programmes and each Revolving Credit Advance will be applied for general corporate purposes of the Consolidated Group including, but not limited to, Acquisitions (provided that a Swingline Advance may not be applied in or towards refinancing another Swingline Advance).
3.2 | No monitoring |
Without affecting the obligations of any Borrower in any way, no Finance Party is bound to monitor or verify the application of the proceeds of any Advance.
4. | CONDITIONS PRECEDENT |
4.1 | Initial conditions precedent |
The obligations of each Finance Party to any Borrower under this Agreement are subject to the conditions precedent that:
(a) | the Agent has notified Vodafone and the Lenders that it has received all of the documents set out in Part 1 of Schedule 2 in the agreed form or such other form and substance satisfactory to the Agent. The Agent will give such notice of receipt within two Business Days after receiving the relevant documents and finding them in form and substance satisfactory to it; and |
(b) | the Agent confirms on or prior to the Signing Date (i) that the 2015 Facility has been cancelled and (ii) all amounts outstanding under the 2015 Facility have been repaid. |
4.2 | Conditions to all drawdowns and rollovers |
The obligations of each Lender to participate in any Advance are subject to the further conditions precedent that on the date of the Request for the Advance (if applicable) and on the date on which the relevant amount is to be drawn down:
(a) | the representations and warranties in Clause 16 (Representations and Warranties) are correct and will be correct immediately after the relevant Advance or amount is drawn down in each case in all material respects; and |
(b) | in the case of a Rollover Advance, no Event of Default is continuing or would result from the proposed Advance, and in the case of any other drawdown, no Default has occurred and is continuing or would result from drawdown of the relevant Advance or amount. |
4.3 | Conditions relating to Optional Currencies |
(a) | A currency will constitute an Optional Currency in relation to an Advance if: |
(i) | it is readily available in the amount required and freely convertible into the Base Currency in the Relevant Interbank Market on the Rate Fixing Day and the Drawdown Date for that Advance; and |
(ii) | it is Sterling or U.S. Dollars, or has been approved by the Agent (acting on the instructions of all the Lenders) on or prior to receipt by the Agent of the relevant Request for that Advance. |
(b) | If by 10:00 a.m. on a Business Day, the Agent has received a written request from Vodafone for a currency to be approved under paragraph (a)(ii) above, the Agent will notify the Lenders of that request by 3:00 p.m. on the same Business Day. Based on any responses received by the Agent by 1:00 p.m. the next Business Day, the Agent will confirm to Vodafone by 5:00 p.m. on that Business Day: |
(i) | whether or not the Lenders have granted their approval; and |
(ii) | if approval has been granted, the minimum amount (and, if required, integral multiples) for any subsequent Utilisation in that currency. |
4.4 | Maximum number of Revolving Credit Advances |
A Borrower may not deliver a Request if as a result of the proposed Advance more than 10 Revolving Credit Advances would be outstanding.
5. | ADVANCES |
5.1 | Receipt of Requests |
(a) | A Borrower may borrow Advances under the Revolving Credit Facility (other than Swingline Advances) if the Agent receives, not later than 5.00 p.m. on the third Business Day before the proposed Drawdown Date, or, in the case of an Advance in Sterling, not later than 5.00 p.m. on the Business Day before the proposed Drawdown Date, a duly completed Request, copied, to the Euro Swingline Agent. |
(b) | A Borrower may borrow Swingline Advances if the Euro Swingline Agent receives, not later than 9.30 a.m. (Central European time) on the proposed Drawdown Date, a duly completed Request, copied to the Agent. |
5.2 | Completion of Requests for Revolving Credit Advances |
A Request for a Revolving Credit Advance will not be regarded as having been duly completed unless:
(a) | the Drawdown Date is a Business Day falling during the Availability Period; |
(b) | only one currency is specified for each separate Advance and the Requested Amount for each separate Advance is in a minimum amount: |
(i) | if in euro, of 25,000,000; |
(ii) | if in Sterling, of £20,000,000; |
(iii) | if in U.S. Dollars, of U.S.$25,000,000; or |
(iv) | appropriate equivalent minimum amounts for Optional Currencies other than Sterling or U.S. Dollars, |
or, in any such case:
(A) | if less, is in an amount equal to the unutilised portion of the Total Commitments; or |
(B) | such other amount as Vodafone and the Agent may agree; |
(c) | only one Term for each separate Advance is specified which: |
(i) | does not overrun the Final Maturity Date; and |
(ii) | is a period of 7 days, one month, two, three (or such comparable period as the Borrower may adopt to reflect international futures exchange settlement dates) or six months (or such other period as may be agreed by Vodafone and (if not more than six months) the Agent or (if more than six months) all of the Lenders); and |
(d) | the payment instructions comply with Clause 10.1 (Place of payment). |
5.3 | Completion of Requests for Swingline Advances |
A Request for a Swingline Advance will not be regarded as having been duly completed unless:
(a) | the Drawdown Date is a Business Day falling during the Availability Period; |
(b) | it is specified that the Swingline Advance is to be made in euro under the Swingline Facility; |
(c) | the Requested Amount is a minimum of 15,000,000 or such other amount as the Euro Swingline Agent and Vodafone may agree; |
(d) | only one Term is specified, which: |
(i) | does not overrun the Final Maturity Date; and |
(ii) | is a period not exceeding five Business Days; and |
(e) | the payment instructions comply with Clause 10.1 (Place of payment). |
5.4 | Amount of each Lenders participation in an Advance |
The amount of a Lenders participation in an Advance will be the proportion of the Requested Amount which:
(a) | in the case of a Revolving Credit Advance, its Revolving Credit Commitment bears to the Total Commitments; and |
(b) | in the case of a Swingline Advance, its Swingline Commitment bears to the Swingline Total Commitments, |
in each case on the date of receipt of the relevant Request, adjusted in the case of paragraph (a) (if necessary) to reflect the operation of Clause 2.2(c) (Overall facility limits).
5.5 | Notification of the Lenders |
The Agent (or, in the case of Swingline Advances, the Euro Swingline Agent) shall promptly notify each Lender (or, as the case may be, Swingline Lender) of the details of the requested Advance and the amount of its participation in such Advance.
5.6 | Payment of proceeds |
Subject to the terms of this Agreement, each Lender (or, as the case may be, Swingline Lender) shall make its participation in an Advance available to the Agent (or, in the case of a participation in a Swingline Advance, the Euro Swingline Agent) for the Borrower concerned for value on the relevant Drawdown Date.
6. | EXTENSION OPTIONS |
6.1 | First extension option |
(a) | Vodafone may by notice to the Agent (the First Extension Request) not more than 60 days and not less than 30 days before the first anniversary of the date of this Agreement (the First Anniversary), request that the Final Maturity Date be extended to the date which is six years after the date of this Agreement (the Sixth Anniversary). |
(b) | The Agent must promptly notify the Lenders of the First Extension Request. |
(c) | Each Lender may, in its sole discretion, agree to the First Extension Request. Subject to paragraph (g) below, each Lender that agrees to the First Extension Request by the date falling 15 days before the First Anniversary, will, on the First Anniversary, extend its Commitments to the Sixth Anniversary and the Final Maturity Date with respect to the Commitments of that Lender will be extended to that date. |
(d) | If any Lender fails to reply to the First Extension Request on or before the date falling 15 days before the First Anniversary, it will be deemed to have refused the First Extension Request and its Commitments will not be extended. |
(e) | Subject to paragraph 6.1 (g) below, the First Extension Request is irrevocable. |
(f) | If one or more (but not all) of the Lenders agree to the First Extension Request, then by the date falling no later than 10 days before the First Anniversary, the Agent must notify Vodafone and the Lenders which have agreed to the first extension, identifying in that notification which Lenders have not agreed to the First Extension Request. |
(g) | Vodafone may, on the basis that one or more of the Lenders have not agreed to the First Extension Request and no later than the date falling 5 days before the First Anniversary, withdraw the request by notice to the Agent which will promptly notify the Lenders. |
6.2 | Second extension option |
(a) | If the Final Maturity Date has been extended to the Sixth Anniversary pursuant to Clause 6.1 (First extension option), Vodafone may by notice to the Agent (the Second Extension Request) not more than 60 days and not less than 30 days before second anniversary of the date of this Agreement (the Second Anniversary), request that the Final Maturity Date be extended to the date which is seven years after the date of this Agreement (the Seventh Anniversary). |
(b) | The Agent must promptly notify the Lenders of the Second Extension Request. |
(c) | Each Lender may, in its sole discretion, agree to the Second Extension Request. Subject to paragraph (g) below, each Lender that agrees to the Second Extension Request by the date falling 15 days before the Second Anniversary, will, on the Second Anniversary, extend its Commitments to the Seventh Anniversary and the Final Maturity Date with respect to the Commitments of that Lender will be extended to that date. |
(d) | If any Lender fails to reply to the Second Extension Request on or before the date falling 15 days before the Second Anniversary, it will be deemed to have refused the Second Extension Request and its Commitments will not be extended. |
(e) | Subject to paragraph (g) below, the Second Extension Request is irrevocable. |
(f) | If one or more (but not all) of the Lenders agree to the Second Extension Request, then by the date falling no later than ten days before the Second Anniversary, the Agent must notify Vodafone and the Lenders which have agreed to the second extension, identifying in that notification which Lenders have not agreed to the Second Extension Request. |
(g) | Vodafone may, on the basis that one or more of the Lenders have not agreed to the Second Extension Request and no later than the date falling 5 days before the Second Anniversary, withdraw the request by notice to the Agent which will promptly notify the Lenders. |
7. | REPAYMENT |
7.1 | Repayment of Revolving Credit Advances |
(a) | Each Borrower shall repay each Revolving Credit Advance made to it in full on its Maturity Date to the Agent for the Lenders, but since the Revolving Credit Facility is available on a revolving basis during the Availability Period amounts repaid may be reborrowed subject to the terms of this Agreement. |
(b) | No Revolving Credit Advance may be outstanding after the Final Maturity Date. |
7.2 | Repayment of Swingline Advances |
(a) | Each Borrower shall repay each Swingline Advance made to it in full on its Maturity Date to the Euro Swingline Agent for the Swingline Lenders. No Swingline Advance may be outstanding after the Final Maturity Date. |
(b) | Each Swingline Advance shall be repaid on its Maturity Date in accordance with paragraph (a) above. In the event and to the extent that a Swingline Advance is not so repaid, each Lender will, within four Business Days of a demand to that effect from the Euro Swingline Agent, pay to the Euro Swingline Agent on behalf of the Swingline Lenders (which shall be deemed to be a drawing of that Lenders Commitment) an amount equal to its Agreed Percentage (without set-off, counterclaim, withholding or other deduction) of the principal amount outstanding of such Swingline Advance and accrued interest (including default interest) thereon to the date of actual payment by such Lender (provided that no Lender shall be obliged to exceed its Commitment as a result of any such payment). The relevant Borrower shall forthwith reimburse the Lenders (through the Agent) in full for each payment made by the Lenders under this paragraph (b). Each amount the relevant Borrower is required to reimburse to the Lenders under this paragraph (b) shall be deemed to be an Overdue Amount which fell due for payment by the relevant Borrower on the day on which the payment by the Lenders giving rise to the reimbursement obligation was made and shall accrue default interest under Clause 9.3 (Default interest) accordingly. The obligations of each Lender under this paragraph (b) are unconditional and shall not be affected by the occurrence or continuance of a Default. |
7.3 | Separate Loans |
(a) | At any time when a Lender becomes a Defaulting Lender, the maturity date of each of the participations of that Lender in the Facilities then outstanding will be automatically extended to the earlier of: |
(i) | the first Business Day falling 364 days after the date on which the Agent or a Borrower gives notice to the Defaulting Lender and the other Parties that the relevant Lender has become a Defaulting Lender, and will be treated as separate Facilities (the Separate Loans) denominated in the currency in which the relevant participations are outstanding; and |
(ii) | the last day of the Availability Period. |
(b) | A Borrower to whom a Separate Loan is outstanding may prepay that Separate Loan by giving 10 Business Days prior notice to the Agent. The Agent will forward a copy of a prepayment notice received in accordance with this paragraph (b) to the Defaulting Lender concerned as soon as practicable on receipt. |
(c) | Interest in respect of a Separate Loan will accrue for successive Terms selected by a Borrower by the time and date specified by the Agent acting reasonably and will be payable by that Borrower to the Defaulting Lender on the last day of each Term of that Advance. |
(d) | The terms of this Agreement relating to the Facilities generally shall continue to apply to Separate Loans other than to the extent inconsistent with paragraphs (a) to (c) above (inclusive) in which case those paragraphs shall prevail in respect of any Separate Loans. |
(e) | If at any time while a Separate Loan is outstanding the Borrower transfers the relevant Defaulting Lenders outstanding participations to a Replacement Lender in accordance with Clause 27.5 (Replacement of Lenders), each Separate Loan transferred to the Replacement |
Lender will automatically become, on the last day of the current Term for each such Separate Loan, a Revolving Credit Advance and paragraphs (a) to (c) above (inclusive) shall cease to apply to that Advance while such Replacement Lender is not a Defaulting Lender.
8. | PREPAYMENT AND CANCELLATION |
8.1 | Automatic cancellation of Total Commitments |
(a) | The Revolving Credit Commitments of each Lender shall be automatically cancelled at the close of business in London on the Final Maturity Date. |
(b) | The Swingline Commitment of each Swingline Lender shall be automatically cancelled at the close of business in London on the Final Maturity Date. |
8.2 | Voluntary cancellation |
(a) | Vodafone may by giving not less than one Business Days prior written notice to the Agent, cancel the unutilised portion of the Total Commitments in whole or in part (but, if in part, in an aggregate minimum amount of 75,000,000) in such proportions as Vodafone may designate in the notice of cancellation. Any cancellation in part shall be applied against the Revolving Credit Commitment of each Lender pro rata. |
(b) | Whenever part of the Total Commitments is cancelled, the Swingline Commitments will not be cancelled unless (i) the amount of the Swingline Total Commitments would exceed the Total Commitments after such cancellation or (ii) the Swingline Commitment of any Swingline Lender would exceed its Commitment after such cancellation. In any such case, the Swingline Total Commitments shall, at the same time as the cancellation of the Total Commitments takes effect, be cancelled by such amount as is necessary to ensure that after the relevant cancellation of the Total Commitments the Swingline Total Commitments do not exceed the Total Commitments and the Swingline Commitment of each Swingline Lender does not exceed its Commitment. |
8.3 | Voluntary prepayment |
(a) | Any Borrower may by giving not less than five Business Days prior written notice to the Agent, prepay the whole or any part of the Revolving Credit Advances (but, if in part, in an aggregate minimum Original Euro Amount, taking all prepayments made by all the Borrowers on the same day together, of 100,000,000). |
(b) | Any Borrower may prepay the whole of any Swingline Advance at any time. |
(c) | Any voluntary prepayment in part made under paragraph (a) above will be applied against all the Revolving Advances pro rata (or against such Revolving Credit Advances as Vodafone (or the relevant Borrower) may designate in the notice of prepayment). |
8.4 | Change of Control |
If control of Vodafone (other than as a result of a Hive Up) or, following a Hive Up, NewTopco, passes to any person acting either individually or in concert (a Change of Control):
(a) | Vodafone shall, promptly upon becoming aware thereof, notify the Agent who shall inform the Lenders; |
(b) | any Lender may, if it determines that as a result of the Change of Control: |
(i) | the level of its exposure to Vodafone, NewTopco and/or the entity which acquires control of Vodafone or NewTopco, as the case may be is unacceptably high in each case in the sole opinion of the Lender; or |
(ii) | it no longer wishes (in its sole discretion and acting in good faith) to continue lending to Vodafone or NewTopco, as the case may be (whether for relationship, internal policy or any other reason); |
propose to Vodafone (through the Agent) the revised terms (if any) which it requires in order to continue to participate in the Facilities; and
(c) | if those revised terms have not been agreed with that Lender (or that Lender is not prepared, for one or more of the reasons set out in paragraph (b)(i) or (ii) above, to continue on any terms) within 30 days of the date of notification in paragraph (a) above (or such longer period as that Lender may agree in writing) then on expiry of 30 days from the date of notification in paragraph (a) above that Lender may by notice to the Agent (which shall promptly inform Vodafone) cancel the whole (but not part only) of such Lenders Commitments and following service of such notice: |
(i) | such Lenders Commitments shall be cancelled on the date of service of the notice or as specified in it; and |
(ii) | all such Lenders outstanding Advances shall be repaid or prepaid on the last day of the then current Term applicable thereto, and no amount may be outstanding to such Lender thereafter. |
For the purposes of this Clause 8.4, control has the meaning given to it in relation to a body corporate by Section 1124 of the Taxes Act.
8.5 | Right of prepayment and cancellation |
If:
(a) | any Borrower is required to pay or is notified by any Lender in writing that it will be required to pay any amount to a Lender under Clause 11 (Taxes) or Clause 13 (Increased Costs); or |
(b) | if circumstances exist such that a Borrower will be required to pay any amount to a Lender under Clause 11 (Taxes) or Clause 13 (Increased Costs), |
Vodafone may serve a notice of prepayment and cancellation on that Lender through the Agent. On the date falling five Business Days after the date of service of the notice:
(i) | each Borrower will prepay the participations of that Lender in all outstanding Advances made to that Borrower; and |
(ii) | the Lenders Commitments shall be permanently cancelled on the date of service of the notice. |
(c) | If any Lender becomes a Defaulting Lender, Vodafone may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent 5 Business Days notice of cancellation of each Available Commitment of that Lender. |
(d) | On the notice referred to in paragraph (d) above becoming effective, each Available Commitment of the Defaulting Lender shall immediately be reduced to zero. |
(e) | The Agent shall as soon as practicable after receipt of a notice referred to in paragraph (e) above, notify all the Lenders. |
8.6 | Miscellaneous provisions |
(a) | Any notice of prepayment and/or cancellation under this Agreement is irrevocable. The Agent shall notify the Lenders promptly of receipt of any such notice. |
(b) | All prepayments under this Agreement shall be made together with accrued interest on the amount prepaid and any other amounts due under this Agreement in respect of that prepayment (including, but not limited to, any amounts payable under Clause 24.2(c) (Other indemnities) if not made on the Maturity Date of the relevant Revolving Credit Advance or Swingline Advance). |
(c) | No prepayment or cancellation is permitted except in accordance with the express terms of this Agreement. |
(d) | Subject to the provisions of this Agreement, any amount prepaid in respect of the Revolving Credit Facility during the Availability Period may be reborrowed. |
(e) | Subject to Clause 2.3 (Increase), no amount of the Total Commitments, (including the Swingline Total Commitments) cancelled under this Agreement may subsequently be reinstated. |
9. | INTEREST |
9.1 | Interest rate for all Advances |
(a) | The rate of interest on each Advance (other than any Swingline Advance) for its Term, is the rate per annum determined by the Agent to be the aggregate of: |
(i) | the applicable Margin; and |
(ii) | EURIBOR or, in the case of an Advance denominated in any Optional Currency, LIBOR. |
(b) | The rate of interest on each Swingline Advance for each day during its Term is the rate per annum determined by the Euro Swingline Agent to be the Swingline Rate for that day. |
(c) | Subject to paragraph (d) below, if EONIA is to be determined by reference to the Reference Banks rates for a day, and a Reference Bank does not supply a quotation by 18.00 (Brussels time) on that day, EONIA for that day shall be calculated on the basis of the quotations of the remaining Reference Banks. |
(d) | If, in relation to any TARGET Day: |
(i) | there is no EONIA Screen Rate, and EONIA is to be determined by reference to the Reference Banks and none or only one of the Reference Banks supplies a rate to the Agent to determine EONIA by 18.00 (Brussels time) on that day; or |
(ii) | on or before the close of business in London on the TARGET Day, the Agent receives notifications from a Lender or Lenders (whose participations in a Swingline Loan exceed 50 per cent. of that Swingline Loan) that the cost to it of obtaining matching deposits in their Relevant Interbank Market would be in excess of EONIA, |
the rate of interest on each Lenders share of the relevant Swingline Loan for the relevant day shall be the percentage rate per annum which is the sum of:
(iii) | the rate notified to the Euro Swingline Agent by that Lender to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Swingline Loan for that day from whatever source it may reasonably select; and |
(iv) | the Swingline Margin. |
9.2 | Due dates |
Except as otherwise provided in this Agreement, accrued interest on each Advance is payable by the relevant Borrower on its Maturity Date and also, in the case of any Advance with a Term longer than six months, at six monthly intervals after its Drawdown Date for so long as the Term is outstanding.
9.3 | Default interest |
(a) | If a Borrower fails to pay any amount payable by it under this Agreement when due (an Overdue Amount), it shall forthwith on demand by the Agent or, as the case may be, the Euro Swingline Agent, pay interest on the Overdue Amount from the due date up to the date of actual payment, both before and after judgment, at a rate (the Default Rate) determined by the Agent or, as the case may be, the Euro Swingline Agent to be one per cent. per annum (the Default Margin) above the higher of: |
(i) | the rate on the Overdue Amount under Clause 9.1 (Interest rate for all Advances) immediately before the due date (in the case of principal); and |
(ii) | the rate which would have been payable under Clause 9.1 (Interest rate for all Advances) if the Overdue Amount had, during the period of non-payment, constituted a Revolving Credit Advance in the currency of the Overdue Amount for such successive Terms of such duration as the Agent may determine (each a Designated Term), |
except that during any grace period specified in Clause 19.2 (Non-payment) the Default Margin portion of the Default Rate will only apply to overdue payments of principal.
(b) | The Default Rate will be determined on each Business Day or the first day of, or two Business Days before the first day of, the relevant Designated Term, as appropriate. |
(c) | If the Agent or, as the case may be, the Euro Swingline Agent, determines that deposits in the currency of the Overdue Amount are not at the relevant time being made available by the Reference Banks to leading banks in the Relevant Interbank Market, the Default Rate will be determined by reference to the cost of funds to the Agent or, as the case may be, the Euro Swingline Agent, from whatever sources it selects, acting reasonably at all times, after consultation with the Reference Banks. |
(d) | Default interest will be compounded at the end of each Designated Term. |
(e) | The Agent shall notify Vodafone of the duration of each Designated Term. |
9.4 | Notification of rates of interest |
The Agent or, as the case may be, the Euro Swingline Agent will promptly notify each relevant Party of the determination of a rate of interest under this Agreement.
9.5 | Margin |
(a) | The Margin applicable to each Advance will be the lowest percentage rate specified in Column 2 below which corresponds to the criteria in relation to the Long Term Credit Rating Assigned to Vodafone in Column 1 below by Moodys, Fitch and/or S&P (as the case may be) (each a Credit Rating Agency) at the relevant time. |
Column 1 | Column 2 | |||
Moodys/Fitch/S&P ratings | Margin (per cent. per annum) | |||
Any two are equal to or higher than: Aa3/AA-/AA- |
0.175 | |||
Any two are equal to or higher than: A1/A+/A+ |
0.20 | |||
Any two are equal to or higher than: A2/A/A |
0.225 | |||
Otherwise |
0.275 | |||
All Quoting Credit Rating Agencies are lower than: A3/A-/A- |
0.325 |
For the purposes of this Clause 9.5(a) All Quoting Credit Rating Agencies means at any time each Credit Rating Agency which has a Long Term Credit Rating Assigned to Vodafone at the relevant time
(b) | For the purposes of paragraph (a) above: |
(i) | the Margin applicable to an Advance throughout the whole of its Term will be determined according to the Long Term Credit Rating Assigned to Vodafone as at the Drawdown Date of the Advance; and |
(ii) | if on the Drawdown Date of any Advance only one Credit Rating Agency assigns a long term credit rating to Vodafone, the Margin applicable to that Advance will be determined in accordance with paragraph (i) by reference to such Long Term Credit Rating Assigned to Vodafone, or in the event that there is no Long Term Credit Rating Assigned to Vodafone the Margin applicable to that Advance will be 0.325 per cent. per annum. |
In the case of Clause 9.5(b)(ii) above, where the ratings category will be determined by one Credit Rating Agency only, the words Any two are and All Quoting Credit Rating Agencies in Column 1 of the table above shall be construed as a reference to the rating determined pursuant to Clause 9.5(b)(ii) above.
(c) | Promptly upon becoming aware of the same, Vodafone shall inform the Agent in writing if any change in the Long Term Credit Rating Assigned to Vodafone occurs or the circumstances contemplated by paragraph 9.5(b)(ii) above arise. |
(d) | For the purpose of this Clause 9.5 the Long Term Credit Rating Assigned to Vodafone means, at any time, the solicited long term credit rating assigned at that time to Vodafone by the relevant Credit Rating Agency (but, for the avoidance of doubt, disregarding any outlook or review action, including placing Vodafone on creditwatch or any similar or analogous step, taken by such Credit Rating Agency) where the rating is based primarily on the unsecured credit risk (not credit enhanced or collateralised) of Vodafone in a manner comparable to the credit structure of Vodafones 1,250,000,000 bond issue due January 2022 (the Reference Bond), or if the Reference Bond ceases to be outstanding, such other |
outstanding series of listed bonds issued or guaranteed by Vodafone with a maturity date following and closest to January 2022. References in this paragraph (d) to Vodafone shall, following the Reorganisation Date, be references to NewTopco, provided that a long term credit rating has been assigned to NewTopco. |
9.6 | Non-Business Days |
If a Term would otherwise end on a day which is not a Business Day, that Term shall instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
10. | PAYMENTS |
10.1 | Place of payment |
All payments by an Obligor or a Lender under this Agreement shall be made to the Agent or (if the payment relates to the Swingline Facility) the Euro Swingline Agent to its account at such office or bank in the principal financial centre of the country of the relevant currency (or, in the case of euro, in the principal financial centre of a Participating Member State or London) or as it may notify to that Obligor or Lender for this purpose.
10.2 | Funds |
Payments under this Agreement to the Agent or, as the case may be, the Euro Swingline Agent shall be made for value on the due date at such times and in such funds as the Agent or, as the case may be, the Euro Swingline Agent may specify to the Party concerned as being customary at the time for the settlement of transactions in the relevant currency in the place for payment.
10.3 | Distribution |
(a) | Each payment received by the Agent or, as the case may be, the Euro Swingline Agent under this Agreement for another Party shall, subject to paragraphs (b) and (c) below, be made available by the Agent or, as the case may be, the Euro Swingline Agent to that Party by payment (on the date of value of receipt and in the currency and funds of receipt) to its account with such bank in the principal financial centre of the country of the relevant currency (or, in the case of euro, in the principal financial centre of a Participating Member State or London) as it may notify to the Agent or, as the case may be, the Euro Swingline Agent for this purpose by not less than five Business Days prior notice. |
(b) | The Agent or, as the case may be, the Euro Swingline Agent may apply any amount received by it for an Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from an Obligor under this Agreement in the same currency on such date or in or towards the purchase of any amount of any currency to be so applied. |
(c) | Where a sum is to be paid under this Agreement to the Agent or, as the case may be, the Euro Swingline Agent for the account of another Party, the Agent or, as the case may be, the Euro Swingline Agent is not obliged to pay that sum to that Party until it has established that it has actually received that sum. The Agent or, as the case may be, the Euro Swingline Agent may, however, assume that the sum has been paid to it in accordance with this Agreement and, in reliance on that assumption, make available to that Party a corresponding amount. If the sum has not been made available but the Agent or, as the case may be, the Euro Swingline Agent has paid a corresponding amount to another Party, that Party shall forthwith on demand refund the corresponding amount to the Agent or, as the case may be, the Euro Swingline Agent together with interest on that amount from the date of payment to the date of receipt, calculated at a rate reasonably determined by the Agent or, as the case may be, the Euro Swingline Agent to reflect its cost of funds. |
10.4 | Currency |
(a) | (i) A repayment or prepayment of an Advance is payable in the currency in which the Advance is denominated. |
(ii) | Interest is payable in the currency in which the relevant amount in respect of which it is payable is denominated. |
(iii) | Amounts payable in respect of costs, expenses, taxes and the like are payable in the currency in which they are incurred. |
(iv) | Any other amount payable under this Agreement is, except as otherwise provided in this Agreement, payable in euro. |
(b) | Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then: |
(i) | any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (acting reasonably and after consultation with Vodafone); and |
(ii) | any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of the currency unit into the other, rounded up or down by the Agent (acting reasonably); and |
(iii) | if a change in any currency of a country occurs this Agreement will be amended to the extent the Agent and Vodafone agree (such agreement not to be unreasonably withheld) to be necessary to reflect the change in currency and to put the Lenders and the Obligors in the same position, as far as possible, that they would have been in if no change in currency had occurred. |
10.5 | Set-off and counterclaim |
Subject to Clause 29.4 (Set-off by Obligors), all payments made by an Obligor under this Agreement shall be made without set-off or counterclaim.
10.6 | Non-Business Days |
(a) | If a payment under this Agreement is due on a day which is not a Business Day, the due date for that payment shall instead be the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not). |
(b) | During any extension of the due date for payment of any principal under this Agreement interest is payable on the principal at the rate payable on the original due date. |
10.7 | Impaired Agent or Euro Swingline Agent |
(a) | If, at any time, the Agent or, as the case may be, the Euro Swingline Agent becomes an Impaired Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Agent or Euro Swingline Agent in accordance with Clause 10 (Payments) may instead either pay that amount direct to the required recipient or pay that amount to an interest-bearing account held with an Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Obligor or the Lender making the payment and designated as a trust account for the benefit of the Party or |
Parties beneficially entitled to that payment under the Finance Documents. In each case such payment must be made on the due date for payment under the Finance Documents. |
(b) | All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements. |
(c) | A party who has made a payment in accordance with this Clause 10.7 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account. |
(d) | Promptly upon the appointment of a successor Agent or, as the case may be, successor Euro Swingline Agent, in accordance with Clause 20.15 (Resignation of the Agent or the Euro Swingline Agent), each Party which has made a payment to a trust account in accordance with this Clause 10.7 shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount) together with any accrued interest to the successor Agent or, as the case may be, the successor Euro Swingline Agent for distribution in accordance with Clause 10.3 (Distribution). |
10.8 | Partial payments |
(a) | If the Agent or, as the case may be, the Euro Swingline Agent receives a payment insufficient to discharge all the amounts then due and payable by an Obligor under this Agreement, the Agent or, as the case may be, the Euro Swingline Agent shall apply that payment towards the obligations of the Obligors under this Agreement in the following order: |
(i) | first, in or towards payment pro rata of any unpaid costs, fees and expenses of the Agent and the Euro Swingline Agent under this Agreement; |
(ii) | secondly, in or towards payment pro rata of any accrued fees due but unpaid under Clause 21 (Fees); |
(iii) | thirdly, in or towards payment pro rata of any interest due but unpaid under this Agreement; |
(iv) | fourthly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and |
(v) | fifthly, in or towards payment pro rata of any other sum due but unpaid under this Agreement. |
(b) | The Agent or, as the case may be, the Euro Swingline Agent, shall, if so directed by all the Lenders, vary the order set out in sub-paragraphs (a)(ii) to (v) above. The Agent or, as the case may be, the Euro Swingline Agent, shall notify Vodafone of any such variation. |
(c) | Paragraphs (a) and (b) above shall override any appropriation made by any Obligor. |
11. | TAXES |
11.1 | Gross-up |
All payments by an Obligor to a Finance Party under the Finance Documents shall be made free and clear of and without deduction for or on account of any Relevant Taxes, except to the extent that the Obligor is required by law to make payment subject to any such taxes. Subject to Clause 11.4 (Qualifying Lenders) and Clause 11.5 (U.S. Taxes), if any Relevant Tax or amounts in respect of Relevant Tax are deducted or withheld from any amounts payable or paid by an Obligor, to a
Finance Party under the Finance Documents (in each case, other than a FATCA Deduction), the Obligor shall pay such additional amounts as may be necessary to ensure that the relevant Finance Party receives a net amount equal to the full amount which it would have received had that Relevant Tax or those amounts in respect of Relevant Tax not been so deducted or withheld.
11.2 | Indemnity |
Save to the extent that the relevant Finance Party is compensated by an increased payment under Clause 11.1 (Gross-up), but otherwise without prejudice to the provisions of Clause 11.1 (Gross-up), but subject to Clause 11.4 (Qualifying Lenders) and Clause 11.5 (U.S. Taxes), if a Finance Party or the Agent (or, as the case may be, the Euro Swingline Agent) on behalf of that Finance Party is required to make any payment on account of any Relevant Tax on or in relation to any sum received or receivable hereunder by such Finance Party or the Agent (or, as the case may be, the Euro Swingline Agent) on behalf of that Finance Party (including a sum received or receivable under this Clause 11) or any liability in respect of any such payment on account of any Relevant Tax is incurred by such Finance Party or the Agent (or, as the case may be, the Euro Swingline Agent) on behalf of that Finance Party (in all cases other than any Tax on Overall Net Income or any FATCA Deduction), the relevant Obligor shall, within five Business Days of demand by the Agent (or, as the case may be, the Euro Swingline Agent) indemnify such Finance Party against such payment or liability in respect of such payment, together with any interest, penalties, reasonable costs and reasonable expenses payable or incurred in connection therewith other than any such interest, penalties, costs or expenses arising as a result of a failure by a Finance Party to make payment of such tax when due.
11.3 | Tax receipts |
All taxes required by law to be deducted or withheld by an Obligor from any amounts paid or payable under the Finance Documents shall be paid by the relevant Obligor when due and the Obligor shall, within 15 days of the payment being made, deliver to the Agent for the relevant Lender evidence satisfactory to that Lender acting reasonably (including any relevant tax receipts which have been received) that the payment has been duly remitted to the appropriate authority.
11.4 | Qualifying Lenders |
(a) | An Obligor is not required to pay to a Lender any amounts under Clause 11.1 (Gross-up) or Clause 11.2 (Indemnity) in respect of Relevant Tax imposed by the United Kingdom if, on the date on which the payment falls due, the relevant Lender is a Party but is not a Qualifying Lender (other than as a result of the introduction, suspension, withdrawal or cancellation of, or change in, or change in the official interpretation, administration or official application of, any law, regulation having the force of law, tax treaty or any published practice or published concession of any relevant taxing authority in any jurisdiction with which the relevant Lender has a connection, occurring after the Signing Date or, if later, the date on which that Lender becomes a Party). |
(b) | A Treaty Lender shall: |
(i) | promptly and, in any event, within seven Business Days after it becomes a Lender, deliver to its local revenue authority for certification such UK HMRC forms (Claim Forms) as may be required for any Obligor making a payment to such Treaty Lender to obtain authorisation from the UK HMRC to make such payment without deduction for or on account of any taxes; |
(ii) | in circumstances where the procedure for Treaty relief contemplated in paragraph (i) above requires a local revenue authority to return a certified Claim Form to the Treaty Lender for submission by that Treaty Lender to the UK HMRC, (a) take all |
reasonable follow up action available to the Treaty Lender to facilitate the return in a timely manner to the Treaty Lender of such Claim Form, duly stamped or certified by the relevant revenue authority and (b) submit such Claim Form to the UK HMRC as soon as reasonably practicable (and in any event within seven Business Days) after receipt of that Claim Form from the local revenue authority; and |
(iii) | in all other circumstances relating to the Treaty relief procedure contemplated in (i) above, following the submission of Claim Forms by the Treaty Lender to the relevant local revenue authority, respond promptly to any further requests any Treaty Lender receives from the relevant local revenue authority and, on receipt of written request from Vodafone to do so, take all reasonable follow up action to facilitate the submission by the relevant local revenue authority of duly stamped or certified Claim Forms to the UK HMRC in a timely manner. |
If there is any change in the procedure by which certification is to be made or to be notified to the UK HMRC, the Treaty Lenders obligations shall be modified in such manner as the Treaty Lender may reasonably determine so that such amended obligations shall, as far as possible, have the same or equivalent effect as the original obligations. No Obligor resident in the UK shall be liable to pay any sums to any Treaty Lender under Clause 11.1 (Gross-up) or Clause 11.2 (Indemnity) unless the Treaty Lender has complied with its obligations under this Clause 11.4(b).
(c) | Subject to paragraph (d) below, each Lender warrants to Vodafone, on each date upon which it makes an Advance and on the due date for each payment of interest to the Lender: |
(i) | that it is a Qualifying Lender; and |
(ii) | if it is a Treaty Lender, it has delivered (or will deliver within the time limits specified herein) the forms described in paragraph (b) above. |
(d) | If a Lender or, as the case may be, the Facility Office of a Lender is aware that it is or will become unable to make the warranty set out in paragraph (c) above of this Clause 11.4 it will promptly notify the Agent and Vodafone. Notwithstanding such notification to Vodafone, the Agent will promptly notify Vodafone and from the date of the first such notification received by Vodafone the warranty in paragraph (c) above will no longer be made by that Lender. |
11.5 | U.S. Taxes |
(a) | A U.S. Tax Obligor shall not be required to pay any amount pursuant to Clause 11.1 (Gross-up) or any amount pursuant to Clause 11.2 (Indemnity) in respect of Relevant Tax imposed by the United States (including, without limitation, federal, state, local or other income taxes, branch profits or franchise taxes U.S. Taxes) with respect to a sum payable by it pursuant to this Agreement to a Lender if on the date a payment of interest falls due under this Agreement either: |
(i) | in the case of a Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code), such Lender is not entitled to receive interest payable under this Agreement free and clear of any U.S. Taxes imposed by way of deduction or withholding at the source under applicable law as in effect on the date such Lender becomes a party to this Agreement or, if such Lender has designated a new Facility Office, the date of such designation; or |
(ii) | such Lender has failed to provide the relevant U.S. Tax Obligor with the appropriate form, certificate or other information with respect to such sum payable that it was required to provide pursuant to paragraphs (b) and (c) below; or |
(iii) | such Lender is subject to such tax by reason of any connection between the Lender or its Facility Office and the jurisdiction imposing such tax on the Lender or its Facility Office other than a connection arising solely from this Agreement or any transaction contemplated hereby. |
(b) | At any time after a U.S. Tax Obligor becomes (and while there continues to be a U.S. Tax Obligor) a Party to this Agreement, if a Lender is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) it shall submit, as soon as reasonably practicable after: |
(i) | the date on which the U.S. Tax Obligor becomes a Party to this Agreement (if requested by the relevant U.S. Tax Obligor); |
(ii) | the date on which the relevant Lender becomes a Party to this Agreement; or |
(iii) | the date on which the relevant Lender designates a new Facility Office, |
(but, in each case, no later than the due date for the next interest payment), in duplicate to each U.S. Tax Obligor duly completed and signed originals of either United States Internal Revenue Service Form W-8BEN or Form W-8ECI or applicable successor form relating to such Lender and evidencing such Lenders complete exemption from withholding on all amounts (to which such withholding would otherwise apply) to be received by such Lender, including fees, pursuant to this Agreement in connection with any borrowing by a U.S. Tax Obligor. Thereafter such Lender shall submit to each U.S. Tax Obligor such additional duly completed and signed originals of one or the other such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxation authorities) or any additional information, in each case as may be required under then current United States law or regulations to claim the inapplicability of or exemption from United States withholding taxes on payments in respect of all amounts (to which such withholding would otherwise apply) to be received by such Lender, including fees, pursuant to this Agreement in connection with any borrowing by a U.S. Tax Obligor unless such Lender is unable to do so as a result of a change in, the introduction of, suspension, withdrawal or cancellation of, or change in the official interpretation, administration or official application of, the Code or any regulation promulgated thereunder or of a convention or agreement for the avoidance of double taxation and the prevention of fiscal evasion between the government of the United States of America and the jurisdiction in which the relevant Lender has a connection, occurring after the date the Lender becomes a Party to this Agreement or, if such Lender has designated a new Facility Office, the date of such designation.
(c) | At any time after a U.S. Tax Obligor becomes (and while there continues to be a U.S. Tax Obligor) a Party to this Agreement, if a Lender is a United States person (as such term is defined in Section 7701(a)(30) of the Code) it shall, as soon as practicable after: |
(i) | the date on which the U.S. Tax Obligor becomes a Party to this Agreement (if requested by the relevant U.S. Tax Obligor); |
(ii) | the date on which the relevant Lender becomes a Party to this Agreement; or |
(iii) | the date on which the relevant Lender designates a new Facility Office, |
(but, in each case, no later than the due date for the next interest payment), and thereafter, on or before the date that any such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form or forms to be delivered, submit in duplicate to each U.S. Tax Obligor a duly completed and signed United States Internal Revenue form W-9 evidencing that such Lender is such a United States person and shall submit any additional information that may be necessary to avoid United States withholding taxes on all payments, including fees, (to which such
withholding would otherwise apply) to be received pursuant to this Agreement in connection with any borrowing by a U.S. Tax Obligor.
11.6 | Refund of Tax Credits |
If any Obligor pays any amount to a Finance Party under this Clause 11 (a Tax Payment) and that Finance Party obtains a refund of a tax, or a credit against tax by reason of either the circumstances giving rise to the Obligors obligation to make the Tax Payment or that Tax Payment (a Tax Credit) then that Finance Party shall reimburse that Obligor such amount, which that Finance Party determines in good faith, as can be determined to be the proportion of the Tax Credit as will leave that Finance Party (after that reimbursement) in no better or worse position than it would have been in if the Tax Payment had not been paid. Nothing in this Clause 11 shall interfere with the right of each Finance Party to arrange its affairs in whatever manner it thinks fit and no Finance Party is obliged to disclose any information regarding its tax affairs or computations to an Obligor which it reasonably considers confidential.
11.7 | FATCA Information |
(a) | Subject to paragraph (c) below, each Party must, within ten Business Days of a reasonable request by another Party: |
(i) | confirm to that other Party whether it is: |
(A) | a FATCA Exempt Party; or |
(B) | not a FATCA Exempt Party; and |
(ii) | supply to that other Party such forms, documentation and other information relating to its status under FATCA (including its applicable passthru payment percentage or other information required under relevant US Treasury regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Partys compliance with FATCA. |
(b) | If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party must notify that other Party reasonably promptly. |
(c) | A Finance Party is not obliged to do anything under paragraph (a) above which would or might in its reasonable opinion constitute a breach of: |
(i) | any law or regulation; |
(ii) | any fiduciary duty; or |
(iii) | any duty of confidentiality. |
(d) | If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then: |
(i) | if that Party failed to confirm whether it is (or remains) a FATCA Exempt Party then such Party is to be treated for the purposes of the Finance Documents (and payments made under them) as if it is not a FATCA Exempt Party; and |
(ii) | if that Party failed to confirm its applicable passthru payment percentage then such Party is to be treated for the purposes of the Finance Documents (and payments |
made under them) as if its applicable passthru percentage is 100% (or such other percentage prescribed under FATCA from time to time), |
until (in each case) such time as the Party in question provides the requested confirmation, forms, documentation or other information.
(e) | If a Borrower is a U.S. Tax Obligor, or where the Agent or, as the case may be, the Euro Swingline Agent, reasonably believes that its obligations under FATCA require it, each Lender shall, within ten Business Days of: |
(i) | where a Borrower is a U.S. Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement; |
(ii) | where a Borrower is a U.S. Tax Obligor and the relevant Lender is a New Lender, the relevant Transfer Date; |
(iii) | the date a new U.S. Tax Obligor accedes as a Borrower; or |
(iv) | where the Borrower is not a U.S. Tax Obligor, the date of a request from the Agent or, as the case may be, the Euro Swingline Agent, |
supply to the Agent or, as the case may be, the Euro Swingline Agent:
(v) | a withholding certificate on Form W-8 or Form W-9 (or any successor form) (as applicable); or |
(vi) | any withholding statement and other documentation, authorisations and waivers as the Agent or, as the case may be, the Euro Swingline Agent, may require to certify or establish the status of such Lender under FATCA. |
The Agent shall provide any withholding certificate, withholding statement, documentation, authorisations and waivers it receives from a Lender pursuant to this paragraph (e) to the Borrower and shall be entitled to rely on any such withholding certificate, withholding statement, documentation, authorisations and waivers provided without further verification. The Agent or, as the case may be, the Euro Swingline Agent, shall not be liable for any action taken by it under or in connection with this paragraph (e).
(f) | Each Lender agrees that if any withholding certificate, withholding statement, documentation, authorisations and waivers provided to the Agent, or, as the case may be, the Euro Swingline Agent, pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, it shall promptly update such withholding certificate, withholding statement, documentation, authorisations and waivers or promptly notify the Agent, or, as the case may be, the Euro Swingline Agent, in writing of its legal inability to do so. The Agent, or, as the case may be, the Euro Swingline Agent, shall provide any such updated withholding certificate, withholding statement, documentation, authorisations and waivers or a copy of any such notification to the Borrower. The Agent or, as the case may be, the Euro Swingline Agent, shall not be liable for any action taken by it under or in connection with this paragraph (f). |
11.8 | FATCA Deduction |
(a) | Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party is required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. |
(b) | Each Party must, promptly upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, must notify Vodafone, the Agent or, as the case may be, the Euro Swingline Agent, and the other Finance Parties. |
12. | MARKET DISRUPTION |
12.1 | Market disturbance |
Notwithstanding anything to the contrary herein contained, if and each time that prior to or on a Drawdown Date relative to an Advance (other than, in the case of paragraphs (a), (b)(ii) or (c) below, a Swingline Advance) to be made:
(a) | only one or no Reference Bank supplies a rate for the purposes of determining EURIBOR or LIBOR (as the case may be) in accordance with paragraph (c) of the relevant definition; or |
(b) | the Agent is notified by Lenders whose participations in that Advance would represent 50 per cent. or more of that Advance that (i) deposits in the currency of that Advance may not in the ordinary course of business be available to them in the Relevant Interbank Market for a period equal to the Term concerned in amounts sufficient to fund their participations in that Advance or (ii) the cost to it of obtaining matching deposits in the Relevant Interbank Market would be in excess of EURIBOR or LIBOR; or |
(c) | the Agent (after consultation with the Reference Banks) shall have determined (which determination shall be conclusive and binding upon all Parties) that by reason of circumstances affecting the Relevant Interbank Market generally, adequate and fair means do not exist for ascertaining the EURIBOR or LIBOR (as the case may be) applicable to such Advance during its Term, |
the Agent shall promptly give written notice of such determination or notification to Vodafone and to each of the Lenders.
12.2 | Alternative rates |
If the Agent gives a notice under Clause 12.1 (Market disturbance):
(a) | Vodafone and the Lenders whose participations in the relevant Advance would represent 50 per cent. or more of that Advance may (through the Agent) agree that (except in the case of a Rollover Advance) that Advance shall not be borrowed; or |
(b) | in the absence of such agreement by the Drawdown Date specified in the relevant Request (and in any event in the case of a Rollover Advance): |
(i) | the Term of the relevant Advance shall be one month; |
(ii) | the Advance shall be made in the currency requested or, in the case of Clause 12.1(b)(i) (Market disturbance), in euro (or, if the currency requested for the relevant Advance is euro, U.S. Dollars); and |
(iii) | during the Term of the relevant Advance the rate of interest applicable to such Advance shall be the Margin plus the rate per annum notified by each Lender concerned to the Agent before the last day of such Term to be that which expresses as a percentage rate per annum the cost to such Lender of funding its participation in such Advance from whatever sources it may reasonably select. |
13. | INCREASED COSTS |
13.1 | Increased costs |
(a) | Except as provided below in this Clause 13, Vodafone will forthwith on demand by a Finance Party pay that Finance Party the amount of any increased cost incurred by it or any of its Affiliates as a result of: |
(i) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation (including any relating to reserve asset, special deposit, cash ratio, liquidity or capital adequacy requirements or any other form of banking or monetary control); |
(ii) | the compliance with any law or regulation made after the date of this Agreement; or |
(iii) | without prejudice to the generality of the foregoing, the implementation or application of or compliance with Basel III or CRD IV or any other law or regulation which implements Basel III or CRD IV (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates). |
(b) | Subject to Clause 13.3 (Basel III cost claims), promptly following the service of any demand, Vodafone will pay to that Finance Party such amount as that Finance Party certifies in the demand (with sufficient details for the calculations to be verified) will in its reasonable opinion compensate it for the applicable increased cost and in relation to the period expressed to be covered by such demand. |
(c) | When calculating an increased cost, a Finance Party will only apply the costs incurred in relation to the Facilities. Nothing contained in this Clause 13.1 shall oblige the Finance Party to disclose any information (other than information which is readily available in the public domain or which is not in the reasonable opinion of the Finance Party confidential) relating to the way in which it employs its capital or arranges its internal financial affairs. |
(d) | In this Agreement increased cost means: |
(i) | an additional cost incurred by a Finance Party or any of its Holding Companies as a result of it performing, maintaining or funding its obligations under, this Agreement; or |
(ii) | that portion of an additional cost incurred by a Finance Party or any of its Holding Companies in making, funding or maintaining all or any advances comprised in a class of advances formed by or including its participations in the Advances made or to be made under this Agreement as is attributable to it making, funding or maintaining its participations; or |
(iii) | a reduction in any amount payable to a Finance Party or the effective return to a Finance Party under this Agreement or on its capital (or the capital of any of its Holding Companies); or |
(iv) | the amount of any payment made by a Finance Party, or the amount of interest or other return foregone by a Finance Party, calculated by reference to any amount received or receivable by a Finance Party from any other Party under this Agreement. |
13.2 | Exceptions |
Clause 13.1 (Increased costs) does not apply to any increased cost:
(a) | attributable to any tax or amounts in respect of tax; or |
(b) | occurring as a result of any negligence or default by a Lender or its Holding Company relating to a breach of any law or regulation including but not limited to a breach by that Lender or Holding Company of any fiscal, monetary or capital adequacy limit imposed on it by any law or regulation; or |
(c) | to the extent that the increased cost was incurred in respect of any day more than six months before the first date on which it was reasonably practicable to notify Vodafone thereof (except in the case of any retrospective change); or |
(d) | attributable to the implementation or application of or compliance with the International Convergence of Capital Measurement and Capital Standards, a Revised Framework published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (Basel II) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates). For the avoidance of doubt, the foregoing shall not include any amendments, supplements, restatements or changes to Basel II to implement Basel III; or |
(e) | attributable to a FATCA Deduction required to be made by a Party. |
13.3 | Basel III Cost claims |
(a) | Vodafone need not make any payment for a Basel III Cost, except to the extent that the Basel III Cost is attributable to an amount of an Advance(s) which has been drawn at any time by an Obligor under this Agreement. |
(b) | Without limiting Clause 13.2 (Exceptions) Vodafone need not make any payment for a Basel III Cost unless the claiming Finance Party: |
(i) | provides reasonable detail of the basis of calculation of such Basel III Costs provided that this obligation to provide reasonable detail does not extend to information and detail that a Finance Party considers it is not legally allowed to disclose, is confidential to third parties, is confidential for internal reasons or is price-sensitive in relation to listed shares or other instruments issued by that Finance Party or any of its Affiliates; |
(ii) | confirms to Vodafone that it is the Finance Partys policy to claim Basel III Costs to a similar extent from similar borrowers in relation to similar facilities; and |
(iii) | confirms to Vodafone that it is making a claim for those Basel III Costs within three months of incurring them. |
(c) | If any claim by any Finance Party is made under this Clause 13 (Increased Costs) in respect of Basel III Costs, that Finance Party and Vodafone shall enter into discussions (for a period not exceeding 15 Business Days) as to the basis for such claim and whether it is reasonable for Vodafone to pay such claim in the circumstances. |
(d) | If no agreement is reached in respect of the payment of such claim within 15 Business Days of the claim being made, the relevant Finance Party may, within 15 Business Days after the end of such period and by ten Business Days prior notice to Vodafone: |
(i) | cancel its Commitments with immediate effect; and |
(ii) | demand the prepayment of its share of all Advances then outstanding together with accrued interest thereon and all other amounts accrued under the Finance Documents. |
(e) | On the expiry of the ten Business Days notice period referred to in paragraph (d) above, Vodafone (or, if applicable, the relevant Borrower) shall pay to the Agent for that Finance Party: |
(i) | the participations of that Lender in all outstanding Advances together with accrued interest; |
(ii) | the increased costs originally claimed by that Lender and the increased costs continuing to be incurred by it for the period until payment by Vodafone in full under this Clause 13.3 (Basel III Cost claims); |
(iii) | any amounts payable pursuant to Clause 24.3 (Breakage Costs); and |
(iv) | all amounts owing to that Finance Party under the Finance Documents. |
14. | ILLEGALITY AND MITIGATION |
14.1 | Illegality |
If it becomes unlawful in any jurisdiction for a Lender to give effect to any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Advance, then the Lender may notify Vodafone through the Agent accordingly and thereupon, but only to the extent necessary to remove the illegality:
(a) | each Borrower shall, upon request from that Lender within the period allowed or if no period is allowed, forthwith, repay any participation of that Lender in the Advances made to it together with all other amounts payable by it to that Lender under this Agreement; and |
(b) | the Lenders Commitments shall be cancelled immediately. |
14.2 | Mitigation |
Notwithstanding the provisions of Clauses 9.1 (Interest rate for all Advances), 11 (Taxes), 13 (Increased Costs) and 14.1 (Illegality), if in relation to a Finance Party circumstances arise which would result in:
(a) | any deduction, withholding or payment of the nature referred to in Clause 11 (Taxes); or |
(b) | any increased cost of the nature referred to in Clause 13 (Increased Costs); or |
(c) | a notification pursuant to Clause 14.1 (Illegality), |
then without in any way limiting, reducing or otherwise qualifying the rights of such Finance Party or the Agent, such Finance Party shall promptly upon becoming aware of the same notify the Agent thereof (whereupon the Agent shall promptly notify Vodafone) and such Finance Party shall use reasonable endeavours to transfer its participation in the Facility and its rights hereunder and under the Finance Documents to another financial institution or Facility Office not affected by circumstances having the results set out in paragraphs (a), (b) or (c) above and shall otherwise take such reasonable steps as may be open to it to mitigate the effects of such circumstances provided that such Finance Party shall not be under any obligation to take any such action if, in its opinion, to do
so would or would be likely to have a material adverse effect upon its business, operations or financial condition or would involve it in any unlawful activity or any activity that is contrary to its policies or any request, guidance or directive of any competent authority (whether or not having the force of law) or (unless indemnified to its satisfaction) would involve it in any significant expense or tax disadvantage.
15. | GUARANTEE |
15.1 | Guarantee |
Each Guarantor jointly and severally, irrevocably and unconditionally:
(a) | as principal obligor, guarantees to each Finance Party that if and whenever: |
(i) | an amount is due and payable by a Borrower under or in connection with any Finance Document; and |
(ii) | demand for payment of that amount has been made by the Agent on that Borrower, |
that Guarantor will forthwith on demand by the Agent pay that amount as if that Guarantor instead of that Borrower were expressed to be the principal obligor; and
(b) | indemnifies each Finance Party on demand against any loss or liability suffered by it if any obligation guaranteed by any Guarantor is or becomes unenforceable, invalid or illegal (the amount of that loss being the amount expressed to be payable by the relevant Borrower in respect of the relevant sum). |
15.2 | Continuing guarantee |
This guarantee is a continuing guarantee and will extend to the ultimate balance of all sums payable by the Borrowers under the Finance Documents, regardless of any intermediate payment or discharge in part.
15.3 | Reinstatement |
(a) | Where any discharge (whether in respect of the obligations of any Borrower or any security for those obligations or otherwise) is made in whole or in part or any arrangement is made on the faith of any payment, security or other disposition which is avoided or must be restored on insolvency, liquidation or otherwise without limitation, the liability of the Guarantors under this Clause 15 shall continue as if the discharge or arrangement had not occurred (but only to the extent that such payment, security or other disposition is avoided or restored). |
(b) | Each Finance Party may concede or compromise any claim that any payment, security or other disposition is liable to avoidance or restoration. |
15.4 | Waiver of defences |
The obligations of each Guarantor under this Clause 15 will not be affected by any act, omission, matter or thing which, but for this provision, would reduce, release or prejudice any of its obligations under this Clause 15 or prejudice or diminish those obligations in whole or in part, including (whether or not known to it or any Finance Party):
(a) | any time or waiver granted to, or composition with, any Borrower or other person; |
(b) | the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Consolidated Group; |
(c) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; |
(d) | any incapacity or lack of powers, authority or legal personality of or dissolution or change in the members or status of a Borrower or any other person; |
(e) | any variation (however fundamental) or replacement of a Finance Document so that references to that Finance Document in this Clause 15 shall include each variation or replacement; |
(f) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document, to the intent that the Guarantors obligations under this Clause 15 shall remain in full force and its guarantee be construed accordingly, as if there were no unenforceability, illegality or invalidity; and |
(g) | any postponement, discharge, reduction, non-provability or other similar circumstance affecting any obligation of any Borrower under a Finance Document resulting from any insolvency, liquidation or dissolution proceedings or from any law, regulation or order so that each such obligation shall, for the purposes of the Guarantors obligations under this Clause 15, be construed as if there were no such circumstance. |
15.5 | Immediate recourse |
Except as provided in Clause 15.1(a)(ii) (Guarantee), each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 15.
15.6 | Appropriations |
Until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
(a) | refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and |
(b) | hold in a suspense account (bearing interest at a commercial rate) any moneys received from any Guarantor or on account of that Guarantors liability under this Clause 15, with any interest earned being credited to that account. |
15.7 | Non-competition |
Until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been paid in full, no Guarantor shall, after a claim has been made or by virtue of any payment or performance by it under this Clause 15:
(a) | be subrogated to any rights, security or moneys held, received or receivable by any Finance Party (or any trustee or agent on its behalf) or be entitled to any right of contribution or |
indemnity in respect of any payment made or moneys received on account of that Guarantors liability under this Clause 15; or |
(b) | claim, rank, prove or vote as a creditor of any Borrower or its estate in competition with any Finance Party (or any trustee or agent on its behalf); or |
(c) | receive, claim or have the benefit of any payment, distribution or security from or on account of any Borrower, or exercise any right of set-off as against any Borrower. |
Each Guarantor shall hold in trust for and forthwith pay or transfer to the Agent for the Finance Parties any payment or distribution or benefit of security received by it contrary to this Clause 15.7.
15.8 | Additional security |
This guarantee is in addition to and is not in any way prejudiced by any other security now or hereafter held by any Finance Party.
15.9 | Removal of Guarantors |
(a) | Any Guarantor (other than, Vodafone (subject to paragraph (b) below) and, following the Reorganisation Date, NewTopco and any Intermediate Holding Company (subject to paragraph (c) below) of Vodafone) which is not a Borrower, may, at the request of Vodafone and if no Default is continuing, cease to be a Guarantor by entering into a supplemental agreement to this Agreement at the cost of Vodafone in such form as the Agent may reasonably require which shall discharge that Guarantors obligations as a Guarantor under this Agreement. |
(b) | If on the Reorganisation Date, NewTopco or any Intermediate Holding Company have acceded as Guarantors in accordance with Clause 27.7 (Additional Guarantors) and no Default is continuing or would result from Vodafones resignation as a Guarantor, Vodafone may cease to be a Guarantor with effect from the Reorganisation Date by entering into a supplemental agreement to this Agreement at the cost of Vodafone or NewTopco in such form as the Agent may reasonably require which shall discharge Vodafones obligations as a Guarantor under this Agreement. |
(c) | If NewTopco has acceded as a Guarantor in accordance with Clause 27.7 (Additional Guarantors) and no Default is continuing or would result from Intermediate Holding Companys resignation as a Guarantor, Intermediate Holding Company may cease to be a Guarantor by entering into a supplemental agreement to this Agreement at the cost of Vodafone or NewTopco in such form as the Agent may reasonably require which shall discharge Intermediate Holding Companys obligation as a Guarantor under this Agreement. |
(d) | Any Party retiring as a Guarantor in accordance with paragraphs (a), (b) or (c) above (a Retiring Guarantor) for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor: |
(i) | that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and |
(ii) | each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in |
connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor. |
15.10 | Limitation on guarantee of U.S. Guarantors |
Notwithstanding any other provision of this Clause 15, the obligations of each Guarantor incorporated in the United States (other than NewTopco and any Intermediate Holding Company, to the extent incorporated in the United States) (a U.S. Guarantor) under this Clause 15 shall be limited to a maximum aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Bankruptcy Code or any applicable provisions of comparable state law (collectively, the Fraudulent Transfer Laws), in each case after giving effect to all other liabilities of such U.S. Guarantor, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically excluding, however, any liabilities of such U.S. Guarantor in respect of intercompany indebtedness to the Borrowers or Affiliates of the Borrowers to the extent that such indebtedness would be discharged in an amount equal to the amount paid by such U.S. Guarantor hereunder) and after giving effect as assets to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, contribution, reimbursement, indemnity or similar rights of such U.S. Guarantor pursuant to (a) applicable law or (b) any agreement providing for an equitable allocation among such U.S. Guarantor and other Affiliates of the Borrowers of obligations arising under guarantees by such parties.
16. | REPRESENTATIONS AND WARRANTIES |
16.1 | Representations and warranties |
Each Obligor makes the representations and warranties set out in this Clause 16 to each Finance Party (in respect of itself and where relevant its Controlled Subsidiaries only).
16.2 | Status |
(a) | It is a duly incorporated and validly existing corporation under the laws of the jurisdiction of its incorporation. |
(b) | Except to the extent specified in the applicable Borrower Accession Agreement or Guarantor Accession Agreement, each Obligor is classified as a corporation for U.S. federal income tax purposes. |
16.3 | Powers and authority |
It has the power to:
(a) | enter into and comply with, all obligations expressed on its part under the Finance Documents; |
(b) | (in the case of a Borrower) to borrow under this Agreement; and |
(c) | (in the case of a Guarantor) to give the guarantee in Clause 15 (Guarantee), |
and has taken all necessary actions to authorise the execution, delivery and performance of the Finance Documents.
16.4 | Non-violation |
The execution, delivery and performance of the Finance Documents will not violate:
(a) | any provisions of any existing law or regulation or statute applicable to it; or |
(b) | to any material extent, any provisions of any mortgage, contract or other undertaking to which it or any of its Controlled Subsidiaries which is a member of the Restricted Group is a party or which is binding upon it or any of its Controlled Subsidiaries which is a member of the Restricted Group, the consequences of which would have a material adverse effect on the ability of the Obligors (taken as a whole) to perform their material obligations under the Finance Documents. |
16.5 | Borrowing limits |
Borrowings under this Agreement up to and including the maximum amount available under this Agreement, together with borrowings under the 2017 Facility up to and including the maximum amount available under the 2017 Facility, will not cause any limit (except to the extent the limit has been waived) on borrowings or, as the case may be, on the giving of guarantees (whether imposed in its Articles of Association or otherwise), or on the powers of its board of directors, applicable to it to be exceeded.
16.6 | Authorisations |
All necessary consents or authorisations of any governmental authority or agency required by it in connection with the execution, validity, performance or enforceability of the Finance Documents have been obtained and are validly existing.
16.7 | No default |
Neither it nor any of its Controlled Subsidiaries which is a member of the Restricted Group is in default under any law or agreement by which it is bound the consequences of which would have a material adverse effect on the ability of the Obligors (taken as a whole) to perform their payment obligations under the Finance Documents.
16.8 | Accounts |
The audited consolidated financial statements of Vodafone (or, following a Hive Up, NewTopco) most recently delivered to the Agent (which, at the date of this Agreement are the audited consolidated accounts of Vodafone for the year ended 31 March 2013):
(a) | give a true and fair view of the consolidated financial position of Vodafone (or, following a Hive Up, NewTopco) as at the date to which they were drawn up; and |
(b) | have been prepared in accordance with generally accepted accounting principles applied by Vodafone (or, following a Hive Up, NewTopco) at such time, consistently applied except for changes disclosed in such financial statements which are necessary to reflect a change in generally accepted accounting principles or the adoption of international finance reporting standards. |
16.9 | No Event of Default |
No Event of Default has occurred and is continuing in respect of it or any of its Subsidiaries which is a member of the Restricted Group.
16.10 | Investment Company |
Each Borrower which is a U.S. Obligor either (i) is not an investment company as defined under United States Investment Company Act of 1940, as amended, or (ii) is exempt from the registration provisions of the Act pursuant to an exemption under that Act.
16.11 | ERISA |
(a) | Each member of the Controlled USA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan maintained by such member or any member of the Controlled USA Group where non-fulfilment of such obligations would have a material adverse effect on the ability of the Obligors (taken as a whole) to perform their payment obligations under the Finance Documents. |
(b) | Each Obligor is in compliance with the applicable provisions of ERISA, the Code and any other applicable United States Federal or State law with respect to each Plan maintained by such Obligor where non-fulfilment of or non-compliance with such provisions would have a material adverse effect on the ability of the Obligors (taken as a whole) to perform their payment obligations under the Finance Documents. |
(c) | No Reportable Event has occurred with respect to any Plan maintained by an Obligor or any member of the Controlled USA Group and no steps have been taken to reorganise or terminate any Single Employer Plan or by that Obligor to effect a complete or partial withdrawal from any Multi-employer Plan where non-compliance or such Reportable Event, reorganisation, termination or withdrawal would have a material adverse effect on the ability of the Obligors (taken as a whole) to perform their payment obligations under the Finance Documents. |
(d) | No member of the Controlled USA Group has: |
(i) | sought a waiver of the minimum funding standard under Section 412 of the Code in respect of any Plan; or |
(ii) | failed to make any contribution or payment to any Single Employer Plan or Multi-employer Plan, or made any amendment to any Plan, and no other event, transaction or condition has occurred which has resulted or would result in the imposition of a lien or the posting of a bond or other security under ERISA or the Code; or |
(iii) | incurred any material, actual liability under Title I or Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA, |
if such seeking, failure or incurrence would have a material adverse effect on the ability of the Obligors (taken as a whole) to perform their payment obligations under the Finance Documents.
16.12 | Anti-Terrorism Laws |
(a) | In this Clause, |
Anti-Terrorism Law means each of:
(i) | Executive Order No. 13224 on Terrorist Financing: Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism issued September 23, 2001, as amended by Order 13268 (as so amended, the Executive Order); |
(ii) | the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (commonly known as the USA Patriot Act) (the USA Patriot Act); |
(iii) | the Money Laundering Control Act of 1986, 18 U.S.C. sect. 1956; and |
(iv) | any similar law enacted in the United States of America subsequent to the date of this Agreement. |
Restricted Party means any person listed:
(i) | in the Annex to the Executive Order; |
(ii) | on the Specially Designated Nationals and Blocked Persons list maintained by the Office of Foreign Assets Control of the United States Department of the Treasury; or |
(iii) | in any successor list to either of the foregoing. |
(b) | No U.S. Obligor or any of its Subsidiaries: |
(i) | is, or is controlled by, a Restricted Party; |
(ii) | to the best of its knowledge, has received funds or other property from a Restricted Party; or |
(iii) | to the best of its knowledge, is in breach of or is the subject of any action or investigation under any Anti-Terrorism Law. |
(c) | Each U.S. Obligor and each of its Subsidiaries have taken reasonable measures to ensure compliance with the Anti-Terrorism Laws. |
16.13 | Sanctions |
To the best of its and its Subsidiaries knowledge, neither it nor any of its Subsidiaries, nor, to the best of its knowledge, any director, officer, agent, employee or affiliate of it or any of its Subsidiaries are currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (OFAC) or any equivalent sanctions administered or enforced by the United Nations Security Council, the European Union, Her Majestys Treasury, the State Secretariat for Economic Affairs or other relevant sanctions authority.
16.14 | Times for making representations and warranties |
(a) | The representations and warranties set out in this Clause 16 (excluding Clause 16.10 (Investment Company) to Clause 16.12 (Anti-Terrorism Laws) (inclusive)): |
(i) | are made by Vodafone on the Signing Date and, in the case of an Obligor which becomes a Party after the Signing Date, will be deemed to be made by that Obligor on the date it executes a Borrower Accession Agreement or Guarantor Accession Agreement; and |
(ii) | are deemed to be made again by each Obligor on the date of each Request and on each Drawdown Date with reference to the facts and circumstances then existing. |
(b) | The representation and warranties set out in Clauses 16.10 (Investment Company), 16.11 (ERISA) and 16.12 (Anti-Terrorism Laws): |
(i) | are made by Vodafone on the date on which the first U.S. Obligor executes a Borrower Accession Agreement or a Guarantor Accession Agreement as the case may be; |
(ii) | are deemed to be made by each Obligor which becomes a party after the Signing Date on the date it executes a Borrower Accession Agreement or Guarantor Accession Agreement, provided that there is a U.S. Obligor; |
(iii) | are deemed to be made again by each Obligor on the date of each Request and on each Drawdown Date with reference to the facts and circumstances then existing, provided that there is a U.S. Obligor. |
17. | UNDERTAKINGS |
17.1 | Duration |
The undertakings in this Clause 17 will remain in force from the Signing Date for so long as any amount is or may be outstanding under this Agreement or any Commitment is in force.
17.2 | Financial information |
(a) | Vodafone shall supply to the Agent: |
(i) | as soon as the same are publicly available (and in any event within 180 days of the end of each of its financial years): |
(A) | the audited consolidated financial statements of the Consolidated Group for that financial year; and |
(B) | (if published) each other Obligors audited statutory accounts for that financial year, consolidated if that Obligor has Subsidiaries and consolidated accounts are prepared and published; |
(ii) | as soon as the same are publicly available (and in any event within 90 days of the end of the first half-year of each of its financial years) the interim unaudited financial statements of the Consolidated Group for that half-year; |
(iii) | within 20 days of the day on which the accounts referred to in paragraph (i) (A) or (ii) above are posted on Vodafones website in accordance with paragraph (b) below (provided that it shall not be a Default under this Clause 17.2 unless Vodafone fails to so supply within 10 days of written request by the Agent (on its own accord or at the request of a Lender) made at any time following the date of such posting) a certificate signed by a Vodafone authorised officer (or following a Hive Up, a NewTopco authorised officer), or in their absence any director of Vodafone or NewTopco, as the case may be, establishing (in reasonable detail) compliance with Clauses 17.8 (Priority borrowing) and 18 (Financial Covenant) as at the date to which those accounts were drawn up and identifying the Principal Subsidiaries and the operating Subsidiaries which are Controlled Subsidiaries; and |
(iv) | if, after the date of the most recent certificate delivered pursuant to paragraph (iii) above and prior to the date that the next certificate is required to be delivered, a Principal Subsidiary ceases to be Principal Subsidiary as a result of (A) a sale or transfer to or a merger into or with an entity which is not a member of the Restricted Group or (B) the acquisition of a new Principal Subsidiary, a certificate signed by a Vodafone authorised officer (or following a Hive Up, a NewTopco authorised officer), or in their absence any director of Vodafone or NewTopco, as the case may be, which identifies the Principal Subsidiary which has ceased to be a Principal Subsidiary and the new Principal Subsidiary. |
(b) | Reports required to be delivered pursuant to clauses (a)(i) and (a)(ii) above for Vodafone shall be deemed to have been delivered on the date on which Vodafone posts such reports to its website on the Internet at the website address listed for Vodafone in Clause 33.2(d) (Addresses for notices) or another relevant website to which the Agent and the Lenders have access and such posting shall be deemed to satisfy the reporting requirements of paragraphs (a)(i) and (a)(ii) above. The Borrower shall provide paper copies of the deliverables required by paragraphs (a)(iii) and (a)(iv) above to the Agent (in sufficient copies for all the Lenders if the Agent so requests). |
17.3 | Informationmiscellaneous |
Vodafone shall supply to the Agent:
(a) | all documents despatched by the ultimate Holding Company of the Controlled Group to its shareholders (or any class of them) or by Vodafone or such ultimate Holding Company to the creditors of the Controlled Group generally (or any class of them) at the same time as they are despatched; and |
(b) | as soon as reasonably practicable, such further publicly available information (including that required to comply with know your customer or similar identification procedures) in the possession or control of any member of the Controlled Group regarding the business, financial or corporate affairs of the Controlled Group, as the Agent may reasonably request. |
17.4 | Notification of Default |
Vodafone shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of it.
17.5 | Authorisations |
Each Obligor shall promptly:
(a) | obtain, maintain and comply in all material respects with the terms of; and |
(b) | if requested, supply certified copies to the Agent of, |
any authorisation required under any law or regulation to enable it to perform its obligations under, or for the validity or enforceability of, any Finance Document.
17.6 | Pari passu ranking |
Each Obligor will procure that its obligations under the Finance Documents do and will rank at least pari passu with all its other present and future unsecured and unsubordinated obligations (save for those obligations mandatorily preferred by applicable law).
17.7 | Negative pledge |
No Obligor will, and each Obligor will procure that none of its Subsidiaries which is a member of the Restricted Group will, create or permit to subsist any Security Interest on or over any of its assets except for any Permitted Security Interest.
17.8 | Priority borrowing |
Each Obligor will procure that none of its Subsidiaries (which is a member of the Restricted Group and which is not a Guarantor) will create, assume, incur, guarantee, permit to subsist or otherwise be
liable in respect of any Financial Indebtedness owed to persons outside the Restricted Group except for:
(a) | Financial Indebtedness of any Subsidiary which became a member of the Restricted Group after 1 February 2014 (unless it became a member of the Restricted Group due to the expansion of the definition of Core Jurisdiction to include members of the European Union after 1 February 2014) provided that: |
(i) | any such Financial Indebtedness is either (A) outstanding before that Subsidiary becomes a member of the Restricted Group and was not created in contemplation of that Subsidiary becoming a member of the Restricted Group and/or (B) drawn at any time under commitments in existence before that Subsidiary becomes a member of the Restricted Group (Existing Commitment) and that commitment was not created in contemplation of that Subsidiary becoming a member of the Restricted Group and/or (C) drawn at any time under commitments (New Commitments) which have refinanced Existing Commitments in whole or in part, to the extent that any such New Commitments do not exceed the Existing Commitments, and provided that to the extent that any New Commitment is to be guaranteed by an Obligor, the obligors under the New Commitments will have validly and legally acceded as Additional Guarantors in accordance with Clauses 27.7(a)(i) and 27.7(b) (Additional Guarantors)) prior to any Obligor providing a guarantee of the New Commitments; and |
(ii) | to the extent that the aggregate principal amount of such Financial Indebtedness exceeds the amounts calculated under paragraph 17.8(a)(i) above upon that Subsidiary becoming a member of the Restricted Group (measured in the same currency), the excess amount of such Financial Indebtedness shall not fall within this paragraph (a); or |
(b) | Financial Indebtedness under finance or structured tax lease arrangements (including, but not limited to qualifying technological equipment leases) to the extent matched as part of those arrangements by deposits of cash or cash equivalent investments (including, but not limited to securities issued by G7 governments) or other securities rated at least A by S&P or A2 by Moodys or A by Fitch which are treated by the creditor concerned as available to reduce its net exposure; or |
(c) | Financial Indebtedness which is created with the prior written consent of the Majority Lenders; or |
(d) | Financial Indebtedness to the extent matched by cash balances or cash equivalent investments (including, but not limited to securities issued by G7 governments) or other securities rated at least A by S&P or A2 by Moodys or A by Fitch, held by members of the Restricted Group which are treated as available for netting by the creditors to whom that Financial Indebtedness is owed under cash management or netting arrangements in the ordinary course of business; or |
(e) | Financial Indebtedness under any finance lease or structured tax lease arrangements (including, but not limited to qualifying technological equipment leases) entered into in respect of assets which were or are acquired or become part of the Restricted Group after 1 March 2014; or |
(f) | Financial Indebtedness under or in connection with any other finance lease entered into in respect of existing assets or future assets (to the extent they are subject to Security Interests contemplated under paragraph (j) of the definition of Permitted Security Interests); or |
(g) | Financial Indebtedness under Back to Back Loans; or |
(h) | Financial Indebtedness of any member of the Controlled Group which operates as a finance company to the extent that any such Financial Indebtedness is on-lent to an Obligor or to a member of the Controlled Group outside the Restricted Group; or |
(i) | Financial Indebtedness that has been defeased to the extent that it is subject to Security Interests contemplated under paragraph (u) of the definition of Permitted Security Interests; or |
(j) | Financial Indebtedness incurred solely in contemplation of an initial public offering or other disposal of the companies or partnerships incurring such Financial Indebtedness, to the extent that (i) the aggregate principal amount of such Financial Indebtedness does not exceed U.S.$5,000,000,000 (or its equivalent in other currencies) whilst such Financial Indebtedness is owed by a member of the Restricted Group; and (ii) the creditors in respect of such Financial Indebtedness have recourse for no more than ninety days to any member of the Controlled Group which is or whose assets are not intended to be subject to the initial public offering or disposal; or |
(k) | Project Finance Indebtedness; or |
(l) | Financial Indebtedness owed to persons outside the Restricted Group under guarantees or other legally binding assurances against financial loss granted by Vodafone Deutschland GmbH or any of its Subsidiaries in respect of any asset, undertaking or business not forming part of the mobile or wireless telecommunications business of the Restricted Group; or |
(m) | Financial Indebtedness under this Agreement; or |
(n) | other Financial Indebtedness to the extent that the sum of: |
(i) | the aggregate unpaid principal amount of the Financial Indebtedness of all the members of the Restricted Group which are not Guarantors and owed to persons outside the Restricted Group (other than Financial Indebtedness under paragraphs (a) to (m) above inclusive); plus |
(ii) | the aggregate unpaid principal amount of Financial Indebtedness secured by Security Interests referred to in paragraph (w) of the definition of Permitted Security Interest (to the extent not falling within paragraph (i) above), |
does not exceed 3,500,000,000 or its equivalent in other currencies.
Compliance with this Clause 17.8 will be tested on the last day of each financial half year. For the purposes of paragraph (n) above, Financial Indebtedness of the Restricted Group not denominated in (or which has not been swapped into) Sterling shall be notionally converted (from the currency in which it is denominated or, as the case may be, into which it has been swapped) to Sterling at the rate of exchange used in the management accounts of the relevant Obligor for that relevant financial quarter.
17.9 | Disposals |
No Obligor will, and each Obligor will procure that none of its Subsidiaries which is a member of the Restricted Group will, either in a single transaction or in a series of transactions, whether related or not and whether voluntarily or involuntarily, make any Asset Disposals other than:
(a) | Asset Disposals: |
(i) | on arms length terms which are, in the opinion of an Obligor, at fair market value; or |
(ii) | required by law or any governmental authority or agency (including without limitation any authority or agency of the European Union); or |
(iii) | made in good faith for the purpose of carrying on the business of the Controlled Group which it is reasonable to believe will benefit the Controlled Group; and |
(b) | a transfer of all or any part of the assets of the Controlled Group to NewTopco and/or any Intermediate Holding Company of Vodafone. |
17.10 | Restriction on Acquisitions |
Vodafone will not, and will procure that no member of the Controlled Group will, make any Acquisition unless the major part of the Controlled Groups business remains telecommunications, data communications and associated businesses.
17.11 | Margin Stock |
(a) | In this Clause, |
Margin Regulations means Regulations T, U and X issued by the Board of Governors of the United States Federal Reserve System.
Margin Stock means margin stock or margin securities as defined in the Margin Regulations.
(b) | No Obligor may: |
(i) | extend credit for the purpose, directly or indirectly, of buying or carrying Margin Stock; or |
(ii) | use any Advance, directly or indirectly, to buy or carry Margin Stock or for any other purpose in violation of the Margin Regulations. |
17.12 | Sanctions |
Each Obligor shall ensure, to the best of its ability, that the proceeds of Advances will not, directly or indirectly, be lent to any person or entity (whether or not related to Vodafone) for the purpose of financing the activities of any person or for the benefit of any country currently subject to any U.S. sanctions administered by OFAC or any equivalent sanctions administered or enforced by the United Nations Security Council, the European Union, Her Majestys Treasury, the State Secretariat for Economic Affairs or other relevant sanctions authority.
18. | FINANCIAL COVENANT |
18.1 | Financial ratio |
Vodafone will procure that for each Ratio Period the ratio of Net Debt of the Consolidated Group to two times Adjusted Group Operating Cash Flow for such Ratio Period will not exceed 3.75:1.
18.2 | Calculation times and periods |
(a) | The first test date for the financial ratio specified in Clause 18.1 (Financial ratio) will occur on 31 March 2014. |
(b) | Each subsequent test date will be on the last day of each financial half year and year of Vodafone or, following a Hive Up, NewTopco. The financial ratio will be calculated using data for the period (each a Ratio Period) ending on each test date and beginning 6 months before the relevant test date. |
18.3 | Information sources |
(a) | Subject to adjustments that may be required by the operation of definitions in Clause 18.1 (Financial ratio) all information for calculation of the financial ratios set out in Clause 18.1 (Financial ratio) and Clause 19.5 (Cross default) will be extracted from figures denominated in the base currency (as defined in paragraph (c) below) used in the preparation of and extracted from: |
(i) | the unaudited consolidated interim financial statements of Vodafone, or following a Hive Up, NewTopco; |
(ii) | the consolidated annual financial statements of Vodafone, or following a Hive Up, NewTopco; or |
(iii) | Vodafones, or following a Hive Up, NewTopcos consolidated management accounts, |
as the case may be, which in respect of paragraphs (i) and (ii) above were delivered to the Agent under paragraphs 17.2(a)(i)(A) and (ii) of Clause 17.2 (Financial information).
(b) | Information from Vodafones, or following a Hive Up, NewTopcos consolidated management accounts will be disclosed only when the relevant interim or annual financial statements and compliance certificates are delivered to the Agent or as required in connection with Clause 19.5(a)(ii) (Cross default). |
(c) | Any amount outstanding in a currency other than the currency used in the latest consolidated published financial statements (the base currency) is to be taken into account at the base currency equivalent of that amount calculated at the rate used in the latest consolidated financial statements delivered to the Agent under Clause 17.2 (Financial information) or the latest consolidated management accounts, as appropriate. |
18.4 | Know Your Customer |
Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
19. | DEFAULT |
19.1 | Events of Default |
Each of the events set out in Clauses 19.2 (Non-payment) to 19.15 (United States Bankruptcy Laws) (inclusive) is an Event of Default (whether or not caused by any reason whatsoever outside the control of any Obligor or any other person).
19.2 | Non-payment |
An Obligor does not pay within four Business Days (the Initial Grace Period) of the due date any amount payable by it under the Finance Documents at the place at, and in the currency in, which it is expressed to be payable unless its failure to pay is caused by:
(a) | administrative or technical error and payment is made within a further two Business Days after the expiry of the Initial Grace Period; or |
(b) | a Disruption Event and payment is made within a further four Business Days after the expiry of the Initial Grace Period. |
19.3 | Breach of other obligations |
(a) | Vodafone does not comply with Clause 18 (Financial Covenant). |
(b) | An Obligor does not comply with any provision of the Finance Documents (other than those referred to in paragraph (a) above or in Clause 19.2 (Non-payment)) and such failure (if capable of remedy before the expiry of such period) continues unremedied for a period of 21 days from the earlier of the date on which (i) such Obligor has become aware of the failure to comply or (ii) the Agent gives notice to Vodafone requiring the same to be remedied. |
19.4 | Misrepresentation |
A representation or warranty made or repeated by any Obligor in any Finance Document is found to be untrue in any respect material in the context of performance of the Finance Documents when made or deemed to have been made.
19.5 | Cross default |
(a) | (i) Any Financial Indebtedness of any Obligor is: |
(A) | not paid when due or within any originally applicable grace period; or |
(B) | declared due, or is capable of being declared due, prior to its specified maturity as a result of an event of default (howsoever described) except this paragraph (B) does not apply to: |
(1) | Financial Indebtedness quoted or listed on a stock exchange; or |
(2) | Financial Indebtedness of an Obligor arising solely under paragraph (f) of the definition of Financial Indebtedness in Clause 1.1 (Definitions); or |
(ii) | any Financial Indebtedness of any Principal Subsidiary is: |
(A) | not paid when due or within any originally applicable grace period; or |
(B) | declared due prior to its specified maturity as a result of an event of default (howsoever described) and is not paid within three Business Days of being declared due, |
except this paragraph (ii) only applies if the ratio calculated in accordance with Clause 18.1 (Financial ratio) for the most recent Ratio Period is greater than 3.25:1; or
(iii) | an Event of Default has occurred under the 2017 Facility and is continuing. |
(b) | Paragraph (a) above does not apply: |
(i) | to Project Finance Indebtedness; or |
(ii) | to Financial Indebtedness which in aggregate is less than £100,000,000 (or equivalent currency); or |
(iii) | where the payment or occurrence of the event concerned is being contested in good faith; or |
(iv) | where the default is under a bond and is capable of waiver without bondholder consent; or |
(v) | to Financial Indebtedness owed to a member of the Restricted Group. |
19.6 | Winding up |
An order is made or an effective resolution is passed for winding up any Obligor or any Principal Subsidiary (except for the purposes of a reconstruction or amalgamation on terms previously approved in writing by the Majority Lenders) or a petition is presented (which is not set aside or withdrawn within the earlier of 30 days of its presentation or by not later than the date for the hearing of such petition) for an administration order or for the winding up of any Obligor or any Principal Subsidiary except where demonstrated to the reasonable satisfaction of the Majority Lenders that any such petition is being contested in good faith.
19.7 | Insolvency process |
(a) | A liquidator, administrator, receiver, trustee, sequestrator or similar officer is appointed in respect of all or any part of the assets of any Obligor or any Principal Subsidiary which generates a material part of the revenues of that Obligor or that Principal Subsidiary; or |
(b) | any Obligor or any Principal Subsidiary, by reason of financial difficulties, enters into a composition, assignment or a moratorium in respect of any indebtedness or arrangement with any class of its creditors. |
19.8 | Enforcement proceedings |
A distress, execution, attachment or other legal process is levied, enforced or sued out upon or against all or any part of the assets of any Obligor or any Principal Subsidiary which generates a material part of the revenues of that Obligor or that Principal Subsidiary except where the same is being contested in good faith or is removed, discharged or paid within 30 days.
19.9 | Insolvency |
Any Obligor or any Principal Subsidiary is deemed under Section 123(1)(e) or 123(2) of the Insolvency Act 1986 to be unable to pay its debts.
19.10 | Similar proceedings |
Anything having a substantially similar effect to any of the events specified in Clauses 19.6 (Winding up) to 19.9 (Insolvency) inclusive shall occur under the laws of any applicable jurisdiction in relation to any Obligor or any Principal Subsidiary.
19.11 | Unlawfulness |
It is or becomes unlawful for any Obligor to perform any of its payment or other material obligations under the Finance Documents.
19.12 | Guarantee |
The guarantee of any Guarantor under Clause 15 (Guarantee) is not effective or is alleged by an Obligor to be ineffective for any reason (other than by reason of written release or waiver by the Finance Parties or in accordance with Clause 15.9 (Removal of Guarantors)).
19.13 | Cessation of business |
Any Obligor or any Principal Subsidiary ceases to carry on all or substantially all of its business otherwise than:
(a) | as a result of a transfer of all or any part of its business to a member of the Restricted Group; or |
(b) | as a result of a disposal permitted under Clause 17.9 (Disposals); or |
(c) | with the prior written consent of the Majority Lenders. |
19.14 | Litigation |
Any litigation proceedings are current which are reasonably likely to be adversely determined and which would have a material adverse effect on the ability of the Obligors (taken as a whole) to perform their payment obligations under the Finance Documents.
19.15 | United States Bankruptcy Laws |
(a) | In this Clause 19.15 and Clause 19.16 (Acceleration): |
U.S. Bankruptcy Law means the United States Bankruptcy Code or any other United States Federal or State bankruptcy, insolvency or similar law.
U.S. Debtor means an Obligor that is incorporated or organized under the laws of the United States of America or any State of the United States of America (including the District of Columbia) or that has a place of business or property in the United States of America.
(b) | Any of the following occurs in respect of a U.S. Debtor: |
(i) | it makes a general assignment for the benefit of creditors; |
(ii) | it commences a voluntary case or proceeding under any U.S. Bankruptcy Law; or |
(iii) | an involuntary case under any U.S. Bankruptcy Law is commenced against it and is not controverted within 20 days or is not dismissed or stayed within 60 days after commencement of the case; or |
(iv) | an order for relief or other order approving any case or proceeding is entered under any U.S. Bankruptcy Law. |
19.16 | Acceleration |
(a) | On and at any time after the occurrence of an Event of Default while such event is continuing the Agent may, and if so directed by the Majority Lenders, will by notice to Vodafone, declare that an Event of Default has occurred and: |
(i) | if not already cancelled under paragraph (b) below, cancel the Total Commitments; and/or |
(ii) | demand that all the Advances, together with accrued interest, and all other amounts accrued under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or |
(iii) | demand that all the Advances be payable on demand, whereupon they shall immediately become payable on demand. |
(b) | If an Event of Default described in Clause 19.15 (United States Bankruptcy Laws) occurs, the Commitments which are available to any U.S. Debtor will, if not already cancelled under this Agreement, be immediately and automatically cancelled and all amounts owed by any U.S. Debtor outstanding under the Finance Documents will be immediately and automatically due and payable, without the requirement of notice or any other formality. |
20. | THE AGENTS AND THE ARRANGERS |
20.1 | Appointment and duties of the Agents |
Each Finance Party (other than the Agent) irrevocably appoints the Agent to act as its agent under and in connection with the Finance Documents and each Swingline Lender appoints the Euro Swingline Agent to act as its agent in relation to the Swingline Facility, and each Finance Party irrevocably authorises the Agent or, as the case may be, the Euro Swingline Agent on its behalf to perform the duties and to exercise the rights, powers and discretions that are specifically delegated to it under or in connection with the Finance Documents, together with any other incidental rights, powers and discretions. The Agent or, as the case may be, the Euro Swingline Agent shall have only those duties which are expressly specified in this Agreement. Those duties are solely of a mechanical and administrative nature.
20.2 | Role of the Arrangers |
Except as otherwise provided in this Agreement, no Arranger has any obligations of any kind to any other Party under or in connection with any Finance Document.
20.3 | Relationship |
The relationship between the Agent or, as the case may be, the Euro Swingline Agent and the other Finance Parties is that of agent and principal only. Nothing in this Agreement constitutes the Agent or, as the case may be, the Euro Swingline Agent as trustee or fiduciary for any other Party or any other person and the Agent or, as the case may be, the Euro Swingline Agent need not hold in trust any moneys paid to it for a Party or be liable to account for interest on those moneys.
20.4 | Majority Lenders directions |
(a) | The Agent or, as the case may be, the Euro Swingline Agent will be fully protected if it acts in accordance with the instructions of the Majority Lenders in connection with the exercise of any right, power or discretion or any matter not expressly provided for in the Finance Documents. Any such instructions given by the Majority Lenders will be binding on all the |
Lenders. In the absence of such instructions the Agent or, as the case may be, the Euro Swingline Agent may act as it considers to be in the best interests of all the Lenders. |
(b) | Neither the Agent nor the Euro Swingline Agent is authorised to act on behalf of a Lender (without first obtaining that Lenders consent) in any legal or arbitration proceedings relating to any Finance Document. |
20.5 | Delegation |
The Agent or, as the case may be, the Euro Swingline Agent may act under the Finance Documents through its personnel and agents.
20.6 | Responsibility for documentation |
Neither the Agent, the Euro Swingline Agent nor any Arranger is responsible to any other Party for:
(a) | the execution, genuineness, validity, enforceability or sufficiency of any Finance Document or any other document by any other Party; or |
(b) | the collectability of amounts payable under any Finance Document; or |
(c) | the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document by any other Party. |
20.7 | Default |
(a) | The Agent or, as the case may be, the Euro Swingline Agent is not obliged to monitor or enquire as to whether or not a Default has occurred. Neither the Agent nor the Euro Swingline Agent will be deemed to have knowledge of the occurrence of a Default. However, if the Agent or, as the case may be, the Euro Swingline Agent receives notice from a Party referring to this Agreement, describing the Default and stating that the event is a Default, it shall promptly notify the Lenders of such notice. |
(b) | The Agent or, as the case may be, the Euro Swingline Agent may require the receipt of security satisfactory to it whether by way of payment in advance or otherwise, against any liability or loss which it will or may incur in taking any proceedings or action arising out of or in connection with any Finance Document before it commences these proceedings or takes that action. |
20.8 | Exoneration |
(a) | Without limiting paragraph (b) below, the Agent or, as the case may be, the Euro Swingline Agent will not be liable to any other Party for any action taken or not taken by it under or in connection with any Finance Document, unless directly caused by its negligence or wilful misconduct or breach of any of its obligations under or in connection with the Finance Documents. |
(b) | No Party may take any proceedings against any officer, employee or agent being an individual of the Agent or, as the case may be, the Euro Swingline Agent in respect of any claim it might have against the Agent or, as the case may be, the Euro Swingline Agent or in respect of any act or omission of any kind (including negligence or wilful misconduct) by that officer, employee or agent in relation to any Finance Document. |
(c) | Any officer, employee or agent being an individual of the Agent, or as the case may be, the Euro Swingline Agent may rely on paragraph (b) above and enforce its terms under the Contract (Rights of Third Parties) Act 1999. |
(d) | Nothing in this Agreement shall oblige the Agent or an Arranger to carry out any know your customer or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Agent and an Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or an Arranger. |
20.9 | Reliance |
The Agent or, as the case may be, the Euro Swingline Agent may:
(a) | rely on any notice or document reasonably believed by it to be genuine and correct and to have been signed by, or with the authority of, the proper person; |
(b) | rely on any statement made by a director or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify; and |
(c) | engage, pay for and rely on legal or other professional advisers selected by it (including those in the Agents or, as the case may be, the Euro Swingline Agents employment and those representing a Party other than the Agent or, as the case may be, the Euro Swingline Agent). |
20.10 | Credit approval and appraisal |
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms that it:
(a) | has made its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Agent, the Euro Swingline Agent or the Arrangers in connection with any Finance Document; and |
(b) | will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities while any amount is or may be outstanding under the Finance Documents or any Commitment is in force. |
20.11 | Information |
(a) | The Agent or, as the case may be, the Euro Swingline Agent shall promptly forward to the person concerned the original or a copy of any document which is delivered to the Agent or, as the case may be, the Euro Swingline Agent by a Party for that person. |
(b) | The Agent shall promptly supply a Lender with a copy of each document received by the Agent under Clauses 4 (Conditions Precedent), 27.7 (Additional Guarantors) or 27.8 (Additional Borrowers) upon the request and at the expense of that Lender. |
(c) | Except where this Agreement specifically provides otherwise, the Agent or, as the case may be, the Euro Swingline Agent is not obliged to review or check the accuracy or completeness of any document it forwards to another Party. |
(d) | The Agent shall provide to Vodafone within 5 Business Days of a request by Vodafone (but no more than once per calendar month), a list (which may be in electronic form) setting out the names of the Lenders as at the date of that request, their respective Commitments, the address and fax number (and the department or officer, if any, for whose attention any communication is to be made or document to be delivered under or in connection with the Finance Documents), the electronic mail address and/or any other information required to |
enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Agent to that Lender under the Finance Documents. |
(e) | Except as provided above, the Agent or, as the case may be, the Euro Swingline Agent has no duty: |
(i) | either initially or on a continuing basis to provide any Lender with any credit or other information concerning the financial condition or affairs of any Obligor or any related entity of any Obligor whether coming into its possession or that of any of its related entities before, on or after the Signing Date; or |
(ii) | unless specifically requested to do so by a Lender in accordance with this Agreement, to request any certificates or other documents from any Obligor. |
20.12 | The Agent, the Euro Swingline Agent and the Arrangers individually |
(a) | If it is also a Lender, each of the Agent, the Euro Swingline Agent and the Arrangers has the same rights and powers under this Agreement as any other Lender and may exercise those rights and powers as though it were not the Agent, the Euro Swingline Agent or an Arranger. |
(b) | Each of the Agent, the Euro Swingline Agent and the Arrangers may: |
(i) | carry on any business with an Obligor or its related entities; |
(ii) | act as agent or trustee for, or in relation to any financing involving, an Obligor or its related entities; and |
(iii) | retain any profits or remuneration in connection with its activities under the Finance Documents, or in relation to any of the foregoing. |
20.13 | Indemnities |
(a) | Without limiting the liability of any Obligor under the Finance Documents, each Lender shall forthwith on demand indemnify the Agent or, as the case may be, the Euro Swingline Agent for its proportion of any liability or loss incurred by the Agent or, as the case may be, the Euro Swingline Agent in any way relating to or arising out of its acting as the Agent or, as the case may be, the Euro Swingline Agent, except to the extent that the liability or loss arises directly from the Agents or, as the case may be, the Euro Swingline Agents negligence or wilful misconduct. |
(b) | A Lenders proportion of the liability or loss set out in paragraph (a) above is the proportion which its Commitment bears to the Total Commitments at the date of demand or, if the Total Commitments have been cancelled, bore to the Total Commitments immediately before being cancelled. |
20.14 | Compliance |
(a) | The Agent or, as the case may be, the Euro Swingline Agent, may refrain from doing anything which might, in its reasonable opinion, constitute a breach of any law or regulation or be otherwise actionable at the suit of any person, and may do anything which, in its reasonable opinion, is necessary or desirable to comply with any law or regulation of any jurisdiction. |
(b) | Without limiting paragraph (a) above, the Agent or, as the case may be, the Euro Swingline Agent, need not disclose any information relating to any Obligor or any of its related entities if the disclosure might, in the opinion of the Agent or, as the case may be, the Euro Swingline Agent, constitute a breach of any law or regulation or any duty of secrecy or confidentiality or be otherwise actionable at the suit of any person. |
20.15 | Resignation of the Agent or the Euro Swingline Agent |
(a) | Notwithstanding its irrevocable appointment, the Agent or, as the case may be, the Euro Swingline Agent, may resign by giving notice to the Lenders and Vodafone, in which case the Agent or, as the case may be, the Euro Swingline Agent, may forthwith appoint one of its Affiliates as successor Agent or, failing that, the Majority Lenders may after consultation with Vodafone appoint a reputable and experienced bank as successor Agent or, as the case may be, successor Euro Swingline Agent. |
(b) | If the appointment of a successor Agent or, as the case may be, successor Euro Swingline Agent is to be made by the Majority Lenders but they have not, within 30 days after notice of resignation, appointed a successor Agent or, as the case may be, successor Euro Swingline Agent which accepts the appointment, the retiring Agent or, as the case may be, the retiring Euro Swingline Agent may, following consultation with Vodafone, appoint a successor Agent or, as the case may be, successor Euro Swingline Agent. |
(c) | The resignation of the retiring Agent or, as the case may be, retiring Euro Swingline Agent and the appointment of any successor Agent or, as the case may be, successor Euro Swingline Agent will both become effective only upon the successor Agent or, as the case may be, successor Euro Swingline Agent notifying all the Parties that it accepts the appointment. On giving the notification and receiving such approval, the successor Agent or, as the case may be, successor Euro Swingline Agent will succeed to the position of the retiring Agent or, as the case may be, retiring Euro Swingline Agent and the term Agent or, as the case may be, Euro Swingline Agent will mean the successor Agent or, as the case may be, successor Euro Swingline Agent. |
(d) | The retiring Agent or, as the case may be, retiring Euro Swingline Agent shall, at its own cost, make available to the successor Agent or, as the case may be, successor Euro Swingline Agent such documents and records and provide such assistance as the successor Agent or, as the case may be, successor Euro Swingline Agent may reasonably request for the purposes of performing its functions as the Agent or, as the case may be, the Euro Swingline Agent under this Agreement. |
(e) | Upon its resignation becoming effective, this Clause 20 shall continue to benefit the retiring Agent or, as the case may be, retiring Euro Swingline Agent in respect of any action taken or not taken by it under or in connection with the Finance Documents while it was the Agent or, as the case may be, the Euro Swingline Agent, and, subject to paragraph (d) above, it shall have no further obligation under any Finance Document. |
(f) | The Majority Lenders may by notice to the Agent or, as the case may be, the Euro Swingline Agent, require it to resign in accordance with paragraph (a) above. In this event, the Agent or, as the case may be, the Euro Swingline Agent shall resign in accordance with paragraph (a) above but it shall not be entitled to appoint one of its Affiliates as successor Agent or successor Euro Swingline Agent. |
(g) | Any successor Agent or, as the case may be, successor Euro Swingline Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original party to this Agreement. |
(h) | The Agent or, as the case may be, the Euro Swingline Agent shall resign in accordance with paragraph (a) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent or, as the case may be, the Euro Swingline Agent, pursuant to paragraph (c) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent or, as the case may be, the Euro Swingline Agent, under the Finance Documents, either: |
(i) | the Agent or, as the case may be, the Euro Swingline Agent, fails to respond to a request under Clause 11.7 (FATCA Information) and Vodafone or a Lender reasonably believes that the Agent or, as the case may be, the Euro Swingline Agent, will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
(ii) | the information supplied by the Agent or, as the case may be, the Euro Swingline Agent, pursuant to Clause 11.7 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or |
(iii) | the Agent or, as the case may be, the Euro Swingline Agent, notifies Vodafone and the Lenders that the Agent or, as the case may be, the Euro Swingline Agent, will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
and (in each case) Vodafone or a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and Vodafone or that Lender, by notice to the Agent, or, as the case may be, the Euro Swingline Agent, requires it to resign.
20.16 | Lenders |
The Agent or, as the case may be, the Euro Swingline Agent may treat each Lender as a Lender, entitled to payments under this Agreement and as acting through its Facility Office(s) until it has received notice from the Lender to the contrary by not less than five Business Days prior to the relevant payment.
20.17 | Chinese wall |
In acting as Agent, Euro Swingline Agent or Arranger, the agency and syndications division of each of the Agent, the Euro Swingline Agent and each Arranger shall be treated as a separate entity from its other divisions and departments. Any information acquired at any time by the Agent, the Euro Swingline Agent or any Arranger otherwise than in the capacity of Agent, Euro Swingline Agent or Arranger through its agency and syndications division (whether as financial advisor to any member of the Consolidated Group or otherwise) may be treated as confidential by the Agent, Euro Swingline Agent or Arranger and shall not be deemed to be information possessed by the Agent, Euro Swingline Agent or Arranger in their capacity as such. Each Finance Party acknowledges that the Agent, the Euro Swingline Agent and the Arrangers may, now or in the future, be in possession of, or provided with, information relating to the Obligors which has not or will not be provided to the other Finance Parties. Each Finance Party agrees that, except as expressly provided in this Agreement, none of the Agent, Euro Swingline Agent or any Arranger will be under any obligation to provide, or under any liability for failure to provide, any such information to the other Finance Parties.
21. | FEES |
21.1 | Commitment fee |
(a) | Vodafone shall pay to the Agent for distribution to each Lender pro rata to the proportion its Revolving Credit Commitment bears to the Total Commitments from time to time a commitment fee at the rate of 35 per cent. of the applicable Margin on any undrawn, uncancelled amount of the Total Commitments on each day. |
(b) | Commitment fee is calculated and accrues on a daily basis on and from the Signing Date and is payable quarterly in arrear. Accrued and unpaid commitment fee is also payable to the Agent for the relevant Lender(s) on any amount of its Revolving Credit Commitment, which is cancelled voluntarily by the Borrower at the time the cancellation takes effect (but only in respect of the period up to the date of cancellation). |
(c) | No commitment fee is payable to the Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender. |
21.2 | Utilisation Fee |
(a) | Vodafone shall pay to the Agent for distribution to each Lender pro rata to the proportion its Revolving Credit Commitment bears to the Total Commitments from time to time a utilisation fee in accordance with paragraphs (b) and (c) below and at the rate per annum specified in paragraph (b) below on any outstanding drawn amount of any Advance on each day. |
(b) | The utilisation fee will be paid on the aggregate outstanding amount of all Advances for each day upon which the outstanding Advances exceed one half of the Total Commitments, at the rate of 0.275 per cent. per annum. |
(c) | The utilisation fee is calculated and accrues on a daily basis and is payable at the end of each Term. |
21.3 | Agents fee |
Vodafone shall pay to the Agent for its own account an agency fee in the amounts and on the dates agreed in the relevant Fee Letter.
21.4 | Front-end fees |
(a) | Vodafone shall pay to the Agent for the Original Lenders as at the Signing Date a front-end fee and MLA fee in the amount and on the date specified in the relevant Fee Letter. |
(b) | If so agreed between Vodafone and an Additional Lender, Vodafone shall pay to such Additional Lender a front-end fee in the amounts and on the dates specified in the relevant Fee Letter. |
21.5 | VAT |
Any fee referred to in this Clause 21 is exclusive of any United Kingdom value added tax. If any value added tax is so chargeable, it shall be paid by Vodafone at the same time as it pays the relevant fee.
22. | EXPENSES |
22.1 | Initial and special costs |
Vodafone shall forthwith on demand pay the Agent, the Euro Swingline Agent and the Arrangers the amount of all out-of-pocket costs and expenses (including but not limited to legal fees up to an amount agreed, in the case of (a)(i) below, with the Arrangers) reasonably incurred by any of them in connection with:
(a) | the negotiation, preparation, printing and execution of: |
(i) | this Agreement and any other documents referred to in this Agreement; and |
(ii) | any other Finance Document (other than a Novation Certificate) executed after the Signing Date; |
(b) | any amendment, waiver, consent or suspension of rights (or any proposal for any of the foregoing) requested by or on behalf of an Obligor and relating to a Finance Document or a document referred to in any Finance Document or any amendment to this Agreement to reflect a change in currency of a country pursuant to Clause 10.4(b)(iii) (Currency); and |
(c) | any other agency matter not of an ordinary administrative nature, arising out of or in connection with a Finance Document in the amount agreed between the Agent and Vodafone at the relevant time. |
22.2 | Enforcement costs |
Vodafone shall within five Business Days of receiving written demand pay to each Finance Party the amount of all costs and expenses (including but not limited to legal fees) incurred (or in the case of (b) below reasonably incurred) by it:
(a) | in connection with the enforcement of any Finance Document; or |
(b) | in connection with the preservation of any rights under any Finance Document. |
23. | STAMP DUTIES |
Vodafone shall pay and within five Business Days of receiving written demand indemnify each Finance Party against any liability it incurs in respect of any stamp, registration or similar tax which is or becomes payable in any jurisdiction in or through which any payment under the Finance Documents is made or any Obligor is incorporated or has any assets in connection with the entry into, performance or enforcement of any Finance Document.
24. | INDEMNITIES |
24.1 | Currency indemnity |
(a) | If a Finance Party receives an amount in respect of an Obligors liability under the Finance Documents or if that liability is converted into a claim, proof, judgment or order in a currency other than the currency (the Contractual Currency) in which the amount is expressed to be payable under the relevant Finance Document: |
(i) | that Obligor shall indemnify that Finance Party as an independent obligation against any loss or liability arising out of or as a result of the conversion; |
(ii) | if the amount received by that Finance Party, when converted into the Contractual Currency at a market rate in the usual course of its business, is less than the amount owed in the Contractual Currency, the Obligor concerned shall forthwith on demand pay to that Finance Party an amount in the Contractual Currency equal to the deficit (provided that if the amount received by the Finance Party following such conversion is greater than the amount owed, the Finance Party shall pay to such Obligor an amount equal to the excess); and |
(iii) | the Obligor shall pay to the Finance Party concerned on demand any exchange costs and taxes payable in connection with any such conversion. |
(b) | Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable. |
24.2 | Other indemnities |
Vodafone shall forthwith on demand indemnify each Finance Party against any loss or liability which that Finance Party incurs as a consequence of:
(a) | the occurrence of any Default; or |
(b) | the operation of Clause 19.16 (Acceleration); or |
(c) | any payment of principal or an Overdue Amount being received from any source otherwise than in the case of Revolving Credit Advances or Swingline Advances on its Maturity Date (and, for the purposes of this paragraph (c), the Maturity Date of an Overdue Amount is the last day of each Designated Term); or |
(d) | a Default or an action or omission by an Obligor resulting in an Advance not being disbursed after a Borrower has delivered a Request for that Advance. |
Vodafones liability in each case includes any loss or expense, (excluding loss of Margin) in respect or on account of funds borrowed, contracted for or utilised to fund any amount payable under any Finance Document, any amount repaid or prepaid or any Advance.
24.3 | Breakage costs |
If a Finance Party receives or recovers any payment of principal of an Advance or of an Overdue Amount other than on its Maturity Date or, as the case may be, the last day of the Designated Term for the purposes of calculation of the amount payable by Vodafone under sub-clause (c) of Clause 24.2 (Other indemnities) in respect of the amount so received or recovered, that Finance Party shall calculate:
(a) | the additional interest (excluding the Margin) which would have been payable on the principal so received or recovered had it been received or recovered on the relevant Maturity Date or, as the case may be, the last day of the Designated Term; and |
(b) | the amount of interest which would have been payable to that Finance Party on the relevant Maturity Date or, as the case may be, the last day of the Designated Term concerned in respect of a deposit by that Finance Party in the currency of the amount received or recovered placed with a prime bank in London earning interest from (and including) the earliest Business Day for placing deposits in such currency following receipt of that amount up to (but excluding) the relevant Maturity Date or, as the case may be, the last day of the applicable Designated Term, |
and if the amount payable under paragraph (a) above is greater than the amount payable under paragraph (b), Vodafone will, forthwith on receipt of a demand from the relevant Finance Party pursuant to sub-clause (c) of Clause 24.2 (Other indemnities), pay to that Finance Party an amount equal to the difference between the amount payable under paragraphs (a) and (b) above.
25. | EVIDENCE AND CALCULATIONS |
25.1 | Accounts |
Accounts maintained by a Finance Party in connection with this Agreement are prima facie evidence of the matters to which they relate (except in a case of manifest error).
25.2 | Certificates and determinations |
Any certification or determination by a Finance Party of a rate or amount under this Agreement is, in the absence of manifest error, prima facie evidence of the matters to which it relates.
25.3 | Calculations |
Interest and the fees payable under Clause 21.1 (Commitment fee) accrue from day to day and are calculated on the basis of the actual number of days elapsed and a year of 360 days, or, in the case of interest at the Swingline Rate or any interest payable in an amount denominated in Sterling, 365 days.
26. | AMENDMENTS AND WAIVERS |
26.1 | Procedure |
(a) | Subject to Clause 26.2 (Exceptions) and Clause 26.3 (NewTopco), any term of the Finance Documents may be amended or waived with the agreement of Vodafone and the Majority Lenders. The Agent may effect, on behalf of the Lenders, an amendment to which the Majority Lenders have agreed. |
(b) | The Agent shall promptly notify the other Parties of any amendment or waiver effected under paragraph (a) above, and any such amendment or waiver shall be binding on all the Parties. |
26.2 | Exceptions |
An amendment or waiver which relates to:
(a) | the definition of Majority Lenders in Clause 1.1 (Definitions); or |
(b) | an extension of the date for, or a decrease in an amount or a change in the currency of, any payment under the Finance Documents; or |
(c) | an increase in or extension of a Lenders Commitment or a change to the Margin; or |
(d) | a change in the guarantee under Clause 15 (Guarantee) otherwise than in accordance with Clause 27.7 (Additional Guarantors) or Clause 15.9 (Removal of Guarantors); or |
(e) | a term of a Finance Document which expressly requires the consent of each Lender; or |
(f) | Clause 27.5 (Replacement of Lenders); or |
(g) | Clause 30 (Pro Rata Sharing) or this Clause 26; or |
(h) | any Term exceeding six months, |
may not be effected without the consent of each Lender. Any amendment or waiver which changes, or relates to the rights and/or obligations of the Agent or Euro Swingline Agent shall also require the Agents or the Euro Swingline Agents (as applicable) agreement.
26.3 | NewTopco |
Any amendment substituting a reference to Vodafone with a reference to NewTopco:
(a) | to any procedural or administrative provision of this Agreement; or |
(b) | which puts the Parties in substantially the same position as applied prior to the Hive Up, |
may be effected by agreement between NewTopco and the Agent.
26.4 | Waivers and remedies cumulative |
The rights of each Party under the Finance Documents:
(a) | may be exercised as often as necessary; |
(b) | are cumulative and not exclusive of its rights under the general law; and |
(c) | may be waived only in writing and specifically. |
Delay in exercising or non-exercise of any such right is not a waiver of that right.
26.5 | Disenfranchisement of Defaulting Lenders |
(a) | For so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lenders commitments will be reduced by the amount of its Available Commitments. |
(b) | For the purposes of this Clause 26.5, the Agent may assume that the following Lenders are Defaulting Lenders: |
(i) | any Lender which has notified the Agent that it has become a Defaulting Lender; |
(ii) | any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a) or (b) of the definition of Defaulting Lender has occurred, and in the case of the events or circumstances referred to in paragraph (a) of the definition of Defaulting Lender, none of the exceptions to that paragraph apply, |
unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.
26.6 | Replacement of a Defaulting Lender |
(a) | Vodafone may, at any time a Lender has become and continues to be a Defaulting Lender, by giving five Business Days prior written notice to the Agent and such Lender: |
(i) | replace such Lender by requiring such Lender to (and such Lender shall) transfer pursuant to Clause 27 (Changes to the Parties) all (and not part only) of its rights and obligations under this Agreement; or |
(ii) | require such Lender to (and such Lender shall) transfer pursuant to Clause 27 (Changes to the Parties) all (and not part only) of the undrawn Commitments of the Lender, |
to a Lender or other bank or financial institution, (a Replacement Lender) selected by Vodafone, and which is acceptable to the Agent (acting reasonably) and which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lenders participations or unfunded participations (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lenders participation in the outstanding Advances and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents.
(b) | Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions: |
(i) | Vodafone shall have no right to replace the Agent; |
(ii) | neither the Agent nor the Defaulting Lender shall have any obligation to Vodafone to find a Replacement Lender; |
(iii) | the transfer must take place no later than 45 Business Days after the notice referred to in paragraph (a) above; and |
(iv) | in no event shall a Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents. |
(c) | An amendment or waiver which relates to this Clause 26 may not be effected without the consent of each Lender. |
27. | CHANGES TO THE PARTIES |
27.1 | Transfers by Obligors |
(a) | No Obligor may assign, transfer, novate or dispose of any of, or any interest in, its rights and/or obligations under this Agreement provided that without any further consent from the Lenders or the Agent it may, subject to paragraph (b) below and provided that no Default is continuing or would result from any such transfer, transfer its rights and obligations under this Agreement to NewTopco or any Intermediate Holding Company and NewTopco or the Intermediate Holding Company will execute a document, or documents, in favour of the Lenders in form and substance the same as this Agreement, with references to such Obligor in this Agreement amended to mean NewTopco or such Intermediate Holding Company (as applicable), provided that if such transfer is to an Intermediate Holding Company, the Agent may, within 30 days of receipt of notification of such transfer, require NewTopco to accede as a Guarantor. The Agent shall (and is hereby authorised to) execute on behalf of the Finance Parties any such document or documents executed by NewTopco or the Intermediate Holding Company provided that the conditions set out in this Clause 27.1 are satisfied. |
(b) | The transfer of rights and obligations under this Agreement to NewTopco or any Intermediate Holding Company shall not require the consent of the Lenders or the Agent |
provided that NewTopco or the Intermediate Holding Company, as applicable, is incorporated and tax resident in the United Kingdom or in the United States and prior to such transfer Vodafone provides satisfactory evidence to the Agent that it is tax resident in one of those jurisdictions. Subject to paragraph (c) below, the prior written consent of the Majority Lenders shall be required in relation to the transfer of rights and obligations to a NewTopco or an Intermediate Holding Company incorporated elsewhere. |
(c) | All Lender consent will be required for any transfer of rights under this Agreement to a NewTopco or an Intermediate Holding Company to the extent the transferee is incorporated or established or carrying on its principal business in a country which is subject to OFAC sanctions, United Nations sanctions under Article 41 of the UN Charter, or any equivalent sanctions administered or enforced by the European Union, Her Majestys Treasury, the State Secretariat for Economic Affairs, or other relevant sanctions authority. |
27.2 | Transfers by Lenders |
(a) | A Lender (the Existing Lender) may at any time assign, transfer or novate any of its rights and/or obligations under this Agreement to another bank, financial institution, central bank or federal reserve (the New Lender) provided that: |
(i) | subject to paragraph (b) below Vodafone (or following a Hive Up, NewTopco) has, except while an Event of Default is continuing or in the case of an assignment, transfer or novation to an Affiliate or another Lender, given its prior written consent (in the case of a transfer to a financial institution, such consent to be in its absolute discretion and, in the case of a transfer to a bank, central bank or federal reserve such consent not to be unreasonably withheld or delayed); |
(ii) | in the case of a partial assignment, transfer or novation of rights and/or obligations, a minimum amount of 8,000,000 in aggregate and in multiples of 1,000,000 (unless to an Affiliate or to a Lender or the Agent agrees otherwise) must be assigned, transferred or novated; and |
(iii) | in the case of an assignment, transfer or novation by a Swingline Lender (or an Affiliate of a Swingline Lender), a portion of that Swingline Lenders Swingline Commitment must also be assigned, transferred or novated to the extent necessary (if at all) to ensure that the Swingline Lenders Swingline Commitment does not exceed its Commitment after the assignment, transfer or novation. |
(b) | Vodafone must respond to a request for its consent to a transfer made under paragraph (a)(i) above as soon as is reasonably practicable and, in any event, no later than 15 Business Days after the day on which it received the request, or Vodafone will be deemed to have given its consent to the transfer. |
(c) | A transfer of obligations will be effective only if either: |
(i) | the obligations are novated in accordance with Clause 27.4 (Procedure for novations); or |
(ii) | the New Lender gives prior written notice to Vodafone and, except while an Event of Default is continuing or in the case of an assignment, transfer or novation to an Affiliate or another Lender, obtains the consent of Vodafone in accordance with paragraph (a)(i) above and confirms to the Agent and Vodafone that it undertakes to be bound by the terms of this Agreement as a Lender in form and substance satisfactory to the Agent. On the transfer becoming effective in this manner the Existing Lender shall be relieved of its obligations under this Agreement to the extent that they are transferred to the New Lender; and |
(iii) | the Agent has performed all know your customer or other checks relating to any person that it is required to carry out in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender. |
(d) | Nothing in this Agreement restricts the ability of a Lender to sub-contract an obligation if that Lender remains liable under this Agreement for that obligation. |
(e) | On each occasion an Existing Lender assigns, transfers or novates any of its rights and/or obligations under this Agreement (other than to an Affiliate), the New Lender shall, on the date the assignment, transfer and/or novation takes effect, pay to the Agent for its own account a fee of 2,500. |
(f) | An Existing Lender is not responsible to a New Lender for: |
(i) | the execution, genuineness, validity, enforceability or sufficiency of any Finance Document or any other document; or |
(ii) | the collectability of amounts payable under any Finance Document; or |
(iii) | the accuracy of any statements (whether written or oral) made in connection with any Finance Document. |
(g) | Each New Lender confirms to the Existing Lender and the other Finance Parties that it: |
(i) | has made its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and |
(ii) | will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities while any amount is or may be outstanding under this Agreement or any Commitment is in force. |
(h) | Nothing in any Finance Document obliges an Existing Lender to: |
(i) | accept a re transfer from a New Lender of any of the rights and/or obligations assigned, transferred or novated under this Clause 27; or |
(ii) | support any losses incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under this Agreement or otherwise. |
(i) | Any reference in this Agreement to a Lender includes a New Lender but excludes a Lender if no amount is or may be owed to or by it under this Agreement and its Commitment has been cancelled or reduced to nil. |
(j) | If any assignment, transfer or novation results either: |
(i) | at the time of the assignment, transfer or novation; or |
(ii) | at any future time where the additional amount was caused as a result of laws and/or regulations in force at the date of the assignment, transfer or novation, |
in additional amounts becoming due under Clause 11 (Taxes) or amounts becoming due under Clause 13 (Increased Costs), the New Lender shall be entitled to receive such additional amounts
only to the extent that the Existing Lender would have been so entitled had there been no such assignment, transfer or novation.
27.3 | Affiliates of Lenders |
(a) | Each Lender may fulfil its obligations in respect of any Advance through an Affiliate if: |
(i) | the relevant Affiliate is specified in this Agreement as a Lender or becomes a Lender by means of a Novation Certificate in accordance with this Agreement and subject to any consent required under Clause 27.2 (Transfers by Lenders); and |
(ii) | the Advances in which that Affiliate will participate are specified in this Agreement or in a notice given by that Lender to the Agent. |
In this event, the Lender and the Affiliate will participate in Advances in the manner provided for in sub-paragraph (ii) above.
(b) | If paragraph (a) above applies, the Lender and its Affiliate will be treated as having a single Commitment and a single vote, but, for all other purposes, will be treated as separate Lenders. |
27.4 | Procedure for novations |
(a) | A novation is effected if: |
(i) | the Existing Lender and the New Lender deliver to the Agent a duly completed certificate (a Novation Certificate), substantially in the form of Part 1 of Schedule 4, with such amendments as the Agent approves to achieve a substantially similar effect (which may be delivered by fax and confirmed by delivery of a hard copy original but the fax will be effective irrespective of whether confirmation is received); and |
(ii) | the Agent executes it (as soon as practicable for it to do so). |
(b) | Each Party (other than the Existing Lender and the New Lender) irrevocably authorises the Agent to execute any duly completed Novation Certificate on its behalf. |
(c) | To the extent that they are expressed to be the subject of the novation in the Novation Certificate: |
(i) | the Existing Lender and the other Parties (the Existing Parties) will be released from their obligations to each other (the Discharged Obligations); |
(ii) | the New Lender and the Existing Parties will assume obligations towards each other which differ from the Discharged Obligations only insofar as they are owed to or assumed by the New Lender instead of the Existing Lender; |
(iii) | the rights of the Existing Lender against the Existing Parties and vice versa (the Discharged Rights) will be cancelled; and |
(iv) | the New Lender and the Existing Parties will acquire rights against each other which differ from the Discharged Rights only insofar as they are exercisable by or against the New Lender instead of the Existing Lender, |
all on the date of execution of the Novation Certificate by the Agent or, if later, the date specified in the Novation Certificate.
(d) | If the effective date of a novation is after the date a Request is received by the Agent but before the date the requested Advance is disbursed to the relevant Borrower, the Existing Lender shall be obliged to participate in that Advance in respect of its Discharged Obligations notwithstanding that novation, and the New Lender shall reimburse the Existing Lender for its participation in that Advance and all interest and fees thereon up to the date of reimbursement (in each case to the extent attributable to the Discharged Obligations) within three Business Days of the Drawdown Date of that Advance. |
(e) | The Agent shall only be obliged to execute a Novation Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender. |
27.5 | Replacement of Lenders |
(a) | In this Clause: |
Non-consenting Lender means a Lender which does not agree to a consent or amendment to, or a waiver of, a provision of a Finance Document requested by Vodafone where:
(i) | the consent, waiver or amendment requires the consent of all the Lenders; |
(ii) | a period of not less than 15 Business Days (or such other longer period as agreed from time to time between the Agent and Vodafone) has elapsed from the date the consent, waiver or amendment was requested; and |
(iii) | 80% of the Lenders have agreed to the consent, waiver or amendment. |
Prepayment Lender means, at any time, a Lender in respect of which a Borrower is at that time entitled to serve a notice under Clause 8.5 (a) to (c) (Right of prepayment and cancellation) (inclusive), but has not done so.
Relevant Lender means:
(i) | a Prepayment Lender; or |
(ii) | a Non-Consenting Lender. |
Replacement Lender means a Lender or any other bank or financial institution selected by Vodafone which:
(i) | in the case of a person which is not an existing Lender is acceptable to the Agent (acting reasonably); and |
(ii) | is willing to assume all of the obligations of the Relevant Lender. |
(b) | Subject to paragraph (e) below, Vodafone may, on giving 10 Business Days prior notice to the Agent and a Relevant Lender, require that Relevant Lender to transfer all of its rights and obligations under this Agreement to a Replacement Lender. |
(c) | On receipt of a notice under paragraph (b) above the Relevant Lender must transfer all of its rights and obligations under this Agreement: |
(i) | in accordance with Clause 27.2 (Transfers by Lenders); |
(ii) | on the date specified in the notice; |
(iii) | to the Replacement Lender specified in the notice; and |
(iv) | for a purchase price equal to the aggregate of: |
(A) | the Relevant Lenders share in the outstanding Facilities; |
(B) | any Break Costs incurred by the Relevant Lender as a result of the transfer; and |
(C) | all accrued interest, fees and other amounts payable to the Relevant Lender under this Agreement as at the transfer date. |
(d) | No member of the Consolidated Group may make any payment or assume any obligation to or on behalf of the Replacement Lender as an inducement for a Replacement Lender to become a Lender, other than as provided in paragraph (c) above. |
(e) | Notwithstanding the above, Vodafones right to replace: |
(i) | a Non-Consenting Lender may only be exercised within 45 Business Days after the date the consent, waiver or amendment was requested by Vodafone; |
(ii) | a Prepayment Lender may only be exercised whilst it is entitled to serve a notice under Clause 8.5 (Right of prepayment and cancellation); and |
(iii) | a Non-Consenting Lender or Prepayment Lender under this Clause 27.5 shall in no way be obliged to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents. |
27.6 | Pro rata interest settlement |
If the Agent has notified the Lenders that it is able to distribute interest payments on a pro rata basis to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 27.2 (Transfers by Lenders) or any novation pursuant to Clause 27.4 (Procedure for novations) the transfer date of which, in each case, is after the date of such notification and is not on the last day of a Term):
(a) | any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the transfer date (Accrued Amounts) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Term (or, if the Term is longer than six Months, on the next of the dates which falls at six monthly intervals after the first day of that Term); and |
(b) | the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts so that, for the avoidance of doubt: |
(i) | when the Accrued Amounts become payable, those Accrued Amounts will be payable for the account of the Existing Lender; and |
(ii) | the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 27.6, have been payable to it on that date, but after deduction of the Accrued Amounts. |
27.7 | Additional Guarantors |
(a) |
(i) | Vodafone will procure that NewTopco and any Intermediate Holding Company of Vodafone will become an Additional Guarantor on or before the Reorganisation Date by executing and delivering the documents set out in paragraph (iii) below on or before the Reorganisation Date. |
(ii) | Subject to Vodafones prior written consent, any other member of the Consolidated Group may become an Additional Guarantor. |
(iii) | The relevant company will become an Additional Guarantor upon: |
(A) | the delivery to the Agent of a Guarantor Accession Agreement duly executed by that company; and |
(B) | delivery to the Agent of all those other documents listed in Part 2 of Schedule 2, in each case in the agreed form or in such other form and substance satisfactory to the Agent. |
(b) | The execution of a Guarantor Accession Agreement constitutes confirmation by the Additional Guarantor concerned that the representations and warranties set out in Clauses 16.1 (Representations and Warranties) to 16.6 (Authorisations) to be made by it on the date of the Guarantor Accession Agreement are correct, as if made with reference to the facts and circumstances then existing. |
27.8 | Additional Borrowers |
(a) | (i) Any member of the Restricted Group, or following a Hive Up (and subject to the proviso below), NewTopco or any Intermediate Holding Company incorporated and tax resident in the United Kingdom or in the United States or, subject to the prior written consent of the Majority Lenders (or, if sub-paragraph (iii) below applies, all the Lenders), elsewhere which Vodafone nominates may become an Additional Borrower, provided that on or prior to the date on which NewTopco or any Intermediate Holding Company accedes as an Additional Borrower it also accedes as an Additional Guarantor. |
(ii) | The relevant member of the Restricted Group (or NewTopco or any Intermediate Holding Company, as applicable) will become an Additional Borrower upon: |
(A) | the delivery to the Agent of a Borrower Accession Agreement duly executed by that member of the Restricted Group (or NewTopco or any Intermediate Holding Company, as applicable); and |
(B) | delivery to the Agent of all those other documents listed in Part 3 of Schedule 2, in each case in the agreed form or in such other form and substance satisfactory to the Agent. |
(iii) | All Lender consent will be required for any Additional Borrower to the extent the Additional Borrower is incorporated or established or carrying on its principal business in a country which is subject to OFAC sanctions or United Nations sanctions under Article 41 of the UN Charter or any equivalent sanctions administered or enforced by the European Union, Her Majestys Treasury or other relevant sanctions authority. |
(b) | The execution of a Borrower Accession Agreement constitutes confirmation by the Additional Borrower concerned that the representations and warranties set out in Clauses 16.1 (Representations and warranties) to 16.6 (Authorisations) to be made by it on the date of the Borrower Accession Agreement are correct, as if made with reference to the facts and circumstances then existing. |
27.9 | Removal of Borrowers |
(a) | Any Borrower (other than Vodafone (subject to paragraph (b) below) or, if applicable, NewTopco) which has no liabilities to the Finance Parties in respect of outstanding Advances or any other liabilities to the Finance Parties under the Finance Documents (other than as a Guarantor) may, at the request of Vodafone and if no Default is outstanding or will result from such action, cease to be a Borrower by entering into a supplemental agreement to this Agreement at the cost of Vodafone in such form as the Agent may reasonably require which shall discharge that Borrowers obligations as a Borrower under this Agreement. |
(b) | If on the Reorganisation Date: |
(i) | NewTopco and any Intermediate Holding Company has acceded as a Guarantor in accordance with Clause 27.7 (Additional Guarantors); |
(ii) | Vodafone has no liabilities to the Finance Parties in respect of outstanding Advances or any other liabilities to the Finance Parties under the Finance Documents (other than as a Guarantor); and |
(iii) | no Default is continuing, |
Vodafone may cease to be a Borrower with effect from the Reorganisation Date by entering into a supplemental agreement to this Agreement at the cost of Vodafone or NewTopco in such form as the Agent may reasonably require which shall discharge Vodafones obligations as a Borrower under this Agreement.
27.10 | Reference Banks |
If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with Vodafone) appoint another Lender or an Affiliate of a Lender which is not a Reference Bank to replace that Reference Bank.
27.11 | Register |
The Agent, acting solely for this purpose as agent of the Borrowers, shall keep a register of all the Parties including in the case of Lenders, their respective commitments, the obligations owing to each, and the details of their Facility Office notified to the Agent from time to time, and shall supply any other Party (at that Partys expense) with a copy of the register on request.
The Agent shall record in the register any transfer by an Obligor or by a Lender described in Clause 27.1(a) or (b) (Transfers by Obligors) or 27.2 (Transfers by Lenders), respectively, and any other modification to the Borrowers, Lenders, Guarantors, or outstanding obligations. The Agent shall record the names and addresses of each Lender and the respective Commitments of and obligations owing to each Lender. The entries in the register shall, in the absence of manifest error, be conclusive and each Obligor, the Agent, and each Lender shall treat each person whose name is recorded in the register as a Lender notwithstanding any notice to the contrary. The register shall be available for inspection by each Obligor at any reasonable time and from time to time upon reasonable prior notice.
27.12 | Security over Lenders rights |
In addition to the other rights provided to Lenders under this Clause 27, each Lender may at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
(a) | any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and |
(b) | with the prior written consent of Vodafone (or following a Hive Up, NewTopco), such consent not to be unreasonably withheld or delayed, in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, |
except that no such charge, assignment or Security shall:
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or other Security for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by an Obligor or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
28. | DISCLOSURE OF INFORMATION |
28.1 | Disclosure |
(a) | A Lender may disclose to any of its Affiliates, directors, employees, officers, professional advisers or auditors; any person to whom or for whose benefit a Lender charges, assigns or otherwise creates security (or may do so) pursuant to Clause 27.12 (Security over Lenders rights); or any person with whom it is proposing to enter, or has entered into, any kind of transfer, participation or other agreement in relation to this Agreement: |
(i) | a copy of any Finance Document; and |
(ii) | any information which that Lender has acquired under or in connection with any Finance Document, |
provided that a Lender shall not disclose any such information:
(A) | to any of its Affiliates, directors, employees, officers, professional advisers or auditors or a federal reserve or central bank, unless the recipient is informed that such information is confidential; or |
(B) | to any other person, unless that person has provided to that Lender a confidentiality undertaking addressed to that Lender and Vodafone substantially in the form of Schedule 5 or such other form as Vodafone may approve. |
(b) | Paragraphs 1(a), 1(c), 2(b), 3, 6, 8, 9 and 12 of Schedule 5 (Form of Confidentiality Undertaking from New Lender) shall be deemed to be incorporated herein as if set out in full (mutatis mutandis), but as if references therein to we, us or our were to each Finance Party and references to you were to Vodafone and as if the Confidential Information included any Funding Rate or Reference Bank Quotation. |
28.2 | Disclosure to numbering service providers |
(a) | Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facilities and/or one or more Obligors the following information: |
(i) | names of Obligors; |
(ii) | country of domicile of Obligors; |
(iii) | place of incorporation of Obligors; |
(iv) | date of this Agreement; |
(v) | the name of the Agent and the Arranger; |
(vi) | date of each amendment and restatement of this Agreement; |
(vii) | amount of Total Commitments; |
(viii) | currencies of the Facilities; |
(ix) | type of Facilities; |
(x) | ranking of Facilities; |
(xi) | Maturity Date for the Facilities; |
(xii) | changes to any of the information previously supplied pursuant to paragraphs (i) to (xi) above (inclusive); and |
(xiii) | such other information agreed between such Finance Party and Vodafone, |
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
(b) | The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facilities and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider. |
(c) | If requested, the Agent shall notify Vodafone and the other Finance Parties of: |
(i) | the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Facilities and/or one or more Obligors; and |
(ii) | the number or, as the case may be, numbers assigned to this Agreement, the Facilities and/or one or more Obligors by such numbering service provider. |
28.3 | Confidentiality of Funding Rates and Reference Bank Quotations |
(a) | Confidentiality and Disclosure |
(i) | The Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (ii), (iii) and (iv) below. |
(ii) | The Agent may disclose: |
(A) | any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to Vodafone pursuant to Clause 9.4 (Notification of rates of interest); and |
(B) | any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Agent and the relevant Lender or Reference Bank, as the case may be. |
(iii) | The Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to: |
(A) | any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and representatives if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this paragraph (A) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it; |
(B) | any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; |
(C) | any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and |
(D) | any person with the consent of the relevant Lender or Reference Bank, as the case may be. |
(iv) | The Agents obligations in this Clause 28.3 relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 9.4 (Notification of rates of interest) provided that (other than pursuant to paragraph (ii)(A) above) the Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification. |
(b) | Other Obligations |
(i) | The Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Agent, each Reference Bank Quotation) is or may be price-sensitive |
information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Agent, any Reference Bank Quotation for any unlawful purpose. |
(ii) | The Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be: |
(A) | of the circumstances of any disclosure made pursuant to paragraphs (a)(iii)(B) or (a)(iii)(C) above except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and |
(B) | upon becoming aware that any information has been disclosed in breach of this Clause 28.3 |
29. | SET-OFF |
29.1 | Contractual set-off |
Whilst an Event of Default subsists each Obligor authorises each Finance Party to apply any credit balance to which that Obligor is entitled on any account of that Obligor with that Finance Party or any other sum due and payable by that Lender to that Obligor in satisfaction of any sum due and payable from that Obligor to that Finance Party under the Finance Documents but unpaid. For this purpose, each Finance Party is authorised to purchase with the moneys standing to the credit of any such account such other currencies as may be necessary to effect such application.
29.2 | Set-off not mandatory |
No Finance Party shall be obliged to exercise any right given to it by Clause 29.1 (Contractual set-off).
29.3 | Notice of set-off |
Any Finance Party exercising its rights under Clause 29.1 (Contractual set-off) shall notify Vodafone promptly after set-off is applied.
29.4 | Set-off by Obligors |
Any Obligor may at any time on or after a Lender becomes a Defaulting Lender set off amounts owed by that Obligor to that Lender under the Finance Documents against any credit balance on any account of that Obligor with that Lender or any other sum due and payable by that Lender to that Obligor (regardless of the place of payment, booking branch or currency of either obligation). If the obligations are in different currencies, that Obligor may convert either obligation at the Agents Spot Rate of Exchange (or, if there is no such rate, at a market rate of exchange reasonably selected by Vodafone) for the purpose of the set-off. If an Obligor exercises such rights of set off: (i) it shall notify the Lender promptly thereafter; and (ii) the Lender shall treat any such obligation owed by the Lender to that Obligor as if it was a payment received by the Lender from that Obligor in accordance with the provisions of this Agreement.
30. | PRO RATA SHARING |
30.1 | Redistribution |
If any amount owing by an Obligor under any Finance Document to a Finance Party (the Recovering Finance Party) is discharged by payment, set-off or any other manner other than through the Agent in accordance with Clause 10 (Payments) (a Recovery), then:
(a) | the Recovering Finance Party shall, within three Business Days, notify details of the Recovery to the Agent; |
(b) | the Agent shall determine whether the Recovery is in excess of the amount which the Recovering Finance Party would have received had the Recovery been received by the Agent and distributed in accordance with Clause 10 (Payments); |
(c) | subject to Clause 30.3 (Exceptions), the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the Redistribution) equal to the excess; |
(d) | the Agent shall treat the Redistribution as if it were a payment by the Obligor concerned under Clause 10 (Payments) and shall pay the Redistribution to the Finance Parties (other than the Recovering Finance Party) in accordance with Clause 10.8 (Partial payments); and |
(e) | after payment of the full Redistribution, the Recovering Finance Party will be subrogated to the portion of the claims paid under paragraph (d) above, and that Obligor will owe the Recovering Finance Party a debt which is equal to the Redistribution, immediately payable and of the type originally discharged. |
30.2 | Reversal of redistribution |
If under Clause 30.1 (Redistribution):
(a) | a Recovering Finance Party must subsequently return a Recovery, or an amount measured by reference to a Recovery, to an Obligor; and |
(b) | the Recovering Finance Party has paid a Redistribution in relation to that Recovery, |
each Finance Party shall, within three Business Days of demand by the Recovering Finance Party through the Agent, reimburse the Recovering Finance Party all or the appropriate portion of the Redistribution paid to that Finance Party. Thereupon the subrogation in Clause 30.1(e) (Redistribution) will operate in reverse to the extent of the reimbursement.
30.3 | Exceptions |
(a) | A Recovering Finance Party need not pay a Redistribution to the extent that it would not, after the payment, have a valid claim against the Obligor concerned in the amount of the Redistribution pursuant to Clause 30.1(e) (Redistribution). |
(b) | A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal proceedings, if the other Finance Party had an opportunity to participate in those legal proceedings but did not do so and did not take separate legal proceedings. |
31. | SEVERABILITY |
If a provision of any Finance Document is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect:
(a) | the legality, validity or enforceability in that jurisdiction of any other provision of the Finance Documents; or |
(b) | the legality, validity or enforceability in other jurisdictions of that or any other provision of the Finance Documents. |
32. | COUNTERPARTS |
This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
33. | NOTICES |
33.1 | Giving of notices |
(a) | All notices or other communications under or in connection with this Agreement shall be given in writing or by facsimile. Any such notice will be deemed to be given as follows: |
(i) | if in writing, when delivered; and |
(ii) | if by facsimile, when received. |
However, a notice given in accordance with the above but received on a non-working day or after business hours in the place of receipt will only be deemed to be given on the next working day in that place.
(b) | Any Party may agree with any other Party to give and receive notices by telex in which case the notice will be deemed given when the correct answerback is received. |
33.2 | Addresses for notices |
(a) | The address and facsimile number of each Party (other than the Agent, the Euro Swingline Agent and Vodafone) for all notices under or in connection with this Agreement are: |
(i) | that notified by that Party for this purpose to the Agent on or before it becomes a Party; or |
(ii) | any other notified by that Party for this purpose to the Agent by not less than five Business Days notice. |
(b) | The address and facsimile numbers of the Agent are: |
For Operational Matters (such as Drawdowns, Interest Rate Fixing, Interest / fee calculations and payments)
The Royal Bank of Scotland plc
1 Hardman Boulevard
Manchester
Greater Manchester
M3 3AQ
Contact: | Lending Operations |
Facsimile: | 020 3043 6688 |
Email: | RbsAgencyOperations@rbs.com |
For Non Operational Matters (such as documentation; covenant compliance; amendments & waivers)
The Royal Bank of Scotland plc
Level 3
Premier Place
2 1⁄2 Devonshire Square
London
EC2M 4BA
Contact: | Bob Ottewill, Associate Director, Syndicated Loans Agency, Corporate & Institutional Banking |
Telephone: | 020 7877 9370 |
Facsimile: | 020 7786 5247 |
Email: | bob.ottewill@rbs.com |
or such other as the Agent may notify to the other Parties by not less than five Business Days notice.
(c) | The address and facsimile numbers of the Euro Swingline Agent are: |
The Royal Bank of Scotland plc
2nd Floor, 1 Hardman Boulevard
Manchester
Greater Manchester
M3 3AQ
Contact: | Banking Operations |
Facsimile: | 020 3043 6688 |
Email: | RbsAgencyOperations@rbs.com |
or such other as the Euro Swingline Agent may notify to the other Parties by not less than five Business Days notice.
(d) | The address, facsimile number and website of Vodafone are: |
Vodafone Group Plc
One Kingdom Street
Paddington Central
London W2 6BY
Contact: | Group Treasury Director |
Telephone: | 0787 9496611 |
Facsimile: | 01635 676 746 |
Email: | neil.garrod@vodafone.com |
Website: http://www.vodafone.com/start/investor_relations/financial_reports. html
or such other as Vodafone may notify to the other Parties by not less than five Business Days notice.
(e) | The Agent shall, promptly upon request from any Party, give to that Party the address or facsimile number of any other Party applicable at the time for the purposes of this Clause 33. |
33.3 | Communication when Agent or Euro Swingline Agent is Impaired Agent |
If the Agent or, as the case may be, the Euro Swingline Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent or, as the case may be, the Euro Swingline Agent, communicate with each other directly and (while the Agent or the Euro Swingline Agent is an impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a successor Agent or, as the case may be, successor Euro Swingline Agent has been appointed.
34. | LANGUAGE |
(a) | Any notice given under or in connection with any Finance Document shall be in English. |
(b) | All other documents provided under or in connection with any Finance Document shall be: |
(i) | in English; or |
(ii) | if not in English, accompanied by a certified English translation and, in this case, the English translation shall prevail unless the document is a statutory or other official document. |
35. | JURISDICTION |
35.1 | Submission |
(a) | For the benefit of each Finance Party, each Obligor agrees that the courts of England have jurisdiction to settle any disputes in connection with any Finance Document or any non-contractual obligation arising out of or in connection with any Finance Document and accordingly submits to the jurisdiction of the English courts. |
(b) | Notwithstanding paragraph (a) above, any New York State court or U.S. Federal court sitting in the City and County of New York also has jurisdiction to settle any dispute in connection with any Finance Document, and, for the benefit of the Finance Parties, each Obligor submits to the jurisdiction of those courts. |
(c) | The English and New York courts are the most appropriate and convenient courts to settle any such dispute and each Obligor waives objection to those courts on the grounds of inconvenient forum or otherwise in relation to proceedings in connection with any Finance Document. |
35.2 | Service of process |
(a) | Without prejudice to any other mode of service, each Obligor (other than an Obligor incorporated in England and Wales): |
(i) | irrevocably appoints Vodafone as its agent for service of process relating to any proceedings before the English courts in connection with any Finance Document (and Vodafone accepts this appointment); |
(ii) | agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned; |
(iii) | consents to the service of process relating to any such proceedings by prepaid posting of a copy of the process to its address for the time being applying under Clause 33.2 (Addresses for notices); and |
(iv) | agrees that if the appointment of any person mentioned in paragraph (i) or (ii) above ceases to be effective, the relevant Obligor shall immediately appoint a further person in England to accept service of process on its behalf in England and, failing such appointment within 15 days, the Agent is entitled to appoint such a person by notice to Vodafone. |
(b) | Prior to the accession of a US Obligor who is not incorporated or having a place of business in New York State such US Obligor must appoint an agent for service of process in any proceedings before any court located in the State of New York on terms reasonably satisfactory to the Agent. |
35.3 | Forum convenience and enforcement abroad |
Each Obligor:
(a) | waives objection to the English courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with a Finance Document; and |
(b) | agrees that a judgment or order of an English court in connection with a Finance Document is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction. |
35.4 | Non-exclusivity |
Nothing in this Clause 35 limits the right of a Finance Party to bring proceedings against an Obligor in connection with any Finance Document:
(a) | in any other court of competent jurisdiction; or |
(b) | concurrently in more than one jurisdiction. |
36. | GOVERNING LAW |
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
37. | USA PATRIOT ACT |
Each Finance Party that is subject to the requirements of the USA Patriot Act hereby notifies each Obligor that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Obligors, which information includes the name and address of the Obligors and other information that will allow such Finance Party to identify the Obligors in accordance with the USA Patriot Act. Each Obligor agrees that it will provide each Finance Party with such information as it may request in order for such Finance Party to satisfy the requirements of the USA Patriot Act.
38. | WAIVER OF TRIAL BY JURY |
EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN CONNECTION WITH ANY FINANCE DOCUMENT OR ANY TRANSACTION CONTEMPLATED BY ANY FINANCE DOCUMENT. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY THE COURT.
THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.
SCHEDULE 1
LENDERS AND COMMITMENTS
PART 1
LENDERS AND COMMITMENTS
Original Lender | Commitment () | |||
ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING AND MARKETS) |
150,000,000 | |||
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED |
80,000,000 | |||
BANCO DE SABADELL S.A., LONDON BRANCH |
80,000,000 | |||
BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED |
150,000,000 | |||
BANK OF CHINA LIMITED, LONDON BRANCH |
150,000,000 | |||
THE BANK OF NEW YORK MELLON |
80,000,000 | |||
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. |
150,000,000 | |||
BARCLAYS BANK PLC |
150,000,000 | |||
BBVA IRELAND P.L.C. |
150,000,000 | |||
BNP PARIBAS, LONDON BRANCH |
150,000,000 | |||
CITIBANK N.A., LONDON |
150,000,000 | |||
COMMERZBANK AKTIENGESELLSCHAFT, LONDON BRANCH |
150,000,000 | |||
DEUTSCHE BANK AG, LONDON BRANCH |
150,000,000 | |||
GOLDMAN SACHS BANK USA |
150,000,000 | |||
HSBC BANK PLC |
150,000,000 | |||
ING BANK N.V., LONDON BRANCH |
150,000,000 | |||
INTESA SANPAOLO S.P.A. |
150,000,000 | |||
JPMORGAN CHASE BANK, N.A., LONDON BRANCH |
150,000,000 | |||
LLOYDS BANK PLC |
150,000,000 |
Original Lender | Commitment () | |||
MIZUHO BANK, LTD |
150,000,000 | |||
MORGAN STANLEY BANK, N.A. |
150,000,000 | |||
NATIONAL AUSTRALIA BANK LIMITED ABN 12 004 044 937 |
80,000,000 | |||
SOCIETE GENERALE, LONDON BRANCH |
80,000,000 | |||
STANDARD CHARTERED BANK |
80,000,000 | |||
SUMITOMO MITSUI BANKING CORPORATION |
150,000,000 | |||
THE ROYAL BANK OF SCOTLAND PLC |
150,000,000 | |||
THE TORONTO-DOMINION BANK |
80,000,000 | |||
UBS AG LONDON BRANCH |
150,000,000 | |||
UNICREDIT LUXEMBOURG S.A. |
150,000,000 | |||
Total |
3,860,000,000 |
PART 2
SWINGLINE LENDERS AND SWINGLINE COMMITMENTS
Swingline Lender | Swingline Commitments | |||
ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING AND MARKETS) |
150,000,000 | |||
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. |
150,000,000 | |||
BARCLAYS BANK PLC |
150,000,000 | |||
BBVA IRELAND P.L.C. |
150,000,000 | |||
BNP PARIBAS, LONDON BRANCH |
150,000,000 | |||
DEUTSCHE BANK AG, LONDON BRANCH |
150,000,000 | |||
HSBC BANK PLC |
150,000,000 | |||
ING BANK N.V., LONDON BRANCH |
150,000,000 | |||
JPMORGAN CHASE BANK, N.A., LONDON BRANCH |
150,000,000 | |||
THE ROYAL BANK OF SCOTLAND PLC |
150,000,000 | |||
UBS AG LONDON BRANCH |
150,000,000 | |||
UNICREDIT LUXEMBOURG S.A. |
150,000,000 | |||
Total |
1,800,000,000 |
PART 3
MANDATED LEAD ARRANGERS
ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING AND MARKETS)
BANCO BILBAO VIZCAYA ARGENTARIA S.A.
BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED
BANK OF CHINA LIMITED, LONDON BRANCH
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
BARCLAYS BANK PLC
BNP PARIBAS
CITIGROUP GLOBAL MARKETS LIMITED
COMMERZBANK AKTIENGESELLSCHAFT
DEUTSCHE BANK AG, LONDON BRANCH
GOLDMAN SACHS BANK USA
HSBC BANK PLC
ING BANK N.V., LONDON BRANCH
INTESA SANPAOLO S.P.A.
J.P. MORGAN LIMITED
LLOYDS BANK PLC
MIZUHO BANK, LTD
MORGAN STANLEY BANK INTERNATIONAL LIMITED
SUMITOMO MITSUI BANKING CORPORATION
THE ROYAL BANK OF SCOTLAND PLC
UBS LIMITED
UNICREDIT BANK AG
PART 4
CO-ARRANGERS
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
BANCO DE SABADELL S.A., LONDON BRANCH
THE BANK OF NEW YORK MELLON
NATIONAL AUSTRALIA BANK LIMITED
SOCIETE GENERALE, LONDON BRANCH
STANDARD CHARTERED BANK
THE TORONTO-DOMINION BANK
SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
PART 1
TO BE DELIVERED BEFORE THE FIRST ADVANCE
1. | Constitutional documents |
A copy of the memorandum and articles of association and certificate of incorporation of Vodafone.
2. | Authorisations |
(a) | A copy of a resolution of the board of directors of Vodafone or, if applicable, of a committee of the board of directors (together with a copy of the resolution of the board of directors constituting that committee): |
(i) | approving the terms of, and the transactions contemplated by, this Agreement and the Fee Letters and resolving that it execute and, where applicable, deliver this Agreement and the Fee Letters; |
(ii) | authorising a specified person or persons to execute and, where applicable, deliver this Agreement and the Fee Letters on its behalf; and |
(iii) | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including Requests) to be signed and/or despatched by it under or in connection with the Finance Documents; |
(b) | a specimen of the signature of each person authorised by the resolution referred to in paragraph (a) above; |
(c) | a certificate of an authorised signatory of Vodafone confirming that as at the first Drawdown Date the borrowing of the Total Commitments in full and the borrowing of the Total Commitments under (and as defined in) the 2017 Facility in full would not together cause any borrowing limit or limit on the giving of guarantees binding on it to be exceeded (whether as a result of such limit having been waived or otherwise); |
(d) | a certificate of an authorised signatory of Vodafone certifying that each copy document specified in this Part 1 of Schedule 2 and supplied by Vodafone is correct, complete and in full force and effect as at a date no earlier than the Signing Date. |
3. | Legal opinions |
A legal opinion of Allen & Overy LLP, English law counsel to the Agent, in relation to English law.
4. | Fee Letter |
Duly executed Fee Letters referred to in paragraphs (a) and (b) of the definition of Fee Letters.
PART 2
TO BE DELIVERED BY AN ADDITIONAL GUARANTOR
1. | A Guarantor Accession Agreement duly executed (if appropriate, under seal) by the Additional Guarantor. |
2. | A copy of the memorandum (if applicable) and articles of association and certificate of incorporation (or other equivalent constitutional documents) of the Additional Guarantor. |
3. | A copy of a resolution of the board of directors of the Additional Guarantor: |
(a) | approving the terms of, and the transactions contemplated by, the Guarantor Accession Agreement and resolving that it execute the Guarantor Accession Agreement as a deed; |
(b) | authorising a specified person or persons to execute the Guarantor Accession Agreement as a deed; and |
(c) | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents to be signed and/or despatched by it under or in connection with this Agreement. |
4. | If the Additional Guarantor is not NewTopco and the lawyers referred to in paragraph 10 below advise it to be necessary or desirable, a copy of a resolution, signed by all the holders of the issued or allotted shares in the Additional Guarantor, approving the terms of, and the transactions contemplated by, the Guarantor Accession Agreement. |
5. | If the Additional Guarantor is not NewTopco, a copy of a resolution of the board of directors of each corporate shareholder in the Additional Guarantor: |
(a) | approving the terms of the resolution referred to in paragraph 4 above; and |
(b) | authorising a specified person or persons to sign the resolution on its behalf. |
6. | A certificate of a director of the Additional Guarantor certifying that the borrowing of the Total Commitments in full and the borrowing of the Total Commitments under (and as defined in) the 2017 Facility in full would not together cause any borrowing limit or limit on the giving of guarantees binding on it to be exceeded (whether as a result of such limit being waived or otherwise). |
7. | A copy of any other authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable in connection with the entry into and performance of, and the transactions contemplated by, the Guarantor Accession Agreement or for the validity and enforceability of any Finance Document. |
8. | A specimen of the signature of each person authorised by the resolutions referred to in paragraphs 3 and, if applicable, 5 above. |
9. | A copy of the latest annual statutory audited accounts of the Additional Guarantor. |
10. | A legal opinion of Allen & Overy, legal advisers to the Agent, and, if applicable, other lawyers approved by the Agent in the place of incorporation of the Additional Guarantor addressed to the Finance Parties. |
11. | A certificate of an authorised signatory of the Additional Guarantor certifying that each copy document specified in this Part 2 of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of the Guarantor Accession Agreement. |
PART 3
TO BE DELIVERED BY AN ADDITIONAL BORROWER
1. | A Borrower Accession Agreement duly executed (if appropriate, under seal) by the Additional Borrower. |
2. | A copy of the memorandum and articles of association and certificate of incorporation (or other equivalent constitutional documents) of the Additional Borrower. |
3. | A copy of a resolution of the board of directors of the Additional Borrower: |
(a) | approving the terms of, and the transactions contemplated by, the Borrower Accession Agreement and resolving that it execute the Borrower Accession Agreement; |
(b) | authorising a specified person or persons to execute the Borrower Accession Agreement; and |
(c) | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents to be signed and/or despatched by it under or in connection with this Agreement. |
4. | A certificate of a director of the Additional Borrower certifying that the borrowing of the Total Commitments in full and the borrowing of the Total Commitments under (and as defined in) the 2017 Facility in full would not together cause any borrowing limit or limit on the giving of guarantees binding on it to be exceeded (whether as a result of such limit being waived or otherwise). |
5. | A copy of any other authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable in connection with the entry into and performance of, and the transactions contemplated by, the Borrower Accession Agreement or for the validity and enforceability of any Finance Document. |
6. | A specimen of the signature of each person authorised by the resolutions referred to in paragraph 3 above. |
7. | A copy of the latest annual statutory audited accounts of the Additional Borrower (if any). |
8. | A legal opinion of Allen & Overy, legal advisers to the Agent, and, if applicable, other lawyers approved by the Agent in the place of incorporation of the Additional Borrower addressed to the Finance Parties. |
9. | A certificate of an authorised signatory of the Additional Borrower certifying that each copy document specified in this Part 3 of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of the Borrower Accession Agreement. |
SCHEDULE 3
FORM OF REQUEST
To: | THE ROYAL BANK OF SCOTLAND PLC as [Agent/Euro Swingline Agent*] |
From: | [BORROWER] |
Date: [ ]
Vodafone Group Plc [ ]
Revolving Credit Agreement dated [] 2014
1. | We wish to utilise the Revolving Credit Facility* and/or the Swingline Facility* by way of Advances*/Swingline Advances* as follows: |
(a) | Drawdown Date: | |||||
Revolving Credit Facility: | [ ]* | |||||
Swingline Facility: | [ ]* | |||||
(b) | Requested Amount (including currency): | |||||
Revolving Credit Facility: | [ ]* | |||||
Swingline Facility: | [ ]* | |||||
(c) | Term: | |||||
Revolving Credit Facility: | [ ]* | |||||
Swingline Facility: | [ ]* | |||||
(d) | Payment Instructions: | |||||
Revolving Credit Facility: | [ ]* | |||||
Swingline Facility: | [ ]* |
2. | We confirm that each condition specified in [Clause 4.2 (Conditions to all drawdowns and rollovers)]** is satisfied on the date of this Request and this Advance would not cause any borrowing limit binding on us to be exceeded. |
[By:
[BORROWER]
Authorised Signatory]
** | Delete as applicable depending on whether the Advance is a Rollover Advance. |
SCHEDULE 4
FORMS OF ACCESSION DOCUMENTS
PART 1
NOVATION CERTIFICATE
To: | THE ROYAL BANK OF SCOTLAND PLC as Agent |
From: | [THE EXISTING LENDER] and [THE NEW LENDER] Date: [ ] |
Vodafone Group Plc [ ]
Revolving Credit Agreement dated [] 2014
We refer to Clause 27.4 (Procedure for novations).
1. | We [ ] (the Existing Lender) and [ ] (the New Lender) agree to the Existing Lender and the New Lender novating all the Existing Lenders rights and obligations referred to in the Schedule in accordance with Clause 27.4 (Procedure for novations). |
2. | The specified date for the purposes of [Clause 27.4(c) (Procedure for novations)] is [date of novation]. |
3. | The Facility Office and address for notices of the New Lender for the purposes of Clause 33.2 (Addresses for notices) are set out in the Schedule. |
4. | The New Lender confirms that it has given notice to Vodafone of the entry into of this Novation Certificate [and has obtained Vodafones consent]* in accordance with Clause 27.2(c)(ii) (Transfers by Lenders). |
5. | This Novation Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law. |
* | Delete as applicable depending on whether Vodafones consent is required. |
THE SCHEDULE
Rights and obligations to be novated
[Details of the rights and obligations of the Existing Lender to be novated.]
[New Lender] | ||||
[Facility Office | Address for notices] | |||
[Existing Lender] | [New Lender] | THE ROYAL BANK OF SCOTLAND PLC | ||
By: | By: | By: | ||
Date: | Date: | Date: |
PART 2
GUARANTOR ACCESSION AGREEMENT
To: | THE ROYAL BANK OF SCOTLAND PLC as Agent |
From: | [PROPOSED GUARANTOR] |
Date: [ ]
Vodafone Group Plc [ ] Revolving Credit Agreement
dated [] 2014 (the Credit Agreement)
Terms used in this Deed which are defined in the Credit Agreement shall have the same meaning in this Deed as in the Credit Agreement.
We refer to Clause 27.7 (Additional Guarantors).
We, [name of company] of [Registered Office] (Registered no. [ ]) agree to become an Additional Guarantor and to be bound by the terms of the Credit Agreement as an Additional Guarantor in accordance with Clause 27.7 (Additional Guarantors). [In addition, we also agree to become bound by all the terms of the Credit Agreement expressed to apply to or be binding on NewTopco]*
Our address for notices for the purposes of Clause 33.2 (Addresses for notices) is:
[
]
[If not classified as a corporation: [Name of company] is [classified as a partnership /OR/ disregarded as an entity separate from its owner] and is owned by [NAME OF OWNER(S)] for U.S. federal income tax purposes.]
This Deed and any non-contractual obligations arising out of or in connection with it are governed by English law.
Executed as a deed by | ) | Director | ||||
[PROPOSED GUARANTOR] | ) | |||||
acting by | ) | Director/Secretary | ||||
And | ) |
* | Only in the case of accession by NewTopCo. |
PART 3
BORROWER ACCESSION AGREEMENT
To: | THE ROYAL BANK OF SCOTLAND PLC as Agent |
From: | [PROPOSED BORROWER] |
[Date]
Vodafone Group Plc - [ ] Revolving Credit Agreement
dated [] 2014 (the Credit Agreement)
Terms used herein which are defined in the Credit Agreement shall have the same meaning herein as in the Credit Agreement.
We refer to Clause 27.8 (Additional Borrowers).
We, [Name of company] of [Registered Office] (Registered no. [ ] agree to become party to and to be bound by the terms of the Credit Agreement as an Additional Borrower in accordance with Clause 27.8 (Additional Borrowers).
The address for notices of the Additional Borrower for the purposes of Clause 33.2 (Addresses for notices) is:
[
]
[If not classified as a corporation: [Name of company] is [classified as a partnership /OR/ disregarded as an entity separate from its owner] and is owned by [NAME OF OWNER(S)] for U.S. federal income tax purposes.]
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
[ADDITIONAL BORROWER]
By:
THE ROYAL BANK OF SCOTLAND PLC
By:
PART 4
LENDER ACCESSION AGREEMENT
To: | THE ROYAL BANK OF SCOTLAND PLC as Agent |
From: | [PROPOSED ADDITIONAL LENDER] |
[Date]
Vodafone Group Plc - [ ] Revolving Credit Agreement
dated [] 2014 (the Credit Agreement)
Terms used herein which are defined in the Credit Agreement shall have the same meaning herein as in the Credit Agreement.
We refer to Clause 2.8 (Additional Lenders).
We, [Name of Additional Lender] agree to become party to and to be bound by the terms of the Credit Agreement as an Additional Lender in accordance with Clause 2.8 (Additional Lenders) with effect on and from [insert date].
Our Revolving Credit Commitment is [ ].[Our Swingline Commitment is [ ]]1
We confirm to each Finance Party that we:
(a) | have made our own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in the Credit Agreement and have not relied exclusively on any information provided to us by a Finance Party in connection with any Finance Document; and |
(b) | will continue to make our own independent appraisal of the creditworthiness of each Obligor and its related entities while any amount is or may be outstanding under the Credit Agreement or any Commitment is in force. |
The Facility Office and address for notices of the Additional Lender for the purposes of Clause 33.2 (Addresses for notices) is:
[ ]
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
[ADDITIONAL LENDER]
By:
THE ROYAL BANK OF SCOTLAND PLC
By:
VODAFONE GROUP PLC
By:
1 | Delete if not applicable |
SCHEDULE 5
FORM OF CONFIDENTIALITY UNDERTAKING FROM NEW LENDER
To: | [Existing Lender]; |
Vodafone Group Plc; |
Dear Sirs,
We refer to the [ ] Revolving Credit Agreement dated [] 2014 (the Credit Agreement) between, among others, Vodafone Group Plc and The Royal Bank of Scotland plc (as Agent).
This is a confidentiality undertaking referred to in Clause 28 (Disclosure of Information) of the Credit Agreement. A term defined in the Credit Agreement has the same meaning in this undertaking.
We are considering entering into contractual relations with [insert name of Lender] (the Existing Lender) and understand that it is a condition of our receiving information about Vodafone Group Plc and its related companies and any Finance Document and/or any information under or in connection with any Finance Document that we execute this undertaking.
1. | Confidentiality Undertaking |
We undertake (a) to keep the Confidential Information confidential and not to disclose it to anyone except as provided for by paragraph 2 below and to ensure that the Confidential Information is protected with security measures and a degree of care that would apply to our own confidential information, (b) to use the Confidential Information only for the Permitted Purpose, (c) to use all reasonable endeavours to ensure that any person to whom we pass any Confidential Information (unless disclosed under paragraph 2(b) below) acknowledges and complies with the provisions of this letter as if that person were also a party to it and (d) not to make enquiries of any member of the Consolidated Group or any of their officers, directors, employees or professional advisers relating directly or indirectly to the Facilities, other than directly to the Group Treasurer of Vodafone.
2. | Permitted Disclosure |
You agree that we may disclose Confidential Information:
(a) | to members of the Purchaser Group and their officers, directors, employees and professional advisers to the extent necessary for the Permitted Purpose and to any auditors of members of the Purchaser Group; |
(b) | where requested or required by any court of competent jurisdiction or any competent judicial, governmental, supervisory or regulatory body, (ii) where required by the rules of any stock exchange on which the shares or other securities of any member of the Purchaser Group are listed or (iii) where required by the laws or regulations of any country with jurisdiction over the affairs of any member of the Purchaser Group. |
3. | Notification of Required or Unauthorised Disclosure |
We agree (to the extent permitted by law) to inform you of the full circumstances of any disclosure under paragraph 2(b) above or upon becoming aware that Confidential Information has been disclosed in breach of this letter.
4. | Return of Copies |
If you so request in writing, we shall return all Confidential Information supplied by you to us and destroy or permanently erase all copies of Confidential Information made by us and use all reasonable endeavours to ensure that anyone to whom we have supplied any Confidential Information destroys or permanently erases such Confidential Information and any copies made by them, in each case save to the extent that we or the recipients are required to retain any such Confidential Information by any applicable law, rule or regulation or by any competent judicial, governmental, supervisory or regulatory body or in accordance with internal policy, or where the Confidential Information has been disclosed under paragraph 2(b) above.
5. | Continuing Obligations |
The obligations in this letter are continuing and, in particular, shall survive the termination of any discussions or negotiations between you and us. Notwithstanding the previous sentence, the obligations in this letter shall cease (a) if we become a party to the Facilities or (b) twelve months after we have returned all Confidential Information supplied to us by you and destroyed or permanently erased all copies of Confidential Information made by us (other than any such Confidential Information or copies which have been disclosed under paragraph 2 above (other than sub-paragraph 2(a)) or which, pursuant to paragraph 4 above, are not required to be returned or destroyed provided that any such Confidential Information retained in accordance with paragraph 4 shall remain confidential, subject to paragraph 2, for the period during which it is retained).
6. | Consequences of Breach, etc. |
We acknowledge and agree that you or members of the Consolidated Group (each a Relevant Person) may be irreparably harmed by the breach of the terms hereof and damages may not be an adequate remedy; each Relevant Person may be granted an injunction or specific performance for any threatened or actual breach of the provisions of this letter by any member of the Purchaser Group.
7. | No Waiver; Amendments, etc. |
This letter sets out the full extent of our obligations of confidentiality owed to you in relation to the information the subject of this letter. No failure or delay in exercising any right, power or privilege hereunder will operate as a waiver thereof nor will any single or partial exercise of any right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privileges hereunder. The terms of this letter and our obligations hereunder may only be amended or modified by written agreement between us.
8. | Inside Information |
We acknowledge that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation relating to insider dealing and we undertake not to use any Confidential Information for any unlawful purpose.
9. | Nature of Undertakings |
The undertakings given by us under this letter are given to you and (without implying any fiduciary obligations on your part) are also given for the benefit of each other member of the Consolidated Group.
10. | Governing Law and Jurisdiction |
This letter and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with the laws of England and the parties submit to the non-exclusive jurisdiction of the English courts.
11. | Third Party Rights |
(a) | Subject to paragraph 6 and to paragraph 9 the terms of this letter may be enforced and relied upon only by you and us and the operation of the Contracts (Rights of Third Parties) Act 1999 is excluded. |
(b) | Notwithstanding any provisions of this letter, the parties of this letter do not require the consent of any Relevant Person to rescind or vary this letter at any time. |
12. | Definitions |
In this letter:
Confidential Information means any information relating to Vodafone, the Consolidated Group and/or the Facilities provided to us by you or any of your Affiliates or advisers, in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that (a) is or becomes public knowledge other than as a direct or indirect result of any breach of this letter or (b) is known by us before the date the information is disclosed to us by you or any of your affiliates or advisers or is lawfully obtained by us thereafter, other than from a source which is connected with the Consolidated Group and which, in either case, as far as we are aware, has not been obtained in violation of, and is not otherwise subject to, any obligation of confidentiality;
Permitted Purpose means considering and evaluating whether to enter into the Facilities; and
Purchaser Group means us, each of our holding companies and subsidiaries and each subsidiary of each of our holding companies (as each such term is defined in the Companies Act 1985).
Yours faithfully
For and on behalf of
[New Lender]
SCHEDULE 6
FORM OF ADDITIONAL LENDERS FEE LETTER
Vodafone Group Plc (Vodafone)
Vodafone House
The Connection
Newbury
Berkshire RG14 2FN
For the attention of [Director of Treasury]
[DATE]
Dear Sirs,
Fee Letter
You have asked us to participate in a [ ] credit facility (the Facility) to provide support for the Consolidated Groups continuing commercial paper programmes and for general corporate purposes of the Consolidated Group including, but not limited to, acquisitions.
Terms defined in the credit agreement dated [] 2014 between (inter alia) Vodafone and the financial institutions listed therein (the Credit Agreement) have the same meaning in this letter unless otherwise defined in this letter or the context otherwise requires.
This letter sets out the terms upon which you have agreed to pay a fee in relation to our participation in the Facility.
1. | Fee |
You will pay to us for our account a non-refundable up-front fee equal to [ ] per cent. flat calculated on our Revolving Credit Commitment as at the date on which we become an Additional Lender pursuant to Clause 2.8 (Additional Lenders) of the Credit Agreement and payable 5 Business Days after that date;
2. | Finance Document |
This Fee Letter is a Finance Document.
3. | No Set-off |
All payments to be made under this Fee Letter will be calculated and made without (and free and clear of any deduction for) set-off or counterclaim).
4. | Governing Law |
This letter and any non-contractual obligations arising out of or in connection with it are governed by and construed in accordance with English law.
If you agree to the above please sign and return the enclosed copy of this letter.
This letter may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this letter.
Yours faithfully,
[ ]
|
For and on behalf of
[ADDITIONAL LENDER]
We agree to the terms set out above.
[ ]
|
For and on behalf of
Vodafone Group Plc
[DATE]
SCHEDULE 7
FORM OF INCREASE CONFIRMATION
To: | THE ROYAL BANK OF SCOTLAND PLC as Agent and Vodafone, for and on behalf of each Obligor |
From: | [the Increase Lender] (the Increase Lender) |
[DATE]
Vodafone Group Plc - [ ] Revolving Credit Agreement
dated [] 2014 (the Credit Agreement)
1. | We refer to the Credit Agreement. This agreement (the Agreement) shall take effect as an Increase Confirmation for the purpose of the Credit Agreement. Terms defined in the Credit Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement. |
2. | We refer to Clause 2.3 (Increase) of the Credit Agreement. |
3. | The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the Relevant Commitment) as if it was an Original Lender under the Credit Agreement. |
4. | The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the Increase Date) is [ ]. |
5. | On the Increase Date, the Increase Lender becomes party to the relevant Finance Documents as a Lender. |
6. | The Facility Office and address, fax number and attention details for notices to the Increase Lender for the purposes of Clause 33.2 (Addresses for notices) are set out in the Schedule. |
7. | The Increase Lender expressly acknowledges the limitations on the Lenders obligations referred to in paragraph (f) of Clause 2.3 (Increase). |
8. | The Increase Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it is: |
(a) | [a Qualifying Lender (other than a Treaty Lender);] |
(b) | [a Treaty Lender;] |
(c) | [not a Qualifying Lender].2 |
[9] This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
[9/10] This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English Law.
[10/11] This Agreement has been entered into on the date stated at the beginning of this Agreement.
2 | Delete as applicable - each Increase Lender is required to confirm which of these three categories it falls within. |
THE SCHEDULE
Relevant Commitment/rights and obligations to be assumed by the Increase Lender
[insert relevant details]
[Facility office address, fax number and attention details for notices and account details for payments]
[Increase Lender]
By:
This Agreement is accepted as an Increase Confirmation for the purpose of the Credit Agreement by the Agent and the Increase Date is confirmed as [ ].
Agent
By:
SIGNATORIES
Borrower and Guarantor
VODAFONE GROUP PLC
By:
NEIL GARROD
ANDY HALFORD
Mandated Lead Arrangers
ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING AND MARKETS)
By:
NEVILLE CROWE
DAVID NAVALON
BANCO BILBAO VIZCAYA ARGENTARIA S.A.
By:
KIM W MCNAMARA
NICHOLAS CONWAY
BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED
By:
RICHARD KING
BANK OF CHINA LIMITED, LONDON BRANCH
By:
STEVE HARDMAN
HUABIN WANG
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
By:
ANDREW TRENOUTH
BARCLAYS BANK PLC
By:
KEITH HATTON
BNP PARIBAS
By:
M. E. MOLLOY
STEVEN WEST
CITIGROUP GLOBAL MARKETS LIMITED
By:
MICHAEL LLEWELYN-JONES
COMMERZBANK AKTIENGESELLSCHAFT
By:
PETER RICHEY
FABRICE LEISTNER
DEUTSCHE BANK AG, LONDON BRANCH
By:
A THOMASIUS
T. ENGELBRECHT
GOLDMAN SACHS BANK USA
By:
ALASDAIR FRASER
HSBC BANK PLC
By:
J MORTIMER
ING BANK N.V., LONDON BRANCH
By:
STEVE FITCH
IAN TAYLOR
INTESA SANPAOLO S.P.A.
By:
GUY PASHLEY
ALESSANDRA CAPOZZI
J.P. MORGAN LIMITED
By:
OWEN MENDLER
LLOYDS BANK PLC
By:
GORDON MILNES
MIZUHO BANK, LTD
By:
ROBERT PETTIT
MORGAN STANLEY BANK INTERNATIONAL LIMITED
By:
NAUMAN ANSARI
SUMITOMO MITSUI BANKING CORPORATION
By:
THIERRY MUSCHS
FRANCOISE BOUCHAT
THE ROYAL BANK OF SCOTLAND PLC
By:
RORY OCONNOR
UBS LIMITED
By:
JUDITH CAMPBELL
ALAN GREENHOW
UNICREDIT BANK AG
By:
CHRISTIAN FISCHER
MIRYAM LUDTKE
Co-Arrangers
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
By:
NICHOLAS HILL
BANCO DE SABADELL S.A., LONDON BRANCH
By:
CARLOS FRANQUES VISCARRO PETER C HOUGHTON
THE BANK OF NEW YORK MELLON
By:
WILLIAM M. FEATHERS
NATIONAL AUSTRALIA BANK LIMITED
By:
LYONS OKEEFFE
SOCIETE GENERALE, LONDON BRANCH
By:
JON ELTRINGHAM
STANDARD CHARTERED BANK
By:
PRABHAKAR SUNDARESAN
THE TORONTO-DOMINION BANK
By:
PHILIP BATES
RYAN CLANCY
Lenders
ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING AND MARKETS)
By:
NEVILLE CROWE
DAVID NAVALON
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
By:
NICHOLAS HILL
BANCO DE SABADELL S.A., LONDON BRANCH
By:
CARLOS FRANQUES VISCARRO PETER C HOUGHTON
BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED
By:
RICHARD KING
BANK OF CHINA LIMITED, LONDON BRANCH
By:
STEVE HARDMAN
HUABIN WANG
THE BANK OF NEW YORK MELLON
By:
WILLIAM M. FEATHERS
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
By:
ANDREW TRENOUTH
BARCLAYS BANK PLC
By:
KEITH HATTON
BBVA IRELAND P.L.C.
By:
PABLO VALLEJO
BNP PARIBAS, LONDON BRANCH
By:
M. E. MOLLOY
STEVEN WEST
CITIBANK N.A., LONDON
By:
MICHAEL LLEWELYN-JONES
COMMERZBANK AKTIENGESELLSCHAFT, LONDON BRANCH
By:
PETER RICHEY
THOMAS BUSH
DEUTSCHE BANK AG, LONDON BRANCH
By:
A THOMASIUS
T. ENGELBRECHT
GOLDMAN SACHS BANK USA
By:
ALASDAIR FRASER
HSBC BANK PLC
By:
J MORTIMER
ING BANK N.V., LONDON BRANCH
By:
STEVE FITCH
IAN TAYLOR
INTESA SANPAOLO S.P.A.
By:
GUY PASHLEY
ALESSANDRA CAPOZZI
JPMORGAN CHASE BANK, N.A., LONDON BRANCH
By:
OWEN MEDLER
LLOYDS BANK PLC
By:
GORDON MILNES
MIZUHO BANK, LTD
By:
ROBERT PETTITT
MORGAN STANLEY BANK, N.A.
By:
MELISSA JAMES
NATIONAL AUSTRALIA BANK LIMITED ABN 12 004 044 937
By:
LYONS OKEEFFE
SOCIETE GENERALE, LONDON BRANCH
By:
JON ELTRINGHAM
STANDARD CHARTERED BANK
By:
PRABHAKAR SUNDARESAN
SUMITOMO MITSUI BANKING CORPORATION
By:
THIERRY MUSCHS
FRANCOISE BOUCHAT
THE ROYAL BANK OF SCOTLAND PLC
By:
RORY OCONNOR
THE TORONTO-DOMINION BANK
By:
PHILIP BATES
RYAN CLANCY
UBS AG LONDON BRANCH
By:
JUDITH CAMPBELL
ALAN GREENHOW
UNICREDIT LUXEMBOURG S.A.
By:
ROBERT RELDENBACH
ANNA BONERT
Swingline Lenders
ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING AND MARKETS)
By:
NEVILLE CROWE
DAVID NAVALON
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
By:
ANDREW TRENOUTH
BARCLAYS BANK PLC
By:
KEITH HATTON
BBVA IRELAND P.L.C.
By:
PABLO VALLEJO
BNP PARIBAS, LONDON BRANCH
By:
M. E. MOLLOY
STEVEN WEST
DEUTSCHE BANK AG, LONDON BRANCH
By:
A THOMASIUS
T. ENGELBRECHT
HSBC BANK PLC
By:
J MORTIMER
ING BANK N.V., LONDON BRANCH
By:
STEVE FITCH
IAN TAYLOR
JPMORGAN CHASE BANK, N.A., LONDON BRANCH
By:
OWEN MEDLER
THE ROYAL BANK OF SCOTLAND PLC
By:
RORY OCONNOR
UBS AG LONDON BRANCH
By:
JUDITH CAMPBELL
ALAN GREENHOW
UNICREDIT LUXEMBOURG S.A.
By:
ROBERT RELDENBACH
ANNA BONERT
Agent
THE ROYAL BANK OF SCOTLAND PLC
By:
RORY OCONNOR
Euro Swingline Agent
THE ROYAL BANK OF SCOTLAND PLC
By:
RORY OCONNOR
Exhibit 4.30
Gerard Kleisterlee Chairman
25 November 2013 |
STRICTLY PRIVATE & CONFIDENTIDAL
Ms Val Gooding
Dear Val
NON-EXECUTIVE DIRECTORSHIP OF VODAFONE GROUP PUBLIC LIMITED COMPANY
Further to our discussions, this letter is to confirm the terms of your appointment as a non-executive director of Vodafone Group Public Limited Company (the Company), without prejudice to your obligations to the Company under English Law.
1 | Role |
Your obligations and responsibilities as a non-executive director are to the Company and, like all directors, you should act at all times in the best interests of the Company, exercising your independent judgment on all matters. Non-executive directors have the same general legal responsibilities to the Company as any other director. The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Companys affairs. Your appointment as a non-executive director of the Company is subject to the Companys Articles of Association (the Articles) and the latter will prevail in the event of any conflict between them and the terms of this letter. A copy of the current version of the Articles is available on the Companys website at www.vodafone.com.
In my view, the role of the non-executive director has a number of key elements and I look forward to your contribution in these areas:
| Strategy: you should constructively challenge and contribute to the development of strategy; |
| Performance: you should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance; |
| Risk: you should satisfy yourself that financial information is accurate and that financial controls and systems of risk management are robust and defensible; and |
| People: non-executive directors are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, senior management and in succession planning. |
2 | Appointment and Term |
Subject to the terms of this letter, your appointment will commence on 1 February 2014 (the Effective Date). The Articles require that directors submit themselves for re-election by shareholders periodically and as a Board we have resolved that all the Directors will submit themselves for re-election every year.
Vodafone Group Plc | Our ref: 053k-SM | |||
Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England | T +44 1635 673915 | |||
T +44 (0)1635 33251 F +44 (0)1635 580857 www.vodafone.com | F +44 1635 580761 | |||
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England. Registered in England No. 1833679 |
The Nominations and Governance Committee each year reviews and considers the submission of the directors for re-election. In the event that when you submit yourself for re-election you are not elected, your appointment as director will automatically terminate. You will not be entitled to receive any compensation from the Company in respect of the termination of your directorship. In accordance with the recommendations of the UK Corporate Governance Code, after nine years service on the Board, a director may not be considered independent.
Overall, we anticipate a time commitment from you involving attendance at all Board meetings (the Company currently has eight each year), the Annual General Meeting (usually held in July each year) and at least one Company/site visit per year. You will be expected to devote appropriate preparation time ahead of each meeting. In addition, each of the principal Board Committees meets about four or five times a year (and in some cases more frequently) and you should anticipate being a member of at least one of these Committees beginning no later than the first anniversary of your appointment to the Board.
By accepting this appointment, you have confirmed that you are able to allocate sufficient time to meet the expectations of your role. If you are unable to attend a Board meeting in person, I hope, nevertheless, that you will be able to join those meetings either by videoconference or teleconference facilities. I would be grateful if, before accepting additional commitments that might affect the time you are able to devote to your role as a non-executive director of the Company, you would seek my agreement.
3 | Fees |
As you will be a non-executive director of the Company, the Board as a whole will determine your remuneration in accordance with the requirements of good corporate governance, and the Financial Conduct Authoritys Listing Rules. The fee for your services is £115,000.00 per annum and it is paid in equal instalments monthly in arrears. You may elect to be paid either in cash or in the Companys shares. Please let me know if you may prefer to receive shares. You will also be entitled to be repaid all travelling and other expenses properly incurred in performing your duties in accordance with the Articles. If you are invited to serve on one or more of the Committees of the Board (in which case this will be covered in a separate communication setting out the Committees terms of reference and any specific responsibilities that may be involved) no additional fee will be payable, unless you are invited to Chair a Committee, in which case an additional fee will be payable in equal instalments monthly in arrears for so long as you hold that position. We currently pay each of the Chairs of our Audit & Risk Committee and Remuneration Committee an additional £25,000 per annum. Payment of all fees will cease immediately after your appointment as a non-executive director of the Company terminates for any reason.
4 | Dealing in the Companys shares |
You shall (and you shall procure that your connected persons, including your spouse and any dependent children shall) comply with the provisions of the Criminal Justice Act 1993, the Financial Services and Markets Act 2000, the Financial Conduct Authoritys Model Code as set out in the Listing Rules and rules and regulations laid down by the Company from time to time in relation to dealing in the Companys shares. Further guidance is provided in your director information pack.
5 | Competitive Businesses |
In view of the sensitive and confidential nature of the Companys business you agree that for so long as you are a non-executive director of the Company you will not, without the consent of the Board, which shall not be withheld unreasonably, be engaged or interested in any capacity in any business or with any
2
company which is, in the reasonable opinion of the Board, competitive with the business of any company in the Group. In the event that you become aware of any potential conflicts of interest, these should be disclosed to me and to the Company Secretary as soon as possible.
6 | Confidentiality |
You agree that you will not make use of, divulge or communicate to any person (except in the proper performance of your duties) any of the trade secrets or other confidential information of or relating to any company in the Group which you have received or obtained from or through the Company. This restriction shall continue to apply after the termination of your appointment without limit in point of time but shall cease to apply to information or knowledge which comes into the public domain otherwise than through your default or which shall have been received by you from a third party entitled to disclose the same to you.
Your attention is also drawn to the requirements under both legislation and regulation as to the disclosure of inside information. Consequently, you should avoid making any statements that might risk a breach of these requirements without prior clearance from me or from the Company Secretary. Please note that all media enquiries concerning the Company must be referred immediately to the Group External Affairs Director.
7 | Illness or Incapacity |
If you are prevented by illness or incapacity from carrying out your duties for a period exceeding three consecutive calendar months or at different times for a period exceeding in aggregate three calendar months in any one period of twelve calendar months or if you become prohibited by law or under the Articles from being a non-executive director of the Company, then the Company may terminate your appointment immediately.
8 | Effect of Termination |
Upon termination of your appointment howsoever arising, you shall forthwith or upon request of the Company, resign from office as a non-executive director of the Company and all other offices held by you in any other companies in the Group and your membership of any organisation acquired by virtue of your tenure of any such office, and should you fail to do so, the Company is hereby irrevocably authorised to appoint some person in your name and on your behalf to sign any documents and do anything necessary or requisite to give effect thereto.
9 | Return of Company Property |
You agree that upon termination of your appointment as a non-executive director, you will immediately deliver to the Company all property belonging to the Company or any member of its Group, including all documents or other records made or compiled or acquired by you during your appointment concerning the business, finances or affairs of the Group.
10 | Independent Professional Advice |
In accordance with the UK Corporate Governance Code, the Board has agreed procedures for directors in the furtherance of their duties to take independent professional advice if necessary, at the Companys expense. A copy of the relevant Board resolution is enclosed in your director information pack. Naturally, if you have any queries or difficulties at any time please feel free to discuss them with me. I am also available at all times to provide you with information and advice you may need.
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11 | Indemnification and Insurance |
You will have the benefit of the following indemnity in relation to liability incurred in your capacity as a Director of the Company. This indemnity is as wide as English law currently permits:
(i) | The Company will provide funds to cover costs as incurred by you in defending legal proceedings brought against you in your capacity as, or as a result of your being or having been, a Director of the Company including criminal proceedings and proceedings brought by the Company itself or an Associated Company; |
(ii) | The Company will indemnify you in respect of any proceedings brought by third parties, including both legal and financial costs of an adverse judgment brought against you in your capacity as, or as a result of your being or having been, a Director of the Company; and |
(iii) | The Company will indemnify you for liability incurred in connection with any application made to a court for relief from liability, where the court grants such relief. |
For the avoidance of doubt, the indemnity granted does not cover:
(i) | Unsuccessful defence of criminal proceedings, in which instance the Company would seek reimbursement for any funds advanced; |
(ii) | Unsuccessful defence of an action brought by the Company itself or an Associated Company, in which instance the Company would seek reimbursement for any funds advanced; |
(iii) | Fines imposed by regulatory bodies; |
(iv) | Fines imposed in criminal proceedings; and |
(v) | Liability incurred in connection with any application under Section 144(3) or (4) of the Companies Act 1985 (acquisition of shares by innocent nominee) or section 1157 of the Companies Act 2006 (general power to grant relief in case of honest and reasonable conduct), where the court refuses to grant you relief, and such refusal is final. |
You will notify the Company as soon as reasonably practicable upon becoming aware of any claim or potential claim against you.
The Company maintains Directors and Officers insurance as additional cover for directors which, if the insurance policy so permits, may provide funds in circumstances where the law prohibits the Company from indemnifying directors. Further information will be provided by the Company Secretary.
12 | Review Process |
The performance of individual directors and the whole Board and its committees is evaluated annually. If, in the interim, there are any matters which cause you concern about your role, please discuss them with me as soon as is appropriate.
13 | Contract for Services |
It is agreed that you will not be an employee of the Company or any of its subsidiaries and that this letter shall not constitute a contract of employment.
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In this letter: | ||
Board | means the board of directors of the Company from time to time or any person or committee | |
nominated by the board of directors as its representative or to whom (and to that extent) it has | ||
delegated powers for the purposes of this letter. | ||
Group | means the Company and any other company which is its subsidiary or in which the Company or any | |
subsidiary of the Company controls not less than 25% of the voting shares (where subsidiary has | ||
the meaning given to it by section 736 of the Companies Act 1985). |
This letter shall be governed by and construed in accordance with English Law. Both parties submit to the exclusive jurisdiction of the English Courts as regards any claim or matter arising in connection with the terms of this letter.
Please acknowledge receipt and acceptance of the terms of this letter by signing the enclosed copy and returning it to the Company Secretary. I am greatly looking forward to working with you.
Kind regards.
Yours sincerely
/s/ Gerard Kleisterlee
I hereby accept that the terms of this letter constitute the terms of my appointment as a non-executive director of the Company.
Signed: /s/Valerie Gooding | Date: 28 November 2013 | |
Val Gooding |
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Exhibit 4.31
Dated 23 January 2014
VODAFONE GROUP PUBLIC LIMITED COMPANY
and
Nicholas Johnathan Read
SERVICE AGREEMENT
Table of Contents
Contents | Page | |||||
1 |
Interpretation | 1 | ||||
2 |
Term of Employment | 1 | ||||
3 |
Appointment and Duties of the Executive | 1 | ||||
4 |
Hours | 2 | ||||
5 |
Interests of the Executive | 2 | ||||
6 |
Location | 3 | ||||
7 |
Salary and Benefits | 3 | ||||
8 |
Expenses | 5 | ||||
9 |
Confidentiality | 5 | ||||
10 |
Intellectual Property Rights | 6 | ||||
11 |
Termination and Suspension | 6 | ||||
12 |
Garden Leave | 8 | ||||
13 |
Restrictions after Termination of Employment | 9 | ||||
14 |
Offers on Liquidation | 11 | ||||
15 |
Return of Company Property | 11 | ||||
16 |
Directorships | 11 | ||||
17 |
Notices | 12 | ||||
18 |
Statutory Particulars | 12 | ||||
19 |
Data Protection Act 1998 | 12 | ||||
20 |
Contracts (Rights of Third Parties) Act 1999 | 13 | ||||
21 |
Miscellaneous | 13 |
This agreement is made on 23 January 2014 between
(1) | VODAFONE GROUP PUBLIC LIMITED COMPANY incorporated in the UK with registered number 1833679 whose registered office is at Vodafone House, The Connection, Newbury, Berkshire RG14 2FN (the Company); and |
(2) | Nicholas Johnathan Read (the Executive). |
This agreement records the terms on which the Executive will continue to serve the Company.
1 | Interpretation |
In this agreement (and any schedules to it):
1.1 | Definitions |
Board means the board of directors of the Company from time to time or any person or committee nominated by the board of directors as its representative for the purposes of this agreement;
Employment means the employment governed by this agreement;
Group means the Company and any other company which is its subsidiary or in which the Company or any subsidiary of the Company controls not less than 20% of the voting shares (where Subsidiary has the meaning given to it by Section 736 of the Companies Act 1985);
Group Company means a member of the Group and Group Companies will be interpreted accordingly;
Listing Rules means the Listing Rules made by the UK Listing Authority under section 74 of the Financial Services and Markets Act 2000;
Remuneration Committee means the Remuneration Committee of the Board from time to time;
Termination Date means the date on which the Employment terminates; and
UK Listing Authority means the Financial Services Authority in its capacity as competent authority under the Financial Services and Markets Act 2000.
2 | Term of Employment |
2.1 | The Employment will commence on 1 January 2014 (the Commencement Date) until termination in accordance with the provisions of this agreement. |
2.2 | The Executive warrants that he is not prevented from undertaking the Employment or from performing his duties in accordance with the terms of this agreement by any obligation or duty owed to any other party, whether contractual or otherwise. |
3 | Appointment and Duties of the Executive |
3.1 | From the Commencement Date the Executive will serve the Company as Chief Financial Officer Designate or such other position as may be agreed from time to time. It is expected that the Executive will be appointed to the Board of Directors of the Company as Chief Financial Officer on 1 April 2014. |
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3.2 | The Executive will: |
3.2.1 | devote the whole of his working time, attention and skill to the Employment; |
3.2.2 | fulfil with due diligence and to the best of his ability the obligations incumbent upon him pursuant to his appointment; |
3.2.3 | accept any offices or directorships as reasonably required by the Board; |
3.2.4 | comply with all rules and regulations issued by the Company or any relevant Group Company; |
3.2.5 | obey the lawful directions of the Board; and |
3.2.6 | promote the interests and reputation of the Group. |
3.3 | The Executive accepts that, subject always to his consent (which he will not unreasonably withhold or delay), the Company may: |
3.3.1 | require him to perform duties for any other Group Company whether for the whole or part of his working time. The Company will remain responsible for the payments and benefits he is entitled to receive under this agreement; |
3.3.2 | appoint any other person to act jointly with him; and |
3.3.3 | transfer the Employment to any other Group Company. |
3.4 | The Executive will promptly disclose to the Board (and where appropriate the board of directors of any other Group Company) full details of any wrongdoing of which he is or becomes aware by any employee of any Group Company where that wrongdoing is material to that employees employment by the relevant company or to the interests or reputation of any Group Company. |
3.5 | At any time during the Employment the Company may require the Executive to undergo a medical examination, related to the performance of the Executives role, by a medical practitioner appointed by the Company. The Executive authorises that medical practitioner to disclose to the Company any report or test results prepared or obtained as a result of that examination which are relevant to the Employment and to discuss with it any matters arising out of the examination which are relevant to the Employment or which might prevent the Executive properly performing the duties of the Employment. |
4 | Hours |
4.1 | The Executive and the Company agree that the Executive is a managing executive for the purposes of the Working Time Regulations 1998 (the Regulations) and is able to determine the duration of his working time himself. As such, the exemptions in Regulation 20 of the Regulations will apply to the Employment. |
5 | Interests of the Executive |
5.1 | The Executive will disclose promptly in writing to the Board all his interests (for example, shareholdings or directorships) in any businesses whether or not of a commercial or business nature except his interests in any Group Company. The Executive has disclosed his interests at the date of this agreement to the Corporate Secretariat. |
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5.2 | Subject to clause 5.3, during the Employment the Executive will not be directly or indirectly engaged or concerned in the conduct of any activity which is similar to or competes with any activity carried on by any Group Company except as a representative of the Company or with the written consent of the Board. |
5.3 | The Executive may not hold or be interested in investments which amount to more than five per cent of the issued investments of any class of any one company whose investments are listed or quoted on any recognised Stock Exchange or dealt in on the Alternative Investments Market. |
5.4 | The Executive may serve as a non-executive director of not more than one non-Group company quoted on a recognised Stock Exchange provided he has prior Board approval to do so. |
5.5 | The Executive will (and will procure that his connected persons, including his spouse and dependent children) comply with all rules of law, including the Criminal Justice Act 1993, the Financial Services and Markets Act 2000, the Model Code as set out in Annex 1 to Listing Rule 9 in the Financial Services Authoritys Listing Rules as amended from time to time and rules or policies applicable to the Company from time to time in relation to the holding or trading of securities. |
6 | Location |
6.1 | The Executive will work at the principal office of the Company or anywhere else within the United Kingdom required by the Board. He may be required to travel and work outside the United Kingdom from time to time. |
7 | Salary and Benefits |
7.1 | From the Commencement Date the Company will pay the Executive a salary of £675,000 per annum. Salary will be paid monthly in arrears by bank credit transfer on or about the 28th day of each month. Salary will be reviewed annually (the first such review to take place in 2014) and the revised salary, if different, will take effect from 1 July. |
7.2 | The salary referred to in clause 7.1 includes directors fees from the Group Companies and any other companies in which the Executive is required to accept a directorship under the terms of this Employment. To achieve this: |
7.2.1 | the Executive will repay any fees he receives to the Company; or |
7.2.2 | his salary will be reduced by the amount of those fees; or |
7.2.3 | a combination of the methods set out in clauses 7.2.1 and 7.2.2 will be applied. References to fees in clause 7.2 exclude any fees received as a result of a directorship held in accordance with clause 5.4. |
7.3 | In addition to the remuneration referred to in clause 7.1 above, the Executive will be entitled to participate in short-term and long-term incentive plans and schemes in accordance with the rules of those plans from time to time in force and the Companys executive remuneration policy as determined by the Remuneration Committee and approved by the Companys shareholders in general meeting from time to time. |
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7.4 | To assist in the performance of his duties under this agreement the Executive will, during the continuance of the Employment be entitled to the benefits of the UK car policy as applicable to directors of the Company from time to time. |
7.5 | The Executive may join the Vodafone UK Defined Contribution Pension Plan (the Plan) at any time. The Executive will be eligible for an allowance of 30% of salary (reducing to 24% from 1 November 2015) which can be taken as an employer pension contribution, taxable cash allowance or a combination of these options. Due to pension taxation changes from April 2011, the maximum Company contribution to the Plan will be £50,000 per annum. The maximum contribution will reduce to £40,000 per annum from 6 April 2014. The Executive may elect not to join the Plan and instead the Company will pay the entire allowance as a taxable cash sum. |
7.6 | If the Executive joins the Plan and subsequently decides to cease membership of the Plan then the Company may choose to re-enrol the Executive back into the Plan on a regular basis, expected to be every 3 years. The date at which the Executive may choose to retire for employment and pension purposes will be their 60th birthday. |
7.7 | Participation in the Plan and the extent to which the Executive is entitled to benefits under it are subject always to the rules of the Plan. The Company expressly reserves the right to discontinue or modify the Plan from time to time. |
7.8 | The Executive will automatically be covered for life assurance at four times salary and receive long-term disability insurance regardless of whether or not they remain in the Plan. This cover will be effective from the Commencement Date. |
7.9 | Without prejudice to the Companys right to terminate the Employment at any time in accordance with clause 11 if the Executive complies with any eligibility or other conditions set by the Company and any insurer appointed by the Company from time to time (the Insurer), the Executive will be provided with long-term disability insurance. The terms upon which this insurance is provided and the level of cover will be in accordance with Company policy from time to time but currently an income of two thirds of basic salary (capped at a maximum of £650,000 per annum) is provided up to retirement on long-term total disability. The Executive understands and agrees that if the Insurer fails or refuses to provide him with any benefit under the insurance arrangement provided by the Company, the Executive will have no right of action against the Company in respect of such failure or refusal. |
7.10 | If the Executive complies with any eligibility requirements or other conditions set by the Company and any insurer appointed by the Company, the Executive and his partner and children under 18 years of age or, children under 21 years of age if in full time education may participate in the Companys private health insurance arrangements at the Companys expense and subject to the terms of those arrangements from time to time. The Company reserves the right at any time to withdraw this benefit or to amend the terms upon which it is provided. |
7.11 | The Executive is entitled to 28 days paid holiday each year (in addition to English Bank and other public holidays) to be taken at times approved in advance by the Board. In addition the Executive shall be entitled to an additional days holiday for each five years of continuous service up to a maximum of 3 days. The leave year runs from 1 December to 30 November. The Executive agrees that the provisions of Regulations 15(1)-(4) inclusive of the Regulations (dates on which leave is taken) do not apply to the Employment. |
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Holiday entitlement will be calculated on a monthly basis and accrue on the basis of completed whole calendar months of Employment. The Executive will be paid for any accrued holiday not taken at the Termination Date. The Company may require the Executive to take accrued holiday during any notice period. If on the Termination Date the Executive has exceeded his accrued holiday entitlement, the excess may be deducted from any sums due to him. The formula for calculating the amount of holiday due to the Executive and any payments or repayments to be made is 1/260 of the Executives annual basic salary.
7.12 | Subject to the rights of the Company under clause 11.6 of this agreement, if the Executive during this agreement is incapacitated by ill health or accident from performing his duties under this agreement he will, during the period of any such incapacity be entitled to Company Sick Pay Scheme subject to and in accordance with the terms of the Scheme (full details of which have been supplied to the Executive) if and for so long as such Scheme remains in force but he shall not be entitled to receive any other remuneration under clause 7.1. |
7.13 | If the Executive is absent from work due to sickness or injury which is caused by the fault of another person, and as a consequence recovers from that person or another person any sum representing compensation for loss of salary under this agreement, the Executive will repay to the Company any money it has paid to him as salary in respect of the same period of absence. |
8 | Expenses |
8.1 | The Company will refund to the Executive all reasonable expenses properly incurred by him in performing his duties under this agreement, provided that these are incurred in accordance with Company policy from time to time. The Company will require the Executive to produce receipts or other documents as proof that he has incurred any expenses he claims. |
9 | Confidentiality |
9.1 | Without prejudice to the common law duties which he owes to the Company, the Executive agrees that he will not, except in the proper performance of his duties, copy, use or disclose to any person any of the Companys trade secrets or confidential information. This restriction will continue to apply after the termination of the Employment without limit in time but will not apply to trade secrets or confidential information which become public other than through unauthorised disclosure by the Executive. The Executive will use his best endeavours to prevent the unauthorised copying use or disclosure of such information. |
For the purposes of this agreement trade secrets and confidential information include but will not be limited to names of clients, suppliers, reports, papers, data and other confidential information in any form prepared by the Company or acquired by it and any other information in whatever form (written, oral, visual and electronic) concerning the confidential affairs of the Company.
9.2 | In the course of the Employment the Executive is likely to obtain trade secrets and confidential information belonging or relating to other Group Companies and other persons. He will treat such information as if it falls within the terms of clause 9.1 and clause 9.1 will apply with any necessary amendments to such information. If requested to do so |
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by the Company the Executive will enter into an agreement with other Group Companies and any other persons in the same terms as clause 9.1 with any amendments necessary to give effect to this provision. |
9.3 | Nothing in this agreement will prevent the Executive from making a protected disclosure in accordance with the provisions of the Employment Rights Act 1996. |
10 | Intellectual Property Rights |
10.1 | The Executive will promptly inform the Company if he makes, creates or is involved in making or generating an Invention, Work or Information during the Employment and will give the Company sufficient details of it to allow the Company to assess the Invention, Work or Information and to decide whether the Invention, Work or Information belongs to the Company. The Company will treat any Invention, Work or Information which does not belong to it as confidential. |
Invention means any invention (whether patentable or not within the meaning of the Patents Act 1977 or other applicable legislation in any other country) relating to or capable of being used in the business of the Company.
Work means any discovery, design, database or other work (whether registrable or not and whether a copyright work or not) which is not an Invention and which the Executive creates or is involved in creating:
10.1.1 | in connection with or in the course of his Employment; or |
10.1.2 | relating to or capable of being used in those aspects of the businesses of the Group Companies in which he is involved. |
Information means any idea, method or information which is not an Invention or Work generated by the Executive either:
10.1.3 | in connection with or in the course of the Employment, or |
10.1.4 | outside the course of the Employment, but relating to the business, finance or affairs of any Group Company. |
10.2 | The Executive is not entitled to any additional compensation for any Invention, Work or Information; such achievements are compensated by base salary. |
10.3 | The Executive shall not make copies of any computer files belonging to any Group Company or their service providers and shall not introduce any of his own computer files into any computer used by a Group Company in breach of any Group Company policy, unless he has obtained the consent of the Company. |
11 | Termination and Suspension |
11.1 | The Employment will continue until terminated by either party giving written notice as set out in clause 11.2. |
11.2 | Either party may terminate the Employment by giving not less than twelve months written notice to the other. |
11.3 | Subject to the Employment Equality (Age) Regulations 2006 and notwithstanding the other provisions of this agreement and in particular clause 11.2, the Employment will automatically terminate (if not already terminated) on the Executives 65th birthday. |
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11.4 | Once notice to terminate has been given by either party in accordance with clause 11.2 the Company reserves the right, exercisable at any time and in its absolute discretion, to terminate the Executives employment forthwith by notice in writing. In such event, the Company shall pay the Executive in lieu of the unexpired period of notice the sums or sum calculated and payable in accordance with clause 11.5 (together the PILON). The PILON shall not constitute a debt payable by the Company and from the Termination Date in accordance with this Clause the Executive shall be obliged to mitigate his losses flowing from such termination subject only to abiding by the obligations as set out in clause 13. For the purposes of this clause and clause 11.5, the Executives obligation to mitigate shall be to take such steps to mitigate as he would have been required to take at common law had he been dismissed in breach of the terms of this agreement. |
11.5 | The amount of the PILON shall be such sum as the Executive would have received in salary (at the rate in force at the Termination Date) had the employment continued throughout the unexpired notice period less the aggregate of (a) any sums earned or received by the Executive as a result of his obligation to mitigate his losses and (b) deductions for income tax and employees national insurance contributions. The PILON shall be payable in installments at the same intervals and on the same dates as salary payments would have been made to the Executive had the employment continued. The Executive shall no later than the 15th day of each month during which installments of the PILON are payable, provide to the Company a statement of all sums earned or received by the Executive referable to the period for which the next installment of the PILON falls to be made. In the absence of receipt of any such statement, payment of the relevant installment of the PILON shall be delayed until 7 working days after receipt of the statement. |
11.6 | The Company may terminate the Employment with immediate effect by giving written notice if the Executive does not perform the duties of the Employment for a period of 130 days (whether or not consecutive) in any period of 365 days because of sickness, injury or other incapacity. This notice can be given whilst the Executive continues not to perform his duties or on expiry of the 130 day period. In this clause, days includes Saturdays, Sundays and public holidays. |
11.7 | The Company may terminate the Employment with immediate effect by giving written notice if the Executive: |
11.7.1 | After due notice, has not performed his duties under this agreement to the standard required by the Board or does not comply with any lawful order or direction given by the Board; or |
11.7.2 | commits any serious or persistent breach of his obligations under or does not comply with any material term of this agreement; or |
11.7.3 | is guilty of any gross misconduct or conducts himself (whether in connection with the Employment or not) in a way which is harmful to any Group Company; or |
11.7.4 | is guilty of dishonesty or is convicted of a criminal offence (other than a motoring offence which does not result in imprisonment) whether in connection with the Employment or not; or |
11.7.5 | commits (or is reasonably believed by the Board to have committed) a breach of any legislation in force which may affect or relate to the business of any Group Company; or |
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11.7.6 | becomes of unsound mind, is bankrupted or has a receiving order made against him or makes any general composition with his creditors or takes advantage of any statute affording relief for insolvent debtors; or |
11.7.7 | becomes disqualified from being a director of a company. |
11.8 | When the Company terminates the Employment by giving written notice to take immediate effect in accordance with either clause 11.6 or 11.7, for the avoidance of doubt there is no obligation to give notice as set out in clause 11.1 or any other period of notice to make any payment in lieu of notice. |
11.9 | The Executive will have no claim for damages or any other remedy against the Company if the Employment is terminated for any of the reasons set out in clause 11.6 or 11.7. |
11.10 | When the Employment terminates the Company may deduct from any money due to the Executive (including remuneration) any amount which he owes to any Group Company. |
11.11 | The Company may suspend the Executive from the Employment on full salary at any time, and for any reason for a reasonable period to investigate any matter in which the Executive is implicated or involved (whether directly or indirectly) and to conduct any related disciplinary proceedings (including any appeals). |
12 | Garden Leave |
12.1 | Neither the Company nor any Group Company is under any obligation to provide the Executive with any work. At any time after notice to terminate the Employment is given by either party under clause 11 above, or if the Executive resigns without giving due notice and the Company does not accept his resignation, the Company may require the Executive to comply with any or all of the provisions in clauses 12.2 and 12.3 for a maximum period of six months (the Garden Leave Period). |
12.2 | The Executive will not, without prior written consent of the Board, be employed or otherwise engaged in the conduct of any activity, whether or not of a business nature during the Garden Leave Period. Further, the Executive will not, unless requested by the Company: |
12.2.1 | enter or attend the premises of the Company or any other Group Company; or |
12.2.2 | contact or have any communication with any customer or client of the Company or any other Group Company in relation to the business of the Company or any other Group Company; or |
12.2.3 | contact or have any communication with any employee, officer, director, agent or consultant of the Company or any other Group Company in relation to the business of the Company or any other Group Company; or |
12.2.4 | remain or become involved in any aspect of the business of the Company or any other Group Company except as required by such companies. |
12.3 | The Company may require the Executive: |
12.3.1 | to comply with the provisions of clause 15, save that he will not be required to return his Company car; and |
12.3.2 | to immediately resign from any directorship which he holds in the Company, any other Group Company or any other company where such directorship is held as a |
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consequence or requirement of the Employment, unless he is required to perform duties to which any such directorship relates in which case he may retain such directorships while those duties are ongoing. The Executive hereby irrevocably appoints the Company to be his attorney to execute any instrument and do anything in his name and on his behalf to effect his resignation if he fails to do so in accordance with this clause 12.3.2. |
12.4 | During the Garden Leave Period: |
12.4.1 | the Executive shall provide such assistance as the Company or any Group Company may require to effect an orderly handover of his responsibilities to any individual or individuals appointed by the Company or any Group Company to take over his roles or responsibilities; |
12.4.2 | the Executive shall make himself available to deal with requests for information, provide assistance, be available for meetings and to advise on matters relating to work (unless the Company has agreed the Executive may be unavailable for a period); and |
12.4.3 | the Company may appoint another person to carry out his duties in substitution for the Executive. |
12.5 | During the Garden Leave Period, the Executive will be entitled to receive his salary and all contractual benefits (for example, his Company car, if any) in accordance with the terms of this agreement. Any unused holiday accrued at the commencement of the Garden Leave Period and any holiday accrued during any such Period will be deemed to be taken by the Executive during the Garden Leave Period. |
12.6 | At the end of the Garden Leave Period, the Company may, but shall not in any way be obliged, to exercise its rights under clause 11.4 and clause 11.5 to pay the Executive the PILON in lieu of the balance of any period of notice given by the Company or the Executive, less any deductions the Company is required by law to make. |
12.7 | All duties of the Employment (whether express or implied), including without limitation the Executives duties of fidelity, good faith and exclusive service, shall continue throughout the Garden Leave Period save as expressly varied by this clause. |
13 | Restrictions after Termination of Employment |
13.1 | In this clause: |
Relevant Date means the Termination Date or, if earlier, the date on which the Executive commences any Garden Leave Period; and
Restricted Period means the period of 12 months commencing on the Relevant Date.
13.2 | The Executive is likely to obtain trade secrets and confidential information and personal knowledge of and influence over customers and employees of the Group during the course of the Employment. To protect these interests of the Company, the Executive agrees with the Company that he will be bound by the following covenants: |
13.2.1 | during the Restricted Period he will not be employed in, or carry on for his own account or for any other person, whether directly or indirectly, (or be a director of any company engaged in) any business which is or is about to be in competition with any business of the Company or any other Group Company being carried on |
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by such company at the Relevant Date provided he was concerned or involved with that business to a material extent at any time during the 12 months prior to the Relevant Date; |
13.2.2 | during the Restricted Period he will not (either on his own behalf or for or with any other person), whether directly or indirectly, canvass or solicit in competition with the Company or any other Group Company the custom of any person who at any time during the 12 months prior to the Relevant Date was a customer of, or in the habit of dealing with, the Company or (as the case may be) any other Group Company and in respect of whom the Executive had access to confidential information or with whose custom or business the Executive was personally concerned or employees reporting directly to him were personally concerned; |
13.2.3 | during the Restricted Period he will not (either on his own behalf or for or with any other person, whether directly or indirectly,) deal with or otherwise accept in competition with the Company or any Group Company the custom of any person who was at any time during the 12 months prior to the Relevant Date a customer of, or in the habit of dealing with, the Company or (as the case may be) any Group Company and in respect of whom the Executive had access to confidential information or with whose custom or business the Executive was personally concerned; |
13.2.4 | during the Restricted Period he will not (either on his own behalf or for or with any other person, whether directly or indirectly) canvass or solicit in competition with the Company or any other Group Company the custom of any person who was negotiating with the Company or any other Group Company for the supply of goods or services (whether as customer, client, supplier, agent or distributor of the Company) during the six months prior to the Relevant Date or who was a potential customer to whom the Executive had made a presentation or a pitch and in respect of whom the Executive had access to confidential information or with whose custom or business the Executive was personally concerned; and |
13.2.5 | during the Restricted Period he will not (either on his own behalf or for or with any other person, whether directly or indirectly,) entice or try to entice away from the Company or any other Group Company any person who was an F band employee or higher employee (or equivalent) of such a company at the Termination Date and who had been such an employee at any time during the six months prior to the Relevant Date and with whom he had worked closely at any time during that period. |
13.3 | Each of the paragraphs contained in clause 13.2 constitutes an entirely separate and independent covenant. If any covenant is found to be invalid this will not affect the validity or enforceability of any of the other covenants. |
13.4 | Following the Termination Date, the Executive will not represent himself as being in any way connected with the businesses of the Company or of any other Group Company (except to the extent agreed by such a company). |
13.5 | Any benefit given or deemed to be given by the Executive to any Group Company under the terms of clause 13 is received and held on trust by the Company for the relevant Group Company. The Executive will enter into appropriate restrictive covenants directly with other Group Companies if asked to do so by the Company. |
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14 | Offers on Liquidation |
The Executive will have no claim against the Company if the Employment is terminated by reason of liquidation in order to reconstruct or amalgamate the Company or by reason of any reorganisation of the Company and the Executive is offered employment with the company succeeding to the Company upon such liquidation or reorganisation and the new terms of employment offered to the Executive are no less favourable to him than the terms of this agreement.
15 | Return of Company Property |
15.1 | At any time during the Employment (at the request of the Company) and in any event when the Employment terminates, the Executive will immediately return to the Company: |
15.1.1 | all documents and other materials (whether originals or copies) made or compiled by or delivered to the Executive during the Employment and concerning all the Group Companies. The Executive will not retain any copies of any materials or other information; and |
15.1.2 | all other property belonging or relating to any of the Group Companies. |
15.2 | When the Employment terminates the Executive will immediately return to the Company any car provided to the Executive which is in the possession or under the control of the Executive. |
15.3 | If the Executive commences Garden Leave in accordance with clause 12 he may be required to comply with the provisions of clause 15.1. |
16 | Directorships |
16.1 | The Executives office as a director of the Company or any other Group Company is subject to the Articles of Association of the relevant company (as amended from time to time). If the provisions of this agreement conflict with the provisions of the Articles of Association, the Articles of Association will prevail. |
16.2 | The Executive must resign from any office held in any Group Company if he is asked to do so by the Company. |
16.3 | If the Executive does not resign as an officer of a Group Company, having been requested to do so in accordance with clause 16.2, the Company will be appointed as his attorney to effect his resignation. By entering into this agreement, the Executive irrevocably appoints the Company as his attorney to act on his behalf to execute any document or do anything in his name necessary to effect his resignation in accordance with clause 16.2. If there is any doubt as to whether such a document (or other thing) has been carried out within the authority conferred by this clause 16.3, a certificate in writing (signed by any director or the secretary of the Company) will be sufficient to prove that the act or thing falls within that authority. |
16.4 | The termination of any directorship or other office held by the Executive will not terminate the Executives employment or amount to a breach of terms of this agreement by the Company. |
16.5 | During the Employment the Executive will not do anything which could cause him to be disqualified from continuing to act as a director of any Group Company. |
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16.6 | The Executive must not resign his office as a director of any Group Company without the agreement of the Company. |
17 | Notices |
17.1 | Any notices given under this agreement must be given by letter or fax. Notice to the Company must be addressed to its registered office at the time the notice is given. Notice to the Executive must be given to him personally or sent to his last known address. |
17.2 | Except for notices given by hand, notices given by post will be deemed to have been given on the next working day after the day of posting and notices given by fax will be deemed to have been given in the ordinary course of transmission. |
18 | Statutory Particulars |
18.1 | The written particulars of employment which the Executive is entitled to receive under the provisions of Part I of the Employment Rights Act 1996 are set out below, insofar as they are not set out elsewhere in this agreement or in any other documents provided with this agreement. |
18.1.1 | The Executives period of continuous employment began on 17th November 2008. |
18.1.2 | The Companys disciplinary rules and disciplinary and grievance procedures as set out in the Employee Handbook from time to time are applicable to the Executive. |
18.1.3 | The Companys normal hours of work are 8.30am to 5.15pm Monday to Thursday and 8.30am to 4.00pm on Friday. |
18.1.4 | There are no terms and conditions relating to collective agreements or to the requirement to work outside the United Kingdom. |
18.1.5 | A contracting-out certificate under the pension Schemes Act 1993 is not in force in respect of this Employment. |
18.2 | The authorisation of the Company to request a medical examination is governed under the Access to Medical Reports Act (1988). |
19 | Data Protection Act 1998 |
19.1 | For the purposes of the Data Protection Act 1998 (the Act) the Executive gives his consent to the holding, processing and disclosure of personal data (including sensitive data within the meaning of the Act) provided by the Executive to the Company for all purposes relating to the performance of this agreement including, but not limited to: |
19.1.1 | administering and maintaining personnel records; |
19.1.2 | paying and reviewing salary and other remuneration and benefits; |
19.1.3 | providing and administering benefits (including if relevant, pension, life assurance, permanent health insurance and medical insurance); |
19.1.4 | undertaking performance appraisals and reviews; |
19.1.5 | maintaining sickness and other absence records; |
19.1.6 | taking decisions as to the Executives fitness for work; |
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19.1.7 | providing references and information to future employers, and if necessary, governmental and quasi-governmental bodies for social security and other purposes, the Inland Revenue and the Contributions Agency; |
19.1.8 | providing information to future purchasers of the Company or of the business in which the Executive works; and |
19.1.9 | transferring information concerning the Executive to a country or territory outside the EEA. |
19.2 | The Executive acknowledges that during his Employment he will have access to and process, or authorise the processing of, personal data and sensitive personal data relating to employees, customers and other individuals held and controlled by the Company. The Executive agrees to comply with the terms of the Act in relation to such data and to abide by the Companys data protection policy issued from time to time. |
20 | Contracts (Rights of Third Parties) Act 1999 |
20.1 | To the extent permitted by law, no person other than the parties to this agreement and the Group Companies shall have the right to enforce any term of this agreement under the Contracts (Rights of Third Parties) Act 1999. For the avoidance of doubt, save as expressly provided in this clause the application of the Contracts (Rights of Third Parties) Act 1999 is specifically excluded from this agreement, although this does not affect any other right or remedy of any third party which exists or is available other than under this Act. |
21 | Miscellaneous |
21.1 | This agreement may only be modified by the written agreement of the parties. |
21.2 | The Executive cannot assign this agreement to anyone else. |
21.3 | References in this agreement to rules, regulations, policies, handbooks or other similar documents which supplement it, are referred to in it or describe any pensions or other benefits arrangement are references to the versions or forms of the relevant documents as amended or updated from time to time. |
21.4 | This agreement supersedes any previous written or oral agreement between the parties in relation to the matters dealt with in it. It contains the whole agreement between the parties relating to the Employment at the date the agreement was entered into (except for those terms implied by law which cannot be excluded by the agreement of the parties). The Executive acknowledges that he has not been induced to enter into this agreement by any representation, warranty or undertaking not expressly incorporated into it. The Executive agrees and acknowledges that his only rights and remedies in relation to any representation, warranty or undertaking made or given in connection with this agreement (unless such representation, warranty or undertaking was made fraudulently) will be for breach of the terms of this agreement, to the exclusion of all other rights and remedies (including those in tort or arising under statute). |
21.5 | Neither partys rights or powers under this agreement will be affected if: |
21.5.1 | one party delays in enforcing any provision of this agreement; or |
21.5.2 | one party grants time to the other party. |
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21.6 | The Interpretation Act 1978 shall apply to this agreement in the same way as it applies to an enactment. |
21.7 | References to any statutory provisions include any modifications or re-enactments of those provisions. |
21.8 | Headings will be ignored in construing this agreement. |
21.9 | If either party agrees to waive his rights under a provision of this agreement, that waiver will only be effective if it is in writing and it is signed by him. A partys agreement to waive any breach of any term or condition of this agreement will not be regarded as a waiver of any subsequent breach of the same term or condition or a different term or condition. |
21.10 | This agreement is governed by and will be interpreted in accordance with the laws of England and Wales. Each of the parties submits to the exclusive jurisdiction of the English Courts as regards any claim or matter arising under this agreement. |
EXECUTED as a DEED on behalf of | /s/ V Colao | |||
VODAFONE GROUP PLC | Director | |||
/s/ R E S Martin | ||||
Company Secretary/Director | ||||
EXECUTED as a DEED by | } | /s/ Nicholas Read | ||
Nicholas Johnathan Read in the presence of:
|
||||
Witnesss signature | /s/ Adrian Jackson | |||
Name | Adrian Jackson | |||
Address | ||||
Occupation | HR Director |
14
Exhibit 4.32
Gerard Kleisterlee Chairman
14 April 2014 |
STRICTLY PRIVATE & CONFIDENTIDAL
Sir Crispin Davis
Dear Crispin
NON-EXECUTIVE DIRECTORSHIP OF VODAFONE GROUP PUBLIC LIMITED COMPANY
Further to our discussions, this letter is to confirm the terms of your appointment as a non-executive director of Vodafone Group Public Limited Company (the Company), without prejudice to your obligations to the Company under English Law.
1 | Role |
Your obligations and responsibilities as a non-executive director are to the Company and, like all directors, you should act at all times in the best interests of the Company, exercising your independent judgment on all matters. Non-executive directors have the same general legal responsibilities to the Company as any other director. The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Companys affairs. Your appointment as a non-executive director of the Company is subject to the Companys Articles of Association (the Articles) and the latter will prevail in the event of any conflict between them and the terms of this letter. A copy of the current version of the Articles is available on the Companys website at www.vodafone.com.
In my view, the role of the non-executive director has a number of key elements and I look forward to your contribution in these areas:
| Strategy: you should constructively challenge and contribute to the development of strategy; |
| Performance: you should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance; |
| Risk: you should satisfy yourself that financial information is accurate and that financial controls and systems of risk management are robust and defensible; and |
| People: non-executive directors are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, senior management and in succession planning. |
Vodafone Group Plc | Our ref: 053k-SM | |||
Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England | T +44 1635 673915 | |||
T +44 (0)1635 33251 F +44 (0)1635 580857 www.vodafone.com | F +44 1635 580761 | |||
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England. Registered in England No. 1833679 |
2 | Appointment and Term |
Subject to the terms of this letter, your appointment as a director will commence on 28 July 2014 (the Effective Date). We would also like you to join the Audit & Risk Committee on the Effective Date, if you are willing to do so.
The Articles require that directors submit themselves for re-election by shareholders periodically and as a Board we have resolved that all the Directors will submit themselves for re-election every year. The Nominations and Governance Committee each year reviews and considers the submission of the directors for re-election and considers the membership of the Board committees. In the event that when you submit yourself for re-election you are not elected, your appointment as director will automatically terminate. You will not be entitled to receive any compensation from the Company in respect of the termination of your directorship. In accordance with the recommendations of the UK Corporate Governance Code, after nine years service on the Board, a director may not be considered independent.
Overall, we anticipate a time commitment from you involving attendance at all Board meetings (the Company currently has eight each year), the Annual General Meeting (usually held in July each year) and at least one Company/site visit per year. You will be expected to devote appropriate preparation time ahead of each meeting. In addition, each of the principal Board Committees meets about four or five times a year (and in some cases more frequently) and you are expected to attend all the meetings of the Committee(s) of which you are member.
By accepting this appointment, you have confirmed that you are able to allocate sufficient time to meet the expectations of your role. If you are unable to attend a Board meeting or Committee meeting in person, I hope, nevertheless, that you will be able to join those meetings either by videoconference or teleconference facilities. I would be grateful if, before accepting additional commitments that might affect the time you are able to devote to your role as a non-executive director of the Company, you would seek my agreement.
3 | Fees |
As you will be a non-executive director of the Company, the Board as a whole will determine your remuneration in accordance with the requirements of good corporate governance, and the Financial Conduct Authoritys Listing Rules. The fee for your services is £115,000.00 per annum and it is paid in equal instalments monthly in arrears. No separate fee is payable for membership of a Board Committee (unless you are the Chair of the Committee). You may elect to be paid either in cash or in the Companys shares. Please let me know if you may prefer to receive shares. You will also be entitled to be repaid all travelling and other expenses properly incurred in performing your duties in accordance with the Articles. Payment of all fees will cease immediately after your appointment as a non-executive director of the Company terminates for any reason.
4 | Dealing in the Companys shares |
You shall (and you shall procure that your connected persons, including your spouse and any dependent children shall) comply with the provisions of the Criminal Justice Act 1993, the Financial Services and Markets Act 2000, the Financial Conduct Authoritys Model Code as set out in the Listing Rules and rules and regulations laid down by the Company from time to time in relation to dealing in the Companys shares. Further guidance is provided in your director information pack.
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5 | Competitive Businesses |
In view of the sensitive and confidential nature of the Companys business you agree that for so long as you are a non-executive director of the Company you will not, without the consent of the Board, which shall not be withheld unreasonably, be engaged or interested in any capacity in any business or with any company which is, in the reasonable opinion of the Board, competitive with the business of any company in the Group. In the event that you become aware of any potential conflicts of interest, these should be disclosed to me and to the Company Secretary as soon as possible.
6 | Confidentiality |
You agree that you will not make use of, divulge or communicate to any person (except in the proper performance of your duties) any of the trade secrets or other confidential information of or relating to any company in the Group which you have received or obtained from or through the Company. This restriction shall continue to apply after the termination of your appointment without limit in point of time but shall cease to apply to information or knowledge which comes into the public domain otherwise than through your default or which shall have been received by you from a third party entitled to disclose the same to you.
Your attention is also drawn to the requirements under both legislation and regulation as to the disclosure of inside information. Consequently, you should avoid making any statements that might risk a breach of these requirements without prior clearance from me or from the Company Secretary. Please note that all media enquiries concerning the Company must be referred immediately to the Group External Affairs Director.
7 | Illness or Incapacity |
If you are prevented by illness or incapacity from carrying out your duties for a period exceeding three consecutive calendar months or at different times for a period exceeding in aggregate three calendar months in any one period of twelve calendar months or if you become prohibited by law or under the Articles from being a non-executive director of the Company, then the Company may terminate your appointment immediately.
8 | Effect of Termination |
Upon termination of your appointment howsoever arising, you shall immediately or upon request of the Company, resign from office as a non-executive director of the Company and all other offices held by you in any other companies in the Group and your membership of any organisation acquired by virtue of your tenure of any such office, and should you fail to do so, the Company is hereby irrevocably authorised to appoint some person in your name and on your behalf to sign any documents and do anything necessary or requisite to give effect thereto.
9 | Return of Company Property |
You agree that upon termination of your appointment as a non-executive director, you will immediately deliver to the Company all property belonging to the Company or any member of its Group, including all documents or other records made or compiled or acquired by you during your appointment concerning the business, finances or affairs of the Group.
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10 | Independent Professional Advice |
In accordance with the UK Corporate Governance Code, the Board has agreed procedures for directors in the furtherance of their duties to take independent professional advice if necessary, at the Companys expense. A copy of the relevant Board resolution is enclosed in your director information pack. Naturally, if you have any queries or difficulties at any time please feel free to discuss them with me. I am also available at all times to provide you with information and advice you may need.
11 | Indemnification and Insurance |
You will have the benefit of the following indemnity in relation to liability incurred in your capacity as a Director of the Company. This indemnity is as wide as English law currently permits:
(i) | The Company will provide funds to cover costs as incurred by you in defending legal proceedings brought against you in your capacity as, or as a result of your being or having been, a Director of the Company including criminal proceedings and proceedings brought by the Company itself or an Associated Company; |
(ii) | The Company will indemnify you in respect of any proceedings brought by third parties, including both legal and financial costs of an adverse judgment brought against you in your capacity as, or as a result of your being or having been, a Director of the Company; and |
(iii) | The Company will indemnify you for liability incurred in connection with any application made to a court for relief from liability, where the court grants such relief. |
For the avoidance of doubt, the indemnity granted does not cover:
(i) | Unsuccessful defence of criminal proceedings, in which instance the Company would seek reimbursement for any funds advanced; |
(ii) | Unsuccessful defence of an action brought by the Company itself or an Associated Company, in which instance the Company would seek reimbursement for any funds advanced; |
(iii) | Fines imposed by regulatory bodies; |
(iv) | Fines imposed in criminal proceedings; and |
(v) | Liability incurred in connection with any application under Section 144(3) or (4) of the Companies Act 1985 (acquisition of shares by innocent nominee) or section 1157 of the Companies Act 2006 (general power to grant relief in case of honest and reasonable conduct), where the court refuses to grant you relief, and such refusal is final. |
You will notify the Company as soon as reasonably practicable upon becoming aware of any claim or potential claim against you.
The Company maintains Directors and Officers insurance as additional cover for directors which, if the insurance policy so permits, may provide funds in circumstances where the law prohibits the Company from indemnifying directors. Further information will be provided by the Company Secretary.
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12 | Review Process |
The performance of individual directors and the whole Board and its committees is evaluated annually. If, in the interim, there are any matters which cause you concern about your role, please discuss them with me as soon as is appropriate.
13 | Contract for Services |
It is agreed that you will not be an employee of the Company or any of its subsidiaries and that this letter shall not constitute a contract of employment.
In this letter:
Board | means the board of directors of the Company from time to time or any person or committee nominated by the board of directors as its representative or to whom (and to that extent) it has delegated powers for the purposes of this letter. | |
Group | means the Company and any other company which is its subsidiary or in which the Company or any subsidiary of the Company controls not less than 25% of the voting shares (where subsidiary has the meaning given to it by section 736 of the Companies Act 1985). |
This letter shall be governed by and construed in accordance with English Law. Both parties submit to the exclusive jurisdiction of the English Courts as regards any claim or matter arising in connection with the terms of this letter.
Please acknowledge receipt and acceptance of the terms of this letter by signing the enclosed copy and returning it to the Company Secretary. I am greatly looking forward to working with you.
Kind regards.
Yours sincerely
/s/ Gerard Kleisterlee
I hereby accept that the terms of this letter constitute the terms of my appointment as a non-executive director of the Company.
Signed: /s/ Sir Crispin Davis | Date: | April 28 2014 | ||
Sir Crispin Davis |
5
Exhibit 4.33
Gerard Kleisterlee Chairman
13 May 2014 |
STRICTLY PRIVATE & CONFIDENTIDAL
Dame Clara Furse
Dear Clara
NON-EXECUTIVE DIRECTORSHIP OF VODAFONE GROUP PUBLIC LIMITED COMPANY
Further to our discussions, this letter is to confirm the terms of your appointment as a non-executive director of Vodafone Group Public Limited Company (the Company), without prejudice to your obligations to the Company under English Law.
1 | Role |
Your obligations and responsibilities as a non-executive director are to the Company and, like all directors, you should act at all times in the best interests of the Company, exercising your independent judgment on all matters. Non-executive directors have the same general legal responsibilities to the Company as any other director. The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Companys affairs. Your appointment as a non-executive director of the Company is subject to the Companys Articles of Association (the Articles) and the latter will prevail in the event of any conflict between them and the terms of this letter. A copy of the current version of the Articles is available on the Companys website at www.vodafone.com.
In my view, the role of the non-executive director has a number of key elements and I look forward to your contribution in these areas:
| Strategy: you should constructively challenge and contribute to the development of strategy; |
| Performance: you should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance; |
| Risk: you should satisfy yourself that financial information is accurate and that financial controls and systems of risk management are robust and defensible; and |
| People: non-executive directors are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, senior management and in succession planning. |
Vodafone Group Plc | Our ref: 053k-SM | |||
Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England | T +44 1635 673915 | |||
T +44 (0)1635 33251 F +44 (0)1635 580857 www.vodafone.com | F +44 1635 580761 | |||
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England. Registered in England No. 1833679 |
2 | Appointment and Term |
Subject to the terms of this letter, your appointment as a director will commence on 1 September 2014 (the Effective Date). We would also like you to join the Audit & Risk Committee on the Effective Date, if you are willing to do so.
The Articles require that directors submit themselves for re-election by shareholders periodically and as a Board we have resolved that all the Directors will submit themselves for re-election every year. The Nominations and Governance Committee each year reviews and considers the submission of the directors for re-election and considers the membership of the Board committees. In the event that when you submit yourself for re-election you are not elected, your appointment as director will automatically terminate. You will not be entitled to receive any compensation from the Company in respect of the termination of your directorship. In accordance with the recommendations of the UK Corporate Governance Code, after nine years service on the Board, a director may not be considered independent.
Overall, we anticipate a time commitment from you involving attendance at all Board meetings (the Company currently has eight each year), the Annual General Meeting (usually held in July each year) and at least one Company/site visit per year. You will be expected to devote appropriate preparation time ahead of each meeting. In addition, each of the principal Board Committees meets about four or five times a year (and in some cases more frequently) and you are expected to attend all the meetings of the Committee(s) of which you are member.
By accepting this appointment, you have confirmed that you are able to allocate sufficient time to meet the expectations of your role. If you are unable to attend a Board meeting or Committee meeting in person, I hope, nevertheless, that you will be able to join those meetings either by videoconference or teleconference facilities. I would be grateful if, before accepting additional commitments that might affect the time you are able to devote to your role as a non-executive director of the Company, you would seek my agreement.
3 | Fees |
As you will be a non-executive director of the Company, the Board as a whole will determine your remuneration in accordance with the requirements of good corporate governance, and the Financial Conduct Authoritys Listing Rules. The fee for your services is £115,000.00 per annum and it is paid in equal instalments monthly in arrears. No separate fee is payable for membership of a Board Committee (unless you are the Chair of the Committee). You may elect to be paid either in cash or in the Companys shares. Please let me know if you may prefer to receive shares. You will also be entitled to be repaid all travelling and other expenses properly incurred in performing your duties in accordance with the Articles. Payment of all fees will cease immediately after your appointment as a non-executive director of the Company terminates for any reason.
4 | Dealing in the Companys shares |
You shall (and you shall procure that your connected persons, including your spouse and any dependent children shall) comply with the provisions of the Criminal Justice Act 1993, the Financial Services and Markets Act 2000, the Financial Conduct Authoritys Model Code as set out in the Listing Rules and rules and regulations laid down by the Company from time to time in relation to dealing in the Companys shares. Further guidance is provided in your director information pack.
2
5 | Competitive Businesses |
In view of the sensitive and confidential nature of the Companys business you agree that for so long as you are a non-executive director of the Company you will not, without the consent of the Board, which shall not be withheld unreasonably, be engaged or interested in any capacity in any business or with any company which is, in the reasonable opinion of the Board, competitive with the business of any company in the Group. In the event that you become aware of any potential conflicts of interest, these should be disclosed to me and to the Company Secretary as soon as possible.
6 | Confidentiality |
You agree that you will not make use of, divulge or communicate to any person (except in the proper performance of your duties) any of the trade secrets or other confidential information of or relating to any company in the Group which you have received or obtained from or through the Company. This restriction shall continue to apply after the termination of your appointment without limit in point of time but shall cease to apply to information or knowledge which comes into the public domain otherwise than through your default or which shall have been received by you from a third party entitled to disclose the same to you.
Your attention is also drawn to the requirements under both legislation and regulation as to the disclosure of inside information. Consequently, you should avoid making any statements that might risk a breach of these requirements without prior clearance from me or from the Company Secretary. Please note that all media enquiries concerning the Company must be referred immediately to the Group External Affairs Director.
7 | Illness or Incapacity |
If you are prevented by illness or incapacity from carrying out your duties for a period exceeding three consecutive calendar months or at different times for a period exceeding in aggregate three calendar months in any one period of twelve calendar months or if you become prohibited by law or under the Articles from being a non-executive director of the Company, then the Company may terminate your appointment immediately.
8 | Effect of Termination |
Upon termination of your appointment howsoever arising, you shall immediately or upon request of the Company, resign from office as a non-executive director of the Company and all other offices held by you in any other companies in the Group and your membership of any organisation acquired by virtue of your tenure of any such office, and should you fail to do so, the Company is hereby irrevocably authorised to appoint some person in your name and on your behalf to sign any documents and do anything necessary or requisite to give effect thereto.
9 | Return of Company Property |
You agree that upon termination of your appointment as a non-executive director, you will immediately deliver to the Company all property belonging to the Company or any member of its Group, including all documents or other records made or compiled or acquired by you during your appointment concerning the business, finances or affairs of the Group.
3
10 | Independent Professional Advice |
In accordance with the UK Corporate Governance Code, the Board has agreed procedures for directors in the furtherance of their duties to take independent professional advice if necessary, at the Companys expense. A copy of the relevant Board resolution is enclosed in your director information pack. Naturally, if you have any queries or difficulties at any time please feel free to discuss them with me. I am also available at all times to provide you with information and advice you may need.
11 | Indemnification and Insurance |
You will have the benefit of the following indemnity in relation to liability incurred in your capacity as a Director of the Company. This indemnity is as wide as English law currently permits:
(i) | The Company will provide funds to cover costs as incurred by you in defending legal proceedings brought against you in your capacity as, or as a result of your being or having been, a Director of the Company including criminal proceedings and proceedings brought by the Company itself or an Associated Company; |
(ii) | The Company will indemnify you in respect of any proceedings brought by third parties, including both legal and financial costs of an adverse judgment brought against you in your capacity as, or as a result of your being or having been, a Director of the Company; and |
(iii) | The Company will indemnify you for liability incurred in connection with any application made to a court for relief from liability, where the court grants such relief. |
For the avoidance of doubt, the indemnity granted does not cover:
(i) | Unsuccessful defence of criminal proceedings, in which instance the Company would seek reimbursement for any funds advanced; |
(ii) | Unsuccessful defence of an action brought by the Company itself or an Associated Company, in which instance the Company would seek reimbursement for any funds advanced; |
(iii) | Fines imposed by regulatory bodies; |
(iv) | Fines imposed in criminal proceedings; and |
(v) | Liability incurred in connection with any application under Section 144(3) or (4) of the Companies Act 1985 (acquisition of shares by innocent nominee) or section 1157 of the Companies Act 2006 (general power to grant relief in case of honest and reasonable conduct), where the court refuses to grant you relief, and such refusal is final. |
You will notify the Company as soon as reasonably practicable upon becoming aware of any claim or potential claim against you.
The Company maintains Directors and Officers insurance as additional cover for directors which, if the insurance policy so permits, may provide funds in circumstances where the law prohibits the Company from indemnifying directors. Further information will be provided by the Company Secretary.
4
12 | Review Process |
The performance of individual directors and the whole Board and its committees is evaluated annually. If, in the interim, there are any matters which cause you concern about your role, please discuss them with me as soon as is appropriate.
13 | Contract for Services |
It is agreed that you will not be an employee of the Company or any of its subsidiaries and that this letter shall not constitute a contract of employment.
In this letter:
Board | means the board of directors of the Company from time to time or any person or committee nominated by the board of directors as its representative or to whom (and to that extent) it has delegated powers for the purposes of this letter. | |
Group | means the Company and any other company which is its subsidiary or in which the Company or any subsidiary of the Company controls not less than 25% of the voting shares (where subsidiary has the meaning given to it by section 736 of the Companies Act 1985). |
This letter shall be governed by and construed in accordance with English Law. Both parties submit to the exclusive jurisdiction of the English Courts as regards any claim or matter arising in connection with the terms of this letter.
Please acknowledge receipt and acceptance of the terms of this letter by signing the enclosed copy and returning it to the Company Secretary. I am greatly looking forward to working with you.
Kind regards.
Yours sincerely
/s/ Gerard Kleisterlee
I hereby accept that the terms of this letter constitute the terms of my appointment as a non-executive director of the Company.
Signed: /s/ Dame Clara Furse | Date: 19 May 2014 | |||
Dame Clara Furse |
5
Exhibit 4.34
STOCK PURCHASE AGREEMENT
Dated as of
September 2, 2013,
among
VODAFONE GROUP PLC,
VODAFONE 4 LIMITED
and
VERIZON COMMUNICATIONS INC.
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINITIONS |
1 | |||||
ARTICLE II PURCHASE AND SALE OF TRANSFERRED SHARES |
15 | |||||
2.1 |
Purchase and Sale of Transferred Shares | 15 | ||||
2.2 |
Consideration for Transferred Shares | 15 | ||||
2.3 |
Scheme Closing | 17 | ||||
2.4 |
Vodafone Scheme Closing Deliverables | 17 | ||||
2.5 |
Share Purchase Closing | 19 | ||||
2.6 |
Share Purchase Closing Deliverables | 19 | ||||
2.7 |
Distribution of the Verizon Shares following a Share Purchase Closing | 21 | ||||
2.8 |
Withholding | 23 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF VODAFONE |
23 | |||||
3.1 |
Organization and Qualification | 23 | ||||
3.2 |
Authority | 24 | ||||
3.3 |
Consents | 25 | ||||
3.4 |
No Liabilities of the Sold Entities; Assets of the Sold Entities | 25 | ||||
3.5 |
Litigation | 26 | ||||
3.6 |
Compliance with Laws; Licenses | 26 | ||||
3.7 |
Capitalization and Ownership of the Sold Entities | 26 | ||||
3.8 |
Ownership of Partnership Interest | 27 | ||||
3.9 |
Ownership of Transferred Shares | 27 | ||||
3.10 |
Tax | 27 | ||||
3.11 |
Information Supplied | 29 | ||||
3.12 |
Brokers and Finders | 29 | ||||
3.13 |
Lack of Ownership of Verizon Common Stock | 29 | ||||
3.14 |
Vodafone Employee Benefits | 29 | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF VERIZON |
30 | |||||
4.1 |
Organization and Qualification | 30 | ||||
4.2 |
Capitalization | 30 | ||||
4.3 |
Authority | 31 | ||||
4.4 |
Consents | 32 | ||||
4.5 |
Verizon SEC Documents; Financial Statements; Verizon UK Prospectus | 32 | ||||
4.6 |
Absence of Certain Changes | 34 | ||||
4.7 |
Litigation | 34 | ||||
4.8 |
Compliance with Laws; Licenses | 35 | ||||
4.9 |
Tax Matters | 35 | ||||
4.10 |
Verizon Employee Benefits | 36 | ||||
4.11 |
Labor Matters | 36 | ||||
4.12 |
Contracts | 37 | ||||
4.13 |
Intellectual Property | 37 | ||||
4.14 |
Financing | 38 | ||||
4.15 |
Verizon Shares | 39 |
i
4.16 |
Brokers and Finders | 39 | ||||
4.17 |
Opinions of Verizon Financial Advisors | 39 | ||||
4.18 |
Lack of Ownership of Vodafone Ordinary Shares | 39 | ||||
ARTICLE V COVENANTS |
40 | |||||
5.1 |
Reorganization | 40 | ||||
5.2 |
Proxy Statement, Verizon Registration Statement and Verizon UK Prospectus | 40 | ||||
5.3 |
Vodafone Shareholder Approval, Circular and Reduction of Capital | 43 | ||||
5.4 |
Cooperation with Respect to Filings and Meetings of Shareholders | 47 | ||||
5.5 |
Press Releases | 48 | ||||
5.6 |
Securityholder Litigation | 49 | ||||
5.7 |
Confidentiality | 49 | ||||
5.8 |
Approvals, Consents and Regulatory Filings | 49 | ||||
5.9 |
Financing | 52 | ||||
5.10 |
Voting Rights; Purchases of Securities | 54 | ||||
5.11 |
Name Changes | 54 | ||||
5.12 |
Further Assurances | 54 | ||||
5.13 |
Access | 55 | ||||
5.14 |
Change in Ownership; ELPI Contribution | 55 | ||||
5.15 |
Indemnification and Insurance; Mutual Release | 55 | ||||
5.16 |
Listing of Verizon Shares | 56 | ||||
5.17 |
Additional Covenants of Verizon | 56 | ||||
5.18 |
Additional Covenants of Vodafone with Respect to the Sold Entities | 58 | ||||
5.19 |
Settlement Note Actions | 59 | ||||
5.20 |
Vodafone B.V. Inc | 59 | ||||
5.21 |
Post-Closing Partnership Tax Distribution Payments | 60 | ||||
ARTICLE VI TAX MATTERS |
60 | |||||
6.1 |
Tax Returns | 60 | ||||
6.2 |
Tax Claims | 62 | ||||
6.3 |
Cooperation | 63 | ||||
6.4 |
Omnitel Entity Classification | 64 | ||||
6.5 |
Tax Sharing Agreements | 65 | ||||
6.6 |
No 338 Election | 65 | ||||
6.7 |
Purchase and Sale of the Transferred Shares | 65 | ||||
6.8 |
Tax Refunds | 65 | ||||
6.9 |
Certain VAT Matters | 66 | ||||
6.10 |
Post-Closing Restrictions | 68 | ||||
ARTICLE VII CONDITIONS TO CLOSING |
68 | |||||
7.1 |
Mutual Conditions | 68 | ||||
7.2 |
Additional Conditions to Obligations of Vodafone | 70 | ||||
7.3 |
Additional Conditions to Obligations of Verizon | 71 | ||||
7.4 |
Frustration of the Closing Conditions | 71 | ||||
ARTICLE VIII TERMINATION |
71 | |||||
8.1 |
Grounds for Termination | 71 |
ii
8.2 |
Effect of Termination | 75 | ||||
8.3 |
Termination Fees | 75 | ||||
ARTICLE IX SURVIVAL; INDEMNIFICATION |
77 | |||||
9.1 |
Survival; Effect of Materiality Qualifiers | 77 | ||||
9.2 |
Indemnification | 78 | ||||
9.3 |
Third-Party Claim Procedures | 81 | ||||
9.4 |
Direct Claim Procedures | 82 | ||||
9.5 |
Limitations on Indemnification | 82 | ||||
9.6 |
Calculation of Damages | 82 | ||||
9.7 |
Exclusive Remedy | 83 | ||||
ARTICLE X MISCELLANEOUS |
83 | |||||
10.1 |
Notices | 83 | ||||
10.2 |
Interpretation | 85 | ||||
10.3 |
Assignment | 85 | ||||
10.4 |
Entire Agreement; Amendments | 85 | ||||
10.5 |
Severability | 86 | ||||
10.6 |
Specific Enforcement | 86 | ||||
10.7 |
Further Assurances | 87 | ||||
10.8 |
Waiver of Jury Trial | 87 | ||||
10.9 |
Submission to Jurisdiction; Waivers | 87 | ||||
10.10 |
No Third Party Beneficiaries | 88 | ||||
10.11 |
Governing Law | 88 | ||||
10.12 |
Expenses | 88 | ||||
10.13 |
Counterparts | 88 | ||||
10.14 |
Extension; Waivers | 88 |
Exhibits
Exhibit A Omnitel Note
Exhibit B Settlement Note
Exhibit C Term Note
Exhibit D Verizon Notes Term Sheet
Exhibit E Vodafone B.V. Inc. Note
Exhibit F Vodafone Scheme
Exhibit G Vodafone Direction Letter
Exhibit H Initial Verizon Press Release
Exhibit I Initial Vodafone Press Release
Schedules
Schedule 1 Adverse Ruling or Statement
Schedule 5.1 Reorganization
Schedule 5.15 Terminations
iii
Schedule 5.19 Settlement Note Actions
Schedule 7.1(g) Requisite Regulatory Approvals
iv
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of September 2, 2013 (this Agreement), is hereby entered into among Vodafone Group Plc, an English public limited company (Vodafone), Vodafone 4 Limited, an indirect wholly owned Subsidiary of Vodafone (Seller), and Verizon Communications Inc., a Delaware corporation (Verizon).
WHEREAS, subject to the terms and conditions set forth herein, Vodafone, Seller and Verizon desire to engage, and cause certain of their respective Affiliates to engage, in certain transactions the consummation of which will have the effect of transferring all of the issued and outstanding capital stock of Vodafone Finance 1, which indirectly owns all of the Partnership Interests of Cellco Partnership d/b/a Verizon Wireless, a Delaware general partnership (the Partnership), that are indirectly owned by Seller, to Verizon or its Affiliates; and
WHEREAS, simultaneously with the execution of this Agreement, Vodafone Europe B.V., an Affiliate of Vodafone (Vodafone Europe) and Verizon Business International Holding BV, an Affiliate of Verizon (VBIH), have entered into a Share Purchase Agreement (the Omnitel Purchase Agreement), pursuant to the terms and conditions of which Vodafone Europe will acquire from VBIH, and VBIH will sell to Vodafone Europe, all of the outstanding equity interests of Vodafone Omnitel NV, an Affiliate of Vodafone (Omnitel), that are owned by VBIH.
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Action has the meaning set forth in Section 10.9(b).
Adjusted Closing Price means a dollar amount equal to (i) if the Average Trading Price is greater than $47.00 and less than $51.00, then the Average Trading Price; (ii) if the Average Trading Price is greater than or equal to $51.00, then $51.00; or (iii) if the Average Trading Price is equal to or less than $47.00, then $47.00.
Adjusted Verizon Share Amount has the meaning set forth in Section 2.2(a)(ii).
Adverse Ruling or Statement has the meaning set forth on Schedule 1 hereto.
Affiliate means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with, such Person; and for purposes of the foregoing, control means (i) the ownership of more than 50% of the voting securities or other voting interests of such Person, or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting shares, by contract or otherwise, it being understood, for the avoidance of
doubt, that the Partnership and its Subsidiaries shall not be considered Affiliates of Vodafone or its Affiliates for the purposes of this Agreement.
Agreement has the meaning set forth in the preamble.
Ancillary Documents means the Verizon Notes, the Vodafone Scheme, the Omnitel Note, the Omnitel Purchase Agreement, the Vodafone Direction Letter, the Vodafone B.V. Inc. Note, the Settlement Note and the Term Note.
Applicable De Minimis Amount means (i) in the case of claims for indemnification pursuant to Section 9.2(a)(i) or 9.2(b)(i), Two Million Dollars ($2,000,000), and (ii) in the case of claims for indemnification pursuant to Sections 9.2(a)(ii) through (vi) or Sections 9.2(b)(ii) through (iv), Two Hundred Fifty Thousand Dollars ($250,000).
Average Trading Price means the volume-weighted average of the per share trading prices of Verizon Common Stock on the NYSE as reported through Bloomberg (based on all NYSE trades in Verizon Common Stock during the primary trading session from 9:30 a.m., New York City time, to 4:00 p.m., New York City time, and not an average of daily averages) for the twenty (20) consecutive full trading days ending on the third (3rd) Business Day prior to the Closing Date (the Reference Period); provided, however, that if an ex-dividend date for Verizon Common Stock occurs during the period beginning on the first (1st) day of such Reference Period and ending on (and including) the Closing Date, then the volume-weighted average of the per share NYSE trading prices of Verizon Common Stock for each day during the portion of such Reference Period that precedes such ex-dividend date shall be reduced by the amount of the applicable dividend payable on a share of Verizon Common Stock.
B Share Election has the meaning set forth in the Vodafone Scheme.
Base Verizon Share Amount has the meaning set forth in Section 2.2(a)(ii).
Burdensome Effect has the meaning set forth in Section 5.8(a).
Business Day means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York or London, United Kingdom are authorized or required by applicable Law to close.
Cash Consideration has the meaning set forth in Section 2.2(a)(i).
Cash Election has the meaning set forth in Section 2.2(b).
Cash Election Amount has the meaning set forth in Section 2.2(b).
Cash Election Notice has the meaning set forth in Section 2.2(b).
Cash Entitlement has the meaning set forth in the Vodafone Scheme.
2
Cash Flow Adjustment Amount shall mean an amount equal to the product of (i) the number of calendar days elapsed from (and including) May 1, 2014 through (and including) the Closing Date and (ii) Ten Million Dollars ($10,000,000).
Check-the-box-election has the meaning set forth in Section 6.4.
Claims means all debts, demands, causes of action, suits, covenants, torts, damages, Encumbrances, claims, defenses, offsets, judgments and demands whatsoever, of every name and nature, both at law and in equity, known or unknown, suspected or unsuspected, accrued or unaccrued, fixed or contingent.
Closing means, if the Transaction is implemented by way of the Vodafone Scheme, the Scheme Closing, and if the Transaction is implemented by way of the Share Purchase, the Share Purchase Closing.
Closing Date means, if the Transaction is implemented by way of the Vodafone Scheme, the Scheme Effective Date and, if the Transaction is implemented by way of the Share Purchase, the Share Purchase Closing Date.
Code means the Internal Revenue Code of 1986, as amended.
Companies Act means the Companies Act 2006.
Consents has the meaning set forth in Section 7.1(g).
Contract means any binding agreement, lease, license, contract, note, mortgage, indenture, arrangement or other contractual obligation.
Controlling Party has the meaning set forth in Section 6.2.
Court means the High Court of Justice of England and Wales.
Court Hearing means the hearing at which the Court will be requested to make an order sanctioning the Vodafone Scheme under Section 899 of the Companies Act.
Court Meeting has the meaning set forth in Section 7.1(b)(i).
Crest means the relevant system (as defined in the Uncertificated Securities Regulations 2001, as amended) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in such regulations).
Damages has the meaning set forth in Section 9.2(a).
Distribution Agent has the meaning set forth in Section 2.7(a).
Distribution Agent Agreement has the meaning set forth in Section 2.7(a).
Dividend Payment Date has the meaning set forth in the respective Certificates of Designation, Preferences and Rights for the VAI Preferred Shares.
3
Dollars and $ means the lawful currency of the United States of America.
Employee Benefit Plans means (i) employee benefit plans (within the meaning of Section 3(3) of ERISA) and (ii) all other compensation or employee benefit plans, programs, policies, agreements or other arrangements, whether or not subject to ERISA, and whether cash-or equity-based, including employment, retention, change of control, health, medical, dental, disability, accident, life insurance, vacation, severance, retirement, pension, savings, or termination plans, programs, policies, agreements or other arrangements.
Encumbrance means any lien, mortgage, security interest, pledge, restriction on transferability, defect of title, option or other claim, charge or encumbrance of any nature whatsoever.
Entity means any corporation, firm, unincorporated organization, association, partnership, limited liability company, business trust, joint stock company, joint venture or other organization, entity or business.
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate means, with respect to any Entity, trade or business, any other Entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the first Entity, trade or business, or that is, or was at the relevant time, a member of the same controlled group as the first Entity, trade or business pursuant to Section 4001(a)(14) of ERISA.
EUR means the lawful single currency of the Institutions of the European Union.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Excluded Assets has the meaning set forth in Section 5.1.
Excluded Liabilities has the meaning set forth in Section 5.1.
FCA means the Financial Conduct Authority.
FCC means the United States Federal Communications Commission.
Financing has the meaning set forth in Section 4.14(a).
Financing Documents has the meaning set forth in Section 4.14(b).
Financing Failure has the meaning set forth in Section 8.1(j)(ii).
Financing Failure Termination Fee means a cash amount equal to Ten Billion Dollars ($10,000,000,000).
Financing Related Party has the meaning set forth in Section 8.3(g).
4
Financing Sources has the meaning set forth in Section 4.14(a).
FSMA means the Financial Services and Markets Act 2000.
GAAP means U.S. generally accepted accounting principles.
Governmental Entity means any federal, state, territorial, county, municipal, local, multinational or other government or governmental agency or body or any other type of regulatory body, whether U.S. or non-U.S.
IFRS means International Financial Reporting Standards as adopted by the European Union.
IRS means the United States Internal Revenue Service.
Indemnified Party has the meaning set forth in Section 9.3(a).
Indemnifying Party has the meaning set forth in Section 9.3(a).
Initial Verizon Press Release has the meaning set forth in Section 5.5.
Initial Vodafone Press Release has the meaning set forth in Section 5.5.
Initial Press Releases has the meaning set forth in Section 5.5.
Intervening Event means a material event or circumstance (occurring or arising after the date hereof) that was neither known nor reasonably foreseeable to the Board of Directors of Verizon on the date of this Agreement, which event or circumstance becomes known to the Board of Directors of Verizon prior to the time at which Verizon receives the Verizon Requisite Vote, other than (i) general events or changes in the industries in which any of Verizon and its Subsidiaries operate; (ii) changes in the market price or trading volume of the Verizon Common Stock; provided, that this clause (ii) shall not prevent or otherwise affect a determination that any event or change in circumstances underlying such change has resulted in or contributed to an Intervening Event; (iii) any action taken by the parties hereto pursuant to and in compliance with this Agreement or any of the Ancillary Documents; (iv) any event or change in circumstances adversely affecting the availability or terms of the Financing or Replacement Financing; (v) any event or change in circumstances that has had or would reasonably be expected to have an adverse effect on the business, financial condition or operations of Verizon or its Subsidiaries; and (vi) the receipt, existence or terms of any proposal or offer made by any Person relating to a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, recapitalization, reorganization, spin-off, share exchange, business combination or similar transaction involving Verizon or any of its Subsidiaries.
JV Partnerco means JV Partnerco LLC.
Knowledge of Verizon means the actual knowledge of the persons set forth in Section 1 of the Verizon Disclosure Letter.
5
Knowledge of Vodafone means the actual knowledge of the persons set forth in Section 1 of the Vodafone Disclosure Letter.
Law means all applicable provisions of (i) constitutions, treaties, statutes, laws (including the common law), rules, regulations, ordinances, codes or orders of any Governmental Entity, (ii) any consents or approvals of any Governmental Entity and (iii) any orders, decisions, injunctions, judgments, awards, decrees of or agreements with any Governmental Entity.
Liability means any liability, indebtedness, obligation, commitment, expense, claim, deficiency, guaranty or endorsement (or claims or contingencies that have not yet become liabilities) of or by any Person of any type, whether accrued, absolute, contingent, matured, unmatured, liquidated, unliquidated, known or unknown, or whether due or to become due, including any fines, penalties, interest, judgments, awards or settlements respecting any judicial, administrative or arbitration proceedings or other actions or any damages, losses, claims or demands with respect to any Law.
Licenses has the meaning set forth in Section 3.6(b).
Listing Rules means the Listing Rules of the UKLA made under Section 73A of FSMA.
Loan Facility has the meaning set forth in Section 4.14(a).
LSE means London Stock Exchange plc.
Measurement Time means, if the Transaction is implemented by way of the Vodafone Scheme, immediately prior to commencement of the Court Hearing on the Sanction Date, and, if the Transaction is implemented by way of the Share Purchase, 8:00 a.m. (New York time) on the Share Purchase Closing Date.
Multiemployer Plan has the meaning set forth in Section 4.10(a).
NASDAQ means the NASDAQ Stock Market.
New Vodafone Shares means ordinary shares in Vodafone arising as a result of the Vodafone Share Consolidation.
New Vodafone Shares Admission has the meaning set forth in Section 7.1(c).
Non-Controlling Party has the meaning set forth in Section 6.2.
NYSE means the New York Stock Exchange.
Official List means the Official List maintained by the FCA for the purposes of Section 74(1) of FSMA.
Omnitel has the meaning set forth in the recitals.
6
Omnitel Consideration Amount means Three Billion Five Hundred Million Dollars ($3,500,000,000).
Omnitel Note means the note to be issued at the Closing by Verizon if the transactions contemplated by the Omnitel Purchase Agreement are not consummated on the Closing Date, and made payable to Seller in the amount of the Omnitel Consideration Amount, having the terms provided for in Exhibit A hereto.
Omnitel Purchase Agreement has the meaning set forth in the recitals.
Overseas Scheme Shareholders has the meaning set forth in the Vodafone Scheme.
Partner has the meaning set forth in the Partnership Agreement.
Partnership has the meaning set forth in the recitals.
Partnership Agreement means the Amended and Restated Partnership Agreement of the Partnership, dated as of April 3, 2000, by and among certain Affiliates of Vodafone and Verizon, as amended.
Partnership Interest means, as of any date, with respect to each Partner of the Partnership, the entire ownership interests and rights of such Partner (expressed as a percentage) in the Partnership as of such date.
PBGC has the meaning set forth in Section 4.10(c).
PCS Nucleus means PCS Nucleus LP.
Person means any natural person or Entity.
Post-Closing Tax Period means (i) any taxable period beginning after the Closing Date and (ii) the portion of any Straddle Period beginning immediately after the Closing Date and ending at the close of the last day of the Straddle Period.
Post-Sanction Conditions means the conditions set forth in Sections 7.1(b)(ii)(y) and 7.1(b)(iii).
Pre-Closing Tax Period means (i) any taxable period ending on or before the close of the Closing Date and (ii) the portion of any Straddle Period beginning on the first day of such Straddle Period and ending at the close of the Closing Date.
Pro Rata Portion has the meaning set forth in Section 2.7(b).
Proxy Statement means the proxy statement relating to matters to be submitted to the stockholders of Verizon at the Verizon Stockholders Meeting, as may be supplemented or amended from time to time.
Purchase Price has the meaning set forth in Section 2.2(c).
7
Reference Period has the meaning set forth in the definition of Average Trading Price.
Reorganization has the meaning set forth in Section 5.1.
Replacement Financing has the meaning set forth in Section 5.9(b).
Replacement Financing Documents has the meaning set forth in Section 5.9(b).
Replacement Financing Sources has the meaning set forth in Section 5.9(b).
Representatives means, with respect to any Person, such Persons controlled Affiliates and its and their officers, directors, employees, investment bankers, attorneys, accountants, consultants or other agents or advisors.
Requisite Regulatory Approvals has the meaning set forth in Section 7.1(g).
Sanction Date has the meaning set forth in Section 7.1(b)(ii).
Scheme Closing means the Vodafone Scheme and the Vodafone Reduction of Capital becoming effective in accordance with their terms and the Companies Act 2006.
Scheme Effective Date means the date on which the Vodafone Reduction of Capital becomes effective in accordance with its terms and the Companies Act 2006.
Scheme Longstop Date means the date falling twenty (20) Business Days following the first scheduled date of the Court Hearing where such date falls after the satisfaction or waiver of the conditions set out in Article VII (other than the conditions set out in Sections 7.1(b)(ii) and 7.1(b)(iii)).
SEC means the United States Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Seller has the meaning set forth in the preamble.
Seller Returns has the meaning set forth in Section 6.1(a).
Settlement Note means the note to be issued by Verizon and made payable to Seller at Closing, in the form appended as Exhibit B, in an amount equal to the principal amount of the Vodafone B.V. Inc. Note plus accrued interest, which shall be settled in accordance with Section 5.19.
Share Issuance has the meaning set forth in Section 4.3(b).
Share Purchase has the meaning set forth in Section 2.5.
Share Purchase Closing has the meaning set forth in Section 2.5.
Share Purchase Closing Date has the meaning set forth in Section 2.5.
8
Significant Subsidiary means a significant subsidiary as defined in Rule 1-02(w) of Regulation S-X of the Securities Act.
Sold Entities means Vodafone Finance 1, Vodafone Finance 2, Vodafone Americas Holdings, Vodafone Americas, Vodafone Holdings LLC, JV Partnerco, PCS Nucleus, Vodafone International Inc. and Vodafone B.V. Inc.
Straddle Period means any taxable period beginning on or before the Closing Date and ending after the Closing Date.
Subsidiary means, with respect to any Person, any Entity, whether incorporated or unincorporated, of which (i) voting power to elect a majority of the board of directors or others performing similar functions with respect to such other Person is held by the first mentioned Person and/or by any one or more of its Subsidiaries or (ii) more than 50% of the equity interests of such other Person is, directly or indirectly, owned or controlled by such first mentioned Person and/or by any one or more of its Subsidiaries.
Supplemental Tax Distributions shall have the meaning set forth in Section 1 of the Verizon Disclosure Letter.
Tax or Taxes means any federal, state, local or foreign income, capital, corporation, gross receipts, property, sales, turnover, value-added, use, license, excise, franchise, employment, payroll, withholding, windfall profits, alternative or add on minimum, ad valorem, transfer, stamp, financial transaction or excise tax, or any other tax, custom, duty, levy, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalties, additions to tax or additional amounts imposed by any Governmental Entity.
Tax Authority means any Governmental Entity exercising any taxing or Tax regulatory authority.
Tax Claim means any claim, notice, demand, assessment, letter, or other document with respect to Taxes made by any Tax Authority that, if pursued successfully, would reasonably be expected to serve as the basis for a claim for indemnification pursuant to Section 9.2(c).
Tax Return means any return, declaration, report or similar statement filed or required to be filed with respect to any Tax (including any attached schedules), including any information return, claim for refund, amended return or declaration of estimated Tax.
Term Note means the note to be issued by Verizon and made payable to Seller at Closing, in the form appended as Exhibit C, in the amount of Two Hundred Fifty Million Dollars ($250,000,000).
Termination Date has the meaning set forth in Section 8.1(b).
Third-Party Claim has the meaning set forth in Section 9.3(a).
Transaction means (a) the Vodafone Scheme and the purchase by Verizon of the Transferred Shares as contemplated thereby or (b) the Share Purchase, as applicable.
9
Transferred Shares has the meaning set forth in Section 2.1.
UKLA means the United Kingdom Listing Authority.
VAI Preferred Shares means (a) the 5.143% Class D Cumulative Preferred Stock, Series 1998, of Vodafone Americas and (b) the 5.143% Class E Cumulative Preferred Stock, Series 1998, of Vodafone Americas.
VAT means (a) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112) and (b) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in clause (a) above, or imposed elsewhere.
VBIH has the meaning set forth in the recitals.
Verizon has the meaning set forth in the preamble.
Verizon Benefit Plans means all Employee Benefit Plans, including the Verizon Stock Plans, that are sponsored, maintained, contributed to or required to be contributed to by Verizon or any of its Subsidiaries for the benefit of current or former employees, directors or consultants of Verizon or its Subsidiaries, or with respect to which Verizon or its Subsidiaries have any current, future or contingent Liability.
Verizon Certificate Amendment has the meaning set forth in Section 4.2(a).
Verizon CDIs has the meaning set forth in Section 5.2(e).
Verizon Change Notice has the meaning set forth in Section 5.2(f).
Verizon Change of Recommendation has the meaning set forth in Section 5.2(f).
Verizon Charter Documents has the meaning set forth in Section 4.1(c).
Verizon Common Stock has the meaning set forth in Section 2.2(a)(ii).
Verizon Disclosure Document means any registration statement, prospectus, offering memorandum, offering circular or similar disclosure document provided by or on behalf of Verizon to shareholders of Vodafone in connection with the Vodafone Scheme or the Share Purchase (including any other documents incorporated by reference therein) pursuant to the securities laws of any jurisdiction or the listing requirements of any securities exchange.
Verizon Disclosure Letter has the meaning set forth in Article IV.
Verizon Fairness Opinions has the meaning set forth in Section 4.17.
Verizon Financial Advisors has the meaning set forth in Section 4.17.
Verizon Indemnitees has the meaning set forth in Section 9.2(a).
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Verizon Indemnity Amount has the meaning set forth in Section 6.4.
Verizon Intellectual Property has the meaning set forth in Section 4.13.
Verizon Material Adverse Effect means (i) any change, effect, event or occurrence that prevents or materially delays the ability of Verizon to consummate the Transaction or (ii) any change, effect, event or occurrence that has a material adverse effect on the financial condition, business or results of operations of Verizon and its Subsidiaries, taken as a whole; provided, however, that any changes, effects, events or occurrences will be deemed not to constitute a Verizon Material Adverse Effect to the extent resulting from (A) changes, effects, events or occurrences generally affecting (x) the United States or global economy or financial, debt, credit or securities markets or (y) any industry in which Verizon or its Subsidiaries operate; (B) declared or undeclared acts of war, terrorism, outbreaks or escalations of hostilities; (C) natural disasters or other force majeure events; (D) any change in GAAP or applicable Laws or regulatory or enforcement developments; (E) the failure by Verizon to meet any estimates of revenues or earnings for any period ending on or after the date hereof; provided, that the exception in this clause (E) shall not prevent or otherwise affect a determination that any change, effect, event or occurrence underlying such decline has resulted in or contributed to a Verizon Material Adverse Effect; (F) a decline in the price of Verizon Common Stock on the NYSE, NASDAQ or the LSE; provided, that the exception in this clause (F) shall not prevent or otherwise affect a determination that any change, effect, event or occurrence underlying such decline has resulted in or contributed to a Verizon Material Adverse Effect; or (G) the execution, delivery or performance of this Agreement, the Ancillary Documents or the Financing Documents (or any Replacement Financing Documents) or the public announcement or consummation of the transactions contemplated by this Agreement, the Ancillary Documents or the Financing Documents (or any Replacement Financing Documents); provided, that the exception in this clause (G) shall not apply to the representation or warranty contained in Section 4.4 to the extent that such representation or warranty purports to address the consequences resulting from the execution and delivery of this Agreement or the Ancillary Documents or the performance of obligations or consummation of the transactions contemplated by this Agreement or the Ancillary Documents; provided, however, that changes, effects, events or occurrences referred to in clauses (A), (B), (C) or (D) above shall, unless otherwise excluded, be considered for purposes of determining whether there is a Verizon Material Adverse Effect if and to the extent that such changes, effects, events or occurrences disproportionately adversely affect Verizon and its Subsidiaries, as compared to other companies operating in the industries in which Verizon and its Subsidiaries operate.
Verizon Material Contract has the meaning set forth in Section 4.12(a).
Verizon Notes means the notes to be issued at the Closing by Verizon and made payable to Seller in the aggregate amount of Five Billion Dollars ($5,000,000,000), having the terms provided for in Exhibit D hereto.
Verizon Preferred Stock has the meaning set forth in Section 4.2(a).
Verizon Recommendation has the meaning set forth in Section 5.2(f).
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Verizon Recommendation Change Fee means a cash amount equal to Four Billion Six Hundred Fifty Million Dollars ($4,650,000,000).
Verizon Registration Statement has the meaning set forth in Section 5.2(c).
Verizon Related Party means Verizon and its Affiliates (including, upon and after the Closing, the Sold Entities), and the respective past or present directors, managers, officers, agents, employees, members, partners, successors and assigns of the foregoing.
Verizon Releasing Persons has the meaning set forth in Section 5.15(c).
Verizon Requisite Vote has the meaning set forth in Section 4.3(c).
Verizon Returns has the meaning set forth in Section 6.1(b).
Verizon Reverse Termination Fee means a cash amount equal to One Billion Five Hundred Fifty Million Dollars ($1,550,000,000).
Verizon SEC Documents has the meaning set forth in Section 4.5(a).
Verizon Shares has the meaning set forth in Section 2.2(a)(ii).
Verizon Stockholders Meeting has the meaning set forth in Section 5.2(b).
Verizon Stock Option means each option to purchase Verizon Common Stock granted pursuant to a Verizon Stock Plan that is outstanding and unexercised as of the Closing Date.
Verizon Stock Plans means the 2009 Verizon Long-Term Incentive Plan and the Verizon Broad-Based Incentive Plan, each as may be amended from time to time, and any other plan, policy or arrangement, including any Verizon Benefit Plan or Contract, pursuant to which Verizon Stock Options or other awards based on, in respect of, or denominated in Verizon Common Stock have been granted.
Verizon Termination Fee has the meaning set forth in Section 8.3(a).
Verizon UK Admission has the meaning set forth in Section 5.2(d).
Verizon UK Prospectus has the meaning set forth in Section 5.2(d).
Verizon US Prospectus has the meaning set forth in Section 5.2(d).
Vodafone has the meaning set forth in the preamble.
Vodafone Americas means Vodafone Americas Inc.
Vodafone Americas Holdings means Vodafone Americas Holdings Inc.
Vodafone B.V. Inc. means Vodafone International Business Ventures Inc., an entity to be incorporated as provided in Schedule 5.1.
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Vodafone B.V. Inc. Note means the loan note issued by Vodafone and held by Vodafone B.V. Inc. pursuant to the Reorganization, in the form appended as Exhibit E, which shall remain outstanding immediately following the consummation of the sale of the Transferred Shares and which shall be settled in accordance with Section 5.19.
Vodafone Change of Recommendation has the meaning set forth in Section 5.3(d).
Vodafone Circular has the meaning set forth in Section 5.3(a)(ii).
Vodafone Circular Posting Date means the date on which the Vodafone Circular is published.
Vodafone Class B Shares means the class B shares in the capital of Vodafone to be issued by Vodafone in accordance with the terms of the Vodafone Scheme, having the rights and restrictions specified in the special resolution to be set out in the Vodafone Circular.
Vodafone Class C Shares means the class C shares in the capital of Vodafone to be issued by Vodafone in accordance with the terms of the Vodafone Scheme, having the rights and restrictions specified in the special resolution to be set out in the Vodafone Circular.
Vodafone Direction Letter has the meaning set forth in Section 2.6(a)(ii).
Vodafone Disclosure Letter has the meaning set forth in Article III.
Vodafone Distribution Record Date has the meaning set forth in Section 2.7(a).
Vodafone Distribution Record Holders has the meaning set forth in Section 2.7(a).
Vodafone Benefit Plans means all Employee Benefit Plans, including the Vodafone Stock Plans, that are sponsored, maintained, contributed to or required to be contributed to by Vodafone or its Subsidiaries for the benefit of current or former employees, directors or consultants of Vodafone or its Subsidiaries, or with respect to which Vodafone or its Subsidiaries have any current, future or contingent Liability.
Vodafone Europe has the meaning set forth in the recitals.
Vodafone Finance 1 means Vodafone Americas Finance 1 Inc.
Vodafone Finance 2 means Vodafone Americas Finance 2 Inc.
Vodafone Holdings LLC means Vodafone Holdings LLC.
Vodafone Indemnitees has the meaning set forth in Section 9.2(b).
Vodafone International Inc. means Vodafone International Inc.
Vodafone Material Adverse Effect means any change, effect, event or occurrence that, individually or in the aggregate with any other changes, effects, events or occurrences, prevents or materially delays the ability of Vodafone to consummate the Transaction.
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Vodafone Material Adverse Financial Effect has the meaning set forth in Section 8.1.
Vodafone Ordinary Shares has the meaning set forth in Section 2.7(a).
Vodafone Partners means PCS Nucleus and JV Partnerco.
Vodafone Recommendation has the meaning set forth in Section 5.3(d).
Vodafone Reduction of Capital means the proposed reductions of capital of Vodafone under Chapter 10 of Part 17 of the Companies Act to be undertaken pursuant to the Vodafone Scheme, being (i) the reduction or cancellation of Vodafones share premium account; (ii) the cancellation of Vodafones capital redemption reserve; (iii) the cancellation of the Vodafone Class B Shares; and (iv) if applicable, the cancellation of the Vodafone Class C Shares, but subject always to Section 5.4(b).
Vodafone Related Party means Vodafone and its Affiliates and the respective past or present directors, managers, officers, agents, employees, members, partners, successors and assigns of (i) the foregoing or (ii) the Partnership or any of its Subsidiaries that, in the case of clause (ii), were designated or appointed by Vodafone or any of its Affiliates.
Vodafone Releasing Persons has the meaning set forth in Section 5.15(c).
Vodafone Requisite Scheme Vote has the meaning set forth in Section 3.2(c)(i).
Vodafone Requisite Share Purchase Vote has the meaning set forth in Section 3.2(c)(ii).
Vodafone Resolutions has the meaning set forth in Section 5.3(a)(vii).
Vodafone Sale Resolutions has the meaning set forth in Section 5.3(a)(vii).
Vodafone Scheme means the scheme of arrangement between Vodafone and its shareholders under Part 26 of the Companies Act, the terms of which shall be included in the Vodafone Circular and shall, subject always to Section 5.4(b), be in the form appended as Exhibit F.
Vodafone Share Consolidation means the proposed subdivision and consolidation of Vodafones share capital pursuant to the Vodafone Scheme, on terms to be set out in the Vodafone Circular.
Vodafone Shareholders means, collectively, the holders of the Vodafone Ordinary Shares and, following the issuance of the Vodafone Class B Shares and the Vodafone Class C Shares in accordance with the Vodafone Scheme, the Vodafone Class B Shares and the Vodafone Class C Shares and, following the Scheme Closing (if applicable), the New Vodafone Shares.
Vodafone Shareholders Meeting has the meaning set forth in Section 3.2(c)(i).
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Vodafone Stock Plans means the Vodafone Group 1999 Long-Term Stock Incentive Plan, the Vodafone Group 2008 Sharesave Plan, the Vodafone Global Long-Term Incentive Plan, the Vodafone Global Incentive Plan and the Vodafone Share Incentive Plan, each as may be amended from time to time, and any other plan, policy or arrangement, including any Vodafone Benefit Plan or Contract pursuant to which awards based on, in respect of, or denominated in Vodafone capital stock have been granted.
Vodafone Termination Fee means a cash amount equal to One Billion Five Hundred Fifty Million Dollars ($1,550,000,000).
Vodafone UK Pension Plan has the meaning set forth in Section 3.14.
ARTICLE II
PURCHASE AND SALE OF TRANSFERRED SHARES
2.1 Purchase and Sale of Transferred Shares. Upon the terms and subject to the conditions set forth in this Agreement and pursuant to the Transaction, at the Closing, Seller will sell, assign, transfer and convey to Verizon, and Verizon will purchase and acquire from Seller, all of the issued and outstanding capital stock of Vodafone Finance 1 (collectively, the Transferred Shares), free and clear of any Encumbrance. As a result of Verizons acquisition of the Transferred Shares, each of the Sold Entities shall, except as a result of the existence of the VAI Preferred Shares, become a direct or indirect wholly owned Subsidiary of Verizon. Subject to Section 2.3, the Transaction shall be implemented by way of the Vodafone Scheme, unless the Vodafone Requisite Scheme Vote is not obtained, any condition set forth in Section 7.1(b) or 7.1(c) is not satisfied or waived or the Vodafone Scheme lapses in accordance with its terms or is withdrawn, in which case the Transaction shall be implemented by way of the Share Purchase, subject to Section 2.5. If Seller fails to perform its obligations pursuant to this Section 2.1, Vodafone shall procure that Seller does so and Vodafone shall be jointly and severally liable to Verizon for any default by Seller in performing its obligations under this clause.
2.2 Consideration for Transferred Shares.
(a) Upon the terms and subject to the conditions set forth in this Agreement and pursuant to the Transaction, at the Closing, Verizon shall:
(i) pay to Seller an amount in cash equal to (A) Fifty-Eight Billion Eight Hundred Eighty-Six Million Dollars ($58,886,000,000), plus (B) if so elected by Verizon pursuant to Section 2.2(b), the Cash Election Amount, plus (C) unless the failure to consummate the Closing prior to May 1, 2014 results from a breach by Vodafone or Seller of this Agreement, an amount equal to the Cash Flow Adjustment Amount, if any (collectively, the Cash Consideration);
(ii) issue and deliver an aggregate number of shares of common stock of Verizon, par value $0.10 per share (the Verizon Common Stock), equal to the quotient obtained by dividing (A) the difference (the Adjusted Verizon Share Amount) between (x) Sixty Billion One Hundred Fifty Million Dollars ($60,150,000,000) (the Base Verizon Share Amount) and (y) the Cash
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Election Amount (if any), by (B) the Adjusted Closing Price (the Verizon Shares); provided, that in the event of any stock split, reverse stock split, stock dividend or dividend payable in other securities, reorganization, reclassification, merger, combination, recapitalization, or other like event that occurs after the date hereof and prior to the Closing (or in respect of which a record date or effective date, as applicable, has been declared and passed within such period) that changes the outstanding shares of Verizon Common Stock into a different number of shares or a different class of stock, then any number, amount or definition contained herein that is used for purposes of determining the number of Verizon Shares to be received by the Vodafone Shareholders will be appropriately adjusted to provide the Vodafone Shareholders with the same economic effect as contemplated by this Agreement prior to such event; provided, further, that the aggregate payment hereunder to be made in the form of Verizon Shares shall be made only in whole shares of Verizon Common Stock, and any fractional share shall be rounded up to the nearest whole share;
(iii) deliver the Verizon Notes to Seller;
(iv) deliver the Term Note to Seller; and
(v) deliver the Settlement Note to Seller.
(b) No later than ten (10) Business Days prior to the Vodafone Circular Posting Date, Verizon may on a single occasion (subject to the below proviso), in its sole discretion, elect to increase the amount of the Cash Consideration payable pursuant to Section 2.2(a)(i) (a Cash Election) by up to Fifteen Billion Dollars ($15,000,000,000), and reduce the Adjusted Verizon Share Amount pursuant to Section 2.2(a)(ii)(A) by an amount equal to such increase, by delivery of a written notice to Vodafone (a Cash Election Notice) specifying the additional amount of Cash Consideration to be paid pursuant to such election (together with any amount elected pursuant to the proviso to this sentence, the Cash Election Amount); provided, in addition to any Cash Election previously made, on a single occasion during the period after the date of the Verizon Shareholders Meeting and prior to the date that is ten (10) Business Days prior to the anticipated Closing Date, if the Verizon Certificate Amendment has not been approved by the Verizon Shareholders, then Verizon may make a Cash Election for a Cash Election Amount of up to the lesser of (x) Five Billion Dollars ($5,000,000,000) and (y) Fifteen Billion Dollars ($15,000,000,000) minus the Cash Election Amount of any Cash Election previously made; provided, further, that upon the making of any Cash Election, the representations and warranties contained in Section 4.14 (Financing) remain true and accurate in all material respects after giving effect to such Cash Election.
(c) (i) If the transactions contemplated by the Omnitel Purchase Agreement are consummated on the Closing Date, Verizon shall pay, or cause to be paid, by wire transfer or intrabank transfer of immediately available funds to an account designated by Vodafone no later than the close of business on the third (3rd) Business Day prior to the Closing Date, cash in the amount of the Omnitel Consideration Amount or (ii) if the transactions contemplated by the Omnitel Purchase Agreement are not consummated on
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the Closing Date, Verizon shall deliver to Seller the Omnitel Note, duly executed by Verizon (the Omnitel Consideration Amount or the Omnitel Note, as applicable, together with the Cash Consideration, Verizon Shares, Verizon Notes, Settlement Note and the Term Note, collectively, the Purchase Price).
2.3 Scheme Closing. Subject to the terms and conditions of this Agreement, (a) the Scheme Closing shall occur on the date that the condition set forth in Section 7.1(b)(iii)(y) is satisfied, (b) Vodafone shall use commercially reasonable efforts to cause to be satisfied the condition set forth in Section 7.1(b)(iii)(x) on the date that the condition set forth in Section 7.1(b)(ii)(x) is satisfied, or at such other time as Verizon and Vodafone may agree in writing and (c) Vodafone shall use commercially reasonable efforts to cause to be satisfied the condition set forth in Section 7.1(b)(iii)(y) on the date that the condition set forth in Section 7.1(b)(ii)(y) is satisfied, or at such other time as Verizon and Vodafone may agree in writing. For the avoidance of doubt, the Court Hearing shall not be held until all of the conditions set forth in Article VII have been satisfied (or, to the extent permitted by applicable Law, waived in a writing signed by the party for whose benefit the condition exists) other than the conditions set forth in Sections 7.1(b)(ii) and 7.1(b)(iii). The purchase and sale of the Transferred Shares in connection with the Scheme Closing shall take place on the Scheme Effective Date at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, NY, or at such other place as Verizon and Vodafone may agree in writing. Upon the earlier of (i) the Scheme Longstop Date and (ii) the date on which the Vodafone Scheme lapses in accordance with its terms or is withdrawn, or as Verizon and Vodafone may otherwise agree in writing, this Section 2.3 shall be of no further force and effect.
2.4 Vodafone Scheme Closing Deliverables. The provisions of this Section 2.4 shall apply (for the avoidance of doubt, without prejudice to the provisions of the Scheme, which shall apply) if the Transaction is implemented by way of the Vodafone Scheme, but not if it is implemented by way of the Share Purchase.
(a) Distribution of Verizon Shares. Promptly following the Scheme Closing, pursuant to and in accordance with the terms of the Vodafone Scheme, the Verizon Shares shall be distributed by or on behalf of Verizon to the Vodafone Shareholders in respect of their Vodafone Class B Shares or Vodafone Class C Shares, as applicable.
(b) Payment of Cash Consideration. If the Transaction is implemented pursuant to the Vodafone Scheme, payment of the Cash Consideration will be made at the Closing by wire transfer or intrabank transfer of immediately available funds to Seller or such other Person as Vodafone may direct to an account or accounts designated by Vodafone in writing, such designation to be made no later than the close of business on the third (3rd) Business Day prior to the Closing Date.
(c) Vodafone Deliverables. At or prior to the Scheme Effective Date or, in the case of clauses (ii) through (vi) of this Section 2.4(c), at or prior to the Measurement Time, Vodafone shall deliver, or cause to be delivered, to Verizon (or to a wholly owned Affiliate of Verizon designated by Verizon or as otherwise set forth below), the following:
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(i) certificates representing the Transferred Shares, duly endorsed in blank or with stock powers duly executed in proper form for transfer in favor of Verizon (or to a wholly owned Affiliate of Verizon designated by Verizon);
(ii) a certificate of an executive officer of Vodafone to the effect that the Reorganization has been completed pursuant to Section 5.1;
(iii) duly executed letters of resignation, effective as of the Scheme Effective Date, providing for the resignation of all of the persons holding the positions of a director, officer or Representative (as defined in the Partnership Agreement) (A) of the Partnership or any of its Subsidiaries who were appointed to such position by Vodafone or any of its Affiliates or (B) of any of the Sold Entities, in each case in office immediately prior to the Closing;
(iv) a certification from Vodafone Finance 1 that complies with Treasury Regulation Section 1.1445-2(c)(3), dated no more than thirty (30) days prior to the Scheme Effective Date and signed by a responsible corporate officer of Vodafone Finance 1, that the Transferred Shares are not a United States real property interest (as defined in Section 897(c)(1) of the Code), and proof reasonably satisfactory to Verizon that Vodafone Finance 1 has provided notice of such certification to the IRS in accordance with the provisions of Treasury Regulation Section 1.897-2(h)(2);
(v) a certificate of an executive officer of Vodafone to the effect set forth in Section 7.3(c); and
(vi) any other documents, instruments or agreements that are reasonably requested by Verizon in connection with the consummation of the transactions contemplated hereby.
(d) Other Verizon Deliverables. At or prior to the Scheme Effective Date or, in the case of clauses (v) through (vii) of this Section 2.4(d), at or prior to the Measurement Time, Verizon shall deliver, or cause to be delivered, to Vodafone (or to a wholly owned Affiliate of Vodafone designated by Vodafone or as otherwise set forth below), the following:
(i) (A) if the transactions contemplated by the Omnitel Purchase Agreement are consummated on the Scheme Effective Date, payment, by wire transfer or intrabank transfer of immediately available funds to an account designated by Vodafone no later than the close of business on the third (3rd) Business Day prior to the Scheme Effective Date, of cash in the amount of the Omnitel Consideration Amount or (B) if the transactions contemplated by the Omnitel Purchase Agreement are not consummated on the Scheme Effective Date, the Omnitel Note, duly executed by Verizon;
(ii) the Verizon Notes, duly executed by Verizon and authenticated by the trustee under the indenture pursuant to which the Verizon Notes are issued;
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(iii) the Settlement Note (which shall be delivered to Seller), duly executed by Verizon;
(iv) the Term Note, duly executed by Verizon;
(v) if Verizon determines (using commercially reasonable efforts) that the Verizon Shares do not constitute a United States real property interest (as defined in Section 897(c)(1) of the Code), a certification from Verizon that complies with Treasury Regulation Section 1.1445-2(c)(3), dated no more than thirty (30) days prior to the Scheme Effective Date and signed by a responsible corporate officer of Verizon, that the Verizon Shares are not a United States real property interest (as so defined) to Vodafone or its Subsidiaries, and proof reasonably satisfactory to Vodafone that Verizon has provided notice of such certification to the IRS in accordance with the provisions of Treasury Regulation Section 1.897-2(h)(2);
(vi) a certificate of an executive officer of Verizon to the effect set forth in Section 7.2(c); and
(vii) any other documents, instruments or agreements which are reasonably requested by Vodafone in connection with the consummation of the transactions contemplated hereby.
2.5 Share Purchase Closing. Subject to the terms and conditions of this Agreement, unless the Scheme Closing shall have occurred, the closing (the Share Purchase Closing) of the Transaction in accordance with Sections 2.6 and 2.7 (the Share Purchase) shall take place at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, NY, at 10:00 a.m., New York time, on the fifth (5th) Business Day (the Share Purchase Closing Date) after the later of (a) the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in Article VII (other than the conditions set forth in Sections 7.1(b) and 7.1(c) and any condition to the Share Purchase that by its nature cannot be satisfied until the Share Purchase Closing, but subject to the satisfaction or waiver (to the extent permitted by applicable Law) by the party or parties entitled to the benefits thereof of such conditions at such time) and (b) the earlier of (i) the Scheme Longstop Date and (ii) the date on which the Vodafone Scheme lapses in accordance with its terms or is withdrawn, or at such other time or place as Verizon and Vodafone may agree in writing. If the Scheme Closing shall have occurred, this Section 2.5 shall be of no further force and effect.
2.6 Share Purchase Closing Deliverables. The provisions of this Section 2.6 shall apply if the Transaction is implemented by way of the Share Purchase, but not if it is implemented by way of the Vodafone Scheme.
(a) Vodafone Deliverables. At or prior to the Share Purchase Closing, Vodafone shall deliver, or cause to be delivered, to Verizon (or to a wholly owned Affiliate of Verizon designated by Verizon or as otherwise set forth below), the following:
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(i) certificates representing the Transferred Shares, duly endorsed in blank or with stock powers duly executed in proper form for transfer in favor of Verizon (or to a wholly owned Affiliate of Verizon designated by Verizon);
(ii) the direction letter, substantially in the form attached hereto as Exhibit G (the Vodafone Direction Letter), duly executed by Vodafone;
(iii) a duly executed copy of the Distribution Agent Agreement;
(iv) a certificate of an executive officer of Vodafone to the effect that the Reorganization has been completed pursuant to Section 5.1;
(v) duly executed letters of resignation, effective as of the Share Purchase Closing Date, providing for the resignation of all of the persons holding the positions of a director, officer or Representative (as defined in the Partnership Agreement) (A) of the Partnership or any of its Subsidiaries who were appointed to such position by Vodafone or any of its Affiliates or (B) of any of the Sold Entities, in each case in office immediately prior to the Closing;
(vi) a certification from Vodafone Finance 1 that complies with Treasury Regulation Section 1.1445-2(c)(3), dated no more than thirty (30) days prior to the Share Purchase Closing Date and signed by a responsible corporate officer of Vodafone Finance 1, that the Transferred Shares are not a United States real property interest (as defined in Section 897(c)(1) of the Code), and proof reasonably satisfactory to Verizon that Vodafone Finance 1 has provided notice of such certification to the IRS in accordance with the provisions of Treasury Regulation Section 1.897-2(h)(2);
(vii) a certificate of an executive officer of Vodafone to the effect set forth in Section 7.3(c); and
(viii) any other documents, instruments or agreements that are reasonably requested by Verizon in connection with the consummation of the transactions contemplated hereby.
(b) Verizon Deliverables. At or prior to the Share Purchase Closing, Verizon shall deliver, or cause to be delivered, to Vodafone (or to a wholly owned Affiliate of Vodafone designated by Vodafone or as otherwise set forth below), the following:
(i) payment of the Cash Consideration, by wire transfer or intrabank transfer of immediately available funds, to Seller or such other Person as Vodafone may direct, to an account or accounts designated by Vodafone in writing, such designation to be made not later than the close of business on the third (3rd) Business Day prior to the Share Purchase Closing Date;
(ii) (A) if the transactions contemplated by the Omnitel Purchase Agreement are consummated on the Share Purchase Closing Date, payment, by wire transfer or intrabank transfer of immediately available funds to an account
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designated by Vodafone no later than the close of business on the third (3rd) Business Day prior to the Share Purchase Closing Date, of cash in the amount of the Omnitel Consideration Amount or (B) if the transactions contemplated by the Omnitel Purchase Agreement are not consummated on the Share Purchase Closing Date, the Omnitel Note, duly executed by Verizon;
(iii) evidence of the book-entry issuance of the Verizon Shares, which Verizon Shares will be deposited by Verizon with the Distribution Agent in accordance with the Vodafone Direction Letter;
(iv) the Verizon Notes, duly executed by Verizon and authenticated by the trustee under the indenture pursuant to which the Verizon Notes are issued;
(v) the Settlement Note (which shall be delivered to Seller), duly executed by Verizon;
(vi) the Term Note, duly executed by Verizon;
(vii) if Verizon determines (using commercially reasonable efforts) that the Verizon Shares do not constitute a United States real property interest (as defined in Section 897(c)(1) of the Code), a certification from Verizon that complies with Treasury Regulation Section 1.1445-2(c)(3), dated no more than thirty (30) days prior to the Share Purchase Closing Date and signed by a responsible corporate officer of Verizon, that the Verizon Shares are not a United States real property interest (as so defined) to Vodafone or its Subsidiaries, and proof reasonably satisfactory to Vodafone that Verizon has provided notice of such certification to the IRS in accordance with the provisions of Treasury Regulation Section 1.897-2(h)(2);
(viii) a certificate of an executive officer of Verizon to the effect set forth in Section 7.2(c); and
(ix) any other documents, instruments or agreements which are reasonably requested by Vodafone in connection with the consummation of the transactions contemplated hereby.
2.7 Distribution of the Verizon Shares following a Share Purchase Closing. The provisions of this Section 2.7 shall apply if the Transaction is implemented by way of the Share Purchase, but not if it is implemented by way of the Vodafone Scheme. As soon as practicable after the date of this Agreement and the selection of the Distribution Agent, the parties shall discuss with Vodafones registrar and the Distribution Agent the method pursuant to which the parties will accomplish the prompt and efficient distribution of the Verizon Shares to the Vodafone Distribution Record Holders in accordance with Law, Vodafones articles of association and market practice. In the absence of agreement pursuant to the preceding sentence, the parties will take the actions specified in clauses (a)-(d) of this Section 2.7.
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(a) Distribution Agent. Prior to the Share Purchase Closing, Vodafone shall enter into an agreement (the Distribution Agent Agreement) with such bank, trust company or other appropriate service provider as may be mutually agreed by Verizon and Vodafone (the Distribution Agent), which agreement shall provide that Verizon shall deposit the Verizon Shares pursuant to the Vodafone Direction Letter, with the Distribution Agent on the Share Purchase Closing, for the benefit of the holders of the Vodafone ordinary shares, par value 11 and 3/7ths cents per share (the Vodafone Ordinary Shares) as of the close of business on a date determined by the Board of Directors of Vodafone (such date, the Vodafone Distribution Record Date and such holders as of the Vodafone Distribution Record Date, the Vodafone Distribution Record Holders), for distribution in accordance with this Section 2.7.
(b) Distribution Procedures. Vodafone shall, if necessary to effect the distribution of the Verizon Shares required by this Section 2.7(b), declare such a dividend as shall enable such distribution to be effected Lawfully and shall instruct the Distribution Agent to distribute, as soon as reasonably practicable after the Share Purchase Closing, to each Vodafone Distribution Record Holder that number of whole shares of Verizon Common Stock representing such Vodafone Distribution Record Holders Pro Rata Portion of the Verizon Shares and cash in lieu of fractional shares pursuant to Section 2.7(c). No interest shall be paid or will accrue on the Verizon Shares or any cash payable to the Vodafone Distribution Record Holders pursuant to the provisions of this Agreement. Pro Rata Portion means the percentage obtained by dividing (i) the number of Vodafone Ordinary Shares owned by a Vodafone Distribution Record Holder by (ii) the total number of Vodafone Ordinary Shares issued and outstanding as of the Vodafone Distribution Record Date.
(c) No Fractional Shares. Notwithstanding anything herein to the contrary, no fractional shares of Verizon Common Stock shall be distributed to Vodafone Distribution Record Holders, and any such fractional share interests to which a Vodafone Distribution Record Holder would otherwise be entitled shall not entitle such Vodafone Distribution Record Holder to vote or to any other rights as a stockholder of Verizon. In lieu of any such fractional shares, each Vodafone Distribution Record Holder who, but for the provisions of this Section 2.7(c), would be entitled to receive a fractional share interest of Verizon Common Stock pursuant to this Section 2.7, shall be paid cash, without any interest thereon, as hereinafter provided. Vodafone shall instruct the Distribution Agent to determine the number of whole shares and fractional shares of Verizon Common Stock allocable to each Vodafone Distribution Record Holder, to aggregate all such fractional shares into whole shares, to sell the whole shares obtained thereby in the open market at the then-prevailing prices on behalf of each Vodafone Distribution Record Holder who otherwise would be entitled to receive fractional share interests and to distribute to each such Vodafone Distribution Record Holder his, her or its ratable share of the total proceeds of such sale, after making appropriate deductions of the amounts required for Tax withholding purposes and after deducting any applicable transfer Taxes and the costs and expenses of such sale and distribution, including brokers fees and commissions. The sales of fractional shares shall occur as soon after the Share Purchase Closing as practicable and as determined by the Distribution Agent. None of Verizon, Vodafone or the Distribution Agent shall guarantee any minimum sale price for the fractional shares of
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Verizon Common Stock. None of Verizon, Vodafone or the Distribution Agent shall pay any interest on the proceeds from the sale of fractional shares. The Distribution Agent shall have the sole discretion to select the broker-dealers through which to sell the aggregated fractional shares and to determine when, how and at what price to sell such shares. Neither the Distribution Agent nor the broker-dealers through which the aggregated fractional shares are sold shall be Affiliates of Verizon or Vodafone.
(d) Unclaimed Stock or Cash. Any Verizon Common Stock or cash in lieu of fractional shares with respect to Verizon Common Stock that remain unclaimed by any Vodafone Distribution Record Holder one (1) year after the Share Purchase Closing Date shall be delivered to Vodafone. Vodafone shall hold such Verizon Common Stock for the account of such Vodafone Distribution Record Holder and the parties agree that all obligations to provide such Verizon Common Stock and cash, if any, in lieu of fractional share interests shall be obligations of Vodafone, subject in each case to applicable escheat or other abandoned property Laws, and Verizon shall have no Liability with respect thereto. For the avoidance of doubt, Vodafone shall have no right to vote any such unclaimed shares of Verizon Common Stock on behalf of any Vodafone Distribution Record Holder.
2.8 Withholding. Verizon shall be entitled to deduct and withhold from the consideration otherwise payable under this Agreement, such amounts as are required to be withheld or deducted under any Tax Law with respect to the making of such payment; provided, that Verizon shall notify and consult with Vodafone prior to making any such withholding or deduction. To the extent that amounts are so withheld or deducted and paid over to the applicable Governmental Entity, such withheld or deducted amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding were made.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VODAFONE
Except as set forth in the corresponding sections of the disclosure letter delivered to Verizon on or prior to entering into this Agreement (the Vodafone Disclosure Letter) (it being agreed that disclosure of any item in any part of the Vodafone Disclosure Letter shall be deemed disclosure with respect to any other part to which the relevance of such item is reasonably apparent), Vodafone hereby makes the following representations and warranties (a) on the date hereof and (b) on the Measurement Time (except in either case to the extent such representation is made as of an earlier date (in which case on and as of such earlier date)):
3.1 Organization and Qualification. Vodafone is a public limited company duly incorporated and validly existing under the Laws of England and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted. Each of Seller and each Sold Entity is duly organized, validly existing in good standing under the Laws of the jurisdiction of its incorporation or organization (with respect to jurisdictions that recognize the concept of good standing) and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as it
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is now being conducted. Each of Seller and each Sold Entity is duly licensed or qualified to do business and is in good standing (with respect to jurisdictions that recognize the concept of good standing) in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties or assets owned or leased by it makes such licensing or qualification necessary, except for such failures to be so licensed, qualified or in good standing as would not reasonably be expected to have, individually or in the aggregate, a Vodafone Material Adverse Effect. Vodafone has filed with the SEC a correct and complete copy of its articles of association, as in force at the date of this Agreement, and made available to Verizon correct and complete copies of the organizational documents (including the certificate of incorporation and bylaws, or comparable documents) of each of Seller and each Sold Entity, in each case as amended to the date of this Agreement.
3.2 Authority.
(a) Each of Vodafone and Seller has the requisite power and authority to execute and deliver this Agreement and, subject to obtaining the approvals set out in Section 3.2(c) below, to consummate the transactions contemplated hereby, and such execution, delivery and, subject to obtaining the approvals set out in Section 3.2(c) below, consummation have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by Vodafone and Seller and, assuming the due execution and delivery by Verizon, constitutes the valid and binding obligation thereof, enforceable against Vodafone and Seller in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, insolvency and similar federal and state Laws generally affecting the rights and remedies of creditors and general principles of equity, whether considered in a proceeding at law or in equity.
(b) The Board of Directors of Vodafone, at a meeting duly called and held on September 1, 2013, has (i) approved this Agreement and the transactions contemplated by this Agreement and the Ancillary Documents, and (ii) resolved to make the Vodafone Recommendation and to include the Vodafone Recommendation in the Vodafone Circular (subject to Section 5.3(d)) substantially on the following terms:
The Board considers that the [Proposals] are in the best interests of Vodafone Shareholders as a whole and accordingly unanimously recommends that all Vodafone Shareholders vote in favour of the Scheme of Arrangement at the Court Meeting and the Resolutions at the Vodafone Shareholders Meeting, as the Directors intend to do in respect of their own beneficial shareholdings. The Vodafone Board, which has been so advised by Goldman Sachs and UBS, considers the terms of the [Transactions] to be fair and reasonable so far as the Vodafone Shareholders are concerned. In providing financial advice to the Vodafone Board, Goldman Sachs and UBS have each taken into account the commercial assessments of the Directors.
(c) (i) The approval of the Vodafone Scheme at the Court Meeting and the passing of the Vodafone Resolutions at a duly convened and held general meeting of Vodafone (the Vodafone Shareholders Meeting), in each case by the requisite majority (the Vodafone Requisite Scheme Vote), are the only votes of the holders of any class or
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series of the equity interests of Vodafone necessary to approve and consummate the Transaction by way of the Vodafone Scheme as contemplated by this Agreement, and (ii) the approval of the Vodafone Sale Resolutions at the Vodafone Shareholders Meeting by the requisite majority (the Vodafone Requisite Share Purchase Vote) is the only vote of the holders of any class or series of the equity interests of Vodafone necessary to approve and consummate the Transaction by way of the Share Purchase as contemplated by this Agreement.
3.3 Consents. Neither the execution and delivery of this Agreement by Vodafone nor the execution and delivery of the Omnitel Purchase Agreement by Vodafone Europe, nor the consummation of the transactions contemplated hereby (including the Reorganization) or thereby, will (a) conflict with, or result in any breach or violation of, any provision of the organizational documents of Vodafone, Seller, Vodafone Europe, Omnitel or any of the Sold Entities; (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create an Encumbrance, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under any order, writ, injunction, decree, Law, statute, rule or regulation, governmental permit or license, or any mortgage, indenture, lease, agreement or other instrument of Vodafone, Seller, Vodafone Europe, Omnitel or the Sold Entities or to which Vodafone, Seller, Vodafone Europe, Omnitel or the Sold Entities or any of their respective assets or properties are subject, except in each case which would not reasonably be expected to have, individually or in the aggregate, a Vodafone Material Adverse Effect; or (c) require any consent, approval, or authorization of, waiver by, notification to, or filing with, any Governmental Entity on the part of Vodafone, Seller, Vodafone Europe, Omnitel or the Sold Entities other than (i) the filing of certificates and other documents with respect to the Reorganization transaction contemplated in Schedule 5.1 hereto, (ii) filings with the FCC or in connection with the transactions contemplated in the Omnitel Purchase Agreement and (iii) such other consents, approvals, authorizations, waivers, notifications or filings the failure of which to be obtained or made would not reasonably be expected to have, individually or in the aggregate, a Vodafone Material Adverse Effect.
3.4 No Liabilities of the Sold Entities; Assets of the Sold Entities.
(a) As of the Closing Date and following completion of the Reorganization, there will be no Liabilities of any Sold Entity of any kind, other than Liabilities (i) set forth on Section 3.4(a) of the Vodafone Disclosure Letter or that exist between such Sold Entity and another Sold Entity arising from the Reorganization, (ii) in the case of each Vodafone Partner, of and in respect of the Partnership pursuant to such Vodafone Partners ownership of its Partnership Interest and (iii) for Taxes of the Sold Entities.
(b) As of the Closing Date and following completion of the Reorganization, none of the Sold Entities will be party to any Contract or will have any assets other than (i) as set forth on Section 3.4(b) of the Vodafone Disclosure Letter or that exist between such Sold Entity and another Sold Entity arising from the Reorganization, (ii) in the case of any Sold Entity that owns another Sold Entity, ownership of such other Sold Entity and (iii) in the case of any Sold Entity which is also a Vodafone Partner, (x) Contracts with the Partnership or its Subsidiaries, Verizon or wholly owned Subsidiaries of Verizon in respect thereof and (y) ownership of any Partnership Interest. As of the Closing Date and
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following completion of the Reorganization, none of the Sold Entities will employ any persons or sponsor, maintain, contribute to or be required to contribute to any Employee Benefit Plan, or have any current, future or contingent Liability in respect of any Employee Benefit Plan, in each case other than Excluded Liabilities.
(c) As of the Closing Date and following completion of the Reorganization, there is no Liability for, or obligation with respect to, any dividends or distributions declared or to be declared or accumulated but unpaid with respect to any shares of the capital stock or other equity interests of any Sold Entity. As of the most recent Dividend Payment Date, there were no accrued and unpaid dividends with respect to the VAI Preferred Shares.
3.5 Litigation. There are no (a) investigations or proceedings pending (or, to the Knowledge of Vodafone, threatened) by any Governmental Entity with respect to any Sold Entity or (b) actions, suits or proceedings pending (or, to the Knowledge of Vodafone, threatened) against any Sold Entity or any of their respective properties at law or in equity before, and there are no orders, judgments or decrees of, any Governmental Entity against any Sold Entity, in each case of clause (a) or (b), which would reasonably be expected to have, individually or in the aggregate, a Vodafone Material Adverse Effect.
3.6 Compliance with Laws; Licenses.
(a) The businesses of the Sold Entities are not being conducted in violation of any applicable Law, except for violations that would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect (disregarding, for purposes of this Section 3.6(a), clause (i) of the definition of Verizon Material Adverse Effect).
(b) As of the date of this Agreement, to the Knowledge of Vodafone, no event or condition has occurred or exists which would result in a violation of, breach, default or loss of a benefit under, or acceleration of an obligation of any Sold Entity under, any permits, licenses, certifications, approvals, registrations, consents, authorizations, franchises, variances, exemptions and orders issued or granted by a Governmental Entity (Licenses) or has caused (or would cause) an applicable Governmental Entity to fail or refuse to issue, renew or extend any License (in each case, with or without notice or lapse of time or both), in each case except for violations, breaches, defaults, losses, accelerations or failures that would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect (disregarding, for purposes of this Section 3.6(b), clause (i) of the definition of Verizon Material Adverse Effect).
(c) None of Vodafone, Seller or any Sold Entity is an investment company as defined in the Investment Company Act of 1940, as amended.
3.7 Capitalization and Ownership of the Sold Entities.
(a) Section 3.7 of the Vodafone Disclosure Letter sets forth, with respect to each Sold Entity, as of the date of this Agreement, (i) the number of its issued and outstanding shares of capital stock or other equity interests of such Sold Entity and (ii) except with
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respect to the VAI Preferred Shares, the owner of such shares of capital stock or other equity interests.
(b) Except for the shares of capital stock or other equity interests of each Sold Entity to be transferred to Verizon, directly or indirectly, pursuant to the terms and subject to the conditions of this Agreement, there are no issued and outstanding equity interests in any Sold Entity other than the VAI Preferred Shares. All of the shares of capital stock or other equity interests of each Sold Entity have been duly authorized and validly issued and are fully paid and nonassessable and, as of immediately prior to the Closing and except for (x) the VAI Preferred Shares or (y) as set forth on Section 3.7 of the Vodafone Disclosure Letter, will be owned, beneficially and of record, by Seller or a Sold Entity, free and clear of all Encumbrances other than transfer restrictions under applicable securities Laws. There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, agreements, arrangements or commitments of any character under which Vodafone or a Sold Entity is or may become obligated to issue or sell, or giving any Person other than a Sold Entity a right to subscribe for or acquire, or in any way dispose of, any shares of capital stock or other securities of any Sold Entity or any securities or obligations convertible or exchangeable into or exercisable for, or convertible into, any shares of capital stock or any securities of any Sold Entity, and no securities or obligations evidencing such rights will be authorized, reserved for issuance, issued or outstanding. Except for the VAI Preferred Shares, no Sold Entity has any outstanding bonds, debentures, notes or other obligations that provide the holders thereof the right to vote (or are convertible or exchangeable into or exercisable for securities having the right to vote) with the shareholders of Vodafone, Seller or any Sold Entity on any matter.
3.8 Ownership of Partnership Interest. The Vodafone Partners (together) have good and valid title to a 45% Partnership Interest in the Partnership, free and clear of any Encumbrance other than any Encumbrance imposed by the organizational documents of the Partnership, the Delaware Revised Uniform Partnership Act or applicable federal and state securities Law transfer restrictions.
3.9 Ownership of Transferred Shares. Seller has good and valid title to the Transferred Shares, free and clear of any Encumbrance other than applicable federal and state securities Law transfer restrictions, and upon consummation of the Transaction, Verizon will have good and valid title to such Transferred Shares, free and clear of any Encumbrance other than applicable federal and state securities Law transfer restrictions.
3.10 Tax.
(a) The Sold Entities (i) have timely filed or caused to be filed (taking into account any extension of time to file granted or obtained) all material Tax Returns required to be filed by or on behalf of them and all such filed Tax Returns are true, correct and complete in all material respects; and (ii) have timely paid all material amounts of Taxes due and payable except, in each case, to the extent that such Taxes are being contested in good faith or are adequately reserved in accordance with IFRS; provided, that no representation is made with respect to the accuracy of any such filed
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Tax Return with respect to information reported to the Sold Entities by the Partnership on Schedule K-1 (IRS Form 1065). There are no material liens with respect to Taxes upon any asset of the Sold Entities, other than liens for current Taxes not yet due and payable.
(b) Other than with respect to items of Partnership income, gain, loss, deduction or credit (or other items reported to its partners on Schedule K-1 (IRS Form 1065)), no material deficiencies for any Taxes have been proposed in writing or assessed against or with respect to any of the Sold Entities, and there is no outstanding audit, assessment, dispute or claim pending or threatened in writing concerning any material Tax Liability of the Sold Entities.
(c) None of the Sold Entities has received any written notice or inquiry that has not been withdrawn or resolved from any jurisdiction where such Sold Entity does not currently file Tax Returns to the effect that such filings may be required or that such Sold Entity may be subject to Tax by such jurisdiction.
(d) None of the Sold Entities (i) is a party to, is bound by or has any obligation under any Tax sharing or Tax indemnity agreement or similar contract or arrangement, (ii) is or was (since June 30, 1999), a member of any consolidated, combined, unitary or affiliated Tax Return group (other than a group consisting solely of one or more of the Sold Entities), and (iii) has any liability for Taxes of any other Person under any Law, as transferee or successor, by contract or otherwise.
(e) None of the Sold Entities will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any Post-Closing Tax Period as a result of any (i) adjustment required by reason of a change in method of accounting for a Pre-Closing Tax Period under Section 481(c) of the Code (or any corresponding or similar provision of state, local or foreign Tax Law), (ii) closing agreement as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign Tax Law) entered into prior to the Closing, or (iii) installment sale or intercompany transaction made prior to the Closing, except, in each case of clauses (i) through (iii), for any such items arising from any such change in method of accounting, closing agreement, installment sale or intercompany transaction by the Partnership.
(f) All material Taxes required to be withheld, collected or deposited by or with respect to any of the Sold Entities have been timely withheld, collected or deposited, as the case may be, and to the extent required, have been paid to the relevant Tax Authority.
(g) Section 3.10(g) of the Vodafone Disclosure Letter specifies any Sold Entity for which an entity classification election pursuant to Treasury Regulation Section 301.7701-3 was made, and with respect to each such election, the effective date thereof and the classification elected pursuant thereto.
(h) Within the past two (2) years, none of the Sold Entities has been a distributing corporation or a controlled corporation in a distribution intended to qualify under Section 355(a) of the Code.
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(i) None of the Sold Entities has participated in any listed transaction within the meaning of Treasury Regulations Section 1.6011-4.
3.11 Information Supplied. None of the information supplied or to be supplied in writing by Vodafone in connection with this Agreement, the Ancillary Documents and the transactions contemplated hereby and thereby specifically for inclusion or incorporation by reference in the Proxy Statement, the Verizon Registration Statement or the Verizon UK Prospectus will, at the time such document or any amendment or supplement thereto is declared effective under the Securities Act or first mailed or posted to shareholders and/or, as applicable, published, contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The Vodafone Circular will not, at the date of publication of the Vodafone Circular, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein; provided, however, that no representation is made by Vodafone with respect to statements made or incorporated by reference therein based on information supplied in writing by Verizon specifically for inclusion or incorporation by reference therein.
3.12 Brokers and Finders. Other than Goldman Sachs International and UBS Limited, the fees and expenses of which will be paid by Vodafone, none of Vodafone or any of its controlled Affiliates has engaged any broker or finder or incurred any Liability for any brokerage fees, commissions or finders fees in connection with the transactions contemplated by this Agreement and the Ancillary Documents for which any cost or Liability could be imposed on Verizon or any of its Affiliates.
3.13 Lack of Ownership of Verizon Common Stock. Except as held by any benefit or pension plan sponsored, maintained, contributed to or required to be contributed to by Vodafone or any of its Subsidiaries for the benefit of current or former employees, directors or consultants of Vodafone or its Subsidiaries, or with respect to which Vodafone or its Subsidiaries have any current, future or contingent Liability, neither Vodafone nor any of its Subsidiaries beneficially owns directly or indirectly, any shares of Verizon Common Stock or other securities convertible into, exchangeable for or exercisable for shares of Verizon Common Stock, and none of Vodafone or any of its Subsidiaries has any rights to acquire any shares of Verizon Common Stock. There are no voting trusts or other agreements or understandings to which Vodafone or any of its Subsidiaries is a party with respect to the voting of the capital stock or other equity interest of Verizon.
3.14 Vodafone Employee Benefits. With respect to each Vodafone Benefit Plan, except as would not reasonably be expected to have, individually or in the aggregate, a Vodafone Material Adverse Effect, (i) Vodafone and its Subsidiaries and the Sold Entities have complied, and are now in compliance with, all Laws applicable to the Vodafone Benefit Plans and their terms, (ii) each Vodafone Benefit Plan has been maintained, funded and administered in compliance with its terms and with applicable Law, and (iii) insofar as relates to any Vodafone Benefit Plan operated in the UK which provides pension benefits other than on a money purchase basis (each such plan, a Vodafone UK Pension Plan), there is no cause to believe that the UK Pensions Regulator currently has any reason to consider issuing a financial support direction or a contribution notice against any entity by reference to such Vodafone UK Pension Plan.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF VERIZON
Except as set forth in the Verizon SEC Documents filed with the SEC after December 31, 2011 and prior to the date hereof (excluding, in each case, any disclosures set forth in any risk factor section or in any other section to the extent they are forward-looking statements or cautionary, predictive or forward-looking in nature) or in the corresponding sections of the disclosure letter delivered to Vodafone on or prior to entering into this Agreement (the Verizon Disclosure Letter) (it being agreed that disclosure of any item in any part of the Verizon Disclosure Letter shall be deemed disclosure with respect to any other part to which the relevance of such item is reasonably apparent), Verizon hereby makes the following representations and warranties (a) on the date hereof and (b) on the Measurement Time (except in either case to the extent such representation is made as of an earlier date (in which case on and as of such earlier date)):
4.1 Organization and Qualification.
(a) Each of Verizon and its Significant Subsidiaries is a legal entity duly organized, validly existing in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of the jurisdiction in which it is incorporated or organized and has all requisite power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted, except, in the case of the Significant Subsidiaries of Verizon, for such failures to be so organized, existing and in good standing or to have such power and authority as would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect.
(b) Each of Verizon and its Subsidiaries is duly licensed or qualified to do business and is in good standing (with respect to jurisdictions that recognize the concept of good standing) in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except for such failures to be so licensed, qualified or in good standing as would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect.
(c) Verizon has filed with the SEC correct and complete copies of its certificate of incorporation and by-laws (the Verizon Charter Documents), in each case as amended to the date of this Agreement. All such Verizon Charter Documents are in full force and effect and Verizon is not in violation of any of their provisions.
4.2 Capitalization.
(a) The authorized capital stock of Verizon consists of 4,250,000,000 shares of Verizon Common Stock and 250,000,000 shares of preferred stock, par value $0.10 per share (Verizon Preferred Stock). As of the close of business on August 30, 2013, (i) 2,861,731,823 shares of Verizon Common Stock were issued and outstanding,
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(ii) 105,878,296 shares of Verizon Common Stock were issued and held in treasury, (iii) 117,180,785 shares of Verizon Common Stock were reserved for issuance upon the exercise of outstanding stock options, the vesting or lapse of restrictions of restricted share units to acquire shares of Verizon Common Stock or the exercise or vesting or lapse of restrictions of or on any similar instruments into Verizon Common Stock and (iv) no shares of Verizon Preferred Stock were issued and outstanding. All of the Verizon Common Stock (A) has been duly authorized and validly issued, (B) is fully paid and nonassessable and (C) was issued in compliance with all applicable Laws concerning the issuance of securities. As of the close of business on August 30, 2013, there were no other equity interests of Verizon issued, authorized or outstanding. In the event that the Verizon Certificate of Incorporation is amended to provide for an increase in the number of shares of Verizon Common Stock authorized by the Verizon Certificate of Incorporation (a Verizon Certificate Amendment), the authorized capital stock of Verizon will be increased by the number of newly authorized shares of Verizon Common Stock provided for thereupon.
(b) Other than pursuant to the Verizon Stock Plans, as of the date hereof, except as expressly contemplated by this Agreement, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments of any character under which Verizon is or may become obligated to issue or sell, or giving any Person a right to subscribe for or acquire, or in any way dispose of, any equity interests of Verizon, or any securities or obligations exercisable or exchangeable for, or convertible into, any equity interests of Verizon, and no securities or obligations evidencing such rights are authorized, reserved for issuance, issued, or outstanding. Upon issuance, the Verizon Shares will not be subject to any voting trust agreement or other contract, agreement or arrangement restricting or otherwise relating to the voting, dividend rights or disposition of such equity interests.
4.3 Authority.
(a) Verizon has the requisite power and authority to execute and deliver this Agreement and, subject to obtaining the Verizon Requisite Vote, to consummate the transactions contemplated by this Agreement and the Ancillary Documents, and such execution, delivery and, subject to obtaining the Verizon Requisite Vote, consummation have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by Verizon and, assuming the due execution and delivery by Vodafone and Seller, constitutes the valid and binding obligation thereof, enforceable against Verizon in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, insolvency and similar federal and state Laws generally affecting the rights and remedies of creditors and general principles of equity, whether considered in a proceeding at law or in equity.
(b) The Board of Directors of Verizon, at a meeting duly called and held, has (i) approved and declared advisable this Agreement and the transactions contemplated by this Agreement and the Ancillary Documents, including the issuance of the Verizon
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Shares (the Share Issuance) and (ii) resolved to make the Verizon Recommendation (subject to Section 5.2(f)).
(c) The affirmative vote (in person or by proxy) pursuant to NYSE listing rules, of the holders of a majority of the shares of Verizon Common Stock voting at the Verizon Stockholders Meeting or any adjournment or postponement thereof to approve the Share Issuance (the Verizon Requisite Vote) is the only vote of the holders of any class or series of the equity interests of Verizon necessary to approve and consummate the Transaction.
4.4 Consents. Neither the execution and delivery of this Agreement by Verizon nor execution and delivery of the Omnitel Purchase Agreement by VBIH, nor the consummation of the transactions contemplated hereby or thereby, will (a) conflict with, or result in any breach or violation of, any provision of the Verizon Charter Documents or any equivalent organizational or governing documents of any Significant Subsidiary of Verizon or VBIH; (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create an Encumbrance, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under any order, writ, injunction, decree, Law, statute, rule or regulation, governmental permit or license, or any mortgage, indenture, lease, agreement or other instrument of Verizon or its Significant Subsidiaries or VBIH or to which Verizon or its Significant Subsidiaries or VBIH or any of their respective assets or properties is subject, except for such breaches, violations, defaults, Encumbrances, and rights as would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect; or (c) require any consent, approval, or authorization of, waiver by, notification to, or filing with, any Governmental Entity on the part of Verizon or any of its Subsidiaries other than (i) those expressly contemplated by this Agreement (including the approvals required by the FCC) or in connection with the transactions contemplated by the Omnitel Purchase Agreement and (ii) such consents, approvals, authorizations, waivers, notifications or filings the failure of which to be obtained or made would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect.
4.5 Verizon SEC Documents; Financial Statements; Verizon UK Prospectus.
(a) Verizon has filed or furnished, as applicable, on a timely basis all required reports, schedules, forms, certifications, prospectuses, and registration, proxy and other statements with the SEC (collectively and together with all documents filed on a voluntary basis on Form 8-K, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the Verizon SEC Documents) since December 31, 2011. Each of the Verizon SEC Documents, at the time of its filing or being furnished, complied, or if not yet filed or furnished, will comply, in all material respects, with the applicable requirements of the Exchange Act, the Securities Act and the Sarbanes-Oxley Act of 2002, and any rules and regulations promulgated thereunder applicable to the Verizon SEC Documents. As of their respective dates (or, if amended prior to the date hereof, as of the date of such amendment), the Verizon SEC Documents did not, and any Verizon SEC Documents filed with or furnished to the SEC subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state
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a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading.
(b) Verizon maintains disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act. Such disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by Verizon is recorded and reported on a timely basis to the individuals responsible for the preparation of Verizons filings with the SEC and other public disclosure documents. Verizon maintains internal control over financial reporting (as defined in Rule 13a-15 or 15d-15, as applicable, under the Exchange Act). Such internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Verizon, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of Verizon are being made only in accordance with authorizations of management and directors of Verizon, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Verizons assets that could have a material effect on its financial statements. Verizon has disclosed, based on the most recent evaluation of its chief executive officer and its chief financial officer prior to the date of this Agreement, to Verizons auditors and the audit committee of Verizons Board of Directors (A) any significant deficiencies (as defined in Auditing Standard No. 5 of the Public Company Accounting Oversight Board, as in effect on the date hereof) in the design or operation of its internal controls over financial reporting that are reasonably likely to adversely affect Verizons ability to record, process, summarize and report financial information and has identified for Verizons auditors and audit committee of Verizons Board of Directors any material weaknesses (as defined in Auditing Standard No. 5 of the Public Company Accounting Oversight Board, as in effect on the date hereof) in internal control over financial reporting and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in Verizons internal control over financial reporting.
(c) Each of the audited consolidated statements of income, changes in stockholders equity and cash flows of Verizon and its consolidated Subsidiaries included in or incorporated by reference into the Verizon SEC Documents (including any related notes and schedules) (i) have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto); (ii) presented fairly, in all material respects, the consolidated financial position of Verizon and its consolidated Subsidiaries as at the dates thereof and the consolidated results of income, changes in stockholders equity and cash flows of Verizon and its consolidated Subsidiaries for the periods then ended, and (iii) were prepared from the books of account and other financial records of Verizon and its consolidated Subsidiaries.
(d) Verizon does not have any Liabilities of any kind (whether or not accrued or contingent) that would be required to be reflected or reserved against on a consolidated
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balance sheet of Verizon prepared in accordance with GAAP (or the notes thereto), except for (i) Liabilities reflected or reserved against on Verizons consolidated unaudited balance sheet as of June 30, 2013 (or the notes thereto), (ii) Liabilities incurred in the ordinary course of business since June 30, 2013, (iii) Liabilities incurred in connection with or contemplated by this Agreement and (iv) Liabilities that would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect.
(e) The Verizon UK Prospectus will contain all such information necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of Verizon and the rights attaching to the Verizon Shares having regard to the matters specified in section 87A of FSMA and all statements contained in the Verizon UK Prospectus or any other Verizon Disclosure Document upon publication will be true and accurate in all material respects and not misleading in any material respect.
(f) None of the information supplied or to be supplied by Verizon for inclusion or incorporation by reference in the Proxy Statement, the Verizon Registration Statement, the Verizon UK Prospectus or any other Verizon Disclosure Document will, at the time such document or any amendment or supplement thereto is declared effective under the Securities Act or first mailed or posted to shareholders and/or, as applicable, published, contain any untrue statement of material fact or omit to state any material fact required to be stated therein to make the statements therein not misleading.
(g) None of the information supplied or to be supplied in writing by Verizon specifically for inclusion or incorporation by reference in the Vodafone Circular will, at the time such document or any amendment or supplement thereto is first mailed or posted to shareholders and/or, as applicable, published, contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
(h) Notwithstanding anything in this Agreement to the contrary, no representation is made by Verizon with respect to statements made or incorporated by reference in any Verizon Disclosure Document based on information supplied in writing by Vodafone in connection with this Agreement, the Ancillary Documents and the transactions contemplated hereby and thereby specifically for inclusion or incorporation by reference in such Verizon Disclosure Document.
4.6 Absence of Certain Changes. Since June 30, 2013 until the date of this Agreement, the businesses of Verizon and its Subsidiaries have been conducted in the ordinary course of business in all material respects. Since December 31, 2012, there has not been any change, effect, event or occurrence that would reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect.
4.7 Litigation. There are no (a) investigations or proceedings pending (or, to the Knowledge of Verizon, threatened) by any Governmental Entity with respect to Verizon or any of its Subsidiaries or (b) actions, suits or proceedings pending (or, to the Knowledge of Verizon,
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threatened) against Verizon or any of its Subsidiaries or any of their respective properties at law or in equity before, and there are no orders, judgments or decrees of, any Governmental Entity against Verizon or any of its Subsidiaries, in each case of clause (a) or (b), which would reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect.
4.8 Compliance with Laws; Licenses.
(a) Verizon and its Subsidiaries each has obtained and is in compliance with all Licenses necessary to conduct its businesses as presently conducted, except those the absence of which would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect. The businesses of Verizon and its Subsidiaries are not being conducted in violation of any applicable Law, except for violations that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect.
(b) As of the date of this Agreement, to the Knowledge of Verizon, no event or condition has occurred or exists which would result in a violation of, breach, default or loss of a benefit under, or acceleration of an obligation of Verizon or any of its Subsidiaries under, any Licenses or has caused (or would cause) an applicable Governmental Entity to fail or refuse to issue, renew or extend any License (in each case, with or without notice or lapse of time or both), except for violations, breaches, defaults, losses, accelerations or failures that would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect.
4.9 Tax Matters. Except as would not, individually or in the aggregate, have and would not reasonably be expected to have, a Verizon Material Adverse Effect:
(a) Verizon and its Subsidiaries (i) have timely filed or caused to be filed (taking into account any extension of time to file granted or obtained) all Tax Returns required to be filed by or on behalf of them and all such filed Tax Returns are true, correct and complete; and (ii) have timely paid all Taxes due and payable except, in each case, to the extent that such Taxes are being contested in good faith or are adequately reserved, in accordance with GAAP. There are no liens with respect to Taxes upon any asset of Verizon or its Subsidiaries, other than liens for current Taxes not yet due and payable.
(b) No deficiencies for any Taxes have been proposed in writing or assessed against or with respect to any Taxes due by or Tax Returns of Verizon or its Subsidiaries, and there is no outstanding audit, assessment, dispute or claim pending or threatened in writing concerning any Tax liability of Verizon or its Subsidiaries.
(c) All Taxes required to be withheld, collected or deposited by or with respect to Verizon and its Subsidiaries have been timely withheld, collected or deposited, as the case may be, and to the extent required, have been paid to the relevant Tax Authority.
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4.10 Verizon Employee Benefits.
(a) Except for such claims which would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect, no action, dispute, suit, claim, arbitration, or legal, administrative or other proceeding or governmental action is pending or, to the Knowledge of Verizon, threatened (x) with respect to any Verizon Benefit Plan (other than a multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA) (a Multiemployer Plan)), other than claims for benefits in the ordinary course, (y) alleging any breach of the material terms of any Verizon Benefit Plan (other than a Multiemployer Plan) or any fiduciary duties with respect thereto or (z) with respect to any violation of any applicable Law with respect to such Verizon Benefit Plan (other than a Multiemployer Plan).
(b) Each Verizon Benefit Plan has been maintained, funded and administered in compliance with its terms and with applicable Law, including ERISA and the Code, except for such non-compliance which would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect. Except, in each case, as would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect, (i) any Verizon Benefit Plan intended to be qualified under Section 401 of the Code has received a favorable determination letter from the IRS that has not been revoked and, (ii) to the Knowledge of Verizon, no fact or event has occurred since the date of such determination letter or letters from the IRS that would reasonably be expected to adversely affect the qualified status of any such Verizon Benefit Plan.
(c) With respect to each Verizon Benefit Plan that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code, (i) Verizon, its Subsidiaries and their respective ERISA Affiliates have complied with the minimum funding requirements under Sections 412, 430 and 431 of the Code and Sections 302, 303 and 304 of ERISA, whether or not waived, (ii) no reportable event within the meaning of Section 4043 of ERISA for which the 30-day notice requirement has not been waived has occurred, (iii) all premiums to the Pension Benefit Guaranty Corporation (the PBGC) have been timely paid in full, (iv) no current or contingent Liability under Title IV of ERISA has been or is expected to be incurred by Verizon, its Subsidiaries or any of their respective ERISA Affiliates (other than for premiums to the PBGC) and (v) the PBGC has not instituted proceedings to terminate any such Verizon Benefit Plan, except, in each case of (i) (v), as would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect. Except for such matters as would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect, with respect to any Verizon Benefit Plan, all contributions, premiums and other payments due from any of Verizon or its Subsidiaries required by Law or any Verizon Benefit Plan have been made under any such plan to any fund, trust or account established thereunder or in connection therewith by the due date thereof.
4.11 Labor Matters. Except for such matters which would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect, (i) there are no (and have not been during the two-year period preceding the date of this Agreement any) strikes or lockouts with respect to any employees of Verizon or any of its Subsidiaries, (ii) to the
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Knowledge of Verizon, there is no (and has not been during the two-year period preceding the date of this Agreement any) union organizing effort pending or threatened against Verizon or any of its Subsidiaries, and (iii) there is no (and has not been during the two-year period preceding the date of this Agreement any) slowdown, or work stoppage in effect or, to the Knowledge of Verizon, threatened with respect to any employees of Verizon or any of its Subsidiaries.
4.12 Contracts.
(a) Except for this Agreement or as filed with the SEC prior to the date of this Agreement, neither Verizon nor any of its Subsidiaries is a party to or bound by, as of the date of this Agreement, any Contract (whether written or oral) which is a material contract (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to Verizon (all such Contracts, Verizon Material Contracts).
(b) (i) Each Verizon Material Contract is valid and binding on Verizon and its Subsidiaries, as applicable, and is in full force and effect, except where such failure to be valid, binding and in full force and effect would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect, (ii) Verizon and each of its Subsidiaries has in all material respects performed all obligations required to be performed by it to date under each Verizon Material Contract, except where such noncompliance would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect, and (iii) neither Verizon nor any of its Subsidiaries has, to the Knowledge of Verizon, received written notice of any event or condition which constitutes, or, after notice or lapse of time or both, will constitute, a material default on the part of Verizon or any of its Subsidiaries under any such Verizon Material Contract, except for such defaults as would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect.
4.13 Intellectual Property. Except for such matters as would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect, either Verizon or a Subsidiary of Verizon owns, or is licensed or otherwise possesses adequate rights to use, all material trademarks, trade names, service marks, service names, mark registrations, logos, assumed names, domain names, registered and unregistered copyrights, patents or applications and registrations, and trade secrets (collectively, the Verizon Intellectual Property) used in their respective businesses as currently conducted. Except for such matters as would not reasonably be expected to have, individually or in the aggregate, a Verizon Material Adverse Effect, (i) there are no pending or, to the Knowledge of Verizon, threatened claims by any Person alleging infringement or misappropriation by Verizon or any of its Subsidiaries of such Persons intellectual property, (ii) to the Knowledge of Verizon, the conduct of the businesses of Verizon and its Subsidiaries does not infringe or misappropriate any intellectual property rights of any Person, (iii) neither Verizon nor any of its Subsidiaries has made any claim of a violation or infringement, or misappropriation by others of its rights to or in connection with the owned Verizon Intellectual Property, and (iv) to the Knowledge of Verizon, no Person is infringing or misappropriating any Verizon Intellectual Property.
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4.14 Financing.
(a) The net proceeds of the loans under the Bridge Credit Agreement, dated as of the date hereof, by and among the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent (including any of their respective successors under such facility, the Financing Sources) and Verizon (the Loan Facility), when funded in accordance with its terms and together with cash on hand (whether from debt issuances, equity issuances, operations or other sources) of Verizon and/or the net proceeds of any Replacement Financing, will, in the aggregate, be sufficient for the payment of the Cash Consideration and any other amounts required to be paid in connection with the consummation of the transactions contemplated hereby, including the payment of all related fees and expenses.
(b) Verizon has delivered to Vodafone true, correct and complete fully executed copies of the Loan Facility, including all exhibits, schedules, annexes and amendments to such Loan Facility in effect as of the date of this Agreement (the Loan Facility, and all exhibits, schedules, annexes and amendments thereto are collectively referred to as the Financing Documents), pursuant to which the lenders party thereto have severally agreed, subject to the conditions set forth therein, to lend the amounts set forth therein (the provision of such funds as set forth therein, the Financing) for the purposes set forth in such Loan Facility. No Financing Document has been amended, restated or otherwise modified or waived prior to the date of this Agreement, and the respective commitments contained in the Loan Facility have not been withdrawn, modified or rescinded in any respect prior to the date of this Agreement. As of the date hereof, the Financing Documents are in full force and effect and constitute the legal, valid and binding obligation of each of Verizon and, to the Knowledge of Verizon, the other parties thereto, except as enforceability may be limited by applicable bankruptcy, reorganization, insolvency and similar federal and state Laws generally affecting the rights and remedies of creditors and general principles of equity, whether considered in a proceeding at law or in equity. There are no conditions precedent (including pursuant to any flex provisions) to the funding of the full amount of the Financing or the Replacement Financing, other than the satisfaction of the conditions contained in Sections 3.01 and 3.02 of the Loan Facility (or, in respect of certainty of funding, such substantially equivalent conditions (or conditions that are more favorable to Verizon) as may appear in any Replacement Financing Document). As of the date hereof, there are no side letters or other contracts or arrangements related to the Financing that could adversely affect the availability of the Financing. As of the date hereof, no event has occurred which would constitute a breach or default (or an event which with notice or lapse of time or both would constitute a breach or default), in each case, on the part of Verizon under the Financing Documents or, to the Knowledge of Verizon, any other party to the Financing Documents. As of the date hereof, subject to the satisfaction of the conditions contained in Section 3.01 and 3.02 of the Loan Facility (or, in respect of certainty of funding, such substantially equivalent conditions (or conditions that are more favorable to Verizon) as may appear in any Replacement Financing Document), Verizon does not have any reason to believe that the funds necessary for the payment of the Cash Consideration, and any other amounts required to be paid in connection with the consummation of the transactions contemplated hereby, including the payment of all related fees and expenses, will not be available to Verizon on the Closing Date. Verizon has fully paid all
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commitment fees or other fees required to be paid prior to the date of this Agreement pursuant to the Financing Documents.
4.15 Verizon Shares.
(a) Upon issuance, the Verizon Shares will be duly authorized, validly issued, fully paid and nonassessable, and will not be subject to any option, call, preemptive, subscription or similar rights under any provision of applicable Law or the Verizon Charter Documents.
(b) At the Closing, Verizon will have sufficient authorized but unissued shares or treasury shares of Verizon Common Stock for Verizon to meet its obligation to deliver the Verizon Shares under this Agreement. Upon consummation of the transactions contemplated hereby, Verizon will deliver the Vodafone Shareholders good and valid title to the Verizon Shares to which they are entitled pursuant to the Transaction and the issuance of such shares will have been registered under the Securities Act.
4.16 Brokers and Finders. Other than Guggenheim Securities, LLC, PJT Capital LLC, J.P. Morgan Securities LLC, Morgan Stanley and Co. LLC, Barclays Capital Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc., the fees and expenses of which will be paid by Verizon, neither Verizon nor any of its controlled Affiliates has engaged any broker or finder or incurred any liability for any brokerage fees, commissions or finders fees in connection with the transactions contemplated by this Agreement and the Ancillary Documents for which any cost or liability could be imposed on Vodafone or any of its Affiliates or, until after the Closing, the Partnership or any of its Subsidiaries.
4.17 Opinions of Verizon Financial Advisors. The Board of Directors of Verizon has received the opinion of each of J.P. Morgan Securities LLC and Morgan Stanley and Co. LLC (collectively, the Verizon Financial Advisors), dated the date of this Agreement, to the effect that, as of such date, and subject to the various assumptions and qualifications set forth therein, the Purchase Price to be paid by Verizon is fair, from a financial point of view, to Verizon (the Verizon Fairness Opinions).
4.18 Lack of Ownership of Vodafone Ordinary Shares. Except as held by any Verizon Benefit Plan, none of Verizon or any of its Subsidiaries beneficially owns directly or indirectly, any ordinary shares of Vodafone or other securities convertible into, exchangeable for or exercisable for Vodafone Ordinary Shares, and neither Verizon nor any of its Subsidiaries has any rights to acquire any Vodafone Ordinary Shares. There are no voting trusts or other agreements or understandings to which Verizon or any of its Subsidiaries is a party with respect to the voting of the capital stock or other equity interest of Vodafone.
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ARTICLE V
COVENANTS
Each of the parties hereby covenants and agrees as follows:
5.1 Reorganization. Prior to the Closing, Vodafone shall, and shall cause its controlled Affiliates to, take all actions and to do, or cause its controlled Affiliates to do, all things necessary, proper or advisable under Law to effect a pre-closing reorganization consisting of the transactions set forth on Schedule 5.1 in all material respects in the manner set forth therein (such transactions, together with any modifications made pursuant to the following sentence of this Section 5.1, collectively, the Reorganization), such that (a) at and following the Closing, the only shares or other equity or partnership interests held (directly or indirectly) by Vodafone Finance 1 shall be shares of, or equity or partnership interests in, a Sold Entity or in the Partnership, (b) Verizon shall not acquire, directly or indirectly, any assets of the Sold Entities, other than those assets set forth in clauses (i) (iii) of the first sentence of Section 3.4(b) (all such assets, other than those assets of the Sold Entities set forth in clauses (i) (iii) of Section 3.4(b), the Excluded Assets), and (c) Verizon shall not assume or be responsible, directly or indirectly (including by virtue of the acquisition of any entity), for any Liabilities of the Sold Entities other than those Liabilities of the Sold Entities set forth in clauses (i) (iii) of Section 3.4(a) (all such Liabilities, other than those Liabilities set forth in clauses (i) (iii) of Section 3.4(a), the Excluded Liabilities). Vodafone may modify the transactions set forth on Schedule 5.1 hereto; provided, that no such modifications shall (i) other than in any de minimis respect, impair or delay consummation of the transactions contemplated by this Agreement and the Ancillary Documents, (ii) cause a breach of any representation or warranty of Vodafone made in this Agreement or (iii) other than in any de minimis respect, increase the risk of any Liability of Verizon or any of its Subsidiaries or any of the Sold Entities or otherwise affect costs (including Taxes), in each case for which Vodafone is not responsible. Vodafone shall notify Verizon in writing of any changes to the Reorganization reasonably in advance of effecting any modified step of the Reorganization and shall consider in good faith any comments received from Verizon.
5.2 Proxy Statement, Verizon Registration Statement and Verizon UK Prospectus.
(a) As soon as reasonably practicable following the date of this Agreement but subject to Section 5.4(a), Verizon shall prepare and file the Proxy Statement with the SEC. Verizon and Vodafone will cooperate with each other in the preparation of the Proxy Statement. Without limiting the generality of the foregoing, Vodafone will furnish to Verizon in writing the information relating to it required by the Exchange Act and the rules and regulations promulgated thereunder to be set forth in the Proxy Statement. Verizon shall use its commercially reasonable efforts to resolve all SEC comments with respect to the Proxy Statement as promptly as reasonably practicable after receipt thereof and to have the Proxy Statement cleared by the staff of the SEC as promptly as reasonably practicable after such filing. Verizon shall as soon as reasonably practicable notify Vodafone of the receipt of any comments from the SEC with respect to the Proxy Statement and any request by the SEC for any amendment to the Proxy Statement or for additional information and shall provide Vodafone with copies of all such comments and correspondence. Prior to filing or mailing the Proxy Statement (or any amendment or
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supplement thereto) or responding to any comments of the SEC (or the staff of the SEC) with respect thereto, Verizon shall provide Vodafone a reasonable opportunity to review and to propose comments on such document or response. Each of Vodafone and Verizon agrees to promptly correct any information provided by it in writing for use in the Proxy Statement which such party shall have become aware is false or misleading. For the avoidance of doubt, Vodafone shall not, and nothing in this Agreement shall require Vodafone to, be responsible for the Proxy Statement other than with respect to the information provided in writing by Vodafone specifically for inclusion in the Proxy Statement.
(b) Verizon, acting through the Verizon Board of Directors (or a committee thereof), shall (i) whether or not there shall have been a Verizon Change of Recommendation, as soon as reasonably practicable after the date hereof, subject to Section 5.4(a), take all action necessary to set a record date for, duly call, give notice of, convene and hold a meeting of its stockholders for the purpose of approving the Share Issuance (the Verizon Stockholders Meeting), (ii) unless there has been a Verizon Change of Recommendation, include in the Proxy Statement the Verizon Recommendation and (iii) use its commercially reasonable efforts to obtain the Verizon Requisite Vote.
(c) As soon as reasonably practicable following the date of this Agreement but subject to Section 5.4(a), Verizon shall prepare and file with the SEC a registration statement on Form S-4 in connection with the issuance, and, as appropriate, the distribution to Vodafone Shareholders, of the Verizon Shares (the Verizon Registration Statement). Verizon and Vodafone will cooperate with each other in the preparation of the Verizon Registration Statement. Without limiting the generality of the foregoing, Vodafone will furnish to Verizon in writing the information relating to it required by the Securities Act and the rules and regulations promulgated thereunder to be set forth in the Verizon Registration Statement. Verizon shall use its commercially reasonable efforts to resolve all SEC comments with respect to the Verizon Registration Statement as promptly as reasonably practicable after receipt thereof and to have the Verizon Registration Statement declared effective by the staff of the SEC as promptly as reasonably practicable after such filing and keep the Verizon Registration Statement effective for so long as necessary to consummate the Transaction. Verizon shall as soon as reasonably practicable notify Vodafone of the receipt of any comments from the SEC with respect to the Verizon Registration Statement and any request by the SEC for any amendment to the Verizon Registration Statement or for additional information and shall provide Vodafone with copies of all such comments and correspondence. Prior to filing the Verizon Registration Statement or mailing the Verizon US Prospectus (or any amendment or supplement thereto) or responding to any comments of the SEC (or the staff of the SEC) with respect thereto, Verizon shall provide Vodafone a reasonable opportunity to review and to propose comments on such document or response. Each of Vodafone and Verizon agrees to promptly correct any information provided by it in writing for use in the Verizon Registration Statement which such party shall have become aware is false or misleading. Following its filing and/or mailing, Verizon undertakes that it shall not (and shall not seek to) withdraw the Verizon Registration Statement on the grounds that there is an exemption from a requirement to register the issuance of the
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Verizon Shares pursuant to the Securities Act. For the avoidance of doubt, Vodafone shall not, and nothing in this Agreement shall require Vodafone to, be responsible for the Verizon Registration Statement other than with respect to the information provided in writing by Vodafone specifically for inclusion in the Verizon Registration Statement.
(d) As soon as reasonably practicable following the date of this Agreement but subject to Section 5.4(a), Verizon shall prepare a prospectus as required by FSMA (the Verizon UK Prospectus) in connection with the admission of the Verizon Shares to listing on the Official List in accordance with the Listing Rules and to trading on the LSE in accordance with paragraph 3 of the LSEs admission and disclosure standards (the Verizon UK Admission). Verizon and Vodafone will cooperate with each other in the preparation of the Verizon UK Prospectus. Without limiting the generality of the foregoing, Vodafone will furnish to Verizon in writing the information relating to it required by the FSMA and the rules and regulations promulgated thereunder to be set forth in the Verizon UK Prospectus. Verizon shall use its commercially reasonable efforts to resolve all UKLA comments with respect to the Verizon UK Prospectus as promptly as reasonably practicable after receipt thereof and to have the Verizon UK Prospectus cleared by the UKLA as promptly as reasonably practicable after such filing. Verizon shall as soon as reasonably practicable notify Vodafone of the receipt of any comments from the UKLA with respect to the Verizon UK Prospectus and any request by the UKLA for any amendment to the Verizon UK Prospectus or for additional information and shall provide Vodafone with copies of all such comments and correspondence. Prior to posting and publishing (as applicable) the Verizon UK Prospectus (or any amendment or supplement thereto), Verizon shall provide Vodafone a reasonable opportunity to review and to propose comments on such document. Each of Vodafone and Verizon agrees to promptly correct any information provided by it in writing for use in the Verizon UK Prospectus which such party shall have become aware is false or misleading. For the avoidance of doubt, Vodafone shall not, and nothing in this Agreement shall require Vodafone to, be responsible for the Verizon UK Prospectus other than with respect to the information provided in writing by Vodafone specifically for inclusion in the Verizon UK Prospectus. For the avoidance of doubt, if Verizon so elects, it may combine the prospectus forming a part of the Verizon Registration Statement (the Verizon US Prospectus) together with the Verizon UK Prospectus into a joint document intended to satisfy the rules and regulations applicable to both documents.
(e) Verizon and Vodafone shall, following the execution of this Agreement and prior to the Closing, discuss in good faith the possibility of offering a mix and match facility through appropriate service providers to enable Vodafone Shareholders (other than Vodafone Shareholders located in certain restricted jurisdictions) to elect to vary the proportion in which such Vodafone Shareholders receive Verizon Shares and cash in respect of their entitlements pursuant to the Vodafone Scheme. Verizon shall also (i) implement a free share dealing facility through one or more appropriate service providers, to enable Vodafone Shareholders (other than Vodafone Shareholders located in certain restricted jurisdictions to be set out in more detail in the Vodafone Circular) holding fewer than 50,000 Vodafone Ordinary Shares in Vodafone to elect to sell the Verizon Shares to which they are entitled pursuant to the terms of the Vodafone Scheme and receive the proceeds of such sale in cash and in such manner as enables such
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Vodafone Shareholders, without charge, to elect to receive such proceeds either in USD, GBP or EUR, such free share dealing facility to be provided for a period of six weeks from the Closing Date; provided, that Vodafone shall pay on demand to Verizon fifty percent (50%) of all costs and expenses incurred by Verizon in connection with the implementation of the free share dealing pursuant to this clause (i), and (ii) implement such arrangements with one or more appropriate service providers (A) as may be reasonably necessary to enable Vodafone Shareholders to hold Crest Depository Instruments representing underlying Verizon Shares (Verizon CDIs) and (B) pursuant to which such appropriate service provider(s) will act as corporate sponsored nominee and hold Verizon CDIs for the benefit of certificated Vodafone Shareholders. Verizon will consult with Vodafone (each acting reasonably and in good faith) with a view to providing that the terms on which the Verizon CDIs, corporate sponsored nominee service and dealing facilities are provided are consistent with market practice for similar facilities in the UK-listed market, such terms to be detailed in the Vodafone Circular and the Verizon UK Prospectus.
(f) Except as set forth below in this Section 5.2(f), neither the Board of Directors of Verizon nor any committee thereof shall withhold or withdraw (or qualify or modify in any manner adverse to Vodafone), the approval, recommendation or declaration of advisability by the Board of Directors of Verizon or any such committee thereof with respect to the Share Issuance (such approval, recommendation or declaration, the Verizon Recommendation and any such withholding, withdrawal, qualification or modification, a Verizon Change of Recommendation). Notwithstanding the foregoing, at any time prior to obtaining the Verizon Requisite Vote, the Board of Directors of Verizon may make a Verizon Change of Recommendation in response to an Intervening Event if the Verizon Board determines in good faith (after consultation with outside counsel and a financial advisor, each of nationally recognized reputation) that the exercise of its fiduciary duties under applicable Law requires such Verizon Change of Recommendation; provided, however, that (i) Verizon shall not be entitled to exercise its right to make a Verizon Change of Recommendation until after the fourth (4th) Business Day following Vodafones receipt of written notice (a Verizon Change Notice) from Verizon advising Vodafone that the Verizon Board intends to take such action and (ii) Verizon shall, throughout such four- (4-) Business Day period, negotiate in good faith with Vodafone with respect to any revisions to the terms of the Transaction proposed by Vodafone in response to an Intervening Event. In determining whether to make a Verizon Change of Recommendation, the Verizon Board shall take into account any changes to the terms of this Agreement proposed by Vodafone in response to a Verizon Change Notice or otherwise.
5.3 Vodafone Shareholder Approval, Circular and Reduction of Capital.
(a) As soon as reasonably practicable following execution of this Agreement but subject to Section 5.4(a), Vodafone shall:
(i) instruct counsel for the purposes of the Vodafone Scheme;
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(ii) prepare a circular (the Vodafone Circular) to its shareholders in relation to (inter alia) the transactions contemplated by this Agreement and the Vodafone Scheme, and, whether or not there shall have been a Vodafone Change of Recommendation, convene the Vodafone Shareholders Meeting (subject to Section 5.4(a)) and, unless Vodafone has withdrawn the Vodafone Scheme, the Court Meeting to consider and, if thought fit, approve the Vodafone Resolutions, and, unless there has been a Vodafone Change of Recommendation, containing the Vodafone Recommendation (whether or not Vodafone has withdrawn the Vodafone Scheme, provided that in such event such Vodafone Recommendation shall be in respect of the Vodafone Sale Resolutions only);
(iii) apply to the Court for leave to convene the Court Meeting and to post or publish the Vodafone Circular, and use commercially reasonable efforts to resolve all comments from the Court as promptly as reasonably practicable;
(iv) supply all documents as may reasonably be required by the UKLA to approve the Vodafone Circular;
(v) correct any information in the Vodafone Circular which shall have become false or misleading and, as soon as reasonably practicable, notify Verizon of any comments from the UKLA with respect to the Vodafone Circular or any request for amendments or additional information, and provide Verizon with copies of all such comments and correspondence;
(vi) post or publish the Vodafone Circular;
(vii) whether or not there shall have been a Vodafone Change of Recommendation and, with respect to subclauses (A) and (B), below, whether or not the Vodafone Scheme shall have been approved by the requisite majority at the Court Meeting, as soon as reasonably practicable after the date hereof, subject to Section 5.4(a), convene the Vodafone Shareholders Meeting to:
(A) | approve the disposal of all the shares in Vodafone Finance 1 pursuant to the terms of this Agreement and the Transaction as a Class 1 transaction under chapter 10 of the Listing Rules; |
(B) | approve as a related party transaction under Chapter 11 of the Listing Rules (x) the disposal of all the shares in Vodafone Finance 1 pursuant to the terms of this Agreement and the Transaction and (y) the acquisition by Vodafone Europe of Verizons indirect ownership interest in Omnitel pursuant to the terms of the Omnitel Purchase Agreement (if such approval is required for such acquisition); |
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(C) | approve the Vodafone Scheme and authorize the implementation thereof; |
(D) | approve the issue of the Vodafone Class B Shares and Vodafone Class C Shares to Vodafone Shareholders in accordance with the terms of the Vodafone Scheme; |
(E) | approve the Vodafone Reduction of Capital and authorize the implementation thereof; |
(F) | approve the Vodafone Share Consolidation and authorize the implementation thereof; |
(G) | amend the articles of association of Vodafone to the extent necessary in connection with the Vodafone Scheme, the issue of the Vodafone Class B Shares and Vodafone Class C Shares, the Vodafone Reduction of Capital and/or the Vodafone Share Consolidation; and |
(H) | do, approve or authorize any other matter or thing which the directors of Vodafone consider necessary or appropriate in connection with the aforementioned, |
(collectively, the Vodafone Resolutions and clauses (A) and (B) thereof, the Vodafone Sale Resolutions); provided, that Vodafone shall use its commercially reasonable efforts to reach a position whereby the Vodafone Sale Resolutions are proposed for approval at the Vodafone Shareholders Meeting as a single, composite resolution or failing which, the related party transaction approvals referred to in (B) above are proposed as a single, composite resolution;
(viii) unless there has been a Vodafone Change of Recommendation, use its commercially reasonable efforts to obtain the Vodafone Requisite Scheme Vote and the Vodafone Requisite Share Purchase Vote;
(ix) apply to the Court for the sanction of the Vodafone Scheme and the confirmation of the Court of the Vodafone Reduction of Capital; provided, that the parties agree to use their respective commercially reasonable efforts to minimize the period between the two hearings of the Court and, subject to the approval of the Court, have both hearings occur on the same day; provided, further, that without limiting any other provision of this Agreement, the hearing in respect of the confirmation by the Court of the Vodafone Reduction of Capital shall (A) not be held on a Friday and (B) be held in the same calendar week as the Court Hearing; and
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(x) give such reasonable undertakings as may be required by the Court as a condition to obtaining the Courts sanction of the Vodafone Scheme and confirmation of the Vodafone Reduction of Capital.
(b) Prior to posting or publishing the Vodafone Circular or responding to comments of the UKLA, Vodafone shall provide Verizon a reasonable opportunity to review and to propose comments on such document or response and give reasonable consideration to all comments proposed by Verizon in connection therewith. Vodafone shall also provide Verizon a reasonable advance opportunity to review and to propose comments on all documents to be filed with the Court in connection with the Vodafone Scheme and give reasonable consideration to all comments proposed by Verizon in connection therewith.
(c) Verizon shall take all such steps as are reasonably necessary to implement the Vodafone Scheme and in particular shall (subject to the satisfaction of the conditions to the Vodafone Scheme):
(i) unless not required by the terms of the Vodafone Scheme, through counsel, consent at the Court Hearing to be bound by the Vodafone Scheme;
(ii) execute or procure the execution of all such documents, and do or procure the carrying out of all such actions, as may be reasonably necessary or desirable to implement the Vodafone Scheme;
(iii) give such reasonable undertakings as may be required by the Court as a condition to obtaining the Courts sanction for the Vodafone Scheme; and
(iv) provide such other assistance (and shall use its commercially reasonable efforts to procure that its Affiliates provide such assistance) as Vodafone may reasonably request in connection with the preparation of the Vodafone Circular, the implementation of the Vodafone Scheme or Vodafone Reduction of Capital and in preparing and obtaining UKLA approval of, and posting or publishing (as appropriate), any other document in connection with the matters set out in this Section 5.3(c), including by, subject to applicable Law, providing information in writing in relation to Verizon, any of its Affiliates and any of its or their directors or officers;
provided, that Verizon and Vodafone shall, in relation to clauses (i) and (iii), cooperate with each other to explain fully to the Court the terms of this Agreement and, in particular, Sections 8.1(j) and 10.6(b), with a view to assuring the Court that, in the event of a Financing Failure, Verizon should not be regarded as being in breach of any consent or undertaking that Verizon is required to give to the Court.
(d) Except as set forth below in this Section 5.3(d), neither the Board of Directors of Vodafone nor any committee thereof shall withhold or withdraw (or qualify or modify in any manner adverse to Verizon) the recommendation by the Board of Directors of
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Vodafone or any such committee thereof to the Vodafone Shareholders to vote in favor of each of the Vodafone Resolutions (such recommendation, the Vodafone Recommendation and any such withholding, withdrawal, qualification or modification, a Vodafone Change of Recommendation). Notwithstanding the foregoing, the Board of Directors of Vodafone may at any time prior to obtaining the Vodafone Requisite Share Purchase Vote make a Vodafone Change of Recommendation if the Board of Directors of Vodafone determines in good faith (in its sole discretion but after consultation with outside counsel and a financial advisor of nationally recognized reputation) that the exercise of its fiduciary duties as the board of directors of an English public limited company requires such Vodafone Change of Recommendation; provided, however, that Vodafone shall, to the extent reasonably practicable and legally permissible (taking into account the date of the Vodafone Shareholders Meeting) seek to consult with Verizon prior to exercising its right to make a Vodafone Change of Recommendation. In determining whether to make a Vodafone Change of Recommendation, the Vodafone Board shall take into account any changes to the terms of this Agreement proposed by Verizon during any such consultation. In the event of a Vodafone Change of Recommendation following the posting of the Vodafone Circular, Vodafone shall, upon request by Verizon, promptly withdraw the Vodafone Scheme from the Court.
(e) Notwithstanding the provisions of the Vodafone Scheme, Vodafone shall not reduce the amount of the Cash Entitlement if and to the extent that such reduction would delay the date on which the Court Hearing would otherwise take place.
5.4 Cooperation with Respect to Filings and Meetings of Shareholders.
(a) Vodafone and Verizon shall cooperate and consult with each other to co-ordinate the timing of the preparation, posting or publication of the relevant documents, convening of the relevant meetings, or the taking of the other steps required pursuant to Sections 5.2 and 5.3, and in particular shall cooperate to ensure that (i) the Proxy Statement is mailed to Verizon Shareholders, and the Verizon UK Prospectus, the Verizon Registration Statement (and the prospectus contained therein) and the Vodafone Circular are mailed or posted to the Vodafone Shareholders and/or, as applicable, published, on the same date and (ii) the Vodafone Shareholders Meeting, the Court Meeting and the Verizon Stockholders Meeting are held on the same date and at substantially the same time.
(b) Vodafone agrees that it shall not, without Verizons consent (such consent not to be unreasonably withheld, conditioned or delayed), except as required by Law, make any amendments to the terms of the Vodafone Scheme which may adversely affect the rights and obligations of Verizon. Vodafone may, at its sole discretion, withdraw the Vodafone Scheme at any time prior to or during the Court Hearing but shall, prior to withdrawing the Vodafone Scheme, consult with Verizon.
(c) Verizon will procure that Verizon and the directors of Verizon accept responsibility for all of the information set out in the Verizon UK Prospectus (but not, for avoidance of doubt, in the Vodafone Circular).
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(d) Vodafone will procure that the directors of Vodafone accept responsibility for all of the information set out in the Vodafone Circular (but not, for the avoidance of doubt, in the Verizon UK Prospectus, the Verizon Registration Statement or any other Verizon Disclosure Document).
(e) If there shall occur any event (including discovery of any fact, circumstance or event) that is required by applicable Law to be set forth in an amendment or supplement to the Vodafone Circular, the Proxy Statement, the Verizon Registration Statement, the Verizon US Prospectus or the Verizon UK Prospectus, Vodafone or Verizon (as applicable) shall prepare and post or publish (as applicable) such an amendment or supplement or issue a press release or take other corrective action, in each case to the extent required by applicable Law, and in each case after, to the extent reasonably practicable: (i) providing the other party with a reasonable opportunity to review such amendment or supplement; and (ii) in good faith giving reasonable consideration to all comments proposed by that other party.
(f) Vodafone and Verizon shall cooperate and consult with each other to determine a mutually satisfactory approach to the treatment of Overseas Scheme Shareholders. Without limitation of the foregoing, (i) Vodafone shall not make a determination under paragraphs 11.1(A) or (B) of the Vodafone Scheme, and Verizon shall not give notice requiring such a determination pursuant to Section 5.4(g), without prior consultation with the other party and (ii) Vodafone and Verizon shall attempt to reach an agreement with respect to the treatment of Overseas Scheme Shareholders prior to the Vodafone Circular Posting Date.
(g) Without prejudice to Section 5.4(f), Vodafone shall not make the B Share Election available to Overseas Scheme Shareholders in any jurisdiction, nor shall Verizon be obliged to issue and deliver Verizon Shares (or procure the delivery of Verizon CDIs or statements of ownership in respect of Verizon CDIs) to Overseas Scheme Shareholders in any jurisdiction, if Verizon has notified Vodafone at least five (5) Business Days before the Court Hearing that it has determined that doing so is (A) prohibited by applicable Law or (B) permitted only subject to compliance by Verizon with requirements of applicable Law (including any requirement to make any registration or filing with, or obtain any consent or approval from, any Governmental Authority) which Verizon, in its absolute discretion, considers to be unduly onerous. If Verizon makes such a notification with respect to a jurisdiction, then Vodafone shall make such determination under paragraph 11.1(A) or (B) of the Scheme as is notified by Verizon to Vodafone for these purposes. For the avoidance of doubt, it shall not be unduly onerous for Verizon to passport the Verizon UK Prospectus from the United Kingdom into any other Member State in accordance with the applicable requirements of the Prospectus Directive and the Laws of such Member State.
5.5 Press Releases. The forms of the initial press releases regarding the transactions contemplated hereby, to be released as promptly as practicable following the execution of this Agreement and at substantially the same time, are attached hereto as Exhibit H (the Initial Verizon Press Release) and Exhibit I (the Initial Vodafone Press Release and, together with the Initial Vodafone Press Release, the Initial Press Releases). Each of Verizon and Vodafone
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agrees that, prior to Closing, it will consult with the other prior to making, or permitting any of their Subsidiaries to make, any public statement or release concerning this Agreement, the Ancillary Documents or the transactions contemplated hereby or thereby, except to the extent otherwise required by Law or the obligations pursuant to any applicable listing agreement with or rules of any securities exchange (including, for avoidance of doubt, the NYSE, the NASDAQ and the LSE); provided, that (a) to the extent such consultation obligation has been discharged with respect to the contents of any such public statement or release, no separate consultation obligation shall apply in respect of such content to the extent replicated in whole or in part in any subsequent public statement or release and (b) Verizon and Vodafone may make public statements in response to questions by the press, analysts, investors or those attending industry conferences or financial analysts conference calls, so long as any such statements are consistent with the Initial Press Releases and other prior press releases, public disclosures or public statements made jointly by Verizon and Vodafone or made by one party in accordance with this Section 5.5 or in the Current Report on Form 8-K filed by Verizon with respect to this Agreement and the transactions contemplated hereby and do not reveal material nonpublic information regarding this Agreement, the Ancillary Documents or the transactions contemplated hereby or thereby.
5.6 Securityholder Litigation. Verizon and Vodafone shall, in connection with the defense or settlement by such party of any actual or threatened securityholder litigation, complaints or challenges against it or its directors or officers relating to the transactions contemplated by this Agreement or the Ancillary Documents (including, for avoidance of doubt, any actual or threatened litigation, complaints or challenges that may be brought in the Court or any other court of England and Wales in connection with the Vodafone Scheme or that otherwise relates to the transactions contemplated by this Agreement or the Ancillary Documents), (a) consult and cooperate with the other party and (b) keep the other party reasonably and timely informed of developments, changes or occurrences with respect to any such litigation.
5.7 Confidentiality. Except as mutually agreed by each of the parties hereto, each of the parties agrees that, during the term of this Agreement and at all times thereafter, it will not disclose to any person (other than any financial advisers, accountants, attorneys, and other Representatives who are required to know such information) any information that has been made available to such party in connection with the negotiation, execution or performance of this Agreement, except as required by Law, regulation or legal process (including necessary disclosure in connection with any legal process relating to establishing or enforcing any rights under this Agreement) or in connection with obtaining the approval of any Governmental Entity, and except that Verizon may disclose this Agreement and the Omnitel Purchase Agreement to Financing Sources.
5.8 Approvals, Consents and Regulatory Filings.
(a) Subject to the terms and conditions set forth in this Agreement, each of the parties shall, and shall cause their respective Subsidiaries to, use its commercially reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things necessary, proper or advisable on its part under this Agreement and the Ancillary Documents to satisfy all legal conditions to the consummation of the transactions contemplated by this Agreement and the Ancillary Documents, and to obtain all consents,
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orders and approvals of Governmental Entities and non-governmental third parties that may be or become necessary for the consummation of any of the transactions contemplated by this Agreement and the Ancillary Documents, in each case as soon as reasonably practicable following the execution of this Agreement, and each of the parties will cooperate fully with the other parties in taking or causing to be taken all actions, or doing or causing to be done all things necessary, proper or advisable on its part under this Agreement and the Ancillary Documents and promptly seeking to obtain all such authorizations, consents, orders and approvals. Without limiting the generality of the foregoing, as soon as practicable after the date hereof (and in any event within fifteen (15) Business Days from the date hereof with respect to clause (i) below), Verizon shall file or cause the Partnership to file (i) applications or notices with the FCC necessary for the consummation of the transactions contemplated by this Agreement and the Ancillary Documents, if any, which applications will comply in all material respects with the requirements of the Communications Act of 1934 as amended and the rules and regulations of the FCC, (ii) applications or notices with each applicable state public service utility commission or other state or local regulatory entity necessary for the consummation of the transactions contemplated by this Agreement and the Ancillary Documents, if any, and (iii) any other regulatory consents and approvals necessary for the consummation of the transactions contemplated by this Agreement and the Ancillary Documents. Verizon shall diligently prosecute and cause its Subsidiaries to diligently prosecute all such applications and take all such actions and give all such notices as may be required or requested by the FCC or any other regulatory agency or as may be appropriate in an effort to expedite the grant of any necessary consent by the FCC or such regulatory agency. For purposes of this Section 5.8, commercially reasonable efforts shall not include nor require any party or any of its Subsidiaries to (A) sell, or agree to sell, hold or agree to hold separate, or otherwise dispose or agree to dispose of any asset, in each case if such sale, separation or disposition or agreement with respect thereto would, individually or in the aggregate, reasonably be expected to have a Verizon Material Adverse Effect, or (B) conduct or agree to conduct its business in any particular manner, or agree to any other condition, requirement, restriction or action, if such conduct or agreement with respect thereto, or such other condition, requirement, restriction or action, would, individually or in the aggregate, reasonably be expected to have a Verizon Material Adverse Effect (each of the foregoing effects, a Burdensome Effect). None of Vodafone or any of its Affiliates shall, without the prior written consent of Verizon, agree to become subject to, or consent to or otherwise take any action with respect to, any requirement, condition, understanding, agreement or order of a Governmental Entity in connection with any of the transactions contemplated by this Agreement to the extent such requirement, condition, understanding, agreement or order would be binding on any Sold Entity or any of its Affiliates upon or following the Closing.
(b) Except to the extent prohibited by Law and without limiting the generality of the foregoing, each of the parties shall, and shall cause their respective Subsidiaries to, (i) cooperate in all respects with each other in connection with any investigation or other inquiry before a Governmental Entity and in connection with the transactions contemplated by this Agreement and the Ancillary Documents, including any proceeding initiated by a Governmental Entity or a private party; (ii) furnish all information required
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or reasonably requested for any application or other filing to be made pursuant to any applicable Laws in connection with the transactions contemplated by this Agreement and the Ancillary Documents; (iii) keep the other parties informed in all material respects of any material communication received by such party from, or given by such party to, any Governmental Entities, and of any material communication received or given in connection with any proceeding by a private party, in each case relating to the transactions contemplated by this Agreement and the Ancillary Documents; (iv) except for filings made by Vodafone and its Affiliates in connection with the Reorganization, give the other parties a reasonable opportunity to review in advance and propose comments with respect to any filing made with, or written materials submitted to, any third party and/or any Governmental Entity in connection with the transactions contemplated by this Agreement and the Ancillary Documents; and (v) except for filings made by Vodafone and its Affiliates in connection with the Reorganization, provide to the other parties hereto copies of all filings and material correspondence with all Governmental Entities with respect to the filings and consents in connection with the transactions contemplated by this Agreement and the Ancillary Documents. In exercising the foregoing rights, each of the parties shall act reasonably and as promptly as practicable; provided, however, that materials provided to the other parties may be redacted (A) to remove references to valuation, (B) as necessary to comply with contractual arrangements, (C) as necessary to address reasonable attorney-client or other privilege or confidentiality concerns and (D) to protect competitively sensitive information.
(c) In furtherance and not in limitation of the covenants of each of the parties contained in Sections 5.8(a) and (b), if any administrative or judicial action or proceeding, including any proceeding by a private party, is instituted (or threatened to be instituted) challenging any transaction contemplated by this Agreement or the Ancillary Documents as violative of any Law, or if any statute, rule, regulation, executive order, decree, injunction or administrative order is enacted, entered or promulgated or enforced by a Governmental Entity which would make the transactions contemplated by this Agreement or the Ancillary Documents illegal or otherwise prohibit or materially impair or delay consummation of the transactions contemplated by this Agreement and the Ancillary Documents, each of the parties shall cooperate in all respects with each of the other parties and use its commercially reasonable efforts to contest and resist any such action or proceeding, to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of any of the transactions contemplated by this Agreement and the Ancillary Documents and to have such statute, rule, regulation, executive order, decree, injunction or administrative order repealed, rescinded or made inapplicable; provided, that the parties shall not be obligated to seek to overturn a final order by the FCC disapproving the transactions contemplated by this Agreement and the Ancillary Documents.
(d) If any objections are asserted with respect to the transactions contemplated by this Agreement or any Ancillary Document under any Law or if any suit is instituted by any Governmental Entity or any private party challenging any of the transactions contemplated by this Agreement or the Ancillary Documents as violative of any Law,
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each of the parties shall use its commercially reasonable efforts to resolve any such objections or challenges as such Governmental Entity or private party may have to such transactions under such Law so as to permit consummation of the transactions contemplated by this Agreement and the Ancillary Documents.
5.9 Financing.
(a) Verizon shall use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and obtain the proceeds of, the Financing and, if applicable, the Replacement Financing on the terms and conditions described in the Financing Documents and Replacement Financing Documents, including using commercially reasonable efforts to (i) comply with its obligations and satisfy the conditions precedent to funding under the Financing Documents and, if applicable, Replacement Financing Documents; (ii) upon satisfaction of the conditions set forth in Section 3.02 of the Loan Facility (and/or, in respect of certainty of funding, such substantially equivalent conditions (or conditions that are more favorable to Verizon) as may appear in any Replacement Financing Document), consummate the Financing and, if applicable, the Replacement Financing at or prior to Closing; and (iii) cause the Financing Sources and, if applicable, Replacement Financing Sources to fund on the Closing Date the Financing and, if applicable, the Replacement Financing to the extent required to consummate the Transaction in accordance with the terms thereof (including, to the extent commercially reasonable, by promptly taking enforcement action under the Financing Documents and, if applicable, the Replacement Financing Documents in the event of a breach by any Financing Sources or Replacement Financing Sources).
(b) Verizon shall have the right to substitute the proceeds of consummated debt (including unsecured notes) or equity offerings for all or any portion of the Financing or, if applicable, Replacement Financing by reducing commitments under the Financing and, if applicable, any Replacement Financing; provided, that to the extent any consummated debt has a scheduled special or mandatory redemption right, such right is not exercisable prior to the Termination Date. Further, Verizon shall have the right to substitute commitments in respect of other debt or equity financing for all or any portion of the Financing from the same and/or alternative bona fide third-party financing sources (Replacement Financing Sources) so long as (i) all conditions precedent to effectiveness of definitive documentation for such debt or equity financing have been satisfied and the conditions precedent to funding under the debt financing or issuance of the equity financing are, in respect of certainty of funding, substantially equivalent to (or conditions that are more favorable to Verizon than) the conditions set forth in Section 3.02 of the Loan Facility, and (ii) in respect of any debt financing, prior to funding of the loans thereunder, the commitments in respect of such debt financing are subject to restrictions on assignment which are substantially equivalent to or more favorable to the Verizon than the restrictions set forth in Section 8.07 of the Loan Facility (any such debt or equity financing which satisfies the foregoing clauses (i) and (ii), the Replacement Financing; the definitive documentation for any such Replacement Financing, the Replacement Financing Documents).
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(c) Verizon shall have the right from time to time to amend, replace, supplement or otherwise modify, or waive any provision or remedy under, the Financing Documents or Replacement Financing Documents; provided, that Verizon shall not, without the prior written consent of Vodafone, at any time prior to the Closing: (i) permit any amendment, replacement, supplement or modification to, or any waiver of any material provision or remedy under, any Financing Document or Replacement Financing Document if such amendment, replacement, supplement, modification or waiver (A) adds any new (or modifies, in a manner materially adverse to Verizon, any existing) conditions to the consummation of the Financing or Replacement Financing (as applicable), (B) reduces the aggregate amount of the Financing and the Replacement Financing other than to the extent that (1) such reduction is required by the terms of the Loan Facility or (2) Verizon has available to it Replacement Financing or cash on hand in an amount equal to such reduction, (C) materially adversely impacts the ability of Verizon to enforce its rights against other parties to any Financing Document as so amended, replaced, supplemented, modified or waived, relative to the ability of Verizon to enforce its rights against such other parties to any Financing Document as in effect on the date hereof or Replacement Financing Document as in effect on the date of execution thereof, or (D) prevents, impedes or materially delays the consummation of the transactions contemplated by this Agreement; provided, further, that notwithstanding the foregoing, Verizon may amend the Financing Documents and/or Replacement Financing Documents to add lenders, lead arrangers, syndication agents, documentation agents or similar entities who had not executed any Financing Document and/or Replacement Financing Document; or (ii) terminate the Loan Facility other than to the extent that (A) the commitments under the Loan Facility have been reduced to zero in accordance with its terms or (B) Verizon has obtained Replacement Financing in an aggregate amount equal to the commitment under the Loan Facility at the time of such termination of the Loan Facility. Verizon shall promptly following execution deliver to Vodafone copies of any such amendment, replacement (including any Replacement Financing Document), supplement, modification or waiver (which may be redacted to delete any compensation information). Notwithstanding anything to the contrary in this Agreement, Verizon agrees that it shall not reduce the aggregate amount of all unfunded commitments in respect of the Financing and, if applicable, Replacement Financing (whether as a result of a disposition of assets, debt issuance or equity issuance but, for the avoidance of doubt, not as a result of the funding of the loans thereunder) to an amount less than Twenty Billion Dollars ($20,000,000,000) without Vodafones consent, which shall not be unreasonably withheld, conditioned or delayed.
(d) Verizon acknowledges and agrees that Vodafone and its Affiliates (including, prior to the Closing, the Sold Entities), their respective Representatives and, prior to the Closing, the Partnership or any of its Subsidiaries and their respective Representatives, shall not have any responsibility for, or incur any liability to, any Person under or pursuant to the Financing or Replacement Financing pursuant to the Financing Documents or Replacement Financing Documents, if any, and that Verizon shall indemnify and hold harmless Vodafone and its Affiliates (including, prior to the Closing, the Sold Entities), their respective Representatives and, prior to the Closing, the Partnership and its Subsidiaries and their respective Representatives from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in
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connection with the Financing or the Replacement Financing pursuant to the Financing Documents or Replacement Financing Documents, if any, except to the extent resulting from any breaches of the representations, warranties or covenants of Vodafone under this Agreement. Verizon shall keep Vodafone reasonably informed with respect to all material activity concerning the status of the financing contemplated by the Financing Documents and Replacement Financing Documents (if any), it being understood, for the avoidance of doubt, that nothing in this Section 5.9(d) shall relieve Vodafone of any liability pursuant to Section 8.3 or require Verizon to provide indemnification in respect of any such liability.
5.10 Voting Rights; Purchases of Securities.
(a) Prior to the Closing, Verizon shall not, and shall cause its controlled Affiliates not to, purchase any ordinary shares of Vodafone or other securities convertible into, exchangeable for or exercisable for ordinary shares of Vodafone, and none of Verizon or any of its Subsidiaries shall purchase any rights to acquire any ordinary shares of Vodafone.
(b) Prior to the Closing, Vodafone shall not, and shall cause its controlled Affiliates not to, purchase any shares of Verizon Common Stock or other securities convertible into, exchangeable for or exercisable for Verizon Common Stock, and neither Vodafone nor any of its Subsidiaries shall purchase any rights to acquire any Verizon Common Stock.
5.11 Name Changes. As promptly as reasonably practicable following the Closing Date but not later than thirty (30) days after the Closing Date, Verizon shall cause the organizational documents of the Sold Entities to be amended so as not to include any of Vodafone or any word, phrase or acronym confusingly similar thereto and take all such other steps required under applicable law to change and register the name of the Sold Entities accordingly.
5.12 Further Assurances. Subject to the terms and provisions of this Agreement, each party hereto shall at any time and from time to time after the Closing, upon the request of another party hereto, do, execute, acknowledge and deliver, and cause to be done, executed, acknowledged or delivered, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney or assurances as may be required for (a) the better transferring, assigning and conveying the equity interests of the Sold Entities to Verizon, or (b) the transfer, assignation, conveyance and assumption of any Excluded Assets owned by or Excluded Liabilities of the Sold Entities to Vodafone or its designated Affiliates following the Closing. Except with respect to a Verizon Change of Recommendation or a Vodafone Change of Recommendation, no party hereto shall take any actions that would be reasonably be expected to prevent, impair or materially delay the consummation of the transactions contemplated by this Agreement or the Ancillary Documents. In the event that Seller fails to perform any covenant, agreement or obligation that it is obligated to perform pursuant to this Agreement, Vodafone shall cause Seller to perform such covenant, agreement or obligation.
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5.13 Access. Except as determined in good faith to be necessary to comply with applicable Law, or preserve any applicable privilege (including the attorney-client privilege), Verizon will cause the Sold Entities and the Partnership and its Subsidiaries, until the date that is six (6) years after the Closing Date, and Vodafone will cause the Sold Entities, prior to the Closing Date, to afford promptly to Vodafone and its Representatives or Verizon and its Representatives, as applicable, reasonable access to their books of account, financial, tax and other records, information, employees and auditors to the extent necessary (a) with respect to Vodafone and its Representatives, in determining any matter in connection with any audit relating to the Sold Entities or their Affiliates and the Partnership with respect to any period ending on or before the Closing Date for purposes of financial statements of Vodafone or its Affiliates or for the preparation of any Tax Returns of Vodafone or its Affiliates and (b) with respect to Verizon and its Representatives, in determining the Tax consequences of the Transaction; provided, that any such access shall not unreasonably interfere with the conduct of the business of Verizon, the Sold Entities, the Partnership or their respective Affiliates or Vodafone, the Sold Entities and their Affiliates, as applicable. The party seeking access to information shall bear all of the out-of-pocket costs and expenses (including attorneys fees, but excluding reimbursement for general overhead, salaries and employee benefits) incurred in connection with obtaining such access. Each party will hold, and will use its commercially reasonable efforts to cause its Representatives to hold (and will be responsible for any failure by any of its Representatives to hold), in confidence all confidential information concerning the Sold Entities or their Affiliates and the Partnership or its Affiliates.
5.14 Change in Ownership; ELPI Contribution.
(a) The parties agree that entry into this Agreement and consummation of the transactions pursuant hereto do not and will not constitute a Change in Ownership for purposes of the Partnership Agreement until the Closing shall have occurred.
(b) Prior to the Closing, Verizon shall not, and shall cause its Affiliates not to, exercise the ELPI Contribution referred to in the ELPI Contribution Agreement, dated as of December 2001, among the Partnership, Verizon, Vodafone and certain other Persons.
5.15 Indemnification and Insurance; Mutual Release.
(a) Vodafone and Verizon agree that all rights to exculpation, indemnification and advancement of expenses for acts or omissions occurring at or prior to the Closing, whether asserted or claimed prior to, at or after the Closing, now existing in favor of the current or former directors, officers, employees and other representatives of the Sold Entities, the Partnership and its Subsidiaries as provided in their respective organizational documents and which, in the case of the Sold Entities, has prior to the date hereof been made available to Verizon shall survive the Closing and shall continue in full force and effect to the extent provided in the following sentence. Verizon shall cause the Sold Entities and the Partnership and its Subsidiaries to maintain in effect until the sixth (6th) anniversary of the Closing any and all exculpation, indemnification and advancement of expenses provisions of such entitys organizational documents, in each case in effect as of the date hereof and which, in the case of the Sold Entities, has been provided to
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Verizon prior to the date hereof, for acts or omissions occurring on or prior to the Closing.
(b) In the event any of the Sold Entities, the Partnership or its Subsidiaries or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in either such case, proper provision shall be made so that the successors and assigns of the applicable Sold Entity, the Partnership or the applicable Subsidiary of the Partnership shall assume all of the obligations of such Person contemplated to be maintained pursuant to Section 5.15(a).
(c) As of the Closing, Verizon, for and on behalf of itself, its Affiliates and their respective successors and assigns (the Verizon Releasing Persons), hereby voluntarily, knowingly, fully, unconditionally and irrevocably acquits, releases and forever discharges each Vodafone Related Party from any and all Claims that such Verizon Releasing Person has or has ever had or may have or that have been or could have been or could be asserted against any Vodafone Related Party, which arise out of or in any way relate to events, circumstances, actions or omissions occurring, existing or taken on or prior to the Closing in connection with or on behalf of the Partnership, its Subsidiaries or the Sold Entities, other than Claims arising out of or permitted under the express terms set forth in this Agreement or the Ancillary Documents or any agreement, other than the Partnership Agreement, that is not terminated pursuant to the last sentence of this Section 5.15. As of the Closing, Vodafone, for and on behalf of itself, its Affiliates and their respective successors and assigns (the Vodafone Releasing Persons), hereby voluntarily, knowingly, fully, unconditionally and irrevocably acquits, releases and forever discharges each Verizon Related Party from any and all Claims that such Vodafone Releasing Person has or has ever had or may have or that have been or could have been or could be asserted against any Verizon Related Party, which arise out of or in any way relate to events, circumstances, actions or omissions occurring, existing or taken on or prior to the Closing in connection with or on behalf of the Partnership, its Subsidiaries or the Sold Entities, other than Claims arising out of or permitted under the express terms set forth in this Agreement or the Ancillary Documents or any agreement, other than the Partnership Agreement, that is not terminated pursuant to the last sentence of this Section 5.15. Additionally, as of the Closing, the parties hereto agree to take the actions specified on Schedule 5.15 hereto.
5.16 Listing of Verizon Shares. Verizon shall use its commercially reasonable efforts to cause the Verizon Shares to be approved for listing (a) on the NYSE and NASDAQ, subject only to official notice of issuance, prior to the Closing and (b) on the Official List and to trading on the LSE on the first (1st) Business Day following the Closing. Verizon shall maintain its standard listing of Verizon Shares on the LSE for a period of at least two (2) years following the Closing.
5.17 Additional Covenants of Verizon. Except as required by applicable Law, as expressly contemplated by this Agreement, as Vodafone may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed) or as set forth in Section 5.17 of the
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Verizon Disclosure Letter, Verizon covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Closing, the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary course of business; provided, however, that no action by Verizon or any of its Subsidiaries with respect to matters specifically addressed by any provision of subsections (a) through (g) of this Section 5.17 shall be deemed to be a breach of this sentence unless such action would constitute a breach of such subsection. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Closing, except as otherwise expressly contemplated by this Agreement, as required by Law or as Vodafone may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed) or as set forth in Section 5.17 of the Verizon Disclosure Letter, Verizon will not and will not permit its Subsidiaries to, directly or indirectly:
(a) other than a Verizon Certificate Amendment, adopt or propose any change in Verizons or the Partnerships certificate of incorporation, certificate of formation, by-laws, operating agreement or other applicable governing instruments, as applicable;
(b) (i) merge or consolidate Verizon with any other Person, (ii) other than in the ordinary course of business with respect to the Significant Subsidiaries of Verizon (other than the Partnership), restructure or reorganize or (iii) completely or partially liquidate;
(c) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, an equity interest in or a substantial portion of the assets of any Person or any business or division thereof, in each case that would reasonably be expected to prevent or materially delay the consummation of the Transaction;
(d) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of Verizon, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, except (i) for grants made pursuant to the Verizon Stock Plans or the exercise, vesting or settlement of any award outstanding thereunder at any time on or following the date of this Agreement, (ii) in connection with the acquisition, directly or indirectly, of an equity interest in or assets of any Person or any business or division thereof, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise and (iii) other than at a price below fair market value (as determined by the Verizon Board of Directors), for issuances of shares of capital stock of Verizon, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, the proceeds of which are used to fund any portion of the Cash Consideration; provided, that following the issuance of any shares of Verizon Common Stock pursuant to clauses (ii) or (iii) above, Verizon shall have a sufficient number of authorized but unissued shares under the certificate of incorporation of Verizon to allow it to issue the maximum number of Verizon Shares issuable pursuant to Section 2.2(a)(ii);
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(e) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (i) distributions made by the Partnership, (ii) dividends paid by any Subsidiary to Verizon or to any other Subsidiary or (iii) regular quarterly dividends in cash on the Verizon Common Stock, declared and paid consistent with prior timing and in the ordinary course of business, including increases to such regular quarterly cash dividends in the ordinary course of business);
(f) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any Verizon capital stock or securities convertible or exchangeable into or exercisable for any shares of Verizon capital stock, other than in the ordinary course of business pursuant to the Verizon Stock Plans or any award outstanding thereunder at any time on or following the date of this Agreement; or
(g) authorize any of, or commit, resolve or agree to take any of the foregoing actions.
5.18 Additional Covenants of Vodafone with Respect to the Sold Entities. From the date of this Agreement until the Closing, except as otherwise expressly contemplated by this Agreement (including as required to implement the Reorganization in accordance with Section 5.1), as Verizon may approve in writing, as required by applicable Law or as set forth in Section 5.18 of the Vodafone Disclosure Letter, from the date of this Agreement to the Closing, Vodafone shall cause each Sold Entity to not do any of the following, directly or indirectly:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property or any combination thereof) in respect of, the capital stock of any Sold Entity other than dividends with respect to the VAI Preferred Shares (which Vodafone shall pay, or cause Vodafone Americas to pay, on a quarterly basis consistent with past practice and consistent with the provisions of the VAI Preferred Shares) or any distributions made to another Sold Entity, (ii) split, combine, subdivide or reclassify any capital stock of any Sold Entity, or securities convertible into or exchangeable or exercisable for such capital stock or other equity interests or voting securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for such capital stock, or (iii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock of any Sold Entity or voting securities of, or equity interests in, any Sold Entity or any securities convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, any Sold Entity, or any warrants, calls, options or other rights to acquire any such capital stock, securities or interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (i) any shares of capital stock of any Sold Entity, (ii) any other equity interests or voting securities of any Sold Entity, (iii) any securities convertible into or exchangeable or exercisable for capital stock of any Sold Entity or voting securities of, or other equity interests in, any Sold Entity, or (iv) any warrants, calls, options or other rights to acquire any capital stock or voting securities of, or other equity interests in, any Sold Entity;
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(c) amend the certificate of incorporation, bylaws or other organizational documents of any Sold Entity;
(d) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or IFRS (after the date of this Agreement);
(e) directly or indirectly acquire in any transaction (i) any equity interest in or business of any firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity or division thereof or (ii) any material properties or assets;
(f) make, change or rescind any Tax election, adopt (other than in the ordinary course of business) or change any method of Tax accounting, or, other than in a manner consistent with past practice, file any amended Tax Return, enter into a closing agreement, settle or compromise any Tax proceeding or surrender any right to claim a refund of Taxes, in each case, if such action is reasonably likely to have an adverse effect on Verizon or any of its Subsidiaries (including any Sold Entity) after the Closing;
(g) merge, consolidate, restructure, reorganize or liquidate, in whole or in part, any of the Sold Entities; provided, that, notwithstanding anything in Section 5.1 or this Section 5.18 to the contrary, none of the Sold Entities shall transfer, directly or indirectly, any interest in the Partnership; or
(h) authorize any of, or commit, resolve or agree to take any of, the foregoing actions.
5.19 Settlement Note Actions. At the Closing and immediately following the consummation of the sale of the Transferred Shares, Verizon and Vodafone shall take, and shall cause their controlled Affiliates to take, all actions and do, and cause their controlled Affiliates to do, all things necessary and proper to effect the transactions substantially as set forth on Schedule 5.19 hereto.
5.20 Vodafone B.V. Inc.
(a) Verizon shall maintain the corporate existence of Vodafone B.V. Inc. for at least the two-year period beginning on the Closing Date and during such period shall cause Vodafone B.V. Inc. to (i) employ at least one individual to manage its finance operations, (ii) not prepay the principal balance of the notes that it holds at the completion of the Reorganization (which Verizon shall cause to be serviced in accordance with their terms) other than any prepayments permitted pursuant to the terms thereof , and (iii) maintain a balance of at least Two Hundred Fifty Million Dollars ($250,000,000) in cash, cash equivalents or third-party investments.
(b) At the Closing and pursuant to the Reorganization, Vodafone shall cause at least Two Hundred Fifty Million Dollars ($250,000,000) of cash to be on deposit in a U.S. account of Vodafone B.V. Inc.
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5.21 Post-Closing Partnership Tax Distribution Payments. Notwithstanding anything to the contrary contained herein, following the Closing, Verizon shall pay to Vodafone, in cash, by wire transfer or intrabank transfer of immediately available funds to an account designated by Vodafone, an amount equal to all Tax Distributions (as defined in the Partnership Agreement and calculated in a manner consistent with past practice of the Partnership) and Supplemental Tax Distributions that would be required to be paid to the Vodafone Partners if the Transaction had not occurred in respect of any Pre-Closing Tax Period or portion thereof (determined, on a basis consistent with Section 6.1(d), as if the Closing Date was the end of the quarterly period of the Partnership) for which the Partnership has not yet paid any such distributions as of the Closing Date, which payment shall be made no later than the time such distribution would have been required to be made under the Partnership Agreement and other arrangements as in effect on the date hereof. The amount of any payment required to be made pursuant to this Section 5.21 shall not be adjusted to take into account any adjustment to items of Partnership income, gain, loss, deduction or credit (or other items reported to its partners on Schedule K-1 (IRS Form 1065)), whether by reason of audit assessment, amended return or otherwise, in each case, occurring after the date of such payment, and with respect to which clause (A)(i) of the penultimate sentence of Section 9.2(c) applies.
ARTICLE VI
TAX MATTERS
6.1 Tax Returns.
(a) Vodafone shall prepare, or cause to be prepared (in a manner consistent with past practices, except as otherwise required by applicable Law), all Tax Returns of the Sold Entities required to be filed for any Pre-Closing Tax Period of a Sold Entity (the Seller Returns). In the case of any Seller Return that is required to be filed on or prior to the Closing Date, Vodafone shall cause each such Seller Return to be timely filed and shall cause the amount of Taxes shown as due on such Seller Return to be timely paid. With respect to any Seller Return filed after the Closing Date, Vodafone shall (i) provide Verizon with a copy of each such Seller Return at least twenty (20) days prior to the due date for filing such Seller Return and (ii) consider in good faith any written comments promptly received from Verizon with respect to such Seller Return (and, if applicable, revise such Seller Return to reflect such comments). In the case of any Seller Return that is required to be filed after the Closing Date, Verizon shall cause the Sold Entities to timely file such Seller Return received from Vodafone; provided, however, that Verizon shall not be required to cause such filing if (i) such Seller Return is not prepared in accordance with this Agreement or (ii) Verizon reasonably believes that there may not be substantial authority (or such higher standard as may be required under applicable Law to avoid the imposition of penalties) supporting each material position reflected on such Seller Return, unless Vodafone provides an opinion reasonably acceptable to Verizon from a recognized tax advisor to the effect that there is substantial authority (or such higher standard as may be required under applicable Law to avoid the imposition of penalties) for such position; and provided, further, that the signing and filing of a Seller Return in accordance with the foregoing provision shall not be considered an acknowledgement that such Seller Return complies with the requirements of this
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Agreement. Verizon shall pay, or cause the Sold Entities to pay, any Taxes due with respect to Seller Returns filed in accordance with the preceding sentence, subject to the other provisions of this Agreement, including the next sentence and any indemnity obligation of Vodafone pursuant to Section 9.2(c). Vodafone shall pay to Verizon by wire transfer of immediately available funds no later than three (3) Business Days prior to the due date for filing any Seller Return required to be filed after the Closing Date the amount of Taxes shown as due and unpaid on such Seller Return for which Vodafone is responsible under this Agreement.
(b) Verizon shall prepare, or cause to be prepared, and file, or cause to be filed, when due all Tax Returns (other than Seller Returns) that are required to be filed by or with respect to the Sold Entities for Straddle Periods of such entities (the Verizon Returns). Verizon shall pay, or cause the Sold Entities to pay, any Taxes due with respect to any Verizon Returns, subject to any indemnity obligation of Vodafone pursuant to Section 9.2(c). If any Verizon Return includes any amounts for which Vodafone is liable under this Agreement (including any indemnity obligation of Vodafone pursuant to Section 9.2(c)), Verizon shall, at least twenty (20) days prior to the due date of any such Verizon Return, deliver such Verizon Return to Vodafone for Vodafones approval (not to be unreasonably withheld, provided, however, that Vodafone may control and direct the manner in which the Reorganization is reported on such Verizon Return; provided, further, that Verizon shall not be required to reflect any material position on such Verizon Return unless, either (i) Verizon reasonably determines that there is at least substantial authority (or such higher standard as may be required under applicable Law to avoid the imposition of penalties) for such position, or (ii) Vodafone provides an opinion reasonably acceptable to Verizon from a recognized tax advisor to the effect that there is substantial authority (or such higher standard as may be required under applicable Law to avoid the imposition of penalties) for such position; and Vodafone shall pay to Verizon by wire transfer of immediately available funds no later than three (3) Business Days prior to the due date for filing such Verizon Return the amount of Taxes shown as due and unpaid on such Verizon Return for which Vodafone is responsible under this Agreement.
(c) For purposes of Section 9.2(c), in the case of any Taxes that are imposed on a periodic basis and are payable for a Straddle Period, the portion of such Tax related to the portion of such Straddle Period ending on and including the Closing Date shall (A) in the case of any gross receipts, employment, sales or use, value added, Taxes based upon or measured by reference to income or gain, and other similar Taxes, be deemed equal to the amount which would be payable if the relevant Tax period ended on and included the Closing Date, and (B) in the case of any Tax other than a Tax described in clause (A) be deemed to be the amount of such Tax for the entire Straddle Period multiplied by a fraction the numerator of which is the number of days in the Straddle Period ending on and including the Closing Date and the denominator of which is the number of days in the entire Straddle Period.
(d) Each Sold Entity that is classified as a partnership for United States federal income Tax purposes (and, with respect to any Sold Entity that holds an interest in an entity classified as a partnership for United States federal income Tax purposes, including
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the Partnership, such other entity) shall be treated for purposes of this Agreement as if its taxable year ended as of the end of the Closing Date. The allocation of any item of income, gain, loss, deduction or credit of the Partnership to the Sold Entities for the period ending on the Closing Date will be determined under the closing of the books method; provided, however, if the Closing Date is not on a quarter end, the items of income, gain, loss, deduction or credit of the Partnership, other than extraordinary items, for the portion of the quarter that ends on the Closing Date may be determined by pro ration of the quarters results, provided that the Tax Distributions are determined on a basis consistent with such allocation. The taxable year of each Sold Entity that is treated as a corporation for United States federal income Tax purposes shall, for such purposes, end as of the end of the Closing Date, and such Sold Entities will become members of Verizons consolidated group on the day after the Closing Date. The allocation of any item of income, gain, loss, deduction or credit of any Sold Entity that is treated as a corporation for United States federal income Tax purposes for the period ending on the Closing Date will be determined under the closing of the books method. To the extent permitted or required under applicable Law, Vodafone and Verizon agree to take all actions necessary to treat the Closing Date as the last day of the taxable year or period of the Sold Entities for all Tax purposes.
6.2 Tax Claims. Vodafone shall, solely at its own cost and expense, have the right to control all Tax proceedings (and make all decisions relating to such Tax proceedings) involving a Tax Claim with respect to the Sold Entities for any taxable period ending on or before the Closing Date; provided, that Vodafone must provide Verizon with written notice of its election to control such Tax Claim within twenty (20) days of Verizon (or a Tax Authority) notifying Vodafone of such Tax Claim; and provided, further, that Vodafone shall not settle, compromise or abandon any such Tax proceeding without the prior written consent of Verizon (which consent shall not be unreasonably withheld) if such settlement, compromise or abandonment would reasonably be expected to have an adverse effect on Verizon or any of its Subsidiaries (including, after the Closing, the Sold Entities) that is material. Vodafone shall keep Verizon reasonably informed with respect to the commencement, status and substantive aspects of any such Tax proceeding. If Verizon receives notice of a Tax Claim, Verizon shall give notice to Vodafone in writing of such claim; provided, however, that no failure or delay by Verizon to give notice of a Tax Claim shall reduce or otherwise affect the obligation of Vodafone hereunder except to the extent Vodafone is actually prejudiced thereby. In the case of a Tax proceeding of or with respect to the Sold Entities for any Straddle Period, the Controlling Party (defined below) shall have the right and obligation to conduct, at its own expense, such Tax proceeding; provided, however, that (i) the Controlling Party shall provide the Non-Controlling Party (defined below) with a timely and reasonably detailed account of each stage of such Tax proceeding, (ii) the Controlling Party shall consult with the Non-Controlling Party before taking any significant action in connection with such Tax proceeding, (iii) the Controlling Party shall consult with the Non-Controlling Party and offer the Non-Controlling Party an opportunity to comment before submitting any written materials prepared or furnished in connection with such Tax proceeding, (iv) the Controlling Party shall defend such Tax proceeding diligently and in good faith as if it were the only party in interest in connection with such Tax proceeding, (v) the Non-Controlling Party shall be entitled to participate in such Tax proceeding and attend any meetings or conferences with the relevant Taxing Authority, and (vi) the Controlling Party shall not settle, compromise or abandon any such Tax proceeding without obtaining the prior written
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consent of the Non-Controlling Party (which consent shall not be unreasonably withheld). For purposes of this Agreement, Controlling Party shall mean Vodafone if Vodafone and its Affiliates are reasonably expected to bear the greater Tax liability in connection with such Tax proceeding, or Verizon if Verizon and its Affiliates are reasonably expected to bear the greater Tax liability in connection with such Tax proceeding (in each case, taking into account the provisions of Section 9.2(c) and Section 9.2(d)); and Non-Controlling Party shall mean whichever of Vodafone or Verizon is not the Controlling Party with respect to such Tax proceeding. Anything in this Section 6.2 to the contrary notwithstanding: (i) Verizon shall, at its sole cost and expense, have the sole right to control any issue arising in a Tax proceeding of or with respect to any of the Sold Entities for any taxable period ending on or prior to the Closing Date or a Straddle Period to the extent such issue relates solely to Taxes imposed on a Sold Entity with respect to any such period for which Vodafone is not responsible pursuant to the penultimate sentence of Section 9.2(c), provided that Verizon shall not settle, compromise or abandon any such Tax proceeding without the prior written consent of Vodafone (which consent shall not be unreasonably withheld) if such settlement, compromise or abandonment would reasonably be expected to have an adverse effect on Vodafone or any of its Subsidiaries that is material, including under Section 9.2(c); and (ii) Vodafone shall, at its sole cost and expense, have the sole right to control any issue arising in any Tax proceeding of or with respect to any of the Sold Entities for any taxable period ending on or prior to the Closing Date or a Straddle Period to the extent such issue relates to the Reorganization (and to make all decisions relating thereto) provided, that Vodafone shall not settle, compromise or abandon any such Tax proceeding without the prior written consent of Verizon (which consent shall not be unreasonably withheld) if such settlement, compromise or abandonment would reasonably be expected to have an adverse effect on Verizon or any of its Subsidiaries (including, after the Closing, the Sold Entities) that is material.
6.3 Cooperation.
(a) Vodafone, and Verizon shall reasonably cooperate, and shall cause their respective Affiliates, officers, employees, agents, auditors and other Representatives to reasonably cooperate, in preparing and filing all Tax Returns and in connection with all disputes, audits and other proceedings relating to Taxes, including by maintaining and making available to each other all records reasonably requested in connection with Taxes and making employees available on a mutually convenient basis to provide additional information or explanation of any material provided hereunder. Vodafone and Verizon shall further reasonably cooperate, and make their respective advisors available to each other, with respect to the Tax consequences of the Reorganization. Vodafone shall cause the Sold Entities to be in possession, at the Closing (or as soon as practicable thereafter, but in any event within 30 days following the Closing Date), of all Tax Returns, schedules, work papers and all other material records and documents relating to Tax matters of the Sold Entities for their respective Tax periods ending on or prior to, or including, the Closing Date. At Verizons written request, Vodafone shall use commercially reasonable efforts to provide Verizon at or prior to the Closing with a schedule setting forth (i) the material tax attributes of each of the Sold Entities, and (ii) any currently effective waivers of any U.S. federal, state, local or foreign statutes of limitation with respect to, or extensions of the period for assessment, of any material Taxes or Tax Returns of the Sold Entities.
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(b) Verizon shall determine, within ninety (90) days of the date hereof, whether or not Verizon will be able to deliver the certification provided for in Section 2.6(b)(vi) of this Agreement, and Verizon shall advise Vodafone as to its determination within such ninety (90) day period. Upon Vodafones request, Verizon shall provide Vodafone with any information relating to the Partnership and any of its Subsidiaries reasonably requested by Vodafone to deliver the certification provided for in Section 2.6(a)(vi) of this Agreement.
(c) If Vodafone determines between the date hereof and the Closing Date that there exist items that could give rise to an indemnification obligation pursuant to Section 9.2(c)(vi), Vodafone shall notify Verizon in writing on or prior to the Closing Date and shall provide Verizon with reasonable detail regarding such items. Prior to taking any action or consummating any transaction that would reasonably be expected to trigger any Taxes with respect to items identified by Vodafone pursuant to the preceding sentence, Verizon shall notify Vodafone and shall consider in good faith any comments or alternative proposals received from Vodafone within a reasonable period of time with respect to the taking of such action or structure of such transaction.
6.4 Omnitel Entity Classification. Vodafone shall take, or cause its controlled Affiliates to take, all actions and to do, or cause its controlled Affiliates to do, all things necessary, including calling board and shareholder meetings and taking other corporate actions, to (a) (i) convert (the Omnitel Conversion) Omnitel under the Laws of the Kingdom of the Netherlands from a naamloze vennootschap to a besloten vennootschap and (ii) to have the Omnitel Conversion comply with the applicable Laws of the Republic of Italy including through registration of the Omnitel Conversion with the appropriate Governmental Entities of the Republic of Italy, in each case effective prior to the earlier of (i) December 27, 2013, and (ii) five (5) days preceding the Closing Date, and (b) amend, effective upon the Omnitel Conversion, the organizational documents and shareholders agreement of Omnitel and other agreements among the shareholders of Omnitel relating thereto, and otherwise take all actions necessary, so as to preserve the relative rights and obligations of such shareholders thereunder. At Verizons written request, Vodafone shall cause Omnitel to elect, pursuant to Treasury Regulations Section 301.7701-3(a), to be classified as a partnership for U.S. federal income tax purposes with an effective date specified in writing by Verizon (the Check-the-box election). Vodafone and Verizon agree to treat such entity classification election, for U.S. federal income tax purposes, as a liquidation of Omnitel within the meaning of Sections 331 and 336 of the Code. Vodafone shall not take any action and shall not permit its Subsidiaries to take any action that would cause Omnitel to be classified, for U.S. federal income tax purposes, as other than a partnership during the twelve-month period following the Closing Date. Vodafone agrees to cause Vodafone Finance 1 to elect under Section 904(f)(1)(B) of the Code and Treasury Regulation 1.904(f)-2(c)(2) to treat up to 100% of any foreign source income received by the consolidated U.S. federal income tax return group of which Vodafone Finance 1 is the common parent during the year in which the Reorganization occurs as U.S. source income so as to reduce, to the greatest extent possible, any overall foreign loss. From and after the date hereof, Vodafone and Verizon and their respective advisors shall cooperate to determine the amount of the overall foreign loss, if any, remaining in the Sold Entities after the election described in the preceding sentence. In the event Verizon is not reasonably satisfied, acting in good faith, that the overall foreign loss of the Sold Entities will be eliminated or reduced to no more than a de minimis amount at the end of
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the taxable year of the Sold Entities that ends on the Closing Date, Verizon may, if Verizon requests that Vodafone cause Omnitel to make a Check-the-box election with an effective date on or prior to December 31, 2013, deliver a written notice to Vodafone to the effect that, in the event the Omnitel Closing does not occur (other than by reason of a breach of Verizon), within ten (10) days of the termination of the Omnitel Agreement (whether in connection with a termination of this Agreement or otherwise), Verizon will request payment of the Verizon Indemnity Amount. Verizon shall, as promptly as reasonably practicable following the delivery of such notice, provide Vodafone with its calculation of the Verizon Indemnity Amount, including supporting detail. The Verizon Indemnity Amount shall equal the amount of all U.S. federal, state and local income Taxes payable with respect to the Check-the-box-election, determined on a with and without basis, provided, however, that the Verizon Indemnity Amount shall not exceed Three Hundred Million Dollars ($300,000,000).
6.5 Tax Sharing Agreements. Vodafone shall terminate (or cause to be terminated) on or before the Closing Date all Tax sharing agreements or arrangements (other than this Agreement), if any, to which any of the Sold Entities, on the one hand, and Vodafone or any Affiliate of Vodafone (other than the Sold Entities), on the other hand, are parties, and neither Vodafone nor any Affiliate of Vodafone, on the one hand, or any of the Sold Entities, on the other hand, shall have any rights or obligations thereunder after the Closing.
6.6 No 338 Election. Verizon shall not make an election under Section 338 of the Code with respect to its purchase of the Sold Entities pursuant to this Agreement.
6.7 Purchase and Sale of the Transferred Shares. Vodafone and Verizon agree to treat, for U.S. federal income tax purposes, the purchase and sale of the Transferred Shares pursuant to this Agreement as a sale or exchange transaction subject to Section 1001 of the Code (which also constitutes a qualified stock purchase) and not a reorganization under Section 368 of the Code or an exchange under Section 351 of the Code. Vodafone and Verizon shall report the purchase and sale of the Transferred Shares in accordance with the prior sentence for U.S. federal income tax purposes. Neither Vodafone nor Verizon shall take any action that would reasonably be expected to result in the transfer of the Transferred Shares by Seller pursuant to this Agreement being treated as an exchange under Section 351 of the Code, and for the two-year period beginning on the Closing Date, Verizon not shall cause Vodafone Americas Finance 1 to liquidate or to merge with any other entity (unless Vodafone Americas Finance 1 is the surviving corporation in such merger, provided that under no circumstances shall Verizon merge with Vodafone Americas Finance 1 during such two-year period).
6.8 Tax Refunds. Vodafone shall be entitled to any refund of Taxes (whether by way of payment or reduction in Taxes otherwise payable in cash) received by Verizon or any of the Sold Entities that are attributable to any Pre-Closing Tax Period (taking into account the allocation principles in Section 6.1(c)); provided, however, that Vodafone shall not be entitled to any refund of Taxes (i) to the extent that such refund is attributable to either (x) the carryback of a loss or other Tax attribute arising in a Post-Closing Tax Period or (y) an adjustment of any item of Partnership income, gain, loss, deduction or credit (or other items reported to its partners on Schedule K-1 (IRS Form 1065)) with respect to a Pre-Closing Tax Period, or (ii) for which Vodafone is not responsible pursuant to the penultimate sentence of Section 9.2(c). Except as provided in the foregoing sentence, Verizon shall be entitled to any other refund of Taxes with
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respect to the Sold Entities. If any party receives a refund to which another party is entitled pursuant to this Section 6.8, such party shall pay over such refund (net of costs or Taxes to the party receiving such refund) to the party entitled to such refund no later than ten (10) Business Days following receipt of such refund.
6.9 Certain VAT Matters.
(a) The Parties intend that any payment of the Financing Failure Termination Fee, the Verizon Reverse Termination Fee, the Verizon Recommendation Change Fee or the Vodafone Termination Fee, being compensatory in nature, shall not be treated, in whole or in part, as consideration for a supply for the purposes of VAT and, accordingly, each of Verizon and Vodafone shall, and shall procure that the representative member of any VAT group of which it is a member will, treat the payment of any such fee as falling outside the scope of VAT and shall pay the full amount of it free and clear of any deduction or adjustment pursuant to Section 6.9(c)(ii) or Section 6.9(d)(iii).
(b) In the event of a Tax proceeding in which a Tax Authority asserts that:
(i) VAT was chargeable with respect to the Vodafone Termination Fee and should have been accounted for by Vodafone under the reverse charge procedure; or
(ii) the Financing Failure Termination Fee, the Verizon Reverse Termination Fee or the Verizon Recommendation Change Fee was, in whole or part, consideration for a supply for the purposes of VAT and that VAT should have been accounted for by Vodafone in respect of that supply;
the provisions of Section 6.2 governing Tax proceedings of the Sold Entities for any Straddle Period shall apply, mutatis mutandis, treating Vodafone as the Controlling Party and Verizon as the Non-Controlling Party with respect to such Tax proceeding.
(c) In the event of a final determination with respect to such Tax proceeding to the effect that the Vodafone Termination Fee was, in whole or in part, consideration for a supply for the purposes of VAT and that should have been accounted for by Vodafone under the reverse charge procedure in respect of that supply:
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(i) Vodafone shall, and shall procure that the representative member of any VAT group of which Vodafone is a member will, (A) account for, under the reverse charge procedure, and pay to the relevant Tax Authority any VAT chargeable thereon, and (B) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT; and
(ii) the amount of the Vodafone Termination Fee payable by Vodafone shall be reduced by an amount such that the sum payable by Vodafone, when aggregated with any irrecoverable VAT thereon, is equal to the amount of the Vodafone Termination Fee that would be payable but for this Section 6.9(c)(ii).
(d) In the event of a final determination with respect to any such Tax proceeding to the effect that the Financing Failure Termination Fee, the Verizon Reverse Termination Fee or the Verizon Recommendation Change Fee was, in whole or in part, consideration for a supply for the purposes of VAT and that VAT should have been accounted for by Vodafone in respect of that supply:
(i) Vodafone shall, and shall procure that the representative member of any VAT group of which Vodafone is a member will, (A) account for and pay to the relevant Tax Authority such VAT, and (B) issue a valid VAT invoice to Verizon;
(ii) Verizon shall, and shall procure that each of its Affiliates will, use its reasonable best efforts to recover (by refund, credit or otherwise) any amounts in respect of such VAT; and
(iii) the amount of the Financing Failure Termination Fee, the Verizon Reverse Termination Fee or the Verizon Recommendation Change Fee (as the case may be) payable by Verizon (inclusive of amounts in respect of VAT) shall be increased by an amount such that the amount payable by Verizon less any VAT that is actually recovered by Verizon or its Affiliates (net of costs or Taxes to Verizon or its Affiliates) is equal to the amount of such fees that would be payable by Verizon but for this Section 6.9(d)(iii).
(e) Any adjustment payment in respect of any reduction made pursuant to Section 6.9(c)(ii) shall be made on the date which is ten (10) Business Days following the date on which Vodafone (or the representative member of any VAT group of which Vodafone is a member) is required to account to any Tax Authority for any such irrecoverable VAT.
(f) Any payment in respect of any adjustment made pursuant to Section 6.9(d)(iii) shall be made on the date which is ten (10) Business Days following the date on which Verizon (or any of its Affiliates) recovers (by refund, credit or otherwise) any amounts in respect of such VAT.
(g) For the avoidance of doubt all payments of the Vodafone Termination Fee, the Financing Failure Termination Fee, the Verizon Reverse Termination Fee and the
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Verizon Recommendation Change Fee shall be inclusive of any applicable VAT save as otherwise provided by this Section 6.9.
6.10 Post-Closing Restrictions. Verizon and its Affiliates (including the Sold Entities) shall not, on or after the Closing Date, (i) make or change any Tax election or accounting method of the Sold Entities with an effective date in any Pre-Closing Tax Period, (ii) file or cause to be filed any amended Tax Return for the Sold Entities (other than a state tax return reflecting changes necessitated by an agreed Federal tax adjustment or amended U.S. federal income tax return) for any Pre-Closing Tax Period, or (iii) extend or waive, or cause to be extended or waived, any statute of limitations or other period for the assessment of any Tax or deficiency with respect to any Sold Entity for any Pre-Closing Tax Period, in each case without Vodafones prior written consent (not to be unreasonably withheld).
ARTICLE VII
CONDITIONS TO CLOSING
The obligations of the parties to consummate the Transaction shall be subject to the fulfillment or satisfaction, at or prior to the Measurement Time, of each of the following conditions precedent (or, to the extent permitted by applicable Law, the waiver thereof in a writing signed by the party for whose benefit the condition exists); provided, however, that if the Transaction is to be implemented by way of the Vodafone Scheme, the conditions set forth in Sections 7.1(b)(ii) and 7.1(b)(iii) shall be satisfied on or prior to the Scheme Effective Date:
7.1 Mutual Conditions.
(a) Vodafone Shareholder Approval. The Vodafone Resolutions shall have been passed at the Vodafone Shareholders Meeting by the requisite majority in accordance with the articles of association of Vodafone and applicable Law; provided, that the condition set forth in this Section 7.1(a) shall be deemed satisfied for purposes of the Share Purchase Closing if the Vodafone Sale Resolutions shall have been passed at the Vodafone Shareholders Meeting by the requisite majority in accordance with the articles of association of Vodafone and applicable Law.
(b) Vodafone Scheme. Only with respect to the obligation to consummate the Vodafone Scheme:
(i) The Vodafone Scheme shall have been approved by the requisite majority at a court meeting of the shareholders of Vodafone convened in accordance with Part 26 of the Companies Act 2006 to consider, and, if thought fit, approve, the Vodafone Scheme (the Court Meeting).
(ii) (x) The Vodafone Scheme shall have been sanctioned by the Court (the date of such sanction, the Sanction Date), and (y) the Vodafone Reduction of Capital confirmed by the Court.
(iii) (x) The relevant order of the Court sanctioning the Vodafone Scheme shall have been delivered to the UK Registrar of Companies in
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accordance with applicable Law, and (y) the relevant order of the Court relating to the Vodafone Reduction of Capital shall have been delivered to, or, where the Court so orders, registered with, the UK Registrar of Companies in accordance with applicable Law.
(c) Admission of New Vodafone Shares. Only with respect to the obligation to consummate the Vodafone Scheme:
(i) All necessary documents in relation to the admission of the New Vodafone Shares to the Official List and to trading on the LSEs Main Market for listed securities (New Vodafone Shares Admission) shall have been supplied to the UKLA and LSE and the admission hearing with the UKLA shall have been held.
(ii) The UKLA shall have acknowledged to Vodafone or its agent (and such acknowledgement shall not have been withdrawn) that the application for the New Vodafone Shares Admission has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject) will become effective as soon as a dealing notice has been issued by the FCA, and any such listing conditions shall have been satisfied.
(iii) The LSE shall have acknowledged to Vodafone or its agent (and such acknowledgement shall not have been withdrawn) that the New Vodafone Shares will be admitted to trading at the same time as the admission of the New Vodafone Shares to the Official List.
(d) Verizon Requisite Vote. The Verizon Requisite Vote shall have been obtained at the Verizon Stockholders Meeting.
(e) Reorganization. The Reorganization shall have been completed in accordance with Section 5.1.
(f) Legality. No Governmental Entity shall have enacted, issued, promulgated, or enforced any Law, statute, rule or regulation or entered or issued any order, writ, injunction or decree (whether temporary, preliminary or permanent) which is then in effect, in each case which has the effect of making the Transaction illegal, or otherwise preventing or prohibiting the Transaction.
(g) Regulatory and Other Approvals. All authorizations, consents, orders, permits or approvals of, or declarations or filings with, and all expirations of waiting periods imposed by, any Governmental Entity (all of the foregoing, Consents) which are set forth on Schedule 7.1(g) hereto, shall have been filed, have occurred or have been obtained (all such Consents being referred to as the Requisite Regulatory Approvals) and all such Requisite Regulatory Approvals shall be in full force and effect; provided, however, that a Requisite Regulatory Approval shall not be deemed to have been obtained if in connection with the grant thereof there shall have been an imposition by any Governmental Entity of any condition, requirement, restriction or change of
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regulation, or any other action directly or indirectly related to such grant taken by such Governmental Entity which would reasonably be expected to have a Burdensome Effect.
(h) Listing of Verizon Shares. The Verizon Shares shall have been approved for listing on the NYSE and NASDAQ, subject only to official notice of issuance.
(i) Verizon UK Admission.
(i) All necessary documents in relation to the Verizon UK Admission shall have been supplied to the UKLA and LSE and the Verizon UK Admission hearing with the UKLA shall have been held.
(ii) The UKLA shall have acknowledged to Verizon or its agent (and such acknowledgement shall not have been withdrawn) that the application for the Verizon UK Admission has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject) will become effective as soon as a dealing notice has been issued by the FCA, and any such listing conditions shall have been satisfied.
(iii) The LSE shall have acknowledged to Verizon or its agent (and such acknowledgement shall not have been withdrawn) that the Verizon Shares will be admitted to trading at the same time as the admission of the Verizon Shares to the Official List.
(j) U.S. Registration Requirements. (i) The Verizon Registration Statement shall have become effective under the Securities Act and (ii) the Verizon Registration Statement shall not be subject to any stop order or proceeding seeking a stop order and no proceedings for that purpose shall have been initiated by the SEC that have not been withdrawn.
7.2 Additional Conditions to Obligations of Vodafone.
(a) Representations and Warranties True. (i) The representations and warranties of Verizon contained in the second sentence of Section 4.6 shall be true and correct on the date hereof and on the Measurement Time and (ii) the other representations and warranties of Verizon contained in this Agreement shall be true and correct in all respects on the date hereof and on the Measurement Time (except to the extent any such representation and warranty expressly relates to an earlier date (in which case it will be true and correct on and as of such earlier date)) except, in the case of this clause (ii), where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to materiality or Verizon Material Adverse Effect set forth therein), individually or in the aggregate, does not have, and would not reasonably be expected to have, a Verizon Material Adverse Effect.
(b) Compliance with this Agreement. Verizon shall have performed in all material respects all of its obligations required to be performed under this Agreement and the Omnitel Purchase Agreement prior to or on the Measurement Time.
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(c) Certificate. Vodafone shall have received a certificate as of the Measurement Time signed on behalf of Verizon by an executive officer of Verizon certifying that the conditions in clauses (a) and (b) above have been satisfied.
7.3 Additional Conditions to Obligations of Verizon.
(a) Representations and Warranties True. (i) The representations and warranties of Vodafone contained in Section 3.7(b) shall be true and correct in all respects on the date hereof and on the Measurement Time and (ii) the other representations of Vodafone contained in this Agreement shall be true and correct in all respects on the date hereof and on the Measurement Time (except to the extent any such representation and warranty expressly relates to an earlier date (in which case it will be true and correct on and as of such earlier date)), except, in the case of this clause (ii), where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to materiality, Verizon Material Adverse Effect or Vodafone Material Adverse Effect set forth therein), individually or in the aggregate, does not have, and would not reasonably be expected to have, a Verizon Material Adverse Effect (disregarding, for purposes of this Section 7.3(a), clause (i) of the definition of Verizon Material Adverse Effect).
(b) Compliance with this Agreement. Vodafone shall have performed in all material respects all of its obligations required to be performed under this Agreement and the Omnitel Purchase Agreement prior to or on the Measurement Time.
(c) Certificate. Verizon shall have received a certificate as of the Measurement Time signed on behalf of Vodafone by an executive officer of Vodafone certifying that the conditions in clauses (a) and (b) above have been satisfied.
7.4 Frustration of the Closing Conditions. Neither Verizon nor Vodafone may rely, either as a basis for not consummating the Transaction or for terminating this Agreement and abandoning the Transaction on the failure of any condition set forth in Sections 7.1, 7.2 or 7.3, as the case may be, to be satisfied if such failure was caused by such partys breach of any provision of this Agreement.
ARTICLE VIII
TERMINATION
8.1 Grounds for Termination. This Agreement may be terminated at any time prior to the Closing:
(a) by mutual written agreement of Vodafone and Verizon;
(b) by either Vodafone or Verizon if the Closing shall not have been consummated on or before the date that is twelve (12) months after the date hereof (the Termination Date); provided, that the right to terminate this Agreement pursuant to this
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Section 8.1(b) shall not be available to any party whose breach of any provision of this Agreement results in the failure of the Closing to be consummated by such time;
(c) by Vodafone, if there has been a material violation or breach by Verizon of any covenant, representation or warranty contained in this Agreement or the Omnitel Purchase Agreement which has caused, or would cause, any condition set forth in Sections 7.1 or 7.2 not to be satisfied and such violation or breach is incapable of being cured by Verizon, or, if capable of being cured by Verizon, has not been cured by Verizon within sixty (60) days after written notice thereof from Vodafone; provided, that Vodafone is not then in breach of this Agreement so as to cause any of the conditions in Section 7.3 not to be satisfied;
(d) by Verizon, if there has been a material violation or breach by Vodafone of any covenant, representation or warranty contained in this Agreement or the Omnitel Purchase Agreement which has caused, or would cause, any condition set forth in Sections 7.1 or 7.3 not to be satisfied and such violation or breach is incapable of being cured by Vodafone, or, if capable of being cured by Vodafone, has not been cured by Vodafone within sixty (60) days after written notice thereof from Verizon; provided, that Verizon is not then in breach of this Agreement so as to cause any of the conditions in Section 7.2 not to be satisfied;
(e) by Vodafone, if a Vodafone Material Adverse Financial Effect has occurred and is continuing as of the date that would otherwise have been the Sanction Date, if the Transaction is to be implemented by way of the Vodafone Scheme, or the date that would otherwise have been the Closing Date, if the Transaction is to be implemented by way of the Share Purchase;
(f) by either Vodafone or Verizon if (i) the Verizon Stockholders Meeting has concluded and the Verizon Requisite Vote has not been obtained or (ii) the Vodafone Shareholders Meeting has concluded and the Vodafone Requisite Share Purchase Vote has not been obtained;
(g) by either Vodafone or Verizon, if (i) a court of competent jurisdiction or other Governmental Entity shall have enacted, entered or promulgated or enforced any statute, rule, regulation, executive order, decree, injunction or administrative order or issued a non-appealable final order, decree or ruling or taken any other non-appealable final action, in each case, having the effect of permanently restraining, enjoining or otherwise prohibiting the Closing and the transactions contemplated hereby or (ii) the FCC shall have issued a final order disapproving the Transaction; provided, that the right to terminate this Agreement pursuant to this Section 8.1(g) shall not be available to any party whose breach of any provision of this Agreement results in such order, decree or ruling or other final action;
(h) by Vodafone, in the event of a Verizon Change of Recommendation; provided, that Vodafones right to terminate this Agreement pursuant to this Section 8.1(h) shall expire at 5:00 p.m. (New York City time) on the thirtieth (30th) calendar day following the date on which such Verizon Change of Recommendation occurs;
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(i) by Verizon, in the event of a Vodafone Change of Recommendation; provided, that Verizons right to terminate this Agreement pursuant to this Section 8.1(i) shall expire at 5:00 p.m. (New York City time) on the thirtieth (30th) calendar day following the date on which such Vodafone Change of Recommendation occurs; and
(j) by Vodafone, in the event that:
(i) all of the conditions to the implementation of the Vodafone Scheme or the Share Purchase, as applicable, set forth in Sections 7.1 and 7.3 were satisfied (other than (1) if the Transaction is to be implemented by way of the Vodafone Scheme, (A) if the condition set forth in Section 7.1(b)(ii)(x) was not yet satisfied, any condition that by its nature would not have been satisfied until the Sanction Date (but each of which was capable of being satisfied on the date the Sanction Date should have occurred) and (B) any Post-Sanction Conditions that had not yet been satisfied or (2) if the Transaction is to be implemented by way of the Share Purchase, any condition thereto that by its nature would not have been satisfied until the Share Purchase Closing Date, but each of which was capable of being satisfied on the date the Share Purchase Closing Date should have occurred) and, if the Transaction is to be implemented by way of the Vodafone Scheme and the condition set forth in Section 7.1(b)(ii)(x) has not yet been satisfied, such condition was capable of being satisfied if the Court Hearing were held on the date of determination and Verizon gave the undertakings necessary to implement the Scheme that it is required to give pursuant to this Agreement;
(ii) the full proceeds to be provided to Verizon by the Financing or the Replacement Financing are not available (other than as a result of conditions to the funding of such Financing or Replacement Financing not yet having been satisfied, but which are capable of being satisfied by the date by which the Closing should occur) to Verizon on the terms thereof to consummate the Closing (this clause (ii) with clause (i) above, together, a Financing Failure);
(iii) Vodafone has irrevocably confirmed in writing (x) that all of the conditions set forth in Section 7.2 have been satisfied (other than (1) if the Transaction is to be implemented by way of the Vodafone Scheme, (A) if the condition set forth in Section 7.1(b)(ii)(x) was not yet satisfied, any condition that by its nature would not have been satisfied until the Sanction Date (but each of which was capable of being satisfied on the date the Sanction Date should have occurred) and (B) any Post-Sanction Conditions that have not yet been satisfied or (2) if the Transaction is to be implemented by way of the Share Purchase, any condition thereto that by its nature would not have been satisfied until the Share Purchase Closing Date, but each of which was capable of being satisfied on the date the Share Purchase Closing Date should have occurred) or (y) that it is willing to waive any unsatisfied conditions in Section 7.2, and, in either case, it is ready, willing and able to effect the Closing;
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(iv) Verizon either fails to (1) appear at the Court Hearing or the hearing in respect of the confirmation by the Court of the Vodafone Reduction of Capital when required to do so pursuant to this Agreement or to give the undertakings necessary to implement the Vodafone Scheme that it is required to give pursuant to this Agreement or (2) effect the Closing pursuant to Section 2.3 or 2.5, as applicable, within three (3) Business Days after such appearance or undertakings were required or such Closing was required to have been consummated pursuant to Section 2.3 or 2.5, as applicable; and
(v) Vodafone was ready, willing and able to effect the Closing throughout such three Business Day period.
For purposes of this Agreement, Vodafone Material Adverse Financial Effect means either:
(i) | the enactment after the date hereof of any change in the law of the United Kingdom, the United States or the Netherlands that is effective on or before the Closing Date; |
(ii) | the making of any public statement or announcement (including the publication of any document and, in the case of an oral statement or announcement, which is accompanied by a written statement or press release) after the date of this Agreement and before the Closing Date, by (A) a United Kingdom government minister, H.M. Treasury or H.M. Revenue & Customs, in each case acting with the authority of the government of the United Kingdom, that contains a proposal to change the law of the United Kingdom with respect to Taxes or implements the same, which change of law, were it to be enacted in accordance with that statement or announcement after the Closing Date, would take effect on or before the Closing Date, or (B) a Dutch minister or junior minister (Staatssecretaris), the Dutch Ministry of Finance (Ministerie van Financien) or senior officials of the Dutch Revenue Service (Belastingdienst) based at the Ministry of Finance, in each case under the authority of the government of the Netherlands, that contains a proposal to change the law of the Netherlands with respect to Taxes or implements the same, which change of law, were it to be enacted in accordance with that statement or announcement after the Closing Date, would take effect on or before the Closing Date; |
(iii) | either (x) draft legislation reported, after the date hereof, out of the Committee on Ways and Means of the U.S. House of Representatives, or passage by one house of the U.S. Congress of legislation or (y) legislation proposed by the U.S. Executive Branch, or draft legislation reported, after the date hereof, out of the Finance Committee of the U.S. Senate, which, in the case of either clause (x) or (y), were such legislation to be enacted after the Closing Date, would take effect on or before the Closing Date, and with respect to which, in the case of a proposal or legislation referred to in clause (y) above, a determination has been made by a panel of three experts with experience in the executive and legislative process relating to the enactment of tax legislation in the US that it is reasonably likely that such legislation will become Law; where one expert is selected by each party and the third is selected by the two other experts, and the majority of the experts make their |
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determination in writing; the experts shall determine the rules for the proceedings and shall make their determination as promptly as practicable, and the parties shall share the costs of the experts equally; and/or |
(iv) | the receipt by Seller of an Adverse Ruling or Statement; |
and with respect to which Vodafones board of directors has made a reasonable good faith determination that (A) in the case of the events described in clauses (ii) and (iii)(x), such announcement or bill is reasonably likely to result in a change of law (which determination shall be made by Vodafones board of directors after considering advice as to the likelihood of enactment from nationally recognized experts in the relevant jurisdiction) and (B) in each case, would result in a liability for UK, U.S., or Netherlands Taxes on Vodafone or any of its Subsidiaries (or the Sold Entities for which Vodafone is responsible pursuant to Section 9.2(c)) with respect to the transactions specifically contemplated by this Agreement (including the Reorganization) that would, individually or in the aggregate, impose an additional cost on Vodafone and/or any of its Subsidiaries (and/or the Sold Entities for which Vodafone is responsible pursuant to Section 9.2(c)), that the parties considered material in this context; provided, that no enactment, announcement, statement or passage of legislation that would effect an increase in generally applicable Tax rates in any of the United Kingdom, the United States or the Netherlands shall be taken into account.
8.2 Effect of Termination. If this Agreement is terminated as permitted by Section 8.1, this Agreement shall forthwith become null and void and there shall be no Liability of any party to this Agreement or their respective Affiliates; provided, that, except as set forth in Section 8.3, no party hereto shall be relieved of any Liability for any willful and material failure to perform a covenant of this Agreement occurring prior to such termination. Notwithstanding anything to the contrary in this Agreement, nothing herein shall relieve any party from any Liability for fraud by such party. The provisions of this Section 8.2 and Sections 8.3 and Article X (other than Sections 10.6 and 10.7) shall survive any termination hereof pursuant to Section 8.1.
8.3 Termination Fees.
(a) In the event that:
(i) this Agreement is terminated pursuant to Section 8.1(f)(i), then Verizon shall, by way of compensation, pay to Vodafone the Verizon Reverse Termination Fee by wire transfer (to an account designated by Vodafone) of immediately available funds no later than the fifth (5th) Business Day following such termination;
(ii) this Agreement is terminated pursuant to Section 8.1(h), then Verizon shall, by way of compensation, pay to Vodafone the Verizon Recommendation Change Fee by wire transfer (to an account designated by Vodafone) of immediately available funds no later than the fifth (5th) Business Day following such termination; or
(iii) this Agreement is terminated pursuant to Section 8.1(j), then Verizon shall, by way of compensation, pay to Vodafone the Financing Failure
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Termination Fee by wire transfer (to an account designated by Vodafone) of immediately available funds no later than the fifth (5th) Business Day following such termination.
In no event shall Verizon be required to pay more than one of the foregoing fees or to pay any such fees on more than one occasion (each of the fees set forth in this Section 8.3(a), a Verizon Termination Fee).
(b) In the event that this Agreement is terminated pursuant to Section 8.1(f)(ii) or 8.1(i), then Vodafone shall, by way of compensation, pay to Verizon the Vodafone Termination Fee by wire transfer (to an account designated by Verizon) of immediately available funds no later than the fifth (5th) Business Day following such termination. In no event shall Vodafone be required to pay the Vodafone Termination Fee on more than one occasion.
(c) In the event that this Agreement is terminated pursuant to Section 8.1(e), then Vodafone shall, by way of compensation, pay to Verizon the Vodafone Termination Fee by wire transfer (to an account designated by Verizon) of immediately available funds no later than the fifth (5th) Business Day following such termination. In no event shall Vodafone be required to pay the Vodafone Termination Fee on more than one occasion.
(d) In the event that this Agreement is terminated pursuant to Section 8.1(d), then Vodafone shall pay to Verizon within five (5) Business Days following the date of such termination, the documented, out of pocket expenses (including expenses related to the Financing) of Verizon, not to exceed One Billion Five Hundred Fifty Million Dollars ($1,550,000,000) in the aggregate, payable by wire transfer of same day funds to an account designated in writing by Verizon.
(e) In the event that this Agreement is terminated pursuant to Section 8.1(c), then Verizon shall pay to Vodafone within five (5) Business Days following the date of such termination, the documented, out of pocket expenses of Vodafone, not to exceed One Billion Five Hundred Fifty Million Dollars ($1,550,000,000) in the aggregate, payable by wire transfer of same day funds to an account designated in writing by Vodafone.
(f) If either party fails to timely pay an amount due pursuant to this Section 8.3, the defaulting party shall pay the non-defaulting party interest on such amount at the prime rate as published in the WALL STREET JOURNAL in effect on the date such payment was required to be made through the date such payment is actually received.
(g) In the event of a Financing Failure that does not result from the willful and material breach by Verizon of any of its covenants in Section 5.9, the sole and exclusive remedy (whether at law, in equity, in contract, in tort or otherwise) of Vodafone or any of its Affiliates against the Financing Sources, the Replacement Financing Sources, if any, and the respective Affiliates, assignees, directors and officers of such Financing Sources and, if any, Replacement Financing Sources (collectively, the Financing Related Parties) and the Verizon Related Parties, in respect of this Agreement (including Section 4.14), the Ancillary Documents and the transactions contemplated hereby and thereby
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shall be to terminate this Agreement in accordance with Section 8.1(j) (if such termination is permitted pursuant thereto) and collect the Financing Failure Termination Fee, if due, and any interest payable thereon pursuant to Section 8.3(f), and upon payment of such amounts in full, no Verizon Related Party or Financing Related Party shall have any further Liability or obligation relating to or arising out of this Agreement, the Ancillary Documents or any of the transactions contemplated hereby or thereby.
(h) Without limiting the obligations of the Financing Sources or the Replacement Financing Sources pursuant to the Financing Documents or the Replacement Financing Documents, respectively, Vodafone acknowledges and agrees that no Financing Related Party shall have any liability or obligation to Vodafone or any of its Affiliates in connection with this Agreement if such Financing Related Party breaches or fails to perform (whether willfully, intentionally, unintentionally or otherwise) any of its obligations under the Financing Documents or the Replacement Financing Documents, as applicable.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
9.1 Survival; Effect of Materiality Qualifiers.
(a) The representations and warranties of Vodafone under this Agreement shall terminate on the Closing Date, except that (x) the representations and warranties in Sections 3.1, 3.2 and 3.12 shall survive the Closing until the date that is twelve (12) months after the Closing Date, at which time they will terminate and (y) the representations and warranties in Sections 3.7(b), 3.8 and 3.9 shall survive the Closing until thirty (30) days after the expiration of the applicable statute of limitations, at which time they will terminate. The representations and warranties of Verizon under this Agreement shall terminate on the Closing Date, except that the representations and warranties in Sections 4.1, 4.3 and 4.16 shall survive the Closing until the date that is twelve (12) months after the Closing Date, at which time they will terminate. The covenants and other agreements of the parties under this Agreement or in any instrument delivered pursuant to this Agreement that specify performance prior to the Closing Date (other than Sections 5.1, 5.17 and 5.18, which shall terminate on the Closing Date, provided, that the covenants contained in Section 5.1 and 5.18(f) shall, for purposes of indemnification pursuant to Section 9.2(c), survive until thirty (30) days after the expiration of the applicable statute of limitations) shall survive the Closing until the expiration of twelve (12) months after the Closing Date, at which time they will terminate. The covenants and other agreements of the parties under this Agreement or in any instrument delivered pursuant to this Agreement that specify performance following the Closing Date shall survive the Closing in accordance with their terms. Notwithstanding the preceding sentences, any breach or inaccuracy of any representation or warranty or any breach of any covenant or agreement in respect of which indemnity may be sought under this Agreement shall survive the time at which it would otherwise terminate pursuant to the preceding sentences, if written notice of the inaccuracy or
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breach thereof giving rise to such right of indemnity shall have been given to the party against whom such indemnity may be sought prior to such time.
(b) Following the Closing, in determining whether any representation or warranty in this Agreement was true and correct as of any particular date and the amount of any Damages in respect of the failure of any such representation or warranty to be true and correct as of any particular date, any qualification or limitation as to materiality (whether by reference to Vodafone Material Adverse Effect, Verizon Material Adverse Effect or otherwise) or knowledge contained in such representation or warranty shall be disregarded.
9.2 Indemnification.
(a) Effective after the Closing, subject to the terms and conditions of this Article IX, Vodafone shall indemnify Verizon, its Affiliates (including, following the Closing, the Sold Entities) and their respective Representatives (collectively, the Verizon Indemnitees) against and shall hold each of them harmless from any claims, losses, costs, Taxes, Liabilities, obligations, and expenses (whether or not arising out of third-party claims), including interest, penalties, attorneys fees and all amounts paid in investigation, defense or settlement of any of the foregoing (Damages) actually incurred or suffered by any such Verizon Indemnitee in connection with, arising out of or resulting from (i) any breach of any of the representations and warranties of Vodafone contained in this Agreement which survive the Closing, (ii) any breach of a covenant or agreement made or to be performed by Vodafone pursuant to this Agreement (other than (x) a covenant or agreement made or to be performed pursuant to Article VI, which shall be governed by Section 9.2(c) and (y) a covenant or agreement made or to be performed pursuant to Sections 5.1 and 5.18, for which there will be no indemnification pursuant to this Section 9.2(a)(ii)), (iii) the Excluded Assets, (iv) the Excluded Liabilities, (v) the Reorganization (except to the extent governed by Section 9.2(c)), or (vi) any litigation which is commenced or threatened against such Verizon Indemnitee asserting claims (A) regarding any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to (x) information contained in the Vodafone Circular, which information was not provided in writing by Verizon or any of its Affiliates or any of their respective Representatives specifically for inclusion in the Vodafone Circular and (y) information contained in any Verizon Disclosure Document, which information was provided in writing by Vodafone or any of its Affiliates or any of their respective Representatives in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby specifically for inclusion in such Verizon Disclosure Document or (B) otherwise alleging that the Vodafone Circular did not comply with any applicable legal or regulatory requirement.
(b) Effective after the Closing, subject to the terms and conditions of this Article IX, Verizon shall indemnify Vodafone, its Affiliates and their respective Representatives (collectively, the Vodafone Indemnitees) against and shall hold each of them harmless from any Damages actually incurred or suffered by any such Vodafone Indemnitee in connection with, arising out of or resulting from (i) any breach of any of
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the representations and warranties of Verizon contained in this Agreement which survive the Closing, (ii) any breach of any covenant or agreement made or to be performed by Verizon pursuant to this Agreement (other than (x) a covenant or agreement made or to be performed pursuant to Section 5.17, for which there will be no indemnification pursuant to this Section 9.2(b)(ii) or (y) a covenant or agreement to be performed pursuant to Section 5.20(a) or Article VI which shall be governed by Section 9.2(d)), (iii) any litigation which is commenced or threatened against such Vodafone Indemnitee asserting claims (A) regarding any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to (x) information contained in any Verizon Disclosure Document, which information was not provided in writing by Vodafone or any of its Affiliates or any of their respective Representatives in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby specifically for inclusion in such Verizon Disclosure Document and (y) information contained in the Vodafone Circular, which information was provided in writing by Verizon or any of its Affiliates or any of their respective Representatives specifically for inclusion in the Vodafone Circular or (B) otherwise alleging that any Verizon Disclosure Document did not comply with any applicable legal or regulatory requirement, or (iv) except as otherwise provided in Section 9.2(c), the Partnership and its Subsidiaries and the business, assets and liabilities thereof to the extent incurred or suffered at any time following the Closing in respect of any period prior to or following the Closing.
(c) Effective after the Closing, notwithstanding any provision of this Agreement to the contrary, Vodafone shall indemnify and hold harmless the Verizon Indemnitees from any and all liability for: (i) Taxes imposed on or payable by any Sold Entity for any Pre-Closing Tax Period; (ii) Taxes incurred with respect to, or arising from, the Reorganization for any Pre-Closing Tax Period; (iii) amounts payable by a Sold Entity pursuant to any Tax sharing, allocation or indemnification agreement entered into before the Closing to indemnify any other Person in respect of or relating to Taxes of such other Person to the extent such amount relates to or arises from a Pre-Closing Tax Period; (iv) transfer, recording, documentary, sales, use, stamp, registration and similar Taxes (including any real estate transfer or similar Tax arising from any indirect transfer of property as a result of the transactions contemplated by this Agreement) and related fees incurred with respect to or arising from (A) the purchase and sale of the Transferred Shares pursuant to this Agreement, (B) the indirect transfer of the shares in and assets of the Sold Entities, or (C) the Reorganization; (v) Taxes for which any Sold Entity is liable (or that may be collected from any Sold Entity by way of offset against a refund of Tax otherwise due to the Sold Entities) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a successor or transferee or as a result of having been a member of any group (other than a group consisting solely of one or more of the Sold Entities) prior to Closing; (vi) Taxes attributable to the inclusion of any item of income in taxable income for any Post-Closing Tax Period as a result of any (x) adjustment required with respect to a Sold Entity by reason of a change in method of accounting for a Pre-Closing Tax Period under Section 481(c) of the Code (or any corresponding or similar provision of state, local or foreign Tax Law), (y) closing agreement as described in Section 7121 of the Code (or any corresponding or similar
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provision of state, local or foreign Tax Law) entered into by a Sold Entity prior to the Closing, or (z) installment sale by, or intercompany transaction (within the meaning of Treasury Regulation Section 1.1502-13) involving, a Sold Entity, in each case prior to the Closing (excluding, for the avoidance of doubt, Taxes attributable to any excess loss account (within the meaning of Treasury Regulation Section 1.1502-19) and California State income Taxes attributable to any Deferred Intercompany Stock Account of a Sold Entity), except, in each case of clauses (x) through (z), for any such items arising from any such change in method of accounting, closing agreement, installment sale or intercompany transaction by the Partnership; (vii) Taxes of Vodafone and its Affiliates (other than the Sold Entities) for any period; (viii) Taxes arising out of or resulting from any breach of a covenant or agreement made or to be performed by Vodafone pursuant to Sections 5.1 or 5.18(f) or Article VI; (ix) provided Verizon has provided notice thereof in accordance with Section 6.4, the Verizon Indemnity Amount; and (x) any out-of-pocket costs and expenses, including legal fees and expenses, attributable to any item described in clauses (i) to (ix). Notwithstanding the foregoing, Vodafone shall not be liable for, and shall have no obligation to indemnify the Verizon Indemnitees for: (A) any Taxes that are attributable to (i) any adjustments made after the Closing (determined on a with and without basis) to items of Partnership income, gain, loss, deduction or credit (or other items reported to its partners on Schedule K-1 (IRS Form 1065)), whether by reason of audit, assessment, amended return or otherwise, for a Pre-Closing Tax Period, (ii) actions not in the ordinary course of business and not contemplated by this Agreement taken by Verizon or any of its Affiliates (including any of the Sold Entities) on the Closing Date after the Closing, (iii) an election made by Verizon under Section 338 of the Code with respect to the Sold Entities, or (iv) items described in clause (vi) of the preceding sentence, which Taxes, in the aggregate, do not exceed Five Million Dollars ($5,000,000); and (B) the excess, if any, of (i) the amount of Taxes imposed on the Sold Entities distributive share of items of Partnership income, gain, loss, deduction or credit (or other items reported to its partners on Schedule K-1 (IRS Form 1065)) for the taxable periods of the Sold Entities beginning on or after April 1, 2013 and ending on the Closing Date, taking into account Section 6.1(d), (determined on a hypothetical basis without regard to any other item of income, gain, loss, deduction or credit of the Sold Entities), over (ii) the sum of (x) the Tax Distributions received by the Sold Entities from the Partnership with respect to such taxable periods and (y) any payments made by Verizon pursuant to Section 5.21 that are measured by reference to Tax Distributions (other than Supplemental Tax Distributions). Any indemnity payment required to be made pursuant to this Section 9.2(c) shall be made by wire transfer or intrabank transfer of immediately available funds to an account designated by Verizon within ten (10) days after any of the Verizon Indemnitees makes written demand upon Vodafone, but in no case earlier than five (5) days prior to the date on which the relevant Taxes or other amounts are required to be paid to the applicable Taxing Authority.
(d) Verizon shall indemnify and hold harmless the Vodafone Indemnitees from any and all liability for: (i) Taxes imposed on or payable by any Sold Entity for any Post-Closing Tax Period except to the extent that Vodafone is responsible for such Taxes pursuant to Section 9.2(c), (ii) Taxes for which Verizon is responsible under Section 9.2(c), and (iii) Taxes arising out of or resulting from any breach of a covenant or agreement made or to be performed by Verizon pursuant to Section 5.20(a) or Article VI.
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Any indemnity payment required to be made pursuant to this Section 9.2(c) shall be made by wire transfer or intrabank transfer of immediately available funds to an account designated by Vodafone within ten (10) days after any of the Vodafone Indemnitees makes written demand upon Verizon, but in no case earlier than five (5) days prior to the date on which the relevant Taxes or other amounts are required to be paid to the applicable Taxing Authority.
(e) Vodafone shall indemnify the Verizon Indemnitees against any Liabilities which are incurred by the Verizon Indemnitees (such Liabilities being determined to have the same economic effect as if they had been incurred directly by Verizon) in relation to any Vodafone UK Pension Plan pursuant to the exercise by the UK Pension Regulator of any of its powers under the UK Pensions Act 2004. Vodafone shall further indemnify the Verizon Indemnitees against any Liabilities incurred after the Closing by or in respect of any of the Sold Entities, which Liabilities are in respect of any (i) persons who were employed by the Sold Entities on or prior to the Closing, (ii) Employee Benefit Plans that were sponsored, maintained, contributed to or required to be contributed to by the Sold Entities on or prior to the Closing, and (iii) Employee Benefit Plans with respect to which the Sold Entities had any current, future or contingent Liability on or prior to the Closing.
(f) The parties to this Agreement agree that any indemnification payment made pursuant to this Agreement shall be treated for Tax purposes as an adjustment to the aggregate consideration being delivered to Seller pursuant to Section 2.2 in the form of the Cash Consideration, the Verizon Shares, the Verizon Notes and the Settlement Note, except to the extent otherwise required by applicable Law.
9.3 Third-Party Claim Procedures.
(a) The Person seeking indemnification under Section 9.2 (the Indemnified Party) agrees to give prompt notice in writing to the party against whom indemnity is to be sought (the Indemnifying Party) of the assertion of any claim or the commencement of any suit, action or proceeding by any third party (Third-Party Claim) in respect of which indemnity may be sought under Section 9.2. Such notice shall set forth in reasonable detail such Third-Party Claim and the basis for indemnification (taking into account the information then available to the Indemnified Party). The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations or Liability hereunder, except to the extent such failure shall have actually prejudiced the Indemnifying Party.
(b) The Indemnifying Party shall be entitled to participate in the defense of any Third-Party Claim and, subject to the limitations set forth in this Section 9.3, shall be entitled to assume the defense thereof at its sole expense with lead counsel appointed by the Indemnifying Party and reasonably acceptable to the Indemnified Party; provided, that if the Indemnified Party has concluded that there may be one or more legal defenses or defense strategies available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party or that there exists or is reasonably likely to exist a conflict of interest, such Indemnified Party shall be entitled, at the
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Indemnifying Partys reasonable expense, to separate counsel (provided, that such counsel is reasonably acceptable to the Indemnifying Party).
(c) If the Indemnifying Party elects to assume the defense of any such Third-Party Claim, all the parties hereto will cooperate in the defense or prosecution of such Third-Party Claim. Such cooperation will include the provision of reasonable access during business hours to the Indemnifying Party of records and information which are reasonably relevant to such Third-Party Claim, and making employees and other Representatives and advisors available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. If the Indemnifying Party assumes the control of the defense of any Third-Party Claim in accordance with the provisions of this Section 9.3, (i) the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld, conditioned or delayed) before entering into any settlement or compromise of such Third-Party Claim, if (A) the settlement or compromise does not release the Indemnified Party and its Affiliates from all Liabilities and obligations with respect to such Third-Party Claim or (B) the settlement or compromise imposes injunctive or other equitable relief against the Indemnified Party or any of its Affiliates, and (ii) the Indemnified Party shall be entitled to participate in the defense of any such Third-Party Claim and to employ, at its expense, separate counsel of its choice for such purpose.
(d) The provisions of this Section 9.3 shall not apply with respect to Tax Claims, which shall be governed by Article VI.
9.4 Direct Claim Procedures. If the Indemnified Party has a claim for indemnity under Section 9.2 against the Indemnifying Party that does not involve a Third-Party Claim, the Indemnified Party agrees to give prompt notice in writing of such claim to the Indemnifying Party. Such notice shall set forth in reasonable detail such claim and the basis for indemnification (taking into account the information then available to the Indemnified Party). The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have prejudiced the Indemnifying Party.
9.5 Limitations on Indemnification.
(a) Vodafone shall have no Liability for any claim for indemnification pursuant to Section 9.2(a) if the Damages for which the Indemnifying Party would be responsible for such claim and all related claims are less than the Applicable De Minimis Amount.
(b) Verizon shall have no Liability for any claim for indemnification pursuant to Section 9.2(b) if the Damages for which the Indemnifying Party would be responsible for such claim and all related claims are less than the Applicable De Minimis Amount.
9.6 Calculation of Damages.
(a) The amount of any Damages or Taxes payable under Section 9.2 by the Indemnifying Party shall be reduced by any amounts recovered by the Indemnified Party under applicable insurance policies or from any other Person alleged to be responsible
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therefor, and shall be (i) net of any Tax benefits actually realized by the Indemnified Party and (ii) increased by any Tax costs incurred by the Indemnified Party (in each case, determined on a with and without basis). If the Indemnified Party receives any amounts under applicable insurance policies, or from any other Person alleged to be responsible for any Damages, subsequent to an indemnification payment by the Indemnifying Party, then the Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by the Indemnifying Party in connection with providing such indemnification payment up to the amount actually received by the Indemnified Party, net of any expenses incurred by the Indemnified Party in collecting such amount. The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under insurance coverage, or from any other Person alleged to be responsible, for any Damages payable under Section 9.2.
(b) The Indemnifying Party shall not be liable under Section 9.2 for any punitive, exemplary or special Damages, or any other Damages that are not reasonably foreseeable; provided, that nothing herein shall prevent any Indemnified Party from recovering for all components of awards against them in Third-Party Claims for which recovery is provided under this Article IX.
9.7 Exclusive Remedy. From and after the Closing and except for the continuing availability of specific performance pursuant to Section 10.6 with respect to covenants that specify performance following the Closing Date, Section 9.2 will (in the absence of fraud) provide the sole and exclusive remedy for each of the parties hereto for any misrepresentation or inaccuracy or breach of any representation and warranty or any breach of covenant or other agreement occurring at or prior to the Closing or other claim arising directly or indirectly out of this Agreement or the transactions contemplated hereby with respect to matters occurring or circumstances existing at or prior to the Closing (other than procedures for the conduct of proceedings relating to Tax Claims, which shall be governed by Section 6.2).
ARTICLE X
MISCELLANEOUS
10.1 Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) when personally delivered or transmitted by telecopier on a business day during normal business hours where such notice is to be received at the address or number designated below or (b) on the business day following the date of mailing by overnight courier, fully prepaid, addressed to such address, whichever shall first occur. The addresses for such communications shall be:
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If to Vodafone, to:
Vodafone Group Plc
Vodafone House
The Connection
Newbury
Berkshire
RG14 2FN
Telecopier: +44 1635 238080
Attention: Company Secretary
If to Seller, to:
Vodafone 4 Limited
Rivium Quadrant 173
2909 LC Capelle aan den IJssel
The Netherlands
Telecopier +31 10 498 77 22
Attention: Erik de Rijk, Managing Director
And, in each case, with copies, which shall not constitute notice, to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
Telecopier: (212) 455-2502
Attention: William E. Curbow and Eric M. Swedenburg
and
Slaughter and May
One Bunhill Row
London EC1Y 8YY
Telecopier: +44 (0)20 7090 5000
Attention: Craig Cleaver and Roland Turnill
If to Verizon, to:
Verizon Communications Inc.
One Verizon Way
Basking Ridge, NJ 07928
Telecopier: (908) 766-3813
Attention: William L. Horton, Jr., Senior Vice President, Deputy
General Counsel and Corporate Secretary
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With copies, which shall not constitute notice, to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Telecopier: (212) 403-2000
Attention: Daniel A. Neff and Steven A. Rosenblum
and
Macfarlanes LLP
20 Cursitor Street
London EC4A 1LT
Telecopier: +44 (0)20 7831 9607
Attention: Charles Martin and Graham Gibb
10.2 Interpretation. When a reference is made in this Agreement to Sections, Schedules or Exhibits, such reference shall be to a Section of, Schedule to or Exhibit to this Agreement unless otherwise indicated. The table of contents, glossary of defined terms and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The term parties shall mean Vodafone, Seller and Verizon, and the term party shall be deemed to refer to either Vodafone, Seller or Verizon, as the case may be. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without limitation. The phrases the date of this Agreement and the date hereof shall be deemed to refer to September 2, 2013. No provision of this Agreement shall be construed to require Vodafone, Seller, Verizon or any of their respective Affiliates to take any action that would violate any Law, rule or regulation.
10.3 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto, in whole or in part (whether by operation of Law or otherwise), without the prior written consent of (i) Vodafone and Seller, if the assigning party is Verizon or (ii) Verizon, if the assigning party is Vodafone or Seller, and any attempt to make any such assignment without such consent shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.
10.4 Entire Agreement; Amendments. Except to the extent that other agreements are specifically referred to herein, this Agreement among Vodafone, Seller and Verizon contains the entire understanding of the parties with respect to the matters covered hereby and, except as specifically set forth herein, none of Vodafone, Seller or Verizon makes any representation, warranty, covenant or undertaking with respect to such matters. This Agreement may be amended only by an agreement in writing executed by the parties hereto. The parties hereto may amend this Agreement without notice to or the consent of any third party; provided, however, that after receipt of the Verizon Requisite Vote or the Vodafone Requisite Share Purchase Vote, there shall not be made any amendment that by Law requires further approval by the holders of
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the Verizon Common Stock or the Vodafone Ordinary Shares without the further approval of such shareholders.
10.5 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
10.6 Specific Enforcement.
(a) The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that unless this Agreement has been terminated in accordance with Article VIII, the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they may be entitled at law or in equity.
(b) Notwithstanding anything in this Agreement to the contrary, including Section 10.6(a), the parties hereby acknowledge and agree that, in the event of a Financing Failure, Vodafone shall not be entitled to specific performance (i) if the Transaction is to be implemented by way of the Vodafone Scheme, to cause Verizon to appear at the Court Hearing or the hearing in respect of the confirmation by the Court of the Vodafone Reduction of Capital, to give any undertakings in connection with the Vodafone Scheme, or to effect the Scheme Closing in accordance with Section 2.3 or (ii) if the Transaction is to be implemented by way of the Share Purchase, to effect the Share Purchase Closing in accordance with Section 2.5. Nothing in this Section 10.6(b) is intended to limit the right and entitlement of Vodafone to specific performance in accordance with Section 10.6(a) with respect to any failure to perform or breach by Verizon of any covenant in this Agreement other than the failure of Verizon, in the event of a Financing Failure, to (x) appear at the Court Hearing or the hearing in respect of the confirmation by the Court of the Vodafone Reduction of Capital, to give any undertakings in connection with the Vodafone Scheme, or to effect the Scheme Closing in accordance with Section 2.3, or (y) effect the Share Purchase Closing in accordance with Section 2.5, if the Transaction is to be implemented by way of the Share Purchase.
(c) Each party further agrees that, subject to Section 10.6(b), (i) such party will not oppose the granting of an injunction, specific performance and other equitable relief as provided herein on the basis that the other party has an adequate remedy at law or an award of specific performance is not an appropriate remedy for any reason at law or equity and (ii) no other party or any other Person shall be required to obtain, furnish or
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post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 10.6, and each party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.
10.7 Further Assurances. Subject to the terms and provisions of this Agreement, each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Ancillary Documents and the consummation of the transactions contemplated hereby and thereby.
10.8 Waiver of Jury Trial. Each of the parties hereto irrevocably and unconditionally waives trial by jury in any legal action or proceeding relating to this Agreement or the transactions contemplated hereby and for any counterclaim therein.
10.9 Submission to Jurisdiction; Waivers.
(a) Each of Vodafone, Seller and Verizon irrevocably agrees that any legal action or proceeding with respect to this Agreement or for recognition and enforcement of any judgment in respect hereof brought by another party hereto or its successors or assigns shall be brought and determined in the United States District Court for the Southern District of New York (or, to the extent such court does not have subject matter jurisdiction, the Supreme Court of the State of New York in New York County), and each of Vodafone, Seller and Verizon hereby irrevocably submits with regard to any such action or proceeding for itself and in respect to its property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of Vodafone, Seller and Verizon hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to serve process in accordance with this Section 10.9, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (c) to the fullest extent permitted by Law, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
(b) Notwithstanding anything herein to the contrary, each of the parties hereto expressly agrees (i) that it will not bring or support any lawsuit, claim, complaint, action, formal investigation or proceeding before any Governmental Entity (each, an Action), whether in law or in equity, whether in contract or in tort or otherwise, against any Financing Related Party arising out of or relating to the transactions contemplated hereby in any forum other than any state or federal court sitting in the borough of Manhattan, New York, New York, and any appellate court thereof, (ii) to waive and hereby waives any right to trial by jury in respect of any such Action and (iii) that any such Action shall
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be governed by, and construed in accordance with, the Laws of the State of New York, without regard to the conflicts of Law rules of such state that would result in the application of the Laws of any other jurisdiction.
10.10 No Third Party Beneficiaries. Except as set forth in (i) Article IX and Sections 5.15, 8.2 and 8.3(f) and, with respect to the Financing Related Parties (in their capacities as such), Sections 8.3(g), 8.3(h) and 10.9(b), this Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision of this Agreement be enforced by, any other person. For the avoidance of doubt, no provision of this Agreement is intended to provide any Vodafone Shareholder (or any party acting on its behalf) the ability to assert or enforce any right (whether in its capacity as a Vodafone Shareholder or derivatively or otherwise on behalf of Vodafone) or seek any remedies pursuant to this Agreement. For the avoidance of doubt, the Financing Related Parties are express third party beneficiaries of Sections 8.3(g), 8.3(h) and 10.9(b).
10.11 Governing Law. This Agreement shall be governed and construed in accordance with the Laws of the State of New York, without regard to the conflicts of Law rules of such state that would result in the application of the Laws of any other jurisdiction.
10.12 Expenses. Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.
10.13 Counterparts. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. Each of the parties hereto (i) has agreed to permit the use, from time to time, of faxed or otherwise electronically transmitted signatures in order to expedite the consummation of the transactions contemplated hereby, (ii) intends to be bound by its respective faxed or otherwise electronically transmitted signature, (iii) is aware that the other parties hereto will rely on the faxed or otherwise electronically transmitted signature, and (iv) acknowledges such reliance and waives any defenses to the enforcement of the documents effecting the transaction contemplated by this Agreement based on the fact that a signature was sent by fax or otherwise electronically transmitted.
10.14 Extension; Waivers. At any time prior to the Closing, Verizon and Vodafone by action taken or authorized by or on behalf of their respective boards of directors may, to the extent legally allowed, (i) extend the time for or waive the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions contained here; provided, however, that after receipt of the Verizon Requisite Vote or the Vodafone Requisite Share Purchase Vote, there shall not be made any waiver that by Law requires further approval by the holders of the Verizon Common Stock or the Vodafone Ordinary Shares without the further approval of such shareholders. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date hereof.
VODAFONE GROUP PLC | ||||
By | /s/ VITTORIO COLAO | |||
Name: | VITTORIO COLAO | |||
Title: | CHIEF EXECUTIVE | |||
VODAFONE 4 LIMITED | ||||
By |
| |||
Name: | ||||
Title: | ||||
By |
| |||
Name: | ||||
Title: |
[Signature Page Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date hereof.
VODAFONE GROUP PLC | ||||
By |
| |||
Name: | ||||
Title: | ||||
VODAFONE 4 LIMITED | ||||
By | /s/ Erik de Rijk | |||
Name: | Erik de Rijk | |||
Title: | Director | |||
By | /s/ L.R.M. KRAAN | |||
Name: | L.R.M. KRAAN | |||
Title: | Company Secretary |
[Signature Page Stock Purchase Agreement]
VERIZON COMMUNICATIONS INC. | ||||
By | /s/ Lowell C. McAdam | |||
Name: | Lowell C. McAdam | |||
Title: | Chairman and Chief Executive Officer |
[Signature Page Stock Purchase Agreement]
Exhibit 4.35
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
This FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT, dated as of December 5, 2013 (this Amendment), is hereby entered into among Vodafone Group Plc, an English public limited company (Vodafone), Vodafone 4 Limited, an indirect wholly owned Subsidiary of Vodafone (Seller), and Verizon Communications Inc., a Delaware corporation (Verizon).
WHEREAS, the parties hereto are parties to that certain Stock Purchase Agreement, dated as of September 2, 2013 (the Agreement);
WHEREAS, Section 10.4 of the Agreement provides, among other things, that the Purchase Agreement may be amended by an agreement in writing executed by Vodafone, Seller and Verizon; and
WHEREAS, the parties hereto desire to amend the Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereby agree to amend the Agreement in the following manner:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. All capitalized terms used and not defined herein shall have the meanings given to such terms in the Agreement.
ARTICLE II
AMENDMENTS TO THE AGREEMENT
2.1 Definitions. Article I of the Agreement is hereby amended as follows:
(i) The defined term New Vodafone Shares Admission is hereby deleted.
(ii) The defined term Scheme Closing is hereby restated to read as follows:
Scheme Closing has the meaning set forth in Section 2.3.
(iii) The defined term Scheme Effective Date is hereby restated to read as follows:
Scheme Effective Date means the date of the Scheme Closing.
(iv) The defined term Settlement Note is hereby amended by (a) the addition of the word substantially immediately prior to the phrase in the form appended as Exhibit B and (b) the addition of the words , with such changes as mutually agreed among the parties hereto immediately after the phrase in the form appended as Exhibit B.
(v) The defined term Vodafone B.V. Inc. Note is hereby amended by (a) the addition of the word substantially immediately prior to the phrase in the form appended as Exhibit E and (b) the addition of the words , with such changes as mutually agreed among the parties hereto immediately after the phrase in the form appended as Exhibit E.
(vi) The defined term Vodafone Reduction of Capital is hereby restated to read as follows:
Vodafone Reduction of Capital means the following proposed reductions of capital of Vodafone under Chapter 10 of Part 17 of the Companies Act to be undertaken pursuant to the Vodafone Scheme, being (i) the reduction or cancellation of Vodafones share premium account; (ii) the cancellation of Vodafones capital redemption reserve; and (iii) the cancellation of the Vodafone Class B Shares, but subject always to Section 5.4(b).
2.2 Scheme Closing. Section 2.3 of the Agreement is hereby restated to read as follows:
Scheme Closing. Subject to the terms and conditions of this Agreement, (a) the closing (the Scheme Closing) of the Transaction in accordance with Section 2.4 shall occur immediately following (and on the date of) the satisfaction of the condition set forth in Section 7.1(b)(ii)(y) and (b) Vodafone shall use commercially reasonable efforts to cause to be satisfied the condition set forth in Section 7.1(b)(iii) on the date that the condition set forth in Section 7.1(b)(ii)(x) is satisfied (and, for the avoidance of doubt, Vodafone shall cause the condition set forth in Section 7.1(b)(iii) to be satisfied before the condition set forth in Section 7.1(b)(ii)(y) is satisfied), or, in the case of (a) or (b), at such other time as Verizon and Vodafone may agree in writing. For the avoidance of doubt, the Court Hearing shall not be held until all of the conditions set forth in Article VII have been satisfied (or, to the extent permitted by applicable Law, waived in a writing signed by the party for whose benefit the condition exists) other than the conditions set forth in Sections 7.1(b)(ii) and 7.1(b)(iii). The purchase and sale of the Transferred Shares in connection with the Scheme Closing shall take place immediately following (and on the date of) the satisfaction of the conditions set forth in Section 7.1(b)(ii)(y) at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, NY, or at such other place as Verizon and Vodafone may agree in writing. Upon the earlier of (i) the Scheme Longstop Date and (ii) the date on which the Vodafone Scheme lapses in accordance with its terms or is withdrawn, or as Verizon and Vodafone may otherwise agree in writing, this Section 2.3 shall be of no further force and effect.
2.3 Vodafone Scheme Closing Deliverables. Section 2.4 of the Agreement is hereby amended by:
(i) Restating Section 2.4(a) to read as follows:
(a) Distribution of Verizon Shares. At or promptly following the delivery (or, where the Court has so ordered, registration) of the order of the Court confirming the Vodafone Reduction of Capital to (or with) the UK Registrar of Companies, pursuant to and in accordance with the terms of the Vodafone Scheme, the Verizon Shares shall be distributed by or on behalf of Verizon to the Vodafone Shareholders in respect of their Vodafone Class B Shares or Vodafone Class C Shares, as applicable.
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(ii) Restating Section 2.4(b) to read as follows:
(b) Payment of Cash Consideration. Payment of the Cash Consideration will be made at the Scheme Closing by wire transfer or intrabank transfer of immediately available funds to Seller or such other Person as Vodafone may direct to an account or accounts designated by Vodafone in writing, such designation to be made no later than the close of business on the third (3rd) Business Day prior to the Closing Date.
(iii) Re-lettering Section 2.4(d) as Section 2.4(e) and replacing the reference therein to Section 2.4(d) with Section 2.4(e).
(iv) Inserting a new Section 2.4(d), which is set forth in its entirety below:
(d) Delivery of Reduction Order. At the Scheme Closing, Vodafone shall cause the order of the Court confirming the Vodafone Reduction of Capital to be delivered to the UK Registrar of Companies.
2.4 Mix and Match and Free Dealing Facility.
(i) Verizon and Vodafone acknowledge and agree that they have discussed the possibility of offering a mix and match facility in accordance with the first sentence of Section 5.2(e) of the Agreement and have determined not to offer such a facility.
(ii) The second and third sentences of Section 5.2(e) of the Agreement are hereby deleted in their entirety and replaced as follows:
Verizon shall (i) implement a free share dealing facility through one or more appropriate service providers, to enable individual Vodafone Shareholders resident in, or with a resident address in, the European Economic Area (other than Croatia) holding fewer than 50,000 Vodafone Ordinary Shares in certificated form to elect to cause the Verizon CDIs to which they are entitled to be sold on a stock exchange and to receive their cash proceeds in their default currency (EUR or GBP, in accordance with their current standing dividend mandate instructions) or, at their election, in USD, EUR or GBP (provided that, where such Vodafone Shareholder has previously made an election (through the relevant form of election) to receive his Cash Entitlement in one of such currencies, the proceeds of sales of Verizon CDIs under the dealing facility shall be paid in that same currency), such free share dealing facility to be provided for a period of six weeks from the Closing Date; provided, that Vodafone shall pay on demand to Verizon fifty percent (50%) of all costs and expenses incurred by Verizon in connection with the implementation of the free share dealing facility pursuant to this clause (i); and (ii) for a period of at least two (2) years following the Closing, implement such arrangements with one or more appropriate service providers (A) as may be reasonably necessary to enable uncertificated Vodafone Shareholders to hold Crest Depository Interests representing underlying Verizon Shares (Verizon CDIs) and (B) pursuant to which such appropriate service provider(s) will act as a corporate sponsored nominee and hold Verizon CDIs for the benefit of individual certificated Vodafone Shareholders resident in, or with a registered address in, the European Economic Area (other than Croatia) holding Vodafone Ordinary Shares in certificated form who receive Verizon Shares pursuant to this Agreement. Verizon will consult with Vodafone (each acting reasonably and in good faith) with a view to providing that the terms on which the
3
Verizon CDIs, corporate sponsored nominee service and free share dealing facility are provided are consistent with market practice for similar facilities in the UK-listed market, and the final terms will be described in the Vodafone Circular (and, where relevant, accompanying materials) and the Verizon UK Prospectus.
2.5 Date of the Court Hearings. Section 5.3(a)(ix) is hereby amended by deleting the second proviso thereto in its entirety and replacing it as follows:
provided, further, that without limiting any other provision of this Agreement, the hearing in respect of the confirmation by the Court of the Vodafone Reduction of Capital shall not be held on a Friday unless the Court Hearing also occurs on such Friday; and
2.6 Restriction on Reorganization of Significant Subsidiaries. Section 5.17(b) of the Agreement is hereby deleted in its entirety and replaced as follows:
(b) (i) merge or consolidate Verizon with any other Person or (ii) restructure, reorganize or completely or partially liquidate any of the Significant Subsidiaries of Verizon except, in the case of Significant Subsidiaries other than the Partnership or any Subsidiary of the Partnership that is a Significant Subsidiary (if any), in the ordinary course of business, it being understood that this clause (ii) shall not restrict the transfer or issuance of any equity or debt of a wholly owned Significant Subsidiary of Verizon to Verizon or any of its wholly owned Subsidiaries;
2.7 Vodafone B.V. Inc. Section 5.20(a) of the Agreement is hereby deleted in its entirety and replaced as follows:
(a) Verizon shall maintain the corporate existence of Vodafone B.V. Inc. for at least the two-year period beginning on the Closing Date and during such period shall (i) cause Vodafone B.V. Inc. to employ at least one individual to manage its finance operations, (ii) not prepay the principal balance of, or cause or permit Vodafone B.V. Inc. to transfer, the Settlement Note (which Verizon shall cause to be serviced in accordance with its terms) other than any prepayments permitted pursuant to the terms thereof, and (iii) cause Vodafone B.V. Inc. to maintain a balance of at least Two Hundred Fifty Million Dollars ($250,000,000) in cash, cash equivalents or third party investments.
2.8 Tax Cooperation. Section 6.3(b) of the Agreement is hereby amended by replacing the references therein to Section 2.6(b)(vi) with Section 2.6(b)(vii).
2.9 Mutual Conditions. Section 7.1 of the Agreement is hereby amended by:
(i) | Restating Section 7.1(b)(iii) to read as follows: |
(iii) The relevant order of the Court sanctioning the Vodafone Scheme shall have been delivered to the UK Registrar of Companies in accordance with applicable Law.
(ii) | Restating Section 7.1(c) to read as follows: |
4
(c) Amendment to the Official List in Respect of New Vodafone Shares. Only with respect to the obligation to consummate the Vodafone Scheme:
(iii) Restating Section 7.1(c)(i) to read as follows:
(i) All necessary documents in relation to the amendment to the Official List for the New Vodafone Shares to trade on the LSEs Main Market for listed securities shall have been supplied to the UKLA and the LSE.
(iv) Restating Section 7.1(c)(ii) to read as follows:
(ii) The UKLA shall have acknowledged to Vodafone or its agent (and such acknowledgement shall not have been withdrawn) that the application to amend the Official List in respect of the New Vodafone Shares has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject) will become effective as soon as any such listing conditions shall have been satisfied.
(v) Restating Section 7.1(c)(iii) to read as follows:
(iii) The LSE shall have acknowledged to Vodafone or its agent (and such acknowledgement shall not have been withdrawn) that the New Vodafone Shares will be enabled to trade on the LSEs Main Market for listed securities at the same time as the amendment to the Official List in respect of the New Vodafone Shares becomes effective.
2.10 Omnitel Consideration. The parties hereto agree, on their own behalf and on behalf of VBIH and Vodafone Europe, that if the transactions contemplated by the Omnitel Purchase Agreement are consummated on the Closing Date, the obligations under Section 2.2(c)(i) of the Agreement and Section 3.2(c) of the Omnitel Purchase Agreement shall be satisfied in accordance with Schedule I hereto.
ARTICLE III
MISCELLANEOUS
3.1 Counterparts. This Amendment may be executed in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts shall together constitute one and the same instrument.
3.2 Continuing Effect of the Agreement. This Amendment shall not constitute an amendment of any other provision of the Agreement not expressly referred to herein. The Agreement shall remain in full force and effect, and this Amendment shall be effective and binding upon Vodafone, Seller and Verizon upon execution and delivery by Vodafone, Seller and Verizon. From and after the date hereof, all references to the term Agreement in the Agreement shall be deemed to refer to the Agreement, as amended hereby.
3.3 Headings. The headings contained in this Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Amendment.
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3.4 Governing Law. This Amendment shall be governed and construed in accordance with the Laws of the State of New York, without regard to the conflicts of Law rules of such state that would result in the application of the Laws of any other jurisdiction.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the date hereof.
VODAFONE GROUP PLC | ||
By | /s/ Rosemary E.S. Martin | |
Name: Rosemary E.S. Martin | ||
Title: Group General Counsel & Company Secretary | ||
VODAFONE 4 LIMITED | ||
By | /s/ Erik de Rijk | |
Name: Erik de Rijk | ||
Title: Director | ||
By | /s/ L.R.M. Kraan | |
Name: L.R.M. Kraan | ||
Title: Company Secretary |
[Signature Page First Amendment to Stock Purchase Agreement]
VERIZON COMMUNICATIONS INC. | ||
By | /s/ Lowell C. McAdam | |
Name: Lowell C. McAdam | ||
Title: Chairman and Chief Executive Officer |
[Signature Page First Amendment to Stock Purchase Agreement]
SCHEDULE I
Omnitel Consideration Mechanics
If the transactions contemplated by the Omnitel Purchase Agreement are consummated on the Closing Date:
1. | Verizons obligation to pay the Omnitel Consideration Amount to Seller on the Closing Date pursuant to Section 2.4(e)(i)(A) of the Agreement shall be satisfied by issuance of a note by Verizon to Seller in the amount of the Omnitel Consideration Amount, having the terms set forth in Exhibit A hereto; and |
2. | Vodafone Europes obligation to pay the Purchase Price (as defined in the Omnitel Purchase Agreement) to VBIH on the Closing Date pursuant to Section 3.2(c) of the Omnitel Purchase Agreement shall be satisfied by issuance of a note by Vodafone Europe to VBIH in the amount of the Omnitel Consideration Amount, having the terms set forth in Exhibit B hereto. |
EXHIBIT A
Form of VCI Note
[Attached.]
EXHIBIT A
THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EXEMPTION THEREFROM UNLESS MADE PURSUANT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
[], 201[] (the Execution Date)
New York, New York
PROMISSORY NOTE
For value received Verizon Communications Inc., a Delaware corporation (Payor), promises to pay to Vodafone 4 Limited (Payee), an indirect wholly owned subsidiary of Vodafone Group Plc (Vodafone), on or before the date that is one Business Day after the Execution Date (the Maturity Date) the amount of Three Billion Five Hundred Million Dollars ($3,500,000,000) (the Principal Amount) in accordance with the terms set forth below.
This Promissory Note is the note referred to in Paragraph 1 of Schedule I to the First Amendment to the Stock Purchase Agreement, dated as of December 5, 2013, among Vodafone, Payee and Payor.
As used in this Promissory Note, the term Business Day means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York, Amsterdam, the Netherlands or London, United Kingdom are authorized or required by applicable law to close.
All payments under this Promissory Note due upon the Maturity Date shall be made in lawful money of the United States of America and in immediately available funds.
For the avoidance of doubt, no interest shall be payable on the Principal Amount under this Promissory Note, and the Principal Amount may be paid at any time prior to the Maturity Date without penalty.
Payor waives presentment, notice of dishonor, protest and any other formality with respect to this Promissory Note, to the fullest extent permitted by applicable law.
This Promissory Note shall be binding on Payor and its successors and permitted assigns and shall inure to the benefit of Payee and its successors and permitted assigns; provided that Payor may not delegate any obligations hereunder without the prior written consent of Payee and Payee may not assign or otherwise transfer all or any portion of this Promissory Note without the prior written consent of Payor.
This Promissory Note shall be construed in accordance with and governed by the laws of the State of New York, without regard to the conflicts of law rules of such state that would result in the application of the laws of any other jurisdiction.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS HEREOF, THE UNDERSIGNED HAS CAUSED THIS PROMISSORY NOTE TO BE DULY EXECUTED AS OF THE DATE FIRST WRITTEN ABOVE:
VERIZON COMMUNICATIONS INC. | ||
By: |
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Title: |
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Date: |
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EXHIBIT B
Form of VEBV Note
[Attached.]
EXHIBIT B
THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EXEMPTION THEREFROM UNLESS MADE PURSUANT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
[], 201[] (the Execution Date)
New York, New York
PROMISSORY NOTE
For value received Vodafone Europe B.V., a private company with limited liability incorporated under the laws of the Netherlands (Payor) and an indirect wholly owned subsidiary of Vodafone Group Plc (Vodafone), promises to pay to Verizon Business International Holding B.V., a private company with limited liability incorporated under the laws of the Netherlands (Payee) and a wholly owned subsidiary of Verizon Communications Inc. (Verizon), on or before the date that is one Business Day after the Execution Date (the Maturity Date) the amount of Three Billion Five Hundred Million Dollars ($3,500,000,000) (the Principal Amount) in accordance with the terms set forth below.
This Promissory Note is the note referred to in Paragraph 2 of Schedule I to the First Amendment to the Stock Purchase Agreement, dated as of December 5, 2013, among Verizon, Vodafone, and Vodafone 4 Limited, an indirect wholly owned subsidiary of Vodafone.
As used in this Promissory Note, the term Business Day means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York, Amsterdam, the Netherlands or London, United Kingdom are authorized or required by applicable law to close.
All payments under this Promissory Note due upon the Maturity Date shall be made in lawful money of the United States of America and in immediately available funds.
For the avoidance of doubt, no interest shall be payable on the Principal Amount under this Promissory Note, and the Principal Amount may be paid at any time prior to the Maturity Date without penalty.
Payor waives presentment, notice of dishonor, protest and any other formality with respect to this Promissory Note, to the fullest extent permitted by applicable law.
This Promissory Note shall be binding on Payor and its successors and permitted assigns and shall inure to the benefit of Payee and its successors and permitted assigns; provided that Payor may not delegate any obligations hereunder without the prior written consent of Payee and Payee may not assign or otherwise transfer all or any portion of this Promissory Note without the prior written consent of Payor.
This Promissory Note shall be construed in accordance with and governed by the laws of the State of New York, without regard to the conflicts of law rules of such state that would result in the application of the laws of any other jurisdiction.
IN WITNESS HEREOF, THE UNDERSIGNED HAS CAUSED THIS PROMISSORY NOTE TO BE DULY EXECUTED AS OF THE DATE FIRST WRITTEN ABOVE:
VODAFONE EUROPE B.V. | ||
By: |
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Title: |
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Date: |
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Exhibit 7
UNAUDITED COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES(1)
2014 £m |
Restated(2) 2013 £m |
Restated(2) £m |
2011 £m |
2010 £m |
||||||||||||||||
Financing costs per consolidated income statement(3) |
1,554 | 1,596 | 1,768 | 359 | 1,448 | |||||||||||||||
Financing costs discontinued operations |
| 56 | 23 | 70 | 64 | |||||||||||||||
One third of rental expense |
718 | 601 | 585 | 629 | 553 | |||||||||||||||
Interest capitalized |
3 | 8 | 25 | 138 | | |||||||||||||||
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Fixed charges |
2,275 | 2,261 | 2,401 | 1,196 | 2,065 | |||||||||||||||
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Profit/(loss) before taxation from continuing operations |
(5,270 | ) | (3,483 | ) | 4,144 | 5,057 | 4,626 | |||||||||||||
Share of profit in associates |
(278 | ) | (575 | ) | (1,129 | ) | (548 | ) | (630 | ) | ||||||||||
Fixed charges |
2,275 | 2,261 | 2,401 | 1,196 | 2,065 | |||||||||||||||
Dividends received from associates |
4,897 | 5,539 | 4,916 | 1,424 | 1,436 | |||||||||||||||
Preference dividend requirements of a consolidated subsidiary |
| | | (89 | ) | (86 | ) | |||||||||||||
Interest capitalized |
(3 | ) | (8 | ) | (25 | ) | (138 | ) | | |||||||||||
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|
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Earnings |
1,621 | 3,734 | 10,307 | 6,902 | 7,411 | |||||||||||||||
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|
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|
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Ratio of earnings to fixed charges |
| 1.7 | 4.3 | 5.8 | 3.6 | |||||||||||||||
Deficiency between fixed charges and earnings |
654 | | | | |
Notes:
1. | All of the financial information presented in this exhibit is unaudited. |
2. | The ratios for the years ended 31 March 2013 and 2012 been restated to reflect the Groups adoption of IFRS 11 Joint Arrangements and the revisions to IAS 19 Employee benefits, and includes the Groups joint ventures using the equity accounting basis. The ratios for the years ended 31 March 2011 and 2010 have not been restated as it would involve unreasonable effort and expense. The ratios for the years ended 31 March 2011 and 2010 therefore include the Groups joint ventures on a proportionate consolidation basis, rather than on an equity accounting basis. |
3. | Fixed charges include (1) interest expensed (2) interest capitalized (3) amortised premiums, discounts and capitalised expenses related to indebtedness, (4) an estimate of the interest within rental expense, and (5) preference security dividend requirements of a consolidated subsidiary. These include the financing costs of subsidiaries. Fixed charges include foreign exchange losses arising from net foreign exchange movements on certain intercompany loans of £nil for the year ended 31 March 2014 (2013: £91 million, 2012: £nil, 2011: £nil, 2010: £78 million) and interest credit on settlement of tax issues of £15 million for the year ended 31 March 2014 (2013: £91 million credit, 2012: £23 million expense, 2011: £826 million credit, 2010: £178 million credit). |
Exhibit 12
RULE 13a-14(a) CERTIFICATION
I, Vittorio Colao, certify that:
1. | I have reviewed this annual report on Form 20-F of Vodafone Group Plc (the Company); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting; and |
5. | The Companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting. |
10 June 2014 | /s/ Vittorio Colao | |||||
Date | Vittorio Colao | |||||
Chief Executive |
Exhibit 12
RULE 13a-14(a) CERTIFICATION
I, Nick Read, certify that:
1. | I have reviewed this annual report on Form 20-F of Vodafone Group Plc (the Company); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting; and |
5. | The Companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting. |
10 June 2014 | /s/ Nick Read | |||||
Date | Nick Read | |||||
Chief Financial Officer |
Exhibit 13
RULE 13a-14(b) CERTIFICATION
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Vodafone Group Plc, a company incorporated under the laws of England and Wales (the Company), hereby certifies, to such officers knowledge, that:
The Annual Report on Form 20-F for the year ended 31 March 2014 (the Report) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
10 June 2014 | /s/ Vittorio Colao | |||||
Date | Vittorio Colao | |||||
Chief Executive |
The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Report or as a separate disclosure document.
RULE 13a-14(b) CERTIFICATION
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Vodafone Group Plc, a company incorporated under the laws of England and Wales (the Company), hereby certifies, to such officers knowledge, that:
The Annual Report on Form 20-F for the year ended 31 March 2014 (the Report) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
10 June 2014 | /s/ Nick Read | |||||
Date | Nick Read | |||||
Chief Financial Officer |
The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Report or as a separate disclosure document.
Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-81825 and 333-149634 on Form S-8 and Registration Statement No. 333-190307 on Form F-3 of our reports dated 20 May 2014, relating to the consolidated financial statements of Vodafone Group Plc and subsidiaries (the Group) (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the Groups adoption of International Financial Reporting Standard 11, Joint Arrangements and amendments to International Accounting Standard 19, Employee Benefits) and the effectiveness of the Groups internal control over financial reporting, appearing in this Annual Report on Form 20-F of Vodafone Group Plc for the year ended 31 March 2014.
/s/ Deloitte LLP
Deloitte LLP
London, United Kingdom
10 June 2014
Exhibit 15.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-81825 and 333-149634 on Form S-8 and Registration Statement No. 333-190307 on Form F-3 of Vodafone Group Plc of our report dated February 27, 2014 relating to the consolidated financial statements of Cellco Partnership d/b/a Verizon Wireless appearing in this Annual Report on Form 20-F of Vodafone Group Plc for the year ended March 31, 2014.
/s/ Deloitte & Touche LLP |
New York, New York |
June 10, 2014 |
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