-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T0z/DgnyxXfmGOU3RFVDN7LODW0W+LogXrQDlAg2p527VNgJz4V9k7k5bB/31Ppr +uQvuiXOrRr9cm0xu+fKrQ== 0000931763-02-001134.txt : 20020415 0000931763-02-001134.hdr.sgml : 20020415 ACCESSION NUMBER: 0000931763-02-001134 CONFORMED SUBMISSION TYPE: 20-F PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020404 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMVESCAP PLC/LONDON/ CENTRAL INDEX KEY: 0000914208 STANDARD INDUSTRIAL CLASSIFICATION: INVESTMENT ADVICE [6282] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 20-F SEC ACT: 1934 Act SEC FILE NUMBER: 001-13908 FILM NUMBER: 02602247 BUSINESS ADDRESS: STREET 1: 11 DEVONSHIRE SQUARE STREET 2: LONDON EC2M 4YR CITY: ENGLAND STATE: X0 BUSINESS PHONE: 442076263434 MAIL ADDRESS: STREET 1: 11 DEVONSHIRE SQUARE STREET 2: LONDON EC2M 4YR CITY: ENGLAND FORMER COMPANY: FORMER CONFORMED NAME: AMVESCAP /LONDON/ DATE OF NAME CHANGE: 19971121 FORMER COMPANY: FORMER CONFORMED NAME: INVESCO PLC /LONDON DATE OF NAME CHANGE: 19940107 FORMER COMPANY: FORMER CONFORMED NAME: AMVESCO PLC /LONDON/ DATE OF NAME CHANGE: 19970612 20-F 1 d20f.txt FORM 20-F 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 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD Commission File Number 1-13908 AMVESCAP PLC ----------------------------------------------------- (Exact name of registrant as specified in its charter) England ---------------------------------------------- (Jurisdiction of incorporation or organization) 11 Devonshire Square, London, EC2M 4YR, United Kingdom ------------------------------------------------------ (Address of principal executive offices) Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered - ------------------------------------- ------------------------ American Depositary Shares each New York Stock Exchange representing 2 Ordinary Shares of 25 pence par value per share Ordinary Shares of 25 pence par value per share London Stock Exchange SBF - Paris Bourse New York Stock Exchange/1/ Securities 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 shares outstanding of each of the issuer's classes of capital or common stock, as of the close of the period covered by the annual report. Outstanding at Class December 31, 2001 - ---------------------------- ----------------- Ordinary Shares of 25 pence 784,146,829/2/ par value per share 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 [X] NO [_] Indicate by check mark which financial statement item the registrant has elected to follow. [ X ] Item 17 [_] Item 18 /1/ Listed not for trading but only in connection with the listing of American Depositary Shares pursuant to requirements of the Securities and Exchange Commission. The Ordinary Shares' primary trading market is the London Stock Exchange. /2/ Includes Ordinary Shares represented by outstanding American Depositary Shares. TABLE OF CONTENTS PART I ....................................................... 1 Cautionary Statements Concerning Forward-Looking Statements...... 1 Item 1. Identity of Directors, Senior Management and Advisers.. 1 Item 2. Offer Statistics and Expected Timetable................ 1 Item 3. Key Information........................................ 1 Selected Financial Data.............................. 1 Dividends............................................ 3 Market for Our Securities............................ 4 Exchange Rates....................................... 4 Financial Statements and Reports..................... 5 Risk Factors......................................... 5 Item 4. Information on the Company............................. 8 History and Development of AMVESCAP.................. 8 Business Overview.................................... 8 Operating Groups..................................... 10 Managed Products............................... 10 INVESCO Institutional.......................... 11 INVESCO Global................................. 12 INVESCO Retirement............................. 13 Private Wealth Management...................... 13 Our Business Strategy................................ 13 Globalization.................................. 14 Diverse Product Offerings...................... 14 Multiple Distribution Channels................. 14 Alignment of Interests of Employees and Shareholders................................. 14 Competition.......................................... 14 Management Contracts................................. 15 Government Regulations............................... 15 Our Organizational Structure......................... 16 Property............................................. 16 Item 5. Operating and Financial Review and Prospects........... 17 General.............................................. 17 Changes in Assets Under Management................... 18 Results of Operations................................ 19 2001 Compared to 2000................................ 20 Assets Under Management........................ 20 Operating Results.............................. 20 Managed Products............................... 21 INVESCO Institutional.......................... 21 INVESCO Global................................. 22 INVESCO Retirement............................. 23 Private Wealth Management...................... 23 New Business Expense........................... 23 Corporate...................................... 23 Other Income/Expense........................... 23 Taxation....................................... 24 2000 Compared to 1999................................ 24 Assets Under Management........................ 24 Operating Results.............................. 24 Managed Products............................... 25 INVESCO Institutional.......................... 25
i INVESCO Global................................. 25 INVESCO Retirement............................. 26 New Business................................... 26 Corporate...................................... 26 Other Income/Expense........................... 26 Taxation....................................... 26 Liquidity and Capital Resources...................... 26 Cash Flows..................................... 26 Borrowings..................................... 26 Capital Expenditures........................... 27 Dividends...................................... 27 Summary of Differences Between U.K. GAAP and U.S. GAAP...................................... 28 New Accounting Standards............................. 28 Item 6. Directors, Senior Management and Employees............. 28 Directors and Senior Management...................... 28 Compensation of Directors and Senior Management...... 33 Salary, Bonus and Other Benefits............... 33 Option Grants.................................. 34 Pension Rights................................. 34 AMVESCAP Global Stock Plan..................... 34 AMVESCAP Deferred Fees Share Plan.............. 35 INVESCO Employee Stock Ownership Plan.......... 35 AMVESCAP Executive Share Option Schemes........ 35 Board Practices...................................... 35 Employees............................................ 36 Share Ownership...................................... 37 Ownership of Ordinary Shares................... 37 Options to Purchase Securities from AMVESCAP... 38 Employee Ownership Opportunities............... 39 Item 7. Major Shareholders and Related Party Transactions...... 39 Major Shareholders................................... 40 Related Party Transactions........................... 40 Item 8. Financial Information.................................. 41 Consolidated Statements and Other Financial Information........................................ 41 Legal Proceedings.................................... 41 Dividend Distributions............................... 41 Significant Changes in Financial Information......... 41 Item 9. The Offer and Listing.................................. 41 Nature of Trading Market and Price History........... 41 Item 10. Additional Information................................. 42 Memorandum and Articles of Association............... 42 Directors...................................... 42 Rights attaching to our shares................. 43 Dividends and entitlement in the event of liquidation to any surplus................... 44 Material Contracts................................... 44 Exchange Controls.................................... 49 Taxation............................................. 49 Item 11. Quantitative and Qualitative Disclosures About Market Risk.......................................... 51 Item 12. Description of Securities Other than Equity Securities. 51 PART II ....................................................... 51 Item 13. Defaults, Dividend Arrearages and Delinquencies........ 52
ii Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds. ........................ 52 Item 15. [Reserved]............................................. 52 Item 16. [Reserved]............................................. 52 PART III ....................................................... 52 Item 17. Financial Statements................................... 52 Item 18. Financial Statements................................... 52 Item 19. Exhibits............................................... 52 SIGNATURES....................................................... 56
iii PART I Cautionary Statements Concerning Forward-Looking Statements We believe it is important to communicate our future expectations to our shareholders and to the public. This report includes, and documents incorporated by reference herein and public filings and oral and written statements by us and our management may include, statements that constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of our management and on information available to our management at the time such statements were made. Forward-looking statements include information concerning possible or assumed future results of our operations, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, assets under management, acquisition activities and the effect of completed acquisitions, debt levels and the ability to obtain additional financing or make payments on our debt, regulatory developments, demand for and pricing of our products and other aspects of our business, general economic conditions and statements that are preceded by, followed by, or include words such as "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "could," "should," "would" or similar expressions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. Many of the factors that will determine these results are beyond our ability to control or predict. We do not intend to review or revise any particular forward-looking statements made or incorporated by reference in this Form 20-F in light of future events, except as otherwise required by law. We caution investors not to rely unduly on any forward-looking statements. The following important factors, and important factors described elsewhere in this report or in other filings with the Securities and Exchange Commission, among others, could cause our results to differ from any results that we may project, forecast or estimate in any such forward-looking statements: (1) variations in demand for our investment products; (2) significant changes in net cash flows into or out of our business; (3) significant fluctuations in the performance of debt and equity markets worldwide; (4) the effect of political or social instability in the countries in which we invest or do business; (5) the effect of terrorist attacks in the countries in which we invest or do business and the escalation of hostilities that could result therefrom; (6) enactment of adverse state, federal or foreign legislation or changes in government policy or regulation (including accounting standards) affecting our operations; (7) adverse results in litigation; (8) exchange rate fluctuations; (9) the effect of economic conditions and interest rates on a U.K., U.S. or international basis; (10) our ability to compete in the investment management business; (11) the effect of consolidation in the investment management business; (12) limitations or restrictions on access to distribution channels for our products; (13) our ability to attract and retain key personnel; (14) the investment performance of our investment products and our ability to retain our accounts; (15) our ability to acquire and integrate other companies into our operations successfully and the extent to which we can realize anticipated cost savings and synergies from such acquisitions; and (16) the effect of system delays and interruptions on our operations. Item 1. Identity of Directors, Senior Management and Advisers Not applicable. Item 2. Offer Statistics and Expected Timetable Not applicable. Item 3. Key Information Selected Financial Data 1 SELECTED CONSOLIDATED FINANCIAL INFORMATION The following tables present selected consolidated financial information of AMVESCAP as of and for each of the five fiscal years ended December 31, 2001. The financial statement information as of and for each of the years in the five- year period ended December 31, 2001, has been derived from the Consolidated Financial Statements, which for each year in such five-year period have been audited by Arthur Andersen, independent auditors. The Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United Kingdom ("U.K. GAAP"), which differs in certain significant respects from generally accepted accounting principles in the United States ("U.S. GAAP"). For a discussion of the principal differences between U.K. GAAP and U.S. GAAP, see "Item 5. Operating and Financial Review and Prospects" and Note 23 to the Consolidated Financial Statements, below. The selected consolidated financial information should be read together with the Consolidated Financial Statements and related notes beginning on page F-1 of this Form 20-F and "Item 5. Operating and Financial Review and Prospects," below.
Year Ended December 31, (1) 2001 (2) 2001 2000 (3) 1999 (3) ------- ---- ------- ------- (In thousands, except per share data) Profit and Loss Data: Amounts in accordance with U.K. GAAP: Revenues..................................... $2,348,778 (Pounds)1,619,847 (Pounds)1,628,662 (Pounds)1,072,350 Operating profit before goodwill amortization and exceptional items.......... 758,872 523,360 588,911 352,713 Operating profit............................. 472,535 325,886 480,690 315,959 Profit before taxation....................... 406,635 280,438 446,233 283,042 Profit after taxation........................ 224,464 154,803 300,728 181,484 Earnings per share before goodwill amortization and exceptional items: Basic...................................... 41.2p 57.5p 34.1p Diluted.................................... 40.0p 54.7p 32.7p Earnings per share: Basic...................................... 19.2p 44.4p 28.4p Diluted.................................... 18.6p 42.3p 27.2p Approximate amounts in accordance with U.S. GAAP: Net income................................... 116,320 80,221 180,710 88,034 Earnings per share before goodwill amortization: Basic...................................... 34.8p 44.6p 29.2p Diluted.................................... 33.8p 42.6p 28.0p Earnings per share: Basic...................................... 10.0p 26.7p 13.8p Diluted.................................... 9.7p 25.7p 13.2p 1998 (3) 1997 (3) ------- ------- Profit and Loss Data: Amounts in accordance with U.K. GAAP: Revenues..................................... (Pounds)802,172 (Pounds)530,659 Operating profit before goodwill amortization and exceptional items.......... 257,316 186,086 Operating profit............................. 187,495 186,086 Profit before taxation....................... 161,478 177,293 Profit after taxation........................ 99,848 118,203 Earnings per share before goodwill amortization and exceptional items: Basic...................................... 26.9p 22.9p Diluted.................................... 25.2p 21.0p Earnings per share: Basic...................................... 16.6p 22.9p Diluted.................................... 15.6p 21.0p Approximate amounts in accordance with U.S. GAAP: Net income................................... 44,251 68,953 Earnings per share before goodwill amortization: Basic...................................... 20.8p 22.0p Diluted.................................... 19.5p 20.2p Earnings per share: Basic...................................... 7.4p 13.4p Diluted.................................... 7.0p 12.4p
As of December 31, (1) 2001 (2) 2001 2000 (3) 1999 (3) ------- ---- ------- ------- (In thousands) Balance Sheet Data: Amounts in accordance with U.K. GAAP: Net current assets, excluding banking and insurance activities........................ $ 209,758 (Pounds) 144,661 (Pounds) 350,566 (Pounds) 212,643 Goodwill..................................... 3,905,806 2,693,659 2,373,060 661,432 Total assets................................. 5,711,003 3,938,623 3,907,147 1,649,692 Current maturities of debt................... 182,451 125,828 6,839 -- Long-term debt, excluding current maturities.................................. 1,224,213 844,285 960,023 659,120 Capital and reserves......................... 3,308,123 2,281,464 2,130,001 451,384 Approximate capital and reserves in accordance with U.S. GAAP.................... 4,512,446 3,112,031 3,018,621 1,337,312 1998 (3) 1997 (3) ------- ------- Balance Sheet Data: Amounts in accordance with U.K. GAAP: Net current assets, excluding banking and insurance activities........................ (Pounds) 119,534 (Pounds) 88,520 Goodwill..................................... 711,795 --- Total assets................................. 1,427,107 428,610 Current maturities of debt................... 7,195 25,991 Long-term debt, excluding current maturities.................................. 686,010 203,598 Capital and reserves......................... 345,241 (12,934) Approximate capital and reserves in accordance with U.S. GAAP.................... 1,255,106 996,362
2
Year Ended December 31, (1) 2001 (2) 2001 2000 1999 -------- ------- ------- ------- (In thousands) Other Data: Amounts in accordance with U.K. GAAP: Cash provided by operations.................. $770,701 (Pounds)531,518 (Pounds)585,211 (Pounds)358,375 EBITDA (4)................................... 874,956 603,418 659,665 431,063 Amounts in accordance with U.S. GAAP: Approximate EBITDA (4)....................... 877,124 604,913 662,422 414,634 Dividends per share (pence)................... 11 10 9 1998 1997 ---- ---- Other Data: Amounts in accordance with U.K. GAAP: Cash provided by operations.................. (Pounds)134,466 (Pounds)234,000 EBITDA (4)................................... 309,459 218,689 Amounts in accordance with U.S. GAAP: Approximate EBITDA (4)....................... 281,112 214,625 Dividends per share (pence)................... 8 7
As of December 31, (1) --------------------------------------- 2001 2000 1999 1998 1997 ---- ---- ---- ---- ---- (In billions) Total assets under management................. $397.9 $402.6 $357.4 $275.4 $192.2
- ---------------- (1) Includes the results of operations attributable to acquired businesses from the respective dates of purchase. See "Item 5: Operating and Financial Review and Prospects" and Note 2 to our Consolidated Financial Statements, below. (2) For the convenience of the reader, we have translated pounds sterling as of and for the fiscal year ended December 31, 2001 into U.S. dollars using the noon buying rate on December 31, 2001 of $1.45 per (Pounds)1.00. We did not use noon buying rates in the preparation of our Consolidated Financial Statements. The rates that we used in the preparation of our Consolidated Financial Statements for the fiscal year ended December 31, 2001 were $1.43 per (Pounds)1.00 for profit and loss statement items, which was the average prevailing exchange rate during the year, and $1.45 per (Pounds)1.00 for balance sheet items, which was the rate prevailing at December 31, 2001. For a discussion of the effects of currency fluctuations on our combined results of operations and combined financial position, see "Risk Factors" and "Item 5: Operating and Financial Review and Prospects," below. (3) Restated for the impact of adopting FRS 19, "Deferred Tax." The U.K. Accounting Standards Board issued FRS 19, which requires companies to change their method of computing deferred taxes. We adopted this new statement in 2001, including a restatement of prior years' profit and loss account and balance sheet. (4) EBITDA consists of earnings before taxation and exceptional item and excluding interest expense, depreciation and amortization charges. EBITDA is presented because we believe that EBITDA may be useful to investors as an indicator of funds available to us, which may be used to pay dividends, to service debt, to make capital expenditures and for working capital purposes. EBITDA should not be construed as an alternative to operating profit (as determined in accordance with U.K. GAAP or U.S. GAAP) as an indicator of our operating performance, cash flows from operating activities (as determined in accordance with U.K. GAAP or U.S. GAAP) as a measure of liquidity, or any other measure of operating performance determined in accordance with U.K. GAAP or U.S. GAAP. Our calculation of EBITDA may not be comparable to similarly titled measures presented by other companies. Dividends Our practice has been to pay an interim dividend and a final dividend in respect of each fiscal year. The interim dividend is generally payable in October of each year by resolution of our Board of Directors, and the final dividend is payable after approval of our financial statements and such dividend by our shareholders at the Annual General Meeting in the year following the fiscal year to which it relates. The declaration, payment and amount of any future dividends will be declared or recommended by our Board of Directors and will depend upon, among other factors, our earnings, financial condition and capital requirements at the time such declaration and payment are considered. See "Item 10. Additional Information," below, for further discussion of our dividend policy and taxes applicable to dividends. See "Item 5. Operating and Financial Review and Prospects," and Note 16 to our Consolidated Financial Statements, below, for a discussion of restrictions on our ability to declare dividends. 3 The following table sets forth the interim, final and total dividends paid per Ordinary Share in respect of each year indicated, translated into U.S. cents per American Depositary Share:
Year Ended U.S. Cents per American December 31, Pence per Ordinary Share Depositary Share(1) ---------------------- ------------------------------------ ------------------------------------------ Interim Final Total Interim Final Total ------- ----- ----- ------- ----- ----- 1997 2.50 4.50 7.00 8.08 14.74 22.82 1998 3.00 5.00 8.00 10.11 15.69 25.79 1999 3.50 5.50 9.00 11.55 17.17 28.72 2000 4.00 6.00 10.00 11.55 17.19 28.74 2001 4.50 6.50/(2)/ 11.00/(2)/ 13.32 /(3)/ /(3)/
________________________ (1) Based on Noon Buying Rates, which are the noon buying rates in the City of New York for cable transfers in pounds sterling as certified for customs purposes by the Federal Reserve Bank of New York on the dates specified, in effect at the respective payment dates, and adjusted to reflect the one-for-two adjustment to the Ordinary Share per American Depositary Share ratio in April 1998, and the change in the Ordinary Share per American Depositary Share ratio from five-for-one to two-for-one on November 8, 2000. (2) Subject to approval of the final dividend by the shareholders at the Annual General Meeting to be held in April 2002. (3) If approved, the final dividend will be paid on May 2, 2002. Therefore, no currency translation can yet be made. Market for Our Securities Our Ordinary Shares are listed for trading on the London Stock Exchange and SBF -- Paris Bourse. Our Ordinary Shares also trade under the symbol "AVZ" on the Frankfurt Stock Exchange. Our American Depositary Shares are listed for trading on the New York Stock Exchange under the symbol "AVZ." Each of our American Depositary Shares represents two Ordinary Shares or the right to receive two Ordinary Shares deposited with the Depositary. The Depositary issues American Depositary Receipts, which may represent any number of American Depositary Shares. We also have Exchangeable Shares and Equity Subordinated Debentures, both of which were issued by one of our subsidiaries and are listed for trading on The Toronto Stock Exchange. Voting rights of holders of Exchangeable Shares and descriptions of Exchangeable Shares and Equity Subordinated Debentures are set forth in "Item 10. Additional Information-- Memorandum and Articles of Association--Rights attaching to our shares" and "Item 10. Additional Information--Material Contracts," below. Our 6.375% Senior Exchange Notes due 2003 and our 6.600% Senior Exchange Notes due 2005 are listed on the Luxembourg Stock Exchange. We have applied to list our 5.90% Senior Notes due 2007 on the Luxembourg Stock Exchange. Exchange Rates We publish our consolidated financial statements in pounds sterling. References in this report to "U.S. dollars," "$" or "cents" are to United States currency and references to "pounds sterling," "(Pounds)," "pence" or "p" are to United Kingdom currency. A discussion of the effects of currency translations and fluctuations on our results is contained in "Risk Factors" and "Item 5. Operating and Financial Review and Prospects," below. Cash dividends on Ordinary Shares are declared and paid in pounds sterling but are paid at a date subsequent to their declaration. Therefore, holders of our American Depositary Shares, each representing two of our Ordinary Shares, are exposed to currency fluctuations from the date of declaration of the dividend to the date when the pounds sterling are converted to U.S. dollars by The Bank of New York (the "Depositary") for distribution to holders of American Depositary Shares. Additionally, currency fluctuations will affect the U.S. dollar equivalent of the pounds sterling price of our Ordinary Shares on the London Stock Exchange and, as a result, are likely to affect the market price of the American Depositary Shares on the New York Stock Exchange. The following tables set forth, for the periods and dates indicated, certain information concerning the Noon Buying Rate for pounds sterling expressed in U.S. dollars per (Pounds)1.00. On March 31, 2002, the Noon Buying Rate was $1.43 per (Pounds)1.00. These translations are not representations that the 4 pounds sterling amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated or at any other rate. We do not use such rates in the preparation of our Consolidated Financial Statements. EXCHANGE RATES Year ended December 31, Year end Average/(1)/ High Low ----------------------- -------- ------------ ---- --- 1997 1.65 1.64 1.71 1.58 1998 1.66 1.66 1.71 1.61 1999 1.62 1.62 1.68 1.55 2000 1.49 1.51 1.65 1.40 2001 1.45 1.44 1.50 1.37 ______________ (1) The average of the exchange rates on the last trading day of each month during the relevant period. Month High Low ----- ---- --- March 2002 1.43 1.41 February 2002 1.43 1.41 January 2002 1.45 1.41 December 2001 1.46 1.42 November 2001 1.47 1.41 October 2001 1.48 1.42 Financial Statements and Reports This report contains our consolidated balance sheets as of December 31, 2001 and 2000 and statements of profit and loss, total recognized gains and losses, shareholders' funds and cash flows for the years ended December 31, 2001, 2000 and 1999. The Consolidated Financial Statements and other financial information concerning us included in this Form 20-F and in our annual and semi- annual reports are presented in conformity with U.K. GAAP. U.K. GAAP as applied to us differs in certain important respects from U.S. GAAP. A description of the principal differences between U.K. GAAP and U.S. GAAP and a reconciliation to U.S. GAAP net income and shareholders' equity are contained in the notes to the Consolidated Financial Statements. We furnish the Depositary with annual reports containing a review of operations, audited consolidated financial statements prepared in accordance with U.K. GAAP and an opinion on the Consolidated Financial Statements by our independent auditors. We also furnish the Depositary with semi-annual reports containing unaudited interim condensed consolidated financial information prepared in accordance with U.K. GAAP. The Depositary arranges for the mailing of our reports to all record holders of American Depositary Shares. In addition, we furnish the Depositary with copies of all notices of shareholders' meetings and other reports and communications that are distributed generally to our shareholders, and the Depositary arranges for the mailing of such notices, reports and communications to all record holders of American Depositary Shares. We currently are exempt from the rules under the Securities Exchange Act of 1934, as amended, prescribing the form and content of proxy statements. The financial information concerning us contained in this Form 20-F does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985 (as amended) of Great Britain. Statutory accounts of our company in respect of the financial years ended December 31, 2001, 2000 and 1999 have been delivered to the Registrar of Companies of England and Wales. In respect of each of those statutory accounts, our auditors, Arthur Andersen, have given reports which were unqualified and did not contain a statement under Section 237(2)-(3) of the Companies Act. Risk Factors Adverse changes in market conditions and investment performance could result in a reduction in the assets under our management and the shift of client investments toward lower fee accounts, which would reduce the investment management fees we earn. We derive substantially all of our revenues from investment management contracts with clients. Under these contracts, the investment management fee paid to us is typically based on the 5 market value from time to time of assets under management. Accordingly, fluctuations in the prices of securities may have a material effect on our consolidated revenues and profitability. Fees vary with the type of assets being managed, with higher fees earned on actively managed equity and balanced accounts and lower fees earned on fixed income and stable return accounts. Therefore, our revenues may decline if client investments shift to these lower fee accounts. Investment management contracts are generally terminable upon 30 or fewer days' notice. Mutual fund and unit trust investors may generally withdraw their funds at any time without prior notice. Institutional clients may elect to terminate their relationships with us or reduce the aggregate amount of assets under management, and individual clients may elect to close their accounts or redeem their shares in our mutual funds or shift their funds to other types of accounts with different rate structures for any of a number of reasons, including investment performance, changes in prevailing interest rates and financial market performance. The loss of a significant number of our clients would adversely affect our revenues and profitability. Poor performance relative to other investment management firms tends to result in decreased sales, increased redemptions of fund shares, and the loss of private institutional or individual accounts, with corresponding decreased revenues to us. Failure of our funds to perform well could, therefore, have a material adverse effect on us. The world economy experienced a marked slowdown in 2001 and the first quarter of 2002 that significantly and adversely affected stock prices generally. A continuation or worsening of the current economic slowdown, regardless of the causes, could adversely impact our investment management fees and results of operations, as well as our ability to raise capital and to continue to grow our business. Our investment management professionals are a vital part of our ability to attract and retain clients, and the loss of a significant portion of those professionals could result in a reduction of our revenues and profitability. Retaining key personnel is important to our ability to attract and retain clients and retail shareholder accounts. The market for investment management professionals is competitive and has grown more so in recent periods as the volatility of the markets has increased and the investment management industry has experienced growth. Our policy has been to provide our investment management professionals with compensation and benefits that we believe to be competitive with other leading investment management firms. However, there can be no assurance that we will be successful in retaining our key personnel, and the loss of a significant portion, either in quality or quantity, of our investment management personnel could reduce the attractiveness of our products to potential and current clients and could, therefore, have a material adverse effect on our revenues and profitability. Competitive pressures may force us to reduce the fees we charge to clients, increase commissions paid to our financial intermediaries or provide more support to those intermediaries, all of which could reduce our profitability. The investment management business is highly competitive, with competition based on a variety of factors, including investment performance, the range of products offered, brand recognition, business reputation, financing strength, the strength and continuity of institutional management and producer relationships, quality of service, the level of fees charged for services and the level of compensation paid and distribution support offered to financial intermediaries. We and our business units compete in every market in which we operate with a large number of investment management firms, commercial banks, investment banks, broker-dealers, insurance companies and other financial institutions. Some of these institutions have greater capital and other resources, and offer more comprehensive lines of products and services, than we do. The recent trend toward consolidation within the investment management industry has served to increase the strength of a number of our competitors. These strengthened competitors seek to expand their market share in many of the products and services we offer. 6 In addition, there are relatively few barriers to entry by new investment management firms, and the successful efforts of new entrants into our various lines of business around the world, including major banks, insurance companies and other financial institutions, also have resulted in increased competition. Finally, the independent financial intermediaries who distribute certain of our products also distribute numerous competing products, including products sponsored by the firms that employ those financial intermediaries. We operate in a highly regulated industry, and any changes in the regulations governing our business could, for example, reduce the number and types of products we can offer or the management fees we can charge our clients, either of which would decrease our revenues and profitability. As with all investment management companies, our operating groups are heavily regulated in almost all countries in which they conduct business. Laws and regulations applied at the national, state or provincial and local level generally grant governmental agencies and industry self-regulatory authorities broad administrative discretion over our activities and the activities of our business units, including the power to limit or restrict business activities. Possible sanctions include the revocation of licenses to operate certain businesses, the suspension or expulsion from a particular jurisdiction or market of any of our business organizations or their key personnel, and the imposition of fines and censures on our employees or us. It is also possible that laws and regulations governing our operations or particular investment products could be amended or interpreted in a manner that is adverse to us. To the extent that existing regulations are amended or future regulations are adopted that affect the sale or increase the redemptions of our products and services or the investment performance of our products, our aggregate assets under management and our revenues could be adversely affected. Our substantial indebtedness could adversely affect our financial position. We have a significant amount of indebtedness. As of December 31, 2001, we had outstanding total debt of (Pounds)970.1 million, net debt of (Pounds)837.6 million and shareholders' funds of (Pounds)2.3 billion. The significant amount of indebtedness we carry could limit our ability to obtain additional financing, if needed, for working capital, capital expenditures, acquisitions, debt service requirements or other purposes, increase our vulnerability to adverse economic and industry conditions, limit our flexibility in planning for, or reacting to, charges in our business or industry, and place us at a competitive disadvantage compared to our competitors that have less debt. Any or all of the above factors could materially adversely affect our financial position. Technology and operating risks could adversely impact our operations. We are dependent on the integrity of our technology, operating systems and premises. Although we have disaster recovery plans in place, we may experience system delays and interruptions as a result of natural disasters, power failures, acts of war, and third party failures, any one or all of which could negatively impact our operations. Since a large part of our operations are denominated in U.S. dollars while our financial results are reported in U.K. pounds sterling, changes in the U.S. dollar to U.K. pounds sterling exchange rate may affect our reported financial results from one period to the next. The majority of our net assets, revenues and expenses, as well as our assets under management, are presently derived from the United States, where the functional currency is the U.S. dollar, while our financial statements are reported in U.K. pounds sterling. As a result, fluctuations in the U.S. dollar to U.K. pounds sterling exchange rate may affect our reported financial results from one period to the next. We do not manage actively our exposure to such effects. Consequently, changes in the U.S. dollar to the U.K. pounds sterling exchange rate could have a material positive or negative impact on our reported financial results. 7 Holders of our American Depositary Shares are exposed to currency fluctuations that will affect the market price of their shares and the amount of cash dividends they will receive. Currency fluctuations will affect the U.S. dollar equivalent of the U.K. pounds sterling price of the Ordinary Shares on the London Stock Exchange and, as a result, are likely to affect the market price of the American Depositary Shares on the New York Stock Exchange. Cash dividends are declared and paid in U.K. pounds sterling but are paid at a date subsequent to their declaration. Therefore, holders of American Depositary Shares are exposed to currency fluctuations from the date of declaration of the dividend to the date when the U.K. pounds sterling are converted to U.S. dollars by the Depositary for distribution to holders of American Depositary Shares. The daily trading volume of our American Depositary Shares on the New York Stock Exchange is limited, which may adversely impact the ability to buy and sell our American Depositary Shares and the trading price of those shares. Although the American Depositary Shares trade on the New York Stock Exchange, the daily trading volume is limited. Our Ordinary Shares are not listed on the New York Stock Exchange, and there is no trading market for the Ordinary Shares in the United States. Item 4. Information on the Company History and Development of AMVESCAP We were incorporated as a U.K. company on December 19, 1935 under the laws of England. Our principal executive offices are located in leased office space at 11 Devonshire Square, London, EC2M 4YR, England, and our telephone number is 011-44-207-626-3434. We have a home page on the Internet at www.amvescap.com. Information contained in our home page shall not be deemed to be part of this Form 20-F. During 2001, we completed the following acquisitions: the January 2001 acquisition of County Investment Management Limited ("County"), the April 2001 acquisition of National Asset Management Corporation ("NAM"), the August 2001 acquisition of Grand Pacific Securities Investment Trust Co., Ltd. ("Grand Pacific"), the August 2001 acquisition of G.N. Parkes and Company Limited ("Parkes"), and the August 2001 acquisition of Pell Rudman & Co., Inc. and Rothschild/Pell Rudman, Inc. (collectively, "Pell Rudman"). Pell Rudman was acquired in connection with the formation of our Private Wealth Management operating group. During the fiscal years ended December 31, 2001, 2000 and 1999, our capital expenditures were (Pounds)79.2 million, (Pounds)62.5 million and (Pounds)57.3 million, respectively. These expenditures related in each year to technology initiatives, including new platforms from which we maintain our portfolio management systems and fund tracking systems, improvements in computer hardware and software desktop products for employees, new telecommunications products to enhance our internal information flow, and back-up disaster recovery systems. Also, in each year, a portion of these costs was related to leasehold improvements made to the various buildings and workspaces used in our offices. In 2001, capital expenditures also included costs incurred to relocate to new facilities in Denver, Colorado. Since December 31, 2001, our capital projects have included continuing technological enhancements to computer hardware and software. These projects have been funded with proceeds from our operating cash flows. During the fiscal years ended December 31, 2001, 2000 and 1999, and since December 31, 2001, our capital divestitures were not significant relative to our total fixed assets. Business Overview We are one of the world's largest independent investment management groups, with $397.9 billion of assets under management at December 31, 2001. We provide our clients with a broad array of domestic, foreign and global investment products, focused primarily on investment management. We 8 have a significant presence in the institutional and retail segments of the investment management industry in North America, Europe and Asia. We operate through various subsidiaries and divisions throughout the world. We are committed to managing assets regionally and believe that our local investment managers provide us with a competitive advantage. We have a team of approximately 900 investment professionals located around the world. In addition, we offer multiple investment styles for the various investment objectives and asset classes of the products we offer. Our products include equity, balanced, fixed income, money market and real estate investment portfolios. Approximately 58% of our assets under management as of December 31, 2001 were invested in equities, and approximately 42% were invested in fixed income securities. We use several methods to distribute our products to retail and institutional clients in each of our markets. In North America, we offer load and no-load mutual funds, separate account management and "wrap" accounts. "Wrap" accounts offer individuals and smaller institutions comprehensive investment management services under a single-fee structure covering substantially all charges, including investment management, brokerage, custody, record keeping and reporting. Outside of North America, we offer unit trusts and other European and Asian mutual funds, as well as private account management for retail and institutional investors. Our retail and institutional clients are located in more than 100 countries. Our business units work together to provide products and services to our clients. A variety of advisory and sub-advisory arrangements allow business units to access specific areas of investment management expertise located elsewhere within our company. We believe that our ability to develop and distribute products across businesses via multiple delivery channels allows us to offer our clients a broader range of products and services than most of our competitors. We have organized our operations with a view to maximizing the benefits of a local presence while exploiting the synergies of a global organization. We are organized into five operating groups: Managed Products which manages and distributes: (i) the AIM family of 87 load mutual funds in the United States, (ii) the INVESCO family of 46 load and no-load mutual funds in the United States, and (iii) the AIM/Trimark family of 85 load mutual funds in Canada; INVESCO Institutional which manages portfolios for institutional investors in the United States and provides services through wrap accounts; INVESCO Global which conducts our operations outside North America, including retail and institutional investment management and related marketing activities primarily in Europe and Asia; INVESCO Retirement which distributes our investment management products by developing, marketing, managing and providing administrative and related services to defined contribution plans, such as 401(k) plans, and related retirement products throughout the world; and Private Wealth Management which provides wealth management services to high net worth individuals and their families. Selected financial and headcount information for each of our operating groups as of and for the year ended December 31, 2001 is set forth below. See Note 4 to our Consolidated Financial Statements, below, for a geographical analysis of our total revenues for the fiscal years ended December 9 31, 2001, 2000 and 1999. See "Item 5: Operating and Financial Review and Prospects," below, for total revenues by operating group for the fiscal years ended December 31, 2000 and 1999.
AMVESCAP OPERATING STRUCTURE (as of and for the year ended December 31, 2001) - -------------------------------------------------------------------------------------------------------------------------------- Managed INVESCO INVESCO INVESCO Private Products Institutional Global Retirement Wealth --------------- ---------------- -------------- --------------- ------------- Revenues (Pounds)986.2m (Pounds)211.9m (Pounds)340.3m (Pounds)58.2m (Pounds)21.2m Operating Profit Before Goodwill (Pounds)436.5m (Pounds)53.6m (Pounds)76.4m (Pounds)5.0m (Pounds)1.2m Amortization and Exceptional Items Assets Under Management $211.2b $116.8b $60.0b $34.6b* $9.9b Headcount 4,346 868 2,334 561 252 - --------------------------------------------------------------------------------------------------------------------------------
* INVESCO Retirement had $34.6 billion in assets under administration as of December 31, 2001, compared to $27.6 billion as of December 31, 2000, of which 65% and 82% were invested in our products in 2001 and 2000, respectively. Operating Groups Managed Products Managed Products manages and distributes mutual funds and related products sold to retail and institutional investors primarily within North America. Managed Products consists of three business units: (i) AIM, (ii) INVESCO Funds Group, Inc. ("INVESCO Funds Group") and (iii) AIM Funds Management Inc., a Canadian business unit ("AIM Canada"). These business units offer mutual funds invested in the U.S. and international markets, including funds that target particular market sectors. Each of the three business units of Managed Products offers equity, balanced, fixed income and money market funds. The investment strategies used by the business units of Managed Products range from aggressive growth to capital appreciation to a combination of growth and income to fixed income. The products offered by each of these business units are described below.
INVESCO AIM Funds Group AIM Canada ---------------------------- ---------------------------- ------------------------------- Products 87 retail mutual fund 46 retail mutual fund 85 retail mutual fund portfolios portfolios portfolios Stock selection process Bottom-up stock selection Bottom-up stock selection Investment managers use a approach approach bottom-up stock selection approach; other units of AMVESCAP serve as advisors for certain AIM Canada funds and use varied approaches Primary sales channel Load funds sold through Load and no-load funds sold Load funds sold through financial intermediaries directly to investors and financial intermediaries through financial intermediaries and selected third-party networks*
10
INVESCO AIM Funds Group AIM Canada ---------------------------- ---------------------------- ------------------------------- Brand name AIM INVESCO AIM/Trimark
______________ * Effective April 1, 2002, most new investors only will be able to acquire classes of fund shares that carry sales loads. AIM is the largest business unit in Managed Products. AIM's bottom-up approach toward equity investing centers on the concept that stock prices eventually follow earnings, and companies with superior earnings provide significantly higher returns than companies without such earnings. AIM also provides advisory services to mutual funds managed by companies unaffiliated with us. In addition, AIM offers funds specially designed for separate insurance company accounts. Customers of AIM's money market funds included eight of the ten largest U.S. banks and 20 of the 25 largest U.S. banks in terms of asset size on June 30, 2001. As investors have sought safety, liquidity and yield during recent periods of market volatility, assets in AIM's money market funds have increased significantly. AIM also has developed a private account business, which tailors individual, privately managed portfolios to clients' investment needs. INVESCO Funds Group's equity staff uses a bottom-up, fundamental investment approach to find the most promising growth companies. INVESCO Funds Group looks for growth stocks of companies that are leaders in high growth industries and that have experienced strong returns and cash flow. INVESCO Funds Group traditionally has distributed no-load funds directly to the public and through 401(k) plans. In response to an increase in investor interest in working with financial advisors, INVESCO Funds Group established an infrastructure dedicated to distributing its funds exclusively through financial intermediaries. This new distribution channel will be implemented for new investors effective April 1, 2002. AIM Canada's investment managers employ a bottom-up stock selection approach. The managers consider themselves "business people buying businesses." The managers evaluate company management, the competitive position of the company within the industry and any proprietary advantage the company possesses. Some of the AIM funds and INVESCO funds are sub-advised by our other business units that have expertise in the specific markets in which such funds are invested. AIM and INVESCO Funds Group also provide advisory services to certain AIM Canada funds and to mutual funds managed by other business units of ours. We believe that this structure allows our business units to combine the economies and quality control made possible by centralized professional management with the diversity of investment management style and depth of expertise made possible through an integrated global network of investment advisers. INVESCO Institutional INVESCO Institutional manages portfolios of equity, balanced, fixed income, real estate and private capital investments for institutional clients and provides services through wrap accounts. INVESCO Institutional's clients include: . corporate pension plans; . public and municipal pension plans; . Taft/Hartley pension plans; . insurance companies and banks; and . non-profit organizations. 11 The following table highlights the risk profiles of and potential returns on certain investments selected by INVESCO Institutional for its clients: Risk Private Global Capital Traditional Structured Equity Equity/(1)/ Fixed Real Estate Balanced Income Return Potential - ----------------- (1) Structured equity products consist of investments selected to meet clients' return and risk objectives through various quantitative techniques and asset allocation models. INVESCO Institutional also provides advisory or sub-advisory services to funds offered by our other business units. INVESCO Institutional employs growth, value-oriented and quantitative approaches to select securities for equity portfolios. The group uses quantitative and value approaches to select securities for fixed income portfolios. INVESCO Institutional customizes its product offerings and stock selection approaches to meet the varied investment objectives of our diverse client base. INVESCO Institutional products and services are marketed by a team of marketers organized by client type. INVESCO Global INVESCO Global comprises our operations outside North America, including retail and institutional investment management and related marketing activities primarily in the U.K., Continental Europe and Asia. We believe that investing in many of the world's financial markets is one of our strengths. INVESCO Global both coordinates the construction of global portfolios and markets our global investment management services. INVESCO Global tailors its marketing strategy to respond to the relevant competitive environment in each country or region. Units of INVESCO Global market investment products through independent brokers, alliances with major financial organizations and direct sales to institutional investors buying for their own accounts. INVESCO Global serves institutional and individual investors primarily in the U.K., Continental Europe and Asia. INVESCO Global operates through 21 offices located around the world. INVESCO Global's main investment offices are located in the following cities: . London . Frankfurt . Melbourne . Henley-on-Thames . Tokyo . Taipei . Paris . Hong Kong 12 INVESCO Global provides various services, including management, distribution, administration and shareholder support services, to the following types of clients: . unit trusts and other mutual funds, including offshore mutual funds; . investment trusts (closed-end investment companies); . personal equity plans and individual savings accounts (tax-advantaged plans invested in managed investment products for U.K. citizens); . institutional separate accounts with assets invested in Europe, emerging markets and global fixed income securities; and . European and international private investors. INVESCO Global business units also provide advisory or sub-advisory services to investment products offered by other of our business units. INVESCO Retirement INVESCO Retirement gathers investment assets for us by developing, marketing, managing and providing administrative and related services to defined contribution plans, such as 401(k) plans, and related retirement products throughout the world. INVESCO Retirement provides a full range of services to various retirement accounts, focusing on accounts invested in our investment products. Services provided include custodian, record keeping, administration, compliance, and client employee education and communication services. INVESCO Retirement sells its services on a full service basis and markets our investment products and services to clients who receive administration services from other providers. One unit of INVESCO Retirement is a U.S. national trust bank that provides custody and trust services to retirement accounts, including offering collective trust funds sub-advised by other of our business units. INVESCO Retirement also includes a unit that focuses on capturing IRA rollovers, a unit that markets and supports our participation in international defined contribution pension markets, and a unit that develops strategic partnerships with other service providers. Our retirement services are distributed through four primary channels: . a direct sales force calling on plan sponsors and consultants; . alliances with other service providers that deliver our investment products to their service accounts; . broker-dealer distribution channels; and . strategic partnerships with other service providers. Private Wealth Management Our Private Wealth Management division was formed in 2001 in connection with our acquisition of Pell Rudman and now operates under the brand name of Atlantic Trust Private Wealth Management. The Private Wealth Management division provides personalized and sophisticated wealth management services to high net worth individuals and their families as well as asset management services to foundations and endowments. The division also provides various investment management services to its clients, including investment management, asset allocation, trust services, custody and family officer services. It primarily obtains clients through referrals from existing clients and a network of attorneys and accountants. Our Business Strategy We have developed a strategy based on elements which we believe are essential to maintain a significant presence in the global asset management industry - globalization, diverse product offerings 13 and multiple distribution channels. In addition, we believe that an experienced staff of professional employees whose interests are aligned with shareholders is a key factor in our ability to implement our goals. Globalization We believe that the investment management industry will continue to become more global in scope, and that large investment management companies that can locally manage investments for clients in different international markets will be in the strongest position to compete successfully. We have established offices with investment and client service professionals in each of the major world capital markets. We intend to continue to expand our global operations to take advantage of geographic markets where we believe the investment management business has the potential for substantial growth. For example, in 2001 we acquired asset management businesses in Australia and Taiwan as a result of our acquisitions of County and Grand Pacific, respectively. Diverse Product Offerings We believe that our ability to offer a full range of retail and institutional investment products managed locally in a wide variety of investment styles enhances our opportunities for attracting new clients and cross-selling our products to existing clients. Each of our business units markets the products and services offered by our other business units to its local and regional clients to enhance the range of investment management products and services offered to our clients. Our broad product line includes a large and varied number of equity products. Our strategy is to seek to capitalize further on this shift as the demand for equity products continues to increase around the world. We seek to complement our existing product offerings through both internal development and acquisition of new investment products and our expansion into new countries. Multiple Distribution Channels Our extensive distribution network enables us to market our products to retail and institutional clients in more than 100 countries throughout the world. We sell our products directly to investors through 60 offices in 22 countries. We also maintain an extensive distribution network through strategic relationships with a variety of financial intermediaries, including major wire houses, regional broker-dealers, banks and financial planners in North America, and independent brokers and financial advisors, banks and financial organizations in Europe and Asia. We seek to sell our products through available distribution channels and to expand our existing distribution network. Alignment of Interests of Employees and Shareholders We view our experienced management team as a key factor in our growth. Although we are a sizable public company, our management philosophy is entrepreneurial and decentralized, with senior professionals having significant responsibility and autonomy. We believe that our structure allows each operating group to focus on and maximize local investment opportunities, compete more effectively in sales and marketing efforts and operate more efficiently. We also believe that stock ownership by management and other employees is an important means of aligning their interests with those of our shareholders. We have implemented various employee benefit plans to facilitate stock ownership by management and employees. Competition The investment management business is highly competitive, with competition based on a variety of factors, including investment performance, the range of products offered, brand recognition, business reputation, financial strength, the strength and continuity of institutional, management and producer relationships, quality of service, the level of fees charged for services, and the level of commissions and other compensation paid, and distribution support offered, to financial intermediaries. 14 We compete with a large number of investment management firms, commercial banks, investment banks, broker-dealers, insurance companies and other financial institutions. Many of these institutions have greater capital and other resources, and offer more comprehensive lines of products and services, than we do. Competition in the investment management industry has increased as a result of the recent trend toward consolidation. We believe that our multiple channels of distribution enable us to compete effectively in the investment management business. We also believe that, over time, institutional investors will seek to reduce the number of specialist firms managing their assets and that larger firms, with the ability to manage funds in a number of different management styles and in a number of different markets, will have a competitive advantage. We believe that we are well positioned to capitalize on this development. Management Contracts We derive substantially all of our revenues from investment management contracts with clients. Fees vary with the type of assets being managed, with higher fees earned on actively managed equity and balanced accounts and lower fees earned on fixed income and stable return accounts. In addition, investment management contracts are generally terminable upon 30 or fewer days' notice. Mutual fund and unit trust investors generally may withdraw their funds at any time without prior notice. Institutional clients may elect to terminate their relationship with us or reduce the aggregate amount of assets under management, and individual clients may elect to close their accounts or redeem their shares in our mutual funds, or shift their funds to other types of accounts with different rate structures, for any of a number of reasons, including investment performance, changes in prevailing interest rates and financial market performance. Government Regulations As with all investment management companies, our operations and investment products are heavily regulated in almost all countries in which our business units conduct business. Laws and regulations applied at the national, state or provincial and local level generally grant government agencies and industry self-regulatory authorities broad administrative discretion over the activities of our business units, including the power to limit or restrict business activities. Possible sanctions include the revocation of licenses to operate certain businesses, the suspension or expulsion from a particular jurisdiction or market of any of our business organizations or their key personnel, and the imposition of fines and censures on our employees or us. It is also possible that laws and regulations governing our operations or particular investment products could be amended or interpreted in a manner that is adverse to us. We conduct substantial business operations in the U.S. Various of our subsidiaries and/or products and services offered by such subsidiaries are regulated in the U.S. by the U.S. Securities and Exchange Commission, the National Association of Securities Dealers, the National Futures Association, the Commodity Futures Trading Commission and the Office of the Comptroller of the Currency. Federal statutes that regulate the products and services offered by us in the U.S. include the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940 and the Employee Retirement Income Security Act of 1974. Various of our business units are regulated in the United Kingdom by the Financial Services Authority. Our operations elsewhere in the world are regulated by similar regulatory organizations. Our principal German and Austrian operations are required by regulations promulgated by the German Federal Securities Supervisory Office and the Austrian Securities Authority, respectively, to have a banking license and thus are also subject to banking regulations. Other regulators who potentially exert a significant impact on our businesses around the world include the Ministry of Finance in Japan, the Banque de France and Commission des Operations de Bourse in France, the Securities and Futures Commission of Hong Kong, the Belgian Banking and Finance Commission, the Australian Securities & Investments Commission, the Securities and Futures Commission of the Ministry of Finance and the Investment Commission of the Ministry of Economic Affairs of the Republic of China, the Commissione Nazionale per le Societa e la Borsa (CONSOB) in Italy, the Netherlands Authority For the Financial Markets, the Swiss Federal Banking Commission, La Comision Nacional del Mercado de Valores (CNMV) 15 in Spain, the Monetary Authority of Singapore, the Central Bank of Ireland, the Jersey Financial Services Commission, the Pension Fund Supervisions Office (UNFE) in Poland and the Canadian securities administrators. Certain of our subsidiaries are required to maintain minimum levels of capital. These and other similar provisions of applicable law may have the effect of limiting withdrawals of capital, repayment of intercompany loans and payment of dividends by such entities. To the extent that existing or future regulations affecting the sale of our products and services or our investment strategies cause or contribute to reduced sales or increased redemptions of our products or impair the investment performance of our products, our aggregate assets under management and revenues might be adversely affected. Our Organizational Structure AMVESCAP is the holding company of our investment management activities, the principal activities of which are asset management and the provision of related financial services. Our significant subsidiaries, all of which are wholly owned subsidiaries, are set forth below: NAME OF COMPANY COUNTRY OF INCORPORATION --------------- ------------------------ AVZ Inc. USA INVESCO UK Limited UK AIM Canada Holdings Inc. Canada INVESCO North American Holdings, Inc. USA INVESCO Institutional (N.A.), Inc. USA INVESCO Funds Group, Inc. USA A I M Management Group Inc. USA AMVESCAP Inc. Canada Our principal operating subsidiaries, all of which are wholly owned subsidiaries, are set forth below:
- ---------------------------------------------------------------------------------------------------------------------------------- NAME OF COMPANY REGISTERED OFFICE (or Principal Place of Business) - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO France S.A. 22 rue de la Tremoille, 75008 Paris France - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO Asset Management Deutschland GmbH Bleichstrasse 60-62, 60313 Frankfurt am Main Federal Republic of Germany - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO Asset Management Ireland Limited 1st Floor, Georges Quay House, Townsend Street, Dublin 2 Ireland - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO UK Limited 11 Devonshire Square, London EC2M 4YR United Kingdom INVESCO Asset Management Limited INVESCO Fund Managers Limited - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO Asia Limited 12th Floor, Three Exchange Square, 8 Connaught Place Central Hong Kong INVESCO Asset Management Asia Limited - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO Asset Management Asia Limited 8F., 122 Tun Hua North Road, Taipei, Taiwan R.O.C. INVESCO Taiwan Limited - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO Australia Limited Level 22, 6 O'Connell Street, Sydney, New South Wales 2000 Australia - ---------------------------------------------------------------------------------------------------------------------------------- Perpetual Unit Trust Management Limited INVESCO Park, Henley-on-Thames, Oxfordshire RG9 1HH United Kingdom Perpetual Portfolio Management Limited - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO Asset Management (Japan) Limited 16th Floor, Imperial Tower, 1-1-1, Uchisaiwai-cho, Chiyoda-ku, Tokyo 100-0011 Japan - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO Institutional (N.A.), Inc. 1360 Peachtree Street N.E., Suite 100 Atlanta, Georgia 30309 USA - ---------------------------------------------------------------------------------------------------------------------------------- AIM Funds Management Inc. 1540 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7 Canada - ---------------------------------------------------------------------------------------------------------------------------------- A I M Management Group Inc. 11 Greenway Plaza, Suite 100 A I M Advisors, Inc. Houston, Texas 77046-1173 USA - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO Funds Group Inc. 4350 South Monaco Street Denver, Colorado 80237 USA - ---------------------------------------------------------------------------------------------------------------------------------- INVESCO Retirement, Inc. 400 Colony Square, 1201 Peachtree Street N.E., Suite 2200, Atlanta, Georgia 30361 USA - ---------------------------------------------------------------------------------------------------------------------------------- Pell Rudman & Co., Inc. 100 Federal Street, Boston, Massachusetts 02110 USA - ----------------------------------------------------------------------------------------------------------------------------------
Property Our principal executive offices are located in leased office space at 11 Devonshire Square, London, EC2M 4YR, England. Our North American executive offices are located in leased office space at 16 1315 Peachtree Street, Atlanta, Georgia 30309. We also lease significant office space at 11 and 12 Greenway Plaza, Houston, Texas 77046 and 4350 South Monaco Street, Denver, Colorado 80237. We generally lease space in the locations where we conduct business, except that we own property at INVESCO Park, Henley-on- Thames, Oxfordshire, RG9 1HH, England. Item 5. Operating and Financial Review and Prospects This discussion and analysis should be read in conjunction with the selected consolidated financial information and the Consolidated Financial Statements included elsewhere in this Form 20-F. The Consolidated Financial Statements are prepared in accordance with U.K. GAAP, which differs in certain significant respects from U.S. GAAP. For a discussion of the principal differences between U.K. GAAP and U.S. GAAP, see "Summary of Differences Between U.K. GAAP and U.S. GAAP" and Note 23 to the Consolidated Financial Statements, below. The following discussion contains forward-looking statements relating to our future financial performance, business strategy, financing plans and other future events that involve uncertainties and risks. Our actual results could differ materially from the results anticipated by these forward-looking statements as a result of known and unknown factors that are beyond our ability to control or predict, including, but not limited to, those discussed in "Item 3. Key Information--Risk Factors," and "Cautionary Statements Concerning Forward-Looking Statements," above. General We are a leading independent global investment management group, with $397.9 billion of assets under management at December 31, 2001. We operate under the AIM, INVESCO and Atlantic Trust brand names. We offer a broad array of domestic, foreign and global investment products and services to institutions and individuals across many distribution channels. We currently provide services to clients in more than 100 countries, employ 8,519 people in 22 countries and manage more than 2,000 separate institutional accounts and 700 retail funds. We derive our revenues primarily from fees for investment advisory services provided to: . institutional clients; . open-end funds, including U.S. mutual funds and European and Asian unit trusts; . closed-end funds, including U.S. closed-end funds and U.K. investment trusts; . collective accounts, including U.S. trust company collective funds; . high net-worth individuals; and . U.S. "wrap" accounts. In addition, we derive revenues from fees for services, which include distribution, trustee and transfer agent services. We also earn revenues from front-end fees and commissions related to trading activities. Our operating expenses primarily consist of compensation, technology and marketing expenses. A significant portion of these expenses are variable in nature, which allows us flexibility to adjust costs consistent with revenue streams. Our significant accounting policies are disclosed in Note 1 to our Consolidated Financial Statements. These policies address such matters as accounting for goodwill and investments, revenue recognition, taxation, and depreciation methods. We are organized into five operating groups: . Managed Products; . INVESCO Institutional; . INVESCO Global; . INVESCO Retirement; and 17 . Private Wealth Management, which we formed in August 2001. Changes in Assets Under Management The following table sets forth changes in assets under management as of the dates indicated./(1)/
Private Managed Products INVESCO INVESCO Wealth Total AIM INVESCO Institutional Global Management (in billions) Assets under management at $275.4 $111.6 $ 22.9 $102.4 $38.5 $ -- December 31, 1998: Market gains 57.5 30.0 8.3 8.5 10.7 -- Net new (lost) business 10.6 7.6 3.4 (4.6) 4.2 -- Change in money market funds 17.0 17.0 -- -- -- -- Transfers -- (1.0) (0.2) (0.1) 1.3 -- Foreign currency(2) (1.1) 0.1 -- -- (1.2) -- Other(3) (2.0) -- -- -- (2.0) -- ---------------------------------------------------------------------------------------- Assets under management at $357.4 $165.3 $ 34.4 $106.2 $51.5 $ -- December 31, 1999: Market gains (32.8) (19.5) (5.5) -- (7.8) -- Acquisitions 34.1 16.7 -- -- 17.4 -- Net new (lost) business 35.4 20.4 13.0 (6.6) 8.6 -- Change in money market funds 12.9 10.9 1.3 -- 0.7 -- Transfers -- -- -- -- -- -- Foreign currency(2) (4.4) (0.6) -- -- (3.8) -- ---------------------------------------------------------------------------------------- Assets under management at $402.6 $193.2 $ 43.2 $ 99.6 $66.6 $ -- December 31, 2000: Market gains/(loss) (49.5) (25.3) (11.5) (3.1) (9.3) (0.3) Acquisitions 32.4 -- -- 17.7 6.7 8.0 Net new (lost) business 1.8 (0.7) 0.4 2.6 (0.5) -- Change in money market funds 12.3 13.0 (0.7) -- -- -- Transfers -- 0.3 -- -- (2.5) 2.2 Foreign currency(2) (1.7) (0.7) -- -- (1.0) -- ---------------------------------------------------------------------------------------- Assets under management at $397.9 $179.8 $ 31.4 $116.8 $60.0 $ 9.9 December 31, 2001:
(1) INVESCO Retirement had $34.6 billion,$27.6 billion, and $23.6 billion in assets under administration as of December 31, 2001, 2000 and 1999 respectively. (2) The exchange movement results from different exchange rates being in effect as of the relevant measurement dates for assets denominated in currencies other than U.S. dollars. (3) Adjusted for assets held in custody without fee and for assets replaced by service fees. 18 Results of Operations The following tables summarize operating profit data by operating group before goodwill amortization and exceptional items for the periods indicated:
Year Ended December 31, 2001(1) Operating Revenues Expenses Profit (In thousands) Managed Products (Pounds) 986,234 (Pounds) (549,763) (Pounds)436,471 INVESCO Institutional 211,917 (158,365) 53,552 INVESCO Global 340,293 (263,871) 76,422 INVESCO Retirement 58,224 (53,247) 4,977 Private Wealth Management 21,211 (19,972) 1,239 New Business 1,968 (12,179) (10,211) Corporate -- (39,090) (39,090) ------------------------------------------------------------- (Pounds)1,619,847 (Pounds) (1,096,487) (Pounds)523,360 Year Ended December 31, 2000(2) Operating Revenues Expenses Profit (In thousands) Managed Products (Pounds)1,064,530 (Pounds) (551,562) (Pounds)512,968 INVESCO Institutional 211,377 (157,771) 53,606 INVESCO Global 303,857 (222,075) 81,782 INVESCO Retirement 48,898 (44,941) 3,957 New Business -- (15,422) (15,422) Corporate -- (47,980) (47,980) ------------------------------------------------------------- (Pounds)1,628,662 (Pounds) (1,039,751) (Pounds)588,911 Year Ended December 31, 1999 Operating Revenues Expenses Profit (In thousands) Managed Products (Pounds) 644,814 (Pounds) (356,912) (Pounds)287,902 INVESCO Institutional 184,849 (118,364) 66,485 INVESCO Global 211,721 (168,309) 43,412 INVESCO Retirement 30,966 (33,906) (2,940) New Business -- (11,840) (11,840) Corporate -- (30,306) (30,306) ------------------------------------------------------------- (Pounds)1,072,350 (Pounds) (719,637) (Pounds)352,713
________________ (1) Includes the results of Perpetual from January 1, 2001, County from February 1, 2001, NAM from May 1, 2001, Pell Rudman from August 2, 2001, and Grand Pacific and Parkes from September 1, 2001. See Note 2 to our Consolidated Financial Statements for details of these transactions. (2) Includes the results of Trimark from August 1, 2000. 19 2001 Compared to 2000 Assets Under Management Assets under management totaled $397.9 billion at December 31, 2001, a decrease of $4.7 billion from December 31, 2000. Net new business amounted to $1.8 billion during the year versus $35.4 billion for the year ended December 31, 2000. The 2001 acquisitions added $32.4 billion of funds under management at dates of acquisition. Average funds under management amounted to $395.0 billion for 2001 compared with $388.5 billion for the prior year. Approximately 58% of the funds under management were invested in equity securities, and 42% were invested in fixed income securities at the end of 2001, a shift from the 67/33 ratio at the end of 2000, resulting in a lower net fee per dollar of asset than in prior years. Total assets are split evenly between institutional, including money market funds ("MMF"), and retail accounts. Gross sales and contributions totaled approximately $98 billion in 2001 versus $127 billion in the prior year. Operating Results The year 2001 presented significant challenges to the global economy, the asset management industry, and to us. Every major market index reflected significant declines during the year, with the FTSE 100 down by 16%, the S&P 500 by 13%, NASDAQ by 21% and the MSCI by 23%. These corrections, compounded by the tragic events of September 11, adversely impacted our financial results for the year. Profit before tax, goodwill amortization, and exceptional items amounted to (Pounds)477.9 million in 2001, a decrease of (Pounds)76.6 million (13.8%) from 2000. Diluted earnings per share before goodwill amortization and exceptional items amounted to 40.0p (2000: 54.7p) for the year ended December 31, 2001, a decrease of 26.9%. The U.K. Accounting Standards Board issued FRS 19, "Deferred Tax," which requires companies to change the method of computing deferred taxes. The Company adopted this new statement in 2001, including a restatement of financial statements for prior years. The effect has been to reduce the tax provision and increase net income previously reported for 2000 by (Pounds)12.2 million (1.7p per diluted share). All revenues substantially arise from management and distribution fees generated from assets under management (AUM). Revenues amounted to (Pounds)1,619.8 million compared with (Pounds)1,628.7 million in 2000. Increases in revenues from acquisitions over the prior period were offset by reductions caused by the declines in the market values of assets under management. Operating profit before goodwill amortization and exceptional items totaled (Pounds)523.4 million in 2001 (2000: (Pounds)588.9 million), a decrease of (Pounds)65.5 million. We acquired County, a leading Australian institutional asset manager, in January, 2001. The acquisition of NAM in April added a range of complementary investment styles to the INVESCO Institutional platform. We completed three acquisitions in August: Pell Rudman, the foundation for our private wealth management business; Grand Pacific, a leading Taiwan SITE; and Parkes, a U.K. real estate advisor. Consideration for these purchases amounted to approximately (Pounds)474.1 million and was satisfied by (Pounds)327.1 million in cash and the issuance of 5.6 million ordinary shares. These purchases are included in our operating results from their dates of acquisition. Exceptional charges of (Pounds)60.0 million were provided in 2001 ((Pounds)39.4 million after tax and 4.8p per diluted share). Integration costs relating to acquisitions amounted to (Pounds)43.3 million with the remainder relating to internal restructurings, severance charges, and expenses incurred in the design and planning for a new operating facility that was postponed indefinitely. Operating expenses before goodwill amortization and exceptional items increased (Pounds)56.7 20 million to (Pounds)1,096.5 million (2000: (Pounds)1,039.8 million), due primarily to the current year acquisitions. We implemented strong expense controls during 2001 that resulted in an operating margin of 32.3% (2000: 36.2%). Compensation and related expenses amounted to (Pounds)652.8 million (2000: (Pounds)623.5 million), 60% of total operating expenses for both 2001 and 2000. Marketing costs were (Pounds)131.2 million, or 12% of total operating expenses, in 2001, a 14% decline. Technology costs accounted for 11% of total operating expenses for both 2001 and 2000. Headcount levels increased to 8,519 employees at the end of 2001 from 8,259 at the end of 2000. Acquisitions added approximately 520 new employees, and staff reductions partially offset this through attrition and selective redundancy initiatives. We have significant operations in the U.S. with earnings denominated in U.S. dollars. Accordingly, our results can be materially affected by the U.S. dollar to U.K. pounds sterling exchange rate. It is not our policy to hedge the translation of profit from U.S. subsidiaries; therefore, changes in exchange rates can materially affect our results. The average U.S. dollar to U.K. pounds sterling exchange rate in 2001 was $1.43 per (Pounds)1.00, compared with $1.51 per (Pounds)1.00 in 2000. Managed Products The Managed Products group reported revenues of (Pounds)986.2 million during 2001, a decrease of (Pounds)78.3 million over the prior year. Operating profits were (Pounds)436.5 million, a decrease of (Pounds)76.5 million. The group generated approximately $50.0 billion of gross sales in 2001 and experienced net redemptions of $308 million during the year, as investors shifted away from growth-oriented products to more conservative equity and fixed income products. Institutional MMFs increased by $12.3 billion in 2001, a 44% growth in average assets for the year. Funds under management amounted to $211.2 billion at December 31, 2001, and headcount was 4,346, a decline of 395. AIM's revenues in the U.S. were (Pounds)626.3 million in 2001, a decline of (Pounds)135.5 million from 2000. AUM totaled $157.7 billion at year-end. INVESCO Funds Group's revenues amounted to (Pounds)201.9 million in 2001 (2000: (Pounds)211.5 million). These revenue declines were due primarily to the sharp declines experienced in the U.S. Markets. Our AUM in Canada amounted to $22.1 billion at the end of the year, and revenues for 2001 amounted to (Pounds)158.0 million. AIM is the seventh largest non-proprietary fund group in the U.S. INVESCO Funds Group ranks as the 45th largest fund group. Together, we rank as the sixth largest fund complex in the U.S. We also rank as the third largest fund group in Canada, operating under the AIM/Trimark brands. While performance in our U.S. mutual funds dropped from prior year levels, Managed Products ended the year with approximately 37% of assets in the top half of the Lipper performance rankings, down from 43% at the end of 2000. The Canadian funds led the way with over 80% of their funds in the top half of the performance rankings. AIM's product line underwent continued diversification in 2001 with the launch of four new funds. INVESCO Funds Group made inroads into the annuities and life products businesses during the year, adding 34 institutional relationships. AIM Canada continues to offer a broad array of mutual fund products, many of which had important achievements during the year. INVESCO Institutional The INVESCO Institutional group reported revenues and operating profits of (Pounds)211.9 million and (Pounds)53.6 million during the year. These results include NAM and Parkes from the dates of acquisition. This group generated approximately $26.6 billion in gross sales during 2001 compared to $20.2 billion in 2000, and net sales of $2.6 billion. Funds under management amounted to $116.8 billion at December 31, 2001. Headcount was 868 (2000: 789) at the end of the current year. 21 Investment performance was mixed for the year. Value products, both domestic and international, had strong results relative to benchmarks. The international team's record over multi-year periods lends itself to strong new business opportunities. Core and growth products had an average year and have attractive long-term numbers. Structured products had a challenging year, but long-term returns remain above average. Fixed income performance kept pace with the benchmarks for the year as a whole. Direct real estate, private equity, and other alternative products had satisfactory results for the year. The new business flow was very strong. We bid for a record amount of assets, won more new business than in any previous year, and closed on a higher percentage of finals than ever before. The pipeline is still quite full, but as ever, much depends on continued strong investment performance. Net new business was positive for 2001, but we continue to suffer outflows in the balanced and large cap value product area. This group has one of the industry's broadest ranges of products, including a recently developed global balanced product, and we are attracting non-U.S. institutions to our structured U.S. equity products. The alternative asset products group successfully brought new private equity and secured loan products to the market during a challenging period. INVESCO Global Revenues for 2001 amounted to (Pounds)340.3 million, an increase of (Pounds)36.4 million over the prior year due to the inclusion of the Perpetual results, offset in part by declines in the global capital markets. Operating profit totaled (Pounds)76.4 million for the year-ended December 31, 2001. The current year's results include County and Grand Pacific from dates of acquisition. AUM were $60.0 billion at December 31, 2001, a decline of $6.6 billion from the end of 2000. Gross sales for 2001 totaled approximately $21.4 billion. The U.K. business had revenues of (Pounds)212.3 million in 2001, an increase of (Pounds)60.8 million during the year. Operating profits and margins remained strong in the year on lower revenue levels. This business generated $6.7 billion in gross sales, but $0.4 billion in net redemptions during the year. Redemptions included a $1 billion client that changed ownership during the period. AUM stood at $31.9 billion at the end of 2001. Headcount for the U.K. was 1,227 at the end of 2001 (2000: 1,307). The Perpetual integration had a successful conclusion with the transfer of all administration onto the Henley platform in October. Subsequently, unit trust mergers were completed, reducing the range of onshore funds from 48 to 33. The brand review project was completed with the positioning for INVESCO in the U.K. and the confirmed continuation of the INVESCO PERPETUAL brand across the retail business. Investment performance in key domestic products has remained strong, with major funds producing top quartile performance. In Continental Europe, revenues totaled (Pounds)56.1 million for the year, a decline of (Pounds)13.0 million from 2000 due to the market declines and lower transaction volumes. Despite $7.7 billion in gross sales and $0.5 billion in net new business, AUM levels dropped by 15% during the year to $13.4 billion at the end of 2001. Headcount was 351 at the end of the year (2000: 300). Despite a turbulent year in the markets, our business across Continental Europe has retained an effective organization and a strong sales capability. The year illustrated the extent to which distribution channels are the principal determinant of success in Europe. Important deals secured with major bank networks in both France and Italy have led to strong new business in those markets. Revenues in Asia Pacific amounted to (Pounds)42.7 million in 2001 (2000: (Pounds)54.4 million), including the County and Grand Pacific acquisitions from the dates of purchase. AUM at end of 2001 were $14.7 billion and headcount was 406 (2000: 262) at that date. This business generated $6.8 billion in gross sales and $0.3 billion in net new business in the year. 22 We are participating, to the extent permitted, in the development of the asset management industry in mainland China. Together with the acquisitions in Australia and Taiwan, this means that our Asia Pacific business now benefits from established operations in the key regional financial centers and is well positioned for long-term growth. INVESCO Retirement INVESCO Retirement's assets under administration and net sales scored record growth during 2001. The group experienced a 25% increase in assets under administration, reaching $34.6 billion at December 31, 2001. Gross sales were $16 billion and net sales were $5.2 billion for INVESCO Retirement's distribution channels in 2001. This group services 630,000 plan participants, up from 381,000 participants at the end of 2000. Approximately 65% of INVESCO Retirement's assets under administration were invested in our funds in 2001, compared to 82% in 2000. The number of plans under administration grew by 165%. INVESCO Retirement was chosen by one of the largest U.S. banks as a strategic partner for its 401(k) business. More than 130,000 participants were added through this strategic partnership. INVESCO Retirement also won mandates from several new companies in the current year. The client service team has continued its exceptionally high client retention rate of 95%. The U.K. defined contribution business added 33 new plans since it was launched in April. Working in conjunction with our local offices around the world, INVESCO Retirement imported its expertise to key markets outside the U.S. We also expanded our presence in France, Germany, and Italy; and in Hong Kong, we increased market share within the MPF government-sponsored retirement scheme. Private Wealth Management The Private Wealth Management division was launched with the Pell Rudman acquisition in 2001. Private Wealth Management provides asset management services to high net worth individuals, families, foundations and endowments. Revenues and operating profits totaled (Pounds)21.2 million and (Pounds)1.2 million for 2001. AUM totaled $9.9 billion at December 31, 2001. The focus of Private Wealth Management this year has been to complete the Pell Rudman acquisition and to position the division for future growth and market penetration. Initiatives have included: improving the infrastructure and technology areas; creating the new Atlantic Trust brand; and adding new professional staff to the business. We anticipate additional investments in 2002 to open new offices, expand banking capabilities, continue technology development and support of the Atlantic Trust brand. These investments will position the division for significant growth and scale. New Business Expense New business expense contains costs (primarily staff costs and marketing) associated with our efforts in the international defined contribution markets in Europe and Asia. Costs for 2001 were in line with expenses incurred in 2000. Corporate Corporate expenses include staff costs related to corporate employees, as well as continued expenditures in Group-wide initiatives. Costs declined over the prior year due to decreases in staff costs and technology initiatives. Other Income/Expense 23 Investment income declined in 2001 as we implemented more effective cash management processes, thus utilizing excess cash to reduce outstanding debt. Other expenses include losses on unlisted investments and amounts invested in seed money investments. Interest expense increased by (Pounds)4.3 million during the year because of higher outstanding debt levels (arising from cash used to fund acquisitions), offset in part by lower interest rates on outstanding balances under our credit facility. Taxation Our effective tax rate on ordinary profit (before goodwill amortization and exceptional items) was 30.6% in 2001, compared to 29.7% in 2000. These tax rates reflect our adoption of FRS 19, which allows previously unrecognized deferred tax benefits to be recorded. 2000 Compared to 1999 Assets Under Management Assets under management were $402.6 billion at December 31, 2000. This reflected an increase of $45.2 billion during the year. Net new business of $35.4 billion contributed to the increase. Our acquisitions of Trimark and Perpetual plc added $34.1 billion of assets as of the dates of such acquisitions. Market loss accounted for a $32.8 billion decrease in assets under management. Average assets under management were $388.5 billion for 2000 compared to $294.9 billion for 1999. The 32% increase in average assets was due to the strength of net new business and the strong capital markets in the early part of 2000, aided by acquisitions. At December 31, 2000, approximately two- thirds of our assets under management were invested in equity securities and one-third in fixed income securities. Operating Results 2000 marked another record year for our group, particularly as every major capital market index experienced sharp declines during the year. Profit before tax, exceptional item and goodwill amortization increased 73% to (Pounds)554.5 million from (Pounds)319.8 million in 1999. Diluted earnings per share before exceptional item and goodwill amortization increased 67% to 54.7p for the 2000 year compared to 32.7p for 1999. Revenues amounted to (Pounds)1.6 billion compared to (Pounds)1.1 billion in 1999. Earnings before interest, taxes, depreciation and amortization and exceptional item, or "EBITDA," reached (Pounds)659.7 million for 2000, compared to (Pounds)431.1 million for the 1999 period. Operating profit before exceptional items and goodwill amortization totaled (Pounds)588.9 million in 2000 compared to (Pounds)352.7 million in 1999, an increase of (Pounds)236.2 million. The operating margin for 2000 was 36.2%, compared to 32.9% in the prior year. We completed the acquisition of Canadian-based Trimark on August 1, 2000. Consideration for this purchase amounted to approximately (Pounds)1.2 billion and was satisfied by the payment of (Pounds)331.1 million in cash, the issuance of 26.4 million Ordinary Shares or Exchangeable Shares, and (Pounds)574 million in Equity Subordinated Debentures. Our 2000 results include the results of Trimark from August 1, 2000. We also acquired Perpetual plc, a leading U.K. retail fund manager, in December 2000. This acquisition was recorded as of December 31, 2000, was valued at approximately (Pounds)1.0 billion and was completed by the issuance of 60.1 million Ordinary Shares, payment of (Pounds)181.9 million in cash and the issuance of (Pounds)128.9 million in loan notes due in 2005. The results of Perpetual plc are included in our Consolidated Financial Statements beginning January 1, 2001. Trimark is being integrated with the existing AIM Canada business, and the INVESCO Global and Perpetual plc businesses are being combined in the U.K. The (Pounds)43.8 million cost of these integration activities coupled with personnel-related restructuring charges of (Pounds)8.0 million for the INVESCO Institutional business have been reflected as an exceptional item in 2000. The total exceptional items 24 amounted to (Pounds)32.6 million after tax, equal to 4.6p per diluted share. Substantially all of our revenues arise from management and distribution fees generated from assets under management. Revenues increased 52% over 1999 levels due to the inclusion of Trimark's results for five months in 2000 and revenues generated from the increased levels of assets under management. Operating expenses before exceptional item increased 39% to (Pounds)1.0 billion in 2000 from (Pounds)719.6 million in 1999, due primarily to increased staff costs. Compensation and related expenses amounted to (Pounds)623.5 million in 2000 from (Pounds)430.2 million in 1999, or 60% of total operating expenses for both 2000 and 1999. Headcount levels increased to approximately 8,259 employees at the end of 2000 from approximately 5,545 at the end of 1999, due primarily to staff added from acquisitions and increased volumes in the business. Marketing costs were (Pounds)152.4 million, or 15% of total operating expenses, in 2000, a 51% increase from the prior year as we continued to promote our AIM and INVESCO brands. Technology costs accounted for 11% of the total operating expenses for 2000 compared to 13% in 1999. Variable costs accounted for approximately 25% of total expenses for both years. Managed Products Managed Products produced another year of record performance, with revenues up 65% to (Pounds)1.1 billion and operating profits of (Pounds)513.0 million, a 78% increase over 1999. Net new business totaled $33.4 billion for Managed Products in 2000, up from $11.0 billion in 1999. These net new business flows reflect the strength of the AIM and INVESCO brands coupled with excellent investment performance. Assets under management totaled $236.4 billion at the end of 2000, an increase of 18% for the year. The acquisition of Trimark, when combined with AIM Canada, created Canada's second largest mutual fund management company with a broad range of products and distribution channels. Operating margins increased to 48% in 2000 from 45% in 1999 as a result of the increased business volumes in 2000. INVESCO Institutional INVESCO Institutional underwent a period of restructuring which, when coupled with a difficult period for value investment managers, resulted in a reduced level of operating profits before exceptional item of (Pounds)53.6 million compared to (Pounds)66.5 million in 1999, and revenues of (Pounds)211.4 million for 2000 compared to (Pounds)184.8 million for 1999. Operating margins declined to 25% in 2000 from 36% in 1999. Assets under management were $99.6 billion at the end of 2000, which represented a decline of $6.6 billion from the end of 1999 as INVESCO Institutional continued to experience shifts from its core value equity products. Marketing activity for INVESCO Institutional as a whole continued to be very strong, with $20.2 billion in new gross sales in 2000. INVESCO Institutional has one of the industry's broadest ranges of products, which includes a recently developed global balanced product, and it is attracting non- U.S. institutions to its structured U.S. equity products. The alternative asset products division of INVESCO Institutional successfully brought new private equity and secured loan products to the market during a challenging period. INVESCO Global The acquisition of Perpetual plc was the final highlight to a year of significant achievement for INVESCO Global. INVESCO Global leveraged its infrastructure, resulting in operating profits of (Pounds)81.8 million in 2000, which represented an increase of 88% over 1999, and a record operating margin level of 27% for the year. Assets under management were $66.6 billion at December 31, 2000, compared to $51.5 billion at the end of 1999. This 29% increase was due to record gross sales of $27.8 billion experienced across the business coupled with the strength in the markets. Assets under management in Continental Europe doubled during 2000. INVESCO Global's net sales in Asia grew over 60% during 2000. INVESCO Global's presence in the U.K. markets and in the offshore product range also reached record levels due to strong investment performance and marketing successes. Our acquisition of County, 25 with $5.1 billion in assets under management as of the date of acquisition on January 31, 2001, expanded INVESCO Global's position in Australia, one of the world's fastest growing pension markets. INVESCO Retirement INVESCO Retirement continued its strong momentum in 2000 with net sales of $5 billion, which represented a 52% increase over 1999, and brought assets under administration to $27.6 billion for all distribution channels at December 31, 2000, which represented a 17% increase over 1999. The number of plans under administration grew by 38% and the number of plan participants rose to 381,000. Internationally, INVESCO Retirement helped launch products in Hong Kong's state- sponsored pension system and entered the U.K. defined contribution market. New Business New business expense consists of costs associated primarily with our efforts in the international defined contribution markets in the U.K., Poland and Hong Kong. The increase in costs over 1999 reflects our entrance into certain markets in Continental Europe. Corporate Corporate expenses include staff costs related to general corporate financial and administrative employees and continued expenditures in company- wide initiatives. The increase in expenses over 1999 relates primarily to increases in headcount necessitated by our global expansion. Other Income/Expense Investment income increased in 2000 from interest income generated from investments. Interest expense increased by (Pounds)6.9 million during the year due to the issuance of the Equity Subordinated Debentures in connection with the Trimark acquisition. Taxation Our effective tax rate on ordinary profit before goodwill amortization and exceptional item, after restatement for FRS 19, was 29.7% in 2000, compared with 31.8% in 1999. Liquidity and Capital Resources Cash Flows The ability to generate cash from operations in excess of our capital expenditures and dividend requirements is one of our fundamental financial strengths. Operations continue to be financed from share capital, retained profits, and borrowings. We generated (Pounds)603.4 million of earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2001. We paid (Pounds)84.4 million in dividends and (Pounds)79.2 million for fixed assets expenditures, principally for technology and capital investments. Shareholder funds increased to (Pounds)2.3 billion at December 31, 2001. We did not change our financial instruments policies in 2001 and did not hedge any of our operational foreign exchange exposures. As a result, our balance sheet may be impacted by movements in U.S. dollar/sterling exchange rates. This is partially mitigated by our U.S. dollar denominated borrowings. Other than this, we do not actively manage our currency exposures. Borrowings Total debt (including current maturities of (Pounds)125.8 million) amounted to (Pounds)970.1 million at 26 December 31, 2001, and net debt was (Pounds)837.6 million (2000: (Pounds)691.9 million), excluding cash held as a result of short-term timing differences on customer transactions of (Pounds)207.3 million. Net debt declined by (Pounds)166 million in 2001, excluding the cash paid for acquisitions. We entered into a new five-year $900 million and 364-day $200 million credit facility with a group of international banks in 2001. On December 31, 2001, (Pounds)106.9 million ($155 million) was drawn under the facility. We issued $300 million in new senior debt in the form of 5.90% Senior Notes due 2007. At December 31, 2000, our total long-term debt amounted to (Pounds)960.0 million. Net debt at December 31, 2000 amounted to (Pounds)691.9 million compared to (Pounds)512.6 million at December 31, 1999, excluding cash held as a result of short-term timing differences on customer transactions of (Pounds)200.9 million in 2000 and (Pounds)41.5 million in 1999. The increase in net debt was due to (Pounds)1.3 billion borrowed or issued for acquisitions during the year, reduced by (Pounds)1.1 billion in repayments from operating cash flow and conversions of Equity Subordinated Debentures into Ordinary Shares. We issued a total of (Pounds)574.0 million in Equity Subordinated Debentures and (Pounds)128.9 million in loan notes in 2000 as part of the consideration for our acquisitions during 2000. During 2000, (Pounds)505.4 million of the Equity Subordinated Debentures were converted into 45.9 million Exchangeable Shares and (Pounds)67.1 million of the Equity Subordinated Debentures remained outstanding at December 31, 2000. The Equity Subordinated Debentures bear interest at 6% per year and mature in 2003. The loan notes mature in 2005 and are callable at the option of the holder on six months notice. A subsidiary issued 21.4 million Exchangeable Shares as part of the acquisition of Trimark. These shares are exchangeable into Ordinary Shares on a one-for-one basis at the request of the holder and are the economic equivalent of the Ordinary Shares. Thus, these shares are treated in the balance sheet and earnings per share calculations as though they are Ordinary Shares. Approximately 86.5 million new Ordinary Shares, including the Exchangeable Shares, were issued during 2000 for acquisitions. Our existing capital structure, together with the cash flow from operations and borrowings under the credit facility, will provide us with sufficient resources to meet present and future cash needs. Capital Expenditures During 2001, 2000 and 1999, our capital expenditures were (Pounds)79.2 million, (Pounds)62.5 million and (Pounds)57.3 million, respectively. These expenditures related in each year to technology initiatives, including new platforms from which to maintain our portfolio management systems and fund tracking systems, improvements in computer hardware and software desktop products for employees, new telecommunications products to enhance our internal information flow, and backup disaster recovery. In 2001, capital expenditures, also included costs incurred to relocate to new facilities in Denver, Colorado. Dividends Our board of directors recommended a final dividend of 6.5p per Ordinary Share, resulting in a total dividend of 11.0p in 2001 versus 10.0p in 2000. The total dividend for 2001 represents an increase of 10% over the total dividend for 2000, and is the ninth consecutive year that the dividend has been increased. Under the Companies Act 1985 of Great Britain, as amended, our ability to declare dividends is restricted to the amount of our distributable profits and reserves, which is the current and retained amounts of our profit and loss account, on an unconsolidated basis. At December 31, 2001, the amount available for dividends was (Pounds)37.6 million after accrual of the recommended final dividend for 2001. Furthermore, the credit facility places certain restrictions on our ability to pay dividends, as described in Note 16 to the Consolidated Financial Statements. These restrictions could impact the ability of our subsidiaries to pay dividends to us and our ability to pay dividends to our shareholders. Such restrictions have not had, and 27 are not expected to have in the future, a material effect on our ability to pay dividends. We believe that our cash flow from operations and credit facilities, together with our ability to obtain alternative sources of financing, will enable us to meet debt and other obligations as they come due and anticipated future capital requirements. Summary of Differences Between U.K. GAAP and U.S. GAAP We prepare our financial statements in accordance with U.K. GAAP, which differs in certain material respects from U.S. GAAP. The principal differences between U.K. GAAP and U.S. GAAP, as applied to us, relate to the historical elimination of goodwill and other intangibles against reserves, shares held by share option trusts, and proposed dividend liabilities. See Note 23 to our Consolidated Financial Statements for a reconciliation of operating results from U.K. GAAP to U.S. GAAP. New Accounting Standards In the U.K., the Accounting Standards Board, or ASB, issued Financial Reporting Standard 17 "Retirement Benefits," in 2000. The impact of applying FRS 17 on our limited number of defined benefit plans was not material to our consolidated operating results or our balance sheet. The ASB also issued FRS 19, "Deferred Tax," in 2000, requiring companies to change the method of computing deferred taxes. We adopted FRS 19 in 2001 including a restatement of all prior periods presented to include the profit and loss impact of recognizing previously unrecognized deferred tax movements. The effect has been to reduce the tax provision and increase net income previously reported for 2000 by (Pounds)12.2 million (1.7p per diluted share). In 2001, we adopted Statement of Financial Accounting Standards 141, "Business Combinations," for acquisitions after June 30, 2001, for reporting under U.S. GAAP. This Statement does not affect our reporting under U.K. GAAP. We have preliminarily allocated the excess purchase price of the Pell Rudman, Grand Pacific, and Parkes acquisitions to non-amortizable goodwill. SFAS 142, "Goodwill and Other Intangible Assets," will be adopted as of January 1, 2002, requiring that goodwill and indefinite-lived intangible assets no longer be amortized, but instead be tested for impairment annually. Definite-lived intangible assets will continue to be amortized over their useful lives. The impact of adopting SFAS 142 is currently being evaluated. Information relating to our adoption in 2000 of FRS 16, "Current Taxation," appears in Note 8 to our Consolidated Financial Statements. Item 6. Directors, Senior Management and Employees Directors and Senior Management Our current directors and members of senior management are:
Name Age* Position* - ---------------------------------- ---------- ----------------------------------------------------------------------------- Charles W. Brady/a c/ 66 Executive Chairman, Board of Directors Rex D. Adams/b c d/ 62 Non-Executive Director Sir John Banham/b c d/ 61 Non-Executive Director The Hon. Michael D. Benson/a/ 58 Vice Chairman, Board of Directors; Chief Executive Officer, INVESCO Global Joseph R. Canion/b c d/ 57 Non-Executive Director Michael J. Cemo/a/ 57 Director; President, A I M Distributors, Inc. Gary T. Crum/a/ 54 Director; President, A I M Capital Management, Inc. Jean-Baptiste Douville de 38 Chief Executive Officer, INVESCO Continental Europe
28
Name Age* Position* - ---------------------------------- ---------- ---------------------------------------------------------------------------- Franssu/a/ Robert H. Graham/a/ 55 Vice Chairman, Board of Directors; Chief Executive Officer, A I M Management Group, Inc. Robert C. Hain/a/ 48 Chief Executive Officer, INVESCO U.K. Hubert L. Harris, Jr./a/ 58 Director; Chief Executive Officer, INVESCO Retirement Donald J. Herrema/a/ 49 Chief Executive Officer, Private Wealth Management Denis Kessler/b c d/ 50 Non-Executive Director Andrew Tak Shing Lo/a/ 40 Chief Executive Officer, Asia Pacific Bevis Longstreth/b c d/ 68 Non-Executive Director Robert F. McCullough/a/ 59 Director; Chief Financial Officer James I. Robertson/a/ 44 Chief Executive Officer, AMVESCAP Group Services, Inc. John D. Rogers/a/ 40 Chief Executive Officer, INVESCO Institutional Stephen K. West/b c d/ 73 Non-Executive Director Alexander M. White/b c d/ 68 Non-Executive Director Neil Williams/a/ 66 General Counsel Mark H. Williamson/a/ 50 Chief Executive Officer, Managed Products; Chairman and Chief Executive Officer, INVESCO Funds Group, Inc.
- ------------------------ /*/ All ages and positions are as of March 31, 2002. /a/ Member of the Executive Board /b/ Member of the Audit Committee /c/ Member of the Nomination Committee /d/ Member of the Remuneration Committee Charles W. Brady 66 Executive Chairman USA/a c/ Charles Brady has served as Executive Chairman of the Board of Directors of our company since 1993, Chief Executive Officer since 1992, and a Director since 1986. He was a founding partner of INVESCO Capital Management Inc., which merged with our predecessor organization in 1988. Mr. Brady began his investment career in 1959 after graduating with a BS from the Georgia Institute of Technology. He also attended the Advanced Management Program at the Harvard Business School. Mr. Brady is a Director of the Atlanta College of Art, a Trustee of the Georgia Tech Foundation and the Carter Library, and a Director of the National Bureau of Asian Research. Rex D. Adams 62 Non-Executive USA/b c d/ Rex Adams has served as a Non-Executive Director of our company since November 2001 and is Chairman of the Remuneration Committee. Mr. Adams served as dean of the Fuqua School of Business and professor of business administration at Duke University from 1996 to 2001. He joined Mobil International in London in 1965 and served as Executive Vice President for Administration for Mobil Corporation from 1988 to 1996. Mr. Adams received a BA magna cum laude from Duke University. He was selected as a Rhodes Scholar in 1962 and studied at Merton College, Oxford University. Mr. Adams sits on the Boards of Directors of Alleghany Corporation, PBS and the Vera Institute of Justice. Sir John Banham 61 Non-Executive UK/b c d/ Sir John Banham has served as a Non-Executive Director of our company since 1999 and is Chairman of the Nomination Committee. He is Chairman of Kingfisher PLC and Whitbread PLC. Sir John was Director General of the Confederation of British Industry from 1987 to 1992, a Director of both National Power and National Westminster Bank from 1992 to 1998, and Chairman of Tarmac PLC from 1994 to March 2000. He also served as Chairman of the Remuneration Committees of both National Power and National Westminster Bank. Sir John is a graduate of Cambridge University and has been awarded honorary doctorates by four leading UK universities. The Hon. Michael D. Benson 58 Vice Chairman and Chief Executive Officer, INVESCO Global UK/a/ Michael Benson has served as Vice Chairman of the Board of Directors of our company since February 2001, a Director of our company since 1994, Chief Executive Officer of INVESCO Global since 1997, and 29 Chief Executive Officer of the Asian region from 1994 to 1997. He began his career with the brokerage firm L. Messel in 1963. He later joined Lazard Brothers Ltd. and became Managing Director of Lazard Securities Ltd., establishing investment offices in Jersey, Guernsey, and Hong Kong. From 1985 to 1992 Mr. Benson established investment offices in London, Boston, Hong Kong, and Singapore for Standard Chartered Bank. In 1992 he joined Capital House Investment Management with responsibility for developing the Far Eastern business. Joseph R. Canion 57 Non-Executive USA/b c d/ Joseph Canion has served as a Non-Executiv e Director our company since 1997. He was a Director of AIM from 1991 through 1997, when AIM was merged with one of our subsidiaries. Since 1992, Mr. Canion has served as Chairman of Insource Technology Corporation, a business and technology management company based in Houston. He was co-founder and, from 1982 to 1991, Chief Executive Officer, President, and a Director of Compaq Computer Corporation. Michael J. Cemo 57 President, A I M Distributors, Inc. USA/a/ Michael Cemo has served as a Director of our company since 1997. He is President of A I M Distributors, Inc., a broker-dealer subsidiary of AIM, and an Executive Vice President of AIM. Mr. Cemo has been in the investment business since 1971 and joined AIM in 1988. He is a member of the Investment Company Institute's sales force marketing committee. Mr. Cemo received a BS from the University of Houston. Gary T. Crum 54 President, A I M Capital Management, Inc. USA/a/ Gary Crum has served as a Director of our company since 1997. He is co-founder of AIM and serves as an Executive Vice President of AIM. He is President of A I M Capital Management, Inc., an investment advisory subsidiary of AIM, and is Director of Investments. Mr. Crum has been in the investment business since 1972. He received a BBA from Southern Methodist University and an MBA from the University of Texas at Austin. Jean-Baptiste de Franssu 38 Chief Executive Officer, INVESCO Continental Europe France/a/ Jean-Baptiste de Franssu has served as Chief Executive Officer, INVESCO Continental Europe (Belgium) since 1999 and as a member of the Executive Board of our company since May 2001. He joined our company as Managing Director and a member of the Board of Directors of INVESCO France in 1990. Mr. de Franssu became Managing Director of the Continental European Division in 1996. He has served as a member of the INVESCO Global Management Committee since 1997. Mr. de Franssu is a graduate of the ESC Group in Rheims. He received a BA from Middlesex University in the U.K. and a post-graduate actuarial degree from Pierre et Marie Curie University in Paris. Robert H. Graham 55 Vice Chairman and Chief Executive Officer, A I M Management Group Inc. USA/a/ Robert Graham became Vice Chairman of the Board of Directors of our company in February 2001. He has served as a Director of our company since 1997 and as Chief Executive Officer of Managed Products from 1997 to January 2001. Mr. Graham is President and Chief Executive Officer of AIM, which he co-founded in 1976. He has been in the investment business since 1972. Mr. Graham received a BS, an MS, and an MBA from the University of Texas at Austin. He has served as a member of the Board of Governors and the Executive Committee of the Investment Company Institute, and as Chairman of the Board of Directors and Executive Committee of the ICI Mutual Insurance Company. Robert C. Hain 48 Chief Executive Officer, INVESCO U.K. Canada/a/ Robert Hain became a member of the Executive Board of our company in February 2001. He served as President and Chief Executive Officer of AIM Funds Management Inc., our Canadian business, from December 1998 until January 2002, when he became Chief Executive Officer of INVESCO U.K. Mr. Hain was Global Head of Private Banking at CIBC from May 1998 to November 1998, a partner at Ernst & Young from 1997 to 1998, an Executive Vice President at Investors Group from 1993 to 1997, and President at Royal Trust Bank (Switzerland) (now Royal Bank of Canada) from 1984 to 1993. He received a BA from the University of Toronto and an M.Litt. from Oxford University. 30 Hubert L. Harris, Jr. 58 Chief Executive Officer, INVESCO Retirement USA/a/ Hubert Harris has served as Chief Executive Officer of INVESCO Retirement since January 1998 and as a Director of our company from 1993 to February 1997, and since 1998. He served as Assistant Director of the Office of Management and Budget in Washington, DC, during President Carter's administration and as President and Executive Director of the International Association for Financial Planning. Mr. Harris received a BS from the Georgia Institute of Technology and an MBA from Georgia State University. Donald J. Herrema 49 Chief Executive Officer, Private Wealth Management USA/a/ Donald Herrema has served as Chairman and Chief Executive Officer of Private Wealth Management and a member of the Executive Board of our company since March 2001. He held several senior positions at Bessemer Trust Company from 1993 to 2001 and became President and Chief Executive Officer of The Bessemer Group Incorporated in 1998. Mr. Herrema began his career at Wells Fargo in 1981 and became President of Wells Fargo Securities in 1991. He received a BA from Whittier College and an MA from the University of Southern California. Mr. Herrema is a Trustee of Whittier College, a former Leaders Council Member of the Institute of Private Investors, and past President of the Bank Securities Association. Denis Kessler 50 Non-Executive France/b c d/ Denis Kessler has served as a Non-Executive Director of our company since March 2002. A noted economist, Mr. Kessler is Executive Chairman of the French Insurance Association (FFSA), Executive Vice Chairman of the French Business Confederation (MEDEF), Vice Chairman of the Comite Europeen des Assurances (CEA), and a member of the Conseil national des Assurances. He serves as a member of the Board of Directors of Dexia Bank, BNP Paribas, Cetelem, Bollore Group, and Vendome Rome Group. Mr. Kessler received a Diplome from the Paris Business School (HEC) and a Doctorat d'Etat in economics from the University of Paris. Andrew T. S. Lo 40 Chief Executive Officer, Asia Pacific Hong Kong/a/ Andrew T. S. Lo has served as Chief Executive Officer of Asia Pacific since February 2001 and as a member of the Executive Board of our company since May 2001. He joined our company as Managing Director for INVESCO Asia in 1994. Mr. Lo began his career as Credit Analyst at Chase Manhattan Bank in 1984. He became Vice President of the Investment Management Group at Citicorp in 1988 and was Managing Director of Capital House Asia from 1990 to early 1994. Mr. Lo was Chairman of the Hong Kong Investment Funds Association from 1996 to 1997, a member of the Council to the Stock Exchange of Hong Kong from 1997 to February 2000, and a member of the Advisory Committee to the Securities and Futures Commission in Hong Kong from 1997 to March 2001. He received a BS and an MBA from Babson College in the U.S. Bevis Longstreth 68 Non-Executive USA/b c d/ Bevis Longstreth has served as a Non-Executive Director of our company since 1993 and is Chairman of the Audit Committee. Mr. Longstreth is retired from Debevoise & Plimpton, based in New York, where he was a partner from 1970 through 1981, and from 1984 through 1997. He was a Commissioner of the Securities and Exchange Commission from 1981 to 1984. Mr. Longstreth is a frequent writer on issues of corporate governance, banking, and securities law, and is the author of Modern Investment Management and the Prudent Man Rule (1986), a book on law reform. He is a graduate of Princeton University and the Harvard Law School. Robert F. McCullough 59 Chief Financial Officer USA/a/ Robert McCullough has served as a Director and Chief Financial Officer of our company since 1996. Before joining our company in 1996, he was an accountant at Arthur Andersen in New York from 1964 until 1987. Mr. McCullough became a partner at Arthur Andersen in 1973 and managing partner of the Atlanta office in 1987. He is a graduate of the University of Texas at Austin and is a Certified Public Accountant. Mr. McCullough is a member of the American Institute of Certified Public Accountants and the Georgia Society of Certified Public Accountants. James I. Robertson 44 Chief Executive Officer, AMVESCAP Group Services, Inc. UK /a/ 31 James Robertson became Chief Executive Officer of AMVESCAP Group Services, Inc. in February 2001. He has been a member of the Executive Board of our company since March 1999. Mr. Robertson joined our company as Director of Finance and Corporate Development for INVESCO Global's European division in 1993 and repeated this role for the Pacific division in 1995. In 1996, he became Managing Director, Global Strategic Planning, of our company. Mr. Robertson holds an MA from Cambridge University. John D. Rogers 40 Chief Executive Officer, INVESCO Institutional USA/a/ John Rogers became Chief Executive Officer of INVESCO Institutional and a member of the Executive Board of our company in December 2000. He joined the Company as Chief Investment Officer and President of INVESCO's Tokyo office in 1994 and became Chief Executive Officer and Co-Chief Investment Officer of INVESCO Global Asset Management (N.A.), Inc. in 1997. Mr. Rogers received a BA cum laude from Yale University and an MA from Stanford University. He is a Chartered Financial Analyst and a member of the International Society of Financial Analysts. Stephen K. West 73 Non-Executive USA/b c d/ Stephen West has served as a Non-Executive Director of our company since 1997. Mr. West was a Director of AIM from 1994 through 1997, when AIM was merged with one of our subsidiaries. From 1964 to 1998 he was a partner of Sullivan & Cromwell, based in New York, and he is presently of counsel to the firm. Mr. West serves on the Boards of Directors of the Pioneer Funds and the Swiss Helvetia Fund, Inc. Mr. West is a graduate of Yale University and the Harvard Law School. Alexander M. White 68 Non-Executive USA/b c d/ Alexander White has served as a Non-Executive Director of our company since 1992. Mr. White has spent his entire career in the financial services community. He has been associated with Merrill Lynch, White Weld & Co., and, most recently, James D. Wolfensohn, Inc., where he was a senior investment banker. Mr. White is a graduate of Harvard College and the Harvard Business School. Neil Williams 66 General Counsel USA/a/ Neil Williams has served as General Counsel of our company and has been a member of our Executive Board since September 1999. Mr. Williams practiced law with the firm of Alston & Bird in Atlanta from 1961 to September 1999. He was Alston & Bird's managing partner from 1984 through 1996. Mr. Williams received an AB and a JD from Duke University. He is a member of the American Law Institute. Mark H. Williamson 50 Chief Executive Officer, Managed Products; Chief Executive Officer, INVESCO Funds Group Inc. USA/a/ Mark Williamson became Chief Executive Officer of Managed Products in February 2001 and has been a member of the Executive Board of our company since December 1999. He has served as Chairman and Chief Executive Officer of INVESCO Funds Group, Inc. since 1998. Mr. Williamson began his career at Merrill Lynch in 1976. He joined C&S Securities in 1985 and was named Managing Director in 1988. He became Chairman and Chief Executive Officer of NationsBank's mutual funds and brokerage subsidiaries in 1997. Mr. Williams graduated from the University of Florida and is a member of the Board of Governors of the Investment Company Institute and the Board of Directors of ICI Mutual Insurance Company. 32 Compensation of Directors and Senior Management Information for Messrs. de Franssu, Hain, Herrema, Lo, Robertson, Rogers, Ward, Williams and Williamson is included in the tables below under the references to senior management as a group because they were members of our Executive Board on December 31, 2001. Mr. Ward resigned as a member of our Executive Board in January 2002. The other members of our Executive Board also serve as directors of our company and are not included in references to senior management. Salary, Bonus and Other Benefits The remuneration of our executive chairman, directors and senior management during the fiscal year ended December 31, 2001 is set forth in the following tables:
Salary Bonus(1) Benefits Total ((Pounds)000) ((Pounds)000) ((Pounds)000) ((Pounds)000) -------------- -------------- -------------- -------------- Executive Chairman: - ---------------------------- Charles W. Brady 394 2,439 3 2,836 Executive Directors: - ---------------------------- The Hon. Michael D. Benson 366 523 1 890 Michael J. Cemo/(2)/ 227 1,622 3 1,852 Gary T. Crum 279 697 3 979 A.D. Frazier, Jr./(3)/ 60 - - 60 Robert H. Graham 348 976 3 1,327 Hubert L. Harris, Jr. 307 697 3 1,007 Robert F. McCullough 287 697 3 987 Non-Executive Directors: - ---------------------------- Rex D. Adams/(4)/ 29 - - 29 Sir John Banham 75 - - 75 Joseph R. Canion/(5)/ 70 - - 70 Roberto A. de 70 - - 70 Guardiola/(5)(6)/ Bevis Longstreth/(5)/ 70 - - 70 Stephen K. West 70 - - 70 Alexander M. White 70 - - 70 Total remuneration of 2,287 4,704 32 7,023 senior management as a group (nine persons)
- ------------------------------- (1) Approximately 5% of the sums included under Bonus for each director and member of senior management was paid into the AMVESCAP Global Stock Plan. (2) Bonus amounts include commissions earned pursuant to approved commission schedules. (3) Mr. Frazier resigned as director of our company on February 28, 2001. (4) Mr. Adams became a director of our company in November 2001. (5) Each of Messrs. Canion, de Guardiola and Longstreth deferred the entire amount of his compensation in 2001 pursuant to the AMVESCAP Deferred Fees Share Plan. (6) Mr. de Guardiola resigned as director of our company on March 4, 2002. 33 Option Grants We granted the following options to purchase our Ordinary Shares to the following executive directors and senior management during 2001. We did not grant any options to Mr. Frazier during 2001.
Option Exercise Name Number of Shares Price Expiration Date - --------------------------------------------- --------------------------------- ------------------- ------------------- Charles W. Brady 300,000 950.0p December 2011 The Hon. Michael D. Benson 150,000 950.0p December 2011 Michael J. Cemo 150,000 950.0p December 2011 Gary T. Crum 150,000 950.0p December 2011 Robert H. Graham 150,000 950.0p December 2011 Hubert L. Harris, Jr. 150,000 950.0p December 2011 Robert F. McCullough 150,000 950.0p December 2011 Total options granted to senior management as a group (nine persons) 58,080 1168.0p March 2011 1,200,000 950.0p December 2011
Pension Rights Our executive directors and senior management participate in a defined contribution pension scheme. Contributions made in respect of executive directors' and senior management's pension arrangements in 2001 were as follows: (Pounds)000 -------------- Charles W. Brady 12 The Hon. Michael D. Benson 32 Michael J. Cemo 17 Gary T. Crum 17 A.D. Frazier, Jr./(1)/ 4 Robert H. Graham 17 Hubert L. Harris, Jr. 17 Robert F. McCullough 17 Total contributions made for senior management as a group (nine persons) 147 - --------------------------- /(1)/ Mr. Frazier resigned as director of our company on February 28, 2001. AMVESCAP Global Stock Plan We have established the AMVESCAP Global Stock Plan, which is a remuneration plan for key employees, called Global Partners, under which a portion of a profit-linked bonus paid annually in respect of each Global Partner is deposited into a discretionary employee benefit trust, which then purchases Ordinary Shares in the open market. The plan trustee is Bank of Bermuda (New York) Limited. The Ordinary Shares purchased by the trust are allocated within the trust to participants and, provided they retain their position with us for a period of three years from the date of the bonus, such allocated shares will be transferred to the participants upon their retirement or termination of employment with us. Approximately (Pounds)8,039,000 million was paid into the AMVESCAP Global Stock Plan for the year ended December 31, 2001. The AMVESCAP Global Stock Plan owned approximately 11.8 million Ordinary Shares on March 8, 2002. On such date, our executive directors and senior management had interests in the Ordinary Shares held by the AMVESCAP Global Stock Plan as set forth in the table below. Mr. Frazier did not have any vested or unvested interests in the AMVESCAP Global Stock Plan on March 8, 2002. 34
Name Vested Interests Unvested Interests - ---------------------------------------------------------------------------------------------------------------- Charles W. Brady 521,854.81 152,556.85 - ---------------------------------------------------------------------------------------------------------------- The Hon. Michael D. Benson 66,714.58 54,149.35 - ---------------------------------------------------------------------------------------------------------------- Michael J. Cemo 63,188.96 44,793.84 - ---------------------------------------------------------------------------------------------------------------- Gary T. Crum 83,423.05 54,527.00 - ---------------------------------------------------------------------------------------------------------------- Robert H. Graham 157,329.92 87,145.82 - ---------------------------------------------------------------------------------------------------------------- Hubert L. Harris, Jr. 145,922.00 44,344.83 - ---------------------------------------------------------------------------------------------------------------- Robert F. McCullough 100,127.94 45,628.74 - ---------------------------------------------------------------------------------------------------------------- Total interests of senior management (nine persons) 269,329.00 227,916.00 - ----------------------------------------------------------------------------------------------------------------
AMVESCAP Deferred Fees Share Plan The AMVESCAP Deferred Fees Share Plan is a plan under which any of our directors may defer all or a part of fees paid for service as a director until such time as he ceases to be a director. Certain members of our Board of Directors participate in the AMVESCAP Deferred Fees Share Plan. INVESCO Employee Stock Ownership Plan The INVESCO Employee Stock Ownership Plan (the "ESOP") was established for employees of certain of our U.S. subsidiaries. Participating subsidiaries made stock bonus contributions to the ESOP comprising cash and/or our securities in respect of their employees who participate in the ESOP. Accounts were established in respect of each participant's allocation of contributions to the ESOP, which were held by the trustee in accordance with the terms of the ESOP. Certain members of the Board and senior management participate in the ESOP. The ESOP was closed to further activity effective January 1, 2000. AMVESCAP Executive Share Option Schemes Our executive directors and qualifying employees of our participating subsidiaries are eligible to be nominated for participation in various of our option plans (the "AMVESCAP Executive Share Option Schemes"). Options under the AMVESCAP Executive Share Option Schemes entitle the holder to acquire Ordinary Shares at a certain price. Options generally remain exercisable between the third and seventh or tenth anniversaries of the date of the grant. The AMVESCAP Executive Share Option Schemes contain limits upon the participation by each individual. Board Practices Non-executive Directors. Non-executive directors do not have formal fixed term contracts; however, under our Articles of Association all directors are required to retire by rotation, and one third of our Board of Directors (the "Board") is required to seek re-election each year. Re-election is subject to shareholders' approval. Sir John Banham and Messrs. Adams, Kessler, Longstreth and West are seeking re-election in 2002. Because Mr. West is over the age of 70 years, he is required to seek re-election each year. Assuming the current composition of the Board does not change, in addition to Mr. West, Mr. White and Mr. Canion will be required to seek re-election in 2003. Executive Directors. Executive directors are employed under continuing contracts of employment that can be terminated by either party under notice provisions of up to a maximum of twelve months. Executive directors' compensation arrangements are determined by the Remuneration Committee, which consists solely of non-executive directors. Messrs. Brady and Harris are seeking re-election in 2002. Assuming the current composition of the Board does not change, Messrs. Benson and Cemo will be required to seek re-election in 2003, and Messrs. Crum, Graham and McCullough will be required to seek re- election in 2004. 35 Executive Board. The Board has appointed an Executive Board to oversee and supervise the business and strategy of the executive management of the company as a whole and to approve and coordinate the activities of management committees for our five operating groups. As of March 8, 2002, the Executive Board consisted of Messrs. Benson, Brady, Cemo, Crum, de Franssu, Graham, Hain, Harris, Herrema, Lo, McCullough, Robertson, Rogers, Williams and Williamson. Membership of the Executive Board may vary with the approval and consent of the Board. Members of the Executive Board serve until they resign from the Executive Board or the Board decides to change the membership of the Executive Board. Remuneration Committee. The Remuneration Committee consists solely of independent non-executive directors. Mr. Adams chairs the Remuneration Committee. The Remuneration Committee determines the remuneration of the Executive Chairman and the executive directors and the allocation of share options and the sums available for distribution in respect of a bonus paid annually to each Global Partner. The Board as a whole determines the remuneration of the non-executive directors. A firm of independent remuneration consultants is engaged to review executive compensation as it relates to a peer group of comparable companies and the industry in general. In determining the sums available for the payment of incentives through the AMVESCAP Global Stock Plan, the Remuneration Committee takes into account the returns provided to our shareholders and our performance. In determining an individual's compensation, the Remuneration Committee considers the individual's performance measured against, among other factors, the achievement of personal and Board objectives and targets. Options are awarded on a merit basis, including our performance during the year. The remuneration policies implemented by the Remuneration Committee comply with the Best Practice Provisions of the Combined Code annexed to the Listing Rules of the London Stock Exchange. Audit Committee. The Audit Committee consists solely of independent non- executive directors. Mr. Longstreth chairs the Audit Committee. The Audit Committee has written terms of reference. The Audit Committee is responsible for accounting and financial controls being in place, ensuring that auditing processes are properly coordinated and work effectively, reviewing the scope and results of the audit and its cost effectiveness, and ensuring the independence and objectivity of the auditors, including the nature and amount of non-audit work supplied by the auditors. The Audit Committee has direct access to our auditors. The Audit Committee receives periodic reports from management and our auditors on the system of internal controls and significant financial reporting issues. Our Compliance Officer regularly reports on significant regulatory compliance matters. Nomination Committee. The Nomination Committee consists of all of the non-executive directors and the Executive Chairman. Sir John Banham chairs the Nomination Committee. The Nomination Committee is responsible for the structure and composition of the Board. The Nomination Committee carries out a formal selection process of candidates when necessary, and makes recommendations to the Board regarding appointments. Employees As of December 31, 2001, we employed 8,519 people, of which approximately 70% were located in North America. See "Item 4. Information on the Company-- Business Overview," above, for a breakdown of headcount by operating group as of December 31, 2001. As of December 31, 2000 and 1999, we employed 8,259 and 5,545 people, respectively. The increase in headcount during 2001 was due to acquisitions we made during that year, and the increase in headcount during 2000 was due to acquisitions we made and increases in the volume of our business during that year. None of our employees is covered under collective bargaining agreements. 36 Share Ownership Ownership of Ordinary Shares The following table discloses, as of March 8, 2002, holdings of Ordinary Shares by our directors and senior management:
----------------------------------------------------------------------------- Percent of Ordinary Shares/(1)/ Outstanding Ordinary Shares ----------------------------------------------------------------------------- Charles W. Brady/(2)/ 4,372,534 * Rex D. Adams 14,000 * Sir John Banham 7,500 * The Hon. Michael D. Benson/(2)/ 73,177 * Joseph R. Canion/(3)/ 2,000 * Michael J. Cemo/(2)(4)/ 6,791,389 * Gary T. Crum/(2)(5)/ 29,505,821 3.76% Jean-Baptiste de Franssu/(2)/ * * A.D. Frazier, Jr./(6)/ 1,815 * Robert H. Graham/(2)(7)/ 30,479,221 3.89% Roberto A. de Guardiola/(3)(8)/ 2,570,886 * Robert C. Hain/(2)/ * * Hubert L. Harris, Jr./(2)/ 209,038 * Donald J. Herrema/(2)/ * * Denis Kessler/(9)/ 2,200 * Andrew Tak Shing Lo/(2)/ * * Bevis Longstreth/(3)(10)/ 70,440 * Robert F. McCullough/(2)/ 13,815 * James I. Robertson/(2)/ * * John D. Rogers/(2)/ * * Hugh R. Ward/(2)(11)/ * * Stephen K. West 209,433 * Alexander M. White 120,000 * Neil Williams/(2)/ * * Mark H. Williamson/(2)/ * *
_______________ * Less than 1%. Persons for whom no ownership of Ordinary Shares is provided beneficially own less than one percent of outstanding Ordinary Shares. Beneficial ownership is determined in accordance with the rules and regulations of the Securities and Exchange Commission. (1) Ordinary Shares include shares held as American Depositary Shares but does not include options to purchase Ordinary Shares held by such individuals. For information regarding ownership of stock options, see "Options to Purchase Securities from AMVESCAP," below. (2) Excludes (a) interests of Messrs. Brady, Benson, Cemo, Crum, de Franssu, Graham, Hain, Harris, Herrema, Lo, McCullough, Robertson, Rogers, Ward, Williams and Williamson in the 11.8 million Ordinary Shares held by the trustees of the AMVESCAP Global Stock Plan, of which such officers may be deemed to be discretionary beneficiaries by virtue of their participation in such plan (see "AMVESCAP Global Stock Plan," above) and the 11.8 million Ordinary Shares held by the trustees of the AMVESCAP Executive Share Option Schemes, of which such officers may be deemed to be discretionary beneficiaries by virtue of their participation in such schemes (see "Options to Purchase Securities from AMVESCAP," below); and (b) interests of Messrs. Brady, Harris, McCullough, Robertson and Rogers in the 10.4 million Ordinary Shares held by the trustees of the ESOP, in which such officers may be deemed to be interested by virtue of their participation in such plan. (3) Excludes interests in 10,373, 20,050 and 20,050 Ordinary Shares held by Messrs. Canion, de Guardiola and Longstreth, respectively, pursuant to the AMVESCAP Deferred Fees Share Plan. (4) Includes 250,000 Ordinary Shares owned by a non-profit corporation of which Mr. Cemo serves as an executive officer, as to which Mr. Cemo disclaims beneficial ownership. 37 (5) Includes (a) 350,000 Ordinary Shares owned by a non-profit corporation of which Mr. Crum serves as president, (b) 7,567,809 Ordinary Shares owned by a limited partnership with a limited liability corporation as its general partner of which Mr. Crum serves as chief executive officer, and (c) 201,577 Ordinary Shares owned by a trust of which Mr. Crum is co-trustee, as to which Mr. Crum disclaims beneficial ownership. (6) Mr. Frazier resigned as director of our company on February 28, 2001. (7) Includes (a) 29,368,653 Ordinary Shares owned by a limited partnership of which Mr. Graham is the managing general partner, and (b) 288,165 Ordinary Shares owned by a limited partnership with a trust as its general partner of which Mr. Graham serves as trustee. (8) Includes 6,000 Ordinary Shares owned by Mr. de Guardiola's wife and 20,000 Ordinary Shares owned by a family foundation, as to all of which Mr. de Guardiola disclaims beneficial ownership. Mr. de Guardiola's share interest arises as a result of his being a discretionary beneficiary of a trust that is the owner of Harley Services Limited, the owner of the Ordinary Shares. Mr. de Guardiola resigned as director of our company on March 4, 2002. (9) Mr. Kessler became a director of our company in March 2002. (10) Represents shares held by a limited partnership of which Mr. Longstreth is a general partner. (11) Mr. Ward resigned as a member of our Executive Board in January 2002. Options to Purchase Securities from AMVESCAP All outstanding options to purchase our shares have been issued under the AMVESCAP Executive Share Option Schemes and various AIM option plans. The table below is a summary of outstanding options to acquire Ordinary Shares held by our executive directors and senior management as of March 8, 2002. As of March 8, 2002, neither Mr. Frazier nor any of our non-executive directors had outstanding options to acquire Ordinary Shares:
- ------------------------------------------------------------------------------------------------------------------------ Option Name Number of Shares Exercise Price Expiration Date - ------------------------------------------------------------------------------------------------------------------------ Charles W. Brady 500,000 244.0p November 2003 100,000 422.5p November 2004 250,000 432.0p December 2008 500,000 660.0p December 2009 200,000 1100.0p December 2010 300,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ The Hon. Michael D. Benson 100,000 422.5p November 2004 200,000 432.0p December 2008 200,000 660.0p December 2009 100,000 1100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ Michael J. Cemo 100,000 422.5p November 2004 100,000 432.0p December 2008 200,000 660.0p December 2009 100,000 1100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ Gary T. Crum 100,000 422.5p November 2004 100,000 432.0p December 2008 150,000 660.0p December 2009 100,000 1100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ Jean-Baptiste Douville de Franssu 200,000 244.0p November 2003 50,000 422.5p November 2004 25,000 416.0p October 2008 25,000 660.0p December 2009 45,000 1100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ Robert H. Graham 100,000 422.5p November 2004 200,000 432.0p December 2008 250,000 660.0p December 2009 100,000 1100.0p December 2010 150,000 950.0p December 2011
38
- ------------------------------------------------------------------------------------------------------------------------ Option Name Number of Shares Exercise Price Expiration Date - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ Robert C. Hain 133,735 452.0p December 2008 75,000 660.0p December 2009 100,000 1100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ Hubert L. Harris, Jr. 100,000 242.0p April 2003 400,000 244.0p November 2003 100,000 422.5p November 2004 100,000 432.0p December 2008 150,000 660.0p December 2009 100,000 1100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ Donald J. Herrema 58,080 1168.0p March 2011 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ Andrew Tak Shing Lo 200,000 244.0p November 2003 50,000 422.5p November 2004 25,000 416.0p October 2008 25,000 660.0p December 2009 42,500 1100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ Robert F. McCullough 200,000 242.0p April 2003 400,000 244.0p November 2003 100,000 422.5p November 2004 100,000 432.0p December 2008 150,000 660.0p December 2009 100,000 1100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ James I. Robertson 200,000 244.0p November 2003 50,000 422.5p November 2004 75,000 416.0p October 2008 150,000 660.0p December 2009 100,000 1,100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ John D. Rogers 200,000 244.0p November 2003 50,000 422.5p November 2004 25,000 416.0p October 2008 25,000 660.0p December 2009 100,000 1,100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ Hugh R. Ward /(1)/ 25,000 660.0p December 2009 - ------------------------------------------------------------------------------------------------------------------------ Neil Williams 126,800 480.0p September 2009 100,000 1,100.0p December 2010 150,000 950.0p December 2011 - ------------------------------------------------------------------------------------------------------------------------ Mark H. Williamson 100,000 416.0p October 2008 100,000 660.0p December 2009 100,000 1,100.0p December 2010 150,000 950.0p December 2011
___________________________ (1) Mr. Ward resigned as a member of our Executive Board in January 2002. Employee Ownership Opportunities We operate various Sharesave option plans that allow employees to set aside part of their salary each month as savings for the exercise of options to purchase our stock at the end of the option period. Additionally, certain of our employees receive contingent rights to receive Ordinary Shares pursuant to the various plans described above and other stock plans. Item 7. Major Shareholders and Related Party Transactions 39 Major Shareholders The following table discloses, as of March 8, 2002, the number of Ordinary Shares owned by each person, other than our current directors and senior management, whom we know to be a beneficial owner of 3% or more of our outstanding Ordinary Shares:
---------------------------------------------------------------------- Shares Beneficially Owned and Percentage of Class/(1)/ ---------------------------------------------------------------------- Percent of Outstanding Ordinary Ordinary Shares/(2)/ Shares ---------------------------------------------------------------------- Charles T. Bauer 32,260,012 4.11% CGNU plc/(3)/ 36,183,253 4.61% AIC Limited/(4)/ 43,677,713 5.43%
_____________________ (1) Beneficial ownership is determined in accordance with the rules and regulations of the Securities and Exchange Commission. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, Ordinary Shares into which Exchangeable Shares beneficially owned by such person are exchangeable are deemed outstanding. These shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. (2) Ordinary Shares include shares held as American Depositary Shares. (3) Holdings of CGNU plc include 36,096,905 Ordinary Shares beneficially owned by Morley Fund Management, of which CGNU plc is deemed to be a beneficial owner by virtue of its ownership of Morley Fund Management. (4) Holdings of AIC Limited include 23,459,134 Ordinary Shares deemed to be beneficially owned by AIC Limited by virtue of its management of a number of mutual funds that hold Ordinary Shares as a portfolio investment and 20,218,579 Exchangeable Shares (constituting 51.19% of outstanding Exchangeable Shares) deemed to be beneficially owned by AIC Limited by virtue of its management of a number of its mutual funds that hold Exchangeable Shares as a portfolio investment. Mr. Bauer's holdings of Ordinary Shares decreased during the period from January 1, 1998 through December 31, 2001 from approximately 9.00% to 4.14% as a result of sales and charitable gifts, as well as increases in the number of outstanding Ordinary Shares. Major shareholders do not have different voting rights from owners of less than 3% of our Ordinary Shares. A total of 784,471,881 Ordinary Shares were issued and outstanding on March 8, 2002, of which 68,836,728 Ordinary Shares were held of record by holders in the U.S. (excluding shares held in American Depositary Receipt form) and 16,333,544 Ordinary Shares were represented by American Depositary Shares evidenced by American Depositary Receipts issued by the Depositary. On March 8, 2002, the number of holders of record of the Ordinary Shares was 15,987, the number of holders of record of Ordinary Shares in the U.S. was 136 and the number of registered holders of the American Depositary Shares was 54. Because certain of these Ordinary Shares and American Depositary Shares were held by brokers or other nominees, the number of holders of record or registered holders in the U.S. is not representative of the number of beneficial holders or of the residence of the beneficial holders. We are not directly or indirectly owned or controlled by any other corporations, foreign governments or other persons. We are not aware of any arrangement the operation of which might result in a change in the control of the company. Related Party Transactions Mr. de Guardiola is Managing Director of de Guardiola Advisors, Inc., which provides investment banking services to us from time to time. In 2001, de Guardiola Advisors, Inc.'s total fees for services provided to us amounted to (Pounds)2.9 million. These fee amounts were based on arms-length negotiations between us and de Guardiola Advisors, Inc. We believe that the fees paid and to be paid by us are customary and reasonable for the services provided by de Guardiola Advisors, Inc. Mr. de Guardiola resigned as director of our company on March 4, 2002. 40 In March and April 2001, we made two short-term interest-free bridge loans in the aggregate principal amount of $4 million to Mr. Williamson in connection with a corporate relocation. These loans were fully repaid in June 2001. Item 8. Financial Information Consolidated Statements and Other Financial Information See "Item 17. Financial Statements" for our Consolidated Financial Statements. Legal Proceedings In the normal course of business, we are subject to various legal proceedings; however, in management's opinion, there are no legal proceedings pending against us or any of our subsidiaries that would have a material adverse effect on our consolidated financial position, results of operations, or liquidity. Dividend Distributions For information on our policy regarding dividend distributions, see "Item 3. Key Information - Dividends," above, and "Item 10. Additional Information," below. Significant Changes in Financial Information No significant change in our financial information has occurred since the date of our annual financial statements included in this Form 20-F. Item 9. The Offer and Listing Nature of Trading Market and Price History The following table sets forth, for the periods indicated, the high and low reported sale prices for the Ordinary Shares on the London Stock Exchange, based on its Daily Price Official List, and the high and low reported sale prices for the American Depositary Shares on the New York Stock Exchange at the closing of each trading day. The Ordinary Shares are listed on the London Stock Exchange and the SBF-Paris Bourse, are traded on the Frankfurt Stock Exchange, and are reported under the symbol "AVZ" on all three exchanges. The American Depositary Shares are listed and traded on the New York Stock Exchange under the symbol "AVZ." Each American Depositary Share represents two Ordinary Shares. 41
Ordinary Shares American Depositary Shares/(1)/ -------------------- ------------------------------- High Low High Low --------- --------- -------------- --------------- March 2002 1,002.00p 885.00p $28.51 $25.12 February 2002 984.00p 788.00p $27.86 $22.54 January 2002 1,120.00p 885.00p $32.22 $25.06 December 2001 1,099.00p 946.00p $31.46 $26.90 November 2001 1,107.50p 807.00p $31.25 $23.60 October 2001 989.00p 683.00p $28.51 $19.97 Ordinary Shares American Depositary Shares/(1)/ --------------------- --------------------------------- High Low High Low --------- --------- ------------- ------------- First Quarter 2002 1,090.00p 807.00p $31.36 $23.08 Fourth Quarter 2001 1,107.50p 683.00p $31.25 $19.97 Third Quarter 2001 1,270.00p 530.00p $35.71 $15.42 Second Quarter 2001 1,392.00p 960.00p $39.75 $27.55 First Quarter 2001 1,620.00p 847.00p $47.36 $24.09 Fourth Quarter 2000 1,734.00p 1,100.00p $49.50 $31.30 Third Quarter 2000 1,500.00p 1,037.00p $43.82 $31.27 Second Quarter 2000 1,060.00p 728.50p $32.14 $23.09 First Quarter 2000 887.00p 642.00p $27.89 $21.03 Ordinary Shares American Depositary Shares/(1)/ ---------------------- -------------------------------- High Low High Low --------- --------- -------------- ------------- 2001 1,620.00p 530.00p $47.36 $15.42 2000 1,734.00p 642.00p $49.50 $21.03 1999 721.00p 434.50p $23.35 $14.41 1998 743.00p 263.00p $24.90 $ 8.62 1997 525.50p 251.50p $17.25 $ 8.73
_________________ (1) American Depositary Share prices have been adjusted to reflect the change in the Ordinary Share per American Depositary Share ratio to one American Depositary Share per two Ordinary Shares effected on November 8, 2000 and the previous change in the Ordinary Share per American Depositary Share ratio to one American Depositary Share per five Ordinary Shares effected in April 1998. Item 10. Additional Information Memorandum and Articles of Association Our Memorandum of Association provides that our principal objects are, among other things, to carry on the business of an investment holding company and to subscribe for, purchase or otherwise acquire and hold shares, debentures or other securities of any other company or body corporate and to acquire and undertake the whole or any part of the business, property and liabilities of any company or body corporate carrying on any business and to sell or deal in or otherwise dispose of any shares, debentures or other securities or property including any business or undertaking of any other company or any other assets or liabilities. Our objects are set out in full in clause 4 of our Memorandum of Association. Our Memorandum of Association, all material agreements discussed in this Form 20-F and all documents filed as exhibits to this Form 20-F are available for inspection at our registered office at 11 Devonshire Square, London, EC2M 4YR. The following discussion summarizes our Articles of Association and should be read in conjunction with the Articles of Association, which are filed as an exhibit to this Form 20-F. Our Articles of Association contain, among other things, provisions to the following effect: Directors At every annual general meeting one third of the directors will retire from office but will be eligible for re-election. We calculate the directors' retirement schedules prior to each annual general 42 meeting based on director retirements during the past 12 months and the date each director was last elected. Other than as provided below, a director cannot vote in respect of any arrangement in which he has any material interest other than by virtue of his interest in our securities. A director will not be counted in the quorum at the meeting in relation to the resolution on which he is not permitted to vote. A director can vote on resolutions concerning (i) debt obligations incurred by him for us, (ii) securities offerings in which he is interested as an underwriting participant, (iii) proposals relating to a company in which he is interested provided he beneficially owns less than 1% of such company, (iv) proposals relating to certain retirement benefit plans and certain employee share participation plans and (v) the purchase and maintenance of insurance. A director cannot vote or be counted in the quorum on any resolution regarding his appointment as an office-holder including fixing or varying the terms of his appointment or termination. Remuneration of non-executive directors is determined by the Board as a whole. Remuneration of executive directors is determined by the Remuneration Committee, which is composed solely of independent non-executive directors. The Board may borrow or raise money as it deems necessary for our purposes, subject to, for certain types of borrowings, an aggregate limit of the greater of (Pounds)150 million or a sum equal to three times the aggregate of certain items in our latest audited consolidated balance sheets. This limit may be varied by action of our shareholders in general meeting. Although directors may serve on the Board beyond their 70th birthday, any director over the age of 70 years who is seeking re-election will be required to do so on an annual basis. Directors are not required to hold shares of our stock as a qualification for office. Rights attaching to our shares Subject to the provisions of the Companies Act of 1985 (the "U.K. Act"), the Board may determine when to hold the annual general meeting, and may call extraordinary meetings when it thinks appropriate. Extraordinary meetings may also be convened by requisitionists. Unless the Board otherwise determines, a shareholder may not be present or vote at a meeting in respect of his shares, and will not be counted in the quorum for such meeting, if he owes any amount to us for the purchase of his shares. If a shareholder does not comply within the specified time period with a request made by us under section 212 of the U.K. Act to disclose the nature of his interest in our shares, the directors may suspend the shareholder's right to attend meetings or vote his shares. Subject to any special voting rights, and if all shares owned have been fully paid for, every shareholder (or shareholder on a poll) who is present in person or by proxy has one vote for every four Ordinary Shares. On a poll, every shareholder who is present in person or by proxy has one vote for every (Pounds)1 in the aggregate paid up in respect of the nominal amount of Ordinary Shares. The special voting share, par value 25 pence, that we issued in connection with the issuance of Exchangeable Shares by one of our subsidiaries (the "Special Voting Share"), has one vote in addition to any votes that may be cast by holders of Exchangeable Shares (other than us). On a poll, the holder of the Special Voting Share has one vote for every four Exchangeable Shares that have been voted by holders of such Exchangeable Shares (other than us). A holder of Exchangeable Shares other than us can instruct the holder of the Special Voting Share to appoint that person as proxy to attend meetings on behalf of his own interests in the Exchangeable Shares. The special rights and privileges of shareholders may be changed upon shareholder vote, but will not be affected by the issuance of additional shares of the same class. We may not issue any special voting shares in addition to the Special Voting Share without the approval of the holder of such share. When no Exchangeable Shares are outstanding (other than those held by us) and no Equity Subordinated Debentures are outstanding, the Special Voting Share will automatically be redeemed and cancelled. Otherwise, the Special Voting Share is not subject to redemption by us or by the holder of such share. 43 There are currently no restrictions under our Memorandum and Articles of Association or under English law that limit the rights of non-resident or foreign owners to freely hold, vote and transfer Ordinary Shares in the same manner as U.K. residents or nationals. Dividends and entitlement in the event of liquidation to any surplus The Board may pay shareholders such annual and interim dividends as appear to be justified by our profits. Before recommending dividends, the Board can set aside sums as a reserve for special purposes. The Board can deduct from any dividend payable to any shareholder sums payable by him to us. The dividend payable by us will not bear interest. If dividends remain unclaimed for one year after being declared, we can utilize the dividend money until claimed. All dividends unclaimed for a period of 12 years after having been declared will be forfeited and revert to us. Every dividend shall be paid to shareholders of record on the record date. The Special Voting Share does not carry any right to receive dividends or distributions. On a winding up of our company, the liquidator may, with the approval of the contributories, divide the our assets among the contributories, setting such value as he deems fair on any property to be divided, provided that the holder of the Special Voting Share must receive 25 pence before any distribution is made on the Ordinary Shares. After payment of such amount, the holder of the Special Voting Share is not entitled to participate in any further distribution of our assets. Restrictions on our ability to declare and pay dividends are described in "Item 5. Operating and Financial Review and Prospects," above, and in Note 16 to our Consolidated Financial Statements, below. Material Contracts The contracts described below (not being contracts entered into in the ordinary course of business) have been entered into by us and/or our subsidiaries since January 1, 2000 and, as of the date of this document, contain provisions under which we or one or more of our subsidiaries have an obligation or entitlement which is or may be material to us. This discussion should be read in conjunction with the agreements described below, each of which is filed as an exhibit to this Form 20-F or incorporated herein by reference. (i) Agreements relating to the acquisition of Trimark: (a) Amended and Restated Merger Agreement, dated as of May 9, 2000, between AMVESCAP and Trimark (the "Trimark Merger Agreement") - The Trimark Merger Agreement specifies the terms of the Trimark merger. It provides that Trimark shareholders can elect (subject to certain limitations) to receive Exchangeable Shares, Ordinary Shares, Equity Subordinated Debentures or cash or a combination thereof in exchange for their Trimark shares. The Trimark Merger Agreement also provides that options to purchase Trimark shares not exercised before a certain date will become options to purchase Ordinary Shares equal to an exchange ratio multiplied by the number of Trimark shares subject to such options. (b) Support Agreement, dated as of August 1, 2000, between AMVESCAP, AVZ Callco Inc. and AMVESCAP Inc. (the "Trimark Support Agreement") - Pursuant to the Trimark Support Agreement, we agree to ensure that our subsidiaries involved in the issuance of Exchangeable Shares can satisfy their respective obligations in respect of the Exchangeable Shares. The Trimark Support Agreement provides that so long as any Exchangeable Shares not owned by us or our affiliates are outstanding, we cannot declare or pay any dividend unless the issuer of the Exchangeable Shares, AMVESCAP Inc. ("Exchangeco"), on the same day declares and pays an equivalent dividend to holders of Exchangeable Shares. If there is a shortfall in Exchangeco's 44 reserves on any dividend declaration date, we are required to fund this shortfall to the extent necessary to pay an economically equivalent dividend. If we are subject to a takeover offer, we must use all reasonable efforts to enable the holders of the Exchangeable Shares to participate on economically equivalent terms. Further, the Trimark Support Agreement contains an anti-dilution covenant that prevents us from issuing Ordinary Shares, convertible shares or options to our shareholders; distributing property to our shareholders, or altering our share capital structure, in each case without either (a) the approval of the holders of the Exchangeable Shares or (b) economically equivalent arrangements being put in place in favor of the holders of the Exchangeable Shares. (c) Voting and Exchange Trust Agreement, dated as of August 1, 2000, between AMVESCAP, AMVESCAP Inc. and CIBC Mellon Trust Company (the "Trimark Voting and Exchange Trust Agreement") - Under the Trimark Voting Trust Agreement, a special voting share is issued to CIBC Mellon Trust Company, the trustee, and a trust is created for the benefit of the holders of the Exchangeable Shares (other than us and our affiliates). The trustee can vote in person or by proxy on any matters put before our shareholders at our general meeting. Each holder of Exchangeable Shares is entitled to instruct the trustee to vote at any meeting at which holders of Ordinary Shares are entitled to vote or to attend the meeting personally and vote directly. Unless instructed, the trustee may not vote, and any Exchangeable Shares held by us or our affiliates may not be voted. The trustee holds automatic exchange rights in trust for the benefit of the holders of the Exchangeable Shares (other than us and our affiliates) which provide that, in the event of insolvency or liquidation of Exchangeco or of us, we will purchase each Exchangeable Share held by such holders in return for one Ordinary Share plus any accrued and unpaid dividends thereon. We provide to the trustee all documents to be sent to our shareholders (including proxies and forms of direction that are subject to the right of reasonable comment by the trustee if reasonably practicable) prior to mailing. The trustee is required, at our expense, to mail all such documents to the holders of the Exchangeable Shares, whenever practicable at the same time as they are mailed to our shareholders. (d) Indenture dated August 1, 2000 among Exchangeco, AMVESCAP and CIBC Mellon Trust Company (the "Trimark Indenture") - The Equity Subordinated Debentures were issued under the Trimark Indenture and mature after three years. All amounts owing under the Equity Subordinated Debentures and the Indenture are subordinated in right of payment to all other senior indebtedness of Exchangeco. The Equity Subordinated Debentures bear interest at a rate of 6.0% per annum payable semi-annually in arrears at six-month intervals in each year. Each Canadian $1,000 principal amount of Equity Subordinated Debentures that is issued is convertible at any time, subject to notice and other usual limitations as set out in the Trimark Indenture, at the option of the holder prior to maturity into a number of Exchangeable Shares calculated as of the date the holder elects to convert the Equity Subordinated Debentures. The calculation of the conversion rate for Equity Subordinated Debentures into Exchangeable Shares is adjustable based upon the occurrence of certain dilutive events. Exchangeco has the right at any time upon at least 20 days' and not more than 30 days' prior written notice to redeem all of the Equity Subordinated Debentures for Canadian $1,200 (plus accrued unpaid interest on such Canadian $1,000 principal amount) for each Canadian $1,000 principal amount of Equity Subordinated Debentures. Exchangeco has the right to purchase Equity Subordinated Debentures without giving notice in the open market or by tender or private contract at any price, except in certain limited circumstances. Exchangeco is required to remain a wholly owned direct or indirect subsidiary of ours so long as the Equity Subordinated Debentures are outstanding. Neither Exchangeco nor we are entitled to amalgamate with any other corporation or enter into any reorganization or arrangement or effect any conveyance, sale, transfer or lease of all or substantially all of its or our assets, unless certain conditions are met. So long as the Equity Subordinated Debentures remain outstanding, Exchangeco is required to maintain the listing of the Exchangeable Shares on the Toronto Stock Exchange. If certain events of default specified in the Indenture occur and are continuing, the Trustee may, in its discretion, and shall, upon request of 45 the holders of not less than 25% in principal amount of the outstanding Equity Subordinated Debentures, declare the principal of, together with accrued interest on, all Equity Subordinated Debentures to be due and payable. We have agreed to guarantee all of the payment obligations and other obligations of Exchangeco under the Equity Subordinated Debentures and the Trimark Indenture. All of our obligations under such guarantee will be subordinated in right of payment to all other of our senior indebtedness. (ii) Agreements relating to the acquisition of Perpetual plc: (a) Final Offer Document, dated October 19, 2000, for Cash and Share Offer by Schroder Salomon Smith Barney on behalf of AMVESCAP PLC to acquire all of the issued share capital of Perpetual plc (the "Perpetual Offer Document") - The Perpetual Offer Document describes the terms of a cash and share offer made by Schroder Salomon Smith Barney on our behalf for all of the issued and to be issued share capital of Perpetual. Schroder Salomon Smith Barney offered two new Ordinary Shares and (Pounds)10 in cash for every Perpetual share, valuing each Perpetual share at approximately (Pounds)35.80 and the existing issued share capital of Perpetual at approximately (Pounds)1.05 billion, based on the closing middle market quotation of an Ordinary Share at the close of business on October 18, 2000. (b) Instrument constituting (Pounds)160,107,220 Floating Rate Unsecured Loan Notes (the "Loan Note Instrument") -- The Loan Note Instrument sets forth the terms under which we issued Loan Notes to certain shareholders of Perpetual who elected to receive such Loan Notes in lieu of cash in connection with our acquisition of Perpetual. Interest is payable under the Loan Notes twice yearly at the rate of six-month LIBOR less 0.50%. The Loan Notes mature on October 30, 2005. (iii) Agreements relating to the acquisition of National Asset Management Corporation: (a) Merger Agreement, dated as of February 28, 2001, among National Asset Management Corporation, the Sellers listed therein, the Option Holder listed therein, AMVESCAP and AVZ, Inc. (the "NAM Merger Agreement") - The NAM Merger Agreement specifies the terms of the merger of National Asset Management Corporation into AVZ, Inc., a direct, wholly owned subsidiary of ours. Pursuant to the NAM Merger Agreement, the shareholders of National Asset Management Corporation received an up front payment of $200 million paid in equal amounts of cash and Ordinary Shares valued as provided under the NAM Merger Agreement. The NAM Merger Agreement also provides that the shareholders of National Asset Management Corporation will receive contingent earn out payments of up to $75 million (based on achieving certain compound annual revenue growth rates over the next three years) and retention payments payable over five years totaling $25 million. Pursuant to the NAM Merger Agreement, the vesting of all outstanding options to purchase shares of National Asset Management was accelerated, and the optionholders exercised their options in full prior to the date of closing of the merger transaction and were treated as shareholders of National Asset Management Corporation for purposes of merger consideration. (iv) Agreements relating to the acquisition of Pell Rudman & Co., Inc. and Rothschild/Pell Rudman, Inc.: (a) Stock Purchase Agreement, dated as of April 26, 2001, by and among Old Mutual, PLC, Old Mutual Holdings (U.S.), Inc., United Asset Management Holdings, Inc., AMVESCAP and INVESCO North American Holdings, Inc. (the "Pell Rudman Stock Purchase Agreement") -- 46 The Pell Rudman Stock Purchase Agreement specifies the terms pursuant to which INVESCO North American Holdings, Inc., an indirect wholly owned subsidiary of ours, purchased all of the common stock of Pell Rudman & Co., Inc. and Rothschild/Pell Rudman, Inc. on August 2, 2001. On that date, the sellers of the common stock received consideration of (Pounds)122.8 million. Under the Pell Rudman Stock Purchase Agreement, the sellers will receive additional consideration for the common stock (the "Additional Consideration") no later than sixty days following each of August 2, 2002 and August 2, 2003. The Additional Consideration is determined based on certain revenue and billing metrics calculated as of each of those dates, except that in no event shall the Additional Consideration paid to the sellers exceed (Pounds)19.0 million. (v) Agreements relating to our revolving credit facilities: (a) Five Year Credit Agreement, dated as of June 18, 2001, by and between AMVESCAP, the banks, financial institutions and other institutional lenders listed on the signature pages thereof, the co-agents listed on the signature pages thereof, Citibank, N.A., Bank of America, N.A. and HSBC Bank plc, as co-syndication agents for the Lenders (as that term is defined therein), and Bank of America, N.A., as funding agent -- The Five Year Credit Agreement sets forth the terms under which the Lenders provide us a revolving credit facility in the initial principal amount of up to $900 million. The credit facility terminates on June 18, 2006, unless that date is extended by agreement of the parties or the credit facility is earlier terminated due to an event of default by us under the Five Year Credit Agreement that remains uncured after the expiration of an applicable cure period, if any. Under the Five Year Credit Agreement, we are required to pay a facility fee to each Lender on the aggregate amount of such Lender's commitment in a percentage per annum ranging from 0.100% to 0.300%, depending upon our financial performance, as well as agents' fees as agreed from time to time. Interest on advances is based on a base rate per annum, computed from time to time, of the greater of Bank of America's prime rate or 0.5% per annum above the Federal Funds Rate, plus a margin for certain eurocurrency rate advances of a percentage per annum ranging from 0.400% to 0.700%, depending upon our financial performance. The Five Year Credit Agreement contains standard terms and conditions for facilities of this type, including making advances contingent on the veracity of representations and warranties made by us and the non-occurrence of events of default under the Five Year Credit Agreement, and requiring us to comply with certain affirmative and negative covenants with respect to, among others, the granting of material liens on our property and the property of our subsidiaries, the making of material loans by us, mergers, consolidations and sales of substantially all of the assets of us or our subsidiaries, payment of dividends and maintenance of financial covenants. Under the Five Year Credit Agreement, advances are contingent on the execution and delivery of a guaranty of our obligations under the Five Year Credit Agreement by certain of our subsidiaries, which guaranty is described below. (b) Guaranty, dated June 18, 2001, made by INVESCO, Inc., INVESCO North American Holdings, Inc., A I M Management Group Inc. and A I M Advisors, Inc. with respect to our obligations under the Five Year Credit Agreement (the "Five Year Guaranty") -- The Five Year Guaranty sets forth the terms under which the various subsidiaries of ours named in the Five Year Guaranty agree to unconditionally and irrevocably guarantee the payment, when due, of our obligations under the Five Year Credit Agreement. The Five Year Guaranty contains terms and conditions standard to guaranties of this type. (c) 364-Day Credit Agreement, dated as of June 18, 2001, by and between AMVESCAP, the banks, financial institutions and other institutional lenders listed on the signature pages thereof, the co-agents listed on the signature pages thereof, Citibank, N.A., Bank of America, N.A. and HSBC Bank plc, as co-syndication agents for the Lenders (as that term is defined therein), and Bank of America, N.A., as funding agent -- 47 The 364-Day Credit Agreement sets forth the terms under which the Lenders provide us a revolving credit facility in an initial principal amount of up to $200 million. The credit facility terminates on June 17, 2002, unless that date is extended by agreement of the parties or the credit facility is earlier terminated due to an event of default by us under the 364-Day Credit Agreement that remains uncured after the expiration of an applicable cure period, if any. Under the 364-Day Credit Agreement, we are required to pay a facility fee to each Lender on the aggregate amount of such Lender's commitment in a percentage per annum ranging from 0.085% to 0.200%, depending upon our financial performance, as well as agents' fees as agreed from time to time. Interest on advances is based on a base rate per annum, computed from time to time, of the greater of Bank of America's prime rate or 0.5% per annum above the Federal Funds Rate, plus a margin for certain eurocurrency rate advances of a percentage per annum ranging from 0.415% to 0.800%, depending upon our financial performance. The 364-Day Credit Agreement contains standard terms and conditions for facilities of this type that mirror those in the Five Year Credit Agreement. Under the 364-Day Credit Agreement, advances are contingent on the execution and delivery of a guaranty of our obligations under the 364-Day Credit Agreement by certain of our subsidiaries, which guaranty is described below. (d) Guaranty, dated June 18, 2001, made by INVESCO, Inc., INVESCO North American Holdings, Inc., A I M Management Group Inc. and A I M Advisors, Inc. with respect to our obligations under the 364- Day Credit Agreement (the "364-Day Guaranty") -- The 364-Day Guaranty sets forth the terms under which the various subsidiaries of ours named in the 364-Day Guaranty agree to unconditionally and irrevocably guarantee the payment, when due, of our obligations under the 364- Day Credit Agreement. The 364-Day Guaranty contains terms and conditions standard to guaranties of this type. (vi) Agreements relating to the issuance of our 5.90% Senior Notes due 2007 (the "Senior Notes"): (a) Indenture, dated as of December 17, 2001, among AMVESCAP PLC, A I M Advisors, Inc., A I M Management Group Inc., INVESCO Institutional (N.A.), Inc. and INVESCO North American Holdings, Inc. and SunTrust Bank. (the "Indenture") -- The Indenture sets forth the terms pursuant to which we created and issued the Senior Notes, in the aggregate principal amount of $300 million, to the initial purchasers of the Senior Notes (the "Initial Purchasers"). Interest accrues on the Senior Notes at the rate of 5.90% per year, which is to be paid on January 15 and July 15 of each year beginning on July 15, 2002, and the Senior Notes have a maturity date of January 15, 2007. Under the Indenture, we can issue additional notes with the same ranking, interest rate, maturity date, redemption rights and other terms as the Senior Notes. Pursuant to the Indenture, A I M Advisors, Inc., A I M Management Group Inc., INVESCO Institutional (N.A.), Inc. and INVESCO North American Holdings, Inc. (the "Guarantors") agree unconditionally and irrevocably to guarantee the payment of principal and interest on the Senior Notes. The Indenture provides that we may redeem some or all of the Senior Notes at any time at a redemption price calculated under the terms of the Indenture. Under the Indenture, we may be required to pay additional amounts to the holders of the Senior Notes if, due to tax law changes or our failure to list or maintain the listing of the Senior Notes on a stock exchange recognized under the tax laws of the United Kingdom, we are required to withhold or deduct withholding taxes on payments made to the holders of the Senior Notes, except that, if either of such events occurs, we have certain rights of redemption under the Indenture. The Indenture also includes provisions limiting our and the Guarantors' rights to engage in a merger, consolidation or sale of substantially all of our or their assets and provides us with certain rights of defeasance and covenant defeasance. (b) Registration Rights Agreement, dated as of December 12, 2001, by and between AMVESCAP PLC, A I M Management Group Inc., A I M Advisors, 48 Inc., INVESCO Institutional (N.A.), Inc., INVESCO American Holdings, Inc. and Salomon Smith Barney Inc., for themselves and as representative of the Initial Purchasers (the "Registration Rights Agreement") -- The Registration Rights Agreement requires us to file with the Securities and Exchange Commission, no later than April 15, 2002, a registration statement with respect to a new issue of notes identical in all material respects to the Senior Notes (the "Exchange Notes"), and use best efforts to cause the registration statement to be declared effective not later than June 15, 2002. Once the registration statement has been declared effective, we are required to give holders of the Senior Notes who are not our affiliates (or who are otherwise prevented by the Securities Act of 1933 (the "Securities Act") and applicable staff interpretations thereunder from doing so) the opportunity to exchange the Senior Notes for the Exchange Notes. In certain cases, including a change in the law or applicable interpretations thereof, we will be required, in lieu of filing a registration statement with respect to the Exchange Notes, to file, and to use best efforts to cause to be declared effective, a shelf registration statement covering resales of the Senior Notes. We also have agreed to use best efforts to cause such shelf registration to remain effective until the Senior Notes are available for sale without restrictions imposed by the Securities Act. If we default on our obligations under the Registration Rights Agreement, following the expiration of any applicable cure period, if any, additional amounts shall accrue daily on the Senior Notes at the rate of 0.25% per year until the default is cured. The additional amounts will be payable in cash at the time interest payments are made to the holders under the terms of the Indenture. (c) Guarantee, dated December 17, 2001, made by A I M Management Group Inc., A I M Advisors, Inc., INVESCO Institutional (N.A.), Inc. and INVESCO North American Holdings, Inc. (the "Guarantee") The Guarantee sets forth the terms under which the parties executing the Guarantee agree to unconditionally guarantee to the holders of the Senior Notes the payment of principal and interest on the Senior Notes when due. Exchange Controls There are currently no U.K. or U.S. foreign exchange control restrictions on the import or export of capital, on the payment of dividends or other payments to holders of Ordinary Shares or on the conduct of our operations. Taxation This section summarizes the principal U.S. and U.K. tax consequences to U.S. Holders (defined below) that own our Ordinary Shares or American Depositary Shares. Except where noted otherwise in this section, tax consequences apply equally to U.S. Holders that own Ordinary Shares and U.S. Holders that own American Depositary Shares. "U.S. Holders" is used in this section to refer to (i) U.S. citizens, (ii) U.S. residents, (iii) U.S. corporations, (iv) U.S. partnerships and (v) U.S. citizens that are resident outside the U.S. and the U.K. and are subject to U.S. taxation on worldwide income regardless of its source. "U.S. Holders" does not include (i) U.S. citizens that are resident or ordinarily resident in the U.K., (ii) U.S. citizens or residents that have a permanent establishment or fixed base of business in the U.K. or (iii) holders of 10% or more of our voting stock. The Convention Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains, as in effect on the date hereof, is referred to in this Form 20-F as the "U.S./U.K. Income Tax Treaty." The Convention Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Estates of Deceased Persons and on Gifts, as in effect on the date hereof, is referred to in this Form 20-F as the "U.S./U.K. Estate Tax Treaty." U.S. Holders who own our Ordinary Shares or American Depositary Shares generally receive 49 the same U.S. tax treatment as if they owned shares of a U.S. company. The following chart summarizes the major differences between the tax treatment for a U.S. Holder that owns shares of a U.S. company and a U.S. Holder that owns shares of a U.K. company:
- ---------------------------------------------------------------------------------------------------------------------------------- Transaction U.S. Company U.K. Company - ---------------------------------------------------------------------------------------------------------------------------------- Purchase of shares No U.S. or U.K. tax ramifications No U.S. or U.K. tax ramifications; U.K. stamp duty or stamp duty reserve tax may be applicable/(1)/. - ---------------------------------------------------------------------------------------------------------------------------------- Ownership of shares Entire dividend taxable in U.S.; no No U.K. withholding tax on dividends received/(3)/; dividend (dividends) withholding tax on dividends received plus tax credit is taxable in U.S./(2)/, /(3)/; U.S. received/(2)/ foreign tax credit may be claimed/(4)/. - ---------------------------------------------------------------------------------------------------------------------------------- Disposition of shares Gain on sale of shares is taxable in Gain on sale of shares is taxable in U.S./(5)/; U.S. rules U.S./(5)/; U.S. rules would treat gain treat gain as capital in nature; capital gain is either as capital in nature; capital gain short- or long-term depending on holding period; no U.K. tax is either short- or long-term to a U.S. Holder/(5)/; U.K. stamp duty or stamp duty reserve depending on holding period tax may be applicable/(1)/. - ---------------------------------------------------------------------------------------------------------------------------------- Other transfers U.S. estate and gift rules apply U.K. inheritance tax would not apply to individuals that are (estate or gift) domiciled in the U.S. or are not considered to be a U.K. national (both determinations made under the U.S./U.K. Estate Tax Treaty)/(6)/; U.S. estate and gift rules apply; treaty provisions provide for a tax credit if U.S. Holder is subject to tax in U.S. and U.K./(6)/; U.K. stamp duty or stamp duty reserve tax may be applicable/(1)/. - ----------------------------------------------------------------------------------------------------------------------------------
__________________________ (1) If an owner of Ordinary Shares transfers his shares to another person through the use of a transfer document (i.e., a bill of sale) executed in or brought to the U.K., the purchaser usually pays the stamp duty at a rate of 0.5%. When Ordinary Shares are transferred without the use of a transfer document, stamp duty does not apply. Instead, the purchaser normally pays Stamp Duty Reserve Tax ("SDRT") at a rate of 0.5% of the purchase price. If stamp duty is charged on the transfer, SDRT may be refunded. If Ordinary Shares are transferred to the Depositary under the Amended and Restated Deposit Agreement, dated as of November 8, 2000, among us, the Depositary, and the holders of American Depositary Receipts issued pursuant to such agreement (the "Depositary Agreement"), the Depositary will charge the U.S. Holder who purchases the American Depositary Receipts representing those shares for the stamp duty or SDRT owed at a rate of 1.5%. No SDRT will be payable on an agreement to transfer American Depositary Receipts, nor will U.K. stamp duty be payable on transfer of the American Depositary Receipts, provided that the instrument of transfer is executed outside the U.K. and subsequently remains at all times outside the U.K. If the Depositary transfers the underlying Ordinary Shares to a U.S. Holder who owned American Depositary Shares representing such Ordinary Shares, such U.S. Holder will pay duty at a rate of (Pounds)5 per transfer. If the Depositary transfers the underlying Ordinary Shares to a purchaser from a U.S. Holder who owned American Depositary Shares representing such Ordinary Shares, such purchaser will pay duty at a rate of 0.5% of the purchase price. (2) A distribution is a dividend for U.S. income tax purposes if it is paid out of either our current or accumulated earnings and profits (as determined under U.S. federal income tax rules). These rules would apply to a U.S. Holder that receives a distribution from either a U.S. company or a U.K. company. The U.K. does not have a withholding tax in respect of dividends. (3) If a claim for credit under the U.S./U.K. Income Tax Treaty is made, the aggregate of the dividend and the accompanying tax credit shall be treated as income for U.S. purposes. If no claim for credit is made, only the dividend amount is treated as income for U.S. purposes, and as a result no credit may be taken. (4) U.S. Holders may reduce their U.S. tax liability by making a claim under the U.S./U.K. Income Tax Treaty for a foreign (non-U.S.) tax credit for the accompanying tax credit amount. The procedures for claiming a credit are outlined in Revenue Procedure 2000-13, 2000-6 I.R.B. 515. A U.S. Holder's ability to claim a foreign tax credit may be limited by his particular situation. (5) The U.S./U.K. Income Tax Treaty states that capital gains arising from the disposition of Ordinary Shares and American Depositary Shares are taxed in accordance with the provisions of domestic law. Under both U.S. and U.K. domestic law, capital gains are sourced to the seller's country of residence. (6) The U.S./U.K. Estate Tax Treaty generally provides for the tax paid in the U.K. to be credited against tax paid in the U.S. or for tax paid in the U.S. to be credited against tax payable in the U.K. based on priority rules set out in that Treaty. The above discussion is based on current U.S. and U.K. laws and current interpretations of these laws in effect as of the date of filing of this Annual Report on Form 20-F. The laws and/or the interpretation of these laws are subject to change and any changes may be made retroactively to include transactions that occurred in an earlier year. On July 24, 2001, a new treaty was signed between the U.S. and the U.K. (the "New U.S./U.K. Income Tax Treaty") that is intended to replace the U.S./U.K. Income Tax Treaty. The New U.S./U.K. Income Tax Treaty will not become effective until it is approved 50 by the legislatures of the two countries. As of the date of this Annual Report on Form 20-F, neither the U.S. Senate nor the U.K. Parliament has ratified the New U.S./U.K. Income Tax Treaty. It is not anticipated that the New U.S./U.K. Income Tax Treaty will alter the U.S. and U.K. tax consequences to U.S. Holders described above. In addition, the above discussion relies on representations of the Depositary and assumes that the terms and conditions of the Deposit Agreement will be followed. THIS SUMMARY DOES NOT ADDRESS THE LAWS OF ANY STATE OR LOCALITY OR ANY GOVERNMENT (OTHER THAN THE U.K. AND U.S.). FURTHERMORE, THIS SUMMARY DOES NOT ADDRESS THE TAX CONSEQUENCES TO ANY TAXPAYERS THAT ARE NOT U.S. HOLDERS (AS DEFINED ABOVE). THE INFORMATION PROVIDED ABOVE IS INTENDED TO BE A GENERAL DISCUSSION AND SHOULD NOT BE CONSIDERED TO BE DIRECTED TO ANY PARTICULAR SHAREHOLDER. SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.K. AND U.S. FEDERAL, STATE AND LOCAL AND ANY OTHER TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF ORDINARY SHARES OR AMERICAN DEPOSITARY SHARES WITH PARTICULAR REFERENCE TO THEIR SPECIFIC CIRCUMSTANCES. Item 11. Quantitative and Qualitative Disclosures About Market Risk We do not hedge, through the use of derivative or other financial instruments, the translation of our profits from overseas subsidiaries or other interest rate or foreign exchange exposures. Therefore, significant changes in exchange rates or interest rates can materially affect our results of operations, particularly since a majority of our business and debt is denominated in U.S. dollars. We hold or issue financial instruments primarily to finance our operations but also for client trading purposes in a limited number of subsidiary operations. The main risks arising from our processing of customer transactions primarily arise as a result of our holding securities in our own investment vehicles to facilitate their orderly management. The risks associated with these securities are interest rate risk, foreign currency risk and counterparty risk. These risks are managed in accordance with limits established by our management and applicable regulations. Trading in financial instruments for customer related transactions only occurs in our German, Austrian, and Canadian subsidiaries, which conduct treasury operations for their clients. This activity involves both the acceptance and placement of client deposits and loans and the execution of clients' foreign currency and interest rate derivative contracts. Interest rate, liquidity and currency risks arising from these transactions are actively managed to minimize any residual exposure to us. At December 31, 2001, 76% of our borrowings had an interest rate that was fixed for an average period of 3 years. The remainder of our borrowings had a floating rate. See Note 22 to our Consolidated Financial Statements for quantitative disclosures about market risk. Item 12. Description of Securities Other than Equity Securities Not applicable. PART II 51 Item 13. Defaults, Dividend Arrearages and Delinquencies We have not had any material defaults in the payment of amounts owed or any other material defaults relating to our indebtedness, we are not delinquent in the payment of any dividends, and we have not experienced any other material delinquencies. Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds No material modifications to the rights of security holders have occurred. Item 15. [Reserved] Not applicable. Item 16. [Reserved] Not applicable. PART III Item 17. Financial Statements Our Consolidated Financial Statements are set forth beginning at page F-1 of this Form 20-F. Item 18. Financial Statements Not applicable. Item 19. Exhibits Exhibits: - -------- 1.1 Memorandum of Association of AMVESCAP, incorporating amendments up to and including July 20, 2000. 1.2 Articles of Association of AMVESCAP, adopted on August 1, 2000, incorporated by reference to exhibit 1.3 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 2.1 Form of Certificate for Ordinary Shares of AMVESCAP, incorporated by reference to exhibit 4.5 to AMVESCAP's Registration Statement on Form F-3/F-1 (file nos. 33-5990 and 33-5990-01), filed with the Securities and Exchange Commission on November 21, 1996. 2.2 Form of Certificate for American Depositary Shares, representing two Ordinary Shares, incorporated by reference to exhibit 2.2 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 2.3 Amended and Restated Deposit Agreement, dated as of November 8, 2000, among AMVESCAP, The Bank of New York and the holders of American Depositary Receipts issued thereunder, incorporated by reference to exhibit 2.3 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 52 2.4 Indenture, dated as of December 16, 1996, among LGT Asset Management, Inc., LGT Bank in Liechtenstein Aktiengesellschaft, and Citibank, N.A., incorporated by reference to exhibit 3.28 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 1998, filed with the Securities and Exchange Commission on March 30, 1999. 2.5 First Supplemental Indenture, dated as of December 31, 1999, among INVESCO, Inc., LGT Bank in Lichetenstein Aktiengesellschaft, and Citibank, N.A., incorporated by reference to exhibit 4.19 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 2.6 Loan Agreement, dated December 14, 1995, between LGT BIL Ltd. and Bank in Liechtenstein Aktiengesellschaft, incorporated by reference to exhibit 3.29 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 1998, filed with the Securities and Exchange Commission on March 30, 1999. 2.7 Indenture, dated as of May 7, 1998, for AMVESCAP's Senior Notes due 2003 and 2005, among AMVESCAP, A I M Management Group, Inc., A I M Advisors, Inc., INVESCO, Inc., INVESCO North American Holdings, Inc. and INVESCO Capital Management, Inc., as initial securities guarantors, and SunTrust Bank, Atlanta, as trustee, incorporated by reference to exhibit 4.1 to AMVESCAP's Registration Statement on Form F-4 (file no. 333-8954) filed with the Securities and Exchange Commission on June 15, 1998. 2.8 Indenture, dated August 1, 2000, among AMVESCAP Inc., AMVESCAP and CIBC Mellon Trust Company, incorporated by reference to exhibit 4.26 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 2.9 Instrument, dated December 20, 2000, constituting (Pounds)160,107,220 Floating Rate Unsecured Loan Notes. 2.10 Five Year Credit Agreement, dated as of June 18, 2001, by and between AMVESCAP, the banks, financial institutions and other institutional lenders listed on the signature pages thereof, the co- agents listed on the signature pages thereof, Citibank, N.A., Bank of America, N.A. and HSBC Bank plc, as co-syndication agents for the Lenders (as that term is defined therein), and Bank of America, N.A., as funding agent. 2.11 Instrument, dated August 31, 2001, constituting (Pounds)4,500,000 Five Per Cent Fixed Rate Unsecured Loan Notes. 2.12 Indenture, dated as of December 17, 2001, for AMVESCAP's 5.90% Senior Notes Due 2007 among AMVESCAP PLC, A I M Advisors, Inc., A I M Management Group Inc., INVESCO Institutional (N.A.), Inc. and INVESCO North American Holdings, Inc. and SunTrust Bank. 4.1 Registration Rights Agreement, dated as of February 28, 1997, by and among AMVESCAP and the former shareholders of A I M Management Group, Inc. named therein, incorporated by reference to exhibit 2.11 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 1996, filed with the Securities and Exchange Commission on May 6, 1997. 4.2 Indemnification Agreement, dated as of February 28, 1997, by and among AMVESCAP, Charles T. Bauer, Robert H. Graham, Gary T. Crum and certain related persons named therein, incorporated by reference to exhibit 2.6 to AMVESCAP's 53 Annual Report on Form 20-F for the year ended December 31, 1996, filed with the Securities and Exchange Commission on May 6, 1997. 4.3 Second Amended and Restated Purchase and Sale Agreement dated as of December 14, 2000, among A I M Management Group Inc., Citibank, N.A. and Citicorp North America, Inc., incorporated by reference to exhibit 4.17 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 4.4 Amendment No. 4 to Facility Documents dated as of August 24, 2001 among A I M Management Group Inc., A I M Advisors, Inc., A I M Distributors, Inc., Citibank, N.A., Bankers Trust Company and Citicorp North America, Inc. 4.5 AMVESCAP Deferred Fees Share Plan, incorporated by reference to exhibit 4.22 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 4.6 Amended and Restated Merger Agreement, dated as of May 9, 2000, between AMVESCAP and Trimark, incorporated by reference to exhibit 4.23 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 4.7 Support Agreement, dated as of August 1, 2000, between AMVESCAP, AVZ Callco Inc., and AMVESCAP Inc., incorporated by reference to exhibit 4.24 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 4.8 Voting and Exchange Trust Agreement, dated as of August 1, 2000, between AMVESCAP, AMVESCAP Inc. and CIBC Mellon Trust Company, incorporated by reference to exhibit 4.25 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 4.9 Final Offer Document, dated October 19, 2000, for Cash and Share Offer by Schroder Salomon Smith Barney on behalf of AMVESCAP PLC to acquire all of the issued share capital of Perpetual plc, incorporated by reference to AMVESCAP's Report of Foreign Private Issuer filed on Form 6- K, filed with the Securities and Exchange Commission on November 6, 2000. 4.10 Merger Agreement, dated as of February 28, 2001, among National Asset Management Corporation, the Sellers listed therein, the Option Holder listed therein, AMVESCAP and AVZ, Inc., incorporated by reference to exhibit 4.28 to AMVESCAP's Annual Report on Form 20-F for the year ended December 31, 2000, filed with the Securities and Exchange Commission on May 17, 2001. 4.11 Stock Purchase Agreement, dated as of April 26, 2001, by and among Old Mutual, PLC, Old Mutual Holdings (U.S.), Inc., United Asset Management Holdings, Inc., AMVESCAP and INVESCO North American Holdings, Inc. 4.12 Amendment No. 1 to Stock Purchase Agreement, dated as of August 2, 2001, by and among Old Mutual, PLC, Old Mutual Holdings (U.S.), Inc., United Asset Management Holdings, Inc., AMVESCAP and INVESCO North American Holdings, Inc. 54 4.13 Guaranty, dated June 18, 2001, made by INVESCO, Inc., INVESCO North American Holdings, Inc., A I M Management Group Inc. and A I M Advisors, Inc. with respect to AMVESCAP's obligations under the Five Year Credit Agreement. 4.14 364-Day Credit Agreement, dated as of June 18, 2001, by and between AMVESCAP, the banks, financial institutions and other institutional lenders listed on the signature pages thereof, the co-agents listed on the signature pages thereof, Citibank, N.A., Bank of America, N.A. and HSBC Bank plc, as co-syndication agents for the Lenders (as that term is defined therein), and Bank of America, N.A., as funding agent. 4.15 Guaranty, dated June 18, 2001, made by INVESCO, Inc., INVESCO North American Holdings, Inc., A I M Management Group Inc. and A I M Advisors, Inc. with respect to AMVESCAP's obligations under the 364-Day Credit Agreement. 4.16 Registration Rights Agreement, dated as of December 12, 2001, by and between AMVESCAP PLC, A I M Management Group Inc., A I M Advisors, Inc., INVESCO Institutional (N.A.), Inc., INVESCO North American Holdings, Inc. and Salomon Smith Barney Inc., for themselves and as representative for the Initial Purchasers. 4.17 Guarantee, dated December 17, 2001, made by A I M Management Group Inc., A I M Advisors, Inc., INVESCO Institutional (N.A.), Inc. and INVESCO North American Holdings, Inc. 4.18 AMVESCAP Global Stock Plan, Amended and Restated Effective as of January 1, 1997. 4.19 First Amendment to the AMVESCAP Global Stock Plan, effective as of December 1, 1998. 4.20 Second Amendment to the AMVESCAP Global Stock Plan, effective as of January 1, 2001. 4.21 Third Amendment to the AMVESCAP Global Stock Plan, effective as of February 1, 2002. 8. List of Significant Subsidiaries, incorporated by reference to the chart in Item 4 of this Annual Report on Form 20-F. 55 SIGNATURES 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 on April 3, 2002. AMVESCAP PLC /S/ ROBERT F. MCCULLOUGH ------------------------ Robert F. McCullough Chief Financial Officer 56 AMVESCAP PLC AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page ---- Report of Independent Public Accountants................................. F-2 Consolidated Statements of Income for the Years Ended December 31, 2001, 2000 and 1999........................................................... F-3 Consolidated Statements of Total Recognized Gains and Losses for the Years Ended December 31, 2001, 2000 and 1999.................................. F-3 Consolidated Balance Sheets for the Years Ended December 31, 2001 and 2000................................................................ F-4 Consolidated Statements of Stockholders' Funds, for the Years Ended December 31, 2001, 2000 and 1999........................................ F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999........................................ F-6 Notes to Consolidated Financial Statements................................ F-7 F-1 AMVESCAP PLC AND SUBSIDIARIES REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To AMVESCAP PLC: We have audited the accompanying consolidated balance sheets of AMVESCAP PLC and subsidiaries as of December 31, 2001 and 2000 and the related consolidated statements of profit and loss, total recognized gains and losses, shareholders' funds, and cash flows for each of the three years in the period ended December 31, 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of AMVESCAP PLC and subsidiaries as of December 31, 2001 and 2000 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United Kingdom. Certain accounting practices of the Company used in preparing the accompanying consolidated financial statements conform with generally accepted accounting principles in the United Kingdom but vary in certain respects from the accounting principles generally accepted in the United States. A description of these differences and the adjustments required to conform consolidated shareholders' equity as of December 31, 2001 and 2000 and the consolidated net income for each of the three years in the period ended December 31, 2001 to accounting principles generally accepted in the United States are set forth in Note 23 to the consolidated financial statements. /s/ Arthur Andersen Chartered Accountants and Registered Auditors 180 Strand, London, WC2R 1BL March 8, 2002 F-2 AMVESCAP PLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
for the year ended December 31 - ----------------------------------------------------------------------------- 2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ---------------------------------- ------------ ------------ ------------ Revenues 1,619,847 1,628,662 1,072,350 Expenses: Operating (1,096,487) (1,039,751) (719,637) Exceptional (note 2) (59,997) (51,804) - Goodwill amortization (137,477) (56,417) (36,754) - ---------------------------------- ------------ ------------ ------------ Operating profit 325,886 480,690 315,959 Investment income (note 5) 10,433 17,147 11,809 Interest expense (note 6) (55,881) (51,604) (44,726) - ---------------------------------- ------------ ------------ ------------ Profit before taxation 280,438 446,233 283,042 Taxation (note 8) (125,635) (145,505) (101,558) - ---------------------------------- ------------ ------------ ------------ Profit for the financial year 154,803 300,728 181,484 Dividends (note 9) (89,260) (75,827) (58,244) - ---------------------------------- ------------ ------------ ------------ Retained profit for the year 65,543 224,901 123,240 - ---------------------------------- ------------ ------------ ------------ Earnings per share before goodwill amortization and exceptional items (note 10): -basic 41.2p 57.5p 34.1p -diluted 40.0p 54.7p 32.7p Earnings per share: -basic 19.2p 44.4p 28.4p -diluted 18.6p 42.3p 27.2p =============================================================================
CONSOLIDATED STATEMENTS OF TOTAL RECOGNIZED GAINS AND LOSSES
for the year ended December 31 - --------------------------------------------------------------------------------------------- 2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ------------------------------------------------ ------------ ------------ ------------ Profit for the financial year 154,803 300,728 181,484 Currency translation differences on investments in overseas subsidiaries (12,941) (45,979) (18,645) - ------------------------------------------------ ------------ ------------ ------------ Total recognized gains for the year 141,862 254,749 162,839 Prior year adjustment 26,921 - - - ------------------------------------------------ ------------ ------------ ------------ Total recognized gains and losses for the year 168,783 254,749 162,839 =============================================================================================
The accompanying notes form part of these financial statements. F-3 AMVESCAP PLC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
December 31 - ------------------------------------------------------------------------------------------------------------- 2001 2000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - -------------------------------------------------- --------------------------- --------------------------- Fixed assets Goodwill (note 11) 2,693,659 2,373,060 Investments (note 12) 166,036 147,652 Tangible assets (note 13) 209,370 201,280 - -------------------------------------------------- --------------------------- --------------------------- 3,069,065 2,721,992 Current assets Debtors (note 14) 576,447 717,192 Investments (note 12) 33,116 65,064 Cash 175,902 327,733 - -------------------------------------------------- ------------ ------------ 785,465 1,109,989 Creditors: amounts falling due within one year (note 15) (640,804) (759,423) - -------------------------------------------------- ------------ ------------ Net current assets, excluding banking and insurance activities 144,661 350,566 Banking and insurance activities Cash 175,076 157,626 Investments 89,079 99,166 Customer and counterparty debtors 179,223 227,185 Policyholder debtors 134,296 94,122 Customer and counterparty creditors (349,560) (395,819) Policyholder creditors (134,296) (94,122) Other, net (9,725) (12,992) - -------------------------------------------------- ------------ ------------ 84,093 75,166 --------------------------- --------------------------- Total assets less current liabilities 3,297,819 3,147,724 Long-term debt (note 16) (844,285) (960,023) Provisions for liabilities and charges (note 17) (172,070) (57,700) - -------------------------------------------------- --------------------------- --------------------------- Net assets 2,281,464 2,130,001 =============================================================================== =========================== Capital and reserves Called up share capital (note 20) 196,037 192,759 Share premium account 1,619,879 1,488,933 Exchangeable shares (note 20) 433,597 477,153 Profit and loss account 685,884 620,341 - -------------------------------------------------- --------------------------- --------------------------- 2,935,397 2,779,186 Other reserves (653,933) (649,185) - -------------------------------------------------- --------------------------- --------------------------- Shareholders' funds, equity interests 2,281,464 2,130,001 =============================================================================================================
The accompanying notes form part of these financial statements. These financial statements were approved by the Board of Directors on March 8, 2002, and were signed on its behalf by: Charles W. Brady Robert F. McCullough F-4 AMVESCAP PLC AND SUBSIDIARIES CONSOLIDATED SHAREHOLDERS' FUNDS
Movements in shareholders' funds comprise: - ----------------------------------------------------------------------------------------------------------------------------------- Called up Profit share Exchangeable Share Other and loss capital shares premium reserves account Total (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ----------------------------------------------------------------------------------------------------------------------------------- January 1, 1999 167,506 - 469,382 (563,847) 272,200 345,241 Profit for the financial year - - - - 181,484 181,484 Dividends - - - - (58,244) (58,244) Exercise of options 1,111 - 9,478 (9,041) - 1,548 Currency translation differences on investments in overseas subsidiaries - - - (18,645) - (18,645) - ----------------------------------------------------------------------------------------------------------------------------------- December 31, 1999 168,617 - 478,860 (591,533) 395,440 451,384 Profit for the financial year - - - - 300,728 300,728 Dividends - - - - (75,827) (75,827) Exercise of options 1,940 - 26,197 (11,673) - 16,464 Trimark acquisition 1,266 232,034 53,700 - - 287,000 Conversion of exchangeable shares Into ordinary shares 5,919 (260,308) 254,389 - - - Conversion of Equity Subordinated Debentures - 505,427 - - - 505,427 Perpetual acquisition 15,017 - 675,787 - - 690,804 Currency translation differences on investments in overseas subsidiaries - - - (45,979) - (45,979) - ----------------------------------------------------------------------------------------------------------------------------------- December 31, 2000 192,759 477,153 1,488,933 (649,185) 620,341 2,130,001 Profit for the financial year - - - - 154,803 154,803 Dividends - - - - (89,260) (89,260) Exercise of options 851 - 12,964 (2,160) - 11,655 NAM acquisition 1,396 - 74,672 - - 76,068 Conversion of exchangeable shares into ordinary shares 1,031 (44,341) 43,310 - - - Conversion of Equity Subordinated Debentures - 785 - - - 785 Adjustment to goodwill - - - 10,353 - 10,353 Currency translation differences on investments in overseas subsidiaries - - - (12,941) - (12,941) - ----------------------------------------------------------------------------------------------------------------------------------- December 31, 2001 196,037 433,597 1,619,879 (653,933) 685,884 2,281,464 ===================================================================================================================================
The accompanying notes form part of these financial statements. F-5 AMVESCAP PLC AND SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENTS
for the year ended December 31 - ------------------------------------------------------------------------------------------------------- 2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ---------------------------------------------------------- ------------- ------------ ------------ Operating activities Operating profit 324,355 463,816 309,508 Exceptional items 16,331 32,736 - Depreciation 68,216 52,531 39,728 Amortization 137,331 56,279 62,531 Decrease in debtors 185,389 27,113 (225,348) Decrease in creditors (236,640) (53,795) 158,679 Other 36,536 6,531 13,277 - ---------------------------------------------------------- ------------- ------------ ------------ 531,518 585,211 358,375 Banking and insurance activities Operating cash flows 11,715 90,615 7,672 Interest and dividends received 2,510 7,916 731 Taxation 458 4,845 (370) Purchase of tangible fixed assets, net of sales (3,549) (921) (1,197) Disposal/(purchase) of fixed asset investments, net 8,445 (1,065) (3,000) Management of liquid resources (1,527) (52,364) (1,246) Financing 294 - - ------------- ------------ ------------ 18,346 49,026 2,590 Returns on investments and servicing of finance Interest and dividends received 10,838 14,274 12,391 Interest paid (58,944) (48,304) (44,147) - ---------------------------------------------------------- ------------- ------------ ------------ (48,106) (34,030) (31,756) Taxation (167,031) (120,603) (56,084) Capital expenditure and financial investment Purchase of tangible fixed assets, net of sales (Note 13) (68,013) (61,051) (55,524) (Purchase)/disposal of fixed asset investments, net (17,065) (16,787) 9,425 - ---------------------------------------------------------- ------------- ------------ ------------ (85,078) (77,838) (46,099) Acquisitions, net of cash, cash equivalents and bank overdraft acquired (311,441) (182,595) - Dividends paid (84,365) (63,558) (54,394) ------------ ------------ ------------ Cash (outflow)/inflow before the use of cash equivalents (146,157) 155,613 172,632 Financing Issues of ordinary share capital 11,655 16,464 1,548 Credit facility, net (185,890) 51,401 (53,911) Issuance of Senior Notes 206,939 - - Other loans and bank overdrafts (15,923) 7,941 (54,381) - ---------------------------------------------------------- ------------- ------------ ------------ 16,781 75,806 (106,744) Change in bank overdrafts (2,040) (8,253) 24,529 Change in cash equivalents 98,087 (119,997) 8,098 ------------- ------------ ------------ (Decrease)/increase in cash (33,329) 103,169 98,515 ======================================================================================================= Reconciliation to (decrease)/increase in cash at bank and in hand (Decrease)/increase in cash (33,329) 103,169 98,515 Change in bank overdrafts 2,040 8,253 (24,529) Change in cash equivalents (96,560) 172,361 (6,852) Foreign exchange movement on cash and cash equivalents (6,532) 11,844 2,947 - ------------------------------------------------------------------------------------------------------- Increase in cash at bank and in hand (134,381) 295,627 70,081 =======================================================================================================
The accompanying notes form part of these financial statements. F-6 AMVESCAP PLC AND SUBSIDIARIES ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS 1. Accounting Policies (a) Basis of Accounting and Consolidation The financial statements consolidate the financial statements of AMVESCAP PLC and all of its subsidiaries. Operating profit includes the results of subsidiaries acquired from their effective dates of acquisition. The consolidated financial statements have been prepared in accordance with the Companies Act 1985 (Schedule 4) and applicable accounting standards. They combine the financial statements of the Group undertakings at December 31 and, as permitted by the Act, the format of the financial statements has been adapted to invoke a true and fair override and therefore give a true and fair view of the state of affairs and the profit of the consolidated Group. The balance sheet and cash flow statement presentations differ from the Companies Act 1985 and FRS 1, in that the banking and insurance assets, liabilities and cash flows have been separately stated so as to distinguish these activities from the asset management activities of the Group. The financial statements have been prepared on a historic cost convention as modified to include certain insurance assets at market value. The Companies Act 1985 requirements have also been adapted in respect of exchangeable shares. See note 20. (b) Goodwill The excess of the cost of companies acquired, over the fair value of their net assets is capitalized as an asset and amortized through the profit and loss account over an estimated useful life of 20 years. Prior to 1998 goodwill was charged directly to other reserves. Additional amortization is taken in the year if goodwill is deemed impaired. (c) Revenue Revenue, which is recorded when earned, represents management, distribution, transfer agent, trading and other fees. (d) Deferred Sales Commissions Amounts paid to brokers and dealers for sales of certain mutual funds that have a contingent deferred sales charge are capitalized and amortized over a period not to exceed the redemption period of the related fund. (e) Tangible Fixed Assets and Depreciation Depreciation is provided on fixed assets at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life: leasehold improvements over the lease term; computers and other various equipment, between three and seven years. (f) Investments Investments held as fixed assets are stated at cost less provisions for any impairment in value. Investments held as current assets are stated at the lower of cost or net realizable value. (g) Leases Assets held under finance leases are capitalized and included in fixed assets. Rentals under operating leases are charged evenly to the profit and loss account over the lease term. F-7 AMVESCAP PLC AND SUBSIDIARIES (h) Taxation Corporation tax payable is provided on taxable profits at the current rate. Deferred taxation is provided on all timing differences, calculated at the rate at which it is estimated that tax will be payable. Deferred tax assets are recognized when it is deemed more likely than not that there will be taxable profits in the future to offset these amounts. (i) Foreign Currencies Assets and liabilities of overseas subsidiaries are translated at the rates of exchange ruling at the balance sheet date. Profit and loss account figures are translated at the weighted average rates for the year. Exchange differences arising on the translation of overseas subsidiaries' accounts are taken directly to reserves. Exchange differences on foreign currency borrowings, to the extent that they are used to finance or provide a hedge against Company equity investments in foreign enterprises, are taken directly to reserves. All other translation and transaction exchange differences (which are not material) are taken to the profit and loss account. (j) Pensions For defined contribution schemes, pension contributions payable in respect of the accounting period are charged to the profit and loss account. For defined benefit schemes, pension contributions are charged systematically to the profit and loss account over the expected service lives of employees. Variations from the regular cost are allocated to the profit and loss account over the average remaining service lives of employees. 2. Acquisitions The Company completed five acquisitions during 2001. These combinations have been accounted for as acquisitions and results have been included from the respective dates of purchase. The following table sets forth the terms of these transactions (each for 100% of the share capital of the companies acquired).
- ------------------------------------------------------------------------------------------------------------------------- Acquisition Cash Shares Earn out Total Company Name Date (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - -------------------------------------------------------------------------------------------------------------------------- County Investment Management Limited (County) January 2001 41,105 - - 41,105 National Asset Management Limited (NAM) April 2001 69,636 76,068 51,866 197,570 Pell Rudman (PR) August 2001 122,835 - 19,034 141,869 Grand Pacific (GP) August 2001 84,350 - - 84,350 Parkes & Co. (Parkes) August 2001 9,210 - - 9,210 ------------------------------------------------------------------------ 327,136 76,068 70,900 474,104 =========================================================================================================================
In connection with the NAM and PR acquisitions, earn-out arrangements were established whereby the Company will pay the former owners of NAM and PR a combination of ordinary shares and cash upon the completion of annual revenue growth targets. Included in the Parkes cash consideration is (Pounds)3.7 million in 5% Loan Notes due 2009. The acquired companies' profit after taxation for the years ended in 2000 and 2001 were as follows: - ------------------------------------------------- Profit After Year Taxation Company Name Ended (Pounds)'000 - ------------------------------------------------- County September 2000 542 NAM December 2000 5,526 PR December 2000 163 GP December 2000 2,511 Parkes February 2001 480 - ------------------------------------------------- F-8 AMVESCAP PLC AND SUBSIDIARIES The summarized profit and loss accounts for the period from the beginning of the acquired companies' last fiscal year up to the date of acquisition is as follows, shown on the basis of the accounting policies of AMVESCAP PLC:
- ------------------------------------------------------------------------------------------------------ County NAM PR GP Parkes (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ------------------------------------------------------------------------------------------------------ Revenues 3,398 9,538 17,614 4,301 1,551 Operating profit/(loss) (760) 735 - 1,033 (312) Profit/(loss) before taxation (241) 735 - 1,175 (301) Net profit/(loss) (916) 389 - 890 (191) - ------------------------------------------------------------------------------------------------------
The operations of the acquired companies have been reorganized, integrated, and merged with and into AMVESCAP's existing subsidiaries. The operating results and cash flows of the combined Group do not separately segregate the former acquired companies operations. It is therefore not possible to determine or estimate the post-acquisition results. The fair value of net assets acquired for all acquisitions was determined as follows:
- ------------------------------------------------------------------------------------------------------------------------------------ Book Value Fair value Fair ------------------------------------------------------------------------- County NAM PR GP Parkes adjustments value (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ------------------------------------------------------------------------------------------------------------------------------------ Fixed assets 827 686 2,094 5,221 273 (217) 8,884 Current assets 5,493 8,074 12,958 9,598 2,178 - 38,301 -------------------------------------------------------------------------------------------------- Total assets 6,320 8,760 15,052 14,819 2,451 (217) 47,185 -------------------------------------------------------------------------------------------------- Creditors (3,120) (6,052) (10,484) (1,376) (717) (223) (21,972) Provisions for liabilities and charges (396) (341) - - - - (737) -------------------------------------------------------------------------------------------------- Total liabilities (3,516) (6,393) (10,484) (1,376) (717) (223) (22,709) -------------------------------------------------------------------------------------------------- Net assets 2,804 2,367 4,568 13,443 1,734 (440) 24,476 -------------------------------------------------------------------------------------------------- Goodwill 449,628 ------- Consideration 474,104 - -----------------------------------------------------------------------------------------------------------------------------------
The Company adjusted and revalued all assets and liabilities acquired to be consistent with the Company's accounting policies and to reflect fair market value at the date of the acquisition. The principal adjustments relate to aligning Pell Rudman's investments and bonus accrual policies to those of AMVESCAP. The consolidated profit and loss account includes exceptional charges in 2001 and 2000 as follows: - ----------------------------------------------------------------- 2001 2000 (Pounds)'000 (Pounds)'000 - ----------------------------------------------------------------- Acquisitions 43,310 43,804 Restructurings 9,993 8,000 Building termination costs 6,694 - - ----------------------------------------------------------------- Total exceptional items 59,997 51,804 - ----------------------------------------------------------------- Total exceptional items, net of tax 39,390 32,637 ================================================================= These costs include staff retention payments and expenses associated with combining systems and other business processes, and costs incurred in reorganizing, restructuring and integrating the acquisitions. The exceptional charge for the year also includes costs incurred during internal restructurings, severance arrangements and building termination costs. F-9 3. Prior Year Restatement The Group policy for calculating the provision for deferred taxes was changed during the year to include the adoption of FRS 19. The U.K. Accounting Standards Board issued FRS 19, "Deferred Tax," which requires companies to change their method of computing deferred taxes. The Company has adopted this new statement in 2001, including a restatement of prior years' profit and loss account and balance sheet. The comparative figures in the primary financial statements and the notes have been restated to reflect the new policy.
- ---------------------------------------------------------------------------------------------- 2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ---------------------------------------------------------------------------------------------- Profit and loss account Decrease in deferred tax expense 5,847 12,198 452 ============================================================================================== Balance Sheet Increase in net assets 32,768 26,921 14,723 ==============================================================================================
4. Segmental Information Geographical analysis of the Group's business, which is principally investment management, is as follows:
Revenues Profit after exceptional items - ---------------------------------------------------------------------------------------------------------------------------------- 2001 2000 1999 2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 ---------------------------------------- ------------ ------------ ------------ North America 1,266,195 1,324,871 859,993 411,809 492,946 322,611 Europe and Pacific 353,652 303,791 212,357 51,554 44,161 30,102 - --------------------------------------- ------------------------------------- ------------ ------------ ------------ 1,619,847 1,628,662 1,072,350 463,363 537,107 352,713 ===================================== Goodwill amortization (137,477) (56,417) (36,754) Net interest expense (45,448) (34,457) (32,917) ------------ ------------ ------------ Profit before taxation 280,438 446,233 283,042 ================================================================================================================================== Net assets - ---------------------------------------------------------------------------------------------------------------------------------- 2001 2000 (Pounds)'000 (Pounds)'000 --------------------------- North America 264,051 324,496 Europe and Pacific 161,311 124,344 - -------------------------------------------- --------------------------- 425,362 448,840 Goodwill 2,693,659 2,373,060 Net debt (837,557) (691,899) - -------------------------------------------- --------------------------- Net assets 2,281,464 2,130,001 ==================================================================================================================================
The U.S. dollar profits have been translated into sterling at an average rate of 1.43 (2000: 1.51, 1999: 1.62). Revenue reflects the geographical segments from which services are provided. Auditors' remuneration was (Pounds)1,698,000 in 2001 (2000: (Pounds)1,361,000, 1999: (Pounds)1,218,000) for audit work and (Pounds)2,281,000 in 2001 (2000: (Pounds)1,295,000, 1999: (Pounds)1,044,000) for non-audit work. Total operating expenses in 2001 were (Pounds)1,293,961,000 (2000: (Pounds)1,147,972,000, 1999: (Pounds)756,391,000). Certain prior year amounts have been restated to conform to the current year presentation of banking and insurance activities. 5. Investment Income ---------------------------------------------------------------------------
2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 ------------ ------------ ------------ Interest receivable 12,295 15,361 8,597 (Loss)/income from listed investments (24) 900 1,480 (Loss)/income from unlisted investments (1,838) 886 1,732 - ------------------------------------------------------------------------------------------------- 10,433 17,147 11,809 =================================================================================================
F-10 6. Interest Expense ---------------------------------------------------------------------------
2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - -------------------------- ------------ ------------ ------------ Senior notes 30,014 27,695 26,343 Credit Facility 12,024 14,900 14,448 Loan notes 6,800 - - ESDs 4,002 6,286 - Other 3,041 2,723 3,935 - -------------------------- ------ ------ ------ 55,881 51,604 44,726 ==================================================================================================================
7. Directors and Employees ---------------------------------------------------------------------------
2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - -------------------------- ------------ ------------ ------------ Wages and salaries 478,687 452,751 308,213 Social security costs 34,072 29,267 18,523 Other pension costs 45,713 33,696 22,440 - -------------------------- ------- ------- ------- 558,472 515,714 349,176 =================================================================================================================
Global Stock Plan ("the Plan") A sum of (Pounds)8,039,000 (2000: (Pounds)29,688,000, 1999: (Pounds)12,453,000) has been paid into the Plan, a remuneration scheme for senior executives. This Plan is funded by a profit-linked bonus paid annually in respect of directors and senior employees into a discretionary employee benefit trust which, then purchases shares of the Company in the open market. These securities are allocated within the trust and, provided they retain their position within the Company for a period of three years from the date of the bonus, are transferred to the participants upon retirement or termination of employment. The trust held 11,899,000 ordinary shares on December 31, 2001 (2000: 11,276,000, 1999: 9,341,000). The average number of employees of the Company during the year was 8,617 (2000: 6,557). Of these totals, 6,072 (2000: 5,020) were employed in North America and the remainder were employed in Europe and the Pacific. 8. Taxation ---------------------------------------------------------------------------
2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - -------------------------- ------------ ------------ ------------ Current Tax U.K. corporation income tax for period 58,574 36,864 30,751 Double taxation relief (33,302) (19,952) (18,654) ------- ------- ------- 25,272 16,912 12,097 Foreign income tax for the period 104,566 141,227 79,333 Adjustments in respect of prior periods - 6,183 - ------- ------- ------- 104,566 147,410 79,333 Total current tax 129,838 164,322 91,430 =================================================================================================================== Deferred Tax Origination and reversal of timing differences 38 (18,817) 10,580 Effect of decreased tax rate on opening liability (4,241) - (452) ------- ------- ------- Total deferred tax (4,203) (18,817) 10,128 Total tax on profit on ordinary activities 125,635 145,505 101,558 ===================================================================================================================
F-11 AMVESCAP PLC AND SUBSIDIARIES
- --------------------------------------------------------------------------------------------------------- 2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ----------------------------------------------------------- ------------- ------------- ------------- Profit before tax 280,438 446,233 283,042 Tax on Group profit on ordinary activities at standard U.K. corporation tax rate 30.0% 30.0% 31.3% Effects of: Non-deductible amortization - Goodwill 6.8% 1.2% 1.0% Foreign exchange gain/(loss) 0.5% (0.9)% 0.0% Higher tax rates on overseas earnings 9.0% 5.1% 0.0% Adjustments in respect of prior periods 0.0% 1.4% 0.0% - --------------------------------------------------------------------------------------------------------- Group current tax charge for the period 46.3% 36.8% 32.3% =========================================================================================================
Factors Affecting the Tax Charge The Group's overseas tax rates are higher than those in the U.K. primarily because the profits earned in the United States are taxed at a rate of 38%, and the profits earned in Canada are taxed at a rate of 42%. The Group expects a reduction in future tax rates following the announcement in 2000 that the rate of tax in Canada will decrease to 30% by 2005. Losses accumulating in several countries have not been recognized for the purposes of deferred tax on the basis that it is currently thought unlikely that they will be utilized within three years.
Components of Deferred Tax - ---------------------------------------------------------------------------------------- 2001 2000 (Pounds)'000 (Pounds)'000 - ---------------------------------------------- -------------- -------------- Deferred compensation arrangements 35,529 30,337 Exceptional items 21,403 8,394 Tax losses carried forward 7,530 6,455 Fixed assets depreciation 4,542 2,310 Amortization (4,154) (5,228) Investments 5,392 5,383 Health, benefits, and rent accruals 5,621 6,242 Accrued interest and other 9,894 7,927 -------------- -------------- Deferred tax assets - debtors 85,757 61,820 Deferred tax liabilities - provisions (55,031) (34,836) - ---------------------------------------------------------------------------------------- Net deferred tax 30,726 26,984 ======================================================================================== 9. Dividends ====================================================================================================== 2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - --------------------------------------------------------- ------------ ------------ ------------ Interim paid, 4.5p per share (2000: 4.0p, 1999: 3.5p) 36,552 28,014 22,700 Final proposed, 6.5p per share (2000: 6.0p, 1999: 5.5p) 52,708 47,813 35,544 - --------------------------------------------------------- ------------ ------------ ------------ 89,260 75,827 58,244 ==========================================================================================================
The trustees of the Employee Share Option Trust waived dividends amounting to (Pounds)1,644,000 in 2001 (2000: (Pounds)2,317,000, 1999: (Pounds)2,796,000). F-12 AMVESCAP PLC AND SUBSIDIARIES 10. Earnings per share Profit before goodwill amortization and exceptional items is a more appropriate basis for the calculation of earnings per share since this represents a more consistent measure of the year-by-year performance of the business, therefore the calculation below is presented on that basis. Basic earnings per share is based on the weighted average number of ordinary and exchangeable shares outstanding during the respective periods. Diluted earnings per share takes into account the effect of dilutive potential ordinary and exchangeable shares outstanding during the period.
- ---------------------------------------------------------------------------------------- Number of Profit shares Per share 2001 (Pounds)'000 '000 amount - ---------------------------------------------------------------------------------------- Basic earnings per share 331,670 805,061 41.2p ========= Issuance of options - 24,922 - ---------------------------------------------------------------------------------------- Diluted earnings per share 331,670 829,983 40.0p ======================================================================================== 2000 - ---------------------------------------------------------------------------------------- Basic earnings per share 389,782 678,006 57.5p ========= Issuance of options - 33,763 Conversion of ESDs 4,093 8,997 - ---------------------------------------------------------------------------------------- Diluted earnings per share 393,875 720,766 54.7p ======================================================================================== 1999 - ---------------------------------------------------------------------------------------- Basic earnings per share 218,238 639,636 34.1p ========= Issuance of options - 27,271 - ---------------------------------------------------------------------------------------- Diluted earnings per share 218,238 666,907 32.7p ========================================================================================
11. Goodwill ==================================================================================================== Net Cost Amortization book value (Pounds)'000 (Pounds)'000 (Pounds)'000 - --------------------------------------------------------------------------------------------------------- January 1, 2000 719,269 (57,837) 661,432 Acquisitions 1,767,565 - 1,767,565 Provided during the year - (56,279) (56,279) Exchange adjustment 342 - 342 - --------------------------------------------------------------------------------------------------------- December 31, 2000 2,487,176 (114,116) 2,373,060 ========================================================================================================= Acquisitions 458,064 - 458,064 Provided during the year - (137,331) (137,331) Exchange adjustment (134) - (134) - --------------------------------------------------------------------------------------------------------- December 31, 2001 2,945,106 (251,447) 2,693,659 ========================================================================================================= Prior to 1998, goodwill has been written off as follows: - --------------------------------------------------------------------------------------------------------- (Pounds)'000 - ---------------------------------------------------------- ------------------------------- To other reserves 1,173,986 To cancellation of share premium account 44,468 To profit and loss account 73,600 - ---------------------------------------------------------- ------------------------------- 1,292,054 =========================================================================================================
F-13 AMVESCAP PLC AND SUBSIDIARIES 12. Investments Investments Held as Fixed Assets
- ------------------------------------------------------------------------------------------------------ Shares of Other AMVESCAP PLC investments Total (Pounds)'000 (Pounds)'000 (Pounds)'000 - ------------------------------------------------------------------------------------------------------ Cost January 1, 2000 96,816 30,651 127,467 Exchange adjustments - (1,176) (1,176) Arising from acquisitions - 12,683 12,683 Additions 35,407 23,454 58,861 Disposals (42,053) (4,611) (46,664) - ------------------------------------------------------------------------------------------------------ December 31, 2000 90,170 61,001 151,171 ====================================================================================================== Exchange adjustments - 467 467 Arising from acquisitions - 625 625 Additions 50,482 22,920 73,402 Disposals (41,045) (15,297) (56,342) - ------------------------------------------------------------------------------------------------------ December 31, 2001 99,607 69,716 169,323 ====================================================================================================== Provisions against investments January 1, 2000 (2,027) (1,487) (3,514) Net change - (5) (5) - ------------------------------------------------------------------------------------------------------ December 31, 2000 (2,027) (1,492) (3,519) Net change - 232 232 - ------------------------------------------------------------------------------------------------------ December 31, 2001 (2,027) (1,260) (3,287) - ------------------------------------------------------------------------------------------------------ Net book value January 1, 2000 94,789 29,164 123,953 December 31, 2000 88,143 59,509 147,652 December 31, 2001 97,580 68,456 166,036 ======================================================================================================
Shares of AMVESCAP PLC include the holdings of the Employee Share Option Trust ("ESOT") and comprise 12,593,503 ordinary shares. The options vest after three years from the date of grant and lapse after seven or 10 years. On December 31, 2001, there were options over these securities at exercise prices between 160p and 1680p. The market price of the ordinary shares at the end of 2001 was 991p. Other investments consist of investments in various Group mutual funds, unit trusts, partnership interests, investments in collateralized loan and bond obligations, investments on behalf of deferred compensation plans, and treasury securities. Investments Held as Current Assets Current asset investments include listed investments of (Pounds)20,429,000 (2000: (Pounds)49,644,000) and unlisted investments of (Pounds)12,687,000 (2000: (Pounds)15,420,000). F-14 AMVESCAP PLC AND SUBSIDIARIES 13. Tangible Assets Tangible assets are comprised of land, buildings, technology and other equipment.
- ---------------------------------------------------------------------------------------------------------------------------------- Technology and other equipment Land and building Total (Pounds)'000 (Pounds)'000 (Pounds)'000 - ---------------------------------------------------------------------------------------------------------------------------------- Cost January 1, 2000 174,696 122 174,818 Exchange adjustment 17,135 - 17,135 Additions 62,750 - 62,750 Arising from acquisitions 20,579 58,801 79,380 Disposals (7,685) - (7,685) - ---------------------------------------------------------------------------------------------------------------------------------- December 31, 2000 267,475 58,923 326,398 ================================================================================================================================== Exchange adjustment 1,933 (20) 1,913 Additions 79,081 83 79,164 Arising from acquisitions 2,602 3,824 6,426 Disposals (24,461) (7,222) (31,683) - ---------------------------------------------------------------------------------------------------------------------------------- December 31, 2001 326,630 55,588 382,218 ================================================================================================================================== Accumulated depreciation January 1, 2000 (68,891) (111) (69,002) Exchange adjustment (9,776) - (9,776) Provided during the year (52,326) - (52,326) Disposals 5,986 - 5,986 - ---------------------------------------------------------------------------------------------------------------------------------- December 31, 2000 (125,007) (111) (125,118) ================================================================================================================================== Exchange adjustment (23) (23) (46) Provided during the year (67,582) (634) (68,216) Disposals 20,311 221 20,532 - ---------------------------------------------------------------------------------------------------------------------------------- December 31, 2001 (172,301) (547) (172,848) ================================================================================================================================== Net Book Value - ---------------------------------------------------------------------------------------------------------------------------------- January 1, 2000 105,805 11 105,816 - ---------------------------------------------------------------------------------------------------------------------------------- December 31, 2000 142,468 58,812 201,280 - ---------------------------------------------------------------------------------------------------------------------------------- December 31, 2001 154,329 55,041 209,370 ================================================================================================================================== 14. Debtors ------------------------------------------------------------------------------------------------------------------------------ 2001 2000 (Pounds)'000 (Pounds)'000 - -------------------------------------------------------------------------- ----------------------------------- Deferred sales commissions 169,457 204,384 Unsettled fund debtors 124,397 191,446 Trade debtors 109,054 172,434 Deferred taxation 85,757 61,820 Other debtors 59,706 65,940 Prepayments 28,076 21,168 - ---------------------------------------------------------------------------------------------------------------------------------- 576,447 717,192 ================================================================================================================================== Substantially all deferred taxes will reverse after one year. 15. Creditors ----------------------------------------------------------------------------------------------------------------------------- 2001 2000 (Pounds)'000 (Pounds)'000 - -------------------------------------------------------------------------- ------------------------------ Accruals and other 226,301 333,754 Unsettled fund creditors 136,375 226,399 Current maturities of long-term debt 125,828 6,839 Proposed dividend 52,708 47,813 Corporation tax payable 51,019 86,188 Trade creditors 38,011 49,977 Bank overdraft 10,562 8,453 - ---------------------------------------------------------------------------------------------------------------------------------- 640,804 759,423 ==================================================================================================================================
F-15 AMVESCAP PLC AND SUBSIDIARIES
16. Long-term debt ============================================================================================================================== 2001 2000 (Pounds)'000 (Pounds)'000 - --------------------------------------------------------------------------- ---------------------------------- Senior notes - U.S.$250 million due 2003 at 6.375%, U.S.$400 million due 2005 at 6.6%, and U.S.$300 million due 2007 at 5.9% 655,308 444,201 U.S.$900 million credit facility due 2006 106,919 300,000 ESDs - C$147.8 million due 2003 at 6% 64,733 67,115 Loan Notes due 2005 125,828 128,934 DM20 million fixed notes due 2003 at 6.75% 6,336 12,454 Senior notes - U.S.$10 million due 2006 at 6.875% 7,304 14,158 Loan Notes due 2009 at 5% 3,685 - - --------------------------------------------------------------------------- ---------------------------------- Total debt 970,113 966,862 Less: current maturities of long-term debt (125,828) (6,839) - --------------------------------------------------------------------------- ---------------------------------- Total long-term debt 844,285 960,023 ==================================================================================================================================
The credit facility provides for borrowings of various maturities and contains certain conditions including a restriction to declare or pay cash dividends in excess of 60% of consolidated net profit. The Company also has an unused 364-day revolving $200 million credit facility available. Interest is payable on both facilities based upon LIBOR rates in existence at the time of each borrowing. The ESDs are issued by a subsidiary of the Company, bear interest at 6% per year (payable semi-annually), and are convertible at any time at the option of the holder into exchangeable shares until August 1, 2003. During 2001, (Pounds)0.8 million (2000: (Pounds)505.4 million) in ESDs were converted into 0.06 million (2000: 45.9 million) exchangeable shares, and (Pounds)13,142 (2000: (Pounds)1.5 million) in ESDs were settled in cash. The Loan Notes due 2005 bear interest at the six-month LIBOR rate less 0.5% payable semi-annually. Holders have the right to redeem the Loan Notes on the semi-annual interest payment dates. Maturities of long-term debt are as follows: (Pounds)125,828,000 in 2002, (Pounds)243,520,000 in 2003, (Pounds)nil in 2004, (Pounds)275,919,000 in 2005, and (Pounds)324,846,000 due thereafter.
17. Provisions for Liabilities and Charges ===================================================================================== Merger, Acquisition and Deferred Tax Provisions (Pounds)'000 - ------------------------------------------------- -------------------- January 1, 2000 23,296 Cash paid (4,231) Acquisitions and other adjustments 2,656 Movement on deferred taxes 34,836 Foreign exchange 1,143 - ------------------------------------------------- -------------------- December 31, 2000 57,700 ========================================================================================= Cash paid (2,400) Adjustment to AIM goodwill (10,353) Acquisitions and other adjustments 106,817 Movement on deferred taxes 20,195 Foreign exchange 111 - ------------------------------------------------- -------------------- December 31, 2001 172,070 =========================================================================================
These provisions consist of amounts provided as a result of acquisitions. Amounts added in 2001 include the (Pounds)51.9 million earn out related to the NAM acquisition, the (Pounds)19.0 million earn out related to the Pell Rudman acquisition, as well as the related retention bonus agreements under both acquisitions. Provisions for liabilities and charges include (Pounds)55.0 million in deferred tax liabilities, arising from contingent deferred sales commissions. F-16 AMVESCAP PLC AND SUBSIDIARIES
18. Reconciliation of Net Cash Flow to Movement in Net Debt ==================================================================================================================== 2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - -------------------------------------------- --------------- -------------- -------------- (Decrease)/increase in cash (33,329) 103,169 98,515 Cash (inflow) from client cash (6,286) (160,478) (33,818) Cash (outflow)/inflow from cash equivalents (96,560) 172,361 (6,852) Cash outflow/(inflow) from lease financing 420 (515) 822 Cash (inflow) from bank loans (3,380) (51,401) 108,290 Cash (outflow) from bank overdrafts - - (47,578) - -------------------------------------------- --------------- -------------- -------------- Change in net debt resulting from cash flows (139,135) 63,136 119,379 - -------------------------------------------- --------------- -------------- -------------- Debt and finance leases (4,249) (195,946) (664) Translation difference (2,274) (46,474) (24,005) - -------------------------------------------- --------------- -------------- -------------- Change in net debt resulting from non-cash changes and translation (6,523) (242,420) (24,669) - -------------------------------------------- --------------- -------------- -------------- Movement in net debt in the year (145,658) (179,284) 94,710 Net debt beginning of the year (691,899) (512,615) (607,325) - -------------------------------------------- --------------- -------------- -------------- Net debt end of the year (837,557) (691,899) (512,615) ========================================================================================================================
19. Analysis of Net Debt ============================================================================================================================== Non-cash December 31, changes and December 31, 2000 Cash flow translation 2001 2001 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ---------------------------------------------------------------------------------------------------------------------------------- Net cash: Cash at bank and in hand, including acquisitions of (Pounds)12,010 485,359 (127,849) (6,532) 350,978 Less: cash equivalents (249,952) 96,560 6,739 (146,653) Bank overdrafts (8,453) (2,040) (69) (10,562) - ---------------------------------------------------------------------------------------------------------------------------------- 226,954 (33,329) 138 193,763 Client cash (200,934) (6,286) (90) (207,310) - ---------------------------------------------------------------------------------------------------------------------------------- 26,020 (39,615) 48 (13,547) Cash equivalents 249,952 (96,560) (6,739) 146,653 Debt due within one year (6,839) 12,942 (131,931) (125,828) Debt due after more than one year (960,023) (16,322) 132,060 (844,285) Finance leases (1,009) 420 39 (550) - ---------------------------------------------------------------------------------------------------------------------------------- Total (691,899) (139,135) (6,523) (837,557) ================================================================================================================================== Non-cash December 31, changes and December 31, 1999 Cash flow translation 2000 2000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ---------------------------------------------------------------------------------------------------------------------------------- Net cash: Cash at bank and in hand, including acquisitions of (Pounds)118,451 189,732 283,783 11,844 485,359 Less: cash equivalents, including acquisitions of (Pounds)154,732 (63,389) (172,361) (14,202) (249,952) Bank overdrafts, including acquisitions of (Pounds)5,933 - (8,253) (200) (8,453) - ---------------------------------------------------------------------------------------------------------------------------------- 126,343 103,169 (2,558) 226,954 Client cash (41,533) (160,478) 1,077 (200,934) - ---------------------------------------------------------------------------------------------------------------------------------- 84,810 (57,309) (1,481) 26,020 Cash equivalents 63,389 172,361 14,202 249,952 Debt due within one year - - (6,839) (6,839) Debt due after more than one year (659,120) (51,401) (249,502) (960,023) Finance leases (1,694) (515) 1,200 (1,009) - ---------------------------------------------------------------------------------------------------------------------------------- Total (512,615) 63,136 (242,420) (691,899) ==================================================================================================================================
F-17 AMVESCAP PLC AND SUBSIDIARIES
Non-cash December 31, changes and December 31, 1998 Cash flow translation 1999 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - -------------------------------------------------------------------------------------------------- Net cash: Cash at bank and in hand 119,651 67,134 2,947 189,732 Less: cash equivalents (67,960) 6,852 (2,281) (63,389) Bank overdrafts (24,651) 24,529 122 - - -------------------------------------------------------------------------------------------------- 27,040 98,515 788 126,343 Client cash (7,715) (33,818) - (41,533) - -------------------------------------------------------------------------------------------------- 19,325 64,697 788 84,810 Cash equivalents 67,960 (6,852) 2,281 63,389 Debt due within one year (7,195) 6,494 701 - Debt due after more than one year (686,010) 54,218 (27,328) (659,120) Finance leases (1,405) 822 (1,111) (1,694) - -------------------------------------------------------------------------------------------------- Total (607,325) 119,379 (24,669) (512,615) ==================================================================================================
20. Called Up Share Capital and Exchangeable Shares Ordinary Shares
- --------------------------------------------------------------------------------------------------------- Number 2001 Number 2000 `000 (Pounds)'000 `000 (Pounds)'000 - ------------------------------------------ --------------------------------------------------------- Authorized ordinary shares of 25p each 1,050,000 262,500 1,050,000 262,500 --------------------------- -------------------------- Allotted, called up and fully paid ordinary shares of 25p each 784,147 196,037 771,038 192,759 =========================================================================================================
During the year the Company has issued 3,398,234 ordinary shares as a result of options exercised. As of December 31, 2001, ordinary shares are reserved for the following purposes:
- --------------------------------------------------------------------------------------------- Last Shares Prices expiry date -------------------------------------------- Options and shares arising from acquisitions 7,358,568 25p - 1396p Feb 2010 Conversion of ESDs 6,107,296 - Aug 2003 Conversion of exchangeable shares 39,498,655 - Dec 2009 Subscription agreement (options) with the Employee Share Option Trust 53,000,000 160p - 1680p Dec 2011 Options granted under the AMVESCAP 2000 Share Option Plan 23,257,437 950p - 1473p Dec 2011 Options granted under Sharesave Schemes 2,425,686 430p - 1048p May 2006 =============================================================================================
Exchangeable Shares The exchangeable shares issued by a subsidiary of the Company are exchangeable into ordinary shares of the Company on a one-for-one basis at any time at the request of the holder. They have, as nearly as practicable, the economic equivalence of the Company's ordinary shares, including the same voting and dividend rights as the ordinary shares. The Company can redeem all outstanding exchangeable shares for ordinary shares after December 31, 2009, or earlier if the total exchangeable shares fall below 5 million. The exchangeable shares are included as part of share capital in the consolidated balance sheet to present a true and fair view of the consolidated Group's capital structure, which differs from the Companies Act 1985 requirements (to reflect these amounts as minority interests), as they will become and are equivalent to ordinary shares. F-18 AMVESCAP PLC AND SUBSIDIARIES Movements in exchangeable shares comprise: - ------------------------------------------------------------ Number - --------------------------------------------------------- Issued August 1, 2000 21,377,158 Converted into ordinary shares (23,674,300) Converted from ESDs 45,856,643 - --------------------------------------------------------- December 31, 2000 43,559,501 ========================================================= Converted into ordinary shares (4,125,367) Converted from ESDs 64,521 - --------------------------------------------------------- December 31, 2001 39,498,655 ========================================================= 21. Commitments and Contingencies The Group operates a number of pension schemes throughout the world. All are defined contribution schemes with the exception of immaterial schemes operating for certain employees in the U.K., U.S., and Germany, which are defined benefit schemes. The U.K. and U.S. plans are closed to new participants. The assets of the defined benefit schemes are held in separate trustee administered funds. The pension costs and provisions of these schemes are assessed in accordance with the advice of professionally qualified actuaries. As of December 31, 2001, all plans are fully funded, with the exception of the German scheme, which is unfunded in accordance with local practice. The costs amounted to (Pounds)6,256,000 (2000: (Pounds)5,860,000) for the defined benefit schemes and (Pounds)39,457,000 (2000: (Pounds)27,836,000) for the defined contribution schemes. The Group's annual commitments under non-cancelable operating leases are as - --------------------------------------------------------------------------- follows: - --------
Land and buildings Other - --------------------------------- ----------------------------- ---------------------------- 2001 2000 2001 2000 Operating leases which expire: (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - --------------------------------- ----------------------------- ---------------------------- Within one year 2,186 407 202 402 Within two to five years inclusive 16,567 16,810 3,373 3,548 In more than five years 16,173 13,856 14 1,292 - --------------------------------- ----------------------------- ---------------------------- 34,926 31,073 3,589 5,242 ===================================================================================================
The majority of the leases of land and buildings are subject to rent reviews. Guarantees and contingencies may arise in the ordinary course of business. In the normal course of business, the Group is subject to various litigation matters; however, in management's opinion, there are no legal proceedings pending against the Company, which would have a material adverse effect on its financial position, results of operations or liquidity. F-19 AMVESCAP PLC AND SUBSIDIARIES 22. Financial Instruments - -------------------------------------------------------------------------------- The interest rate profile of the financial liabilities of the Group on December 31 was:
2001 - ------------------------------------------------------------------------------------------------------------------ Fixed rate financial liabilities ----------------------------------- Weighted Weighted average period average for which Total Floating rate Fixed rate interest rate rate is fixed Currency (Pounds)'000 (Pounds)'000 (Pounds)'000 % Years - ------------------------------------------------------------------------------------------------------------------ US dollar 769,756 106,919 662,837 6.3 3.4 Sterling 129,513 125,828 3,685 5.0 7.7 Euro 6,336 - 6,336 6.8 2.0 Canadian dollar 64,733 - 64,733 6.0 1.6 Japanese yen 325 - 325 2.0 1.5 - ------------------------------------------------------------------------------------------------------------------ 970,663 232,747 737,916 6.3 3.2 ==================================================================================================================
2000 - --------------------------------------------------------------------------------------------------------------- Fixed rate financial liabilities -------------------------------- Weighted Weighted average period average for which Total Floating rate Fixed rate interest rate rate is fixed Currency (Pounds)'000 (Pounds)'000 (Pounds)'000 % Years - --------------------------------------------------------------------------------------------------------------- US dollar 458,679 - 458,679 6.5 3.6 Sterling 429,073 429,073 - - - Euro 12,454 - 12,454 6.5 2.0 Canadian dollar 67,115 - 67,115 6.0 4.6 Japanese yen 550 - 550 2.0 2.3 - --------------------------------------------------------------------------------------------------------------- 967,871 429,073 538,798 6.5 3.7 ===============================================================================================================
The Group held the following financial assets as of December 31: - -------------------------------------------------------------------- 2001 2000 (Pounds)'000 (Pounds)'000 - -------------------------- ---------------- --------------- Cash deposits: - -------------- U.S. dollar 60,991 131,591 Sterling 48,082 118,676 Canadian dollar 41,148 34,847 Euro 15,101 27,353 Japanese yen 2,920 4,736 Other 7,660 10,530 Investments: - ------------ U.S. dollar 35,221 39,692 Sterling 191 30,835 Canadian dollar 13,056 11,668 Euro 3,012 65 Japanese yen 8,404 3,040 Other 2,946 1,929 Sterling treasury bills 9,150 8,564 Taiwan dollar commercial paper 5,942 - - -------------------------- ---------------- --------------- Total 253,824 423,526 ==================================================================== The cash deposits comprise deposits placed primarily in money market accounts and 7-day deposits. The average interest rate on the treasury bills is 9.1% for both 2001 and 2000, and the average time for which the rate is fixed is 0.9 years (2000: 1.7 years). The average interest rate on the commercial paper is 2.2%, and the average time for which the rate is fixed is 0.05 years. F-20 AMVESCAP PLC AND SUBSIDIARIES Banking and insurance subsidiaries within the Group held (Pounds)261.9 million in financial assets during 2001 (2000: (Pounds)254.4 million), consisting of primarily U.S. dollar and Canadian dollar cash deposits of (Pounds)175.1 million (2000: (Pounds)157.6 million), (Pounds)9.9 million in U.S. dollar treasury bills (2000: (Pounds)4.1 million), (Pounds)2.8 million in Canadian dollar treasury bills (2000: (Pounds)2.7 million), (Pounds)47.1 million in euro fixed interest securities (2000: (Pounds)44.7 million), (Pounds)26.3 million in Canadian dollar fixed interest securities (2000: (Pounds)40.4 million), and (Pounds)0.7 million in other equity securities (2000: (Pounds)4.9 million). The average interest rate on the treasury bills is 5.9% for 2001 (2000: 6.8%), and the average time for which the rate is fixed is 2.9 years (2000: 5.6 years). The average interest rate on the euro securities is 3.5% (2000: 5.0%), and the average time for which the rate is fixed is 0.1 years for both 2001 and 2000. The average interest rate on the Canadian dollar securities is 6.6% (2000: 7.5%), and the average time for which the rate is fixed is 5.9 years for 2001 (2000: 6.7 years). The Group has excluded debtors and creditors from its financial instrument disclosures. The majority of these amounts mature within three months, and there is no material interest rate gap on these amounts. There were no material differences between the book value and fair values of financial assets and liabilities at December 31, 2001 and 2000. 23. Information for U.S. Shareholders Reconciliation to U.S. Accounting Principles The Group prepares its consolidated accounts in accordance with Generally Accepted Accounting Principles ("GAAP") in the United Kingdom, which differ in certain material respects from U.S. GAAP. The following is a summary of material adjustments to profit and shareholders' funds which would be required if U.S. Generally Accepted Accounting Principles ("U.S. GAAP'') had been applied instead of U.K. Generally Accepted Accounting Principles ("U.K. GAAP'').
- ---------------------------------------------------------------------------------------- 2001 2000 1999 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ---------------------------------------------------------------------------------------- Profit for the financial year (U.K. GAAP) 154,803 300,728 181,484 Acquisition accounting /(a)/ (35,538) (65,451) (76,380) Taxation /(b)/ (40,539) (57,325) (15,030) Other /(e)/ 1,495 2,758 (2,040) - ---------------------------------------------------------------------------------------- Net income (U.S. GAAP) 80,221 180,710 88,034 - ---------------------------------------------------------------------------------------- Earnings per share (U.S. GAAP): -basic 10.0p 26.7p 13.8p -diluted 9.7p 25.7p 13.2p Earnings per share before goodwill amortization (U.S. GAAP): -basic 34.8p 44.6p 29.2p -diluted 33.8p 42.6p 28.0p =========================================================================================
- --------------------------------------------------------------------------------------- 2001 2000 (Pounds)'000 (Pounds)'000 - --------------------------------------------------------------------------------------- Shareholders' funds (U.K. GAAP) 2,281,464 2,130,001 Acquisition accounting /(a)/ 984,436 1,020,052 Treasury stock /(c)/ (186,134) (168,292) Dividends /(d)/ 52,708 47,813 Other /(b,e)/ (20,443) (10,953) - --------------------------------------------------------------------------------------- Shareholders' equity (U.S. GAAP) 3,112,031 3,018,621 =======================================================================================
F-21 AMVESCAP PLC AND SUBSIDIARIES (a) Acquisition Accounting Under U.K. GAAP, goodwill arising on acquisitions prior to 1998 has been eliminated directly against reserves. Goodwill arising in 1998 and after is capitalized and amortized over a period of 20 years. Integration-related amounts were expensed directly to the profit and loss account. Under U.S. GAAP, the acquisitions of Pell Rudman, Grand Pacific, and Parkes occurred after the adoption of Statement of Financial Accounting Standards (SFAS) 141, "Business Combinations." SFAS 141 requires that goodwill and indefinite-lived intangibles not be amortized on acquisitions that occurred after July 1, 2001. Accordingly, we have preliminarily allocated the excess purchase price to non-amortizable goodwill for these three acquisitions under U.S. GAAP. SFAS 142, "Goodwill and Other Intangible Assets," will be adopted as of January 1, 2002, requiring that goodwill and indefinite-lived intangible assets no longer be amortized, but instead be tested for impairment annually. Definite-lived intangible assets will continue to be amortized over their estimated useful lives. The impact of adopting SFAS 142 is currently being evaluated. The integration costs were either capitalized as goodwill or expensed to the profit and loss account in the year paid. (b) Taxation The taxation adjustment primarily relates to differences in the financial statement treatments of stock option deductions under U.K. and U.S. GAAP. Under U.K. GAAP, current tax expense is reduced by the tax benefit of the stock option deduction. Under U.S. GAAP, the tax benefit is written off directly to equity. In addition, certain exceptional costs are not included in U.S. GAAP book income until incurred, and therefore the associated tax benefit has been removed from the U.S. GAAP tax expense. The adoption of FRS 19 for U.K. GAAP significantly reduces the differences in the recognition of deferred tax assets under U.K. and U.S. GAAP. The differences are limited to certain intangibles that are treated as deferred tax items for U.S. GAAP that are permanent items under U.K. GAAP. In addition, certain exceptional costs are not included in U.S. GAAP book income until incurred and therefore the associated deferred tax asset has been removed from the U.S. GAAP balance sheet. The cumulative effect of the adoption of FRS 19 on years prior to 2001 has been reflected in the shareholder's equity deferred taxation adjustment. (c) Treasury Stock Under U.K. GAAP, shares held by the ESOT are reflected as investments. Additionally, the trust related to the Global Stock Plan is not consolidated with the Group. Under U.S. GAAP, shares held by the ESOT and the Global Stock Plan trust are reflected as treasury stock. (d) Dividends Under U.K. GAAP, ordinary dividends proposed after the end of an accounting period are deducted in arriving at retained earnings for that period. Under U.S. GAAP, dividends are not recorded until formally approved. (e) Other Other adjustments include accounting differences relating to pension costs, interval fund amortization, and loans of employee stock ownership plans. F-22 AMVESCAP PLC AND SUBSIDIARIES 24. Guarantor Condensed Consolidating Financial Statements The 6.375% senior notes due 2003 and 6.6% senior notes due 2005, which were issued in connection with the GT Global acquisition, and which have an aggregate principal amount of $650 million, and the 5.9% senior notes due 2007, which have an aggregate principal amount of $300 million, are fully and unconditionally guaranteed as to payment of principal, interest and any other amounts due thereon by the following wholly owned subsidiaries: AIM Management Group, Inc., AIM Advisors, Inc., INVESCO North American Holdings, Inc., and INVESCO Institutional (N.A.), Inc. (the "Guarantors"). Presented below are condensed consolidating financial statements of the Company for the years ended December 31, 2001, 2000, and 1999. Prior year disclosures have been restated to reflect the internal reorganization of INVESCO Institutional (N.A.), Inc., which occurred at the beginning of 2000. Condensed Consolidating Balance Sheet and Reconciliation of Shareholders' Funds from U.K. to U.S. GAAP
- ------------------------------------------------------------------------------------------------------------------------- 2001 Consolidated Guarantor Non-guarantor AMVESCAP PLC elimination Consolidated subsidiaries subsidiaries parent company entries total (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ------------------------------------------------------------------------------------------------------------------------- Fixed assets 920,524 4,139,632 2,608,896 (4,599,987) 3,069,065 Current assets 91,818 682,427 11,220 - 785,465 Creditors: amounts falling due within one year (110,023) (354,643) (176,138) - (640,804) Intercompany balances (197,468) (25,567) 223,035 - - Banking and insurance activities - 84,093 - - 84,093 Creditors: amounts falling due after more than one year 21,002 (218,211) (819,146) - (1,016,355) - ------------------------------------------------------------------------------------------------------------------------- Net assets/(liabilities) 725,853 4,307,731 1,847,867 (4,599,987) 2,281,464 ========================================================================================================================= Capital and reserves Called up share capital 2,849 802,594 196,037 (805,443) 196,037 Share premium account 830,814 1,628,791 1,619,879 (2,459,605) 1,619,879 Exchangeable shares - 433,597 - - 433,597 Profit and loss account 371,264 630,699 685,884 (1,001,963) 685,884 Other reserves (479,074) 812,050 (653,933) (332,976) (653,933) - ------------------------------------------------------------------------------------------------------------------------- Shareholders' funds under UK GAAP 725,853 4,307,731 1,847,867 (4,599,987) 2,281,464 ========================================================================================================================= Reconciliation to US accounting principles US GAAP adjustments: Acquisition accounting 948,335 527,336 (167,185) (324,050) 984,436 Treasury stock - - (186,134) - (186,134) Dividends - 2,568 50,140 - 52,708 Other (11,429) (9,014) (20,443) 20,443 (20,443) - ------------------------------------------------------------------------------------------------------------------------- Shareholders' equity under US GAAP 1,662,759 4,828,621 1,524,245 (4,903,594) 3,112,031 =========================================================================================================================
F-23 AMVESCAP PLC AND SUBSIDIARIES
- -------------------------------------------------------------------------------------------------------------------------- 2000 Non- Consolidated Guarantor guarantor AMVESCAP PLC elimination Consolidated subsidiaries subsidiaries parent company entries total (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ------------------------------------------------------------------------------------------------------------------------- Fixed assets 592,457 3,091,031 2,421,889 (3,383,385) 2,721,992 Current assets 181,283 873,053 55,653 - 1,109,989 Creditors: amounts falling (127,629) (549,450) (82,344) - (759,423) due within one year Intercompany balances (131,949) (12,275) 144,224 - - Banking and insurance activities - 75,166 - - 75,166 Creditors: amounts falling due after more than one year (7,663) (123,486) (886,574) - (1,017,723) - ------------------------------------------------------------------------------------------------------------------------- Net assets/(liabilities) 506,499 3,354,039 1,652,848 (3,383,385) 2,130,001 ========================================================================================================================= Capital and reserves Called up share capital 2,823 782,674 192,759 (785,497) 192,759 Share premium account 627,850 539,052 1,488,933 (1,166,902) 1,488,933 Exchangeable shares - 477,153 - - 477,153 Profit and loss account 347,975 748,083 620,341 (1,096,058) 620,341 Other reserves (472,149) 807,077 (649,185) (334,928) (649,185) - ------------------------------------------------------------------------------------------------------------------------- Shareholders' funds under UK GAAP 506,499 3,354,039 1,652,848 (3,383,385) 2,130,001 ========================================================================================================================= Reconciliation to US accounting principles US GAAP adjustments: Acquisition accounting 996,586 1,173,697 (131,569) (1,018,662) 1,020,052 Treasury stock - - (168,292) - (168,292) Dividends - 2,614 45,199 - 47,813 Other (13,288) 2,335 (10,953) 10,953 (10,953) - ------------------------------------------------------------------------------------------------------------------------- Shareholders' equity under US GAAP 1,489,797 4,532,685 1,387,233 (4,391,094) 3,018,621 =========================================================================================================================
F-24 AMVESCAP PLC AND SUBSIDIARIES Condensed Consolidating Statement of Profit and loss and Reconciliation of net Income from U.K. to U.S. GAAP
- ---------------------------------------------------------------------------------------------------------------- Non- Consolidated 2001 Guarantor guarantor AMVESCAP PLC elimination Consolidated subsidiaries subsidiaries parent company entries total (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ---------------------------------------------------------------------------------------------------------------- Revenues 635,169 984,678 - - 1,619,847 Operating expenses (355,920) (739,252) (1,315) - (1,096,487) - ---------------------------------------------------------------------------------------------------------------- Operating profit 279,249 245,426 (1,315) - 523,360 Other net income/(expense) (100,156) (132,179) (10,587) - (242,922) - ---------------------------------------------------------------------------------------------------------------- Profit before taxation 179,093 113,247 (11,902) - 280,438 Taxation (42,918) (77,488) (5,229) - (125,635) - ---------------------------------------------------------------------------------------------------------------- Profit for the financial year 136,175 35,759 (17,131) - 154,803 Share of profits of Subsidiaries 76,223 136,175 171,934 (384,332) - - ---------------------------------------------------------------------------------------------------------------- Net income under UK GAAP, (equity method) 212,398 171,934 154,803 (384,332) 154,803 Reconciliation to US Accounting principles US GAAP adjustments: Acquisition accounting 8,935 (44,473) (35,538) (35,538) Taxation (24,063) (16,476) (40,539) (40,539) Other 1,495 - 1,495 1,495 - ---------------------------------------------------------------------------------------------------------------- Net income under US GAAP 198,765 110,985 80,221 80,221 ================================================================================================================ - ---------------------------------------------------------------------------------------------------------------- Non- Consolidated 2000 Guarantor guarantor AMVESCAP PLC elimination Consolidated subsidiaries subsidiaries parent company entries total (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ---------------------------------------------------------------------------------------------------------------- Revenues 747,903 880,759 - - 1,628,662 Operating expenses (375,037) (666,119) 1,405 - (1,039,751) - ---------------------------------------------------------------------------------------------------------------- Operating profit 372,866 214,640 1,405 - 588,911 Other net income/(expense) (70,594) (80,605) 8,521 - (142,678) - ---------------------------------------------------------------------------------------------------------------- Profit before taxation 302,272 134,035 9,926 - 446,233 Taxation (84,202) (57,205) (4,098) - (145,505) - ---------------------------------------------------------------------------------------------------------------- Profit for the financial year 218,070 76,830 5,828 - 300,728 Share of profits of Subsidiaries 94,105 218,070 294,900 (607,075) - - ---------------------------------------------------------------------------------------------------------------- Net income under UK GAAP, (equity method) 312,175 294,900 300,728 (607,075) 300,728 Reconciliation to US Accounting principles US GAAP adjustments: Acquisition accounting (7,974) (57,477) (65,451) (65,451) Taxation (41,355) (15,970) (57,325) (57,325) Other 2,758 - 2,758 2,758 - ---------------------------------------------------------------------------------------------------------------- Net income under US GAAP 265,604 221,453 180,710 180,710 ================================================================================================================
F-25 AMVESCAP PLC AND SUBSIDIARIES
- ---------------------------------------------------------------------------------------------------------------- 1999 Non- Consolidated Guarantor guarantor AMVESCAP PLC elimination Consolidated subsidiaries subsidiaries parent company entries total (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - ---------------------------------------------------------------------------------------------------------------- Revenues 538,188 534,162 - - 1,072,350 Operating expenses (269,195) (449,032) (1,410) - (719,637) - ---------------------------------------------------------------------------------------------------------------- Operating profit 268,993 85,130 (1,410) - 352,713 Other net income/(expense) (55,555) (20,745) 6,629 - (69,671) - ---------------------------------------------------------------------------------------------------------------- Profit before taxation 213,438 64,385 5,219 - 283,042 Taxation (76,423) (23,278) (1,857) - (101,558) - ---------------------------------------------------------------------------------------------------------------- Profit for the financial year 137,015 41,107 3,362 - 181,484 Share of profits of subsidiaries 50,411 137,015 178,122 (365,548) - - ---------------------------------------------------------------------------------------------------------------- Net income under UK GAAP, (equity method) 187,426 178,122 181,484 (365,548) 181,484 Reconciliation to US accounting principles US GAAP adjustments: Acquisition accounting (7,480) (68,900) (76,380) (76,380) Taxation (6,758) (8,272) (15,030) (15,030) Other (2,040) - (2,040) (2,040) - ---------------------------------------------------------------------------------------------------------------- Net income under US GAAP 171,148 100,950 88,034 88,034 ================================================================================================================
F-26 AMVESCAP PLC AND SUBSIDIARIES Condensed Consolidating Statement of Cash Flows
- -------------------------------------------------------------------------------------------------------------------- 2001 Non- Consolidated Guarantor guarantor AMVESCAP PLC elimination Consolidated subsidiaries subsidiaries parent company entries total (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - -------------------------------------------------------------------------------------------------------------------- Net cash inflow from operating activities 355,584 255,222 (79,288) - 531,518 Banking and insurance activities - 18,346 - - 18,346 Net cash (outflow)/inflow from returns on investments and servicing of finance (34,688) 185,538 108,084 (307,040) (48,106) Taxation (105,319) (57,231) (4,481) - (167,031) Net cash (outflow)/inflow from capital expenditure and financial investment (17,054) (62,588) (5,436) - (85,078) Acquisitions and disposals - - (311,441) - (311,441) Dividends paid (188,286) (120,550) (82,569) 307,040 (84,365) Net cash (outflow)/inflow from financing (5,217) (319,039) 341,037 - 16,781 Change in bank overdrafts - (2,040) - - (2,040) Change in cash equivalents (4,349) 64,476 37,960 - 98,087 - -------------------------------------------------------------------------------------------------------------------- (Decrease)/increase in cash 671 (37,866) 3,866 - (33,329) ====================================================================================================================
- -------------------------------------------------------------------------------------------------------------------- 2000 Non- Consolidated Guarantor guarantor AMVESCAP PLC elimination Consolidated subsidiaries subsidiaries parent company entries total (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - -------------------------------------------------------------------------------------------------------------------- Net cash inflow from operating activities 306,422 165,095 113,694 - 585,211 Banking and insurance activities - 49,026 - - 49,026 Net cash (outflow)/inflow from returns on investments and servicing of finance (42,705) 124,103 82,736 (198,164) (34,030) Taxation (123,907) (7,145) 10,449 - (120,603) Net cash (outflow)/inflow from capital expenditure and financial investment (37,593) (47,392) 7,147 - (77,838) Acquisitions and disposals - - (182,595) - (182,595) Dividends paid (128,688) (69,476) (63,558) 198,164 (63,558) Net cash (outflow)/inflow from financing (275) 8,216 67,865 - 75,806 Change in bank overdrafts - (8,253) - - (8,253) Change in cash equivalents 20,664 (99,599) (41,062) - (119,997) - -------------------------------------------------------------------------------------------------------------------- (Decrease)/increase in cash (6,082) 114,575 (5,324) - 103,169 ====================================================================================================================
F-27
- ------------------------------------------------------------------------------------------------------------------- 1999 Non- Consolidated Guarantor guarantor AMVESCAP PLC elimination Consolidated subsidiaries subsidiaries parent company entries total (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 - -------------------------------------------------------------------------------------------------------------------- Net cash inflow/(outflow) from operating activities 284,262 (58,351) 132,464 - 358,375 Banking and insurance activities - 2,590 - - 2,590 Net cash (outflow)/inflow from returns on investments and servicing of finance (34,440) 151,201 45,644 (194,161) (31,756) Taxation (71,569) 22,399 (6,914) - (56,084) Net cash (outflow)/inflow from capital expenditure and financial investment (31,628) 45,012 (59,483) - (46,099) Dividends paid (150,666) (43,495) (54,394) 194,161 (54,394) Net cash outflow from financing (257) (54,126) (52,361) - (106,744) Change in bank overdrafts - 24,529 - - 24,529 Change in cash equivalents 4,794 3,304 - - 8,098 - -------------------------------------------------------------------------------------------------------------------- Increase in cash 496 93,063 4,956 - 98,515 ====================================================================================================================
F-28 EX-1.1 3 dex11.txt MEMORANDUM OF ASSOCIATION OF AMVESCAP EXHIBIT 1.1 Company No: 308372 THE COMPANIES ACT 1929 AND THE COMPANIES ACTS 1948 TO 1981 ---------------------------------- COMPANY LIMITED BY SHARES ----------------------------------- Memorandum of Association of AMVESCAP PLC* (Incorporating amendments made on or before 20th July 2000) ----------------------------------- 1. The name of the Company is "AMVESCAP PLC".* 2. The Company is to be a public company. 3. The registered office of the Company will be situate in England. 4. The objects for which the Company is established are:- (A) To carry on the business of an investment holding company and to subscribe for, purchase, or otherwise acquire, and hold, shares, debentures or other securities of any other company or body corporate and to acquire and undertake the whole or any part of the business, property and liabilities of any company or body corporate carrying on any business and to sell or deal in or otherwise dispose of any shares, debentures or other securities or property including any business or undertaking of any other company or any other assets or liabilities. (B) To acquire by purchase, lease, concession, grant, licence or otherwise, such lands, buildings, leases, underleases, rights, privileges, stocks, shares, debentures, debenture stock, bonds, obligations or securities of any government, state or authority or of any public or private company, corporate or unincorporate, policies of assurance and such other property and rights and interest in property as the Company shall deem fit, with a view to receiving the income therefrom. *The Company was incorporated on 19th December 1935 as H. Lotery & Company Limited. The name of the Company was changed to Slater, Walker & Co. Limited on 24th September 1964, to Slater, Walker Securities Limited on 24th November 1965 and to Britannia Arrow Holdings Limited on 16th September 1977. The Company re-registered as a public company under the name Britannia Arrow Holdings Public Limited Company on 19th March 1982. The name of the Company was changed to INVESCO MIM PLC on 31st January 1990, to INVESCO PLC on 21st June 1993, to AMVESCO PLC on 3rd March 1997 and to AMVESCAP PLC on 8th May 1997. (C) To demise, lease or let the whole or any part of the property of the Company on such terms as the Company shall determine, and to supply power, light, heat and water, and to lay out land for building purposes, and to build on, improve, let on building leases, advance money to persons building, or otherwise to develop the same. (D) To build, construct, maintain, alter, enlarge, pull down and remove or replace any buildings, shops, factories, offices, works, machinery, engines and to clear sites for the same or to join with any person, firm or company in doing any of the things aforesaid and to manage and control the same or join with others in so doing. (E) To purchase, take on lease or in exchange, hire or otherwise acquire and hold for any estate or interest, any lands, buildings, easements, rights, privileges, concessions, machinery, plant, stock-in-trade, trade marks and any real and personal property of any kind necessary or convenient for the Company's business. (F) To purchase or otherwise acquire any patents, brevets d'inventions, licences, concessions and the like conferring any exclusive or non-exclusive or limited right to use any invention which may seem capable of being used for any of the purposes of the Company or acquisition of which may seem calculated directly or indirectly to benefit this Company and to use, exercise, develop or grant licences in respect of or otherwise turn to account the property and rights so acquired. (G) To erect, construct, lay down, enlarge, alter and maintain any buildings, works and machinery necessary or convenient for the Company's business. (H) To borrow and raise money and secure or discharge any debt or obligation of or binding on the Company in such manner as may be thought fit, and in particular by mortgages of or charges upon the undertaking and all or any of the real and personal property (present and future), and the uncalled capital of the Company, or by the creation and issue, on such terms as may be thought expedient, of debentures, debenture stock or other securities or obligations of any description; and to issue any of the Company's shares, stock securities or other obligations for such consideration (whether for cash, services rendered or property acquired or otherwise) and on such terms as may be thought fit. (I) To issue and deposit any securities which the Company has power to issue by way of mortgage to secure any sum less than the nominal amount of such securities, and also by way of security for the performance of any contracts or obligations of the Company. (J) To receive loans at interest or otherwise from and to lend money and give credit to, and to become or give security for, or guarantee the performance of contracts by, any person or company where the so doing may seem advantageous or desirable in the interests of the Company. (K) To pay bonuses, gratuities, pensions and allowances on retirement to any officers or servants of the Company or any parent or subsidiary company or to their widows or dependants, and to make contributions to any fund and to pay premiums for the purchase or provision of any such gratuity, pension or allowance or to promote or assist financially, whether by way of contributions, donations, payment of premiums, or otherwise, any fund or scheme for the benefit, wholly or in part, of the Directors, ex-Directors or employees or ex-employees of the Company or any parent or subsidiary company or their dependants or relatives, or for the purpose of establishing and supporting or aiding in the establishment and support of any schools and educational, scientific, literary, religious or charitable institutions or trade societies, whether such societies be solely connected with the business carried on by the Company or not, and generally to subscribe or guarantee money for charitable or benevolent objects or for any exhibition or for any public, general or useful object (L) To remunerate employees and servants of the Company or any parent or subsidiary company and others out of or in proportion to the returns or profits of the Company or otherwise as the Company shall think fit; and to promote and give effect to any scheme or arrangement for sharing profits with employees, whether involving the issue of shares or not. (LL) To remunerate any officer, servant or employee of the Company by the allotment of shares or securities of the Company credited as paid up in full or in part to or for the benefit of any such person, on such terms as the Board may think fit. (M) To draw accept, endorse, issue, or execute promissory notes, bills or exchange, bills of lading, warrants and other negotiable, transferable or mercantile instruments. (N) To give guarantees, indemnities or any security for (whether by personal covenants or by mortgaging or charging all or any part of the undertaking, property and assets, both present and future, and uncalled capital of the Company or by both such methods) the performance of the obligations of and the repayment or payment of the principal amounts of and premiums, interest and dividends on any moneys borrowed by or on any securities of any person, firm or company, including (but without prejudice to the generality of the foregoing) any company which is for the time being a subsidiary of the Company. (O) To invest and deal with the capital and other moneys of the Company in the purchase or upon the security of shares, stocks, debentures, debenture stocks, bonds, mortgages, obligations and other securities issued or guaranteed by any government, sovereign ruler, commissioners, trusts, municipal local or other authority or body of whatever nature, whether at home or abroad and upon such other securities and in such manner as may from time to time be determined and to hold, sell, mortgage or deal with such shares, stocks, debentures, denture stocks, bonds, mortgages, obligations and other securities (whether such shares or securities be fully paid or not) where the so doing may seem desirable in the interests of the Company. (P) To pay for any property or rights acquired by the Company, either in cash or shares, with or without preferred or deferred rights in respect of dividend or repayment of capital or otherwise, or by any securities which the Company has power to issue or partly in one mode and partly in another, and generally on such terms as the Company may determine. (Q) To remunerate any person or company for services rendered or to be rendered in placing or assisting to place any of the shares or debenture capital or other securities of the Company, or in or about the formation or promotion of the Company or the conduct of its business, and to pay the preliminary expenses of the Company. (R) To accept payment for any property or rights sold or otherwise disposed of or dealt with by the Company, either in cash, by instalments or otherwise, or in shares of any company or corporation with or without deferred or preferred rights in respect of dividend or repayment of capital or otherwise, or by means of a mortgage or by debentures or debenture stock of any company or corporation, or partly in one mode and partly in another, and generally on such terms as the company may determine, and to hold, deal with or dispose of any consideration so received. (S) To enter into partnership or any arrangement for sharing profits, union of interests or co-operation with any company, firm or person carrying on or proposing to carry on any business within the objects of this Company, or calculated to advance its interests, and to acquire and hold shares, stock or securities of any such company. (T) To establish or promote or concur in establishing or promoting any other company whose objects shall include the acquisition and taking over of all or any of the assets and liabilities of or shall be in any manner calculated to advance directly or indirectly the objects or interests of this Company, and to acquire and hold shares, stock or securities of and guarantee the payment of the dividends or capital of any shares or stock or the interest or principal of any securities issued by or any other obligation of any company promoted by this Company or in which this Company may be or may be about to become interested. (U) To purchase or otherwise acquire and undertake and carry on all or any part of the business, property and transactions of any person or company carrying on any business which this Company is authorised to carry on, or possessed of property suitable for the purposes of this Company. (V) To sell, improve, manage, develop, turn to account, exchange, let on rent, royalty, share of profits or otherwise, grant licences, easements and other rights in respect of, and in any other manner deal with or dispose of the undertaking of the Company or any part thereof, or all or any of the property for the time being of the Company, and for any consideration, whether in cash or in shares (fully or partly paid), debentures, debenture stock or other interests in or securities of any company or otherwise. (W) To amalgamate with any other company whose objects are or include objects similar to those of this Company, whether by sale or purchase (for fully or partly paid shares or otherwise) of the undertaking, subject to the liabilities of this or any such other company as aforesaid, with or without winding up, or by purchase (for fully or partly paid shares or otherwise) of all or a controlling interest in the shares or stock of any such other company, or in any other manner. (X) To enter into any arrangement with any government or authority supreme, municipal, local or otherwise and to obtain from any such government or authority any rights, concessions or privileges that may seem conductive to the attainment of the Company's objects or any of them. (Y) To distribute among the members of the Company in kind any of the property of the Company and in particular any shares, debentures or securities of other companies belonging to this Company or of which this Company may have the power of disposing. (Z) To do all or any of the above things in any part of the world, and either as principals, agents, trustees, contractors or otherwise, and either alone or in conjunction with others, and either by or through agents, sub-contractors, trustees or otherwise. (ZZ) To do all such other things as are incidental or conductive to the above objects or any of them. And it is hereby declared that the word "company" in this clause shall be deemed to include any partnership or other body of persons whether incorporated or not incorporated and whether domiciled in the United Kingdom or elsewhere and the intention is that the objects specified in each paragraph of this clause shall, except where otherwise expressed in such paragraph, be independent main objects and shall be in no wise limited or restricted by reference to or inference from the terms of any other paragraph or the name of the Company. 5. The liability of the Members is limited. 6. *The share capital of the Company is (pound)262,500,000, divided into 1,049,999,999 ordinary shares of 25p each and 1 special voting share of 25p. The shares in the original or any increased capital may be divided into several classes, and there may be attached thereto respectively any preferential, deferred or other special rights, privileges, conditions or restrictions as to dividends, capital, voting or otherwise. * The share capital was increased from (pound)103,637,500 to (pound)192,700,000 on 27th November 1996 and from (pound)192,700,000 to (pound)212,700,000 on 7th May 1998. The share capital was increased from (pound)212,700,000 to (pound)262,500,000 by the creation of 199,999,999 ordinary shares of 25p each and 1 special voting share of 25p by Special Resolution passed on 20th July 2000. EX-2.9 4 dex29.txt INSTRUMENT DATED DECEMBER 20, 2000 Exhibit 2.9 Dated 20 December 2000 ---------------------- -------------------------------------------------------- INSTRUMENT Constituting (pound)160,107,220 Floating Rate Unsecured Loan Notes -------------------------------------------------------- ASHURST MORRIS CRISP Broadwalk House 5 Appold Street London EC2A 2HA Tel: 0207-638 1111 Fax: 0207-972 7990 CRA/A985.00009 CONFORMED COPY -------------- THIS INSTRUMENT is made by way of deed on 20 December 2000 BY:- (1) AMVESCAP PLC (No.308372) whose registered office is at 11 Devonshire Square, London EC2M 4YR (the "Company"). WHEREAS the Company has, pursuant to its Memorandum and Articles of Association and by resolution of its board of directors passed on 1 November 2000, created and authorised the issue of a maximum nominal amount of (pound)160,107,220 Floating Rate Unsecured Loan Notes to be constituted as hereinafter provided and subject to, and with the benefit of, the schedules hereto which shall be deemed to form part of this instrument. BY THIS DEED THE COMPANY DECLARES AND COVENANTS AS FOLLOWS:- 1. DEFINITIONS AND INTERPRETATION 1.1 In this instrument and the schedules the following words and expressions shall have the following meanings, unless the context otherwise requires:- "business day" means a day (excluding Saturdays) on which banks generally are open in London for the transaction of normal banking business; "Conditions" means the conditions of the Notes as set out in schedule 2; "Directors" means the board of directors for the time being of the Company; "Extraordinary Resolution" means an extraordinary resolution as defined in paragraph 18 of schedule 4; "Interest Payment Date" has the meaning given in Condition 7.1; "North American person" means:- (a) any individual who is a resident or individual of the United States; (b) a corporation, partnership or other entity created or organised in or under the laws of the United States or any state thereof or an estate or trust the income of which is subject to United States federal income taxation regardless of its source; and (c) any individual, corporation, partnership, trust or other entity resident in Canada, provided that the term "North American person" shall not include a branch or agency of a United States bank or insurance company that is operating outside the United States for valid business reasons as a locally registered branch or agency engaged in the banking and insurance business and not solely for the purpose of investing in securities not registered under the United States Securities Act of 1933, as amended; -1- CONFORMED COPY -------------- "Notes" means the (pound)160,107,220 Floating Rate Unsecured Loan Notes 2005 constituted by this instrument or, as the case may be, the principal amounts represented by them and for the time being issued and outstanding; "Noteholder" means a person whose name is for the time being entered in the Register as the holder of a Note; "these presents" means this instrument and the schedules and includes any instrument Substitution to this instrument; "Register" means the register of the holders of the Notes kept by or on behalf of the Company; "Registrars" means the holders from time to time of the Register; and "United States" means the United States of America its territories and possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction and political sub-division thereof. 1.2 Subject as herein expressly defined any words and expressions defined in the Companies Act 1985 and 1989 shall have the meanings therein ascribed to them. 1.3 References to any provision of any statute shall be deemed also to refer to any statutory modification or re-enactment thereof from time to time in force. 1.4 Words denoting persons shall include corporations, the masculine gender shall include the feminine and the singular shall include the plural and vice versa. 1.5 References to this "instrument" or this "deed" include, where the context so admits, the schedules hereto. 1.6 The headings are for convenience only and shall not affect the interpretation hereof. 2. AMOUNT OF THE NOTES 2.1 The aggregate nominal amount of the Notes constituted by this instrument is limited to(pound)160,107,220. 2.2 The Notes will be issued in registered form in denominations of (pound)1 in nominal amount or integral multiples thereof and shall be transferable in accordance with schedule 2. 3. STATUS OF THE NOTES 3.1 The Notes represent a direct and unsecured obligation of the Company for the due and punctual payment of the principal and interest in respect of them and for the performance of all the obligations of the Company with respect to them. -2- CONFORMED COPY -------------- 3.2 The Notes when issued will rank pari passu equally and rateably and without discrimination or preference as unsecured obligations of the Company and with all other unsecured indebtedness of the Company except to the extent provided by law. 3.3 The Notes shall be known as Floating Rate Unsecured Loan Notes. 4. CERTIFICATE FOR NOTES 4.1 Each Noteholder shall be entitled to a certificate stating the nominal amount of the Notes held by him. Each certificate shall bear a denoting number, shall (subject as provided in this clause 4.1) be executed under the seal (or any securities seal) of the Company, shall be substantially in the form set out in schedule 1 and shall have endorsed on it conditions in the form or substantially in the form set out in schedule 2. Where permitted by law, a certificate signed by one Director and the Secretary or by two Directors and expressed to be executed by the Company shall have the same effect as if executed under the seal. The Company shall not be bound to register more than four persons as the joint holders of any Notes. Joint holders of Notes will be entitled to only one Note in respect of their joint holding and the Note will be delivered to that one of the joint holders who is first-named in the Register in respect of the joint holding or to such other person as the joint holders may, in writing, direct. Delivery of a certificate to one of such persons shall be sufficient delivery to all. When a Noteholder has redeemed or transferred part only of his Notes the old certificate shall be cancelled and a new certificate for the balance of such Notes issued without charge. 4.2 The Directors may by resolution (either generally or in any particular case or cases) determine that the signatures required by clause 4.1 shall be affixed by means of some method or system of mechanical signature. 5. COVENANTS BY THE COMPANY The Company HEREBY COVENANTS with the Noteholders and each of them to comply with the terms of the Notes and to observe and perform the Conditions, which conditions shall be deemed to be incorporated in this instrument and shall be binding on the Company and the Noteholders and all persons claiming through or under them respectively. 6. REGISTER OF NOTEHOLDERS 6.1 The Company shall cause a register to be maintained in respect of the Notes in accordance with the provisions of schedule 3. 6.2 The provisions relating to the Register set out in schedule 3 shall be deemed to be incorporated in this instrument and shall be binding on the Company and the Noteholders and on all persons claiming through or under them respectively. 7. SUBSTITUTION 7.1 The Company may (or, where a substitution has taken place under this clause 7, the Substituted Debtor may), without the consent of the Noteholders, substitute any subsidiary or -3- CONFORMED COPY -------------- holding company of the Company incorporated in England and Wales (the "Substituted Debtor") for, or in place of, the Company (or of any previous Substituted Debtor under this clause 7) as the principal debtor under this instrument and the Notes by means of any instrument (the "Substitution Instrument") executed by the Company (or any previous Substituted Debtor under this clause 7) and the Substituted Debtor in such form as they may agree, a copy of which shall be made available for inspection by Noteholders without charge. 7.2 Immediately on the execution of the Substitution Instrument, the Substituted Debtor shall assume liability as the principal debtor under the instrument and the Notes for all monies payable from time to time in respect of the Notes or otherwise under or in respect of this instrument, whereupon the Company (or any such previous Substituted Debtor) shall automatically be released from any and all of its liabilities and obligations under this instrument and the Notes (other than any existing liability in respect of any breach of the instrument). Not later than 28 days after the execution of the Substitution Instrument and after compliance with the provisions set out in clause 7.1, the Company shall give notice of the substitution to the Noteholders. Such notice shall also state where copies of the Substitution Instrument may be inspected. The non-receipt of notice by, or the accidental omission to give notice to, any Noteholder shall not invalidate any substitution effected pursuant to this clause 7. 7.3 On the execution of the Substitution Instrument and compliance with the other provisions of clause 7.1, the Substituted Debtor shall be deemed to be named in this instrument and on the Notes as the principal debtor in place of the Company (or of any previous Substituted Debtor) as provided in the Substitution Instrument. The existing Note certificates held by the Noteholders (including the conditions endorsed thereon) shall not be cancelled but shall remain valid in relation to the Substituted Debtor as aforesaid. 8. EXCHANGE 8.1 The Company may, without the consent of the Noteholders, require all (but not some only) of the Noteholders to exchange the Notes for loan notes of the same nominal amount issued on the same terms as to interest rate, maturity and otherwise (other than the first interest payment date) by any subsidiary or holding company of the Company incorporated in the England and Wales (the "Exchangee") in place of the Notes by means of an instrument (the "Exchange Instrument") executed by the Company and the Exchangee in such form as they may agree, a copy of which shall be made available for inspection by Noteholders free of charge. On the execution of any Exchange Instrument, the Noteholders shall be bound to accept such loan notes of the Exchangee in exchange for the Notes. 8.2 Immediately on the execution of the Exchange Instrument, the Exchangee shall become the owner of the Notes from the Noteholders in consideration of the issue of such replacement loan notes. The Company shall procure that the Exchangee shall issue the Noteholders with new certificates in respect of the Exchangee loan notes so issued. The Company shall issue to the Exchangee a new certificate in respect of the Notes acquired by the Exchangee pursuant to this clause 8 (whether or not any instrument of transfer has been executed by, or on behalf of, the relevant Noteholders) and the existing certificates in respect of the Notes shall thereupon cease to be valid or have any legal effect. -4- CONFORMED COPY -------------- 8.3 Any director of the Company is hereby irrevocably authorised to execute such instruments of transfer of the Notes under this clause 8 or any other document or take any steps necessary or desirable on behalf of, and as agent for, the Noteholders (or any of them) to effect the transfer of the Notes to the Exchangee under this clause 8. 8.4 The Company shall give at least seven days' prior notice in writing of such proposed exchange to the Noteholders. The Company shall also give notice of any such exchange to, and shall procure that a new loan note certificate in respect of the Exchangee loan notes issued in consideration for the transfer of the Notes is forwarded to, all relevant Noteholders within 28 days of the execution of the Exchange Instrument. Such notice shall also give details of where copies of the Exchange Instrument may be inspected in England and Wales. The non-receipt of notice by, or the accidental omission to give notice to, any Noteholder shall not invalidate any exchange pursuant to this clause 8. On receipt of notice of any such exchange, the Noteholders shall return the certificates in respect of their holding of Notes to the registered office of the Company or to such other address in England as the Company may from time to time notify Noteholders but so that failure to do so will not prejudice the operation of this clause 8. 9. LOAN INSTRUMENT 9.1 The Company (or any Substituted Debtor or Exchangee) may only exercise the right of substitution or exchange in clauses 7 and 8 of this instrument if the Company (or any Substituted Debtor or Exchangee, as appropriate) has received a written opinion in terms satisfactory to it from a leading taxation Queen's Counsel selected by the Company to the affect that the proposed substitution or exchange will not adversely affect the UK Tax position of the Noteholders as a class and in particular will not constitute or cause a disposal of the Notes for the purpose of United Kingdom Taxation (the "Opinion") and such Opinion is included in the notice to be sent to Noteholder as set out in clauses 7.2 and 8.4. 9.2 In the event of substitution or exchange of the Notes under clause 7 or clause 8, the Company will execute and date the form of guarantee, as set out in Schedule 5. 10. MEETINGS OF NOTEHOLDERS The provisions for meetings of holders of the Notes set out in schedule 4 shall be deemed to be incorporated in this instrument and shall be binding on the Company (and any Substituted Debtor or Exchangee) and the Noteholders and on all persons claiming through or under them respectively. 11. FOREIGN NOTEHOLDERS The Notes have not and will not be registered under the United States Securities Act of 1933 (as amended) and no steps have been taken to qualify the Notes for distribution in Japan or any province or territory of Canada and no prospectus in relation to the Notes will be lodged with or registered by the Australian Securities Commission. Accordingly, unless an exemption under the Securities Act or relevant securities laws is available, the Notes will not be available -5- CONFORMED COPY -------------- in the United States, Canada, Australia or Japan and the Notes will not be directly or indirectly offered, sold or delivered in or into the United States, Canada, Australia or Japan or to or for the account or benefit of any restricted overseas persons. 12. FURTHER NOTES The Company shall be entitled from time to time, by resolution of the board or of a duly authorised committee thereof, to cancel any created but unissued Notes or to create and issue further unsecured loan notes (in good faith, at arms length and not merely to reduce the voting rights of the existing Noteholders) to be constituted by deed or instrument expressed to be supplemental hereto either so as to be identical in all respects and form a single series with the Notes or to carry such rights as to interest, redemption and otherwise as the board may think fit. 13. GOVERNING LAW 13.1 These presents (and any dispute, controversy, proceedings or claim of whatever nature arising out of or in any way relating to this instrument or the constitution of the Notes) shall be governed by and construed in accordance with English law. IN WITNESS whereof this instrument has been executed as a deed and has been delivered on the date which appears first on page 1. -6- CONFORMED COPY -------------- Signed as a deed by AMVESCAP PLC ) acting by ) Director Signed by The Hon Michael Benson Secretary/Director Signed by Mr Michael Perman -7- CONFORMED COPY -------------- SCHEDULE 1 Form of Note Certificate No. Transfer No. Date Nominal Amount (pound)1.00 AMVESCAP PLC ----------------------------- (Incorporated in England and Wales under the Companies Act 1985 under No. 308372) FLOATING RATE UNSECURED LOAN NOTES Issue of (pound)160,107,220 Floating Rate Unsecured Loan Notes (the "Notes"), created and issued by AMVESCAP PLC (the "Company") pursuant to the Memorandum and Articles of Association of the Company and a resolution of the board of directors passed on 1 November 2000. THIS IS TO CERTIFY that [ ]of [ ] is/are the registered holder(s) of [(pound) ] nominal of the Notes which are constituted by an instrument made by the Company on 1 November 2000 (the "instrument") and are issued with the benefit of and subject to the provisions contained in the instrument and the conditions endorsed hereon. Interest calculated in accordance with the conditions endorsed hereon is payable half-yearly in arrears on 30 October and 30 April in each year. Given under the common seal of the Company ---------------------------- Director ---------------------------- Director/Secretary Dated / / 2000 Notes: (i) Where the context so admits, words and expressions defined in the instrument shall bear the same respective meanings in the conditions endorsed hereon. (ii) The Notes are transferable in minimum amounts or multiples of (pound)1,000. No transfer, whether of the whole or any part of the Notes comprised in this -8- CONFORMED COPY -------------- certificate, will be accepted for registration unless accompanied by this certificate and lodged at the registered office of the Company. (iii)The Notes have not and will not be registered under the United States Securities Act of 1933 (as amended) and no steps have been taken to qualify the Notes for distribution in Japan or any province or territory of Canada and no prospectus in relation to the Notes will be lodged with or registered by the Australian Securities Commission. Accordingly, unless an exemption under the Securities Act or relevant securities laws is available, the Notes will not be available in the United States, Canada, Australia or Japan and the Notes will not be directly or indirectly offered, sold or delivered in or into the United States, Canada, Australia or Japan or to or for the account or benefit of any restricted overseas persons. (iv) The Notes are repayable in accordance with the conditions endorsed hereon. -9- CONFORMED COPY -------------- SCHEDULE 2 Conditions 1. Form and Status The Notes constitute unsecured obligations of the Company. The instrument pursuant to which the Notes are issued does not contain any restrictions on borrowing, charging or disposal of assets by the Company or any of its subsidiaries. 2. Repayment, Prepayment, Purchase and Redemption 2.1 If not previously repaid or purchased, the Notes will be repaid (together with accrued interest, subject to any requirement to deduct any applicable tax) by the Company in full at par on 30 October 2005. 2.2 Each Noteholder shall be entitled to require the whole (whatever the amount) or any part (being (pound)1000 or an integral multiple thereof) of the Notes held by him to be repaid at par, together with interest in accordance with condition 2.8 on any Interest Payment Date falling on or after 30 October 2001. 2.3 Such right shall be exercisable by the Noteholder concerned completing and signing the Notice of Repayment printed on the Note to be repaid (or by completing such other form as the Directors may approve) and lodging the same at the registered office of the Company not less than 30 days before the relevant Interest Payment Date accompanied by such evidence (if any) as the Directors may require to prove the title of the person requiring repayment. A Notice of Repayment given (duly completed) to the Company in accordance with this condition shall be irrevocable. No such notice may be given in respect of any Notes in respect of which notice of redemption has previously been given by the Company. 2.4 Against such delivery, the Company shall on the relevant Interest Payment Date pay to any Noteholder who is or was a Noteholder at the close of business on that date, the principal amount of his Note or, as the case may be, the part thereof to be repaid, together with interest in accordance with condition 2.8. 2.5 If, at any time, the principal amount of all Notes outstanding is less than (pound)5 million, the Company shall be entitled upon giving to the remaining Noteholders not less than 30 days' notice in writing expiring on 30 October 2001 or any subsequent Interest Payment Date, to redeem all (but not some only) of the outstanding Notes at par, together with accrued interest in accordance with condition 2.8 (subject to any requirement to deduct tax therefrom) up to and including the date of redemption. 2.6 The Company may at any time purchase any Notes by tender (available to all Noteholders alike) or by private treaty at any price agreed by the Noteholder. 2.7 The Company shall be entitled to redeem the Notes, on any Interest Payment Date, at par together with accrued interest up to, and including, the date of redemption (subject to any -10- CONFORMED COPY -------------- requirement to deduct tax therefrom) on not less than 30 days' prior written notice to the Noteholders if interest payable under the Notes is reasonably expected by the Company to fall to be treated as a distribution for corporation tax purposes or otherwise to be non-deductible for corporation tax purposes.. 2.8 On making any payment of principal to a Noteholder under this condition the Company shall pay to him the interest accrued thereon up to (and including) the date of payment but subject to any deduction or withholding required by law. 3. Events of Default 3.1 Notwithstanding any other provisions of this instrument, each Noteholder shall be entitled to require all of the Notes held by him to be repaid at par together with accrued interest (subject to any requirement to deduct any tax therefrom) immediately if:- (a) the Company fails to pay in full within 30 days of the due date any principal or interest payable in respect of the Notes to the Noteholder; or (b) an order is made or an effective resolution is passed for the winding-up or dissolution of the Company (otherwise than for the purposes of an amalgamation or reconstruction or a members' voluntary winding up upon terms previously approved by Extraordinary Resolution); or (c) an encumbrancer takes possession or a trustee, receiver or an administrator or administrative receiver or similar officer is appointed or an administration order is made in respect of all or substantially all of the undertaking of the Company and such person has not been paid out or discharged within 30 days. 3.2 Such right shall be exercisable by the Noteholder concerned and thereupon such Notes shall immediately become repayable. Completing and signing the Notice of repayment printed on the Note to be repaid (or by completing such other form as the Directors may approve) and lodging the same at the registered office of the Company accompanied by such evidence (if any) as the Directors may require to prove the title of the person requiring payment. 3.3 At any time after the Notes have become repayable under the provisions of this condition, any Noteholder may without notice institute such proceedings as he may think fit to enforce repayment of the Notes. 3.4 The Company shall notify the Noteholders in writing forthwith of the happening of any of the events specified in condition 3.1. 4. Method of Payment Payment of the principal monies and interest payable upon the Notes, or any part thereof, may be made by cheque, warrant or money order sent through the post at the risk of the Noteholder to the registered address of the Noteholder or, in the case of joint Noteholders, to the registered address of that one of them who is first named on the Register (or to such person and to such -11- CONFORMED COPY -------------- address as the Noteholder or joint Noteholders may in writing direct) or by a bank or other funds transfer system. Every such cheque, warrant or money order shall be made payable to the order of the person to whom it is sent (or to such person as the Noteholder or joint Noteholders may in writing direct) and payment of the cheque, warrant or money order shall be a satisfaction of the principal and interest represented thereby. If payment is made by a bank or other funds transfer, the Company shall not be responsible for amounts lost or delayed in the course of the transfer. 5. Surrender of certificate and Prescription 5.1 Every Noteholder any part of whose Notes are due to be repaid under any of the provisions of these conditions, other than a Noteholder any part of whose Notes are due to be repaid under Condition 3, should give written notice not less than 30 days before the appropriate Interest Payment Date enclosing the relevant certificates for such Notes to the Registrars on behalf of the Company or as it shall direct. Unless payment of the amount due to be repaid has already been made in accordance with condition 4 above, upon such delivery the Company shall pay to the Noteholder the amount payable to him in respect of such repayment in accordance with condition 4. If part only of any Note(s) as evidenced by the relevant certificate so delivered is then due to be repaid, the Company shall either endorse such Note with a memorandum of the date and amount paid to the holder of such Note and return it to the Noteholder or shall cancel such Note and without charge issue to such Noteholder a new Note for the balance of the principal amount due to him. 5.2 If any Noteholder, any part of whose Notes is liable to be repaid under these conditions, shall fail or refuse to deliver up the forms required under condition 2.3 and/or the certificate(s) for such Notes at the time and place fixed for repayment thereof or should fail or refuse to accept payment of the repayment monies payable in respect thereof, the monies payable to such Noteholder shall be set aside by the Company and paid into a separate bank account and held by the Company in trust for such Noteholder but without interest and such setting aside shall be deemed for all the purposes of these conditions to be a payment to such Noteholder and the Company shall thereby be discharged from all obligations in connection with such Notes. If the Company shall place the said monies on deposit at a bank, the Company shall not be responsible for the safe custody of such monies or for interest thereon except such interest (if any) as the said monies may earn whilst on deposit, less any expenses incurred by the Company in connection therewith. Any such amount so paid or deposited, which remains unclaimed after a period of 12 years from the making of the payment or deposit, shall revert to the Company notwithstanding that in the intervening period the obligation to pay the same may have been provided for in the books, accounts and other records of the Company. 6. Cancellation All Notes purchased, redeemed or repaid by the Company shall be cancelled and shall not be available for reissue. 7. Interest -12- CONFORMED COPY -------------- 7.1 Until such time as the Notes are redeemed, repaid or purchased in accordance with these conditions, the Company will pay interest on the principal amount of each Note (subject to any requirement to deduct tax) twice yearly in arrears on 30 October and 30 April in each year or, if such day is not a business day, on the next following business day ("Interest Payment Dates") in respect of the Interest Periods (as defined below) up to and including those days, in each case only to persons who are registered as Noteholders at the close of business on the relevant Record Date, except that the first payment of interest in respect of any Note will be made on 30 October 2001 in respect of the period from and including the date that the offer becomes wholly unconditional up to and including 30 October 2001. The period from and including the date of issue up to and including 30 October 2001 and the period from but excluding 30 October 2001 or any subsequent interest payment date up to and including the next following Interest Payment Date is referred to as an "Interest Period". 7.2 Should any Payment Date fall on a day which is not a business day, then for the purpose of the payment of interest and any other payments due to the Noteholder pursuant to condition 2, the Interest Payment Date shall be deemed to be the next business day immediately following such an Interest Payment Date. This provision shall not affect any Interest Period nor shall it affect the amount of interest (or any other monies) to be paid on any Interest Payment Date. 7.3 The "Record Date" shall mean those on the Register at the close of business on the Interest Payment Date. 7.4 The rate of interest for an Interest Period on the Notes (the "Rate of Interest") will be determined on the basis of the following provisions:- (a) on the date of the first issue of the Notes (or, if not a business day, the first business day thereafter), on 21 December 2000 (or, if not a business day then on the next business day thereafter) and on the first business day of each subsequent Interest Period for such Note(s) ("Interest Determination Date"), the Company will request the principal London office of such two London clearing banks as the Company may nominate to provide its offered quotation ("LIBOR") for making six month sterling deposits with leading banks in the London Inter Bank Market as at 11.00 a.m. (London time) on the Interest Determination Date in question, having regard to the aggregate amount in respect of which the Rate of Interest is to be applied. The Rate of Interest for that Interest Period will be 0.5 per cent. less than the average (rounded down where necessary to the nearest whole multiple of one-sixteenth of one per cent.) of such quotations; and (b) if on any Interest Determination Date the rate of interest cannot be established in accordance with paragraph 7.4 (a) above, the Rate of Interest for the relevant Interest Period shall be calculated by reference to such rate as the Company shall determine on the basis of quotations made for six month deposits of a similar size and currency in any such other inter-bank market or markets as the Company may select and, if a rate of interest cannot be established in accordance with the foregoing provisions for any succeeding Interest Period, then the rate of interest on the Notes for such Interest Period shall be the same as that applicable to the Notes during the previous Interest -13- CONFORMED COPY -------------- Period unless in any such case any one such bank as is referred to in paragraph 7.4 (a) above shall have been prepared to offer a rate as aforesaid in which case the rate of interest in respect of the relevant Interest Period will be calculated as if such rate were the aforesaid average. 8. Currency conversion Each Noteholder may, by notice in writing to the Company given on or before a date (the "Election Date") being 30 days prior to 30 October 2005 (the "Redemption Date") elect that the principal amount of the Notes held by that Noteholder then outstanding shall be redeemed in US dollars in which event the Company shall on the Redemption Date and in full discharge of its obligations to repay the Notes held by that Noteholder pay to the Noteholder an amount in US dollars obtained by converting the principal amount outstanding of the Notes into US dollars (at the spot rate for the purchase of US dollars with sterling certified by Schroder Salomon Smith Barney as prevailing at or about 11.00 am on the Election Date (or, where the Election Date is not a business day, on the immediately preceding business day) provided that:- (a) if the amount payable in US dollars hereunder would otherwise exceed an amount in US dollars obtained by converting 100.3 per cent. of the sterling principal amount outstanding of the Notes into US dollars at the spot rate for the purchase of US dollars with sterling certified by Schroder Salomon Smith Barney as prevailing at or about 11.00 am on the Redemption Date the latter amount shall be substituted therefor; (b) if the amount payable in US dollars hereunder would otherwise be less than the amount in US dollars obtained by converting 99.7 per cent. of the sterling principal amount outstanding of the Notes into US dollars at the spot rate for the purchase of US dollars with sterling certified by Schroder Salomon Smith Barney as prevailing at or about 11.00 am on the Redemption Date the latter amount shall be substituted therefor. 9. Modification 9.1 The provisions of the instrument and the rights of the Noteholders may from time to time be modified, abrogated or compromised in any respect by the Company with the written consent of the holders of 75 per cent. in nominal amount of the Notes then in issue or the sanction of an Extraordinary Resolution of the Noteholders as provided in the instrument. 9.2 The Company may amend the provisions of the instrument without such sanction or consent if, in the opinion of the financial adviser to the Company, such amendment is of a formal, minor or technical nature or corrects a manifest error. Any opinion of the financial adviser in this regard shall be arrived at in its absolute discretion and no liability shall attach to it in respect thereof. 10. Registration, Transfer and Marketability 10.1 The Notes are transferable, subject to and in accordance with the provisions of the instrument, in amounts of (pound)1,000 or integral multiples thereof. -14- CONFORMED COPY -------------- 10.2 No application has been or is intended to be made to any listing authority or to any stock exchange for any of the Notes to be listed or otherwise traded. 10.3 No transfer of Notes will be registered during the 21 days immediately preceding an Interest Payment Date or while the register of Noteholders is closed. 11. Lost or Destroyed Notes If a Note is defaced, lost or destroyed it may be renewed on payment of such fee as is reasonable and on such terms (if any) as to evidence and indemnity as the board may require but so that in the case of defacement the defaced Note shall be surrendered before a new Note is issued. An entry as to the issue of a new Note and indemnity (if any) shall be made in the Register. 12. Notice to Noteholders 12.1 Any notice or other document (including certificates for Notes) may be served on a Noteholder by sending the same by post in a prepaid letter addressed to such Noteholder at his registered address, in the United Kingdom or (if he has no registered address within the United Kingdom) to the address, if any, within the United Kingdom supplied by him to the Company as his address for the service of notices. 12.2 In the case of joint Noteholders a notice or document served on the Noteholder whose name stands first in the Register shall be sufficient notice to all the joint Noteholders. 12.3 Any notice or other document may be served on the person entitled to a Note in consequence of the death or bankruptcy of any Noteholder by sending the same by post, in a prepaid letter addressed to him by name or by the title of the representative or trustees of such Noteholder, at the address (if any) in the United Kingdom supplied for the purpose by such persons or (until such address is supplied) by giving notice in the manner in which it would have been given if the death or bankruptcy had not occurred. 13. Notices to the Company Any notice, demand or other document (including certificates for Notes and transfers of Notes) may be served on the Company by sending the same by post in a prepaid letter to the registered office of the Company or to such other address in England as the Company may from time to time notify Noteholders. 14. Service of Notices Any notice or document served by post shall be deemed to have been served on the day after it is posted or, if such day is not a business day, then on the next following business day and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed, stamped and posted. -15- CONFORMED COPY -------------- 15. Inspection of the Instrument A copy of the instrument shall be kept at the registered office of the Company. A Noteholder and any person authorised by a Noteholder may at all reasonable times during office hours inspect, at no charge, such copy. -16- CONFORMED COPY -------------- NOTICE OF REPAYMENT To: AMVESCAP PLC (the "Company") 1. I/We being the registered holder(s) of the Notes represented by this certificate hereby give notice that I/we require repayment in the manner set out in paragraph 2.1/2.2/1/ below of all/(pound)[ ]/2/ of the Notes in accordance with the above conditions. 2. I/We authorise and request you:- 2.1 (a) to make the cheque or warrant payable to the person whose name is set out below or, if none is set out, to me/us; and (b) to send it by post at my/our risk to the person whose name and address is set out below or, if none is set out, to the registered address of the sole or first-named holder; or 2.2 to transfer the repayment monies to:- Bank: ---------------------------------------- Address: ---------------------------------------- (outside the United States, Canada, Japan or Australia) Branch Code: ---------------------------------------- Account name: ---------------------------------------- Account no: ---------------------------------------- I/We acknowledge that payment of the monies hereby authorised shall be in full and final satisfaction of the monies to which I/we become entitled as aforesaid. 3. I/We hereby authorise the despatch of a certificate for the balance (if any) of the Notes represented by this certificate which is not repaid by post at my/our risk to the person whose name and address is set out below or, if none is set out, to the sole or first-named holder at his/her registered address. Dated [ / / ] /1/ Please delete 2.1 or 2.2 as appropriate. If neither or both is deleted, repayment will be made in accordance with paragraph 2.1. /2/ Delete or complete as appropriate. Repayment of part only is permitted in accordance with Condition 2 only and must be (pound)1,000 or a multiple thereof. If no amount is inserted, all of such Notes will be repaid. -17- CONFORMED COPY -------------- Signature(s) of Noteholder(s)/3/ ------------------------------------- ------------------------------------- ------------------------------------- Name/4/ ------------------------------------- Address: ------------------------------------- (outside the United States, Canada, Japan or Australia) /3/ In the case of joint holders ALL must sign. A body corporate should execute under its common seal or under the hand of some officer or attorney duly authorised on its behalf, in which event, the Note must be accompanied by the authority under which this Notice is completed. /4/ Please insert in BLOCK CAPITALS the name of the person to whom you wish the cheque, warrant or money order to be made payable (if not to you) and/or the address of the person to whom you wish the cheque, warrant or money order and any balance certificate to be sent if it is different from that of the sole or first-named holder. If the space is left blank, the cheque, warrant or money order will be made payable to the sole holder or all of the joint holders and it and any balance certificate will be sent to the registered address of the first-named Noteholder. -18- CONFORMED COPY -------------- SCHEDULE 3 Provisions as to the Register 1. Register of Notes 1.1 The Company shall cause a register to be maintained at the registered office of the Company showing the amount of the Notes for the time being issued, the date of issue and the amount of Notes for the time being outstanding, the names and addresses of the Noteholders, the nominal amounts of the Notes held by them respectively and all transfers or changes of ownership of the Notes. 1.2 Any change of name or address on the part of any holder of Notes shall forthwith be notified by the holder to the Company and the Company shall alter the Register accordingly. 2. Recognition of Noteholder as absolute owner 2.1 Except as required by law, the Company will recognise the registered holder of any Notes as the absolute owner thereof and shall not (except as ordered by a court of competent jurisdiction) be bound to take notice or see to the execution of any trust, whether express, implied or constructive, to which any Notes may be subject and the Company may accept the receipt of the registered holder for the time being of any Notes, or in the case of joint registered holders the receipt of any of them, for the principal monies payable in respect thereof or for the interest from time to time accruing due in respect thereof or for any other monies payable in respect thereof as a good discharge to the Company notwithstanding any notice it may have whether express or otherwise of the right, title, interest or claim of any other person to or in such Notes, interest or monies. 2.2 If a warrant in payment of any amounts due to the registered holders of any Notes, made payable and despatched in accordance with the conditions, is encashed such encashment shall be deemed to be a good discharge to the Company notwithstanding any notice it may have whether express or otherwise of the right, title, interest or claim of any other person to or in such monies. 2.3 No notice of any trust, express, implied or constructive, shall (except as by statute provided or as required by order of a court of competent jurisdiction) be entered in the Register in respect of any Notes. 3. Exclusion of equities The Company will recognise every holder of Notes as entitled to his Notes free from any equity, set-off or cross-claim on the part of the Company against the original or any intermediate holder of the Notes. -19- CONFORMED COPY -------------- 4. Transferability of Notes 4.1 Every holder of Notes will be entitled (subject as hereinafter provided) to transfer the same or any part (being an amount or integral multiple of (pound)1,000) by an instrument in writing in the usual or common form or such other form as the Company may accept. There shall not be included in any instrument of transfer any notes other than the Notes constituted by the instrument. 4.2 Every instrument of transfer must be signed by the transferor or where the transferor is a corporation given under its common seal or signed on its behalf by a duly authorised officer or agent and the transferor shall remain the owner of the Notes to be transferred until the name of the transferee is entered in the Register in respect thereof. 4.3 Every instrument of transfer must be lodged for registration at the place where the Register shall for the time being be kept accompanied by the certificate for the Notes all or part of the nominal amount of which is to be transferred and such other evidence as the Directors or other officers of the Company authorised to deal with transfers may require to prove the title of the transferor or his right to transfer the Notes and, if the instrument of transfer is executed by some other person on his behalf, the authority of the person signing the same. 4.4 No transfer shall be registered of Notes in respect of which a notice requiring repayment has been given. 4.5 All instruments of transfer which shall be registered may be retained by the Company. 5. No fee for registration of transfers No fee shall be charged for the registration of any transfer or for the registration of any probate, letters of administration, certificate of marriage or death, power of attorney or other document relating to or affecting the title to any Notes. 6. Death or bankruptcy of Noteholders 6.1 The executors or administrators of a deceased Noteholder (not being one of several joint holders) shall be the only persons recognised by the Company as having any title to or interest in such Note. 6.2 In the case of the death of any of the joint holders of a Note the survivors or survivor will be the only persons or person recognised by the Company as having any title to or interest in such Note. 6.3 Any person becoming entitled to Notes in consequence of the death or bankruptcy of any Noteholder or of any other event giving rise to the transmission of such Notes by operation of law may, upon producing such evidence that he sustains the character in respect of which he proposes to act under this paragraph or of his title as the Directors shall think sufficient, be registered himself as the holder of the Note or subject to the preceding paragraphs may transfer the Note. -20- CONFORMED COPY -------------- 7. Receipt of joint holders If several persons are entered in the register as joint registered holders of any Notes then, without prejudice to paragraph 2 above, the receipt of any one of such persons for any interest or principal or other monies payable in respect of such Notes shall be as effective a discharge to the Company as if the person signing such receipt were the sole registered holder of such Notes. 8. The Register 8.1 A Noteholder and any person authorised by him may at all reasonable times during office hours inspect the Register and upon payment of a reasonable charge take copies of, or extracts from, the Register or any part of it. 8.2 The Register may be closed by the Company for such periods and at such times (not exceeding 30 business days in any one year) as it may think fit and during such period the Company shall be under no obligation to register transfers of the Notes. 9. Replacement of certificates If the certificate for any Notes is lost, defaced or destroyed, it may be renewed, on such terms (if any) as to evidence and indemnity as the Directors may require, but so that in the case of defacement the defaced certificate shall be surrendered before the new certificate is issued. 10. Risk to Noteholders All certificates, other documents and remittances sent through the post shall be sent at the risk of the Noteholders entitled thereto. -21- CONFORMED COPY -------------- SCHEDULE 4 Provisions for meetings of Noteholders 1. Calling of meetings The Company at any time may, and shall upon the request in writing signed by Noteholders holding not less than one-tenth in nominal value of the Notes for the time being outstanding, convene a meeting of the Noteholders. Every such meeting and every adjourned meeting shall be held at the registered office of the Company for the time being or such other place as the Company may specify. 2. Notice of meetings At least 21 days' notice (exclusive of the day on which the notice is given or deemed to be given and the day on which the meeting is to be held) specifying the day, time and place of meeting shall be given to the Noteholders of any meeting of the Noteholders. Any such notice shall specify the terms of the resolutions to be proposed and shall include a statement to the effect that proxies may be appointed in accordance with the provisions of paragraph 15 of this schedule. No amendment (other than an amendment to correct a typographical or manifest error) may subsequently be made to the resolution(s) specified in the notice of meeting. The accidental omission to give notice to, or the non-receipt of notice by, any of the Noteholders shall not invalidate the proceedings at any meeting. 3. Chairman of meetings Such person (who may, but need not, be a Noteholder) nominated in writing by the Company shall be entitled to take the chair at every such meeting or adjourned meeting. If at any meeting or adjourned meeting no person shall be nominated or the person nominated shall not be present within 15 minutes after the time appointed for the holding of such meeting or adjourned meeting the Noteholders present shall choose one of their number to be chairman. 4. Quorum at meetings At any such meeting two or more persons present in person (not being the Company, any person directly or indirectly under the control of the Company or any nominees thereof) or by proxy holding Notes or being proxies and being or representing in the aggregate the holders of one-tenth in nominal amount of the Notes then outstanding and not held by or on behalf of the Company shall 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 business. 5. Absence of quorum If within half an hour from the time appointed for any such meeting a quorum is not present, the meeting shall, if convened upon the requisition of Noteholders, be dissolved. In any other -22- CONFORMED COPY -------------- case, the meeting shall stand adjourned for such period, not being less than 14 days nor more than 42 days, and to such time and place as may be appointed by the chairman. At such adjourned meeting two or more persons present in person or by proxy (not being the Company, any person directly or indirectly under the control of the Company or any nominee thereof) holding Notes or being proxies (whatever the nominal amount of the Notes which they hold or represent) shall form a quorum and shall have the 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 a quorum been present at such meeting. 6. Notice of adjourned meetings At least ten days' notice of any meeting adjourned through want of a quorum shall be given in the same manner as of an original meeting and such notice shall state the quorum required at such adjourned meeting. Subject as aforesaid it shall not be necessary to give any notice of an adjourned meeting. 7. Adjournment of meetings The chairman may with the consent of (and shall if directed by) any 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 have been transacted at the meeting from which the adjournment took place. 8. Resolution on a show of hands or poll Every question submitted to a meeting shall be decided in the first instance by a show of hands, and unless a poll is demanded (before or on the declaration of the result of the show of hands) by the chairman, the Company or by one or more persons holding Notes or being proxies and being or representing in the aggregate the holders of not less than one-twentieth of the nominal amount of the Notes then outstanding and not held by or on behalf of the Company, a declaration by the chairman that the resolution has been carried, or carried by a particular majority, or lost, or not carried by any 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. 9. Manner of taking poll If at any meeting a poll is so demanded it shall be taken in such manner and, subject as hereinafter provided, either at once or after such 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 question on which the poll has been demanded. 10. Time for taking poll -23- CONFORMED COPY -------------- Any poll demanded at any meeting on the election of a chairman or on any question of adjournment shall be taken at the meeting without adjournment. 11. Persons entitled to attend and vote Any persons duly authorised by the Company including without limitation the Directors, the secretary or the Company's auditors or legal or financial advisers shall be entitled to attend and speak at any meeting of the Noteholders and any other person authorised in that behalf by the Directors. Save as aforesaid no person shall be entitled to attend or vote at any meeting of the Noteholders unless he is registered as a holder of Notes or he produces written evidence of his appointment as a representative pursuant to paragraph 20 or is a proxy. No votes may be exercised in respect of Notes held by or for the account of the Company or anyone directly or indirectly under the control of it, but this shall not prevent any proxy from being a director, officer or representative of, or otherwise connected with the Company. 12. Votes 12.1 Subject as provided in paragraph 11 above, at any meeting:- (a) on a show of hands every Noteholder who (being an individual) is present in person or by proxy or (being a corporation) is present by its representative duly authorised in accordance with paragraph 20 below or its proxy, shall have one vote; and (b) on a poll every person who is so present shall have one vote in respect of every (pound)1 nominal of Notes of which he is the holder or in respect of which he is a proxy or a representative. 12.2 Without prejudice to the obligations of any proxies 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. 13. Votes of joint holders In the case of the joint holders of Notes the vote of the senior who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the name stands in the Register. 14. Casting vote of chairman In the case of an 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 proxy or as a representative. -24- CONFORMED COPY -------------- 15. Appointment of proxy 15.1 Proxies named in any Form of Proxy (as defined below) or block voting instruction need not be Noteholders. 15.2 A Noteholder may by instrument in writing (a "Form of Proxy") appoint a proxy. The Form of Proxy shall be signed by the appointor or his attorney duly authorised in writing or if the appointor is a corporation either under the common seal or under the hand of an officer or attorney so authorised. The Company may, but shall not be bound to, require evidence of the authority of any such officer or attorney. 15.3 A Form of Proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority shall be deposited at such place as the Company may, in the notice convening the meeting, direct or, if no such place is appointed, then at the registered office of the Company not less than 48 hours before the time appointed for holding the meeting at which the person named in the Form of Proxy proposes to vote and in default the Form of Proxy shall not be treated as valid. No Form of Proxy shall be valid after the expiration of 12 months from the date named in it as the date of its execution. 15.4 A Form of Proxy may be in any usual or common form or in any other form which the Company shall approve. A proxy shall, unless the contrary is stated therein and subject to paragraph 15.3 above and paragraph 15.5 below, be valid as well for any adjournment of the meeting as for the meeting to which it relates and need not be witnessed. 15.5 A vote given in accordance with the terms of a Form of Proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed provided that no intimation in writing of such death, insanity or revocation shall have been received by the Company at its registered office before the commencement of the meeting or adjourned meeting for the time being at which the proxy is used. 16. Powers of meetings of Noteholders 16.1 A meeting of the Noteholders shall in addition to all other powers (but without prejudice to any powers conferred on other persons in the instrument) have the following powers exercisable only by Extraordinary Resolution namely:- 16.2 to sanction any proposal by the Company for any modification, abrogation, variation or compromise of, or arrangement in respect of, the rights of the Noteholders against the Company whether such rights shall arise under the conditions, the instrument or otherwise; 16.3 to sanction any proposal by the Company for the exchange or substitution for the Notes of, or the conversion of the Notes into, other obligations or securities of the Company or any other person or entity; 16.4 to assent to any modification or abrogation of the conditions and of the provisions of these presents which shall be proposed by the Company and to authorise the Company to execute -25- CONFORMED COPY -------------- an instrument Substitution to this instrument embodying any such modification or abrogation; and 16.5 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 any powers or discretions which the Noteholders could themselves exercise by Extraordinary Resolution. 17. Extraordinary Resolution binding on all Noteholders An Extraordinary Resolution passed at a meeting of the Noteholders duly convened and held in accordance with this instrument shall be binding upon all the Noteholders whether present or not at such meeting and each of the Noteholders shall be bound to give effect thereto accordingly. The passing of any such resolution shall be conclusive evidence that the circumstances of any such resolution justify the passing thereof. 18. Definition of Extraordinary Resolution The expression "Extraordinary Resolution" when used in this instrument means a resolution passed at a meeting of the Noteholders duly convened and held in accordance with the provisions contained herein by a majority consisting of not less than three-quarters of the persons voting thereat upon a show of hands or, if a poll is demanded, then by a majority consisting of not less than three-quarters of the votes cast thereon. 19. Minutes of Meetings Minutes of all resolutions and proceedings at every meeting shall be made and duly entered in books to be from time to time provided for that purpose by the Company and any such minutes, if they purport to be signed by the chairman of the meeting at which such resolutions were passed or proceedings were transacted or by the chairman of the next succeeding meeting of the Noteholders, shall be conclusive evidence of the matters therein contained and, until the contrary is proved, every meeting in respect of which minutes of the proceedings have been made and signed as aforesaid shall be deemed to have been duly held and convened and all resolutions passed or proceedings transacted thereat to have been duly passed and transacted. 20. Corporate representatives Any company or corporation which is a holder of Notes may by resolution of its directors or other governing body authorise any person to act as its representative at any meeting of Noteholders and such representative shall be entitled to exercise the same powers on behalf of the company or corporation which he represents as if he were the holder of Notes. 21. Resolutions in writing A resolution in writing proposed by the Company and signed by the holders of not less than three-quarters in nominal amount of the Notes then in issue (other than Notes held by or for the account of the Company) shall have effect in the same manner as an Extraordinary Resolution of Noteholders duly passed at a meeting duly convened and held. Such resolution -26- CONFORMED COPY -------------- in writing may be contained in one document or in several documents in like form, each signed by one or more Noteholders. 22. Consent of Company Notwithstanding anything in this instrument to the contrary, no resolution shall be effective which would increase any obligation of the Company under the instrument without the written consent of the Company. -27- CONFORMED COPY -------------- SCHEDULE 5 Form of Company Guarantee THIS GUARANTEE is made on 2000 BY: AMVESCAP PLC (No. 308372) whose registered office is at 11 Devonshire Square, London EC2M 4YR (the "Company") RECITALS: This Deed (as defined below) has been entered into pursuant to the Notes issued by the Company. Pursuant to clause 7 and clause 8 of the Deed, the Company wishes to substitute without the consent of the Noteholders another member of its Group as issuer, and accordingly must enter into this guarantee. THE PARTY AGREES AS FOLLOWS: 1. INTERPRETATION 1.1 Terms used herein without further definition shall have the same meaning as in the Deed. 1.2 The following term shall have the following meaning when used in this agreement: "Deed" means the deed entered into by the Company dated 20 December 2000 constituting (pound)160,170,220 Floating Rate Unsecured Loan Notes 2005 as modified from time to time a copy of which is annexed hereto marked 'A' for the purpose of identification only. 1.3 Headings shall be ignored in construing the guarantee. 1.4 References to clauses are, unless otherwise stated, references to clauses of this guarantee. 2. GUARANTEE 2.1 The Company unconditionally and irrevocably guarantees that, if for any reason the Substituted Debtor or Exchangee (or any subsequent Substituted Debtor or Exchangee) does not pay any sum payable by it in relation to the Notes within five business days after the time and date specified for such payment the Company will, within 14 days, pay that sum in immediately available funds. 2.2 The Company's obligations hereunder are and will remain in full force and effect by way of continuing security until no sum remains payable in relation to the Notes. 2.3 As a separate alternative stipulation, the Company unconditionally and irrevocably agrees that any sum expressed to be payable in accordance with the terms and conditions of the Notes but which is, for any reason, (whether or not now known) not recoverable from the Substituted -28- CONFORMED COPY -------------- Debtor or Exchangee (as the case may be) on the basis of this guarantee will nevertheless be recoverable from the Company as if it were the sole principal debtor, with any time indulgence granted to either the Substituted Debtor or the Exchangee applying pro tanto. 2.4 The Company's obligations are and will remain in full force and effect by way of continuing security until no sum remains to be paid under the Notes and the Noteholders have irrevocably received or recovered all sums payable under the Notes. Furthermore, those obligations of the Company are additional to, and not instead of, any security or other guarantee at any time existing in favour of any person, whether from the Company or otherwise. 2.5 As separate independent and alternative stipulations, the Company unconditionally and irrevocably agrees that any sum which, although expressed to be payable by the Substituted Debtor or Exchangee under the Notes, is for any reason not recoverable from the Substituted Debtor on the basis of the Substituted Deed shall nevertheless be recoverable from it as if it were the sole principal debtor and shall be paid by it to the Noteholders on demand. 3. GOVERNING LAW This guarantee shall be governed by and construed in all respects in accordance with the laws of England. IN WITNESS whereof this document has been executed as a deed on the date first above written. -29- CONFORMED COPY -------------- Signed as a deed by AMVESCAP PLC ) acting by ) Director Secretary/Director -30- CONFORMED COPY -------------- The common seal of ) AMVESCAP PLC ) was hereunto affixed in the presence of:- ) ) Director Secretary -31- EX-2.10 5 dex210.txt FIVE YEAR CREDIT AGREEMENT EXHIBIT 2.10 FIVE YEAR CREDIT AGREEMENT Dated as of June 18, 2001 AMVESCAP PLC, a company organized under the laws of England and Wales, and its successors (the "Borrower"), the banks, financial institutions and other -------- institutional lenders (the "Initial Lenders") listed on the signature pages --------------- hereof, the co-agents listed on the signature pages hereof, CITIBANK, N.A. ("Citibank"), BANK OF AMERICA, N.A. ("Bank of America") and HSBC BANK PLC ------- --------------- ("HSBC"), as co-syndication Agents (the "Co-Syndication Agents") for the Lenders ---- --------------------- (as hereinafter defined) and Bank of America, as funding agent (the "Funding ------- Agent"; the Funding Agent and the Co-Syndication Agents are collectively, the - ----- "Agents"), agree as follows: ----- PRELIMINARY STATEMENTS: The Borrower has requested that the Lenders provide the Borrower with a revolving credit facility in an initial principal amount of up to $900,000,000. The Lenders have agreed, subject to the terms and conditions of this Agreement, to provide such credit facility to the Borrower. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS Section 1.01 Certain Defined Terms. As used in this Agreement, the --------------------- following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Adjusted Debt" outstanding on any date means the sum, without ------------- duplication, of (a) the aggregate principal amount of all Debt of the Borrower and its Subsidiaries, on a Consolidated basis, outstanding on such date of the kinds referred to in clauses (a), (c), (d), (e), (f) and (h) of the definition of "Debt" and (b) the aggregate principal amount of all Debt of the Borrower and its Subsidiaries, on a consolidated basis, outstanding on such date of the kinds referred to in clause (i) of the definition of Debt that relates to Debt of other Persons of the kinds referred to in clauses (a), (c), (d), (e), (f) and (h) of the definition of "Debt". "Advance" means an advance by a Lender to the Borrower as part of a ------- Borrowing and refers to a Base Rate Advance or a Eurocurrency Rate Advance (each of which shall be a "Type" of Advance). ---- "Affiliate" means, as to any Person, any other Person that, directly --------- or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. For purposes of this definition, the term "control" (including the terms "controlling", "controlled by" and "under common control with") of a Person means the possession, direct or indirect, of the power to vote 10% or more of the Voting Stock of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by contract or otherwise. "Agents" has the meaning specified in the recital of parties to this ------ Agreement. "Anniversary Date" means June 18, 2002 and June 18 of each succeeding ---------------- calendar year occurring during the term of this Agreement. "Applicable Lending Office" means, with respect to each Lender, such ------------------------- Lender's Domestic Lending Office in the case of a Base Rate Advance and such Lender's Eurocurrency Lending Office in the case of a Eurocurrency Rate Advance. "Applicable Margin" means, as of any date, a percentage per annum ----------------- determined by reference to the Performance Level applicable on such date as set forth below: - ----------- --------------------- -------------------------- Performance Applicable Margin for Applicable Margin for Level Base Rate Advances Eurocurrency Rate Advances - ----------- --------------------- -------------------------- I 0% 0.400% - ----------- --------------------- -------------------------- II 0% 0.460% - ----------- --------------------- -------------------------- III 0% 0.525% - ----------- --------------------- -------------------------- IV 0% 0.650% - ----------- --------------------- -------------------------- V 0% 0.700% - ----------- --------------------- -------------------------- For purposes of this definition, the Performance Level shall be determined as at the end of each fiscal quarter of the Borrower based upon the calculation of the Debt/EBITDA Ratio for such fiscal quarter set forth in the compliance certificate delivered pursuant to Section 5.01(j)(i) or (ii). The Applicable Margin shall be adjusted (if necessary) upward or downward as of the first day of each fiscal quarter to reflect the Performance Level as of the last day of the immediately preceding fiscal quarter; provided that if such compliance certificate is delivered after the first day of a fiscal quarter, such adjustment shall be made on the first day following the delivery of such compliance certificate and shall be deemed to have become effective as of the first day of such fiscal quarter. "Applicable Percentage" means, as of any date, a percentage per annum --------------------- determined by reference to the Performance Level applicable on such date as set forth below: 2 - ----------- ---------- Performance Applicable Level Percentage - ----------- ---------- I 0.100% - ----------- ---------- II 0.115% - ----------- ---------- III 0.125% - ----------- ---------- IV 0.200% - ----------- ---------- V 0.300% - ----------- ---------- For purposes of this definition, the Performance Level shall be determined as at the end of each fiscal quarter of the Borrower based upon the calculation of the Debt/EBITDA Ratio for such fiscal quarter set forth in the compliance certificate delivered pursuant to Section 5.01(j)(i) or (ii). The Applicable Percentage shall be adjusted (if necessary) upward or downward as of the first day of each fiscal quarter to reflect the Performance Level as of the last day of the immediately preceding fiscal quarter; provided that if such compliance certificate is delivered after the first day of a fiscal quarter, such adjustment shall be made on the first day following the delivery of such compliance certificate and shall be deemed to have become effective as of the first day of such fiscal quarter. "Assignment and Acceptance" means an assignment and acceptance entered ------------------------- into by a Lender and an Eligible Assignee, and accepted by the Funding Agent, in substantially the form of Exhibit C hereto. "Assuming Lender" means an Eligible Assignee not previously a Lender --------------- that becomes a Lender hereunder pursuant to Section 2.05(b) or 2.17. "Assumption Agreement" means an agreement in substantially the form of -------------------- Exhibit D hereto by which an Eligible Assignee agrees to become a Lender hereunder pursuant to Section 2.05(b) or 2.17, in each case agreeing to be bound by all obligations of a Lender hereunder. "Bank of America" has the meaning specified in the recital of parties --------------- to this Agreement. "Base Rate" means a fluctuating interest rate per annum in effect from --------- time to time, which rate per annum shall at all times be equal to the higher of: (a) the rate of interest announced publicly by Bank of America from time to time as Bank of America's prime rate; (b) 1/2 of one percent per annum above the Federal Funds Rate. "Base Rate Advance" means an Advance denominated in Dollars that bears ----------------- interest as provided in Section 2.07(a)(i). "Borrower" has the meaning specified in the recital of parties to this -------- Agreement. 3 "Borrowing" means a borrowing consisting of simultaneous Advances of --------- the same Type made by each of the Lenders pursuant to Section 2.01. "Business Day" means a day of the year other than a day on which banks ------------ are required or authorized by law to close in New York City and Charlotte, North Carolina and, if the applicable Business Day relates to any Eurocurrency Rate Advances, a day on which dealings are carried on in the London interbank market and banks are open for business in London. "Capital Leases" means all leases that have been or should be, in -------------- accordance with UK GAAP, recorded as capital leases. "Citibank" has the meaning specified in the recital of parties to this -------- Agreement. "Commitment" means, as to any Lender, the Dollar amount set forth ---------- opposite its name on the signature pages hereof or, if such Lender has entered into any Assumption Agreement or Assignment and Acceptance, the Dollar amount set forth for such Lender in the Register maintained by the Funding Agent pursuant to Section 8.07(d), in each case as such amount may be reduced pursuant to Section 2.05(a) or increased pursuant to Section 2.05(b). "Confidential Information" means information that the Borrower or its ------------------------ Subsidiaries furnishes to the Funding Agent, any Co-Syndication Agent or any Lender in a writing designated as confidential, but does not include any such information that is or becomes generally available to the public (other than as a result of a breach by the Funding Agent, any Co-Syndication Agent or any Lender of its obligations hereunder) or that is or becomes available to such Agent or such Lender from a source or Person other than the Borrower or its Subsidiaries (which Person is not known by such Agent or such Lender, as the case may be, to be subject to a confidentiality agreement). "Consenting Lender" has the meaning specified in Section 2.17(b). ----------------- "Consolidated" refers to the consolidation of accounts in accordance ------------ with UK GAAP. "Convert", "Conversion" and "Converted" each refers to a conversion of ------- ---------- --------- Advances of one Type into Advances of the other Type pursuant to Section 2.08 or 2.09. "Co-Syndication Agents" has the meaning specified in the recital of --------------------- parties to this Agreement. "Debt" of any Person means, without duplication, (a) all indebtedness ---- of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of such Person's business and payable on customary terms), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the 4 rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property) (other than trade payables incurred in the ordinary course of such Person's business and payable on customary terms), (e) all obligations of such Person as lessee under Capital Leases, (f) all obligations, contingent or otherwise, of such Person in respect of acceptances, letters of credit or similar extensions of credit, (g) all net payment obligations of such Person in respect of Hedge Agreements on the date of determination, (h) all Debt of others referred to in clauses (a) through (g) above or clause (i) below guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through a written agreement (1) to pay or purchase such Debt or to advance or supply funds for the payment or purchase of such Debt, (2) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Debt or to assure the holder of such Debt against loss, (3) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (4) otherwise to assure a creditor against loss, and (i) all Debt referred to in clauses (a) through (h) above secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Debt. "Debt/EBITDA Ratio" means, as of any date of determination, the ratio ----------------- of Adjusted Debt to EBITDA for each period of four consecutive fiscal quarters of the Borrower ended on or immediately prior to such time. "Default" means any Event of Default or any event that would ------- constitute an Event of Default but for the requirement that notice be given or time elapse or both. "Disclosed Litigation" has the meaning specified in Section 4.01(i). -------------------- "Dollars" and the "$" sign each means lawful money of the United ------- - States of America. "Domestic Lending Office" means, with respect to any Lender, the ----------------------- office of such Lender specified as its "Domestic Lending Office" opposite its name on Schedule I hereto or in the Assumption Agreement or the Assignment and Acceptance pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Funding Agent. "EBITDA" means, for any period, net income (or net loss) of the ------ Borrower and its Subsidiaries, on a Consolidated basis plus the sum of (a) interest expense, (b) income tax expense, (c) depreciation expense, (d) amortization expense and (e) extraordinary losses and exceptional losses, minus extraordinary gains and exceptional gains, in each case determined in accordance with UK GAAP for such period; provided, that, for purposes of calculating EBITDA for the Borrower and its Subsidiaries for any period, the EBITDA of any Person (or assets or division of such Person) acquired by the Borrower or any of its 5 Subsidiaries during such period shall be included on a pro forma basis for such period (assuming the consummation of such acquisition occurred on the first day of such period). "Effective Date" has the meaning specified in Section 3.01. -------------- "Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender; ----------------- (iii) a commercial bank organized under the laws of the United States, or any State thereof, and having total assets of at least $1,000,000,000; (iv) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof, and having total assets of at least $1,000,000,000; (v) a commercial bank organized under the laws of any other country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of any such country, and having total assets of at least $1,000,000,000; (vi) the central bank of any country that is a member of the Organization for Economic Cooperation and Development; (vii) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and having total assets of at least $500,000,000 and (viii) any other Person approved by the Agents and the Borrower, such approval not to be unreasonably withheld or delayed; provided, however, that neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee. "Equivalent" in Dollars of Sterling on any date means the equivalent ---------- in Dollars of Sterling determined by using the quoted spot rate at which Bank of America's principal office in London offers to exchange Dollars for Sterling in London at 11:00 A.M. (London time) two Business Days prior to such date, and the "Equivalent" in Sterling of Dollars means the equivalent --------- in Sterling of Dollars determined by using the quoted spot rate at which Bank of America's principal office in London offers to exchange Sterling for Dollars in London at 11:00 A.M. (London time) two Business Days prior to such date. "ERISA" means the Employee Retirement Income Security Act of 1974, as ----- amended from time to time, and the regulations promulgated and rulings issued thereunder. "ERISA Affiliate" means any Person that for purposes of Title IV of --------------- ERISA is a member of any Loan Party's controlled group, or under common control with any Loan Party, within the meaning of Section 414 (b) or (c) of the Internal Revenue Code or, for purposes of Sections 412(c)(ii) and 412(u) of the Internal Revenue Code, under Section 414(m) or (o) of the Internal Revenue Code. "ERISA Event" means (a) (i) the occurrence of a reportable event, ----------- within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC, or (ii) at the time when the requirements of subsection (1) of Section 4043(b) of ERISA (without regard to subsection (2) of such Section) are applicable to any Loan Party or any ERISA Affiliate an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA 6 is reasonably expected to occur with respect to a Plan within the following 30 days; (b) the filing by any Loan Party or any ERISA Affiliate of an application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien under Section 302(f) of ERISA on the assets of any Loan Party or any ERISA Affiliate shall have been met with respect to any Plan; (g) the adoption of an amendment to a Plan requiring any Loan Party or any ERISA Affiliate to provide security to such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Plan, provided, however, that the event or condition set forth in Section 4042(a)(4) of ERISA shall be an ERISA Event only if the PBGC has notified any Loan Party or any ERISA Affiliate that it has made a determination under such section or that it is considering termination of a Plan on such grounds. "Eurocurrency Lending Office" means, with respect to any Lender, the --------------------------- office of such Lender specified as its "Eurocurrency Lending Office" opposite its name on Schedule I hereto or in the Assumption Agreement or the Assignment and Acceptance pursuant to which it became a Lender (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Funding Agent. "Eurocurrency Liabilities" has the meaning assigned to that term in ------------------------ Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Eurocurrency Rate" means, for any Interest Period for each ----------------- Eurocurrency Rate Advance comprising part of the same Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the average (rounded upward to the nearest whole multiple of 1/100th of 1% per annum, if such average is not such a multiple) of the rate per annum at which deposits in Dollars or Sterling, as the case may be, are offered by the principal office of each of the Reference Banks in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period in an amount substantially equal to such Reference Bank's Eurocurrency Rate Advance comprising part of such Borrowing to be outstanding during such Interest Period and for a period equal to such Interest Period by (b) a percentage equal to 100% minus the Eurocurrency Rate Reserve Percentage for such Interest Period. The Eurocurrency Rate for any Interest Period for each Eurocurrency Rate Advance comprising part of the same Borrowing shall be determined by the Funding Agent on the basis of applicable rates furnished to and received by the Funding 7 Agent from the Reference Banks two Business Days before the first day of such Interest Period, subject, however, to the provisions of Section 2.08. "Eurocurrency Rate Advance" means an Advance that bears interest as ------------------------- provided in Section 2.07(a)(ii). "Eurocurrency Rate Reserve Percentage" for any Interest Period for all ------------------------------------ Eurocurrency Rate Advances comprising part of the same Borrowing means the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurocurrency Rate Advances is determined) having a term equal to such Interest Period. "Events of Default" has the meaning specified in Section 6.01. ----------------- "Existing Debt" means the Debt of the Borrower and its Subsidiaries ------------- outstanding as of the Effective Date, as listed on Schedule 3.01(v). "Extension Date" has the meaning specified in Section 2.17(b). -------------- "Federal Funds Rate" means, for any period, a fluctuating interest ------------------ rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Funding Agent from three Federal funds brokers of recognized standing selected by it. "Funding Agent" has the meaning specified in the recital of parties to ------------- this Agreement. "Funding Agent's Account" means (a) in the case of Advances ----------------------- denominated in Dollars the account of the Funding Agent maintained by the Funding Agent at Bank of America with its office at Charlotte, North Carolina, ABA No. 053000196, Account No. 1366210022506 Re: INVESCO, Attention: Corporate Credit Support and (b) in the case of Advances denominated in Sterling, the account of the Funding Agent maintained by the Funding Agent at Midland Bank PLC with its office at 110 Cannon Street, EC4N 6AA London, England, for the account of Bank of America, N.A., Account # 00478549 Ref: INVESCO. "Guarantors" means INVESCO, Inc., a Delaware corporation, INVESCO ---------- North American Holdings, Inc., a Delaware corporation, AIM Management Group Inc., a Delaware corporation, AIM Advisors, Inc., a 8 Delaware corporation and upon the execution and delivery of an Assumption of Guaranty (as defined in the Guaranty) pursuant to Section 5.01(h) by any other Subsidiary of the Borrower, such other Subsidiary. "Guaranty" has the meaning specified in Section 3.01(d)(iv). -------- "Hedge Agreements" means interest rate swap, cap or collar agreements, ---------------- interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar agreements. "Information Memorandum" means the information memorandum dated May 1, ---------------------- 2001 used by the Agents in connection with the syndication of the Commitments. "Initial Lenders" has the meaning specified in the recital of parties --------------- to this Agreement. "Insufficiency" means, with respect to any Plan, the amount, if any, ------------- of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA. "Interest Period" means, for each Eurocurrency Rate Advance comprising --------------- part of the same Borrowing, the period commencing on the date of such Eurocurrency Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurocurrency Rate Advance and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, with respect to Eurocurrency Rate Advances, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period for each Eurocurrency Rate Advance shall be one, two, three or six months, as the Borrower may, upon notice received by the Funding Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that: (i) the Borrower may not select any Interest Period that ends after the Termination Date; (ii) Interest Periods commencing on the same date for Eurocurrency Rate Advances comprising part of the same Borrowing shall be of the same duration; (iii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and 9 (iv) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month. "Internal Revenue Code" means the Internal Revenue Code of 1986, as --------------------- amended from time to time, and the regulations promulgated and rulings issued thereunder. "Investment" in any Person means any purchase or other acquisition of ---------- any capital stock, warrants, rights, options, obligations or other securities or all or substantially all of the assets of such Person, any capital contribution to such Person or any other investment in such Person (other than a loan or advance), including, without limitation, any arrangement pursuant to which the investor incurs Debt of the types referred to in clauses (h) and (i) of the definition of "Debt" in respect ---- of such Person. "Lenders" means the Initial Lenders, each Assuming Lender and each ------- Person that shall become a party hereto pursuant to Section 8.07(a), (b) and (c). "Lien" means any lien, security interest or other charge or ---- encumbrance of any kind, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property. "Loan Documents" means this Agreement, the Notes and the Guaranty. -------------- "Loan Parties" means the Borrower and each Guarantor. ------------ "Material Adverse Change" means any material adverse change in the ----------------------- business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries taken as a whole. "Material Adverse Effect" means a material adverse effect on (a) the ----------------------- business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Funding Agent, any Co-Syndication Agent or any Lender under this Agreement or any Note or (c) the ability of the Borrower to perform its obligations under this Agreement or any Note. "Material Subsidiary" means each Subsidiary of the Borrower to which ------------------- as of the end of any fiscal year of the Borrower is attributed twenty percent or more of the Consolidated pre-tax income of the Borrower and its Subsidiaries taken as a whole, determined by reference to the most recent annual audited financial statements delivered by the Borrower to the Lenders pursuant to Section 5.01(j) or, in the case of any Subsidiary of the Borrower that is acquired or is merged with or into any other Subsidiary of the Borrower, determined by reference to the pro forma financial statements of the Borrower and its Subsidiaries prepared in accordance with UK GAAP as of the most recent fiscal year end of the Borrower, giving effect to such acquisition or merger as if such transaction had been consummated as of the last day of such fiscal year. 10 "Multiemployer Plan" means a multiemployer plan, as defined in Section ------------------ 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions. "Multiple Employer Plan" means a single employer plan, as defined in ---------------------- Section 4001(a)(15) of ERISA, that is maintained for current or former employees of any Loan Party or any ERISA Affiliate and at least one Person other than such Loan Party and the ERISA Affiliates. "Non-Consenting Lender" has the meaning specified in Section 2.17(b). --------------------- "Note" means a promissory note of the Borrower payable to the order of ---- any Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Advances made by such Lender. "Notice of Borrowing" has the meaning specified in Section 2.02(a). ------------------- "PBGC" means the Pension Benefit Guaranty Corporation (or any ---- successor). "Performance Level" means, as of any date of determination, the level ----------------- set forth below as then applicable: I Debt/EBITDA Ratio is less than or equal to 1.00:1.00. II Debt/EBITDA Ratio is greater than 1.00:1.00 but less than or equal to 1.75:1.00. III Debt/EBITDA Ratio is greater than 1.75:1.00 but less than or equal to 2.25:1.00. IV Debt/EBITDA Ratio is greater than 2.25:1.00 but less than or equal to 2.75:1.00. V Debt/EBITDA Ratio is greater than 2.75:1.00. "Permitted Liens" means such of the following as to which no --------------- enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) Liens for taxes, assessments or other governmental charges being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which such reserves or other appropriate provision, if any, as shall be required by UK GAAP shall have been made and maintained in accordance with UK GAAP and past practices of the Borrower and its Subsidiaries therefor; (b) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which such reserves or other appropriate provision, if any, as shall be required by UK GAAP shall 11 have been made therefor; (c) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business (i) in connection with workers' compensation, unemployment insurance and other types of social security or (ii) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, performance bonds, purchase, construction or sales contracts and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property; (d) any attachment or judgment Lien, unless the judgment it secures shall not, within 60 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 60 days after the expiration of any such stay; and (e) leases or subleases granted to others, easements, rights of way and other encumbrances on title to real property that, in the case of any property material to the operation of the business of the Borrower and its Subsidiaries taken as a whole, do not render title to the property encumbered thereby unmarketable or materially adversely affect the use of such property for its present purposes. "Person" means an individual, partnership, corporation (including a ------ business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company or other entity, or a government or any political subdivision or agency thereof. "Plan" means a Single Employer Plan or a Multiple Employer Plan. "Pro ---- Rata Share" of any amount means, with respect to any Lender at any time, the product of such amount times a fraction the numerator of which is the amount of such Lender's Commitment at such time and the denominator of which is the Total Commitment at such time. "Reference Banks" means Citibank, Bank of America, The Chase Manhattan --------------- Bank and Suntrust Bank. "Register" has the meaning specified in Section 8.07(d). -------- "Relevant Taxing Authority" means the taxing authority with which the ------------------------- applicable Treaty Form is required to be filed, in the country of residence of a Lender. "Required Lenders" means at any time Lenders owed at least 51% of the ---------------- then aggregate unpaid principal amount of the Advances owing to Lenders, or, if no such principal amount is then outstanding, Lenders having at least 51% of the Commitments. "Restricted Subsidiary" means each Subsidiary of the Borrower that (a) --------------------- is a Guarantor or a Subsidiary of a Guarantor or (b) is subject to any agreement described in Section 5.02(j)(i), (ii) or (iii), provided that such Subsidiary shall be a Restricted Subsidiary under this clause (b) only so long as such agreement is in effect. "Significant Subsidiary" means each Subsidiary of the Borrower that ---------------------- (a) is organized under the laws of the United States or any political subdivision thereof or (b) is 12 an operating Subsidiary of the Borrower or a Subsidiary of the Borrower that directly or indirectly owns an operating Subsidiary of the Borrower. "Single Employer Plan" means a single employer plan, as defined in -------------------- Section 4001(a)(15) of ERISA, that is maintained for employees of any Loan Party or any ERISA Affiliate and no Person other than any Loan Party and the ERISA Affiliates. "Solvent" and "Solvency" mean, with respect to any Person on a ------- -------- particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. "Sterling" means lawful money of the United Kingdom of Great Britain -------- and Northern Ireland. "Subsidiary" of any Person means any corporation, limited liability ---------- company, partnership, joint venture, trust or estate of which (or in which) more than 50% of (a) in the case of a corporation, the issued and outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) in the case of a limited liability company, partnership or joint venture, the interest in the capital or profits of such limited liability company, partnership or joint venture or (c) in the case of a trust or estate, the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person's other Subsidiaries. "Termination Date" means the earlier of June 18, 2006, subject to the ---------------- extension thereof pursuant to Section 2.17 and the date of termination in whole of the Commitments pursuant to Section 2.05 or 6.01; provided, -------- however, that the Termination Date of any Lender that is a Non-Consenting ------- Lender to any requested extension pursuant to Section 2.17 shall be the Termination Date in effect immediately prior to the applicable Extension Date for all purposes of this Agreement. "Total Commitment" means, at any time, the aggregate amount of the ---------------- Lenders' Commitments at such time. 13 "Treaty Form" means a form of claim for the benefits of an income tax ----------- treaty between the United Kingdom and the country of residence of a Lender or an Agent, as is specified from time to time by the Financial Intermediaries and Claims Office (International) of the Board of Inland Revenue for the United Kingdom. "UK GAAP" has the meaning specified in Section 1.03. ------- "Voting Stock" means capital stock issued by a corporation, or ------------ equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency. "Withdrawal Liability" has the meaning specified in Part I of Subtitle -------------------- E of Title IV of ERISA. Section 1.02 Computation of Time Periods. In this Agreement in the --------------------------- computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding". Section 1.03 Accounting Terms. All accounting terms not specifically ---------------- defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(f) ("UK GAAP"). ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES Section 2.01 The Advances. Each Lender severally agrees, on the terms ------------ and conditions hereinafter set forth, to make Advances to the Borrower from time to time on any Business Day during the period from the Effective Date until the Termination Date in an aggregate amount (based in respect of any Advance denominated in Sterling on the Equivalent in Dollars), not to exceed at any time outstanding the amount set forth opposite such Lender's Commitment. Each Borrowing shall be in an aggregate amount of $5,000,000 (or the Equivalent thereof in Sterling) or an integral multiple of $1,000,000 (or the Equivalent thereof in Sterling) in excess thereof and shall consist of Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender's Commitment, the Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.10 and reborrow under this Section 2.01. Section 2.02 Making the Advances. (a) Each Borrowing shall be made on ------------------- notice, given not later than (x) 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurocurrency Rate Advances denominated in Dollars, (y) 11:00 A.M. (New York City time) on the fifth Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurocurrency Rate Advances denominated in Sterling, or (z) 9:00 A.M. (New York City time) 14 on the date of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the Funding Agent, which shall give to each Lender prompt notice thereof by telecopier or telex. Each such notice of a Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed immediately in writing, or telecopier or telex in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in the case of a Borrowing consisting of Eurocurrency Rate Advances, the initial Interest Period and whether such Advance shall be in Dollars or in Sterling. Each Lender shall, before 11:00 A.M. (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Funding Agent at the applicable Funding Agent's Account, in same day funds, such Lender's Pro Rata Share of such Borrowing. After the Funding Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article 3, the Funding Agent will make such funds available to the Borrower at the Funding Agent's address referred to in Section 8.02. (b) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not select Eurocurrency Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000 or if the obligation of the Lenders to make Eurocurrency Rate Advances shall then be suspended pursuant to Section 2.08 or 2.12 and (ii) the Eurocurrency Rate Advances may not be outstanding as part of more than ten separate Borrowings. (c) Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurocurrency Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date. (d) Unless the Funding Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Funding Agent such Lender's Pro Rata Share of such Borrowing, the Funding Agent may assume that such Lender has made such amount available to the Funding Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Funding Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such amount available to the Funding Agent, such Lender and the Borrower severally agree to repay to the Funding Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Funding Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Advances comprising such Borrowing and (ii) in the case of such Lender (A) the Federal Funds Rate in the case of Advances denominated in Dollars or (B) the cost of funds incurred by the Funding Agent in respect of such amount in the case of Advances denominated in Sterling. If such Lender shall repay to the Funding Agent such corresponding amount, such amount so 15 repaid shall constitute such Lender's Advance as part of such Borrowing for purposes of this Agreement. (e) The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing. Section 2.03 [Intentionally omitted]. ----------------------- Section 2.04 Fees. (a) Facility Fee. The Borrower agrees to pay to the ---- ------------ Funding Agent for the account of each Lender a facility fee on the aggregate amount of such Lender's Commitment from the Effective Date in the case of each Initial Lender and from the effective date specified in the Assumption Agreement or the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Termination Date at a rate per annum equal to the Applicable Percentage in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December, commencing June 30, 2001, and on the Termination Date. (b) Agent's Fees. The Borrower shall pay to the Agents for their own ------------ account such fees as may from time to time be agreed between the Borrower and the Agents. Section 2.05 Termination, Reduction or Increase of the Commitments. ----------------------------------------------------- (a) Termination or Reduction. The Borrower shall have the right, upon at least ------------------------ three Business Days' notice to the Funding Agent, to terminate in whole or reduce ratably in part the unused portions of the respective Commitments of the Lenders, provided that each partial reduction of the Total Commitment shall be in the aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof. (b) Increase in Aggregate of the Commitments. The Borrower may at any time, ---------------------------------------- by notice to the Funding Agent, propose that the Total Commitment be increased (such aggregate amount being, a "Commitment Increase"), effective as at a date ------------------- prior to the Termination Date (an "Increase Date") as to which agreement is to ------------- be reached by an earlier date specified in such notice (a "Commitment Date"); --------------- provided, however, that (A) the Borrower may not propose more than two Commitment Increases in any twelve month period, (B) the minimum proposed Commitment Increase per notice shall be $50,000,000, (C) in no event shall the Total Commitment at any time exceed $1,000,000,000, (D) at the time of and after giving effect to such Commitment Increase, the Debt/EBITDA Ratio is less than or equal to 2.25:1.00, (E) no Default shall have occurred and be continuing on such Increase Date and (F) an officer's certificate as to corporate authorization for such Commitment Increase and other appropriate documentation reasonably requested by the Funding Agent, any Co-Syndication Agent, any Increasing Lender or any Assuming Lender is received by the Funding Agent. The Funding Agent shall notify the Lenders thereof promptly upon its receipt of any such notice. The Funding Agent agrees that it will cooperate with the Borrower in discussions with the Lenders and other Eligible Assignees with a view to arranging the proposed Commitment Increase through the increase of the Commitments of one or more of the Lenders (each such Lender that 16 is willing to increase its Commitment hereunder being an "Increasing Lender") ----------------- and the addition of one or more other Eligible Assignees as Assuming Lenders and as parties to this Agreement; provided, however, that it shall be in each Lender's sole discretion whether to increase its Commitment hereunder in connection with the proposed Commitment Increase; and provided further that the minimum Commitment of each such Assuming Lender that becomes a party to this Agreement pursuant to this Section 2.05(b), shall be at least equal to $25,000,000. If any of the Lenders agree to increase their respective Commitments by an aggregate amount in excess of the proposed Commitment Increase, the proposed Commitment Increase shall be allocated among such Lenders as determined at such time by the Borrower. If agreement is reached on or prior to the applicable Commitment Date with any Increasing Lenders and Assuming Lenders as to a Commitment Increase (which may be less than but not greater than specified in the applicable notice from the Borrower), such agreement to be evidenced by a notice in reasonable detail from the Borrower to the Funding Agent on or prior to the applicable Commitment Date, such Assuming Lenders, if any, shall become Lenders hereunder as of the applicable Increase Date, the Commitments of such Assuming Lenders shall be, as of the Increase Date, the amounts specified in such notice and the Commitments of each Increasing Lender shall be, as of the Increase Date, increased by the amounts specified in such notice; provided that: (x) the Funding Agent shall have received (with copies for each Lender, including each such Assuming Lender) by no later than 10:00 A.M. (New York City time) on the applicable Increase Date a copy certified by the Secretary, an Assistant Secretary or a comparable officer of the Borrower, of the resolutions adopted by the Board of Directors of the Borrower authorizing such Commitment Increase; (y) each such Assuming Lender shall have delivered to the Funding Agent by no later than 10:00 A.M. (New York City time) on such Increase Date, an appropriate Assumption Agreement in substantially the form of Exhibit D hereto, duly executed by such Assuming Lender and the Borrower; and (z) each such Increasing Lender shall have delivered to the Funding Agent by no later than 10:00 A.M. (New York City time) on such Increase Date (A) its existing Note and (B) confirmation in writing satisfactory to the Funding Agent as to its increased Commitment. (c) In the event that the Funding Agent shall have received notice from the Borrower as to its agreement to a Commitment Increase on or prior to the applicable Commitment Date and each of the actions provided for in clauses (x) through (z) above shall have occurred prior to 10:00 A.M. (New York City time) on the applicable Increase Date to the satisfaction of the Funding Agent, the Funding Agent shall notify the Lenders (including any Assuming Lenders) and the Borrower of the occurrence of such Commitment Increase by telephone, confirmed immediately in writing, telecopier, telex or cable and in any event no later than 1:00 P.M. (New York City time) on such Increase Date and shall record in the Register the relevant information with respect to each Increasing Lender and Assuming Lender. Each Increasing Lender and each Assuming Lender shall, before 2:00 P.M. (New York City time) on the applicable Increase Date, make available for the account of its Applicable Lending Office to the Funding Agent at the applicable Funding Agent's Account, in same day funds, in the case of such Assuming Lender, an amount equal to such Assuming Lender's Pro Rata Share of the Borrowings then outstanding 17 (calculated based on its Commitment as a percentage of the aggregate Commitments outstanding after giving effect to the relevant Commitment Increase) and, in the case of such Increasing Lender, an amount equal to the excess of (i) such Increasing Lender's Pro Rata Share of the Borrowings then outstanding (calculated based on its Commitment as a percentage of the aggregate Commitments outstanding after giving effect to the relevant Commitment Increase) over (ii) such Increasing Lender's Pro Rata Share of the Borrowings then outstanding (calculated based on its Commitment (without giving effect to the relevant Commitment Increase) as a percentage of the aggregate Commitments (without giving effect to the relevant Commitment Increase). After the Funding Agent's receipt of such funds from each such Increasing Lender and each such Assuming Lender, the Funding Agent will promptly thereafter cause to be distributed like funds to the other Lenders for the account of their respective Applicable Lending Offices in an amount to each other Lender such that the aggregate amount of the outstanding Advances owing to each Lender after giving effect to such distribution equals such Lender's ratable portion of the Borrowings then outstanding (calculated based on its Commitment as a percentage of the aggregate Commitments outstanding after giving effect to the relevant Commitment Increase). Within five Business Days after the Borrower receives notice from the Funding Agent, the Borrower, at its own expense, shall execute and deliver to the Funding Agent Notes payable to the order of each Assuming Lender, if any, and, each Increasing Lender, dated as of the applicable Increase Date, in a principal amount equal to such Lender's Commitment after giving effect to the relevant Commitment Increase, and substantially in the form of Exhibit A hereto. The Funding Agent, upon receipt of such Notes, shall promptly deliver such Notes to the respective Assuming Lenders and Increasing Lenders. (d) In the event that the Funding Agent shall not have received notice from the Borrower as to such agreement on or prior to the applicable Commitment Date or the Borrower shall, by notice to the Funding Agent prior to the applicable Increase Date, withdraw its proposal for a Commitment Increase or any of the actions provided for above in clauses (i)(x) through (i)(z) shall not have occurred by 10:00 A.M. (New York City time) on such Increase Date, such proposal by the Borrower shall be deemed not to have been made. In such event, any actions theretofore taken under clauses (i)(x) through (i)(z) above shall be deemed to be of no effect and all the rights and obligations of the parties shall continue as if no such proposal had been made. Section 2.06 Repayment of Advances. The Borrower shall repay to the --------------------- Funding Agent for the ratable account of the Lenders on the Termination Date the aggregate principal amount of all Advances then outstanding. Section 2.07 Interest on Advances. (a) Scheduled Interest. The -------------------- ------------------ Borrower shall pay interest on the unpaid principal amount of each Advance owing to each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum: (i) Base Rate Advances. During such periods as such Advance is a Base ------------------ Rate Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in effect from time to time plus (y) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full. 18 (ii) Eurocurrency Rate Advances. During such periods as such Advance -------------------------- is a Eurocurrency Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (x) the Eurocurrency Rate for such Interest Period for such Advance plus (y) the Applicable Margin in effect from time to time, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurocurrency Rate Advance shall be Converted or paid in full. (b) Default Interest. Upon the occurrence and during the continuance of an ---------------- Event of Default, the Borrower shall pay interest on (i) the unpaid principal amount of each Advance owing to each Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any interest, fee or other amount payable hereunder that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on Base Rate Advances pursuant to clause (a)(i) above. Section 2.08 Interest Rate Determination. (a) Each Reference Bank --------------------------- agrees to furnish to the Funding Agent timely information for the purpose of determining each Eurocurrency Rate. If any one or more of the Reference Banks shall not furnish such timely information to the Funding Agent for the purpose of determining any such interest rate, the Funding Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks. The Funding Agent shall give prompt notice to the Borrower and the Lenders of the applicable interest rate determined by the Funding Agent for purposes of Section 2.07(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for the purpose of determining the interest rate under Section 2.07(a)(ii). (b) If, with respect to any Eurocurrency Rate Advances, the Required Lenders notify the Funding Agent that the Eurocurrency Rate for any Interest Period for such Advances will not adequately reflect the cost to such Required Lenders of making, funding or maintaining their respective Eurocurrency Rate Advances for such Interest Period, the Funding Agent shall forthwith so notify the Borrower and the Lenders, whereupon (i) each Eurocurrency Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance, and (ii) the obligation of the Lenders to make, or to Convert Base Rate Advances into, Eurocurrency Rate Advances shall be suspended until the Funding Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist. (c) If the Borrower shall fail to select the duration of any Interest Period for any Eurocurrency Rate Advances in accordance with the provisions contained in the definition of "Interest Period" in Section 1.01, the Funding Agent will forthwith so notify the Borrower and the Lenders and such Advances will automatically, on the last day of the then existing Interest Period for such Eurocurrency Rate Advance, Convert into Base Rate Advances. 19 (d) On the date on which the aggregate unpaid principal amount of Eurocurrency Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $5,000,000, such Advances shall automatically Convert into Base Rate Advances. (e) Upon the occurrence and during the continuance of any Event of Default, (i) each Eurocurrency Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into, Eurocurrency Rate Advances shall be suspended. (f) If fewer than two Reference Banks furnish timely information to the Funding Agent for determining the Eurocurrency Rate for any Eurocurrency Rate Advances. (i) the Funding Agent shall forthwith notify the Borrower and the Lenders that the interest rate cannot be determined for such Eurocurrency Rate Advances. (ii) with respect to Eurocurrency Rate Advances, each such Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance (or if such Advance is then a Base Rate Advance, will continue as a Base Rate Advance), and (iii) the obligation of the Lenders to make Eurocurrency Rate Advances or to Convert Advances into Eurocurrency Rate Advances shall be suspended until the Funding Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist. Section 2.09 Optional Conversion of Advances. The Borrower may on any ------------------------------- Business Day, upon notice given to the Funding Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Sections 2.08 and 2.12, Convert all Advances of one Type comprising the same Borrowing into Advances of the other Type; provided, however, that any Conversion of Eurocurrency Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurocurrency Rate Advances, any Conversion of Base Rate Advances into Eurocurrency Rate Advances shall be in an amount not less than the minimum amount specified in Section 2.02(b) and no Conversion of any Advances shall result in more separate Eurocurrency Rate Borrowings than permitted under Section 2.02(b). Each such notice of a Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Advances to be Converted, and (iii) if such Conversion is into Eurocurrency Rate Advances, the duration of the initial Interest Period for each such Advance. Each notice of Conversion shall be irrevocable and binding on the Borrower. Section 2.10 Prepayments of Advances. (a) Optional Prepayments. The ----------------------- -------------------- Borrower may, upon notice to the Funding Agent stating the proposed date and aggregate principal amount of the prepayment, given not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of such proposed prepayment, in the case of Eurocurrency Rate Advances, and not later than 11:00 A.M. (New York City time) on the day of such proposed prepayment, in the case of Base Rate Advances, and if such notice is given the 20 Borrower shall, prepay the outstanding principal amount of the Advances comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that (x) each partial prepayment shall be in an aggregate principal amount of $5,000,000 or the Equivalent thereof in Sterling or an integral multiple of $1,000,000 or the Equivalent thereof in Sterling in excess thereof and (y) in the event of any such prepayment of a Eurocurrency Rate Advance, the Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(c). (b) Mandatory Prepayments. (i) If the Funding Agent notifies the Borrower --------------------- that, on any interest payment date, the sum of (A) the aggregate principal amount of all Advances denominated in Dollars then outstanding plus (B) the Equivalent in Dollars of the aggregate principal amount of all Advances denominated in Sterling then outstanding exceeds 105% of the Total Commitment on such date, the Borrower shall, within two Business Days after receipt of such notice, prepay the outstanding principal amount of any Advances in an aggregate amount sufficient to reduce such sum to an amount not to exceed 100% of the Total Commitment on such date. (ii) If the Funding Agent notifies the Borrower that, on any date, the sum of the amounts described in clauses (A) and (B) of subsection (i) above exceeds 103% of the Total Commitment on such date, the Borrower shall, within two Business Days after receipt of such notice, prepay the outstanding principal amount of any Advances in an aggregate amount sufficient to reduce such sum to an amount not to exceed 100% of the Total Commitment on such date, provided that if the aggregate principal amount of Base Rate Advances then outstanding is less than the amount of such required prepayment, the portion of such required prepayment in excess of the aggregate principal amount of Base Rate Advances then outstanding shall be paid on the last day of each Interest Period ended on or after the date of such notice in an amount equal to the aggregate principal amount of the Eurodollar Rate Advances then maturing until such excess has been fully paid. (iii) Each prepayment made pursuant to this Section 8.10(b) shall be made together with any interest accrued to the date of such prepayment on the principal amounts prepaid and, in the case of any prepayment of a Eurocurrency Rate Advance on a date other than the last day of an Interest Period or at its maturity, any additional amounts which such Borrower shall be obligated to reimburse to the Lenders in respect thereof pursuant to Section 8.04(c). The Funding Agent shall give prompt notice of any prepayment required under this Section 2.10(b) to the Borrower and the Lenders. Section 2.11 Increased Costs. (a) If, due to either (i) the --------------- introduction of or any change in or in the interpretation of any law or regulation occurring after the date hereof or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law) issued or made after the date hereof, there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining Eurocurrency Rate Advances (excluding for purposes of this Section 2.11 any such increased costs resulting from (i) Indemnified Taxes or Other Taxes (as to which Section 2.14 shall govern) and (ii) changes in taxes measured by or imposed upon the net income or gross income or franchise taxes, or taxes measured by or imposed upon capital or net worth, or branch 21 taxes, of such Lender or its Applicable Lending Office), then the Borrower shall from time to time, within ten days of demand by such Lender (with a copy of such demand to the Funding Agent), pay to the Funding Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost; provided that, before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would avoid the need for, or reduce the amount of, such additional cost and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. (b) If any Lender reasonably determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority regarding capital adequacy (whether or not having the force of law) issued or made after the date hereof affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender's commitment to lend hereunder and other commitments of this type, and such Lender reasonably determines that the rate of return on its or such controlling corporation's capital as a consequence is reduced to a level below that which such Lender or such controlling corporation would have achieved but for the occurrence of such conditions, then, within ten days of demand by such Lender (with a copy of such demand to the Funding Agent), the Borrower shall pay to the Funding Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender or such corporation in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender's commitment to lend hereunder. (c) If a Lender changes its Applicable Lending Office (other than pursuant to this Section 2.11 or Section 2.12 or 2.14(h)) and the effect of such change, as of the date of such change, would be to cause the Borrower to become obligated to pay any additional amounts under this Section 2.11, the Borrower shall not be obligated to pay such additional amount. (d) A certificate of a Lender setting forth the amount of any claim made under this Section 2.11 and identifying with reasonable specificity the basis for calculating such amount, shall be delivered to the Borrower and the Funding Agent and shall be conclusive absent manifest error. Section 2.12 Illegality. Notwithstanding any other provision of this ---------- Agreement, if any Lender shall notify the Funding Agent (who will promptly notify the Borrower and the other Lenders) that the introduction of or any change in or in the interpretation of any law or regulation after the date hereof makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for any Lender or its Eurocurrency Lending Office to perform its obligations hereunder to make Eurocurrency Rate Advances or to fund or maintain Eurocurrency Rate Advances hereunder, (i) each Eurocurrency Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance or an Advance that bears interest at the rate set forth in Section 2.07(a)(i), as the case may be, and (ii) the obligation of the Lenders to make Eurocurrency Rate Advances or to Convert Base Rate Advances into Eurocurrency Rate Advances shall be suspended until the Funding Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist or that such Lender has entered 22 into one or more Assignments and Acceptances pursuant to Section 8.07 assigning its Commitment to one or more Eligible Assignees; provided that, before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. Section 2.13 Payments and Computations. (a) The Borrower shall make ------------------------- each payment hereunder and under the Notes without set-off or counterclaim, not later than 11:00 A.M. (New York City time) on the day when due in Dollars, in the case of Advances denominated in Dollars, or in Sterling, in the case of Advances denominated in Sterling, to the Funding Agent at the applicable Funding Agent's Account in same day funds. The Funding Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest or facility fees ratably (other than amounts payable pursuant to Section 2.11, 2.14 or 8.04(c)) to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 8.07(c), from and after the effective date specified in such Assignment and Acceptance, the Funding Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves. Upon any Assuming Lender becoming a Lender hereunder as a result of a Commitment Increase pursuant to Section 2.05(b) or in connection with a Commitment extension pursuant to Section 2.17 and upon the Funding Agent's receipt of such Lender's Assumption Agreement and recording the information contained therein in the Register, from and after the applicable Increase Date, the Funding Agent shall make all payments hereunder and under the Notes in respect of the interest assumed thereby to such Assuming Lender. (b) All computations of interest based on the Base Rate or the Federal Funds Rate shall be made by the Funding Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurocurrency Rate and of facility fees shall be made by the Funding Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or facility fees are payable. Each determination by the Funding Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error. (c) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or facility fee, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurocurrency Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day. 23 (d) Unless the Funding Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Funding Agent may assume that the Borrower has made such payment in full to the Funding Agent on such date and the Funding Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Funding Agent, each Lender shall repay to the Funding Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Funding Agent, at the Federal Funds Rate. Section 2.14 Taxes. (a) Except as otherwise required by law, any and ----- all payments by the Borrower hereunder or under the Notes issued hereunder shall be made, in accordance with Section 2.13, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto (all such taxes, levies, imposts, deductions, charges, withholdings, and liabilities in respect of payments hereunder or under the Notes being hereafter referred to as "Taxes"), excluding, in the case of payments made to any Lender or any Agent (A) ----- Taxes imposed on or measured by its net income, and franchise Taxes, branch Taxes, Taxes on doing business and Taxes measured by or imposed upon its capital or net worth, in each case imposed as a result of such Lender (and or such Lender's Applicable Lending Office) or such Agent being organized under the laws of, or being a legal resident of, or having a fixed place of business or a permanent establishment or doing business in the jurisdiction imposing such Tax (other than any such connection arising solely from such Lender (and or such Lender's Applicable Lending Office) or such Agent having executed, delivered or performed its obligations, or having received a payment, or having enforced its rights and remedies, under this Agreement or any of the other Loan Documents), (B) United Kingdom withholding Taxes except to the extent such United Kingdom withholding Taxes would not have been imposed but for a change, after the date such Lender or such Agent (as the case may be) becomes a party hereto, in United Kingdom tax law or United Kingdom officially published Inland Revenue practice or an amendment or revocation, after the date such Lender or such Agent (as the case may be) becomes a party hereto, of an applicable United Kingdom income tax treaty with Austria, Denmark, Finland, France, Germany, Ireland, Iceland, Luxembourg, Netherlands, Norway, Sweden, Switzerland or the United States, (C) United Kingdom Taxes imposed as a result of the failure of the Inland Revenue to approve, on or before the payment of interest to a Lender hereunder, a claim by such Lender for exemption, on or before the payment of interest hereunder, where such failure is due to such Lender's failure to timely submit a validly completed and executed Treaty Form within a time sufficient for the Inland Revenue to approve such Lender's claim and (D) United States withholding Taxes except to the extent such United States withholding Taxes are imposed solely as a result of (1) a change, after the date such Lender or such Agent (as the case may be) becomes a party hereto, in the Internal Revenue Code or any regulations promulgated thereunder (or in the official interpretation of the Internal Revenue Code or any regulations promulgated thereunder) or an amendment or revocation or change in official interpretation, after the date such Lender or such Agent (as the case may be) becomes a party hereto, of an applicable United States income tax treaty with Austria, Denmark, Finland, France, Germany, Ireland, Iceland, Luxembourg, Netherlands, Norway, Sweden or the United Kingdom or (2) the failure by the Borrower to timely request an updated or successor Form W-8BEN or W-8ECI, as appropriate, 24 under Section 2.14(e) (all such non-excluded Taxes hereinafter referred to as "Indemnifiable Taxes"). If the Borrower shall be required by law to deduct any ------------------- Indemnifiable Taxes from or in respect of any sum payable hereunder or under any Note issued hereunder to any Lender or any Agent or, if any Agent shall be required by law to deduct any Indemnifiable Taxes from or in respect of any sum paid or payable hereunder or under any Note to any Lender, (i) the sum payable shall be increased as may be necessary so that after making all required deductions for Indemnifiable Taxes (including deductions for Indemnifiable Taxes, whether by the Borrower or any Agent, applicable to additional sums payable under this Section 2.14) such Lender or such Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower (or, as the case may be and as required by applicable law, any Agent) shall make such deductions and (iii) the Borrower (or, as the case may be and as required by applicable law, any Agent) shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) In addition, the Borrower shall pay any present or future stamp or documentary taxes or any other excise (other than income) or property taxes, charges or similar levies that arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, or performing under this Agreement or the Notes or any document to be furnished under or in connection with any thereof or any modification or amendment in respect of this Agreement or the Notes (hereinafter referred to as "Other Taxes"). ----------- (c) The Borrower shall indemnify each Lender and each Agent for the full amount of Indemnifiable Taxes or Other Taxes imposed on or paid by such Lender or such Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Lender or such Agent (as the case may be) makes written demand therefor. (d) Within 30 days after the date of any payment of Indemnifiable Taxes under Section2.14(a) by the Borrower, the Borrower shall furnish to the Funding Agent, at its address referred to in Section 8.02, the original or a certified copy of a receipt evidencing such payment to the extent such receipt is received by the Borrower, or other written proof of payment reasonably satisfactory to the Funding Agent showing payment thereof. In the case of any payment hereunder or under the Notes issued hereunder by or on behalf of the Borrower through an account or branch outside the United Kingdom or by or on behalf of the Borrower by a payor that is not a United Kingdom person, if the Borrower determines that no Indemnifiable Taxes are payable in respect thereof, the Borrower shall furnish, or shall cause such payor to furnish, to the Funding Agent, at such address, an opinion of counsel acceptable to the Agents stating that such payment is exempt from Indemnifiable Taxes. (e) Each Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender and on the date of the Assumption Agreement or the Assignment and Acceptance pursuant to which it becomes a Lender in the case of each other Lender, and from time to time thereafter as requested in writing by the Borrower shall provide each of the Funding Agent and the Borrower with (i) two original Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor or other from prescribed by the Internal Revenue Service, certifying that such Lender is exempt from United States withholding tax and (ii) to the extent 25 that any such form or other certification becomes obsolete with respect to any Lender, such Lender shall, upon the written request of the Borrower to such Lender and the Funding Agent, promptly provide either an updated or successor form or certification to the Borrower and the Funding Agent unless, in each case, any change in treaty, law or regulation has occurred after the date such Lender becomes a party hereunder which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Borrower and the Funding Agent. (f) Each Lender shall (i) as soon as reasonably practicable following the date it becomes a party hereto, submit to its Relevant Taxing Authority a validly completed Treaty Form (or successor Treaty Form thereto) claiming exemption from United Kingdom withholding Tax on interest, or (ii) (A) on or before the date it becomes a party hereto, furnish to the Borrower, with a copy to the Funding Agent, a certificate substantially in the form of Exhibit I (a "U.K. Tax Compliance Certificate") certifying that such Lender (1) is a Bank ------------------------------- within the meaning of Section 840A of the Income and Corporation Taxes Act of 1988 of the United Kingdom and (2) is within the charge to corporation tax in the United Kingdom with respect to payment hereunder and (B) agree, upon reasonable request by the Borrower, to provide to the Borrower and the Funding Agent, to the extent it is legally entitled to do so, such other forms as may be required by law in order to establish the legal entitlement of such Lender to an exemption from United Kingdom withholding Tax with respect to payments under this Agreement and the Notes issued hereunder, unless, in each case, any change in treaty, law or regulation has occurred after the date such Lender becomes a party hereunder which renders any such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Borrower and the Funding Agent. (g) For any period with respect to which a Lender has failed to provide the Borrower with the appropriate form described in Section 2.14(e) or (f) (other than if the Borrower has failed to timely request with reasonable notice any appropriate renewal, successor or other form or if any such form otherwise is not required under subsection (e) or (f)), such Lender shall not be entitled to indemnification under Section 2.14(a) or (c) with respect to Indemnifiable Taxes imposed by the United Kingdom or the United States by reason of such failure; provided, however, that should a Lender become subject to Indemnifiable Taxes or United Kingdom withholding Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Indemnifiable Taxes or United Kingdom withholding Taxes. If the Borrower is required by law to pay interest hereunder or on any Note issued hereunder, to any Lender subject to a deduction or withholding for United Kingdom Tax, but the Borrower has received at least 14 days prior to the relevant interest payment date a copy of a valid claim made and filed by such Lender on a Treaty Form (or successor thereto) as filed with the Inland Revenue which claim would, if accepted by the Inland Revenue, result in an authorization being given to the Borrower to make the payment of interest without such a deduction or withholding, then the Borrower shall, at such Lender's request, make the relevant payment to such Lender without such deduction or withholding; provided that such Lender shall indemnify the Borrower for any Indemnifiable Taxes or United Kingdom withholding Taxes or other costs imposed by the Inland Revenue upon and paid by the Borrower directly resulting from having relied upon such copy in making such payment. If the Borrower does make such payment without deduction or withholding for United Kingdom Tax upon such a request of such Lender, the Borrower shall not be obligated to such 26 Lender to comply with the provisions of paragraph (a) of this Section 2.14 with respect to such United Kingdom Tax. (h) If a condition or an event occurs which would, or would upon the passage of time or giving notice, result in the payment of any additional amounts pursuant to this Section 2.14, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. (i) If any Agent or any Lender, in its sole opinion, determines that it has finally and irrevocably received or been granted a refund in respect of any Indemnifiable Taxes or Other Taxes as to which indemnification has been paid by the Borrower pursuant to Section 2.14(a) or (c), it shall promptly remit such refund to the Borrower, net of all out-of-pocket expenses of such Agent or such Lender; provided, however, that the Borrower upon the request of such Agent or such Lender, agrees promptly to return such refund to such party in the event such party is required to repay such refund to the relevant taxing authority. Such Agent or such Lender shall provide the Borrower with a copy of any notice or assessment from the relevant taxing authority (deleting any confidential information contained therein) requiring the repayment of such refund. Nothing contained herein shall impose an obligation on any Agent or any Lender to apply for any refund or to disclose to any party any information regarding their proprietary information regarding tax affairs and computations. (j) If a Lender changes its Applicable Lending Office (other than pursuant to subsection (h) above or Section 2.11 or 2.12) and the effect of such change, as of the date of such change, would be to cause the Borrower to become obligated to pay any additional amounts under this Section 2.14, the Borrower shall not be obligated to pay such additional amount. (k) A certificate of a Lender setting forth such amount or amounts as shall be necessary to compensate such Lender specified in Section 2.14(a), (b), or (c) above, as the case may be, and identifying with reasonable specificity the basis for calculation such amount or amounts, shall be delivered to the Borrower and the Funding Agent and shall be conclusive absent manifest error. (l) The obligations of a Lender under this Section 2.14 shall survive the termination of this Agreement and the payment of the Advances and all amounts payable hereunder. Section 2.15 Sharing of Payments, Etc. If any Lender shall obtain any ------------------------ payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Advances owing to it (other than pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of its ratable share of payments on account of the Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Advances owing to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the 27 extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.15 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. Section 2.16 Use of Proceeds. The proceeds of the Advances shall be --------------- available (and the Borrower agrees that it shall use such proceeds) solely (i) to refinance Existing Debt, (ii) to provide liquidity support for commercial paper issued by the Borrower and (iii) for working capital and other general corporate purposes (including acquisitions) of the Borrower and its Subsidiaries. Section 2.17 Extension of Termination Date. (a) At least 45 days but ----------------------------- not more than 90 days prior to each of two Anniversary Dates, the Borrower, by written notice to the Funding Agent, may request an extension of the Termination Date in effect at such time by one year from its then scheduled expiration. The Funding Agent shall promptly notify each Lender of such request, and each Lender shall in turn, in its sole discretion, not earlier than 30 days, nor later than 20 days, prior to such Anniversary Date, notify the Borrower and the Funding Agent in writing as to whether such Lender will consent to such extension. If any Lender shall fail to notify the Funding Agent and the Borrower in writing of its consent to any such request for extension of the Termination Date at least 20 days prior to the pending Anniversary Date, such Lender shall be deemed to be a Non-Consenting Lender with respect to such request. The Funding Agent shall notify the Borrower not later than 15 days prior to the pending Anniversary Date of the decision of the Lenders regarding the Borrower's request for an extension of the Termination Date. (b) If all the Lenders consent in writing to any such request in accordance with subsection (a) of this Section 2.17, the Termination Date in effect at such time shall, effective as at the next Anniversary Date (the "Extension Date"), be -------------- extended for one calendar year; provided that on each Extension Date the -------- applicable conditions set forth in Section 3.02 shall be satisfied. If less than all of the Lenders consent in writing to any such request in accordance with subsection (a) of this Section 2.17, the Termination Date in effect at such time shall, effective as at the applicable Extension Date and subject to subsection (d) of this Section 2.17, be extended as to those Lenders that so consented (each a "Consenting Lender") but shall not be extended as to any other Lender ----------------- (each a "Non-Consenting Lender"). To the extent that the Termination Date is not --------------------- extended as to any Lender pursuant to this Section 2.17 and the Commitment of such Lender is not assumed in accordance with subsection (c) of this Section 2.17 on or prior to the applicable Extension Date, the Commitment of such Non-Consenting Lender shall automatically terminate in whole, and all Advances, interest, fees and other amounts due to such Non-Consenting Lender shall be due and payable, on such unextended Termination Date without any further notice or other action by the Borrower, such Lender or any other Person; provided that -------- such Non-Consenting Lender's rights under Sections 2.11, 2.14 and 8.04, and its obligations under Section 7.05, shall survive the Termination Date for such Lender as to matters occurring prior to such date. It is understood and agreed that no Lender shall have any obligation 28 whatsoever to agree to any request made by the Borrower for any requested extension of the Termination Date. (c) If less than all of the Lenders consent to any such request pursuant to subsection (a) of this Section 2.17, the Funding Agent shall promptly so notify the Consenting Lenders, and each Consenting Lender may, in its sole discretion, give written notice to the Funding Agent not later than 10 days prior to the Termination Date of the amount of any Non-Consenting Lenders' Commitments for which it is willing to accept an assignment. If the Consenting Lenders notify the Funding Agent that they are willing to accept assignments of Commitments in an aggregate amount that exceeds the amount of the Commitments of the Non-Consenting Lenders, such Commitments shall be allocated among the Consenting Lenders willing to accept such assignments in such amounts as are agreed between the Borrower and the Funding Agent. If after giving effect to the assignments of Commitments described above there remain any Commitments of Non-Consenting Lenders, the Borrower may arrange for one or more Consenting Lenders or other Eligible Assignees as Assuming Lenders to assume, effective as of the Extension Date, any Non-Consenting Lender's Commitment and all of the obligations of such Non-Consenting Lender under this Agreement thereafter arising, without recourse to or warranty by, or expense to, such Non-Consenting Lender; provided, however, -------- ------- that the amount of the Commitment of any such Assuming Lender as a result of such substitution shall in no event be less than $25,000,000 unless the amount of the Commitment of such Non-Consenting Lender is less than $25,000,000, in which case such Assuming Lender shall assume all of such lesser amount; and provided further that: - -------- ------- (i) any such Consenting Lender or Assuming Lender shall have paid to such Non-Consenting Lender (A) the aggregate principal amount of, and any interest accrued and unpaid to the effective date of the assignment on, the outstanding Advances, if any, of such Non-Consenting Lender plus (B) any ---- accrued but unpaid facility fees owing to such Non-Consenting Lender as of the effective date of such assignment; (ii) all additional costs, reimbursements, expense reimbursements and indemnities payable to such Non-Consenting Lender, and all other accrued and unpaid amounts owing to such Non-Consenting Lender hereunder, as of the effective date of such assignment shall have been paid to such Non-Consenting Lender; and (iii) with respect to any such Assuming Lender, the applicable processing and recordation fee required under Section 8.07(a) for such assignment shall have been paid; provided further that such Non-Consenting Lender's rights under Sections 2.11, - -------- ------- 2.14 and 8.04, and its obligations under Section 7.05, shall survive such assignment and assumption as to matters occurring prior to the date of assignment and assumption. At least three Business Days prior to any Extension Date, (A) each such Assuming Lender, if any, shall have delivered to the Borrower and the Funding Agent an Assumption Agreement, duly executed by such Assuming Lender, such Non-Consenting Lender, the Borrower and the Funding Agent, (B) any such Consenting Lender shall have delivered confirmation in writing satisfactory to the Borrower and the Funding Agent as to the increase in the amount of its Commitment and (C) each Non-Consenting Lender being replaced pursuant to this Section 2.17 shall have delivered to the Funding Agent any Note or Notes held by such Non-Consenting Lender. Upon the payment or 29 prepayment of all amounts referred to in clauses (i), (ii) and (iii) of the immediately preceding sentence, each such Consenting Lender or Assuming Lender, as of the Extension Date, will be substituted for such Non-Consenting Lender under this Agreement and shall be a Lender for all purposes of this Agreement, without any further acknowledgment by or the consent of the other Lenders, and the obligations of each such Non-Consenting Lender hereunder shall, by the provisions hereof, be released and discharged. (d) If (after giving effect to any assignments or assumptions pursuant to subsection (c) of this Section 2.17) Lenders having Commitments equal to at least 50% of the Commitments in effect immediately prior to the Extension Date consent in writing to a requested extension (whether by execution or delivery of an Assumption Agreement or otherwise) not later than one Business Day prior to such Extension Date, the Funding Agent shall so notify the Borrower, and, subject to the satisfaction of the applicable conditions in Section 3.02, the Termination Date then in effect shall be extended for the additional one-year period as described in subsection (a) of this Section 2.17, and all references in this Agreement, and in the Notes, if any, to the "Termination Date" shall, with respect to each Consenting Lender and each Assuming Lender for such Extension Date, refer to the Termination Date as so extended. Promptly following each Extension Date, the Funding Agent shall notify the Lenders (including, without limitation, each Assuming Lender) of the extension of the scheduled Termination Date in effect immediately prior thereto and shall thereupon record in the Register the relevant information with respect to each such Consenting Lender and each such Assuming Lender. ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING Section 3.01 Conditions Precedent to Effectiveness. This Agreement ------------------------------------- shall become effective on and as of the first date (the "Effective Date") on -------------- which the following conditions precedent have been satisfied: (a) The Borrower shall have paid all fees and expenses of the Agents and the Lenders payable hereunder and accrued as of the Effective Date (including the accrued fees and expenses of counsel to the Agents). (b) On the Effective Date, the following statements shall be true and the Funding Agent shall have received for the account of each Lender a certificate signed by a duly authorized officer of the Borrower, dated the Effective Date, stating that: (i) The representations and warranties contained in Section 4.01 are correct in all material respects on and as of the Effective Date, and (ii) No event has occurred and is continuing that constitutes a Default. (c) The Funding Agent shall have received on or before the Effective Date the following, each dated such day, in form and substance satisfactory to the Agents and (except for the Notes) in sufficient copies for each Lender: 30 (i) The Notes payable to the order of each of the Lenders, in a principal amount equal to each such Lender's Commitment. (ii) Certified copies of the resolutions of the Board of Directors (or committee thereof) of the Borrower and each other Loan Party approving this Agreement, the Notes and the Guaranty to which it is or is to be a party, and of all documents evidencing other necessary corporate action and governmental and other third party approvals and consents, if any, with respect to this Agreement, the Notes and the Guaranty. (iii) A certificate of the Secretary or an Assistant Secretary of each Loan Party certifying the names and true signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party and the other documents to be delivered hereunder. (iv) A guaranty in substantially the form of Exhibit E (as amended, supplemented or otherwise modified from time to time, the "Guaranty"), duly executed by each Guarantor. (v) An opinion of Alston & Bird, LLP, counsel for the Loan Parties, in substantially the form of Exhibit F hereto and as to such other matters as any Lender through the Agents may reasonably request. (vi) An opinion of Ashurst Morris Crisp, English counsel for the Borrower, in substantially the form of Exhibit G hereto and as to such other matters as any Lender through the Agents may reasonably request. (vii) An opinion of Shearman & Sterling, counsel for the Agents, in form and substance satisfactory to the Agents. (d) The termination of the commitments of the lenders and the payment in full of all amounts outstanding under the Amended and Restated Credit Agreement dated December 17, 1997 among the Borrower, the lenders parties thereto, Citibank, N.A. and NationsBank, N.A., as co-syndication agents, and The Chase Manhattan Bank, SunTrust Bank, Atlanta and Wachovia Bank, N.A., as managing agents. Section 3.02 Conditions Precedent to Each Borrowing, Each Increase ----------------------------------------------------- Date and Each Extension Date. The obligation of each Lender to make an Advance - ---------------------------- on the occasion of each Borrowing, each increase of Commitments pursuant to Section 2.05(b) and each extension of Commitments pursuant to Section 2.17 shall be subject to the conditions precedent that the Effective Date shall have occurred and on the date of such Borrowing, such Increase Date or the applicable Extension Date the following statements shall be true (and each of the giving of the applicable Notice of Borrowing, request for Commitment increase, request for Commitment extension and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Borrowing, such Increase Date or such Extension Date such statements are true): (a) the representations and warranties contained in Section 4.01 (excluding, in the case of Borrowings, clauses (g) and (i)(i) of Section 4.01) are correct in all material 31 respects on and as of the date of such date, before and after giving effect to such Borrowing, such Increase Date or such Extension Date and to the application of the proceeds therefrom, as though made on and as of such date, and (b) no event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, or such Increase Date or such Extension Date, that constitutes a Default. Section 3.03 Determinations Under Section 3.01. For purposes of --------------------------------- determining compliance with the conditions specified in Section 3.01, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the Funding Agent responsible for the transactions contemplated by this Agreement shall have received notice from such Lender prior to the date that the Borrower, by notice to the Lenders, designates as the proposed Effective Date, specifying its objection thereto. The Funding Agent shall promptly notify the Lenders and the Borrower of the occurrence of the Effective Date. ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.01 Representations and Warranties of the Borrower. The ---------------------------------------------- Borrower represents and warrants as follows: (a) Each Loan Party (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) is duly qualified and in good standing as a foreign corporation in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed is not reasonably likely to have a Material Adverse Effect and (iii) has all requisite corporate power and authority (including, without limitation, all governmental licenses, permits and other approvals) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted. (b) Set forth on Schedule 4.01(b) hereto is a complete and accurate list of all Significant Subsidiaries of each Loan Party as of the Effective Date, showing as of such date (as to each such Significant Subsidiary) the jurisdiction of its incorporation, the number of shares of each class of capital stock authorized, and the number of shares outstanding, on such date and the percentage of the outstanding shares of each such class owned (directly or indirectly) by such Loan Party and the number of shares covered by all outstanding options, warrants, rights of conversion or purchase and similar rights at such date. All of the outstanding capital stock of all of such Significant Subsidiaries has been validly issued, is fully paid and non-assessable and is owned by such Loan Party or one or more of its Subsidiaries free and clear of all Liens. Each such Significant Subsidiary (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) is duly qualified and in good standing as a foreign corporation in each other jurisdiction in which it owns or leases property or 32 in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed is not reasonably likely to have a Material Adverse Effect and (iii) has all requisite corporate power and authority (including, without limitation, all governmental licenses, permits and other approvals) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted. (c) The execution, delivery and performance by each Loan Party of this Agreement, the Notes and each other Loan Document to which it is or is to be a party, and the incurrence of the obligations provided for herein and therein, are within such Loan Party's corporate powers, have been duly authorized by all necessary corporate action, and do not (i) contravene such Loan Party's charter or bylaws, (ii) violate any law (including, without limitation, the Securities Exchange Act of 1934), rule, regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties or (iv) result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which is reasonably likely to have a Material Adverse Effect. (d) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for (i) the due execution, delivery, recordation, filing or performance by any Loan Party of this Agreement, the Notes or any other Loan Document to which it is or is to be a party, or for the performance of any Loan Document or (ii) the exercise by the Agents or any Lender of its rights under the Loan Documents, except for the authorizations, approvals, actions, notices and filings listed on Schedule 4.01(d), all of which have been duly obtained, taken, given or made and are in full force and effect. (e) This Agreement has been, and each of the Notes and each other Loan Document when delivered hereunder will have been, duly executed and delivered by each Loan Party party thereto. This Agreement is, and each of the Notes and each other Loan Document when delivered hereunder will be, the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms. (f) The Consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as at December 31, 2000, and the related Consolidated and consolidating statements of income and Consolidated statement of cash flows of the Borrower and its Subsidiaries for the fiscal year then ended, accompanied by an opinion of Arthur Andersen LLP, independent public accountants (as to such Consolidated financial statements), and the Consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as at March 31, 2001, and the related Consolidated and consolidating statements of income and Consolidated statement of cash flows of the Borrower and its Subsidiaries for the three months then ended, duly certified by the chief financial officer of the Borrower, copies of which have been furnished to each Lender, 33 fairly present, subject, in the case of said balance sheets as at March 21, 2001, and said statements of income and cash flows for the three months then ended, to year-end audit adjustments, the Consolidated and consolidating financial condition of the Borrower and its Subsidiaries as at such dates and the Consolidated and consolidating results of the operations of the Borrower and its Subsidiaries for the periods ended on such dates, all in accordance with United Kingdom generally accepted accounting principles applied on a consistent basis. (g) Since December 31, 2000, there has been no Material Adverse Change. (h) No written information, exhibit or report furnished by any Loan Party to any Agent or any Lender in connection with the negotiation of the Loan Documents or pursuant to the terms of the Loan Documents contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made therein not misleading in light of the circumstances under which they were made. (i) There is no action, suit, investigation, litigation or proceeding affecting any Loan Party or, to the best knowledge of the Loan Parties, any of its Subsidiaries pending or, to the best knowledge of the Loan Parties, threatened before any court, governmental agency or arbitrator that (i) would be reasonably likely to have a Material Adverse Effect (other than the matters described on Schedule 4.01(i) hereto (the "Disclosed Litigation")) and there has -------------------- been no material adverse change in the status, or financial effect on any Loan Party or any of its Subsidiaries, of the Disclosed Litigation from that described on Schedule 4.01(i) or (ii) purports to affect the legality, validity or enforceability of this Agreement, any Note or any other Loan Document or the consummation of the transactions contemplated hereby. (j) Following application of the proceeds of each Advance, not more than 25 percent of the value of the assets (either of the Borrower only or of the Borrower and its Subsidiaries on a Consolidated basis) subject to the provisions of Section 5.02(a) or 5.02(d) or subject to any restriction contained in any agreement or instrument between the Borrower and any Lender or any Affiliate of any Lender relating to Debt and within the scope of Section 6.01(e) will be margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System). Neither the making of any Advance nor the use of proceeds thereof will violate or be inconsistent with the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System. (k) No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan that has resulted in or is reasonably expected to result in a Material Adverse Effect. (l) Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) required to be filed for each Plan, copies of which have been filed with the Internal Revenue Service and, with respect to each Plan whose funded current liability percentage (as defined in Section 302(d)(8) of ERISA) is less than 100%, furnished to the Lenders, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status. (m) Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably expected to incur (i) any liability under Section 4064 or 4069 of ERISA or (ii) any Withdrawal 34 Liability to any Multiemployer Plan that has resulted or would be reasonably likely to result in a Material Adverse Effect. (n) Neither any Loan Party nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and, to the best knowledge of any Loan Party or any ERISA Affiliate, no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA. (o) Each Loan Party and each of its Subsidiaries and Affiliates has filed, has caused to be filed or has been included in all tax returns (Federal, state, local and foreign) required to be filed and has paid all taxes shown thereon to be due, together with applicable interest and penalties. (p) Neither any Loan Party nor any of its Subsidiaries is an "investment company", or a company "controlled by" an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended. Neither the making of any Advances nor the application of the proceeds or repayment thereof by the Borrower, nor the consummation of the other transactions contemplated hereby, will violate any provision of such Act or any rule, regulation or order of the Securities and Exchange Commission thereunder. (q) Neither the Borrower nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended. (r) Each Subsidiary of the Borrower engaged in advisory or management activities, if any, is duly registered as an investment adviser as and to the extent required under the Investment Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder. Each Subsidiary of the Borrower engaged in the broker-dealer business, if any, is duly registered as a broker-dealer as and to the extent required under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder and, as and to the extent required is a member in good standing of the National Association of Securities Dealers, Inc. (s) As of the Effective Date, neither the Borrower nor any of its Subsidiaries is in default and no waiver of default is in effect with respect to the payment of any principal or interest of any Existing Debt for borrowed money. (t) The obligations of each Loan Party under the Loan Documents to which it is a party constitute direct, unconditional and general obligations of such Loan Party that rank and will rank at least pari passu in priority of payment and in all other respects with all other Debt of such Loan Party. (u) Each Loan Party is, individually and together with its Subsidiaries, Solvent. (v) Set forth on Schedule 4.01(v) hereto is a complete and accurate list of all Existing Debt showing as of the date hereof the principal amount outstanding thereunder. 35 (w) The Borrower and each of its Significant Subsidiaries owns or has fully sufficient right to use, free from all material restrictions (other than Permitted Liens), all real and personal (including, without limitation, intellectual) properties that are necessary for the operation of their respective businesses as currently conducted. (x) Except under documents governing any Existing Debt and except for any restrictions under documents governing Debt of a Person that shall be acquired by, or merged with or into, the Borrower or any Subsidiary of the Borrower, no Subsidiary of the Borrower is party to any agreement prohibiting, conditioning or limiting the payment of dividends or other distributions to the Borrower or any of its Subsidiaries or the repayment of Debt owed to the Borrower by any Subsidiary of the Borrower. ARTICLE V COVENANTS OF THE BORROWER Section 5.01 Affirmative Covenants. So long as any Advance shall --------------------- remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will: (a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries ------------------------- to comply, in all material respects, with all applicable laws, rules, regulations and orders, such compliance to include (to the extent applicable), without limitation, compliance with the Investment Advisers Act of 1940, as amended, ERISA and environmental laws, except where the failure to do so would not, and would not be reasonably expected to, have a Material Adverse Effect. (b) Payment of Taxes, Etc. Pay and discharge, and cause each of its --------------------- Subsidiaries to pay and discharge, before the same shall become delinquent, all taxes, assessments, claims and governmental charges or levies imposed upon it or upon its property, except to the extent that any failure to do so would not, and would not be reasonably expected to, have a Material Adverse Effect; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, claim or charge that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained. (c) Maintenance of Insurance. Maintain, and cause each of its Significant ------------------------ Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Significant Subsidiary operates. (d) Preservation of Corporate Existence, Etc. Preserve and maintain, and ---------------------------------------- cause each of its Subsidiaries to preserve and maintain, its existence, legal structure, legal name, rights (charter and statutory), permits, licenses, approvals, registrations, privileges and franchises; provided, however, that the Borrower and its Subsidiaries may consummate any merger or consolidation permitted under Section 5.02(c); and provided further that neither the Borrower nor any of its Subsidiaries shall be required to preserve any right, permit, license, approval, 36 registration, privilege or franchise if the Board of Directors of the Borrower or such Subsidiary shall determine that the failure to so maintain such existence (in the case of any Subsidiary that is not a Loan Party) or such rights and franchises (in the case of the Borrower or any of its Subsidiaries) would not, and would not be reasonably expected to, have a Material Adverse Effect. (e) Visitation Rights. At any reasonable time and from time to time, permit ----------------- any Agent or any of the Lenders or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Borrower and any of its Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower and any of its Subsidiaries with any of their officers or directors and with their independent certified public accountants. (f) Keeping of Books. Keep, and cause each of its Significant Subsidiaries ---------------- to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each such Significant Subsidiary in accordance with generally accepted accounting principles applicable to such Person in effect from time to time. (g) Maintenance of Properties, Etc. Take all reasonable action to maintain ------------------------------ and preserve, and cause each of its Subsidiaries to take all reasonable action to maintain and preserve, all of its properties that are necessary in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except where the failure to so maintain and preserve such properties would not, and would not be reasonably expected to, have a Material Adverse Effect. (h) New Material Subsidiaries. Promptly and in any event within 30 days ------------------------- following the request of the Required Lenders made after either (i) the organization or acquisition of any new Material Subsidiary or (ii) the delivery of audited annual financial statements pursuant to Section 5.01(j) that indicate that a Subsidiary of the Borrower that is not at such time a guarantor is a Material Subsidiary, cause such Material Subsidiary to execute and deliver an Assumption of Guaranty (as defined in the Guaranty), together with such documents as the Required Lenders may request evidencing corporate action taken to authorize such execution and delivery and the incumbency and signatures of officers of such Material Subsidiary, provided that a Material Subsidiary shall not be required to become a Guarantor if (A) a guaranty by such Material Subsidiary would result in materially adverse tax consequences to the Borrower and its Subsidiaries or shareholders of the Borrower or (B) a guaranty by such Material Subsidiary is prohibited or limited by regulatory requirements or applicable law. (i) Use of Proceeds. Use the proceeds of the Advances solely as provided in --------------- Section 2.16 and otherwise in accordance with the terms hereof. (j) Reporting Requirements. Furnish to the Lenders: ---------------------- (i) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Borrower, Consolidated and consolidating balance sheets of the Borrower and its 37 Subsidiaries as of the end of such quarter and Consolidated and consolidating statements of income and Consolidated cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments) by the chief financial officer of the Borrower as having been prepared in accordance with generally accepted accounting principles and certificates of the chief financial officer of the Borrower as to compliance with the terms of this Agreement and setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 5.03, provided that in the event of any change in UK GAAP used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 5.03, a statement of reconciliation conforming such financial statements to UK GAAP; (ii) as soon as available and in any event within 150 days after the end of each fiscal year of the Borrower, a copy of the annual audit report for such year for the Borrower and its Subsidiaries, containing Consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as of the end of such fiscal year and Consolidated and consolidating statements of income and Consolidated cash flows of the Borrower and its Subsidiaries for such fiscal year, in each case accompanied by an opinion acceptable to the Required Lenders by Arthur Andersen LLP or other independent public accountants acceptable to the Required Lenders (as to such Consolidated financial statements), provided that in the event of any change in UK GAAP used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 5.03, a statement of reconciliation conforming such financial statements to UK GAAP; (iii) as soon as possible and in any event within five days after the occurrence of each Default continuing on the date of such statement, a statement of the chief financial officer of the Borrower setting forth details of such Default and the action that the Borrower has taken and proposes to take with respect thereto; (iv) promptly after the commencement thereof, notice of all actions and proceedings before any court, governmental agency or arbitrator affecting the Borrower or any of its Subsidiaries of the type described in Section 4.01(i); (v) (A) promptly and in any event within 20 days after any Loan Party or any ERISA Affiliate knows or has reason to know that (1) any ERISA Event has occurred which could result in a material liability of any Loan Party or any ERISA Affiliate, or (2) any Loan Party or any ERISA Affiliate has incurred or is reasonably expected to incur a material liability under Section 4064 or 4069 of ERISA, a statement of the chief financial officer of the Borrower describing such ERISA Event and the circumstances giving rise to, and the amount of such liability and the action, if any, that such Loan Party or such ERISA Affiliate has taken and proposes to take with respect thereto and (B) on the date any records, 38 documents or other information must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of such records, documents and information; (vi) promptly and in any event within two Business Days after receipt thereof by any Loan Party or any ERISA Affiliate, copies of each notice from the PBGC stating its intention to terminate any Plan or to have a trustee appointed to administer any Plan; (vii) promptly upon request from the Funding Agent or any Lender, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) required to be filed with respect to each Plan whose funded current liability percentage (as defined in Section 302(d)(8) of ERISA) is less than 100%; (viii) promptly and in any event within 20 days after receipt thereof by any Loan Party or any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each notice concerning (A) the imposition on any Loan Party or any ERISA Affiliate of Withdrawal Liability in a material amount by any such Multiemployer Plan, (B) the reorganization or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the amount of liability incurred, or that may be incurred, by any Loan Party or any ERISA Affiliate in connection with any event described in clause (A) or (B); (ix) promptly and in any event within five Business Days after the organization or acquisition of any Material Subsidiary, notice of such event; and (x) such other information respecting the Borrower or any of its Subsidiaries as any Lender through the Funding Agent may from time to time reasonably request. Section 5.02 Negative Covenants. So long as any Advance shall remain ------------------ unpaid or any Lender shall have any Commitment hereunder, the Borrower will not, at any time: (a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of ---------- its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any of its properties of any character (including, without limitation, accounts) whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any accounts or other right to receive income, excluding, however, from the operation of the foregoing restrictions the following: (i) Permitted Liens; (ii) Liens on deposit accounts of the Borrower and its Subsidiaries in respect of their cash pooling operations; (iii) purchase money Liens upon or in real property or equipment acquired or held by the Borrower or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such property or equipment or to secure Debt incurred solely 39 for the purpose of financing the acquisition of any such property or equipment, or Liens existing on any such property or equipment at the time of acquisition (other than any such Liens created in contemplation of such acquisition that were not incurred to finance the acquisition of such property), or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount; provided, however, that no such Lien shall extend to or cover any properties of any character other than the property or equipment being acquired, and no such extension, renewal or replacement shall extend to or cover any property not theretofore subject to the Lien being extended, renewed or replaced; and provided further that the aggregate principal amount of the Debt secured by Liens permitted by this clause (iii) and clause (iv) below shall not exceed $100,000,000 at any time outstanding; (iv) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Borrower or any Subsidiary of the Borrower or becomes a Subsidiary of the Borrower; provided that such Liens were not created in contemplation of such merger, consolidation or investment and do not extend to any assets other than those of the Person merged into or consolidated with the Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary; provided, further, that the aggregate principal amount of the Debt secured by Liens permitted by this clause (iv) and clause (iii) above shall not exceed $100,000,000 at any time outstanding; (v) Liens arising pursuant to one or more securitization programs permitted pursuant to Section 5.02(d)(ii); (vi) the replacement, extension or renewal of any Lien permitted by clauses (iii) through (iv) above upon or in the same property theretofore subject thereto or the replacement, extension or renewal (without increase in the amount or addition of any direct or contingent obligor) of the Debt secured thereby; and (vii) Liens existing as of the Effective Date as described on Schedule 5.02(a). (b) Loans. Make or hold, or permit any of its Subsidiaries to make or hold, ----- loans or advances to any Person other than (i) loans or advances between or among the Borrower and any of its Subsidiaries, (ii) loans or advances to Affiliates of the Borrower in an aggregate amount at any one time outstanding not to exceed $100,000,000 and (iii) loans or advances not otherwise permitted by clauses (i) and (ii) above in an aggregate amount at any one time outstanding not to exceed $40,000,000. (c) Mergers, Etc. Merge into or consolidate with any Person or permit any ------------ Person to merge into it, or permit any of its Subsidiaries to do so, except that (i) any of the Borrower's Subsidiaries may merge into the Borrower, (ii) any Subsidiary of the Borrower that is not a Restricted Subsidiary may merge with any other Subsidiary of the Borrower that is not a Restricted Subsidiary, (iii) any Subsidiary of a Guarantor may merge with any Guarantor or a Subsidiary of a Guarantor, 40 (iv) any Guarantor may merge with any other Subsidiary of the Borrower, and (v) mergers in connection with acquisitions of Investments to the extent not prohibited pursuant to Section 5.02(e); provided, however, that in each case, immediately after giving effect thereto, no event shall occur and be continuing that constitutes a Default and, in the case of any such merger to which the Borrower is a party, the Borrower is the surviving corporation or, in the case of any merger to which a Guarantor, but not the Borrower, is a party, the surviving corporation is a Guarantor and is not (as a result of such merger) subject to any agreement described in Section 5.02(k)(i), (ii) or (iii). (d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of, --------------------- or permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets, or grant any option or other right to purchase, lease or otherwise acquire any assets, except: (i) in a transaction authorized by subsection (c) of this Section, (ii) the sale or other disposition to a third-party investor by the Borrower or any of its Subsidiaries of its rights to receive distribution fees and contingent deferred sales charges pursuant to a securitization program, (iii) the Borrower and its Subsidiaries may, during any fiscal year of the Borrower, sell, lease, transfer or otherwise dispose of assets (including equity securities owned by such Persons) which generated up to, but not to exceed, twenty percent (20%) of the consolidated revenues of the Borrower during the immediately preceding fiscal year of the Borrower; (iv) any Subsidiary of the Borrower that is not a Restricted Subsidiary may sell, lease, transfer or otherwise dispose of all or substantially all of its assets to the Borrower or a wholly-owned Subsidiary of the Borrower that is not a Restricted Subsidiary or a Guarantor; (v) any Guarantor or any Subsidiary of a Guarantor may sell, lease, transfer or otherwise dispose of all or substantially all of its assets to any other Guarantor or a Subsidiary of a Guarantor; and (vi) sales or other dispositions of obsolete equipment and furniture. (e) Investments. Make, or permit any of its Subsidiaries to make, any ----------- Investment in any Person unless each of the following conditions are satisfied: (i) after giving effect to such Investment, no Event of Default shall be continuing; and (ii) if and to the extent such Investment relates to the purchase or acquisition of all of the capital stock of, or all or substantially all of the assets of, such Person (A) such Person shall be in substantially similar lines of business as the Borrower and its Subsidiaries or businesses reasonably related or complimentary thereto and (B) after giving effect to such Investment, the Borrower will, on a pro forma basis, be in compliance with the financial covenants set forth in Section 5.03. 41 (f) Dividends, Etc. Declare or make any dividend payment or other -------------- distribution of assets, properties, cash, rights, obligations or securities on account of any class of shares of capital stock of the Borrower, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom, the Borrower may (i) declare and pay dividends and distributions payable only in ordinary shares and/or exchangeable shares of the Borrower and (ii) declare and pay cash dividends and make other distributions to its stockholders solely out of 60% of net income of the Borrower arising after December 31, 2000 and computed on a cumulative, Consolidated basis. (g) Change in Nature of Business. Make, or permit any of its Significant ---------------------------- Subsidiaries to make, any material change in the nature of its business as carried on at the date hereof. (h) Charter Amendments. Amend, or permit any of its Significant ------------------ Subsidiaries to amend, its certificate of incorporation or bylaws in a manner that has a Material Adverse Effect. (i) Accounting Changes. Make or permit, or permit any of its Significant ------------------ Subsidiaries to make or permit, any material change in accounting policies or reporting practices, except as required by the generally accepted accounting principles applicable to the Borrower or such Significant Subsidiary. (j) Limitation on Subsidiary Dividends, Etc. Enter into or suffer to exist, --------------------------------------- or permit any of its Subsidiaries to enter into or suffer to exist, any agreement prohibiting, conditioning or limiting (i) the payment of dividends by any Subsidiary of the Borrower, (ii) the payment of Debt of a Subsidiary of the Borrower to the Borrower or other Subsidiaries of the Borrower or (iii) the ability of any Subsidiary of the Borrower to guaranty Debt of the Borrower, other than (A) in favor of the Lenders, (B) in connection with any Existing Debt (but not extensions or refinancings of any such Existing Debt) or (C) as required by any law or regulation applicable to such Person. (k) Negative Pledge. Enter into or suffer to exist, or permit any of its --------------- Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon any of its property or assets other than (i) in favor of the Lenders, (ii) in connection with any Existing Debt (but not extensions or refinancings of any such Existing Debt) or (iii) with respect to purchase money liens, capital leases and operating leases, but only as to the assets so purchased or leased. (l) Partnerships, Etc. Become a general partner in any general or limited ----------------- partnership or joint venture, or permit any of its Subsidiaries to do so, other than any Subsidiary the sole assets of which consist of its interest in such partnership or joint venture. (m) Transactions with Affiliates. Conduct, or permit any of its ---------------------------- Subsidiaries to conduct, transactions with any of their Affiliates except in the ordinary course of business of and pursuant to the reasonable requirements of the Borrower's or such Subsidiaries business and upon fair and reasonable terms that are no less favorable to the Borrower or such Subsidiary, as the case may be, than those which would be obtained in a comparable arm's-length transaction with a Person not an Affiliate; provided that the foregoing restrictions shall not apply to 42 (i) any transaction (A) between any Loan Parties, (B) between any Subsidiary of the Borrower that is not a Restricted Subsidiary and any other Subsidiary of the Borrower that is not a Restricted Subsidiary, (C) between any Guarantor and any of its Subsidiaries, and (D) between the Borrower or any of its Subsidiaries and their respective employees to make loans to such employees for purposes of exercising stock options of such employees and paying tax liabilities of such employees associated therewith, and (ii) transactions between the Borrower or any Subsidiary or other Investment Company sponsored by the Borrower or any Subsidiary or for which the Borrower or any Subsidiary provides advisory, administrative, supervisory, management, consulting, underwriting or similar services, that are otherwise permissible under the Investment Company Act of 1940, the Investment Advisers Act of 1940 and the applicable management contract. Section 5.03 Financial Covenants. So long as any Advance shall remain ------------------- unpaid or any Lender shall have any Commitment hereunder, the Borrower will: (a) Debt/EBITDA Ratio. Maintain at the end of each fiscal quarter of the ----------------- Borrower a Debt/EBITDA Ratio of not greater than 3.00:1.00. (b) Coverage Ratio. Maintain at the end of each fiscal quarter of the -------------- Borrower a ratio of EBITDA for the four consecutive fiscal quarters of the Borrower ended on or immediately prior to the date of determination to interest payable on, and amortization of debt discount in respect of, Adjusted Debt for such period, of not less than 4.00:1.00. ARTICLE VI EVENTS OF DEFAULT Section 6.01 Events of Default. If any of the following events ----------------- ("Events of Default") shall occur and be continuing: ----------------- (a) The Borrower shall fail to pay any principal of any Advance when the same becomes due and payable; or the Borrower shall fail to pay any interest on any Advance or make any other payment of fees or other amounts payable under this Agreement or any Note within three days after the same becomes due and payable; or (b) Any representation or warranty made by the Borrower or any Loan Party under any Loan Document or by the Borrower (or any of its officers) in connection with any Loan Document shall prove to have been incorrect in any material respect when made; or (c) (i) The Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 5.01(d), (e) or (j), 5.02 or 5.03, or (ii) the Borrower shall fail to perform or observe any other term, covenant or agreement contained in this Agreement on its part to be performed or observed if such failure shall remain unremedied for 30 days after written notice thereof shall have been given to the Borrower by an Agent or any Lender; or 43 (d) The Borrower or any of its Subsidiaries shall fail to pay any principal of or premium or interest on any Debt that is outstanding in a principal or notional amount of at least $50,000,000 (or the equivalent thereof in any other currencies) in the aggregate (but excluding Debt outstanding hereunder) of the Borrower or such Subsidiary (as the case may be), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid or redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or (e) The Borrower or any of its Significant Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower or any of its Significant Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 45 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Borrower or any of its Significant Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (e); or (f) Any judgment or order for the payment of money in excess of $50,000,000 (or the equivalent thereof in any other currencies) shall be rendered against the Borrower or any of its Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; provided, however, that any such judgment or order shall not be an Event of Default under this Section 6.01(f) if and for so long as (i) the amount of such judgment or order in excess of $50,000,000 (or the equivalent thereof in any other currencies) is covered by a valid and binding policy of insurance between the defendant and the insurer covering payment thereof and (ii) such insurer, which shall be rated at least "A" by A.M. Best Company, has been notified of, and has not disputed the claim made for payment of, the amount of such excess amount; or (g) Any non-monetary judgment or order shall be rendered against the Borrower or any of its Subsidiaries that could be reasonably expected to have a Material Adverse Effect, and 44 there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (h) (i) Any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of the Borrower (or other securities convertible into such Voting Stock) representing 33% or more of the combined voting power of all Voting Stock of the Borrower; or (ii) during any period of up to 24 consecutive months, commencing after the date of this Agreement, individuals who at the beginning of such 24-month period were directors of the Borrower shall cease for any reason to constitute a majority of the board of directors of the Borrower; or (i) Any ERISA Event shall have occurred with respect to a Plan, or any Loan Party or any ERISA Affiliate shall have incurred or be reasonably expected to incur liability under Section 4064 or 4069 of ERISA, and the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to which an ERISA Event shall have occurred and then exist (or the liability of the Loan Parties and the ERISA Affiliates incurred or expected to be incurred with respect to Section 4064 or 4069 of ERISA or related to such ERISA Event) exceeds $25,000,000; or (j) Any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined as of the date of such notification), exceeds $25,000,000 or requires payments exceeding $5,000,000 per annum; or (k) Any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, and as a result of such reorganization or termination the aggregate annual contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years of such Multiemployer Plans immediately preceding the plan year in which such reorganization or termination occurs by an amount exceeding $25,000,000; or (l) Any governmental authority or regulatory body shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which prohibits, enjoins or otherwise restricts the Borrower or any of its Subsidiaries in a manner that has a Material Adverse Effect; then, and in any such event, the Funding Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the obligation of each Lender to make Advances to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Notes, all interest thereon and all other amounts payable under this Agreement to be 45 forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to make Advances shall automatically be terminated and (B) the Notes, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. ARTICLE VII THE AGENTS Section 7.01 Authorization and Action. Each Lender hereby appoints and ------------------------ authorizes the Funding Agent and the Co-Syndication Agents to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Funding Agent and the Co-Syndication Agents by the terms hereof, together with such powers and discretion as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Notes), the Funding Agent and the Co-Syndication Agents shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding upon all Lenders and all holders of Notes; provided, however, that neither the Funding Agent nor any Co-Syndication Agent shall be required to take any action that exposes such Agent to personal liability or that is contrary to this Agreement or applicable law. The Funding Agent and each Co-Syndication Agent agree to give to each Lender prompt notice of each notice given to it by the Borrower pursuant to the terms of this Agreement. Section 7.02 Agents' Reliance, Etc. Neither the Funding Agent, any --------------------- Co-Syndication Agent nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, each Agent: (i) may treat the payee of any Note as the holder thereof until the Funding Agent receives and accepts an Assignment and Acceptance entered into by the Lender that is the payee of such Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07; (ii) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or to inspect the property (including the books and records) of the Borrower; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and (vi) shall 46 incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram or telex) believed by it to be genuine and signed or sent by the proper party or parties. Section 7.03 Citibank, Bank of America and Affiliates. With respect to ---------------------------------------- its Commitment, the Advances made by it and the Note issued to it, each of Citibank and Bank of America shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not an Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include each of Citibank and Bank of America in its individual capacity. Each of Citibank and Bank of America and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with, the Borrower, any of its Subsidiaries and any Person who may do business with or own securities of the Borrower or any such Subsidiary, all as if Citibank and Bank of America were not Agents and without any duty to account therefor to the Lenders. Section 7.04 Lender Credit Decision. Each Lender acknowledges that it ---------------------- has, independently and without reliance upon any Agent or any other Lender and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon any Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. Section 7.05 Indemnification. The Lenders agree to indemnify the --------------- Funding Agent and each Co-Syndication Agent (to the extent not reimbursed by the Borrower), ratably according to the respective principal amounts of the Notes then held by each of them (or if no Notes are at the time outstanding, ratably according to the respective amounts of their Commitments), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against such Agent in any way relating to or arising out of this Agreement or any action taken or omitted by such Agent under this Agreement (collectively, the "Indemnified ----------- Costs"), provided that no Lender shall be liable for any portion of such - ----- liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Funding Agent and each Co-Syndication Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that such Agent is not reimbursed for such expenses by the Borrower. In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05 applies whether any such investigation, litigation or proceeding is brought by any Agent, any Lender or a third party. 47 Section 7.06 Successor Agents. The Funding Agent may resign at any ---------------- time by giving written notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Funding Agent with the consent, so long as no Event of Default has occurred and is continuing, of the Borrower (which consent shall not be unreasonably withheld or delayed). If no successor Funding Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Funding Agent's giving of notice of resignation or the Required Lenders' removal of the retiring Funding Agent, then the retiring Funding Agent may, on behalf of the Lenders, appoint a successor Funding Agent, which shall be an Eligible Assignee. Upon the acceptance of any appointment as Funding Agent hereunder by a successor Funding Agent, such successor Funding Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Funding Agent, and the retiring Funding Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Funding Agent's resignation or removal hereunder as Funding Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Funding Agent under this Agreement. (a) Any Co-Syndication Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower. 48 Section 7.07 Co-Agents. The co-agents shall have no duties or --------- obligations under this Agreement or the other Loan Documents in their capacities as co-agents. ARTICLE VIII MISCELLANEOUS Section 8.01 Amendments, Etc. No amendment or waiver of any provision --------------- of this Agreement or the Notes, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Lenders, do any of the following: (a) waive any of the conditions specified in Section 3.01, (b) increase or extend the Commitments of the Lenders (other than pursuant to Section 2.05(b) or 2.17) or subject the Lenders to any additional obligations, (c) reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder, (d) postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, (e) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Lenders, that shall be required for the Lenders or any of them to take any action hereunder, (f) release any obligations of the Guarantors or (g) amend this Section 8.01; and provided further that no amendment, waiver or consent shall, unless in writing and signed by the Funding Agent or any Co-Syndication Agent (as the case may be) in addition to the Lenders required above to take such action, affect the rights or duties of the Funding Agent or such Co-Syndication Agent under this Agreement or any Note. Section 8.02 Notices, Etc. All notices and other communications ------------ provided for hereunder shall be in writing (including telecopier, telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed or delivered, if to the Borrower, at its address at 11 Devonshire Square, London EC2N 4YR, England, Attention: Michael S. Perman, with a copy to 1315 Peachtree Street N.E., Suite 500, Atlanta, Georgia 30309, Attention: Mark Bole; if to any Initial Lender, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender, at its Domestic Lending Office specified in the Assumption Agreement or the Assignment and Acceptance pursuant to which it became a Lender; and if to the Funding Agent pursuant to Article II, at its address at 100 Tryon Street, Charlotte, North Carolina 28255, Attention: Margaret Rhodes, and if the Funding Agent pursuant to any provision of this Agreement other than Article II, at its address at 600 Peachtree Street N.E., Atlanta, Georgia 30308, Attention: Betty Reed; or, as to the Borrower or the Funding Agent, at such other address as shall be designated by such party in a written notice to the other parties and, as to each other party, at such other address as shall be designated by such party in a written notice to the Borrower and the Funding Agent. All such notices and communications shall, when mailed, telecopied, telegraphed or telexed, be effective when deposited in the mails, telecopied, delivered to the telegraph company or confirmed by telex answerback, respectively, except that notices and communications to the Funding Agent pursuant to Article II, III or VII shall not be effective until received by the Funding Agent. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or the Notes or of any Exhibit hereto to 49 be executed and delivered hereunder shall be effective as delivery of a manually executed counterpart thereof. Section 8.03 No Waiver; Remedies. No failure on the part of any ------------------- Lender, any Co-Syndication Agent or the Funding Agent to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. Section 8.04 Costs and Expenses. The Borrower agrees to pay on demand ------------------ all costs and expenses of the Agents in connection with the preparation, execution, delivery, administration, modification and amendment of this Agreement, the Notes and the other documents to be delivered hereunder, including, without limitation, (A) all due diligence, syndication (including printing, distribution and bank meetings), transportation, computer, duplication, appraisal, consultant, and audit expenses and (B) the reasonable fees and expenses of counsel for the Agents with respect thereto and with respect to advising each Agent as to its rights and responsibilities under this Agreement. The Borrower further agrees to pay on demand all costs and expenses of the Agents and the Lenders, if any (including, without limitation, reasonable counsel fees and expenses), in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Notes and the other documents to be delivered hereunder, including, without limitation, reasonable fees and expenses of counsel for each Agent and each Lender in connection with the enforcement of rights under this Section 8.04(a). (a) The Borrower agrees to indemnify and hold harmless the Funding Agent, each Co-Syndication Agent and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each, an "Indemnified ----------- Party") from and against any and all claims, damages, losses, liabilities and - ----- expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) the Notes, this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Advances, except to the extent such claim, damage, loss, liability or expense resulted from such Indemnified Party's gross negligence or willful misconduct. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 8.04(b) applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, its directors, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. The Borrower also agrees not to assert any claim against the Funding Agent, any Co-Syndication Agent, any Lender, any of their Affiliates, or any of their respective directors, officers, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Notes, this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Advances. 50 (b) If any payment of principal of, or Conversion of, any Eurocurrency Rate Advance is made by the Borrower to or for the account of a Lender other than on the last day of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.08(c) or (d), 2.10 or 2.12, acceleration of the maturity of the Notes pursuant to Section 6.01 or for any other reason, or by an Eligible Assignee to a Lender other than on the last day of the Interest Period for such Advance upon an assignment of rights and obligations under this Agreement pursuant to Section 8.07 as a result of a demand by the Borrower pursuant to Section 8.07(a), the Borrower shall, upon demand by such Lender (with a copy of such demand to the Funding Agent), pay to the Funding Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Advance, less the return such Lender reasonably expects to receive on its redeployment of funds. (c) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in Sections 2.11, 2.14 and 8.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Notes. Section 8.05 Right of Set-off. Upon the occurrence and during the ---------------- continuance of any Event of Default, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Note held by such Lender, whether or not such Lender shall have made any demand under this Agreement or such Note and although such obligations may be unmatured. Each Lender agrees promptly to notify the Borrower after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender and its Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Lender and its Affiliates may have. Section 8.06 Binding Effect. This Agreement shall become effective -------------- when it shall have been executed by the Borrower and the Funding Agent and each Co-Syndication Agent, the conditions precedent set forth in Section 3.01 shall have been satisfied and when the Funding Agent shall have been notified by each Initial Lender that such Initial Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Funding Agent, each Co-Syndication Agent and each Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders. Section 8.07 Assignments and Participations. (a) Each Lender may, with ------------------------------ the consent, not to be unreasonably withheld, of the Funding Agent and, unless an Event of Default has occurred and is continuing, the Borrower and, if demanded by the Borrower at a time when no Default has occurred and is continuing (following a demand by such Lender pursuant to 51 Section 2.11 or 2.14 or a notice by such Lender pursuant to Section 2.12) upon at least five Business Days' notice to such Lender and the Funding Agent, will assign to one or more Persons all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender or an assignment of all of a Lender's rights and obligations under this Agreement, the amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $15,000,000, (iii) unless an Event of Default shall have occurred and be continuing, each such assignment shall be to an Eligible Assignee, (iv) each such assignment made as a result of a demand by the Borrower pursuant to this Section 8.07(a) shall be arranged by the Borrower after consultation with the Funding Agent and shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the assigning Lender under this Agreement, (v) no Lender shall be obligated to make any such assignment as a result of a demand by the Borrower pursuant to this Section 8.07(a) unless and until such Lender shall have received one or more payments from either the Borrower or one or more Eligible Assignees in an aggregate amount at least equal to the aggregate outstanding principal amount of the Advances owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement, (vi) any demand by the Borrower pursuant to this Section 8.07(a) shall be made on all Lenders that have made a demand pursuant to Section 2.11 or 2.14 or given notice pursuant to Section 2.12, as the case may be, and (vii) the parties to each such assignment shall execute and deliver to the Funding Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with any Note subject to such assignment and a processing and recordation fee of $3,500 provided that, in the case of an assignment of rights and obligations under this Agreement as a result of a demand by the Borrower, the Borrower shall pay the processing and recordation fee of $3,500, which fee shall not be payable if the assignee is an existing Lender; provided further, that the consent of the Funding Agent and the Borrower shall not be required in the case of any assignment by a Lender to one or more of such Lender's Affiliates. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (y) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto). (b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any 52 statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Funding Agent, any Co-Syndication Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the Funding Agent and each Co-Syndication Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to such Agent by the terms hereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender. (c) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with any Note or Notes subject to such assignment, the Funding Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower. Within five Business Days after its receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Funding Agent in exchange for the surrendered Note a new Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it pursuant to such Assignment and Acceptance and, if the assigning Lender has retained a Commitment hereunder, a new Note to the order of the assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit A hereto. (d) The Funding Agent shall maintain at its address referred to in Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Advances owing to, each Lender from time to time (the "Register"). The entries in the Register shall be -------- conclusive and binding for all purposes, absent manifest error, and the Borrower, the Funding Agent, each Co-Syndication Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. (e) Each Lender may sell participations to one or more banks or other entities (other than the Borrower or any of its Affiliates) in or to all or a portion of its rights and obligations 53 under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) such Lender's obligations under this Agreement (including, without limitation, its Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrower, the Funding Agent, each Co-Syndication Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement, (v) all amounts payable to a Lender under this Agreement (including, without limitation, Sections 2.11, 2.14 and 8.04) shall be determined as if such Lender had not granted any such participations and (vi) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of this Agreement or any Note, or any consent to any departure by the Borrower therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation. (f) Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 8.07, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any Confidential Information relating to the Borrower received by it from such Lender by executing a confidentiality letter substantially in the form of Exhibit H. (g) Any Lender may at any time, without the consent of the Funding Agent or the Borrower, create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the Advances owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System. (h) Any Lender may at any time, without the consent of the Funding Agent or the Borrower, but with notice to the Funding Agent, assign all or a part of its rights under this Agreement to any Affiliate of such Lender. (i) Notwithstanding any other provision of this Agreement, no assignee of a Lender, which as of the date of any assignment to it pursuant to this Section 8.07 would be entitled to receive any greater payment under Section 2.11 or 2.14 than the assigning Lender would have been entitled to receive as of such date under such Sections with respect to the rights assigned, shall be entitled to receive any greater payments than such assigning Lender would have been entitled to receive unless the Borrower has expressly consented in writing to waive the benefit of this provision at the time of such assignment. Section 8.08 Confidentiality. None of the Funding Agent, any --------------- Co-Syndication Agent nor any Lender shall disclose any Confidential Information to any other Person without the consent of the Borrower, other than (a) to such Agent's or such Lender's Affiliates and their 54 officers, directors, employees, agents and advisors and, as contemplated by Section 8.07(f), to actual or prospective assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process (provided that, to the extent practicable and legally permissible, such party shall give the Borrower prior notice of any such legally required disclosure) and (c) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking. Section 8.09 Governing Law. This Agreement and the Notes shall be ------------- governed by, and construed in accordance with, the laws of the State of New York. Section 8.10 Execution in Counterparts. ------------------------- This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement. Section 8.11 Jurisdiction, Etc. (a) Each of the parties hereto hereby ----------------- irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court. The Borrower hereby agrees that service of process in any such action or proceeding brought in any such New York State court or in such federal court may be made upon the Borrower c/o AVZ Inc. at its offices at 1315 Peachtree Street N.E., Suite 500, Atlanta, Georgia 30309, Attention: General Counsel (the "Process Agent"), and hereby further agrees that the failure of the ------- ----- Process Agent to give any notice of any such service to the Borrower shall not impair or affect the validity of such service or of any judgment rendered in any action or proceeding based thereon. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or the Notes in the courts of any jurisdiction. (b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the Notes in any New York State or federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (c) To the extent that the Borrower has or hereafter may acquire any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with 55 respect to itself or its property, the Borrower hereby irrevocably waives such immunity in respect of its obligations under this Agreement and the other Loan Documents. Section 8.12 Judgment. (a) Rate of Exchange. If, for the purpose of -------- ---------------- obtaining judgment in any court, it is necessary to convert a sum due hereunder or under the Notes in another currency into Dollars, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which, in accordance with normal banking procedures, the Funding Agent could purchase such other currency with Dollars in New York City, New York, at the close of business on the Business Day immediately preceding the day on which final judgment is given, together with any premiums and costs of exchange payable in connection with such purchase. (b) Indemnity. The obligation of the Borrower in respect of any sum due --------- from it to any Agent or any Lender hereunder or under any Note shall, notwithstanding any judgment in a currency other than Dollars, be discharged only to the extent that on the Business Day next succeeding receipt by such Agent or such Lender of any sum adjudged to be so due in such other currency, such Agent or such Lender, as the case may be, may, in accordance with normal banking procedures, purchase Dollars with such other currency. If the Dollars so purchased are less than the sum originally due to such Agent or such Lender in Dollars, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Agent or such Lender against such loss, and if the Dollars so purchased exceed the sum originally due to any Agent or any Lender in Dollars, such Agent or such Lender agrees to remit to the Borrower such excess. Section 8.13 Waiver of Jury Trial. Each of the Borrower, the Funding -------------------- Agent, the Co-Syndication Agents and the Lenders hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the Notes or the actions of any Agent or any Lender in the negotiation, administration, performance or enforcement thereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. AMVESCAP PLC By /s/ Charles W. Brady ----------------------------- Title: Chairman and CEO BANK OF AMERICA, N.A., as Funding Agent By /s/ Joan L. D'Amico ----------------------------- Title: Managing Director 56 Lead Arrangers -------------- $77,727,272.70 CITIBANK, N.A. By /s/ Robert A. Danziger ---------------------------------- Title: Attorney in Fact $77,727,272.70 BANK OF AMERICA, N.A. By /s/ Joan L. D'Amico ---------------------------------- Title: Managing Director $77,727,272.70 HSBC BANK PLC By /s/ Robin E. Penfold ---------------------------------- Title: Head of Fund Managers and Consumer Finance Lead Agents ----------- $57,272,727.30 DEUTSCH BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCH By /s/ Alan Krouk ---------------------------------- Title: Vice President By /s/ John S. McGill ---------------------------------- Title: Director $57,272,727.30 SUNTRUST BANK By /s/ Daniel S. Komitor ---------------------------------- Title: Director Managing Agents --------------- $45,000,000.00 CIBC INC. By /s/ Robert Mendeles ---------------------------------- Title: Executive Director 57 $45,000,000.00 THE CHASE MANHATTAN BANK By /s/ Elizabeth H. Schwabe ---------------------------------- Title: Managing Director $45,000,000.00 ROYAL BANK OF CANADA EUROPE LIMITED By /s/ John Hopper ---------------------------------- Title: Senior Manager $45,000,000.00 THE ROYAL BANK OF SCOTLAND PLC By /s/ Clark McGinn ---------------------------------- Title: Senior Vice President $45,000,000.00 WACHOVIA BANK, N.A. By /s/ Brantley Echols ---------------------------------- Title: Senior Vice President Lenders ------- $36,818,181.80 BANK ONE, NA By /s/ Nicole Holzapfel ---------------------------------- Title: Director, Capital Markets $36,818,181.80 THE BANK OF NEW YORK By /s/ Timothy L. Somers ---------------------------------- Title: Vice President $36,818,181.80 BARCLAYS BANK PLC By /s/ Marlene Wechselblatt ---------------------------------- Title: Vice President 58 $36,818,181.80 BNP PARIBAS By /s/ Lauren Vanderzypre/ Marguerite L. Lebor ---------------------------------- Title: Vice President/Associate $36,818,181.80 FLEET NATIONAL BANK By /s/ Robert McClelland ---------------------------------- Title: Director $36,818,181.80 MELLON BANK, N.A. By /s/ Marla A. DeYulis ---------------------------------- Title: Lending Officer $36,818,181.80 STATE STREET BANK AND TRUST COMPANY By /s/ Steven G. Caron ---------------------------------- Title: Vice President $36,818,181.80 THE TORONTO-DOMINION BANK By /s/ Carolyn R. Faeth ---------------------------------- Title: Mgr. Cr. Admin. $32,727,272.70 WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH By /s/ Kathleen Bowers ---------------------------------- Title: Associate Director By /s/ David J. Sellers ---------------------------------- Title: Director $900,000,000 Total of the Commitments 59 SCHEDULE I LIST OF APPLICABLE LENDING OFFICES
- -------------------------------------------------------------------------------------------------------------------- Name of Initial Lender Domestic Lending Office Eurodollar Lending Office ---------------------- ----------------------- ------------------------- - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- Bank of America, N.A. - -------------------------------------------------------------------------------------------------------------------- The Bank of New York One Wall Street, 17th Floor One Wall Street, 17th Floor New York, NY 10286 New York, NY 10286 Attn: Sally Persaud Attn: Sally Persaud T: 212 635-7392 T: 212 635-7392 F: 212 635-6348 F: 212 635-6348 - -------------------------------------------------------------------------------------------------------------------- Bank One, NA One Bank One Plaza One Bank One Plaza Chicago, IL 60670 Chicago, IL 60670 Attn: Yuvette Owens Attn: Yuvette Owens T: 312 732-4855 T: 312 732-4855 F: 312 732-3537 F: 312 732-3537 - -------------------------------------------------------------------------------------------------------------------- Barclays Bank PLC 222 Broadway 222 Broadway New York, NY 10038 New York, NY 10038 Attn: Attn: T: 212 412-3701 T: 212 412-3701 F: 212 412-5306 F: 212 412-5306 - -------------------------------------------------------------------------------------------------------------------- BNP Paribas 787 Seventh Avenue 787 Seventh Avenue New York, Y 10019 New York, Y 10019 Attn: Laurent Vanderzyppe Attn: Laurent Vanderzyppe T: 212 841-8927 T: 212 841-8927 F: 212 841-2533 F: 212 841-2533 - -------------------------------------------------------------------------------------------------------------------- The Chase Manhattan Bank 270 Park Avenue, 15th Floor 270 Park Avenue, 15th Floor New York, NY 10017 New York, NY 10017 Attn: Elisabeth Schuabe Attn: Elisabeth Schuabe T: 212 270-4954 T: 212 270-4954 F: 212 270-1511 F: 212 270-1511 - -------------------------------------------------------------------------------------------------------------------- CIBC Inc. 2727 Paces Ferry Road 2727 Paces Ferry Road Suite 1200 Suite 1200 2 Paces West, Building 2 2 Paces West, Building 2 Atlanta, GA 30339 Atlanta, GA 30339 Attn: Ava Cool Attn: Ava Cool T: 770 319-4816 T: 770 319-4816 F: 770 319-4950 F: 770 319-4950 - -------------------------------------------------------------------------------------------------------------------- Citibank, N.A. 388 Greenwich Street 388 Greenwich Street New York, NY 10013 New York, NY 10013 Attn: Michael Secondo Attn: Michael Secondo T: 212 816-3518 T: 212 816-3518 F: 212 816-4140 F: 212 816-4140 - --------------------------------------------------------------------------------------------------------------------
1 - -------------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, New York and/or 130 Liberty Street 130 Liberty Street Cayman Islands Branch Mail Stop NYC02-1414 Mail Stop NYC02-1414 New York, NY 10006 New York, NY 10006 Attn: Thomas Balacki Attn: Thomas Balacki T: 212 250-5386 T: 212 250-5386 F: 212 669-1706 F: 212 669-1706 - -------------------------------------------------------------------------------------------------------------------- Fleet National Bank 100 Federal Street 100 Federal Street MA DE 10010H MA DE 10010H Boston, MA 02110 Boston, MA 02110 Attn: Robert McClelland Attn: Robert McClelland T: 617 434-3710 T: 617 434-3710 F: 617 434-1096 F: 617 434-1096 - -------------------------------------------------------------------------------------------------------------------- HSBC Bank PLC 24-32 Poultry 24-32 London EC2P 2BX London EC2P 2BX Attn: John Ross Attn: John Ross T: 44 020 7260-7193 T: 44 020 7260-7193 F: 44 020 7260-7393 F: 44 020 7260-7393 - -------------------------------------------------------------------------------------------------------------------- Mellon Bank, N.A. One Mellon Bank Center One Mellon Bank Center Pittsburgh, PA 15258 Pittsburgh, PA 15258 Attn: Marla A. De Yulis Attn: Marla A. De Yulis T: 412 236-9141 T: 412 236-9141 F: 412 234-9047 F: 412 234-9047 - -------------------------------------------------------------------------------------------------------------------- Royal Bank of Canada Europe Limited 71 Queen Victoria Street 71 Queen Victoria Street London, England EC4V 4DE London, England EC4V 4DE Attn: John Hopper Attn: John Hopper T: 44 207 653 4070 T: 44 207 653 4070 F: 44 207 489 1675 F: 44 207 489 1675 - -------------------------------------------------------------------------------------------------------------------- The Royal Bank of Scotland 65 East 55th Street, 21st Floor 65 East 55th Street, 21st Floor New York, NY 10022 New York, NY 10022 Attn: Sheila Shan Attn: Sheila Shan T: 212 401-1338 T: 212 401-1338 F: 212 401-1336 F: 212 401-1336 - -------------------------------------------------------------------------------------------------------------------- State Street Bank and Trust Company 225 Franklin Street 225 Franklin Street Boston, MA 02110 Boston, MA 02110 Attn: Allison King Attn: Allison King T: 617 664-3657 T: 617 664-3657 F: 617 664-3674 F: 617 664-3674 - -------------------------------------------------------------------------------------------------------------------- Suntrust Bank 25 Park Place 25 Park Place Atlanta, GA 30303 Atlanta, GA 30303 Attn: Tom Presley Attn: Tom Presley T: 404 588-7077 T: 404 588-7077 F: 404 230-1910 F: 404 230-1910 - --------------------------------------------------------------------------------------------------------------------
2 - -------------------------------------------------------------------------------------------------------------------- Toronto Dominion Bank 909 Fannin Street, 17th Floor 909 Fannin Street, 17th Floor Houston, TX 77010 Houston, TX 77010 Attn: Carolyn Faeth Attn: Carolyn Faeth T: 713 427-8520 T: 713 427-8520 F: 713 951-9921 F: 713 951-9921 - -------------------------------------------------------------------------------------------------------------------- Wachovia Bank, N.A. - -------------------------------------------------------------------------------------------------------------------- Westdeutsche Landesbank Girozentrale 1211 Avenue of the Americas New York, NY 10036 Attn: Brian Wilson T: 212 597-1442 F: 212 302-7946 - --------------------------------------------------------------------------------------------------------------------
3 EXECUTION COPY U.S. $900,000,000 FIVE YEAR CREDIT AGREEMENT Dated as of June 18, 2001 Among AMVESCAP PLC as Borrower -- -------- and THE INITIAL LENDERS NAMED HEREIN as Initial Lenders -- ------- ------- and CITIBANK, N.A. BANK OF AMERICA, N.A. and HSBC BANK PLC as Co-Syndication Agents -- -------------- ------ and BANK OF AMERICA, N.A. as Funding Agent -- ------- ----- ---------------------------------------------------------- SALOMON SMITH BARNEY INC. BANC OF AMERICA SECURITIES LLC and HSBC SECURITIES (USA) INC. as Joint Lead Arrangers and Book Managers -- ----- ---- --------- --- ---- -------- Table of Contents
Page ARTICLE I DEFINITIONS AND ACCOUNTING TERMS................................................................................1 Section 1.01 Certain Defined Terms..........................................................................1 Section 1.02 Computation of Time Periods...................................................................14 Section 1.03 Accounting Terms..............................................................................14 ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES.............................................................................14 Section 2.01 The Advances..................................................................................14 Section 2.02 Making the Advances...........................................................................14 Section 2.03 [Intentionally ommitted]......................................................................16 Section 2.04 Fees16 Section 2.05 Termination, Reduction or Increase of the Commitments.........................................16 Section 2.07 Repayment of Advances.........................................................................18 Section 2.08 Interest on Advances..........................................................................18 Section 2.09 Interest Rate Determination...................................................................19 Section 2.10 Optional Conversion of Advances...............................................................20 Section 2.11 Prepayments of Advances.......................................................................20 Section 2.13 Increased Costs...............................................................................21 Section 2.14 Illegality....................................................................................22 Section 2.15 Payments and Computations.....................................................................23 Section 2.16 Taxes 24 Section 2.17 Sharing of Payments, Etc......................................................................27 Section 2.18 Use of Proceeds...............................................................................28 Section 2.19 Extension of Termination Date.................................................................28 ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING......................................................................30 Section 3.01 Conditions Precedent to Effectiveness.........................................................30 Section 3.02 Conditions Precedent to Each Borrowing and Each Extension Date................................31 Section 3.03 Determinations Under Section 3.01.............................................................32 ARTICLE IV REPRESENTATIONS AND WARRANTIES................................................................................32 Section 4.01 Representations and Warranties of the Borrower................................................32 ARTICLE V COVENANTS OF THE BORROWER......................................................................................36 Section 5.01 Affirmative Covenants.........................................................................36 Section 5.02 Negative Covenants............................................................................39 Section 5.03 Financial Covenants...........................................................................43 ARTICLE VI EVENTS OF DEFAULT.............................................................................................43 Section 6.01 Events of Default.............................................................................43
i ARTICLE VII THE AGENTS...................................................................................................46 Section 7.01 Authorization and Action......................................................................46 Section 7.02 Agents' Reliance, Etc.........................................................................46 Section 7.03 Citibank, Bank of America and Affiliates......................................................47 Section 7.04 Lender Credit Decision........................................................................47 Section 7.05 Indemnification...............................................................................47 Section 7.06 Successor Agents..............................................................................48 Section 7.07 Co-Agents.....................................................................................49 ARTICLE VIII MISCELLANEOUS...............................................................................................49 Section 8.01 Amendments, Etc...............................................................................49 Section 8.02 Notices, Etc..................................................................................49 Section 8.03 No Waiver; Remedies...........................................................................50 Section 8.04 Costs and Expenses............................................................................50 Section 8.05 Right of Set-off..............................................................................51 Section 8.06 Binding Effect................................................................................51 Section 8.07 Assignments and Participations................................................................51 Section 8.08 Confidentiality...............................................................................54 Section 8.09 Governing Law.................................................................................55 Section 8.10 Execution in Counterparts.....................................................................55 Section 8.11 Jurisdiction, Etc.............................................................................55 Section 8.12 Judgment......................................................................................56 Section 8.13 Waiver of Jury Trial..........................................................................56
Schedules - --------- Schedule I - List of Applicable Lending Offices Schedule 4.01(b) - Subsidiaries Schedule 4.01(d) - Required Authorizations and Approvals Schedule 4.01(i) - Disclosed Litigation Schedule 4.01(v) - Existing Debt Schedule 5.02(a) - Existing Liens Exhibits - -------- Exhibit A - Form of Note Exhibit B - Form of Notice of Borrowing Exhibit C - Form of Assignment and Acceptance ii Exhibit D - Form of Assumption Agreement Exhibit E - Form of Guaranty Exhibit F - Form of Opinion of New York Counsel for the Borrower Exhibit G - Form of Opinion of English Counsel for the Borrower Exhibit H - Form of Confidentiality Letter Exhibit I - UK Tax Compliance Certificate iii EX-2.11 6 dex211.txt INSTRUMENT DATED AUGUST 31, 2001 Exhibit 2.11 Dated 31 August 2001 -------------------- -------------------------------------------------------- INSTRUMENT Constituting(pound)4,500,000 5 per cent. fixed rate Unsecured Loan Notes -------------------------------------------------------- ASHURST MORRIS CRISP Broadwalk House 5 Appold Street London EC2A 2HA Tel: 020 7638 1111 Fax: 020 7638 1112 CJA/KAE/A983.00018 THIS INSTRUMENT is made by way of deed on 31 August 2001 BY:- (1) INVESCO UK LIMITED (No. 3004959) whose registered office is at 11 Devonshire Square, London EC2M 4YR (the "Company") WHEREAS the Company has, pursuant to its Memorandum and Articles of Association and by resolution of its board of directors passed on 31 August 2001, created and authorised the issue of a maximum nominal amount of (pound)4,500,000 5% Fixed Rate Unsecured Loan Notes 2009 to be constituted as hereinafter provided and subject to, and with the benefit of, the schedules hereto which shall be deemed to form part of this instrument. BY THIS DEED THE COMPANY DECLARES AND COVENANTS AS FOLLOWS:- 1. DEFINITIONS AND INTERPRETATION 1.1 In this instrument and the schedules the following words and expressions shall have the following meanings, unless the context otherwise requires:- "business day" means a day (excluding Saturdays) on which banks generally are open in London for the transaction of normal banking business; "Conditions" means the conditions of the Notes as set out in schedule 2; "Directors" means the board of directors for the time being of the Company; "Extraordinary Resolution" means an extraordinary resolution as defined in paragraph 18 of schedule 4; "First Redemption Date" means the first anniversary of the date hereof; "Interest Payment Date" has the meaning given in Condition 7.1; "North American person" means:- (a) any individual who is a resident or individual of the United States; (b) a corporation, partnership or other entity created or organised in or under the laws of the United States or any state thereof or an estate or trust the income of which is subject to United States federal income taxation regardless of its source; and (c) any individual, corporation, partnership, trust or other entity resident in Canada, provided that the term "North American person" shall not include a branch or agency of a United States bank or insurance company that is operating outside the United States for valid business reasons as a locally registered branch or agency engaged in the banking and -1- insurance business and not solely for the purpose of investing in securities not registered under the United States Securities Act of 1933, as amended; "Notes" means the (pound)4,500,000 5% Fixed Rate Unsecured Loan Notes 2009 constituted by this instrument or, as the case may be, the principal amounts represented by them and for the time being issued and outstanding; "Noteholder" means a person whose name is entered in the Register as the holder of a Note; "these presents" means this instrument and the schedules and includes any Substitution Instrument to this instrument; "Register" means the register of holders of the Notes kept by or on behalf of the Company; and "United States" means the United States of America. 1.2 Subject as herein expressly defined any words and expressions defined in the Companies Act 1985 and 1989 shall have the meanings therein ascribed to them. 1.3 References to any provision of any statute shall be deemed also to refer to any statutory modification or re-enactment thereof from time to time in force. 1.4 Words denoting persons shall include corporations, the masculine gender shall include the feminine and the singular shall include the plural and vice versa. 1.5 References to this "instrument" or this "deed" include, where the context so admits, the schedules hereto. 1.6 The headings are for convenience only and shall not affect the interpretation hereof. 2. AMOUNT OF THE NOTES 2.1 The aggregate nominal amount of the Notes constituted by this instrument is limited to(pound)4,500,000. 2.2 The Notes will be issued in registered form in denominations of(pound)1 in nominal amount or integral multiples thereof and shall be transferable in accordance with schedule 2. 3. STATUS OF THE NOTES 3.1 The Notes represent a direct and unsecured obligation of the Company for the due and punctual payment of the principal and interest in respect of them and for the performance of all the obligations of the Company with respect to them. -2- 3.2 The Notes when issued will rank pari passu equally and rateably without discrimination or preference as unsecured obligations of the Company and with all other unsecured indebtedness of the Company except to the extent provided by law. 3.3 The Notes shall be known as 5% Fixed Rate Unsecured Loan Notes 2009. 4. CERTIFICATE FOR NOTES 4.1 Each Noteholder shall be entitled to a certificate stating the nominal amount of the Notes held by him. Each certificate shall bear a denoting number, shall (subject as provided in this clause 4.1) be executed under the seal (or any securities seal) of the Company, shall be substantially in the form set out in schedule 1 and shall have endorsed on it conditions in the form or substantially in the form set out in schedule 2. Where permitted by law, a certificate signed by one Director and the Secretary or by two Directors and expressed to be executed by the Company shall have the same effect as if executed under the seal. The Company shall not be bound to register more than four persons as the joint holders of any Note. Joint holders of Notes will be entitled to only one Note in respect of their joint holding and the Note will be delivered to that one of the joint holders who is first-named in the Register in respect of the joint holding or to such other person as the joint holders may, in writing, direct. Delivery of a certificate to one of such persons shall be sufficient delivery to all. When a Noteholder has redeemed or transferred part only of his Notes the old certificate shall be cancelled and a new certificate for the balance of such Notes issued without charge. 4.2 The Directors may by resolution (either generally or in any particular case or cases) determine that the signatures required by clause 4.1 shall be affixed by means of some method or system of mechanical signature. 5. COVENANTS BY THE COMPANY The Company HEREBY COVENANTS with the Noteholders and each of them to comply with the terms of the Notes and to observe and perform the Conditions, which conditions shall be deemed to be incorporated in this instrument and shall be binding on the Company and the Noteholders and all persons claiming through or under them respectively. 6. REGISTER OF NOTEHOLDERS 6.1 The Company shall cause a register to be maintained in respect of the Notes in accordance with the provisions of schedule 3. 6.2 The provisions relating to the Register set out in schedule 3 shall be deemed to be incorporated in this instrument and shall be binding on the Company and the Noteholders and on all persons claiming through or under them respectively. 7. MEETINGS OF NOTEHOLDERS -3- The provisions for meetings of holders of the Notes set out in schedule 4 shall be deemed to be incorporated in this instrument and shall be binding on the Company and the Noteholders and on all persons claiming through or under them respectively. 8. FOREIGN NOTEHOLDERS The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended, nor under any of the relevant securities laws of any province or territory of Canada or Australia. Accordingly, unless an exemption under such Act or laws is applicable, the Notes may not be offered, sold or delivered, directly or indirectly, in or into the United States, Canada or Australia or to or for the account or benefit of any North American person or resident of Canada or Australia. 9. FURTHER NOTES The Company shall be entitled from time to time, by resolution of the board or of a duly authorised committee thereof, or to create and issue further unsecured loan notes to be constituted by deed or instrument expressed to be supplemental hereto either so as to be identical in all respects and form a single series with the Notes or to carry such rights as to interest, redemption and otherwise as the board may think fit. 10. SUBSTITUTION 10.1 Subject to clause 10.2 the Company may (or, where a substitution has taken place under this clause 10, the Substituted Debtor may), without the consent of the Noteholders, following the First Redemption Date, substitute any subsidiary or holding company of the Company incorporated in the United Kingdom (the "Substituted Debtor") for, or in place of, the Company (or of any previous Substituted Debtor under this clause 10) as the principal debtor under this instrument and the Notes by means of any instrument (the "Substitution Instrument") executed by the Company (or any previous Substituted Debtor under this clause 10) and the Substituted Debtor in such form as they may agree, a copy of which shall be made available for inspection by Noteholders. 10.2 Clause 10.1 shall not apply unless the Substituted Debtor qualifies or is treated as a trading company or the holding company of a trading group, both as defined in schedule A1 of the Taxation of Chargeable Gains Act 1992 and provided further such Substituted Debtor is a company of equivalent financial standing at the time of substitution as the Company at the date of this Instrument. 10.3 Immediately on the execution of the Substitution Instrument, the Substituted Debtor shall assume liability as the principal debtor under the instrument and the Notes for all moneys payable from time to time in respect of the Notes or otherwise under or in respect of this instrument, whereupon the Company (or any such previous Substituted Debtor) shall automatically be released from any and all of its liabilities and obligations under this instrument and the Notes (other than any existing liability in respect of any breach of the instrument). Not later than 28 days after the execution of the Substitution Instrument and after compliance with the provisions set out in clause 10.1, the Company shall give notice of -4- the substitution to the Noteholders. Such notice shall also state where copies of the Substitution Instrument may be inspected. The non-receipt of notice by, or the accidental omission to give notice to, any Noteholder shall not invalidate any substitution effected pursuant to this clause 10. 10.4 On the execution of the Substitution Instrument and compliance with the other provisions of clause 10.1, the Substituted Debtor shall be deemed to be named in this instrument and on the Notes as the principal debtor in place of the Company (or of any previous Substituted Debtor) as provided in the Substitution Instrument. The existing Note certificates held by the Noteholders (including the conditions endorsed thereon) shall not be cancelled but shall remain valid in relation to the Substituted Debtor as aforesaid. 11. GOVERNING LAW 11.1 These presents (and any dispute, controversy, proceedings or claim of whatever nature arising out of or in any way relating to this instrument or the constitution of the Notes) shall be governed by and construed in accordance with English law. IN WITNESS whereof this instrument has been executed as a deed and has been delivered on the date which appears first on page 1. -5- SCHEDULE 1 Form of Note Certificate No. Transfer No. Date Nominal Amount (pound)1 INVESCO UK LIMITED ------------------ (Registered in England No. 3004959) FIXED RATE UNSECURED LOAN NOTES 2009 Issue of (pound)4,500,000 5% Fixed Rate Unsecured Loan Notes 2009 (the "Notes"), created and issued by INVESCO UK LIMITED (the "Company") pursuant to the Memorandum and Articles of Association of the Company and a resolution of the board of directors passed on 31 August 2001. THIS IS TO CERTIFY that of is/are the registered holder(s) of (pound) ---------- nominal of the Notes which are constituted by an instrument made by the Company on 31 August 2001 (the "instrument") and are issued with the benefit of and subject to the provisions contained in the instrument and the conditions endorsed hereon. Interest calculated in accordance with the conditions endorsed hereon is payable half-yearly in arrears on 30 October and 30 April in each year. Given under the Common Seal of the Company -------------------------- Director -------------------------- Director/Secretary Dated 2001 ------- Notes: (i) Where the context so admits, words and expressions defined in the instrument shall bear the same respective meanings in the conditions endorsed hereon. (ii) The Notes are transferable in amounts or multiples of (pound)100,000. No transfer, whether of the whole or any part of the Notes comprised in this certificate, will be accepted -6- for registration unless accompanied by this certificate and lodged at the registered office of the Company. (iii) This Note has not been and will not be registered under the United States Securities Act of 1933, as amended, nor under any of the relevant securities laws of any province or territory of Canada or Australia. Accordingly, unless an exemption under such Act or laws is applicable, this Note may not be offered, sold or delivered, directly or indirectly in or into the United States, Canada or Australia or to or for the account or benefit of any North American person or resident of Australia or Canada. (iv) The Notes are repayable in accordance with the conditions endorsed hereon. -7- SCHEDULE 2 Conditions 1. Form and Status The Notes constitute unsecured obligations of the Company. The instrument pursuant to which the Notes are issued does not contain any restrictions on borrowing, charging or disposal of assets by the Company or any of its subsidiaries. 2. Repayment, Prepayment, Purchase and Redemption 2.1 If not previously repaid or purchased, the Notes will be repaid by the Company at par on 31 August 2009. 2.2 Each Noteholder shall be entitled to require the whole or any part (being (pound)100,000 or a greater amount) of the Notes held by him to be repaid at par, together with interest (subject to any requirement to deduct any applicable tax) in accordance with condition 2.7 on any date falling on or after the First Redemption Date. 2.3 Such right shall be exercisable by the Noteholder concerned completing and signing the Notice of Repayment printed on the Note to be repaid (or by completing such other form as the Directors may approve) and lodging the same at registered office of the Company accompanied by such evidence (if any) as the Directors may require to prove the title of the person requiring repayment. A Notice of Repayment given to the Company in accordance with this condition shall be irrevocable. No such notice may be given in respect of any Notes in respect of which notice of redemption has previously been given by the Company. 2.4 Against such delivery, the Company shall within 30 days of receipt of the Notice of Repayment pay to the Noteholder concerned the principal amount of his Note or, as the case may be, the part thereof to be repaid, together with interest in accordance with condition 2.7 (subject to any requirement to deduct any applicable tax therefrom). 2.5 If, at any time, the principal amount of all Notes outstanding is less than (pound)1,000,000, the Company shall be entitled upon giving to the remaining Noteholders not less than 30 days' notice in writing, such notice not to take effect prior to 31 August 2002, to redeem, on the expiry date of such notice, all (but not part only) of the outstanding Notes by payment of the principal amount thereof, together with interest in accordance with condition 2.7. 2.6 The Company may at any time purchase any Notes by tender (available to all holders alike) or by private treaty at any price. 2.7 On making any payment of principal to a Noteholder under this condition the Company shall pay to him the interest accrued thereon up to (but excluding) the date of payment but subject to any deduction or withholding required by law. -1- 3. Events of Default 3.1 Notwithstanding any other provisions of this instrument, each Noteholder shall be entitled to require all of the Notes held by him to be repaid at par together with accrued interest (after deduction of tax) whilst any of the following is continuing:- (a) the Company fails to pay within 30 days of the due date any principal or interest payable in respect of the Notes; or (b) an order is made or an effective resolution is passed for the winding-up or dissolution of the Company (otherwise than for the purposes of an amalgamation or reconstruction or a members' voluntary winding up upon terms previously approved by Extraordinary Resolution); or (c) an encumbrancer takes possession or a trustee, receiver or an administrator or administrative receiver or similar officer is appointed of all or substantially all of the undertaking of the Company and such person has not been paid out or discharged within 30 days. 3.2 Such right shall be exercisable by the Noteholder concerned in the manner described in condition 2.3 and thereupon such Notes shall immediately become repayable. 3.3 At any time after the Notes have become repayable under the provisions of this condition, any Noteholder may without notice institute such proceedings as he may think fit to enforce repayment of the Notes. 3.4 The Company shall notify the Noteholders forthwith of the happening of any of the events specified in condition 3.1. 4. Method of Payment Payment of the principal monies and interest payable upon the Notes, or any part thereof, may be made by cheque, warrant or money order sent through the post to the registered address of the Noteholder or, in the case of joint Noteholders, to the registered address of that one of them who is first named on the Register (or to such person and to such address as the Noteholder or joint Noteholders may in writing direct) or by a bank or other funds transfer system. Every such cheque, warrant or money order shall be made payable to the order of the person to whom it is sent (or to such person as the Noteholder or joint Noteholders may in writing direct) and payment of the cheque, warrant or money order shall be a satisfaction of the principal and interest represented thereby. If payment is made by a bank or other funds transfer, the Company shall not be responsible for amounts lost or delayed in the course of the transfer. 5. Surrender of certificate and Prescription 5.1 Every Noteholder any part of whose Notes are due to be repaid under any of the provisions of these conditions shall, not later than the due date for such repayment, deliver the relevant -2- certificates for such Notes to the registered office of the Company or as it shall direct. Unless payment of the amount due to be repaid has already been made in accordance with condition 4 above, upon such delivery and against a receipt for the principal moneys payable in respect of the Notes to be repaid, the Company shall pay to the Noteholder the amount payable to him in respect of such repayment in accordance with condition 4. If part only of any Note(s) as evidenced by the relevant certificate so delivered is then due to be repaid, the Company shall either endorse such Note with a memorandum of the date and amount paid to the holder of such Note and return it to the Noteholder or shall cancel such Note and without charge issue to such Noteholder a new Note for the balance of the principal amount due to him. 5.2 If any Noteholder, any part of whose Notes is liable to be repaid under these conditions, shall fail or refuse to deliver up the forms required under condition 2.3 and/or the certificate(s) for such Notes at the time and place fixed for repayment thereof or should fail or refuse to accept payment of the repayment monies payable in respect thereof, the monies payable to such Noteholder shall be set aside by the Company and paid into a separate bank account and held by the Company in trust for such Noteholder but without interest and such setting aside shall be deemed for all the purposes of these conditions to be a payment to such Noteholder and the Company shall thereby be discharged from all obligations in connection with such Notes. If the Company shall place the said monies on deposit at a bank, the Company shall not be responsible for the safe custody of such monies or for interest thereon except such interest (if any) as the said monies may earn whilst on deposit, less any expenses incurred by the Company in connection therewith. Any such amount so paid or deposited, which remains unclaimed after a period of 12 years from the making of the payment or deposit, shall revert to the Company notwithstanding that in the intervening period the obligation to pay the same may have been provided for in the books, accounts and other records of the Company. 6. Cancellation All Notes purchased or repaid by the Company shall be cancelled and shall not be available for reissue. 7. Interest 7.1 Until such time as the Notes are redeemed, repaid or purchased in accordance with these conditions, the Company will pay interest on the principal amount of each Note (subject to any requirement to deduct tax) twice yearly in arrears on 30 October and 30 April in each year or, if such day is not a business day, on the next following business day ("Interest Payment Dates") in respect of the Interest Periods (as defined below) up to and including those days, in each case only to persons who are registered as Noteholders at the close of business on the relevant Record Date, except that the first payment of interest in respect of any Note will be made on 30 October 2001 (other than by payment of interest payable in accordance with condition 2) in respect of the period from and including the date of issue. The period from and including the date of issue up to and including 30 October 2001 and the period from but excluding 30 October 2001 or any subsequent interest payment date up to and including the next following Interest Payment Date is referred to as an "Interest Period". -3- 7.2 Should any Payment Date fall on a day which is not a business day, then for the purpose of the payment of interest and any other payments due to the Noteholder pursuant to condition 2, the Interest Payment Date shall be deemed to be the next business day immediately following such an Interest Payment Date. This provision shall not affect any Interest Period nor shall it affect the amount of interest (or any other monies) to be paid on any Interest Payment Date. 7.3 The "Record Date" shall mean those on the Register at the close of business on the Interest Payment Date. 7.4 Interest for any Interest Period (the "Rate of Interest") shall be paid at the fixed rate of 5 per cent. per annum. 7.5 The amount of interest payable on a Note shall be calculated by applying the Rate of Interest to the principal amount of the Note and multiplying such sum by the actual number of days in the Interest Period concerned divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366 and by rounding up the resultant figure to the nearest penny. The determination of the Rate of Interest and the calculation of each interest amount shall, in the absence of manifest error, be final and binding. 7.6 Interest on such Notes becoming liable to repayment shall cease to accrue as from the due date for repayment of such Notes. 7.7 Any interest which remains unclaimed after the period of six years from the date of first payment shall revert to the Company notwithstanding that in the intervening period the obligation to pay the same may have been provided for in the books, accounts and the other records of the Company. 7.8 If the Company fails to pay the Noteholders any interest payable under the Note within 10 Business Days of the relevant Interest Payment Date, the Company (without prejudice to all other rights and remedies of the Noteholders) shall pay to the Noteholders additional interest at the Agreed Rate on the overdue interest from the date of the failure to pay up to the date of actual payment (both before as well as after any judgement) calculated on a day to day basis (but without compounding) for as long as the amount remains unpaid. 8. Currency conversion Each Noteholder may, by notice in writing to the Company given on or before a date (the "Election Date") being 30 days prior to 31 August 2009 (the "Redemption Date") elect that the principal amount of the Notes held by that Noteholder then outstanding shall be redeemed in US dollars in which event the Company shall on the Redemption Date and in full discharge of its obligations to repay the Notes held by that Noteholder pay to the Noteholder an amount in US dollars obtained by converting the principal amount outstanding of the Notes into US dollars (at the spot rate for the purchase of US dollars with sterling certified by National Westminster Bank plcas prevailing at or about 11.00 am on the Election Date (or, where the Election Date is not a business day, on the immediately preceding business day) provided that:- -4- (a) if the amount payable in US dollars hereunder would otherwise exceed an amount in US dollars obtained by converting 100.3 per cent. of the sterling principal amount outstanding of the Notes into US dollars at the spot rate for the purchase of US dollars with sterling certified by National Westminster Bank plc as prevailing at or about 11.00 am on the Redemption Date the latter amount shall be substituted therefor; (b) if the amount payable in US dollars hereunder would otherwise be less than the amount in US dollars obtained by converting 99.7 per cent. of the sterling principal amount outstanding of the Notes into US dollars at the spot rate for the purchase of US dollars with sterling certified by National Westminster Bank plc as prevailing at or about 11.00 am on the Redemption Date the latter amount shall be substituted therefor. 9. Modification 9.1 The provisions of the instrument and the rights of the Noteholders may from time to time be modified, abrogated or compromised in any respect by the Company with the written consent of the holders of 100 per cent. in nominal amount of the Notes then in issue or the sanction of an Extraordinary Resolution of the Noteholders as provided in the instrument. 9.2 The Company may amend the provisions of the instrument without such sanction or consent if, in the opinion of the financial adviser to the Company, such amendment is of a formal, minor or technical nature or corrects a manifest error. Any opinion of the financial adviser in this regard shall be arrived at in its absolute discretion and no liability shall attach to it in respect thereof. 10. Registration, Transfer and Marketability 10.1 The Notes are transferable, in accordance with the provisions of the instrument, in amounts of(pound)100,000 or greater. 10.2 No application has been or is intended to be made to any listing authority or to any stock exchange for any of the Notes to be listed or otherwise traded. 10.3 No transfer of Notes will be registered during the 21 days immediately preceding an Interest Payment Date. 11. Lost or Destroyed Notes If a Note is defaced, lost or destroyed it may be renewed on payment of such fee as is reasonable and on such terms (if any) as to evidence and indemnity as the board may require but so that in the case of defacement the defaced Note shall be surrendered before a new Note is issued. An entry as to the issue of a new Note and indemnity (if any) shall be made in the Register. 12. Notice to Noteholders -5- 12.1 Any notice or other document (including certificates for Notes) may be served on a Noteholder by sending the same by post in a prepaid letter addressed to such Noteholder at his registered address, in the United Kingdom or (if he has no registered address within the United Kingdom) to the address, if any, within the United Kingdom supplied by him to the Company as his address for the service of notices. 12.2 In the case of joint Noteholders a notice or document served on the Noteholder whose name stands first in the Register shall be sufficient notice to all the joint Noteholders. 12.3 Any notice or other document may be served on the person entitled to a Note in consequence of the death or bankruptcy of any Noteholder by sending the same by post, in a prepaid letter addressed to him by name or by the title of the representative or trustees of such Noteholder, at the address (if any) in the United Kingdom supplied for the purpose by such persons or (until such address is supplied) by giving notice in the manner in which it would have been given if the death or bankruptcy had not occurred. 13. Notices to the Company Any notice, demand or other document (including certificates for Notes and transfers of Notes) may be served on the Company by sending the same by post in a prepaid letter to the registered office of the Company or to such other address in England as the Company may from time to time notify Noteholders. 14. Service of Notices Any notice or document served by post shall be deemed to have been served on the day after it is posted or, if such day is not a business day, then on the next following business day and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed, stamped and posted. -6- 15. Inspection of the Instrument A copy of the instrument shall be kept at the registered office of the Company. A Noteholder and any person authorised by a Noteholder may at all reasonable times during office hours inspect such copy. -7- NOTICE OF REPAYMENT To: INVESCO UK LIMITED (the "Company") 1. I/We being the registered holder(s) of the Notes represented by this certificate hereby give notice that I/we require repayment in the manner set out in paragraph 2.1/2.2/1/ below of all/(pound) /2/ of the Notes ------- in accordance with the above conditions. 2. I/We authorise and request you:- 2.1 (a) to make the cheque or warrant payable to the person whose name is set out below or, if none is set out, to me/us; and (b) to send it by post at my/our risk to the person whose name and address is set out below or, if none is set out, to the registered address of the sole or first-named holder; or 2.2 to transfer the repayment monies to:- Bank: ---------------------------------------- Address: ---------------------------------------- (outside the United States, Canada or Australia) Branch Code: ---------------------------------------- Account name: ---------------------------------------- Account no: ---------------------------------------- I/We acknowledge that payment of the moneys hereby authorised shall be in full and final satisfaction of the moneys to which I/we become entitled as aforesaid. 3. I/We hereby authorise the despatch of a certificate for the balance (if any) of the Notes represented by this certificate which is not repaid by post at my/our risk to the person whose name and address is set out below or, if none is set out, to the sole or first-named holder at his/her registered address. Dated ------- ------- - -------------------------------------------------------------------------------- /1/ Please delete 2.1 or 2.2 as appropriate. If neither or both is deleted, repayment will be made in accordance with paragr 2.1. Signature(s) of Noteholder(s)3 /2/ Delete or complete as appropriate. Repayment of part only is permitted in accordance with Condition 2 only and mus (pound)100,000 or greater amount. If no amount is inserted, all of such Notes will be repaid. -8- Signature(s)of Noteholder(s)/3/ ------------------------------------- ------------------------------------- Name/4/ ------------------------------------- Address: ------------------------------------- (outside the United States, Canada or Australia) - -------------------------------------------------------------------------------- /3/ In the case of joint holders ALL must sign. A body corporate should execute under its common seal or under the hand of some officer or attorney duly authorised in that behalf in which event the Note must be accompanied by the authority under which this Notice is completed. /4/ Please insert in BLOCK CAPITALS the name of the person to whom you wish the cheque, warrant or money order to be made payable (if not to you) and/or the address of the person to whom you wish the cheque, warrant or money order and any balance certificate to be sent if it is different from that of the sole or first-named holder. If the space is left blank, the cheque, warrant or money order will be made payable to the sole holder or all of the joint holders and it and any balance certificate will be sent to the registered address of the first-named Noteholder. -9- SCHEDULE 3 Provisions as to the Register 1. Register of Notes 1.1 The Company shall cause a register to be maintained at the registered office of the Company showing the amount of the Notes for the time being issued, the date of issue and the amount of Notes for the time being outstanding, the names and addresses of the Noteholders, the nominal amounts of the Notes held by them respectively and all transfers or changes of ownership of the Notes. 1.2 Any change of name or address on the part of any holder of Notes shall forthwith be notified by the holder to the Company and the Company shall alter the Register accordingly. 2. Recognition of Noteholder as absolute owner 2.1 Except as required by law, the Company will recognise the registered holder of any Notes as the absolute owner thereof and shall not (except as ordered by a court of competent jurisdiction) be bound to take notice or see to the execution of any trust, whether express, implied or constructive, to which any Notes may be subject and the Company may accept the receipt of the registered holder for the time being of any Notes, or in the case of joint registered holders the receipt of any of them, for the principal monies payable in respect thereof or for the interest from time to time accruing due in respect thereof or for any other moneys payable in respect thereof as a good discharge to the Company notwithstanding any notice it may have whether express or otherwise of the right, title, interest or claim of any other person to or in such Notes, interest or moneys. 2.2 If a warrant in payment of any amounts due to the registered holders of any Notes, made payable and despatched in accordance with the conditions, is encashed such encashment shall be deemed to be a good discharge to the Company notwithstanding any notice it may have whether express or otherwise of the right, title, interest or claim of any other person to or in such moneys. 2.3 No notice of any trust, express, implied or constructive, shall (except as by statute provided or as required by order of a court of competent jurisdiction) be entered in the Register in respect of any Notes. 3. Exclusion of equities The Company will recognise every holder of Notes as entitled to his Notes free from any equity, set-off or cross-claim on the part of the Company against the original or any intermediate holder of the Notes. 4. Transferability of Notes -10- 4.1 Every holder of Notes will be entitled (subject as hereinafter provided) to transfer the same or any part (being an amount or integral multiple of (pound)100,000) by an instrument in writing in the usual or common form or such other form as the Company may accept. There shall not be included in any instrument of transfer any notes other than the Notes constituted by the instrument. 4.2 Every instrument of transfer must be signed by the transferor or where the transferor is a corporation given under its common seal or signed on its behalf by a duly authorised officer or agent and the transferor shall remain the owner of the Notes to be transferred until the name of the transferee is entered in the Register in respect thereof. 4.3 Every instrument of transfer must be lodged for registration at the place where the Register shall for the time being be kept accompanied by the certificate for the Notes all or part of the nominal amount of which is to be transferred and such other evidence as the Directors or other officers of the Company authorised to deal with transfers may require to prove the title of the transferor or his right to transfer the Notes and, if the instrument of transfer is executed by some other person on his behalf, the authority of the person signing the same. 4.4 No transfer shall be registered of Notes in respect of which a notice requiring repayment has been given. 4.5 All instruments of transfer which shall be registered may be retained by the Company. 5. No fee for registration of transfers No fee shall be charged for the registration of any transfer or for the registration of any probate, letters of administration, certificate of marriage or death, power of attorney or other document relating to or affecting the title to any Notes. 6. Death or bankruptcy of Noteholders 6.1 The executors or administrators of a deceased Noteholder (not being one of several joint holders) shall be the only persons recognised by the Company as having any title to or interest in such Note. 6.2 In the case of the death of any of the joint holders of a Note the survivors or survivor will be the only persons or person recognised by the Company as having any title to or interest in such Note. 6.3 Any person becoming entitled to Notes in consequence of the death or bankruptcy of any Noteholder or of any other event giving rise to the transmission of such Notes by operation of law may, upon producing such evidence that he sustains the character in respect of which he proposes to act under this paragraph or of his title as the Directors shall think sufficient, be registered himself as the holder of the Note or subject to the preceding paragraphs may transfer the Note. -11- 7. Receipt of joint holders If several persons are entered in the register as joint registered holders of any Notes then, without prejudice to paragraph 2 above, the receipt of any one of such persons for any interest or principal or other monies payable in respect of such Notes shall be as effective a discharge to the Company as if the person signing such receipt were the sole registered holder of such Notes. 8. The Register 8.1 A Noteholder and any person authorised by him may at all reasonable times during office hours inspect the Register and upon payment of a reasonable charge take copies of, or extracts from, the Register or any part of it. 8.2 The Register may be closed by the Company for such periods and at such times (not exceeding 30 business days in any one year) as it may think fit and during such period the Company shall be under no obligation to register transfers of the Notes. 9. Replacement of certificates If the certificate for any Notes is lost, defaced or destroyed, it may be renewed, on such terms (if any) as to evidence and indemnity as the Directors may require, but so that in the case of defacement the defaced certificate shall be surrendered before the new certificate is issued. 10. Risk to Noteholders All certificates, other documents and remittances sent through the post shall be sent at the risk of the Noteholders entitled thereto. -12- SCHEDULE 4 Provisions for meetings of Noteholders 1. Calling of meetings The Company at any time may, and shall upon the request in writing signed by Noteholders holding not less than twenty five per cent. in nominal value of the Notes for the time being outstanding, convene a meeting of the Noteholders. Every such meeting and every adjourned meeting shall be held at the registered office of the Company for the time being or such other place as the Company may specify. 2. Notice of meetings At least 21 days' notice (exclusive of the day on which the notice is given or deemed to be given and the day on which the meeting is to be held) specifying the day, time and place of meeting shall be given to the Noteholders of any meeting of the Noteholders. Any such notice shall specify the terms of the resolutions to be proposed and shall include a statement to the effect that proxies may be appointed in accordance with the provisions of paragraph 15 of this schedule. No amendment (other than an amendment to correct a typographical or manifest error) may subsequently be made to the resolution(s) specified in the notice of meeting. The accidental omission to give notice to, or the non-receipt of notice by, any of the Noteholders shall not invalidate the proceedings at any meeting. 3. Chairman of meetings Such person (who may, but need not, be a Noteholder) nominated in writing by the Company shall be entitled to take the chair at every such meeting or adjourned meeting. If at any meeting or adjourned meeting no person shall be nominated or the person nominated shall not be present within 15 minutes after the time appointed for the holding of such meeting or adjourned meeting the Noteholders present shall choose one of their number to be chairman. 4. Quorum at meetings At any such meeting two or more persons present in person (not being the Company, any person directly or indirectly under the control of the Company or any nominees thereof) or by proxy holding Notes or being proxies and being or representing in the aggregate the holders of a majority in nominal amount of the Notes then outstanding and not held by or on behalf of the Company shall 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 business. 5. Absence of quorum If within half an hour from the time appointed for any such meeting a quorum is not present, the meeting shall, if convened upon the requisition of Noteholders, be dissolved. In any other -13- case, the meeting shall stand adjourned for such period, not being less than 14 days nor more than 42 days, and to such time and place as may be appointed by the chairman. At such adjourned meeting two or more persons present in person or by proxy (not being the Company, any person directly or indirectly under the control of the Company or any nominee thereof) holding Notes or being proxies (whatever the nominal amount of the Notes which they hold or represent) shall form a quorum and shall have the 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 a quorum been present at such meeting. 6. Notice of adjourned meetings At least ten days' notice of any meeting adjourned through want of a quorum shall be given in the same manner as of an original meeting and such notice shall state the quorum required at such adjourned meeting. Subject as aforesaid it shall not be necessary to give any notice of an adjourned meeting. 7. Adjournment of meetings The chairman may with the consent of (and shall if directed by) any 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 have been transacted at the meeting from which the adjournment took place. 8. Resolution on a show of hands or poll Every question submitted to a meeting shall be decided in the first instance by a show of hands, and unless a poll is demanded (before or on the declaration of the result of the show of hands) by the chairman, the Company or by one or more persons holding Notes or being proxies and being or representing in the aggregate the holders of not less than one-twentieth of the nominal amount of the Notes then outstanding and not held by or on behalf of the Company, a declaration by the chairman that the resolution has been carried, or carried by a particular majority, or lost, or not carried by any 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. 9. Manner of taking poll If at any meeting a poll is so demanded it shall be taken in such manner and, subject as hereinafter provided, either at once or after such 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 question on which the poll has been demanded. 10. Time for taking poll -14- Any poll demanded at any meeting on the election of a chairman or on any question of adjournment shall be taken at the meeting without adjournment. 11. Persons entitled to attend and vote Any persons duly authorised by the Company including without limitation the Directors, the secretary or the Company's auditors or legal or financial advisers shall be entitled to attend and speak at any meeting of the Noteholders and any other person authorised in that behalf by the Directors. Save as aforesaid no person shall be entitled to attend or vote at any meeting of the Noteholders unless he is registered as a holder of Notes or he produces written evidence of his appointment as a representative pursuant to paragraph 20 or is a proxy. No votes may be exercised in respect of Notes held by or for the account of the Company or anyone directly or indirectly under the control of it, but this shall not prevent any proxy from being a director, officer or representative of, or otherwise connected with the Company. 12. Votes 12.1 Subject as provided in paragraph 11 above, at any meeting:- (a) on a show of hands every Noteholder who (being an individual) is present in person or by proxy or (being a corporation) is present by its representative duly authorised in accordance with paragraph 20 below or its proxy, shall have one vote; and (b) on a poll every person who is so present shall have one vote in respect of every(pound)1 nominal of Notes of which he is the holder or in respect of which he is a proxy or a representative. 12.2 Without prejudice to the obligations of any proxies 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. 13. Votes of joint holders In the case of the joint holders of Notes the vote of the senior who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the name stands in the Register. 14. Casting vote of chairman In the case of an 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 proxy or as a representative. 15. Appointment of proxy 15.1 Proxies named in any Form of Proxy (as defined below) or block voting instruction need not be Noteholders. -15- 15.2 A Noteholder may by instrument in writing (a "Form of Proxy") appoint a proxy. The Form of Proxy shall be signed by the appointor or his attorney duly authorised in writing or if the appointor is a corporation either under the common seal or under the hand of an officer or attorney so authorised. The Company may, but shall not be bound to, require evidence of the authority of any such officer or attorney. 15.3 A Form of Proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority shall be deposited at such place as the Company may, in the notice convening the meeting, direct or, if no such place is appointed, then at the registered office of the Company not less than 48 hours before the time appointed for holding the meeting at which the person named in the Form of Proxy proposes to vote and in default the Form of Proxy shall not be treated as valid. No Form of Proxy shall be valid after the expiration of 12 months from the date named in it as the date of its execution. 15.4 A Form of Proxy may be in any usual or common form or in any other form which the Company shall approve. A proxy shall, unless the contrary is stated therein and subject to paragraph 15.3 above and paragraph 15.5 below, be valid as well for any adjournment of the meeting as for the meeting to which it relates and need not be witnessed. 15.5 A vote given in accordance with the terms of a Form of Proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed provided that no intimation in writing of such death, insanity or revocation shall have been received by the Company at its registered office before the commencement of the meeting or adjourned meeting for the time being at which the proxy is used. 16. Powers of meetings of Noteholders A meeting of the Noteholders shall in addition to all other powers (but without prejudice to any powers conferred on other persons in the instrument) have the following powers exercisable only by Extraordinary Resolution namely:- 16.1 to sanction any proposal by the Company for any modification, abrogation, variation or compromise of, or arrangement in respect of, the rights of the Noteholders against the Company whether such rights shall arise under the conditions, the instrument or otherwise; 16.2 to sanction any proposal by the Company for the exchange or substitution for the Notes of, or the conversion of the Notes into, other obligations or securities of the Company or any other person or entity; 16.3 to assent to any modification or abrogation of the conditions and of the provisions of these presents which shall be proposed by the Company and to authorise the Company to execute a Substitution Instrument to this instrument embodying any such modification or abrogation; and -16- 16.4 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 any powers or discretions which the Noteholders could themselves exercise by Extraordinary Resolution. 17. Extraordinary Resolution binding on all Noteholders An Extraordinary Resolution passed at a meeting of the Noteholders duly convened and held in accordance with this instrument shall be binding upon all the Noteholders whether present or not at such meeting and each of the Noteholders shall be bound to give effect thereto accordingly. The passing of any such resolution shall be conclusive evidence that the circumstances of any such resolution justify the passing thereof. 18. Definition of Extraordinary Resolution The expression "Extraordinary Resolution" when used in this instrument means a resolution passed at a meeting of the Noteholders duly convened and held in accordance with the provisions contained herein by a majority consisting of not less than three-quarters of the persons voting thereat upon a show of hands or, if a poll is demanded, then by a majority consisting of not less than three-quarters of the votes cast thereon. 19. Minutes of Meetings Minutes of all resolutions and proceedings at every meeting shall be made and duly entered in books to be from time to time provided for that purpose by the Company and any such minutes, if they purport to be signed by the chairman of the meeting at which such resolutions were passed or proceedings were transacted or by the chairman of the next succeeding meeting of the Noteholders, shall be conclusive evidence of the matters therein contained and, until the contrary is proved, every meeting in respect of which minutes of the proceedings have been made and signed as aforesaid shall be deemed to have been duly held and convened and all resolutions passed or proceedings transacted thereat to have been duly passed and transacted. 20. Corporate representatives Any company or corporation which is a holder of Notes may by resolution of its directors or other governing body authorise any person to act as its representative at any meeting of Noteholders and such representative shall be entitled to exercise the same powers on behalf of the company or corporation which he represents as if he were the holder of Notes. 21. Resolutions in writing A resolution in writing proposed by the Company and signed by the holders of not less than three-quarters in nominal amount of the Notes then in issue (other than Notes held by or for the account of the Company) shall have effect in the same manner as an Extraordinary Resolution of Noteholders duly passed at a meeting duly convened and held. Such resolution in writing may be contained in one document or in several documents in like form, each signed by one or more Noteholders. -17- 22. Consent of Company Notwithstanding anything in this instrument to the contrary, no resolution shall be effective which would increase any obligation of the Company under the instrument without the written consent of the Company. -18- The common seal of ) INVESCO UK LIMITED was hereunto affixed in the ) presence of:- ) ) Director /s/ Graeme J. Proudfoot Secretary /s/ Michael S. Perman -19- EX-2.12 7 dex212.txt INSTRUMENT DATED DECEMBER 17, 2001 EXHIBIT 2.12 INDENTURE, dated as of December 17, 2001, among AMVESCAP PLC, a public limited company duly organized and existing under the laws of the United Kingdom (the "Company"), A I M ADVISORS, INC., A I M MANAGEMENT GROUP INC., INVESCO INSTITUTIONAL (N.A.), INC., and INVESCO NORTH AMERICAN HOLDINGS, INC. (collectively, the "Guarantors") and SunTrust Bank, a bank and trust company duly organized and existing under the laws of Georgia (the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to create and provide for the issuance from time to time of 5.90% Senior Notes due 2007 (the "Initial Securities") and 5.90% Senior Notes due 2007, Series B (the "Exchange Securities" and, together with the Initial Securities, the "Securities") of substantially the tenor as hereinafter set forth. Each of the Guarantors has duly authorized the execution and delivery of this Indenture to provide for the issuance of guarantees of the Securities as provided in this Indenture. Upon the effectiveness of the Exchange Offer Registration Statement (as defined herein) or the Shelf Registration Statement (as defined herein), this Indenture will be subject to the provisions of the Trust Indenture Act of 1939, as amended, that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions. All things necessary to make this Indenture a valid and legally binding agreement of the Company and the Guarantors, in accordance with its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.01 Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Indenture; and (d) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Act", when used with respect to any Holder, has the meaning specified in Section 1.04. "Additional Amounts" has the meaning set forth in Section 10.04. "Additional Securities" has the meaning set forth in Section 3.01. "Affiliate" means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control", when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent Member" means any member of or participant in, the Depositary. "Applicable Procedures" means applicable procedures of the Depositary, Euroclear System or Clearstream, as the case may be. "Board of Directors" means, as the context requires, either the board of directors of the Company or a Guarantor, as the case may be, or any duly authorized committee of that board. "Board Resolution" means, as the context requires, a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or a Guarantor, as the case may be, to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in New York, New York or London, England are authorized or obligated by law or executive order to close. "Change in Tax Law" has the meaning specified in Section 11.01(a). "Clearstream" means Clearstream Banking, societe anonyme, Luxembourg, or any successor securities clearing agency. "Commission" means the Securities and Exchange Commission, from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this 2 Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman, its Chief Executive Officer, its President, any Vice President, its Treasurer or an Assistant Treasurer, and delivered to the Trustee. "Comparable Treasury Issue" means the United States Treasury security selected by the Reference Treasury Dealer as having a maturity comparable to the remaining term of the Securities to be redeemed that would be utilized, at the time of selection and in accordance with customary financing practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Securities. "Comparable Treasury Price" means (a) the average of three Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (b) if the Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such quotations. "Corporate Trust Office" means the principal corporate trust office of the Trustee, at which at any particular time its corporate trust business shall be administered, which office at the date of execution of this Indenture is located at 58 Edgewood Avenue, Room 400 - Annex, Atlanta, Georgia 30303. "Credit Facilities" means (a) the Five-Year Credit Agreement, dated as of June 18, 2001, among the Company, as borrower, Citibank, N.A., Bank of America, N.A. and HSBC Bank Plc, as co-syndication agents, Bank of America, N.A., as funding agent, and the initial lenders named therein, as the same may be amended, modified, extended, refinanced, restated or replaced from time to time, (b) the 364-Day Credit Agreement, dated as June 18, 2001, among the Company, as borrower, Citibank, N.A., Bank of America, N.A. and HSBC Bank Plc, as co-syndication agents, Bank of America, N.A., as funding agent, and the initial lenders named therein, as the same may be amended, modified, extended, refinanced, restated or replaced from time to time, and (c) any other agreement or agreements between the Company and one or more financial institutions providing for the making of loans or advances on a revolving basis, term loans, the issuance of letters of credit and/or the creation of bankers' acceptances to fund, among other things, the Company's general corporate requirements. "Default" means any event that is, or after notice or passage of time or both would be, an Event of Default. "Defaulted Interest" has the meaning specified in Section 3.09. "Depositary" means The Depository Trust Company, its nominees and successors. 3 "Euroclear" means the Euroclear Clearance System, or any successor securities clearing agency. "Event of Default" has the meaning specified in Section 5.01. "Exchange Act" means the Securities and Exchange Act of 1934, as amended from time to time, and the rules and regulations thereunder. "Exchange Offer" means the exchange offer that may be effected pursuant to the Registration Rights Agreement or other substantially similar exchange offer relating to Additional Initial Securities. "Exchange Offer Registration Statement" means the Exchange Offer Registration Statement as defined in the Registration Rights Agreement or other substantially similar registration statement relating to Additional Initial Securities. "Exchange Security" means any Security issued in exchange for an Initial Security or Initial Securities pursuant to the Exchange Offer or otherwise registered under the Securities Act and any Security with respect to which the next preceding Predecessor Security of such Security was an Exchange Security. "Global Security" shall have the meaning specified in Section 2.01. "Guarantees" has the meaning specified in Section 13.01. "Guarantor" means (a) each Person named as the "Guarantor" in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Guarantor" shall mean such successor Person and (b) any Person that becomes a Guarantor after the date of this Indenture pursuant to Section 10.09 hereof. "Holder" means the Person in whose name a Security is, at the time of determination, registered on the Security Register. "Indebtedness" means indebtedness for borrowed money or for the unpaid purchase price of real or personal property of the Company in accordance with generally accepted accounting principles in the United Kingdom, consistently applied, that are then in effect. "Indenture" means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof. "Initial Securities" has the meaning stated in the first recital of this Indenture. "Interest Payment Date" means the Stated Maturity of an installment of interest on the Securities. "Listing Failure" has the meaning specified in Section 10.04. 4 "Luxembourg Paying Agent" means Banque Generale de Luxembourg S.A. or any successor thereto appointed by the Company. "Maturity", when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, notice of redemption or otherwise. "Obligations" means the obligations of the Company and any other obligor hereunder or under the Securities, including the Guarantors, to pay principal of, interest on and Additional Amounts with respect to the Securities when due and payable at Maturity, and all other amounts due or to become due under or in connection with this Indenture, the Securities and the performance of all other obligations to the Trust (including all amounts due to the Trustee under Section 6.07 hereof) and the Holders under this Indenture and the Securities according to the terms hereof and thereof. "Officers' Certificate" means a certificate signed by the Chairman, the Executive Chairman, the Chief Executive Officer, the President, the Chief Financial Officer, the General Counsel or any Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary, an Assistant Secretary or the Chief Financial Officer (provided that the Chief Financial Officer may only sign on behalf of the Company or any Guarantor once) of the Company or any Guarantor, as applicable, and delivered to the Trustee. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company or the Guarantors, as applicable, including an employee of the Company, and who shall be acceptable to the Trustee. "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (b) Securities, or portions thereof, for whose payment, redemption or purchase money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; (c) Securities, except to the extent provided in Article XII, with respect to which the Company has effected defeasance and/or covenant defeasance as provided in Article XII; and (d) Securities which have been paid pursuant to Section 3.08 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been 5 presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands the Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, authorization, direction, consent, notice or waiver hereunder, and for the purpose of making the calculations required by TIA Section 313, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in making such calculation or in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee has actual knowledge are so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor. "Paying Agent" means any Person authorized by the Company to pay the principal of or interest on any Securities on behalf of the Company. "Person" means any individual, corporation, limited or general partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment" means, when used with respect to the Securities, the place or places where the principal of and interest on the Securities are payable as specified as contemplated by Section 3.01 and Section 3.09. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.08 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Private Placement Legend" has the meaning specified in Section 2.02. "QIB" means a "Qualified Institutional Buyer" under Rule 144A. "Redemption Date", when used with respect to any Security to be redeemed, in whole or in part, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Reference Treasury Dealer" means Salomon Smith Barney Inc., J.P. Morgan Securities Inc., and their respective successors, and any other primary treasury dealer selected by the Trustee and acceptable to the Company. 6 "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. "Registrar" means SunTrust Bank and any successor authorized by the Company to act as Registrar. "Registration Rights Agreement" means the Registration Rights Agreement dated as of December 12, 2001, among the Company, the Guarantors and the initial purchasers named therein. "Registration Statement" means the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be. "Regular Record Date" for the interest payable on any Interest Payment Date means the January 1 or July 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. "Regulation S" means Regulation S under the Securities Act. "Regulation S Global Security" has the meaning specified in Section 2.01. "Responsible Officer" when used with respect to the Trustee, means any officer within the corporate trust department at the Corporate Trust Office (or any successor office) of the Trustee, including any Vice President, Assistant Vice President or any other officer of the Trustee customarily performing functions similar to those performed by any of the above-designated officers, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Global Security" has the meaning specified in Section 2.01. "Restricted Period" has the meaning set forth in Section 3.06. "Rule 144A" means Rule 144A under the Securities Act. "Securities" means the Initial Securities, the Exchange Securities and any Additional Securities and more particularly means any Securities authenticated and delivered under this Indenture. All Initial Securities, Exchange Securities and Additional Securities shall vote together and be treated for all purposes as one series of Securities under this Indenture. "Securities Act" means the Securities Act of 1933, as amended from time to time, and the rules and regulations thereunder. "Security Register" has the meaning set forth in Section 3.05. 7 "Shelf Registration Statement" means the Shelf Registration Statement as defined in the Registration Rights Agreement or other substantially similar registration statement relating to Additional Initial Securities. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.09. "Stated Maturity" means, when used with respect to any Security or any installment of interest thereon, the date specified in such Security as the fixed date on which the principal of such Security or such installment of interest is due and payable. "Subsidiary" means any Person a majority of the equity ownership or voting stock of which is at the time owned, directly or indirectly, by the Company and/or one or more Subsidiaries of the Company. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "Tax" means any tax, duty, levy, impost, assessment or other governmental charge (including penalties, interest and any other liabilities related thereto). "Taxing authority" means any government or political subdivision or territory or possession of any government or any authority or agency therein or thereof having power to tax. "Treasury Rate" means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield-to-maturity of the Comparable Treasury Issue (computed as of the third Business Day immediately preceding the Redemption Date), assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as amended, as in force at the date as of which this Indenture was executed, except as provided in Section 9.05. "Trustee" means the Person named as the "Trustee" in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee. "U.K." means the United Kingdom. "U.K. Withholdings Taxes" has the meaning specified in Section 10.04. "U.S. Government Obligations" has the meaning set forth in Section 12.04. "U.S. Physical Securities" has the meaning set forth in Section 2.01. Section 1.02 Compliance Certificates and Opinions. Upon any application or request by the Company or the Guarantor to the Trustee to take any action under any provision of this Indenture, the Company or the Guarantor, as the case may 8 be, shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company or the Guarantor, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than pursuant to Section 10.06(a)) shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 1.03 Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company and/or any Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company and/or any such Guarantor stating that the information with respect to such factual matters is in the possession of the Company and/or any such Guarantors, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument 9 Section 1.04 Acts of Holders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in Person or by agents duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company or the Guarantors. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee, the Company and the Guarantors, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient. The ownership of Securities shall be proved by the Security Register. If the Company or any Guarantor shall solicit from the Holders of Securities any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company or any such Guarantor (as the case may be), may, at its option, by or pursuant to a Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company or any such Guarantor (as the case may be) shall have no obligation to do so. Notwithstanding TIA Section 316(c), such record date shall be the record date specified in or pursuant to such Board Resolution, which shall be a date not earlier than the date 30 days prior to the first solicitation of Holders generally in connection therewith and not later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after the record date. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu 10 thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company and/or the Guarantors in reliance thereon, whether or not notation of such action is made upon such Security. For all purposes of this Indenture, all Initial Securities, Exchange Securities and Additional Securities shall vote together as one series of Securities under this Indenture. Section 1.05 Notices, etc., to Trustee, Company or Guarantors. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: (a) the Trustee by any Holder, the Company or any Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing or mailed, first-class postage prepaid, to or with the Trustee at its Corporate Trust Office, or sent by facsimile to the Trustee at 25 Park Place, 24th Floor, Atlanta, Georgia 30303 (with receipt confirmed by telephone at 404-588-7335); or (b) the Company by the Trustee, any Holder or any Guarantor shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at 11 Devonshire Square, London, ECZM 4YR, England, Attention: Secretary, or sent by facsimile to the Company at 011-44-207-454-3962 (with receipt confirmed by phone at 011-44-207-626-3434) with a copy to 1315 Peachtree Street, N.E., Suite 500, Atlanta, Georgia 30309, Attention: Chief Financial Officer, or sent by facsimile at (404) 724-4280 (with receipt confirmed by telephone at (404) 724-4251, or at any other address or facsimile number previously furnished in writing to the Trustee by the Company; or (c) any Guarantor by the Company, any other Guarantor, the Trustee or any Holder shall be sufficient for any purpose hereunder (unless otherwise herein expressly provided) if in writing, and mailed, first class postage prepaid, to such Guarantor addressed to it c/o AMVESCAP PLC, 1315 Peachtree Street, N.E., Suite 500, Atlanta, Georgia 30309, Attention: General Counsel, or sent by facsimile to such Guarantor at (404) 724-4280 (with receipt confirmed by telephone at (404) 479-2889), or at any other address or facsimile number previously furnished in writing to the Trustee by such Guarantor; or (d) the Luxembourg Paying Agent by the Company, any Guarantor, the Trustee or any Holder shall be sufficient for any purpose hereunder (unless otherwise herein expressly provided) if in writing, and mailed, first class postage prepaid, to the Luxembourg Paying Agent addressed to it at Banque Generale de Luxembourg S.A., 50 Avenue J.F. Kennedy, L-2951 Luxembourg, or at any other address or facsimile number previously furnished in writing to the Company. 11 Section 1.06 Notice to Holders, Waiver. Where this Indenture provides for notice of any event to Holders by the Company or the Trustee, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Any notice mailed to a Holder in the manner herein prescribed shall be conclusively deemed to have been received by such Holder, whether or not such Holder actually receives such notice. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of or irregularities in regular mail service or by reason of any other cause, it shall be impracticable to mail notice of any event to Holders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice for every purpose hereunder. Section 1.07 Conflict of any Provision of Indenture with Trust Indenture Act. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 318, inclusive, of the Trust Indenture Act, or conflicts with any provision (an "incorporated provision") required by or deemed to be included in this Indenture by operation of such Trust Indenture Act sections, such imposed duties or incorporated provision shall control. Section 1.08 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 1.09 Successors and Assigns. All covenants and agreements in this Indenture by the Company and the Guarantors shall bind its respective successors and assigns, whether so expressed or not. Section 1.10 Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 12 Section 1.11 Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any Securities Registrar and their successors hereunder, and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 1.12 Governing Law. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York (without regard to applicable principles of conflicts of law thereof). Upon the issuance of the Exchange Securities, if any, or the effectiveness of the Exchange Offer Registration Statement or, under certain circumstances, the effectiveness of the Shelf Registration Statement, this Indenture shall be subject to the provisions of the Trust Indenture Act that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions. Section 1.13 Legal Holidays. In any case where any Interest Payment Date, Redemption Date, date established for payment of Defaulted Interest pursuant to Section 3.09, Stated Maturity or Maturity with respect to any Security or other day on which principal, interest or Additional Amounts in respect or the Securities is due, shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment of principal, interest or Additional Amounts need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, Redemption Date, date established for payment of Defaulted Interest pursuant to Section 3.09 or Stated Maturity or Maturity; provided that no interest shall accrue for the period from and after such Interest Payment Date or other such day, Redemption Date, date established for payment of Defaulted Interest pursuant to Section 3.09, Stated Maturity or Maturity, as the case may be, to the next succeeding Business Day. Section 1.14 Agent for Service; Submission to Jurisdiction; Waiver of Immunities and Jury Trial. The Company and each Guarantor agree that any suit, action or proceeding against the Company or any Guarantor arising out of or based upon this Indenture or the transactions contemplated hereby may be instituted in any State or Federal court in The City of New York, New York, and waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the nonexclusive jurisdiction of such courts in any suit, action or proceeding. The Company and each Guarantor has appointed C T Corporation System, 111 Eighth Avenue, New York, New York 10011 as its authorized agent (the "Authorized Agent") upon whom process may be served in any suit, action or proceeding arising out of or based upon this Indenture or the transactions contemplated herein which may be instituted in any State or Federal court in The City of New York, New York, and expressly accepts the nonexclusive jurisdiction of any such court in respect of any such suit, action or proceeding. The Company and the Guarantors further agree to take any and all action as may be 13 necessary to maintain such designation and appointment of such agent in full force and effect for a period of ten years from the date of this Indenture. If for any reason C T Corporation System shall cease to be available to act as such authorized agent for the Company and the Guarantors, the Company the Guarantors agree to designate a new agent in the State of New York on the terms and for the purpose of this Section 1.14. The Company and each Guarantor hereby represent and warrant that the Authorized Agent has accepted such appointment and has agreed to act as said agent for service of process, and the Company and each Guarantor agree to take any and all action, including the filing of any and all documents that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Company. Notwithstanding the foregoing, any action arising out of or based upon this Indenture may be instituted in any court of competent jurisdiction in England. To the extent that the Company or any Guarantor has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set off or any legal process (whether service of notice, attachment in aid of or otherwise) with respect to itself or its property, it hereby irrevocably waives and agrees not to plead or claim such immunity in respect of its obligations under this Indenture, the Securities or the Guarantees, as applicable. Section 1.15 Currency. (a) Each reference in this Indenture to U.S. dollars (the "relevant currency") is of the essence. To the fullest extent permitted by law, the obligation of the Company in respect of any amount due with respect to the Securities or any other obligation under this Indenture will, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the relevant currency that the party entitled to receive such payment may, in accordance with its normal procedures, purchase with the sum paid in such other currency (after any premium and costs of exchange) on the Business Day immediately following the day on which such party receives such payment. If the amount in the relevant currency that may be so purchased for any reason falls short of the amount originally due, the Company will pay such additional amounts, in the relevant currency, as may be necessary to compensate for the shortfall. Any obligation of the Company not discharged by such payment will, to the fullest extent permitted by applicable law, be due as a separate and independent obligation and, until discharged as provided herein, will continue in full force and effect. (b) The Company and the Guarantors, jointly and severally, agree to indemnify each Holder against any loss incurred by such Holder as a result of any judgment or order being given or made against the Company or any of the Guarantors, for any U.S. dollar amount due under this Indenture and such judgment or order being expressed and paid in a currency (the "Judgment Currency") other than United States dollars and as a result of any variation as between (i) the rate of exchange at which the United States dollar amount is converted into the Judgment Currency for the purpose of such judgment or order and (ii) the spot rate of exchange in the City of New York at which such party on the date of payment of such judgment or order is able to purchase United States dollars with the amount of the Judgment Currency actually received by such party if such party had utilized such amount of Judgment Currency to purchase United States dollars as 14 promptly as practicable upon such party's receipt thereof. The foregoing indemnity shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term "spot rate of exchange" shall include any premiums and costs of exchange payable in connection with the purchase or, or conversion into, United States dollars. ARTICLE II SECURITY FORMS Section 2.01 Forms Generally. The Securities and the Trustee's certificate of authentication shall be in substantially the form annexed hereto as Exhibit A, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. Any portion of the text of any Security may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Security. The definitive Securities shall be printed, lithographed or engraved on steel-engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing such Securities, as evidenced by their execution of such Securities. The terms and provisions contained in the form of the Securities annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a part of this Indenture. To the extent applicable, the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. Initial Securities offered and sold in reliance on Rule 144A shall be issued initially in the form of one or more permanent global Securities without interest coupons substantially in the form set forth in Exhibit A (collectively "Restricted Global Security") deposited with, or on behalf of, the Depositary or with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Restricted Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided. Initial Securities offered and sold in reliance on Regulation S shall be issued initially in the form of one or more permanent global Securities in fully registered form without interest coupons substantially in the form set forth in Exhibit A (collectively, the "Regulation S Global Security" and, together with the Restricted Global Security, the "Global Securities" or each individually, a "Global Security"). The Regulation S Global Securities will be registered in the name of a nominee of DTC and deposited with or on behalf of the Depositary or with the Trustee, as custodian for Depositary, for the accounts of Euroclear and Clearstream. The aggregate principal amount of the Regulation S Global Security may from time to time be increased or decreased by adjustments made on the records of the Depositary or its nominee, or of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided. Until and 15 including the 40th day after the date of this Indenture, beneficial interests in the Regulation S Global Security may be held only through Euroclear or Clearstream, unless delivery is made through the Restricted Global Security in accordance with the certification requirements provided in this Indenture. If DTC is at any time unwilling or unable to continue as a depositary, or if, in the case of the Regulation S Global Security held for an account of Euroclear or Clearstream, Euroclear or Clearstream, as the case may be, is closed for business for 14 continuous days or announces an intention to cease or permanently ceases business, the Company will issue certificates for the Securities in definitive, fully registered, non-global form without interest coupons in exchange for the Regulation S Global Security or Restricted Global Security, as the case may be. In all cases, certificates for Securities delivered in exchange for any Global Security or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by DTC. In the case of certificates for Securities in non-global form issued in exchange for the Regulation S Global Security or Restricted Global Security, such certificates will bear the first legend appearing under Section 2.02 of this Indenture (unless the Company determines otherwise in accordance with applicable law). The holder of a Security in non-global form may transfer such Security, subject to compliance with the provisions of such legend, by surrendering it at the office or agency maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, which initially will be the office of the Trustee. Initial Securities offered and sold other than as global securities shall be issued in the form of permanent certificated Securities in registered form in substantially the form set forth in this Article (the "U.S. Physical Securities"). Section 2.02 Restrictive Legends. Unless and until (i) an Initial Security is sold under an effective Registration Statement or (ii) an Initial Security is exchanged for an Exchange Security in connection with an effective Registration Statement, in each case pursuant to the Registration Rights Agreement, each certificate representing a Security shall contain a legend substantially to the following effect (the "Private Placement Legend") on the face thereof: "THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY THE INITIAL INVESTOR (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATIONS UNDER THE SECURITIES ACT AND APPLICABLE SECURITIES LAWS OF SUCH 16 OFFSHORE JURISDICTION OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), AND (B) BY SUBSEQUENT INVESTORS, AS SET FORTH IN (A) ABOVE OR (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND ANY JURISDICTION OUTSIDE THE UNITED STATES." Each Global Security, whether or not an Initial Security, shall also bear the following legend on the face thereof: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 3.06 AND 3.07 OF THE INDENTURE. ARTICLE III THE SECURITIES Section 3.01 Title and Terms. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. Concurrently with the execution and delivery of this Indenture, the aggregate principal amount of Initial Securities to be authenticated and delivered under this Indenture is $300,000,000. Additional Securities, which may be Initial Securities or Exchange Securities ("Additional Securities"), may be authenticated and delivered under this 17 Indenture at any time from time to time, and such Securities will have the same terms and conditions as, and be treated as a single class (for all purposes under this Indenture) with, all such previously authenticated and delivered Securities. The Initial Securities shall be known and designated as the "5.90% Senior Notes due 2007" and the Exchange Securities shall be known and designated as the "5.09% Senior Notes due 2007, Series B." The Stated Maturity of the Securities shall be January 15, 2007, and the Securities shall bear interest at the rate of 5.90% per annum from their date of original issue, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semiannually in arrears on January 15 and July 15 in each year, commencing on the date set forth in the definitive form of such Securities, until the principal thereof is paid or duly provided for, to the Person in whose name the Security (or any Predecessor Security) is registered at the close of business on the January 1 or July 1 next preceding such Interest Payment Date. The principal of and interest on the Securities shall be payable, and the Securities shall be exchangeable and transferable, at the office or agency of the Company in (i) The City of New York and, (ii) so long as the Securities are listed on the Luxembourg Stock Exchange, and the rules of such stock exchange require, in Luxembourg, in each case maintained for such purposes, (which initially shall be the office of the Trustee located at SunTrust Bank, 919 Main Street, Richmond, VA, 23219, Attention: Corporate Trust Operations and the office of the Luxembourg Paying Agent located at Banque Generale de Luxembourg S.A., 50 Avenue J.F. Kennedy, L-2951 Luxembourg) or, at the option of the Company, interest may be paid by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register; provided that all payments with respect to Securities the Holders of which have given wire transfer instructions to the Trustee (or other Paying Agent)) by the Regular Record Date for such payment, will be required to be made by wire transfer of immediately available funds to the accounts specified by the Holders thereof. Securities that remain outstanding after the consummation of the Exchange Offer and Exchange Securities issued in connection with the Exchange Offer will be treated as a single class of securities under this Indenture. The Securities shall be redeemable as provided in Article XI. Section 3.02 Denominations. The Securities shall be issuable only in registered form without coupons and only in denominations of US$1,000 and any integral multiple thereof. Section 3.03 Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by any Director or member of its Executive Committee. The Guarantees endorsed thereon shall be executed on behalf of each Guarantor by any authorized officer of each Guarantor. The signature of any of these officers on the Securities or the Guarantees may be manual or facsimile signatures of the present or any future such authorized officer and may be imprinted or otherwise reproduced on the Securities and the Guarantees. 18 Securities or Guarantees bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company or the applicable Guarantor shall bind the Company or the Guarantor, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Initial Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Initial Securities directing the Trustee to authenticate the Securities and certifying that all conditions precedent to the issuance of Securities contained herein have been fully complied with, and the Trustee in accordance with such Company Order shall authenticate and deliver such Initial Securities. On Company Order, the Trustee shall authenticate for original issue Exchange Securities; provided that such Exchange Securities shall be issuable only upon the valid surrender for cancellation of Initial Securities of a like aggregate principal amount together with a Company Order for the authentication of such Securities certifying that all conditions precedent to the issuance have been complied with (including the effectiveness of a registration statement related thereto). In each case, the Trustee shall be entitled to receive an Officers' Certificate and an Opinion of Counsel of the Company that it may reasonably request in connection with such authentication of Securities. Such order shall specify the amount of Securities to be authenticated and the date on which the original issue of Initial Securities or Exchange Securities is to be authenticated. Each Security shall be dated the date of its authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for in Exhibit A duly executed by the Trustee by manual signature of an authorized officer, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. In case the Company, pursuant to Article VIII, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Article VIII, any of the Securities authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Securities executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon Company Request of the successor Person, shall authenticate and deliver Securities as specified in such request for the purpose of such exchange. If Securities shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section in exchange or substitution for or upon registration of transfer of any Securities, 19 such successor Person, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities at the time Outstanding for Securities authenticated and delivered in such new name. Section 3.04 Temporary Securities. Pending the preparation of definitive Securities, the Company and the Guarantors may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities having duly executed Guarantees endorsed thereon, which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities and Guarantees may determine, as conclusively evidenced by their execution of such Securities. If temporary Securities are issued, the Company and the Guarantors will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at the office or agency of the Company designated for such purpose pursuant to Section 10.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company and the Guarantors shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities having Guarantees duly endorsed thereon of authorized denominations. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. Section 3.05 Registration, Registration of Transfer and Exchange. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 10.02 being herein sometimes referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Security Register shall be in written form or any other form capable of being converted into written form within a reasonable time. At all reasonable times, the Security Register shall be open to inspection by the Trustee. The Trustee is hereby initially appointed as "Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security at the office or agency of the Company designated pursuant to Section 10.02, the Company and the Guarantors shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities having duly executed Guarantees endorsed thereon of any authorized denomination or denominations of a like aggregate principal amount. At the option of the Holder, Securities may be exchanged for other Securities of any authorized denomination and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange (including an exchange of Initial Securities for Exchange Securities), the Company 20 shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive; provided that no exchange of Initial Securities for Exchange Securities shall occur until an Exchange Offer Registration Statement shall have been declared effective by the Commission and that the Initial Securities to be exchanged for the Exchange Securities shall be cancelled by the Trustee. All Securities and Guarantees issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company and the Guarantors, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities and Guarantees surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Registrar) be duly endorsed, or be accompanied by a written instrument of transfer, in form satisfactory to the Company and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange or redemption of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.04, 9.06 or 11.08 not involving any transfer. The Company shall not be required (i) to issue, register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before the selection of Securities to be redeemed under Section 11.04 and ending at the close of business on the day of such mailing of the relevant notice of redemption, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. Notwithstanding anything to the contrary contained herein, the Trustee shall have no duty whatsoever to monitor Federal or State securities laws other than to collect the certificates required herein. Section 3.06 Book-Entry Provisions for Restricted Global Security. (a) Any Global Security initially shall (i) be registered in the name of Cede & Co., as nominee of the Depositary, (ii) be deposited with, or on behalf of, the Depositary or with the Trustee, as custodian for such Depositary, and (iii) bear legends as set forth in Section 2.02. The Depository or its nominee shall be the Holder of the Global Securities, and owners of beneficial interests in the Securities represented by the Global Securities shall hold such interests pursuant to the procedures and practices of the Depositary. Any such owner's beneficial ownership of any such Securities will be shown only on, and the transfer of such ownership interest shall be effected only through, records maintained by the Depositary or its nominee. Investors in any Regulation S Global Security may hold their interests in Regulation S Global Security through Euroclear or Clearstream, if they are participants in such systems, or indirectly through organizations which are participants in such systems. After the expiration of the applicable Restricted Period (but not earlier), investors in any Regulation S Global Security may 21 also hold such interests through organizations other than Euroclear or Clearstream that are participants in the Depositary's system. Euroclear and Clearstream will hold interests in such Regulation S Global Security on behalf of their participants through customers' securities accounts in their respective names on the books of their respective depositaries, which, in turn, will hold such interests in such Regulation S Global Security in customer's securities accounts in the depositaries' names on the books of the Depositary. All interests in a Global Security, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of the Depositary. Those interests held through Euroclear and Clearstream will be subject to the procedures and requirements of such system. As used herein, the term "Restricted Period" means the period of 40 consecutive days beginning on and including the first day after the later of (i) the day on which the Securities are first offered to persons other than distributors (as defined in Regulation S), if applicable, and (ii) the original issue date of the Securities. (b) Transfers of any Global Security shall be limited to transfers of such Global Security in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in any Global Security may be transferred in accordance with the rules and procedures of the Depositary and the provisions of Section 3.07. Unless (i) the Depositary notifies the Company that it is unwilling or unable to continue as depositary for a Global Security or ceases to be a "Clearing Agency" registered under the Exchange Act or announces an intention permanently to cease business or does in fact do so and a successor Depositary is not appointed by the Company within 90 days of such notice, (ii) an Event of Default has occurred and is continuing with respect to a Global Security or (iii) Company determines that the Global Securities (in whole or in part) should be exchanged for definitive Securities; provided that (x) such exchange is required by (A) any applicable law or (B) any event beyond the Company's control or (y) payments of interest on any Global Security, or beneficial interest are, of would become, subject to any deduction or withholding for taxes, owners of beneficial interests in a Global Security will not be entitled to have any portions of such Global Security registered in their names, will not receive or be entitled to receive physical delivery of Securities in definitive form and will not be considered the owners or holders of the Global Security. (c) Securities issued in exchange for a Global Security or any portion thereof pursuant to the last sentence of subsection (b) of this Section shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Security or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the Depositary shall designate and shall bear any legends required hereunder. Any Global Security to be exchanged in whole shall be surrendered by the Depositary to the Trustee, as Registrar. With regard to any Global Security to be exchanged in part, either such Global Security shall be so surrendered for exchange or, if the Trustee is acting as custodian for the Depositary or its nominee with respect to such Global Security, the principal amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate and make available for delivery the Security issuable on such exchange to or upon the order of the Depositary or an authorized representative thereof. In the event of the occurrence of any of the events specified in the last sentence of subsection (b) of this Section 3.06, the Company will 22 promptly make available to the Trustee a reasonable supply of certificated Securities in definitive form. (d) Except as otherwise set forth in this Indenture or a Global Security, owners of beneficial interests in the Securities evidenced by a Global Security will not be entitled to any rights under this Indenture with respect to such Global Security, and the Depositary or its nominee may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the owner and Holder of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any such agent from giving effect to any written certification, proxy or other authorization furnished by the Depositary or its nominee or impair, as between the Depositary or its nominee and such owners of beneficial interests, the operation of customary practices governing the exercise of the rights of the Depositary or its nominee as Holder of any Security. Section 3.07 Special Transfer Provisions. Unless and until (i) an Initial Security is sold under an effective Registration Statement, or (ii) an Initial Security is exchanged for an Exchange Security in connection with an effective Registration Statement, the following provisions shall apply: (a) Restricted Global Security to Regulation S Global Security. If, at ---------------------------------------------------------- any time, an owner of a beneficial interest in a Restricted Global Security deposited with the Depositary (or the Trustee as custodian for the Depositary) wishes to transfer its interest in such Restricted Global Security to a Person who is required or permitted to take delivery thereof in the form of an interest in a Regulation S Global Security, such owner shall, subject to the Applicable Procedures, exchange or cause the exchange of such interest for an equivalent beneficial interest in a Regulation S Global Security as provided in this Section 3.07(a). Upon receipt by the Trustee of (1) instructions given in accordance with the Applicable Procedures from an Agent Member directing the Trustee to credit or cause to be credited a beneficial interest in the Regulation S Global Security in an amount equal to the beneficial interest in the applicable Restricted Global Security to be exchanged, (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depositary and the Euroclear or Clearstream account (if applicable) to be credited with such increase, and (3) a certificate substantially in the form of Exhibit B hereto given by the owner of such beneficial interest, the Trustee, as Registrar, shall instruct the Depositary to reduce or cause to be reduced the aggregate principal amount of the applicable Restricted Global Security and to increase or cause to be increased the aggregate principal amount of the applicable Regulation S Global Security by the principal amount of the beneficial interest in the Restricted Global Security to be exchanged, to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Regulation S Global Security equal to the reduction in the aggregate principal amount of the applicable Restricted Global Security, and to debit, or cause to be debited, from the account of the Person making such exchange or transfer the beneficial interest in the Restricted Global Security that is being exchanged or transferred. 23 (b) Regulation S Global Security to Restricted Global Security. If, at ---------------------------------------------------------- any time, an owner of a beneficial interest in a Regulation S Global Security deposited with the Depositary or with the Trustee as custodian for the Depositary wishes to transfer its interest in such Regulation S Global Security to a Person who is required or permitted to take delivery thereof in the form of an interest in a Restricted Global Security, such owner shall, subject to the Applicable Procedures, exchange or cause the exchange of such interest for an equivalent beneficial interest in a Restricted Global Security, as provided in this Section 3.07(b). Upon receipt by the Trustee of (1) instructions given in accordance with the Applicable Procedures from an Agent Member, directing the Trustee, as Registrar, to credit or cause to be credited a beneficial interest in the Restricted Global Security equal to the beneficial interest in the Regulation S Global Security to be exchanged, (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depositary to be credited with such increase and (3) if such transfer is requested prior to the expiration of the Restricted Period, a certificate in the form of Exhibit C attached hereto given by the owner of such beneficial interest, the Trustee, as Registrar, shall instruct the Depositary to reduce or cause to be reduced the aggregate principal amount of such Regulation S Global Security and to increase or cause to be increased the aggregate principal amount of the applicable Restricted Global Security by the principal amount of the beneficial interest in the Regulation S Global Security to be exchanged, and the Trustee, as Registrar, shall instruct the Depositary, concurrently with such reduction, to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the applicable Restricted Global Security equal to the reduction in the aggregate principal amount of such Regulation S Global Security and to debit or cause to be debited from the account of the Person making such transfer the beneficial interest in the Regulation S Global Security that is being transferred. After the expiration of the Restricted Period, the certificate described in clause (3) above shall no longer be required to effect transfers pursuant to this Section 3.07(b). (c) Transfers of U.S. Physical Securities for Restricted Global ------------------------------------------------------------ Security or Regulation S Global Security. If the holder of a U.S. Physical ---------------------------------------- Security wishes at any time to transfer such holder's U.S. Physical Security to a Person who wishes to take delivery thereof in the form of a beneficial interest in the Regulation S Global Security or the Restricted Global Security, such transfer may be effected, subject to the Applicable Procedures, only in accordance with the provisions of this Section 3.07(c). Upon receipt by the Trustee of (1) instructions given in accordance with the Applicable Procedures from an Agent Member directing the Trustee to credit or cause to be credited a beneficial interest in the Regulation S Global Security or Restricted Global Security, as the case may be, in a principal amount equal to that of the U.S. Physical Securities to be so transferred, (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depositary (and the Euroclear or Clearstream account, as applicable) to be credited with such beneficial interest and (3) a certificate in substantially the form set forth in Exhibit D, given by the holder of such U.S. Physical Security, the Trustee, as Security Registrar, shall instruct the Depositary to increase the principal amount of the Regulation S Global Security or the Restricted Global Security, as the case may be, by the principal amount of the U.S. 24 Physical Security to be so transferred, and to cancel or cause to be canceled such U.S. Physical Security. (d) Restricted Global Security or U.S. Physical Security to Regulation --------------------------------------------------------- S Global Security After Two Years. If the holder of a beneficial interest --------------------------------- in a Restricted Global Security or U.S. Physical Security wishes at any time after the second anniversary of the date of original issuance of the Securities to (A) transfer such interest to a Person who wishes to take delivery thereof in the form of a beneficial interest in the Regulation S Global Security or (B) to exchange such interest for a beneficial interest in a Regulation S Global Security, such transfer or exchange may be effected, subject to the Applicable Procedures, only in accordance with this Section 3.07(d). Upon receipt by the Trustee of (1) in the case of a transfer or exchange of an interest in the Restricted Global Security or a U.S. Physical Security, instructions given in accordance with the Applicable Procedures from an Agent Member directing the Trustee to credit or cause to be credited to a beneficial interest in the Regulation S Global Security in an amount equal to that the beneficial interest in the Restricted Global Security to be so transferred or exchanged, (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depositary (and, if applicable, the Euroclear or Clearstream account, as the case may be) to be credited with such beneficial interest and (3) a certificate substantially in the form of Exhibit E hereto given by the holder of such beneficial interest, the Trustee, as Registrar, shall (i) in the case of a transfer or exchange of an interest in the Restricted Global Security, instruct the Depositary to reduce the principal amount of the Restricted Global Security, and to increase the principal amount of the Regulation S Global Security, by the principal amount of the beneficial interest in the Restricted Global Security to be so transferred or exchanged, and to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Regulation S Global Security having a principal amount equal to the amount by which the principal amount of the Restricted Global Security was reduced upon such transfer or exchange or (ii) in the case of a transfer or exchange of a U.S. Physical Security, cancel such U.S. Physical Security and increase the principal amount of the Regulation S Global Security accordingly. (e) Private Placement Legend. Upon the transfer, exchange or ------------------------ replacement of Securities not bearing the Private Placement Legend, the Registrar shall deliver Securities that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Securities bearing the Private Placement Legend, the Registrar shall deliver only Securities that bear the Private Placement Legend unless either (i) the circumstances contemplated by clauses (i) or (ii) or Section 2.02 exist and the Company directs the Trustee pursuant to an Officers' Certificate to remove such legend or (ii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. (f) General. By its acceptance of any Security bearing the Private ------- Placement Legend, each Holder of such a Security acknowledges the restrictions on transfer of such 25 Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture. The Registrar shall retain as required by law copies of all letters, notices and other written communications received pursuant to Section 3.06 or this Section 3.07. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar. Section 3.08 Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company and the Guarantor shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security having a duly executed Guarantee endorsed thereon, of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company, the Guarantor and the Trustee (1) evidence to their satisfaction of the destruction, loss or theft of any Security and (2) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of written notice to the Company, the Guarantor or the Trustee that such Security has been acquired by a bona fide purchaser, the Company and the Guarantor shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security having a duly executed Guarantee endorsed thereon, of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security, and the Guarantee endorsed thereon, issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities, and the Guarantees endorsed thereon, duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. 26 Section 3.09 Payment of Interest and Certain Additional Amounts; Rights to Interest and Certain Additional Amounts Preserved. Interest on and any Additional Amounts with respect to any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name such Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest at the office or agency of the Company in The City of New York and, if the Securities are still registered on the Luxembourg Stock Exchange and the rules of such exchange so require, in Luxembourg, in each case maintained for such purposes (which initially shall be the office of the Trustee located at SunTrust Bank, 919 Main Street, Richmond, VA, 23219, Attention: Corporate Trust Operations and the office of the Luxembourg Paying Agent, located at Banque Generale de Luxembourg S.A., 50 Avenue J.F. Kennedy, L-2951 Luxembourg) pursuant to Section 10.02 or, at the option of the Company, interest may be paid by check mailed to the address of the Person entitled thereto pursuant to 3.10 as such address appears in the Security Register; provided that all payments with respect to Securities, the Holders of which have given wire transfer instructions to the Trustee (or other Paying Agent) by the Regular Record Date shall be required to be made by wire transfer of immediately available funds to the accounts specified by the holders thereof. Any interest on and any Additional Amounts with respect to any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to the Holder on the Regular Record Date by virtue of having been such Holder, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne by the Securities (such defaulted interest and interest thereon herein collectively called "Defaulted Interest") may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below: (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date, and in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given in the manner provided for in Section 1.06, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so given, such Defaulted Interest shall be paid to the Persons in 27 whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b). (b) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest and any Additional Amounts accrued and unpaid, and to accrue, which were carried by such other Security. If the Company shall be required to pay any additional interest pursuant to the terms of the Registration Rights Agreement, it shall deliver an Officers' Certificate to the Trustee setting forth the new interest rate and the period for which such rate is applicable as required by Section 7.02. Section 3.10 Persons Deemed Owners. Prior to the due presentment of a Security for registration of transfer, the Company, each Guarantor, the Trustee and any agent of the Company, such Guarantor or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of, and (subject to Sections 3.05 and 3.09), interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and none of the Company, the Guarantors, the Trustee or any agent of the Company, such Guarantor or the Trustee shall be affected by notice to the contrary. Section 3.11 Cancellation. All Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of by the Trustee in accordance with its customary procedures. 28 Section 3.12 CUSIP and CINS Numbers. The Company in issuing the Securities may use "CUSIP" and "CINS" numbers (if then generally in use) and, if so, the Trustee shall use "CUSIP" and "CINS" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. Section 3.13 Computation of Interest. Interest on the Securities shall be computed on the basis of a 360-day year consisting of twelve 30-day months. ARTICLE IV SATISFACTION AND DISCHARGE Section 4.01 Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request cease to be of further effect (except as to surviving rights of registration of transfer or exchange of the Securities, as expressly provided for herein or pursuant hereto and any right to receive Additional Amounts) and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture when (a) either (i) all the Securities theretofore authenticated and delivered (other than mutilated, destroyed, lost or stolen Securities that have been replaced or paid as provided in Section 3.08 and Securities that have been subject to defeasance under Article XII) have been delivered to the Trustee for cancellation; or (ii) all Securities not theretofore delivered to the Trustee for cancellation (A) have become due and payable, (B) will become due and payable at Stated Maturity within one year, or (C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company or the Guarantors, as the case may be, in the case of (A), (B) or 29 (C) above, has irrevocably deposited or caused to be deposited with the Trustee funds in trust for the purpose in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal of and interest on, and any Additional Amounts with respect to, the Securities to the date of such deposit (in the case of Securities that have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be, together with irrevocable instructions directing the Trustee to apply the funds to the payment of the Securities at the Stated Maturity or Redemption Date, as the case may be; (b) the Company or the Guarantors, as the case may be, has paid or caused to be paid all sums payable hereunder by the Company; and (c) the Company or the Guarantors, as the case may be, has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.06 and, if money shall have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of this Section, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall survive. Section 4.02 Application of Trust Money. Subject to the provisions of the last paragraph of Section 10.03, all money deposited with the Trustee pursuant to Section 4.01 or Article XII shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal of and interest and Additional Amounts for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law. ARTICLE V REMEDIES Section 5.01 Events of Default. "Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) default in the payment of any interest on or any Additional Amounts payable in respect of any Security when it becomes due and payable, and continuance of such default for a period of 30 days; 30 (b) default in the payment of the principal of any Security when due; (c) default in the observance or performance, or breach, of any covenant or agreement of the Company or any Guarantor contained in this Indenture (other than as contemplated by clauses (a) and (b) above) and continuance of such default or breach for a period of 60 days after written notice has been given (x) to the Company by the Trustee or (y) to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Securities then Outstanding specifying such default or breach, requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; (d) the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of the Company or any Guarantor, as the case may be, in an involuntary case or proceeding under any applicable U.S. federal or state or English bankruptcy, insolvency, reorganization or other similar law or (ii) a decree or order adjudging the Company or any Guarantor, as the case may be, a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or such Guarantor, as the case may be, under any applicable U.S. federal or state law or English law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Guarantor, as the case may be, or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; provided that, with respect to any Guarantor, such events referred to in clauses (i) or (ii) have had or could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), earnings, business or prospects of the Company and its Subsidiaries taken as a whole; or (e) the commencement by the Company or any Guarantor, as the case may be, of a voluntary case or proceeding under any applicable U.S. federal or state or English bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company or any Guarantor, as the case may be, in an involuntary case or proceeding under any applicable U.S. federal or state or English bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable U.S. federal or state law or English law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Guarantor, as the case may be, or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company or any Guarantor, as the case may be, in furtherance of any such action; provided, that, with respect to any Guarantor, such events have had or could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), earnings, business or prospects of the Company and its Subsidiaries taken as a whole. 31 Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an Event of Default (other than as specified in Section 5.01(d) or (e)) occurs and is continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities then Outstanding may, and the Trustee at the request of such Holders shall, declare the principal of and accrued and unpaid interest on, all of the Outstanding Securities immediately due and payable by a notice in writing to the Company (and to the Trustee if given by the Holders) and, upon any such declaration, all such amounts will become due and payable immediately. If an Event of Default specified in Section 5.01(d) or (e) above occurs and is continuing, then the principal amount of all of the Securities Outstanding shall automatically become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of Securities. At any time after a declaration of acceleration and before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of a majority in aggregate principal amount of the Outstanding Securities, by written notice to the Company and the Trustee, may rescind such declaration and its consequences if: (a) the Company or any Guarantor has paid or deposited with the Trustee a sum sufficient to pay, (i) all overdue interest on and Additional Amounts with respect to all Securities, (ii) all principal of any Outstanding Securities that has become due other than by such declaration of acceleration and interest thereon at the rate borne by the Securities and any Additional Amounts payable with respect thereto, (iii) to the extent that payment of such interest is lawful, interest on overdue interest, any Additional Amounts and overdue principal at the rate borne by the Securities, and (iv) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (b) all Events of Default, other than the non-payment of amounts of principal of or interest on and any Additional Amounts with respect to the Securities that have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13. No such rescission shall affect any subsequent Default or impair any right consequent thereon. 32 Section 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee. The Company and each of the Guarantor covenants that if: (a) default is made in the payment of any interest on or Additional Amounts with respect to any Security when such interest or Additional Amounts shall have become due and payable and such default continues for a period of 30 days, or (b) default is made in the payment of the principal of any Security at the Maturity thereof, the Company and each Guarantor will, upon demand of the Trustee, pay to the Trustee for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal, interest and Additional Amounts, and interest on any overdue principal and, to the extent that payment of such interest shall be legally enforceable, upon any overdue installment of interest and Additional Amounts, at the rate borne by the Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If the Company or any Guarantor, as the case may be, fails to pay such amounts forthwith upon such demand, the Trustee, in its own name as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company, such Guarantor or any other obligor upon the Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company, such Guarantor or any other obligor upon the Securities, wherever situated. If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. Section 5.04 Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities (including the Guarantors) or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal, interest or Additional Amounts) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of principal, interest and Additional Amounts owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the 33 Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other securities or property payable or deliverable upon the conversion or exchange of such securities or upon any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 5.05 Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. Section 5.06 Application of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal, interest and any Additional Amounts, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 6.06; SECOND: To the payment of the amounts then due and unpaid for principal of and interest and any Additional Amounts on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, interest and any Additional Amounts, respectively; and THIRD: The balance, if any, to the Company and/or the Guarantors, as the case may be. 34 Section 5.07 Limitation on Suits. No Holder of any Securities shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default; (b) the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (c) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities (including fees and expenses of its agents and counsel) to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority or more in principal amount of the Outstanding Securities; it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders. Section 5.08 Unconditional Right of Holders to Receive Principal, Interest and Additional Amounts. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment, as provided herein (including, if applicable, Article XII) and in such Security of the principal of, and (subject to Section 3.09) interest on, and any Additional Amounts with respect to such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. Section 5.09 Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Guarantors, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and 35 thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. Section 5.10 Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.08, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 5.11 Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 5.12 Control by Holders. The Holders of not less than a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, provided that: (a) such direction shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Section 5.13 Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstanding Securities may, on behalf of the Holders of all of the Securities, waive any past defaults hereunder, except a default: (a) in the payment of the principal of, interest on or any Additional Amounts with respect to any Security, or (b) in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the Holder of each Security Outstanding. 36 Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Section 5.14 Waiver of Stay or Extension Laws. The Company and each Guarantor covenant (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company and each Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. Section 5.15 Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorney's fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of the payment of the principal of, interest on or Additional Amounts with respect to any Security on or after the respective Stated Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date). ARTICLE VI THE TRUSTEE Section 6.01 Certain Duties and Responsibilities. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers hereunder. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. 37 The Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee. In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). The Trustee shall not be liable for any error of judgement made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. Section 6.02 Notice of Defaults. If a Default or an Event of Default occurs and is continuing and is known to the Trustee, the Trustee shall mail to each Holder of the Securities in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act, notice of the Default or Event of Default within 30 days after the occurrence thereof; provided, however, that, except in the case of a Default or an Event of Default in the payment of principal of, interest on or Additional Amounts with respect to any Securities, the Trustee may withhold the notice to the Holders of the Securities if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determine that withholding such notice is in the interests of the Holders of the Securities. Section 6.03 Certain Rights of Trustee. Subject to Section 6.01: (a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting, pursuant to the terms of this Indenture or otherwise, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper Person or Persons; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order with sufficient detail as may be requested by the Trustee and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) 38 may, in the absence of bad faith on its part, rely upon an Officers' Certificate or an Opinion of Counsel; (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities (including fees and expenses of its agents and counsel) which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into, and may conclusively rely upon, the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. Notwithstanding anything else herein contained, whenever any provision of this Indenture indicates that any confirmation of a condition or event is qualified "to the knowledge of" or "known to" the Trustee or other words of similar meaning, said words shall mean and refer to the actual current awareness of one or more Responsible Officers. Section 6.04 Trustee Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except for the Trustee's certificates of authentication, shall be taken as the statements of the Company and the Guarantors, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture, the Securities or any Guarantee, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Securities and perform its obligations hereunder and, upon the effectiveness of a Registration Statement, that the statements made by it in a Statement of Eligibility on Form T-1 supplied to the Company are true and accurate, subject to the qualifications set forth therein. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. 39 Section 6.05 May Hold Securities. The Trustee, any Paying Agent, any Registrar or any other agent of the Company or of the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Registrar or such other agent. Section 6.06 Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law or Section 311 of the Trust Indenture Act. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company or any Guarantor, as the case may be. Section 6.07 Compensation and Reimbursement. The Company agrees: (a) to pay to the Trustee (in its capacity as Trustee, Paying Agent and Registrar) from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith or willful default by the Trustee under the Indenture; and (c) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of enforcing this Indenture against the Company or the Guarantors (including this Section 6.06) and of defending itself against any claim (whether asserted by any Holder or the Company) or liability in connection with the exercise or performance of any of its powers or duties hereunder except to the extent that any such loss, liability or expense was due to the negligence or willful misconduct of the Trustee or willful default by the Trustee under the Indenture. The obligations of the Company under this Section to compensate the Trustee, to pay or reimburse the Trustee for expenses, disbursements and advances and to indemnify and hold harmless the Trustee shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture and any termination under any bankruptcy law. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.01(d) or (e), the expenses (including the reasonable charges and 40 expenses of its counsel) of and the compensation for such services are intended to constitute expenses of administration under any applicable bankruptcy, insolvency or other similar law of the United Kingdom or United States. The provisions of this Section shall survive the termination of this Indenture. Section 6.08 Corporate Trustee Required; Eligibility. There shall be at all times a Trustee hereunder which shall be eligible to act as Trustee under Section 310(a)(1) of the Trust Indenture Act and shall have a combined capital and surplus of at least US$50,000,000. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of United States federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 6.09 Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.10. (b) The Trustee may resign at any time by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.10 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. (c) The Trustee may be removed at any time by Act of the Holders of not less than a majority in principal amount of the Outstanding Securities, delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, except when the Trustee's duty to resign is stayed in accordance with the provisions of Section 310(b) of the Trust Indenture Act, or (2) the Trustee shall cease to be eligible under Section 6.08 and shall fail to resign after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or 41 (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company, by a Board Resolution, may remove the Trustee, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Notwithstanding the foregoing, the Trustee shall at all times comply with the provisions of Section 310(b) of the Trust Indenture Act. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided subject to Section 315(e) of the Trust Indenture Act, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to the Holders of Securities in the manner provided for in Section 1.06. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. Section 6.10 Acceptance of Appointment by Successor. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. 42 Section 6.11 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. In case at that time any of the Securities shall not have been authenticated, any successor Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor Trustee. In all such cases such certificates shall have the full force and effect which this Indenture provides that the certificate of authentication of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Securities in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. Section 6.12 Withholding Taxes. Notwithstanding any other provision of this Agreement, the Trustee, as agent for the Company and the Guarantors, shall exclude and withhold from each payment of principal and interest and other amounts due hereunder or under the Securities or the Guarantees any and all withholding taxes applicable thereto as required by law. The Trustee agrees to act as such withholding agent and, in connection therewith, whenever any present or future taxes or similar charges are required to be withheld with respect to any amounts payable in respect of the Securities or the Guarantees, to withhold such amounts and timely pay the same to the appropriate authority in the name of and on behalf of the Holders of the Securities, that it will furnish to the Holders of the Securities such forms or certificates as are necessary or appropriate to provide the information described in Section 10.04(c)(1) or make the declaration or claim described in Section 10.04(c)(2), that it will file any necessary withholding tax returns or statements when due, and that, as promptly as possible after the payment thereof, it will deliver to each Holder of a Security appropriate documentation showing the payment thereof, together with such additional documentary evidence as such Holders may reasonably request from time to time. In the event that the Trustee is also acting as Paying Agent, transfer agent, or Registrar hereunder, the rights and protections afforded to the Trustee pursuant to this Article VI shall also be afforded to such Paying Agent, transfer agent, or Registrar. The Company will notify the Trustee of any change that becomes effective after the date hereof in the laws of the United Kingdom or any political subdivision or Taxing authority thereof or therein or any change in the interpretation or administration thereof the effect of which is to require the deduction or withholding of any amount of taxes pursuant to the Securities or the Guarantees. 43 ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE Section 7.01 Disclosure of Names and Addresses of Holders. Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that none of the Company or the Trustee or any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 312 of the Trust Indenture Act, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of the Trust Indenture Act. The Trustee shall comply with any request made pursuant to and in accordance with Section 312(b) of the Trust Indenture Act. Section 7.02 Reports by Trustee. Within 60 days after December 31 of each year commencing with the first December 31 after the first issuance of Securities, the Trustee shall transmit to the Holders, in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act, a brief report dated as of such December 31 as required by Sections 313(a) and 313(b) of the Trust Indenture Act. The Trustee shall file a copy of each report delivered pursuant to this section as required by the Trust Indenture Act. ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 8.01 Company and Guarantors May Consolidate, etc., Only on Certain Terms. Neither the Company nor any Guarantor shall, in a single transaction or a series of related transactions, (i) consolidate with or merge into any other Person or permit any other Person to consolidate with or merge into the Company of any such Guarantor or (ii) directly or indirectly, transfer, sell, lease or otherwise dispose of all or substantially all of its assets to any other Person, unless: (a) in a consolidation or merger in which the Company does not survive or if the Company transfers, sells, leases or otherwise disposes of all or substantially all of its assets to any other Person, the successor Person to the Company shall expressly assume, by a supplemental indenture executed and delivered to the Trustee in form satisfactory to the Trustee, all of the Company's obligations under this Indenture and the Securities; (b) in a consolidation or merger in which any Guarantor does not survive or if any Guarantor transfers, sells, leases, or otherwise disposes of all or substantially all of its assets to another Person (other than the Company or another Guarantor), the successor Person to such Guarantor shall expressly assume, by a supplemental indenture executed and delivered to the Trustee in form satisfactory to the Trustee, all of such Guarantor's obligations under this Indenture and the Guarantee issued by such Guarantor; 44 (c) after giving effect to such transaction, no Event of Default or event that with the passing of time or the giving of notice, or both, would constitute an Event of Default shall have occurred and be continuing; and (d) in the event that the successor Person is incorporated in a jurisdiction other than the U.S. or the U.K., (A) the Company delivers to the Trustee an Opinion of Counsel stating that the obligations of the successor Person under this Indenture, the Securities and the Guarantees, as applicable, are enforceable against such successor Person to the same extent as the obligations of the Company or such Guarantor under this Indenture, the Securities and the Guarantees, as applicable, immediately prior to such transaction; (B) the successor Person agrees in writing to submit to jurisdiction and appoints an agent for the service of process, each under terms substantially similar to the terms contained in the Indenture with respect to the Company or such Guarantor, as applicable; (C) the successor Person agrees in writing to pay Additional Amounts as provided under this Indenture under Section 10.04 with respect to the Company or such Guarantor, as applicable, except that such Additional Amounts shall relate to any withholding tax whatsoever regardless of any change of law (subject to exceptions substantially similar to those contained in Section 10.04); and (D) the Board of Directors of the Company determines in good faith that such transaction will have no material adverse effect on any Holder and a Board Resolution to that effect is delivered to the Trustee. Section 8.02 Successor Person Substituted for Company. Upon any consolidation by the Company or any Guarantor with or merger by the Company or a Guarantor into any other Person or any transfer, sale, lease or other disposition of the properties and assets of the Company or any Guarantor substantially as an entirety to any Person in accordance with Section 8.01, the successor Person formed by such consolidation or merger or to which such transfer, sale, lease or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or such Guarantor under the Indenture, the Securities and the Guarantees, as the case may be, with the same effect as if such successor Person had been named as the Company or a Guarantor herein; and thereafter, except in the case of a lease to another Person, the predecessor Person shall be released from all obligations and covenants under this Indenture and the Securities. ARTICLE IX SUPPLEMENTS AND AMENDMENTS TO INDENTURE AND SECURITIES GUARANTEES Section 9.01 Without Consent of Holders. Without the consent of any Holders, the Company and any affected Guarantor, each when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, for any of the following purposes: (a) to evidence the succession of another Person to the Company or any Guarantor and the assumption by any such successor of the covenants of the Company or 45 any Guarantor contained herein and in the Securities or to add any Guarantors of the Securities; or (b) to add to the covenants of the Company and the Guarantors for the benefit of the Holders or to surrender any right or power herein conferred upon the Company or the Guarantors; or (c) to add any additional Events of Default; or (d) to provide for uncertificated Securities in addition to or in place of the certificated Securities; or (e) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee pursuant to the requirements of Section 6.09; or (f) to secure the Securities or any Guarantee; or (g) to cure any ambiguity, to correct or supplement any provision in this Indenture which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action shall not adversely affect the interests of the Holders in any material respect; or (h) to comply with any requirement of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act. Section 9.02 With Consent of Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company, any affected Guarantor and the Trustee, the Company and the Guarantors, each when authorized by a Board Resolution, and the Trustee may enter into one or more indentures supplemental hereto for the purpose of modifying in any manner this Indenture or any Guarantee; provided, however, that no such indenture supplemental may, without the consent of the Holder of each Outstanding Security affected thereby: (a) change the Stated Maturity of the principal of, or any installment of interest on or any Additional Amounts with respect to, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof or any Additional Amounts with respect to, or change the obligation of the Company to pay Additional Amounts pursuant to Section 10.04 or change the place of payment where, or the coin or currency in which any Security or the interest thereon or any Additional Amounts with respect to is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); or 46 (b) reduce the percentage in aggregate principal amount of the Outstanding Securities required to consent to any amendment of, or waiver of compliance with, any provision of or defaults under this Indenture; or (c) waive a Default or Event of Default in the payment of principal of, interest on or any Additional Amounts with respect to the Securities (except a rescission of acceleration of Securities by the Holders of at least a majority in aggregate principal amount of the then Outstanding Securities (including Additional Securities issued under this Indenture, if any); or (d) release any Guarantor from any of its obligations under its Guarantee or this Indenture, except in accordance with the terms of this Indenture; or (e) make any change that would adversely affect the rights of Holders to receive Additional Amounts; or (f) make any change in the Company's obligations to maintain an office or agency in the places and for the purposes set forth in Section 10.02; or (g) amend, change or modify any of the provisions in this Section 9.02. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 9.03 Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that such supplemental indenture constitutes the legal, valid and binding obligation of the Company and the Guarantors subject to the customary exceptions. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 9.04 Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 9.05 Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. 47 Section 9.06 Reference in Securities to Supplemental Indentures. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities. Section 9.07 Notice of Supplemental Indentures. Promptly after the execution by the Company, any affected Guarantor and the Trustee of any supplemental indenture pursuant to the provisions of Section 9.02, the Company shall give notice thereof to the Holders of each Outstanding Security affected, in the manner provided for in Section 1.06, setting forth in general terms the substance of such supplemental indenture. Any failure by the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment or waiver. Section 9.08 Revocation and Effect of Consents, Waivers and Actions. Until an amendment, waiver or other action by Holders becomes effective, a consent to it or any other action by a Holder of a Security hereunder is a continuing consent by the Holder and every subsequent Holder of that Security, even if notation of the consent, waiver or action is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent, waiver or action as to such Holder's Security if the Trustee receives the notice of revocation before the consent of the requisite aggregate principal amount of the Securities then outstanding has been obtained and not revoked. After an amendment, waiver or action becomes effective, it shall bind every Security Holder, except as provided in Section 9.02. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment or waiver. If a record date is fixed, then, notwithstanding the first two sentences of the immediately preceding paragraph, those person who were Holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date. ARTICLE X COVENANTS Section 10.01 Payment of Principal and Interest. The Company covenants and agrees for the benefit of the Holders that it will duly and punctually pay the principal of, interest on and any Additional Amounts with respect to the Securities in accordance with the terms of the Securities and this Indenture. 48 The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest and any Additional Amounts at the same rate to the extent lawful. Section 10.02 Maintenance of Office or Agency. The Company will maintain in The City of New York and, so long as the Securities are listed on the Luxembourg Stock Exchange and the rules of such stock exchange require, in Luxembourg, an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities or any Guarantor in respect of the Guarantees and this Indenture may be served. The Corporate Trust Office located at SunTrust Bank, 919 Main Street, Richmond, VA 23219, Attention: Corporate Trust Operations of the Trustee shall initially be such office or agency of the Company in New York, and so long as the Securities are listed on the Luxembourg Stock Exchange and the rules of such stock exchange require, the office of Banque Generale de Luxembourg S.A. at 50 Avenue J.F. Kennedy, L-2951 Luxembourg shall initially be such office or agency in Luxembourg, unless the Company shall designate and maintain some other office or agency for one or more of such purposes. The Company will give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall appoint a new Luxembourg Paying Agent and transfer agent, the Company will publish notice in a Luxembourg newspaper of general circulation. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee and the Company and each Guarantor hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies (in or outside of The City of New York) outside of the United Kingdom where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in The City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency. Section 10.03 Money for Security Payments to Be Held in Trust. If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of, interest on or any Additional Amounts with respect to any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal, interest or Additional Amounts so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for the Securities, it will, on or before each due date of the principal of, interest on or any Additional Amounts with 49 respect to any Securities, deposit with a Paying Agent a sum sufficient to pay the principal, interest or Additional Amounts so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, interest or Additional Amounts, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of such action or any failure so to act. The Company will cause each Paying Agent (other than the Trustee) to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (a) hold all sums held by it for the payment of the principal of, interest or Additional Amounts on Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any default by the Company (or any other obligor upon the Securities) in the making of any payment of principal, interest or Additional Amounts; and (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such sums. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, interest on or Additional Amounts with respect to any Security and remaining unclaimed for two years after such principal, interest or Additional Amount has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. 50 Section 10.04 Additional Amounts. All payments of, or in respect of, principal of and interest on the Securities shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of any kind whatever imposed or levied by or on behalf of the U.K. or any political subdivision or any Taxing authority thereof or therein ("U.K. Withholding Taxes"), unless such U.K. Withholding Taxes are required by the U.K. or any such subdivision or authority to be withheld or deducted. In the event of (i) a Change in Tax Law or (ii) a failure by the Company to list or maintain a listing of the Securities on a "recognized stock exchange" (within the meaning of Section 841 of the U.K. Income and Corporation Taxes Act 1988) (a "Listing Failure"), the effect of which, in each case, is to require the withholding or deduction by the Company or the Guarantors pursuant to the Securities or the Guarantees, respectively, of any amount for U.K. Withholding Taxes that would not have been required to be withheld or deducted absent such event, the Company or the Guarantors, as the case may be, will pay such additional amounts ("Additional Amounts") on the Securities that result (after deduction or withholding of such U.K. Withholding Taxes, including any deduction or withholding of such U.K. Withholding Taxes with respect to such Additional Amounts) in the payment to each Holder of a Security the amounts that would have been payable in respect of such Security had no such withholding or deduction been required, except that no Additional Amounts shall be so payable for or on account of: (a) any tax, duty, assessment or other governmental charge that would not have been imposed but for (1) the existence of any present or former connection between a Holder or the beneficial owner of a Security (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 U.K. or any political subdivision or taxing authority thereof or therein (other than mere ownership of, or receipt of payment under, such Security) including, without limitation, such Holder or beneficial owner (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a resident, domiciliary or national of, or being or having been present or engaged in a trade or business therein or having or having had a permanent establishment in, the U.K. or any political subdivision or any Taxing authority thereof or therein, (2) the presentation of a Security or a Guarantee for payment in the U.K. or any political subdivision or any Taxing authority thereof or therein, unless such Security or Guarantee could not have been presented elsewhere, or (3) the presentation of a Security or a Guarantee for payment on a date more than 30 days after the date on which such payment in respect of such Security became due and payable or provided for, whichever occurs later, except to the extent that the Holder of such Security or such Guarantee would have been entitled to such Additional Amounts if it had presented such Security or such Guarantee for payment within such 30-day period. (b) any estate, inheritance, gift, sale, transfer, personal property or similar tax, duty, assessment or governmental charge; (c) any tax, duty, assessment or other governmental charge that is imposed or withheld by reason of the failure by the Holder or the beneficial owner of a Security to comply, or the delay in complying, with a request in writing of the Company or a 51 Guarantor (which request shall be furnished to the Trustee) (1) to provide information concerning the nationality, residence, place of establishment or identity of the Holder or such beneficial owner or (2) to make any declaration or other similar claim or satisfy any information or reporting requirement which, in the case of (1) or (2), is required or imposed by a statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition to exemption from or reduction of all or part of such tax, duty, assessment or other governmental charge; (d) any tax, duty, assessment or other governmental charge resulting from a Listing Failure with respect to any Security issued in the form of a certificated Security pursuant to the terms of this Indenture; or (e) any combination of items (a), (b), (c) and (d) above; nor shall Additional Amounts be paid with respect to any payment of the principal of, or any interest on, any Security or Guarantee to any Holder who is a fiduciary or partnership other than the sole beneficial owner of such Security or Guarantee, to the extent such payment would be required by the laws of the U.K. (or any political subdivision or relevant 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 member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts had it been the Holder of the Security. At least 30 days prior to each date on which any payment under or with respect to the Securities is due and payable, if the Company or a Guarantor will be obligated to pay Additional Amounts with respect to such payment, the Company or the Guarantor will deliver to the Trustee an Officer's Certificate stating the fact that such Additional Amounts will be payable and the amounts so payable and will set forth such other information necessary to enable the Trustee to pay such Additional Amounts to Holders on the payment date. Whenever in this Indenture there is mentioned, in any context, the payment of principal, Redemption Price, interest or any other amount payable under or with respect to any Security or the net proceeds received on the sale or exchange of any Security, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Indenture to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to this Indenture. Section 10.05 Corporate Existence. Subject to Article VIII, the Company and each Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect their respective corporate existence and their respective rights (charter and statutory) and franchises, provided, however, that the foregoing shall not obligate the Company or any Guarantor to preserve any such right or franchise if (i) the Company or any Guarantor shall determine that the preservation thereof is no longer desirable in the conduct of its business and would not have a material adverse effect on the condition, financial or otherwise, earnings, business affairs or business prospects of the Company and its Subsidiaries considered as one enterprise and would not materially, adversely affect the ability of the Company or any Guarantor to perform its obligations under this Indenture and (ii) failure to preserve the corporate existence of any Guarantor or any such right 52 or franchise would not result in a downgrading of any credit rating then applicable to the Securities. Section 10.06 Statement by Officers As to Default. (a) The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company (beginning with the fiscal year ending December 31, 2002), a brief certificate from the principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of the Company during such year and of its performance under this Indenture has been made under the supervision of the signers thereof and to the best of his or her knowledge, based on such review, no event has occurred and is continuing which is, or after notice or lapse of time would become, an Event of Default. (b) When any Default has occurred and is continuing under this Indenture, the Company shall deliver to the Trustee an Officers' Certificate specifying such event, notice or other action within five days of the Company Secretary or Chief General Manager Finance and Administration becomes aware of the occurrence thereof. Section 10.07 Provision of Reports and Financial Statements. (a) [Intentionally Omitted] (b) The Company shall (i) file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act and (ii) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations. (c) If the Company is no longer required (or is not required, as the case may be) to file reports pursuant to Section 13 or 15(d) of the Exchange Act, then it shall (i) file with the Trustee and the Commission such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be required by the rules and regulations of the Commission; and (ii) prior to the consummation of the Exchange Offer, promptly furnish or cause to be furnished such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto) to such Holder or to a prospective purchaser of a Security who is designated by such Holder and is a qualified institutional buyer (as defined in Rule 144A), upon the request of such Holder or prospective purchaser, in order to permit compliance by such Holder with Rule 144A under the Securities Act. (d) The Company shall transmit by mail to all Holders, in the manner and to the extent provided in TIA Section 313(c), as soon as reasonably practicable and in any event within 53 30 days after the filing thereof with the Trustee, such information, documents and reports required to be filed by the Company pursuant to paragraphs (a) and (b) of this Section. (e) Within five days after any change in the interest rate of the Securities pursuant to the Registration Rights Agreement, the Company shall deliver an Officers' Certificate to the Trustee stating the new interest rate and the date on which it became effective. Section 10.08 Waiver of Certain Covenants. The Company or any Guarantor may omit in any particular instance to comply with any term, provision or condition set forth in Sections 10.05 through 10.07, inclusive, if before or after the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities, by Act of such Holders, waive such compliance in such instance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. Section 10.09 Additional Guarantors. The Company shall cause any of its Subsidiaries that guarantees Indebtedness under any Credit Facility to, as primary obligors and not merely as sureties, fully and unconditionally guarantee pursuant to a Guarantee, on a senior unsecured basis, the due and punctual payment of all amounts payable under the Securities, when and if the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, upon redemption or otherwise by execution of an indenture supplemental hereto delivered to the Trustee that adds such Subsidiary as a subsequent Guarantor. ARTICLE XI REDEMPTION OF SECURITIES Section 11.01 Right of Redemption. (a) If, as the result of (1) any change in or amendment to the laws, regulations or published tax rulings of the U.K., or of any political subdivision or Taxing authority thereof or therein, affecting taxation, or any change in or amendment to the official or unofficial administration, application or interpretation by a court or tribunal, government or governmental authority of the U.K. of such laws, regulations or published tax rulings either generally or in relation to any Securities, which change or amendment is announced or becomes effective on or after the date of this Indenture or which change in official administration, application or interpretation by a court or tribunal, government or governmental authority of the U.K. shall not have been available to the public prior to such issue date and is notified to the Company on or after such issue date (a "Change in Tax Law"), or (2) a Listing Failure provided that the Company has used reasonable best efforts to list and maintain a listing of the Securities on a "recognized stock exchange" (within the meaning of Section 841 of the U.K. Income and Corporation Taxes Act 1988), it is determined by the Company that the Company would be required to pay any 54 Additional Amounts pursuant to Section 10.04 of this Indenture or the terms of the Securities in respect of interest on the next succeeding Interest Payment Date, the Company may, at its option, redeem all (but not less than all) of the Securities at any time, upon notice as provided in Section 11.05, at a Redemption Price equal to 100% of the principal amount thereof plus accrued and unpaid interest and Additional Amounts, if any, thereon to but excluding the Redemption Date; provided that (a) no such notice of redemption may be given earlier than 60 days prior to the earliest date on which the Company would be obligated to pay such Additional Amounts were a payment in respect of the Securities then due, and (b) at the time any such redemption notice is given, such obligation to pay such Additional Amounts must remain in effect. On and after the Redemption Date, interest will cease to accrue on Securities called for redemption and accepted for payment unless the Company shall default in the payment of the Redemption Price and accrued interest. Prior to any redemption of the Securities pursuant to this Section 11.01 (a), the Company or the Guarantors shall provide the Trustee with an Opinion of Counsel that the conditions precedent to the right of the Company or the Guarantors to redeem the Securities pursuant to this Section 11.01(a) have occurred. Such Opinion of Counsel shall be based on the laws and application and interpretation thereof in effect on the date of such opinion or to become effective on or before the next succeeding Interest Payment Date. (b) The Securities are redeemable, in whole or in part, at the option of the Company at any time at a Redemption Price equal to the greater of (i) 100% of the aggregate principal amount of the Securities to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on such Securities to be redeemed discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points, plus, in each case, accrued and unpaid interest and Additional Amounts, if any, thereon to but excluding the Redemption Date; provided, however, that interest installments due on an Interest Payment Date which is on or prior to the Redemption Date will be payable to Holders who are Holders of record of such Securities as of the close of business on the Regular Record Date next preceding such Interest Payment Date. All determinations made by any Reference Treasury Dealer with respect to determining the Redemption Price pursuant to this Section 11.01(b) shall be final and binding on the Company, the Guarantors, the Trustee and the Holders absent manifest error. Section 11.02 Applicability of Article. Redemption of Securities at the election of the Company or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article. 55 Section 11.03 Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities pursuant to Section 11.01 shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company, the Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed and shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Securities to be redeemed pursuant to Section 11.04. Section 11.04 Selection by Trustee of Securities to Be Redeemed. If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities not previously called for redemption, on a pro rata basis or such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions of the principal of Securities; provided, however, that no such partial redemption shall reduce the portion of the principal amount of a Security not redeemed to less than US$1,000. In the event of redemption of a Security in part only, a new Security for the unredeemed portion thereof shall be issued in the name of the Holder thereof upon the cancellation thereof. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed. Section 11.05 Notice of Redemption. Notice of redemption shall be given in the manner provided for in Section 1.06 not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Securities to be redeemed. All notices of redemption shall state: (a) the Redemption Date, (b) the Redemption Price and the amount of accrued and unpaid interest to the Redemption Date payable as provided in Section 11.07, if any, (c) if less than all Outstanding Securities are to be redeemed, the identification (and, in the case of a partial redemption, the principal amounts) of the particular Securities to be redeemed, 56 (d) in case any Security is to be redeemed in part only, the notice which relates to such Security shall state that on and after the Redemption Date, upon surrender of such Security, the holder will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed, (e) that on the Redemption Date, the Redemption Price (and accrued interest, if any, to the Redemption Date payable as provided in Section 11.07) will become due and payable upon each such Security, or the portion thereof, to be redeemed, and that interest thereon will cease to accrue on and after said date, (f) the place or places where such Securities are to be surrendered for payment of the Redemption Price and accrued interest, if any, and (g) the CUSIP or CINS number, as the case may be. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. As long as the Securities are listed on the Luxembourg Stock Exchange and the rules of such stock exchange require, the Company will give notice of such redemption to the Luxembourg Stock Exchange and publish a notice of redemption in a Luxembourg newspaper of general circulation. Section 11.06 Deposit of Redemption Price. On or prior to 12:00 noon (New York City time) on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent in immediately available funds, or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.03, an amount of money sufficient to pay the Redemption Price of, and accrued interest on or Additional Amounts payable with respect to, all the Securities which are to be redeemed on that date. Section 11.07 Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified (together with accrued interest, if any, to the Redemption Date), and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest or Additional Amounts, if any, to the Redemption Date; provided, however, that installments of interest and Additional Amounts whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 3.09. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Securities. 57 Section 11.08 Securities Redeemed in Part. Any Security which is to be redeemed only in part shall be surrendered at the office or agency of the Company maintained for such purpose pursuant to Section 10.02 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. ARTICLE XII DEFEASANCE AND COVENANT DEFEASANCE Section 12.01 Company Option to Effect Defeasance or Covenant Defeasance. The Company may, at its option by Board Resolution at any time, with respect to the Securities, elect to have either Section 12.02 or Section 12.03 be applied to all Outstanding Securities upon compliance with the conditions set forth below in this Article XII. Section 12.02 Defeasance and Discharge. Upon the Company's exercise under Section 12.01 of the option applicable to this Section 12.02, the Company and the Guarantors shall be deemed to have been discharged from their obligations with respect to all Outstanding Securities on the date the conditions set forth in Section 12.04 are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities, which shall thereafter be deemed to be "Outstanding" only for the purposes of Section 12.05 and the other Sections of this Indenture referred to in (A) and (B) below, and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of Outstanding Securities to receive payments in respect of the principal of and interest on such Securities when such payments are due, (B) the Company's obligations with respect to such Securities under Sections 3.04, 3.05, 3.08 and 10.03, (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder, (D) this Article XII and (E) the Company's obligation to pay Additional Amounts under Section 10.04. Subject to compliance with this Article XII, the Company may exercise its option under this Section 12.02 notwithstanding the prior exercise of its option under Section 12.03 with respect to the Securities. Section 12.03 Covenant Defeasance. Upon the Company's exercise under Section 12.01 of the option applicable to this Section 12.03, each of the Company and the Subsidiaries shall be released from its obligations under any covenant contained in Section 8.01 and in Sections 10.05 and 10.07 with respect to the 58 Outstanding Securities on and after the date the conditions set forth below are satisfied (hereinafter, "covenant defeasance"), and the Securities shall thereafter be deemed not to be "Outstanding" for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "Outstanding" for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to the Outstanding Securities, the Company and any Subsidiary may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 5.01(c) but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby. Section 12.04 Conditions to Defeasance or Covenant Defeasance. The following shall be the conditions to application of either Section 12.02 or Section 12.03 to the Outstanding Securities: (a) The Company shall irrevocably have deposited with the Trustee (or another trustee satisfying the requirements of Section 6.07 who shall agree to comply with the provisions of this Article XII applicable to it) as trust funds in trust, for the benefit of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations (as defined herein) that through the scheduled payment of principal and interest thereon will provide money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the principal of and interest on the Outstanding Securities on the Stated Maturity (or upon Redemption Date, if applicable) of such principal or installment of interest; provided that the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to said payments with respect to the Securities. Before such a deposit, the Company may give to the Trustee, in accordance with Section 11.03 hereof, a notice of its election to redeem all of the Outstanding Securities at a future date in accordance with Article XI hereof, which notice shall be irrevocable. Such irrevocable redemption notice, if given, shall be given effect in applying the foregoing. For this purpose, "U.S. Government Obligations" means securities that are (x) direct obligations of the United States for the timely payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. 59 Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt. (b) No Default or Event of Default with respect to the Securities shall have occurred and be continuing on the date of such deposit or, insofar as paragraphs (d) and (e) of Section 5.01 hereof are concerned, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period). (c) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound. (d) In the case of an election under Section 12.02, the Company shall have delivered to the Trustee (1) an Opinion of Counsel to the effect that (i) the Holders of the Securities of the applicable series will not recognize income, gain or loss for United States federal income tax purposes as a result of the exercise of the option under Section 12.02 and will be subject to United States federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised, and (ii) either (A) the Company has received from, or there has been published by the United States Internal Revenue Service, a ruling to that effect, or (B) since the date of the Indenture, there has been a change in the applicable United States federal income tax law; and (2) an Opinion of Counsel to the effect that (i) the creation of the defeasance trust does not violate the Investment Company Act of 1940 and (ii) after the passage of 123 days following the deposit (except, with respect to any trust funds for the account of any Holder who may be deemed to be "connected" with the Company for purposes of the Insolvency Act of 1986 after two years following the deposit), the trust funds will not be subject to the effect of Section 547 of the United States Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law and either (x) the trust funds will no longer remain the property of the Company (and therefore will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally) or (y) if a court were to rule under any such law in any case or proceeding that the trust funds remained property of the Company (I) assuming such trust funds remained in the possession of the Trustee prior to such court ruling to the extent not paid to the Holders, the Trustee will hold, for the benefit of the Holders, a valid and perfected security interest in such trust funds that is not avoidable in bankruptcy or otherwise and (II) no property, rights in property or other interests granted to the Trustee or the Holders in exchange for, or with respect to, such trust funds will be subject to any prior rights of holders of other indebtedness of the Company or any of its Securities. (e) In the case of an election under Section 12.03, the Company has delivered to the Trustee an Opinion of Counsel to the effect that (1) the creation of the defeasance trust does not violate the Investment Company Act of 1940, (2) the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and the defeasance of the obligations referred to in the first paragraph of Section 60 12.03 and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred and (3) after the passage of 123 days following the deposit (except with respect to any trust funds for the account of any Holder who may be deemed to be "connected" with the Company for purposes of the Insolvency Act of 1986 after two years following the deposit), the trust funds will not be subject to the effect of Section 547 of the United States Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law, and either (A) the trust funds will no longer remain the property of the Company (and therefore will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally) or (B) if a court were to rule under any such law in any case or proceeding that the trust funds remained property of the Company (i) assuming such trust funds remained in the possession of the Trustee prior to such court ruling to the extent not paid to the Holders, the Trustee will hold, for the benefit of the Holders, a valid and perfected security interest in such trust funds that is not avoidable in bankruptcy or otherwise and (ii) no property, rights in property or other interests granted to the Trustee or the Holders in exchange for, or with respect to, such trust funds will be subject to any prior rights or holders of other indebtedness of the Company or any of its Securities. (f) If at such time the Securities are listed on a national securities exchange, the Company has delivered to the Trustee an Opinion of Counsel to the effect that the Securities will not be delisted as a result of the Company's exercise of its option under this Section 12.02; and (g) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to either the defeasance under Section 12.02 or the covenant defeasance under Section 12.03, as the case may be, have been complied with. Section 12.05 Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions. Subject to the provisions of the last paragraph of Section 10.03, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 12.05, the "Trustee") pursuant to Section 12.04 in respect of the Outstanding Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal, interest and Additional Amounts, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Governmental Obligations deposited pursuant to Section 12.04 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Securities. 61 Anything in this Article XII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations (or other property and any proceeds therefrom) held by it as provided in Section 12.04 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent defeasance or covenant defeasance, as applicable, in accordance with this Article. Section 12.06 Reinstatement. If the Trustee or any Paying Agent is unable to apply any money in accordance with Section 12.05 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 12.02 or 12.03, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 12.05; provided, however, that if the Company makes any payment of principal of, interest on or Additional Amounts with respect to any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE XIII SECURITIES GUARANTEES Section 13.01 Unconditional Guarantee. Subject to the provisions of this Article XIII, the Guarantors hereby, jointly and severally, unconditionally and irrevocably guarantee (such guarantees to be referred to herein as "Guarantees") to each Holder of a Security authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Securities or the obligations of the Company to the Holders or the Trustee hereunder or thereunder, that: (a) the principal of, interest on and Additional Amounts with respect to the Securities shall be duly and punctually paid in full when due, whether at maturity, upon redemption at the option of Holders pursuant to the provisions of the Securities relating thereto, by acceleration or otherwise, and interest on the overdue principal and (to the extent permitted by law) interest, if any, and Additional Amounts with respect to the Securities and all other obligations of the Company or the Guarantors to the Holders or the Trustee hereunder or thereunder (including amounts due the Trustee hereunder) and all other Obligations shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Securities or any of such other Obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed, or failing performance of any other Obligation of the Company to the Holders under this Indenture or under the Securities, for whatever reason, the Guarantors shall be obligated to pay, or to perform or cause the performance of, the same immediately. An Event of Default under this Indenture or the Securities shall constitute an event 62 of default under the Guarantees, and shall entitle the Holders of Securities to accelerate the obligations of the Guarantors hereunder in the same manner and to the same extent as the obligations of the Company. The Guarantees will be senior unsecured obligations of the Guarantors and will rank pari passu in right of payment with all other existing and future senior unsecured obligations of the Guarantors. The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Securities or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Securities with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same, whether or not a Guarantee is affixed to any particular Security, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. The Guarantors hereby waive the benefit of diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that the Guarantees shall not be discharged except by complete performance of the obligations contained in the Securities, this Indenture and this Guarantee. This Guarantee is a guarantee of payment and not of collection. Each Guarantor further agrees that, as between it, on the one hand, and the Holders of Securities and the Trustee, on the other hand, (a) subject to this Article XIII, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article V hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (b) in the event of any acceleration of such obligations as provided in Article V hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. The obligations of the Guarantors hereunder shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment which would otherwise have reduced the obligations of the Guarantors hereunder (whether such payment shall have been made by or on behalf of the Company or by or on behalf of the Guarantors) is rescinded or reclaimed from any of the Holders upon the insolvency, bankruptcy, liquidation or reorganization of the Company or any Guarantor otherwise, all as though such payment had not been made. If demand for, or acceleration of the time for, payment by the Company is stayed upon the insolvency, bankruptcy, liquidation or reorganization of the Company, all such indebtedness otherwise subject to demand for payment or acceleration shall nonetheless be payable by the Guarantors as provided herein. Section 13.02 Limitations on Guarantees. The obligations of the Guarantors under their Guarantees are limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of each Guarantors (including without limitation, any other Guarantor senior debt) will result in the obligations of the Guarantors under the Guarantees not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. 63 Section 13.03 Execution and Delivery of Guarantees. To further evidence the Guarantees set forth in Section 13.01, the Guarantors hereby agree that a notation of such guarantee, substantially in the form set forth in Exhibit A hereto, shall be endorsed on each Security authenticated and delivered by the Trustee. Such Guarantees shall be executed on behalf of the Guarantors by either manual of facsimile signature of an officer of each Guarantor who shall have been duly authorized to so executed by all requisite corporation action. The validity and enforceability of any Guarantee shall not be affected by the fact that it is not affixed to any particular Security. The Guarantors hereby agree that the Guarantees set forth in Exhibit A shall remain in full force and effect notwithstanding any failure to endorse on each Security a notation of such Guarantee. If an officer of a Guarantor whose signature is on this Indenture or a Guarantee no longer holds that office at the time the Trustee authenticates the Security on which such Guarantee is endorsed or at any time thereafter, the Guarantor's Guarantee of such Security shall nevertheless be valid. The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of any Guarantee set forth in this Indenture on behalf of the Guarantors. Section 13.04 Release of the Guarantors. (a) Upon the consolidation or merger of a Guarantor with or into any Person, or the transfer, sale, lease or other disposition of all or substantially all of its assets to any Person in compliance with Article VIII, such Guarantor's Guarantee will be automatically discharged and released from all obligations under this Article XIII without any further action required on the part of the Trustee or any Holder; provided, however, the successor Person expressly assumes such Guarantor's obligations under the Guarantee, under the Indenture and under the Registration Rights Agreement pursuant to Article VIII. (b) The Trustee shall deliver an appropriate instrument evidencing the release of a Guarantor upon receipt of a request by the Company or a Guarantor accompanied by an Officers' Certificate and an Opinion of Counsel certifying as to the compliance with this Section 13.04; provided, however, that the legal counsel delivering such Opinion of Counsel may rely as to matters of fact on one or more Officers' Certificates of the Company. The Trustee shall execute any documents reasonably requested by the Company or a Guarantor in order to evidence the release of such Guarantor from its obligations under its Guarantee endorsed on the Securities and under this Article XIII. 64 Section 13.05 Waiver of Subrogation. Until this Indenture is discharged and all of the Securities are discharged and paid in full, the Guarantors hereby irrevocably waive and agree not to exercise any claim or other rights which they may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of the Company's obligations under the Securities or this Indenture and the Guarantors' obligations under the Guarantees and this Indenture, in any such instance including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, and any right to participate in any claim or remedy of the Holders against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to a Guarantor in violation of the preceding sentence and any amounts owing to the Trustee or the Holders of Securities, this Indenture, or any other document or instrument delivered under or in connection with such agreements or instruments, shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Trustee or the Holders and shall forthwith be paid to the Trustee for the benefit of itself or such Holders to be credited and applied to the obligations in favor of the Trustee or the Holders, as the case may be, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 13.05 is knowingly made in contemplation of such benefits. Section 13.06 Immediate Payment. Each Guarantor agrees to make immediate payment to the Trustee on behalf of the Holders of all Obligations owing or payable to the respective Holders upon receipt of a demand for payment therefor by the Trustee to the Guarantor in writing. Section 13.07 No Set-Off. Each payment to be made by a Guarantor hereunder in respect of its obligations shall be payable in the currency or currencies in which such obligations are denominated, and shall be made without set-off, counterclaim, reduction or diminution of any kind or nature. Section 13.08 Obligations Absolute. The obligations of the Guarantors hereunder are and shall be absolute and unconditional and any monies or amounts expressed to be owing or payable by the Guarantors hereunder which may not be recoverable from the Guarantors on the basis of a Guarantee shall be recoverable from the Guarantor as a primary obligor and principal debtor in respect thereof. The Obligations of the Guarantors hereunder shall be continuing and shall remain in full force and effect until all the Obligations have been paid and satisfied in full. 65 Section 13.09 Obligations Not Reduced. The obligations of the Guarantors hereunder shall not be satisfied, reduced or discharged solely by the payment of such principal, interest, Additional Amounts, fees and other monies or amounts as may at any time prior to discharge of this Indenture pursuant to Article XIII be or become owing or payable under or by virtue of or otherwise in connection with the Securities or this Indenture. Section 13.10 [Intentionally Omitted] Section 13.11 Obligations Not Affected. The obligations of the Guarantors hereunder shall not be affected, impaired or diminished in any way by any act, omission, matter or thing whatsoever, occurring before, upon or after any demand for payment hereunder (and whether or not known or consented to by the Guarantors or any of the Holders) which, but for this provision, might constitute a whole or partial defense to a claim against the Guarantors hereunder or might operate to release or otherwise exonerate the Guarantors from any of their obligations hereunder or otherwise affect such obligations, whether occasioned by default of any of the Holders or otherwise, including, without limitation: (a) any limitation of status or power, disability, incapacity or other circumstance relating to the Company or any other Person, including any insolvency, bankruptcy, liquidation, reorganization, readjustment, composition, dissolution, winding-up or other proceeding involving or affecting the Company or any other Person; (b) any irregularity, defect, unenforceability or invalidity in respect of any indebtedness or other obligation of the Company or any other Person under this Indenture, the Securities or any other document or instrument; (c) any failure of the Company, whether or not without fault on its part, to perform or comply with any of the provisions of this Indenture or the Securities, or to give notice thereof to the Guarantor; (d) the taking or enforcing or exercising or the refusal or neglect to take or enforce or exercise any right or remedy from or against the Company or any other Person or their respective assets or the release or discharge of any such right or remedy; (e) the granting of time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person; (f) any change in the time, manner or place of payment of, or in any other term of, any of the Securities, or any other amendment, variation, supplement, replacement or waiver of, or any consent to departure from, any of the Securities of this Indenture, including, without limitation, any increase or decrease in the principal amount of, interest on or Additional Amounts with respect to any of the Securities; (g) any change in the ownership, control, name, objects, businesses, assets, capital structure or constitution of the Company or the Guarantors; 66 (h) except as provided herein, any merger or consolidation of the Company or any Guarantor with any Person or Persons; (i) the occurrence of any change in the laws, rules, regulations or ordinances of any jurisdiction by any present or future action of any governmental authority or court amending, varying, reducing or otherwise affecting, or purporting to amend, vary, reduce or otherwise affect, any of the Obligations under this Indenture or the obligations of the Guarantors under the Guarantees; and (j) any other circumstance, including release of the Guarantor other than pursuant to Section 13.04, that might otherwise constitute a legal or equitable discharge or defense of the Company under this Indenture or the Securities or of the Guarantors in respect of its Guarantees hereunder. Section 13.12 Waiver. Without in any way limiting the provisions of Section 13.01 hereof, the Guarantors hereby waive notice of acceptance hereof, notice of any liability of the Guarantors hereunder, notice or proof of reliance by the Holders upon the obligations of the Guarantors hereunder, and diligence, presentment, demand for payment on the Company, protest, notice of dishonor or non-payment of any of the Obligations, or other notice or formalities to the Company or the Guarantors of any kind whatsoever. Section 13.13 No Obligation To Take Action Against the Company. Neither the Trustee nor any other Person shall have any obligation to enforce or exhaust any rights or remedies or to take any other steps under any security for the Obligations under this Indenture or against the Company or any other Person or any property of the Company or any other Person before the Trustee is entitled to demand payment and performance by the Guarantors of their liabilities and obligations under their respective Guarantees or under this Indenture. Section 13.14 Dealing with the Company and Others. The Holders, without releasing, discharging, limiting or otherwise affecting in whole or in part the obligations and liabilities of the Guarantors hereunder and without the consent of or notice to any Guarantor, may: (a) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person; (b) take or abstain from taking security or collateral from the Company or from perfecting security or collateral of the Company; (c) release, discharge, compromise, realize, enforce or otherwise deal with or do any act or thing in respect of (with or without consideration) any and all collateral, mortgages or other security given by the Company or any third party with respect to the obligations or matters contemplated by this Indenture or the Securities; 67 (d) accept compromises or arrangements from the Company; (e) apply all monies at any time received from the Company or from any security upon such part of the obligations as the Holders may see fit or change any such application in whole or in part from time to time as the Holders may see fit; and (f) otherwise deal with, or waive or modify their right to deal with, the Company and all other Persons and any security as the Holders or the Trustee may see fit. Section 13.15 Default and Enforcement. If a Guarantor fails to pay in accordance with Section 13.06 hereof, the Trustee may proceed in its name as trustee hereunder in the enforcement of the Guarantees of such Guarantor and such Guarantor's obligations thereunder and hereunder by any remedy provided by law, whether by legal proceedings or otherwise, and to recover from the Guarantors the Obligations. Section 13.16 Amendment, Etc. No amendment, modification or waiver of any provision of this Indenture relating to the Guarantors or consent to any departure by the Guarantors or any other Person from any such provision will in any event be effective unless it is signed by the Guarantors and the Trustee. Section 13.17 Acknowledgement. Each Guarantor hereby acknowledges communication of the terms of this Indenture and the Securities and consents to and approves of the same. Section 13.18 No Merger or Waiver; Cumulative Remedies. No Guarantee shall operate by way of merger of any of the obligations of the Guarantors under any other agreement, including, without limitation, this Indenture. No failure to exercise and no delay in exercising, on the part of the Trustee or the Holders, any right, remedy, power or privilege hereunder or under this Indenture or the Securities, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under this Indenture or the Securities preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges in the Guarantees and under this Indenture, the Securities and any other document or instrument between the Guarantors and/or the Company and the Trustee are cumulative and not exclusive of any rights, remedies, powers and privilege provided by law. 68 Section 13.19 Survival of Obligations. Without prejudice to the survival of any of the other obligations of the Guarantors hereunder, the obligations of the Guarantors under Section 13.01 shall survive the payment in full of the Obligations under this Indenture and shall be enforceable against the Guarantors without regard to and without giving effect to any defense, right of offset or counterclaim available to or which may be asserted by the Company or the Guarantors. Section 13.20 Guarantee in Addition to Other Obligations. The obligations of the Guarantors under the Guarantees and this Indenture are in addition to and not in substitution for any other obligations to the Trustee or to any of the Holders in relation to this Indenture or the Securities and any guarantees or security at any time held by or for the benefit of any of them. Section 13.21 Severability. Any provision of this Article XIII which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction unless its removal would substantially defeat the basic intent, spirit and purpose of this Indenture and this Article XIII. Section 13.22 Successors and Assigns. Each Guarantee shall be binding upon and inure to the benefit of the Guarantor and the Trustee and the other Holders and the other Holders and their respective successors and permitted assigns, except that the Guarantor may assign any of its obligations hereunder or thereunder. Section 13.23 Severability. In case any provision of this Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 69 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written. AMVESCAP PLC By /s/ Charles W. Brady ------------------------------- Name: Charles W. Brady Title: Executive Chairman A I M MANAGEMENT GROUP INC. By /s/ Robert H. Graham ------------------------------- Name: Title: A I M ADVISORS, INC. By /s/ Robert H. Graham ------------------------------- Name: Title: INVESCO INSTITUTIONAL (N.A.), INC. By /s/ John Rogers ------------------------------- Name: John Rogers Title: CEO and President INVESCO NORTH AMERICAN HOLDINGS, INC. By /s/ Robert F. McCullough ------------------------------- Name: Robert F. McCullough Title: Chief Financial Officer Exhibit A [FACE OF SECURITY] AMVESCAP PLC 5.90% Senior Note due 2007 [,Series B]** CUSIP -------------- No. US$ ------- ----------------- AMVESCAP PLC, a corporation formed under the laws of the United Kingdom (the "Company", which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to , or ----------- its registered assigns, the principal sum of (US$ ), on , . - ------------------------------------ ----------- ------------ ---- [Initial Interest Rate: % per annum.]* ---- [Interest Rate: % per annum.]** ---- Interest Payment Dates: January 15 and July 15 of each year commencing . ---------- Regular Record Dates: January 1 and July 1of each year. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. A-1 IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer. Date: AMVESCAP PLC -------------- By: ----------------------------- Title: A-2 (Form of Trustee's Certificate of Authentication) This is one of the 5.90% Senior Notes due 2007 [,Series B]* described in the within-mentioned Indenture. SUNTRUST BANK By: ----------------------------- Authorized Signatory - ---------- ** Include only for Exchange Securities. A-3 [REVERSE SIDE OF SECURITY] AMVESCAP PLC 5.90% Senior Notes due 2007 [, Series B]** 1. Principal and Interest. ---------------------- The Company will pay the principal of this Security on January 15, 2007. The Company promises to pay interest on the principal amount of this Security on each Interest Payment Date, as set forth below, at the rate of 5.90% per annum [subject to adjustment as provided below)]* Interest will be payable semiannually (to the holders of record of the Securities (or any predecessor Securities) at the close of business on the January 1 or July 1 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing January 1, 2002. [The Holder of this Security is entitled to the benefits of the Registration Rights Agreement, dated December 12, 2001, among the Company, the Guarantors and the Initial Purchasers named therein (the "Registration Rights Agreement"). In the event that either (a) the Exchange Offer Registration Statement is not filed with the Securities and Exchange Commission on or prior to April 15, 2002, (b) the Exchange Offer Registration Statement is not declared effective on or prior to June 15, 2002, (c) the Exchange Offer is not consummated on or prior to July 15, 2002, (d) the Shelf Registration Statement is not declared effective on or prior to July 15, 2002 or (e) any registration statement required by the Registration Rights Agreement is filed and declared effective but shall thereafter cease to be effective and such registration statement ceases to be effective for more than 60 days (whether or not consecutive) in any 12-month period (except as specifically provided herein and in the Registration Rights Agreement) without being succeeded immediately by an additional registration statement filed and declared effective, the interest rate borne by this Security shall be increased by 0.25% per annum. Upon the filing of the Exchange Offer Registration Statement, the effectiveness of the Exchange Offer Registration Statement, the consummation of the Exchange Offer, or the effectiveness of a Shelf Registration Statement, as the case may be, the interest rate borne by this Security from the date of such filing, consummation or effectiveness, as the case may be, will be reduced to the original interest rate set forth above; provided, however, that, if after such reduction in interest rate, a different event specified in clause (a), (b), (c), (d) or (e), above occurs, the interest rate may again be increased pursuant to the foregoing provisions.]* - ---------- * Include only for Initial Securities. * Include only for Initial Securities. A-4 Interest on this Security will accrue from the most recent date to which interest has been paid [on this Security or the Security surrendered in exchange herefor]** or, if no interest has been paid, from ; provided that, if ---------- there is no existing default in the payment of interest and if this Security is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such Interest Payment Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Under certain circumstances described in the Indenture, the Company or the Guarantors also shall pay Additional Amounts to the Holders of Securities equal to an amount that the Company or Guarantors may be required to withhold or deduct for or on account of Taxes imposed by a Taxing authority within the United Kingdom from any payment made under or with respect to the Securities or the Guarantees. The Company shall pay interest on overdue principal and interest on overdue installments of interest and Additional Amounts, to the extent lawful, at a rate per annum equal to the rate of interest applicable to the Securities. 2. Method of Payment. ----------------- The Company will pay interest (except defaulted interest) on the principal amount of the Securities on each January 15 and July 15 to the persons who are Holders (as reflected in the Security Register at the close of business on the January 1 and July 1 immediately preceding the Interest Payment Date), in each case, even if the Security is cancelled on registration of transfer or registration of exchange after such record date; provided that, with respect to the payment of principal, the Company will make payment to the Holder that surrenders this Security to any Paying Agent on or after January 15, 2007. The Company will pay principal, interest and Additional Amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts. [Payment of the principal of, interest on and Additional Amounts with respect to the Securities will be made at the office or agency of the Company maintained for that purpose in The City of New York (which shall be the Corporate Finance Department of the Trustee, unless the Company shall designate and maintain some other office or agency for such purpose) and, so long as the Securities are registered on the Luxembourg Stock Exchange and the rules of the stock exchange require, at the office of the Luxembourg Paying Agent in Luxembourg, or at such other office or agency of the Company as may be maintained for such purpose, in lawful money of the United States of America, or payment of interest may be made at the option of the Company by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register; provided, however, that all payments to Holders who have given wire transfer instructions to the Company will be made by wire transfer of immediately available funds to the accounts specified by such Holder.]* [All payments will be made by wire transfer of - ---------- ** Include only for Exchange Securities *** Include for Physical Securities only. A-5 immediately available funds to the accounts specified by the Holder.]** If a payment date is a date other than a Business Day at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period. 3. Paying Agent and Registrar. -------------------------- Initially, the Trustee will act as Paying Agent and Registrar and, so long as the Securities are listed on the Luxembourg Stock Exchange and the rules of the stock exchange require, the Luxembourg Paying Agent will act as Luxembourg paying agent. The Company may change any Paying Agent or Registrar upon written notice thereto. The Company, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Registrar or co-registrar. 4. Guarantees. ----------- This Security is entitled to the benefits of the Guarantee made by each of the Guarantors as described in the Indenture, pursuant to which the Guarantors have irrevocably and unconditionally, jointly and severally, guaranteed on a senior subordinated basis the punctual payment when due, whether at Stated Maturity, by acceleration, redemption or otherwise, of all obligations of the Company under the Indenture and this Security. A Guarantor shall be released from its Guarantee upon the terms and subject to the conditions set forth in the Indenture. 5. Indenture; Limitations. ----------------------- The Company issued the Securities under an Indenture dated as of December 17, 2001 (the "Indenture"), among the Company, the Guarantors named therein (the "Guarantors" which term will include all successor guarantors under the Indenture) and SunTrust Bank, as trustee (the "Trustee"). Capitalized terms herein are used as defined in the Indenture unless otherwise indicated. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Securities are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Security and the terms of the Indenture, the terms of the Indenture shall control. The Securities are senior unsecured obligations of the Company. 6. Redemption. ----------- (a) In the event that the Company has become or would become obligated to pay any Additional Amounts as a result of (i) a Change in Tax Law or (ii) a Listing Failure provided that the Company has used reasonable best efforts to list or maintain a listing of the Securities on a "recognized stock exchange" (within the meaning of Section 841 of the U.K. Income and Corporation Taxes Act 1988) (as provided for in Section 10.04 of the Indenture), then the Company may redeem all, but not less than all, of the Securities at any time at 100% of the principal amount thereof on the Redemption Date, together with accrued and unpaid interest and - ---------- ** Include for Restricted Global Security only. A-6 Additional Amounts, if any, thereon to but excluding the Redemption Date. Prior to the publication of the notice of redemption in accordance with the foregoing, the Company shall deliver to the Trustee an Officer's Certificate stating that the Company is entitled to effect such redemption based on a written opinion of independent tax counsel or accounting firm reasonably satisfactory to the Trustee. (b) The Securities may be redeemed, in whole or in part, at the option of the Company at any time at a Redemption Price equal to the greater of (i) 100% of the aggregate principal amount of the Securities to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of the principal and interest on such Securities to be redeemed discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points, plus, in each case, accrued and unpaid interest and Additional Amounts, if any, thereon to but excluding the Redemption Date; provided, however, that interest installments due on an Interest Payment Date which is on or prior to the Redemption Date will be payable to Holders who are Holders of record of such Securities as of the close of business on the Regular Record Date preceding such Interest Payment Date. (c) Notice of a redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Securities to be redeemed at such Holder's last address as it appears in the Security Register. Securities in original denominations larger than US$1,000 may be redeemed in part in integral multiples of US$1,000. On and after the Redemption Date, interest ceases to accrue on Securities or portions of Securities called for redemption, unless the Company defaults in the payment of the Redemption Price. 7. Denominations; Transfer; Exchange. ---------------------------------- The Securities are in registered form without coupons, in denominations of US$1,000 and multiples of US$1,000 in excess thereof. A Holder may register the transfer or exchange of Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer or exchange of any Securities selected for redemption (except the unredeemed portion of any Security being redeemed in part). Also, it need not register the transfer or exchange of any Securities for a period of 15 days before a selection of Securities to be redeemed is made. As long as the Securities are listed on the Luxembourg Stock Exchange and the rules of the stock exchange require, the Company shall give notice of such redemption to the Luxembourg Stock Exchange and publish a notice of redemption in a Luxembourg newspaper of general circulation. 8. Persons Deemed Owners. ---------------------- Prior to due presentment of this Security for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, the Guarantors or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, A-7 whether or not this Security be overdue, and neither the Company, the Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary. 9. Unclaimed Money. --------------- If money for the payment of principal or interest remains unclaimed for two years, the Trustee and the Paying Agent will pay the money back to the Company at its request. After that, Holders entitled to the money must look to the Company for payment, unless an abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease. 10. Discharge Prior to Redemption or Maturity. ----------------------------------------- If the Company irrevocably deposits, or causes to be deposited, with the Trustee money or U.S. Government Obligations sufficient to pay the then outstanding principal of, accrued interest on and Additional Amounts with respect to the Securities to redemption or maturity, the Company will be discharged from the Indenture and the Securities, except in certain circumstances for certain sections thereof. 11. Amendment; Supplement; Waiver. ----------------------------- Subject to certain exceptions, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then Outstanding, and any existing default or compliance with any provision may be waived with the consent of the Holders of a majority in aggregate principal amount of the Securities then Outstanding. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture or the Securities to, among other things, cure any ambiguity, defect or inconsistency and make any change that does not adversely affect the rights of any Holder. 12. Restrictive Covenants. --------------------- The Indenture contains certain covenants, including, without limitation, covenants with respect to the merger and certain transfers of assets. Within 120 days after the end of each fiscal year, the Company must report to the Trustee on compliance with such limitations. 13. Successor Persons. ----------------- When a successor person or other entity assumes all the obligations of its predecessor under the Securities and the Indenture, the predecessor person will be released from those obligations. 14. Remedies for Events of Default. ------------------------------ If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee or the Holders of not less than 25% in principal amount of the Securities then Outstanding may declare all the Securities to be immediately due and payable. If a bankruptcy or insolvency default with respect to the Company or any Guarantor occurs and is continuing, the Securities A-8 automatically become immediately due and payable. Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of at least a majority in principal amount of the Securities then Outstanding may direct the Trustee in its exercise of any trust or power. 15. Trustee Dealings with Company. ----------------------------- The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may make loans to, accept deposits from, perform services for, and otherwise deal with, the Company and its Affiliates as if it were not the Trustee. 16. Authentication. -------------- This Security shall not be valid until the Trustee signs the certificate of authentication on the other side of this Security. 17. Abbreviations. ------------- Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act). The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to AMVESCAP PLC, 1315 Peachtree Street, N.E., Suite 500, Atlanta, Georgia 30309, Attention: Chief Financial Officer. A-9 [FORM OF TRANSFER NOTICE] FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto Insert Taxpayer Identification No. - --------------------------------- (Please print or typewrite name and address including zip code of assignee) the within Security and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer such Security on the books of the Company with full power of substitution in the premises. [THE FOLLOWING PROVISION TO BE INCLUDED ON ALL CERTIFICATES EXCEPT PERMANENT OFFSHORE PHYSICAL CERTIFICATES] In connection with any transfer of this Security occurring prior to the date which is the earlier of the date of an effective Registration Statement or , the undersigned confirms that without utilizing any general solicitation - ------ or general advertising that: [Check One] --------- [ ] (a) this Security is being transferred in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Rule 144A thereunder. or - -- [ ] (b) this Security is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Security and the Indenture. If none of the foregoing boxes is checked, the Trustee or other Registrar shall not be obligated to register this Security in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 307 of the Indenture shall have been satisfied. A-10 Date: -------------------- NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. ----------------------------------- Signature guaranteed by a member of a "Signature Guarantee Program" ("STAMP"), Stock Exchange Medallion Program ("SEMP") or New York Stock Exchange Medallion Signature Program, ("MSP") (an "Eligible Institution"), the signature(s) must be guaranteed by an Eligible Institution. TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED. The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: ------------------ NOTICE: To be executed by an executive officer, general partner, trustee or similar representative. A-11 FORM OF GUARANTEE For value received, the undersigned hereby, jointly and severally, unconditionally guarantee, as principal obligor and not only as a surety, to the Holder of this Security the cash payments in United States dollars of principal of and interest on this Security in the amounts and at the times when due and interest on the overdue principal, interest, if any, and Additional Amounts with respect to this Security, if lawful, and the payment or performance of all other obligations of the Company under the Indenture (as defined below) or the Securities, to the Holder of this Security and the Trustee, all in accordance with and subject to the terms and limitations of this Security, Article XIII of the Indenture and this Guarantee. This Guarantee will become effective in accordance with Article XIII of the Indenture and its terms shall be evidenced therein. The validity and enforceability of any Guarantee shall not be affected by the fact that it is not affixed to any particular Security. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Indenture (the "Indenture") dated as of December 17, 2001 among AMVESCAP PLC, the Guarantors and SunTrust Bank, as trustee (the "Trustee"). The obligations of the undersigned to the Holders of Securities and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article XIII of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee and all of the other provisions of the Indenture to which this Guarantee relates. This Guarantee will be a senior unsecured obligation of the Guarantors and will rank pari passu in right of payment with all other existing and future senior unsecured obligations of the Guarantors. This Guarantee shall be governed by and construed in accordance with the laws of the state of New York. This Guarantee is subject to release upon the terms set forth in the Indenture. IN WITNESS WHEREOF, the Guarantor has caused this instrument to be duly executed. Date: ----------------- A I M MANAGEMENT GROUP INC. By -------------------------------- Name: Title: A-12 A I M ADVISORS, INC. By -------------------------------- Name: Title: INVESCO INSTITUTIONAL (N.A.), INC. By -------------------------------- Name: Title: INVESCO NORTH AMERICAN HOLDINGS, INC. By -------------------------------- Name: Title: A-13 EXHIBIT B FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM RESTRICTED GLOBAL SECURITY TO REGULATION S GLOBAL SECURITY SunTrust Bank 58 Edgewood Road Room 400 - Annex Atlanta, Georgia 30303 Attn: Corporate Trust Office Re: 5.90% Senior Notes due 2007 of AMVESCAP PLC Reference is hereby made to the Indenture, dated as of December 17, 2001 (the "Indenture"), between AMVESCAP PLC, as issuer (the "Company"), each of the Guarantors named in the first paragraph of the Indenture and SunTrust Bank, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to US$ principal amount of Securities which --------- are evidenced by the Restricted Global Security (CUSIP No. ) and held --------- with the Depositary in the name of Cede & Co. (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Securities to a Person who will take delivery thereof in the form of an equal principal amount of Securities evidenced by the Regulation S Global Security (CUSIP No. ). - -------- In connection with such request and in respect of such Securities, the Transferor hereby certifies that such transfer has been effected in compliance with the transfer restrictions applicable to the Global Securities and pursuant to and in accordance with Rule 903, Rule 904 or Rule 144 under the United States Securities Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor hereby further certifies that: (A) if the transfer has been effected pursuant to Rule 903 or Rule 904: (1) the offer of the Securities was not made to a person in the United States; (2) either: (a) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed and believes that the transferee was outside the United States; or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was prearranged with a buyer in the United States; B-1 (3) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; (4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; (5) if the transfer is being requested prior to , upon ------------ completion of the transaction, the beneficial interest being transferred as described above is to be held with the Depositary through Euroclear or Clearstream Banking, societe anonyme, Luxembourg, or both (Common Code ); and ------------ (B) If the transfer has been effected pursuant to Rule 144, the Securities have been transferred in a transaction permitted by Rule 144 under the Securities Act. Upon giving effect to this request to exchange a beneficial interest in such Restricted Global Security for a beneficial interest in a Regulation S Global Security, the resulting beneficial interest shall be subject to the restrictions on transfer applicable to Regulation S Global Security pursuant to the Indenture and the Securities. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act. [Insert Name of Transferor] By: ------------------------------- Name: Title: ----------------------------------- Signature guaranteed by a member of a "Signature Guarantee Program" ("STAMP"), Stock Exchange Medallion Program ("SEMP") or New York Stock Exchange Medallion Signature Program, ("MSP") (an "Eligible Institution"), the signature(s) must be guaranteed by an Eligible Institution. Dated: , ------------ ---- B-2 EXHIBIT C FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM REGULATION S GLOBAL SECURITY TO RESTRICTED GLOBAL SECURITY SunTrust Bank 58 Edgewood Road Room 400 - Annex Atlanta, Georgia 30303 Attn: Corporate Trust Office Re: 5.90% Senior Notes due 2007 of AMVESCAP PLC Reference is hereby made to the Indenture, dated as of December 17, 2001 (the "Indenture"), between AMVESCAP PLC, as issuer (the "Company"), each of the Guarantors named in the first paragraph of the Indenture and SunTrust Bank, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to US$ principal amount of the Securities ------------ which are evidenced by the Regulation S Global Security (CUSIP No. ) --------- and held with the Depositary in the name of Cede & Co. (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Securities to a Person who will take delivery thereof in the form of an equal principal amount of Securities evidenced by the Restricted Global Security (CUSIP No. ), to be held with the Depositary. ---------- In connection with such request and in respect of such Securities, the Transferor hereby certifies that such transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the Securities are being transferred to a Person that the Transferor reasonably believes is purchasing the Securities for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Securities are being transferred in compliance with any applicable blue sky securities laws of any state of the United States. Upon giving effect to this request to exchange a beneficial interest in Regulation S Global Securities for a beneficial interest in the Restricted Global Security, the resulting beneficial interest shall be subject to the restrictions on transfer applicable to the U.S. Global Securities pursuant to the Indenture and the Securities Act. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act. C-1 [Insert Name of Transferor] By: ------------------------------ Name: Title: Dated: , ------------ ---- ----------------------------------- Signature guaranteed by a member of a "Signature Guarantee Program" ("STAMP"), Stock Exchange Medallion Program ("SEMP") or New York Stock Exchange Medallion Signature Program, ("MSP") (an "Eligible Institution"), the signature(s) must be guaranteed by an Eligible Institution. C-2 EXHIBIT D FORM OF CERTIFICATE FOR TRANSFER OF U.S. PHYSICAL SECURITIES TO REGULATION S GLOBAL SECURITY OR RESTRICTED GLOBAL SECURITY SunTrust Bank 58 Edgewood Road Room 400 - Annex Atlanta, Georgia 30303 Attn: Corporate Trust Office Re: 5.90% Senior Notes due 2007 of AMVESCAP PLC Reference is hereby made to the Indenture, dated as of December 17, 2001 (the "Indenture"), between AMVESCAP PLC as issuer (the "Company"), each of the Guarantors named in the first paragraph of the Indenture and SunTrust Bank, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to US$ principal amount of Securities which ----------- are evidenced by a definitive certificated Security (Certificate No. , ---------- CUSIP No. , in the name of ) (the "Transferor"). The ---------- ----------------- Transferor has requested a transfer of such interest in the Securities to a Person that will take delivery thereof in the form of an equal principal amount of Securities evidenced by the [Restricted Global Security CUSIP No. ] [Regulation S Global Security (CUSIP No. )]. - ------------ ----------- In connection with such request and in respect of such Securities, the Transferor does hereby certify that: [if such request is made for transfer to the Regulation S Global Security: such transfer has been effected pursuant to and in accordance with Rule 903, Rule 904 or Rule 144 under the United States Securities Act of 1933, as amended (the "Securities Act") and accordingly the Transferor does hereby further certify that: (1) if the transfer has been effected pursuant to Rule 903 or Rule 904: (A) the offer of the Securities was not made to a person in the United States; (B) either: (i) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States, or (ii) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was prearranged with a buyer in the United States; D-1 (C) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable; [and] (D) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; [and (E) if the transfer is being requested prior to : Upon --------- completion of the transaction, the beneficial interest being transferred as described above is to be held with the Depositary through Euroclear or Clearstream Banking or both (Common Code );] or ---------- (2) if the transfer has been effected pursuant to Rule 144, the Securities have been transferred in a transaction permitted by Rule 144.] (3) if such request is made for transfer to the Restricted Global Security: Such transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act, and, accordingly, the Transferor hereby further certifies that the Securities are being transferred to a person that the Transferor reasonably believes is purchasing the Securities for its own account, or for one or more accounts with respect to which such person exercises sole investment discretion, and such person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act. D-2 Upon completion of the transaction, the beneficial interest being transferred as described above is to be held with the Depositary through Euroclear or Clearstream Banking or both (Common Code ). ----- [Insert Name of Transferor] By: ----------------------------- Name: Title: Dated: , ------- ---- ----------------------------------- Signature guaranteed by a member of a "Signature Guarantee Program" ("STAMP"), Stock Exchange Medallion Program ("SEMP") or New York Stock Exchange Medallion Signature Program, ("MSP") (an "Eligible Institution"), the signature(s) must be guaranteed by an Eligible Institution. D-3 EXHIBIT E FORM OF CERTIFICATE FOR TRANSFER OR EXCHANGE AFTER TWO YEARS SunTrust Bank 58 Edgewood Road Room 400 - Annex Atlanta, Georgia 30303 Attn: Corporate Trust Office Re: 5.90% Senior Notes due 2007 of AMVESCAP PLC Reference is hereby made to the Indenture, dated as of December 17, 2001 (the "Indenture"), between AMVESCAP PLC as issuer (the "Company"), each of the Guarantors named in the first paragraph of the Indenture and SunTrust Bank, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. [For transfers: This letter relates to US$ principal amount of ---------- Securities which are evidenced by a [Restricted Global Security (CUSIP No. ) and held with the Depositary in the name of Cede & Co.] [a U.S. - --------- Physical Security (CUSIP No. ) registered in the name of ---------------- ] [and held for the benefit of ] (the - ----------------- ----------------- "Beneficial Owner"). The Beneficial Owner has requested that its beneficial interest in such Securities be transferred to a Person that will take delivery thereof in the form of an equal principal amount of Securities evidenced by the Regulation S Global Security (CUSIP No. ). --------- In connection with such request and in respect of such Securities, the Beneficial Owner does hereby certify that upon such transfer, (a) a period of at least two years will have elapsed since , (b) the Beneficial Owner ------------- during the three months preceding the date of such transfer was not an "affiliate" of the Company (as defined in Rule 144 under the Securities Act), and it was not acting on behalf of such an affiliate and (c) such Person to whom such transfer is being made is not an "affiliate" of the Company.] [For exchanges: This letter relates to US$ principal amount of ---------- Securities that are evidenced by a [Restricted Global Security (CUSIP No. ) and held with the Depositary in the name of [ ] [and held - ---------- ----------- for the benefit of [ ] (the "Beneficial Owner"). The Beneficial Owner ----------- has requested that its beneficial interest in such Securities be exchanged for a beneficial interest in an equal principal amount of Securities evidenced by the Regulation S Global Security (CUSIP No. ). ---------- In connection with such request and in respect of such Securities, the Beneficial Owner does hereby certify that [it is located and acquired such securities outside the United States (if the Restricted Period has ended) and that such transfer is being made in accordance with Rule 903 or 904 of Regulation S promulgated under the U.S. Securities Act of 1933][, upon such exchange, E-1 (a) it will be the beneficial owner of such Securities, (b) a period of at least two years will have elapsed since and (c) the Beneficial Owner will not ------- be, andduring the three months preceding the date of such exchange will not have been, an "affiliate" of the Company (as defined in Rule 144 under the Securities Act), and it is not acting on behalf of such an affiliate.] This certificate and the statements contained herein are made for your benefit and the benefit of the Company. Dated: [Insert Name of Beneficial Owner] By: ------------------------------------- Name: Title: ---------------------------------------- Signature guaranteed by a member of a "Signature Guarantee Program" ("STAMP"), Stock Exchange Medallion Program ("SEMP") or New York Stock Exchange Medallion Signature Program, ("MSP") (an "Eligible Institution"), the signature(s) must be guaranteed by an Eligible Institution. E-2 -------------------- Indenture Dated as of December 17, 2001 --------------------- US$300,000,000 5.90% Senior Notes due 2007 -------------------- AMVESCAP PLC Issuer, EACH OF THE GUARANTORS NAMED HEREIN, Guarantors, and SUNTRUST BANK, Trustee AMVESCAP PLC Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of December 17, 2001
Trust Indenture Act Section Indenture Section Section 310(a)(1)...................................................................... 6.08 310(a)(2)...................................................................... 6.08 310(a)(3)...................................................................... N/A 310(a)(4)...................................................................... N/A 310(a)(5)...................................................................... 6.08 310(b)......................................................................... 6.05, 6.09 Section 311 .......................................................................... 6.05, 6.06 Section 312(a)......................................................................... 7.01 312(b)......................................................................... 7.01 312(c)......................................................................... 7.01 Section 313(a)......................................................................... 7.02 Section 313(b)......................................................................... 7.02 313(c)......................................................................... 6.01,7.02 Section 313(d)......................................................................... 7.02 Section 314(a)......................................................................... 10.06;10.07 Section 314(b)......................................................................... N/A Section 314(c)......................................................................... N/A Section 314(d)......................................................................... N/A Section 314(e)......................................................................... 1.02 Section 315(a)......................................................................... 6.01 Section 315(b)......................................................................... 6.02 Section 315(c)......................................................................... 6.01 Section 315(e)......................................................................... 5.15 Section 316(a)......................................................................... 5.12,5.13 Section 316(b)......................................................................... 5.08 Section 316(c)......................................................................... 1.04
TABLE OF CONTENTS
Page PARTIES......................................................................................................1 RECITALS OF THE COMPANY......................................................................................1 ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.01 Definitions....................................................................................1 Section 1.02 Compliance Certificates and Opinions. .........................................................8 Section 1.03 Form of Documents Delivered to Trustee. .......................................................9 Section 1.04 Acts of Holders. .............................................................................10 Section 1.05 Notices, etc., to Trustee, Company or Guarantors. ............................................11 Section 1.06 Notice to Holders, Waiver.....................................................................12 Section 1.07 Conflict of any Provision of Indenture with Trust Indenture Act...............................12 Section 1.08 Effect of Headings and Table of Contents......................................................12 Section 1.09 Successors and Assigns........................................................................12 Section 1.10 Separability Clause. .........................................................................12 Section 1.11 Benefits of Indenture.........................................................................13 Section 1.12 Governing Law. ...............................................................................13 Section 1.13 Legal Holidays................................................................................13 Section 1.14 Agent for Service; Submission to Jurisdiction; Waiver of Immunities and Jury Trial. ..........13 Section 1.15 Currency......................................................................................14 ARTICLE II ARTICLE II SECURITY FORMS Section 2.01 Forms Generally. .............................................................................15 Section 2.02 Restrictive Legends. .........................................................................16 ARTICLE III THE SECURITIES Section 3.01 Title and Terms...............................................................................17 Section 3.02 Denominations. ...............................................................................18 Section 3.03 Execution, Authentication, Delivery and Dating. ..............................................18 Section 3.04 Temporary Securities. ........................................................................20
- ---------- Note: This table of contents shall not, for any purpose, be deemed to be a part of the Indenture. v Section 3.05 Registration, Registration of Transfer and Exchange...........................................20 Section 3.06 Book-Entry Provisions for Restricted Global Security..........................................21 Section 3.07 Special Transfer Provisions...................................................................23 Section 3.08 Mutilated, Destroyed, Lost and Stolen Securities..............................................26 Section 3.09 Payment of Interest and Certain Additional Amounts; Rights to Interest and Certain Additional Amounts Preserved.......................................................................27 Section 3.10 Persons Deemed Owners.........................................................................28 Section 3.11 Cancellation..................................................................................28 Section 3.12 CUSIP and CINS Numbers........................................................................29 Section 3.13 Computation of Interest.......................................................................29 ARTICLE IV SATISFACTION AND DISCHARGE Section 4.01 Satisfaction and Discharge of Indenture.......................................................29 Section 4.02 Application of Trust Money....................................................................30 ARTICLE V REMEDIES Section 5.01 Events of Default.............................................................................30 Section 5.02 Acceleration of Maturity; Rescission and Annulment............................................32 Section 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee...............................33 Section 5.04 Trustee May File Proofs of Claim..............................................................33 Section 5.05 Trustee May Enforce Claims Without Possession of Securities...................................34 Section 5.06 Application of Money Collected................................................................34 Section 5.07 Limitation on Suits...........................................................................35 Section 5.08 Unconditional Right of Holders to Receive Principal, Interest and Additional Amounts..........35 Section 5.09 Restoration of Rights and Remedies............................................................35 Section 5.10 Rights and Remedies Cumulative................................................................36 Section 5.11 Delay or Omission Not Waiver..................................................................36 Section 5.12 Control by Holders............................................................................36 Section 5.13 Waiver of Past Defaults.......................................................................36 Section 5.14 Waiver of Stay or Extension Laws..............................................................37 Section 5.15 Undertaking for Costs.........................................................................37 ARTICLE VI THE TRUSTEE Section 6.01 Certain Duties and Responsibilities...........................................................37 Section 6.02 Notice of Defaults............................................................................38 Section 6.03 Certain Rights of Trustee.....................................................................38 Section 6.04 Trustee Not Responsible for Recitals or Issuance of Securities................................39 Section 6.05 May Hold Securities...........................................................................40 Section 6.06 Money Held in Trust. .........................................................................40 Section 6.07 Compensation and Reimbursement................................................................40 Section 6.08 Corporate Trustee Required; Eligibility.......................................................41
Section 6.09 Resignation and Removal; Appointment of Successor.............................................41 Section 6.10 Acceptance of Appointment by Successor........................................................42 Section 6.11 Merger, Conversion, Consolidation or Succession to Business. .................................43 Section 6.12 Withholding Taxes. ...........................................................................43 ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE Section 7.01 Disclosure of Names and Addresses of Holders. ................................................44 Section 7.02 Reports by Trustee. ..........................................................................44 ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 8.01 Company and Guarantors May Consolidate, etc., Only on Certain Terms. .........................44 Section 8.02 Successor Person Substituted for Company. ....................................................45 ARTICLE IX SUPPLEMENTS AND AMENDMENTS TO INDENTURE AND SECURITIES GUARANTEES Section 9.01 Without Consent of Holders. ..................................................................45 Section 9.02 With Consent of Holders. .....................................................................46 Section 9.03 Execution of Supplemental Indentures. ........................................................47 Section 9.04 Effect of Supplemental Indentures. ...........................................................47 Section 9.05 Conformity with Trust Indenture Act. .........................................................47 Section 9.06 Reference in Securities to Supplemental Indentures. ..........................................48 Section 9.07 Notice of Supplemental Indentures. ...........................................................48 Section 9.08 Revocation and Effect of Consents, Waivers and Actions. ......................................48 ARTICLE X COVENANTS Section 10.01 Payment of Principal and Interest. ..........................................................48 Section 10.02 Maintenance of Office or Agency. ............................................................49 Section 10.03 Money for Security Payments to Be Held in Trust. ............................................49 Section 10.04 Additional Amounts. .........................................................................51 Section 10.05 Corporate Existence. ........................................................................52 Section 10.06 Statement by Officers As to Default. ........................................................53 Section 10.07 Provision of Reports and Financial Statements. ..............................................53 Section 10.08 Waiver of Certain Covenants. ................................................................54 Section 10.09 Additional Guarantors. ......................................................................54 ARTICLE XI REDEMPTION OF SECURITIES Section 11.01 Right of Redemption. ........................................................................54
Section 11.02 Applicability of Article. ...................................................................55 Section 11.03 Election to Redeem; Notice to Trustee. ......................................................56 Section 11.04 Selection by Trustee of Securities to Be Redeemed. ..........................................56 Section 11.05 Notice of Redemption. .......................................................................56 Section 11.06 Deposit of Redemption Price. ................................................................57 Section 11.07 Securities Payable on Redemption Date. ......................................................57 Section 11.08 Securities Redeemed in Part. ................................................................58 ARTICLE XII ARTICLE XII DEFEASANCE AND COVENANT DEFEASANCE Section 12.01 Company Option to Effect Defeasance or Covenant Defeasance. .................................58 Section 12.02 Defeasance and Discharge. ...................................................................58 Section 12.03 Covenant Defeasance. ........................................................................58 Section 12.04 Conditions to Defeasance or Covenant Defeasance. ............................................59 Section 12.05 Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions. ............................................................................61 Section 12.06 Reinstatement. ..............................................................................62 ARTICLE XIII SECURITIES GUARANTEES Section 13.01 Unconditional Guarantee. ....................................................................62 Section 13.02 Limitations on Guarantees. ..................................................................63 Section 13.03 Execution and Delivery of Guarantees.........................................................64 Section 13.04 Release of the Guarantors....................................................................64 Section 13.05 Waiver of Subrogation........................................................................65 Section 13.06 Immediate Payment............................................................................65 Section 13.07 No Set-Off...................................................................................65 Section 13.08 Obligations Absolute.........................................................................65 Section 13.09 Obligation Not Reduced.......................................................................66 Section 13.10 [Intentionally Omitted]......................................................................66 Section 13.11 Obligations Not Affected.....................................................................66 Section 13.12 Waiver.......................................................................................67 Section 13.13 No Obligation To Take Action Against the Company.............................................67 Section 13.14 Dealing with the Company and Others..........................................................67 Section 13.15 Default and Enforcement. ....................................................................68 Section 13.16 Amendment, Etc. .............................................................................68 Section 13.17 Acknowledgement. ............................................................................68 Section 13.18 No Merger or Waiver; Cumulative Remedies. ...................................................68 Section 13.19 Survival of Obligations. ....................................................................69 Section 13.20 Guarantee in Addition to Other Obligations. .................................................69 Section 13.21 Severability. ...............................................................................69 Section 13.22 Successors and Assigns. .....................................................................69
Section 13.23 Severability.................................................................................69
EXHIBITS Exhibit A - Form of Security Exhibit B - Form of Certificate for Exchange or Registration of Transfer from Restricted Global Security to Regulation S Global Security Exhibit C - Form of Certificate for Exchange or Registration of Transfer from Regulation S Global Security to Restricted Global Security Exhibit D - Form of Certificate for Transfer of U.S. Physical Securities to Regulation S Global Security or Restricted Global Security Exhibit E - Form of Certificate for Transfer or Exchange after Two Years
x EX-4.4 8 dex44.txt AMENDMENT TO FACILITY DOCUMENTS Exhibit 4.4 AMENDMENT NO. 4 TO FACILITY DOCUMENTS Amendment No. 4 to Facility Documents dated as of August 24, 2001 (the "Amendment") among AIM MANAGEMENT GROUP INC., as Seller (together with its successors and assigns, the "Seller") and as servicer (the "Servicer"), AIM ADVISORS, INC., as advisor (together with its successors and assigns, the "Advisor"), AIM DISTRIBUTORS, INC., as distributor (together with its successors and assigns, the "Distributor"), CITIBANK, N.A., as Purchaser (together with its successors and assigns, the "Purchaser"), BANKERS TRUST COMPANY, as collection agent (together with its successors and assigns, the "Collection Agent") and CITICORP NORTH AMERICA, INC., as program agent (together with its successors and assigns, the "Program Agent"). W I T N E S S E T H WHEREAS, the Purchaser, the Distributor, the Advisor, the Program Agent and the Seller have entered into that certain Second Amended and Restated Purchase and Sale Agreement dated as of December 14, 2000 (as amended and supplemented, the "Purchase Agreement"); WHEREAS, the Seller, the Purchaser, the Program Agent and the Collection Agent, have entered into that certain Second Amended and Restated Collection Agency Agreement dated as of December 14, 2000 (as amended and supplemented, the "Collection Agency Agreement"); WHEREAS, the parties to this Amendment desire to amend the Purchase Agreement and the Collection Agency Agreement as hereinafter provided; WHEREAS, AIM Growth Series, AIM Floating Rate Fund, AIM Investment Funds and AIM Series Trust (individually an "Affected Company" and collectively the "Affected Companies") propose to modify, add to or eliminate certain of the Fundamental Investment Objectives of the Funds which are portfolios of the Affected Companies; and WHEREAS, the existing Advisory Agreements of the Funds which are portfolios of the Affected Companies are being terminated and replaced by successor investment advisory agreements; NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein contained, the parties hereto agree as follows: Section 1. Defined Terms. ------------- "Affected Funds" means the portfolios of the Affected Companies. -------------- "Approved Changes" means the changes to the Fundamental Investment ---------------- Objectives of the Affected Funds set forth on Annex A hereto. "Amendment Effective Date" means the later to occur of (i) the day on ------------------------ which the Program Agent shall have executed and delivered one or more counterparts of this Amendment and shall have received one or more counterparts of this Amendment executed by each of the other parties hereto, and (ii) the conditions precedent set forth in Section 5 hereof shall have been fulfilled; provided, however, that (i) the amendments relating to the Approved Changes, the - -------- ------- Substitutions (as defined below) and the replacement of Schedule IV set forth in Section 2(l) shall be effective on September 1, 2001. Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to such terms in Appendix A to the Purchase Agreement, as amended by this Amendment. Section 2. Amendments to the Purchase Agreement. ------------------------------------ (a) Appendix A of the Purchase Agreement is amended by adding the following definitions in their proper alphabetical order: ""Amendment No. 4 to Facility Documents" shall mean Amendment No. 4 to ------------------------------------- Facility Documents dated as of August 24, 2001 among the Seller, the Advisor, the Distributor, the Purchaser, the Program Agent and the Collection Agent. "Non-Omnibus Shares" shall mean, in respect of any Fund, all Shares of ------------------ such Fund which are not Omnibus Shares. "Specified Sub-transfer Agent" shall have the meaning assigned to such ---------------------------- term in the Irrevocable Payment Instruction."" (b) Appendix A of the Purchase Agreement is hereby further amended by deleting the definitions "Non-ML Omnibus Shares", "Purchaser's CDSC Portion Subaccount", "Seller's CDSC Portion Subaccount" and "Subaccounts". (c) The definition of "Facility Documents" set forth in Appendix A of the Purchase Agreement is hereby amended by inserting the words "Amendment No. 4 to the Facility Documents" after the words "Amendment No. 3 to Facility Documents," set forth therein. (d) The definition of "Program Termination Date" set forth in Appendix A of the Purchase Agreement shall be amended by adding the following sentence thereto: "For the avoidance of doubt, the Seller shall not be required to determine the Unamortized Gross Purchase Amount until such time as the Seller shall deem it necessary for the purpose of 2 determining whether the Program Termination Date has occurred." (e) Section 4.01(h)(iii) of the Purchase Agreement is hereby amended by replacing the words "if adversely determined could give rise to a reasonable possibility of an Adverse Effect;" following the words "which in each case," set forth therein with "could reasonably be expected to give rise to an Adverse Effect;". (f) Section 5.02(b) of the Purchase Agreement is hereby amended by (i) adding the words "change its jurisdiction of incorporation or" after the words "in respect of the Seller and the Distributor," set forth therein, and (ii) adding the words "new jurisdiction or" after the words "clearly describing the" set forth in subsection (a) therein. (g) Section 5.02 of the Purchase Agreement is hereby further amended by replacing clause (i) set forth therein in its entirety with the following language: "(i) permit the record ownership on the records of the Transfer Agent of any Share of any Fund to be in the name of any Sub-transfer Agent's street account, unless (w) such Sub-transfer Agent for such Omnibus Shares has tracking capabilities, procedures and reporting practices sufficient to allocate Collections and Related Collections in respect of such Omnibus Shares as contemplated by the Allocation Procedures, (x) the Program Agent shall have approved in writing the form of the Sub-transfer Agent Report of such Sub-transfer Agent which sets forth the methodology to be used by such Sub-transfer Agent to allocate Shares as contemplated by the Allocation Procedures, (y) if such Sub- transfer Agent is not a Specified Sub-transfer Agent, such Sub- transfer Agent will, no later than the second (2nd) Business Day following the end of the calendar week in which Shares held in its Omnibus Account are redeemed, remit such CDSCs to the Demand Deposit Account in accordance with the applicable Irrevocable Payment Instruction, and (z) if such Sub-transfer Agent is a Specified Sub- transfer Agent, such Sub-transfer Agent will, no later than the tenth (10th) Business Day of the calendar month next following the calendar month in which the Shares relating to such CDSCs were redeemed, remit all CDSCs in respect of the Omnibus Shares in its related Omnibus Account to the Demand Deposit Account in accordance with the applicable Irrevocable Payment Instruction;" (h) Section 5.04(e) of the Purchase Agreement is hereby amended by (i) inserting the subsection reference "(A)" following the words "ensure that" set forth therein, and (ii) adding the following language thereto: 3 ", and (B) that all CDSCs are remitted to the Demand Deposit Account in accordance with the Irrevocable Payment Instructions". (i) Section 5.04 is hereby further amended by inserting the following new clause after clause (h) set forth therein: "(i) use its best efforts to cause (a) each Sub-transfer Agent (other than a Specified Sub-transfer Agent), no later than the second (2nd) Business Day following the end of the calendar week in which Shares held in such Sub-transfer Agent's Omnibus Account are redeemed, to remit such CDSCs to the Demand Deposit Account in accordance with the applicable Irrevocable Payment Instruction, and (b) each Specified Sub-transfer Agent, no later than the tenth (10th) Business Day of the calendar month next following the calendar month in which the Shares relating to such CDSCs were redeemed, to remit all CDSCs in respect of the Omnibus Shares in such Sub-transfer Agent's Omnibus Account to the Demand Deposit Account in accordance with the applicable Irrevocable Payment Instruction;" (j) Section 9.04(b) of the Purchase Agreement is hereby amended by adding the language "or any commingling of Collections with any other funds" to the end of clause (vii) thereof. (k) Section 9.04(b) is hereby further amended by adding the following language to the end of clause (ix) thereof: "or any failure of any Sub-transfer Agent to remit all CDSCs in respect of Omnibus Shares in its related Omnibus Account to the Demand Deposit Account as and when specified in the Irrevocable Payment Instruction." (l) The Purchase Agreement is hereby amended by replacing Schedule IV attached thereto with Schedule IV attached hereto as Annex B. (m) The Purchase Notice attached as Exhibit A-1 to the Purchase Agreement is hereby amended by deleting the last paragraph set forth therein in its entirety. (n) The Purchase Agreement is hereby amended by replacing Exhibit C attached thereto with Exhibit C attached hereto as Annex C. (o) The Purchase Agreement is hereby further amended by replacing Exhibit E attached thereto with Exhibit E attached hereto as Annex D. 4 Section 3. Amendments to the Collection Agency Agreement. --------------------------------------------- (a) Section 2.2 of the Collection Agency Agreement is hereby amended by (i) deleting the subsection reference "(a)" set forth therein, and (ii) deleting clause (b) set forth therein in its entirety. (b) Section 4.1 of the Collection Agency Agreement is hereby amended by (i) deleting the second and third sentences set forth therein in their entirety, and (ii) by deleting the parenthetical "(including without limitations the Subaccounts)" following the words "and the Collection Account" in the third and forth sentences set forth therein. (c) Section 4.3(a) of the Collection Agency Agreement is hereby amended by (A) deleting subsections (i) and (ii) in their entirety, and (B) replacing subsection reference "(iii)" set forth therein and the first word thereof with "(a) On". (d) Section 4.3(c) of the Collection Agency Agreement is hereby amended by replacing subsections (iii) and (iv) set forth therein in their entirety with the following subsections: "(iii) an amount equal to the result of (A) the sum of the Purchaser's Asset Based Sales Charge Portion, plus, the Purchaser's CDSC Portion, ---- less, (B) the sum of (x) the Purchaser's allocable portion of the ---- amount distributed pursuant to clause (i) above, as determined in accordance with Section 4.3(d), and (y) the amount distributed pursuant to clause (ii) above, shall be distributed to the Purchaser's Remittance Account; (iv) an amount equal to the result of (A) the sum of the Seller's Asset Based Sales Charge Portion, plus, the Seller's CDSC Portion, ---- less, (B) the Seller's allocable portion of the amount distributed ---- pursuant to clause (i) above, as determined in accordance with Section 4.3(d) shall be transferred to the Seller's Account." (e) Section 4.3(f) of the Collection Agency Agreement is hereby amended by (i) deleting the first sentence set forth therein in its entirety, and (ii) by replacing the subsection references "4.3(a)(iii)" set forth in the second sentence therein with "4.3(a)". (f) Section 4.3 of the Collection Agency Agreement is hereby further amended by deleting clause (g) set forth therein in its entirety. (g) Section 14 of the Collection Agency Agreement is hereby amended by replacing the language set forth therein with the following language: 5 "This Agreement shall terminate on the date the Collection Agent receives written notification from the Program Agent that the Program Termination Date has occurred." Section 4. Consent and Waiver. ------------------ (a) The Purchaser and the Program Agent hereby consent to the Approved Changes to the Fundamental Investment Objectives of the Affected Funds. The parties hereto agree that from and after the Amendment Effective Date all references in the Program Documents to "any change in the Fundamental Investment Objectives since the date of this Agreement" shall, in respect of the aspects of such Fundamental Investment Objectives modified by such Approved Changes, be deemed to refer to changes since the Amendment Effective Date. (b) The Purchaser and the Program Agent hereby consent to the termination of the existing Advisory Agreements in respect of the Affected Funds (the "Current Advisory Agreements") and the adoption (each such termination and adoption, a "Substitution") of the Investment Advisory Agreements in the form attached hereto as Annex E (the "Successor Advisory Agreements"). The parties hereto agree that all references in the Program Documents to the term "Advisory Agreement" shall be deemed to include a reference to the Successor Advisory Agreements and all references in the Program Documents to "any modification, amendment or supplement, termination or waiver of the Advisory Agreement" in respect of the Affected Funds shall be deemed to refer to the Successor Advisory Agreements. (c) The Program Agent and the Purchaser hereby (i) acknowledge the receipt of written notification of (a) the Approved Changes, as required by Sections 5.01(n) of the Purchase Agreement and (b) the Substitution as required by Section 5.01(q) of the Purchase Agreement; and (ii) waive the requirements for certificates with respect to the Approved Changes pursuant to Section 5.01(n) of the Purchase Agreement. (d) The Purchaser and the Program Agent hereby waive the provisions of Section 5.01(d) of the Purchase Agreement in respect of the Approved Changes and the Substitution, and acknowledge that the Approved Changes and the Substitution do not constitute Events of Termination pursuant to Sections 6.01(h) or 6.01(i) of the Purchase Agreement. (e) The consents and waivers set forth herein shall be effective only in the specific instances and for the specific purposes set forth herein. Section 5. Conditions Precedent to Effectiveness of this Amendment. ------------------------------------------------------- The occurrence of the Amendment Effective Date shall be subject to the fulfillment of each of the following conditions precedent: (i) this Amendment shall have been duly executed by the parties hereto and shall be in full force and effect, and the Program Agent shall have received a fully executed copy of this Amendment; 6 (ii) the Program Agent shall have received fully executed copies of each amended and restated Irrevocable Payment Instruction in respect of each Company and Transfer Agent substantially in the form attached as Annex D hereto, and such Irrevocable Payment Instructions as so amended shall be in full force and effect; (iii) immediately after giving effect to this Amendment, there shall exist no Event of Termination (or event which, with the passage of time or notice, or both would constitute an Event of Termination); (iv) the Program Agent shall have received such opinions of counsel as it shall have reasonably requested and in form, scope and substance reasonably satisfactory to the Program Agent; and (v) a consent to the amendments contemplated by this Amendment shall have been duly executed by each Transferee which is required to execute the same, and the Program Agent shall have received a fully executed copy thereof. Section 6. Representations and Warranties. ------------------------------ Each of the Seller, the Distributor and the Advisor represent and warrant to the Purchaser and the Program Agent that immediately after giving effect to the amendments contemplated by this Amendment that (a) the representations and warranties of the Seller (as Servicer or otherwise) and the Advisor and the Distributor set forth in the Program Documents are true and correct, and (b) no Event of Termination (or event which with the passage of time or notice, or both, would constitute an Event of Default) has occurred or will result therefrom. In addition, each of the Seller, the Distributor and the Advisor represents and warrants that the Approved Changes and the Substitutions could not reasonably be expected to give rise to a Material Adverse Effect. Section 7. Execution in Counterparts. ------------------------- This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original, and all of which counterparts, when taken together, shall constitute but one and the same amendment. Section 8. Governing Law. ------------- THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Section 9. Severability of Provisions. -------------------------- Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 7 Section 10. Captions. -------- The captions in this Amendment are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. 8 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written. AIM MANAGEMENT GROUP INC. as Seller and Servicer By: /s/ Robert H. Graham ---------------------------- Authorized Signatory CITIBANK, N.A., as Purchaser By: /s/ Jean M. Diaz ---------------------------- Authorized Signatory CITICORP NORTH AMERICA, INC., as Program Agent By: /s/ Jean M. Diaz ---------------------------- Authorized Signatory AIM ADVISORS, INC. By: /s/ Robert H. Graham ---------------------------- Authorized Signatory AIM DISTRIBUTORS, INC. By: /s/ Michael J. Cemo ---------------------------- Authorized Signatory BANKERS TRUST COMPANY, as Collection Agent By: /s/ Louis Bodi ---------------------------- Authorized Signatory 9 EX-4.11 9 dex411.txt STOCK PURCHASE AGREEMENT EXHIBIT 4.11 - -------------------------------------------------------------------------------- STOCK PURCHASE AGREEMENT BY AND AMONG OLD MUTUAL PLC, OLD MUTUAL (US) HOLDINGS INC., UNITED ASSET MANAGEMENT HOLDINGS, INC. AMVESCAP PLC AND INVESCO NORTH AMERICAN HOLDINGS, INC. DATED APRIL 26, 2001 - -------------------------------------------------------------------------------- Table of Contents
ARTICLE I - DEFINITIONS..............................................................2 1.1 Definitions................................................................2 1.2 Other Definitional Provisions..............................................9 1.3 Cross Reference of Other Definitions......................................10 ARTICLE II - PURCHASE AND SALE OF STOCK.............................................11 2.1 Stock Purchase............................................................11 2.2 Purchase Price for Common Stock...........................................11 2.3 Computation of Base Annual Billings and Adjusted Base Annual Billings.....11 2.4 Additional Consideration..................................................13 2.5 Estimated Closing Balance Sheet...........................................13 2.6 Post-Closing Adjustment for Net Tangible Assets...........................14 2.7 Closing Transactions......................................................14 ARTICLE III - CONDITIONS TO CLOSING.................................................15 3.1 Conditions to the Purchaser's Obligations.................................15 3.2 Conditions to the Sellers' Obligations....................................18 ARTICLE IV - COVENANTS PRIOR TO CLOSING.............................................19 4.1 Affirmative Covenants of Old Mutual.......................................19 4.2 Client Consents...........................................................20 4.3 Section 15 of the 1940 Act; Reorganization of the Mid Cap Portfolio.......21 4.4 Negative Covenants of Old Mutual..........................................22 4.5 Covenants of the Purchaser................................................23 4.6 Regulatory Matters; Third Party Consents..................................24 4.7 Retention Bonus Plan......................................................24 4.8 Employment Agreements.....................................................25 4.9 Gramm-Leach-Bliley........................................................25 4.10 Release...................................................................25 4.11 Regarding Certain Trust Investments.......................................25 4.12 Revenue Sharing Purchase Agreement; Signing Bonus Plan....................27 4.13 Termination of Employee Benefit Plans.....................................27 4.14 401(K) Plan Transfer......................................................27 4.15 Redemption of Unit Awards.................................................27 4.16 Acquisition Event.........................................................27 4.17 Cooperation...............................................................28 ARTICLE V- REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANIES..................28 5.1 Organization and Corporate Power..........................................28 5.2 Authorization of Transactions.............................................28 5.3 Capitalization............................................................28 5.4 Subsidiaries; Investments.................................................29 5.5 Absence of Conflicts......................................................29 5.6 Financial Statements and Related Matters..................................30 5.7 Absence of Undisclosed Liabilities........................................30 5.8 Absence of Certain Developments...........................................30 5.9 Title to Properties.......................................................32 5.10 Reserved..................................................................33 5.11 Contracts and Commitments.................................................33
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5.12 Proprietary Rights........................................................34 5.13 Litigation; Proceedings...................................................34 5.14 Brokerage.................................................................35 5.15 Governmental Filings......................................................35 5.16 Employee Benefit Plans....................................................35 5.17 Insurance.................................................................37 5.18 Affiliate Transactions....................................................37 5.19 Compliance with Laws......................................................37 5.20 Disclosure................................................................38 5.21 Investment Contracts, Funds and Clients...................................39 5.22 Assets Under Management...................................................41 5.23 Labor Matters, etc........................................................41 5.24 Derivative Products.......................................................41 5.25 Section 15(f) Materials...................................................41 ARTICLE VI - REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLERS..................42 6.1 Organization and Corporate Power..........................................42 6.2 Authorization of Transactions.............................................42 6.3 No Violation..............................................................42 6.4 Shares....................................................................42 6.5 Taxes.....................................................................42 6.6 Litigation................................................................44 6.7 Brokerage.................................................................44 6.8 Governmental Filings......................................................44 6.9 Insurance.................................................................44 ARTICLE VII - REPRESENTATIONS AND WARRANTIES CONCERNING THE PURCHASER...............45 7.1 Organization and Corporate Power..........................................45 7.2 Authorization of Transaction..............................................45 7.3 No Violation..............................................................45 7.4 Governmental Authorities and Consents.....................................45 7.5 Litigation................................................................45 7.6 Brokerage.................................................................46 7.7 Purchase Price............................................................46 7.8 Ineligible Persons........................................................46 7.9 Facts Affecting Regulatory Approvals......................................46 ARTICLE VIII - TERMINATION..........................................................46 8.1 Termination...............................................................46 8.2 Effect of Termination.....................................................47 ARTICLE IX - INDEMNIFICATION AND RELATED MATTERS....................................48 9.1 Survival..................................................................48 9.2 Indemnification...........................................................48 9.3 Procedure.................................................................51 9.4 Exclusive Remedy..........................................................52 9.5 Net Recovery..............................................................52 9.6 Right of Off-Set/Set-Off..................................................53 9.7 Adjustment to Purchase Price..............................................53
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ARTICLE X - ADDITIONAL AGREEMENTS...................................................53 10.1 Tax Matters...............................................................53 10.2 Press Releases and Announcements..........................................55 10.3 Further Transfers.........................................................56 10.4 Expenses..................................................................56 10.5 Exclusivity...............................................................56 10.6 Books and Records.........................................................56 10.7 Confidentiality and Non-Disclosure........................................57 10.8 Guarantee.................................................................57 10.9 Personnel Changes.........................................................57 10.10 Disposition of Business of the Companies...............................57 ARTICLE XI - MISCELLANEOUS..........................................................58 11.1 Amendment and Waiver......................................................58 11.2 Notices...................................................................58 11.3 Binding Agreement; Assignment.............................................60 11.4 Severability..............................................................60 11.5 No Strict Construction....................................................60 11.6 Captions..................................................................60 11.7 Entire Agreement..........................................................60 11.8 Counterparts..............................................................60 11.9 Governing Law.............................................................60 11.10 Parties in Interest.......................................................60
-iii- INDEX OF EXHIBITS ----------------- Exhibit A - Form of Client Notice Exhibit B-1 - Form of Employment Agreement Exhibit B-2 - List of Persons to Enter Into Employment Agreements Exhibit C - Form of Retention Bonus Plan Exhibit D - List of Employees Exhibit E - Reserved Exhibit F - List of Offices of the Companies Exhibit G - Form of Revenue Sharing Purchase Agreement INDEX OF SCHEDULES ------------------ - -------------------------------------------------------------------------------- Schedule 2.3(a) Client Schedule - -------------------------------------------------------------------------------- Schedule 4.9 Gramm Leach-Bliley Schedule (not referenced in text) - -------------------------------------------------------------------------------- Schedule 5.1 Organization Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.4 Subsidiaries Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.5 Conflicts Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.6 Financial Statements Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.7 Undisclosed Liabilities (Companies) - -------------------------------------------------------------------------------- Schedule 5.8 Developments Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.9 Leased Property Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.11 Material Contracts Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.12 Proprietary Rights Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.13 Litigation Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.14 Brokerage Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.16 Benefit Plans Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.16(c) Filings with respect to Benefit Plans (Companies) - -------------------------------------------------------------------------------- Schedule 5.17 Insurance Schedule (Companies) - -------------------------------------------------------------------------------- Schedule 5.18 Affiliate Transactions Schedule - -------------------------------------------------------------------------------- Schedule 5.19 Compliance with Laws Schedule - -------------------------------------------------------------------------------- Schedule 5.21(a) Investment Contracts, Funds and Clients Schedule - -------------------------------------------------------------------------------- Schedule 6.4 Shares Schedule (Sellers) - -------------------------------------------------------------------------------- Schedule 6.5 Taxes Schedule (Sellers) - -------------------------------------------------------------------------------- Schedule 6.7 Brokerage Schedule (Sellers) - -------------------------------------------------------------------------------- Schedule 6.9 Insurance Schedule (Sellers) - -------------------------------------------------------------------------------- - iv - STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT is made as of April 26, 2001, by and among OLD MUTUAL PLC, a corporation incorporated under the laws of England and Wales ("Parent"), OLD MUTUAL (US) HOLDINGS INC., a Delaware corporation ("Old ------ --- Mutual"), UNITED ASSET MANAGEMENT HOLDINGS, INC., a Delaware corporation - ------ ("Holdings"), AMVESCAP PLC, a corporation incorporated under the laws of England -------- and Wales ("AMVESCAP"), and INVESCO NORTH AMERICAN HOLDINGS, INC., a Delaware -------- corporation (the "Purchaser"). Parent, Old Mutual, Holdings, AMVESCAP and the --------- Purchaser are referred to herein collectively as the "Parties" and individually ------- as a "Party." ----- W I T N E S S E T H: WHEREAS, Parent owns beneficially and of record all of the issued and outstanding shares of capital stock of Old Mutual; and WHEREAS, Old Mutual owns beneficially and of record all of the issued and outstanding shares of capital stock of Holdings, and Holdings in turn owns beneficially and of record all of the issued and outstanding common stock of Pell Rudman & Co., Inc., a Delaware corporation ("Pell Rudman"); and ----------- WHEREAS, Old Mutual owns beneficially and of record all of the issued and outstanding shares of capital stock of Rothschild/Pell Rudman, Inc., a Maryland corporation ("Rothschild"); and ---------- WHEREAS, Edward I. Rudman ("Rudman") and Jeffrey S. Thomas ("Thomas") hold certain rights under the Revenue Sharing Agreements with respect to the business, market and rights to provide services of Pell Rudman; and WHEREAS, AMVESCAP owns beneficially and of record all of the issued and outstanding shares of capital stock of the Purchaser; and WHEREAS, the Purchaser desires to acquire from Old Mutual and Holdings, and Old Mutual and Holdings desire to sell to the Purchaser, all of the shares of capital stock of Pell Rudman and of Rothschild; and WHEREAS, Purchaser desires to acquire from Rudman and Thomas and Rudman and Thomas desire to sell to the Purchaser, all of their respective right, title and interest in and to the Revenue Sharing Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to become legally bound, hereby agree as follows: ARTICLE I DEFINITIONS ----------- 1.1 Definitions. For purposes hereof, the following terms, when used herein ----------- with initial capital letters, shall have the respective meanings set forth herein: "Acquisition Event" means: (x) any merger or consolidation after which the ----------------- Person holding at least 50% of the voting securities of any of the Companies outstanding immediately prior thereto (either by remaining outstanding or by being converted into voting securities of the surviving or acquiring entity) holds less than 50% of the combined voting power of the voting securities of such Company or such surviving or acquiring entity outstanding immediately after such event; or (y) any sale of all or substantially all of the assets or capital stock of any of the Companies, in either case, which occurs after the Closing Date. "Adverse Consequences" means all actions, suits, proceedings, hearings, -------------------- investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, fines, costs, amounts paid in settlement, Liabilities, obligations, Taxes, Liens, Losses, expenses, and fees, including court costs and reasonable fees and expenses of attorneys and other advisors. "Advisers Act" means the Investment Advisers Act of 1940, as amended. ------------ "Advisory Entity" means Rothschild and Sovereign, each of which is --------------- registered under the Advisers Act. "Affiliate" of any Person means any other Person controlling, controlled by --------- or under common control with such first Person, where "control" means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities or otherwise. "Affiliated Group" means an affiliated group as defined in Section 1504 of ---------------- the Code (or any similar combined, consolidated or unitary group defined under state, local or foreign income Tax law). "Agreement" means this Stock Purchase Agreement, including all Exhibits and --------- Schedules hereto, as it may be amended from time to time in accordance with its terms. "Anniversary Date" means either of the First Anniversary Date or the Second ---------------- Anniversary Date. "Anniversary Date Revenue" means, as of any Anniversary Date, the aggregate ------------------------ revenues of the Companies derived from management, trust, custodial or advisory services to Clients (provided, however, as to revenues from and with respect to Clients with whom the Companies had no relationship, direct or indirect, prior to the Closing Date, revenues from such Clients shall be included in such aggregate revenues only if the Client relationship is sourced from the offices -2- of the Companies listed on Exhibit F hereto). Such aggregate revenues will be --------- measured for the twelve months ending on (i) the last day of the calendar month next preceding such Anniversary Date or (ii) if such Anniversary Date is the last day of a calendar month, such Anniversary Date; provided, however, in calculating Anniversary Date Revenues there shall be subtracted from any revenues included therein any performance based fees and such revenues shall be net of and shall take into account any fee waivers or caps, expense limitations, expense reimbursements and any un-reimbursed payments by any Company with respect to the distribution of shares of the Mid Cap Portfolio. For purposes of the foregoing, the policies and procedures employed in recognizing revenues shall be consistent with those employed by the Companies immediately prior to the Closing Date to the extent those employed immediately prior to the Closing Date are consistent with GAAP. "Applicable Law" means any federal, state, local or foreign law, statute, -------------- ordinance, rule, regulation, judgment, order, injunction, decree, arbitration award, agency requirement, license or permit of any Governmental Authority. "Atlantic" means Pell Rudman Trust Company (Atlantic), N.A., a national -------- banking association and a wholly-owned subsidiary of Pell Rudman. "Banks" means Atlantic and PR Trust. ----- "Business Day" means any day other than a Saturday, a Sunday or a day on ------------ which banks in the State of New York are generally closed for regular banking business. "Code" means the United States Internal Revenue Code of 1986, as amended. ---- "Committee" means the committee comprised of Charles Brady, James --------- Robertson, Don Herrema, Edward Rudman and James Spencer, or their respective successors. "Common Stock" means, together, 100 shares of common stock of Pell Rudman, ------------ no par value, and 638.6316 shares of Rothschild, no par value. "Companies" means Pell Rudman, Rothschild, Sovereign, the Banks and each --------- Subsidiary thereof. "Company Confidential Information" means information regarding the identity -------------------------------- of, assets under management for, revenues derived from or investment objectives of Clients. "Consent" shall mean any and all filings, consents or approvals, whether ------- from a regulatory authority or other third party, that are necessary in connection with (i) the execution and delivery by the Companies, the Sellers and the Purchaser of this Agreement and (ii) the consummation by the Companies, the Sellers and the Purchaser of the transactions contemplated hereby. "Effective Time" has the meaning set forth in Section 2.4(a). -------------- -3- "Employment Agreement" means that certain employment agreement -------------------- substantially in the form of Exhibit B-1 to be entered into between the Persons ----------- set forth in Exhibit B-2 and the Purchaser concurrently with the execution of ----------- this Agreement. "Estimated Closing Balance Sheet" has the meaning set forth in Section 2.4. ------------------------------- "First Anniversary Date" means the date that is the first anniversary of ---------------------- the Closing Date. "First Contingent Payment" means an amount (not less than zero) equal to ------------------------ the lesser of the following amounts: 1. 4 x [FADR - ABAB] x .8; or 2. 4 x [.5 (50,000,000 - ABAB)] x .8; where FADR means Anniversary Date Revenue as of the First Anniversary Date. For purposes of the foregoing, ABAB cannot exceed $50 million. "Funds" means Sovereign New Millenium Fund, L.P., Sovereign New Millenium ----- Fund II, L.P., and Pell Rudman Venture Partners, L.P. "GAAP" means generally accepted accounting principles as used in the United ---- States of America as in effect at the time any applicable financial statements were prepared or any act requiring the application of GAAP was performed. "Governmental Authority" means any government, any state or other political ---------------------- subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the SEC or any other government authority, agency, department, board, commission or instrumentality of the United States, any State of the United States or any political subdivision thereof, and any court, tribunal or arbitrator(s) of competent jurisdiction, and any governmental or non-governmental self-regulatory organization, agency or authority. "Indebtedness" of any Person means, without duplication: (a) indebtedness ------------ for borrowed money or for the deferred purchase price of property or services in respect of which such Person is liable, contingently or otherwise, as obligor or otherwise (other than trade payables and other current liabilities incurred in the ordinary course of business) and any commitment by which such Person assures a creditor against loss, including contingent reimbursement obligations with respect to letters of credit; (b) indebtedness guaranteed in any manner by such Person, including a guarantee in the form of an agreement to repurchase or reimburse; and (c) obligations under capitalized leases in respect of which such Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations such Person assures a creditor against loss. "Initial Payment Amount" means an amount (not less than zero) determined in ---------------------- accordance with the following formula: -4- 4 x ABAB - {[(4 x ABAB - 100,000,000) x .5] - 5,000,000} x .4 where ABAB means Adjusted Base Annual Billings. For purposes of the foregoing, ABAB cannot exceed $50 million. "Insider" means, any officer or director of each of the Companies or any ------ immediate family member of such Person (including, without limitation, any Person related by marriage or adoption to any such individual), or any entity in which any such Person owns any beneficial interest. "Knowledge" means actual knowledge after Reasonable Inquiry. --------- "Liability" means any liability (whether known or unknown, whether asserted --------- or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes. "LIBOR" means the one year London Interbank Offered Rates as reported in ----- the Wall Street Journal as the same may be changed from time to time. "Lien" means any mortgage, pledge, security interest, encumbrance, ---- easement, restriction, charge, or other lien. "Loss" means, with respect to any Person, any damage, liability, demand, ---- claim, action, cause of action, cost, deficiency, penalty, fine or other loss or expense, whether or not arising out of a third party claim, including all penalties, reasonable attorneys' fees and expenses and all amounts paid or incurred in connection with any action, demand, proceeding, investigation or claim by any third party (including any Governmental Authority) against or affecting such Person or which, if determined adversely to such Person, would give rise to, evidence the existence of, or relate to, any other Loss, and includes the investigation, defense or settlement of any of the foregoing. "Material Adverse Effect" means: (a) any material adverse effect on the ----------------------- business, financial condition, operations, or properties of the Companies, taken as a whole, other than any change or effect arising out of (i) a decline or deterioration in the economy or the capital markets in general or the markets in which the Companies operate, or (ii) this Agreement or the transactions contemplated hereby or the announcement thereof or (b) an effect which is reasonably likely to prevent, materially delay or materially impair the ability of the Parties to consummate the transactions contemplated by this Agreement. "Material Contract" means any contract required to be disclosed on Schedule ---------------- 5.11 of this Agreement. "Mid Cap Portfolio" means the Pell Rudman Mid Cap Growth Portfolio, a ----------------- series of UAM Funds, Inc., a series management company registered under the 1940 Act. -5- "Net Tangible Assets" means, (i) the book value of the Companies' total ------------------- assets determined on a combined basis in accordance with GAAP consistently applied with those principles followed in preparation of the Financial Statements, but excluding amounts relating to contracts, accumulated contract amortization, goodwill and accumulated amortization of goodwill, and other assets classified by GAAP as intangible, minus (ii) the book value of the Company's total liabilities, determined on a combined basis in accordance with GAAP consistently applied as aforesaid and including (a) an accrual for all unpaid amounts owed to Old Mutual or any of its Affiliates under any Related Party Agreement to and including the Closing Date, (b) an accrual for all unpaid bonuses, compensation, and deferred compensation payable, whether before or after the Closing Date, with respect to services provided prior to the Closing Date, (other than amounts payable pursuant to the Retention Bonus Plan referred to in Section 4.7, the Signing Bonus Plan and other than amounts payable in redemption of the Unit Awards redeemed as provided in Section 4.15), (c) an accrual for amounts potentially payable to John McColskey under his employment agreement as if the measurement period for such payments ended immediately prior to the Closing Date; (d) adequate accruals for all unpaid expenses (without related tax benefits) incurred or payable by the Companies in connection with the transactions contemplated by this Agreement, (e) an accrual for all amounts payable with respect to the purchase of shares from the Federal Reserve Bank as described in Item 7 of Schedule 5.19, if such shares have not been purchased ------------- prior to the Closing Date and (f) an accrual for all amounts payable with respect to the settlement of the lawsuit described as Item 2 on Schedule 5.8. ------------ "OCC" means the Office of the Comptroller of the Currency. --- "Old Mutual's Knowledge" means the Knowledge of any of Franklin H. Kettle, ---------------------- Joseph R. Ramrath, Richard S. Robie III, or James F. Orr III after Reasonable Inquiry. "Ordinary Course of Business" means the ordinary course of business --------------------------- consistent with past practice (including, without limitation, with respect to collection of accounts receivable, purchases of services, payment of accounts payable and accrued expenses, levels of capital expenditures and operation of cash management practices generally). "Permit" shall mean any approval, authorization, certificate, consent, ------ easement, filing, franchise, license, notice, permit, registration or right of any Governmental Authority or any other Person to which any Person is a party or that is or may be binding upon or inure to the benefit of any Person or its securities, assets or business. "Person" means an individual, a partnership, a corporation, an association, ------ a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization, a Governmental Authority or any department, agency or political subdivision thereof and any other entity. "PR Trust" means Pell Rudman Trust Company, N.A., a national banking -------- association and a wholly-owned subsidiary of Pell Rudman. -6- "Proprietary Rights" means any and all patents, patent applications, ------------------ trademarks, service marks, trademark or service mark applications and registrations, trade and corporate names, copyrights, copyright applications and registrations, trade secrets, know-how, technology, computer software and software systems, business and marketing plans, customer and supplier lists, confidential information and all other proprietary intangible property, rights and interests. "Reasonable Inquiry" means when used with reference to "Old Mutual's ------------------ Knowledge" that Old Mutual has caused each of the representations and warranties made or given by it herein that relates in any way to the business, affairs, properties, assets, liabilities or financial affairs of any of the Companies, and all Schedules related to any such representations and warranties, to be reviewed by Rudman, Thomas, James F. Spencer ("Spencer"), Steven G. Hoch ("Hoch") and Mark J. Panarese ("Panarese"), and Old Mutual shall have obtained from each of Rudman, Thomas, Spencer, Hoch and Panarese, their certificate that (i) they have reviewed for completeness and accuracy the representations and warranties concerning the Companies in Article V of this Agreement, (ii) they have reviewed for completeness and accuracy the disclosure Schedules relating thereto (as the same shall have been amended and updated through the time of Closing), (iii) they have caused the representations and warranties contained in Article V of this Agreement to the extent they relate to Sovereign, and all Schedules relating thereto, to be reviewed by Katherine A. Cattanach and Mary F. Kelley, and (iv) they have conducted such other inquiry which they as such officers have deemed reasonable and appropriate, and (v) based on the foregoing inquiry, nothing has come to their attention that would lead them to believe that such representations and warranties contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein contained not misleading; and shall mean when used with reference to the "Knowledge" of any other Person such degree of inquiry as is commercially reasonable under the circumstances; provided however, the certificates of Cattanach and Kelley described above may be limited to matters relating to Sovereign. "Related Party Agreements" means any agreement or arrangement, whether oral ------------------------ or written, between any of the Companies and Old Mutual or any Affiliate thereof pursuant to which (a) the Company party thereto is obligated to pay any amounts to Old Mutual or such Affiliate, (b) Old Mutual or any Affiliate thereof provides any goods or services to any Company party thereto, or (c) any Company is indebted to Old Mutual or any Affiliate thereof with respect to any loan or other advance (howsoever characterized) made by Old Mutual or any Affiliate thereof to any Company, and Related Party Agreement shall include, specifically but without limitation, the Revenue Sharing Agreements; provided however that Cattanach and Kelley's rights to carried interest distributions under the Sovereign New Millennium Fund, L.P. Limited Partnership Agreement dated September 26, 1997 by and among Sovereign Financial Services, LLC as general partner and the limited partners and the Sovereign New Millennium Fund II, L.P. Limited Partnership Agreement dated November 30, 1999 by and among Sovereign New Millennium, LLC as general partner and the limited partners shall not fall within the definition of Related Party Agreement. "Required Amount" means the greater of (a) $5,000,000 or (b) the minimum --------------- amount of regulatory capital required of the Banks under the regulations of the OCC; provided, however, if -7- the minimum amount of regulatory capital so required is in excess of $7,000,000, the amount in this clause (b) shall be limited to the sum of (x) $7,000,000 plus (y) one-half of the amount of such required regulatory capital in excess of $7,000,000. "Retention Bonus Plan" means the Retention Bonus Plan substantially in the -------------------- form of Exhibit C hereto. --------- "Revenue Sharing Agreements" means (i) that certain Amended and Restated -------------------------- Revenue Sharing Agreement, dated January 2, 1998 between Old Mutual, Pell Rudman, Holdings, Edward I. Rudman, James S. McDonald and Jeffrey S. Thomas; and (ii) that certain Revenue Sharing Agreement dated November 1, 1994 by and among Old Mutual, Rothschild, Edward I. Rudman, James S. McDonald, and Jeffrey S. Thomas. "SEC" means the Securities and Exchange Commission. --- "Second Anniversary Date" means the date that is the second anniversary of ----------------------- the Closing Date. "Second Contingent Payment" means an amount (not less than zero) determined ------------------------- as follows: a. If FADR exceeds ABAB and if the First Contingent Payment is determined by line 1 of the definition of such term: 4 x [SADR - FADR] x .8 b. If FADR exceeds ABAB and if the First Contingent Payment is determined by line 2 of the definition of such term: 4 x [SADR - (ABAB + .5 (50,000,000 - ABAB))] x .8 c. If ABAB equals or exceeds FADR: 4 x [SADR - ABAB] x .8 where SADR means Anniversary Date Revenue as of the Second Anniversary Date. For purposes of the foregoing, neither SADR nor ABAB can exceed $50 million. "Sellers" means Old Mutual and Holdings, acting jointly and severally. ------- "Sovereign" means Sovereign Financial Services, Inc., a Delaware --------- corporation, and a wholly-owned subsidiary of Pell Rudman. "Subsidiary" means, with respect to any Person, any corporation a majority ---------- of the total voting power of shares of stock of which is entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned -8- or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or any partnership, association or other business entity a majority of the partnership or other similar ownership interest of which is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes of this definition, a Person is deemed to have a majority ownership interest in a partnership, association or other business entity if such Person is allocated a majority of the gains or losses of such partnership, association or other business entity or is or controls a managing director or general partner of such partnership, association or other business entity. "Tax Returns" means returns, declarations, reports, claims for refund, ----------- information returns or other documents (including any related or supporting schedules, statements or information) filed, or required to be filed, in connection with the determination, assessment or collection of Taxes of any party or the administration of any laws, regulations or administrative requirements relating to any Taxes. "Taxes" means any federal, state, local, or foreign income, gross receipts, ----- license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, or other tax, fee, assessment or charge of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. "Total Contingent Payment" shall equal (a) one hundred eighty-two million ------------------------ dollars ($182,000,000) less (b) the Initial Payment Amount. "Transaction Documents" means this Agreement, and all other agreements, --------------------- instruments, certificates and other documents to be entered into or delivered by any Party in connection with the transactions contemplated to be consummated pursuant to this Agreement. "Treasury Regulations" means the United States Treasury Regulations -------------------- promulgated pursuant to the Code. "Unit Award" means a Unit Award issued under the United Asset Management ---------- Corporation Marketing Incentive Plan, as from time to time in effect. "1940 Act" means the Investment Company Act of 1940, as amended. -------- 1.2 Other Definitional Provisions. ----------------------------- (a) Accounting Terms. Accounting terms which are not otherwise defined in ---------------- this Agreement have the meanings given to them under GAAP. To the extent that the definition of an accounting term that is defined in this Agreement is inconsistent with the meaning of such term under GAAP, the definition set forth in this Agreement will control. -9- (b) "Hereof," etc. The terms "hereof," "herein" and "hereunder" and terms ------------ of similar import are references to this Agreement as a whole and not to any particular provision of this Agreement. Section, clause, Schedule and Exhibit references contained in this Agreement are references to Sections, clauses, Schedules and Exhibits in or to this Agreement, unless otherwise specified. (c) Successor Laws. Any reference to any particular Code or Treasury -------------- Regulation section or any other law or regulation will be interpreted to include any revision of or successor to that section regardless of how it is numbered or classified. 1.3 Cross Reference of Other Definitions. Each capitalized term listed ------------------------------------ below is defined in the corresponding Section of this Agreement: Term Section - ---- ------- Actual Net Tangible Assets 2.6(a) Adjusted Base Annual Billings 2.3(b) Advisory Contract 5.21(a) Applicable Limitation Date 9.1 Base Annual Billings 2.3(a) Cap 9.2(b)(iii) Change in Bank Control Act 3.1(d) Client 5.21(a) Closing 2.7(a) Closing Date 2.7(a) Closing Transactions 2.7(b) Contracts 5.21(a) Draft Computation 2.6(a) Effective Time 2.7(a) Employee Benefit Plan 5.16(a) ERISA 5.16(a) ERISA Affiliate 5.16(a) Exempt Fund Client 5.21(a) Financial Statements 5.6 GLBA 4.9 Holdings Preface HSR Act 3.1 (d) Income Statement 2.6 Indemnified Party 9.3(a) Indemnifying Party 9.3(a) Interim Advisory Agreement 4.3 Latest Balance Sheet 5.6 Leased Properties 5.9(b) Non-Limited Reps 9.2(b)(ii) Notice 4.2 -10- Objection Notice 2.6(a) Old Mutual Preface Old Mutual Parties 9.2(c) Original Schedule 2.3 Parent Recitals Party Preface Pell Rudman Recitals PPM 5.20(b) Purchase Agreement 3.1(k) Purchase Price 2.2 Purchaser Preface Purchaser Parties 9.2(a) Revised Schedule 2.3(b) Rothschild Recitals Rudman Recitals Signing Bonus Plan 4.12(b) Subsidiary Stock 5.4 Third Party Claim 9.3(b) Thomas Recitals Trust Agreement 5.21(a) 2000 Combined Audited Financials 4.1(j) ARTICLE II PURCHASE AND SALE OF STOCK -------------------------- 2.1 Stock Purchase. On the Closing Date, subject to the terms and -------------- conditions set forth in this Agreement, AMVESCAP shall cause the Purchaser to purchase from the Sellers, and the Sellers shall sell and transfer to the Purchaser, all of the shares of Common Stock owned by the Sellers, free and clear of any Liens. 2.2 Purchase Price for Common Stock. The aggregate purchase price to be ------------------------------- paid to the Sellers for the Common Stock (the "Purchase Price") is the sum of -------------- (i) the Initial Payment Amount, plus or minus (ii) 80% of the amount by which Actual Net Tangible Assets exceed or are less than the Required Amount, plus (iii) the First Contingent Payment and plus (iv) the Second Contingent Payment. 2.3 Computation of Base Annual Billings and Adjusted Base Annual Billings. --------------------------------------------------------------------- (a) Pell Rudman will prepare and deliver to the Purchaser promptly after the date hereof, a list (Schedule 2.3(a) or the "Original Schedule") of all ------------------------------------------ Clients of the Companies, as of March 31, 2001, showing for each Client as of that date, the Client's name, fee arrangements, assets under management or held in trust, custodial or advisory accounts (as the case may be), and pro forma annual billings calculated by multiplying the assets under management or in trust, custodial or advisory accounts on March 31, 2001 by the annual percentage fee in effect with -11- such client on March 31, 2001. The Parties agree that the total of such pro forma annual billings reflected on the Original Schedule is $43,000,000 (the "Base Annual Billings"). (b) At the Closing, Pell Rudman will deliver to the Purchaser Schedule -------- 2.3(b) (the "Revised Schedule") as of the close of business on the last day of - ----- ---------------- the month ending immediately before the Closing (the "Revision Date") prepared ------------- as follows which shows only the following adjustments to Base Annual Billings: (i) The pro forma annual billings under any management, trust, custodial or advisory relationship of a Client with the Companies that has been terminated by such Client, or as to which the Client has notified any of the Companies (orally or in writing) of its decision to terminate such relationship, since the date of the Original Schedule shall be subtracted. With respect to the Mid Cap Portfolio, the failure of the board of directors of UAM Funds, Inc. to vote in person to approve an interim advisory contract pursuant to Rule 15a-4 of the 1940 Act or, in the alternative, of the shareholders to approve a new investment advisory agreement, shall be deemed to be a termination of the advisory relationship. (ii) The pro forma annual billings of any Client that has engaged any of the Companies to provide management, trust, custodial or advisory services and for whom any of the Companies has commenced providing such services since the date of the Original Schedule shall be added. (iii) A portion of the pro forma annual billings of any Client that has withdrawn assets in excess of income earned during the period from the date of the Original Schedule to the Revision Date from the management, trust, custodial or advisory services by any of the Companies since the date of the Original Schedule equal to the percentage calculated by dividing (a) the value of the assets so withdrawn (as of the date of withdrawal) in excess of income so earned, by (b) the aggregate value of the assets of such Client subject to management, trust, custodial or advisory services by any of the Companies as of the date of the Original Schedule shall be subtracted. If on or prior to the Closing Date any of the Companies has been notified (orally or in writing) of a Client's decision to withdraw assets in excess of income earned during the period from the date of the Original Schedule to the Revision Date from the management, trust custodial or advisory services by any of the Companies, a portion of the pro forma billings of such Client equal to the percentage calculated by dividing (a) the value of the assets to be so withdrawn in excess of income so earned by (b) the aggregate value of the assets of such Client subject to management, trust, custodial or advisory services as of the date of the Original Schedule shall be subtracted. (iv) The amount of the increase in the pro forma annual billings for any Client that has added assets with respect to which any of the Companies provide management, trust, custodial or advisory services at any time prior to the Closing Date (including any income earned during the period from the date of the Original Schedule to the Revision Date) attributable to such added assets shall be added. -12- (v) Except as expressly provided above, pro forma annual billings will be determined in the manner specified in Section 2.3. (vi) If any of the Companies shall, after the date hereof, implement a fee increase with respect to any Client account that is included in the Original Schedule, the revenues of such client reflected on the Revised Schedule shall reflect that fee increase. (vii) The aggregate net amount of the foregoing additions and subtractions shall be determined and shall be added to (if a positive amount), or subtracted from (if a negative amount) Base Annual Billings and the amount so determined shall be the "Adjusted Base Annual Billings." ----------------------------- 2.4 Additional Consideration. ------------------------ (a) As additional consideration for the Common Stock, the Purchaser agrees to pay to the Sellers additional amounts, if any, as follows: (i) Not later than sixty (60) days following the First Anniversary Date, an amount not less than zero equal to the First Contingent Payment; and (ii) Not later than sixty (60) days following the Second Anniversary Date, an amount not less than zero equal to the Second Contingent Payment; provided, however, that in no event shall the sum of the First Contingent Payment and the Second Contingent Payment exceed the Total Contingent Payment. (b) Payment of any amounts payable under this Section 2.4 shall be made by wire transfer of immediately available funds to an account of Old Mutual designated in writing delivered to Purchaser. 2.5 Estimated Closing Balance Sheet. Not later than five (5) Business Days ------------------------------- prior to the Closing Date, Old Mutual shall cause the Companies to deliver to the Purchaser a pro forma estimated combined balance sheet of the Companies as of the Closing Date, reflecting the good faith best estimate of the Sellers as to the book value of the assets and the amount of the liabilities of the Company as of the close of business on the Business Day before the Closing Date and prepared in a manner consistent with the definition of Net Tangible Assets (the "Estimated Closing Balance Sheet"). The Estimated Closing Balance Sheet, when so ------------------------------- delivered, shall be accompanied by a schedule (the "Estimated Closing Schedule") -------------------------- prepared by the chief financial officer of the Companies, showing the Estimated Net Tangible Assets as of the close of business on the Business Day before the Closing Date as reflected on the Estimated Closing Balance Sheet, which Estimated Closing Balance Schedule shall reflect thereon the written concurrence of Old Mutual to the Net Tangible Assets shown thereon. The Net Tangible Assets reflected on the Estimated Closing Schedule is referred to herein as the "Estimated Net Tangible Assets." ----------------------------- -13- 2.6 Post-Closing Adjustment for Net Tangible Assets. ----------------------------------------------- (a) Within sixty (60) days after the Closing Date, the Purchaser will prepare and deliver to Old Mutual a computation of the Net Tangible Assets as of the close of business on the Business Day before the Closing Date (the "Draft ----- Computation"). The Purchaser will make available to Old Mutual all records and - ----------- work papers used in preparing the Draft Computation. If Old Mutual disagrees with the computation of the Net Tangible Assets reflected on the Draft Computation, Old Mutual may, within thirty (30) days after receipt of the Draft Computation, deliver a notice (an "Objection Notice") to the Purchaser setting ---------------- forth Old Mutual's calculation of the amount of the Net Tangible Assets as of the close of business on the Business Day before the Closing Date. The Purchaser and Old Mutual will attempt in good faith to resolve any disagreements as to the computation of the Net Tangible Assets, but if they do not obtain a final resolution within thirty (30) days after delivery of an Objection Notice, the Purchaser and Old Mutual will jointly retain an independent accounting firm of recognized national or regional standing (the "Firm") to resolve any remaining ---- disagreements. If the Purchaser and Old Mutual are unable to agree on the choice of the Firm, the Firm will be a "big-five" accounting firm (or successor thereof) selected by lot (after excluding one firm designated by the Purchaser and one firm designated by Old Mutual). The Purchaser and Old Mutual will request that the Firm use its best efforts to render a determination within sixty (60) days of its retention and the Purchaser, Old Mutual and their respective agents will cooperate with the Firm during its engagement. The Firm will consider only those items and amounts in the Draft Computation set forth in the Objection Notice which the Purchaser and Old Mutual are unable to resolve. The Firm's determination will be based on the definition of Net Tangible Assets included herein. The determination of the Firm will be conclusive and binding upon the Purchaser and the Sellers. The Purchaser and Old Mutual shall bear the costs and expenses of the Firm based on the percentage which the portion of the contested amount not awarded to each Party bears to the amount actually contested by such Party. The Net Tangible Assets, as finally determined pursuant to this Section 2.6(a), is referred to herein as the "Actual Net Tangible ------------------- Assets." - ------ (b) If the amount of the Actual Net Tangible Assets is less than the amount of the Estimated Net Tangible Assets, Old Mutual shall pay to the Purchaser, within five (5) Business Days after the determination of the Actual Net Tangible Assets, 80% of the amount of such shortfall by wire transfer. If, on the other hand, the amount of the Actual Net Tangible Assets is greater than the amount of the Estimated Net Tangible Assets, the Purchaser shall pay to Old Mutual, within five (5) Business Days after the determination of the Actual Net Tangible Assets, 80% of the amount of such excess by wire transfer. Payments due under Section 2.6(b) shall bear and be accompanied by interest at a rate equal to LIBOR from the Closing Date until paid. 2.7 Closing Transactions. -------------------- (a) Closing. The closing of the transactions contemplated by this Agreement ------- (the "Closing") shall take place at the offices of Hill & Barlow, One ------- International Place, Boston, MA 02110, commencing at 10:00 a.m. on the tenth Business Day following the end of the calendar month during which occurs the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (other than conditions with respect -14- to actions the respective Parties will take at the Closing itself), or at such other place or on such other date as may be mutually agreeable to the Purchaser and Old Mutual. The date and time of the Closing are herein referred to as the "Closing Date." The consummation of the transactions contemplated hereby shall ------------ be deemed effective as of 12:01 A.M. on the Closing Date (the "Effective Time"). (b) Closing Transactions. Subject to the conditions set forth in this -------------------- Agreement, the Parties shall consummate the following transactions (the "Closing ------- Transactions") on the Closing Date: - ------------ (i) The Sellers shall deliver to the Purchaser certificates representing the Common Stock, duly endorsed for transfer or accompanied by duly executed stock powers with all requisite state and federal transfer stamps affixed thereto; (ii) The Purchaser shall deliver to Old Mutual by wire transfer, to an account designated by Old Mutual by a writing delivered to Purchaser not later than five (5) Business Days prior to the Closing Date, an amount equal to the Initial Payment Amount plus or minus, as the case may be, 80% of the amount by which Estimated Net Tangible Assets exceed or are less than the Required Amount; and (iii) The Sellers and the Purchaser, as applicable, shall deliver the certificates and other documents and instruments required to be delivered by or on behalf of such Party under Article III. ARTICLE III CONDITIONS TO CLOSING --------------------- 3.1 Conditions to the Purchaser's Obligations. The obligation of the ----------------------------------------- Purchaser to consummate the transactions contemplated by this Agreement is subject to the satisfaction of the following conditions as of the Closing Date: (a) The representations and warranties set forth in Article V and Article VI hereof shall be true and correct in all material respects at and as of the date of this Agreement and shall be true and correct in all material respects at and as of the Closing Date as though then made and as though the Closing Date were substituted for the date of this Agreement throughout such representations and warranties, after taking into account any disclosures made by the Companies or the Sellers, as the case may be, to the Purchaser pursuant to Section 4.1(f)(i) hereof, provided, however, to the extent the representations and warranties set forth in Section 5.6 shall be untrue in any material respect and the facts or circumstances giving rise to such untruth can be remedied as provided in clause (i) of Section 8.1(f) or are subject to indemnification as provided in clause (ii) of Section 8.1(f), such untruth shall be excepted from the condition precedent stated in this Section 3.1(a); -15- (b) The Sellers shall have performed and complied in all material respects with all of the covenants and agreements required to be performed by them under this Agreement on or prior to the Closing; (c) All Consents by third parties under any Material Contract (other than Advisory Contracts and Trust Agreements), the absence of which would have a Material Adverse Effect, shall have been obtained, and releases of any and all Liens held by third parties on the Common Stock shall have been obtained, all on terms reasonably satisfactory to the Purchaser; (d) The applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), shall have ------- expired or been terminated; and the Purchaser shall have either received notice from the OCC that pursuant to the Change in Bank Control Act of 1978 (the "Change in Bank Control Act") or applicable regulations, the OCC will not ------------------------- disapprove of the Purchaser's acquisition of either Atlantic or PR Trust, or the period of time for OCC review of the transactions specified in the Change in Bank Control Act or the applicable regulations shall have expired; (e) No action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable judgment, decree, injunction, order or ruling would prevent the performance of this Agreement or any of the transactions contemplated hereby, declare unlawful the transactions contemplated by this Agreement, cause such transactions to be rescinded or materially and adversely affect the right of the Purchaser to own, operate or control any of the Companies, and no judgment, decree, injunction, order or ruling shall have been entered which has any of the foregoing effects; (f) All Related Party Agreements shall have been terminated by any Seller parties thereto and any Affiliates of Sellers who are parties thereto effective as of the close of business on the Closing Date, all amounts payable to Old Mutual or any Affiliate thereof thereunder for any period to and including the effective date of such termination shall have been paid, all Seller parties and any Affiliates of Sellers who are parties thereto to such Related Party Agreements shall have released in writing the Companies and the Purchaser from any claims or liability thereunder, and the Purchaser shall have received evidence reasonably satisfactory to it of such termination and release. Notwithstanding the foregoing, the Companies shall make payment to Old Mutual after the Closing Date of amounts owed to Old Mutual as of the Closing Date under the Revenue Sharing Agreements, but only to the extent such amounts are accrued for and included in the determination of Actual Net Tangible Assets, as such amounts are collected during the calendar quarter following the Closing Date from receivables that were in existence and revenues that were unbilled as of the Closing Date, in a manner consistent with past practice; provided, however, that all such amounts shall be paid no later than the last day of the first quarter ending following the Closing Date. (g) All Unit Awards shall have been redeemed as provided in Section 4.15 below, and Purchaser shall have received evidence reasonably satisfactory to it of such redemptions. -16- (h) No change in the business of the Companies shall have occurred which would have a Material Adverse Effect; (i) On or prior to the Closing Date, the Sellers shall have delivered to the Purchaser all of the following: (i) a certificate from each of the Companies in a form reasonably satisfactory to the Purchaser, dated the Closing Date, stating that the preconditions specified in Sections 3.1 (a) through (h), inclusive, have been satisfied; (ii) copies of all third party and governmental Consents, approvals, filings, releases and terminations required by the terms of this Agreement in connection with the consummation of the transactions contemplated herein; (iii) certified copies of the resolutions of Old Mutual's and Holdings' board of directors approving the transactions contemplated by this Agreement; (iv) with respect to each of the Companies, certificates of the secretary of state of such Company's state of incorporation and each state where such Company is required to qualify to do business, which certificates shall be dated not more than twenty (20) days prior to the Closing Date, providing that such Company is in good standing in such jurisdiction; (v) true and correct copies of the certificates of each of Rudman, Thomas, Spencer, Hoch and Panarese, as described in the definition of Reasonable Inquiry; (vi) a true and correct copy of each amended trust agreement, consent or waiver required under Section 4.11(b) hereof, and true and correct copies of amended trust agreements, consents or waivers as contemplated by Section 4.11(a) from the trustee or co-trustees under trusts described in that Section 4.11(a) that in the aggregate represent not less than 75% of the aggregate amount of the assets of such trusts invested in the Funds; and (vii) such other documents or instruments as the Purchaser may reasonably request to effect the transactions contemplated hereby; (j) All proceedings to be taken by the Sellers in connection with the consummation of the Closing Transactions and the other transactions contemplated hereby and all certificates, opinions, instruments and other documents required to be delivered by the Sellers to effect the transactions contemplated hereby reasonably requested by the Purchaser shall be reasonably satisfactory in form and substance to the Purchaser; and (k) The transactions provided for in a Revenue Sharing Purchase Agreement substantially in the form of Exhibit G hereto ("Purchase Agreement") with each of Rudman and Thomas shall have been consummated. -17- Any condition specified in this Section 3.1 may be waived by the Purchaser; provided that no such waiver shall be effective unless it is set forth in writing executed by the Purchaser. 3.2 Conditions to the Sellers' Obligations. The obligation of the Sellers -------------------------------------- to consummate the transactions contemplated by this Agreement is subject to the satisfaction of the following conditions as of the Closing Date: (a) The representations and warranties set forth in Article VII hereof shall be true and correct in all material respects at and as of the date of this Agreement, and shall be true and correct in all material respects at and as of the Closing Date as though then made and as though the Closing Date were substituted for the date of this Agreement throughout such representations and warranties, after taking into account any disclosures made by the Purchaser to Old Mutual pursuant to Section 4.5(a)(i) hereof; (b) The Purchaser shall have performed and complied with all of the covenants and agreements required to be performed by it under this Agreement on or prior to the Closing; (c) The applicable waiting period, if any, under the HSR Act shall have expired or been terminated; and not more than six (6) months prior to the Closing Date the Purchaser shall have either received notice from the OCC that pursuant to the Change in Bank Control Act or applicable regulations, OCC will not disapprove of the Purchaser's acquisition of either Atlantic or PR Trust, or the period of time for OCC review of the transactions specified in the Change in Bank Control Act or the applicable regulations shall have expired; (d) No action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable judgment, decree, injunction, order or ruling would prevent the performance of this Agreement or any of the transactions contemplated hereby, declare unlawful the transactions contemplated by this Agreement, cause such transactions to be rescinded or materially and adversely affect the right of the Purchaser to own, operate or control any of the Companies, and no judgment, decree, injunction, order or ruling shall have been entered which has any of the foregoing effects; (e) On or prior to the Closing Date, the Purchaser shall have delivered to Old Mutual all of the following: (i) a certificate from the Purchaser in a form reasonably satisfactory to Old Mutual, dated the Closing Date, stating that the preconditions specified in Sections 3.2(a) through (d), inclusive, have been satisfied; (ii) certified copies of the resolutions of the Purchaser's board of directors approving the transactions contemplated by this Agreement; and -18- (iii) such other documents or instruments as Old Mutual may reasonably request to effect the transactions contemplated hereby; (f) All amounts payable to Old Mutual or any Affiliate thereof under any Related Party Agreement for any period to and including the Closing Date shall have been paid or an accrual for the payment of any unpaid amounts due thereunder shall be reflected on the Estimated Closing Balance Sheet and the Closing Review; (g) All proceedings to be taken by the Purchaser in connection with the consummation of the Closing Transactions and the other transactions contemplated hereby and all certificates, opinions, instruments and other documents required to be delivered by the Purchaser to effect the transactions contemplated hereby reasonably requested by Old Mutual shall be reasonably satisfactory in form and substance to Old Mutual; and (h) The transactions provided for in the Purchase Agreement with each of Rudman and Thomas shall have been consummated. Any condition specified in this Section 3.2 may be waived by Old Mutual; provided that no such waiver shall be effective unless it is set forth in a writing executed by Old Mutual. ARTICLE IV COVENANTS PRIOR TO CLOSING -------------------------- 4.1 Affirmative Covenants of Old Mutual. Prior to the Closing, unless the ------------------------------------ Purchaser otherwise agrees in writing, Old Mutual shall cause each of the Companies to: (a) conduct its business and operations only in the Ordinary Course of Business; (b) keep in full force and effect its corporate existence and use commercially reasonable efforts to keep all rights, franchises and Proprietary Rights relating or pertaining to its business and to cause its current insurance (or reinsurance) policies not to be canceled or terminated or any of the coverage thereunder to lapse, except where the failure to do so would not have a Material Adverse Effect; (c) use commercially reasonable efforts to carry on its business in the same manner as presently conducted and keep its business organization and properties intact, including its present business operations, physical facilities, working conditions and employees and its present relationships with lessors, licensors, suppliers, Clients and others having business relations with it, except where the failure to do so would not have a Material Adverse Effect; (d) maintain its material assets in good repair, order and condition (normal wear and tear excepted) consistent with current needs and, in the event of a casualty, loss or damage to any of such assets or properties prior to the Closing Date, whether or not it is insured, either repair or replace such damaged property or use the proceeds of such insurance in such other manner as mutually agreed upon by Old Mutual and the Purchaser; -19- (e) maintain its books, accounts and records in accordance with past custom and practice as used in the preparation of the Financial Statements; (f) promptly (once Old Mutual obtains Knowledge thereof) inform the Purchaser in writing of (i) any variances from the representations and warranties contained in Article V or Article VI hereof which arise as a result of the occurrence of events between the date hereof and the Closing Date, and as a result of which, if such representations and warranties were restated on the Closing Date, such representations and warranties would not be true and correct in all material respects, and (ii) any material breach of any representation, warranty or covenant hereunder by the Sellers; (g) cooperate with the Purchaser and use commercially reasonable efforts to cause the conditions to the Purchaser's obligation to close to be satisfied (including, without limitation, the execution and delivery of all agreements contemplated hereunder to be so executed and delivered and the making and obtaining of all third party and governmental notices, filings, authorizations, approvals, consents, releases and terminations); (h) cooperate with the Purchaser in the Purchaser's investigation of the business and properties of the Companies, to permit the Purchaser and its employees, agents, accounting, legal and other authorized representatives to the extent permitted by Applicable Law to (i) have full access to the premises, books and records of each of the Companies at reasonable hours, (ii) visit and inspect any of the properties of each of the Companies, and (iii) discuss the affairs, finances and accounts of each of the Companies with the respective directors, officers, and key employees of each of the Companies; (i) use commercially reasonable efforts to obtain from the OCC, SEC or any applicable state Governmental Authority such authority as may be necessary to make available to Purchaser the reports of examination of the Banks and all correspondence between any of the Banks or the Companies and the OCC, the SEC, or state Governmental Authorities and to make all such reports and correspondence available to Purchaser; and (j) cause to be delivered to Purchaser as soon as practicable after the date hereof, but in any event at least ten (10) Business Days prior to the Closing Date, the audited combined financial statements of the Companies for the fiscal year ended December 31, 2000 (the "2000 Combined Audited Financials"). -------------------------------- 4.2 Client Consents. --------------- (a) As soon as reasonably practicable following the date hereof, Old Mutual shall cause the Advisory Entities and the Banks to send notices substantially in the form attached hereto as Exhibit A (each, a "Notice"), (a) informing their --------- ------ Clients of the transactions contemplated by this Agreement; and (b) requesting the consent or approval of the assignment or deemed assignment if Client consent to such assignment or deemed assignment is required by Applicable Law or is required under the respective Advisory Contract for such assignment or -20- deemed assignment resulting from the transactions contemplated hereby. Old Mutual shall also cause the Companies and Banks to request any Consents and approvals or to provide notice as required by the governing documents of their Exempt Fund Clients. The Purchaser shall use its commercially reasonable efforts to cooperate with and assist the Advisory Entities in obtaining Client consents pursuant to this Section 4.2. (b) Old Mutual and the Companies shall make available to Purchaser copies of any and all correspondence between it and Clients or Exempt Fund Clients relating to the consent solicitation provided for in this Section 4.2, and shall promptly inform Purchaser of the substance of any material oral communications by a Client or Exempt Fund Client relating to such consent solicitation. (c) In connection with obtaining the Client Consents required by subsections (a) above and Section 4.3 below, Old Mutual and the Companies shall keep the Purchaser informed of the status of obtaining such Client Consents and deliver to the Purchaser prior to the Closing copies of all such executed Client Consents and make available for inspection the originals of such Consents prior to the Closing. 4.3 Section 15 of the 1940 Act; Reorganization of the Mid Cap Portfolio. ------------------------------------------------------------------- (a) Old Mutual shall, as promptly as practical, use its commercially reasonable efforts to assure that the board of directors of UAM Funds Trust, acting on behalf of the Mid Cap Portfolio, votes in person to: (i) approve the transfer of the assets of the Mid Cap Portfolio to a new portfolio, which will be a series of the Invesco Funds Group, and with entities designated by AMVESCAP serving as the investment adviser, administrator and distributor (such transfer is referred to herein as the "Reorganization"), (ii) call a special meeting of the shareholders of the Mid Cap Portfolio to be held as promptly as reasonably practical for the purpose of obtaining the approval of such shareholders of a new Investment Advisory Agreement with the investment adviser designated by AMVESCAP pursuant to and in accordance with the provisions of Section 15 of the 1940 Act and the Reorganization and any other matters as may be required by the 1940 Act, (iii) cause UAM Funds Trust, to approve, and to use its commercially reasonable efforts to obtain, or cause to be obtained, the approval by the shareholders of the Mid Cap Portfolio of, such new Investment Advisory Agreement pursuant to and in accordance with the provisions of Section 15 of the 1940 Act and the Reorganization and any other matters as may be required by the 1940 Act, (iv) cause the Mid Cap Portfolio to prepare, file with and cause to be cleared by the SEC and all other Governmental Authorities having jurisdiction thereof, as promptly as practical after the date hereof, all proxy solicitation materials required to be distributed to the shareholders of the Mid Cap Portfolio with respect to the actions recommended for shareholder approval by UAM Funds Trust, (v) cause the Mid Cap Portfolio to mail such proxy materials to such shareholders promptly after clearance by the SEC and cause to be submitted to a meeting of the shareholders of the Mid Cap Portfolio as soon as practical after such mailing the proposals described in clause (iii) above, (vi) cause UAM Funds Trust, acting on behalf of the Mid Cap Portfolio to approve, pursuant to and in conformity with SEC Rule 15a-4 under the 1940 Act, an interim investment advisory contract between the Mid Cap Portfolio and an entity designated by AMVESCAP (the "Interim Advisory Agreement"). -------------------------- -21- (b) Prior to the earlier of the Closing Date or the termination of this Agreement, Old Mutual and the Purchaser will cooperate with each other and each will endeavor in good faith to cause the Mid Cap Portfolio to file revised prospectuses or post-effective amendments to its registration statement on Form N-1A or S-6, which revised prospectuses or amendments shall reflect changes as necessary in its affairs as a consequence of the transactions contemplated by this Agreement, and shall cooperate with one another in causing the Mid Cap Portfolio to make any other filing necessary to satisfy disclosure requirements to enable the public distribution of its shares of beneficial interest to continue unabated after the Closing. (c) Prior to the earlier of the Closing Date or the termination of this Agreement, Old Mutual shall use its commercially reasonable efforts to ensure that the Mid Cap Portfolio does not take any action that (a) would prevent it from qualifying as a "regulated investment company" under Section 851 of the Code, or (b) would be inconsistent with each of its prospectuses and other offering, advertising and marketing materials, as amended or supplemented. (d) In connection with the preparation and filing of the proxy solicitation materials referred to in Section 4.3(a) above, Old Mutual, the Advisory Entities and Purchaser will cooperate with each other and with the board of directors of UAM Funds Trust, including providing such information as may be reasonably requested for inclusion in such proxy statements. Each of UAM, the Advisor Entities and Purchaser agrees that none of such information provided by it for inclusion in such proxy solicitation materials will contain any untrue statement of material fact, or omit to state any material fact required to make the statements therein, in light of the circumstances in which they were made, not misleading. 4.4 Negative Covenants of Old Mutual. Prior to the Closing, unless the -------------------------------- Purchaser otherwise agrees in writing, Old Mutual shall cause each of the Companies to not: (a) make any loans, enter into any transaction with any Insider, or, except in the Ordinary Course of Business, make or grant any increase in any officer's or director's compensation, or make or grant any increase in any employee benefit plan, incentive arrangement or other benefit covering any of its employees; (b) establish any pension, retirement, profit sharing or stock bonus plan covering its employees, or contribute to any existing pension, retirement, profit sharing or stock bonus plan covering its employees except in amounts consistent with past practice; (c) except as specifically contemplated by this Agreement, enter into any contract, agreement or transaction, other than in the Ordinary Course of Business; (d) issue, sell, transfer, contribute, distribute, or otherwise dispose of any of its securities or any material assets to any Person; provided, however, -------- ------- distributions under the Revenue Sharing Agreements may continue to be made in the Ordinary Course of Business; -22- (e) incur any Indebtedness other than Indebtedness necessary to finance its working capital needs; (f) create, renew, amend, terminate or cancel, or take any other action that may result in the creation, renewal, amendment, termination or cancellation of, any Contract except in the Ordinary Course of Business; (g) take any action impairing its rights in any Contract or its assets other than in the Ordinary Course of Business; (h) purchase or lease any assets from, or sell or lease any assets to, any of its Affiliates; (i) amend its certificate or articles of incorporation, by-laws or other organizational documents; (j) terminate senior officers of any Company; (k) enter into any new line of business unrelated to the business as currently conducted; (l) acquire or sell in any manner, including by way of merger, consolidation or purchase or sale of an equity interest or assets, any business or any corporation, partnership, association or other business organization or division thereof; (m) take or fail to take any action which action or omission constitutes a breach or default under any Material Contract or material license to which any Company is a party or by which it or any of its properties are bound, the effect of which could reasonably be expected to cause or result in a Material Adverse Effect; or (n) agree to do any of the foregoing other than in the Ordinary Course of Business. 4.5 Covenants of the Purchaser. Prior to the Closing, the Purchaser shall: -------------------------- (a) promptly (once it obtains knowledge thereof) inform Old Mutual in writing of any (i) variances from the representations and warranties contained in Article VII hereof which arise as a result of the occurrence of events between the date hereof and the Closing Date, and as a result of which, if such representations and warranties were restated on the Closing Date, such representations and warranties would not be true and correct in all material respects, and (ii) breach of any representation, warranty or covenant hereunder by the Purchaser; (b) cooperate with Old Mutual and use commercially reasonable efforts to cause the conditions to the Sellers' obligation to close to be satisfied (including, without limitation, the execution and delivery of all agreements contemplated hereunder to be so executed and delivered -23- and the making and obtaining of all third party and governmental filings, authorizations, approvals, consents, releases and terminations); and (c) as soon as practical following the date of this Agreement, file any notice required under the Change in Bank Control Act or applicable regulations with the OCC with respect to the Purchaser's acquisition of Atlantic and PR Trust and use commercially reasonable efforts to obtain promptly a determination from the OCC that the acquisition has not been disapproved. 4.6 Regulatory Matters; Third Party Consents. The parties to this Agreement ---------------------------------------- shall cooperate with each other and use all reasonable efforts promptly to prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, and to obtain as promptly as practicable all Consents and Permits which are necessary or advisable to consummate the transactions contemplated by this Agreement (it being understood that the Companies and the Sellers shall be responsible only for using commercially reasonable efforts to obtain all such approvals, waivers and Consents from such parties with whom the Companies are in contractual privity). If any required Consent of or waiver by any third party (excluding any Governmental Authority and excluding any Consent required to be obtained from a Client) is not obtained prior to the Closing, the Parties hereto, each without cost, expense or liability to any other Party, shall cooperate in good faith to seek, if possible, an alternative arrangement to achieve the economic results intended. The parties to this Agreement will have the right to review in advance, and will consult with the other on, in each case subject to Applicable Laws relating to the exchange of information, all of the information relating to Purchaser, the Companies or the Sellers, as the case may be, which appear in any filing made with, or written materials submitted to, any third party or any Governmental Authority in connection with the transactions contemplated by this Agreement; provided, however, that nothing contained herein shall be deemed to provide any - -------- ------- party to this Agreement with a right to review any information provided to any Governmental Authority on a confidential basis in connection with the transactions contemplated hereby. The parties to this Agreement agree that they will consult with each other with respect to the obtaining of all permits, Consents, approvals and authorizations of all third parties and Governmental Authority necessary or advisable to consummate the transactions contemplated by this Agreement and each party will keep the others appraised of the status of matters relating to completion of the transactions contemplated herein. The party responsible for a filing as set forth above shall promptly deliver or make available to the other parties hereto evidence of the filing of all applications, filings, registrations and notifications relating thereto (except for any confidential portions thereof), and any supplement, amendment or item of additional information in connection therewith (except for any confidential portions thereof). The party responsible for a filing shall also promptly deliver or make available to the other parties hereto a copy of each material notice, order, opinion and other item of correspondence received by such filing party from any Governmental Authority in respect of any such application (except for any confidential portions thereof). In exercising the foregoing rights and obligations, Purchaser, the Companies and the Sellers shall each act reasonably and as promptly as practicable. 4.7 Retention Bonus Plan. Purchaser agrees that it will cause the Companies -------------------- to (a) adopt and implement, as soon as practicable effective as of the Closing Date, a retention bonus plan (the "Retention Bonus Plan"), which shall provide -------------------- for payments to the participants therein -24- substantially on the terms and conditions and over the periods set forth in Exhibit C, and (b) designate as participants in such Retention Bonus Plan those - --------- employees of the Companies listed on Exhibit D who remain in the employment of --------- the Companies immediately following the Closing Date. 4.8 Employment Agreements. Each of the senior executive employees of the --------------------- Companies whose name is set forth on Exhibit B-1 has entered into an employment ----------- agreement with Purchaser substantially in the form of Exhibit B-2 hereto. ----------- 4.9 Gramm-Leach-Bliley ("GLBA"). Old Mutual and each of the Companies shall --------------------------- prosecute with commercially reasonable diligence the action described as Item 1 on Schedule 4.9. ------------ 4.10 Release. If the transactions contemplated by this Agreement are ------- consummated, effective at the Effective Time, Old Mutual hereby agrees to the termination, effective as of the day before the Closing Date, of each Related Party Agreement (provided, however, that the Purchaser agrees to pay all amounts accrued and owed under the Revenue Sharing Agreements as of the Closing Date no later than the last day of the first quarter ending following the Closing Date), and each Seller hereby releases and discharges the Companies and the Purchaser, and their Affiliates and their respective past, present and future officers, directors, agents and employees, of, from, against and in respect of any action, cause of action, damage, claim, or liability based upon, arising out of, or relating to (a) any Related Party Agreement, or (b) the ownership by such Seller of shares of the capital stock of any Company (including, without limitation, any claim for payment of any dividends accrued and unpaid or declared but unpaid) at any time or for any period ending on, prior to or after the Effective Time; provided, however, no Seller shall be deemed to release any claim based upon rights of such Seller under this Agreement including the right of Old Mutual to receive payments accrued on the Estimated Closing Balance Sheet or the Closing Review but unpaid under the Revenue Sharing Agreements for any period ended with or prior to the effective time of the termination of such agreement. 4.11 Regarding Certain Trust Investments. Prior to the Closing, Old Mutual ----------------------------------- and Holdings shall take the following actions with respect to any trust agreement, whether revocable or irrevocable, to which either Bank or any employee thereof is a party, pursuant to which such Bank or employee, as trustee or co-trustee thereunder, has caused any portion of the assets of such trust to be invested in either of the Funds, to the reasonable satisfaction of the Purchaser: (a) In the case of any trust which may be altered, amended, or revoked by the grantor thereof as of the date of this Agreement, (i) to communicate to the grantor that assets of the trust have been invested in either or both of the Funds, and to describe such assets and such investments in detail; (ii) to describe in detail in such communication to the grantor the nature of the relationship between the Bank and the Fund(s) in which trust assets have been invested, any interest the Bank and/or any of its Affiliates may have in the underwriting or distribution of the Fund(s) in which trust assets have been invested or any other securities -25- in which trust assets have been invested, any capacity in which the Bank and/or any of its Affiliates acts for the issuer of the Fund(s) in which trust assets have been invested or any other securities in which trust assets have been invested, and any services provided by the Bank and/or any of its Affiliates to the Fund(s) in which trust assets have been invested or any other investment company in the securities of which trust assets have been invested and the compensation received for such services; (iii) to enter into an amendment of such trust with the grantor thereof pursuant to which (a) appropriate waivers and/or consents are given by the grantor of such trust to the making of, and the continuation prior to the date of such amendment of, the investment of such trust assets in the Funds or any other securities required to be described in the communication required by subparagraphs 1 and 2, and (b) waiving any failure of the Bank party to such trust agreement to timely make any disclosures required by applicable law or regulation with respect to such investment, and (c) granting to the Bank, as trustee, the express authority to continue such investment of trust assets in the Funds following the Closing Date. (b) In the case of any trust which may not be altered, amended, or revoked by the grantor thereof as of the date of this Agreement, or which becomes unalterable, unamendable, or irrevocable before the provisions of paragraph (a) have been complied with (for example, because of the grantor's death before the Closing Date), (i) to communicate to each person to whom statements for the trust are rendered (or required to be rendered), or to whom statements for the trust have previously been rendered (or required to be rendered), or to whom statements for the trust are expected to be rendered (or required to be rendered) before the Closing Date, that assets of the trust have been invested in either or both of the Funds, and to describe such assets and such investments in detail; (ii) to describe in detail in such communication(s) the nature of the relationship between the Bank and the Fund(s) in which trust assets have been invested, any interest the Bank and/or any of its Affiliates may have in the underwriting or distribution of the Fund(s) in which trust assets have been invested or any other securities in which trust assets have been invested, any capacity in which the Bank and/or any of its Affiliates acts for the issuer of the Fund(s) in which trust assets have been invested or any other securities in which trust assets have been invested, and any services provided by the Bank and/or any of its Affiliates to the Fund(s) in which trust assets have been invested or any other investment company in the securities of which trust assets have been invested and the compensation received for such services; (iii) to secure from each person entitled to receive the communications required by subparagraphs 1 and 2 appropriate waivers and/or consents to the making of, and the continuation prior to the date of such waivers and/or consents, the investment of such trust assets in the Funds or any other securities required to be described in the communication required by subparagraphs 1 and 2, and (b) waiving any failure of the -26- Bank party to such trust agreement to timely make any disclosures required by applicable law or regulation with respect to such investment, and (c) granting to the Bank, as trustee, the express authority to continue such investment of trust assets in the Funds following the Closing Date. 4.12 Revenue Sharing Purchase Agreement; Signing Bonus Plan. ------------------------------------------------------ (a) Contemporaneously with and as a part of the execution and delivery of this Agreement, Purchaser has entered into a Purchase Agreement with each of Rudman and Thomas providing for the purchase by Purchaser simultaneously with and as a part of the Closing of the respective interest of Rudman and Thomas in the Revenue Sharing Agreements. (b) Prior to the Closing Date, Old Mutual shall have adopted the Signing Bonus Plan (the "Signing Bonus Plan"), pursuant to which amounts shall be paid ------------------ by Old Mutual to the participants in the Signing Bonus Plan on the terms, at the times and subject to the conditions to payment stated therein. Old Mutual shall be solely responsible for payment of all amounts that are or become payable under the Signing Bonus Plan, and neither Purchaser, AMVESCAP nor any of the Companies shall have any liability or obligation with respect to payment of any amounts payable thereunder. 4.13 Termination of Employee Benefit Plans. Prior to the Closing Date, ------------------------------------- Purchaser may require the Companies to take all steps reasonably necessary to terminate any Employee Benefit Plan that is maintained or contributed to solely by one of the Companies, including, but not limited to, providing any required notices, adopting any required amendments or resolutions to be effective before or coincident with the Closing Date. 4.14 401(k) Plan Transfer. As soon as practicable following the Closing -------------------- Date, Sellers shall cause the trustees of the United Asset Management Corporation Profit Sharing and 401(k) Plan (the "UAM 401(k) Plan") to transfer to a defined contribution plan maintained by Purchaser or an Affiliate thereof an amount equal to the aggregate account balances of participants (or their beneficiaries) in the UAM 401(k) Plan who are either currently employed by one of the Companies or last employed by one of the Companies immediately prior to separating from service with an Affiliate. Such transfer shall be evidenced by an agreement in a form as shall be mutually agreed upon by the parties hereto. 4.15 Redemption of Unit Awards. Prior to the Closing Date, Old Mutual shall ------------------------- redeem or cause to be redeemed each Unit Award issued and outstanding such that no Unit Awards will be outstanding at the time of the Closing. Old Mutual shall be solely responsible for, and shall pay, all amounts that shall become payable in respect of any Unit Award prior to its redemption and in respect of the redemption of all Unit Awards as required herein, and neither Purchaser, AMVESCAP nor any of the Companies shall have any liability or obligation with respect to the payment of any such amounts. 4.16 Acquisition Event. If an Acquisition Event is consummated prior to the ----------------- Second Anniversary Date, Purchaser shall require the Person or entity holding more than fifty percent -27- (50%) of the combined voting power of the applicable voting securities immediately following such consummation to assume all of the Purchaser's unfulfilled obligations and covenants under this Agreement. 4.17 Cooperation. Except as otherwise permitted in this Agreement, Sellers ----------- shall not take any action to prevent the transactions contemplated by each of the Purchase Agreements to be consummated. ARTICLE V REPRESENTATIONS AND WARRANTIES ------------------------------ CONCERNING THE COMPANIES ------------------------ As a material inducement to the Purchaser to enter into this Agreement, the Sellers hereby represent and warrant that: 5.1 Organization and Corporate Power. Each of the Advisory Entities is a -------------------------------- corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and is qualified to do business in every jurisdiction in which it is required to be qualified, except where the failure to be so qualified would not have a Material Adverse Effect. Each of the Banks is a corporation duly organized, validly existing and in good standing under the laws of the United States as a national banking association authorized to engage in fiduciary activities. Each of the Banks meets the requirements for exclusion from the definition of "bank" under Section 2(c)(1)(D) of the Bank Holding Company Act. The jurisdictions of incorporation of each of the Companies and Banks and all jurisdictions in which such Companies are qualified to do business are set forth on Schedule 5.1 attached hereto. Each of the Companies has full ------------ power and authority and all licenses, permits and authorizations necessary to own and operate its properties and to carry on its business as now conducted, except where the failure to obtain such licenses, permits and authorizations would not have a Material Adverse Effect. Correct and complete copies of each of the Companies' certificate of incorporation (or articles of association, in the case of the Banks) and by-laws have been furnished to the Purchaser, which documents reflect all amendments made thereto at any time prior to the date of this Agreement. Correct and complete copies of the minute books containing the records of meetings of the stockholders and board of directors, the stock certificate books and the stock record books of each of the Companies have been made available to the Purchaser. No Company is in default under or in violation of any provision of its certificates of incorporation (or articles of association, in the case of the Banks) or its by-laws. 5.2 Authorization of Transactions. All corporate proceedings on the part of ----------------------------- any of the Companies necessary to approve and authorize the execution and delivery of the Transaction Documents and the consummation of the transactions contemplated thereby have been taken. 5.3 Capitalization. The authorized capital stock of Pell Rudman consists of -------------- 100 shares of common stock, no par value, of which 100 shares are issued and outstanding and owned, beneficially and of record, by Holdings. The authorized capital stock of Rothschild consists of 5,000 shares of common stock, no par value, of which 638.6316 shares are issued and -28- outstanding and owned, beneficially and of record, by Old Mutual. All of the issued and outstanding shares of Pell Rudman's and Rothschild's capital stock have been duly authorized, are validly issued, fully paid, and nonassessable, are owned of record and beneficially free and clear of all Liens, and are not subject to, nor were they issued in violation of, any preemptive rights or rights of first refusal. There are no outstanding or authorized options, warrants, rights, contracts, calls, puts, rights to subscribe, conversion rights or other agreements or commitments to which Pell Rudman or Rothschild is a party or which are binding upon Pell Rudman or Rothschild providing for the issuance, disposition or acquisition of any of their capital stock (other than this Agreement). There are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to Pell Rudman or Rothschild. There are no voting trusts, proxies or any other agreements or understandings with respect to the voting of the capital stock of Pell Rudman or Rothschild. Neither Pell Rudman nor Rothschild is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock. 5.4 Subsidiaries; Investments. Except as set forth on Schedule 5.4 attached ------------------------- ------------ hereto, neither Pell Rudman, Rothschild nor any Subsidiary of Pell Rudman or Rothschild owns or holds any shares of stock or any other security or interest in any other Person or any rights to acquire any such stock or other security or interest. All of the authorized, issued and outstanding shares of capital stock of each of the Subsidiaries identified on Schedule 5.4 (the "Subsidiary Stock") ------------ ---------------- and the class and par value of such Subsidiary Stock are set forth on such Schedule. All of the issued and outstanding shares of Subsidiary Stock have been duly authorized, are validly issued, fully paid, and nonassessable, and are held of record and beneficially by the Persons and in the amounts set forth on Schedule 5.4 and are not subject to, nor were they issued in violation of, any - ------------ preemptive rights or rights of first refusal, and are owned of record and beneficially by the respective Persons as set forth on such Schedule free and clear of all Liens (except as otherwise set forth on such Schedule). There are no outstanding or authorized options, warrants, rights, contracts, calls, puts, rights to subscribe, conversion rights or other agreements or commitments to which any Subsidiary identified on Schedule 5.4 is a party or which are binding ------------ upon any of the Subsidiaries providing for the issuance, disposition or acquisition of any capital stock of any of the Subsidiaries. There are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Subsidiaries. There are no voting trusts, proxies or any other agreements or understandings with respect to the voting of the Subsidiary Stock. None of the Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of Subsidiary Stock. 5.5 Absence of Conflicts. Except as set forth on Schedule 5.5 attached -------------------- ------------ hereto, and except for the filing requirements under the HSR Act and the Change in Bank Control Act, the execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby by the Companies do not and shall not (a) conflict with or result in any breach of any of the terms, conditions or provisions of, (b) constitute a default under, (c) result in a violation of, (d) give any third party the right to modify, terminate or accelerate any obligation under, (e) result in the creation of any Lien upon the Common Stock or the assets of the Companies, or (f) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or other -29- governmental body or agency, under the provisions of the certificates of incorporation (or articles of association in the case of the Banks) or by-laws of the Companies or any indenture, mortgage, lease, loan agreement or other agreement or instrument to which any of the Companies is bound or affected, or any Applicable Law to which any of the Companies is subject. 5.6 Financial Statements and Related Matters. Attached hereto as Schedule ---------------------------------------- -------- 5.6 are copies of (i) the unaudited combined balance sheet for the Companies as - --- --------- of December 31, 2000 (the "Latest Balance Sheet") and the related statements of -------------------- income for the 12-month period then ended, (ii) the audited balance sheets for ------- the Banks and related statements of income and cash flows as of and for the fiscal years ended December 31, 2000, 1999 and 1998, (iii) the unaudited combined balance sheets for the Companies and related statements of income as of and for the fiscal years ended December 31, 1999 and 1998; and (iv) the unaudited combined balance sheets and related statements of income for the Companies as of and for the three (3) month period ended March 31, 2001. Each of the foregoing financial statements (including in all cases the notes thereto, if any) (the "Financial Statements") is accurate and complete in all material -------------------- respects, is consistent with the Companies' books and records (which, in turn, are accurate and complete in all material respects), presents fairly the Companies' financial condition and results of operations as of the times and for the periods referred to therein, and has been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered, and, with respect to unaudited financial statements are subject to normal year-end adjustments. 5.7 Absence of Undisclosed Liabilities. Except as set forth on Schedule ---------------------------------- -------- 5.7, none of the Companies has any obligations or liabilities arising out of - --- transactions entered into at or prior to the Closing, or any action or inaction at or prior to the Closing, or any state of facts existing at or prior to the Closing, which would be required to be reflected on the liabilities side of a balance sheet under GAAP, except (i) liabilities reflected on the liabilities side of the Latest Balance Sheet, and (ii) liabilities which have arisen after the date of the Latest Balance Sheet in the Ordinary Course of Business or otherwise in accordance with the terms and conditions of this Agreement. 5.8 Absence of Certain Developments. Except as set forth on the Schedule ------------------------------- -------- 5.8 attached hereto and except as expressly contemplated by this Agreement, - --- since December 31, 2000, none of the Companies has: (a) suffered any change that has had a Material Adverse Effect or suffered any theft, damage, destruction or casualty loss that has had or could reasonably be expected to have a Material Adverse Effect, to its assets, whether or not covered by insurance; (b) redeemed or repurchased, directly or indirectly, any shares of capital stock or other equity security or declared, set aside or paid any dividends or made any other distributions (whether in cash or in kind) with respect to any shares of its capital stock or other equity security other than in the Ordinary Course of Business; -30- (c) issued, sold or transferred any Company equity securities, any securities convertible, exchangeable or exercisable into shares of its capital stock or other equity securities, or warrants, options or other rights to acquire shares of its capital stock or other equity securities; (d) incurred or become subject to any liabilities, except liabilities incurred in the Ordinary Course of Business; (e) subjected any portion of its properties or assets to any Lien; (f) sold, leased, assigned or transferred any portion of its material tangible assets, or canceled without fair consideration any material debts or claims owing to or held by it; (g) sold, assigned, licensed or transferred any Proprietary Rights owned by, issued to or licensed to it or disclosed any confidential information (other than pursuant to agreements requiring the party to which such information is disclosed to maintain the confidentiality of and preserving all rights of the relevant Company in such confidential information), or received any confidential information of any third party in violation of any obligation of confidentiality, except where such action would not have a Material Adverse Effect; (h) suffered any extraordinary losses or waived any rights of material value; (i) incurred any Indebtedness (other than indebtedness to finance its working capital needs); (j) entered into, amended or terminated any material lease, contract, agreement or commitment, or taken any other action or entered into any other transaction other than in the Ordinary Course of Business; (k) entered into any other material transaction, or materially changed any business practice; (l) made or granted any bonus or any wage, salary or compensation increase to any director or officer, or made or granted any increase in any employee benefit plan or arrangement, or amended or terminated any existing employee benefit plan or arrangement or adopted any new employee benefit plan or arrangement other than in the Ordinary Course of Business and consistent both as to amount and to the recipients thereof with past practices; (m) made any other change in employment terms for any of its directors and officers outside the Ordinary Course of Business; (n) made any capital expenditures or commitments for capital expenditures that aggregate in excess of $200,000; (o) made any material loans or advances to, or guarantees for the benefit of, any Persons; -31- (p) made any material charitable contributions, pledges, association fees or dues; (q) changed (or authorized any change) in its certificates of incorporation (or articles of association, in the case of the Banks) or by-laws; or (r) enforceably agreed or committed to do any of the foregoing. 5.9 Title to Properties. ------------------- (a) Owned Properties. None of the Companies owns any real property. ---------------- (b) Leased Properties. The leases and subleases described on Schedule 5.9 ----------------- ------------ attached hereto (the "Leased Properties") constitute all of the leases and ----------------- subleases under which any of the Companies holds leasehold or subleasehold interests in real property. The real property leases and subleases described on Schedule 5.9 are, to Old Mutual's Knowledge, valid, binding, enforceable and in - ------------ full force and effect and have not been modified (except to the extent disclosed in the documents delivered to the Purchaser), and the relevant Company holds a valid and existing leasehold interest under such leases or subleases to which it is a party for the term set forth on Schedule 5.9. The Companies have delivered ------------ to the Purchaser complete and accurate copies of each of the leases or subleases described on Schedule 5.9. With respect to each lease and sublease listed on ------------ Schedule 5.9 and except as set forth therein: - ------------ (i) the lease or sublease shall continue to be legal, valid, binding, enforceable and in full force and effect on identical terms immediately following the Closing; (ii) no Company nor, to Old Mutual's Knowledge, any other party to the lease or sublease is in material breach or default, and no event has occurred which, with notice or lapse of time, would constitute such a breach or default or permit termination, modification or acceleration under the lease or sublease; (iii) no Company nor, to Old Mutual's Knowledge, any other party to the lease or sublease has repudiated any material provision thereof and there are no material disputes, oral agreements or forbearance programs in effect as to the lease or sublease; and (iv) no Company has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold. (c) No Other Real Property. The real property described on Schedule 5.9 ---------------------- ------------ constitutes all of the real property used or occupied by the Companies. (d) Personal Property. One or more of the Companies owns good title to, or ----------------- a valid leasehold interest in, free and clear of all Liens, all of the personal property and assets which are -32- shown on the Latest Balance Sheet or which have been acquired by one of the Companies thereafter. 5.10 Reserved. 5.11 Contracts and Commitments. ------------------------- (a) Except as set forth on Schedule 5.11 attached hereto, and other than ------------- the Contracts described in Section 5.21, no Company is a party to, or bound by, any: (i) collective bargaining agreement or contract with any labor union or any bonus, pension, profit sharing, retirement or any other form of deferred compensation plan or any stock purchase, stock option, hospitalization insurance or similar plan or practice; (ii) contract for the employment of any officer; (iii) agreement or indenture relating to the borrowing of money or to mortgaging, pledging or otherwise placing a Lien on any of its assets; (iv) agreements with respect to the lending or investing of funds; (v) material license or royalty agreements; (vi) guaranty of any obligation, other than endorsements made for collection; (vii) material lease or agreement under which it is lessor of or permits any third party to hold or operate any property, real or personal, owned or controlled by it; (viii) contract or group of related contracts with the same party continuing over a period of more than six months from the date or dates thereof, not terminable by it on 30 days or less notice without penalties or involving more than $10,000; (ix) contract which prohibits it from freely engaging in business anywhere in the world; or (x) other agreement material to it whether or not entered into in the Ordinary Course of Business. (b) Except as disclosed on Schedule 5.11 or addressed in Section 5.21 and ------------- except to the extent that any of the following could not reasonably be expected to have a Material Adverse Effect, (i) no contract or commitment required to be disclosed on Schedule 5.11 has been breached or canceled by the other party, and ------------- Old Mutual has no Knowledge of any anticipated breach by any other party to any contract required to be set forth on Schedule 5.11, (ii) to Old Mutual's ------------- Knowledge, no supplier has indicated in writing to any Company that it desires to -33- renegotiate its contract or current arrangement with such Company, (iii) each of the Companies has performed all the obligations required to be performed by it in connection with the contracts or commitments required to be disclosed on Schedule 5.11 and is not in default under or in breach of any contract or - ------------- commitment required to be disclosed on Schedule 5.11, and no event has occurred ------------- which with the passage of time or the giving of notice or both would result in such a default or breach thereunder, and (iv) each agreement required to be set forth on Schedule 5.11 is legal, valid, binding, enforceable and in full force ------------- and effect and will continue as such following the consummation of the transactions contemplated hereby. (c) The Companies have provided the Purchaser with a true and correct copy of all written contracts which are required to be disclosed on Schedule 5.11, in ------------- each case together with all material amendments, waivers or other changes thereto. (d) Neither James S. McDonald nor any other party, other than Sellers, Parent, the Companies, Thomas and Rudman, has any presently existing or contingent right, title or interest in the Revenue Sharing Agreements. 5.12 Proprietary Rights. ------------------ (a) Schedule 5.12 attached hereto sets forth a complete and correct list ------------- of: (i) all material patented, registered or applied for Proprietary Rights owned or used by any of the Companies; (ii) all material trade names, unregistered trademarks and material unregistered copyrights owned or used by any of the Companies; (iii) all material licenses or other similar agreements to which any of the Companies is a party, either as licensee or licensor, for any Proprietary Rights. (b) Except as set forth on Schedule 5.12, (i) each of the Companies owns ------------- and possesses without material restriction as to use, all right, title and interest in and to the Proprietary Rights necessary for the operation of such Company's business as currently conducted; (ii) no Company has received any notices of invalidity, infringement or misappropriation from any third party with respect to any such Proprietary Rights; (iii) to Old Mutual's Knowledge, no Company has interfered with, infringed upon, misappropriated or otherwise come into conflict with any Proprietary Rights of any third parties; and (iv) to Old Mutual's Knowledge, no third party has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Proprietary Rights of any of the Companies. 5.13 Litigation; Proceedings. Except as set forth on Schedule 5.13 attached ----------------------- ------------- hereto, there are no actions, suits, proceedings, orders, judgments, decrees or investigations pending or, to Old Mutual's Knowledge, threatened against or affecting any of the Companies at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign. No Company is subject to any outstanding order, judgment or decree issued by any court or quasi judicial or administrative agency of any federal, state, local or foreign jurisdiction or any arbitrator. -34- 5.14 Brokerage. Except as set forth on Schedule 5.14 attached hereto, there --------- ------------- are no claims for brokerage commissions, finders' fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of any of the Companies. All such commissions, finders' fees or similar compensation shown on Schedule 5.14 shall be the sole responsibility of, and shall be paid by, Old Mutual. 5.15 Governmental Filings. Other than the filings and/or notices under the -------------------- HSR Act, the 1940 Act, and the Advisers Act, no filings, reports or notices are required to be made by any Company with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by any Company from, any Governmental Authority, in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, except such as would not have a Material Adverse Effect. 5.16 Employee Benefit Plans. ---------------------- (a) Attached hereto as Schedule 5.16 is a list of plans and arrangements ------------- that Old Mutual or one of the Companies maintains or contributes to, or has any actual or potential liability with respect to and for the benefit of the Companies' employees, former employees, retirees, dependents, spouses, directors, independent contractors, or other beneficiaries, including any (i) deferred compensation or bonus or retirement plans or arrangements, (ii) qualified or nonqualified defined contribution or defined benefit plans or arrangements which are employee pension benefit plans (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA")), or (iii) ----- employee welfare benefit plans, (as defined in Section 3(1) of ERISA), stock option or stock purchase plans, or material fringe benefit plans or programs whether in writing or oral and whether or not terminated ("Employee Benefit Plan"). Neither Sellers nor any entity that is considered a single employer with the Sellers under Section 4001 of ERISA or Code Section 414 (an "ERISA Affiliate") has ever contributed to a multiemployer pension plan (as defined in Section 3(37) of ERISA), and neither Sellers nor any ERISA Affiliate has ever maintained or contributed to any defined benefit plan (as defined in Section 3(35) of ERISA) that has or could create a Loss for any Company. Neither Sellers nor any ERISA Affiliate has ever maintained or contributed to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides health, accident or life insurance benefits to former employees, their spouses or dependents, other than in accordance with Section 4980B of the Code that has or could create a Loss for any Company. (b) The Employee Benefit Plans (and related trusts and insurance contracts) comply in form and in operation in all material respects with the requirements of Applicable Laws and regulations, including, but not limited to, ERISA and the Code. Each Employee Benefit Plan (and all prior versions thereof) that is intended to be qualified under Code Section 401(a) has received a favorable determination letter from the Internal Revenue Service, and neither Sellers nor Companies are aware of any circumstances likely to result in revocation of any such favorable determination letter. (c) Except as disclosed on Schedule 5.16(c), all required reports and ---------------- descriptions (including Form 5500 Annual Reports, Summary Annual Reports and Summary Plan -35- Descriptions) with respect to the Employee Benefit Plans have been properly and timely filed with the appropriate government agency and distributed to participants as required. (d) With respect to each Employee Benefit Plan, (i) there have been no "prohibited transactions" as defined in Section 406 of ERISA or Section 4975 of the Code, (ii) no fiduciary (as defined in Section 3(21) of ERISA) has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of such plans, and (iii) no actions, investigations, suits or claims with respect to the assets thereof (other than routine claims for benefits) are pending or threatened. (e) With respect to each Employee Benefit Plan maintained for the benefit of the Companies' employees, Old Mutual has furnished or made available to the Purchaser true and complete copies of (i) the plan documents (including amendments thereto), summary plan descriptions and summaries of material modifications and other material employee communications; (ii) determination letters, rulings, opinion letters, information letters, or advisory opinions issued by the Internal Revenue Service or the Department of Labor; (iii) annual reports or returns, audited or unaudited financial statements, actuarial valuations and reports, and summary annual reports; (iv) all related trust agreements, insurance contracts or other funding agreements which implement such plans; and (v) all contracts relating to each such plan, including, without limitation, service provider agreements, insurance contracts, investment management agreements and recordkeeping agreements. (f) There are no restrictions on the rights of Sellers or the Companies to amend or terminate any Employee Benefit Plan without incurring any Liability thereunder. No tax under Code Sections 4980B or 5000 has been incurred with respect to any Employee Benefit Plan and no circumstances exist which could give rise to such taxes. (g) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment (including severance, unemployment compensation, golden parachute, or otherwise) becoming due to any director or any employee of any Company other than as required pursuant to Section 4.15, (ii) increase any benefits otherwise payable under any Employee Benefit Plan, or (iii) result in any acceleration of the time of payment or vesting of any such benefit. No payment that is owed or may become due to any shareholder, director, officer, employee or agent of a Company will be non-deductible or subject to tax under Code Section 280G or 4999; nor will any Company be required to "gross up" or otherwise compensate such individuals because of the imposition of any excise tax upon payment to such individual. (h) No event has occurred or circumstances exist that could result in a material increase in premiums or costs under any Employee Benefit Plan. (i) Sellers and the Companies have performed all of their respective obligations under the Employee Benefit Plans and have made appropriate entries in their financial records and statements for all such obligations that have accrued but that are not yet due. The actuarial present values of all accrued deferred compensation entitlements (including entitlements under -36- any executive compensation, supplemental retirement, or employment agreement) of employees and former employees of any Company and their respective beneficiaries have been fully reflected on the Companies' financial statements to the extent required by and in accordance with GAAP. Sellers and the Companies have made all required contributions and payments under each Employee Benefit Plan for all periods through and including the Closing Date. 5.17 Insurance. Schedule 5.17 attached hereto lists each insurance policy --------- ------------- maintained by each of the Companies with respect to its properties, assets and business. All of the insurance policies listed on Schedule 5.17 are in full ------------- force and effect, and no Company is in default with respect to its obligations under any such insurance policies. 5.18 Affiliate Transactions. Except as set forth on Schedule 5.18, no ---------------------- ------------- Insider is a party to any agreement, contract, commitment or transaction with any of the Companies or which pertains to the business of any of the Companies or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of any of the Companies. 5.19 Compliance with Laws. -------------------- (a) Except as set forth on Schedule 5.19 or is not, individually or in the ------------- aggregate, reasonably likely to cause or result in a Material Adverse Effect, each of the Companies and its respective officers, directors, and employees have complied with, and is in compliance with, all Applicable Laws which are applicable to the business and business practices of such Company, no claims have been filed against any of the Companies alleging a violation of any such laws or regulations which remains unsatisfied, and no Company has received notice of any such violations within the past two years; (b) Except as set forth on Schedule 5.19, the businesses of each of the ------------- Companies that are required to be licensed or registered as a broker/dealer, an investment adviser, a registered representative, a commodity trading advisor, commodity pool operator, futures commission merchant, trust company, or transfer agent (or in a similar capacity) with any Governmental Authority, are duly registered or licensed or, in the case of any officer or employee, in the process of being duly licensed or registered as such, and each such registration or license is in full force and effect; and each of the officers, employees and affiliates of each of the Companies that is required to be registered or licensed as a broker/dealer, an investment adviser, a registered representative, an investment adviser representative, a commodity trading advisor, a commodity pool operator, a futures commission merchant, a trust company, a transfer agent or a sales person (or in a similar capacity) with any Governmental Authority, is duly registered or licensed or, in the case of any officer or employee, in the process of being duly registered or licensed as such, and each such registration or license is in full force and effect; (c) Except as set forth on Schedule 5.19, each of the Companies has ------------- administered all accounts for which such Person acts as fiduciary or agent, including but not limited to accounts for which it serves as a trustee, agent, custodian, personal representative, guardian or conservator, -37- in compliance with the terms of the governing documents and Applicable Law, where the failure to do so would have a Material Adverse Effect; (d) Except as set forth on Schedule 5.19, no Company is registered as, or ------------- is required to be registered as, an investment company under the 1940 Act; and (e) Each Form ADV filed by each of the Companies that is a registered investment adviser under the Advisers Act in its most recent form filed with the SEC, including any amendments thereto filed with the SEC, is complete and correct in all material respects and omits no material facts required to be stated therein. (f) Except as set forth on Schedule 5.19, each of the common trust funds ------------- offered by the Companies has been operated in accordance with OCC Regulation 9 and federal securities laws. 5.20 Disclosure. ---------- (a) Neither the representations and warranties in this Agreement nor any of the Schedules hereto, contain any untrue statement of a material fact or omit a material fact necessary to make each statement contained herein or therein, not misleading. (b) Neither the Companies nor any of the Sellers, nor representatives of the Companies or any of the Sellers, have made any representations or warranties relating to the Companies or their business, operations or prospects or otherwise in connection with the transactions contemplated herein other than those expressly set forth in this Article V. Without limiting the generality of the foregoing, neither the Companies nor any Sellers, nor representatives of the Companies or any of the Sellers has made, and shall not be deemed to have made, any representations or warranties in the Confidential Memorandum dated December, 2000 (together with all revisions thereof or supplements thereto, the "PPM") or --- in any presentation of the business of the Companies in connection with the transactions contemplated hereby, and no statement contained in the PPM or made in any such presentation shall be deemed a representation or warranty hereunder or otherwise. It is expressly understood that any cost estimates, projections, predictions or forward-looking statements contained in any data, financial information, memoranda or offering materials or presentations, including but not limited to the PPM, are not and shall not be deemed to be or include representations or warranties of the Companies or any Sellers or any representative of the Companies or the Sellers. (c) Certain information set forth in the Schedules may be included solely for informational purposes and may not be required to be disclosed pursuant to this Agreement. The disclosure of such information shall not be deemed to constitute an acknowledgment that such information is required to be disclosed in connection with the representations and warranties made by the Sellers in this Agreement or that it is material, nor shall information be deemed to establish a standard of materiality. -38- 5.21 Investment Contracts, Funds and Clients --------------------------------------- (a) The Advisory Entities provide investment management and investment advisory services; each contract for such services is referred to herein as an "Advisory Contract." The Banks provide financial counseling, estate planning, ----------------- trust, custody and family office services; each contract for such services is referred to herein as a "Trust Agreement." The Advisory Contracts and the Trust --------------- Agreements are referred to collectively herein as "Contracts." Each other party --------- or other Person with respect to which a Company provides the services described above is referred to herein as a "Client"; and each Client that is an investment ------ company but is exempt from registration under the 1940 Act by virtue of Sections 3(c)(1) or 3(c)(7) of that Act is referred to herein as an "Exempt Fund Client." ------------------ The only Client that is a series of an investment company registered under the 1940 Act is the Mid Cap Portfolio. (i) Except as is not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect, there does not exist under any Contract any event or condition that, after notice or lapse of time or both, would constitute an event of default thereunder on the part of any Company, or, to Old Mutual's Knowledge, any other party thereto. (ii) Except as is not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect, neither of the Advisory Entities, nor, to Old Mutual's Knowledge, any other person "associated" with either of the Advisory Entities (as defined under the Advisers Act), has been convicted of any crime or has been subject to any disqualification that would be a basis for denial, suspension, or revocation of registration of an investment adviser under Section 203(e) of the Advisers Act or Rule 206(4)-4(b) thereunder during the five-year period immediately preceding the date hereof; and, to Old Mutual's Knowledge, there is no basis for, or proceeding or investigation that could reasonably be expected to become the basis for, any such disqualification, denial, suspension or revocation. (iii) Except as set forth on Schedule 5.21(a), the Trust Agreements ---------------- are consistent with federal law and applicable state law and provide sufficient authority under federal law and applicable state law for the Banks to make the investments that have been made for Clients who are parties to such Trust Agreements. (b) Mid Cap Portfolio. ----------------- (i) The Mid Cap Portfolio is, and at all times required under the securities laws has been, a series of UAM Funds, Inc., a registered investment company under the 1940 Act; and except as would not, individually or in the aggregate, reasonably be likely to have a Material Adverse Effect, is in compliance with (x) the Applicable Laws, regulations, rules or orders of the SEC, and (y) the Applicable Laws of any state in which the Mid Cap Portfolio is registered, qualified, or sold. (ii) Except as is not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect, (x) each Advisory Contract in effect on the date hereof -39- between any of the Advisory Entities and the Mid Cap Portfolio and any subsequent renewal has been duly authorized, executed and delivered by such Advisory Entity, the Mid Cap Portfolio and, to Old Mutual's Knowledge, each other party thereto, if any; and is a valid and legally binding agreement, enforceable against such Advisory Entity, and, to Old Mutual's Knowledge, each other party thereto; and (y) each Advisory Contract with the Mid Cap Portfolio, except as is not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect, has been adopted in compliance with Section 15 of the 1940 Act. (iii) Each Advisory Entity that acts as an investment adviser to an investment company registered under the 1940 Act has adopted a formal code of ethics and a written policy regarding insider trading, each of which complies with Applicable Law. The policies of each Advisory Entity with respect to avoiding conflicts of interest are as set forth in the most recent Forms ADV thereof, as amended; and to Old Mutual's Knowledge, there have been no material violations or allegations of violations of such policies that have occurred or been made that have not been addressed in accordance with these procedures. (iv) None of the Advisory Entities nor, to the best of Old Mutual's Knowledge, any of their respective officers, directors, or employees has any express or implied understanding or arrangement that would impose an unfair burden on the Mid Cap Portfolio or would in any way violate Section 15(f) of the 1940 Act as a result of this transaction. (v) Neither any of the Advisory Entities, the Mid Cap Portfolio nor, to Old Mutual's Knowledge, any other person "associated" (as defined under the Advisers Act) with any of the Advisory Entities or the Mid Cap Portfolio, has for a period not less than ten (10) years prior to the date hereof, been convicted of any crime, or is or has been subject to any disqualification that would be a basis for disqualification as an investment adviser to any investment company pursuant to Section 9(a) of the 1940 Act, and, to Old Mutual's Knowledge, there is no basis for, or proceeding or investigation that could become the basis for, any such disqualification. (c) Exempt Fund Clients. ------------------- (i) Except as is not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect, (x) each Exempt Fund Client that is a juridical entity has been duly organized, and is validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite corporate, partnership, limited liability company, or similar power and authority, and possesses all rights, licenses, authorizations and approvals necessary to entitle it to use its name, to own, lease or otherwise hold its properties and assets and to carry on its business as it is now conducted, and is duly qualified, licensed or registered to do business in each jurisdiction where it is required to do so under Applicable Law (except where the failure to do so is not material to its -40- business); and (y) each Exempt Fund Client is in substantial compliance with the terms and conditions of its constituent documents. (ii) Except as is not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect, (x) all outstanding shares or units of each Exempt Fund Client have been issued and sold in substantial compliance with Applicable Law; and (y) each Exempt Fund Client, since inception of operations, has been operated and is currently operating in substantial compliance with its respective investment objectives and policies and Applicable Law. (iii) Except as is not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect, none of the Exempt Fund Clients has been enjoined, indicted, convicted or made the subject of disciplinary proceedings, consent decrees or administrative orders on account of any violation of the rules or orders of the Governmental Authority or self regulatory body having jurisdiction over the Exempt Fund Client. 5.22 Assets Under Management. As of the close of business on March 31, ----------------------- 2001, the aggregate amount of assets under management (i.e., assets as to which any Company is entitled to receive asset management fees) (i) for the Mid Cap Portfolio was approximately $18,000,000, (ii) for assets held pursuant to Contracts was approximately $7,791,000,000. Other than the Mid Cap Portfolio, no more than $591,000,000 assets under management are under Contracts with an Advisory Entity requiring Consent. 5.23 Labor Matters, etc. No Company is a party to or bound by any ------------------ collective bargaining or other labor agreement. Each Company is currently in compliance with and for the past five (5) years has materially complied with all applicable provisions of Applicable Laws pertaining to the employment or termination of employment of its employees, except for any failures to comply that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 5.24 Derivative Products. None of the Companies, either on its own behalf ------------------- or on behalf of any Client, has entered into any, interest rate swaps, caps, floors, option agreements, futures and forward Contracts and other similar risk management arrangements; provided, however, from time to time the Companies advise Clients to place funds into such arrangements sponsored or offered by other entities. 5.25 Section 15(f) Materials. The books and records of each Company, the ----------------------- Mid Cap Portfolio and each Client and account have been fully, properly and accurately maintained in all material respects, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein, and they fairly present in all material respects the financial position of the Companies, and the assets and performance of the Mid Cap Portfolio and each Client and account. The valuations of the assets and liabilities of the Mid Cap Portfolio and each Client and account have been supplied by sources that the Sellers believe are reasonably reliable and -41- accurate, and, to Old Mutual's Knowledge, accurately reflect the fair market values of such assets and liabilities as of the dates thereof. ARTICLE VI REPRESENTATIONS AND WARRANTIES ------------------------------ CONCERNING THE SELLERS ---------------------- As a material inducement to the Purchaser to enter into this Agreement, the Sellers hereby represent and warrant that: 6.1 Organization and Corporate Power. Each of the Sellers is a corporation -------------------------------- duly organized, validly existing and in good standing under the laws of its state of incorporation with full corporate power and authority to enter into the Transaction Documents to which such Seller is a party and to perform its obligations thereunder. 6.2 Authorization of Transactions. The execution, delivery and performance ----------------------------- of this Agreement and the other Transaction Documents to which either of the Sellers is a party have been duly and validly authorized by all requisite corporate action on the part of such Seller, and no other corporate proceedings on the part of the Sellers are necessary to authorize the execution, delivery or performance of this Agreement or the other Transaction Documents. This Agreement has been duly executed and delivered and constitutes, and each of the other Transaction Documents to which either of the Sellers is a party shall when executed constitute, a valid and binding obligation of such Seller, enforceable in accordance with their respective terms. 6.3 No Violation. Neither of the Sellers is subject to or obligated under ------------ its certificate of incorporation, its by-laws, any Applicable Law, or any agreement or instrument, or any license, franchise or permit, or subject to any order, writ, injunction or decree, which would be breached or violated by its execution, delivery or performance of this Agreement and the other Transaction Documents to which such Seller is a party. 6.4 Shares. Each Seller holds of record and owns beneficially the shares of ------ Common Stock as indicated on Schedule 6.4 attached hereto, free and clear of any ------------ Liens. No Seller is a party to any option, warrant, right, contract, call, put or other agreement or commitment providing for the disposition or acquisition of any capital stock of either Pell Rudman or Rothschild (other than this Agreement). No Seller is a party to any voting trust, proxy or other agreement or understanding with respect to the voting of any capital stock of either Pell Rudman or Rothschild. 6.5 Taxes. Except as set forth on Schedule 6.5 attached hereto: ----- ------------ (a) Old Mutual has timely filed prior to the date hereof or has sought an extension with respect to all Tax Returns which are required to be filed with respect to the business or assets of the Companies, all such Tax Returns are true, complete and accurate in all material respects and have been prepared in compliance with Applicable Law, and Schedule 6.5 ------------ -42- indicates the jurisdictions in that Old Mutual or the Companies are required to file Tax Returns that include any of the Companies; (b) all Taxes due and payable by Old Mutual or by each of the Companies with respect to any of the Companies or for which they could be held liable, whether or not shown on a Tax Return, have been paid or will be paid prior to the expiration of any applicable extension period, and no such Taxes are delinquent; (c) no deficiency for any amount of Tax that has not been resolved has been asserted or assessed by a taxing authority against Old Mutual with respect to any of the Companies or for which they could be held liable, and Old Mutual has no Knowledge that any such assessment or asserted Tax liability shall be made; (d) there is no action, suit, taxing authority proceeding or audit now in progress, pending or, to Old Mutual's Knowledge, threatened against or with respect to any Tax Return of Old Mutual which includes any of the Companies; (e) Old Mutual has not (i) waived any statute of limitations, (ii) agreed to any extension of the period for assessment or collection or (iii) executed or filed any power of attorney, which power of attorney is currently in force, in each case with respect to any Tax Return which includes any of the Companies. (f) Old Mutual has delivered to Purchaser correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies assessed against, affecting or agreed to by any of the Companies since December 31, 1995; (g) none of the Companies has filed a consent under Code Section 341(f) concerning collapsible corporations; (h) none of the Companies has made any payments, is obligated to make any payments, or is a party to an agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Code Section 280G or 162(m); (i) none of the Companies has been a United States real property holding corporation within the meaning of Code ss.897(c)(2) during the applicable period specified in Code Section.897(c)(1)(A)(ii); (j) within the past six years, none of the Companies has been a member of an Affiliated Group, or any similar group defined under local, state or foreign Tax law, other than an Affiliated Group of which Old Mutual is a part; (k) no Company is a party to or bound by any Tax allocation, sharing, indemnity or similar agreement or arrangement with any Person, and no Company has any current or potential contractual obligation to indemnify any other Person with respect to Taxes; -43- (l) no claim has ever been made by a taxing authority in a jurisdiction where any Company does not pay Taxes or file Tax Returns that such Company is or may be subject to Taxes assessed by such jurisdiction; (m) each of the Companies has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, independent contractor or other third party; (n) any partnership or limited liability company owned in whole or in part by any of the Companies is treated for all federal and state income tax purposes as either a partnership or a disregarded entity; and (o) none of the Companies is, or owns or is deemed to own an interest directly or indirectly in a passive foreign investment company as defined in Section 1297(a) of the Code. Notwithstanding the foregoing, with respect to any Tax imposed by any state governing or taxing authority (or any political subdivision thereof), other than a Tax based in whole or in part on income or net worth of a taxpayer, the foregoing representations are made by Old Mutual solely to its Knowledge. In addition, to the extent any of the foregoing representations are related to Old Mutual or its Affiliates (other than the Companies), such representations are made only to the extent that the failure of such statements to be true could have a material adverse affect on the business or assets of the Companies, either directly or indirectly. 6.6 Litigation. There are no actions, suits, proceedings or orders pending ---------- or, to Old Mutual's Knowledge, threatened against or affecting the Sellers at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which would adversely affect either Seller's performance under this Agreement and the other Transaction Documents to which such Seller is a party or the consummation of the transactions contemplated hereby. 6.7 Brokerage. Except as set forth on Schedule 6.7 attached hereto, there --------- ------------ are no claims for brokerage commissions, finders' fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of either of the Sellers. All such commissions, finders' fees or similar compensation shown on Schedule 6.7 shall ------------ be the sole responsibility of, and shall be paid by, Old Mutual. 6.8 Governmental Filings. Other than the filings and/or notices under the -------------------- HSR Act and the Advisers Act, no filings, reports or notices are required to be made by either Seller with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by either Seller from, any Governmental Authority, in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. 6.9 Insurance. Schedule 6.9 attached hereto lists each insurance policy --------- ------------ maintained by Old Mutual with respect to the properties, assets and business of any of the Companies. All -44- of the insurance policies listed on Schedule 6.9 are in full force and effect, ------------ and Old Mutual is not in default with respect to its obligations under any such insurance policies. ARTICLE VII REPRESENTATIONS AND WARRANTIES ------------------------------ CONCERNING THE PURCHASER ------------------------ As a material inducement to the Sellers to enter into this Agreement, the Purchaser and AMVESCAP hereby jointly and severally represent and warrant that: 7.1 Organization and Corporate Power. The Purchaser is a corporation duly -------------------------------- organized, validly existing and in good standing under the laws of the State of Delaware, with full corporate power and authority to enter into the Transaction Documents to which the Purchaser is a party and to perform its obligations hereunder and thereunder. AMVESCAP is a corporation duly organized, validly existing and in good standing under the laws of England and Wales, with full corporate power and authority to enter into the Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder. 7.2 Authorization of Transaction. The execution, delivery and performance ---------------------------- of this Agreement and the other Transaction Documents to which each of the Purchaser and AMVESCAP is a party have been duly and validly authorized by all requisite corporate action on the part of the Purchaser and/or AMVESCAP (as the case may be), and no other corporate proceedings on its part are necessary to authorize the execution, delivery or performance of this Agreement or the other Transaction Documents. This Agreement has been duly executed and delivered and constitutes, and each of the other Transaction Documents to which the Purchaser or AMVESCAP is a party shall when executed constitute, a valid and binding obligation of the Purchaser and/or AMVESCAP (as the case may be), enforceable in accordance with their respective terms. 7.3 No Violation. Neither AMVESCAP nor the Purchaser is subject to or ------------ obligated under its certificate of incorporation, its by-laws, any Applicable Law, or any agreement or instrument, or any license, franchise or permit, or subject to any order, writ, injunction or decree, which would be breached or violated by its execution, delivery or performance of this Agreement and the other Transaction Documents to which either the Purchaser or AMVESCAP is a party. 7.4 Governmental Authorities and Consents. Other than the filings and/or ------------------------------------- notices under the HSR Act, the Advisers Act, and the Change in Bank Control Act, no filings, reports or notices are required to be made by the Purchaser or AMVESCAP with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by the Purchaser from, any Governmental Authority, in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. 7.5 Litigation. There are no actions, suits, proceedings or orders pending ---------- or, to the Purchaser's knowledge, threatened against or affecting the Purchaser or AMVESCAP at law or in equity, or before or by any federal, state, municipal or other governmental department, -45- commission, board, bureau, agency or instrumentality, domestic or foreign, which would adversely affect the Purchaser's or AMVESCAP's performance under this Agreement and the other agreements contemplated hereby to which the Purchaser or AMVESCAP is a party or the consummation of the transactions contemplated hereby or thereby. 7.6 Brokerage. Except for fees payable to de Guardiola Advisors, Inc., the --------- fees and expenses of which will be paid by Purchaser, there are no claims for brokerage commissions, finders' fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of the Purchaser. 7.7 Purchase Price. The Purchaser has readily-available funds sufficient to -------------- pay the Purchase Price. 7.8 Ineligible Persons. Neither the Purchaser nor any "affiliated person" ------------------ (as defined in the 1940 Act) thereof, as applicable, is ineligible pursuant to Section 9(a) or 9(b) of the 1940 Act to serve as an investment adviser (or in any other capacity contemplated by the 1940 Act) to a registered investment company. Neither the Purchaser nor any "person associated with an investment adviser" (as defined in the Advisers Act) thereof, as applicable, is ineligible pursuant to Section 203 of the Advisers Act to serve as an investment adviser or as an associated person to a registered investment adviser or has committed any act enumerated in Rule 206(4)-4(b) under the Advisers Act. Neither the Purchaser nor any "associated person" (as defined in the Securities Exchange Act of 1934, as amended) thereof, as applicable, is ineligible pursuant to Section 15(b) of that Act to serve as a broker-dealer or as an associated person to a registered broker-dealer. 7.9 Facts Affecting Regulatory Approvals. There is no fact, event or ------------------------------------ condition applicable to the Purchaser which will, or reasonably could be expected to, adversely affect the likelihood of securing the requisite approvals or consents of any Governmental Authority to the transactions contemplated by this Agreement. ARTICLE VIII TERMINATION ----------- 8.1 Termination. This Agreement may be terminated at any time prior to the ----------- Closing: (a) by mutual written consent of Old Mutual and the Purchaser; (b) by the Sellers, (i) in the event of a material breach of this Agreement by the Purchaser that has not been cured, or if any representation or warranty of the Purchaser shall have become untrue in any material respect, provided that in either case such breach or untruth is incapable of being cured by the Closing Date or will prevent or delay consummation of the transactions contemplated by this Agreement by or beyond the Termination Date or (ii) if events have occurred which have made it impossible to satisfy an unwaived condition precedent to the Purchaser's obligations to consummate the transactions contemplated hereby, unless Old -46- Mutual's or Holdings' willful or knowing breach of this Agreement has caused the condition to be unsatisfied; (c) by the Purchaser, (i) in the event of a material breach of this Agreement by the Sellers that has not been cured, or if any representation or warranty of the Sellers shall have become untrue in any material respect, provided that in either case such breach or untruth is incapable of being cured by the Closing Date, or (ii) if events have occurred which have made it impossible to satisfy an unwaived condition precedent to the Sellers' obligations to consummate the transactions contemplated hereby, unless the Purchaser's willful or knowing breach of this Agreement has caused the condition to be unsatisfied; (d) by Old Mutual or the Purchaser if the Closing has not occurred on or prior to November 30, 2001; provided, however, that neither the Purchaser nor Old Mutual shall be entitled to terminate this Agreement pursuant to this Section 8.1 (d) if such Party's willful or knowing breach of this Agreement has prevented the consummation of the transactions contemplated hereby at or prior to such time; or (e) by Old Mutual or the Purchaser upon the expiration of thirty (30) days after any Governmental Authority denies or refuses to grant any approval, consent or authorization required to be obtained in order to consummate the transactions contemplated by this Agreement unless, within said thirty (30) day period after such denial or refusal, the Parties agree to resubmit the application or notice to the Governmental Authority that has denied or refused to grant the approval, consent or qualification requested. (f) by the Purchaser, by giving notice to Sellers prior to 5:00 p.m. (Eastern time) on the tenth Business Day after receipt by Purchaser of the audited combined balance sheet of the Companies as at December 31, 2000 and the audited combined results of operations of the Companies 2000 Combined Audited Financials, if in the reasonable opinion of Purchaser there is a material difference in the financial position at December 31, 2000 and results of operations of the Companies, each on a combined basis, for the twelve month period then ended as reflected on the 2000 Combined Audited Financials (including the footnotes thereto) from the financial position at such date and results of operations of the Companies, each on a combined basis, for such period as reflected on the unaudited combined December 31, 2000 financial statements (including the footnotes thereto) delivered to Purchaser pursuant to Schedule 5.6 together with the 2000 Audited Financial Statements with respect to PR Trust and Atlantic (including the footnotes thereto) (the "2000 Combined Unaudited Financials") unless (i) the matters which constitute or make up any such material difference are subject or susceptible to resolution pursuant to the provisions of Section 2.6, or (ii) the Sellers and Parent have agreed in writing to indemnify Purchaser and the Companies, fully and without limitation, for any Loss based upon, resulting from or arising out of such material difference. 8.2 Effect of Termination. In the event of termination of this Agreement by --------------------- either Old Mutual or the Purchaser as provided in Section 8.1, this Agreement shall forthwith become void, and there shall be no liability on the part of any Party to any other Party under this Agreement, except that the provisions of Article IX shall continue in full force and effect, and -47- except that nothing herein shall relieve any Party from liability for any breach of this Agreement prior to such termination. ARTICLE IX INDEMNIFICATION AND RELATED MATTERS ----------------------------------- 9.1 Survival. All representations, warranties, covenants and agreements set -------- forth in this Agreement shall survive the Closing Date and the consummation of the transactions contemplated hereby and shall not be affected by any examination made for or on behalf of any Party, the knowledge of any of such Party's officers, directors, stockholders, employees or agents, or the acceptance of any certificate or opinion. Notwithstanding the foregoing, (i) the Parties' exclusive remedy for any claims arising in respect of this Agreement from and after the Closing shall be as set forth in Section 9.2; and (ii) no Party shall be entitled to recover for any Loss pursuant to Section 9.2(a)(i) or Section 9.2(c)(i) unless written notice of a claim thereof is delivered to the other Party, with reasonable particularity, prior to the Applicable Limitation Date. For purposes of this Agreement, the term "Applicable Limitation Date" -------------------------- shall mean the second anniversary following the Closing Date; provided that the Applicable Limitation Date with respect to the following Losses shall be as follows: (i) with respect to any Loss arising from or related to a breach of the representations and warranties set forth in Section 6.5 (Taxes) or Section 5.16 (Employee Benefit Plans), the Applicable Limitation Date shall be the 30th day after expiration of the applicable statute of limitations (including any extensions thereto to the extent that such statute of limitations may be tolled) for the assertion against the Companies of Liability based upon facts or circumstances the existence or occurrence of which constitutes a breach of such representations or warranties, and (ii) with respect to any Loss arising from or related to a breach of the representations and warranties set forth in Sections 5.1, 5.2, 5.3 and 5.4, a claim for such Loss may be asserted without limitation as to any time or date. 9.2 Indemnification. --------------- (a) The Sellers and Parent shall jointly and severally indemnify the Purchaser, and each of its respective officers, directors, stockholders, employees, agents, representatives, Affiliates, successors and assigns (collectively, the "Purchaser Parties") and hold each of them harmless from and ----------------- against and pay on behalf of or reimburse such Purchaser Parties in respect of any Loss which any such Purchaser Party may suffer, sustain or become subject to, as a result of, arising out of, based upon or relating to: (i) the breach of any representation or warranty made by the Sellers contained in this Agreement or any certificate delivered by the Sellers (or either of them) to the Purchaser with respect thereto in connection with the Closing, or any matter or circumstance described in Items 1, 2, 4, 6, 7 or 8 of Schedule 5.19; or ------------- (ii) the breach of any covenant or agreement made by the Sellers contained in this Agreement, the other Transaction Documents, any Exhibit hereto or any certificate delivered by the Sellers (or either of them) to the Purchaser with respect thereto in connection with the Closing; or -48- (iii) any matter or circumstance described in Items 3 or 5 on Schedule 5.19 ------------- or Item 2 on Schedule 5.21(a) hereto; or ---------------- (iv) the matter described in Item 3 of Schedule 5.8 hereto. ------------ For purposes of Section 9.2(a)(i), the existence of an inaccuracy or breach of any representation or warranty of Sellers made in this Agreement shall be determined without giving effect to any exception in such representation or warranty relating to materiality or Material Adverse Effect. (b) The indemnification provided for in Section 9.2(a)(i) above is subject to the following limitations: (i) the Sellers will be liable to the Purchaser Parties with respect to claims referred to in Section 9.2(a)(i) only if the Purchaser Party gives Old Mutual written notice thereof, with reasonable particularity, prior to the Applicable Limitation Date, if any; (ii) the Sellers will be liable to the Purchaser Parties with respect to claims referred to in Section 9.2(a)(i) based upon or arising out of the breach of any representation or warranty of Sellers, other than the representations and warranties of Sellers contained in Sections 5.1 (except with respect to qualification and possession of all necessary licenses, permits and authorizations), 5.2, 5.3, 5.4, 5.16 and 6.5 (the "Non-Limited ----------- Reps") only if the aggregate amount of all Losses relating to any and all ---- claims referred to in Section 9.2(a)(i), other than claims based on a breach of the Non-Limited Reps, exceeds $2,500,000 in which event Sellers shall be liable for all Losses in excess of $2,500,000. (iii) the aggregate amount of all payments made by the Sellers in satisfaction of claims for indemnification pursuant to Section 9.2(a)(i) based upon or arising out of the breach of any representation or warranty of Sellers, other than the Non-Limited Reps, shall not exceed fifty percent (50%) of the Purchase Price (the "Cap"); and --- (iv) no Indemnified Party shall be entitled to recover hereunder punitive, exemplary or consequential damages, except to the extent the indemnified matter requires the Indemnified Party to pay such damages to a third party. Notwithstanding any implication to the contrary contained in this Agreement, so long as the Purchaser delivers written notice of a claim in respect of which a Loss has occurred to Old Mutual, with reasonable particularity, no later than the Applicable Limitation Date, the Sellers shall be required to indemnify the Purchaser Parties for all Losses (up to the Cap) which the Purchaser Parties may incur in respect of the matters which are the subject of such claim, regardless of when incurred. -49- (c) The Purchaser shall indemnify and hold each of the Sellers and their respective officers, directors, stockholders, employees, agents, representatives, Affiliates, successors and assigns (collectively, the "Old --- Mutual Parties") harmless from and against and pay on behalf of or reimburse - -------------- such Old Mutual Party in respect of any Loss which any Old Mutual Party may suffer, sustain or become subject to, as a result of, arising out of, based upon or relating to: (i) the breach of any representation or warranty made by the Purchaser contained in Article VII of this Agreement or any certificate delivered by the Purchaser to the Sellers (or either of them) with respect thereto in connection with the Closing; or (ii) the breach of any covenant or agreement made by the Purchaser contained in this Agreement, the other Transaction Documents, any Exhibit hereto or any certificate delivered by the Purchaser to the Sellers (or either of them) with respect thereto in connection with the Closing. (d) The indemnification provided for in Section 9.2(c)(i) above is subject to the following limitations: (i) The Purchaser will be liable to the Old Mutual Parties with respect to claims referred to in Section 9.2(c)(i) only if Old Mutual gives the Purchaser written notice thereof, with reasonable particularity, prior to the Applicable Limitation Date; (ii) the Purchaser will be liable to the Old Mutual Parties with respect to claims referred to in Section 9.2(c)(i) only if the aggregate amount of all Losses relating to any and all claims referred to in Section 9.2(c)(i) exceeds $2,500,000 and then only to the extent of such excess; and (iii) The aggregate amount of all payments made by the Purchaser in satisfaction of claims for indemnification pursuant to Section 9.2(c)(i) shall not exceed the Cap. Notwithstanding any implication to the contrary contained in this Agreement, so long as the Old Mutual Party delivers written notice of a claim in respect of which a Loss has occurred to the Purchaser, with reasonable particularity, no later than the Applicable Limitation Date, the Purchaser shall be required to indemnify the Old Mutual Parties for all Losses (up to the Cap) which the Old Mutual Parties may incur in respect of the matters which are the subject of such claim, regardless of when incurred. (e) Notwithstanding any other provision of this Article IX, Sellers and Parent, jointly and severally, agrees to indemnify the Purchaser and the Companies from and against the entirety of any Loss the Companies or the Purchaser may suffer resulting from, arising out of, relating to, in the nature of, or caused by any liability of the Company (x) for any Taxes of the Companies with respect to any Tax year or portion thereof ending on or before the Closing Date (or for any Tax to the extent allocable (determined in a manner consistent with ss. 10.1(b)) to the portion of such period beginning before and ending on the Closing Date)to the extent such Taxes are not -50- reflected in the reserve for Tax Liabilities (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) shown on the face of the Estimated Closing Balance Sheet (rather than in any notes thereto), and (y) for any Taxes of the Affiliate Group arising under Treasury Regulation ss. 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise or of the Companies arising as a result of their ceasing to be members of Old Mutual's Affiliated Group; provided, however, Sellers and Parent shall not be obligated to indemnify Purchasers and the Companies under this Section 9.2(e) except to the extent that the aggregate amount of all Losses that are described in this Section 9.2(e) shall exceed the amount accrued for Taxes with respect to periods ended on or prior to the Closing Date and taken into account in determining Actual Net Tangible Assets. (f) Sellers and Parent, jointly and severally, shall indemnify and hold each of the Purchasers and their respective officers, directors, stockholders, employees, agents, representatives, Affiliates, employee benefit plans, trustees, their successors and assigns harmless from and against and pay on behalf of or reimburse such party in respect of any Loss which any such party may suffer, sustain or become subject to, as a result of or relating to any Employee Benefit Plan (as defined in Section 5.16 hereof) that is not maintained or sponsored solely by one of the Companies; except that the Sellers shall not have any liability with respect to acts or omissions that occur with respect to transferred accounts after the consummation of the transfer described in Section 4.14. 9.3 Procedure. --------- (a) Notice of Claims. Any indemnified party seeking indemnification for any ---------------- Loss or potential Loss the ("Indemnified Party") shall give written notice to the applicable party from whom indemnification hereunder is being sought (the "Indemnifying Party"), specifying in detail (i) the representation and warranty or covenant or other agreement that is alleged to have been inaccurate or to have been breached, (ii) the basis for such allegation, including the provision of supporting documentation and (iii) if known, the aggregate amount of the Losses for which a claim is being made under this Article IX or, to the extent that such Losses are not known or have not been incurred at the time such claim is made, an estimate, to be prepared in good faith and accompanied by supporting documentation, of the aggregate potential amount of such Losses. Written notice to such Indemnifying Party of the existence of a Claim shall be given by the Indemnified Party promptly after the Indemnified Party first receives notice of the potential claim; provided, however, that the Indemnified Party shall not be -------- ------- foreclosed from seeking indemnification pursuant to this Article IX by any failure to provide such prompt notice of the existence of a Claim to the applicable Indemnifying Party except and only to the extent that such Indemnifying Party actually incurs an incremental out-of-pocket expense or otherwise has been materially damaged or prejudiced as a result of such delay. (b) Defense. Except as otherwise provided herein, in the case of any claim ------- asserted by a Person that is not a party to this Agreement (a "Third Party ----------- Claim"), an Indemnifying Party may elect to compromise or defend, at such - ----- Indemnifying Party's own expense and by such Indemnifying Party's own counsel (which counsel shall be reasonably satisfactory to the Indemnified Party), any Third Party Claim. If an Indemnifying Party elects to compromise or -51- defend such Third Party Claim, it shall promptly notify the Indemnified Party and any other Indemnifying Parties of its intent to do so, and the Indemnified Party shall cooperate, at the expense of the applicable Indemnifying Party or Indemnifying Parties, in the compromise of, or defense against, such Third Party Claim. For so long as no Indemnifying Party elects to compromise or defend against the Third party Claim, fails to notify the Indemnified Party of its election to do so, or otherwise abandons the defense of such Third Party Claim, (i) the Indemnified Party may pay (without prejudice of any of its rights as against any applicable Indemnifying Party), compromise or defend such Third Party Claim (until such defense is assumed by an applicable Indemnifying Party) and (ii) the costs and expenses of the Indemnified Party incurred in connection therewith shall be indemnifiable by the applicable Indemnifying Party or Indemnifying Parties pursuant to the terms of this Agreement. Notwithstanding anything to the contrary contained herein, in connection with any Third Party Claim in which the Indemnified Party shall reasonably conclude, based upon the written advice of its counsel, that (iii) there is a conflict of interest between an applicable Indemnifying Party and the Indemnified Party in the conduct of the defense of such Third Party Claim or (iv) there are specific defenses available to the Indemnified Party which are different from or additional to those available to an applicable Indemnifying Party and which could be materially adverse to such Indemnifying Party, then the Indemnified Party shall have the right to assume and direct the defense of such Third Party Claim. In such an event, the applicable Indemnifying Party or Indemnifying Parties shall pay the reasonable fees and disbursements of their own counsel and one counsel to all the Indemnified Parties. Notwithstanding the foregoing, the Indemnifying Party shall not have the right to assume control of such defense and shall pay the fees and expenses of counsel retained by the Indemnified Party, if the claim over which the Indemnifying Party seeks to assume control (i) seeks non-monetary relief, (ii) involves criminal or quasi-criminal allegations, or (iii) involves a claim which, upon petition by the Indemnified Party, the appropriate court rules that the Indemnifying Party failed or is failing to vigorously prosecute or defend. In any event, except as otherwise provided herein, any applicable Indemnified Party and any Indemnifying Party that has any liability with respect to such claim may each participate, at its own expense, in the defense of such Third Party Claim without, in the case of such Indemnified Party, any right to control such defense. If an Indemnifying Party chooses to defend any claim, the Indemnified Party shall make available to such Indemnifying Party any personnel or any books, records or other documents within its control that are reasonably necessary or appropriate for such defense, subject to the receipt of appropriate confidentiality agreements. 9.4 Exclusive Remedy. The indemnification provisions set forth in this ---------------- Article IX shall be the exclusive remedy following and subject to the Closing for any breaches or alleged breaches of any representation, warranty or covenant contained in this Agreement or any Transaction Document, except for breaches of any covenant or agreement contained herein or in any Transaction Document which by its terms is required to be performed after the Closing. 9.5 Net Recovery. The amount to which an Indemnified Party may become ------------ entitled under this Article IX shall be net of any recovery (whether by way of payment, discount, credit, set-off, tax benefit, counterclaim or otherwise) received from a third party (including any insurer or taxing authority) in respect of such claim. If any such recovery shall be received by an Indemnified Party after payment by an Indemnifying Party of an amount in respect of a claim -52- which did not take such recovery into account, the amount of any such recovery, less all reasonable costs, charges and expenses incurred by the relevant Indemnified Party in obtaining such recovery from the third party, shall be repaid by the relevant Indemnified Party to the relevant Indemnifying Party promptly upon the receipt thereof from the third party. 9.6 Right of Off-Set/Set-Off. To the extent it is determined that the ------------------------ Purchaser has an indemnifiable Loss under Section 9.2, and subject to the limitations contained in Section 9.2(b), Purchaser shall have the right to off-set or set-off any indemnification payment from a Seller to which it is entitled pursuant to this Article IX against any other payment to be made by Purchaser to such Seller, whether pursuant to this Agreement or otherwise. No permitted exercise by Purchaser of such right of off-set or set-off shall constitute a default in the payment of any amount against which such off-set or set-off is made. 9.7 Adjustment to Purchase Price. Amounts paid to or on behalf of the ---------------------------- Sellers or the Purchaser as indemnification shall be treated as adjustments to the Purchase Price for Tax purposes. ARTICLE X ADDITIONAL AGREEMENTS --------------------- 10.1 Tax Matters. The following provisions shall govern the allocation of ----------- responsibility as between the Purchaser and Old Mutual for certain tax matters following the Closing Date: (a) Tax Periods Ending on or Before the Closing Date. Old Mutual shall ------------------------------------------------ prepare or cause to be prepared all Tax Returns for each of the Companies for all periods ending on or prior to the Closing Date which are filed after the Closing Date. Old Mutual shall pay all Taxes attributable to the income earned during Tax periods ending on or before the Closing Date to the extent such Taxes are not reflected in the reserve for Tax Liabilities (rather than any reserve for deferred Taxes established to reflect timing difference between book and Tax income) shown on the face of the estimated Closing Balance Sheet (rather than in any notes thereto) and the Purchaser shall pay or cause the Companies to pay any other amounts due and owning. The Companies will furnish Tax information to Old Mutual for inclusion in Old Mutual's federal consolidated income Tax Return for the period which includes the Closing Date in accordance with the Companies' past custom and practice. Old Mutual will allow the Purchaser an opportunity to review and comment upon such Tax Returns (including any amended returns) to the extent that they relate to the Companies at least thirty (30) days in advance of the proposed filing thereof. Old Mutual will take no position on such Tax Returns that relate to the Companies that would adversely affect the Companies after the Closing Date unless such position would be reasonable in the case of a Person that owned the Companies both before and after the Closing Date. The income of the Companies will be apportioned to the period up to and including the Closing Date and the period after the Closing Date by closing the books of the Companies as of the end of the Closing Date. After the Closing, the Companies shall cooperate in the preparation, execution (to the extent required) and filing of any such return. -53- (b) Tax Periods Beginning Before and Ending After the Closing Date. With -------------------------------------------------------------- the assistance of and subject to review by Old Mutual, the Purchaser shall prepare or cause to be prepared and file or cause to be filed any Tax Returns for each of the Companies for Tax periods which begin before the Closing Date and end after the Closing Date. Old Mutual shall pay to the Purchaser within fifteen (15) days of the date on which Taxes are paid with respect to such periods an amount equal to the portion of such Taxes which relates to the portion of such Taxable period ending on the Closing Date to the extent the amounts of such Taxes are not utilized in determining the Actual Net Tangible Assets. For purposes of this Section, in the case of any Taxes that are imposed on a periodic basis and are payable for a Taxable period that includes (but does not end on) the Closing Date, the portion of such Taxes which relates to the portion of such Taxable period ending on the Closing Date shall (i) in the case of any Taxes other than Taxes based upon or related to income, be deemed to be the amount of such Tax for the entire Taxable period multiplied by a fraction the numerator of which is the number of days in the Taxable period ending on the Closing Date and the denominator of which is the number of days in the entire Taxable period, and (ii) in the case of any Tax based upon or related to income be deemed equal to the amount which would be payable if the relevant Taxable period ended on the Closing Date. All determinations necessary to give effect to the foregoing allocations shall be made in a manner consistent with prior practice of the applicable Company. (c) Section 338(h)(10) Election. Old Mutual will join with the Purchaser in --------------------------- making an election under Section 338(h)(10) of the Code (and any corresponding elections under state, local, or foreign tax law) with respect to the purchase and sale of the Common Stock hereunder. Old Mutual will pay any Tax attributable to the making of such election and will indemnify the Purchaser and the Companies against any Adverse Consequences arising out of any failure to pay such Tax. Old Mutual will also pay any state, local, or foreign Tax (and indemnify the Purchaser and the Companies against any Adverse Consequences arising out of any failure to pay such Tax) attributable to an election under state, local, or foreign law similar to the election available under Section 338(g) of the Code (or which results from the making of an election under Section 338(g) of the Code) with respect to the purchase and sale of the Common Stock hereunder. The Parties agree that the Purchase Price and the Liabilities of the Companies (plus other relevant items including payments under the Purchase Agreement) will be allocated to the assets of the Companies for purposes of this election as proposed by Purchaser and approved by Old Mutual (which approval will not be unreasonably withheld). The Purchaser, the Companies, and Old Mutual will file all Tax Returns (including amended returns and claims for refund) and information reports in a manner consistent with such allocation. (d) Cooperation on Tax Matters. -------------------------- (i) The Purchaser and Old Mutual shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other Party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Old Mutual -54- agrees to retain all books and records with respect to Tax matters and pertinent to Companies relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by the Purchaser, any extensions thereof of the respective taxable periods), and to abide by all record retention agreements entered into with any taxing authority. (ii) The Purchaser and Old Mutual further agree, upon request, to use commercially reasonable efforts to obtain any certificate or other document from any governmental authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby). (e) Certain Taxes. All transfer, documentary, sales, use, stamp, ------------- registration and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement, shall be paid by Old Mutual when due, and Old Mutual will, at its own expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other Taxes and fees, and, if required by applicable law. The Purchaser will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation. (f) Tax Sharing Agreements. All tax-sharing agreements or similar ---------------------- agreements with respect to any of the Companies shall be terminated as of the Closing Date and, after the Closing Date, no Company shall be bound thereby or have any liability thereunder (whether the current year, a future year, or a past year). (g) Real Property Holding Corporation. Old Mutual will furnish the --------------------------------- Purchaser prior to the Closing a certification pursuant to Treasury Regulation ss. 1.897-2 to the effect that Old Mutual is not a "United States real property holding corporation" as defined in Section 897 of the Code. (h) Audits. Old Mutual will allow the Companies and their advisors to ------ participate in any audits of Old Mutual's consolidated federal income Tax Returns to the extent that such returns relate to the Companies and such audit could result in adjustments affecting periods for which the Purchaser is responsible. In such event, Old Mutual will not settle any such audit in a manner which would adversely affect the Companies after the Closing Date without the prior written consent of the Purchaser, which consent shall not unreasonably be withheld. (i) Retention of Carryovers. Old Mutual will not elect to retain any net ----------------------- operating loss carryovers or capital loss carryovers of the Companies under Reg.ss.1.1502-20(g). 10.2 Press Releases and Announcements. Prior to the Closing Date, no press -------------------------------- releases related to this Agreement and the transactions contemplated herein, or other announcements to the employees, customers or suppliers of any of the Companies shall be issued without the mutual approval of all Parties, except for any public disclosure which any Party in good faith believes is required by law or regulation; provided that the Purchaser shall be entitled -55- to (a) disclose the transactions contemplated hereby in any document filed with the SEC or the OCC, and (b) include a detailed description of the Companies in such filing. After the Closing Date, no press releases related to this Agreement and the transactions contemplated herein, or other announcements to the employees, customers or suppliers of any of the Companies shall be issued without the Purchaser's consent (which shall not be unreasonably withheld). 10.3 Further Transfers. The Sellers shall execute and deliver such further ----------------- instruments of conveyance and transfer and take such additional action as the Purchaser may reasonably request to effect, consummate, confirm or evidence the transfer to the Purchaser of the Common Stock and any other transactions contemplated hereby. 10.4 Expenses. Except as otherwise provided herein, the Sellers and the -------- Purchaser shall pay all of their own fees, costs and expenses (including, without limitation, fees, costs and expenses of legal counsel, investment bankers, brokers or other representatives and consultants and appraisal fees, costs and expenses) incurred in connection with the negotiation of this Agreement and the other agreements contemplated hereby, the performance of its obligations hereunder and thereunder, and the consummation of the transactions contemplated hereby and thereby. 10.5 Exclusivity. Until this Agreement is terminated by its terms Old ----------- Mutual may not (and Old Mutual shall not cause or permit any Insider or agent or any other Person acting on behalf of Old Mutual to), (a) solicit, initiate or encourage the submission of any proposal or offer from any Person (including any of them) relating to any (i) liquidation, dissolution or recapitalization of; (ii) merger or consolidation with or into; (iii) acquisition or purchase of assets of or any equity interest in; or (iv) similar transaction or business combination involving any of the Companies, or (b) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any other Person to do or seek any of the foregoing. Old Mutual agrees that it will discontinue immediately (and will cause any Insider or agent or any other Person acting on behalf of Old Mutual to discontinue immediately) any negotiations or discussion with respect to any of the foregoing. Until this Agreement is terminated by its terms, Old Mutual shall notify the Purchaser immediately if any Person makes any proposal, offer, inquiry or contact with respect to any of the foregoing. 10.6 Books and Records. Unless otherwise consented to in writing by Old ----------------- Mutual and the Purchaser, the Purchaser and Old Mutual will not, for a period of seven (7) years following the date hereof, destroy, alter or otherwise dispose of any of the books and records of any of the Companies acquired by the Purchaser hereunder or retained by Old Mutual without first offering to surrender to the other Party such books and records or any portion thereof of which Old Mutual or the Purchaser may intend to destroy, alter or dispose. The Purchaser and Old Mutual will allow the other Party's representatives, attorneys and accountants access to such books and records, upon reasonable request during such Party's normal business hours, for the purpose of examining and copying the same in connection with any matter whether or not related to or arising out of this Agreement or the transactions contemplated hereby. -56- 10.7 Confidentiality and Non-Disclosure. ---------------------------------- (a) Old Mutual, for itself and its Affiliates, and the respective successors and assigns of Old Mutual and each such Affiliate, hereby covenants and agrees that all Company Confidential Information furnished to or known by Old Mutual or Holdings will be kept confidential, and will not be used or disclosed by Old Mutual or Holdings, or by the respective successors or assigns of Old Mutual or Holdings, in any manner whatsoever, other than with the prior expressed written consent of Purchaser. (b) In the event that any Party or its Affiliate is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Company Confidential Information, such Party shall notify the other Party promptly of the request or requirement so that such other Party may seek an appropriate protective order or waive compliance with the provisions of this Section 10.7. If, in the absence of a protective order or the receipt of a waiver hereunder, any Party is, on the advice of counsel, compelled to disclose any Company Confidential Information to any tribunal or else stand liable for contempt, such Party may disclose the Company Confidential Information to the tribunal; provided that such disclosing Party shall use commercially reasonable efforts to obtain, at the request of the other Party, an order or other assurance that confidential treatment shall be accorded to such portion of the Company Confidential Information required to be disclosed as the Party to whom such information relates shall designate. (c) Old Mutual covenants and agrees that it will not, nor will it cause, permit or allow any of its Affiliates to, conduct any business or enterprise involving investment advisory or trust services under any name like or similar to the name of any Company, as such name exists on the date hereof, or any name incorporating the name "Pell," "Rudman," "Rothschild" or "Sovereign" or any combination thereof or in combination with any other name or mark. 10.8 Guarantee. AMVESCAP guarantees the performance and payment of all of --------- Purchaser's covenants and obligations under this Agreement and the other Transaction Documents. 10.9 Personnel Changes. Purchaser agrees that it will not, in the operation ----------------- of the Companies during the two year period following the Closing Date, assign any managerial employee of the Companies to provide such employee's services, for any period of more than sixty (60) Business Days in any twelve (12) month period, to Purchaser or any Affiliate thereof or require any managerial employee of the Company to relocate to another office of the Companies, Purchaser or any Affiliate thereof, in either case without the consent of (a) all members of the Committee, and (b) such employee. 10.10 Disposition of Business of the Companies. If Purchaser shall, at any ----------------------------------------- time during the two (2) year period following the Closing Date, sell or otherwise dispose of the stock or any of the assets of any Company to any entity, other than an Affiliate of AMVESCAP and other than in a transaction in which all of the stock or substantially all of the assets of all of the Companies -57- are sold as a unit, for all purposes of the determinations of any payment due on any Anniversary Date occurring after the date of such sale or disposition (a) all revenues that would otherwise be includable in the determination of Anniversary Date Revenue with respect to the payment due on such Anniversary Date that were derived from, or are attributable to, the assets so disposed of, or to the Company or Companies whose stock is sold, and which revenues resulted from the operation of the business of such Company or Companies or the business transacted with such assets during the portion of the period with respect to which such Anniversary Date Revenues are being determined that occurred prior to the date of such sale or disposition, shall be excluded from the determination of Anniversary Date Revenues, and (b) there shall, in lieu of such excluded revenues, be included in the determination of such Anniversary Date Revenues an amount equal to (i) the net revenues (determined using the principles contained in the definition of Anniversary Date Revenues) derived from or attributable to the assets so disposed of or to the Company or Companies whose stock is sold during the calendar quarter ended next prior to the date of such sale or disposition, multiplied by (ii) four (4). ARTICLE XI MISCELLANEOUS ------------- 11.1 Amendment and Waiver. This Agreement may be amended and any provision -------------------- of this Agreement may be waived, provided that any such amendment or waiver shall be binding upon a Party only if such amendment or waiver is set forth in a writing executed by the Purchaser and Old Mutual. No course of dealing between or among any persons having any interest in this Agreement shall be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Party under or by reason of this Agreement. 11.2 Notices. All notices, demands and other communications given or ------- delivered under this Agreement shall be in writing and shall be personally delivered, mailed by first class mail, return receipt requested, delivered by express courier service, or telecopied (with hard copy to follow), and shall be effective upon receipt. Unless another address is specified in writing, such notices, demands or other communications shall be sent to the address or telecopy number indicated below: -58- Notice to Sellers: with a copy to: - ----------------- -------------- Attn: Joseph R. Ramrath, Esq. Terrence W. Mahoney, Esq. Old Mutual (US) Holdings, Inc. Hill & Barlow One International Place One International Place Boston, MA 02110 Boston, MA 02110 (T): (617) 330-8900 (T): (617) 428-3000 (F): (617) 330-1133 (F): (617) 428-3500 Mr. Edward I. Rudman Michael Davis, Esq. Pell Rudman & Co., Inc. Christopher Cabot, Esq. 100 Federal Street Sullivan & Worcester LLP Boston, MA 02110 One Post Office Square (T): (617) 337-9600 Boston, MA 02109 (F): (617) 350-7195 (T): (617) 338-2800 (F): (617) 338-2880 Notices to Purchaser: with a copy to: - -------------------- -------------- AMVESCAP PLC L. Neil Williams, Esq. 11 Devonshire Square AMVESCAP London EC2 M4YR 1315 Peachtree Street, NE United Kingdom Suite 500 Attn: Company Secretary Atlanta, GA 30309 (T): (404) 479-2889 (F): (404) 724-4280 Robert McCullough AMVESCAP 1315 Peachtree Street, NE Suite 500 Atlanta, GA 30309 (T): (404) 724-4251 (F): (404) 724-4280 Sidney J. Nurkin, Esq. Alston & Bird LLP One Atlantic Center 1201 West Peachtree Street Atlanta, GA 30309 (T): (404) 881-7260 (F): (404) 881-7777 -59- 11.3 Binding Agreement; Assignment. This Agreement and all of the ----------------------------- provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any Party without the prior written consent of the other Parties. 11.4 Severability. Whenever possible, each provision of this Agreement ------------ shall be interpreted in such manner as to be effective and valid under Applicable Law, but if any provision of this Agreement is held to be prohibited by or invalid under Applicable Law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement. 11.5 No Strict Construction. The language used in this Agreement shall be ---------------------- deemed to be the language chosen by the Parties to express their mutual intent. Each provision hereof has been subject to the mutual consultation, negotiation and agreement of the Parties, and there shall be no construction against any Party based on any presumption of that Party's involvement in the drafting thereof. 11.6 Captions. The captions used in this Agreement are for convenience of -------- reference only and do not constitute a part of this Agreement and shall not be deemed to limit, characterize or in any way affect any provision of this Agreement, and all provisions of this Agreement shall be enforced and construed as if no captions had been used in this Agreement. 11.7 Entire Agreement. This Agreement and the other Transaction Documents ---------------- contain the entire agreement between the Parties and supersede any prior understandings, agreements or representations by or between the Parties, written or oral, which may have related to the subject matter hereof in any way. 11.8 Counterparts. This Agreement may be executed in multiple counterparts, ------------ each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. 11.9 Governing Law. All questions concerning the construction, validity and ------------- interpretation of this Agreement shall be governed by and construed in accordance with the domestic laws of the Commonwealth of Massachusetts, without giving effect to any choice of law or conflict of law provision (whether of the Commonwealth of Massachusetts or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Massachusetts. 11.10 Parties in Interest. Nothing in this Agreement, express or implied, -------------------- is intended to confer on any person other than the Parties and their respective successors and assigns any rights or remedies under or by virtue of this Agreement. -60- IN WITNESS WHEREOF, the Parties have executed this Stock Purchase Agreement as of the date first written above. OLD MUTUAL (US) HOLDINGS INC. By: /s/ Franklin H. Kettle ---------------------- Name: Franklin H. Kettle Title: Senior Vice President UNITED ASSET MANAGEMENT HOLDINGS, INC. By: /s/ Joseph R. Ramrath --------------------- Name: Joseph R. Ramrath Title: Vice President OLD MUTUAL PLC By: /s/ M. J. Levett ---------------- Name: M. J. Levett Title: Chairman and Chief Executive INVESCO NORTH AMERICAN HOLDINGS, INC. By: /s/ Neil Williams ----------------- Name: Neil Williams Title: Secretary and General Counsel AMVESCAP PLC By: /s/ Robert F. McCullough ------------------------ Name: Robert F. McCullough Title: CFO -61- EX-4.12 10 dex412.txt AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT Exhibit 4.12 AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT AMENDMENT NO. 1 made this 2d day of August, 2001 to the certain STOCK PURCHASE AGREEMENT dated April 26, 2001 (the "Agreement") by and between, on the one hand, AMVESCAP PLC and INVESCO NORTH AMERICAN HOLDINGS, INC. and, on the other hand, OLD MUTUAL PLC, OLD MUTUAL (US) HOLDINGS INC., AND UNITED ASSET MANAGEMENT HOLDINGS, INC. WHEREAS the parties to the Agreement wish to amend such Agreement as set forth herein; WHEREAS, United Asset Management Holdings, Inc. has been merged with and into Old Mutual (US) Holdings Inc; NOW, THEREFORE, in consideration of the premises, the parties hereto agree as follows: 1. The definition of "Net Tangible Assets" is hereby amended by deleting the words that appear in clause (ii)(d) thereof and substituting the following for such deleted words: "(d) an accrual of $600,000 for the G Family Trust matter disclosed on revised Schedule 5.11, #54 and an accrual of $62,500 for the Pelgrin matter disclosed on revised Schedule 5.11, #53, "and a corresponding reduction in the accrual for incentive compensation under clause (b) above pursuant to the Revenue Sharing Agreement for the G Family Trust matter." 2. The following is hereby added to the definition of "Anniversary Date Revenue": Anniversary Date Revenues for any twelve month period for which such revenues are computed shall include revenues received by any Affiliate of Purchaser in such period pursuant to any advisory agreement, whether or not interim, between such Affiliate of Purchaser and the Mid-Cap Portfolio (including any successor thereto). 3. The second sentence in Section 2.3(b)(i) of the Agreement is amended to read as follows: With respect to the Mid-Cap Portfolio, the approval by the board of directors of UAM Funds, Inc. prior to Closing of an interim advisory contract pursuant to Rule 15a-4 of the 1940 Act with an Affiliate of Purchaser shall not be deemed to be a termination of the advisory relationship of the Companies with the Mid-Cap Portfolio.8 4. The Agreement is hereby amended by replacing Section 2.4(b) to read in its entirety as follows: (b) Payment of any amounts payable under this Section 2.4 shall be made by wire transfer of immediately available funds either to (i) an account of Old Mutual designated in writing delivered to the Buyer or (ii) directly to PRCI, on the Sellers' behalf, in accordance with the Signing Bonus Plan. 5. The Agreement is hereby further amended by replacing the first sentence of Section 2.7(a) with the following sentence: "The closing of the transaction contemplated by this Agreement (the "Closing") shall take place at the offices ------- of Hill & Barlow, One International Place, Boston, Massachusetts 02110, commencing at 10:00 a.m. on August 2, 2001." 6. Section 3.1(g) of the Agreement is amended to read as follows: (g) Old Mutual shall have obtained from each holder of a Unit Award the executed written agreement of such holder to surrender all Unit Awards held by such holder for redemption upon payment to such holder of the redemption price therefor (each a "Redemption Agreement" and collectively, the "Redemption Agreements"), the originals of all such Redemption Agreements shall have been delivered by Old Mutual to Christopher Cabot at Sullivan & Worcester ("S&W") to be delivered to Purchaser as provided in Section 4.15 below, and Old Mutual shall have delivered to Purchaser copies of each such Redemption Agreement or other evidence reasonably satisfactory to Purchaser that all holders of outstanding Unit Awards have agreed to surrender the Unit Awards respectively held by such holders for redemption. 7. Section 4.12(b) of the Agreement is amended to read in its entirety as follows: (b) Purchaser agrees that it will, effective from and after the Closing, cause Pell Rudman to implement the Restated Pell Rudman Signing Bonus Plan (the "Signing Bonus Plan") in the form of Exhibit A to this --------- Amendment No. 1. Parent and Old Mutual shall be solely responsible for paying, and shall pay in accordance with Pell Rudman's - 2 - direction, as and when due in accordance with and subject to the terms of the Signing Bonus Plan, to Pell Rudman (or at Pell Rudman's further direction, to Purchaser or an Affiliate of Purchaser that will make payment of the bonus amounts payable under the Signing Bonus Plan) all amounts that are or become payable by Parent and Old Mutual under the Signing Bonus Plan (including, without limitation, the Aggregate Closing Date Bonus Pool, as such term is defined in the Signing Bonus Plan), it being understood that any payments so made by Parent and Old Mutual shall not be deemed a reduction in or return of the Purchase Price payable hereunder for financial accounting purposes and that all such payments shall be deemed made to and for the benefit of Pell Rudman under the terms of and in accordance with the Signing Bonus Plan. Purchaser (or its Affiliate) will, as soon as practical following its receipt of such payments, and acting solely in the capacity of a payroll paying agent for Pell Rudman and as an accommodation to Parent, Old Mutual and Pell Rudman, make payment to the participants in the Signing Bonus Plan of the Closing Date Bonuses; provided, however, that subject to receipt by Purchaser on or before August 7, 2001 of the Aggregate Closing Date Bonus Pool in immediately available funds and the receipt by Purchaser prior to August 2, 2001 of satisfactory payroll payment information in electronic form compatible with Purchaser's payroll payment systems with respect to all participants who are to receive Closing Date Bonus payments, Purchaser shall cause the Closing Date Bonuses to be paid on August 8, 2001. 8. Section 4.15 of the Agreement is amended to read as follows: 4.15 Redemption of Unit Awards. On the Closing Date, Old Mutual will ------------------------- cause its counsel to deliver to Christopher Cabot at S&W, the original of each executed Redemption Agreement and shall pay to Pell Rudman, by wire transfer to an account designated by Pell Rudman, an amount equal to the aggregate amount payable, plus the aggregate amount of the employers' portion of any FICA, Medicare, Social Security or other like taxes with respect to such payments, under all such Redemption Agreements in redemption of all Unit Awards. Pursuant to a separate Letter Agreement, S&W has agreed to deliver all such Redemption Agreements to Pell Rudman promptly upon receipt of notice of payment by Pell Rudman of the amounts payable thereunder. Not later than August 5, 2001, Old Mutual will deliver to Purchaser such information as Purchaser shall reasonably require in - 3 - order to pay the amounts payable under the Redemption Agreements. On August 15, 2001, and subject to the contemporaneous delivery of all such Redemption Agreements and the timely receipt of the payment information described in the foregoing sentence, Purchaser, as agent for Pell Rudman, shall pay to each holder of a Unit Award or Unit Awards the amount payable to such holder under and in respect of the Redemption Agreement respectively executed by such holder, all such Redemption Agreements shall be deemed delivered and effective, and all such Unit Awards shall thereupon be deemed redeemed and no longer issued or outstanding. 9. Article IV of the Agreement is amended by adding thereto Section 4.18, which shall read in its entirety as follows: 4.18 Mid-Cap Portfolio. Purchaser and Parent covenant that they will use ----------------- all commercially reasonable efforts to assure that an affiliate of Purchaser maintains a fee-generating advisory relationship with the Mid-Cap Portfolio through the Second Anniversary Date. 10. Section 9.2 (a)(i) of the Agreement is amended by inserting immediately following the words "Section 5.19" the following language: "or Item ------------ 7 of Schedule 5.7." ------------ 11. Section 9.2(a) of the Agreement is amended further by deleting the word "or" at the end of clause (iii) thereof, replacing the "." at the end of clause (iv) thereof with ";" and adding the following: "(v) the Pelgrin matter referred to in revised Schedule 5.11, #53 and the G Family Trust matter referred to in revised Schedule 5.11, #54 (but in each case only to the extent the aggregate Loss with respect to such matters exceed any amount paid or accrued and reflected in the computation of Actual Net Tangible Assets). 12. All other provisions of the Agreement are unchanged. IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be executed as of the date first written above. [SIGNATURES CONTINUE ON NEXT PAGE] - 4 - [SIGNATURE PAGE TO AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT] AMVESCAP PLC By: /s/ Robert F. McCullough --------------------------------- Title: CFO INVESCO NORTH AMERICAN HOLDINGS, INC. By: /s/ Neil Williams --------------------------------- Title: General Counsel & Secretary OLD MUTUAL (US) HOLDINGS INC. By: /s/ Franklin H. Kettle --------------------------------- Title: - 5 - EX-4.13 11 dex413.txt GUARANTY DATED JUNE 18, 2001 EXHIBIT 4.13 GUARANTY GUARANTY dated June 18, 2001 made by INVESCO, Inc., a Delaware corporation, INVESCO North American Holdings, Inc., a Delaware corporation, A I M Management Group Inc., a Delaware corporation, and A I M Advisors, Inc., a Delaware corporation (collectively, the "Guarantors"), in favor of the Lenders ---------- (as defined in the Credit Agreement referred to below). PRELIMINARY STATEMENT. The Lenders, Citibank, N.A. and Bank of America, N.A., as Managing Agents, and Bank of America, N.A., as Funding Agent (the Managing Agents and the Funding Agent are collectively, the "Agents") are ------ parties to a Five Year Credit Agreement dated as of June 18, 2001 (said Agreement, as it may hereafter be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", the terms defined therein are ---------------- used herein as therein defined) with AMVESCAP PLC, a company organized under the laws of England (the "Borrower"). Each Guarantor may receive a portion of the -------- proceeds of the Advances under the Credit Agreement and will derive substantial direct and indirect benefit from the transactions contemplated by the Credit Agreement. It is a condition precedent to the making of Advances by the Lenders under the Credit Agreement that the Guarantors shall have executed and delivered this Guaranty. NOW, THEREFORE, in consideration of the premises and in order to induce the Lenders to make Advances under the Credit Agreement from time to time, each of the Guarantors hereby agrees as follows: Section 1. Guaranty; Limitation of Liability. (a) Each Guarantor --------------------------------- hereby unconditionally and irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of each other Loan Party now or hereafter existing under the Loan Documents, whether for principal, interest, fees, expenses or otherwise (such obligations being the "Guaranteed Obligations"), and agrees to pay any and all expenses ---------------------- (including reasonable counsel fees and expenses) incurred by any Agent or any Lender in enforcing any rights under this Guaranty. Without limiting the generality of the foregoing, each Guarantor's liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by a Loan Party to the Agents or the Lenders under the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such Loan Party. (b) Each Guarantor, and by its acceptance of this Guaranty, each Agent and each Lender, hereby confirms that it is the intention of all such Persons that this Guaranty and the obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Guaranty and the obligations of each Guarantor hereunder. To effectuate the foregoing intention, the Agents, the Lenders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the obligations of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance. (c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to any Agent or any Lender under this Guaranty, such Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other Guarantor so as to maximize the aggregate amount paid to the Agents and the Lenders under or in respect of the Loan Documents. Section 2. Guaranty Absolute. Each Guarantor guarantees that the ----------------- Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Agent or any Lender with respect thereto. The obligations of each Guarantor under this Guaranty are independent of the Guaranteed Obligations or any other obligations of any other Loan Party under the Loan Documents, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Borrower or any other Loan Party or whether the Borrower or any other Loan Party is joined in any such action or actions. The liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following: (a) any lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto; (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other obligations of any other Loan Party under the Loan Documents, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to the Borrower or any of its Subsidiaries or otherwise; (c) any taking, exchange, release or non-perfection of any collateral, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations; (d) any manner of application of collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any collateral for all or any of the Guaranteed Obligations or any other obligations of any other Loan Party under the Loan Documents or any other assets of the Borrower or any of its Subsidiaries; -2- (e) any change, restructuring or termination of the corporate structure or existence of the Borrower or any of its Subsidiaries; (f) any failure of any Lender to disclose to the Borrower or any of the Guarantors any information relating to the financial condition, operations, properties or prospects of any other Loan Party now or in the future known to any Lender (each Guarantor waiving any duty on the part of the Lenders to disclose such information); or (g) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by any Agent or any Lender that might otherwise constitute a defense available to, or a discharge of, the Borrower, any Guarantor or any other guarantor or surety. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any Lender or any other Person upon the insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party or otherwise, all as though such payment had not been made. Section 3. Waivers and Acknowledgments. (a) Each Guarantor hereby --------------------------- waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Agents or any other Lender protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against the Borrower or any other Person or any collateral. (b) Each Guarantor hereby waives any right to revoke this Guaranty, and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future. (c) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Loan Documents and that the waivers set forth in this Section 3 are knowingly made in contemplation of such benefits. Section 4. Subrogation. Each Guarantor will not exercise any rights ----------- that it may now or hereafter acquire against the Borrower or any other insider guarantor that arise from the existence, payment, performance or enforcement of such Guarantor's obligations under this Guaranty or any other Loan Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Agent or any Lender against any Loan Party or any other insider guarantor or any collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Loan Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, -3- unless and until all of the obligations and all other amounts payable under this Guaranty shall have been paid in full in cash and the Commitments shall have expired or terminated. If any amount shall be paid to any such Guarantor in violation of the preceding sentence at any time prior to the later of the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty and the Termination Date, such amount shall be held in trust for the benefit of the Agents and the Lenders and shall forthwith be paid to the Funding Agent to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents, or to be held as collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (i) any Guarantor shall make payment to any Agent or any other Lender of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall be paid in full in cash and (iii) the Termination Date shall have occurred, the Agents and the Lenders will, at such Guarantor's request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor. Section 5. Payments Free and Clear of Taxes, Etc. (a) Except as ------------------------------------- otherwise required by law, any and all payments by any Guarantor hereunder shall be made, in accordance with Section 2.13 of the Credit Agreement, free and clear of and without deduction for any and all Indemnifiable Taxes. If any Guarantor shall be required by law to deduct any Indemnifiable Taxes from or in respect of any sum payable hereunder to any Lender or any Agent or, if any Agent shall be required by law to deduct any Indemnifiable Taxes from or in respect of any sum paid or payable hereunder to any Lender, (i) the sum payable shall be increased as may be necessary so that after making all required deductions for Indemnifiable Taxes (including deductions, whether by such Guarantor or any Agent, applicable to additional sums payable under this Section) such Lender or such Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Guarantor (or, as the case may be and as required by applicable law, any Agent) shall make such deductions and (iii) such Guarantor (or, as the case may be and as required by applicable law, any Agent) shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) In addition, each Guarantor shall pay any present or future Other Taxes. (c) Each Guarantor shall indemnify each Lender and each Agent for the full amount of Indemnifiable Taxes or Other Taxes imposed on or paid by such Lender or such Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Lender or such agent (as the case may be) makes written demand therefor. -4- (d) The obligations of each Guarantor under this Section are subject in all respects to the limitations, qualifications and satisfaction of conditions set forth in Section 2.14 of the Credit Agreement. Without limitation of the foregoing, the Lenders are subject to the obligations set forth in Section 2.14 of the Credit Agreement to the same extent as if set forth herein. Section 6. Representations and Warranties. Each Guarantor hereby ------------------------------ represents and warrants as follows: (a) There are no conditions precedent to the effectiveness of this Guaranty that have not been satisfied or waived. (b) Each Guarantor has, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Guaranty, and such Guarantor has established adequate means of obtaining from any other Loan Parties on a continuing basis information pertaining to, and is now and on a continuing basis will be completely familiar with, the financial condition, operations, properties and prospects of such other Loan Parties. Section 7. Amendments, Etc. (a) Except as provided in subsection (b) ---------------- to this Section 9, no amendment or waiver of any provision of this Guaranty and no consent to any departure by the Guarantors therefrom shall in any event be effective unless the same shall be in writing and signed by the Agents and the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, -------- however, that no amendment, waiver or consent shall, unless in writing and - ------- signed by all of the Lenders, (1) limit the liability of any of the Guarantors hereunder, (2) postpone any date fixed for payment hereunder or (3) change the number of Lenders required to take any action hereunder. (b) Upon the execution and delivery by any Person of an assumption of guaranty in substantially the form of Exhibit 1 hereto (each, an "Assumption of Guaranty"), such Person shall be and become a Guarantor ---------------------- hereunder and each reference in this Guaranty to "Guarantors" shall also ---------- mean and be a reference to such Additional Guarantor. Section 8. Notices, Etc. All notices and other communications provided ------------- for hereunder shall be in writing (including telegraphic, telecopy or telex communication) and mailed, telegraphed, telecopied, telexed or delivered to it, if to any Guarantor, addressed to it at the address of AMVESCAP PLC specified in the Credit Agreement, if to any Agent or any Lender, at their addresses specified in the Credit Agreement, or as to any party at such other address as shall be designated by such party in a written notice to each other party. All such -5- notices and other communications shall, when mailed, telegraphed, telecopied or telexed, be effective when deposited in the mails, delivered to the telegraph company, transmitted by telecopier or confirmed by telex answerback, respectively. Section 9. No Waiver; Remedies. No failure on the part of any Agent or ------------------- any Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. Section 10. Right of Set-off. Upon the occurrence and during the ---------------- continuance of any Event of Default, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or such Affiliate to or for the credit or the account of the Guarantors against any and all of the obligations of the Guarantors now or hereafter existing under this Guaranty, whether or not such Lender shall have made any demand under this Guaranty and although such obligations may be unmatured. Each Lender agrees promptly to notify the Guarantors after any such set-off and application, provided that the failure to -------- give such notice shall not affect the validity of such set-off and application. The rights of each Lender and its respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Lender and its respective Affiliates may have. Section 11. Indemnification. Without limitation on any other --------------- obligations of the Guarantors or remedies of the Lenders under this Guaranty, each Guarantor shall, to the fullest extent permitted by law, indemnify, defend and save and hold harmless each Lender from and against, and shall pay on demand, any and all losses, liabilities, damages, costs, expenses and charges (including the fees and disbursements of such Lender's legal counsel) suffered or incurred by such Lender as a result of any failure of any Guaranteed Obligations to be the legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their terms. Section 12. Continuing Guaranty; Assignments under the Credit ------------------------------------------------- Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full - --------- force and effect until the later of the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty and the Termination Date, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Agents and the Lenders and their successors, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Lender may assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement (including, without limitation, all or any portion of its Commitment, the Advances owing to it and the Note or Notes held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such -6- Lender herein or otherwise, in each case as and to the extent provided in Section 8.07 of the Credit Agreement. Section 13. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. ------------------------------------------------------- (a) This Guaranty shall be governed by, and construed in accordance with, the laws of the State of New York. (b) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Guaranty or any of the other Loan Documents to which it is or is to be a party, or for recognition or enforcement of any judgment, and each Guarantor hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court. Each Guarantor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Guaranty shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Guaranty or any of the other Loan Documents to which it is or is to be a party in the courts of any jurisdiction. (c) Each Guarantor irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Guaranty or any of the other Loan Documents to which it is or is to be a party in any New York State or federal court. Each Guarantor hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. -7- (d) Each Guarantor hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to any of the Loan Documents, the transactions contemplated thereby or the actions of any Agent or any Lender in the negotiation, administration, performance or enforcement thereof. IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. INVESCO, INC. By /s/ Luis Aguilar ------------------------------ Title: Executive Vice President INVESCO NORTH AMERICAN HOLDINGS, INC. By /s/ Neil Williams ------------------------------ Title: Secretary A I M MANAGEMENT GROUP INC. By /s/ J. Abbott Sprague ------------------------------ Title: Senior Vice President A I M ADVISORS, INC. By /s/ J. Abbott Sprague ------------------------------ Title: Senior Vice President -8- EXHIBIT 1 - ASSUMPTION OF GUARANTY ASSUMPTION OF GUARANTY ---------------------- , 200 ---------- - Citibank, N.A., and Bank of America, N.A. as Managing Agents to the Credit Agreement Credit Agreement dated as of June 18, 2001 (as amended or otherwise modified from time to time, the "Credit Agreement") among AMVESCAP ---------------- PLC, a company organized under the laws of England (the "Borrower"), -------- the lenders and the co-agents listed on the signature pages thereof, Citibank, N.A. and Bank of America, N.A., as managing agents, and Bank of America, N.A., as funding agent. Ladies and Gentlemen: Reference is made to the above-captioned Credit Agreement and to the Guaranty referred to therein (such Guaranty, as in effect on the date hereof and as it may hereafter be amended, modified or supplemented from time to time, being the "Guaranty"). The terms defined in the Guaranty and not otherwise -------- defined herein are used herein as therein defined. The undersigned hereby unconditionally guarantees the punctual payment when due, whether at stated maturity by acceleration or otherwise, of all of the Guaranteed Obligations and agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Agents or the Lenders, on the terms and subject to the limitations set forth in the Guaranty as if it were an original party thereto. On and after the date hereof, each reference in the Guaranty to "Guarantor" shall mean and be a reference to the undersigned. The undersigned hereby agrees to be bound as a Guarantor by all of the terms and provisions of the Guaranty to the same extent as each other Guarantor and hereby represents and warrants as follows: (a) The undersigned (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) is duly qualified and in good standing as a foreign corporation in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed is not reasonably likely to have a Material Adverse Effect and (iii) has all requisite corporate power and authority (including, without limitation, all governmental licenses, permits and other approvals) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted. (b) The execution, delivery and performance by the undersigned of this Assumption of Guaranty and each other Loan Document to which the undersigned is or is to be a party and the performance by the undersigned of its obligations under the Guaranty, as amended and supplemented by this Assumption of Guaranty, and each such other Loan Document are within the corporate powers of the undersigned, have been duly authorized by all necessary corporate action, and do not (i) contravene the undersigned's charter or bylaws, (ii) violate any law (including, without limitation, the Securities Exchange Act of 1934), rule, regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting the undersigned, any of its Subsidiaries or any of their properties or (iv) result in or require the creation or imposition of any Lien upon or with respect to any of the properties of the undersigned or any of its Subsidiaries. Neither the undersigned nor any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which is reasonably likely to have a Material Adverse Effect. (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for (i) the due execution, delivery, recordation, filing or performance by the undersigned of this Assumption of Guaranty or any other Loan Document to which the undersigned is or is to be a party, or for the performance by the undersigned of the Guaranty, as amended and supplemented by this Assumption of Guaranty, and each such other Loan Document or (ii) the exercise by the Agents or any Lender of its rights under the Guaranty, as amended and supplemented by this Assumption of Guaranty, except for the authorizations, approvals, actions, notices and filings listed on Schedule 1 hereto, all of which have been duly obtained, taken, given or made and are in full force and effect. (d) This Assumption of Guaranty has been, and each other Loan Document to which the undersigned is or is to be a party when delivered pursuant to the Credit Agreement will have been, duly executed and delivered by the undersigned. This Assumption of Guaranty and the Guaranty as amended and supplemented hereby are, and -2- each other Loan Document to which the undersigned is or is to be a party when delivered pursuant to the Credit Agreement will be, the legal, valid and binding obligations of the undersigned, enforceable against the undersigned in accordance with its terms. THIS ASSUMPTION OF GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. Very truly yours, [NAME OF ADDITIONAL GUARANTOR] By ------------------------------- Name: Title: -3- EXECUTION COPY GUARANTY Dated June 18, 2001 From INVESCO, INC., INVESCO NORTH AMERICAN HOLDINGS, INC. A I M MANAGEMENT GROUP INC. and A I M ADVISORS, INC. as Guarantors -- ---------- in favor of THE LENDERS REFERRED TO IN THE CREDIT AGREEMENT REFERRED TO HEREIN -4- EXHIBIT E FORM OF GUARANTY FORM OF GUARANTY Dated June 18, 2001 From INVESCO, INC., INVESCO NORTH AMERICAN HOLDINGS, INC. A I M MANAGEMENT GROUP INC. and A I M ADVISORS, INC. as Guarantors -- ---------- in favor of THE LENDERS REFERRED TO IN THE CREDIT AGREEMENT REFERRED TO HEREIN T A B L E O F C O N T E N T S - - - - - - - - - - - - - - - Section Page 1. Guaranty; Limitation of Liability 1 --------------------------------- 2. Guaranty Absolute 2 ----------------- 3. Waivers and Acknowledgments 3 --------------------------- 4. Subrogation 3 ----------- 5. Payments Free and Clear of Taxes, Etc. 4 ------------------------------------- 6. Representations and Warranties 5 ------------------------------ 7. Amendments, Etc. 5 ---------------- 8. Notices, Etc. 5 ------------- 9. No Waiver; Remedies 6 ------------------- 10. Right of Set-off 6 ---------------- 11. Indemnification 6 --------------- 12. Continuing Guaranty; Assignments under the Credit Agreement 6 ----------------------------------------------------------- 13. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. 7 ------------------------------------------------------- EX-4.14 12 dex414.txt 364-DAY CREDIT AGREEMENT EXHIBIT 4.14 364-DAY CREDIT AGREEMENT Dated as of June 18, 2001 AMVESCAP PLC, a company organized under the laws of England and Wales, and its successors (the "Borrower"), the banks, financial institutions and other institutional lenders (the "Initial Lenders") listed on the signature pages hereof, the co-agents listed on the signature pages hereof, CITIBANK, N.A. ("Citibank"), BANK OF AMERICA, N.A. ("Bank of America") and HSBC BANK PLC ("HSBC"), as co-syndication Agents (the "Co-Syndication Agents") for the Lenders (as hereinafter defined) and Bank of America, as funding agent (the "Funding Agent"; the Funding Agent and the Co-Syndication Agents are collectively, the "Agents"), agree as follows: PRELIMINARY STATEMENTS: The Borrower has requested that the Lenders provide the Borrower with a revolving credit facility in an initial principal amount of up to $200,000,000. The Lenders have agreed, subject to the terms and conditions of this Agreement, to provide such credit facility to the Borrower. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS Section 1.01. Certain Defined Terms. As used in this Agreement, the --------------------- following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Adjusted Debt" outstanding on any date means the sum, without ------------- duplication, of (a) the aggregate principal amount of all Debt of the Borrower and its Subsidiaries, on a Consolidated basis, outstanding on such date of the kinds referred to in clauses (a), (c), (d), (e), (f) and (h) of the definition of "Debt" and (b) the aggregate principal amount of all Debt of the Borrower and its Subsidiaries, on a consolidated basis, outstanding on such date of the kinds referred to in clause (i) of the definition of Debt that relates to Debt of other Persons of the kinds referred to in clauses (a), (c), (d), (e), (f) and (h) of the definition of "Debt". "Advance" means an advance by a Lender to the Borrower as part of a ------- Borrowing and refers to a Base Rate Advance or a Eurocurrency Rate Advance (each of which shall be a "Type" of Advance). ---- "Affiliate" means, as to any Person, any other Person that, directly --------- or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. For purposes of this definition, the term "control" (including the terms "controlling", "controlled by" and "under common control with") of a Person means the possession, direct or indirect, of the power to vote 10% or more of the Voting Stock of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by contract or otherwise. "Agents" has the meaning specified in the recital of parties to this ------ Agreement. "Applicable Lending Office" means, with respect to each Lender, such ------------------------- Lender's Domestic Lending Office in the case of a Base Rate Advance and such Lender's Eurocurrency Lending Office in the case of a Eurocurrency Rate Advance. "Applicable Margin" means, as of any date, a percentage per annum ----------------- determined by reference to the Performance Level applicable on such date as set forth below: - ------------------------------------------------------------------------------- Applicable Margin Applicable Margin for Performance for Eurocurrency Rate Level Base Rate Advances Advances - ------------------------------------------------------------------------------- I 0% 0.415% - ------------------------------------------------------------------------------- II 0% 0.475% - ------------------------------------------------------------------------------- III 0% 0.540% - ------------------------------------------------------------------------------- IV 0% 0.700% - ------------------------------------------------------------------------------- V 0% 0.800% - ------------------------------------------------------------------------------- For purposes of this definition, the Performance Level shall be determined as at the end of each fiscal quarter of the Borrower based upon the calculation of the Debt/EBITDA Ratio for such fiscal quarter set forth in the compliance certificate delivered pursuant to Section 5.01(j)(i) or (ii). The Applicable Margin shall be adjusted (if necessary) upward or downward as of the first day of each fiscal quarter to reflect the Performance Level as of the last day of the immediately preceding fiscal quarter; provided that if such compliance certificate is delivered after the first day of a fiscal quarter, such adjustment shall be made on the first day following the delivery of such compliance certificate and shall be deemed to have become effective as of the first day of such fiscal quarter. "Applicable Percentage" means, as of any date, a percentage per annum --------------------- determined by reference to the Performance Level applicable on such date as set forth below: - -------------------------------------------------------------------------------- Performance Applicable Level Percentage - -------------------------------------------------------------------------------- I 0.085% - -------------------------------------------------------------------------------- II 0.100% - -------------------------------------------------------------------------------- III 0.110% - -------------------------------------------------------------------------------- IV 0.150% - -------------------------------------------------------------------------------- V 0.200% - -------------------------------------------------------------------------------- For purposes of this definition, the Performance Level shall be determined as at the end of each fiscal quarter of the Borrower based upon the calculation of the Debt/EBITDA Ratio for such fiscal quarter set forth in the compliance certificate delivered pursuant to Section 5.01(j)(i) or (ii). The Applicable Percentage shall be adjusted (if necessary) upward or downward as of the first day of each fiscal quarter to reflect the Performance 2 Level as of the last day of the immediately preceding fiscal quarter; provided that if such compliance certificate is delivered after the first day of a fiscal quarter, such adjustment shall be made on the first day following the delivery of such compliance certificate and shall be deemed to have become effective as of the first day of such fiscal quarter. "Assignment and Acceptance" means an assignment and acceptance entered ------------------------- into by a Lender and an Eligible Assignee, and accepted by the Funding Agent, in substantially the form of Exhibit C hereto. "Assuming Lender" means an Eligible Assignee not previously a Lender --------------- that becomes a Lender hereunder pursuant to Section 2.17. "Assumption Agreement" means an agreement in substantially the form of -------------------- Exhibit D hereto by which an Eligible Assignee agrees to become a Lender hereunder pursuant to Section 2.17, in each case agreeing to be bound by all obligations of a Lender hereunder. "Bank of America" has the meaning specified in the recital of parties --------------- to this Agreement. "Base Rate" means a fluctuating interest rate per annum in effect from --------- time to time, which rate per annum shall at all times be equal to the higher of: (a) the rate of interest announced publicly by Bank of America from time to time as Bank of America's prime rate; (b) 1/2 of one percent per annum above the Federal Funds Rate. "Base Rate Advance" means an Advance denominated in Dollars that bears ----------------- interest as provided in Section 2.07(a)(i). "Borrower" has the meaning specified in the recital of parties to this -------- Agreement. "Borrowing" means a borrowing consisting of simultaneous Advances of --------- the same Type made by each of the Lenders pursuant to Section 2.01. "Business Day" means a day of the year other than a day on which banks ------------ are required or authorized by law to close in New York City and Charlotte, North Carolina and, if the applicable Business Day relates to any Eurocurrency Rate Advances, a day on which dealings are carried on in the London interbank market and banks are open for business in London. "Capital Leases" means all leases that have been or should be, in -------------- accordance with UK GAAP, recorded as capital leases. "Citibank" has the meaning specified in the recital of parties to this -------- Agreement. "Commitment" means, as to any Lender, the Dollar amount set forth ---------- opposite its name on the signature pages hereof or, if such Lender has entered into any Assumption Agreement or Assignment and Acceptance, the Dollar amount set forth for such Lender 3 in the Register maintained by the Funding Agent pursuant to Section 8.07(d), in each case as such amount may be reduced pursuant to Section 2.05(a). "Confidential Information" means information that the Borrower or its ------------------------ Subsidiaries furnishes to the Funding Agent, any Co-Syndication Agent or any Lender in a writing designated as confidential, but does not include any such information that is or becomes generally available to the public (other than as a result of a breach by the Funding Agent, any Co-Syndication Agent or any Lender of its obligations hereunder) or that is or becomes available to such Agent or such Lender from a source or Person other than the Borrower or its Subsidiaries (which Person is not known by such Agent or such Lender, as the case may be, to be subject to a confidentiality agreement). "Consenting Lender" has the meaning specified in Section 2.17(b). ----------------- "Consolidated" refers to the consolidation of accounts in accordance ------------ with UK GAAP. "Convert", "Conversion" and "Converted" each refers to a conversion of ------- ---------- --------- Advances of one Type into Advances of the other Type pursuant to Section 2.08 or 2.09. "Co-Syndication Agents" has the meaning specified in the recital of --------------------- parties to this Agreement. "Debt" of any Person means, without duplication, (a) all indebtedness --- of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of such Person's business and payable on customary terms), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property) (other than trade payables incurred in the ordinary course of such Person's business and payable on customary terms), (e) all obligations of such Person as lessee under Capital Leases, (f) all obligations, contingent or otherwise, of such Person in respect of acceptances, letters of credit or similar extensions of credit, (g) all net payment obligations of such Person in respect of Hedge Agreements on the date of determination, (h) all Debt of others referred to in clauses (a) through (g) above or clause (i) below guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through a written agreement (1) to pay or purchase such Debt or to advance or supply funds for the payment or purchase of such Debt, (2) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Debt or to assure the holder of such Debt against loss, (3) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (4) otherwise to assure a creditor against loss, and (i) all Debt referred to in clauses (a) through (h) above secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such 4 Person, even though such Person has not assumed or become liable for the payment of such Debt. "Debt/EBITDA Ratio" means, as of any date of determination, the ratio ----------------- of Adjusted Debt to EBITDA for each period of four consecutive fiscal quarters of the Borrower ended on or immediately prior to such time. "Default" means any Event of Default or any event that would ------- constitute an Event of Default but for the requirement that notice be given or time elapse or both. "Disclosed Litigation" has the meaning specified in Section 4.01(i). -------------------- "Dollars" and the "$" sign each means lawful money of the United ------- - States of America. "Domestic Lending Office" means, with respect to any Lender, the ----------------------- office of such Lender specified as its "Domestic Lending Office" opposite its name on Schedule I hereto or in the Assumption Agreement or the Assignment and Acceptance pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Funding Agent. "EBITDA" means, for any period, net income (or net loss) of the ------ Borrower and its Subsidiaries, on a Consolidated basis plus the sum of (a) interest expense, (b) income tax expense, (c) depreciation expense, (d) amortization expense and (e) extraordinary losses and exceptional losses, minus extraordinary gains and exceptional gains, in each case determined in accordance with UK GAAP for such period; provided, that, for purposes of calculating EBITDA for the Borrower and its Subsidiaries for any period, the EBITDA of any Person (or assets or division of such Person) acquired by the Borrower or any of its Subsidiaries during such period shall be included on a pro forma basis for such period (assuming the consummation of such acquisition occurred on the first day of such period). "Effective Date" has the meaning specified in Section 3.01. -------------- "Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender; ----------------- (iii) a commercial bank organized under the laws of the United States, or any State thereof, and having total assets of at least $1,000,000,000; (iv) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof, and having total assets of at least $1,000,000,000; (v) a commercial bank organized under the laws of any other country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of any such country, and having total assets of at least $1,000,000,000; (vi) the central bank of any country that is a member of the Organization for Economic Cooperation and Development; (vii) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and having total assets of at least $500,000,000 and (viii) any other Person approved by the Agents and the Borrower, such approval not to be unreasonably withheld or delayed; provided, however, that neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee. 5 "Equivalent" in Dollars of Sterling on any date means the equivalent --------- in Dollars of Sterling determined by using the quoted spot rate at which Bank of America's principal office in London offers to exchange Dollars for Sterling in London at 11:00 A.M. (London time) two Business Days prior to such date, and the "Equivalent" in Sterling of Dollars means the equivalent in Sterling of Dollars determined by using the quoted spot rate at which Bank of America's principal office in London offers to exchange Sterling for Dollars in London at 11:00 A.M. (London time) two Business Days prior to such date. "ERISA" means the Employee Retirement Income Security Act of 1974, as ----- amended from time to time, and the regulations promulgated and rulings issued thereunder. "ERISA Affiliate" means any Person that for purposes of Title IV of --------------- ERISA is a member of any Loan Party's controlled group, or under common control with any Loan Party, within the meaning of Section 414 (b) or (c) of the Internal Revenue Code or, for purposes of Sections 412(c)(ii) and 412(u) of the Internal Revenue Code, under Section 414(m) or (o) of the Internal Revenue Code. "ERISA Event" means (a) (i) the occurrence of a reportable event, ----------- within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC, or (ii) at the time when the requirements of subsection (1) of Section 4043(b) of ERISA (without regard to subsection (2) of such Section) are applicable to any Loan Party or any ERISA Affiliate an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to a Plan within the following 30 days; (b) the filing by any Loan Party or any ERISA Affiliate of an application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien under Section 302(f) of ERISA on the assets of any Loan Party or any ERISA Affiliate shall have been met with respect to any Plan; (g) the adoption of an amendment to a Plan requiring any Loan Party or any ERISA Affiliate to provide security to such Plan pursuant to 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Plan, provided, however, that the event or condition set forth in Section 4042(a)(4) of ERISA shall be an ERISA Event only if the PBGC has notified any Loan Party or any ERISA Affiliate that it has made a determination under such section or that it is considering termination of a Plan on such grounds. "Eurocurrency Lending Office" means, with respect to any Lender, the --------------------------- office of such Lender specified as its "Eurocurrency Lending Office" opposite its name on Schedule I hereto or in the Assumption Agreement or the Assignment and Acceptance pursuant to which it became a Lender (or, if no such office is specified, its Domestic 6 Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Funding Agent. "Eurocurrency Liabilities" has the meaning assigned to that term in ------------------------ Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Eurocurrency Rate" means, for any Interest Period for each ----------------- Eurocurrency Rate Advance comprising part of the same Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the average (rounded upward to the nearest whole multiple of 1/100th of 1% per annum, if such average is not such a multiple) of the rate per annum at which deposits in Dollars or Sterling, as the case may be, are offered by the principal office of each of the Reference Banks in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period in an amount substantially equal to such Reference Bank's Eurocurrency Rate Advance comprising part of such Borrowing to be outstanding during such Interest Period and for a period equal to such Interest Period by (b) a percentage equal to 100% minus the Eurocurrency Rate Reserve Percentage for such Interest Period. The Eurocurrency Rate for any Interest Period for each Eurocurrency Rate Advance comprising part of the same Borrowing shall be determined by the Funding Agent on the basis of applicable rates furnished to and received by the Funding Agent from the Reference Banks two Business Days before the first day of such Interest Period, subject, however, to the provisions of Section 2.08. "Eurocurrency Rate Advance" means an Advance that bears interest as ------------------------- provided in Section 2.07(a)(ii). "Eurocurrency Rate Reserve Percentage" for any Interest Period for all ------------------------------------ Eurocurrency Rate Advances comprising part of the same Borrowing means the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurocurrency Rate Advances is determined) having a term equal to such Interest Period. "Events of Default" has the meaning specified in Section 6.01. ----------------- "Existing Debt" means the Debt of the Borrower and its Subsidiaries ------------- outstanding as of the Effective Date, as listed on Schedule 4.01(v). "Extension Date" has the meaning specified in Section 2.17(b). -------------- "Federal Funds Rate" means, for any period, a fluctuating interest ------------------ rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the 7 quotations for such day on such transactions received by the Funding Agent from three Federal funds brokers of recognized standing selected by it. "Funding Agent" has the meaning specified in the recital of parties to ------------- this Agreement. "Funding Agent's Account" means (a) in the case of Advances ----------------------- denominated in Dollars the account of the Funding Agent maintained by the Funding Agent at Bank of America with its office at Charlotte, North Carolina, ABA No. 053000196, Account No. 1366210022506 Re: INVESCO, Attention: Corporate Credit Support and (b) in the case of Advances denominated in Sterling, the account of the Funding Agent maintained by the Funding Agent at Midland Bank PLC with its office at 110 Cannon Street, EC4N 6AA London, England, for the account of Bank of America, N.A., Account # 00478549 Ref: INVESCO. "Guarantors" means INVESCO, Inc., a Delaware corporation, INVESCO ---------- North American Holdings, Inc., a Delaware corporation, AIM Management Group Inc., a Delaware corporation, AIM Advisors, Inc., a Delaware corporation and upon the execution and delivery of an Assumption of Guaranty (as defined in the Guaranty) pursuant to Section 5.01(h) by any other Subsidiary of the Borrower, such other Subsidiary. "Guaranty" has the meaning specified in Section 3.01(d)(iv). -------- "Hedge Agreements" means interest rate swap, cap or collar agreements, ---------------- interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar agreements. "Information Memorandum" means the information memorandum dated May 1, ---------------------- 2001 used by the Agents in connection with the syndication of the Commitments. "Initial Lenders" has the meaning specified in the recital of parties --------------- to this Agreement. "Insufficiency" means, with respect to any Plan, the amount, if any, ------------- of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA. "Interest Period" means, for each Eurocurrency Rate Advance comprising --------------- part of the same Borrowing, the period commencing on the date of such Eurocurrency Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurocurrency Rate Advance and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, with respect to Eurocurrency Rate Advances, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period for each Eurocurrency Rate Advance shall be one, two, three or six months, as the Borrower may, upon notice received by the Funding Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that: 8 (i) the Borrower may not select any Interest Period that ends after the Termination Date or, if the Advances have been converted to a term loan pursuant to Section 2.06 prior to such selection, that ends after the Maturity Date; (ii) Interest Periods commencing on the same date for Eurocurrency Rate Advances comprising part of the same Borrowing shall be of the same duration; (iii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and (iv) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month. "Internal Revenue Code" means the Internal Revenue Code of 1986, as --------------------- amended from time to time, and the regulations promulgated and rulings issued thereunder. "Investment" in any Person means any purchase or other acquisition of --------- any capital stock, warrants, rights, options, obligations or other securities or all or substantially all of the assets of such Person, any capital contribution to such Person or any other investment in such Person (other than a loan or advance), including, without limitation, any arrangement pursuant to which the investor incurs Debt of the types referred to in clauses (h) and (i) of the definition of "Debt" in respect ---- of such Person. "Lenders" means the Initial Lenders, each Assuming Lender and each ------- Person that shall become a party hereto pursuant to Section 8.07(a), (b) and (c). "Lien" means any lien, security interest or other charge or ---- encumbrance of any kind, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property. "Loan Documents" means this Agreement, the Notes and the Guaranty. -------------- "Loan Parties" means the Borrower and each Guarantor. ----------- "Material Adverse Change" means any material adverse change in the ----------------------- business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries taken as a whole. "Material Adverse Effect" means a material adverse effect on (a) the ----------------------- business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Funding Agent, any Co-Syndication Agent or any Lender under this Agreement or any 9 Note or (c) the ability of the Borrower to perform its obligations under this Agreement or any Note. "Material Subsidiary" means each Subsidiary of the Borrower to which ------------------- as of the end of any fiscal year of the Borrower is attributed twenty percent or more of the Consolidated pre-tax income of the Borrower and its Subsidiaries taken as a whole, determined by reference to the most recent annual audited financial statements delivered by the Borrower to the Lenders pursuant to Section 5.01(j) or, in the case of any Subsidiary of the Borrower that is acquired or is merged with or into any other Subsidiary of the Borrower, determined by reference to the pro forma financial statements of the Borrower and its Subsidiaries prepared in accordance with UK GAAP as of the most recent fiscal year end of the Borrower, giving effect to such acquisition or merger as if such transaction had been consummated as of the last day of such fiscal year. "Maturity Date" means the earlier of (a) the first anniversary of the ------------- Termination Date and (b) the date of termination in whole of the aggregate Commitments pursuant to Section 2.05 or 6.01. "Multiemployer Plan" means a multiemployer plan, as defined in Section ------------------ 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions. "Multiple Employer Plan" means a single employer plan, as defined in ---------------------- Section 4001(a)(15) of ERISA, that is maintained for current or former employees of any Loan Party or any ERISA Affiliate and at least one Person other than such Loan Party and the ERISA Affiliates. "Non-Consenting Lender" has the meaning specified in Section 2.17(b). --------------------- "Note" means a promissory note of the Borrower payable to the order of ---- any Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Advances made by such Lender. "Notice of Borrowing" has the meaning specified in Section 2.02(a). ------------------- "PBGC" means the Pension Benefit Guaranty Corporation (or any ---- successor). "Performance Level" means, as of any date of determination, the level ----------------- set forth below as then applicable: I Debt/EBITDA Ratio is less than or equal to 1.00:1.00. II Debt/EBITDA Ratio is greater than 1.00:1.00 but less than or equal to 1.75:1.00. III Debt/EBITDA Ratio is greater than 1.75:1.00 but less than or equal to 2.25:1.00. 10 IV Debt/EBITDA Ratio is greater than 2.25:1.00 but less than or equal to 2.75:1.00. V Debt/EBITDA Ratio is greater than 2.75:1.00. "Permitted Liens" means such of the following as to which no --------------- enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) Liens for taxes, assessments or other governmental charges being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which such reserves or other appropriate provision, if any, as shall be required by UK GAAP shall have been made and maintained in accordance with UK GAAP and past practices of the Borrower and its Subsidiaries therefor; (b) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which such reserves or other appropriate provision, if any, as shall be required by UK GAAP shall have been made therefor; (c) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business (i) in connection with workers' compensation, unemployment insurance and other types of social security or (ii) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, performance bonds, purchase, construction or sales contracts and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property; (d) any attachment or judgment Lien, unless the judgment it secures shall not, within 60 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 60 days after the expiration of any such stay; and (e) leases or subleases granted to others, easements, rights of way and other encumbrances on title to real property that, in the case of any property material to the operation of the business of the Borrower and its Subsidiaries taken as a whole, do not render title to the property encumbered thereby unmarketable or materially adversely affect the use of such property for its present purposes. "Person" means an individual, partnership, corporation (including a ------ business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company or other entity, or a government or any political subdivision or agency thereof. "Plan" means a Single Employer Plan or a Multiple Employer Plan. ---- "Pro Rata Share" of any amount means, with respect to any Lender at -------------- any time, the product of such amount times a fraction the numerator of which is the amount of such Lender's Commitment at such time and the denominator of which is the Total Commitment at such time. "Reference Banks" means Citibank, Bank of America, The Chase Manhattan --------------- Bank and SunTrust Bank. "Register" has the meaning specified in Section 8.07(d). -------- 11 "Relevant Taxing Authority" means the taxing authority with which the ------------------------- applicable Treaty Form is required to be filed, in the country of residence of a Lender. "Required Lenders" means at any time Lenders owed at least 51% of the ---------------- then aggregate unpaid principal amount of the Advances owing to Lenders, or, if no such principal amount is then outstanding, Lenders having at least 51% of the Commitments. "Restricted Subsidiary" means each Subsidiary of the Borrower that (a) --------------------- is a Guarantor or a Subsidiary of a Guarantor or (b) is subject to any agreement described in Section 5.02(j)(i), (ii) or (iii), provided that such Subsidiary shall be a Restricted Subsidiary under this clause (b) only so long as such agreement is in effect. "Significant Subsidiary" means each Subsidiary of the Borrower that ---------------------- (a) is organized under the laws of the United States or any political subdivision thereof or (b) is an operating Subsidiary of the Borrower or a Subsidiary of the Borrower that directly or indirectly owns an operating Subsidiary of the Borrower. "Single Employer Plan" means a single employer plan, as defined in -------------------- Section 4001(a)(15) of ERISA, that is maintained for employees of any Loan Party or any ERISA Affiliate and no Person other than any Loan Party and the ERISA Affiliates. "Solvent" and "Solvency" mean, with respect to any Person on a ------- -------- particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. "Sterling" means lawful money of the United Kingdom of Great Britain -------- and Northern Ireland. "Subsidiary" of any Person means any corporation, limited liability ---------- company, partnership, joint venture, trust or estate of which (or in which) more than 50% of (a) in the case of a corporation, the issued and outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) in the case of a limited liability company, partnership or joint venture, the interest in the capital or profits of such limited liability company, partnership or joint venture or (c) in the case of a trust or estate, the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person's other Subsidiaries. 12 "Termination Date" means the earlier of June 17, 2002, subject to the ---------------- extension thereof pursuant to Section 2.17 and the date of termination in whole of the Commitments pursuant to Section 2.05 or 6.01; provided, -------- however, that the Termination Date of any Lender that is a Non-Consenting ------- Lender to any requested extension pursuant to Section 2.17 shall be the Termination Date in effect immediately prior to the applicable Extension Date for all purposes of this Agreement. "Term Loan Conversion Date" means the Termination Date on which all ------------------------- Advances outstanding on such date are converted into a term loan pursuant to Section 2.06. "Term Loan Election" has the meaning specified in Section 2.06. ------------------ "Total Commitment" means, at any time, the aggregate amount of the ---------------- Lenders' Commitments at such time. "Treaty Form" means a form of claim for the benefits of an income tax ----------- treaty between the United Kingdom and the country of residence of a Lender or an Agent, as is specified from time to time by the Financial Intermediaries and Claims Office (International) of the Board of Inland Revenue for the United Kingdom. "UK GAAP" has the meaning specified in Section 1.03. ------- "Voting Stock" means capital stock issued by a corporation, or ------------ equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency. "Withdrawal Liability" has the meaning specified in Part I of Subtitle -------------------- E of Title IV of ERISA. Section 1.02. Computation of Time Periods. In this Agreement in the --------------------------- computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding". Section 1.03. Accounting Terms. All accounting terms not specifically ---------------- defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(f) ("UK GAAP"). ------- ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES Section 2.01. The Advances. Each Lender severally agrees, on the terms and ------------ conditions hereinafter set forth, to make Advances to the Borrower from time to time on any Business Day during the period from the Effective Date until the Termination Date in an aggregate amount (based in respect of any Advance denominated in Sterling on the Equivalent in Dollars), not to exceed at any time outstanding the amount set forth opposite such Lender's Commitment. Each 13 Borrowing shall be in an aggregate amount of $5,000,000 (or the Equivalent thereof in Sterling) or an integral multiple of $1,000,000 (or the Equivalent thereof in Sterling) in excess thereof and shall consist of Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender's Commitment, the Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.10 and reborrow under this Section 2.01. Section 2.02. Making the Advances. (a) Each Borrowing shall be made on ------------------- notice, given not later than (x) 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurocurrency Rate Advances denominated in Dollars, (y) 11:00 A.M. (New York City time) on the fifth Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurocurrency Rate Advances denominated in Sterling, or (z) 9:00 A.M. (New York City time) on the date of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the Funding Agent, which shall give to each Lender prompt notice thereof by telecopier or telex. Each such notice of a Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed immediately in writing, or telecopier or telex in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in the case of a Borrowing consisting of Eurocurrency Rate Advances, the initial Interest Period and whether such Advance shall be in Dollars or in Sterling. Each Lender shall, before 11:00 A.M. (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Funding Agent at the applicable Funding Agent's Account, in same day funds, such Lender's Pro Rata Share of such Borrowing. After the Funding Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Funding Agent will make such funds available to the Borrower at the Funding Agent's address referred to in Section 8.02. (b) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not select Eurocurrency Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000 or if the obligation of the Lenders to make Eurocurrency Rate Advances shall then be suspended pursuant to Section 2.08 or 2.12 and (ii) the Eurocurrency Rate Advances may not be outstanding as part of more than ten separate Borrowings. (c) Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurocurrency Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date. (d) Unless the Funding Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Funding Agent such Lender's Pro Rata Share of such Borrowing, the Funding Agent may assume that such Lender has made such amount available to the Funding Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Funding Agent may, in reliance upon 14 such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such amount available to the Funding Agent, such Lender and the Borrower severally agree to repay to the Funding Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Funding Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Advances comprising such Borrowing and (ii) in the case of such Lender (A) the Federal Funds Rate in the case of Advances denominated in Dollars or (B) the cost of funds incurred by the Funding Agent in respect of such amount in the case of Advances denominated in Sterling. If such Lender shall repay to the Funding Agent such corresponding amount, such amount so repaid shall constitute such Lender's Advance as part of such Borrowing for purposes of this Agreement. (e) The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing. Section 2.03. [Intentionally omitted]. ----------------------- Section 2.04. Fees. (a) Facility Fee. The Borrower agrees to pay to the ---- ------------ Funding Agent for the account of each Lender a facility fee on the aggregate amount of such Lender's Commitment from the Effective Date in the case of each Initial Lender and from the effective date specified in the Assumption Agreement or the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Termination Date at a rate per annum equal to the Applicable Percentage in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December, commencing June 30, 2001, and on the Termination Date. (b) Agent's Fees. The Borrower shall pay to the Agents for their own ------------ account such fees as may from time to time be agreed between the Borrower and the Agents. Section 2.05. Termination or Reduction of the Commitments. (a) Optional. ------------------------------------------- -------- The Borrower shall have the right, upon at least three Business Days' notice to the Funding Agent, to terminate in whole or reduce ratably in part the unused portions of the respective Commitments of the Lenders, provided that each partial reduction of the Total Commitment shall be in the aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof. (b) Mandatory. On the Termination Date, if the Borrower has made the Term --------- Loan Election in accordance with Section 2.06 prior to such date, and from time to time thereafter upon each prepayment of the Advances, the Commitments of the Lenders shall be automatically and permanently reduced on a pro rata basis by an amount equal to the amount by which (i) the aggregate Commitments immediately prior to such reduction exceeds (ii) the aggregate unpaid principal amount of ------- all Advances outstanding at such time. Section 2.06. Repayment of Advances. The Borrower shall, subject to the --------------------- next succeeding sentence, repay to the Funding Agent for the ratable account of the Lenders on the Termination Date the aggregate principal amount of the Advances then outstanding. The Borrower may, upon not less than 15 days' prior written notice to the Funding Agent, elect (the 15 "Term Loan Election") to convert all of the Advances outstanding on the - ------------------- Termination Date in effect at such time into a term loan which the Borrower shall repay in full ratably to the Lenders on the Maturity Date; provided that the Term Loan Election may not be exercised if a Default has occurred and is continuing on the date of notice of the Term Loan Election or on the date on which the Term Loan Election is to be effected. All Advances converted into a term loan pursuant to this Section 2.06 shall continue to constitute Advances except that the Borrower may not reborrow pursuant to Section 2.01 after all or any portion of such Advances have been prepaid pursuant to Section 2.10. Section 2.07. Interest on Advances. (a) Scheduled Interest. The Borrower -------------------- ------------------ shall pay interest on the unpaid principal amount of each Advance owing to each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum: (i) Base Rate Advances. During such periods as such Advance is a Base ------------------ Rate Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in effect from time to time plus (y) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full. (ii) Eurocurrency Rate Advances. During such periods as such Advance -------------------------- is a Eurocurrency Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (x) the Eurocurrency Rate for such Interest Period for such Advance plus (y) the Applicable Margin in effect from time to time, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurocurrency Rate Advance shall be Converted or paid in full. (b) Default Interest. Upon the occurrence and during the continuance of an ---------------- Event of Default, the Borrower shall pay interest on (i) the unpaid principal amount of each Advance owing to each Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any interest, fee or other amount payable hereunder that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on Base Rate Advances pursuant to clause (a)(i) above. Section 2.08. Interest Rate Determination. (a) Each Reference Bank agrees --------------------------- to furnish to the Funding Agent timely information for the purpose of determining each Eurocurrency Rate. If any one or more of the Reference Banks shall not furnish such timely information to the Funding Agent for the purpose of determining any such interest rate, the Funding Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks. The Funding Agent shall give prompt notice to the Borrower and the Lenders of the applicable interest rate determined by the Funding Agent for purposes of Section 2.07(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for the purpose of determining the interest rate under Section 2.07(a)(ii). 16 (b) If, with respect to any Eurocurrency Rate Advances, the Required Lenders notify the Funding Agent that the Eurocurrency Rate for any Interest Period for such Advances will not adequately reflect the cost to such Required Lenders of making, funding or maintaining their respective Eurocurrency Rate Advances for such Interest Period, the Funding Agent shall forthwith so notify the Borrower and the Lenders, whereupon (i) each Eurocurrency Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance, and (ii) the obligation of the Lenders to make, or to Convert Base Rate Advances into, Eurocurrency Rate Advances shall be suspended until the Funding Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist. (c) If the Borrower shall fail to select the duration of any Interest Period for any Eurocurrency Rate Advances in accordance with the provisions contained in the definition of "Interest Period" in Section 1.01, the Funding Agent will forthwith so notify the Borrower and the Lenders and such Advances will automatically, on the last day of the then existing Interest Period for such Eurocurrency Rate Advance, Convert into Base Rate Advances. (d) On the date on which the aggregate unpaid principal amount of Eurocurrency Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $5,000,000, such Advances shall automatically Convert into Base Rate Advances. (e) Upon the occurrence and during the continuance of any Event of Default, (i) each Eurocurrency Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into, Eurocurrency Rate Advances shall be suspended. (f) If fewer than two Reference Banks furnish timely information to the Funding Agent for determining the Eurocurrency Rate for any Eurocurrency Rate Advances. (i) the Funding Agent shall forthwith notify the Borrower and the Lenders that the interest rate cannot be determined for such Eurocurrency Rate Advances. (ii) with respect to Eurocurrency Rate Advances, each such Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance (or if such Advance is then a Base Rate Advance, will continue as a Base Rate Advance), and (iii) the obligation of the Lenders to make Eurocurrency Rate Advances or to Convert Advances into Eurocurrency Rate Advances shall be suspended until the Funding Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist. Section 2.09. Optional Conversion of Advances. The Borrower may on any ------------------------------- Business Day, upon notice given to the Funding Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Sections 2.08 and 2.12, Convert all Advances of one Type comprising the same Borrowing into Advances of the other Type; provided, however, that any Conversion of Eurocurrency Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurocurrency Rate Advances, any Conversion of Base Rate Advances into Eurocurrency Rate Advances shall be in an amount not less than the minimum amount specified in 17 Section 2.02(b) and no Conversion of any Advances shall result in more separate Eurocurrency Rate Borrowings than permitted under Section 2.02(b). Each such notice of a Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Advances to be Converted, and (iii) if such Conversion is into Eurocurrency Rate Advances, the duration of the initial Interest Period for each such Advance. Each notice of Conversion shall be irrevocable and binding on the Borrower. Section 2.10. Prepayments of Advances. (a) Optional Prepayments. The ----------------------- -------------------- Borrower may, upon notice to the Funding Agent stating the proposed date and aggregate principal amount of the prepayment, given not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of such proposed prepayment, in the case of Eurocurrency Rate Advances, and not later than 11:00 A.M. (New York City time) on the day of such proposed prepayment, in the case of Base Rate Advances, and if such notice is given the Borrower shall, prepay the outstanding principal amount of the Advances comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that (x) each partial prepayment shall be in an aggregate principal amount of $5,000,000 or the Equivalent thereof in Sterling or an integral multiple of $1,000,000 or the Equivalent thereof in Sterling in excess thereof and (y) in the event of any such prepayment of a Eurocurrency Rate Advance, the Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(c). (b) Mandatory Prepayments. (i) If the Funding Agent notifies the Borrower --------------------- that, on any interest payment date, the sum of (A) the aggregate principal amount of all Advances denominated in Dollars then outstanding plus (B) the Equivalent in Dollars of the aggregate principal amount of all Advances denominated in Sterling then outstanding exceeds 105% of the Total Commitment on such date, the Borrower shall, within two Business Days after receipt of such notice, prepay the outstanding principal amount of any Advances in an aggregate amount sufficient to reduce such sum to an amount not to exceed 100% of the Total Commitment on such date. (ii) If the Funding Agent notifies the Borrower that, on any date, the sum of the amounts described in clauses (A) and (B) of subsection (i) above exceeds 103% of the Total Commitment on such date, the Borrower shall, within two Business Days after receipt of such notice, prepay the outstanding principal amount of any Advances in an aggregate amount sufficient to reduce such sum to an amount not to exceed 100% of the Total Commitment on such date, provided that if the aggregate principal amount of Base Rate Advances then outstanding is less than the amount of such required prepayment, the portion of such required prepayment in excess of the aggregate principal amount of Base Rate Advances then outstanding shall be paid on the last day of each Interest Period ended on or after the date of such notice in an amount equal to the aggregate principal amount of the Eurodollar Rate Advances then maturing until such excess has been fully paid. (iii) Each prepayment made pursuant to this Section 2.10(b) shall be made together with any interest accrued to the date of such prepayment on the principal amounts prepaid and, in the case of any prepayment of a Eurocurrency Rate Advance on a date other than the last day of an Interest Period or at its maturity, any additional amounts which such Borrower shall be obligated to reimburse to the Lenders in respect thereof pursuant to Section 8.04(c). The Funding Agent shall give prompt notice of any prepayment required under this Section 2.10(b) to the Borrower and the Lenders. 18 Section 2.11. Increased Costs. (a) If, due to either (i) the introduction --------------- of or any change in or in the interpretation of any law or regulation occurring after the date hereof or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law) issued or made after the date hereof, there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining Eurocurrency Rate Advances (excluding for purposes of this Section 2.11 any such increased costs resulting from (i) Indemnified Taxes or Other Taxes (as to which Section 2.14 shall govern) and (ii) changes in taxes measured by or imposed upon the net income or gross income or franchise taxes, or taxes measured by or imposed upon capital or net worth, or branch taxes, of such Lender or its Applicable Lending Office), then the Borrower shall from time to time, within ten days of demand by such Lender (with a copy of such demand to the Funding Agent), pay to the Funding Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost; provided that, before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would avoid the need for, or reduce the amount of, such additional cost and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. (b) If any Lender reasonably determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority regarding capital adequacy (whether or not having the force of law) issued or made after the date hereof affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender's commitment to lend hereunder and other commitments of this type, and such Lender reasonably determines that the rate of return on its or such controlling corporation's capital as a consequence is reduced to a level below that which such Lender or such controlling corporation would have achieved but for the occurrence of such conditions, then, within ten days of demand by such Lender (with a copy of such demand to the Funding Agent), the Borrower shall pay to the Funding Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender or such corporation in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender's commitment to lend hereunder. (c) If a Lender changes its Applicable Lending Office (other than pursuant to this Section 2.11 or Section 2.12 or 2.14(h)) and the effect of such change, as of the date of such change, would be to cause the Borrower to become obligated to pay any additional amounts under this Section 2.11, the Borrower shall not be obligated to pay such additional amount. (d) A certificate of a Lender setting forth the amount of any claim made under this Section 2.11 and identifying with reasonable specificity the basis for calculating such amount, shall be delivered to the Borrower and the Funding Agent and shall be conclusive absent manifest error. Section 2.12. Illegality. Notwithstanding any other provision of this ---------- Agreement, if any Lender shall notify the Funding Agent (who will promptly notify the Borrower and the other Lenders) that the introduction of or any change in or in the interpretation of any law or regulation after the date hereof makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for any Lender or its Eurocurrency Lending Office to perform its obligations hereunder to make Eurocurrency Rate Advances or to fund or maintain Eurocurrency 19 Rate Advances hereunder, (i) each Eurocurrency Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance or an Advance that bears interest at the rate set forth in Section 2.07(a)(i), as the case may be, and (ii) the obligation of the Lenders to make Eurocurrency Rate Advances or to Convert Base Rate Advances into Eurocurrency Rate Advances shall be suspended until the Funding Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist or that such Lender has entered into one or more Assignments and Acceptances pursuant to Section 8.07 assigning its Commitment to one or more Eligible Assignees; provided that, before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. Section 2.13. Payments and Computations. (a) The Borrower shall make each ------------------------- payment hereunder and under the Notes without set-off or counterclaim, not later than 11:00 A.M. (New York City time) on the day when due in Dollars, in the case of Advances denominated in Dollars, or in Sterling, in the case of Advances denominated in Sterling, to the Funding Agent at the applicable Funding Agent's Account in same day funds. The Funding Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest or facility fees ratably (other than amounts payable pursuant to Section 2.11, 2.14 or 8.04(c)) to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 8.07(c), from and after the effective date specified in such Assignment and Acceptance, the Funding Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves. Upon any Assuming Lender becoming a Lender hereunder as a result of a Commitment Increase pursuant to Section 2.05(b) or in connection with a Commitment extension pursuant to Section 2.17 and upon the Funding Agent's receipt of such Lender's Assumption Agreement and recording the information contained therein in the Register, from and after the applicable Increase Date, the Funding Agent shall make all payments hereunder and under the Notes in respect of the interest assumed thereby to such Assuming Lender. (b) All computations of interest based on the Base Rate or the Federal Funds Rate shall be made by the Funding Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurocurrency Rate and of facility fees shall be made by the Funding Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or facility fees are payable. Each determination by the Funding Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error. (c) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or facility fee, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurocurrency Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day. 20 (d) Unless the Funding Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Funding Agent may assume that the Borrower has made such payment in full to the Funding Agent on such date and the Funding Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Funding Agent, each Lender shall repay to the Funding Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Funding Agent, at the Federal Funds Rate. Section 2.14. Taxes. (a) Except as otherwise required by law, any and all ----- payments by the Borrower hereunder or under the Notes issued hereunder shall be made, in accordance with Section 2.13, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto (all such taxes, levies, imposts, deductions, charges, withholdings, and liabilities in respect of payments hereunder or under the Notes being hereafter referred to as "Taxes"), ---- excluding, in the case of payments made to any Lender or any Agent (A) Taxes imposed on or measured by its net income, and franchise Taxes, branch Taxes, Taxes on doing business and Taxes measured by or imposed upon its capital or net worth, in each case imposed as a result of such Lender (and or such Lender's Applicable Lending Office) or such Agent being organized under the laws of, or being a legal resident of, or having a fixed place of business or a permanent establishment or doing business in the jurisdiction imposing such Tax (other than any such connection arising solely from such Lender (and or such Lender's Applicable Lending Office) or such Agent having executed, delivered or performed its obligations, or having received a payment, or having enforced its rights and remedies, under this Agreement or any of the other Loan Documents), (B) United Kingdom withholding Taxes except to the extent such United Kingdom withholding Taxes would not have been imposed but for a change, after the date such Lender or such Agent (as the case may be) becomes a party hereto, in United Kingdom tax law or United Kingdom officially published Inland Revenue practice or an amendment or revocation, after the date such Lender or such Agent (as the case may be) becomes a party hereto, of an applicable United Kingdom income tax treaty with Austria, Denmark, Finland, France, Germany, Ireland, Iceland, Luxembourg, Netherlands, Norway, Sweden, Switzerland or the United States, (C) United Kingdom Taxes imposed as a result of the failure of the Inland Revenue to approve, on or before the payment of interest to a Lender hereunder, a claim by such Lender for exemption, on or before the payment of interest hereunder, where such failure is due to such Lender's failure to timely submit a validly completed and executed Treaty Form within a time sufficient for the Inland Revenue to approve such Lender's claim and (D) United States withholding Taxes except to the extent such United States withholding Taxes are imposed solely as a result of (1) a change, after the date such Lender or such Agent (as the case may be) becomes a party hereto, in the Internal Revenue Code or any regulations promulgated thereunder (or in the official interpretation of the Internal Revenue Code or any regulations promulgated thereunder) or an amendment or revocation or change in official interpretation, after the date such Lender or such Agent (as the case may be) becomes a party hereto, of an applicable United States income tax treaty with Austria, Denmark, Finland, France, Germany, Ireland, Iceland, Luxembourg, Netherlands, Norway, Sweden or the United Kingdom or (2) the failure by the Borrower to timely request an updated or successor Form W-8BEN or W-8ECI, as appropriate, under Section 2.14(e) (all such non-excluded Taxes hereinafter referred to as "Indemnifiable Taxes"). If the ------------------- Borrower shall be required by law to deduct any Indemnifiable Taxes from or in respect of any sum payable hereunder or under any Note issued hereunder to any Lender or any Agent or, if 21 any Agent shall be required by law to deduct any Indemnifiable Taxes from or in respect of any sum paid or payable hereunder or under any Note to any Lender, (i) the sum payable shall be increased as may be necessary so that after making all required deductions for Indemnifiable Taxes (including deductions for Indemnifiable Taxes, whether by the Borrower or any Agent, applicable to additional sums payable under this Section 2.14) such Lender or such Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower (or, as the case may be and as required by applicable law, any Agent) shall make such deductions and (iii) the Borrower (or, as the case may be and as required by applicable law, any Agent) shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) In addition, the Borrower shall pay any present or future stamp or documentary taxes or any other excise (other than income) or property taxes, charges or similar levies that arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, or performing under this Agreement or the Notes or any document to be furnished under or in connection with any thereof or any modification or amendment in respect of this Agreement or the Notes (hereinafter referred to as "Other Taxes"). ----------- (c) The Borrower shall indemnify each Lender and each Agent for the full amount of Indemnifiable Taxes or Other Taxes imposed on or paid by such Lender or such Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Lender or such Agent (as the case may be) makes written demand therefor. (d) Within 30 days after the date of any payment of Indemnifiable Taxes under Section 2.14(a) by the Borrower, the Borrower shall furnish to the Funding Agent, at its address referred to in Section 8.02, the original or a certified copy of a receipt evidencing such payment to the extent such receipt is received by the Borrower, or other written proof of payment reasonably satisfactory to the Funding Agent showing payment thereof. In the case of any payment hereunder or under the Notes issued hereunder by or on behalf of the Borrower through an account or branch outside the United Kingdom or by or on behalf of the Borrower by a payor that is not a United Kingdom person, if the Borrower determines that no Indemnifiable Taxes are payable in respect thereof, the Borrower shall furnish, or shall cause such payor to furnish, to the Funding Agent, at such address, an opinion of counsel acceptable to the Agents stating that such payment is exempt from Indemnifiable Taxes. (e) Each Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender and on the date of the Assumption Agreement or the Assignment and Acceptance pursuant to which it becomes a Lender in the case of each other Lender, and from time to time thereafter as requested in writing by the Borrower shall provide each of the Funding Agent and the Borrower with (i) two original Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor or other from prescribed by the Internal Revenue Service, certifying that such Lender is exempt from United States withholding tax and (ii) to the extent that any such form or other certification becomes obsolete with respect to any Lender, such Lender shall, upon the written request of the Borrower to such Lender and the Funding Agent, promptly provide either an updated or successor form or certification to the Borrower and the Funding Agent unless, in each case, any change in treaty, law or regulation has occurred after the date such Lender becomes a party hereunder which renders all such forms inapplicable or which 22 would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Borrower and the Funding Agent. (f) Each Lender shall (i) as soon as reasonably practicable following the date it becomes a party hereto, submit to its Relevant Taxing Authority a validly completed Treaty Form (or successor Treaty Form thereto) claiming exemption from United Kingdom withholding Tax on interest, or (ii) (A) on or before the date it becomes a party hereto, furnish to the Borrower, with a copy to the Funding Agent, a certificate substantially in the form of Exhibit I (a "U.K. Tax Compliance Certificate") certifying that such Lender (1) is a Bank ------------------------------- within the meaning of Section 840A of the Income and Corporation Taxes Act of 1988 of the United Kingdom and (2) is within the charge to corporation tax in the United Kingdom with respect to payment hereunder and (B) agree, upon reasonable request by the Borrower, to provide to the Borrower and the Funding Agent, to the extent it is legally entitled to do so, such other forms as may be required by law in order to establish the legal entitlement of such Lender to an exemption from United Kingdom withholding Tax with respect to payments under this Agreement and the Notes issued hereunder, unless, in each case, any change in treaty, law or regulation has occurred after the date such Lender becomes a party hereunder which renders any such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Borrower and the Funding Agent. (g) For any period with respect to which a Lender has failed to provide the Borrower with the appropriate form described in Section 2.14(e) or (f) (other than if the Borrower has failed to timely request with reasonable notice any appropriate renewal, successor or other form or if any such form otherwise is not required under subsection (e) or (f)), such Lender shall not be entitled to indemnification under Section 2.14(a) or (c) with respect to Indemnifiable Taxes imposed by the United Kingdom or the United States by reason of such failure; provided, however, that should a Lender become subject to Indemnifiable Taxes or United Kingdom withholding Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Indemnifiable Taxes or United Kingdom withholding Taxes. If the Borrower is required by law to pay interest hereunder or on any Note issued hereunder, to any Lender subject to a deduction or withholding for United Kingdom Tax, but the Borrower has received at least 14 days prior to the relevant interest payment date a copy of a valid claim made and filed by such Lender on a Treaty Form (or successor thereto) as filed with the Inland Revenue which claim would, if accepted by the Inland Revenue, result in an authorization being given to the Borrower to make the payment of interest without such a deduction or withholding, then the Borrower shall, at such Lender's request, make the relevant payment to such Lender without such deduction or withholding; provided that such Lender shall indemnify the Borrower for any Indemnifiable Taxes or United Kingdom withholding Taxes or other costs imposed by the Inland Revenue upon and paid by the Borrower directly resulting from having relied upon such copy in making such payment. If the Borrower does make such payment without deduction or withholding for United Kingdom Tax upon such a request of such Lender, the Borrower shall not be obligated to such Lender to comply with the provisions of paragraph (a) of this Section 2.14 with respect to such United Kingdom Tax. (h) If a condition or an event occurs which would, or would upon the passage of time or giving notice, result in the payment of any additional amounts pursuant to this Section 2.14, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts 23 that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. (i) If any Agent or any Lender, in its sole opinion, determines that it has finally and irrevocably received or been granted a refund in respect of any Indemnifiable Taxes or Other Taxes as to which indemnification has been paid by the Borrower pursuant to Section 2.14(a) or (c), it shall promptly remit such refund to the Borrower, net of all out-of-pocket expenses of such Agent or such Lender; provided, however, that the Borrower upon the request of such Agent or such Lender, agrees promptly to return such refund to such party in the event such party is required to repay such refund to the relevant taxing authority. Such Agent or such Lender shall provide the Borrower with a copy of any notice or assessment from the relevant taxing authority (deleting any confidential information contained therein) requiring the repayment of such refund. Nothing contained herein shall impose an obligation on any Agent or any Lender to apply for any refund or to disclose to any party any information regarding their proprietary information regarding tax affairs and computations. (j) If a Lender changes its Applicable Lending Office (other than pursuant to subsection (h) above or Section 2.11 or 2.12) and the effect of such change, as of the date of such change, would be to cause the Borrower to become obligated to pay any additional amounts under this Section 2.14, the Borrower shall not be obligated to pay such additional amount. (k) A certificate of a Lender setting forth such amount or amounts as shall be necessary to compensate such Lender specified in Section 2.14(a), (b), or (c) above, as the case may be, and identifying with reasonable specificity the basis for calculation such amount or amounts, shall be delivered to the Borrower and the Funding Agent and shall be conclusive absent manifest error. (l) The obligations of a Lender under this Section 2.14 shall survive the termination of this Agreement and the payment of the Advances and all amounts payable hereunder. Section 2.15. Sharing of Payments, Etc. If any Lender shall obtain any ------------------------ payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Advances owing to it (other than pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of its ratable share of payments on account of the Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Advances owing to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.15 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. Section 2.16. Use of Proceeds. The proceeds of the Advances shall be --------------- available (and the Borrower agrees that it shall use such proceeds) solely (i) to refinance Existing Debt, (ii) to 24 provide liquidity support for commercial paper issued by the Borrower and (iii) for working capital and other general corporate purposes (including acquisitions) of the Borrower and its Subsidiaries. Section 2.17. Extension of Termination Date. (a) At least 30 days but not ----------------------------- more than 45 days prior to the Termination Date, the Borrower, by written notice to the Funding Agent, may request an extension of the Termination Date in effect at such time by 364 days from its then scheduled expiration; provided, however, -------- ------- that the Borrower shall not have made the Term Loan Election for Advances outstanding on such Termination Date prior to such time. The Funding Agent shall promptly notify each Lender of such request, and each Lender shall in turn, in its sole discretion, not earlier than 30 days, nor later than 20 days, prior to the Termination Date, notify the Borrower and the Funding Agent in writing as to whether such Lender will consent to such extension. If any Lender shall fail to notify the Funding Agent and the Borrower in writing of its consent to any such request for extension of the Termination Date at least 20 days prior to the Termination Date, such Lender shall be deemed to be a Non-Consenting Lender with respect to such request. The Funding Agent shall notify the Borrower not later than 15 days prior to the Termination Date of the decision of the Lenders regarding the Borrower's request for an extension of the Termination Date. (b) If all the Lenders consent in writing to any such request in accordance with subsection (a) of this Section 2.17, the Termination Date in effect at such time shall, effective as at the Termination Date (the "Extension Date"), be -------------- extended for 364 days; provided that on each Extension Date the applicable -------- conditions set forth in Section 3.02 shall be satisfied. If less than all of the Lenders consent in writing to any such request in accordance with subsection (a) of this Section 2.17, the Termination Date in effect at such time shall, effective as at the applicable Extension Date and subject to subsection (d) of this Section 2.17, be extended as to those Lenders that so consented (each a "Consenting Lender") but shall not be extended as to any other Lender (each a ----------------- "Non-Consenting Lender"). To the extent that the Termination Date is not --------------------- extended as to any Lender pursuant to this Section 2.17 and the Commitment of such Lender is not assumed in accordance with subsection (c) of this Section 2.17 on or prior to the applicable Extension Date, the Commitment of such Non-Consenting Lender shall automatically terminate in whole, and all Advances, interest fees and other amounts due to such Non-Consenting Lender shall be due and payable on such unextended Termination Date without any further notice or other action by the Borrower, such Lender or any other Person; provided that -------- such Non-Consenting Lender's rights under Sections 2.11, 2.14 and 8.04, and its obligations under Section 7.05, shall survive the Termination Date for such Lender as to matters occurring prior to such date. It is understood and agreed that no Lender shall have any obligation whatsoever to agree to any request made by the Borrower for any requested extension of the Termination Date. (c) If less than all of the Lenders consent to any such request pursuant to subsection (a) of this Section 2.17, the Funding Agent shall promptly so notify the Consenting Lenders, and each Consenting Lender may, in its sole discretion, give written notice to the Funding Agent not later than 10 days prior to the Termination Date of the amount of any Non-Consenting Lenders' Commitments for which it is willing to accept an assignment. If the Consenting Lenders notify the Funding Agent that they are willing to accept assignments of Commitments in an aggregate amount that exceeds the amount of the Commitments of the Non-Consenting Lenders, such Commitments shall be allocated among the Consenting Lenders willing to accept such assignments in such amounts as are agreed between the Borrower and the Funding Agent. If after giving effect to the assignments of Commitments described above there remain any Commitments of Non-Consenting Lenders, the Borrower may arrange for one or more 25 Consenting Lenders or other Eligible Assignees as Assuming Lenders to assume, effective as of the Extension Date, any Non-Consenting Lender's Commitment and all of the obligations of such Non-Consenting Lender under this Agreement thereafter arising, without recourse to or warranty by, or expense to, such Non-Consenting Lender; provided, however, that the amount of the Commitment of --------- ------ any such Assuming Lender as a result of such substitution shall in no event be less than $25,000,000 unless the amount of the Commitment of such Non-Consenting Lender is less than $25,000,000, in which case such Assuming Lender shall assume all of such lesser amount; and provided further that: -------- ------- (i) any such Consenting Lender or Assuming Lender shall have paid to such Non-Consenting Lender (A) the aggregate principal amount of, and any interest accrued and unpaid to the effective date of the assignment on, the outstanding Advances, if any, of such Non-Consenting Lender plus (B) any ---- - accrued but unpaid facility fees owing to such Non-Consenting Lender as of the effective date of such assignment; (ii) all additional costs reimbursements, expense reimbursements and indemnities payable to such Non-Consenting Lender, and all other accrued and unpaid amounts owing to such Non-Consenting Lender hereunder, as of the effective date of such assignment shall have been paid to such Non-Consenting Lender; and (iii) with respect to any such Assuming Lender, the applicable processing and recordation fee required under Section 8.07(a) for such assignment shall have been paid; provided further that such Non-Consenting Lender's rights under Sections 2.11, - -------- ------- 2.14 and 8.04, and its obligations under Section 7.05, shall survive such assignment and assumption as to matters occurring prior to the date of assignment and assumption. At least three Business Days prior to any Extension Date, (A) each such Assuming Lender, if any, shall have delivered to the Borrower and the Funding Agent an Assumption Agreement, duly executed by such Assuming Lender, such Non-Consenting Lender, the Borrower and the Funding Agent, (B) any such Consenting Lender shall have delivered confirmation in writing satisfactory to the Borrower and the Funding Agent as to the increase in the amount of its Commitment and (C) each Non-Consenting Lender being replaced pursuant to this Section 2.17 shall have delivered to the Funding Agent any Note or Notes held by such Non-Consenting Lender. Upon the payment or prepayment of all amounts referred to in clauses (i), (ii) and (iii) of the immediately preceding sentence, each such Consenting Lender or Assuming Lender, as of the Extension Date, will be substituted for such Non-Consenting Lender under this Agreement and shall be a Lender for all purposes of this Agreement, without any further acknowledgment by or the consent of the other Lenders, and the obligations of each such Non-Consenting Lender hereunder shall, by the provisions hereof, be released and discharged. (d) If (after giving effect to any assignments or assumptions pursuant to subsection (c) of this Section 2.17) Lenders having Commitments equal to at least 50% of the Commitments in effect immediately prior to the Extension Date consent in writing to a requested extension (whether by execution or delivery of an Assumption Agreement or otherwise) not later than one Business Day prior to such Extension Date, the Funding Agent shall so notify the Borrower, and, subject to the satisfaction of the applicable conditions in Section 3.02, the Termination Date then in effect shall be extended for the additional 364-day period as described in subsection (a) of this Section 2.17, and all references in this Agreement, and in the Notes, if any, to the "Termination Date" shall, ----------- ---- with respect to each Consenting Lender and each Assuming Lender for such Extension Date, refer to the Termination Date as so extended. Promptly following each 26 Extension Date, the Funding Agent shall notify the Lenders (including, without limitation, each Assuming Lender) of the extension of the scheduled Termination Date in effect immediately prior thereto and shall thereupon record in the Register the relevant information with respect to each such Consenting Lender and each such Assuming Lender. ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING Section 3.01. Conditions Precedent to Effectiveness. This Agreement shall ------------------------------------- become effective on and as of the first date (the "Effective Date") on which the -------------- following conditions precedent have been satisfied: (a) The Borrower shall have paid all fees and expenses of the Agents and the Lenders payable hereunder and accrued as of the Effective Date (including the accrued fees and expenses of counsel to the Agents). (b) On the Effective Date, the following statements shall be true and the Funding Agent shall have received for the account of each Lender a certificate signed by a duly authorized officer of the Borrower, dated the Effective Date, stating that: (i) The representations and warranties contained in Section 4.01 are correct in all material respects on and as of the Effective Date, and (ii) No event has occurred and is continuing that constitutes a Default. (c) The Funding Agent shall have received on or before the Effective Date the following, each dated such day, in form and substance satisfactory to the Agents and (except for the Notes) in sufficient copies for each Lender: (i) The Notes payable to the order of each of the Lenders, in a principal amount equal to each such Lender's Commitment. (ii) Certified copies of the resolutions of the Board of Directors (or committee thereof) of the Borrower and each other Loan Party approving this Agreement, the Notes and the Guaranty to which it is or is to be a party, and of all documents evidencing other necessary corporate action and governmental and other third party approvals and consents, if any, with respect to this Agreement, the Notes and the Guaranty. (iii) A certificate of the Secretary or an Assistant Secretary of each Loan Party certifying the names and true signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party and the other documents to be delivered hereunder. (iv) A guaranty in substantially the form of Exhibit E (as amended, supplemented or otherwise modified from time to time, the "Guaranty"), duly -------- executed by each Guarantor. 27 (v) An opinion of Alston & Bird, LLP, counsel for the Loan Parties, in substantially the form of Exhibit F hereto and as to such other matters as any Lender through the Agents may reasonably request. (vi) An opinion of Ashurst Morris Crisp, English counsel for the Borrower, in substantially the form of Exhibit G hereto and as to such other matters as any Lender through the Agents may reasonably request. (vii) An opinion of Shearman & Sterling, counsel for the Agents, in form and substance satisfactory to the Agents. (d) The termination of the commitments of the lenders and the payment in full of all amounts outstanding under the Amended and Restated Credit Agreement dated December 17, 1997 among the Borrower, the lenders parties thereto, Citibank, N.A. and NationsBank, N.A., as co-syndication agents, and The Chase Manhattan Bank, SunTrust Bank, Atlanta and Wachovia Bank, N.A., as managing agents. Section 3.02. Conditions Precedent to Each Borrowing and Each Extension --------------------------------------------------------- Date. The obligation of each Lender to make an Advance on the occasion of each - ---- Borrowing and each extension of Commitments pursuant to Section 2.17 shall be subject to the conditions precedent that the Effective Date shall have occurred and on the date of such Borrowing or the applicable Extension Date the following statements shall be true (and each of the giving of the applicable Notice of Borrowing, request for Commitment extension and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Borrowing or such Extension Date such statements are true): (a) the representations and warranties contained in Section 4.01 (excluding, in the case of Borrowings, clauses (g) and (i)(i) of Section 4.01) are correct in all material respects on and as of the date of such date, before and after giving effect to such Borrowing or such Extension Date and to the application of the proceeds therefrom, as though made on and as of such date, and (b) no event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, or such Extension Date, that constitutes a Default. Section 3.03. Determinations Under Section 3.01. For purposes of --------------------------------- determining compliance with the conditions specified in Section 3.01, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the Funding Agent responsible for the transactions contemplated by this Agreement shall have received notice from such Lender prior to the date that the Borrower, by notice to the Lenders, designates as the proposed Effective Date, specifying its objection thereto. The Funding Agent shall promptly notify the Lenders and the Borrower of the occurrence of the Effective Date. 28 ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.01. Representations and Warranties of the Borrower. The Borrower ---------------------------------------------- represents and warrants as follows: (a) Each Loan Party (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) is duly qualified and in good standing as a foreign corporation in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed is not reasonably likely to have a Material Adverse Effect and (iii) has all requisite corporate power and authority (including, without limitation, all governmental licenses, permits and other approvals) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted. (b) Set forth on Schedule 4.01(b) hereto is a complete and accurate list of all Significant Subsidiaries of each Loan Party as of the Effective Date, showing as of such date (as to each such Significant Subsidiary) the jurisdiction of its incorporation, the number of shares of each class of capital stock authorized, and the number of shares outstanding, on such date and the percentage of the outstanding shares of each such class owned (directly or indirectly) by such Loan Party and the number of shares covered by all outstanding options, warrants, rights of conversion or purchase and similar rights at such date. All of the outstanding capital stock of all of such Significant Subsidiaries has been validly issued, is fully paid and non-assessable and is owned by such Loan Party or one or more of its Subsidiaries free and clear of all Liens. Each such Significant Subsidiary (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) is duly qualified and in good standing as a foreign corporation in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed is not reasonably likely to have a Material Adverse Effect and (iii) has all requisite corporate power and authority (including, without limitation, all governmental licenses, permits and other approvals) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted. (c) The execution, delivery and performance by each Loan Party of this Agreement, the Notes and each other Loan Document to which it is or is to be a party, and the incurrence of the obligations provided for herein and therein, are within such Loan Party's corporate powers, have been duly authorized by all necessary corporate action, and do not (i) contravene such Loan Party's charter or bylaws, (ii) violate any law (including, without limitation, the Securities Exchange Act of 1934), rule, regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties or (iv) result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture, mortgage, 29 deed of trust, lease or other instrument, the violation or breach of which is reasonably likely to have a Material Adverse Effect. (d) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for (i) the due execution, delivery, recordation, filing or performance by any Loan Party of this Agreement, the Notes or any other Loan Document to which it is or is to be a party, or for the performance of any Loan Document or (ii) the exercise by the Agents or any Lender of its rights under the Loan Documents, except for the authorizations, approvals, actions, notices and filings listed on Schedule 4.01(d), all of which have been duly obtained, taken, given or made and are in full force and effect. (e) This Agreement has been, and each of the Notes and each other Loan Document when delivered hereunder will have been, duly executed and delivered by each Loan Party party thereto. This Agreement is, and each of the Notes and each other Loan Document when delivered hereunder will be, the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms. (f) The Consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as at December 31, 2000, and the related Consolidated and consolidating statements of income and Consolidated statement of cash flows of the Borrower and its Subsidiaries for the fiscal year then ended, accompanied by an opinion of Arthur Andersen LLP, independent public accountants (as to such Consolidated financial statements), and the Consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as at March 31, 2001, and the related Consolidated and consolidating statements of income and Consolidated statement of cash flows of the Borrower and its Subsidiaries for the three months then ended, duly certified by the chief financial officer of the Borrower, copies of which have been furnished to each Lender, fairly present, subject, in the case of said balance sheets as at March 21, 2001, and said statements of income and cash flows for the three months then ended, to year-end audit adjustments, the Consolidated and consolidating financial condition of the Borrower and its Subsidiaries as at such dates and the Consolidated and consolidating results of the operations of the Borrower and its Subsidiaries for the periods ended on such dates, all in accordance with United Kingdom generally accepted accounting principles applied on a consistent basis. (g) Since December 31, 2000, there has been no Material Adverse Change. (h) No written information, exhibit or report furnished by any Loan Party to any Agent or any Lender in connection with the negotiation of the Loan Documents or pursuant to the terms of the Loan Documents contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made therein not misleading in light of the circumstances under which they were made. (i) There is no action, suit, investigation, litigation or proceeding affecting any Loan Party or, to the best knowledge of the Loan Parties, any of its Subsidiaries pending or, to the best knowledge of the Loan Parties, threatened before any court, governmental agency or arbitrator that (i) would be reasonably likely to have a Material Adverse Effect (other than the matters described on Schedule 4.01(i) hereto (the "Disclosed Litigation")) and there has -------------------- been no material adverse change in the status, or financial effect on any Loan Party or any of its Subsidiaries, of the Disclosed Litigation from that described on Schedule 4.01(i) or (ii) purports to affect the 30 legality, validity or enforceability of this Agreement, any Note or any other Loan Document or the consummation of the transactions contemplated hereby. (j) Following application of the proceeds of each Advance, not more than 25 percent of the value of the assets (either of the Borrower only or of the Borrower and its Subsidiaries on a Consolidated basis) subject to the provisions of Section 5.02(a) or 5.02(d) or subject to any restriction contained in any agreement or instrument between the Borrower and any Lender or any Affiliate of any Lender relating to Debt and within the scope of Section 6.01(e) will be margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System). Neither the making of any Advance nor the use of proceeds thereof will violate or be inconsistent with the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System. (k) No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan that has resulted in or is reasonably expected to result in a Material Adverse Effect. (l) Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) required to be filed for each Plan, copies of which have been filed with the Internal Revenue Service and, with respect to each Plan whose funded current liability percentage (as defined in Section 302(d)(8) of ERISA) is less than 100%, furnished to the Lenders, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status. (m) Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably expected to incur (i) any liability under Section 4064 or 4069 of ERISA or (ii) any Withdrawal Liability to any Multiemployer Plan that has resulted or would be reasonably likely to result in a Material Adverse Effect. (n) Neither any Loan Party nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and, to the best knowledge of any Loan Party or any ERISA Affiliate, no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA. (o) Each Loan Party and each of its Subsidiaries and Affiliates has filed, has caused to be filed or has been included in all tax returns (Federal, state, local and foreign) required to be filed and has paid all taxes shown thereon to be due, together with applicable interest and penalties. (p) Neither any Loan Party nor any of its Subsidiaries is an "investment company", or a company "controlled by" an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended. Neither the making of any Advances nor the application of the proceeds or repayment thereof by the Borrower, nor the consummation of the other transactions contemplated hereby, will violate any provision of such Act or any rule, regulation or order of the Securities and Exchange Commission thereunder. (q) Neither the Borrower nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended. 31 (r) Each Subsidiary of the Borrower engaged in advisory or management activities, if any, is duly registered as an investment adviser as and to the extent required under the Investment Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder. Each Subsidiary of the Borrower engaged in the broker-dealer business, if any, is duly registered as a broker-dealer as and to the extent required under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder and, as and to the extent required is a member in good standing of the National Association of Securities Dealers, Inc. (s) As of the Effective Date, neither the Borrower nor any of its Subsidiaries is in default and no waiver of default is in effect with respect to the payment of any principal or interest of any Existing Debt for borrowed money. (t) The obligations of each Loan Party under the Loan Documents to which it is a party constitute direct, unconditional and general obligations of such Loan Party that rank and will rank at least pari passu in priority of payment and in all other respects with all other Debt of such Loan Party. (u) Each Loan Party is, individually and together with its Subsidiaries, Solvent. (v) Set forth on Schedule 4.01(v) hereto is a complete and accurate list of all Existing Debt showing as of the date hereof the principal amount outstanding thereunder. (w) The Borrower and each of its Significant Subsidiaries owns or has fully sufficient right to use, free from all material restrictions (other than Permitted Liens), all real and personal (including, without limitation, intellectual) properties that are necessary for the operation of their respective businesses as currently conducted. (x) Except under documents governing any Existing Debt and except for any restrictions under documents governing Debt of a Person that shall be acquired by, or merged with or into, the Borrower or any Subsidiary of the Borrower, no Subsidiary of the Borrower is party to any agreement prohibiting, conditioning or limiting the payment of dividends or other distributions to the Borrower or any of its Subsidiaries or the repayment of Debt owed to the Borrower by any Subsidiary of the Borrower. ARTICLE V COVENANTS OF THE BORROWER Section 5.01. Affirmative Covenants. So long as any Advance shall remain --------------------- unpaid or any Lender shall have any Commitment hereunder, the Borrower will: (a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries ------------------------- to comply, in all material respects, with all applicable laws, rules, regulations and orders, such compliance to include (to the extent applicable), without limitation, compliance with the Investment Advisers Act of 1940, as amended, ERISA and environmental laws, except where the failure to do so would not, and would not be reasonably expected to, have a Material Adverse Effect. 32 (b) Payment of Taxes, Etc. Pay and discharge, and cause each of its --------------------- Subsidiaries to pay and discharge, before the same shall become delinquent, all taxes, assessments, claims and governmental charges or levies imposed upon it or upon its property, except to the extent that any failure to do so would not, and would not be reasonably expected to, have a Material Adverse Effect; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, claim or charge that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained. (c) Maintenance of Insurance. Maintain, and cause each of its Significant ------------------------ Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Significant Subsidiary operates. (d) Preservation of Corporate Existence, Etc. Preserve and maintain, and ---------------------------------------- cause each of its Subsidiaries to preserve and maintain, its existence, legal structure, legal name, rights (charter and statutory), permits, licenses, approvals, registrations, privileges and franchises; provided, however, that the Borrower and its Subsidiaries may consummate any merger or consolidation permitted under Section 5.02(c); and provided further that neither the Borrower nor any of its Subsidiaries shall be required to preserve any right, permit, license, approval, registration, privilege or franchise if the Board of Directors of the Borrower or such Subsidiary shall determine that the failure to so maintain such existence (in the case of any Subsidiary that is not a Loan Party) or such rights and franchises (in the case of the Borrower or any of its Subsidiaries) would not, and would not be reasonably expected to, have a Material Adverse Effect. (e) Visitation Rights. At any reasonable time and from time to time, permit ----------------- any Agent or any of the Lenders or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Borrower and any of its Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower and any of its Subsidiaries with any of their officers or directors and with their independent certified public accountants. (f) Keeping of Books. Keep, and cause each of its Significant Subsidiaries ---------------- to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each such Significant Subsidiary in accordance with generally accepted accounting principles applicable to such Person in effect from time to time. (g) Maintenance of Properties, Etc. Take all reasonable action to maintain ------------------------------ and preserve, and cause each of its Subsidiaries to take all reasonable action to maintain and preserve, all of its properties that are necessary in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except where the failure to so maintain and preserve such properties would not, and would not be reasonably expected to, have a Material Adverse Effect. (h) New Material Subsidiaries. Promptly and in any event within 30 days ------------------------- following the request of the Required Lenders made after either (i) the organization or acquisition of any new Material Subsidiary or (ii) the delivery of audited annual financial statements pursuant to Section 5.01(j) that indicate that a Subsidiary of the Borrower that is not at such time a guarantor 33 is a Material Subsidiary, cause such Material Subsidiary to execute and deliver an Assumption of Guaranty (as defined in the Guaranty), together with such documents as the Required Lenders may request evidencing corporate action taken to authorize such execution and delivery and the incumbency and signatures of officers of such Material Subsidiary, provided that a Material Subsidiary shall not be required to become a Guarantor if (A) a guaranty by such Material Subsidiary would result in materially adverse tax consequences to the Borrower and its Subsidiaries or shareholders of the Borrower or (B) a guaranty by such Material Subsidiary is prohibited or limited by regulatory requirements or applicable law. (i) Use of Proceeds. Use the proceeds of the Advances solely as provided in --------------- Section 2.16 and otherwise in accordance with the terms hereof. (j) Reporting Requirements. Furnish to the Lenders: ---------------------- (i) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Borrower, Consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as of the end of such quarter and Consolidated and consolidating statements of income and Consolidated cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments) by the chief financial officer of the Borrower as having been prepared in accordance with generally accepted accounting principles and certificates of the chief financial officer of the Borrower as to compliance with the terms of this Agreement and setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 5.03, provided that in the event of any change in UK GAAP used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 5.03, a statement of reconciliation conforming such financial statements to UK GAAP; (ii) as soon as available and in any event within 150 days after the end of each fiscal year of the Borrower, a copy of the annual audit report for such year for the Borrower and its Subsidiaries, containing Consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as of the end of such fiscal year and Consolidated and consolidating statements of income and Consolidated cash flows of the Borrower and its Subsidiaries for such fiscal year, in each case accompanied by an opinion acceptable to the Required Lenders by Arthur Andersen LLP or other independent public accountants acceptable to the Required Lenders (as to such Consolidated financial statements), provided that in the event of any change in UK GAAP used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 5.03, a statement of reconciliation conforming such financial statements to UK GAAP; (iii) as soon as possible and in any event within five days after the occurrence of each Default continuing on the date of such statement, a statement of the chief financial officer of the Borrower setting forth details of such Default and the action that the Borrower has taken and proposes to take with respect thereto; 34 (iv) promptly after the commencement thereof, notice of all actions and proceedings before any court, governmental agency or arbitrator affecting the Borrower or any of its Subsidiaries of the type described in Section 4.01(i); (v) (A) promptly and in any event within 20 days after any Loan Party or any ERISA Affiliate knows or has reason to know that (1) any ERISA Event has occurred which could result in a material liability of any Loan Party or any ERISA Affiliate, or (2) any Loan Party or any ERISA Affiliate has incurred or is reasonably expected to incur a material liability under Section 4064 or 4069 of ERISA, a statement of the chief financial officer of the Borrower describing such ERISA Event and the circumstances giving rise to, and the amount of such liability and the action, if any, that such Loan Party or such ERISA Affiliate has taken and proposes to take with respect thereto and (B) on the date any records, documents or other information must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of such records, documents and information; (vi) promptly and in any event within two Business Days after receipt thereof by any Loan Party or any ERISA Affiliate, copies of each notice from the PBGC stating its intention to terminate any Plan or to have a trustee appointed to administer any Plan; (vii) promptly upon request from the Funding Agent or any Lender, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) required to be filed with respect to each Plan whose funded current liability percentage (as defined in Section 302(d)(8) of ERISA) is less than 100%; (viii) promptly and in any event within 20 days after receipt thereof by any Loan Party or any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each notice concerning (A) the imposition on any Loan Party or any ERISA Affiliate of Withdrawal Liability in a material amount by any such Multiemployer Plan, (B) the reorganization or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the amount of liability incurred, or that may be incurred, by any Loan Party or any ERISA Affiliate in connection with any event described in clause (A) or (B); (ix) promptly and in any event within five Business Days after the organization or acquisition of any Material Subsidiary, notice of such event; and (x) such other information respecting the Borrower or any of its Subsidiaries as any Lender through the Funding Agent may from time to time reasonably request. Section 5.02. Negative Covenants. So long as any Advance shall remain ------------------ unpaid or any Lender shall have any Commitment hereunder, the Borrower will not, at any time: (a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of ---------- its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any of its properties of any character (including, without limitation, accounts) whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any accounts or other 35 right to receive income, excluding, however, from the operation of the foregoing restrictions the following: (i) Permitted Liens; (ii) Liens on deposit accounts of the Borrower and its Subsidiaries in respect of their cash pooling operations; (iii) purchase money Liens upon or in real property or equipment acquired or held by the Borrower or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such property or equipment or to secure Debt incurred solely for the purpose of financing the acquisition of any such property or equipment, or Liens existing on any such property or equipment at the time of acquisition (other than any such Liens created in contemplation of such acquisition that were not incurred to finance the acquisition of such property), or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount; provided, however, that no such Lien shall extend to or cover any properties of any character other than the property or equipment being acquired, and no such extension, renewal or replacement shall extend to or cover any property not theretofore subject to the Lien being extended, renewed or replaced; and provided further that the aggregate principal amount of the Debt secured by Liens permitted by this clause (iii) and clause (iv) below shall not exceed $100,000,000 at any time outstanding; (iv) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Borrower or any Subsidiary of the Borrower or becomes a Subsidiary of the Borrower; provided that such Liens were not created in contemplation of such merger, consolidation or investment and do not extend to any assets other than those of the Person merged into or consolidated with the Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary; provided, further, that the aggregate principal amount of the Debt secured by Liens permitted by this clause (iv) and clause (iii) above shall not exceed $100,000,000 at any time outstanding; (v) Liens arising pursuant to one or more securitization programs permitted pursuant to Section 5.02(d)(ii); (vi) the replacement, extension or renewal of any Lien permitted by clauses (iii) through (iv) above upon or in the same property theretofore subject thereto or the replacement, extension or renewal (without increase in the amount or addition of any direct or contingent obligor) of the Debt secured thereby; and (vii) Liens existing as of the Effective Date as described on Schedule 5.02(a). (b) Loans. Make or hold, or permit any of its Subsidiaries to make or hold, ----- loans or advances to any Person other than (i) loans or advances between or among the Borrower and any of its Subsidiaries, (ii) loans or advances to Affiliates of the Borrower in an aggregate amount at any one time outstanding not to exceed $100,000,000 and (iii) loans or advances not otherwise permitted by clauses (i) and (ii) above in an aggregate amount at any one time outstanding not to exceed $40,000,000. (c) Mergers, Etc. Merge into or consolidate with any Person or permit any ------------ Person to merge into it, or permit any of its Subsidiaries to do so, except that 36 (i) any of the Borrower's Subsidiaries may merge into the Borrower, (ii) any Subsidiary of the Borrower that is not a Restricted Subsidiary may merge with any other Subsidiary of the Borrower that is not a Restricted Subsidiary, (iii) any Subsidiary of a Guarantor may merge with any Guarantor or a Subsidiary of a Guarantor, (iv) any Guarantor may merge with any other Subsidiary of the Borrower, and (v) mergers in connection with acquisitions of Investments to the extent not prohibited pursuant to Section 5.02(e); provided, however, that in each case, immediately after giving effect thereto, no event shall occur and be continuing that constitutes a Default and, in the case of any such merger to which the Borrower is a party, the Borrower is the surviving corporation or, in the case of any merger to which a Guarantor, but not the Borrower, is a party, the surviving corporation is a Guarantor and is not (as a result of such merger) subject to any agreement described in Section 5.02(k)(i), (ii) or (iii). (d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of, --------------------- or permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets, or grant any option or other right to purchase, lease or otherwise acquire any assets, except: (i) in a transaction authorized by subsection (c) of this Section, (ii) the sale or other disposition to a third-party investor by the Borrower or any of its Subsidiaries of its rights to receive distribution fees and contingent deferred sales charges pursuant to a securitization program, (iii) the Borrower and its Subsidiaries may, during any fiscal year of the Borrower, sell, lease, transfer or otherwise dispose of assets (including equity securities owned by such Persons) which generated up to, but not to exceed, twenty percent (20%) of the consolidated revenues of the Borrower during the immediately preceding fiscal year of the Borrower; (iv) any Subsidiary of the Borrower that is not a Restricted Subsidiary may sell, lease, transfer or otherwise dispose of all or substantially all of its assets to the Borrower or a wholly-owned Subsidiary of the Borrower that is not a Restricted Subsidiary or a Guarantor; (v) any Guarantor or any Subsidiary of a Guarantor may sell, lease, transfer or otherwise dispose of all or substantially all of its assets to any other Guarantor or a Subsidiary of a Guarantor; and (vi) sales or other dispositions of obsolete equipment and furniture. (e) Investments. Make, or permit any of its Subsidiaries to make, any ----------- Investment in any Person unless each of the following conditions are satisfied: (i) after giving effect to such Investment, no Event of Default shall be continuing; and (ii) if and to the extent such Investment relates to the purchase or acquisition of all of the capital stock of, or all or substantially all of the 37 assets of, such Person (A) such Person shall be in substantially similar lines of business as the Borrower and its Subsidiaries or businesses reasonably related or complimentary thereto and (B) after giving effect to such Investment, the Borrower will, on a pro forma basis, be in compliance with the financial covenants set forth in Section 5.03. (f) Dividends, Etc. Declare or make any dividend payment or other -------------- distribution of assets, properties, cash, rights, obligations or securities on account of any class of shares of capital stock of the Borrower, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom, the Borrower may (i) declare and pay dividends and distributions payable only in ordinary shares and/or exchangeable shares of the Borrower and (ii) declare and pay cash dividends and make other distributions to its stockholders solely out of 60% of net income of the Borrower arising after December 31, 2000 and computed on a cumulative, Consolidated basis. (g) Change in Nature of Business. Make, or permit any of its Significant ---------------------------- Subsidiaries to make, any material change in the nature of its business as carried on at the date hereof. (h) Charter Amendments. Amend, or permit any of its Significant ------------------ Subsidiaries to amend, its certificate of incorporation or bylaws in a manner that has a Material Adverse Effect. (i) Accounting Changes. Make or permit, or permit any of its Significant ------------------ Subsidiaries to make or permit, any material change in accounting policies or reporting practices, except as required by the generally accepted accounting principles applicable to the Borrower or such Significant Subsidiary. (j) Limitation on Subsidiary Dividends, Etc. Enter into or suffer to exist, --------------------------------------- or permit any of its Subsidiaries to enter into or suffer to exist, any agreement prohibiting, conditioning or limiting (i) the payment of dividends by any Subsidiary of the Borrower, (ii) the payment of Debt of a Subsidiary of the Borrower to the Borrower or other Subsidiaries of the Borrower or (iii) the ability of any Subsidiary of the Borrower to guaranty Debt of the Borrower, other than (A) in favor of the Lenders, (B) in connection with any Existing Debt (but not extensions or refinancings of any such Existing Debt) or (C) as required by any law or regulation applicable to such Person. (k) Negative Pledge. Enter into or suffer to exist, or permit any of its --------------- Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon any of its property or assets other than (i) in favor of the Lenders, (ii) in connection with any Existing Debt (but not extensions or refinancings of any such Existing Debt) or (iii) with respect to purchase money liens, capital leases and operating leases, but only as to the assets so purchased or leased. (l) Partnerships, Etc. Become a general partner in any general or limited ----------------- partnership or joint venture, or permit any of its Subsidiaries to do so, other than any Subsidiary the sole assets of which consist of its interest in such partnership or joint venture. (m) Transactions with Affiliates. Conduct, or permit any of its ---------------------------- Subsidiaries to conduct, transactions with any of their Affiliates except in the ordinary course of business of and pursuant to the reasonable requirements of the Borrower's or such Subsidiaries business and upon fair and reasonable terms that are no less favorable to the Borrower or such Subsidiary, as the case may be, than those which would be obtained in a comparable arm's-length transaction with a Person not an Affiliate; provided that the foregoing restrictions shall not apply to 38 (i) any transaction (A) between any Loan Parties, (B) between any Subsidiary of the Borrower that is not a Restricted Subsidiary and any other Subsidiary of the Borrower that is not a Restricted Subsidiary, (C) between any Guarantor and any of its Subsidiaries, and (D) between the Borrower or any of its Subsidiaries and their respective employees to make loans to such employees for purposes of exercising stock options of such employees and paying tax liabilities of such employees associated therewith, and (ii) transactions between the Borrower or any Subsidiary or other Investment Company sponsored by the Borrower or any Subsidiary or for which the Borrower or any Subsidiary provides advisory, administrative, supervisory, management, consulting, underwriting or similar services, that are otherwise permissible under the Investment Company Act of 1940, the Investment Advisers Act of 1940 and the applicable management contract. Section 5.03. Financial Covenants. So long as any Advance shall remain ------------------- unpaid or any Lender shall have any Commitment hereunder, the Borrower will: (a) Debt/EBITDA Ratio. Maintain at the end of each fiscal quarter of the ----------------- Borrower a Debt/EBITDA Ratio of not greater than 3.00:1.00. (b) Coverage Ratio. Maintain at the end of each fiscal quarter of the -------------- Borrower a ratio of EBITDA for the four consecutive fiscal quarters of the Borrower ended on or immediately prior to the date of determination to interest payable on, and amortization of debt discount in respect of, Adjusted Debt for such period, of not less than 4.00:1.00. ARTICLE VI EVENTS OF DEFAULT Section 6.01. Events of Default. If any of the following events ("Events of ----------------- Default") shall occur and be continuing: (a) The Borrower shall fail to pay any principal of any Advance when the same becomes due and payable; or the Borrower shall fail to pay any interest on any Advance or make any other payment of fees or other amounts payable under this Agreement or any Note within three days after the same becomes due and payable; or (b) Any representation or warranty made by the Borrower or any Loan Party under any Loan Document or by the Borrower (or any of its officers) in connection with any Loan Document shall prove to have been incorrect in any material respect when made; or (c) (i) The Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 5.01(d), (e) or (j), 5.02 or 5.03, or (ii) the Borrower shall fail to perform or observe any other term, covenant or agreement contained in this Agreement on its part to be performed or observed if such failure shall remain unremedied for 30 days after written notice thereof shall have been given to the Borrower by an Agent or any Lender; or (d) The Borrower or any of its Subsidiaries shall fail to pay any principal of or premium or interest on any Debt that is outstanding in a principal or notional amount of at least $50,000,000 (or the equivalent thereof in any other currencies) in the aggregate (but excluding 39 Debt outstanding hereunder) of the Borrower or such Subsidiary (as the case may be), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid or redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or (e) The Borrower or any of its Significant Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower or any of its Significant Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 45 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Borrower or any of its Significant Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (e); or (f) Any judgment or order for the payment of money in excess of $50,000,000 (or the equivalent thereof in any other currencies) shall be rendered against the Borrower or any of its Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; provided, however, that any such judgment or order shall not be an Event of Default under this Section 6.01(f) if and for so long as (i) the amount of such judgment or order in excess of $50,000,000 (or the equivalent thereof in any other currencies) is covered by a valid and binding policy of insurance between the defendant and the insurer covering payment thereof and (ii) such insurer, which shall be rated at least "A" by A.M. Best Company, has been notified of, and has not disputed the claim made for payment of, the amount of such excess amount; or (g) Any non-monetary judgment or order shall be rendered against the Borrower or any of its Subsidiaries that could be reasonably expected to have a Material Adverse Effect, and there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (h) (i) Any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of the Borrower (or other securities convertible into such Voting Stock) representing 33% or 40 more of the combined voting power of all Voting Stock of the Borrower; or (ii) during any period of up to 24 consecutive months, commencing after the date of this Agreement, individuals who at the beginning of such 24-month period were directors of the Borrower shall cease for any reason to constitute a majority of the board of directors of the Borrower; or (i) Any ERISA Event shall have occurred with respect to a Plan, or any Loan Party or any ERISA Affiliate shall have incurred or be reasonably expected to incur liability under Section 4064 or 4069 of ERISA, and the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to which an ERISA Event shall have occurred and then exist (or the liability of the Loan Parties and the ERISA Affiliates incurred or expected to be incurred with respect to Section 4064 or 4069 of ERISA or related to such ERISA Event) exceeds $25,000,000; or (j) Any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined as of the date of such notification), exceeds $25,000,000 or requires payments exceeding $5,000,000 per annum; or (k) Any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, and as a result of such reorganization or termination the aggregate annual contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years of such Multiemployer Plans immediately preceding the plan year in which such reorganization or termination occurs by an amount exceeding $25,000,000; or (l) Any governmental authority or regulatory body shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which prohibits, enjoins or otherwise restricts the Borrower or any of its Subsidiaries in a manner that has a Material Adverse Effect; then, and in any such event, the Funding Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the obligation of each Lender to make Advances to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Notes, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to make Advances shall automatically be terminated and (B) the Notes, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. 41 ARTICLE VII THE AGENTS Section 7.01. Authorization and Action. Each Lender hereby appoints and ------------------------ authorizes the Funding Agent and the Co-Syndication Agents to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Funding Agent and the Co-Syndication Agents by the terms hereof, together with such powers and discretion as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Notes), the Funding Agent and the Co-Syndication Agents shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding upon all Lenders and all holders of Notes; provided, however, that neither the Funding Agent nor any Co-Syndication Agent shall be required to take any action that exposes such Agent to personal liability or that is contrary to this Agreement or applicable law. The Funding Agent and each Co-Syndication Agent agree to give to each Lender prompt notice of each notice given to it by the Borrower pursuant to the terms of this Agreement. Section 7.02. Agents' Reliance, Etc. Neither the Funding Agent, any --------------------- Co-Syndication Agent nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, each Agent: (i) may treat the payee of any Note as the holder thereof until the Funding Agent receives and accepts an Assignment and Acceptance entered into by the Lender that is the payee of such Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07; (ii) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or to inspect the property (including the books and records) of the Borrower; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and (vi) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram or telex) believed by it to be genuine and signed or sent by the proper party or parties. Section 7.03. Citibank, Bank of America and Affiliates. With respect to its ---------------------------------------- Commitment, the Advances made by it and the Note issued to it, each of Citibank and Bank of America shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not an Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include each of Citibank and Bank of America in its individual capacity. Each of Citibank and Bank of America and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with, the Borrower, any of its 42 Subsidiaries and any Person who may do business with or own securities of the Borrower or any such Subsidiary, all as if Citibank and Bank of America were not Agents and without any duty to account therefor to the Lenders. Section 7.04. Lender Credit Decision. Each Lender acknowledges that it has, ---------------------- independently and without reliance upon any Agent or any other Lender and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon any Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. Section 7.05. Indemnification. The Lenders agree to indemnify the Funding --------------- Agent and each Co-Syndication Agent (to the extent not reimbursed by the Borrower), ratably according to the respective principal amounts of the Notes then held by each of them (or if no Notes are at the time outstanding, ratably according to the respective amounts of their Commitments), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against such Agent in any way relating to or arising out of this Agreement or any action taken or omitted by such Agent under this Agreement (collectively, the "Indemnified ----------- Costs"), provided that no Lender shall be liable for any portion of such - ----- liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Funding Agent and each Co-Syndication Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that such Agent is not reimbursed for such expenses by the Borrower. In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05 applies whether any such investigation, litigation or proceeding is brought by any Agent, any Lender or a third party. Section 7.06. Successor Agents. (a) The Funding Agent may resign at any ---------------- time by giving written notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Funding Agent with the consent, so long as no Event of Default has occurred and is continuing, of the Borrower (which consent shall not be unreasonably withheld or delayed). If no successor Funding Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Funding Agent's giving of notice of resignation or the Required Lenders' removal of the retiring Funding Agent, then the retiring Funding Agent may, on behalf of the Lenders, appoint a successor Funding Agent, which shall be an Eligible Assignee. Upon the acceptance of any appointment as Funding Agent hereunder by a successor Funding Agent, such successor Funding Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Funding Agent, and the retiring Funding Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Funding Agent's resignation or removal hereunder as Funding Agent, the provisions of 43 this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Funding Agent under this Agreement. (b) Any Co-Syndication Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower. Section 7.07. Co-Agents. The co-agents shall have no duties or obligations --------- under this Agreement or the other Loan Documents in their capacities as co-agents. ARTICLE VIII MISCELLANEOUS Section 8.01. Amendments, Etc. No amendment or waiver of any provision of --------------- this Agreement or the Notes, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Lenders, do any of the following: (a) waive any of the conditions specified in Section 3.01, (b) increase or extend the Commitments of the Lenders (other than pursuant to Section 2.05(b) or 2.17) or subject the Lenders to any additional obligations, (c) reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder, (d) postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, (e) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Lenders, that shall be required for the Lenders or any of them to take any action hereunder, (f) release any obligations of the Guarantors or (g) amend this Section 8.01; and provided further that no amendment, waiver or consent shall, unless in writing and signed by the Funding Agent or any Co-Syndication Agent (as the case may be) in addition to the Lenders required above to take such action, affect the rights or duties of the Funding Agent or such Co-Syndication Agent under this Agreement or any Note. Section 8.02. Notices, Etc. All notices and other communications provided ------------ for hereunder shall be in writing (including telecopier, telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed or delivered, if to the Borrower, at its address at 11 Devonshire Square, London EC2N 4YR, England, Attention: Michael S. Perman, with a copy to 1315 Peachtree Street N.E., Suite 500, Atlanta, Georgia 30309, Attention: Mark Bole; if to any Initial Lender, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender, at its Domestic Lending Office specified in the Assumption Agreement or the Assignment and Acceptance pursuant to which it became a Lender; and if to the Funding Agent pursuant to Article II, at its address at 100 Tryon Street, Charlotte, North Carolina 28255, Attention: Margaret Rhodes, and if the Funding Agent pursuant to any provision of this Agreement other than Article II, at its address at 600 Peachtree Street N.E., Atlanta, Georgia 30308, Attention: Betty Reed; or, as to the Borrower or the Funding Agent, at such other address as shall be designated by such party in a written notice to the other parties and, as to each other party, at such other address as shall be designated by such party in a written notice to the Borrower and the Funding Agent. All such notices and communications shall, when mailed, telecopied, telegraphed or telexed, be effective when deposited in the mails, telecopied, delivered to the telegraph company or confirmed by telex answerback, respectively, except that notices 44 and communications to the Funding Agent pursuant to Article II, III or VII shall not be effective until received by the Funding Agent. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or the Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of a manually executed counterpart thereof. Section 8.03. No Waiver; Remedies. No failure on the part of any Lender, ------------------- any Co-Syndication Agent or the Funding Agent to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. Section 8.04. Costs and Expenses. (a) The Borrower agrees to pay on demand ------------------ all costs and expenses of the Agents in connection with the preparation, execution, delivery, administration, modification and amendment of this Agreement, the Notes and the other documents to be delivered hereunder, including, without limitation, (A) all due diligence, syndication (including printing, distribution and bank meetings), transportation, computer, duplication, appraisal, consultant, and audit expenses and (B) the reasonable fees and expenses of counsel for the Agents with respect thereto and with respect to advising each Agent as to its rights and responsibilities under this Agreement. The Borrower further agrees to pay on demand all costs and expenses of the Agents and the Lenders, if any (including, without limitation, reasonable counsel fees and expenses), in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Notes and the other documents to be delivered hereunder, including, without limitation, reasonable fees and expenses of counsel for each Agent and each Lender in connection with the enforcement of rights under this Section 8.04(a). (b) The Borrower agrees to indemnify and hold harmless the Funding Agent, each Co-Syndication Agent and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each, an "Indemnified ----------- Party") from and against any and all claims, damages, losses, liabilities and - ----- expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) the Notes, this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Advances, except to the extent such claim, damage, loss, liability or expense resulted from such Indemnified Party's gross negligence or willful misconduct. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 8.04(b) applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, its directors, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. The Borrower also agrees not to assert any claim against the Funding Agent, any Co-Syndication Agent, any Lender, any of their Affiliates, or any of their respective directors, officers, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Notes, this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Advances. 45 (c) If any payment of principal of, or Conversion of, any Eurocurrency Rate Advance is made by the Borrower to or for the account of a Lender other than on the last day of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.08(c) or (d), 2.10 or 2.12, acceleration of the maturity of the Notes pursuant to Section 6.01 or for any other reason, or by an Eligible Assignee to a Lender other than on the last day of the Interest Period for such Advance upon an assignment of rights and obligations under this Agreement pursuant to Section 8.07 as a result of a demand by the Borrower pursuant to Section 8.07(a), the Borrower shall, upon demand by such Lender (with a copy of such demand to the Funding Agent), pay to the Funding Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Advance, less the return such Lender reasonably expects to receive on its redeployment of funds. (d) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in Sections 2.11, 2.14 and 8.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Notes. Section 8.05. Right of Set-off. Upon the occurrence and during the ---------------- continuance of any Event of Default, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Note held by such Lender, whether or not such Lender shall have made any demand under this Agreement or such Note and although such obligations may be unmatured. Each Lender agrees promptly to notify the Borrower after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender and its Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Lender and its Affiliates may have. Section 8.06. Binding Effect. This Agreement shall become effective when it -------------- shall have been executed by the Borrower and the Funding Agent and each Co-Syndication Agent, the conditions precedent set forth in Section 3.01 shall have been satisfied and when the Funding Agent shall have been notified by each Initial Lender that such Initial Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Funding Agent, each Co-Syndication Agent and each Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders. Section 8.07. Assignments and Participations. (a) Each Lender may, with the ------------------------------ consent, not to be unreasonably withheld, of the Funding Agent and, unless an Event of Default has occurred and is continuing, the Borrower and, if demanded by the Borrower at a time when no Default has occurred and is continuing (following a demand by such Lender pursuant to Section 2.11 or 2,14 or a notice by such Lender pursuant to Section 2.12) upon at least five Business Days' notice to such Lender and the Funding Agent, will assign to one or more Persons all or a portion of its rights and obligations under this Agreement (including, without limitation, 46 all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender or an assignment of all of a Lender's rights and obligations under this Agreement, the amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $15,000,000, (iii) unless an Event of Default shall have occurred and be continuing, each such assignment shall be to an Eligible Assignee, (iv) each such assignment made as a result of a demand by the Borrower pursuant to this Section 8.07(a) shall be arranged by the Borrower after consultation with the Funding Agent and shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the assigning Lender under this Agreement, (v) no Lender shall be obligated to make any such assignment as a result of a demand by the Borrower pursuant to this Section 8.7(a) unless and until such Lender shall have received one or more payments from either the Borrower or one or more Eligible Assignees in an aggregate amount at least equal to the aggregate outstanding principal amount of the Advances owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement, (vi) any demand by the Borrower pursuant to this Section 8.07(a) shall be made on all Lenders that have made a demand pursuant to Section 2.11 or 2.14 or given notice pursuant to Section 2.12, as the case may be, and (vii) the parties to each such assignment shall execute and deliver to the Funding Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with any Note subject to such assignment and a processing and recordation fee of $3,500 provided that, in the case of an assignment of rights and obligations under this Agreement as a result of a demand by the Borrower, the Borrower shall pay the processing and recordation fee of $3,500, which fee shall not be payable if the assignee is an existing Lender; provided further, that the consent of the Funding Agent and the Borrower shall not be required in the case of any assignment by a Lender to one or more of such Lender's Affiliates. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (y) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto). (b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; 47 (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Funding Agent, any Co-Syndication Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the Funding Agent and each Co-Syndication Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to such Agent by the terms hereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender. (c) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with any Note or Notes subject to such assignment, the Funding Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower. Within five Business Days after its receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Funding Agent in exchange for the surrendered Note a new Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it pursuant to such Assignment and Acceptance and, if the assigning Lender has retained a Commitment hereunder, a new Note to the order of the assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit A hereto. (d) The Funding Agent shall maintain at its address referred to in Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Advances owing to, each Lender from time to time (the "Register"). The entries in the Register shall be -------- conclusive and binding for all purposes, absent manifest error, and the Borrower, the Funding Agent, each Co-Syndication Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. (e) Each Lender may sell participations to one or more banks or other entities (other than the Borrower or any of its Affiliates) in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) such Lender's obligations under this Agreement (including, without limitation, its Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrower, the Funding Agent, each Co-Syndication Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement, (v) all amounts payable to a Lender under this Agreement (including, without limitation, Sections 2.11, 48 2.14 and 8.07) shall be determined as if such Lender had not granted any such participations and (vi) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of this Agreement or any Note, or any consent to any departure by the Borrower therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation. (f) Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 8.07, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any Confidential Information relating to the Borrower received by it from such Lender by executing a confidentiality letter substantially in the form of Exhibit K. (g) Any Lender may at any time, without the consent of the Funding Agent or the Borrower, create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the Advances owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System. (h) Any Lender may at any time, without the consent of the Funding Agent or the Borrower, but with notice to the Funding Agent, assign all or a part of its rights under this Agreement to any Affiliate of such Lender. (i) Notwithstanding any other provision of this Agreement, no assignee of a Lender, which as of the date of any assignment to it pursuant to this Section 8.07 would be entitled to receive any greater payment under Section 2.11 or 2.14 than the assigning Lender would have been entitled to receive as of such date under such Sections with respect to the rights assigned, shall be entitled to receive any greater payments than such assigning Lender would have been entitled to receive unless the Borrower has expressly consented in writing to waive the benefit of this provision at the time of such assignment. Section 8.08. Confidentiality. None of the Funding Agent, any --------------- Co-Syndication Agent nor any Lender shall disclose any Confidential Information to any other Person without the consent of the Borrower, other than (a) to such Agent's or such Lender's Affiliates and their officers, directors, employees, agents and advisors and, as contemplated by Section 8.07(f), to actual or prospective assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process (provided that, to the extent practicable and legally permissible, such party shall give the Borrower prior notice of any such legally required disclosure) and (c) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking. Section 8.09. Governing Law. This Agreement and the Notes shall be governed ------------- by, and construed in accordance with, the laws of the State of New York. Section 8.10. Execution in Counterparts. This Agreement may be executed in ------------------------- any number of counterparts and by different parties hereto in separate counterparts, each of which 49 when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement. Section 8.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby ----------------- irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court. The Borrower hereby agrees that service of process in any such action or proceeding brought in any such New York State court or in such federal court may be made upon the Borrower c/o AVZ Inc. at its offices at 1315 Peachtree Street N.E., Suite 500, Atlanta, Georgia 30309, Attention: General Counsel (the "Process Agent"), and hereby further agrees that the failure of the ------------- Process Agent to give any notice of any such service to the Borrower shall not impair or affect the validity of such service or of any judgment rendered in any action or proceeding based thereon. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or the Notes in the courts of any jurisdiction. (b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the Notes in any New York State or federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (c) To the extent that the Borrower has or hereafter may acquire any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, the Borrower hereby irrevocably waives such immunity in respect of its obligations under this Agreement and the other Loan Documents. Section 8.12. Judgment. (a) Rate of Exchange. If, for the purpose of -------- ---------------- obtaining judgment in any court, it is necessary to convert a sum due hereunder or under the Notes in another currency into Dollars, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which, in accordance with normal banking procedures, the Funding Agent could purchase such other currency with Dollars in New York City, New York, at the close of business on the Business Day immediately preceding the day on which final judgment is given, together with any premiums and costs of exchange payable in connection with such purchase. (b) Indemnity. The obligation of the Borrower in respect of any sum due --------- from it to any Agent or any Lender hereunder or under any Note shall, notwithstanding any judgment in a currency other than Dollars, be discharged only to the extent that on the Business Day next succeeding receipt by such Agent or such Lender of any sum adjudged to be so due in such other 50 currency, such Agent or such Lender, as the case may be, may, in accordance with normal banking procedures, purchase Dollars with such other currency. If the Dollars so purchased are less than the sum originally due to such Agent or such Lender in Dollars, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Agent or such Lender against such loss, and if the Dollars so purchased exceed the sum originally due to any Agent or any Lender in Dollars, such Agent or such Lender agrees to remit to the Borrower such excess. Section 8.13. Waiver of Jury Trial. Each of the Borrower, the Funding -------------------- Agent, the Co-Syndication Agents and the Lenders hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the Notes or the actions of any Agent or any Lender in the negotiation, administration, performance or enforcement thereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. AMVESCAP PLC By /s/ Charles W. Brady -------------------------------------------- Title: Chairman and CEO BANK OF AMERICA, N.A., as Funding Agent By /s/ Joan L. D'Amico -------------------------------------------- Title: Managing Director Lead Arrangers -------------- $17,272,727.30 CITIBANK, N.A. By /s/ Robert A. Danziger -------------------------------------------- Title: Attorney in Fact $17,272,727.30 BANK OF AMERICA, N.A. By /s/ Joan L. D'Amico -------------------------------------------- Title: Managing Director $17,272,727.30 HSBC BANK PLC By /s/ Robin E. Penfold -------------------------------------------- Title: Head of Fund Managers and Consumer Finance 51 Lead Agents ----------- $12,727,272.70 DEUTSCH BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCH By /s/ Alan Krouk -------------------------------------------- Title: Vice President By /s/ John S. McGill -------------------------------------------- Title: Director $12,727,272.70 SUNTRUST BANK By /s/ Daniel S. Komitor -------------------------------------------- Title: Director Managing Agents --------------- $10,000,000.00 CIBC INC. By /s/ Robert Mendeles -------------------------------------------- Title: Executive Director $10,000,000.00 THE CHASE MANHATTAN BANK By /s/ Elizabeth H. Schwabe -------------------------------------------- Title: Managing Director $10,000,000.00 ROYAL BANK OF CANADA, LONDON BRANCH By /s/ John Hopper -------------------------------------------- Title: Senior Manager $10,000,000.00 THE ROYAL BANK OF SCOTLAND PLC By /s/ Clark McGinn -------------------------------------------- Title: Senior Vice President $10,000,000.00 WACHOVIA BANK, N.A. By /s/ Brantley Echols -------------------------------------------- Title: Senior Vice President 52 Lenders ------- $8,181,818.20 BANK ONE, NA By /s/ Nicole Holzapfel -------------------------------------------- Title: Director, Capital Markets $8,181,818.20 THE BANK OF NEW YORK By /s/ Timothy L. Somers -------------------------------------------- Title: Senior Vice President $8,181,818.20 BARCLAYS BANK PLC By /s/ Marlene Wechselblat -------------------------------------------- Title: Vice President $8,181,818.20 BNP PARIBAS By /s/ Laurent Vanderzypre/Marguerite L Lebon -------------------------------------------- Title: Vice President/Associate $8,181,818.20 FLEET NATIONAL BANK By /s/ Robert McClelland -------------------------------------------- Title: Director $8,181,818.20 MELLON BANK, N.A. By /s/ Marla A. DeYulis -------------------------------------------- Title: Lending Officer $8,181,818.20 STATE STREET BANK AND TRUST COMPANY By /s/ Steven G. Caron -------------------------------------------- Title: Vice President $8,181,818.20 THE TORONTO-DOMINION BANK By /s/ Carolyn R. Faeth -------------------------------------------- Title: Mgr. Cr. Admin. 53 $7,272,727.30 WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH By /s/ Kathleen Bowers -------------------------------------------- Title: Associate Director By /s/ David J. Sellers -------------------------------------------- Title: Director $200,000,000 Total of the Commitments 54 SCHEDULE I LIST OF APPLICABLE LENDING OFFICES
- ------------------------------------------------------------------------------------------------------------ Name of Initial Lender Domestic Lending Office Eurodollar Lending Office ---------------------- ----------------------- ------------------------- - ------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------ Bank of America, N.A. - ------------------------------------------------------------------------------------------------------------ The Bank of New York One Wall Street, 17th Floor One Wall Street, 17th Floor New York, NY 10286 New York, NY 10286 Attn: Sally Persaud Attn: Sally Persaud T: 212 635-7392 T: 212 635-7392 F: 212 635-6348 F: 212 635-6348 - ------------------------------------------------------------------------------------------------------------ Bank One, NA One Bank One Plaza One Bank One Plaza Chicago, IL 60670 Chicago, IL 60670 Attn: Yuvette Owens Attn: Yuvette Owens T: 312 732-4855 T: 312 732-4855 F: 312 732-3537 F: 312 732-3537 - ------------------------------------------------------------------------------------------------------------ Barclays Bank PLC 222 Broadway 222 Broadway New York, NY 10038 New York, NY 10038 Attn: Attn: T: 212 412-3701 T: 212 412-3701 F: 212 412-5306 F: 212 412-5306 - ------------------------------------------------------------------------------------------------------------ BNP Paribas 787 Seventh Avenue 787 Seventh Avenue New York, Y 10019 New York, Y 10019 Attn: Laurent Vanderzyppe Attn: Laurent Vanderzyppe T: 212 841-8927 T: 212 841-8927 F: 212 841-2533 F: 212 841-2533 - ------------------------------------------------------------------------------------------------------------ The Chase Manhattan Bank 270 Park Avenue, 15th Floor 270 Park Avenue, 15th Floor New York, NY 10017 New York, NY 10017 Attn: Elisabeth Schuabe Attn: Elisabeth Schuabe T: 212 270-4954 T: 212 270-4954 F: 212 270-1511 F: 212 270-1511 - ------------------------------------------------------------------------------------------------------------ CIBC Inc. 2727 Paces Ferry Road 2727 Paces Ferry Road Suite 1200 Suite 1200 2 Paces West, Building 2 2 Paces West, Building 2 Atlanta, GA 30339 Atlanta, GA 30339 Attn: Ava Cool Attn: Ava Cool T: 770 319-4816 T: 770 319-4816 F: 770 319-4950 F: 770 319-4950 - ------------------------------------------------------------------------------------------------------------ Citibank, N.A. 388 Greenwich Street 388 Greenwich Street New York, NY 10013 New York, NY 10013 Attn: Michael Secondo Attn: Michael Secondo T: 212 816-3518 T: 212 816-3518 F: 212 816-4140 F: 212 816-4140 - ------------------------------------------------------------------------------------------------------------ Deutsche Bank AG, New York and/or 130 Liberty Street 130 Liberty Street Cayman Islands Branch Mail Stop NYC02-1414 Mail Stop NYC02-1414 New York, NY 10006 New York, NY 10006 Attn: Thomas Balacki Attn: Thomas Balacki T: 212 250-5386 T: 212 250-5386 F: 212 669-1706 F: 212 669-1706 - ------------------------------------------------------------------------------------------------------------
1 - ------------------------------------------------------------------------------------------------------------ Fleet National Bank 100 Federal Street 100 Federal Street MA DE 10010H MA DE 10010H Boston, MA 02110 Boston, MA 02110 Attn: Robert McClelland Attn: Robert McClelland T: 617 434-3710 T: 617 434-3710 F: 617 434-1096 F: 617 434-1096 - ------------------------------------------------------------------------------------------------------------ HSBC Bank PLC 24-32 Poultry 24-32 London EC2P 2BX London EC2P 2BX Attn: John Ross Attn: John Ross T: 44 020 7260-7193 T: 44 020 7260-7193 F: 44 020 7260-7393 F: 44 020 7260-7393 - ------------------------------------------------------------------------------------------------------------ Mellon Bank, N.A. One Mellon Bank Center One Mellon Bank Center Pittsburgh, PA 15258 Pittsburgh, PA 15258 Attn: Marla A. De Yulis Attn: Marla A. De Yulis T: 412 236-9141 T: 412 236-9141 F: 412 234-9047 F: 412 234-9047 - ------------------------------------------------------------------------------------------------------------ Royal Bank of Canada, London Branch 71 Queen Victoria Street 71 Queen Victoria Street London, England EC4V 4DE London, England EC4V 4DE Attn: John Hopper Attn: John Hopper T: 44 207 653 4070 T: 44 207 653 4070 F: 44 207 489 1675 F: 44 207 489 1675 - ------------------------------------------------------------------------------------------------------------ The Royal Bank of Scotland 65 East 55th Street, 21st Floor 65 East 55th Street, 21st Floor New York, NY 10022 New York, NY 10022 Attn: Sheila Shan Attn: Sheila Shan T: 212 401-1338 T: 212 401-1338 F: 212 401-1336 F: 212 401-1336 - ------------------------------------------------------------------------------------------------------------ State Street Bank and Trust Company 225 Franklin Street 225 Franklin Street Boston, MA 02110 Boston, MA 02110 Attn: Allison King Attn: Allison King T: 617 664-3657 T: 617 664-3657 F: 617 664-3674 F: 617 664-3674 - ------------------------------------------------------------------------------------------------------------ Suntrust Bank 25 Park Place 25 Park Place Atlanta, GA 30303 Atlanta, GA 30303 Attn: Tom Presley Attn: Tom Presley T: 404 588-7077 T: 404 588-7077 F: 404 230-1910 F: 404 230-1910 - ------------------------------------------------------------------------------------------------------------ Toronto Dominion Bank 909 Fannin Street, 17th Floor 909 Fannin Street, 17th Floor Houston, TX 77010 Houston, TX 77010 Attn: Carolyn Faeth Attn: Carolyn Faeth T: 713 427-8520 T: 713 427-8520 F: 713 951-9921 F: 713 951-9921 - ------------------------------------------------------------------------------------------------------------ Wachovia Bank, N.A. - ------------------------------------------------------------------------------------------------------------ Westdeutsche Landesbank Girozentrale 1211 Avenue of the Americas New York, NY 10036 Attn: Brian Wilson T: 212 597-1442 F: 212 302-7946 - ------------------------------------------------------------------------------------------------------------
2 EXECUTION COPY U.S. $200,000,000 364-DAY CREDIT AGREEMENT Dated as of June 18, 2001 Among AMVESCAP PLC as Borrower -- -------- and THE INITIAL LENDERS NAMED HEREIN as Initial Lenders -- ------- ------- and CITIBANK, N.A. BANK OF AMERICA, N.A. and HSBC BANK PLC as Co-Syndication Agents -- -------------- ------ and BANK OF AMERICA, N.A. as Funding Agent -- ------- ----- ---------------------------------------------------------- SALOMON SMITH BARNEY INC. BANC OF AMERICA SECURITIES LLC and HSBC SECURITIES (USA) INC. as Joint Lead Arrangers and Book Managers -- ----- ---- --------- --- ---- -------- Table of Contents
Page ARTICLE I DEFINITIONS AND ACCOUNTING TERMS...........................................................................1 Section 1.01. Certain Defined Terms.....................................................................1 Section 1.02. Computation of Time Periods..............................................................13 Section 1.03. Accounting Terms.........................................................................13 ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES........................................................................13 Section 2.01. The Advances.............................................................................13 Section 2.02. Making the Advances......................................................................14 Section 2.03. [Intentionally ommitted].................................................................15 Section 2.04. Fees 15 Section 2.05. Termination or Reduction of the Commitments..............................................15 Section 2.06. Repayment of Advances....................................................................15 Section 2.07. Interest on Advances.....................................................................16 Section 2.08. Interest Rate Determination..............................................................16 Section 2.09. Optional Conversion of Advances..........................................................17 Section 2.10. Prepayments of Advances..................................................................18 Section 2.11. Increased Costs..........................................................................19 Section 2.12. Illegality...............................................................................19 Section 2.13. Payments and Computations................................................................20 Section 2.14. Taxes 21 Section 2.15. Sharing of Payments, Etc.................................................................24 Section 2.16. Use of Proceeds..........................................................................24 Section 2.17. Extension of Termination Date............................................................25 ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING.................................................................27 Section 3.01. Conditions Precedent to Effectiveness....................................................27 Section 3.02. Conditions Precedent to Each Borrowing and Each Extension Date...........................29 Section 3.03. Determinations Under Section 3.01........................................................29 ARTICLE IV REPRESENTATIONS AND WARRANTIES...........................................................................29 Section 4.01. Representations and Warranties of the Borrower...........................................29 ARTICLE V COVENANTS OF THE BORROWER.................................................................................32 Section 5.01. Affirmative Covenants....................................................................32 Section 5.02. Negative Covenants.......................................................................35 Section 5.03. Financial Covenants......................................................................39 ARTICLE VI EVENTS OF DEFAULT........................................................................................39 Section 6.01. Events of Default........................................................................39
i ARTICLE VII THE AGENTS..............................................................................................42 Section 7.01. Authorization and Action.................................................................42 Section 7.02. Agents' Reliance, Etc....................................................................42 Section 7.03. Citibank, Bank of America and Affiliates.................................................42 Section 7.04. Lender Credit Decision...................................................................43 Section 7.05. Indemnification..........................................................................43 Section 7.06. Successor Agents.........................................................................43 Section 7.07. Co-Agents................................................................................44 ARTICLE VIII MISCELLANEOUS..........................................................................................44 Section 8.01. Amendments, Etc..........................................................................44 Section 8.02. Notices, Etc.............................................................................44 Section 8.03. No Waiver; Remedies......................................................................45 Section 8.04. Costs and Expenses.......................................................................45 Section 8.05. Right of Set-off.........................................................................46 Section 8.06. Binding Effect...........................................................................46 Section 8.07. Assignments and Participations...........................................................46 Section 8.08. Confidentiality..........................................................................49 Section 8.09. Governing Law............................................................................49 Section 8.10. Execution in Counterparts................................................................49 Section 8.11. Jurisdiction, Etc........................................................................50 Section 8.12. Judgment ................................................................................50 Section 8.13. Waiver of Jury Trial.....................................................................51
Schedules - --------- Schedule I - List of Applicable Lending Offices Schedule 4.01(b) - Subsidiaries Schedule 4.01(d) - Required Authorizations and Approvals Schedule 4.01(i) - Disclosed Litigation Schedule 4.01(v) - Existing Debt Schedule 5.02(a) - Existing Liens Exhibits - -------- Exhibit A - Form of Note Exhibit B - Form of Notice of Borrowing Exhibit C - Form of Assignment and Acceptance Exhibit D - Form of Assumption Agreement Exhibit E - Form of Guaranty ii Exhibit F - Form of Opinion of New York Counsel for the Borrower Exhibit G - Form of Opinion of English Counsel for the Borrower Exhibit H - Form of Confidentiality Letter Exhibit I - UK Tax Compliance Certificate iii EX-4.15 13 dex415.txt GUARANTY DATED JUNE 18, 2001 EXHIBIT 4.15 GUARANTY GUARANTY dated June 18, 2001 made by INVESCO, Inc., a Delaware corporation, INVESCO North American Holdings, Inc., a Delaware corporation, A I M Management Group Inc., a Delaware corporation, and A I M Advisors, Inc., a Delaware corporation (collectively, the "Guarantors"), in favor of the Lenders ---------- (as defined in the Credit Agreement referred to below). PRELIMINARY STATEMENT. The Lenders, Citibank, N.A. and Bank of America, N.A., as Managing Agents, and Bank of America, N.A., as Funding Agent (the Managing Agents and the Funding Agent are collectively, the "Agents") are ------ parties to a 364-Day Credit Agreement dated as of June 18, 2001 (said Agreement, as it may hereafter be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", the terms defined therein are used herein as ---------------- therein defined) with AMVESCAP PLC, a company organized under the laws of England (the "Borrower"). Each Guarantor may receive a portion of the proceeds -------- of the Advances under the Credit Agreement and will derive substantial direct and indirect benefit from the transactions contemplated by the Credit Agreement. It is a condition precedent to the making of Advances by the Lenders under the Credit Agreement that the Guarantors shall have executed and delivered this Guaranty. NOW, THEREFORE, in consideration of the premises and in order to induce the Lenders to make Advances under the Credit Agreement from time to time, each of the Guarantors hereby agrees as follows: Section 1. Guaranty; Limitation of Liability. (a) Each Guarantor --------------------------------- hereby unconditionally and irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of each other Loan Party now or hereafter existing under the Loan Documents, whether for principal, interest, fees, expenses or otherwise (such obligations being the "Guaranteed Obligations"), and agrees to pay any and all expenses ---------------------- (including reasonable counsel fees and expenses) incurred by any Agent or any Lender in enforcing any rights under this Guaranty. Without limiting the generality of the foregoing, each Guarantor's liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by a Loan Party to the Agents or the Lenders under the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such Loan Party. (b) Each Guarantor, and by its acceptance of this Guaranty, each Agent and each Lender, hereby confirms that it is the intention of all such Persons that this Guaranty and the obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Guaranty and the obligations of each Guarantor hereunder. To effectuate the foregoing intention, the Agents, the Lenders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the obligations of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance. (c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to any Agent or any Lender under this Guaranty, such Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other Guarantor so as to maximize the aggregate amount paid to the Agents and the Lenders under or in respect of the Loan Documents. Section 2. Guaranty Absolute. Each Guarantor guarantees that the ----------------- Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Agent or any Lender with respect thereto. The obligations of each Guarantor under this Guaranty are independent of the Guaranteed Obligations or any other obligations of any other Loan Party under the Loan Documents, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Borrower or any other Loan Party or whether the Borrower or any other Loan Party is joined in any such action or actions. The liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following: (a) any lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto; (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other obligations of any other Loan Party under the Loan Documents, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to the Borrower or any of its Subsidiaries or otherwise; (c) any taking, exchange, release or non-perfection of any collateral, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations; (d) any manner of application of collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any collateral for all or any of the Guaranteed Obligations or any other obligations of any other Loan Party under the Loan Documents or any other assets of the Borrower or any of its Subsidiaries; (e) any change, restructuring or termination of the corporate structure or existence of the Borrower or any of its Subsidiaries; -2- (f) any failure of any Lender to disclose to the Borrower or any of the Guarantors any information relating to the financial condition, operations, properties or prospects of any other Loan Party now or in the future known to any Lender (each Guarantor waiving any duty on the part of the Lenders to disclose such information); or (g) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by any Agent or any Lender that might otherwise constitute a defense available to, or a discharge of, the Borrower, any Guarantor or any other guarantor or surety. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any Lender or any other Person upon the insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party or otherwise, all as though such payment had not been made. Section 3. Waivers and Acknowledgments. (a) Each Guarantor hereby --------------------------- waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Agents or any other Lender protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against the Borrower or any other Person or any collateral. (b) Each Guarantor hereby waives any right to revoke this Guaranty, and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future. (c) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Loan Documents and that the waivers set forth in this Section 3 are knowingly made in contemplation of such benefits. Section 4. Subrogation. Each Guarantor will not exercise any rights ----------- that it may now or hereafter acquire against the Borrower or any other insider guarantor that arise from the existence, payment, performance or enforcement of such Guarantor's obligations under this Guaranty or any other Loan Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Agent or any Lender against any Loan Party or any other insider guarantor or any collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Loan Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the obligations and all other amounts payable under this Guaranty shall have been paid in full in cash and the Commitments shall have expired or terminated. If any amount shall be paid to any such Guarantor in violation of the preceding sentence at any time prior to the later of the payment in full in cash of the Guaranteed Obligations and all other -3- amounts payable under this Guaranty and the Termination Date, such amount shall be held in trust for the benefit of the Agents and the Lenders and shall forthwith be paid to the Funding Agent to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents, or to be held as collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (i) any Guarantor shall make payment to any Agent or any other Lender of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall be paid in full in cash and (iii) the Termination Date shall have occurred, the Agents and the Lenders will, at such Guarantor's request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor. Section 5. Payments Free and Clear of Taxes, Etc. (a) Except as ------------------------------------- otherwise required by law, any and all payments by any Guarantor hereunder shall be made, in accordance with Section 2.13 of the Credit Agreement, free and clear of and without deduction for any and all Indemnifiable Taxes. If any Guarantor shall be required by law to deduct any Indemnifiable Taxes from or in respect of any sum payable hereunder to any Lender or any Agent or, if any Agent shall be required by law to deduct any Indemnifiable Taxes from or in respect of any sum paid or payable hereunder to any Lender, (i) the sum payable shall be increased as may be necessary so that after making all required deductions for Indemnifiable Taxes (including deductions, whether by such Guarantor or any Agent, applicable to additional sums payable under this Section) such Lender or such Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Guarantor (or, as the case may be and as required by applicable law, any Agent) shall make such deductions and (iii) such Guarantor (or, as the case may be and as required by applicable law, any Agent) shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) In addition, each Guarantor shall pay any present or future Other Taxes. (c) Each Guarantor shall indemnify each Lender and each Agent for the full amount of Indemnifiable Taxes or Other Taxes imposed on or paid by such Lender or such Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Lender or such agent (as the case may be) makes written demand therefor. (d) The obligations of each Guarantor under this Section are subject in all respects to the limitations, qualifications and satisfaction of conditions set forth in Section 2.14 of the Credit Agreement. Without limitation of the foregoing, the Lenders are subject to the obligations set forth in Section 2.14 of the Credit Agreement to the same extent as if set forth herein. -4- Section 6. Representations and Warranties. Each Guarantor hereby ------------------------------ represents and warrants as follows: (a) There are no conditions precedent to the effectiveness of this Guaranty that have not been satisfied or waived. (b) Each Guarantor has, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Guaranty, and such Guarantor has established adequate means of obtaining from any other Loan Parties on a continuing basis information pertaining to, and is now and on a continuing basis will be completely familiar with, the financial condition, operations, properties and prospects of such other Loan Parties. Section 7. Amendments, Etc. (a) Except as provided in subsection (b) --------------- to this Section 9, no amendment or waiver of any provision of this Guaranty and no consent to any departure by the Guarantors therefrom shall in any event be effective unless the same shall be in writing and signed by the Agents and the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, -------- however, that no amendment, waiver or consent shall, unless in writing and - ------- signed by all of the Lenders, (1) limit the liability of any of the Guarantors hereunder, (2) postpone any date fixed for payment hereunder or (3) change the number of Lenders required to take any action hereunder. (b) Upon the execution and delivery by any Person of an assumption of guaranty in substantially the form of Exhibit 1 hereto (each, an "Assumption of Guaranty"), such Person shall be and become a Guarantor ---------------------- hereunder and each reference in this Guaranty to "Guarantors" shall also ---------- mean and be a reference to such Additional Guarantor. Section 8. Notices, Etc. All notices and other communications provided ------------ for hereunder shall be in writing (including telegraphic, telecopy or telex communication) and mailed, telegraphed, telecopied, telexed or delivered to it, if to any Guarantor, addressed to it at the address of AMVESCAP PLC specified in the Credit Agreement, if to any Agent or any Lender, at their addresses specified in the Credit Agreement, or as to any party at such other address as shall be designated by such party in a written notice to each other party. All such notices and other communications shall, when mailed, telegraphed, telecopied or telexed, be effective when deposited in the mails, delivered to the telegraph company, transmitted by telecopier or confirmed by telex answerback, respectively. Section 9. No Waiver; Remedies. No failure on the part of any Agent or ------------------- any Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or -5- further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. Section 10. Right of Set-off. Upon the occurrence and during the ---------------- continuance of any Event of Default, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or such Affiliate to or for the credit or the account of the Guarantors against any and all of the obligations of the Guarantors now or hereafter existing under this Guaranty, whether or not such Lender shall have made any demand under this Guaranty and although such obligations may be unmatured. Each Lender agrees promptly to notify the Guarantors after any such set-off and application, provided that the failure to -------- give such notice shall not affect the validity of such set-off and application. The rights of each Lender and its respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Lender and its respective Affiliates may have. Section 11. Indemnification. Without limitation on any other --------------- obligations of the Guarantors or remedies of the Lenders under this Guaranty, each Guarantor shall, to the fullest extent permitted by law, indemnify, defend and save and hold harmless each Lender from and against, and shall pay on demand, any and all losses, liabilities, damages, costs, expenses and charges (including the fees and disbursements of such Lender's legal counsel) suffered or incurred by such Lender as a result of any failure of any Guaranteed Obligations to be the legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their terms. Section 12. Continuing Guaranty; Assignments under the Credit ------------------------------------------------- Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full - --------- force and effect until the later of the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty and the Termination Date, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Agents and the Lenders and their successors, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Lender may assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement (including, without limitation, all or any portion of its Commitment, the Advances owing to it and the Note or Notes held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise, in each case as and to the extent provided in Section 8.07 of the Credit Agreement. Section 13. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. ------------------------------------------------------ (a) This Guaranty shall be governed by, and construed in accordance with, the laws of the State of New York. -6- (b) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Guaranty or any of the other Loan Documents to which it is or is to be a party, or for recognition or enforcement of any judgment, and each Guarantor hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court. Each Guarantor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Guaranty shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Guaranty or any of the other Loan Documents to which it is or is to be a party in the courts of any jurisdiction. (c) Each Guarantor irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Guaranty or any of the other Loan Documents to which it is or is to be a party in any New York State or federal court. Each Guarantor hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. -7- (d) Each Guarantor hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to any of the Loan Documents, the transactions contemplated thereby or the actions of any Agent or any Lender in the negotiation, administration, performance or enforcement thereof. IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. INVESCO, INC. By /s/ Luis Aguilar ---------------------------- Title: Executive Vice President INVESCO NORTH AMERICAN HOLDINGS, INC. By /s/ Neil Williams ---------------------------- Title: Secretary A I M MANAGEMENT GROUP INC. By /s/ J. Abbott Sprague ---------------------------- Title: Senior Vice President A I M ADVISORS, INC. By /s/ J. Abbott Sprague ---------------------------- Title: Senior Vice President -8- EXHIBIT 1 - ASSUMPTION OF GUARANTY ASSUMPTION OF GUARANTY ---------------------- , 200 ------ --- -- Citibank, N.A., and Bank of America, N.A. as Managing Agents to the Credit Agreement Credit Agreement dated as of June 18, 2001 (as amended or otherwise modified from time to time, the "Credit Agreement") among AMVESCAP ---------------- PLC, a company organized under the laws of England (the "Borrower"), -------- the lenders and the co-agents listed on the signature pages thereof, Citibank, N.A. and Bank of America, N.A., as managing agents, and Bank of America, N.A., as funding agent. Ladies and Gentlemen: Reference is made to the above-captioned Credit Agreement and to the Guaranty referred to therein (such Guaranty, as in effect on the date hereof and as it may hereafter be amended, modified or supplemented from time to time, being the "Guaranty"). The terms defined in the Guaranty and not otherwise defined herein are used herein as therein defined. The undersigned hereby unconditionally guarantees the punctual payment when due, whether at stated maturity by acceleration or otherwise, of all of the Guaranteed Obligations and agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Agents or the Lenders, on the terms and subject to the limitations set forth in the Guaranty as if it were an original party thereto. On and after the date hereof, each reference in the Guaranty to "Guarantor" shall mean and be a reference to the undersigned. The undersigned hereby agrees to be bound as a Guarantor by all of the terms and provisions of the Guaranty to the same extent as each other Guarantor and hereby represents and warrants as follows: (a) The undersigned (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) is duly qualified and in good standing as a foreign corporation in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed is not reasonably likely to have a Material Adverse Effect and (iii) has all requisite corporate power and authority (including, without limitation, all governmental licenses, permits and other approvals) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted. (b) The execution, delivery and performance by the undersigned of this Assumption of Guaranty and each other Loan Document to which the undersigned is or is to be a party and the performance by the undersigned of its obligations under the Guaranty, as amended and supplemented by this Assumption of Guaranty, and each such other Loan Document are within the corporate powers of the undersigned, have been duly authorized by all necessary corporate action, and do not (i) contravene the undersigned's charter or bylaws, (ii) violate any law (including, without limitation, the Securities Exchange Act of 1934), rule, regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting the undersigned, any of its Subsidiaries or any of their properties or (iv) result in or require the creation or imposition of any Lien upon or with respect to any of the properties of the undersigned or any of its Subsidiaries. Neither the undersigned nor any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which is reasonably likely to have a Material Adverse Effect. (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for (i) the due execution, delivery, recordation, filing or performance by the undersigned of this Assumption of Guaranty or any other Loan Document to which the undersigned is or is to be a party, or for the performance by the undersigned of the Guaranty, as amended and supplemented by this Assumption of Guaranty, and each such other Loan Document or (ii) the exercise by the Agents or any Lender of its rights under the Guaranty, as amended and supplemented by this Assumption of Guaranty, except for the authorizations, approvals, actions, notices and filings listed on Schedule 1 hereto, all of which have been duly obtained, taken, given or made and are in full force and effect. (d) This Assumption of Guaranty has been, and each other Loan Document to which the undersigned is or is to be a party when delivered pursuant to the Credit Agreement will have been, duly executed and delivered by the undersigned. This Assumption of Guaranty and the Guaranty as amended and supplemented hereby are, and each other Loan Document to which the undersigned is or is to be a party when delivered pursuant to the Credit Agreement will be, the legal, valid and binding obligations of the undersigned, enforceable against the undersigned in accordance with its terms. -2- THIS ASSUMPTION OF GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. Very truly yours, [NAME OF ADDITIONAL GUARANTOR] By ---------------------------------- Name: Title: -3- EXECUTION COPY GUARANTY Dated June 18, 2001 From INVESCO, INC., INVESCO NORTH AMERICAN HOLDINGS, INC. A I M MANAGEMENT GROUP INC. and A I M ADVISORS, INC. as Guarantors -- ---------- in favor of THE LENDERS REFERRED TO IN THE CREDIT AGREEMENT REFERRED TO HEREIN -4- EXHIBIT E FORM OF GUARANTY FORM OF GUARANTY Dated June 18, 2001 From INVESCO, INC., INVESCO NORTH AMERICAN HOLDINGS, INC. A I M MANAGEMENT GROUP INC. and A I M ADVISORS, INC. as Guarantors -- ---------- in favor of THE LENDERS REFERRED TO IN THE CREDIT AGREEMENT REFERRED TO HEREIN T A B L E O F C O N T E N T S - - - - - - - - - - - - - - - Section Page 1. Guaranty; Limitation of Liability 1 --------------------------------- 2. Guaranty Absolute 2 ----------------- 3. Waivers and Acknowledgments 3 --------------------------- 4. Subrogation 3 ----------- 5. Payments Free and Clear of Taxes, Etc. 4 ------------------------------------- 6. Representations and Warranties 5 ------------------------------ 7. Amendments, Etc. 5 ---------------- 8. Notices, Etc. 5 ------------- 9. No Waiver; Remedies 5 ------------------- 10. Right of Set-off 6 ---------------- 11. Indemnification 6 --------------- 12. Continuing Guaranty; Assignments under the Credit Agreement 6 ----------------------------------------------------------- 13. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. 6 ------------------------------------------------------- EX-4.16 14 dex416.txt REGISTRATION RIGHTS AGREEMENT EXHIBIT 4.16 AMVESCAP PLC 5.90% Senior Notes due 2007 REGISTRATION RIGHTS AGREEMENT New York, New York December 12, 2001 Salomon Smith Barney Inc. J.P. Morgan Securities Inc. Deutsche Banc Alex. Brown Inc. HSBC Securities (USA) Inc. Lehman Brothers Inc. As Representatives of the Initial Purchasers c/o Salomon Smith Barney Inc. Investment Banking 388 Greenwich Street, 35th Floor New York, New York 10013 Dear Sirs: AMVESCAP PLC, a public limited company incorporated under the laws of England (the "Company"), proposes to issue and sell to certain purchasers (the "Initial Purchasers"), upon the terms set forth in a purchase agreement of even date herewith (the "Purchase Agreement"), and A I M Management Group Inc., A I M Advisors, Inc., INVESCO Institutional (N.A.), Inc. and INVESCO North American Holdings, Inc. (together with each subsidiary of the Company that pursuant to the terms of the Indenture referred to herein guarantees the Company's obligations under the Indenture, the "Guarantors") propose to guarantee the Company's 5.90% Senior Notes due 2007 (the "Securities") relating to the initial placement of the Securities (the "Initial Placement"). To induce the Initial Purchasers to enter into the Purchase Agreement and to satisfy a condition of your obligations thereunder, the Company and the Guarantors agree with you for your benefit and the benefit of the holders from time to time of the Securities (including the Initial Purchasers) (each a "Holder" and, together, the "Holders"), as follows: 1. Definitions. Capitalized terms used herein without definition shall have ----------- their respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following capitalized defined terms shall have the following meanings: "Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. "Affiliate" of any specified Person shall mean any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such specified Person. For purposes of this definition, control of a Person shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise; and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing. "Broker-Dealer" shall mean any broker or dealer registered as such under the Exchange Act. "Business Day" shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City, or London, England. "Commission" shall mean the Securities and Exchange Commission. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. "Exchange Offer Registration Period" shall mean the one-year period following the consummation of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in effect suspending the effectiveness of the Exchange Offer Registration Statement. "Exchange Offer" shall mean the proposed offer of the Company and the Guarantors to issue and deliver to the Holders of the Securities that are not prohibited by any law or policy of the Commission from participating in such offer, in exchange for the Securities, a like aggregate principal amount of the New Securities. "Exchange Offer Registration Statement" shall mean a registration statement of the Company and the Guarantors on an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and supplements to such registration statement, including post-effective amendments thereto, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "Exchanging Dealer" shall mean any Holder (which may include any Initial Purchaser) that is a Broker-Dealer and elects to exchange for New Securities any Securities that it acquired for its own account as a result of market-making activities or other trading activities (but not directly from the Company or any Affiliate of the Company). "Final Memorandum" shall have the meaning set forth in the Purchase Agreement. "Guarantors" shall have the meaning set forth in the preamble hereto. "Holder" shall have the meaning set forth in the preamble hereto. "Indenture" shall mean the Indenture relating to the Securities and, when issued, the New Securities, dated as of December 17, 2001, between the Company, the Guarantors and SunTrust 2 Bank, as trustee, as the same may be amended from time to time in accordance with the terms thereof. "Initial Placement" shall have the meaning set forth in the preamble hereto. "Initial Purchaser" shall have the meaning set forth in the preamble hereto. "Losses" shall have the meaning set forth in Section 6(d) hereof. "Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of Securities registered under a Registration Statement. "Managing Underwriters" shall mean the investment banker or investment bankers and manager or managers that shall administer an underwritten offering. "New Securities" shall mean debt securities of the Company identical in all material respects to the Securities (except that interest rate step-up provisions and the transfer restrictions shall be modified or eliminated, as appropriate) and to be issued under the Indenture. "Prospectus" shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Securities or the New Securities covered by such Registration Statement, and all amendments and supplements thereto and all material incorporated by reference therein. "Purchase Agreement" shall have the meaning set forth in the preamble hereto. "Registration Statement" shall mean any Exchange Offer Registration Statement or Shelf Registration Statement that covers any of the Securities or the New Securities pursuant to the provisions of this Agreement, any amendments and supplements to such registration statement, including post-effective amendments (in each case including the Prospectus contained therein), all exhibits thereto and all material incorporated by reference therein. "Securities" shall have the meaning set forth in the preamble hereto. "Shelf Registration" shall mean a registration effected pursuant to Section 3 hereof. "Shelf Registration Period" has the meaning set forth in Section 3(b) hereof. "Shelf Registration Statement" shall mean a "shelf" registration statement of the Company and the Guarantors pursuant to the provisions of Section 3 hereof which covers some or all of the Securities or New Securities, as applicable, on an appropriate form under Rule 415 under the Act, or any similar rule that may be adopted by the Commission, amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. 3 "Trustee" shall mean the trustee with respect to the Securities under the Indenture. "underwriter" shall mean any underwriter of Securities in connection with an offering thereof under a Shelf Registration Statement. 2. Registered Exchange Offer. (a) The Company and the Guarantors shall ------------------------- prepare and, not later than April 15, 2002, file with the Commission the Exchange Offer Registration Statement with respect to the Registered Exchange Offer. The Company and the Guarantors shall use their best efforts to cause the Exchange Offer Registration Statement to become effective under the Act not later than June 15, 2002. (b) Upon the effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantors shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder electing to exchange Securities for New Securities (assuming that such Holder is not an Affiliate of the Company, acquires the New Securities in the ordinary course of such Holder's business, has no arrangements with any Person to participate in the distribution of the New Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) and to trade such New Securities from and after their receipt without any limitations or restrictions under the Act and without material restrictions under the securities laws of a substantial proportion of the several states of the United States. (c) In connection with the Registered Exchange Offer, the Company and the Guarantors shall: (i) mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (ii) keep the Registered Exchange Offer open for not less than 30 days after the date notice thereof is mailed to the Holders (or, in each case, longer if required by applicable law); (iii) use its best efforts to keep the Exchange Offer Registration Statement continuously effective under the Act, supplemented and amended as required under the Act to ensure that it is available for sales of New Securities by Exchanging Dealers during the Exchange Offer Registration Period; (iv) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan in New York City, which may be the Trustee or its Affiliate; (v) permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last Business Day on which the Registered Exchange Offer is open; (vi) prior to effectiveness of the Exchange Offer Registration Statement, provide a supplemental letter to the Commission (A) stating that the Company and the 4 Guarantors are conducting the Registered Exchange Offer in reliance on the position of the Commission in Exxon Capital Holdings Corporation (pub. ---------------------------------- avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, ---------------------------- 1991); and (B) including a representation that the Company and the Guarantors have not entered into any arrangement or understanding with any Person to distribute the New Securities to be received in the Registered Exchange Offer and that, to the best of the Company's and the Guarantors' information and belief, each Holder participating in the Registered Exchange Offer is acquiring the New Securities in the ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the New Securities; (vii) comply in all respects with all applicable laws; (viii) cause the New Securities to be listed on the Luxembourg Stock Exchange or on any other exchange on which the Securities are then listed or quoted; (ix) if the Securities are listed on the Luxembourg Stock Exchange, (A) provide written notice of the Registered Exchange Offer to the Luxembourg Stock Exchange, (B) publish notice of the Registered Exchange Offer in a Luxembourg newspaper of general circulation announcing (x) the commencement of the Registered Exchange Offer, (y) following completion thereof, the results of such Registered Exchange Offer and (z) the common codes and ISIN numbers of the New Securities, (C) appoint an exchange agent in Luxembourg through which all documents with respect to the Registered Exchange Offer will be made available and (D) cause the New Securities to be accepted for clearance through Euroclear or Clearstream Banking, societe anonyme, Luxembourg; (d) As soon as practicable after the close of the Registered Exchange Offer, the Company and the Guarantors shall: (i) accept for exchange all Securities tendered and not validly withdrawn pursuant to the Registered Exchange Offer; (ii) deliver to the Trustee for cancellation in accordance with Section 4(s) all Securities so accepted for exchange; and (iii) cause the Trustee promptly to authenticate and deliver to each Holder of Securities a principal amount of New Securities equal to the principal amount of the Securities of such Holder so accepted for exchange. (e) Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Registered Exchange Offer to participate in a distribution of the New Securities (x) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley - ---------------------------------- -------------- and Co., Inc. (pub. avail. June 5, 1991), as interpreted in the Commission's - ------------- letter to Shearman & Sterling dated July 2, 1993 and similar no-action letters; and (y) must comply with the registration and prospectus delivery requirements of the Act in connection with any secondary resale transaction, and any secondary resale transactions by such 5 Holder must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K under the Act if the resales are of New Securities obtained by such Holder in exchange for Securities acquired by such Holder directly from the Company or one of its Affiliates. Accordingly, each Holder participating in the Registered Exchange Offer shall be required to represent to the Company and the Guarantors that, at the time of the consummation of the Registered Exchange Offer: (i) any New Securities received by such Holder will be acquired in the ordinary course of business; (ii) such Holder will have no arrangement or understanding with any Person to participate in the distribution of the Securities or the New Securities within the meaning of the Act; and (iii) such Holder is not an Affiliate of the Company. (f) If any Initial Purchaser determines that it is not eligible to participate in the Registered Exchange Offer with respect to the exchange of Securities constituting any portion of an unsold allotment, at the request of such Initial Purchaser, the Company and the Guarantors shall issue and deliver to such Initial Purchaser or the Person purchasing New Securities registered under a Shelf Registration Statement as contemplated by Section 3 hereof from such Initial Purchaser, in exchange for such Securities, a like principal amount of New Securities. The Company and the Guarantors shall use their best efforts to cause the CUSIP Service Bureau to issue the same CUSIP number for such New Securities as for New Securities issued pursuant to the Registered Exchange Offer. 3. Shelf Registration. (a) If (i) due to any change in law or applicable ------------------ interpretations thereof by the Commission's staff, the Company and the Guarantors determine upon advice of their outside counsel that they are not permitted to effect the Registered Exchange Offer as contemplated by Section 2 hereof; (ii) on or before June 15, 2002, any Initial Purchaser so requests with respect to Securities that are not eligible to be exchanged for New Securities in the Registered Exchange Offer; (iii) any Holder (other than an Initial Purchaser) is not eligible to participate in the Registered Exchange Offer; or (iv) in the case of any Initial Purchaser that participates in the Registered Exchange Offer or acquires New Securities pursuant to Section 2(f) hereof, such Initial Purchaser does not receive freely tradeable New Securities in exchange for Securities constituting any portion of an unsold allotment (it being understood that (x) the requirement that an Initial Purchaser deliver a Prospectus containing the information required by Item 507 or 508 of Regulation S-K under the Act in connection with sales of New Securities acquired in exchange for such Securities shall result in such New Securities being not "freely tradeable"; and (y) the requirement that an Exchanging Dealer deliver a Prospectus in connection with sales of New Securities acquired in the Registered Exchange Offer in exchange for Securities acquired as a result of market-making activities or other trading activities shall not result in such New Securities being not "freely tradeable"), the Company and the Guarantors shall effect a Shelf Registration Statement in accordance with subsection (b) below. (b) (i) The Company and the Guarantors shall as promptly as practicable file with the Commission and thereafter shall use their best efforts to cause to be declared effective under the 6 Act a Shelf Registration Statement relating to the offer and sale of the Securities or the New Securities, as applicable, by the Holders thereof from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement; provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder; and provided further, that with respect to New Securities received by an Initial Purchaser in exchange for Securities constituting any portion of an unsold allotment, the Company and the Guarantors may, if permitted by current interpretations by the Commission's staff, file a post-effective amendment to the Exchange Offer Registration Statement containing the information required by Item 507 or 508 of Regulation S-K, as applicable, in satisfaction of its obligations under this subsection with respect thereto, and any such Exchange Offer Registration Statement, as so amended, shall be referred to herein as, and governed by the provisions herein applicable to, a Shelf Registration Statement. (ii) The Company and the Guarantors shall use their best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required by the Act, in order to permit the Prospectus forming part thereof to be usable by Holders for a period of two years from the date the Shelf Registration Statement is declared effective by the Commission or such shorter period that will terminate when all the Securities or New Securities, as applicable, covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or when applicable law is amended to provide a shorter restrictive period (in any such case, such period being called the "Shelf Registration Period"). The Company and the Guarantors shall be deemed not to have used their best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless (A) such action is required by applicable law; or (B) such action is taken by the Company or the Guarantors in good faith and for valid business reasons (not including avoidance of the Company's or the Guarantors' obligations hereunder), including the acquisition or divestiture of assets, so long as the Company and the Guarantors promptly thereafter comply with the requirements of Section 4(k) hereof, if applicable. (iii) The Company and the Guarantors shall cause the Shelf Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (A) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission; and (B) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 4. Additional Registration Procedures. In connection with any Shelf ---------------------------------- Registration Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following provisions shall apply. 7 (a) The Company and the Guarantors shall: (i) furnish to you, at a reasonable time prior to the filing thereof with the Commission, a copy of any Exchange Offer Registration Statement and any Shelf Registration Statement, and each amendment thereof and each amendment or supplement, if any, to the Prospectus included therein (including all documents incorporated by reference therein after the initial filing) and shall use its best efforts to reflect in each such document, when so filed with the Commission, such comments as you reasonably propose; (ii) include the information set forth in Annex A hereto on the facing page of the Exchange Offer Registration Statement, in Annex B hereto in the forepart of the Exchange Offer Registration Statement in a section setting forth details of the Exchange Offer, in Annex C hereto in the underwriting or plan of distribution section of the Prospectus contained in the Exchange Offer Registration Statement, and in Annex D hereto in the letter of transmittal delivered pursuant to the Registered Exchange Offer; (iii) if requested by an Initial Purchaser, include the information required by Item 507 or 508 of Regulation S-K, as applicable, in the Prospectus contained in the Exchange Offer Registration Statement; and (iv) in the case of a Shelf Registration Statement, include the names of the Holders that propose to sell Securities pursuant to the Shelf Registration Statement as selling security holders. (b) The Company and the Guarantors shall ensure that: (i) any Registration Statement and any amendment thereto and any Prospectus forming part thereof and any amendment or supplement thereto complies in all material respects with the Act and the rules and regulations thereunder; and (ii) any Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (c) The Company and the Guarantors shall advise you, the Holders of Securities covered by any Shelf Registration Statement and any Exchanging Dealer under any Exchange Offer Registration Statement that has provided in writing to the Company and the Guarantors a telephone or facsimile number and address for notices, and, if requested by you or any such Holder or Exchanging Dealer, shall confirm such advice in writing (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the Prospectus until the Company and the Guarantors shall have remedied the basis for such suspension): (i) when a Registration Statement and any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective; 8 (ii) of any request by the Commission for any amendment or supplement to the Registration Statement or the Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company or the Guarantors of any notification with respect to the suspension of the qualification of the securities included therein for sale in any jurisdiction or the initiation of any proceeding for such purpose; and (v) of the happening of any event that requires any change in the Registration Statement or the Prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading. (d) The Company and the Guarantors shall use their best efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement or the qualification of the securities therein for sale in any jurisdiction at the earliest possible time. (e) The Company and the Guarantors shall furnish to each Holder of Securities covered by any Shelf Registration Statement, without charge, at least one copy of such Shelf Registration Statement and any post-effective amendment thereto, including all material incorporated therein by reference, and, if the Holder so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein). (f) The Company and the Guarantors shall, during the Shelf Registration Period, deliver to each Holder of Securities covered by any Shelf Registration Statement, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request. The Company and the Guarantors consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of securities in connection with the offering and sale of the securities covered by the Prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement. (g) The Company and the Guarantors shall furnish to each Exchanging Dealer which so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including all material incorporated by reference therein, and, if the Exchanging Dealer so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein). (h) The Company and the Guarantors shall promptly deliver to each Initial Purchaser, each Exchanging Dealer and each other Person required to deliver a Prospectus during the Exchange Offer Registration Period, without charge, as many copies of the Prospectus included in such Exchange Offer Registration Statement and any amendment or supplement thereto as any such Person may reasonably request. The Company and the Guarantors consent to the use of the Prospectus or any amendment or supplement thereto by any Initial Purchaser, any 9 Exchanging Dealer and any such other Person that may be required to deliver a Prospectus following the Registered Exchange Offer in connection with the offering and sale of the New Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Exchange Offer Registration Statement. (i) Prior to the Registered Exchange Offer or any other offering of Securities pursuant to any Registration Statement, the Company and the Guarantors shall arrange, if necessary, for the qualification of the Securities or the New Securities for sale under the laws of such jurisdictions as any Holder shall reasonably request and will maintain such qualification in effect so long as required; provided that in no event shall the Company and the Guarantors be obligated to qualify to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the Initial Placement, the Registered Exchange Offer or any offering pursuant to a Shelf Registration Statement, or subject itself to taxation in any such jurisdiction where it is not then so subject. (j) The Company and the Guarantors shall cooperate with the Holders of Securities to facilitate the timely preparation and delivery of certificates representing New Securities or Securities to be issued or sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as Holders may request. (k) Upon the occurrence of any event contemplated by subsections (c)(ii) through (v) above, the Company and the Guarantors shall promptly prepare a post-effective amendment to the applicable Registration Statement or an amendment or supplement to the related Prospectus or file any other required document so that, as thereafter delivered to Initial Purchasers of the securities included therein, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. In such circumstances, the period of effectiveness of the Exchange Offer Registration Statement provided for in Section 2 and the Shelf Registration Statement provided for in Section 3(b) shall each be extended by the number of days from and including the date of the giving of a notice of suspension pursuant to Section 4(c) to and including the date when the Initial Purchasers, the Holders of the Securities and any known Exchanging Dealer shall have received such amended or supplemented Prospectus pursuant to this Section. (l) Not later than the effective date of any Registration Statement, the Company and the Guarantors shall provide a CUSIP number for the Securities or the New Securities, as the case may be, registered under such Registration Statement and provide the Trustee with printed certificates for such Securities or New Securities, in a form eligible for deposit with The Depository Trust Company. (m) The Company and the Guarantors shall comply with all applicable rules and regulations of the Commission and shall make generally available to its security holders as soon as practicable after the effective date of the applicable Registration Statement an earnings statement satisfying the provisions of Section 11(a) of the Act. 10 (n) The Company and the Guarantors shall cause the Indenture to be qualified under the Trust Indenture Act in a timely manner. (o) The Company and the Guarantors may require each Holder of securities to be sold pursuant to any Shelf Registration Statement to furnish to the Company and the Guarantors such information regarding the Holder and the distribution of such securities as the Company and the Guarantors may from time to time reasonably require for inclusion in such Registration Statement. The Company and the Guarantors may exclude from such Shelf Registration Statement the Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request. (p) In the case of any Shelf Registration Statement, the Company and the Guarantors shall enter into such agreements and take all other appropriate actions (including if requested an underwriting agreement in customary form) in order to expedite or facilitate the registration or the disposition of the Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable than those set forth in Section 6 (or such other provisions and procedures acceptable to the Majority Holders and the Managing Underwriters, if any, with respect to all parties to be indemnified pursuant to Section 6. (q) In the case of any Shelf Registration Statement, the Company and the Guarantors shall: (i) make reasonably available for inspection by the Holders of Securities to be registered thereunder, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by the Holders or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries (including the Guarantors); (ii) cause the Company's and the Guarantors' officers, directors and employees to supply all relevant information reasonably requested by the Holders or any such underwriter, attorney, accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations; provided, however, that any information that is -------- ------- designated in writing by the Company or the Guarantors, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Holders or any such underwriter, attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by law, or such information becomes available to the public generally or through a third party without an accompanying obligation of confidentiality; (iii) make such representations and warranties to the Holders of Securities registered thereunder and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Purchase Agreement; 11 (iv) obtain opinions of counsel to the Company and the Guarantors and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the Managing Underwriters, if any) addressed to each selling Holder and the underwriters, if any, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters; (v) obtain "cold comfort" letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each selling Holder of Securities registered thereunder and the underwriters, if any, in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with primary underwritten offerings; and (vi) deliver such documents and certificates as may be reasonably requested by the Majority Holders and the Managing Underwriters, if any, including those to evidence compliance with Section 4(k) and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company and the Guarantors. The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section shall be performed at (A) the effectiveness of such Registration Statement and each post-effective amendment thereto; and (B) each closing under any underwriting or similar agreement as and to the extent required thereunder. (r) In the case of any Exchange Offer Registration Statement, the Company and the Guarantors shall: (i) make reasonably available for inspection by such Initial Purchaser, and any attorney, accountant or other agent retained by such Initial Purchaser, all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries (including the Guarantors); (ii) cause the Company's and the Guarantors' officers, directors and employees to supply all relevant information reasonably requested by such Initial Purchaser or any such attorney, accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations; provided, however, that any information that is -------- ------- designated in writing by the Company or the Guarantors, in good faith, as confidential at the time of delivery of such information shall be kept confidential by such Initial Purchaser or any such attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by law, or such information becomes available to the public generally or through a third party without an accompanying obligation of confidentiality; 12 (iii) make such representations and warranties to such Initial Purchaser, in form, substance and scope as are customarily made by issuers to underwriters in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Purchase Agreement; (iv) obtain opinions of counsel to the Company and the Guarantors and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to such Initial Purchaser and its counsel) addressed to such Initial Purchaser, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Initial Purchaser or its counsel; (v) obtain "cold comfort" letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to such Initial Purchaser, in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with primary underwritten offerings, or if requested by such Initial Purchaser or its counsel in lieu of a "cold comfort" letter, an agreed-upon procedures letter under Statement on Auditing Standards No. 35, covering matters requested by such Initial Purchaser or its counsel; and (vi) deliver such documents and certificates as may be reasonably requested by such Initial Purchaser or its counsel, including those to evidence compliance with Section 4(k) and with conditions customarily contained in underwriting agreements. The foregoing actions set forth in clauses (iii), (iv), (v), and (vi) of this Section shall be performed at the close of the Registered Exchange Offer and the effective date of any post-effective amendment to the Exchange Offer Registration Statement. (s) If a Registered Exchange Offer is to be consummated, upon delivery of the Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the New Securities, the Company shall mark, or caused to be marked, on the Securities so exchanged that such Securities are being canceled in exchange for the New Securities. In no event shall the Securities be marked as paid or otherwise satisfied. (t) The Company and the Guarantors will use their best efforts (i) if the Securities have been rated prior to the initial sale of such Securities, to confirm such ratings will apply to the Securities or the New Securities, as the case may be, covered by a Registration Statement; or (ii) if the Securities were not previously rated, to cause the Securities covered by a Registration Statement to be rated with at least one nationally recognized statistical rating agency, if so requested by Majority Holders with respect to the related Registration Statement or by any Managing Underwriters. (u) In the event that any Broker-Dealer shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or "assist in the 13 distribution" (within the meaning of the Rules of Fair Practice and the By-Laws of the National Association of Securities Dealers, Inc.) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, assist such Broker-Dealer in complying with the requirements of such Rules and By-Laws, including, without limitation, by: (i) if such Rules or By-Laws shall so require, engaging a "qualified independent underwriter" (as defined in such Rules) to participate in the preparation of the Registration Statement, to exercise usual standards of due diligence with respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities; (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 6 hereof; and (iii) providing such information to such Broker-Dealer as may be required in order for such Broker-Dealer to comply with the requirements of such Rules. The Company and the Guarantors shall use their best efforts to take all other steps necessary to effect the registration of the Securities or the New Securities, as the case may be, covered by a Registration Statement. 5. Registration Expenses. The Company and the Guarantors shall bear all --------------------- expenses incurred in connection with the performance of their obligations under Sections 2, 3 and 4 hereof and, in the event of any Shelf Registration Statement, will reimburse the Holders for the reasonable fees and disbursements of one firm or counsel designated by the Majority Holders to act as counsel for the Holders in connection therewith, and, in the case of any Exchange Offer Registration Statement, will reimburse the Initial Purchasers for the reasonable fees and disbursements of counsel acting in connection therewith. 6. Indemnification and Contribution. (a) The Company and the Guarantors, -------------------------------- jointly and severally, agree to indemnify and hold harmless each Holder of Securities or New Securities, as the case may be, covered by any Registration Statement (including each Initial Purchaser and, with respect to any Prospectus delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer), the directors, officers, employees and agents of each such Holder and each Person who controls any such Holder within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement as originally filed or in any amendment thereof, or in any preliminary Prospectus or the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or 14 defending any such loss, claim, damage, liability or action; provided, however, -------- ------- that the Company and the Guarantors will not be liable in any case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company or the Guarantors by or on behalf of any such Holder specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Company and the Guarantors may otherwise have. The Company and the Guarantors, jointly and severally, also agree to indemnify or contribute as provided in Section 6(d) to Losses of each any underwriter of Securities or New Securities, as the case may be, registered under a Shelf Registration Statement, their directors, officers, employees or agents and each Person who controls such underwriter on substantially the same basis as that of the indemnification of the Initial Purchasers and the selling Holders provided in this Section 6(a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement, as provided in Section 4(p) hereof. (b) Each Holder of securities covered by a Registration Statement (including each Initial Purchaser and, with respect to any Prospectus delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer) severally agrees to indemnify and hold harmless the Company and the Guarantors and each of their respective directors and officers who signs such Registration Statement and each Person who controls the Company and the Guarantors within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company and the Guarantors to each such Holder, but only with reference to written information relating to such Holder furnished to the Company by or on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any such Holder may otherwise have. (c) Promptly after receipt by an indemnified party under this Section 6 or notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be -------- ------- satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any 15 such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section is unavailable to or insufficient to hold harmless an indemnified party for any reason, then each applicable indemnifying party shall have a joint and several obligation to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative benefits received by such indemnifying party, on the one hand, and such indemnified party, on the other hand, from the Initial Placement and the Registration Statement which resulted in such Losses; provided, however, -------- ------- that in no case shall any Initial Purchaser or any subsequent Holder of any Security or New Security be responsible, in the aggregate, for any amount in excess of the purchase discount or commission applicable to such Security, or in the case of a New Security, applicable to the Security that was exchangeable into such New Security, as set forth on the cover page of the Final Memorandum, nor shall any underwriter be responsible for any amount in excess of the underwriting discount or commission applicable to the securities purchased by such underwriter under the Registration Statement which resulted in such Losses. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the indemnifying party and the indemnified party shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company and the Guarantors shall be deemed to be equal to the sum of (x) the total net proceeds from the Initial Placement (before deducting expenses) as set forth on the cover page of the Final Memorandum and (y) the total amount of additional interest which the Company and the Guarantors were not required to pay as a result of registering the securities covered by the Registration Statement which resulted in such Losses. Benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions as set forth on the cover page of the Final Memorandum, and benefits received by any other Holders shall be deemed to be equal to the value of receiving Securities or New Securities, as applicable, registered under the Act. Benefits received by any underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Registration Statement which resulted in such Losses. Relative fault shall be determined by reference to, among other things, whether any alleged untrue statement or omission relates to information provided by the 16 indemnifying party, on the one hand, or by the indemnified party, on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each Person who controls a Holder within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of such Holder shall have the same rights to contribution as such Holder, and each Person who controls the Company or any Guarantor within the meaning of either the Act or the Exchange Act, each officer of the Company or any Guarantor who shall have signed the Registration Statement and each director of the Company or any Guarantor shall have the same rights to contribution as the Company or any Guarantor, subject in each case to the applicable terms and conditions of this paragraph (d). (e) The provisions of this Section will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder, the Company or any Guarantor or any of the officers, directors or controlling Persons referred to in this Section hereof, and will survive the sale by a Holder of securities covered by a Registration Statement. 7. Underwritten Registrations. (a) If any of the Securities or New -------------------------- Securities, as the case may be, covered by any Shelf Registration Statement are to be sold in an underwritten offering, the Managing Underwriters shall be selected by the Majority Holders. (b) No Person may participate in any underwritten offering pursuant to any Shelf Registration Statement, unless such Person (i) agrees to sell such Person's Securities or New Securities, as the case may be, on the basis reasonably provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements; and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 8. No Inconsistent Agreements. The Company and the Guarantor have not, as -------------------------- of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to the Company's securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof. 9. Amendments and Waivers. The provisions of this Agreement, including the ---------------------- provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company and the Guarantors have obtained the written consent of the Majority Holders (or, after the consummation of any Registered Exchange Offer in accordance with Section 2 hereof, the Holders of a majority in aggregate principal amount of New Securities); provided that, with -------- respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, the Company and the Guarantors shall obtain the written consent of each such Initial 17 Purchaser against which such amendment, qualification, supplement, waiver or consent is to be effective. Notwithstanding the foregoing (except the foregoing proviso), a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities or New Securities, as the case may be, are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the basis of Securities or New Securities, as the case may be, being sold rather than registered under such Registration Statement. 10. Notices. All notices and other communications provided for or permitted ------- hereunder shall be made in writing by hand-delivery, first-class mail, telex, telecopier or air courier guaranteeing overnight delivery: (a) if to a Holder, at the most current address given by such holder to the Company and the Guarantors in accordance with the provisions of this Section, which address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture, with a copy in like manner to the Representatives of the Initial Purchasers; (b) if to you, initially at the respective addresses set forth in the Purchase Agreement; and (c) if to the Company and the Guarantors, initially at their respective addresses set forth in the Purchase Agreement. All such notices and communications shall be deemed to have been duly given when received. The Initial Purchasers, the Company or the Guarantors by notice to the other parties may designate additional or different addresses for subsequent notices or communications. 11. Successors. This Agreement shall inure to the benefit of and be binding ---------- upon the successors and assigns of each of the parties, including, without the need for an express assignment or any consent by the Company or the Guarantors thereto, subsequent Holders of Securities and the New Securities. The Company and the Guarantors hereby agree to extend the benefits of this Agreement to any Holder of Securities and the New Securities, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto. 12. Counterparts. This agreement may be in signed counterparts, each of ------------ which shall be an original and all of which together shall constitute one and the same agreement. 13. Headings. The headings used herein are for convenience only and shall -------- not affect the construction hereof. 14. Applicable Law. This Agreement shall be governed by and construed in -------------- accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York. 15. Severability. In the event that any one or more of the provisions ------------ contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any 18 respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law. 16. Securities Held by the Company, etc. Whenever the consent or approval ----------------------------------- of Holders of a specified percentage of principal amount of Securities or New Securities is required hereunder, Securities or New Securities, as applicable, held by the Company or its Affiliates (other than subsequent Holders of Securities or New Securities if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such Securities or New Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 17. Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By ------------------------------------------------------------------- the execution and delivery of this Agreement, the Company (i) acknowledges that it has, by separate written instrument, irrevocably designated and appointed C T Corporation System (and any successor entity), as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating to this Agreement that may be instituted in any federal or state court in the State of New York or brought under federal or state securities laws, and acknowledges that C T Corporation System has accepted such designation, (ii) submits to the nonexclusive jurisdiction of any such court in any such suit or proceeding, and (iii) agrees that service of process upon C T Corporation System and written notice of said service to the Company shall be deemed in every respect effective service of process upon it in any such suit or proceeding. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of C T Corporation System in full force and effect so long as any of the Securities shall be outstanding. To the extent that the Company may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, it hereby irrevocably waives such immunity in respect of this Agreement, to the fullest extent permitted by law. 19 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company, the Guarantors and the several Initial Purchasers. Very truly yours, AMVESCAP PLC By: /s/ Neil Williams --------------------------------- Name: Neil Williams Title:General Counsel A I M MANAGEMENT GROUP INC. By: /s/ Robert H. Graham --------------------------------- Name: Title: A I M ADVISORS, INC. By: /s/ Robert H. Graham --------------------------------- Name: Title: INVESCO INSTITUTIONAL (N.A.), INC. By: /s/ David A. Hartley --------------------------------- Name: David A. Hartley Title:CFO INVESCO NORTH AMERICAN HOLDINGS, INC. By: /s/ Neil Williams --------------------------------- Name: Neil Williams Title:Secretary 20 The foregoing Agreement is hereby confirmed and accepted as of the date first above written. J.P. Morgan Securities, Inc. Salomon Smith Barney Inc. Deutsche Banc Alex. Brown Inc. HSBC Securities (USA) Inc. Lehman Brothers Inc. By: Salomon Smith Barney Inc. By: /s/ Gol Kalev ------------- Name: Gol Kalev Title:Vice President For themselves and the other several Initial Purchasers named in Schedule I to the Purchase Agreement. 21 ANNEX A Each Broker-Dealer that receives New Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is an "underwriter: within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Broker-Dealer in connection with resales of New Securities received in exchange for Securities where such Securities were acquired by such Broker-Dealer as a result of market-making activities or other trading activities. The Company and the Guarantors have agreed that, starting on the Expiration Date (as defined herein) and ending on the close of business one year after the Expiration Date, they will make this Prospectus available to any Broker-Dealer for use in connection with any such resale. See "Plan of Distribution". 22 ANNEX B Each Broker-Dealer that receives New Securities for its own account in exchange for Securities, where such Securities were acquired by such Broker-Dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. See "Plan of Distribution". 23 ANNEX C PLAN OF DISTRIBUTION Each Broker-Dealer that receives New Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Broker-Dealer in connection with resales of New Securities received in exchange for Securities where such Securities were acquired as a result of market-making activities or other trading activities. The Company and the Guarantors have agreed that, starting on the Expiration Date and ending on the close of business one year after the Expiration Date, they will make this Prospectus, as amended or supplemented, available to any Broker-Dealer for use in connection with any such resale. In addition, until , 200 , all ------ --- dealers effecting transactions in the New Securities may be required to deliver a prospectus. The Company and the Guarantors will not receive any proceeds from any sale of New Securities by brokers-dealers. New Securities received by Broker-Dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such Broker-Dealer and/or the purchasers of any such New Securities. Any Broker-Dealer that sells New Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such New Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit of any such resale of New Securities and any commissions or concessions received by any such Persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of one year after the Expiration Date, the Company and the Guarantors will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any Broker-Dealer that requests such documents in the Letter of Transmittal. The Company and the Guarantors have agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the holder of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Securities (including any Broker-Dealers) against certain liabilities, including liabilities under the Securities Act. 24 ANNEX D CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: -------------------------------------------- Address: -------------------------------------------- -------------------------------------------- ---------- If the undersigned is not a Broker-Dealer, the undersigned represents that it acquired the New Securities in the ordinary course of its business, it is not engaged in, and does not intend to engage in, a distribution of New Securities and it has no arrangements or understandings with any Person to participate in a distribution of the New Securities. If the undersigned is a Broker-Dealer that will receive New Securities for its own account in exchange for Securities, it represents that the Securities to be exchanged for New Securities were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such New Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. 25 EX-4.17 15 dex417.txt GUARANTEE Exhibit 4.17 GUARANTEE For value received, the undersigned hereby, jointly and severally, unconditionally guarantee, as principal obligor and not only as a surety, to the Holder of this Security the cash payments in United States dollars of principal of and interest on this Security in the amounts and at the times when due and interest on the overdue principal, interest, if any, and Additional Amounts with respect to this Security, if lawful, and the payment or performance of all other obligations of the Company under the Indenture (as defined below) or the Securities, to the Holder of this Security and the Trustee, all in accordance with and subject to the terms and limitations of this Security, Article XIII of the Indenture and this Guarantee. This Guarantee will become effective in accordance with Article XIII of the Indenture and this Guarantee. This Guarantee will become effective in accordance with Article XIII of the Indenture and its terms shall be evidenced therein. The validity and enforceability of any Guarantee shall not be affected by the fact that it is not affixed to any particular Security. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Indenture (the "Indenture") dated as of December 17, 2001 among AMVESCAP PLC, the Guarantors and SunTrust Bank, as trustee (the "Trustee"). The obligations of the undersigned to the Holders of Securities and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article XIII of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee and all of the other provisions of the Indenture to which this Guarantee relates. This Guarantee will be a senior unsecured obligation of the Guarantors and will rank pari passu in right of payment with all other existing and future senior unsecured obligations of the Guarantors. This Guarantee shall be governed by and construed in accordance with the laws of the state of New York. This Guarantee is subject to release upon the terms set forth in the Indenture. IN WITNESS WHEREOF, the Guarantor has caused this instrument to be duly executed. Date: December 17, 2001 A I M MANAGEMENT GROUP, INC. By: /s/ Robert H. Graham ---------------------------------- Name: Title: A I M ADVISORS, INC. By: /s/ Robert H. Graham ---------------------------------- Name: Title: INVESCO INSTITUTIONAL (N.A.), INC. By: /s/ John D. Rogers ---------------------------------- Name: John Rogers Title: CEO and President INVESCO NORTH AMERICAN HOLDINGS, INC. By: /s/ Neil Williams ---------------------------------- Name: Neil Williams Title: Secretary EX-4.18 16 dex418.txt AMVESCAP GLOBAL STOCK PLAN EXHIBIT 4.18 - -------------------------------------------------------------------------------- AMVESCAP GLOBAL STOCK PLAN Amended and Restated Effective as of January 1, 1997 - -------------------------------------------------------------------------------- Table of Contents ----------------- Page ---- ARTICLE I PURPOSES OF THE PLAN.............................. 1 ARTICLE II DEFINITIONS....................................... 1 ARTICLE III EFFECTIVE DATE AND TERM........................... 6 ARTICLE IV ADMINISTRATION OF THE PLAN........................ 6 ARTICLE V ELIGIBILITY....................................... 7 Section 5.1 In General........................................ 7 Section 5.2 Investment Company Act Limitation................. 7 ARTICLE VI AWARDS............................................ 8 Section 6.1 Grant of Awards and Contributions to the Trust.... 8 Section 6.2 Accounts.......................................... 8 Section 6.3 Vesting of Awards................................. 8 Section 6.4 Forfeited Awards.................................. 9 Section 6.5 Date of Termination or Demotion................... 9 Section 6.6 Acceleration of Vesting........................... 9 Section 6.7 Dividends......................................... 9 Section 6.8 Voting of Shares.................................. 9 Section 6.9 Tender of Shares.................................. 10 Section 6.10 Forfeiture of Awards for Gross Malfeasance........ 11 ARTICLE VII DISTRIBUTIONS UNDER THE PLAN...................... 11 Section 7.1 In General........................................ 11 Section 7.2 Distribution Election............................. 12 Section 7.3 Distribution Upon the Death of a Participant...... 12 Section 7.4 Distribution Upon Disability...................... 12 Section 7.5 Termination of Trust or Court-Ordered Distribution 12 Section 7.6 Acceleration of Distribution...................... 13 Section 7.7 Distributions to Insiders......................... 13 ARTICLE VIII FUNDING OF THE PLAN............................... 13 Section 8.1 Unfunded Plan..................................... 13 Section 8.2 Trust............................................. 13 Section 8.3 Internal Funding.................................. 14 ARTICLE IX SECURITIES MATTERS................................ 14 - -------------------------------------------------------------------------------- Table of Contents ----------------- Page ---- ARTICLE I PURPOSES OF THE PLAN.............................. 1 ARTICLE II DEFINITIONS....................................... 1 ARTICLE III EFFECTIVE DATE AND TERM........................... 6 ARTICLE IV ADMINISTRATION OF THE PLAN........................ 6 ARTICLE V ELIGIBILITY....................................... 7 Section 5.1 In General........................................ 7 Section 5.2 Investment Company Act Limitation................. 7 ARTICLE VI AWARDS............................................ 8 Section 6.1 Grant of Awards and Contributions to the Trust.... 8 Section 6.2 Accounts.......................................... 8 Section 6.3 Vesting of Awards................................. 8 Section 6.4 Forfeited Awards.................................. 9 Section 6.5 Date of Termination or Demotion................... 9 Section 6.6 Acceleration of Vesting........................... 9 Section 6.7 Dividends......................................... 9 Section 6.8 Voting of Shares.................................. 9 Section 6.9 Tender of Shares.................................. 10 Section 6.10 Forfeiture of Awards for Gross Malfeasance........ 11 ARTICLE VII DISTRIBUTIONS UNDER THE PLAN...................... 11 Section 7.1 In General........................................ 11 Section 7.2 Distribution Election............................. 12 Section 7.3 Distribution Upon the Death of a Participant...... 12 Section 7.4 Distribution Upon Disability...................... 12 Section 7.5 Termination of Trust or Court-Ordered Distribution 12 Section 7.6 Acceleration of Distribution...................... 13 Section 7.7 Distributions to Insiders......................... 13 ARTICLE VIII FUNDING OF THE PLAN............................... 13 Section 8.1 Unfunded Plan..................................... 13 Section 8.2 Trust............................................. 13 Section 8.3 Internal Funding.................................. 14 ARTICLE IX SECURITIES MATTERS................................ 14 i ARTICLE X MISCELLANEOUS PROVISIONS.......................... 15 Section 10.1 Taxes............................................. 15 Section 10.2 No Special Employment Rights...................... 15 Section 10.3 Expenses.......................................... 16 Section 10.4 Titles and Headings Not to Control................ 16 Section 10.5 Amendment or Termination of Plan.................. 16 Section 10.6 Governing Law..................................... 16 Section 10.7 Waiver of Punitive Damages........................ 17 Section 10.8 Restrictions on Transfer.......................... 17 Section 10.9 Change in Control................................. 17 Section 10.10 Consolidation or Merger of the Company............ 17 Section 10.11 Set-off........................................... 17 Section 10.12 Special Rules Regarding Management Committee...... 17 APPENDIX A SPECIAL RULES RELATING TO PARTICIPANTS IN JAPAN ii AMVESCAP GLOBAL STOCK PLAN (Amended and Restated Effective as of January 1, 1997) ARTICLE I PURPOSES OF THE PLAN The main purposes of the AMVESCAP Global Stock Plan are (i) to provide - additional incentives to Global Partners in the form of contingent awards of ordinary shares of AMVESCAP p.l.c. (including American depositary shares representing such ordinary shares), (ii) to seek to retain senior personnel by -- making a portion of Global Partners' compensation contingent upon the satisfaction of certain vesting requirements, (iii) to promote retention of --- ordinary shares of AMVESCAP p.l.c. (including American depositary shares representing such ordinary shares) held on behalf of Global Partners by requiring such shares to be retained in a grantor trust of AMVESCAP p.l.c. for the period a Global Partner remains employed by AMVESCAP p.l.c. and its Subsidiaries and (iv) to provide benefits to Global Partners upon their -- retirement from employment with AMVESCAP p.l.c. and its Subsidiaries. This Plan is intended to be an unfunded plan for the purpose of providing deferred compensation for a select group of management or highly compensated employees for the purposes of Title I of ERISA and is intended to be part of an employees' share scheme (within the meaning of section 743 of the Companies Act). ARTICLE II DEFINITIONS As used in the Plan, the terms set forth below shall have the meanings indicated unless the context clearly indicates to the contrary. Where the context so admits or requires, the singular shall include the plural and the masculine shall include the feminine and vice versa. Account. "Account" shall mean a book account maintained by a Participant's ------- employer (the Company or a Subsidiary, as the case may be) reflecting the Shares, cash and other property, together with earnings and distributions thereon, credited to a Participant with respect to his Award(s) under the Plan. Additional Shares. "Additional Shares" shall mean Shares purchased with ----------------- reinvested dividends or dividend equivalent contributions pursuant to Section 6.7. Average Cost Per Share. "Average Cost Per Share," with respect to an Award ---------------------- and with respect to the reinvestment of dividends or dividend equivalent contributions pursuant to Section 6.7 ("Reinvestment"), shall mean (i) with - respect to ordinary shares of the Company, the average cost per share purchased with respect to such Award or Reinvestment, as the case may be, as determined in any reasonable manner by the Management Committee and (ii) with respect to American depositary shares -- ("ADSs") representing ordinary shares of the Company, the average cost per ADS purchased with respect to such Award or Reinvestment, as the case may be, as determined in any reasonable manner by the Management Committee. Award. "Award" shall mean, with respect to each Global Partner, the right ----- to receive Shares, cash or other property (or a combination of the foregoing) equal to the amount initially awarded to such Global Partner under the Plan by the Remuneration Committee pursuant to Section 6.1 and as adjusted for earnings, distributions and gains and losses on such Shares, cash and/or other property. Beneficiary. "Beneficiary" shall mean the person or persons determined to ----------- be a Participant's beneficiary pursuant to Section 7.3. Board of Directors. "Board of Directors" shall mean the Board of Directors ------------------ of AMVESCAP p.l.c. Business Day. "Business Day" shall mean a day on which The Stock Exchange ------------ is open for the transaction of business. Cause. "Cause" shall mean, when used in connection with the termination of ----- a Participant's employment, the termination of the Participant's employment by the Company or a Subsidiary on account of (i) the willful violation by the - Participant of (x) any law, (y) any rule of the Company or such Subsidiary or - - (z) any rule or regulation of any regulatory body to which the Company or such - Subsidiary is subject, including, without limitation, The Stock Exchange or any other exchange or contract market of which the Company or such Subsidiary is a member, which violation would materially reflect on the Participant's character, competence or integrity, (ii) a breach by a Participant of the Participant's -- duty of loyalty to the Company and/or its Subsidiaries in contemplation of the Participant's termination of employment with the Company or a Subsidiary, such as the Participant's solicitation of customers or employees of the Company or any Subsidiary prior to the termination of his employment or (iii) the --- Participant's unauthorized removal from the premises of the Company or a Subsidiary of any records, files, memoranda, data in machine readable form, reports, fee lists, customer lists, drawings, plans, sketches, or other documents (in any medium or form) relating to the business of the Company or a Subsidiary or the customers of the Company or a Subsidiary, including, but not limited to, all intellectual property and proprietary research which the Participant uses, develops or comes in contact with in the course of or as the result of his employment with the Company or a Subsidiary, as the case may be. Any rights the Company or a Subsidiary may have hereunder in respect of the events giving rise to Cause shall be in addition to the rights the Company or such Subsidiary may have under any other agreement with the employee or at law or in equity. If, subsequent to a Participant's voluntary termination of employment or involuntary termination of 2 employment without Cause, it is discovered that the Participant's employment could have been terminated for Cause, such Participant's employment shall, at the election of the Management Committee in its sole discretion, be deemed for the purposes of this Plan to have been terminated for Cause. Change in Control. "Change in Control" shall mean (x) with respect to the ----------------- - Company, the occurrence of any of the following events: (i) the stockholders of the Company shall approve a definitive agreement (a) for the merger or other business combination of the Company - with or into another corporation, and with respect to the surviving public company, a majority of the directors of which were not directors of the Company immediately prior to such merger or combination and in which the stockholders of the Company immediately prior to the effective date of such merger or combination directly or indirectly own less than a majority of the voting power in such corporation or (b) for the direct or indirect sale - or other disposition of all or substantially all of the assets of the Company; (ii) (a) the acquisition by purchase, subscription or otherwise - (including pursuant to a reconstruction or scheme of arrangement) by any person (or persons acting together, meaning persons party to an agreement to which section 204 of the Companies Act applies) of 20 percent or more of the relevant share capital of the Company (or any successor company to which all or the majority of the assets of the Company are transferred pursuant to any such reconstruction or scheme of arrangement); (b) the - giving of notice of any general meeting of the Company at which a resolution will be proposed for the winding-up of the Company; (c) if - under section 425 of the Companies Act, the Court sanctions a compromise or arrangement proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies; or (d) any scheme of arrangement involving - the reconstruction of the Company or the amalgamation of the Company with any other entity that is approved by the holders of Shares; (iii) any person obtains Control of the Company as a result of making an offer to acquire Shares which is either unconditional or is made on a condition such that, if it is satisfied, the person making the offer will have Control of the Company; or (iv) a change in the composition of the Board of Directors such that individuals who, as of January 1, 1997, constituted the Board of Directors (generally the "Directors" and as of January 1, 1997, the "Continuing Directors") cease for any reason to constitute at least a majority thereof, provided that any person becoming a Director subsequent to January 1, 1997 whose nomination for 3 election was approved by a vote of at least a majority of the Continuing Directors (other than a nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors) shall be deemed to be a Continuing Director; and (y) with respect to a Subsidiary, the - consummation of the sale of the capital stock or all or substantially all of the assets of such Subsidiary to, or the merger or other business combination of such Subsidiary with or into, a third party that is not affiliated with the Company or any Subsidiary. For the purpose of clause (x) (iii) above, (A) a person shall be deemed to have obtained "Control of - the Company" if he and others acting in concert with him have together obtained Control of it and (B) "Control" shall mean, in relation to the - Company, the power of a person to secure that the affairs of the Company are conducted in accordance with the wishes of that person by means of the holding of shares or the possession of voting power in or in relation to the Company or by virtue of any powers conferred by the articles of association of the Company. Code. "Code" shall mean the United States of America Internal Revenue Code ---- of 1986, as amended from time to time. Companies Act. "Companies Act" shall mean the Companies Act 1985 of Great ------------- Britain, as amended from time to time. Company. "Company" shall mean AMVESCAP p.l.c. and any successor ------- corporation which continues the Plan pursuant to Section 10.10. Demotion. "Demotion" shall mean, in relation to a Participant, his ceasing -------- to be a Global Partner other than by reason of the termination of his employment with the Company or a Subsidiary. Disability. "Disability" shall mean any physical or mental condition that ---------- would qualify a Participant for a disability benefit under the long-term disability plan maintained by the Company or a Subsidiary and applicable to the Participant. Distribution Election. "Distribution Election" shall mean a Participant's --------------------- written election pursuant to Section 7.2. ERISA. "ERISA" shall mean the United States of America Employee Retirement ----- Income Security Act of 1974, as amended from time to time. Exchange Act. "Exchange Act" shall mean the United States of America ------------ Securities Exchange Act of 1934, as amended from time to time. Global Partner. "Global Partner" shall mean an employee of the Company or -------------- a Subsidiary who (i) has been designated as such by the Company and (ii) has - -- executed a 4 Global Partner Employment Agreement no later than 90 days after such employee's designation as a "global partner"; provided that, the Management Committee may, in its sole discretion, extend such 90-day deadline with respect to any employee; provided further that, with respect to an employee designated as a Global Partner on or before July 31, 1994, such employee shall be a "Global Partner" for purposes of the Plan provided that such employee executes a Global Partner Employment Agreement by December 31, 1994. Management Committee. "Management Committee" shall mean the management -------------------- committee, or any successor committee, comprised solely of United States persons within the meaning of section 7701(a)(30) of the Code and appointed by the Board of Directors of AVZ, Inc. from time to time to administer the Plan and direct the Trustee and serving at the pleasure of the Board of Directors of AVZ, Inc. To the extent that (i) Section 16 of the Exchange Act is applicable to any - equity securities of the Company and (ii) Rule 16b-3, as promulgated under the -- Exchange Act, or any successor rule is applicable to the composition of the Management Committee, the composition of the Management Committee shall comply with the terms of Rule 16b-3 or such successor rule. Participant. "Participant" shall mean any Global Partner or former Global ----------- Partner with respect to whom an Award, which has not previously been forfeited, is outstanding. Permissive Retirement. "Permissive Retirement" shall mean a Participant's --------------------- termination of employment with the Company and the Subsidiaries as a Global Partner, other than by reason of death or Disability, on or after the earlier to occur of the following dates: (i) the attainment of age 58; or - (ii) retirement with the approval of the Management Committee. -- Plan. "Plan" shall mean the AMVESCAP Global Stock Plan, as constituted by ---- these rules and as amended from time to time. Remuneration Committee. "Remuneration Committee" shall mean the duly ---------------------- appointed Remuneration Committee, or any successor thereto, of the Board of Directors. Shares. "Shares" shall mean the ordinary shares of the Company, or any ------ other shares and/or other property into which the ordinary shares of the Company are converted pursuant to a stock split, reverse split, subdivision, reconstruction, amalgamation, scheme of arrangement, recapitalization, reorganization, merger, combination, consolidation, split-up or other similar corporate event and shall include American depositary shares representing such ordinary shares. 5 Subsidiary. "Subsidiary" shall mean a corporation with respect to which ---------- the Company, directly or indirectly, has the power, whether through the ownership of voting securities, by contract or otherwise, to elect at least a majority of the members of such corporation's board of directors. The Stock Exchange. "The Stock Exchange" shall mean The International ------------------ Stock Exchange of the United Kingdom and Republic of Ireland Limited. Trust. "Trust" shall mean the grantor trust of the Company from time to ----- time to which contributions are made in respect of the Plan. Trust Agreement. "Trust Agreement" shall mean the trust agreement between --------------- the Company and the Trustee as amended from time to time with respect to the Trust. Trustee. "Trustee" shall mean the entity from time to time serving as ------- trustee under the Trust Agreement. ARTICLE III EFFECTIVE DATE AND TERM The Plan was originally adopted effective as of December 17, 1993, and has been amended and restated as set forth herein effective as of January 1, 1997 unless otherwise indicated. The Plan shall continue in effect, as amended from time to time, in accordance with its terms until terminated by the Remuneration Committee or the Board of Directors. The Plan is a plan of the Company and a plan of each Subsidiary that is the employer of a Global Partner. ARTICLE IV ADMINISTRATION OF THE PLAN The Plan shall be administered by the Management Committee, provided that the Remuneration Committee shall have the duties and powers specified for it herein and in the Trust Agreement. The Management Committee shall have full authority, consistent with the Plan, to administer the Plan, including authority to interpret and construe any provision of the Plan and to adopt such rules and regulations for administering the Plan and such forms of election as it may deem necessary or appropriate. Any person making a claim for any distribution under the Plan shall file a written claim with the Management Committee. Decisions of the Management Committee regarding any matter connected with the Plan shall be final and binding on all parties. Management Committee decisions shall be made by a majority of its members at a meeting (which meeting may be held by telephone) duly called by any member on no less than 48 hours written notice; notice may be transmitted by facsimile, telex, courier or by other reasonable means of transmission. Any decision reduced to writing and signed by all of the members of the 6 Management Committee shall be as fully effective as if it had been made at a meeting duly held. No member of the Management Committee or the Remuneration Committee shall be liable for any action, omission or determination relating to the Plan, and the Company and the Subsidiaries shall indemnify and hold harmless each member of the Management Committee and the Remuneration Committee and each other director or employee of the Company or a Subsidiary to whom any duty or power relating to the administration or interpretation of the Plan has been delegated, against any cost, expense (including counsel fees, which fees shall be paid as incurred) or liability (including any sum paid in settlement of a claim with the approval of the Board of Directors) arising out of any action, omission or determination relating to the Plan, if such action, omission or determination was taken or made by such member, director or employee in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and the Subsidiaries, and with respect to any criminal action or proceeding, such member had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company and the Subsidiaries, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. ARTICLE V ELIGIBILITY Section 5.1 In General. All Global Partners shall be eligible to participate in ---------- the Plan in accordance with the terms of the Plan and the rules and procedures established by the Management Committee. Subject to the definition of "Participant" in Article II, a Global Partner shall become a Participant effective as of the date on which such Global Partner is granted an Award hereunder. Participation by eligible Global Partners is mandatory, not elective. Prior to the vesting of any Awards granted to a Global Partner hereunder, such Global Partner must complete a participation consent form, on a form approved by the Management Committee, acknowledging such Global Partner's participation subject to the terms of the Plan. Section 5.2 Investment Company Act Limitation. With respect to any Participant, --------------------------------- the Management Committee may, in its sole discretion, use its authority under Section 6.6 to accelerate the vesting of such Participant's Award(s) and its authority under Section 7.6 to accelerate the time of distribution with respect to such Award(s) so that neither the Plan nor the Trust will be required to register as an investment company under the United States of America Investment Company Act of 1940, as amended from time to time. 7 ARTICLE VI AWARDS Section 6.1 Grant of Awards and Contributions to the Trust. The ---------------------------------------------- Remuneration Committee may grant Awards (which may be of differing amounts) to any or all Global Partners employed by the Company or a Subsidiary. The Remuneration Committee shall specify the year to which an Award relates. The Company intends to contribute, or procure the contributions, and transfer to the Trust funds and/or other property equivalent to the sum of the amounts of all Awards made to Global Partners. At the direction of the Management Committee, the Trustee shall use such funds and/or other property to purchase Shares from any person, and to make such other investments, as the Management Committee shall direct. Each Participant's Award shall be subject to the terms of the Plan applicable to that Participant and such additional terms as may be adopted from time to time applicable to particular jurisdictions. No Participant shall have any right to receive any Shares, cash or other property under the Plan other than in accordance with the terms of the Plan, including any applicable additional terms. Section 6.2 Accounts. Each Participant's Account shall be comprised of -------- one or more sub-accounts where each sub-account relates to a particular Award granted to such Participant and is initially credited with the amount of such Award. Each sub-account of the Participant's Account shall be adjusted to reflect the earnings, distributions, gains and losses with respect to the Shares, cash and/or other property allocated to the Award. Shares shall be allocated among Participant's Accounts and sub-accounts based upon the Average Cost Per Share. Fractional Shares may be allocated to a Participant's Account or sub-account. Cash or other property remaining after a whole number of Shares has been purchased may be added to any dividend or dividend equivalent contributions to purchase Additional Shares pursuant to Section 6.7 from time to time. Each Participant's Account and sub-accounts shall reflect any securities, cash or other property received with respect to Shares, cash or other property credited to such Participant's Account or sub-account, as the case may be. The Shares, cash or other property, together with earnings and distributions thereon, allocated to an Award shall be subject to the same vesting and other restrictions to which such initial Award is subject. Each Participant shall receive a statement of his Account quarterly. Section 6.3 Vesting of Awards. Subject to Sections 6.4, 6.6 and 6.10, an ----------------- Award shall fully vest on the December 15th of the third year following the year to which the Award is attributable. Notwithstanding the foregoing, any Award(s) of a Participant not previously forfeited shall immediately vest in the event of (i) such Participant's Permissive Retirement or (ii) such Participant's - -- termination of employment with the Company or a Subsidiary by reason of his death or Disability. Prior to vesting, an Award shall be completely unvested. Both vested and unvested Awards shall be subject to the 8 terms of the Plan including, without limitation, Article VII regarding distributions under the Plan. A Participant shall have no rights with respect to the Shares, cash or other property underlying his vested and unvested Awards until such Shares, cash or other property are distributed pursuant to Article VII. Section 6.4 Forfeited Awards. Upon termination of a Participant's ---------------- employment with the Company and its Subsidiaries or, at the discretion of the Management Committee, upon Demotion of a Participant, any Award(s) granted to such Participant which have not vested shall be forfeited unless otherwise determined by the Management Committee. The Shares, cash and/or other property underlying forfeited Awards shall revert to the Trust and, unless otherwise determined by the Management Committee, shall be added to and allocated as part of subsequent Award(s) made under the Plan. Under no circumstances shall such Shares, cash or other property held in the Trust revert to the Company or any of its Subsidiaries; however such Shares, cash or other property shall be available to creditors of the Company in the event of its insolvency as described in Section 8.2 and the Trust Agreement. Section 6.5 Date of Termination or Demotion. The date of a Participant's ------------------------------- termination of employment or Demotion shall be determined at the sole discretion of the Management Committee. Section 6.6 Acceleration of Vesting. The Management Committee may ----------------------- accelerate the vesting of any Award at any time at its sole discretion. Section 6.7 Dividends. The Management Committee shall direct the Trustee --------- to reinvest the full amount of any dividends paid on Shares held in the Trust in Additional Shares and shall direct such purchase of Additional Shares. Participants' Accounts (and the underlying sub-accounts) shall be credited with the appropriate number of Additional Shares based upon the Average Cost Per Share. Additional Shares shall be subject to the same vesting requirements and other restrictions as are the Award to which such Additional Shares relate. The Management Committee may direct the Trustee to waive dividends on Shares held in the Trust; in such event, the Company may make, or cause to be made, contributions to the Trust equivalent to the dividends waived in respect of such Shares. Such dividend equivalent contributions shall be used to purchase Additional Shares as described in this Section 6.7. Section 6.8 Voting of Shares. ---------------- (a) The Management Committee shall direct the Trustee, and the Trustee shall have no discretion, as to the manner in which the voting rights attaching to Shares that are allocated to unvested Awards are to be voted. 9 (b) The Management Committee shall direct the Trustee, and the Trustee shall have no discretion, as to the manner in which the voting rights attaching to Shares that are allocated to vested Awards are to be voted; provided that, the Management Committee may, in its sole discretion, direct the Trustee to take direction from any or all Participants as to the manner in which the Shares subject to the relevant Participant's vested Awards are to be voted. If the Management Committee directs the Trustee to take voting directions from any Participant(s), (i) the Trustee shall vote combined fractional Shares, to the - extent possible, to reflect the directions of the Participant(s) holding such Shares and (ii) if the Trustee does not receive valid Participant voting -- directions with respect to the Shares allocated to a Participant's vested Award(s), the Trustee shall have no discretion as to the voting of such Shares but shall vote such Shares in the manner directed by the Management Committee. (c) Notwithstanding any other provision of this Section 6.8, the Shares allocated to a Participant's Awards shall be voted by the Trustee, at the direction of the Management Committee, with respect to any Participant(s) with respect to whom counsel to the Company advises that the Participant might be taxed on the value of the Participant's Awards if the Participant(s) were permitted to direct the voting of such Shares. Section 6.9 Tender of Shares. ---------------- (a) If any person shall commence a tender or exchange offer or any similar transaction with respect to Shares, the Management Committee shall be entitled to direct the Trustee, and the Trustee shall have no discretion, as to whether the Shares underlying unvested Awards allocated to Participants' Accounts are to be tendered and whether such tender is to be revoked (to the extent such a revocation is permitted by the terms of such tender or exchange offer or applicable law). (b) If any person shall commence a tender or exchange offer or any similar transaction with respect to Shares, the Management Committee shall be entitled to direct the Trustee, and the Trustee shall have no discretion, as to whether the Shares underlying vested Awards allocated to Participants' Accounts are to be tendered and whether such tender is to be revoked (to the extent such a revocation is permitted by the terms of such tender or exchange offer or applicable law); provided that, the Management Committee may, in its sole discretion, direct the Trustee to take direction from any or all Participant(s) as to whether such Shares are to be tendered and whether such tender is to be revoked (to the extent such a revocation is permitted by the terms of such tender or exchange offer or applicable law). If the Management Committee directs the Trustee to take tender directions from any Participant(s), (i) the Trustee - shall tender Shares underlying vested Awards allocated to any Participants' Accounts for which the Trustee shall have received affirmative and valid Participant directions to tender (except to the extent such directions are revoked prior to such tender); (ii) the Trustee shall revoke the -- 10 tender of Shares allocated to any Participants' Accounts underlying vested Awards for which the Trustee shall have received affirmative and valid Participant directions to revoke such tender; and (iii) the Trustee shall not --- tender, or revoke the tender of, Shares allocated to Participants' Accounts for which the Trustee does not receive affirmative and valid Participant directions. (c) To the extent that a Participant or the Management Committee elects to tender Shares allocated to a Participant's Account, the Trustee shall transfer the consideration the Trustee receives as a result of such tender into the Trust and the Participant's Account shall reflect the transfer. (d) Notwithstanding any other provision of this Section 6.9, the Management Committee, in its sole discretion, shall make tender decisions with respect to Shares held in the Accounts of Participants with respect to whom counsel to the Company advises that the Participant(s) might be taxed on the value of the Participant's Account if the Participant(s) were permitted to direct the tender of Shares. Section 6.10 Forfeiture of Awards for Gross Malfeasance. Notwithstanding ------------------------------------------ any other provision of the Plan, Awards (whether vested or unvested) will be forfeited in their entirety by a Participant and the Participant will retain no right whatsoever in relation to any Award in the event that the Participant commits an act of gross malfeasance, such as theft of corporate property or client funds, against the Company or any Subsidiary which act results in the termination of that Participant's employment by the Company or Subsidiary, as appropriate. ARTICLE VII DISTRIBUTIONS UNDER THE PLAN Section 7.1 In General. Subject to any applicable withholding obligations ---------- and Sections 5.2, 6.4, 6.10, 7.2 and 10.1, the Management Committee shall direct the Trustee to deliver or cause to be delivered to a Participant certificates for Shares, cash or other property equivalent to the amount credited to such Participant's Account in respect of vested Awards, no later than one year and sixteen days after such Participant's termination of employment with the Company and its Subsidiaries. The Management Committee may, in its sole discretion and at any time, direct the Trustee to sell any securities or other property that would have been received in respect of Shares or other property credited to a Participant's Account for cash or other property of equivalent value. Upon termination of a Participant's employment with the Company and its Subsidiaries, the Shares, cash or other property credited to such Participant's Account in respect of vested Awards shall continue to be invested in Shares until a complete distribution of the value of the vested Awards credited to such Account is made to such Participant. The Management Committee may, in its sole discretion, consult with the 11 Participant as to timing of the distribution of Shares, cash or other property credited to a Participant's Account in respect of vested Awards. Section 7.2 Distribution Election. Prior to the vesting of an Award, each --------------------- Participant shall be entitled to make a Distribution Election with respect to such Award in accordance with options approved by the Management Committee. The Management Committee, at its sole discretion, may approve or disapprove such Distribution Election. A Participant's Distribution Election with respect to a particular Award shall become irrevocable upon the vesting of such Award. Section 7.3 Distribution Upon the Death of a Participant. Each -------------------------------------------- Participant shall have the right to designate in writing from time to time a Beneficiary by filing a written notice of such designation with the Management Committee. A Participant's designation of a Beneficiary may be revoked by filing with the Management Committee an instrument of revocation or a later designation. Any designation or revocation shall be effective when received by the Management Committee. In the event of the death of a Participant, certificates for Shares, cash or other property equivalent to the amount remaining in such Participant's Account in respect of vested Awards may, at the discretion of the Management Committee, be distributed to the Participant's Beneficiary as soon as reasonably practicable. Unless the Participant's Beneficiary designation provides otherwise, no person shall be entitled to benefits upon the death of the Participant unless such person survives the Participant. If the Beneficiary designated by a Participant does not survive the Participant or if the Participant has not made a valid Beneficiary designation, such Participant's Beneficiary shall be such Participant's estate. Section 7.4 Distribution Upon Disability. In the event of the termination ---------------------------- of a Participant's employment by reason of Disability, certificates for Shares, cash or other property equivalent to the amount credited to such Participant's Account in respect of vested Awards shall be distributed as soon as reasonably practicable to the Participant or such other representative of the Participant as the Management Committee in its sole discretion shall determine. Section 7.5 Termination of Trust or Court-Ordered Distribution. In the -------------------------------------------------- event that the Trust is terminated prior to the vesting of an Award or in the event that a court of competent jurisdiction finally determines that the Company or a Subsidiary is obligated to distribute to a Participant, Beneficiary or any other person certificates representing any Shares credited to a Participant's Account prior to the time of distribution otherwise provided for in this Article VII, the Share certificates so distributed to such Participant, Beneficiary or other person shall, in the sole discretion of the Management Committee, be restricted as to transferability until the date that the Shares would otherwise have been distributed to the Participant or a Beneficiary under the terms of the Plan had they not been distributed to the Participant, Beneficiary or other person and had remained subject to the Plan, and each such stock certificate shall bear the following legend: "The 12 transferability of this certificate and the ordinary shares represented hereby are subject to the restrictions, terms and conditions (including vesting, forfeiture and restrictions against transfer) contained in the AMVESCAP Global Stock Plan. A copy of the Plan is on file in the office of the Corporate Secretary of AMVESCAP p.l.c., 11 Devonshire Square, London, England." Section 7.6 Acceleration of Distribution. The Management Committee may, ---------------------------- in its sole discretion, accelerate the time of distribution with respect to any or all of a Participant's Awards. Section 7.7 Distributions to Insiders. Effective as of November 1, 1996, ------------------------- with respect to any Award made to a Participant who is subject to the reporting requirements of section 16(a) of the Exchange Act (an "insider"), distributions with respect to such Awards shall be made only in the form of Shares and in the form of cash or other property for any fractional Shares. ARTICLE VIII FUNDING OF THE PLAN Section 8.1 Unfunded Plan. The Plan shall be unfunded, including without ------------- limitation for purposes of the United States of America Department of Labor Regulation (S) 2520.104-23. Benefits under the Plan to a Participant shall be the unfunded obligation of such Participant's employer or former employer (the Company or a Subsidiary, as the case may be). Notwithstanding the fact that the Company established the Trust for the purpose of assisting itself and its Subsidiaries in meeting their respective compensatory obligations to their employees, the Company and each of the Subsidiaries, respectively, shall remain obligated to pay the amounts credited to Participant's Accounts as a result of Awards under the Plan. In the event that assets of the Trust are used to satisfy the claims of general creditors of the Company in accordance with Section 8.2 and the Trust Agreement, such assets shall be deemed to be sold at their fair market value and the Accounts of Participants shall be adjusted to reflect such deemed sale. Nothing shall relieve the Company and each of the Subsidiaries of their respective liabilities under the Plan except to the extent amounts are paid to Participants or Beneficiaries from the assets of the Trust. Section 8.2 Trust. Effective as of December 24, 1997, the Company has ----- established the Trust, which is intended to be (i) a "grantor trust" within the - meaning of sections 671 et seq. of the Code of the Company and (ii) a "United -- --- -- States person" within the meaning of section 7701(a)(30) of the Code, to assist the Company and its Subsidiaries in meeting their respective compensatory obligations to their employees. The Trust is part of an employees' share scheme as defined in section 743 of the Companies Act . The Trustee is the Bank of Bermuda (Limited) New York and the Trust is domiciled in the State of New York. Pursuant to the Trust Agreement, the 13 Management Committee may remove the Trustee and appoint a successor Trustee and may change the domicile of the Trust. The Trust can hold Shares, cash and other property contributed to the Trust by the Company to provide itself and the Subsidiaries with a source of funds to assist each of them in meeting their respective compensatory obligations to their employees. The Management Committee shall direct that the assets of the Trust be invested and reinvested primarily in Shares. The trust agreement creating the Trust contains procedures to the following effect: In the event of the insolvency of the Company, the assets of the Trust shall be available to pay the claims of creditors of the Company as a court of competent jurisdiction may direct. The Company shall be deemed to be "insolvent" if the Company is generally unable to pay its debts as they become due or if the Company is subject to a pending proceeding under the bankruptcy laws of the United Kingdom. In the event the Company becomes insolvent, the Board of Directors and the Chief Executive Officer of the Company have a duty to inform the Trustee in writing of the Company's insolvency. Upon receipt of such notice, or if the Trustee receives written notice from a person claiming to be a creditor of the Company alleging such insolvency, the Trustee shall cease making payments from the assets of the Trust, shall hold such assets for the benefit of creditors of the Company and shall resume payments from the assets of the Trust only after the Trustee has determined that the Company is not, or is no longer, insolvent. Section 8.3 Internal Funding. The Subsidiaries shall have no obligations ---------------- to make contributions to the Trust, although a Subsidiary may reimburse the Company for contributions to the Trust made by the Company on behalf of employees of such Subsidiary. The Subsidiaries shall have obligations to make payments under the Plan to the Participants that are their respective employees. To the extent that a Subsidiary's obligations under the Plan are satisfied by the Company or by the distribution of assets from the Trust, such distribution shall be treated as a capital contribution from the Company to the Subsidiary as of the date on which such obligation is satisfied. To the extent that a Subsidiary reimburses the Company for contributions to the Trust and the Company then fails to satisfy the Subsidiary's obligation under the Plan (by a distribution from the Trust or otherwise) and the Subsidiary pays such obligations, the Subsidiary shall have the right to recover such payment from the Company. ARTICLE IX SECURITIES MATTERS Subject to Section 7.5, the Company shall use its best efforts to ensure that any securities distributed to Participants hereunder are marketable at the time of distribution. Notwithstanding anything herein to the contrary, the Company shall not be obliged to cause to be delivered any certificates evidencing Shares pursuant to the Plan unless and until the Company is advised by its counsel that the delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the 14 requirements of The Stock Exchange and any other securities exchange on which Shares are traded. The Management Committee may require, as a condition of the delivery of certificates evidencing Shares pursuant to the terms hereof, the recipient of such Shares to make such covenants, agreements and representations, and that such certificates bear such legends, as the Management Committee, in its sole discretion, deems necessary or desirable, provided that any such legends shall not contravene any rules or regulations of The Stock Exchange or any applicable statute. ARTICLE X MISCELLANEOUS PROVISIONS Section 10.1 Taxes. As a condition to the making of any Award, the ----- vesting of any Award or the lapse of the restrictions pertaining thereto, the Company or a Subsidiary may require a Participant to pay such sum to the Company or such Subsidiary as may be necessary to discharge the Company's or such Subsidiary's obligations with respect to any taxes, withholding, assessment or other governmental charge imposed on property or income received by the Participant pursuant to the Plan. In accordance with the rules and procedures established by the Management Committee and in the discretion of the Management Committee, such payment may be in the form of cash or other property. The Company and the Subsidiaries shall have the right to withhold from any cash or property payable to a Participant (including any salary, bonus or any other amount payable from the Company or a Subsidiary to the Participant) an amount sufficient to satisfy applicable withholding tax requirements, prior to a distribution of Share certificates or other property under the Plan or to direct the Trustee to sell any Shares or other property credited to a Participant's Account in respect of vested Awards to satisfy applicable withholding tax requirements. In order to satisfy such taxes, assessments or other governmental charges, the Management Committee may direct the Trustee to pay to the Company or a Subsidiary an amount to satisfy such obligation and to pay the balance to the Participant. At the direction of the Participant and subject to the approval of the Management Committee, the Company and its Subsidiaries may deduct or withhold from any payment or distribution to a Participant whether or not pursuant to the Plan in order to satisfy required withholding obligations under the Plan. Section 10.2 No Special Employment Rights. Nothing contained in the Plan ---------------------------- shall confer upon any Participant any right with respect to the continuation of the Participant's employment by the Company or a Subsidiary or interfere in any way with the right of the Company or a Subsidiary at any time to terminate such employment or demote such Participant from the status of "Global Partner" without prior notice at any time for any or no reason. Each Participant shall, by participating in the Plan, waive all and any right to compensation or damages in consequence of the termination of his office or employment with the Company or a Subsidiary for any reason whatsoever in so far as these rights arise or may arise from his ceasing to have rights under the Plan as a result of 15 such termination. Nothing in the Plan shall be deemed to give any employee of the Company or a Subsidiary any right to participate in the Plan. Section 10.3 Expenses. Subject to the Trust Agreement, all expenses and -------- costs in connection with the administration of the Plan shall be borne by the Company and the Subsidiaries. Section 10.4 Titles and Headings Not to Control. The titles to Articles ---------------------------------- and headings of Sections in the Plan are placed herein for convenience of reference only and shall not affect the meaning of any of the provisions of the Plan. Section 10.5 Amendment or Termination of Plan. The Remuneration Committee -------------------------------- may modify, amend, suspend or terminate this Plan in whole or in part at any time, provided that, such modification, amendment, suspension or termination -------- ---- shall not, without a Participant's consent, affect adversely the rights of a Participant with respect to outstanding Awards that have not previously been forfeited; provided further, that the Remuneration Committee may, without a -------- ------- Participant's consent, amend the Plan from time to time in such a manner as may be necessary to avoid having the Plan, the Trust Agreement or the Trust being subject to ERISA and to avoid the current taxation of the assets held in the Trust. In this regard, neither a Participant's incurring tax liability nor the loss of an investment opportunity as a result of the termination of the Plan shall be considered an impairment of the rights of a Participant. Upon termination of the Plan or the Trust, unvested Awards of each Participant shall immediately vest and the Shares, cash or other property, or the equivalent thereof, credited to the Account of each Participant in respect of vested Awards shall be distributed to each such Participant in order to meet the payment obligations under the Plan with respect to each such Participant. In the event that Shares or other property allocated to unvested Awards have been previously forfeited, the Management Committee shall determine how such Shares and other property shall be applied to provide compensation and benefits to employees of the Company and the Subsidiaries. No portion of the assets held in the Trust shall revert to the Company or the Subsidiaries at any time except for the reimbursement of taxes pursuant to Section 10.1 and the Trust Agreement; provided that, in the event of the insolvency of the Company, the assets of the Trust shall be available to pay the claims of creditors of the Company as provided in Section 8.2 and the Trust Agreement. Section 10.6 Governing Law. Effective as of December 24, 1997, the Plan, ------------- as amended from time to time, and all rights hereunder shall be governed by, administered and enforced in accordance with the laws of the State of New York (without reference to the choice of law doctrine). 16 Section 10.7 Waiver of Punitive Damages. There is no right to punitive, -------------------------- exemplary or similar damages as a result of any controversy or claim arising out of, relating to or in connection with the Plan, or the breach, termination or validity thereof, and each Participant shall, by participating in the Plan, waive all and any of such rights. Section 10.8 Restrictions on Transfer. No transfer (other than any transfer ------------------------ made by will or by the laws of descent and distribution), charge or encumbrance by a Participant of any right to any payment hereunder, whether voluntary or involuntary, by operation of law or otherwise, shall vest the transferee with any interest or right in or with respect to such payment, and the transfer, charge or encumbrance shall be of no force and effect. Section 10.9 Change in Control. In the event of a Change in Control of ----------------- the Company or a Participant's employer, all of a Participant's unvested Award(s) shall immediately vest if (i) the Participant's employment with the - Company and its Subsidiaries is involuntarily terminated other than for Cause or (ii) the Participant voluntarily terminates employment with the Company and its -- Subsidiaries for "good reason" which shall mean (a) reduction in compensation - following the Change in Control or (b) reduction in responsibilities or position - following the Change in Control. Section 10.10 Consolidation or Merger of the Company. In the event of the -------------------------------------- consolidation, amalgamation, combination or merger of the Company with or into any other corporation, or the sale by the Company of substantially all of its assets, the resulting successor may continue the Plan by adopting the same by resolution of its board of directors and by executing a proper supplemental agreement to the Trust Agreement with the Trustee. If within ninety days from the effective date of such consolidation, amalgamation, combination, merger or sale of assets, such new corporation does not adopt the Plan, the rights of all affected Participants to their respective benefits with respect to vested and unvested Awards shall be non-forfeitable as of the effective date of such consolidation, amalgamation, combination, merger or sale of assets. Section 10.11 Set-off. In the event that the Company or a Subsidiary has ------- any claims against a Participant, the Company or Subsidiary (as the case may be) may, in its discretion, offset such claims against its obligations to such Participant under the Plan. The Company or Subsidiary, as the case may be, shall give notice to the Participant of any set-off effected under this Section 10.11. Section 10.12 Special Rules Regarding Management Committee. -------------------------------------------- Notwithstanding any other provision of the Plan, with respect to any power of the Management Committee described herein that is exercised with respect to a Participant who is a member of the Management Committee and the exercise of such power does not affect all Participants relatively equally, such power shall be exercised with respect to such Participant by the non-Participant members of the Management Committee, if any; 17 provided that, if all members of the Management Committee are Participants, then - -------- ---- such powers shall be exercised with respect to such Participants by the Remuneration Committee. 18 SPECIAL RULES RELATING TO PARTICIPANTS IN JAPAN In order to comply with laws and regulations of Japan and notwithstanding Section 7.6 or any other provision of the Plan, the Management Committee shall not accelerate the time of distribution with respect to any Awards of a Participant resident in, or employed by a Subsidiary that is resident in, Japan. 19 EX-4.19 17 dex419.txt FIRST AMENDMENT TO AMVESCAP GLOBAL STOCK PLAN EXHIBIT 4.19 FIRST AMENDMENT TO THE AMVESCAP GLOBAL STOCK PLAN (Amended and Restated Effective as of January 1, 1997) ------------------------------------------------------ Acting pursuant to Section 10.5 of the AMVESCAP Global Stock Plan (the "Plan"), the Remuneration Committee of the Board of Directors of AMVESCAP p.l.c. hereby amends the Plan, effective as of December 1, 1998, as follows: 1. Article II of the Plan is hereby amended to delete the definition of "Distribution Election" therefrom. 2. Section 7.2 of the Plan is hereby amended to read in its entirety as follows: Section 7.2 Distribution Election. A Participant may voluntarily --------------------- elect to defer receipt of distribution of his Awards under this Plan upon such terms and conditions as the Management Committee may prescribe. The Management Committee, at its sole discretion, may approve or disapprove any such distribution election. 3. Article X of the Plan is hereby amended to add the following at the end thereof: Section 10.13 Transfer of Awards. The Management Committee may, with ------------------ a Participant's consent, permit the transfer of such Participant's vested awards under the AMVESCAP Global Stock Plan II to this Plan upon such terms and conditions as the Management Committee may prescribe. EX-4.20 18 dex420.txt SECOND AMENDMENT TO AMVESCAP GLOBAL STOCK PLAN EXHIBIT 4.20 SECOND AMENDMENT TO THE AMVESCAP GLOBAL STOCK PLAN (Amended and Restated Effective as of January 1, 1997) ------------------------------------------------------ Acting pursuant to Section 10.5 of the AMVESCAP Global Stock Plan (the "Plan"), the Remuneration Committee of the Board of Directors of AMVESCAP p.l.c. hereby amends the Plan, effective as of January 1, 2001, as follows: 1. The definition of "Trust" contained in Article II of the Plan is hereby amended to read in its entirety as follows: "Trust" shall mean the grantor trust of the Company from time to time to which contributions are made in respect of the Plan and, in the case of any Subsidiary, the term "Trust" shall be limited to such Subsidiary's Sub-Trust as described in Section 1.3 of the Trust Agreement. The Company and the Subsidiaries intend that, in the event of the insolvency or bankruptcy of the Company or any Subsidiary, only the assets of the Trust which are attributable to the aggregate Account Balances of the Company or such Subsidiary's Participants be available to pay the claims of the Company's or such Subsidiary's creditors." 2. The last sentence of Section 6.4 of the Plan is hereby amended to read in its entirety as follows: "Under no circumstances shall such Shares, cash or other property held in the Trust revert to the Company or any of its Subsidiaries; however such Shares, cash or other property shall be available to creditors of the Company or any Subsidiary in the event of the Company's or such Subsidiary's insolvency in accordance with the terms and conditions of Section 8.2 and the Trust Agreement." 3. The third and fourth sentences of Section 7.1 of the Plan are hereby amended to read in their entirety as follows: "Upon termination of a Participant's employment with the Company and its Subsidiaries, the Shares, cash or other property credited to such Participant's Account in respect of vested Awards shall continue to be invested in Shares, cash or other property until a complete distribution of the value of the vested Awards credited to such Account is made to such Participant; provided, however, that during the period prior to a Participant's Permissive Retirement as determined by the Management Committee, the Management Committee, in its sole discretion and upon written notice by such Participant, may direct the Trustee to sell any Shares or other property credited to such Participant's Account in respect of vested Awards for cash or other property and direct the investment of such proceeds in such manner as the Management Committee may approve until a complete distribution of the value of the vested Awards credited to such Account is made to such Participant. The Management Committee (or its delegate) may, in its sole discretion, consult with the Participant as to the investment of, or the timing of the distribution or sale of, Shares, cash or other property credited to a Participant's Account in respect of vested Awards." 4. The second paragraph of Section 8.2 of the Plan is hereby amended to read in its entirety as follows: "The trust agreement creating the Trust contains procedures to the following effect: In the event of the insolvency of the Company or any Subsidiary, the assets of the Trust shall be available to pay the claims of creditors of the Company or such Subsidiary, as the case may be, as a court of competent jurisdiction may direct. The Company or any Subsidiary shall be deemed to be "insolvent" if the Company or such Subsidiary is generally unable to pay its debts as they become due, or if the Company is subject to a pending proceeding under the bankruptcy laws of the United Kingdom, or if such Subsidiary is subject to a pending proceeding under the bankruptcy laws of the jurisdiction in which it is organized or incorporated. In the event the Company or any Subsidiary becomes insolvent, the Board of Directors and the Chief Executive Officer of the Company or such Subsidiary, as the case may be, have a duty to inform the Trustee in writing of the Company's or such Subsidiary's insolvency. Upon receipt of such notice, or if the Trustee receives written notice from a person claiming to be a creditor of the Company or any Subsidiary alleging such insolvency, the Trustee shall cease making payments from the assets of the Trust on behalf of the Company or such Subsidiary, shall hold such assets for the benefit of creditors of the Company or such Subsidiary, as the case may be, and shall resume payments from the assets of the Trust only after the Trustee has determined that the Company or such Subsidiary, as the case may be, is not, or is no longer, insolvent." 5. The last sentence of Section 10.5 of the Plan is hereby amended to read in its entirety as follows: "No portion of the assets held in the Trust shall revert to the Company or the Subsidiaries at any time except for the reimbursement of taxes pursuant to Section 10.1 and the Trust Agreement; provided that, in the event of the insolvency of the Company or any Subsidiary, the assets of the Trust shall be available to pay the claims of creditors of the Company or such Subsidiary, as the case may be, as provided in Section 8.2 and the Trust Agreement." EX-4.21 19 dex421.txt THIRD AMENDMENT TO AMVESCAP GLOBAL STOCK PLAN EXHIBIT 4.21 THIRD AMENDMENT TO THE AMVESCAP GLOBAL STOCK PLAN (Amended and Restated Effective as of January 1, 1997) ------------------------------------------------------ Acting pursuant to Section 10.5 of the AMVESCAP Global Stock Plan (the "Plan"), the Remuneration Committee of the Board of Directors of AMVESCAP p.l.c. hereby amends the Plan, effective as of February 1, 2002, as follows: 1. The first sentence of the definition of "Management Committee" contained in Article II of the Plan is hereby amended to read in its entirety as follows: "Management Committee" shall mean the management committee, or any successor committee, comprised of a majority of United States persons within the meaning of section 7701(a)(30) of the Code and appointed by the Board of Directors of AVZ, Inc. from time to time to administer the Plan and direct the Trustee and serving at the pleasure of the Board of Directors of AVZ, Inc." 2. The fifth and sixth sentences of the first paragraph of Article IV of the Plan are hereby amended to read in their entirety as follows: "Management Committee decisions shall be made by a majority of its members at a meeting (which meeting may be held by telephone) at which there is a quorum and which has been duly called by any member on no less than 48 hours written notice; notice may be transmitted by facsimile, telex, courier or by other reasonable means of transmission. No notice of any meeting of the Management Committee need be given to any member who submits a signed waiver of notice, whether before or after the meeting. Neither the business to be transacted at, nor the purpose of, any meeting of the Management Committee need be specified in a written waiver of notice. The attendance of any member at a meeting of the Management Committee shall constitute a waiver of notice of such meeting, except when the member attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is lawfully called or convened. At all meetings of the Management Committee, the presence of a majority of the members of the Management Committee comprised of a majority of United States persons within the meaning of section 7701(a)(30) of the Code shall constitute a quorum for the transaction of business. Except as otherwise provided by law, the vote of a majority of the members present at any meeting at which a quorum is present (including those who participate by telephone) shall constitute the action of the Management Committee. Any decision reduced to writing and signed by all of the members of the Management Committee shall be as fully effective as if it had been made at a meeting duly held." 3. The first sentence of Section 6.3 of the Plan is hereby amended to read in its entirety as follows: "Subject to Sections 6.4, 6.6 and 6.10, an Award shall fully vest on the November 30th of the third year following the year to which the Award is attributable." 4. The third sentence of Section 7.1 of the Plan is hereby amended to read in its entirety as follows: "Upon termination of a Participant's employment with the Company and its Subsidiaries, the Shares, cash or other property credited to such Participant's Account in respect of vested Awards shall continue to be invested in Shares, cash or other property until a complete distribution of the value of the vested Awards credited to such Account is made to such Participant; provided, however, that (i) during the period prior to a Participant's Permissive Retirement as - determined by the Management Committee or (ii) upon a Participant's attainment -- of age 58, a Participant may request in writing and the Management Committee, if such a request is made, in its sole discretion, may (but need not) direct the Trustee to sell any Shares or other property credited to such Participant's Account in respect of vested Awards for cash or other property and direct the investment of such proceeds in such manner as the Management Committee may approve until a complete distribution of the value of the vested Awards credited to such Account is made to such Participant." 5. Section 10.12 of the Plan is hereby amended to read in its entirety as follows: "Section 10.12 Special Rules Regarding Management Committee. -------------------------------------------- Notwithstanding any other provision of the Plan, with respect to any power of the Management Committee described herein that is exercised with respect to a Participant who is a member of the Management Committee and the exercise of such power does not affect all Participants relatively equally, such power shall be exercised with respect to such Participant by the non-Participant members of the Management Committee who are United States persons within the meaning of section 7701(a)(30) of the Code, if any; provided that, if all members of the Management -------- ---- Committee are Participants or none of the non-Participant members of the Management Committee are United States persons within the meaning of section 7701(a)(30) of the Code, then such powers shall be exercised with respect to such Participants by the members of the Remuneration Committee who are United States persons within the meaning of section 7701(a)(30) of the Code." -----END PRIVACY-ENHANCED MESSAGE-----