RNS No 0722m
CALA PLC
1 June 1999
PART 2
Not for release, publication or distribution in or into the
United States,Canada, Australia or Japan
INCREASED AND FINAL CASH OFFER FOR CALA OF 200 PENCE PER CALA SHARE BY
NOBLE GROSSART ON BEHALF OF DOTTEREL
APPENDIX 1
Definitions
The following definitions apply throughout this announcement unless the
context otherwise require:
"Act" the Companies Act 1985 (as amended)
"Australia" the Commonwealth of Australia, its territories and
possessions
"Bank of Scotland" The Governor and Company of the Bank of Scotland
"Board" or "CALA board" the board of directors of CALA
"CALA Executive Share the CALA plc Executive Share Option Scheme
Option Scheme"
"CALA ESOT" a trust established by CALA for the benefit of
employees the trustee of which is CALA (ESOP)
Trustees Limited
"CALA ESOT the agreement dated 29th and 30th April 1999 as
Share Exchange Agreement" varied by supplementary agreement dated 20th and
25th May 1999 between CALA (ESOP) Trustees Limited
and Dotterel
"CALA Group" or "Group" CALA, together with its subsidiary undertakings and
associated undertakings
"CALA Management" the individuals whose names are set out under the
section headed "Introduction"
"CALA Matching Share the long-term incentive plan whereby participants
Plan" invest in CALA shares which are held by the CALA
ESOT pending the achievement of specific performance
criteria
"CALA option holders" holders of options under the CALA Share Schemes
"CALA Preference Shares" the 50,000 existing issued 2.8% cumulative
redeemable preference shares of #1 each in the
share capital of CALA
"CALA SAYE Scheme" the CALA plc Employee Savings Related Share
Option Scheme
"CALA shares" or "shares" the existing issued or unconditionally allotted
and fully paid ordinary shares of 5 pence each
in the share capital of CALA and any further such
shares which are unconditionally allotted or issued
and fully paid (or credited as fully paid) before
the date on which the Final Offer closes (or
such earlier date(s) as Dotterel may, subject to the
City Code, decide) including any such shares
unconditionally allotted or issued pursuant to the
exercise of options granted under the CALA Share
Schemes
"CALA shareholders" holders of CALA shares
"CALA Share Schemes" the CALA SAYE Scheme and the CALA Executive Share
Option Scheme
"Canada" Canada, its provinces and territories and all areas
subject to its jurisdiction and any political
subdivision thereof
"City Code" The City Code on Takeovers and Mergers
"Company" or "CALA" CALA plc
"Dotterel" Dotterel Limited
"Dotterel A Shares" A ordinary shares of 1p each in the capital of
Dotterel
"Dotterel B Shares" B ordinary shares of 1p each in the capital of
Dotterel
"Dotterel C Shares" C ordinary shares of 1p each in the capital of
Dotterel
"Dotterel D Shares" D ordinary shares of 1p each in the capital of
Dotterel
"Dresdner Kleinwort Kleinwort Benson Securities Limited
Benson"
"Executive Directors" Geoffrey Arthur Ball, Alan Wood Downie and Robert
John Westwater Dick, the executive directors of CALA
"Excluded Shares" 1,318,330 CALA shares proposed to be acquired by
Dotterel from CALA Management and the trustee of the
CALA ESOT pursuant to the Share Exchange Agreements
"Final Offer" or the increased and final cash offer to be made by
"Increased Noble Grossart on behalf of Dotterel to acquire the
and Final Cash Offer" whole of the issued and to be issued share capital
of CALA (other than the Excluded Shares) on the
terms and subject to the conditions to be set out in
the Offer Document and the Form of Acceptance
including (where the context so requires) any
subsequent revision, variation, renewal or extension
thereof
"Form of Acceptance" the form of acceptance, authority and election
relating to the Final Offer, accompanying the
Offer Document
"Improved Loan Note the alternative whereby holders of CALA shares who
Alternative" validly accept the Final Offer may elect to
receive, for every #1 of cash, #1 nominal of Loan
Notes as an alternative to all or part of their
entitlement to cash under the Final Offer
"Independent Directors" Lord Razzall and Donald Sutherland, being those
directors of CALA who are considered independent in
relation to the Final Offer for the purposes of
the City Code
"Japan" Japan, its cities and prefectures, territories and
possessions
"LIBOR" London Inter Bank Offered Rate
"Loan Notes" unsecured guaranteed variable rate loan notes
1999-2006 of Dotterel, particulars of which are set
out in Appendix III, to be issued pursuant to the
Improved Loan Note Alternative
"London Stock Exchange" London Stock Exchange Limited
"Management Share the agreement dated 30th April 1999 as varied by
Exchange Agreement" supplementary agreement dated 25th May 1999 between
CALA Management and Dotterel
"Miller" Miller 1999 plc, (a subsidiary of The Miller Group
Limited)
"Miller final offer" the increased and final offer of 200p in cash per
CALA share announced by Miller on 10th May 1999
"Morrison Construction" Morrison Construction Group plc
"Noble Grossart" Noble Grossart Limited
"Noble Grossart Noble Grossart Investments Limited (a subsidiary of
Investments" Noble Grossart)
"North American Person" a US person and any individual, corporation,
partnership, trust or other entity resident in Canada
or receiving the offer in Canada, provided however
that the terms "North American person" and "US
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 or insurance business
and not solely for the purpose of investing in
securities not registered under the Securities Act
"Offer Document" the document to be addressed to holders of CALA
shares containing the Final Offer
"Offer Period" the period commencing on 15th March 1999 and ending
on whichever of the following dates shall be the
latest (i) 3.00pm on the first closing date of the
Final Offer, (ii) the date on which the Final
Offer lapses and (iii) the date the Final Offer
becomes or is declared unconditional as to
acceptances
"Official List" Daily Official List of the London Stock Exchange
"Panel" The Panel on Takeovers and Mergers
"Securities Act" the United States Securities Act of 1933, as amended
and the rules and regulations promulgated thereunder
"Share Exchange the Management Share Exchange Agreement and the
Agreements" CALA ESOT Share Exchange Agreement
"Shareholders Agreement" the agreement dated 29th and 30th April 1999 between
Dotterel, Uberior, Bank of Scotland, Morrison
Construction and CALA Management as amended by
supplementary agreement dated 24th and 25th May 1999
between Dotterel, Uberior, Bank of Scotland,
Morrison Construction, Noble Grossart
Investments and CALA Management
"Uberior" Uberior Investments plc, a subsidiary of Bank of
Scotland
"United States" or "US" the United States of America (including the states of
the United States of America and District of
Columbia), its territories, its possessions and all
other areas subject to its jurisdiction
Where reference is made to the value of the Final Offer, net asset value of a
CALA share or earnings per share of a CALA share, the calculation has been
made on the basis of the issued ordinary share capital of CALA as at 27th May
1999, the number of CALA shares which would be issued following the exercise
of options outstanding at 31st December 1998 under the CALA Executive Share
Option Scheme and the maximum number at 20th April 1999 of CALA shares which
would be issued following the exercise of options under the CALA SAYE Scheme.
APPENDIX II
Conditions and certain further terms of the Final Offer
The Final Offer, which will be made by Noble Grossart on behalf of Dotterel,
will comply with the applicable rules and regulations of the City Code and the
London Stock Exchange and will be subject to the terms and conditions set out
in the Offer Document and related Form of Acceptance and the following
conditions:
1. valid acceptances being received (and not, where permitted, withdrawn) by
3.00 pm on the first closing date of the Final Offer (or such later
time(s) and/or date(s) as Dotterel may, subject to the rules of the City
Code, decide) in respect of not less than 90 per cent (or such lesser
percentage as Dotterel may decide) in nominal value of the CALA shares to
which the Final Offer relates, provided that this condition will not
be satisfied unless Dotterel shall have acquired, or agreed to acquire,
whether pursuant to the Final Offer or otherwise, CALA shares
carrying in aggregate more than 50 per cent of the voting rights normally
exercisable at general meetings of CALA (including for this purpose, to
the extent, if any, required by the Panel, any such voting rights
attaching to any CALA shares which are unconditionally allotted or issued
before the Final Offer becomes or is declared unconditional as to
acceptances), and for this purpose the expression "CALA shares to which
the Final Offer relates" shall not include the Excluded Shares and
shall otherwise be construed in accordance with Sections 428 to 430F of
the Act, and CALA shares which have been unconditionally allotted shall
be deemed to carry the voting rights which they will carry on issue;
2. except as publicly announced prior to 28th May 1999, there being no
provision, arrangement, agreement, licence, permit or other instrument to
which any member of the Wider CALA Group (as defined at the end of this
Appendix II) is a party, or by or to which any member of the Wider CALA
Group, or any of its assets, may be bound, entitled or subject, which
would in consequence of the acquisition of the issued share capital of
CALA or any part thereof by Dotterel result, to an extent which is
material in the context of the Wider CALA Group taken as a whole, in:
2.1 any monies borrowed by or other indebtedness, actual or contingent, of
any member of the Wider CALA Group being or becoming repayable, or being
or becoming capable of being declared repayable, immediately or earlier
than the repayment date stated in such arrangement, agreement or other
instrument or the ability of any such member to borrow monies or incur
any indebtedness being withdrawn or inhibited; or
2.2 any such provision, arrangement, agreement, licence, permit or other
instrument being terminated, revoked or adversely modified or any adverse
action being taken or obligation or liability arising thereunder; or
2.3 the business or interests of any such member of the Wider CALA Group with
or in any other person, firm, company or body (or any arrangements
relating to such business or interests) being terminated, adversely
modified or otherwise adversely affected; or
2.4 the creation of any mortgage, charge or other security interest over the
whole or any part of the business, property or assets of any such member
of the Wider CALA Group or any such security, whenever arising or having
arisen, becoming enforceable;
2.5 any assets of any such member of the Wider CALA Group being disposed of
otherwise than in the ordinary course of business or any right arising
under which any such asset could be required to be disposed of; or
2.6 the value of any member of the Wider CALA Group or its financial or
trading position being adversely affected;
3. no government, governmental, quasi-governmental, supranational,
statutory, regulatory or investigative body or court or any trade agency,
association, institution or professional body, or any other person or
body having jurisdiction in any jurisdiction, prior to the date when the
Final Offer becomes otherwise unconditional in all respects, having
instituted, implemented or threatened any action, suit, proceeding,
investigation or enquiry (and in each case not having irrevocably
withdrawn such action, suit, proceeding, investigation or enquiry or
threat thereof) or enacted, made or proposed any statute, regulation,
decision or order (and any such statute, regulation, decision or order
which has been enacted or made remaining in force or otherwise effective)
or taken any other step that would:
3.1 make the Final Offer or the acquisition or proposed acquisition of
any CALA shares by Dotterel void, illegal or unenforceable under the laws
of any jurisdiction or otherwise directly or indirectly restrain,
prohibit, restrict, frustrate or delay or otherwise interfere in the
implementation of, or impose additional conditions or obligations with
respect to, or otherwise challenge, the Final Offer or the proposed
acquisition of any CALA shares by Dotterel or the implementation thereof;
or
3.2 result in a material delay in, or impose any material limitation on, the
ability of Dotterel, or render Dotterel unable, to acquire some or all of
the CALA shares; or
3.3 require or prevent the divestiture by the Wider CALA Group of all or any
material part of their respective businesses, assets or properties or
impose any limitation which is or may be material on the ability of any
of them to conduct their respective businesses (or any part thereof) or
own their respective assets or properties (or any part thereof) and in
each case the result of which would have a material adverse effect on the
Wider CALA Group taken as a whole; or
3.4 require or prevent the divestiture by Dotterel of any shares or other
securities in any member of the Wider CALA Group; or
3.5 impose any material limitation on the ability of Dotterel to acquire or
hold or effectively to exercise, directly or indirectly, all or any
rights of ownership of CALA shares; or
3.6 impose any material limitation on the ability of any member of the Wider
CALA Group, or on Dotterel, to hold or effectively to exercise any rights
of ownership of shares or the equivalent in any member of the Wider CALA
Group or to exercise management control over any such member of the Wider
CALA Group; or
3.7 otherwise materially and adversely affect the business or profits of any
member of the Wider CALA Group taken as a whole;
and all applicable waiting periods during which any such government,
governmental, quasi- governmental, supranational, statutory, regulatory
or investigative body, court, trade agency or association, institution or
professional body, other person or body could institute, implement or
threaten any such action, suit, proceeding, investigation or enquiry or
enact any such statute, regulation, decision or order or take any such
other step having expired, lapsed or been terminated;
4. all authorisations, orders, grants, consents, recognitions,
confirmations,licences, clearances, permissions and approvals
("Authorisations") which are necessary for or in respect of the Final
Offer or the proposed acquisition or acquisition of any CALA shares by
Dotterel and all Authorisations which are necessary for the carrying on
of the business of the Wider CALA Group or any part thereof and the
absence of which in each case would have a material adverse effect on any
member of the Wider CALA Group, having been obtained, in terms and in
forms satisfactory to Dotterel acting reasonably, from all appropriate
government, governmental, quasi-governmental, supranational or statutory
or regulatory bodies or courts, trade agencies, associations,
institutions or professional bodies or persons, and such Authorisations
remaining in full force and effect at the time when the Final Offer
becomes otherwise unconditional in all respects and not being subject to
any notice, intimation or indication of an intention to revoke, suspend,
restrict, modify or not to renew the same;
5. since 30th June 1998 and at any time prior to the Final Offer
becoming otherwise unconditional in all respects, other than as disclosed
in the annual report and accounts of the CALA Group for the year ended
30th June 1998, the announcement by CALA on 1st March 1999 of its
results for the six months ended 31st December 1998 or as disclosed in
any public announcement made through the London Stock Exchange before the
date of announcement of the Final Offer:
5.1 no member of the Wider CALA Group having recommended, declared, paid or
made, or proposed the declaration, paying or making of, any dividend,
bonus or other distribution in respect of any of its share capital other
than to another member of the CALA Group;
5.2 save as between CALA and wholly owned subsidiaries of CALA or upon the
grant or exercise of rights to subscribe for CALA shares pursuant to the
exercise of options under the CALA Share Schemes before the date of
announcement of the Final Offer, no member of the Wider CALA Group
having issued or authorised or proposed the issue of additional shares of
any class, or securities convertible into shares of any class, or rights,
warrants or options to subscribe for or acquire, any such shares or
convertible securities, or having purchased or agreed to purchase, or
authorised or proposed the purchase of, any of its own shares or other
securities or reduced or made any other change to any part of its share
capital;
5.3 save as between CALA and wholly owned subsidiaries of CALA, no member of
the Wider CALA Group having issued or authorised or proposed the issue of
any debentures or loan capital or having incurred or increased any
indebtedness or contingent liability which in any such case is material
in the context of the Wider CALA Group taken as a whole;
5.4 there having been no material adverse change in the business, financial
or trading position, profits or assets of the Wider CALA Group taken as a
whole;
5.5 save as between CALA and wholly-owned subsidiaries of CALA, no member of
the Wider CALA Group having merged with any body corporate or acquired or
disposed of any material assets or shares or any right, title or interest
in any material assets or shares or authorised or proposed or announced
any intention to propose any merger or demerger of any acquisition or
disposal as aforesaid, other than in any such case in the ordinary course
of business;
5.6 no litigation or arbitration proceedings or prosecution or other legal
proceedings to which any member of the Wider CALA Group is or may become
a party and no investigation against or in respect of any member of the
Wider CALA Group having been announced, instituted or threatened by or
against or remaining outstanding in respect of any member of the Wider
CALA Group which in any such case would adversely affect the Wider CALA
Group taken as a whole to a material extent;
5.7 no member of the Wider CALA Group having waived or compromised any claim
which is material to the Wider CALA Group taken as a whole;
5.8 no member of the Wider CALA Group having entered into or changed the
terms of, or having authorised, proposed or announced its intention to
enter into or change the terms of, any contract, transaction, commitment
or arrangement (whether in respect of capital expenditure or otherwise)
which is not in the ordinary course of business or which is of a long
term or unusual nature or which is or may be restrictive on the business
of any member of the Wider CALA Group or which involves or might
reasonably be expected to involve any material obligation on that member
of the Wider CALA Group and which in any such case is material in the
context of the Wider CALA Group taken as a whole; or
5.9 no member of the Wider CALA Group having created any mortgage, charge or
other security interest over the whole or any material part of its
business, property or assets or any rights, title or interest in any such
assets;
5.10 contingent or other liability having arisen which would adversely affect
the Wider CALA Group taken as a whole to a material extent;
5.11 no member of the Wider CALA Group having announced any proposal to
purchase, redeem or repay any of its own shares or other securities or
having purchased, redeemed or repaid any such shares or other securities;
5.12 no member of the Wider CALA Group having implemented, authorised,
proposed or announced its intention to implement any reconstruction,
amalgamation, scheme or other similar transaction or arrangement
otherwise than in the ordinary course of business;
5.13 no member of the Wider CALA Group having made any alteration to its
memorandum or articles of association;
5.14 no member of the Wider CALA Group having been unable to pay its debts or
having stopped or suspended (or threatened to stop or suspend) payment of
its debts or having ceased or threatened to cease carrying on all or any
material part of its business or having taken any action or had any order
made for its winding up, dissolution or (in the context of insolvency)
reorganisation or for the appointment of a receiver, administrative
receiver, administrator, trustee or similar officer of all or any of its
assets or revenues and no analogous or similar event having occurred in
any jurisdiction;
5.15 no member of the Wider CALA Group having entered into any contract,
commitment, agreement or arrangements with respect to any of the
transactions, matters or events referred to in this paragraph (6) or
announced any intention so to do or passed any resolution with respect
thereto;
6. Dotterel not having discovered after the date of the announcement of the
Final Offer but before the date when the Final Offer becomes or is
declared unconditional in all respects that:
6.1 any financial, business or other information about the Wider CALA Group
which has been publicly disclosed at any time by or on behalf of any
member of the Wider CALA Group is misleading in any material
respect,contains a material misrepresentation of fact or omits to state a
fact necessary to make the information contained therein not misleading in
any material respect; or
6.2 any member of the Wider CALA Group is subject to any liability, contingent
or otherwise, which is material which is not disclosed in the annual
report and accounts of CALA Group for the year ended 30th June 1998 or
the announcement by CALA on 1st March 1999 of its results for the six
months ended 31st December 1998.
Dotterel reserves the right to waive, in whole or in part, all or any of
conditions 2 to 6 inclusive. The Final Offer will lapse unless all the
conditions set out in this Appendix have been fulfilled or (if capable of
waiver) waived or, where appropriate, have been determined by Dotterel in its
reasonable opinion to be and continue to be satisfied on or before midnight on
the 21st day after the later of the first closing date of the Final Offer and
the date on which condition l is fulfilled, or in each case such later date as
Dotterel may, with the consent of the Panel, decide. Dotterel shall be under
no obligation to waive or treat as fulfilled any of conditions 2 to 7
inclusive by a date earlier than the latest date specified above for the
satisfaction thereof notwithstanding that the other conditions of the Final
Offer may at such earlier date have been waived or fulfilled and that there
are at such earlier date no circumstances indicating that any such conditions
may not be capable of fulfilment.
If Dotterel is required by the Panel to make an offer for any CALA shares
under the provisions of Rule 9 of the City Code, Dotterel may make such
alterations to the conditions of the Final Offer, including condition l above,
as are necessary to comply with the provisions of that Rule.
The Final Offer will lapse (unless otherwise agreed with the Panel) if the
acquisition of CALA is referred to the Monopolies and Mergers Commission
before the later of 3.00 pm on the first closing date of the Final Offer and
the date on which the Final Offer becomes unconditional as to acceptances. If
the Final Offer lapses for any reason, the Final Offer will cease to be
capable of further acceptance and accepting holders of CALA shares, Dotterel
and Noble Grossart will cease to be bound by Forms of Acceptance submitted
before the time when the Final Offer lapses.
The Final Offer will not be made, directly or indirectly, in or into, or by
use of the mails of the United States, Canada, Australia or Japan or by any
means or instrumentality (including, without limitation, post, electronic
mail, telex, facsimile transmission and telephone) of interstate or foreign
commerce of, or of any facility of a national securities exchange of the
United States, Canada, Australia or Japan. Accordingly, copies of this
announcement are not being, and must not be, and copies of the Offer Document
and Form of Acceptance will not be, and must not be, mailed or otherwise
distributed or sent in, into or from the United States, Canada, Australia or
Japan.
For the purposes of these conditions the "Wider CALA Group" means CALA and its
subsidiary undertakings, associated undertakings and any other undertaking in
which CALA and such undertakings (aggregating their interests) have a
significant interest; and for the purposes of this definition, "subsidiary
undertaking", "associated undertaking" and "undertaking" have the meanings
given to those terms by the Act (but for this purpose ignoring paragraph
20(1)(b) of Schedule 4A to the Act) and "significant interest" means a direct
or indirect interest in 20 per cent. or more of the equity capital of an
undertaking.
The Final Offer will be subject to Scots law.
APPENDIX III
Particulars of the Loan Notes
The Unsecured Redeemable Guaranteed Variable Rate Loan Notes 1999-2006 of
Dotterel will be created by a resolution of the board of Dotterel and will be
constituted by a loan note instrument (the "Loan Note Instrument") executed by
Dotterel and Bank of Scotland. The issue of the Loan Notes will be
conditional on the Final Offer becoming or being declared unconditional in all
respects. The Loan Note Instrument will contain provisions, inter alia, to
the effect set out below.
1. Form and status
The Loan Notes will be issued by Dotterel at par, in integral multiples
of #1 and will constitute unsecured obligations of Dotterel. The Loan
Note Instrument will not contain any restrictions on borrowing, disposals
or charging of assets by Dotterel.
2. Interest
Interest, payable on the nominal amount of the Loan Notes outstanding,
will accrue from day to day and will be calculated on the basis of a 365
day year (or in the case of a leap year a 366 day year) and will be
payable (subject to any requirement to deduct income or other tax
therefrom) twice yearly in arrears on 31st March and 30th September in
each year or, if such day is not a business day, on the next following
business day (each an "interest payment date") in respect of the interest
periods (as defined below) ending on those dates, at the rate of 0.5 per
cent per annum below 6 month LIBOR except that the first payment of
interest on the Loan Notes, which will be made on 30th September 1999,
will be respect of the period from the date of issue of the relevant Loan
Notes to 30th September 1999 (both dates inclusive). The period from and
excluding 30th September 1999 to any subsequent interest payment date, to
and including the next following interest payment date, is herein called
an "interest period".
3. Redemption of Loan Notes
Any holder of Loan Notes ("Noteholder") shall be entitled to require
Dotterel to redeem, on 31st March 2000 or on any subsequent 31st March or
30th September, the whole or any part of his holding of Loan Notes then
outstanding in integral multiples of #1,000 at par together with interest
(subject to deduction of any income or other tax required by law to be
deducted) accrued on the Loan Notes to be redeemed up to and including the
date of redemption by giving notice in writing to Dotterel (in the form
endorsed on the Loan Note certificate) not less than 30 days prior to such
interest payment date accompanied by the certificate(s) for all the Loan
Notes to be redeemed (or a certificate of indemnity in respect thereof).
Any Loan Notes not previously purchased or redeemed (in whole or in part)
by 31st March 2006 will be redeemed by Dotterel on that date, at par,
together with interest (subject to deduction of any income or other tax
required by law to be deducted) accrued up to and including that date.
If at any time 10% or less in aggregate of the nominal value of the Loan
Notes originally issued pursuant to the Loan Note Alternative remain
outstanding, Dotterel will be entitled on giving to the Noteholders not
less than 30 days' prior notice in writing to redeem, on the expiry of
such notice, the whole (but not part only) of the outstanding Loan Notes
at par together with interest (subject to deduction of any income or other
tax required by law to be deducted) accrued up to an including the date of
redemption.
If any redemption of any Loan Notes would be required to take place on a
day which is not a business day, the redemption will take place on the
next following business day.
A Noteholder shall also be entitled to require redemption of all of the
Loan Notes held by him at par together with interest (subject to deduction
of any income or other tax required by law to be deducted), accrued
thereon if Dotterel fails to pay the principal amount of his Loan Notes
within 21 days of the date of redemption, or fails to pay interest within
21 days after an interest payment date, or breaches a condition of the
Loan Notes and does not remedy the breach within 21 days, or on the
occurrence of certain insolvency events described in the Loan Note
Instrument.
4. Purchase of Loan Notes
Dotterel shall be entitled to purchase Loan Notes from the Noteholders or
any of them at any time after the date falling 6 months from the date of
issue of the Loan Notes, at any price by tender (available to all
Noteholders alike), private treaty or otherwise by agreement with the
relevant Noteholder(s).
5. Conversion
The holder of Loan Notes will be entitled to require Dotterel to redeem
the Loan Notes on 31st March 2006 in US dollars instead of pounds sterling
by giving notice in writing (which notice shall be irrevocable) not later
than 3 months prior to 31st March 2006 to apply the relevant conversion
provisions. The reasonable fees and expenses associated with the
conversion will be deducted from the proceeds payable to the Noteholder
and the rate of exchange between US dollars and pound sterling shall be
the spot rate (being the rate at which pound sterling may be sold and US
dollars bought) generally prevailing at the close of business in London on
the business day 90 days immediately proceeding 31st March 2006 provided
that:
a) under no circumstances whatsoever shall the pound sterling equivalent of
the amount equal to the US gross redemption amount (less the relevant
conversion fees) exceed the pound sterling nominal value of the Loan Notes
to be repaid plus 0.25% of the pound sterling nominal value of the Loan
Notes to be redeemed on 31st March 2006;
b) for the purposes of proviso (a) above the US redemption amount shall be
converted to the pound sterling equivalent at the rate of exchange
generally prevailing at the close of business in London at close of
business on the business day 90 days immediately preceding the maturity
date; and
c) in no circumstances whatsoever shall the pound sterling equivalent of the
US redemption amount converted as set out in b) above be less than the
pound sterling nominal value of the Loan Notes to be repaid less 0.25 per
cent of the pound sterling nominal value of the Loan Notes to be redeemed
at 31st March 2006.
6. Guarantee
The obligations of Dotterel under the Loan Note Instrument as to repayment
of principal and in respect of arrears of interest of up to six months
will be guaranteed by Bank of Scotland.
7. Cancellation
Any Loan Notes redeemed or purchased by Dotterel or converted shall be
cancelled and shall not be available for re-issue.
8. Modifications
The provisions of the Loan Note Instrument and the rights of the
Noteholders may be amended with the sanction of an Extraordinary
Resolution of the Noteholders, as defined in the Loan Note Instrument, but
subject to the consent of Dotterel and Bank of Scotland.
9. Registration and transfer
The Loan Notes will be in registered form, evidenced by the issue of
certificates. The Loan Notes will be freely transferable in integral
multiples of #1,000 or, if less, the whole amount of the transferor's
Loan Notes. No transfer will be registered during the 20 days immediately
preceding any interest payment date.
No transfer will be permitted into jurisdictions in which such a transfer
would constitute a violation of securities laws and Dotterel reserves
the right to refuse to register such a transfer.
10. No listing
No application has been made or is intended to be made to any stock
exchange for the Loan Notes to be listed, dealt in or otherwise traded.
11. Governing law
The Loan Notes and the Loan Note Instrument will be governed by and
construed in accordance the law of Scotland.
Loan Notes will not be available to North American Persons or residents of
Australia or Japan or persons who will hold the Loan Notes for the account
or benefit of a North American Person or resident of Australia or Japan or
whom Dotterel has reason to believe will offer, sell or deliver the Loan
Notes directly or indirectly in the US, Canada, Australia or Japan.
END
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