Document:

Exhibit 4.18

 

CONFORMED COPY

 

AGREEMENT

 

18 JULY 2007

 

SUBORDINATED EQUITY BRIDGE CREDIT FACILITIES

 

for

 

IMPERIAL TOBACCO GROUP PLC

 

as Borrower

 

and

 

IMPERIAL TOBACCO LIMITED

 

as Guarantor

 

with

 

CITIBANK INTERNATIONAL PLC, LONDON BRANCH

 

as Facility Agent

 

 

 

Allen
& Overy LLP

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Interpretation

  	
   

  	
  1

  
	
  2.

  	
   

  	
  Facilities

  	
   

  	
  22

  
	
  3.

  	
   

  	
  Purpose

  	
   

  	
  24

  
	
  4.

  	
   

  	
  Conditions Precedent
  and Certain Funds

  	
   

  	
  25

  
	
  5.

  	
   

  	
  Utilisation - Loans

  	
   

  	
  26

  
	
  6.

  	
   

  	
  Utilisation – Avales

  	
   

  	
  28

  
	
  7.

  	
   

  	
  Avales

  	
   

  	
  29

  
	
  8.

  	
   

  	
  Repayment

  	
   

  	
  33

  
	
  9.

  	
   

  	
  Redenomination of
  facility

  	
   

  	
  33

  
	
  10.

  	
   

  	
  Prepayment and
  cancellation

  	
   

  	
  34

  
	
  11.

  	
   

  	
  Interest

  	
   

  	
  37

  
	
  12.

  	
   

  	
  Terms

  	
   

  	
  39

  
	
  13.

  	
   

  	
  Market disruption

  	
   

  	
  39

  
	
  14.

  	
   

  	
  Taxes

  	
   

  	
  40

  
	
  15.

  	
   

  	
  Increased Costs

  	
   

  	
  44

  
	
  16.

  	
   

  	
  Mitigation

  	
   

  	
  44

  
	
  17.

  	
   

  	
  Payments

  	
   

  	
  45

  
	
  18.

  	
   

  	
  Guarantee and
  indemnity

  	
   

  	
  47

  
	
  19.

  	
   

  	
  Representations

  	
   

  	
  50

  
	
  20.

  	
   

  	
  Undertakings

  	
   

  	
  52

  
	
  21.

  	
   

  	
  Offer Covenants

  	
   

  	
  58

  
	
  22.

  	
   

  	
  Financial Covenants

  	
   

  	
  60

  
	
  23.

  	
   

  	
  Default

  	
   

  	
  60

  
	
  24.

  	
   

  	
  The Administrative
  Parties

  	
   

  	
  64

  
	
  25.

  	
   

  	
  Evidence and
  Calculations

  	
   

  	
  69

  
	
  26.

  	
   

  	
  Fees

  	
   

  	
  69

  
	
  27.

  	
   

  	
  Indemnities and Break
  Costs

  	
   

  	
  70

  
	
  28.

  	
   

  	
  Expenses

  	
   

  	
  71

  
	
  29.

  	
   

  	
  Amendments and
  Waivers

  	
   

  	
  72

  
	
  30.

  	
   

  	
  Changes to the
  Parties

  	
   

  	
  73

  
	
  31.

  	
   

  	
  Disclosure of
  information

  	
   

  	
  78

  
	
  32.

  	
   

  	
  Set-off

  	
   

  	
  79

  
	
  33.

  	
   

  	
  Pro rata sharing

  	
   

  	
  79

  
	
  34.

  	
   

  	
  Severability

  	
   

  	
  81

  
	
  35.

  	
   

  	
  Counterparts

  	
   

  	
  81

  
	
  36.

  	
   

  	
  Notices

  	
   

  	
  81

  
	
  37.

  	
   

  	
  Language

  	
   

  	
  83

  
	
  38.

  	
   

  	
  Governing law

  	
   

  	
  83

  
	
  39.

  	
   

  	
  Jurisdiction

  	
   

  	
  83

  
	
  40.

  	
   

  	
  Waiver of Trial by
  Jury

  	
   

  	
  84

  

 

 

	
  Schedule

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Original Parties

  	
   

  	
  85

  
	
   

  	
   

  	
  Part 1      Mandated Lead Arrangers

  	
   

  	
  85

  
	
   

  	
   

  	
  Part 2      Original Lenders

  	
   

  	
  86

  
	
   

  	
   

  	
  Part 3      Issuing Entities

  	
   

  	
  86

  
	
  2.

  	
   

  	
  Conditions Precedent
  Documents

  	
   

  	
  87

  
	
   

  	
   

  	
  Part 1      To be delivered before first Request

  	
   

  	
  87

  
	
   

  	
   

  	
  Part 2      Conditions precedent to drawdown of Loans

  	
   

  	
  89

  
	
   

  	
   

  	
  Part 3      For an Additional Guarantor

  	
   

  	
  90

  
	
  3.

  	
   

  	
  Form of Notices

  	
   

  	
  91

  
	
   

  	
   

  	
  Part 1      Form of Request

  	
   

  	
  91

  
	
   

  	
   

  	
  Part 2      Form of Guarantor Accession Agreement

  	
   

  	
  92

  
	
   

  	
   

  	
  Part 3      Form of Redenomination Request

  	
   

  	
  93

  
	
  4.

  	
   

  	
  Calculation of the
  Mandatory Cost

  	
   

  	
  96

  
	
  5.

  	
   

  	
  Form of Transfer
  Certificate

  	
   

  	
  99

  
	
  6.

  	
   

  	
  Form of Compliance
  Certificate

  	
   

  	
  100

  
	
  7.

  	
   

  	
  Form of Resignation
  Request

  	
   

  	
  101

  
	
  8.

  	
   

  	
  Form of Indemnity
  Claim Notice

  	
   

  	
  102

  
	
  9.

  	
   

  	
  Form of Avales

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signatories

  	
   

  	
  105

  

 

 

THIS
AGREEMENT is dated 18 July 2007

 

BETWEEN:

 

(1)           IMPERIAL TOBACCO GROUP PLC
(registered number 03236483) (the Borrower);

 

(2)           IMPERIAL TOBACCO LIMITED
(registered number 01860181) (the Original  Guarantor);

 

(3)           THE FINANCIAL INSTITUTIONS
listed in Part 1 of Schedule 1 (Mandated Lead Arrangers) as mandated lead
arrangers (the Mandated Lead Arrangers);

 

(4)           THE FINANCIAL INSTITUTIONS
listed in Part 2 of Schedule 1 (Original Lenders) as original lenders (the Original Lenders);

 

(5)           THE FINANCIAL INSTITUTIONS
listed in Part 3 of Schedule 1
(Issuing Entities) as issuing entities (the Original
Issuing Entities); and

 

(6)           CITIBANK INTERNATIONAL
PLC, LONDON BRANCH as facility agent (in this
capacity, the Facility Agent).

 

IT IS
AGREED as follows:

 

1.             INTERPRETATION

 

1.1          Definitions

 

In this
Agreement:

 

Acceptable Transferee means:

 

(a)           a New Lender
which has, or which is guaranteed by an entity which has, a long term credit
rating assigned to it which is no lower than A3 in the case of Moody’s or A- in
the case of S&P and, if such Lender has a long term credit rating assigned
to it by both S&P and Moody’s, then the lower of such ratings will apply;
or

 

(b)            in respect of any
transfer otherwise than in accordance with paragraph (a) above, a New Lender
acceptable to each Issuing Entity.

 

Additional Guarantor
means a member of the Group which becomes a Guarantor after the date of this
Agreement.

 

Administrative Party means
a Mandated Lead Arranger, an Issuing Entity or the Facility Agent.

 

Affected Lender means, at any
time:

 

(a)           a Lender in
respect of which the Obligors’ Agent is at that time entitled to serve a notice
under Clause 10.8 (Involuntary prepayment and cancellation), but has not done
so;

 

(b)           a Lender who has
notified the Obligors’ Agent under Clause 10.1 (Mandatory prepayment -
illegality) that it has become unlawful for that Lender to perform its
obligations under a Finance Document or fund or maintain its share in any
Credit; or

 

(c)           a Related Lender
for the purposes of Clause 21.7(b) (Underwriting Agreement).

 

1

 

Affiliate means a
Subsidiary or a Holding Company of a person, or any other Subsidiary of that
Holding Company.

 

Agent’s Spot Rate of Exchange
means the Facility Agent’s spot rate of exchange for the purchase of the
relevant currency in the London foreign exchange market with Euros at or about
11.00 a.m. on any particular Business Day.

 

Available Commitments
means, in relation to a Facility a Lender’s Commitment under that Facility on
the proposed Utilisation Date minus:

 

(a)           its participation
in any Loans under that Facility outstanding at such time; and

 

(b)           its participation
in any Avales under that Facility outstanding at such time,

 

to the extent not
cancelled, reduced or transferred by it under this Agreement and for this
purpose its participation in any Loan which has been redenominated into
Sterling shall be the Euro equivalent of such amount determined at the rate
used for such redenomination.

 

Availability Period means, in
respect of each Facility:

 

(a)           for the issue of
Avales in relation to the Offer, the period from and including the date of this
Agreement to and including the date falling 60 days after the date of this
Agreement;

 

(b)           for the issue of
Avales in relation to the Delisting Offer, the period from and including the
Closing Date to and including the date falling 60 days after the Closing Date;
and

 

(c)           for Loans, the
period from and including the Closing Date to and including the Final Maturity
Date.

 

Aval means each aval
issued by an Issuing Entity substantially in the form set out in Schedule 9
(Form of Avales) or with such changes as may be required by the CNMV provided
such changes do not (individually or in aggregate) materially and adversely
affect the interests of the Finance Parties or are otherwise approved by the
Issuing Entities and the Original Lenders in each case in connection with the
Offer or Delisting Offer and any substitute Aval issued in accordance with
Clause 6.3 (Issue of Avales) (together, the Avales).

 

Aval Cash Collateralisation Date means
the date falling 364 days after the date of this Agreement.

 

Aval Fee means the fees payable under
Clause 26.4(b) (Fees in respect of Avales).

 

Aval Release Date means
the date on which an Aval is repaid or prepaid in full.

 

Basel II Framework means the
framework for measuring the capital adequacy of banks in the form set out in
the paper entitled “International Convergence of Capital Measurement and
Capital Standards, a Revised Framework” issued by the Basel Committee on
Banking Supervision in June 2004.

 

Break Costs means the amount
(if any) which a Lender is entitled to receive under this Agreement as
compensation if any part of a Loan or overdue amount is prepaid (including
pursuant to Clause 9 (Redenomination of Facility)).

 

Business Day means a day
(other than a Saturday or a Sunday) on which banks are open for general
business in London and:

 

2

 

(a)           if on that day a
payment in or a purchase of a currency (other than Euro) is to be made, the
principal financial centre of the country of that currency; or

 

(b)           if on that day a
payment in or a purchase of Euro is to be made, a day which is also a TARGET
Day.

 

Cat means Compañia de Distribución Integral Logista, S.A.  and its Subsidiaries.

 

Certain Funds  Credit means an Aval or a Loan to be applied to finance the
acquisition of any Tiger Shares or refinance the indebtedness of the Group
and/or the Tiger Group.

 

Certain Funds Period
means the period from (and including) the date of this Agreement to (and
including) the earlier of the Aval Cash Collateralisation Date and the date
falling 90 days after the Closing Date.

 

Circular means the Class 1
circular issued or to be issued by Imperial to its shareholders and the working
capital statements relating to it.

 

Claimed Amount has the meaning
given to that term in Clause 7.1 (Authority to pay claims under an Aval).

 

Clean-Up Period means
the period from the Closing Date to the date falling 90 days after the Closing
Date.

 

Closing Date means the date
on which the first payment in respect of the Tiger Shares is made under the
Offer.

 

CNMV means
the National Securities Market Commission of Spain (Comisión Nacional del Mercado de Valores).

 

CNR means the Centre
for Non-Residents of HM Revenue & Customs of the U.K.

 

Commitment means:

 

(a)           for an Original
Lender, the amount set out opposite its name in Part 2 of Schedule 1 (Original
Lenders) under the heading commitments and designated A,
B or C
and the amount of any other Commitment as so designated it acquires; and

 

(b)           for any other Lender, the amount of any Commitment as
so designated as it acquires,

 

to the extent not cancelled, transferred or reduced under this
Agreement.

 

Competition Analysis
means the table entitled “Project Vancouver – Competition Analysis”.

 

Compliance Certificate
means a certificate substantially in the form of Schedule 6 (Form of Compliance
Certificate) setting out, among other things, calculations of the financial
covenants.

 

Confidentiality Undertaking
means a confidentiality undertaking substantially in the form recommended by
the Loan Market Association as at the date of this Agreement or such other form
agreed between the Obligors’ Agent and the Facility Agent (acting reasonably).

 

Consolidated Cash and Cash Equivalents
means, at any time:

 

(a)           cash in hand or
on deposit;

 

3

 

(b)           bonds, notes or
open market commercial paper:

 

(i)            which mature
within one year after the relevant date of calculation; and

 

(ii)           which have a
short-term credit rating of either A-1 (or higher) by S&P, A-1 (or higher)
by Fitch or P-1 by Moody’s, or, if no short-term rating is available in respect
of such commercial paper or the indebtedness arising in respect thereof, the
issuer of which has, in respect of its long-term debt obligations, an
equivalent rating;

 

(c)           Sterling bills of
exchange eligible for rediscount at the Bank of England and accepted by an
acceptable bank;

 

(d)           securities issued
in money market funds where:

 

(i)            those securities
are acquired on terms that they will be acquired or re-acquired by a third
party within one year or not more than three months after demand; and

 

(ii)           the relevant
third party has a short-term credit rating of either A-1 (or higher) by
S&P, A-1 (or higher) by Fitch or P-1 by Moody’s or, if no short-term rating
is available in respect of that third party in respect of its long-term debt
obligations, an equivalent rating; or

 

(e)           any other
instrument, security or investment approved by the Majority Lenders,

 

in each case, to
which any member of the Group is beneficially entitled at that time.

 

Consolidated EBITDA means in
relation to the Group for a Measurement Period the consolidated profits on
ordinary activities before taxation for that Measurement Period:

 

(a)           after adding back
Consolidated Net Interest Payable;

 

(b)           before taking into
account any impact from the post-employment benefits charged under IAS 19,
comprising service cost, interest cost, expected return on plan assets, past
service costs and the effect of any settlement or curtailment;

 

(c)           before taking
into account any amount attributable to minority interests;

 

(d)           after adding back
depreciation and amortisation;

 

(e)           before taking
into account any items which are represented by gains, losses or non-recurring
costs, charges or expenses arising on:

 

(i)            restructuring of
the activities of any part of the Group;

 

(ii)           disposal of
non-current assets;

 

(iii)          disposal of
assets associated with discontinued operations; and

 

(iv)          reversal of any
provision in relation to (i), (ii), and (iii) above,

 

which are charged
to the consolidated income statement of the Group; and

 

(f)            before taking
into account any increase or decrease in the fair value of any financial
instrument charged to the consolidated income statement of the Group,

 

4

 

and, for the
purposes of Clause 22.2 (Gearing) only, including the Proforma EBITDA of
any business or company acquired during a Measurement Period for the part of
the Measurement Period falling before the effective date of that acquisition.

 

Consolidated Interest Payable
means in relation to a Measurement Period all interest charges, periodic
financing charges and charges in the nature of interest, including acceptance
commission, commitment fee, guarantee fee, fronting fee and the interest
element of rental payments or payments under finance or capital leases
(whether, in each case, paid, payable or capitalised), incurred by the Group in
effecting, servicing or maintaining Consolidated Total Borrowings during that
Measurement Period but excluding such charges, commission, fees and payments
incurred under (a) this Agreement and (b) during the period from and
including the date of this Agreement to and including the Closing Date, the
Senior Facilities Agreement.

 

Consolidated Net Interest Payable
means Consolidated Interest Payable less all financing charges and interest
charges received or receivable by the Group during the relevant Measurement
Period.

 

Consolidated Total Borrowings
means, at any time, the aggregate principal amount of the Financial
Indebtedness of the Group falling within paragraphs (a), (b) or (c) of the
definition of that term plus the capital element of all rental payments under
finance or capital leases entered into by any member of the Group but excluding
(a) any monies borrowed or raised under this Agreement and (b) the amount of
any Aval outstanding under this Agreement or the Senior Facilities Agreement.

 

Consolidated Total Net Borrowings
means at any time Consolidated Total Borrowings less Consolidated Cash and Cash
Equivalents.

 

Credit means a Loan or
an Aval.

 

Default means an Event
of Default or an event which, with the giving of notice, lapse of time,
determination of materiality or fulfilment or any other applicable condition
(or any combination of the foregoing), in each case as specified in
Clause 23 (Default), would constitute an Event of Default.

 

Delisting Offer means the tender
offer to be made to all the shareholders of Tiger for the Tiger Shares by Tiger
or, if agreed by the CNMV, by the company making the Offer, in accordance with
Article 7 of the Spanish Royal Decree 1197/1991 of 26 July on Public Tender
Offers (as amended) or any other legislation that may replace it.

 

Delisting Offer Document means
the prospectus (Folleto Explicativo) registered
with the CNMV in respect of the Delisting Offer and each annex to that
prospectus.

 

Dirham Facility Document
means each of:

 

(a)           the
MAD3,000,000,000 senior facility agreement dated 11 July 2003 entered into by
Tiger as supplemented and amended from time to time;

 

(b)           the
MAD2,000,000,000 senior facility agreement dated 22 December 2003 entered into
by Tiger as supplemented and amended from time to time; and

 

(c)           any agreements
and documents relating to the refinancing of such facilities provided that the
recourse to members of the Group is no greater than under the original finance
documents relating to such facilities and the principal amount of any such
refinancings is no greater in aggregate than the principal amount of those
facilities immediately prior to any such refinancing.

 

5

 

Environmental Law means any
applicable law in any jurisdiction in which any member of the Group conducts
business which imposes obligations upon such Group member relating to the
pollution or protection of the environment or harm to or the protection of
human health or the health of animals or plants.

 

EURIBOR means, for a
Term of any Loan or overdue amount in Euro:

 

(a)           the applicable
Screen Rate; or

 

(b)           if no Screen Rate
is available for that Term of that Loan or overdue amount, the arithmetic mean
(rounded upward to four decimal places) of the rates, as supplied to the
Facility Agent at its request, quoted by the Reference Banks to leading banks
in the European interbank market,

 

in each case, as
of 11.00 a.m. (Brussels time) on the Rate Fixing Day for the offering of deposits
in Euro, for a period comparable to that Term.

 

Euro and € means the single currency of the
Participating Member States.

 

Event of Default means an event
or circumstance specified as such in Clause 23 (Default).

 

Existing Facilities Agreement
means the Euro 3,750,000,000 and £500,000,000 credit facilities agreement dated
10 February 2005 between, amongst others, Imperial Tobacco Finance PLC,
Imperial Tobacco Group PLC and HSBC Bank PLC (as amended, restated or
supplemented from time to time).

 

Facility means a
subordinated credit facility made available under this Agreement and when
designated A,  B
or C means the relevant Facility as so
designated.

 

Facility Office means the
office(s) notified by a Lender to the Facility Agent:

 

(a)           on or before the
date it becomes a Lender; or

 

(b)           by giving not
less than five Business Days’ notice,

 

as the office(s)
through which it will perform its obligations under this Agreement.

 

Fee Letter means any letter
entered into by reference to this Agreement between one or more Administrative
Parties and the Obligors’ Agent setting out the amount of certain fees referred
to in this Agreement.

 

Final Maturity Date means the date
falling 364 days after the date of this Agreement.

 

Final Release Date means
the date on which the Aval Release Date has occurred in respect of each Aval.

 

Finance Document means:

 

(a)           this Agreement;

 

(b)           a Fee Letter;

 

(c)           a Transfer
Certificate;

 

6

 

(d)           the Syndication
Letter;

 

(e)           each Aval; or

 

(f)            any other
document designated as such by the Facility Agent and the Obligors’ Agent.

 

Finance Party means a Lender
or an Administrative Party.

 

Financial Indebtedness
means any indebtedness (other than indebtedness owed by one member of the Group
to another member of the Group) in respect of:

 

(a)           moneys borrowed
or raised;

 

(b)           any debenture,
bond, note, loan stock, commercial paper or similar instrument;

 

(c)           any acceptance
credit, bill-discounting, note purchase or other similar facility;

 

(d)           any counter-indemnity
obligation in respect of any guarantee, bond, documentary letters of credit or
other similar instrument issued by a bank or financial institution;

 

(e)           any finance
lease;

 

(f)            any receivables
purchase, factoring or discounting arrangement under which there is recourse in
whole or in part to any member of the Group;

 

(g)           any currency
swap, or interest rate swap, cap or collar arrangement, option or any other
derivative instrument;

 

(h)           any arrangement
entered into primarily as a method of raising finance pursuant to which any
asset sold or otherwise disposed of by that person is or may be leased to or
re-acquired by a member of the Group (whether following the exercise of an
option or otherwise); or

 

(i)            any guarantee,
indemnity or other legally binding assurance against financial loss in respect
of the indebtedness of any person arising under an obligation falling within
(a) to (h) above.

 

First Cash Utilisation Date
means the first Utilisation Date on which a Facility is utilised other than by
way of the issuance of an Aval.

 

Fitch means Fitch
Ratings Ltd or any successor to its ratings business.

 

Group means the
Borrower and its Subsidiaries for the time being.

 

Guarantor means an
Original Guarantor or an Additional Guarantor.

 

Guarantor  Accession  Agreement means
a letter, substantially in the form of Part 2 of Schedule 3 (Form of Guarantor
Accession Agreement), with such amendments as the Facility Agent may approve or
reasonably require.

 

Holding Company means a holding
company within the meaning of section 736 of the Companies Act 1985.

 

Hybrid Securities means any
issuance of an individual security by a member of the Group containing both a
debt and equity component and the equity component
of any Hybrid Securities

 

7

 

will be the component credited as equity by Moody’s
or S&P (or an equivalent statistical rating agency).

 

IAS 19 means
International Accounting Standard 19 (1998) (Employee
Benefits) issued by the International Accounting Standards Board and
effective at 1 January 1999 (as amended and revised from time to time).

 

IBOR means LIBOR or EURIBOR.

 

Increased Cost means:

 

(a)           an additional or
increased cost;

 

(b)           a reduction in
the rate of return under a Finance Document or on the overall capital of a
Finance Party or any of its Affiliates; or

 

(c)           a reduction of an
amount due and payable under any Finance Document,

 

which is incurred
or suffered by a Finance Party or any of its Affiliates but only to the extent
attributable to that Finance Party having entered into any Finance Document or
funding or performing its obligations under any Finance Document.

 

Indemnified Party means:

 

(a)           each Issuing
Entity; and

 

(b)           each Lender.

 

Indemnity Claim has
the meaning given to that term in Clause 7.2 (Lenders’ Indemnity).

 

Indemnity Claim Notice means
a notice in respect of an Indemnity Claim served pursuant to Clause 7.5
(Settlement of Claims under Lenders’ Indemnity) and substantially in the form
of Schedule 8 (Form of Indemnity Claim Notice).

 

ISP means the
International Standby Practices, 1998.

 

Issuer means Imperial
Tobacco Overseas B.V.

 

Issuing Entity means:

 

(a)           an Original
Issuing Entity; or

 

(b)           any person which becomes an
Issuing Entity after the date of this Agreement.

 

Issuing Entity Accession
Agreement means an agreement
substantially in the form of Schedule 3 Part 4 (Form of Notices) with such
amendments as the Facility Agent and the Obligors’ Agent may agree.

 

Lehman Issuing Entity
means Lehman Brothers Bankhaus A.G., London Branch or, if acceptable to the
CNMV and so elected by Lehman Commercial Paper Inc., UK Branch, Lehman
Commercial Paper Inc., UK Branch.

 

8

 

Lender means:

 

(a)           an Original
Lender; or

 

(b)           any person which
becomes a Lender after the date of this Agreement.

 

LIBOR means, for a
Term of any Loan or overdue amount:

 

(a)           the applicable
Screen Rate; or

 

(b)           if no Screen Rate
is available for the relevant currency or Term of that Loan or overdue amount,
the arithmetic mean (rounded upward to four decimal places) of the rates, as
supplied to the Facility Agent at its request, quoted by the Reference Banks to
leading banks in the London interbank market,

 

in each case, as
of 11.00 a.m. on the Rate Fixing Day for the offering of deposits in the
currency of that Loan or overdue amount, for a period comparable to that Term.

 

Litigation Report means:

 

(a)           the report dated
on or about the date of this Agreement entitled Project Vancouver – Tiger
Litigation; and

 

(b)           the report dated
on or about the date of this Agreement entitled Project Vancouver – Litigation
Report.

 

Loan means, unless
otherwise stated in this Agreement, the principal amount of each borrowing
under this Agreement or the principal amount outstanding of that borrowing
including, without limitation, following any redenomination under this
Agreement.

 

Major Breach means a breach
of:

 

(a)           Clause 20.10
(Negative pledge);

 

(b)           Clause 20.11
(Restrictions on Guarantees);

 

(c)           Clause 20.12
(Disposals); or

 

(d)           Clause 21.1
(Compliance in connection with the Offer) to Clause 21.6 (Equity Documents).

 

Major Default means any of the
following Events of Default but only so far as they relate to an Obligor:

 

(a)           Clause 23.2
(Non-payment);

 

(b)           Clause 23.4
(Other breaches) but only in so far as it relates to a Major Breach;

 

(c)           Clause 23.5
(Misrepresentation) but only in so for as it relates to a Major Representation;

 

(d)           Clause 23.7
(Insolvency), Clause 23.8 (Winding up), Clause 23.9 (Creditors’ process) or
Clause 23.14 (Cessation of Business); or

 

(e)           Clause 23.12
(Unlawfulness) or Clause 23.13 (Repudiation).

 

Major Representation means
any of the following representations:

 

9

 

(a)           Clause 19.2
(Status);

 

(b)           Clause 19.3
(Powers and authority) but only if this would be reasonably likely to
materially and adversely affect the interests of the Finance Parties;

 

(c)           Clause 19.4
(Legal validity); or

 

(d)           Clause 19.5
(Non-conflict) (other than subparagraph (c) of that clause).

 

Majority Lenders means, at any
time, Lenders:

 

(a)           whose share in
the outstanding Credits and whose Available Commitments then aggregate 662/3%
or more of the aggregate of all the outstanding Credits and the Available
Commitments of all the Lenders;

 

(b)           if there is no
Credits then outstanding, whose Available Commitments then aggregate 662/3%
or more of the Total Commitments; or

 

(c)           if there is no
Credits then outstanding and the Total Commitments have been reduced to zero,
whose Commitments aggregated 662/3% or more of the Total
Commitments immediately before that reduction.

 

Mandatory Cost means the cost
of complying with certain regulatory requirements, expressed as a percentage
rate per annum and calculated by the Facility Agent under Schedule 4
(Calculation of the Mandatory Cost).

 

Margin means, subject
to Clause 11.3 (Margin step-up), 0.45 per cent. per annum provided that from
(and including) the date falling three months after the Closing Date to (but
excluding) the date of execution of any Underwriting Agreement entered into by
the Borrower in accordance with clause 10 (Underwriting) of the Back-Stop
Underwriting Agreement, the Margin will be 0.75 per cent. per annum.

 

Material Adverse Effect
means a material adverse effect on the ability of the Obligors (taken as a
whole and taking into account resources of the Group which would be available
to the Obligors) to perform their obligations under the Finance Documents.

 

Material Company means:

 

(a)           an Obligor; and

 

(b)           a Principal
Subsidiary.

 

Measurement Period means a period
of 12 months ending on the last day of a financial year or half-year of the
Borrower.

 

Moody’s means Moody’s
Investors Service Limited or any successor to its rating business.

 

MSA means the master
settlement agreement dated 28 November 1998 (as amended from time to time)
among 46 of the United States of America, certain territories of the United
States of America and certain tobacco companies.

 

Net Proceeds means in respect
of an issuance or disposal an amount equal to the cash proceeds received by any
member of the Group net of relevant fees, costs, expenses and Taxes incurred by
any member of the Group in relation to that issuance or disposal.

 

10

 

Non-Consenting Lender
means a Lender which does not agree to a consent or amendment to, or a waiver
of, a provision of a Finance Document requested by the Obligors’ Agent where:

 

(a)           the consent,
waiver or amendment requires the consent of all the Lenders;

 

(b)           a period of not
less than 20 Business Days has elapsed from the date the consent, waiver or
amendment was delivered to the Facility Agent; and

 

(c)           the consent,
waiver or amendment has been agreed to by a Super Majority.

 

Non-Funding Lender means a Lender
which has:

 

(a)           failed to advance
its share of a Credit it is obliged to make under this Agreement and the
Obligors’ Agent (acting reasonably) has determined that the Lender is not
likely to advance that amount; or

 

(b)           given notice to
the Obligors’ Agent and/or the Facility Agent that it will not advance, or that
it has disaffirmed or repudiated any obligation to advance, its share in any
Credit.

 

Obligor means a Borrower
or a Guarantor.

 

Obligors’ Agent means Imperial
Tobacco Group PLC.

 

Offer
means the offer to the shareholders of Tiger for Tiger Shares to be filed by
the Borrower or a wholly owned subsidiary of the Borrower (or on their behalf)
with the CNMV as that Offer is supplemented or amended from time to time.

 

Offer Costs means all fees,
costs, expenses, stamp, registration or transfer Taxes incurred by (or required
to be paid by) any member of the Group in connection with the Offer or any
Delisting Offer.

 

Offer Document means
the prospectus (Folleto Explicativo)
registered with the CNMV in respect of the Offer and each annex or supplement
to that prospectus.

 

Original Financial Statements
means the audited consolidated financial statements of the Group for the year
ended 30 September 2006.

 

Participating Member State
means a member state of the European Communities that adopts or has adopted the
Euro as its lawful currency under the legislation of the European Community for
Economic Monetary Union.

 

Party means a party to
this Agreement.

 

Pension Facility Agreement means
the facility agreement dated 6 December 2004 between, amongst others, Imperial
Tobacco Limited, Imperial Tobacco Group PLC, Imperial Tobacco Finance PLC and
HSBC Bank Plc as facility agent (as amended, restated or supplemented from time
to time).

 

Permitted Reorganisation means:

 

(a)           a reorganisation
involving the business, assets or shares of (or other interest in) a member of
the Group on a solvent basis (including any winding up, dissolution or
corporate reconstruction) where:

 

11

 

(i)            no Default is
outstanding or would result from the proposed reorganisation;

 

(ii)           all the assets of
that member remain within the Group or a part of those assets proportionate to
the relevant member of the Group’s equity interest in that member remain with
the Group; and

 

(iii)          there is no
material and adverse impact on the financial position of the Guarantors arising
as a result of the Permitted Reorganisation; or

 

(b)           any other
reorganisation of one or more members of the Group approved by the Majority
Lenders.

 

Permitted Securitisation
means any securitisation programme operated by any members of the Tiger Group
in substantially the manner such programme was operated prior to the date of
the Offer.

 

Principal Subsidiary
means:

 

(a)           any Subsidiary of
the Borrower whose net assets or pre-tax profit, at any time after the date of
this Agreement, equal or exceed five per cent. (5%) of the consolidated net
assets or adjusted consolidated pre-tax profit of the Group at that time, and
for the purposes of the above:

 

(i)            the consolidated
net assets of the Group shall be the consolidated net assets of the Group
ascertained by reference to the latest audited published consolidated accounts
of the Group;

 

(ii)           the adjusted
consolidated pre-tax profit of the Group shall be the aggregate of:

 

(A)          the consolidated pre-tax
profit of the Group ascertained by reference to the latest audited published
consolidated accounts of the Group; and

 

(B)           the consolidated pre-tax
profit (the pre-acquisition profit) of any
Subsidiary which became a member of the Group during the period for which the
latest audited published consolidated accounts of the Group were prepared (an acquired subsidiary) for the part of that period which falls
before the effective date of such acquisition calculated in accordance with
approved accounting standards used in the preparation of the latest audited
published accounts of the Group;

 

(iii)          the net assets of
any Subsidiary shall be the net assets of that Subsidiary calculated in
accordance with approved accounting standards used in the preparation of the
latest audited published accounts of the Group; and

 

(iv)          the pre-tax
profit of any Subsidiary shall be the pre-taxation profit of that Subsidiary
calculated in accordance with approved accounting standards used in the
preparation of the latest audited published accounts of the Group plus, in the
case of any acquired subsidiary, an amount equal to any pre-acquisition,
pre-tax profit,

 

and for the
purposes of the above, net assets in
respect of the Group or any such Subsidiary means the fixed assets and current
assets of the Group or that Subsidiary (as the case may be); and

 

12

 

(b)           a Subsidiary of
the Borrower to which has been transferred (whether by one transaction or a
series of transactions, related or not) the whole or substantially the whole of
the assets of a Subsidiary which immediately prior to those transactions was a
Principal Subsidiary.

 

Proforma EBITDA means in
relation to a business or company, the proforma consolidated profits on
ordinary activities before taxation of that business or company, adjusted in
accordance with paragraphs (a) to (f) (inclusive) of the definition of
Consolidated EBITDA, applied mutatis mutandis to
that business or company.

 

Pro rata Share means:

 

(a)           for the purpose of
determining a Lender’s share in a utilisation of a Facility, the proportion
which its Available Commitment under that Facility bears to all the Available
Commitments under that Facility; and

 

(b)           for any other
purpose on a particular date:

 

(i)            the proportion
which a Lender’s participation in the Credits (if any) bears to all the
Credits;

 

(ii)           if there are no
Credits outstanding on that date, the proportion which its Commitment bears to
the Total Commitments on that date;

 

(iii)          if the Total
Commitments have been cancelled, the proportion which its Commitments bore to
the Total Commitments immediately before being cancelled; or

 

(iv)          when the term is
used in relation to a Facility, the above proportions but applied only to the
Credits and Commitments for that Facility,

 

and for the
purpose of paragraph (iv) above, the Facility Agent will, in the case of a
dispute, determine whether the term in any case relates to a particular
Facility.

 

PTR Scheme means the
Provisional Treaty Relief Scheme operated by CNR and includes any modifications
or republications thereof from time to time.

 

Qualifying Lender means a Lender
which is:

 

(a)           a U.K. Lender;

 

(b)           a Treaty Lender;
or

 

(c)           a U.K. Non-Bank
Lender.

 

Rate Fixing Day means:

 

(a)           the first day of
a Term for a Loan denominated in Sterling;

 

(b)           the second
Business Day before the first day of a Term for a Loan denominated in any other
currency (other than Euro); or

 

(c)          the second TARGET Day before
the first day of a Term for a Loan denominated in Euro,

 

13

 

or such other day as the Facility Agent determines is generally treated
as the rate fixing day by market practice in the relevant interbank market.

 

Redenomination Date means
each date on which any Loan is converted into Sterling in accordance with
Clause 9 (Redenomination of Facility).

 

Redenomination Request
means a request by the Obligors’ Agent to redenominate all or part of a Loan
denominated in Euro, substantially in the form of Part 3 of Schedule 3 (Form of
Redenomination Request).

 

Redenomination Swap means any
transaction entered into by Imperial Tobacco Finance PLC and a Redenomination
Swap Counterparty in connection with the conversion of the Rights Issue
proceeds into Euro for the purposes of repayment or prepayment of a Facility or
the redenomination of a Facility into Sterling (in whole or in part) in order
to facilitate the repayment of that Facility using the proceeds of any Rights
Issue.

 

Redenomination Swap Counterparty
means any bank or financial institution or Affiliate of a bank or financial
institution which acts as counterparty under a Redenomination Swap.

 

Reference  Bank means each of Citibank N.A., London Branch and ABN AMRO
Bank N.V. and any other bank or financial institution appointed as such by the
Facility Agent in accordance with the terms of this Agreement.

 

Related Issuing Entity
means:

 

(a)           in respect of ABN AMRO Bank
N.V., ABN AMRO Bank N.V. Sucursal en España;

 

(b)           in respect of Citibank,
N.A., London Branch, Citibank International plc, Sucursal en España;

 

(c)           in respect of
Morgan Stanley Bank International Limited/Morgan Stanley Senior Funding, Inc.,
Morgan Stanley Bank International Limited; and

 

(d)           in respect of
Lehman Brothers Holdings, Inc., the Lehman Issuing Entity.

 

Related Lender has the meaning
given to it in Clause 21.7(b) (Underwriting Agreement).

 

Relevant Lender means:

 

(a)           an
Affected Lender;

 

(b)           a Non-Consenting Lender; or

 

(c)           a Non-Funding Lender.

 

Relevant Obligations
means:

 

(a)           in respect of
each Issuing Entity, all of its obligations and liabilities (whether actual or
contingent) under the Aval issued by it; and

 

(b)           in respect of
each Lender, all of its obligations and liabilities (whether actual or
contingent) under Clause 7.2 (Lenders’ Indemnity).

 

Repeating Representations
means the representations which are deemed to be repeated under Clause 19.15
(Times for making Representations).

 

14

 

Replacement Lender means a Lender
or any other person selected by the Obligors’ Agent which is:

 

(a)           willing to assume all of the
obligations of the Relevant Lender;

 

(b)           if such assumption will
occur prior to the Final Release Date, an Acceptable Transferee; and

 

(c)           satisfactory to the Facility
Agent (acting reasonably) from a know your  customer perspective.

 

Request means a request
for a Credit, substantially in the form of Part 1 of Schedule 3 (Form of
Request).

 

Reservations means:

 

(a)           the principles
that enforceability may be limited by the laws of administration, liquidation,
insolvency, reorganisation, suretyship or similar laws of general application
affecting creditors’ rights; and

 

(b)           any other general
principles of law referred to in any legal opinion delivered in connection with
the Finance Documents and any qualifications to which any such opinion is
subject.

 

Resignation Request means a letter
substantially in the form of Schedule 7 (Form of Resignation Request).

 

Rights Issue means the rights
issue outlined in any Underwriting Agreement.

 

Rights Issue Underwriters means
Citigroup Global Markets Limited, Hoare Govett Limited and Morgan Stanley &
Co. International plc.

 

S&P means Standard
& Poor’s Rating Services, a division of The McGraw-Hill Companies Inc. or
any successor to its rating business.

 

Screen Rate means:

 

(a)           for LIBOR, the
British Bankers Association Interest Settlement Rate (if any); and

 

(b)           for EURIBOR, the
percentage rate per annum determined by the Banking Federation of the European
Union,

 

for the relevant
currency and Term displayed on the appropriate page of the Reuters screen
selected by the Facility Agent.  If the
relevant page is replaced or the service ceases to be available, the Facility
Agent may (with the agreement of the Obligors’ Agent) specify another page or
service displaying the appropriate rate.

 

Security Interest means any
mortgage, pledge, lien, charge, assignment, hypothecation or security interest
securing any obligation of any person, or any other agreement or arrangement
having a similar effect, in each case created with the intention of conferring
a security interest.

 

Senior Facilities Agreement means
the facilities agreement dated on or about the date of this Agreement between,
amongst others, Imperial Tobacco Finance PLC, Imperial Tobacco Enterprise
Finance Limited, Imperial Tobacco Group PLC, Imperial Tobacco Limited and The
Royal Bank of Scotland plc as facility agent (as amended, restated or
supplemented from time to time)

 

15

 

Spain means the Kingdom
of Spain and its constituent parts and Spanish shall
be construed accordingly.

 

Sterling and £ means the lawful currency for the time being of the U.K.

 

Subsidiary means a
subsidiary within the meaning of section 736 of the Companies Act 1985.

 

Super Majority means, at any
time, Lenders:

 

(a)           whose share in
the outstanding Credits and whose Available Commitments then aggregate 85% or
more of the aggregate of all of the outstanding Credits and the Available
Commitments of all the Lenders;

 

(b)           if there is no
Credit then outstanding, whose Available Commitment then aggregate 85% or more
of the Total Commitment; or

 

(c)           if there is no
Credit then outstanding and the Total Commitments have been reduced to zero,
whose Commitments aggregated 85% or more of the Total Commitments immediately
before that reduction.

 

Syndication Date means the date
on which close of primary syndication of the Facilities occurs in accordance
with the terms of the Syndication Letter.

 

Syndication Letter means the
syndication letter dated on or about the date of this Agreement between the
Obligor’s Agent and the Mandated Lead Arrangers.

 

TARGET  Day means a day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer payment system is open for the
settlement of payments in Euro.

 

Tax means any tax,
levy, impost, duty or other charge or withholding of a similar nature
(including any related penalty or interest).

 

Tax Confirmation means a
confirmation by a U.K. Non-Bank Lender that the person beneficially entitled to
payments made to that Lender in respect of an advance under a Finance Document
is either:

 

(a)           a company
resident in the U.K., or a partnership each member of which is a company
resident in the U.K., for U.K. tax purposes; or

 

(b)           a company not so
resident in the U.K. which carries on a trade in the U.K. through a permanent
establishment and those payments in respect of that advance fall to be brought
into account in computing the chargeable profits of that company for the
purposes of section 11(2) of the Income and Corporations Taxes Act, 1988.

 

Tax Credit means a credit
against any Tax or any relief or remission for Tax (or its repayment).

 

Tax Deduction means a
deduction or withholding for or on account of Tax from a payment under a
Finance Document.

 

Tax Payment means a payment
made by an Obligor to a Finance Party in any way relating to a Tax Deduction or
under any indemnity given by that Obligor in respect of Tax under any Finance
Document.

 

16

 

Term means each
period determined under this Agreement by reference to which interest on a Loan
or an overdue amount is calculated.

 

Tiger means Altadis,
S.A.

 

Tiger Bond Documents
means:

 

(a)           the agreements and documents
governing the terms of the following bond issues:

 

	
  Amount (€)

  	
   

  	
  Maturity Date

  	
   

  	
  Issuer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  600,000,000

  	
   

  	
  2 October 2008

  	
   

  	
  Altadis Finance B.V.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  500,000,000

  	
   

  	
  2 October 2013

  	
   

  	
  Altadis Finance B.V.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  500,000,000

  	
   

  	
  11 December 2015

  	
   

  	
  Altadis Emisiones Financieras, S.A.U.

  

 

(b)          any agreements
and documents relating to the refinancing of such bond issues set out at
paragraph (a) above provided that the recourse to members of the Group is no
greater than under the original Tiger Bond Documents relating to such bond
issues and the principal amount of such refinancing is no greater than the
principal amount of such bond issues,

 

provided that notwithstanding the foregoing the
Borrower and/or Imperial Tobacco Limited may provide guarantees to the
bondholders under any Tiger Bond Documents and the Tiger Bond Documents will
include any documentation in relation to such guarantees.

 

Tiger Group means Tiger and
its Subsidiaries for the time being.

 

Tiger Shares means shares in
the issued share capital of Tiger.

 

Total Commitments means the
aggregate of the Commitments of all the Lenders.

 

Total A Commitments means the aggregate of the A Commitments of the
Lenders, being the total amount identified as such in Part 2 of Schedule 1
(Original Lenders) at the date of this Agreement.

 

Total B Commitments means the aggregate of the B Commitments of the
Lenders, being the total amount identified as such in Part 2 of Schedule 1
(Original Lenders) at the date of this Agreement.

 

Total C Commitments means the aggregate of the C Commitments of the
Lenders, being the total amount identified as such in Part 2 of Schedule 1
(Original Lenders) at the date of this Agreement.

 

Transfer Certificate
means a certificate, substantially in the form of Schedule 5 (Form of Transfer
Certificate), with such amendments as the Facility Agent may approve or
reasonably require, or any other form agreed between the Facility Agent and the
Obligors’ Agent.

 

Transfer Date means, in
respect of a Transfer Certificate, the later of:

 

(a)           the proposed
Transfer Date specified in that Transfer Certificate; and

 

(b)           the date on which
the Facility Agent executes that Transfer Certificate.

 

Treaty Lender means a Lender
which is, on the date a payment of interest falls due under this Agreement:

 

17

 

(a)           resident (as
defined in the appropriate double taxation agreement) in a country with which
the U.K. has a double taxation agreement and which is entitled to a complete
exemption under that double taxation agreement from U.K. taxation on interest;
and

 

(b)           does not carry on
a business in the U.K. through a permanent establishment with which the payment
is effectively connected,

 

and for this
purpose double  taxation
agreement means any convention or
agreement between the government of the U.K. and any other government for the
avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes on income and capital gains.

 

U.K. means the United
Kingdom of Great Britain and Northern Ireland.

 

U.K. Lender means a Lender
which is within the charge to U.K. corporation tax in respect of, and
beneficially entitled to, a payment of interest on a Loan made by a person that
was a bank for the purposes of section 879 of the Income Tax Act 2007 (as
currently defined in section 991 of the Income Tax Act 2007) at the time the
Loan was made.

 

U.K. Non-Bank Lender
means a Lender which is neither a U.K. Lender nor a Treaty Lender and which is:

 

(a)           a company
resident in the U.K. for U.K. tax purposes;

 

(b)           a partnership
each member of which is a company resident in the U.K. for U.K. tax purposes;
or

 

(c)           a company not resident in the U.K.
which carries on a trade in the U.K. through a permanent establishment and is
required to bring into account payments made to it in computing its chargeable
profits for the purposes of section 11(2) of the Income and Corporation
Taxes Act 1988,

 

and which has
given (and not revoked) a Tax Confirmation to the Obligors’ Agent and the
Facility Agent.

 

Underwriting Agreement means
each of:

 

(a)          the back-stop
sponsor’s and underwriting agreement (the Back-Stop Underwriting
Agreement) in the agreed form dated on or about the date of this
Agreement between the Borrower, Hoare Govett Limited, Morgan Stanley & Co.
International plc, Citigroup Global Markets Limited, Citigroup Global Markets
U.K. Equity Limited and Lehman Brothers International (Europe) or any
replacement underwriting agreement entered into by the Borrower as supplemented
and amended from time to time without breaching this Agreement; and

 

(b)          any underwriting
agreement entered into by the Borrower after the date of this Agreement
pursuant to the Back-Stop Underwriting Agreement on closer to market terms or
any replacement of any such underwriting agreement.

 

U.S. Dollars and $ means the lawful currency for the time being of the
United States.

 

U.S. Facilities Agreement
means the US$1,900,000,000 facilities agreement dated 8 February 2007 between,
amongst others, Imperial Tobacco Finance PLC, Imperial Tobacco Group PLC,
Citibank, N.A., London Branch and The Royal Bank of Scotland plc (as amended,
restated or supplemented from time to time).

 

18

 

Utilisation  Date means each date on which a Facility is utilised.

 

1.2          Construction

 

(a)           In this
Agreement, unless the contrary intention appears, a reference to:

 

(i)            an amendment includes a supplement, novation, restatement or
re-enactment, and amended will be
construed accordingly;

 

(ii)           assets
includes present and future properties, revenues and rights of every
description;

 

(iii)          an authorisation includes an authorisation, consent, approval,
resolution, licence, exemption, filing, registration or notarisation;

 

(iv)          disposal
means a sale, transfer, grant, lease or other disposal, whether voluntary or
involuntary, and dispose will be construed
accordingly;

 

(v)           indebtedness
includes any obligation (whether incurred as principal or as surety) for the
payment or repayment of money;

 

(vi)          know your customer
requirements are the identification checks that a Finance
Party reasonably requests in order to meet its obligations under any applicable
law or regulation to identify a person who is (or is to become) its customer;

 

(vii)         a long term credit rating of the Borrower is a reference to
the solicited long term credit rating of the Borrower where the rating is based
primarily on the unsecured credit risk of the Borrower;

 

(viii)        a Lender’s participation in an Aval shall be construed as a reference
to the relevant amount that is or may be payable by such Lender in relation to
that Aval which may become payable under Clause 7.2 (Lenders’ Indemnity);

 

(ix)           a person includes any individual, company, corporation,
unincorporated association or body (including a partnership, trust, joint
venture or consortium), government, state, agency, organisation or other entity
whether or not having separate legal personality;

 

(x)            a regulation includes any regulation, rule, official
directive, request or guideline (whether or not having the force of law but, if
not having the force of law, being of a type with which any person to which it
applies is accustomed to comply) of any governmental, inter-governmental or
supranational body, agency, department or regulatory, self-regulatory or other
authority or organisation;

 

(xi)           a currency is a
reference to the lawful currency for the time being of the relevant country;

 

(xii)          a Default being outstanding means that it has not been remedied or waived;

 

(xiii)         a provision of
law is a reference to that provision as extended, applied, amended or re-enacted
and includes any subordinate legislation;

 

(xiv)        a Clause, a
Subclause or a Schedule is a reference to a clause or subclause of, or a
schedule to, this Agreement;

 

(xv)         a person includes
its successors in title, permitted assigns and permitted transferees;

 

19

 

(xvi)        a Finance
Document or another document is a reference to that Finance Document or other
document as amended (including, without limitation, any amendment providing for
any increase in the amount of a facility or an additional facility); and

 

(xvii)       a time of day is
a reference to London time (unless otherwise stated).

 

(b)           Unless the
contrary intention appears, a reference to a month
or months is a reference to a period
starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month or the calendar month in which it
is to end as appropriate, except that:

 

(i)            if the
numerically corresponding day is not a Business Day, the period will end on the
next Business Day in that month (if there is one) or the preceding Business Day
(if there is not);

 

(ii)           if there is no
numerically corresponding day in that month, that period will end on the last
Business Day in that month; and

 

(iii)          notwithstanding
paragraph (i) above, a period which commences on the last Business Day of a
month will end on the last Business Day in the next month or the calendar month
in which it is to end, as appropriate.

 

(c)           (i)            The parties to
the Senior Facilities Agreement, the Pension Facility Agreement, the Existing
Facilities Agreement and the U.S. Facilities Agreement may enforce the
provisions of Clause 2.3 (Subordination) and the provisions of the Contract
(Rights of Third Parties) Act 1999;

 

(ii)           the parties to this Agreement do not require the
consent of any person not a party to this Agreement for any variation
(including any release or compromise of any liability) or termination of a
Finance Document save that the consent of the parties to the Senior Facilities
Agreement, the Pension Facility Agreement, the Existing
Facilities Agreement and the U.S. Facilities Agreement shall be required for any amendment or variation to
this Clause 1.2(c) or Clause 2.3 (Subordination); and

 

(iii)          save as set out in paragraph
(i) above a person who is not a party to a Finance Document may not enforce any
of its terms under the Contracts (Rights of Third Parties) Act 1999.

 

(d)           Unless the
contrary intention appears:

 

(i)            a reference to a
Party will not include that Party if it has ceased to be a Party under this
Agreement;

 

(ii)           a word or
expression used in any other Finance Document or in any notice given in
connection with any Finance Document has the same meaning in that Finance
Document or notice as in this Agreement; and

 

(iii)          any obligation of
an Obligor under the Finance Documents which is not a payment obligation
remains in force for so long as any payment obligation of an Obligor is or may
be outstanding under the Finance Documents.

 

(e)           The headings in
this Agreement do not affect its interpretation.

 

(f)            References to a
Commitment of Morgan Stanley Bank International Limited/Morgan Stanley Senior
Funding, Inc. (together the Morgan Stanley Entities)
in relation to the Facility shall be construed as a reference to the aggregate
Commitment of Morgan Stanley Bank International Limited and Morgan Stanley
Senior Funding, Inc. in relation to the Facility (as allocated between the
Morgan

 

20

 

Stanley Entities in such proportions and such
amounts as each Morgan Stanley Entity notifies to the Facility Agent from time
to time).

 

1.3          Avales

 

(a)           An Aval is repaid or prepaid if:

 

(i)            the Borrower
provides cash cover for that Aval; or

 

(ii)           the maximum
amount payable under that Aval is paid or reduced in accordance with its terms;
or

 

(iii)          that Aval is
returned to the relevant Issuing Entity; or

 

(iv)          the relevant
Issuing Entity is satisfied that it has no further liability under that Aval,

 

provided that,
for the avoidance of doubt, a substitution of an Aval for the purposes referred
to in Clause 6.3 (Issue of Avales) will not constitute a repayment or
prepayment of that Aval for the purposes of this Agreement save to the extent
of any reduction in the amount of that Aval occurring as a result of that
substitution.

 

The amount by
which an Aval is repaid or prepaid under subparagraphs (i) and (ii) above is
the amount of the relevant cash cover, payment or reduction.

 

(b)           The outstanding or principal
amount of an Aval at any time is the maximum amount that is or may be payable
by the Borrower in respect of that Aval at that time.

 

(c)           Cash cover is
provided for an Aval if the Borrower (i) funds and maintains a cash deposit in
the currency of the Aval with the CNMV in place of or in consideration of a
reduction in the amount of that Aval (provided the Issuing Entities have
received evidence in form and substance satisfactory to them (acting
reasonably) that the Aval has been reduced by such amount) or (ii) pays an
amount in the currency of the Aval to an interest-bearing account(s) in the
name of the Borrower and the following conditions are met:

 

(i)            subject as set
out below, the account(s) is with the relevant Issuing Entity in such branch as
it may specify (acting reasonably) if the cash cover is to be provided for a
particular Issuing Entity or the Facility Agent if cash cover is to be provided
to all Issuing Entities;

 

(ii)           until no amount
is or may be outstanding under that Aval, withdrawals from the account may only
be made:

 

(A)          to pay to the
relevant holder of the cash collateral amounts due and payable to the Finance
Parties for whom that cash collateral is held under that Aval; and

 

(B)           if no Default is
outstanding, by the Borrower, to the extent that the balance in the account
exceeds the outstanding amount of that Aval;

 

(iii)          if requested by
the Facility Agent or any Issuing Bank (acting reasonably) the Borrower has
executed and delivered a security document over that account, in a form and
substance satisfactory to the Facility Agent and the relevant Issuing Entities
(in respect of cash cover for all Issuing Entities) or the relevant Issuing
Entity (in respect of cash cover for a particular Issuing Entity) (in either
case acting reasonably) for which the cash cover is provided, creating a first
ranking security interest over that account in favour of the Issuing Entity.

 

21

 

(d)           References to
cash cover exclude any interest accrued on that cash cover.

 

(e)           Any amount
standing to the credit of an account(s) maintained by the Borrower under paragraph
(c) above will bear interest at not less than a normal market rate for deposits
of a similar duration, currency and amount.

 

(f)            At any time
whilst the Borrower is providing cash cover to an Issuing Entity in respect of
an Aval, the Finance Parties if requested by the Borrower will co-operate (to
the extent reasonable) in effecting any arrangement to procure that the CNMV
accepts a cash deposit by the Borrower in place of or in consideration of a
reduction in the amount of that Aval (such reduction to be evidenced to the
satisfaction of the Issuing Entities (acting reasonably)).

 

(g)           At
any time prior to the Aval Release Date the Borrower will to the extent that
there are at that time any Avales outstanding hold any amount of any repayment
of a deposit by the CNMV on trust for payment to the relevant Issuing Entities
and the issuing entities under the Equity Bridge Facility Agreement (together
the Relevant Issuing Entities) in
proportion to the outstanding amounts of the Avales issued by it and the Borrower
will promptly pay those amounts to the Relevant Issuing Entities to be held by
way of cash cover in proportion to the amount of all Avales issued under the
Facilities and avales issued under the Senior Facilities Agreement.

 

2.             FACILITIES

 

2.1          Term
Loan Facilities

 

Subject to the
terms of this Agreement, the Lenders make available to the Borrower:

 

(a)           a committed Euro (or
following a redenomination in accordance with the terms of this Agreement,
Sterling) term loan facility in an aggregate amount equal to the Total A
Commitments;

 

(b)           a committed Euro (or
following a redenomination in accordance with the terms of this Agreement,
Sterling) term loan facility in an aggregate amount equal to the Total B
Commitments; and

 

(c)           a
committed Euro (or following a redenomination in accordance with the terms of
this Agreement, Sterling) term loan facility in an aggregate amount equal to
the Total C Commitments.

 

2.2          Avales

 

Subject to the
terms of this Agreement, each Facility may also be utilised by way of the issuance
by the Issuing Entities in respect of that Facility of Avales in connection
with the Offer or any Delisting Offer.

 

2.3          Subordination

 

(a)           The rights of the
Lenders and the Issuing Entities to receive repayment or prepayment of the
Credits or any other sum due hereunder (other than pursuant to Clause 8.2 (Cash
Collateralisation of Avales), Clause 9 (Redenomination), Clause 10.1 (Mandatory
prepayment – Illegality), Clause 10.4 (Mandatory prepayment from relevant
issuance), Clause 11 (Interest), Clause 26 (Fees), Clause 28.1 (Initial costs)
and Clause 30.9 (Replacement of a Lender), are fully subordinated to repayment
of the amounts outstanding under the Senior Facilities Agreement, the Existing
Facilities Agreement, the Pension Facility Agreement and the U.S. Facilities
Agreement. Accordingly, no Lender or Issuing Entity will have any right to
receive or retain repayment or prepayment of any Credit or any amount

 

22

 

due hereunder (other than pursuant to Clause 8.2
(Cash Collateralisation of Avales), Clause 9 (Redenomination), Clause 10.1
(Mandatory prepayment – Illegality), Clause 10.4 (Mandatory prepayment from
relevant issuance), Clause 11 (Interest), Clause 26 (Fees), Clause 28.1
(Initial costs) and Clause 30.9 (Replacement of a Lender)) or to enforce the
provisions of this Agreement to receive any such amount until such time (the Discharge Date) as all amounts outstanding under the Senior
Facilities Agreement, the Existing Facilities Agreement, the Pension Facility
Agreement and the U.S. Facilities Agreement have been repaid in full.

 

(b)           Subject as set
out below if any Lender receives any payment not permitted by paragraph (a) of
this Clause 2.3 (whether by direct payment, distribution, set-off or otherwise)
it will promptly pay all amounts so received to the Facility Agent (as defined
in the Senior Facilities Agreement) and pending that payment will hold those
amounts and distributions on trust for the Facility Agent (as defined in the
Senior Facilities Agreement) or if the facilities under the Senior Facilities
Agreement have not been utilised on that date, the Facility Agent (as defined
in the Existing Facilities Agreement), the Facility Agent (as defined in the
Pension Facility Agreement) and the Facility Agent (as defined in the U.S.
Facilities Agreement) pro rata to the
amounts outstanding under those agreements or such other proportion as the
Borrower may direct.

 

(c)           The Lenders will
not in any circumstances be subrogated to the rights of the Finance Parties (as
defined in the Senior Facilities Agreement, the Existing Facilities Agreement,
the Pension Facility Agreement and the U.S. Facilities Agreement) until the
Discharge Date.

 

(d)           Nothing in this
clause will prevent:

 

(i)            the Facilities
from being prepaid or repaid from the facilities under the Senior Facilities
Agreement to the extent required if any amounts remain outstanding under this
Agreement after the proceeds of the Rights Issue have been used in prepayment
or repayment of the Facility;

 

(ii)           a repayment of the Facilities (including the provision
of cash cover in respect of Avales) provided the Borrower has received
confirmation from S&P and Moody’s that the long term credit rating assigned
to the Group after and taking into account such repayment, the Rights Issue and
the application of the proceeds thereof, will be no lower than BBB- by S&P
or Baa3 by Moody’s;

 

(iii)          any redenomination of the Facility in accordance with
the terms of this Agreement;

 

(iv)          any prepayment of the Facilities approved by the
Majority Lenders under and as defined in the Senior Facilities Agreement; and

 

(v)           any transfer in accordance with Clause 30.2 (Assignments
and transfers by Lenders).

 

2.4          Nature
of a Finance Party’s rights and obligations

 

Unless otherwise
agreed by all the Finance Parties:

 

(a)           the obligations of a Finance
Party under the Finance Documents are several;

 

(b)           failure by a Finance Party
to perform its obligations does not affect the obligations of any other Party
under the Finance Documents other than an obligation of an Obligor to that
Finance Party;

 

(c)           no Finance Party is
responsible for the obligations of any other Finance Party under the Finance
Documents;

 

23

 

(d)           the rights of a Finance Party
under the Finance Documents are separate and independent rights;

 

(e)           a debt arising under the
Finance Documents to a Finance Party is a separate and independent debt; and

 

(f)            a Finance Party may, except
as otherwise stated in the Finance Documents, separately enforce those rights.

 

3.             PURPOSE

 

3.1          Loan
proceeds

 

Each Loan may
only be used in or towards:

 

(a)           financing the acquisition of
Tiger Shares pursuant to the Offer for Tiger Shares and Delisting Offer or
(after the First Cash Utilisation Date) otherwise;

 

(b)           refinancing outstanding
indebtedness of the Group and the Tiger Group;

 

(c)           payment of the Offer Costs
and the payment of other fees, costs and expenses associated with the
Facilities;

 

(d)           providing cash cover for the
Avales on the Aval Cash Collateralisation Date;

 

(e)           after the Closing Date, to
fund amounts due to shareholders in Tiger (other than members of the Group)
pursuant to any dividend or other capital distribution or reduction, share
redemption or buy back or compensation payment in connection with their
shareholding in Tiger and/or any dilution of that shareholding;

 

(f)            the settlement of the Redenomination Swap in
accordance with Clause 9.3(d) (Redenomination); and

 

(g)           if the CNMV makes a demand in respect of an aval
issued under the Senior Facilities Agreement, to make prepayments of the
facilities under the Senior Facilities Agreement provided that, following such
prepayment the proportion of the facilities drawn by way of loans under the
Senior Facilities Agreement is at least equal to the proportion of the
Facilities utilised by way of Loans,

 

provided that until the Closing Date, no Loan may be used to fund the
purchase price for Tiger Shares (other than pursuant to the Offer) or refinance
outstanding indebtedness of the Tiger Group.

 

3.2          Avales

 

Each Aval may
only be used to support the obligations of the Borrower or one of its wholly
owned subsidiaries or Tiger in respect of the Offer and/or any Delisting Offer
in accordance with the requirements of the CNMV pursuant to Spanish Royal
Decree 1197/1991 (dated 26 July 1991) on Public Tender Offers (as amended), as
replaced or substituted by any other applicable regulations on tender offers.

 

3.3          No
obligation to monitor

 

No Finance Party
is bound to monitor or verify the utilisation of a Facility.

 

24

 

4.             CONDITIONS PRECEDENT AND CERTAIN
FUNDS

 

4.1          Conditions
precedent documents

 

(a)           A Loan may not be
utilised or an Aval issued until the Facility Agent has notified the Obligors’
Agent and the Lenders that it has received all of the documents and evidence
set out in Part 1 of Schedule 2 (Conditions Precedent Documents) in form and
substance satisfactory to the Facility Agent (acting reasonably). The Facility
Agent must give this notification to the Obligors’ Agent and the Lenders
promptly upon being so satisfied.

 

(b)           For the avoidance
of doubt, in respect of the conditions precedent documentation listed at
paragraph 3(l) and (m) of Part 1 of Schedule 2 (Conditions Precedent
Documents) the Borrower shall be entitled to apply the Sterling proceeds of the
Rights Issue to discharge any currency hedging it has entered into in respect
of the proceeds of the Rights Issue in prepayment of the Facility.

 

4.2          Further
conditions precedent to utilisation by way of Avales

 

The obligations of each Issuing Entity to issue an
Aval are subject to the further conditions precedent that on both the date of
the Request and the Utilisation Date for that Aval:

 

(a)           the Repeating
Representations are correct in all respects; and

 

(b)           no Default is outstanding or
would result from the issuance of that Aval.

 

4.3          Conditions
precedent on the First Cash Utilisation Date

 

The obligations
of each Lender to participate in any Loan to be made on the First Cash
Utilisation Date are subject to the further conditions precedent that:

 

(a)           all amounts outstanding
under the Existing Facilities Agreement and the U.S. Facilities Agreement have
been or will be repaid, prepaid and cancelled in full on or prior to the First
Cash Utilisation Date; and

 

(b)           to the extent such documents
and evidence are not required to be delivered pursuant to Clause 4.1 above the
Facility Agent has notified the Obligors’ Agent and the Lenders that it has
received all of the documents and evidence set out in Part 2 of Schedule 2
(Conditions Precedent Documents) in form and substance satisfactory to the
Facility Agent (acting reasonably). The Facility Agent must give this
notification to the Obligors’ Agent and the Lenders promptly upon being so
satisfied.

 

4.4          Further
conditions precedent to utilisation by way of Loans

 

(a)           The obligations
of each Lender to participate in any Loan are subject to the further conditions
precedent that on both the date of the Request and the Utilisation Date for
that Loan:

 

(i)            the Repeating
Representations are correct in all respects; and

 

(ii)           no Default is
outstanding or would result from the Loan.

 

(b)           The conditions
precedent set out at paragraph (a) above will not apply to any utilisation by
way of a Loan to fund the repayment or prepayment of the Avales on the Aval
Cash Collateralisation Date or any utilisation by way of Loans for the purposes
set out in Clause 3.1(f) and 3.1(g) (Loan proceeds).

 

25

 

4.5          Limitations

 

Unless the
Facility Agent agrees pursuant to Clause 12.3 (Other adjustments) or
otherwise, a Request may not be made (or, if made, shall not be regarded as
having been validly made) if, as a result, there would be more than:

 

(a)           12 Loans; and

 

(b)           6 Avales,

 

outstanding.

 

4.6          Certain
Funds

 

(a)           Notwithstanding
any term of this Agreement, during the Certain Funds Period no Lender is
entitled to:

 

(i)            refuse to
participate in or make available any Certain Funds Credit;

 

(ii)           cancel its
Commitment to the extent to do so would prevent or limit the making of a
Certain Funds Credit;

 

(iii)          exercise any
right of rescission or similar right or remedy which it may have in relation to
any Certain Funds Credit; or

 

(iv)          accelerate or
cause repayment of any Certain Funds Credit,

 

except as
provided in paragraph (b) below.

 

(b)           Paragraph (a)
does not apply if the entitlement arises because:

 

(i)            the Obligors’
Agent has not delivered or procured the delivery of all of the documents
required under Clause 4.1 (Conditions precedent documents) and the delivery of
any such documents has not been waived by the Facility Agent;

 

(ii)           a Major
Representation is not correct or will not be correct immediately after any
Certain Funds Credit is made;

 

(iii)          a Major Default
is outstanding or will result from the making of any Certain Funds Credit; or

 

(iv)          it is unlawful
for the Lender to maintain its Commitment or to perform its obligations to make
available that Certain Funds Credit.

 

Immediately upon
the expiry of the Certain Funds Period all such rights, remedies and
entitlements shall be available to the Lenders notwithstanding that they may
not have been used or have been available for use during the Certain Funds
Period.

 

5.             UTILISATION - LOANS

 

5.1          Giving
of Requests

 

(a)           The Borrower may
borrow a Loan by giving to the Facility Agent a duly completed Request.

 

26

 

(b)           Unless the
Facility Agent otherwise agrees, the latest time for receipt by the Facility
Agent of a duly completed Request for a Loan is 11.00 a.m. one Business Day
before the Rate Fixing Day for the proposed borrowing.

 

(c)           Each such Request
is irrevocable.

 

(d)           Notwithstanding
the issue of Avales, the Borrower may deliver a Request in respect of each
relevant Facility to fund the cash consideration payable for the Tiger Shares
supported by that Aval upon that cash consideration becoming due pursuant to
the Offer or a Delisting Offer and to fund any cash cover for the Avales on the
Aval Cash Collateralisation Date.

 

5.2          Completion
of Requests

 

A Request for a
Loan will not be regarded as having been duly completed unless:

 

(a)           the Utilisation Date is a
Business Day falling within the Availability Period;

 

(b)           it specifies the Facility
and, where relevant, any further designation of that Facility under which the
Loan is to be utilised;

 

(c)           the amount of the Loan
requested is:

 

(i)            a minimum of Euro 5,000,000
(or its equivalent) and an integral multiple of 1,000,000 units of that
currency;

 

(ii)           the maximum undrawn amount
available under the relevant Facility on the proposed Utilisation Date; or

 

(iii)          such other amount as the
Facility Agent may agree;

 

(d)           the proposed currency and
Term comply with this Agreement; and

 

(e)           the payment instructions
comply with Clause 17.1 (Place of Payments).

 

5.3          Advance
of Loan

 

(a)           The Facility
Agent must promptly notify each Lender of the details of the requested Loan and
the amount of its share in that Loan.

 

(b)           The amount of
each Lender’s share of a Loan under a Facility will be its Pro rata Share of
such Loan on the proposed Utilisation Date.

 

(c)           Subject to clause
5.1(d), no Lender is obliged to participate in a Loan under a Facility if as a
result:

 

(i)            its share in the
Loans and its participation in Avales under that Facility would exceed its
Available Commitment for that Facility; or

 

(ii)           the aggregate
amount of all Credits would exceed the Total Commitments.

 

(d)           In addition to
paragraph (c) above:

 

(i)            Facility B will
not be utilised unless Facility A has been utilised in full; and

 

(ii)           Facility C will
not be utilised unless Facility B and Facility A have been utilised in full.

 

27

 

(e)           If the conditions
set out in this Agreement have been met, each Lender must make its share in the
Loan available to the Facility Agent for the Borrower on the Utilisation Date.

 

6.             UTILISATION – AVALES

 

6.1          Giving
of Requests

 

(a)           The Obligors’
Agent may request an Aval or Avales be issued by giving to the Facility Agent a
duly completed Request.

 

(b)           Unless the
Facility Agent and the Issuing Entity otherwise agree, the latest time for
receipt by the Facility Agent of a duly completed Request for Avales is 11.00
a.m. three Business Days before the proposed Utilisation Date or, in the case
of Avales to be issued on the date of this Agreement, on the Utilisation Date.

 

(c)           Each such Request
is irrevocable.

 

6.2          Completion
of Requests

 

(a)           A Request for
Avales will not be regarded as having been duly completed unless:

 

(i)            it specifies that
it is for Avales;

 

(ii)           it specifies the
Facility and, where relevant, any further designation of that Facility under
which the Avales are to be issued;

 

(iii)          the Utilisation
Date is a Business Day falling within the Availability Period;

 

(iv)          the aggregate
amount of the Avales requested (together with the aggregate amount of any other
Avales previously issued under this Agreement, to the extent that such
previously issued Avales are not being substituted by the Avales requested):

 

(A)          is (I) equal to
or less than the Available Commitment under the relevant Facility on the
proposed Utilisation Date and (II) equal to the amount of the cash
consideration payable for the Tiger Shares proposed to be acquired pursuant to
the Offer or, if applicable the Delisting Offer; or

 

(B)           such other amount
as the Facility Agent may agree;

 

(v)           the proposed
beneficiary is the CNMV for the benefit of shareholders of Tiger;

 

(vi)          the form of
Avales are attached; and

 

(vii)         the delivery
instructions for the Avales are specified.

 

(b)           A Request may
include a request for an Aval to be issued in substitution for an existing Aval
in the manner contemplated in Clause 6.3 (Issue of Aval) below.

 

6.3          Issue
of Avales

 

(a)           The Facility
Agent must promptly notify each Issuing Entity and each Lender of the details
of the requested Avales and the amount of its share of those Avales.

 

28

 

(b)           The amount of
each Lender’s share in an Aval will be its Pro rata Share on the proposed
Utilisation Date.

 

(c)           Each of the
Issuing Entities will subject to paragraph (h) below and any substitution in
accordance with Clause 30.11 (New Issuing Entities) issue Avales in an amount
equal to the percentage of the aggregate amount of Avales specified in the
Request set out opposite its name in Schedule 1 Part 3 (Issuing Entities) for
the relevant Facility.

 

(d)           If the relevant
conditions set out in this Agreement have been met, the Issuing Entities must
issue the Avales on the Utilisation Date.

 

(e)           An Aval may be
issued under this Agreement as a substitute for an existing Aval for the
purposes of amending the amount of that existing Aval or making administrative
or technical changes to its terms. The definition of Aval under this Agreement
shall be construed to include such substitute Aval.

 

(f)            The Borrower
shall file the Avales or procure the Avales are filed with the CNMV promptly
upon issue.

 

(g)           The Issuing
Entities are not obliged to issue any Aval if as a result:

 

(i)            a Lender’s share
in a Loan and its participation in Avales would exceed its Commitment; or

 

(ii)           the aggregate
amount of the Credits would exceed the Total Commitments.

 

(h)           In addition no
Aval will be issued:

 

(i)            under Facility B
unless all amounts have been utilised under Facility A; and

 

(ii)           under Facility C unless all amounts have
been utilised under Facility A and Facility B.

 

(i)            No Issuing Entity
has a duty to enquire of any person whether or not the conditions set out in
paragraph (g) above have been met. The Issuing Entity may assume that those
conditions have been met unless it is expressly notified to the contrary by the
Facility Agent. The Issuing Entity will have no liability to any person for
issuing an Aval based on any such assumption.

 

7.             AVALES

 

7.1          Authority
to pay claims under an Aval

 

(a)           The Borrower
irrevocably and unconditionally authorises the Issuing Entities to pay any
claim made or purported to be made under an Aval which appears on its face to
be in order (a claim), the amount of any such
claim being a Claimed Amount.

 

(b)           The Borrower
acknowledges that the Issuing Entities:

 

(i)            are not obliged
to carry out any investigation or seek any confirmation from any other person
before paying a claim; and

 

(ii)           deals in
documents only and will not be concerned with the legality of a claim or any
underlying transaction or any available set-off, counterclaim or other defence
of any person.

 

(c)           The obligations
of the Borrower under this Clause will not be affected by:

 

29

 

(i)            the sufficiency,
accuracy or genuineness of any claim or any other document; or

 

(ii)           any incapacity
of, or limitation on the powers of, any person signing a claim or other
document.

 

7.2          Lenders’
Indemnity

 

(a)           Subject to the
terms of this Agreement, each Lender unconditionally and irrevocably agrees to
pay to each Issuing Entity, on demand, an amount equal to its share of any
Claimed Amount in accordance with the arrangements for payment set out in
Clause 7.5 (Settlement of Claims under Lenders’ Indemnity) (such demand being
an Indemnity Claim).

 

(b)           No Indemnity
Claim can be made in respect of any Claimed Amount for which an Issuing Entity
has otherwise been reimbursed including, without limitation, by way of the
provision of cash cover to the Issuing Entity out of the proceeds of a Loan.

 

(c)           Each Lender’s
share of any Claimed Amount referred to in Clause 7.2(a) (Lenders’ Indemnity)
shall be its Pro rata Share on the Utilisation Date of the relevant Aval but
adjusted to reflect any subsequent assignment or transfer under this Agreement.

 

(d)           The maximum
aggregate liability of each Lender to the Issuing Entities under this Clause 7.2
(Lenders’ Indemnity) shall be automatically reduced by an amount equal to:

 

(i)            any payments made
by that Lender to an Issuing Entity under or in respect of an Aval; and

 

(ii)           that Lender’s
share (determined in accordance with Clause 7.2(c) (Lenders’ Indemnity) of:

 

(A)          any payment made
by the Borrower to an Issuing Entity in relation to a Claimed Amount pursuant
to Clause 7.3 (Borrower Indemnities); and

 

(B)           any reduction in
the amount of an Aval other than as a result of a repayment or prepayment.

 

(e)           The obligations
of any Lender under this Clause 7.2 (Lenders’ Indemnity) and Clause 7.3
(Borrower Indemnities) will, in each case, not be affected by any act, omission
or thing which, but for this provision, would reduce, release or prejudice any
of its obligations under this Clause and Clause 7.3 (Borrower Indemnities) (as
appropriate) (whether or not known to it or any other person).  This includes:

 

(i)            any time or
waiver granted to, or composition with, any person;

 

(ii)           any release of
any person under the terms of any composition or arrangement;

 

(iii)          the taking,
variation, compromise, exchange, renewal or release of, or refusal or neglect
to perfect, take up or enforce, any rights against, or security over assets of,
any person;

 

(iv)          any
non-presentation or non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full value of any
security;

 

(v)           any incapacity or
lack of power, authority or legal personality of or dissolution or change in
the members or status of any person;

 

(vi)          any amendment
(however fundamental) of a Finance Document, any Aval or any other document or
security; or

 

30

 

(vii)         any
unenforceability, illegality or invalidity of any obligation of any person
under any Finance Document, any Aval or any other document or security.

 

(f)            Until the
Syndication Date the indemnities given to each Issuing Entity pursuant to this
Clause are given by each Lender to its Related Issuing Entity only and on and
from the Syndication Date by each Lender to each Issuing Entity.

 

(g)           Any failure by
any Party to perform its obligations under an Aval or under this Agreement
shall not relieve or discharge any other Party of its obligations under the
relevant Aval or under this Agreement. 
The failure of a Lender to perform its obligations under this Clause
shall not affect or increase the liability of any other Lender under this
Clause.

 

(h)           The obligations
of each Lender under this Clause 7.2 (Lenders’ Indemnity) are:

 

(i)            continuing
obligations and will extend to the ultimate balance of all amounts payable by
that Lender under or in connection with any Aval, regardless of any
intermediate payment or discharge in whole or in part;

 

(ii)           several; and

 

(iii)          independent,
primary obligations which each Lender undertakes as principal, and not as a
surety or guarantor.

 

For the purpose of this
Agreement the Avales will constitute and shall be treated as a “standby” for
the purposes of Rule 1.01 of the ISP. 
The ISP shall apply to each such obligation, to the extent not
inconsistent with the terms of the Finance Documents.

 

7.3          Borrower
Indemnities

 

(a)           The Borrower must
on demand by an Indemnified Party:

 

(i)            indemnify that
Indemnified Party against any loss or liability which that Indemnified Party
incurs under or in connection with the Relevant Obligations or that Indemnified
Party’s performance of the Relevant Obligations (unless caused by the gross
negligence or wilful misconduct of that Indemnified Party); and

 

(ii)           reimburse that
Indemnified Party for any amount demanded of, or paid by, it under the Relevant
Obligations in the currency of the relevant amount of the relevant demand,
provided that to the extent the Borrower is obliged to reimburse the Lenders
under this Agreement, the claims of the Lenders against the Borrower in respect
of such reimbursement shall be evidenced by one or more Loans arising under
Clause 7.5(c) (Settlement of Claims under Lenders’ Indemnity) and the
provisions of Clause 7.5 (Settlement of Claims under Lenders’ Indemnity) will
govern such reimbursement. 

 

(b)           The Borrower
irrevocably and unconditionally authorises and directs each Indemnified Party
to pay any demand made under or in connection with the Relevant Obligations and
confirm that each Indemnified Party shall be entitled to pay any demand which
appears on its face to be in order.  The
Borrower agrees that in respect of the Relevant Obligations no Indemnified Party
is concerned with the legality of the claim or any underlying transaction or
any set-off, counterclaim or defence as between any Indemnified Party and any
other person.  

 

(c)           The obligations
of the Borrower under this Clause 7.3 (Borrower Indemnities) shall be
continuing obligations, shall extend to the ultimate balance of all amounts
expressed to be payable by the

 

31

 

Borrower under or in connection with any Aval,
regardless of any intermediate payment or discharge in whole or in parts of
amounts payable hereunder.  

 

7.4          Rights
of contribution

 

The Borrower will not be
entitled to any right of contribution or indemnity from any Finance Party in
respect of any payment it may make under this Clause.

 

7.5          Settlement
of Claims under Lenders’ Indemnity

 

(a)           If an Issuing
Entity wishes to make an Indemnity Claim under Clause 7.2 (Lenders’ Indemnity),
it shall do so by serving, if prior to the Syndication Date, on each Lender
providing such indemnity or, if on or after the Syndication Date, on the
Facility Agent a duly completed Indemnity Claim Notice specifying the Claimed
Amount and the amount of each Lender’s share of that Claimed Amount determined
in accordance with Clause 7.2(c) (Lenders’ Indemnity).  The Facility Agent must serve a copy of any
Indemnity Claim Notice received by it on each Lender promptly upon receipt of
the same.  

 

(b)           Any Indemnity
Claim Notice must be substantially in the form set out in Schedule 8 (Form of
Indemnity Claim Notice).  If in that form
and if properly completed, such Indemnity Claim Notice shall, in the absence of
manifest error, be prima facie evidence
of the matters to which it relates.

 

(c)           Each Lender will
make payment of its share of any Indemnity Claim on the date falling one
Business Day after receipt of the relevant Indemnity Claim Notice (the Payment Date).  Any
such payment must be made to the Facility Agent for the account of the relevant
Issuing Entity.  The Facility Agent will
immediately remit such payments to or to the order of the relevant Issuing
Entity in accordance with the payment instructions such Issuing Entity shall
from time to time provide to the Facility Agent for this purpose.

 

(d)           If a Lender makes
payment of any amount due pursuant to an Indemnity Claim, that Lender shall
automatically be subrogated to the rights of the relevant Issuing Entity in
respect of such payment.

 

(e)           The making of a
payment by a Lender pursuant to this Clause 7.5 (Settlement of Claims under
Lenders’ Indemnity) shall, to the extent that Lender at that time has an
Available Commitment (calculated for the purpose of this Clause 7.5 (Settlement
of Claims under Lenders’ Indemnities) without taking into account any
utilisation under this Agreement by way of Avales), constitute a utilisation by
way of the borrowing of Loans by the Borrower pro rata to those Available
Commitments.  The other provisions of
this Agreement shall apply to each such Loan save that:

 

(i)            the conditions
precedent set out in Clauses 4.1 (Conditions precedent documents), 4.3
(Conditions precedent on the First Cash Utilisation Date) and Clause 4.4
(Further conditions precedent to utilisation by way of Loans) shall not apply
to the making of any such Loan; and

 

(ii)           each such Loan
shall have an initial Term of one month commencing on the relevant Payment
Date. 

 

(f)            The Borrower
hereby irrevocably authorises the borrowing of any Loan made under this Clause
7.5 (Settlement of Claims under Lenders’ Indemnity) and agrees to adopt, and
that it shall be liable in respect of, each such Loan as if it was a Loan
borrowed by the Borrower pursuant to a Request.

 

32

 

8.             REPAYMENT 

 

8.1          Repayment
of Loans

 

The Borrower must
repay the Loans in full on the earlier of the Final Maturity Date and the date
falling five Business Days after the date on which all the new shares are
issued in accordance with the Underwriting Agreement.

 

8.2          Cash
Collateralisation of Avales

 

The Borrower must
provide cash cover in respect of the full amount of each Aval on the earlier of
the Aval Cash Collateralisation Date and the date falling five Business Days
after the date on which all the new shares are issued in accordance with the Underwriting
Agreement. 

 

9.             REDENOMINATION OF FACILITY

 

9.1          Giving of Redenomination Request

 

(a)           The Obligors’ Agent shall be entitled to redenominate
some or all of the Loans at any time and deliver to the Facility Agent a duly
completed Redenomination Request.

 

(b)           Unless the Facility Agent otherwise agrees, the latest
time for receipt by the Facility Agent of a duly completed Redenomination
Request is 11.00am three Business Days before the proposed Redenomination Date.

 

(c)           Each Redenomination Request is irrevocable.

 

9.2          Completion of Redenomination Request

 

A Redenomination Request will not be regarded as having been duly
completed unless:

 

(a)             it specifies the proposed Redenomination Date which
must be a Business Day falling on or after the First Cash Utilisation Date and
which must not be earlier than three Business Days after the relevant
Redenomination Request is delivered;

 

(b)            it identifies the Facility and amount of the Loans to
be redenominated;

 

(c)             the aggregate of the amounts of the Loans to be
redenominated on any Redenomination Date does not exceed €1,500,000,000; 

 

(d)            the aggregate Sterling amount drawn down under this
Agreement for the purposes of a redenomination pursuant to this Agreement may
not at any time exceed the amount (in Sterling) of the underwriting under the
Underwriting Agreement;

 

(e)             it specifies that the redenomination currency will be
Sterling; 

 

(f)             the Facility Agent has received from the
Redenomination Swap Counterparty, no later than 11.00am on the second Business
Day prior to the relevant Redenomination Date, confirmation (in form and
substance satisfactory to the Facility Agent (acting reasonably)) that it has
entered into the Redenomination Swap, the rate at which the swap will be
effected on the Redenomination Date, the amount of Sterling the Redenomination
Swap Counterparty needs to receive to settle the Redenomination Swap and the
Euro amount to be paid by it under the Redenomination Swap on the relevant
Redenomination Date; and

 

33

 

(g)            it specifies that the portion of the Loans
redenominated following the redenomination requested in the relevant
Redenomination Request will be used to repay or prepay in whole or in part the
amounts of the Loans outstanding under the Facility (after effecting the
Redenomination Swap) on the relevant Redenomination Date.

 

9.3          Redenomination

 

(a)           The new amount of the portion of the Loans
redenominated in Sterling will be equal to the amount in Sterling that can be
achieved under the relevant Redenomination Swap against the portion of the
Loans to be redenominated.

 

(b)           The Facility Agent must, no later than 11.00am on the
Business Day prior to the relevant Redenomination Date, notify each Lender of
the details of a requested redenomination and the amount of its share in the
Sterling redenominated portion of the Loans, which shall be the same share as
its participation in the Euro denominated portion of the Loans to be repaid
bears to the aggregate amount of such portion of the Loans.

 

(c)           If the relevant conditions in this Agreement have been
met, each Lender must make its share of the portion of the Sterling
redenominated Loans available to the Facility Agent on the Redenomination Date.

 

(d)           The Facility Agent shall pay to the Borrower the
amount paid to it pursuant to paragraph (c) above on the relevant
Redenomination Date and the Borrower will upon receipt of that amount settle
the relevant Redenomination Swap and upon settlement of that Redenomination
Swap on the relevant Redenomination Date pay to the Facility Agent for the
Lenders in their relevant shares the amount received under that Redenomination
Swap.

 

(e)           With effect from the relevant Redenomination Date, the
portion of the Loans subject to the relevant Redenomination Request shall be
deemed to be Loans for the purposes of this Agreement and be deemed to be
outstanding in Sterling.

 

9.4          Payment of interest on Redenomination Date

 

On each Redenomination Date, the Borrower shall pay all accrued but
unpaid interest on any Loans to be redenominated on that date for the period
from the first day of the Term for that Loan up to that Redenomination Date and
following the redenomination of that Loan, the Term for the Loan so
redenominated will commence on that Redenomination Date for a period to be
determined in accordance with the terms of Clause 12 (Terms) of this Agreement.

 

10.          PREPAYMENT AND CANCELLATION

 

10.1        Mandatory
prepayment - illegality

 

(a)           A Lender must
notify the Facility Agent and the Obligors’ Agent promptly if it becomes aware
that it is unlawful in any jurisdiction for that Lender to perform any of its
obligations under a Finance Document or to fund or maintain its share in any
Credit.

 

(b)           After
notification under paragraph (a) above and subject to Clause 30.9 (Replacement
of a Lender):

 

(i)            the Borrower must
repay or prepay the share of that Lender in each Credit on the date specified
in paragraph (c) below; and

 

(ii)           the Commitments
of that Lender will be immediately cancelled.

 

34

 

(c)           The date for
repayment or prepayment of a Lender’s share in a Credit will be:

 

(i)            ten Business Days
following receipt by the Obligors’ Agent of notice from the Lender under
paragraph (a) above; or

 

(ii)           if earlier, the
latest date allowed by the relevant law.

 

10.2        Mandatory
Prepayment - disposal

 

(a)           The Obligors’
Agent must promptly notify the Facility Agent of a disposal by the Group of all
or substantially all of the assets of the Group.

 

(b)           On any such
disposal referred to in paragraph (a) above:

 

(i)            the Borrower must
immediately repay or prepay each Credit utilised by it; and

 

(ii)           the Total
Commitments will be immediately cancelled.

 

10.3        Mandatory
prepayment - change of control

 

(a)           The Obligors’
Agent must promptly notify the Facility Agent if it becomes aware of any person
or group of associated persons (being persons acting in concert (within the
meaning set out in the City Code on Takeovers and Mergers) and/or any connected
persons (as defined in the Income and Corporation Taxes Act of 1988) of those
persons) acquiring the right to exercise more than 50 per cent. of the votes
exercisable at a general meeting of the Borrower.

 

(b)           Unless otherwise
agreed by the Lenders, on any such acquisition referred to in paragraph (a)
above:

 

(i)            the Borrower must
immediately repay each Credit utilised by it; and

 

(ii)           the Total
Commitments will be immediately cancelled.

 

10.4        Mandatory
prepayment from relevant issuance

 

(a)           In this Subclause
relevant issuance means any issue, sale
or public offering:

 

(i)            the equity
component of Hybrid Securities by any member of the Group; or

 

(ii)           pursuant to a
Rights Issue.

 

(b)           The Borrower must
promptly apply or must procure there is applied promptly an amount equal to the
Net Proceeds of any relevant issuance in or towards the prepayment of the
Loans.

 

(c)           For the avoidance
of doubt, the Borrower will be permitted to apply the Sterling proceeds of any
Rights Issue to discharge any currency hedging it has entered into in respect
of the proceeds of that Rights Issue prior to the application of such proceeds
in prepayment or repayment of the Facility.

 

(d)           If at any time
there is a difference in the amount of the equity component of any Hybrid
Security as determined by Moody’s and S&P (or an equivalent statistical
rating agency) the equity component for the purpose of this Clause will be
deemed to be the higher of such amounts.

 

35

 

10.5        Voluntary
prepayment

 

(a)           The Obligors’
Agent may, by giving not less than five Business Days’ prior notice to the
Facility Agent, prepay any Credit at any time in whole or in part.

 

(b)           A prepayment of
part of a Credit (other than pursuant to Clause 9 (Redenomination of Facility))
must be in a minimum amount of Euro 25,000,000 (or equivalent) and integral
multiples of Euro 5,000,000 (or equivalent) or, if less, the outstanding amount
of that Credit.

 

10.6        Automatic
cancellation

 

(a)           Save as provided
below the Commitments of each Lender will be automatically cancelled at the
close of business on the last day of the Availability Period.

 

(b)           To the extent
that, at any time before the relevant Aval Release Date, the amount of an Aval
is repaid or prepaid (for this purpose ignoring any cancellation of an Aval
which occurs as a result of a substitution of that Aval in accordance with this
Agreement save to the extent of any net reduction occurring as a result of such
substitution) the Commitments in respect of that Aval will be automatically
cancelled on that date.

 

(c)           The Commitments of each Lender will be automatically
cancelled at close of business on the first Utilisation Date to the extent not
utilised.

 

10.7        Voluntary
cancellation

 

(a)           The Obligors’
Agent may, by giving not less than five Business Days’ prior notice to the
Facility Agent, cancel the Total Commitments in whole or in part.

 

(b)           Partial
cancellation of the Total Commitments must be in a minimum amount of
Euro 25,000,000 (or equivalent) and an integral multiple of Euro 5,000,000
(or equivalent) or, if less, the undrawn amount of the relevant Commitment.

 

(c)           Any cancellation
in part of the Commitments under a Facility will be applied against the
Commitments of each Lender under that Facility pro rata.

 

(d)           The Obligors’
Agent must ensure that if, following any voluntary cancellation of the
Commitments under a Facility, the outstanding Credits under that Facility would
exceed the relevant Commitment, an amount of the Credits under that Facility
equal to the excess shall be prepaid.

 

10.8        Involuntary
prepayment and cancellation

 

(a)           If the Borrower
is, or will be, required to pay to a Lender a Tax Payment or an Increased Cost,
the Obligors’ Agent may, while the requirement continues, give notice to the
Facility Agent requesting prepayment and cancellation in respect of that Lender.

 

(b)           After
notification under paragraph (a) above and subject to Clause 30.9 (Replacement
of a Lender):

 

(i)            the Borrower must
repay or prepay that Lender’s share in each Credit utilised by it on the date
specified in paragraph (c) below; and

 

(ii)           the Commitments
of that Lender will be immediately cancelled.

 

(c)           The date for
repayment or prepayment of a Lender’s share in a Credit will be the last day of
the current Term for that Credit or, if earlier, the date specified by the
Obligors’ Agent in its notification.

 

36

 

10.9        Partial
prepayment of Loans

 

Save as set out
in Clause 5.1(d) (Giving of Requests), no amount of a Loan prepaid under this
Agreement may subsequently be re-borrowed.

 

10.10      Miscellaneous
provisions

 

(a)           Any notice of
prepayment and/or cancellation under this Agreement is irrevocable and must
specify the relevant date(s) and the affected Credits and Commitments.  The Facility Agent must notify the Lenders
promptly on receipt of any such notice.

 

(b)           All prepayments
under this Agreement must be made with accrued interest on the amount
prepaid.  No premium or penalty is
payable in respect of any prepayment except for Break Costs.

 

(c)           The Majority
Lenders may agree a shorter notice period for a voluntary prepayment or a
voluntary cancellation.

 

(d)           No prepayment or
cancellation is allowed except in accordance with the express terms of this
Agreement.

 

(e)           Except to the
extent expressly set out in this Agreement, no amount of the Total Commitments
cancelled under this Agreement may subsequently be reinstated.

 

10.11      Application
of amounts in cancellation or prepayment

 

(a)           Except as set out
in this Clause 10, if any amount is voluntarily or mandatorily prepaid
under this Agreement (other than, for the avoidance of doubt, pursuant to
Clause 10.7(d) (Voluntary cancellation)) the amount prepaid will be
applied (i) first pro rata against the
participations of the Lenders under Facility C, (ii) second pro rata against the participations of the Lenders under
Facility B and (iii) thereafter pro rata
against the participations of the Lenders under Facility A.

 

(b)           Until the Syndication Date, any Rights Issue proceeds
received from a Rights Issue Underwriter, whether by its Related Lender or by
the Borrower in order that the Borrower can apply such proceeds in discharge
any currency hedging it has entered into in respect of the proceeds of the
Rights Issue, shall be applied in prepayment of the participations of its
Related Lender under the Facilities until such participations have been prepaid
in full and thereafter in prepayment of the participations of the other Lenders
in accordance with paragraph (a) above.

 

(c)           Any prepayment will be applied as between Loans and/or
Avals outstanding under a particular Facility in accordance with the
instructions of the Obligors’ Agent.

 

11.          INTEREST

 

11.1        Calculation
of interest

 

The rate of
interest on each Loan for each Term is the percentage rate per annum equal to
the aggregate of the applicable:

 

(a)           Margin;

 

(b)           EURIBOR or, in the case of a
Loan denominated in Sterling, LIBOR; and

 

(c)           Mandatory Cost (if any).

 

37

 

11.2        Payment
of interest

 

Except where it
is provided to the contrary in this Agreement, the Borrower must pay accrued
interest on each Loan made to it on the last day of each Term and, if the Term
is longer than six months, on the dates falling at six-monthly intervals after
the first day of that Term.

 

11.3        Margin
step-up

 

For so long as:

 

(a)           the Borrower is in default
of its obligations under this Agreement to provide a Compliance Certificate; or

 

(b)           an Event of Default is
outstanding,

 

the Margin will
be one per cent. (1.00%) above the then applicable Margin.

 

11.4        Interest
on overdue amounts

 

(a)           If an Obligor
fails to pay any amount payable by it under the Finance Documents, it must
immediately on demand by the Facility Agent pay interest on the overdue amount
from its due date up to the date of actual payment, both before, on and after
judgment.

 

(b)           Interest on an
overdue amount is payable at a rate determined by the Facility Agent to be one
per cent. (1.00%) per annum above the rate which would have been payable if the
overdue amount had, during the period of non-payment, constituted a Loan in the
currency of the overdue amount.  For this
purpose, the Facility Agent may (acting reasonably):

 

(i)            select successive
Terms of any duration of up to three months; and

 

(ii)           determine the
appropriate Rate Fixing Day for that Term.

 

(c)           Notwithstanding
paragraph (b) above, if the overdue amount is a principal amount of a Loan and
becomes due and payable prior to the last day of its current Term, then:

 

(i)            the first Term
for that overdue amount will be the unexpired portion of that Term; and

 

(ii)           the rate of
interest on the overdue amount for that first Term will be one per cent.
(1.00%) per annum above the rate then payable on that Loan.

 

After the expiry
of the first Term for that overdue amount, the rate on the overdue amount will
be calculated in accordance with paragraph (b) above.

 

(d)           The default rate
will be determined on each Business Day or on the Rate Fixing Day, as
appropriate.

 

(e)           Interest (if
unpaid) on an overdue amount will be compounded with that overdue amount at the
end of each of its Terms but will remain immediately due and payable.

 

11.5        Notification
of rates of interest

 

The Facility
Agent must promptly notify each relevant Party of the determination of a rate
of interest under this Agreement including as a result of any change to the Margin
during the Term of a Loan.

 

38

 

12.          TERMS

 

12.1        Selection

 

(a)           Each Loan has
successive Terms.

 

(b)           The Borrower must
select the first Term for a Loan in the relevant Request and each subsequent
Term in an irrevocable notice received by the Facility Agent not later than
11.00 a.m. one Business Day before the Rate Fixing Day for that Term.  The first Term for a Loan will start on its
Utilisation Date and each subsequent Term will start on the expiry of the
preceding Term for the relevant Loan.

 

(c)           If the Borrower
fails to select a Term for an outstanding Loan under Paragraph (b) above, that
Term will, subject to any other provisions of this Clause 12 and Clause 7.5(e)
(Settlement of Claims under Lenders’ Indemnity), be one month.

 

(d)           Subject to the
provisions of this Clause 12 and 7.5(e) (Settlement of Claims under Lenders’
Indemnity), each Term for a Loan will be one, two or three months or any other
period agreed by the Obligors’ Agent and the Lenders.

 

(e)           Notwithstanding
paragraph (d) above, in order to facilitate the syndication of the Facilities
or repayment or prepayment in whole or in part of a Facility including
synchronising a Redenomination Date with a Redenomination Swap, each Term for a
Loan may also be any other period of less than one month duration to be
selected by the Obligors’ Agent.

 

12.2        No
overrunning the Final Maturity Date

 

If a Term for a
Loan under a particular Facility would otherwise overrun the Final Maturity
Date it will be shortened so that it ends on the relevant Final Maturity Date.

 

12.3        Other
adjustments

 

The Facility
Agent and the Obligors’ Agent may enter into such other arrangements as they
may agree for the adjustment of Terms and the consolidation and/or splitting of
Loans.

 

12.4        Notification

 

The Facility
Agent must notify the Obligors’ Agent and the Lenders of the duration of each
Term promptly after ascertaining its duration.

 

13.          MARKET DISRUPTION

 

13.1        Failure
of a Reference Bank to supply a rate

 

If an IBOR is to
be calculated by reference to the Reference Banks but a Reference Bank does not
supply a rate by 12.00 noon on a Rate Fixing Day, the applicable IBOR will,
subject as provided below, be calculated on the basis of the rates of the
remaining Reference Banks.

 

13.2        Market
disruption

 

(a)           In this
Clause 13, each of the following events is a market
disruption event:

 

(i)            an IBOR is to be
calculated by reference to the Reference Banks but no, or only one, Reference
Bank supplies a rate by 12.00 noon on the Rate Fixing Day; or

 

39

 

(ii)           the Facility
Agent receives by close of business on the Rate Fixing Day notification from
Lenders whose shares in the relevant Loan exceed 30 per cent. of that Loan that
the cost to them of obtaining matching deposits in the relevant interbank
market is in excess of the relevant IBOR for the relevant Term.

 

(b)           The Facility
Agent must promptly notify the Obligors’ Agent and the Lenders of the
occurrence of a market disruption event.

 

(c)           After
notification under paragraph (b) above, the rate of interest on each Lender’s
share in the affected Loan for the relevant Term will be the aggregate of the
applicable:

 

(i)            Margin;

 

(ii)           rate notified to
the Facility Agent by that Lender as soon as practicable, and in any event
before interest is due to be paid in respect of that Term, to be that which
expresses as a percentage rate per annum the cost to that Lender of funding its
share in that Loan from whatever source it may reasonably select; and

 

(iii)          Mandatory Cost
(if any).

 

13.3        Alternative
basis of interest or funding

 

(a)           If a market
disruption event occurs and the Facility Agent or the Obligors’ Agent so
requires, the Obligors’ Agent and the Facility Agent must enter into
negotiations for a period of not more than 30 days with a view to agreeing an
alternative basis for determining the rate of interest and/or funding for the
affected Loan and any future affected Loan.

 

(b)           Any alternative
basis agreed will be, with the prior consent of all the Lenders, binding on all
the Parties.

 

14.          TAXES

 

14.1        Tax
gross-up

 

(a)           Each Obligor must
make all payments to be made by it under the Finance Documents without any Tax
Deduction, unless a Tax Deduction is required by law.

 

(b)           If:

 

(i)            a Lender is not,
or ceases to be, a Qualifying Lender; or

 

(ii)           an Obligor or a
Lender is aware that an Obligor must make a Tax Deduction (or that there is a
change in the rate or the basis of a Tax Deduction),

 

it must promptly
notify the Facility Agent.  The Facility
Agent must then promptly notify the affected Parties.

 

(c)           Except as
provided below, if a Tax Deduction is required by law to be made by an Obligor
or the Facility Agent, the amount of the payment due from the Obligor will be
increased to an amount which (after making the Tax Deduction) leaves an amount
equal to the payment which would have been due if no Tax Deduction had been
required.

 

(d)           Except as
provided below, an Obligor is not required to make an increased payment under
paragraph (c) above for a Tax Deduction to a Lender that is not, or has
ceased to be, a Qualifying

 

40

 

Lender in respect of that payment in excess of the
amount that the Obligor would have had to pay had the Lender been, or not
ceased to be, a Qualifying Lender.

 

(e)           Paragraph (d)
above will not apply if the Lender has ceased to be a Qualifying Lender by
reason of any change after the date it became a Lender under this Agreement in
(or in the interpretation, administration, or application of) any law or double
taxation agreement or any published practice or concession of any relevant
taxing authority.

 

(f)            An Obligor is not
required to make an increased payment to a Lender under paragraph (c) above for
a Tax Deduction in respect of Tax imposed or levied by the U.K. or any taxing
authority of or in the U.K. if that Lender is a Treaty Lender and the Obligor
making the payment is able to demonstrate that the Tax Deduction would not have
been required if the Lender had complied with its obligations under paragraph
(i) below.

 

(g)           If an Obligor is
required to make a Tax Deduction, that Obligor must make the minimum Tax
Deduction required and must make any payment required in connection with that
Tax Deduction within the time allowed by law.

 

(h)           Within 30 days of
making either a Tax Deduction or a payment required in connection with a Tax
Deduction, the Obligor making that Tax Deduction or payment must deliver to the
Facility Agent for the relevant Finance Party evidence that the Tax Deduction has
been made or (as applicable) the appropriate payment has been paid to the
relevant taxing authority.

 

(i)            A Treaty Lender
and each Obligor which makes a payment to which that Treaty Lender is entitled
shall co-operate and use their reasonable endeavours in completing any
procedural formalities necessary for that Obligor to obtain authorisation to
make that payment without a Tax Deduction and to claim re-imbursement of any
Tax paid prior to obtaining that authorisation.

 

(j)            An Obligor is not
required to make an increased payment to a U.K. Non-Bank Lender under paragraph
(c) above if the Board of HM Revenue & Customs has given (and not revoked)
a direction in respect of that U.K. Non-Bank Lender under section 931 of the
Income Tax Act 2007 (as that provision has effect on the date on which the
relevant U.K. Non-Bank Lender became a party to this Agreement) and the
relevant Obligor has notified the relevant U.K. Non-Bank Lender of the precise
terms of that notice.

 

(k)           A U.K. Non-Bank
Lender must as soon as reasonably practicable notify the Obligors’ Agent and
the Facility Agent of any change to its status that may affect the Tax
Confirmation made by that U.K. Non-Bank Lender.

 

(l)            Each Original
Lender hereby confirms that it is not a U.K. Non-Bank Lender.

 

14.2        Tax
indemnity

 

(a)           Except as
provided below, the Obligors’ Agent must indemnify a Finance Party against any
loss or liability which that Finance Party (in its absolute discretion)
determines will be or has been suffered (directly or indirectly) by that Finance
Party for or on account of Tax in relation to a payment received or receivable
(or any payment deemed to be received or receivable) under a Finance Document.

 

(b)           Paragraph (a)
above does not apply to any Tax assessed on a Finance Party under the laws of
the jurisdiction in which:

 

41

 

(i)            that Finance
Party is incorporated or, if different, the jurisdiction (or jurisdictions) in
which that Finance Party is treated as resident for tax purposes or has a permanent
establishment; or

 

(ii)           that Finance
Party’s Facility Office is located in respect of amounts received or receivable
in that jurisdiction,

 

if that Tax is
imposed on or calculated by reference to the net income, gains or profits
received or receivable by that Finance Party. 
However, any payment deemed to be received or receivable, including any
amount treated as income but not actually received by the Finance Party, such
as a Tax Deduction, will not be treated as net income received or receivable
for this purpose.

 

(c)           Paragraph (a)
above does not apply to the extent that a loss or liability:

 

(i)            is compensated
for by an increased payment under Clause 14.1(c) (Tax gross-up); or

 

(ii)           would have been
compensated for by an increased payment under Clause 14.1(c) (Tax
gross-up) but was not so compensated because an exclusion set out in
Clauses 14.1(d), (f) or (j) (Tax gross-up) applied.

 

(d)           A Finance Party
making, or intending to make, a claim under Clause 14.1(a) (Tax gross-up)
above must promptly notify the Obligors’ Agent in reasonable detail of the
event which will give, or has given, rise to the claim.

 

14.3        Tax
Credit

 

If an Obligor
makes a Tax Payment and the relevant Finance Party determines that:

 

(a)           a Tax Credit is attributable
to that Tax Payment; and

 

(b)           it has used and retained
that Tax Credit,

 

the Finance Party
must pay an amount to the Obligor which that Finance Party determines will
leave it (after that payment) in the same after-tax position as it would have
been in if the Tax Payment had not been made by the Obligor.

 

14.4        Stamp
taxes

 

The Obligors’
Agent must pay and indemnify each Finance Party against any stamp duty,
registration or other similar Tax payable:

 

(a)           in the U.K. or any
jurisdiction in which any Obligor is incorporated or resident for tax purposes
in connection with the entry into or performance of any Finance Document,
except for any such Tax payable in connection with the entry into a Transfer
Certificate; or

 

(b)           in any jurisdiction in
connection with the enforcement of any Finance Document.

 

14.5        Value
added taxes

 

(a)           Any amount
(including costs and expenses) payable under a Finance Document by an Obligor
is exclusive of any value added tax (or any other Tax of a similar nature)
which might be chargeable in connection with that amount.  If any such Tax is chargeable, the Obligor
must pay to the Finance Party (in addition to and at the same time as paying
that amount) an amount equal to the amount of that Tax.

 

42

 

(b)           Where a Finance
Document requires any Party to reimburse a Finance Party for any costs or
expenses, that Party must also at the same time pay and indemnify the Finance
Party against all value added tax incurred by the Finance Party in respect of
those costs or expenses but only to the extent that Finance Party (acting
reasonably) determines that it is not entitled to credit or repayment from the
relevant tax authority in respect of the Tax.

 

14.6        Provisional
Treaty Relief Scheme

 

(a)           Each Treaty
Lender on and after the date it becomes a Party:

 

(i)            irrevocably
appoints the Facility Agent to act as syndicate manager under, and authorises
the Facility Agent to operate, and take any action necessary or desirable
under, the PTR Scheme in connection with the Facility;

 

(ii)           shall co-operate
with the Facility Agent in completing any procedural formalities necessary
under the PTR Scheme, and shall promptly supply to the Facility Agent such
information as the Facility Agent may request in connection with the operation
of the PTR Scheme;

 

(iii)          without limiting
the liability of any Obligor under this Agreement, shall, within five Business
Days of demand, indemnify the Facility Agent for any liability or loss incurred
by the Facility Agent as a result of the Facility Agent acting as syndicate
manager under the PTR Scheme in connection with the Treaty Lender’s
participation in any Loan (except to the extent that the liability or loss
arises directly from the Facility Agent’s gross negligence or wilful
misconduct); and

 

(iv)          shall, within
five Business Days of demand, indemnify each Obligor for any Tax which such
Obligor becomes liable to pay in respect of any payments made to such Treaty
Lender arising as a result of any incorrect information supplied by such Treaty
Lender under paragraph (ii) above which results in a provisional authority
issued by the HM Revenue & Customs under the PTR Scheme being withdrawn.

 

(b)           Each Obligor
acknowledges that it is fully aware of its contingent obligations under the PTR
Scheme and shall:

 

(i)            promptly supply
to the Facility Agent such information as the Facility Agent may request in
connection with the operation of the PTR Scheme; and

 

(ii)           act in accordance
with any provisional notice issued by HM Revenue & Customs under the PTR
Scheme.

 

(c)           The Facility
Agent agrees to provide, as soon as reasonably practicable, a copy of any
provisional authority issued to it under the PTR Scheme in connection with any
Loan to those Obligors specified in such provisional authority.

 

(d)           All Parties acknowledge
that the Facility Agent:

 

(i)            is entitled to
rely completely upon information provided to it in connection with paragraphs
(a) and (b) above;

 

(ii)           is not obliged to
undertake any enquiry into the accuracy of such information, nor into the
status of the Treaty Lender or, as the case may be, Obligor providing such
information; and

 

(iii)          shall have no
liability to any person for the accuracy of any information it submits in
connection with paragraph (a)(i) above.

 

43

 

15.          INCREASED COSTS

 

15.1        Increased
Costs

 

Except as
provided below in this Clause 15, the Obligors’ Agent must pay to a
Finance Party the amount of any Increased Cost incurred by that Finance Party
or any of its Affiliates as a result of:

 

(a)           the introduction of, or any
change in, or any change in the interpretation or application of, any law or
regulation; or

 

(b)           compliance with any law or
regulation,

 

made after the
date of this Agreement.

 

15.2        Exceptions

 

The Obligors’
Agent need not make any payment for an Increased Cost to the extent that the
Increased Cost is:

 

(a)           compensated for under
another Clause or would have been but for an exception to that Clause;

 

(b)           a tax on the overall net
income of a Finance Party or any of its Affiliates;

 

(c)           attributable to a Finance
Party or its Affiliate wilfully failing to comply with any law or regulation;

 

(d)           attributable to the period,
if any, starting 90 days after any officer of the relevant Finance Party
involved with the Facility became aware of that Increased Cost but before the
Obligors’ Agent is notified by the Finance Party of the Increased Cost under
this Clause 15;

 

(e)           attributable to the
negligence or wilful misconduct of a Finance Party or its Affiliate; or

 

(f)            attributable only to the
implementation or application of or compliance with the Basel II Framework (or
any other law or regulation which implements that framework) including any
change to the risk-weighting of any Loan (or the risk-weighting of any other
exposure to an Obligor under this Agreement which occurs as a result of any
change in the financial position or prospects of the Borrower) which results in
any change to any internal or external credit rating of an Obligor.

 

15.3        Claims

 

(a)           A Finance Party
intending to make a claim for an Increased Cost must notify the Obligors’ Agent
promptly of the circumstances giving rise to, and the amount of, the claim.

 

(b)           Any notification
must include in reasonable detail the reasons for, and a calculation of, the
Increased Cost.

 

16.          MITIGATION

 

16.1        Mitigation

 

(a)           Each Finance
Party must, in consultation with the Obligors’ Agent, take all reasonable steps
to mitigate any circumstances which arise and which result or would result in:

 

44

 

(i)            any Tax Payment
or Increased Cost being payable to that Finance Party;

 

(ii)           that Finance
Party being able to exercise any right of prepayment and/or cancellation under
this Agreement by reason of any illegality; or

 

(iii)          that Finance
Party incurring any Mandatory Cost,

 

including
transferring its rights and obligations under the Finance Documents to an
Affiliate or changing its Facility Office.

 

(b)           The Obligors’
Agent must indemnify each Finance Party for all costs and expenses reasonably
incurred by that Finance Party as a result of any step taken by it under
paragraph (a) above.

 

(c)           A Finance Party
is not obliged to take any step under paragraph (a) above if, in the opinion of
that Finance Party (acting reasonably), to do so might be prejudicial to it.

 

16.2        Conduct
of business by a Finance Party

 

No term of this
Agreement will:

 

(a)           interfere with the right of
any Finance Party to arrange its affairs (Tax or otherwise) in whatever manner
it thinks fit;

 

(b)           oblige any Finance Party to
investigate or claim any credit, relief, remission or repayment available to it
in respect of Tax or the extent, order and manner of any claim; or

 

(c)           oblige any Finance Party to
disclose any information relating to its affairs (Tax or otherwise) or any
computation in respect of Tax.

 

17.          PAYMENTS

 

17.1        Place
of Payments

 

Unless a Finance
Document specifies that payments under it are to be made in another manner, all
payments by a Party (other than the Facility Agent) under the Finance Documents
must be made to the relevant Agent to its account at such office or bank:

 

(a)           in the principal financial
centre of the country of the relevant currency; or

 

(b)           in the case of
Euro, in the principal financial centre of a Participating Member State or
London,

 

as it may notify
to that Party for this purpose by not less than five Business Days’ prior
notice.

 

17.2        Funds

 

Payments under
the Finance Documents to the Facility Agent must be made for value on the due
date at such times and in such funds as the Facility Agent may specify to the
Party concerned as being customary at the time for the settlement of
transactions in the relevant currency in the place for payment.

 

45

 

17.3        Distribution

 

(a)           Each payment
received by the Facility Agent under the Finance Documents for another Party
must, except as provided below, be made available by the Facility Agent to that
Party by payment (as soon as practicable after receipt) to its account with
such office or bank:

 

(i)            in the principal
financial centre of the country of the relevant currency; or

 

(ii)           in the case of
Euro, in the principal financial centre of a Participating Member State or
London,

 

as it may notify to the Facility Agent for this
purpose by not less than five Business Days’ prior notice.

 

(b)           Each Agent may
apply any amount received by it for an Obligor in or towards payment (as soon
as practicable after receipt) of any amount due from that Obligor under the
Finance Documents or in or towards the purchase of any amount of any currency
to be so applied.

 

(c)           Where a sum is
paid to the Facility Agent under this Agreement for another Party, the Facility
Agent is not obliged to pay that sum to that Party until it has established
that it has actually received it. 
However, the Facility Agent may assume that the sum has been paid to it,
and, in reliance on that assumption, make available to that Party a
corresponding amount.  If it transpires
that the sum has not been received by the Facility Agent, that Party must
immediately on demand by the Facility Agent refund any corresponding amount
made available to it together with interest on that amount from the date of
payment to the date of receipt by the Facility Agent at a rate calculated by
the Facility Agent to reflect its cost of funds.

 

17.4        Currency

 

(a)           Unless a Finance
Document specifies that payments under it are to be made in a different manner,
the currency of each amount payable under the Finance Documents is determined
under this Clause.

 

(b)           Interest is
payable in the currency in which the relevant amount in respect of which it is
payable is denominated.

 

(c)           A repayment or
prepayment of any principal amount is payable in the currency in which that
principal amount is denominated on its due date.

 

(d)           Amounts payable
in respect of Taxes, fees, costs and expenses are payable in the currency in
which they are incurred.

 

(e)           Each other amount
payable under the Finance Documents is payable in Euros.

 

17.5        No
set-off or counterclaim

 

All payments made
by an Obligor under the Finance Documents must be made without set-off or
counterclaim.

 

17.6        Business
Days

 

(a)           If a payment
under the Finance Documents is due on a day which is not a Business Day, the
due date for that payment will instead be the next Business Day in the same
calendar month (if there is one) or the preceding Business Day (if there is
not) or whatever day the Facility Agent determines is market practice.

 

46

 

(b)           During any
extension of the due date for payment of any principal under this Agreement
interest is payable on that principal at the rate payable on the original due
date.

 

17.7        Partial
payments

 

(a)           If any
Administrative Party receives a payment insufficient to discharge all the
amounts then due and payable by the Obligors under the Finance Documents, the
Administrative Party must apply that payment towards the obligations of the
Obligors under the Finance Documents in the following order:

 

(i)            first, in
or towards payment pro rata of any
unpaid fees, costs and expenses of the Administrative Parties under the Finance
Documents;

 

(ii)           secondly, in
or towards payment pro rata of any
accrued interest or fee (including fronting fees and guarantee fees) due but
unpaid under this Agreement;

 

(iii)          thirdly, in
or towards payment pro rata of any
other principal amount due but unpaid under this Agreement; and

 

(iv)          fourthly, in
or towards payment pro rata of any
other sum due but unpaid under the Finance Documents.

 

(b)           The Facility
Agent must, if so directed by all the Lenders, vary the order set out in
paragraphs (a)(ii) to (iv) above.

 

(c)           This
Clause 17.7 will override any appropriation made by an Obligor.

 

17.8        Timing
of payments

 

If a Finance
Document does not provide for when a particular payment is due, that payment
will be due within three Business Days of demand by the relevant Finance Party.

 

17.9        Good
discharge

 

Without prejudice
to any other term of this Agreement, any payment by an Obligor to the Facility
Agent in accordance with this Clause 17 for a Lender constitutes a
discharge of its obligations to that Lender in respect of that payment.  Accordingly, no Obligor is liable to the
Lender if the Facility Agent fails for any reason to make the corresponding
payment to that Lender.

 

18.          GUARANTEE AND INDEMNITY

 

18.1        Guarantee
and indemnity

 

Each Guarantor
jointly and severally irrevocably and unconditionally:

 

(a)           guarantees to each Finance
Party punctual performance by the Borrower of all its obligations under the
Finance Documents;

 

(b)           undertakes with each Finance
Party that, whenever the Borrower does not pay any amount when due under any
Finance Document, that Guarantor shall immediately on demand by the Facility
Agent pay that amount as if it were the principal obligor; and

 

(c)           indemnifies each Finance
Party immediately on demand against any loss or liability suffered by that
Finance Party if any obligation guaranteed by it is or becomes unenforceable,
invalid

 

47

 

or illegal; the amount of the loss or liability under this indemnity
will be equal to the amount the Finance Party would otherwise have been
entitled to recover.

 

18.2        Continuing
guarantee

 

This guarantee is
a continuing guarantee and will extend to the ultimate balance of all sums
payable by the Borrower under the Finance Documents, regardless of any
intermediate payment or discharge in whole or in part.

 

18.3        Reinstatement

 

(a)           If any discharge
(whether in respect of the obligations of an Obligor or any security for those
obligations or otherwise) or arrangement is made in whole or in part on the
faith of any payment, security or other disposition which is avoided or must be
restored on insolvency, liquidation or otherwise without limitation, the
liability of each Guarantor under this Clause 18 will continue as if the
discharge or arrangement had not occurred.

 

(b)           Each Finance
Party may concede or compromise any claim that any payment, security or other
disposition is liable to avoidance or restoration.

 

18.4        Waiver
of defences

 

The obligations
of each Guarantor under this Clause 18 will not be affected by any act,
omission or thing which, but for this provision, would reduce, release or
prejudice any of its obligations under this Clause 18 (whether or not
known to it or any Finance Party).  This
includes:

 

(a)           any time or waiver granted
to, or composition with, any person;

 

(b)           any release of any person
under the terms of any composition or arrangement;

 

(c)           the taking, variation,
compromise, exchange, renewal or release of, or refusal or neglect to perfect,
take up or enforce, any rights against, or security over assets of, any person;

 

(d)           any non-presentation or
non-observance of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any security;

 

(e)           any incapacity or lack of
power, authority or legal personality of or dissolution or change in the
members or status of any person;

 

(f)            any amendment (however
fundamental) of a Finance Document or any other document or security; or

 

(g)           any unenforceability,
illegality, invalidity or non-provability of any obligation of any person under
any Finance Document or any other document or security.

 

18.5        Immediate
recourse

 

Each Guarantor
waives any right it may have of first requiring any Finance Party (or any
trustee or agent on its behalf) to proceed against or enforce any other right
or security or claim payment from any person before claiming from it under this
Clause 18.

 

48

 

18.6        Appropriations

 

Until all amounts
which may be or become payable by the Obligors under the Finance Documents have
been irrevocably paid in full, each Finance Party (or any trustee or agent on
its behalf) may:

 

(a)           without affecting the
liability of any Guarantor under this Clause 18:

 

(i)            refrain from applying or
enforcing any other moneys, security or rights held or received by that Finance
Party (or any trustee or agent on its behalf) in respect of those amounts; or

 

(ii)           apply and enforce them in
such manner and order as it sees fit (whether against those amounts or
otherwise); and

 

(b)           hold in an interest-bearing
suspense account any moneys received from any Guarantor or on account of that
Guarantor’s liability under this Clause 18.

 

18.7        Non-competition

 

Unless:

 

(a)           all amounts which may be or
become payable by the Obligors under the Finance Documents have been
irrevocably paid in full; or

 

(b)           the Facility Agent otherwise
directs,

 

no Guarantor
will, after a claim has been made or by virtue of any payment or performance by
it under this Clause 18:

 

(i)            be subrogated to
any rights, security or moneys held, received or receivable by any Finance
Party (or any trustee or agent on its behalf);

 

(ii)           be entitled to
any right of contribution or indemnity in respect of any payment made or moneys
received on account of its liability under this Clause 18;

 

(iii)          claim, rank,
prove or vote as a creditor of the Borrower or its estate in competition with
any Finance Party (or any trustee or agent on its behalf); or

 

(iv)          receive, claim or
have the benefit of any payment, distribution or security from or on account of
the Borrower, or exercise any right of set-off as against the Borrower.

 

Each Guarantor
must hold in trust for and immediately pay or transfer to the Facility Agent
for the Finance Parties any payment or distribution or benefit of security
received by it contrary to this Clause 18 or in accordance with any
directions given by the Facility Agent under this Clause 18.

 

18.8        Additional
security

 

This guarantee is
in addition to and is not in any way prejudiced by any other security now or
subsequently held by any Finance Party.

 

49

 

18.9        Limitation

 

This guarantee
does not apply to any liability to the extent it would result in this guarantee
constituting unlawful financial assistance within the meaning of Section 151 of
the Companies Act 1985.

 

19.          REPRESENTATIONS

 

19.1        Representations

 

The Borrower
makes the representations and warranties set out in this Clause 19 to each
Finance Party on the date of this Agreement.

 

19.2        Status

 

Each Obligor is a
limited liability company, duly incorporated and validly existing under the
laws of England and Wales.

 

19.3        Powers
and authority

 

Each Obligor has
the power to enter into and perform, and has taken all necessary action to
authorise the entry into, performance and delivery of, the Finance Documents to
which it is or will be a party and the transactions contemplated by those
Finance Documents.

 

19.4        Legal
validity

 

Subject to the
Reservations, each Finance Document to which an Obligor is or will be a party
constitutes, or when executed in accordance with its terms will constitute its
legal, valid, binding and enforceable obligation in accordance with its terms.

 

19.5        Non-conflict

 

The entry into
and performance by each Obligor of, and the transactions contemplated by, the
Finance Documents does not and will not conflict with:

 

(a)           any law or regulation or
judicial order applicable to it; or

 

(b)           its memorandum or articles
of association; or

 

(c)           any document which is
binding upon any member of the Group or any of their assets.

 

19.6        No
default

 

(a)           No Default has
occurred and remains unremedied or unwaived.

 

(b)           No other event or
circumstance is outstanding which constitutes a default under any other
agreement or instrument which is binding on a member of the Group or to which
their assets are subject which has or could reasonably be expected to have a
Material Adverse Effect.

 

19.7        Authorisations

 

All
authorisations required by the Obligors in connection with the entry into,
performance, validity, enforceability and admissibility into evidence of, and
the transactions contemplated by, the Finance Documents have been obtained or
effected and are in full force and effect.

 

50

 

19.8        Information

 

To the best of
the knowledge, information and belief of the Borrower, all factual written
information provided by or on behalf of the Borrower to the Mandated Lead
Arrangers in connection with the Facilities was, at the time the same was
provided or if a date of preparation of that information is stated on the
information, the date so stated, true and accurate in all material respects.

 

19.9        Accounts

 

The Original
Financial Statements:

 

(a)           were prepared in accordance
with approved accounting standards in the U.K.; and

 

(b)           in conjunction with the
notes, gave a true and fair view of the financial condition of the Group as at
the date to which they were drawn up and the results of the Group’s operations
during the relevant financial period,

 

and as at the
date of this Agreement, there has been no material adverse change in the
consolidated financial condition of the Group since the date to which those
accounts were drawn up.

 

19.10      Litigation

 

Save as disclosed
in the Litigation Report, no litigation, arbitration or administrative
proceedings against any member of the Group are either current or, to the best
of its knowledge and belief, threatened or pending which, if adversely
determined, could reasonably be expected to have, a Material Adverse Effect.

 

19.11      Security
Interest

 

The execution of
this Agreement, and the exercise by the Obligors of their rights or performance
of their obligations under this Agreement, will not result in the existence of,
or oblige any member of the Group to create, any Security Interest over all or
any part of its present or future assets which would not be permitted to be
created pursuant to Clause 20.10 (Negative pledge).

 

19.12      Pari
passu ranking

 

Under the laws of
England and Wales in force at the date of this Agreement, the claims of the
Finance Parties against the Obligors under the Finance Documents will rank pari passu with the claims of all other unsecured and
unsubordinated creditors of that Obligor, except for obligations which are
mandatorily preferred by law applying to companies generally.

 

19.13      Environmental
Compliance

 

Each member of
the Group has complied in all respects with all Environmental Law save to the
extent that non-compliance could reasonably be expected not to have a Material
Adverse Effect.

 

51

 

19.14      Competition
Analysis

 

To the best of the knowledge of the Borrower, as at
the date of this Agreement all information contained in the Competition
Analysis is true and accurate in all material respects.

 

19.15      Times
for making Representations

 

(a)           The
representations set out in this Clause 19 (Representations) are made by the
Borrower on the date of this Agreement.

 

(b)           With the
exception of those matters set out in Clauses 19.6 (No default) to 19.14
(Competition Analysis) inclusive, each representation set out in this Clause 19
(Representations) is deemed to be repeated by the Borrower on the date of each
Request, the first day of each Term and on the date falling six months after
the issue of the first Aval under this Agreement unless the First Cash
Utilisation Date has occurred prior to that date, in each case with reference
to the facts and circumstances then existing.

 

20.          UNDERTAKINGS

 

20.1        Duration

 

The undertakings
in this Clause 20 (Undertakings) remain in force from the date of this
Agreement for so long as any amount is or may be outstanding under this
Agreement.

 

20.2        Financial
Information

 

(a)           The Borrower
must:

 

(i)            as soon as the
same become available, but in any event within 180 days after the end of each
of its financial years, deliver to the Facility Agent the audited consolidated
accounts of the Group for that financial year;

 

(ii)           as soon as the same
become available, but in any event within 90 days after the end of the first
half of each of its financial years, deliver to the Facility Agent the half
yearly financial statements of the Group for that period required to be sent to
the holders of the Borrower’s listed shares pursuant to the Stock Exchange
Publication “Admission of Securities to Listing”, or any equivalent statement
or report required to be so delivered by any replacement or successor
publication dealing with the information obligations of listed companies;

 

(iii)          as soon as the
same become available but in any event within either 30 days of the same being
filed at Companies House or within the relevant statutory period for
preparation whichever is the earlier, deliver to the Facility Agent the audited
accounts of the Borrower for each financial year; and

 

(iv)          the Borrower
shall ensure that each set of accounts referred to in paragraphs (i), (ii) and
(iii) above (except as may be stated in the notes to the accounts):

 

(A)          are prepared in accordance
with approved accounting standards in the U.K. or such other accounting
standards as agreed in accordance with paragraph (b)(i) below;

 

(B)           in the case of
the accounts referred to in paragraphs (i) and (iii) above, give a true and
fair view of the financial condition of the Group or, as the case may be, the
Borrower as at the date to which they were drawn up and the results of the
Group’s

 

52

 

or, as
the case may be, the Borrower’s operations during the relevant financial year;
and

 

(C)           in the case of
the accounts referred to in paragraph (ii) above, fairly represents the
financial condition of the Group during the period to which it relates.

 

(b)           The Borrower
must:

 

(i)            notify the
Facility Agent of any change to the basis on which its audited consolidated
financial statements are prepared and any change to its financial year end;

 

(ii)           if requested by
the Facility Agent, supply to the Facility Agent:

 

(A)          a full
description of any change notified under paragraph (i) above; and

 

(B)           sufficient
information to enable the Finance Parties to make a proper comparison between
the financial position shown by the set of financial statements prepared on the
changed basis and its most recent audited consolidated financial statements
delivered to the Facility Agent under this Agreement;

 

(iii)          if requested by
the Facility Agent (and, if requested by the Borrower, the Facility Agent must)
enter into discussions for a period of not more than 30 days with a view to agreeing
any amendments required to be made to this Agreement to place the Obligor and
the Lenders in the same position as they would have been in if the change had
not happened.  Any agreement between the
Obligor and the Facility Agent will be, with the prior consent of the Majority
Lenders, binding on all the Parties; and

 

(iv)          if no agreement
is reached under paragraph (iii) above on the required amendments to this
Agreement, ensure that its auditors or another firm of accountants certify
those amendments and the certificate of the auditors or another firm of
accountants will be, in the absence of manifest error, binding on all the
Parties. In preparing the report the auditors or another firm of accountants
will act as independent experts and not as auditors.

 

20.3        Information
- Miscellaneous

 

The Borrower
shall:

 

(a)           supply to the Facility Agent
all documents despatched by it to its shareholders generally (or any class of
them) or its creditors generally (or any class of them) within two Business
Days of the same being despatched;

 

(b)           supply to the Facility Agent
promptly on demand by the Facility Agent, such further information in the
possession or control of any member of the Group regarding its financial
condition and operations, as it may reasonably request except to the extent the
Borrower is prevented from doing so by any law or regulation or confidentiality
undertaking binding on it; 

 

(c)           promptly upon becoming aware
of them, supply to the Facility Agent the details of any litigation,
arbitration, competition or administrative proceedings which are commenced
against any member of the Group and which are or are reasonably likely to be
determined adversely to it and which, if so adversely determined, would have a
Material Adverse Effect; 

 

(d)           promptly
upon becoming aware of them, supply to the Facility Agent the details of any
fine levied on any member of the Group by a competition authority in relation
to the acquisition of Tiger Shares which is reasonably likely to have a
Material Adverse Effect;

 

53

 

(e)           promptly upon becoming aware of the same, notify the
Facility Agent of the publication or withdrawal of any revised long term credit
rating assigned to the Borrower by either Moody’s or S&P (or any substitute
statistical rating agency that the Facility Agent and the Obligors’ Agent have
agreed to refer to for the purposes of this Agreement); and

 

(f)            promptly
upon it becoming aware of the same, notify the Facility Agent of any
information received by it which would render the information contained in the
Competition Analysis inaccurate in any material respect.

 

20.4        Notification
of Default

 

The Borrower
shall notify the Facility Agent of any Default (and the steps, if any, being
taken to remedy it) promptly upon it becoming aware of such occurrence.

 

20.5        Know
your customer requirements

 

(a)           Subject to
paragraph (b) below, each Obligor must as soon as reasonably practicable on the
request of any Finance Party supply to that Finance Party any documentation or
other evidence which is reasonably requested by that Finance Party (whether for
itself, on behalf of any Finance Party or any prospective new Lender) to enable
a Finance Party or prospective new Lender (including a Replacement Lender) to
carry out and be satisfied with the results of all applicable know your
customer requirements.

 

(b)           An Obligor is
only required to supply any information under paragraph (a) above, if the
necessary information is not already available to the relevant Finance Party
and the requirement arises as a result of:

 

(i)            the introduction
of or any change in (or in the interpretation, administration or application
of) any law or regulation made after the date of this Agreement;

 

(ii)           any change in the
status of an Obligor after the date of this Agreement; or

 

(iii)          a proposed
assignment or transfer by a Lender of any of its rights and/or obligations
under this Agreement to a person that is not a Lender before that assignment or
transfer.

 

(c)           Each Lender must
promptly on the request of the Facility Agent supply to the Facility Agent any
documentation or other evidence which is reasonably required by the Facility
Agent to carry out and be satisfied with the results of all applicable know
your customer requirements.

 

20.6        Compliance
Certificates

 

The Borrower
shall promptly supply to the Facility Agent (in sufficient copies for all the
Lenders, if the Facility Agent so requests):

 

(a)           with each set of financial
statements of the Group delivered to it under Clauses 20.2(a)(i) and (ii)
(Financial Information) above for a Measurement Period of the Group ending on
or after 31 March 2007, a Compliance Certificate signed by one of its directors
or senior officers and with each set of financial statements of the Group
delivered to it under Clause 20.2(a)(i) (Financial Information) only a
list of the Principal Subsidiaries as at the date of those accounts; and

 

(b)           if the Facility Agent so
requests, a certificate signed by one of its directors or senior officers on
its behalf certifying that no Default is outstanding or, if a Default is
outstanding, specifying the Default and the steps (if any) being taken to
remedy it.

 

54

 

20.7        Authorisations

 

Each Obligor
shall promptly:

 

(a)           obtain, maintain and comply
with the terms of; and

 

(b)           (if the Facility Agent so
requests) supply certified copies to the Facility Agent of,

 

any authorisation
required under any law or regulation to enable it to perform its obligations
under the Finance Documents, and to ensure the validity, enforceability and the
admissibility in evidence in England and Wales of each Finance Document.

 

20.8        Compliance
with laws

 

The Borrower
shall, and shall procure that each member of the Group shall, comply in all
respects with all laws (including, without limitation, Environmental Law) to
which it is subject, if failure so to comply has or could reasonably be
expected to have a Material Adverse Effect.

 

20.9        Pari
passu  ranking

 

Each Obligor
shall procure that its payment obligations under the Finance Documents do and
will rank at least pari passu with
all its other present and future unsecured and unsubordinated liabilities,
except for liabilities which are mandatorily preferred by law applying to
companies generally.

 

20.10      Negative
pledge

 

(a)           The Borrower
shall not, and shall procure that no other member of the Group will, create or
permit to subsist any Security Interest on any of its present or future assets.

 

(b)           Paragraph (a)
above does not apply to the following Security Interests:

 

(i)            any lien arising
solely by operation of law;

 

(ii)           any Security
Interest existing on or over the assets of any company at the time it becomes a
member of the Group after the date of this Agreement, but only if:

 

(A)          the Security
Interest (and the indebtedness secured thereby) was not created in
contemplation of the company becoming a member of the Group; and

 

(B)           the maximum
principal amount of the indebtedness secured by the Security Interest is not
subsequently increased;

 

(iii)          any Security
Interest existing on or over an asset acquired by a member of the Group after
the date of this Agreement, but only if:

 

(A)          the Security
Interest (and the indebtedness secured thereby) was not created in
contemplation of the acquisition; and

 

(B)           the maximum
principal amount of the indebtedness secured by the Security Interest is not
subsequently increased;

 

(iv)          any Security
Interest over any fixed asset acquired by a member of the Group after the date
of this Agreement as security for, or for indebtedness incurred to finance or
refinance

 

55

 

(within
six months of the acquisition), all or part of the consideration for the
acquisition of that fixed asset;

 

(v)           any Security
Interest arising over accounts with banks and financial institutions as a
result of netting and set-off arrangements existing and/or arising from time to
time with those banks and financial institutions which have extended or extend
cash management facilities to any member of the Group;

 

(vi)          any Security
Interest over goods purchased by a member of the Group in the ordinary course
of its trade arising in favour of the relevant supplier by virtue of the
supplier’s retention of title clause and which secures only the purchase price
of the goods;

 

(vii)         any security
granted by a member of the Group (other than an Obligor) in favour of another
member of the Group;

 

(viii)        any Security
Interest over cash or credit balances on any account arising 

 

from the customary general business conditions of
any credit institution with whom any member of the Group maintains a banking
relationship in the ordinary course of its business; 

 

(ix)           any Security
Interest arising as a result of a Permitted Securitisation; 

 

(x)            any Security
Interest entered into pursuant to Clause 1.3 (Avales); and

 

(xi)           any Security
Interest (other than any Security Interests permitted by paragraphs (i) to (x)
above) securing indebtedness not exceeding in aggregate €250,000,000 (or
equivalent).

 

(c)           If any Obligor
creates or permits to subsist any Security Interest on any of its assets
contrary to paragraph (a) above but subject to paragraph (b) above all the
obligations of the Obligors under this Agreement shall automatically and
immediately be secured upon the same assets, ranking at least pari passu with the other obligations secured on those
assets.

 

20.11      Restrictions
on Guarantees

 

The Borrower
shall procure that no other member of the Group (other than the Borrower) will
guarantee (which for the purposes of this Clause 20.11 includes an indemnity
or other form of assurance against financial loss) any indebtedness of the
Borrower unless the obligations of the Borrower under this Agreement are
similarly guaranteed except:

 

(a)           where such guarantee is
given by a member of the Group in connection with netting and set-off
arrangements under cash management facilities existing and/or arising from time
to time in the ordinary course of its banking arrangements and extended to
members of the Group by a bank or financial institution; or

 

(b)           under or in connection with
a Permitted Securitisation.

 

20.12      Disposals

 

The Borrower
shall not, and shall procure that no other member of the Group shall, either in
a single transaction or in a series of transactions, whether related or not,
and whether voluntarily or involuntarily, sell, transfer, grant or lease, or
otherwise dispose of all or substantially all of the assets of the Group save
as a result of a Permitted Reorganisation.

 

56

 

20.13      Merger

 

No Obligor shall
enter into any amalgamation, demerger, merger or corporate reconstruction
without the prior approval of the Majority Lenders save as a result of a
Permitted Reorganisation.

 

20.14      Change
of Business

 

The Borrower shall procure that no substantial change is made to the
general nature of the business of the Group from that carried on at the date of
this Agreement.

 

20.15      Financial
Indebtedness

 

(a)           The Borrower
shall procure that the aggregate principal amount of outstanding Financial
Indebtedness of the Group does not exceed €750,000,000 (or equivalent).

 

(b)           Paragraph (a)
above does not apply to any Financial Indebtedness:

 

(i)            of the Obligors;

 

(ii)           incurred by the
Issuer or any member of the Group (any such member of the Group being an Issuing Company) under any issue of
securities (other than any issue under a Tiger Bond Document) in the debt
capital markets the Net Proceeds of which are lent directly or indirectly by
the Issuer or Issuing Company to an Obligor; 

 

(iii)          incurred by a
member of the Group arising in connection with a guarantee, bonding or other
similar document or instrument issued to any relevant agency or authority for
the purpose of providing a guarantee or assurance for the payment of Tax or
payment under the MSA which is or may become due from any member of the Group
in the ordinary course of its business;

 

(iv)          constituting
debit balances on accounts maintained with banks or financial institutions up
to the amount of any credit balance of any member of the Group on any account
where there is a legal arrangement permitting those balances to be offset;

 

(v)           incurred under
any Permitted Securitisation; 

 

(vi)          incurred under
any Dirham Facility Document; or

 

(vii)         incurred under
any Tiger Bond Document.

 

20.16      The
Issuer

 

The Borrower shall
procure that the Issuer or an Issuing Company will not:

 

(a)           carry on any trade or
business;

 

(b)           own any material assets; or

 

(c)           incur any material
liabilities,

 

other than:

 

(i)            the incurrence of
any liabilities under or in connection with any indebtedness permitted under
Clause 20.15 (Financial Indebtedness);

 

57

 

(ii)           any receivable
owed to the Issuer or Issuing Company by Imperial Tobacco Finance PLC, Imperial
Tobacco Enterprise Finance Limited or an Obligor (either directly or
indirectly) resulting from a loan referred to in Clause 20.15(b)(ii)
(Financial Indebtedness) and any liability for Tax incurred by the Issuer or an
Issuing Company in respect of interest on any such loan; and

 

(iii)          any amount held
in cash by the Issuer or an Issuing Company pending application in servicing
the indebtedness referred to in paragraph (i) above.

 

21.          OFFER COVENANTS

 

21.1        Compliance
in connection with the Offer and Delisting Offer

 

(a)           The Borrower must
comply in all material respects with:

 

(i)            all laws and
regulations relevant in the context of the Offer and Delisting Offer including
the Law 24/1998 of July 28 on the Securities Market (as amended) as developed
by Spanish Royal Decree 1197/1991 (dated 26 July 1991) on Public Tender Offers
(as amended), as replaced or substituted by any other applicable regulations on
public tender offers; and 

 

(ii)           the Offer
Document and any Delisting Offer Document where failure to do so would have a
material adverse effect on the business, assets or financial condition of the
Group and the Tiger Group (taken as a whole).

 

(b)           Notwithstanding
paragraph (a)(i) above and Clause 21.3(a)(i)(i) (Amendments and waivers), the
Borrower may close the Offer without receiving competition clearances in the
jurisdictions referred to in the Competition Analysis provided that in the case
of those jurisdictions (other than Armenia and Azerbaijan) the Borrower will
use reasonable endeavours to obtain the competition clearances including
(without limitation) by ensuring that all the relevant filings have been made
and applications lodged in such jurisdictions prior to the Closing Date.

 

21.2        Offer
information

 

The Borrower must
promptly supply to the Facility Agent:

 

(a)           copies of the Offer Document
and Delisting Offer Document;

 

(b)           notification of any
amendment to any Offer Document and Delisting Offer Document;

 

(c)           notification of any waiver
of any condition of or any referral in relation to the Offer and Delisting
Offer ; and

 

(d)           any other information
regarding the progress of the Offer and Delisting Offer as the Facility Agent
may reasonably request,

 

in each case
except to the extent the Borrower is prevented from doing so by any law or
regulation or confidentiality undertaking binding on it.

 

21.3        Amendments
and waivers

 

(a)           Save as permitted under
Clause 21.4 (Level of acceptances), the Borrower must not, without the prior
written consent of the Majority Lenders, waive or amend:

 

58

 

(i)              any condition of
the Offer and Delisting Offer in any respect which would have a material
adverse effect on the business, assets or financial condition of the Group and
Tiger Group (taken as a whole); 

 

(ii)             the condition of
the Offer that a general meeting of the shareholders of Tiger is held resolving
to amend Article 24 of the bye-laws of Tiger before the date on which the Offer
acceptance period ends in order to remove the limitation to the votes that each
shareholder of Tiger may cast at a general shareholders meeting of Tiger; and

 

(iii)            any condition of
the Offer that a general meeting of the shareholders of Imperial is held
resolving to increase Imperial’s share capital by an amount sufficient for the
Rights Issue, approving the allotment of shares and approving the Acquisition
as a Class 1 transaction.

 

(b)           Paragraph (a) will not prohibit the addition of any
new condition to the Offer or the Delisting Offer.

 

21.4        Level
of acceptances

 

The Borrower must
procure that the minimum acceptance level in respect of the Offer is not waived
unless notwithstanding such waiver the Borrower will acquire beneficially more
than fifty per cent. (50%) of the issued share capital of Tiger pursuant to the
Offer.

 

21.5        Return
of Avales

 

(a)           The day after the
Offer or Delisting Offer (as appropriate) is settled or lapses for any reason
the Borrower shall issue a request or shall procure the subsidiary making the
Offer or Delisting Offer (as appropriate) issues a request to the CNMV that
each Aval is released to the relevant Issuing Entity.

 

(b)           If the Borrower
receives an Aval from the CNMV it will deliver the relevant Aval to the
Facility Agent or relevant Issuing Entity as soon as possible.

 

21.6        Equity
Documents

 

The Borrower
will:

 

(a)           not amend or waive any term
of any Underwriting Agreement or permit any reduction in the amount of any
underwriting under any Underwriting Agreement or substitute any Underwriting
Agreement in each case in a manner or to an extent which would materially and
adversely prejudice the interests of the Finance Parties under the Finance
Documents; and

 

(b)           use reasonable endeavours to
procure the fulfilment of the conditions set out in Clause 2.1 of the Back-Stop
Underwriting Agreement.

 

21.7        Underwriting
Agreement

 

(a)           The Borrower will
exercise the rights available to it under any Underwriting Agreement to the
extent necessary to ensure that the Facility will be repaid and prepaid in full
on or prior to the Final Maturity Date.

 

(b)           The Borrower may
not terminate or reduce the equity underwriting of a Rights Issue Underwriter
under any Underwriting Agreement unless any Lender related to or an Affiliate
of that Rights Issue Underwriter (such Lender being a Related
Lender) otherwise agrees or is replaced in accordance

 

59

 

with Clause 30.9 (Replacement of a Lender) or an
equivalent amount of their Commitment, Loans and/or Avales are repaid without
breaching the terms of this Agreement.

 

21.8        Posting of Circular

 

Imperial will or will procure that the Circular is posted within seven
days of the date of this Agreement.

 

22.          FINANCIAL COVENANTS

 

22.1        Interpretation

 

Except as
provided to the contrary in this Agreement, an accounting term used in this
Clause is to be construed in accordance with the principles applied in
connection with the Original Financial Statements.

 

22.2        Gearing

 

The Borrower
shall ensure that the ratio of Consolidated Total Net Borrowings to
Consolidated EBITDA at the end of each Measurement Period ending on or after 1
March 2007 does not exceed 4.50:1.

 

22.3        Interest
cover

 

The Borrower
shall ensure that the ratio of Consolidated EBITDA to Consolidated Net Interest
Payable for each Measurement Period ending on or after 1 March 2007 is not less
than 4.00:1.

 

22.4        Testing
of Financial Covenants

 

The financial
covenants set out in this Clause 22 (Financial Covenants) shall not be tested
until the end of the Measurement Period beginning on or after the Closing Date.

 

23.          DEFAULT

 

23.1        Events
of Default

 

Each of the
events and circumstances set out in this Clause 23 is an Event of Default.

 

23.2        Non-payment

 

An Obligor does
not pay on the due date any amount payable by it under the Finance Documents at
the time, in the currency and in the manner specified in the Finance Documents
and (if caused by technical or administrative error) the failure to pay is not
remedied within five Business Days of the due date.

 

23.3        Breach
of Financial Covenant

 

(a)           The Borrower is
in breach of its obligations under Clause 22.3 (Interest cover).

 

(b)           The Borrower is in
breach of its obligations under Clause 22.2 (Gearing), unless it would not
otherwise be in breach of its obligations under that clause if for the purposes
of calculating the ratio of Consolidated Total Net Borrowings to Consolidated
EBITDA, Consolidated Total Net Borrowings had been calculated using the
currency translation criteria applied to continuing businesses in the latest
profit and loss account of the Group delivered under Clause 20.2
(Financial

 

60

 

Information) in respect of the relevant Measurement
Period which means applying the average of the foreign exchange rates specified
as the daily rate of foreign exchange transactions between each relevant
currency (other than Sterling) and Sterling on the Reuters screen WMR spot 16
for each Business Day of that Measurement Period of the Group, except that:

 

(i)            if the Reuters
screen WMR spot 16 is not available on any day, the next day on which the
Reuters screen WMR spot 16 is available will be used in applying the average of
the foreign exchange rates; and

 

(ii)           if the Reuters
screen WMR spot 16 is replaced or the service ceases to be available (for more
than 10 consecutive Business Days), the Facility Agent (after consultation with
the Obligors’ Agent and the Lenders) may specify another page or service
displaying the appropriate rate.

 

The Borrower
shall supply to the Facility Agent details of the currency translation criteria
applied for the purpose of this Clause 23.3 together with each Compliance Certificate
under Clause 20.6 (Compliance Certificates).

 

23.4        Other
breaches

 

An Obligor fails
duly to perform or comply with any obligation expressed to be assumed by it in
the Finance Documents (other than any referred to in Clause 23.2
(Non-payment) or Clause 23.3 (Breach of Financial Covenant)) and the
default (if capable of remedy) is not remedied within thirty days after the
Facility Agent has given notice of the default to the relevant Obligor.

 

23.5        Misrepresentation

 

Any
representation or statement made by the Borrower in this Agreement, any request
or any information provided pursuant to Clause 20.3 (Information -
Miscellaneous) is or proves to have been incorrect or misleading when made or
(if applicable) repeated and, where the circumstances making such
representation or statements incorrect or misleading are capable of being
altered so that such representation or statement is correct or not misleading,
such circumstances are not so altered within 30 days of the Facility Agent
notifying the Borrower of such representations or statement being incorrect or
misleading.

 

23.6        Cross-default

 

(a)           Any Financial
Indebtedness of a member of the Group is not paid when due or within any
originally applicable grace period.

 

(b)           Any Financial
Indebtedness of a member of the Group is declared to be or otherwise becomes
due and payable prior to its specified maturity by reason of a default or an
event of default (howsoever described).

 

(c)           Any creditor of a
member of the Group becomes entitled to declare any Financial Indebtedness of
all or any of the members of the Group due and payable prior to its specified
maturity as a result of a default or an event of default (howsoever described).

 

(d)           No Event of
Default will occur under paragraphs (a), (b) or (c) above if:

 

(i)            the aggregate
amount of the Financial Indebtedness concerned is Euro 50,000,000 (or
equivalent) or less; or

 

61

(ii)            (A)         the default or
event of default concerned arises immediately or promptly upon and directly or
indirectly as a result of an acquisition of the business or shares of another
company made by a member of the Group;

 

(B)           the Group has
financial resources available to it that are sufficient to refinance the
aggregate amount of such Financial Indebtedness without breaching the terms of
this Agreement; and

 

(C)           if applicable,
such Financial Indebtedness is repaid within ten Business Days after becoming
due or being declared due and payable prior to its specified maturity (subject
to any originally applicable grace period).

 

23.7        Insolvency

 

A Material
Company:

 

(a)           is unable to pay its debts
as they fall due; or

 

(b)           commences negotiations with
any one or more of its creditors with a view to the general readjustment or
rescheduling of its indebtedness; or

 

(c)           makes a general assignment
for the benefit of, or a composition with, its creditors.

 

23.8        Winding
up

 

A Material
Company takes any corporate action or other steps are taken or legal
proceedings are started for its winding-up, dissolution or reconstruction or
for the appointment of a receiver, administrative receiver, administrator or
similar officer of it or of all or any part (having an aggregate value of at
least Euro 50,000,000 (or equivalent)) of its assets or under Title 11 of the
United States of America Code entitled Bankruptcy (or any successor thereto or
amendment thereof), except if, in any such case:

 

(a)           the Majority Lenders give
their consent; or

 

(b)           in the case of a Material
Company other than the Borrower as a result of a Permitted Reorganisation; or

 

(c)           it comprises action taken by
a creditor in the course of legal proceedings which can be demonstrated to be
an abuse of the process of the court or otherwise be frivolous or vexatious and
which are being contested in good faith by the relevant Material Company with a
reasonable prospect of success.

 

23.9        Creditors’
process

 

Any attachment,
sequestration, distress or execution affects all or any part (such part having
an aggregate value of at least Euro 50,000,000 (or equivalent)) of the assets
of a Material Company and is not discharged within 30 days.

 

23.10      Guarantee

 

Any guarantee
given pursuant to Clause 18 (Guarantee and indemnity) is not effective, or
is alleged by the relevant Guarantor to be ineffective, for any reason.

 

62

 

23.11      Ownership
of the Obligors

 

Each Obligor
(other than the Borrower) is not or ceases to be a direct or indirect wholly
owned Subsidiary of the Borrower.

 

23.12      Unlawfulness

 

It is or becomes
unlawful for an Obligor to perform any of its obligations under the Finance
Documents which obligations could reasonably be considered to be material to
the interests of the Finance Parties under the Finance Documents.

 

23.13      Repudiation

 

An Obligor
repudiates a Finance Document or evidences an intention to repudiate a Finance
Document.

 

23.14      Cessation
of Business

 

A Material
Company ceases or threatens to cease all or the substantial part of its
business except that a Material Company will not be treated as having ceased to
carry on all or the substantial part of its business by reason of any disposal
on arm’s length terms which is otherwise permitted under the terms of this
Agreement or as a result of a Permitted Reorganisation.

 

23.15      Litigation

 

(a)           Any litigation,
arbitration or administrative proceedings or governmental or regulatory
investigations, proceedings or disputes are commenced against a Material
Company which are or are reasonably likely to be determined adversely to it and
which, if so adversely determined, would have a Material Adverse Effect unless
such litigation, arbitration, proceeding, investigation or dispute is being
contested by such Material Company in good faith and a legal opinion is
delivered to the Facility Agent in form and substance acceptable to the Lenders
confirming that such Material Company has a reasonable prospect of success in
relation to that litigation.

 

(b)           Any litigation,
arbitration or administration proceedings or governmental or regulatory
investigations, proceedings or disputes are finally determined and such
determination has a Material Adverse Effect.

 

(c)           Any
action is taken by a competition authority against any member of the Group or
any fine is levied on any member of the Group by a competition authority in
each case in relation to the acquisition of Tiger Shares which is finally
determined and such determination has a Material Adverse Effect.

 

23.16      Acceleration

 

On and at any
time after the occurrence of an Event of Default which is then continuing, the
Facility Agent may, and shall if instructed to do so by the Majority Lenders,
by notice to the Obligors’ Agent:

 

(a)           cancel the Facility; and/or

 

(b)           declare that all the Loans,
together with accrued interest and all other amounts accrued under this
Agreement, be immediately due and payable, whereupon they shall become
immediately due and payable; and/or

 

(c)           demand that all Loans be
payable on demand, whereupon they shall immediately become payable on demand by
the Facility Agent on the instructions of the Majority Lenders; and/or

 

63

 

(d)           declare that full cash cover
in respect of each Aval is immediately due and payable.

 

23.17      Clean-up
Period

 

Notwithstanding any other term of this Agreement

 

any event or circumstance which is in existence on
the Closing Date or one month thereafter and which would constitute a Default
or Event of Default will be deemed not to constitute a Default or Event of
Default during the Clean-Up Period to the extent that:

 

(a)           such Default or Event of
Default results from a default under or in respect of the existing Financial
Indebtedness of Tiger or Tiger Group caused by a change of control occurring as
a result of the Offer; or

 

(b)           such event or circumstance:

 

(i)            relates solely to Tiger and
its Subsidiaries; and

 

(ii)           has not been procured,
solicited or approved by any member of the Group (which for these purposes
shall not include the Tiger Group).

 

24.          THE ADMINISTRATIVE PARTIES

 

24.1        Appointment
and duties of the Facility Agent

 

(a)           Each Finance
Party (other than the Facility Agent) irrevocably appoints the Facility Agent
to act as its agent under the Finance Documents.

 

(b)           Each Finance
Party irrevocably authorises the Facility Agent to:

 

(i)            perform the
duties and to exercise the rights, powers and discretions that are specifically
given to it under the Finance Documents, together with any other incidental
rights, powers and discretions; and

 

(ii)           execute each
Finance Document expressed to be executed by the Facility Agent.

 

(c)           The Facility
Agent has only those duties which are expressly specified in the Finance
Documents. Those duties are solely of a mechanical and administrative nature.

 

24.2        Role
of the Mandated Lead Arrangers

 

Except as
specifically provided in the Finance Documents, no Mandated Lead Arranger has
any obligations of any kind to any other Party in connection with any Finance
Document.

 

24.3        No
fiduciary duties

 

Except as specifically
provided in a Finance Document, nothing in the Finance Documents makes an
Administrative Party a trustee or fiduciary for any other Party or any other
person. No Administrative Party need hold in trust any moneys paid to it for a
Party or be liable to account for interest on those moneys.

 

64

 

24.4        Individual
position of an Administrative Party

 

(a)           If it is also a
Lender, each Administrative Party has the same rights and powers under the
Finance Documents as any other Lender and may exercise those rights and powers
as though it were not an Administrative Party.

 

(b)           Each
Administrative Party may:

 

(i)            carry on any
business with any member of the Group (including acting as an agent or a
trustee for any other financing); and

 

(ii)           retain any
profits or remuneration it receives under the Finance Documents or in relation
to any other business it carries on with any member of the Group.

 

24.5        Reliance

 

The Facility
Agent may:

 

(a)           rely on any notice or document
believed by it to be genuine and correct and to have been signed by, or with
the authority of, the proper person;

 

(b)           rely on any statement made
by any person regarding any matters which may reasonably be assumed to be
within his knowledge or within his power to verify;

 

(c)           engage, pay for and rely on
professional advisers selected by it (including those representing a Party
other than the Facility Agent); and

 

(d)           act under the Finance
Documents through its personnel and agents.

 

24.6        Majority
Lenders’ instructions

 

(a)           The Facility
Agent is fully protected if it acts on the instructions of the Majority Lenders
in the exercise of any right, power or discretion or any matter not expressly
provided for in the Finance Documents. Any such instructions given by the
Majority Lenders will be binding on all the Lenders. In the absence of
instructions, the Facility Agent may act as it considers to be in the best
interests of all the Lenders.

 

(b)           The Facility
Agent is not authorised to act on behalf of a Lender (without first obtaining
that Lender’s consent) in any legal or arbitration proceedings in connection
with any Finance Document.

 

(c)           The Facility
Agent may require the receipt of security satisfactory to it, whether by way of
payment in advance or otherwise, against any liability or loss which it may
incur in complying with the instructions of the Majority Lenders.

 

24.7        Responsibility

 

(a)           No Administrative
Party is responsible to any other Finance Party for the adequacy, accuracy or
completeness of:

 

(i)            any Finance
Document or any other document; or

 

(ii)           any statement or
information (whether written or oral) made in or supplied in connection with
any Finance Document.

 

65

 

(b)           Without affecting
the responsibility of any Obligor for information supplied by it or on its
behalf in connection with any Finance Document, each Lender confirms that it:

 

(i)            has made, and
will continue to make, its own independent appraisal of all risks arising under
or in connection with the Finance Documents (including the financial condition
and affairs of each Obligor and its related entities and the nature and extent
of any recourse against any Party or its assets); and

 

(ii)           has not relied
exclusively on any information provided to it by any Administrative Party in
connection with any Finance Document.

 

24.8        Exclusion
of liability

 

(a)           The Facility
Agent is not liable or responsible to any other Finance Party for any action
taken or not taken by it in connection with any Finance Document, unless
directly caused by its gross negligence or wilful misconduct.

 

(b)           No Party may take
any proceedings against any officer, employee or agent of the Facility Agent in
respect of any claim it might have against the Facility Agent or in respect of
any act or omission of any kind by that officer, employee or agent in
connection with any Finance Document. Any officer, employee or agent of an
Agent may rely on this Clause 24.8 and enforce its terms under the
Contracts (Rights of Third Parties) Act 1999.

 

(c)           Nothing
in this Agreement will oblige any Administrative Party to satisfy any know your
customer requirement in relation to the identity of any person on behalf of any
Finance Party.

 

(d)           Each Finance
Party confirms to each Administrative Party that it is solely responsible for
any know your customer requirements it is required to carry out and that it may
not rely on any statement in relation to those requirements made by any other
person.

 

24.9        Default

 

(a)           The Facility
Agent is not obliged to monitor or enquire whether a Default has occurred. The
Facility Agent is not deemed to have knowledge of the occurrence of a Default.

 

(b)           If the Facility
Agent:

 

(i)            receives notice
from a Party referring to this Agreement, describing a Default and stating that
the event is a Default; or

 

(ii)           is aware of the
non-payment of any principal or interest or any fee payable to a Lender under
this Agreement,

 

it must promptly
notify the Lenders.

 

24.10      Information

 

(a)           The Facility
Agent must promptly forward to the person concerned the original or a copy of
any document which is delivered to it by a Party for that person.

 

(b)           Except where a
Finance Document specifically provides otherwise, the Facility Agent is not
obliged to review or check the adequacy, accuracy or completeness of any
document it forwards to another Party.

 

66

 

(c)           Except as
provided above, the Facility Agent has no duty:

 

(i)            either initially
or on a continuing basis to provide any Lender with any credit or other
information concerning the risks arising under or in connection with the
Finance Documents (including any information relating to the financial
condition or affairs of any member of the Group or the nature or extent of
recourse against any Party or its assets) whether coming into its possession
before, on or after the date of this Agreement; or

 

(ii)           unless
specifically requested to do so by a Lender in accordance with a Finance
Document, to request any certificate or other document from any Obligor.

 

(d)           In acting as
Facility Agent, the agency division of the Facility Agent is treated as a
separate entity from its other divisions and departments. Any information
acquired by the Facility Agent which, in its opinion, is acquired by it otherwise
than in its capacity as the Facility Agent may be treated as confidential by
the Facility Agent and will not be treated as information possessed by the
Facility Agent in its capacity as such.

 

(e)           The Facility
Agent is not obliged to disclose to any person any confidential information
supplied to it by a member of the Group solely for the purpose of evaluating
whether any waiver or amendment is required to any term of the Finance
Documents.

 

(f)            Each Obligor
irrevocably authorises the Facility Agent to disclose to the other Finance
Parties any information which, in its opinion, is received by it in its
capacity as the Facility Agent.

 

24.11      Indemnities

 

(a)           Without limiting
the liability of any Obligor under the Finance Documents, each Lender must indemnify
the Facility Agent for that Lender’s Pro rata Share of any loss or liability
incurred by it in acting as the Facility Agent, except to the extent that the
loss or liability is caused by the Facility Agent’s gross negligence or wilful
misconduct.

 

(b)           The Facility
Agent may deduct from any amount received by it for a Lender any amount due to
it from that Lender under a Finance Document but unpaid.

 

24.12      Compliance

 

The Facility
Agent may refrain from doing anything (including disclosing any information)
which might, in its opinion, constitute a breach of any law or regulation or be
otherwise actionable at the suit of any person, and may do anything which, in
its opinion, is necessary or desirable to comply with any law or regulation.

 

24.13      Resignation
of an Agent

 

(a)           The Facility
Agent may resign and appoint any of its Affiliates as a successor Facility
Agent by giving notice to the Lenders and the Obligors’ Agent.

 

(b)           Alternatively,
the Facility Agent may resign by giving notice to the Lenders and the Obligors’
Agent, in which case the Majority Lenders may appoint a successor Facility
Agent.

 

(c)           If no successor
Facility Agent has been appointed under paragraph (b) above within 30 days
after notice of resignation was given, the Facility Agent may appoint a
successor Facility Agent.

 

67

 

(d)           The person(s)
appointing a successor Facility Agent must, if practicable, consult with the
Obligors’ Agent prior to the appointment. Any successor Facility Agent must
have an office in the U.K. and must be capable of performing it’s obligations
under this Agreement.

 

(e)           The resignation
of the Facility Agent and the appointment of any successor Facility Agent will
both become effective only when the successor Facility Agent notifies all the
Parties that it accepts its appointment. On giving the notification, the
successor Facility Agent will succeed to the position of the Facility Agent
which it succeeds and the term Facility  Agent, as the case may be, will mean the successor Facility
Agent.

 

(f)            The retiring
Facility Agent must, at its own cost, make available to the successor Facility
Agent such documents and records and provide such assistance as the successor
Facility Agent may reasonably request for the purposes of performing its
functions as Facility Agent under the Finance Documents.

 

(g)           Upon its
resignation becoming effective, this Clause 24 (The Administrative Parties)
will continue to benefit the retiring Facility Agent in respect of any action
taken or not taken by it in connection with the Finance Documents while it was
Facility Agent, and, subject to paragraph (f) above, it will have no further
obligations under any Finance Document.

 

(h)           The Majority
Lenders may, by notice to the Facility Agent, require it to resign under
paragraph (b) above.

 

24.14      Relationship
with Lenders

 

(a)           The Facility
Agent may treat each Lender as a Lender, entitled to payments under this
Agreement and as acting through its Facility Office(s) until it has received
not less than five Business Days’ prior notice from that Lender to the
contrary.

 

(b)           The Facility
Agent may at any time without any cost to the Borrower, and must if requested
to do so by the Majority Lenders, convene a meeting of the Lenders.

 

(c)           The Facility
Agent must keep a register of all the Parties and supply any other Party with a
copy of the register on request. The register will include each Lender’s
Facility Office(s) and contact details for the purposes of this Agreement.

 

24.15      Agents’
management time

 

If the Facility
Agent requires, any amount payable to the Facility Agent by any Party under any
indemnity or in respect of any costs or expenses incurred by the Facility Agent
under the Finance Documents after the date of this Agreement may include the
cost of using its management time or other resources and will be calculated on
the basis of such reasonable daily or hourly rates as the Facility Agent may
notify to the relevant Party. This is in addition to any amount in respect of
fees or expenses paid or payable to the Facility Agent under any other term of
the Finance Documents.

 

24.16      Notice
period

 

Where this
Agreement specifies a minimum period of notice to be given to the Facility
Agent, the Facility Agent may, at its discretion, accept a shorter notice period.

 

68

 

25.          EVIDENCE AND CALCULATIONS

 

25.1        Accounts

 

Accounts
maintained by a Finance Party in connection with this Agreement are prima facie evidence of the matters to which they relate for
the purpose of any litigation or arbitration proceedings.

 

25.2        Certificates
and determinations

 

Any certification
or determination by a Finance Party of a rate or amount under the Finance
Documents will be, in the absence of manifest error, conclusive evidence of the
matters to which it relates.

 

25.3        Calculations

 

Any interest or
fee accruing under this Agreement accrues from day to day and is calculated on
the basis of the actual number of days elapsed and a year of 360 or 365 days or
otherwise, depending on what the Facility Agent (acting reasonably) determines
is market practice.

 

26.          FEES

 

26.1        Agent’s
fee

 

The Obligors’
Agent must pay to the Facility Agent for the account of the Facility Agent an
agency fee in the amount set out in and in the manner agreed in the Fee Letter
between the Facility Agent and the Obligors’ Agent.

 

26.2        Arrangement
fee

 

The Obligors’
Agent must pay to the Facility Agent for the account of each of the Mandated
Lead Arrangers an arrangement fee in the amount set out in and in the manner
agreed in the Fee Letter between the Mandated Lead Arrangers and the Obligors’
Agent.

 

26.3        Commitment
fee

 

(a)           The Obligors’
Agent must pay in respect of the Facilities a commitment fee computed at the
rate per annum equal to 0.125 per cent. on the undrawn, uncancelled amount
of each Lender’s Commitment.

 

(b)           The commitment
fee is payable to the Facility Agent accrues from the date falling 90 days
after the date of this Agreement and is payable on the later of the last day of
the first quarter thereafter and the date falling five Business Days after the
Obligors’ Agent receives from the Facility Agent an invoice for such amount and
thereafter quarterly in arrear on the later of the last day of the relevant
quarter and the date falling five Business Days after the Obligors’ Agent
receives from the Facility Agent an invoice for such amount. Accrued commitment
fee is also payable to the Facility Agent for a Lender on the later of the date
its Commitment is cancelled in full and the date falling five Business Days after
the Obligors’ Agent receives from the Facility Agent an invoice for such
amount.

 

26.4        Fees
in respect of Avales

 

(a)           The Obligors’
Agent must pay the fronting fees in respect of each Aval requested by it in the
manner agreed in the Fee Letter between the Mandated Lead Arrangers and the
Obligors’ Agent.

 

69

 

(b)           The Obligors’
Agent must pay the fees on the outstanding amount of each Aval issued under
this Agreement in the manner agreed in the Fee Letter between the Mandated Lead
Arrangers and the Obligors’ Agent.

 

26.5        VAT

 

(a)           Any fee referred
to in this Clause 26 (Fees) is exclusive of any value added tax or any
similar Tax which might be chargeable in connection with that fee. If any value
added tax or other tax is so chargeable, it shall subject to paragraph (b)
below be paid by the Obligors’ Agent or the Borrower (as appropriate) at the
same time as it pays the relevant fee.

 

(b)           If any invoice
for an amount payable under this Agreement includes value added tax the Party
to whom that amount is payable shall provide the Obligors’ Agent or the
Borrower (as appropriate) with an appropriate value added tax invoice.

 

27.          INDEMNITIES AND BREAK COSTS

 

27.1        Currency
indemnity

 

(a)           The Obligors’
Agent must, as an independent obligation, indemnify each Finance Party against
any loss or liability which that Finance Party incurs as a consequence of:

 

(i)            that Finance
Party receiving an amount in respect of an Obligor’s liability under the
Finance Documents; or

 

(ii)           that liability
being converted into a claim, proof, judgment or order,

 

in a currency
other than the currency in which the amount is expressed to be payable under
the relevant Finance Document.

 

(b)           Unless otherwise
required by law, each Obligor waives any right it may have in any jurisdiction
to pay any amount under the Finance Documents in a currency other than that in
which it is expressed to be payable.

 

27.2        Other
indemnities

 

(a)           The Obligors’
Agent must indemnify each Finance Party against any cost, loss or liability
which that Finance Party incurs as a consequence of:

 

(i)            the occurrence of
any Event of Default;

 

(ii)           any failure by an
Obligor to pay any amount due under a Finance Document on its due date,
including any resulting from any distribution or redistribution of any amount
among the Lenders under this Agreement;

 

(iii)          (other than by
reason of negligence or default by that Finance Party) a Loan not being made or
an Aval not being issued after a Request has been delivered for that Loan or
Aval; or

 

(iv)          a Loan (or part
of a Loan) not being prepaid in accordance with a notice of prepayment or, in
connection with Clause 9 (Redenomination of Facility), any amount due to be
received by the Facility Agent on a particular Redenomination Date is not so
received.

 

70

 

The liability of
the Obligors’ Agent in each case includes any loss or expense on account of
funds borrowed, contracted for or utilised to fund any amount payable under any
Finance Document, any amount repaid or prepaid or any Loan.

 

(b)           The Obligors’
Agent must indemnify the Facility Agent against any cost, loss or liability
incurred by the Facility Agent as a result of:

 

(i)            investigating any
event which the Facility Agent reasonably believes to be a Default; or

 

(ii)           acting or relying
on any notice under any Finance Document which the Facility Agent reasonably
believes to be genuine, correct and appropriately authorised.

 

27.3        Break
Costs

 

(a)           The Obligors’
Agent must pay to each Lender its Break Costs on the date falling five Business
Days after the date on which the Obligors’ Agent receives from the Facility
Agent an invoice for such amount.

 

(b)           Break Costs are
the amount (if any) determined by the relevant Lender by which:

 

(i)            the interest
(excluding the Margin) which that Lender would have received for the period
from the Business Day on which it receives any part of its share in a Loan or
an overdue amount to the last day of the applicable Term for that Loan or
overdue amount if the principal or overdue amount received had been paid on the
last day of that Term;

 

exceeds

 

(ii)           the amount which
that Lender would be able to obtain by placing an amount equal to the amount
received by it on deposit with a leading bank in the appropriate interbank
market for a period starting on the Business Day on which it receives any part
of its share in a Loan or overdue amount and ending on the last day of the
applicable Term.

 

(c)           Each Lender must
supply to the Facility Agent for the Obligors’ Agent details of the amount of
any Break Costs claimed by it under this Clause 27.3 and the calculation of
that amount.

 

28.          EXPENSES

 

28.1        Initial
costs

 

The Obligors’
Agent must pay to each Administrative Party the amount of all reasonable costs
and expenses (including reasonable legal fees) properly incurred by it in
connection with the negotiation, preparation, printing, execution and
syndication of the Finance Documents provided such costs and expenses do not
exceed the amounts agreed by the Obligors’ Agent and the Mandated Lead
Arrangers on or before the date of this Agreement, such costs and expenses to
be payable five Business Days after the date on which the Obligors’ Agent
receives from the Facility Agent an invoice for such amount.

 

28.2        Subsequent
costs

 

The Obligors’
Agent must pay to the Facility Agent the amount of all reasonable costs and
expenses (including reasonable legal fees) properly incurred by it in
connection with:

 

(a)           the negotiation,
preparation, printing and execution of any Finance Document (other than a
Transfer Certificate) executed after the date of this Agreement; and

 

71

 

(b)           any amendment, waiver or
consent requested by or on behalf of an Obligor or specifically allowed by this
Agreement,

 

such costs and
expenses to be payable five Business Days after the date on which the Obligors’
Agent receives from the Facility Agent an invoice for such amount.

 

28.3        Enforcement
costs

 

The Obligors’
Agent must pay to each Finance Party the amount of all costs and expenses
(including legal fees) incurred by it in connection with the enforcement of, or
the preservation of any rights under, any Finance Document.

 

29.          AMENDMENTS AND WAIVERS

 

29.1        Procedure

 

(a)           Except as
provided in this Clause 29, any term of the Finance Documents may be
amended or waived with the agreement of the Obligors’ Agent and the Majority
Lenders. The Facility Agent may effect, on behalf of any Finance Party, an
amendment or waiver allowed under this Clause 29.

 

(b)           The Facility Agent
must promptly notify the other Parties of any amendment or waiver effected by
it under paragraph (a) above. Any such amendment or waiver is binding on all
the Parties.

 

29.2        Exceptions

 

(a)           An amendment or
waiver which relates to:

 

(i)            the definition of
Majority  Lenders
in Clause 1.1 (Definitions);

 

(ii)           an extension of
the date of payment of any amount to a Lender under the Finance Documents;

 

(iii)          a reduction in
the Margin or a reduction in the amount of any payment of principal, interest,
fee or other amount payable to a Lender under the Finance Documents;

 

(iv)          an increase in,
or an extension of, a Commitment or the Total Commitments except in accordance
with the terms of this Agreement;

 

(v)           a release of an
Obligor;

 

(vi)          a term of a
Finance Document which expressly requires the consent of each Lender;

 

(vii)         the right of a
Lender to assign or transfer its rights or obligations under the Finance
Documents;

 

(viii)        the terms of
Clause 21.7(b) (Underwriting Agreement); or

 

(ix)           this
Clause 29.2,

 

may only be made
with the consent of all the Lenders.

 

(b)           An amendment or
waiver which relates to the rights or obligations of an Administrative Party
may only be made with the consent of that Administrative Party.

 

72

 

29.3        Change
of currency

 

If a change in
any currency of a country occurs (including where there is more than one
currency or currency unit recognised at the same time as the lawful currency of
a country), the Finance Documents will be amended to the extent the Facility
Agent (acting reasonably and after consultation with the Obligors’ Agent)
determines is necessary to reflect the change.

 

29.4        Waivers
and remedies cumulative

 

The rights of
each Finance Party under the Finance Documents:

 

(a)           may be exercised as often as
necessary;

 

(b)           are cumulative and not
exclusive of its rights under the general law; and

 

(c)           may be waived only in
writing and specifically.

 

Delay in
exercising or non-exercise of any right is not a waiver of that right.

 

30.          CHANGES TO THE PARTIES

 

30.1        Assignments
and transfers by Obligors

 

No Obligor may
assign or transfer any of its rights and obligations under the Finance
Documents without the prior consent of all the Lenders.

 

30.2        Assignments
and transfers by Lenders

 

(a)           A Lender (the Existing  Lender) may,
subject to the following provisions of this Clause 30.2, and the terms of
the Syndication Letter at any time assign or transfer (including by way of
novation) any of its rights and obligations under this Agreement to a bank or
financial institution (a New  Lender).

 

(b)           The Obligors’
Agent shall be notified by the Facility Agent of any assignment or transfer
(including by way of novation) by an Existing Lender of that Existing Lender’s
rights and obligations under the Facility or any sub-participation in respect
of the Facility in each case promptly on or before the occurrence of such
assignment or transfer or sub-participation.

 

(c)           Unless the
Obligors’ Agent and the Facility Agent, (both acting reasonably), otherwise
agree, a transfer of part of a Commitment under this Agreement by the Existing
Lender must not result in that Existing Lender or the New Lender having a
Commitment in a Facility of less than Euro 25,000,000 (or its equivalent).

 

(d)           Unless otherwise
agreed by each Issuing Entity, until the later of the end of the Availability
Period for Avales and the date of prepayment or repayment in full of the Avales
no assignment or transfer (including by way of novation) of any Lender’s rights
and obligations under a Facility may be effected unless:

 

(i)            the New Lender is
an Acceptable Transferee; or

 

(ii)           the New Lender
has provided cash cover in accordance with Clause 30.10 (Cash Cover) below to
each Issuing Entity whose consent to such transfer has not been obtained.

 

(e)           The Facility
Agent is not obliged to execute a Transfer Certificate or approve any
confirmation in accordance with paragraph (f)(ii) below until it has completed
all know your customer requirements 

 

73

 

to its
satisfaction. The Facility Agent must complete all know your customer
requirements expeditiously and must promptly notify the Existing Lender and the
New Lender if there are any such requirements.

 

(f)            A transfer of
obligations will be effective only if either:

 

(i)            the obligations
are novated in accordance with the following provisions of this Clause 30;
or

 

(ii)           the New Lender
confirms to the Facility Agent and the Obligors’ Agent in form and substance
satisfactory to the Facility Agent and Obligors’ Agent that it is bound by the
terms of this Agreement as a Lender. On the transfer becoming effective in this
manner the Existing Lender will be released from its obligations under this
Agreement to the extent that they are transferred to the New Lender.

 

(g)           Unless the
Facility Agent otherwise agrees, the New Lender must pay to the Facility Agent
for its own account, on or before the date any assignment or transfer occurs, a
fee of Euro 1,500.

 

(h)           Any reference in
this Agreement to a Lender includes a New Lender but excludes a Lender if no
amount is or may be owed to or by it under this Agreement.

 

30.3        Procedure
for transfer by way of novations

 

(a)           A novation is
effected if:

 

(i)            the Existing
Lender and the New Lender deliver to the Facility Agent a duly completed
Transfer Certificate; and

 

(ii)           the Facility
Agent executes it.

 

Subject to
Clause 30.2(e) (Assignments and transfers by Lenders), the Facility Agent
must execute as soon as reasonably practicable a Transfer Certificate delivered
to it and which appears on its face to be in order.

 

(b)           Each Party (other
than the Existing Lender and the New Lender) irrevocably authorises the
Facility Agent to execute any duly completed Transfer Certificate on its
behalf.

 

(c)           On the Transfer
Date:

 

(i)            the New Lender
will assume the rights and obligations of the Existing Lender expressed to be
the subject of the novation in the Transfer Certificate in substitution for the
Existing Lender; and

 

(ii)           the Existing
Lender will be released from those obligations and cease to have those rights.

 

(d)           The Facility
Agent must, as soon as practicable after it has executed a Transfer
Certificate, send to the Obligors’ Agent a copy of that Transfer Certificate.

 

30.4        Limitation
of responsibility of Existing Lender

 

(a)           Unless expressly
agreed to the contrary, an Existing Lender is not responsible to a New Lender
for the legality, validity, adequacy, accuracy, completeness or performance of:

 

(i)            any Finance
Document or any other document; or

 

74

 

(ii)           any statement or
information (whether written or oral) made in or supplied in connection with
any Finance Document,

 

and any
representations or warranties implied by law are excluded.

 

(b)           Each New Lender
confirms to the Existing Lender and the other Finance Parties that it:

 

(i)            has made, and
will continue to make, its own independent appraisal of all risks arising under
or in connection with the Finance Documents (including the financial condition
and affairs of each Obligor and its related entities and the nature and extent
of any recourse against any Party or its assets) in connection with its
participation in this Agreement; and

 

(ii)           has not relied
exclusively on any information supplied to it by the Existing Lender in
connection with any Finance Document.

 

(c)           Nothing in any
Finance Document requires an Existing Lender to:

 

(i)            accept a
re-transfer from a New Lender of any of the rights and obligations assigned or
transferred under this Clause 30; or

 

(ii)           support any
losses incurred by the New Lender by reason of the non-performance by any
Obligor of its obligations under any Finance Document or otherwise.

 

30.5        Costs
resulting from change of Lender or Facility Office

 

If:

 

(a)           a Lender assigns or
transfers any of its rights and obligations under the Finance Documents or
changes its Facility Office; and

 

(b)           as a result of circumstances
existing at the date the assignment, transfer or change occurs, an Obligor
would be obliged to pay a Tax Payment or an Increased Cost,

 

the Obligor need
only pay that Tax Payment or Increased Cost to the same extent that it would
have been obliged to if no assignment, transfer or change had occurred.

 

30.6        Additional
Guarantors

 

(a)           If the Borrower
wishes one of its directly or indirectly wholly-owned Subsidiaries to become an
Additional Guarantor then it may deliver to the Facility Agent the relevant
documents and evidence listed in Part 3 of Schedule 2 (Conditions Precedent
Documents).

 

(b)          The Obligors’ Agent shall,
by not less than 10 Business Days’ prior written notice to the Facility Agent,
notify the Facility Agent (which shall promptly notify the Lenders) of its
intention to request that one of its Subsidiaries becomes an Additional
Guarantor pursuant to this Clause 30.6 (Additional Guarantors).

 

(c)           If the accession
of an Additional Guarantor requires any Finance Party to carry out know your
customer requirements in circumstances where the necessary information is not
already available to it, the Obligors’ Agent must as soon as reasonably practicable
on request by any Finance Party supply to that Finance Party any documentation
or other evidence which is reasonably requested by that Finance Party (whether
for itself, on behalf of any Finance Party or any prospective new Lender) to
enable a Finance Party or prospective new Lender to carry out and be satisfied
with the results of all applicable know your customer requirements. Each
Finance Party must complete all know your

 

75

 

customer requirements in relation to an Additional
Guarantor expeditiously and must promptly notify the Existing Lender and the
Additional Guarantor if there are any such requirements.

 

(d)           The relevant
Subsidiary will become an Additional Guarantor when the Facility Agent notifies
the other Finance Parties and the Borrower that it has received all of the
documents and evidence referred to in paragraph (a) above. The Facility Agent
must give this notification as soon as practicable.

 

30.7        Resignation
of a Guarantor

 

(a)           The Obligors’
Agent may request that a Guarantor ceases to be a Guarantor by giving to the
Facility Agent a duly completed Resignation Request.

 

(b)           The Facility
Agent must accept a Resignation Request and notify the Obligors’ Agent and the
Lenders of its acceptance if:

 

(i)            the Lenders have
consented to the Resignation Request;

 

(ii)           it is not aware
that a Default is outstanding or would result from the acceptance of the
Resignation Request; and

 

(iii)          no amount owed by
that Guarantor under this Agreement is still outstanding; or

 

the guarantee
given by the Original Guarantor will result in Moody’s or S&P assigning a
non-investment grade long term credit rating to the Borrower provided that such
statistical rating agency has not confirmed to the Borrower that it would
assign a non-investment grade long term credit rating to the Borrower whether
or not such resignation occurs.

 

(c)           The Guarantor
will cease to be a Guarantor when the Facility Agent gives the notification
referred to in paragraph (b) above.

 

(d)           A Guarantor may
also cease to be a Guarantor in any other manner approved by the Lenders.

 

30.8        Changes
to the Reference Banks

 

If a Reference
Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an
Affiliate) ceases to be a Lender, the Facility Agent must (with the prior
agreement of the Obligors’ Agent (acting reasonably)) appoint another Lender or
an Affiliate of a Lender to replace that Reference Bank.

 

30.9        Replacement
of a Lender

 

(a)           Except in the
case of an Original Lender (other than a Lender who is a Related Lender for the
purposes of Clause 21.7(b) (Underwriting Agreement)) the Obligors’ Agent may,
by giving written notice to the Facility Agent and a Relevant Lender, require
that Relevant Lender to transfer all of its rights and obligations under this
Agreement to a Replacement Lender.

 

(b)           On receipt of a
notice under paragraph (a) above the Relevant Lender must transfer all of its
rights and obligations under this Agreement:

 

(i)            in accordance
with Clause 30.2 (Assignments and transfers by Lenders);

 

(ii)           on the date
specified in the notice provided it is no earlier than five Business Days from
the date of the notice and no later than 10 Business Days from the date of the
notice;

 

76

 

(iii)          to the
Replacement Lender specified in the notice provided such Replacement Lender
meets the criteria set out in clause 30.2; and

 

(iv)          for a purchase
price equal to the aggregate of:

 

(A)          the Relevant
Lender’s participation in the outstanding Loans and any amount then due from
such Lender under the Avales;

 

(B)           any Break Costs
payable by the Relevant Lender as a result of the transfer; and

 

(C)           all accrued
interest, fees and other amounts payable to the Relevant Lender under this
Agreement as at the transfer date specified in the notice referred to at sub
paragraph (ii) above.

 

(c)           The Obligors’
Agent’s right to replace a Non-Funding Lender is in addition to all other
rights and remedies available to the Obligors’ Agent against the Non-Funding
Lender.

 

(d)           The replacement of a Lender pursuant to this Clause
shall be subject to the following conditions:

 

(i)            the Borrower shall have no right to replace the
Facility Agent;

 

(ii)           neither the Facility Agent nor the Lender shall have
any obligation to the Borrower to find a Replacement Lender;

 

(iii)          in the event of a replacement of a Non-Consenting
Lender such replacement must take place no later than 45 days after the
Non-Consenting Lender notifies the Borrower and the Facility Agent of its
failure or refusal to agree to any consent, waiver or amendment to the Finance
Documents; and

 

(iv)          in no event shall the Lender replaced under this
Clause 30.9 be required to pay or surrender to such Replacement Lender any of
the fees received by such Lender pursuant to the Finance Documents.

 

30.10      Issuing
Entity Cash Cover

 

(a)           If a New Lender
is not an Acceptable Transferee, the relevant New Lender will, as a condition
to any assignment or transfer to that New Lender pursuant to this Clause 30
taking effect, if so requested by an Issuing Entity deposit with each relevant
Issuing Entity (in such bank account at such bank as it shall promptly notify
to the Facility Agent from time to time for such purpose) an amount equal to,
and on account of, the maximum potential liability of such New Lender to that
Issuing Entity under Clause 7.2 (Lenders’ Indemnity).

 

(b)           If the higher of
the long term credit ratings assigned to a Lender and the long term credit
ratings assigned to any entity which provides a guarantee in respect of the
obligations of that Lender under  Clause
7.2 (Lenders’ Indemnity) are not or cease to be equal to or higher than A3 by
Moody’s and A by S&P, the relevant Lender will, within three Business Days
of request by an Issuing Entity deposit with the relevant Issuing Entity (in
such bank account at such bank as it shall promptly notify to the Facility
Agent from time to time for such purpose) an amount equal to, and on account
of, the maximum potential liability of such New Lender to that Issuing Entity
under Clause 7.2 (Lenders’ Indemnity).

 

(c)           Each Issuing
Entity shall be entitled to apply such deposit (by application of funds,
set-off, combination of accounts or otherwise as that Issuing Entity shall
determine) against amounts due to it from time to time from such New Lender
under Clause 7.2 (Lenders’ Indemnity) and the Issuing

 

77

 

Entities will so apply such amounts if directed to
do so by the relevant Lender at any time after a demand has been made under the
relevant Aval.

 

(d)           Any such deposit
shall be on terms that the Issuing Entities shall only be required to repay
such deposit to or to the order of such New Lender on the relevant Aval Release
Date (to the extent that such funds have not been applied in accordance with
Clause 30.10(c) above or on compliance in full by such New Lender with its
obligations to the Issuing Entities under Clause 7.2 (Lenders’ Indemnity).

 

(e)           Any such deposit
shall be denominated in Euro and shall bear interest at a deposit rate calculated
on the aggregate amount of the deposit, on the basis of a year of 360 days for
the actual number of days elapsed. Such interest shall be payable (subject to
deduction of Tax if so required by applicable law) by the Issuing Entities to
such New Lender quarterly in arrears (or as otherwise agreed) until repayment
of the deposit or application of the deposit by the Issuing Entities against
the obligations of such Lender to it under Clause 7.2 (Lenders’ Indemnity).

 

30.11      Accession of Issuing Entities

 

(a)           At any time whilst there are no Avales issued and
outstanding by it under this Agreement an Issuing Entity (the Resigning Issuing Entity) may (with the prior consent of the
Facility Agent and the Obligors’ Agent) resign as an Issuing Entity, such resignation
to take effect on the date on which an Issuing Entity (other than the Resigning
Issuing Entity) confirms in writing to the Facility Agent and the Obligors’
Agent that it will act as Issuing Entity in replacement of the Resigning
Issuing Entity and assume all the obligations of the Resigning Issuing Entity
or on which a bank or financial institution accedes as an Issuing Entity in
replacement of the Resigning Issuing Entity in accordance with the provisions
of paragraph (b) below.

 

(b)           A bank or financial institution may (with the prior
consent of the Facility Agent and the Obligors’ Agent) become an Issuing Entity
for the purposes of this Agreement when:

 

(i)            it delivers an Issuing Entity Accession Agreement to
the Facility Agent specifying the Issuing Entity it is replacing;

 

(ii)           the Facility Agent notifies the other Finance Parties
and the Obligors’ Agent that the Issuing Entity Accession Agreement is in form
and substance satisfactory to it (acting reasonably); and

 

(iii)          the Facility Agent executes the Issuing Entity
Accession Agreement.

 

The Facility Agent must give
this notification as soon as reasonably practicable.

 

31.          DISCLOSURE OF INFORMATION

 

(a)           Each Finance
Party must keep confidential any information supplied to it by or on behalf of
any Obligor in connection with the Finance Documents.

 

(b)           However, a
Finance Party is entitled to disclose Confidential Information:

 

(i)            which is publicly
available, other than as a result of a breach by that Finance Party of this
Clause 31;

 

(ii)           in connection
with any legal or arbitration proceedings;

 

(iii)          if required to do
so under any law or regulation;

 

78

 

(iv)          to a
governmental, banking, taxation or other regulatory authority;

 

(v)           to its
professional advisers;

 

(vi)          to the extent
allowed under paragraph (c) below; or

 

(vii)         with the prior
written agreement of the relevant Obligor.

 

(c)           A Finance Party
may disclose to an Affiliate or any person with whom it may enter, or has
entered into, any kind of transfer or other agreement permitted under this
Agreement (a proposed recipient):

 

(i)            a copy of any
Finance Document; and

 

(ii)           any information
which that Finance Party has acquired under or in connection with any Finance
Document.

 

However, before a
proposed recipient may receive any Confidential Information (as defined in the
Confidentiality Undertaking), it must enter into a Confidentiality Undertaking.

 

(d)           This Clause 31
supersedes any previous confidentiality undertaking given by a Finance Party in
connection with this Agreement prior to it becoming a Party.

 

32.          SET-OFF

 

Following the
occurrence of an Event of Default which remains outstanding, a Finance Party
may combine, consolidate or merge all or any accounts of an Obligor with, or
liabilities to, that Finance Party and may set off any matured obligation owed
by an Obligor under this Agreement against an obligation (whether or not
matured) owed by the relevant Finance Party to that Obligor, regardless of the
place or payment, booking branch or currency of either obligations. If the
obligations are in different currencies, the Finance Party may convert either
obligation at a market rate of exchange in its usual course of business for the
purpose of the set-off.

 

33.          PRO RATA SHARING

 

33.1        Redistribution

 

If any amount
owing by an Obligor under this Agreement to a Lender (the recovering
Lender) is discharged by payment,
set-off or any other manner other than through the Facility Agent under this
Agreement (a recovery), then:

 

(a)           the recovering Lender must,
within three Business Days, supply details of the recovery to the Facility
Agent;

 

(b)           the Facility Agent must
calculate whether the recovery is in excess of the amount which the recovering
Lender would have received if the recovery had been received and distributed by
the Facility Agent under this Agreement; and

 

(c)           the recovering Lender must
pay to the Facility Agent an amount equal to the excess (if any) (the redistribution).

 

79

 

33.2        Effect
of redistribution

 

(a)           The Facility Agent must
treat a redistribution as if it were a payment by the relevant Obligor under
this Agreement and distribute it among the Lenders, other than the recovering
Lender, accordingly.

 

(b)           When the Facility Agent
makes a distribution under paragraph (a) above, the recovering Lender will be
subrogated to the rights of the Finance Parties which have shared in that
redistribution.

 

(c)           If and to the extent that
the recovering Lender is not able to rely on any rights of subrogation under
paragraph (b) above, the relevant Obligor will owe the recovering Lender a debt
which is equal to the redistribution, immediately payable and of the type
originally discharged.

 

(d)           If:

 

(i)            a recovering Lender must
subsequently return a recovery, or an amount measured by reference to a
recovery, to an Obligor; and

 

(ii)           the recovering Lender has
paid a redistribution in relation to that recovery,

 

each Finance
Party must reimburse the recovering Lender all or the appropriate portion of
the redistribution paid to that Finance Party, together with interest for the
period while it held the re-distribution. In this event, the subrogation in
paragraph (b) above will operate in reverse to the extent of the
redistribution.

 

33.3        Exceptions

 

Notwithstanding
any other term of this Clause 33, a recovering Lender need not pay a
redistribution to the extent that:

 

(a)           it
would not, after the payment, have a valid claim against the relevant Obligor
in the amount of the redistribution; or

 

(b)           it
would be sharing with another Finance Party any amount which the recovering
Lender has received or recovered as a result of legal or arbitration
proceedings, where:

 

(i)            the recovering Lender
notified the Facility Agent of those proceedings; and

 

(ii)           the
other Finance Party had an opportunity to participate in those proceedings but
did not do so or did not take separate legal or arbitration proceedings as soon
as reasonably practicable after receiving notice of them.

 

33.4        Loss sharing

 

(a)           In this Clause 33.4 (Loss
sharing):

 

(i)            Outstandings means, in relation to a
Lender, its aggregate participation in each Loan from time to time; and

 

(ii)           Total Outstandings
means the aggregate of all Outstandings.

 

(b)           On the date
following the Final Release Date notified by the Facility Agent pursuant to
paragraph (c) below, each Lender shall (to the extent necessary) by
corresponding transfers adjust their participations in Loans then outstanding
to ensure that after such transfers the Outstandings of each

 

80

 

Lender bear the
same proportion to the Total Outstandings as such Lender’s Commitment bears to
the Total Commitments, each as at the Final Release Date.

 

(c)           The amount of any
transfers required pursuant to this Clause 33.4 (Loss sharing) shall be
calculated by the Facility Agent on the Final Release Date and promptly
communicated to each Lender by the Facility Agent together with the date, as
determined by the Facility Agent, upon which such transfers shall take place.

 

34.          SEVERABILITY

 

If a term of a
Finance Document is or becomes illegal, invalid or unenforceable in any
jurisdiction, that shall not affect:

 

(a)           the legality, validity or
enforceability in that jurisdiction of any other term of the Finance Documents;
or

 

(b)           the legality, validity or
enforceability in other jurisdictions of that or any other term of the Finance
Documents.

 

35.          COUNTERPARTS

 

Each Finance
Document may be executed in any number of counterparts. This has the same
effect as if the signatures on the counterparts were on a single copy of the
Finance Document.

 

36.          NOTICES

 

36.1        In
writing

 

(a)           Any
communication in connection with a Finance Document must be in writing and,
unless otherwise stated, may be given:

 

(i)          in person, by post or fax;
or

 

(ii)         if
between the Facility Agent and a Lender and the Facility Agent and the Lender
agree, by e-mail or other electronic communication.

 

(b)           For the purpose of the
Finance Documents, an electronic communication will be treated as being in writing.

 

(c)           Unless
it is agreed to the contrary, any consent or agreement required under a Finance
Document must be given in writing.

 

36.2        Contact
details

 

(a)           Except as provided below,
the contact details of each Party for all communications in connection with the
Finance Documents are those notified by that Party for this purpose to the
Facility Agent on or before the date it becomes a Party.

 

(b)           The contact
details of the Obligors’ Agent, the Borrower and Imperial Tobacco Limited for
this purpose are:

 

Address:                PO
Box 244 

Upton Road

 

81

 

Southville

Bristol BS99 7UJ

 

Attention:              John Jones, Group Treasurer

 

Phone number:     0117 963 6636

 

Fax number:           0117 966 7957

 

(c)           The contact
details of the Facility Agent for this purpose are:

 

Address:                Agency
Office, EMEA Loans

Citigroup

Citigroup Centre

25 Canada Square

London E14 5LB

 

Fax number:          020
8636 3824

 

Attention:              Raya
Brody

 

(d)           Any Party may change its
contact details by giving five Business Days’ notice to the Facility Agent or
(in the case of the Facility Agent) to the other Parties.

 

(e)           Where a Party nominates a
particular department or officer to receive a communication, a communication
will not be effective if that communication fails to specify that department or
officer so nominated.

 

36.3        Effectiveness

 

(a)           Except as provided below,
any communication in connection with a Finance Document will be deemed to be
given as follows:

 

(i)            if delivered in
person, at the time of delivery;

 

(ii)           if posted, five days
after being deposited in the post, postage prepaid, in a correctly addressed
envelope; and

 

(iii)          if by fax, when
received in legible form.

 

(b)           A communication
given under paragraph (a) above but received on a non-Business Day or after
business hours in the place of receipt will only be deemed to be given at 9.00
a.m. on the next Business Day in that place.

 

(c)           A communication
to the Facility Agent will only be effective on actual receipt by it.

 

36.4        Obligors

 

(a)           All formal
communications under the Finance Documents to or from an Obligor must be sent
through the Facility Agent.

 

(b)           All formal
communications under the Finance Documents to or from an Obligor (other than
the Obligors’ Agent) must be sent through the Obligors’ Agent.

 

82

 

(c)           Each Obligor (other than the
Obligors’ Agent) irrevocably appoints the Obligors’ Agent to act as its agent
and irrevocably authorises the Obligors’ Agent:

 

(i)            to give and
receive all communications under the Finance Documents;

 

(ii)           to supply all
information concerning itself to any Finance Party; and

 

(iii)          to sign all
documents under or in connection with the Finance Documents.

 

(d)           Any communication given to
the Obligors’ Agent in connection with a Finance Document will be deemed to
have been given also to each other Obligor.

 

(e)           The Facility Agent may
assume that any communication made by the Obligors’ Agent is made with the
consent of each other Obligor.

 

36.5        Personal
Liability

 

If an individual
signs a certificate on behalf of a Party and the certificate proves to be
incorrect, the individual will incur no personal liability as a result, unless
the individual acted fraudulently or recklessly in giving the certificate. In
this case any liability of the individual will be determined in accordance with
applicable law.

 

37.          LANGUAGE

 

(a)           Any notice given
in connection with a Finance Document must be in English.

 

(b)           Any other
document provided in connection with a Finance Document must be:

 

(i)            in English; or

 

(ii)           (unless the Facility Agent
otherwise agrees) accompanied by a certified English translation. In this case,
the English translation prevails unless the document is a statutory or other
official document.

 

38.          GOVERNING LAW

 

This Agreement is
governed by English law.

 

39.          JURISDICTION

 

(a)           The English
courts have exclusive jurisdiction to settle any dispute in connection with any
Finance Document.

 

(b)           The English courts are the
most appropriate and convenient courts to settle any such dispute and each
Obligor waives objection to those courts on the grounds of inconvenient forum
or otherwise in relation to proceedings in connection with any Finance
Document.

 

(c)           This Clause 39 is for the
benefit of the Finance Parties only. To the extent allowed by law, a Finance
Party may take:

 

(i)            proceedings in any other
court; and

 

(ii)           concurrent proceedings in
any number of jurisdictions.

 

83

 

40.          WAIVER OF TRIAL BY JURY

 

EACH PARTY WAIVES
ANY RIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN
CONNECTION WITH ANY FINANCE DOCUMENT OR ANY TRANSACTION CONTEMPLATED BY ANY
FINANCE DOCUMENT. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY
THE COURT.

 

THIS
AGREEMENT has been entered into on the date stated at the
beginning of this Agreement.

 

84

 

SCHEDULE 1

 

ORIGINAL PARTIES

 

PART 1

 

MANDATED LEAD ARRANGERS

 

ABN AMRO BANK N.V.

 

CITIGROUP GLOBAL
MARKETS LIMITED

MORGAN STANLEY BANK INTERNATIONAL LIMITED

 

LEHMAN BROTHERS
INTERNATIONAL (EUROPE)

 

85

 

PART 2

 

ORIGINAL LENDERS

 

	
  Name of Original Lender

  	
   

  	
  A Facility

  Commitments

  	
   

  	
  B Facility

  Commitments

  	
   

  	
  C Facility

  Commitments

  	
   

  
	
   

  	
   

  	
  (Euro)

  	
   

  	
  (Euro)

  	
   

  	
  (Euro)

  	
   

  
	
  ABN AMRO Bank N.V.

  	
   

  	
  2,515,065,000

  	
   

  	
  —

  	
   

  	
  360,985,800

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Citibank, N.A., London Branch

  	
   

  	
  1,257,532,500

  	
   

  	
  —

  	
   

  	
  180,492,900

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Morgan Stanley Bank International Limited/Morgan
  Stanley Senior Funding, Inc.

  	
   

  	
  2,515,065,000

  	
   

  	
  —

  	
   

  	
  360,985,800

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lehman Brothers Holdings, Inc.

  	
   

  	
  —

  	
   

  	
  698,629,167

  	
   

  	
  100,273,833

  	
   

  
	
  Total

  	
   

  	
  6,287,662,500

  	
   

  	
  698,629,167

  	
   

  	
  1,002,738,333

  	
   

  

 

PART 3

 

ISSUING ENTITIES

 

	
  Name of Issuing Entity

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Facility A

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ABN AMRO Bank N.V., Sucursal en
  España

  	
   

  	
  40

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Citibank International plc, Sucursal en España

  	
   

  	
  20

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Morgan
  Stanley Bank International Limited

  	
   

  	
  40

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Facility B

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Lehman
  Issuing Entity

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Facility C

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ABN AMRO Bank N.V. Sucursal en
  España

  	
   

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Citibank International plc, Sucursal en España

  	
   

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Morgan
  Stanley Bank International Limited

  	
   

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Lehman
  Issuing Entity

  	
   

  	
  10

  	
   

  

 

86

 

SCHEDULE 2

 

CONDITIONS PRECEDENT DOCUMENTS

 

PART 1

 

TO BE DELIVERED BEFORE FIRST REQUEST

 

1.             Obligors

 

(a)           A
copy of the constitutional documents of each Obligor.

 

(b)           A resolution of
the board of directors of each Obligor approving the terms of, and the
transactions contemplated by, this Agreement.

 

(c)           A shareholders
resolution of the Original Guarantor approving the granting of the guarantee by
the Original Guarantor under this Agreement.

 

(d)           A
specimen of the signature of each person authorised on behalf of each Obligor
to execute any Finance Document or to sign or send any Request, document or
notice in connection with any Finance Document.

 

2.             Legal opinions

 

A legal opinion
of Clifford Chance LLP, legal advisers to the Mandated Lead Arrangers and the
Facility Agent substantially in the form distributed to the Lenders prior to
the date of this Agreement, addressed to the Finance Parties.

 

3.             Miscellaneous

 

(a)           A
copy of the Litigation Report.

 

(b)           A
copy of the Competition Analysis.

 

(c)           A
copy of the Original Financial Statements.

 

(d)           A
duly executed Fee Letter.

 

(e)           A
duly executed Syndication Letter.

 

(f)            A
copy of the duly executed Senior Facilities Agreement.

 

(g)           A
copy of the duly executed Back-Stop Underwriting Agreement.

 

(h)           A copy of any
waivers under the Existing Facilities Agreement in order to avoid an event of
default occurring under that agreement as a result of the issue of the Avales.

 

(i)            A copy of the
agreed form Class 1 circular to be issued by the Borrower to its shareholders.

 

(j)            Evidence that
resolutions increasing the share capital of Imperial by an amount sufficient
for the Rights Issue, approving the allotment of shares pursuant to the Rights
Issue and approving the Acquisition as a Class 1 transaction:

 

(i)            if
not a condition of the Offer, have been obtained; or

 

87

 

(ii)           if a condition of
the Offer, are the subject of an extraordinary general meeting of the
shareholders of Imperial to be convened and that the board of directors of
Imperial is recommending that such resolutions are passed.

 

(k)           A letter from the
Borrower confirming the appointment of the receiving agent (the Receiving Agent) in respect of the Rights Issue.

 

(l)            A copy of an
irrevocable payment instruction from the Borrower to the Receiving Agent to pay
the proceeds of the Rights Issue to the Facility Agent for application in
prepayment of the Facility (it being acknowledged that the Borrower shall, in
accordance with Clause 4.1(b) (Conditions precedent documents), be entitled to
apply the Sterling proceeds of the Rights Issue to discharge any currency
hedging it has entered into in respect of the proceeds of the Rights Issue in
prepayment of the Facility).

 

(m)          A copy of
irrevocable payment instructions from the Borrower to each Rights Issue
Underwriter in respect of the payment of their respective underwritten portion
of the Rights Issue to its Related Lender and confirmation from each Rights
Issue Underwriter in respect of such instruction (it being acknowledged that
the Borrower shall, in accordance with Clause 4.1(b) (Conditions precedent documents),
be entitled to apply the Sterling proceeds of the Rights Issue to discharge any
currency hedging it has entered into in respect of the proceeds of the Rights
Issue in prepayment of the Facility).

 

(n)           Evidence that the
facilities made available under the Senior Facilities Agreement will be drawn
down by way of Avales immediately after the first drawing of the Facility (but
for the avoidance of doubt there shall be no requirement as to the minimum
amount of such drawing).

 

88

 

PART 2

 

CONDITIONS PRECEDENT TO DRAWDOWN
OF LOANS

 

ON FIRST CASH UTILISATION DATE

 

1.             A copy of the
Class 1 circular issued or to be issued by Imperial to its shareholders and the
working capital statements relating to it.

 

2.             Evidence that
Imperial’s authorised share capital has been increased by an amount sufficient
for the Rights Issue and that shareholder approval has been received for the
allotment of shares and the Acquisition as a Class 1 transaction.

 

89

 

PART
3

 

FOR AN ADDITIONAL GUARANTOR

 

1.             Additional
Guarantors

 

(a)           A
Guarantor Accession Agreement, duly executed by the Obligors’ Agent and the
Additional Guarantor.

 

(b)           A
copy of the constitutional documents of the Additional Guarantor.

 

(c)           A copy of a
resolution of the board of directors of the Additional Guarantor approving the
terms of, and the transactions contemplated by, the Guarantor Accession
Agreement.

 

(d)           A specimen of the
signature of each person authorised on behalf of the Additional Guarantor to
execute any Finance Document.

 

2.             Legal opinions

 

(a)           A
legal opinion of legal advisers in England and Wales addressed to the Finance
Parties.

 

(b)           If the Additional
Guarantor is incorporated in a jurisdiction other than England and Wales, a
legal opinion from legal advisers in that jurisdiction, addressed to the
Finance Parties.

 

3.             Miscellaneous

 

(a)           In the case of an
Additional Guarantor incorporated in the U.K., a copy of a resolution, signed
by all (or any lower percentage agreed by the Facility Agent) of the holders of
its issued or allotted shares, approving the terms of, and the transactions
contemplated by, the Guarantor Accession Agreement.

 

(b)           A certificate of
an authorised signatory of the Additional Guarantor certifying that each copy
document specified in Part 3 of this Schedule is correct, complete and in full
force and effect as at a date no earlier than the date of the Guarantor
Accession Agreement.

 

(c)           If
available, a copy of the latest audited accounts of the Additional Guarantor.

 

(d)           For any
Additional Guarantor which is not incorporated under the laws of England and
Wales, evidence that its agent under the Finance Documents for service of
process in England has accepted its appointment.

 

90

 

SCHEDULE 3

 

FORM OF NOTICES

 

PART 1

 

FORM OF REQUEST

 

To:          [l] as
Facility Agent

 

From:      IMPERIAL TOBACCO GROUP PLC

 

Date:       [               ]

 

IMPERIAL
TOBACCO GROUP PLC

Subordinated Equity Bridge Credit Agreement dated [l] 2007

(the Agreement)

 

3.             We refer to the
Agreement. This is a Request.

 

4.             We wish to borrow
[a Loan/arrange for an Aval to be issued] under [Facility A/Facility B/Facility
C] on the following terms:

 

(a)           Utilisation Date:                [               ]

 

(b)           Amount/currency:             [               ]

 

(c)           Term:                                 [               ]

 

5.             [Our payment
instructions are:         [              ]]/[Please
pay in accordance with our current standard settlement instructions](1).

 

6.             We confirm that
each condition precedent under the Agreement which must be satisfied on the
date of this Request is so satisfied.

 

7.             [We attach a copy
of the proposed Aval.]

 

8.             This Request is
irrevocable.

 

IMPERIAL
TOBACCO GROUP PLC

 

By:

 

 

(1)   For cash cover for Avales.

 

91

 

Part 2

 

Form of Guarantor Accession Agreement

 

To:          [l] as
Facility Agent

 

From:      Imperial Tobacco
Group PLC and [Proposed Guarantor]

 

	
  

  	
   

  	
  Date:    [               ]

  	
   

  

 

IMPERIAL
TOBACCO GROUP PLC - 

Subordinated
Equity Bridge Credit Agreement dated [l] 2007

(the
Agreement)

 

1.             We
refer to the Agreement.  This is a
Guarantor Accession Agreement.

 

2.             [Name
of proposed guarantor] of [address/registered office/registered number] agrees
to become an Additional Guarantor and to be bound by the terms of the Agreement
as an Additional Guarantor.

 

3.             This
Guarantor Accession Agreement is a Finance Document.

 

4.             This
Guarantor Accession Agreement is governed by English law.

 

 

IMPERIAL
TOBACCO GROUP PLC

 

By:

 

 

[PROPOSED GUARANTOR]

 

By:

 

92

 

Part
3

 

Form of REdenomination Request

 

To:          [l] as
Facility Agent

 

From:      IMPERIAL TOBACCO
GROUP PLC

 

	
  

  	
   

  	
  Date:    [               ]

  	
   

  

 

IMPERIAL
TOBACCO GROUP PLC

Subordinated Equity Bridge Credit Agreement dated [l] 2007

(the Agreement)

 

1.             We refer to the
Agreement.  This is a Redenomination
Request.

 

2.             We wish to
redenominate part of the Loans on the following terms:

 

(a)           Redenomination Date:                                         [               ]

 

(b)           Amount of Facility to be
redenominated:        [               ]

 

(c)           Redenomination currency:                                 Sterling

 

3.             We confirm that the portion
of the Facility redenominated following the redenomination requested in this
Redenomination Request will be used to repay or prepay in whole or in part the
amounts outstanding under the Facility on the relevant Redenomination Date.

 

 

IMPERIAL TOBACCO
GROUP PLC

 

By:

 

93

 

Part 4

 

Form of Issuing
Entity Accession Agreement

 

To:          [FACILITY AGENT]
as Facility Agent

 

From:      [Proposed Issuing
Entity]

 

Date:       [            ]

 

IMPERIAL
TOBACCO GROUP PLC

Subordinated Equity Bridge Credit Agreement dated [l] 2007

(the Agreement)

 

We refer to the
Agreement.  This is an Issuing Entity
Accession Agreement.

 

1.             [NEW
ISSUING ENTITY] of [address/registered office] agrees to become an Issuing
Entity under the Agreement and to be bound by the terms of the Agreement as an
Issuing Entity in respect of [Facility A/Facility B/Facility C].

 

2.             We
are acceding to the Agreement in place of [RESIGNING ISSUING ENTITY].

 

3.             It
is intended that this document takes effect as a deed notwithstanding the fact
that a party may only execute this document under hand.

 

4.             This
Issuing Entity Accession Agreement has been executed and delivered as a deed on
the date stated at the beginning of this Issuing Entity Accession Agreement and
is governed by English law.

 

	
  Executed as a deed by

  	
   

  	
   

  
	
  [ISSUING ENTITY]

  	
   

  	
   

  
	
  acting by

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
  Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
  Executed as a deed by

  	
   

  	
   

  
	
  [FACILITY AGENT]

  	
   

  	
   

  
	
  acting by

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
  Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
  Executed as a deed by

  	
   

  	
   

  
	
  [RESIGNING ISSUING ENTITY]

  	
   

  	
   

  
	
  acting by

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
  Director/Secretary

  	
   

  
	
  We confirm the above

  	
   

  	
   

  

 

94

 

	
   

  	
   

  	
   

  
	
  Executed as a deed by

  	
   

  	
   

  
	
  IMPERIAL TOBACCO GROUP PLC

  	
   

  	
   

  
	
  acting by

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
  Director/Secretary

  	
   

  

 

95

 

Schedule 4

 

Calculation of the Mandatory Cost

 

1.             General

 

(a)           The Mandatory Cost is to
compensate a Lender for the cost of compliance with:

 

(i)            the requirements of the Bank
of England and/or the Financial Services Authority (or, in either case, any
other authority which replaces any of its functions); or

 

(ii)           the requirements of the
European Central Bank.

 

(b)           The Mandatory Cost is
expressed as a percentage rate per annum.

 

(c)           The Mandatory Cost is the
weighted average (weighted in proportion to the percentage share of each Lender
in the relevant Loan) of the rates for the Lenders calculated by the Facility
Agent in accordance with this Schedule 4 on the first day of a Term (or as soon
as possible after then).

 

(d)           The Facility Agent must
distribute each amount of Mandatory Cost among the Lenders on the basis of the
rate for each Lender.

 

(e)           Any determination by the
Facility Agent pursuant to this Schedule 4 will be, in the absence of manifest
error, conclusive and binding on all the Parties.

 

2.             For a Lender lending from a
Facility Office in the U.K.

 

(a)           The relevant rate for a
Lender lending from a Facility Office in the U.K. is calculated in accordance
with the following formulae:

 

for a Loan in Sterling:

 

	
  AB + C(B – D) +
  E x 0.01

  	
   per cent. per annum

  
	
  100 – (A+C)

  

 

for any other Loan:

 

	
  E x 0.01

  	
   per cent. per annum

  
	
  300

  

 

where on the day of application of the formula:

 

A             is the percentage of that
Lender's eligible liabilities (in excess of any stated minimum) which the Bank
of England requires it to hold on a non-interest-bearing deposit account in
accordance with its cash ratio requirements;

 

B             is the percentage rate of
LIBOR and, if a Loan is due and payable but unpaid by a Borrower, the
additional rate of interest specified in Clause 11.4 (Interest on overdue
amounts), for the relevant Term;

 

96

 

C             is the percentage (if any)
of that Lender's eligible liabilities which the Bank of England requires it to
place as an interest bearing special deposit;

 

D             is the percentage rate per
annum payable by the Bank of England on interest bearing special deposits; and

 

E              is calculated by the
Facility Agent as being the average of the rates of charge under the fees rules
supplied by the Reference Banks to the Facility Agent under paragraph (d)
below and expressed in pounds per £1 million.

 

(b)           For the purposes of this
paragraph 2:

 

(i)            eligible liabilities and
special deposit(s) have the meanings
given to them at the time of application of the formula pursuant to the Bank of
England Act 1988 or (as appropriate) by the Bank of England;

 

(ii)           fees rules
means the then current rules on periodic fees in the Supervision Manual of the
FSA Handbook or any other law or regulation as may then be in force for the
payment of fees for the acceptance of deposits;

 

(iii)          fee tariffs
means the fee tariffs specified in the fees rules under fee-block Category A1
(Deposit acceptors) (ignoring any minimum fee or zero rated fee required
pursuant to the fees rules but applying any applicable discount rate); and

 

(iv)          tariff base has
the meaning given to it in, and will be calculated in accordance with, the fees
rules.

 

(c)           (i)            In the
application of the formulae, A, B, C and D are included as figures and not as
percentages, e.g. if A = 0.5 per cent. and B = 15 per cent., AB is calculated
as 0.5 x 15.  A negative result obtained
by subtracting D from B is taken as zero.

 

(ii)           Each rate calculated in
accordance with a formula is, if necessary, rounded upward to four decimal
places.

 

(d)           If
requested by the Facility Agent, each Reference Bank must, as soon as
practicable after publication by the Financial Services Authority, supply to
the Facility Agent the rate of charge payable by that Reference Bank to the
Financial Services Authority under the fees rules for that financial year of
the Financial Services Authority (calculated by that Reference Bank as being
the average of the fee tariffs applicable to that Reference Bank for that
financial year) and expressed in pounds per £1 million of the tariff base of
that Reference Bank.

 

(e)           Each
Lender must supply to the Facility Agent the information required by it to make
a calculation of the rate for that Lender. 
In particular, each Lender must supply the following information on or
prior to the date on which it becomes a Lender:

 

(i)            the jurisdiction of its
Facility Office; and

 

(ii)           any other information that
the Facility Agent reasonably requires for that purpose.

 

Each Lender must promptly notify the Facility Agent of any change to
the information supplied to it under this paragraph (e).

 

(f)            The percentages of each
Lender for the purposes of A and C above and the rates of charge of each
Reference Bank for the purpose of E above are determined by the Facility Agent
based upon the information supplied to it under paragraphs (d) and (e)
above.  Unless a Lender notifies the
Facility

 

97

 

Agent to the contrary, the
Facility Agent may assume that the Lender’s obligations in respect of cash
ratio deposits and special deposits are the same as those of a typical bank
from its jurisdiction of incorporation with a Facility Office in the same
jurisdiction as its Facility Office.

 

(g)           The Facility Agent has no
liability to any Party if its calculation over or under compensates any Lender.
 The Facility Agent is entitled to assume
that the information provided by any Lender or Reference Bank under this
Schedule 4 is true and correct in all respects.

 

3.             For a Lender
lending from a Facility Office in a Participating Member State

 

(a)           The
relevant rate for a Lender lending from a Facility Office in a Participating
Member State is the percentage rate per annum notified by that Lender to the
Facility Agent.  This percentage rate per
annum must be certified by that Lender in its notice to the Facility Agent as
its reasonable determination of the cost (expressed as a percentage of that
Lender’s share in all Loans made from that Facility Office) of complying with
the minimum reserve requirements of the European Central Bank in respect of
Loans made from that Facility Office.

 

(b)           If a Lender fails to specify
a rate under paragraph (a) above, the Facility Agent will assume that the
Lender has not incurred any such cost.

 

4.             Changes

 

(a)           The Facility Agent may,
after consultation with the Obligors’ Agent and the Lenders, determine and
notify all the Parties of any amendment to this Schedule 4 which is required to
reflect:

 

(i)            any change in law or
regulation; or

 

(ii)           any requirement imposed by
the Bank of England, the Financial Services Authority or the European Central
Bank (or, in any case, any successor authority).

 

(b)           If the Facility Agent, after
consultation with the Obligors’ Agent, determines that the Mandatory Cost for a
Lender lending from a Facility Office in the U.K. can be calculated by reference
to a screen rate, the Facility Agent may notify all the Parties of any
amendment to this Agreement which is required to reflect this.

 

98

 

Schedule 5

 

Form of Transfer
Certificate

 

To:          [l] as
Facility Agent

 

From:      [The Existing
Lender] (the Existing Lender) and [the New
Lender] (the New Lender)

 

	
  

  	
   

  	
  Date:    [               ]

  	
   

  

 

IMPERIAL
TOBACCO GROUP PLC - 

Subordinated
Equity Bridge Credit Agreement dated [l] 2007

(the
Agreement)

 

1.             We
refer to the Agreement.  This is a
Transfer Certificate.

 

2.             The
Existing Lender transfers by novation to the New Lender the Existing Lender's
rights and obligations referred to in the Schedule below in accordance with the
terms of the Agreement.

 

3.             The
proposed Transfer Date is
[               ].

 

4.             The
administrative details of the New Lender for the purposes of the Agreement are
set out in the Schedule.

 

5.             [The
Lender is a U.K. Non-Bank Lender.](2)

 

6.             This
Transfer Certificate is governed by English law.

 

THE
SCHEDULE

Rights
and obligations to be transferred by novation

[insert relevant details, including applicable Commitment (or part)]

 

Administrative
details of the New Lender

[insert details of Facility Office, address for notices and payment
details etc.]

 

	
  [EXISTING LENDER]

  	
  [NEW LENDER]

  
	
   

  	
   

  
	
  By:

  	
  By:

  

 

The Transfer Date
is confirmed by the Facility Agent as
[               ].

 

[FACILITY AGENT]

 

By:

 

 

(2)        Include
if applicable.

 

99

 

Schedule 6

 

Form of
Compliance Certificate

 

To:          [l] as
Facility Agent

 

From:      Imperial Tobacco
Group PLC

 

	
  

  	
   

  	
  Date:    [               ]

  	
   

  

 

IMPERIAL
TOBACCO GROUP PLC - 

Subordinated Equity Bridge
Credit Agreement dated [l] 2007

(the
Agreement)

 

1.             We
refer to the Agreement.  This is a
Compliance Certificate.

 

2.             We confirm that as at
[insert relevant testing date]:

 

(a)           Consolidated EBITDA was
[               ]
[(including Proforma EBITDA of
[               ]
in connection with the acquisition of
[               ])](3)
and Consolidated Total Net Borrowings were
[               ]
and therefore, the ratio of Consolidated Total Net Borrowings to Consolidated
EBITDA was [               ]
to 1; and

 

(b)           Consolidated EBITDA
[(excluding Proforma EBITDA) was
[               ]]
and Consolidated Net Interest Payable was
[               ]
therefore, the ratio of Consolidated EBITDA to Consolidated Net Interest
Payable was [     ] to 1.

 

3.             We
set out below calculations establishing the figures in paragraph 2 above

 

[               ].

 

4.             We
confirm that the following companies were Principal Subsidiaries at [insert
relevant testing date]:(4)

 

[               ].

 

5.             [We
confirm that no Default is outstanding as at [insert relevant testing date].](5)

 

IMPERIAL
TOBACCO GROUP PLC

 

By:

 

 

(3)           Include
only for any Measurement Period which includes the effective date of any
business or company acquired during that Measurement Period.

(4)           This
statement need only be made for a Compliance Certificate delivered with a set
of financial statements pursuant to Clause 19.2(a)(i) of the Agreement.

(5)           This
statement need only be made if requested by the Facility Agent pursuant to
Clause 20.6(b) (Compliance Certificates). 
If this statement has been requested by the Facility Agent but cannot be
made, the certificate should identify any Default that is outstanding and the
steps, if any, being taken to remedy it.

 

100

 

Schedule 7

 

Form of Resignation Request

 

To:          [l] as
Facility Agent

 

From:      Imperial Tobacco
Group PLC

 

	
  

  	
   

  	
  Date:    [               ]

  	
   

  

 

IMPERIAL
TOBACCO GROUP PLC - 

Subordinated
Equity Bridge Credit Agreement dated [l] 2007

(the
Agreement)

 

1.             We
refer to the Agreement.  This is a
Resignation Request.

 

2.             We
request that [resigning Guarantor] be released from its obligations as a
Guarantor under the Agreement.

 

3.             We
confirm that no Default is outstanding or would result from the acceptance of
this Resignation Request.

 

4.             We
confirm that as at the date of this Resignation Request no amount owed by
[resigning Guarantor] under the Agreement is outstanding.

 

5.             This
Resignation Request is governed by English law.

 

	
  IMPERIAL TOBACCO GROUP PLC

  	
  [Relevant Guarantor]

  
	
   

  	
   

  
	
  By:

  	
  By:

  

 

The Facility
Agent confirms that this resignation takes effect on
[               ].

 

[FACILITY AGENT]

 

By:

 

101

 

Schedule 8

 

Form of Indemnity Claim Notice

 

To:          [FACILITY AGENT]

 

Copy:     IMPERIAL TOBACCO
GROUP PLC

 

From:      [RELEVANT ISSUING
ENTITY]

 

Date:       [           ]

 

IMPERIAL
TOBACCO GROUP PLC

Subordinated Equity Bridge Credit Agreement dated [l] 2007 (the Agreement)

 

1.             We
refer to the Agreement.  This is
Indemnity Claim Notice.

 

2.             We
certify that:

 

(a)           a Claimed Amount has been
demanded in an amount of €[l]; and

 

(b)           each relevant Lenders share
in the Claimed Amount determined in accordance with Clause 7.2 (Lenders’
Indemnity) of the Agreement amounts to €[l].

 

3.             We
demand payment from each relevant Lender of the amount referred to paragraph
2(b) above.

 

4.             Payment
should be made to the following account:

 

Account name:             [                           ]

 

Account number:         [                           ]

 

Account bank:              [                           ]

 

By

 

[RELEVANT ISSUING
ENTITY]

 

102

 

Schedule 9

 

Form of Avales

 

[l] (el Banco Avalista), sociedad válidamente
constituida y vigente con arreglo a la legislación [l], con domicilio social en [l], e inscrita en el Registro Mercantil de [l] con el número [l]. Actúan en su nombre y representación Don [l], mayor de edad, con domicilio en [l], con D.N.I. [l] y Don [l] , mayor de edad, con domicilio en [l], con D.N.I. [l], debidamente facultados para este acto en virtud del poder [insertar detalles del poder].

 

AVALA

 

Ante la Comisión Nacional del Mercado de Valores, y en beneficio de los
accionistas de Altadis, S.A. que acudan a la oferta pública de adquisición
formulada por la sociedad IMPERIAL TOBACCO OVERSEAS HOLDINGS (3) LIMITED, con
domicilio social en [l], inscrita en el Registro Mercantil de [l] con el número [l] (el Oferente),
sobre [l] acciones de la sociedad Altadis, S.A. (la Oferta),
las obligaciones de pago asumidas por el Oferente en la Oferta, cuyos términos
y condiciones se describen en el folleto explicativo de la Oferta presentado
para su registro en la Comisión Nacional del Mercado de Valores, en
cumplimiento de lo dispuesto en el Real Decreto 1197/1991 de 26 de Julio sobre
el régimen de Ofertas Públicas de Adquisición de Valores.

 

El importe máximo de este aval es de [l] EUROS ([l]Euros).

 

El presente Aval se otorga con carácter irrevocable, incondicional y
solidario, con renuncia expresa a los beneficios de división, orden y excusión.

 

El pago se hará en Madrid, a primer requerimiento de la Sociedad de Gestión
de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.
(IBERCLEAR) o de la Comisión Nacional del Mercado de Valores, formulado por
escrito y notificado al Banco Avalista en el domicilio de su sucursal en
España, en la calle [l]. Recibido el requerimiento de pago correspondiente, el Banco
Avalista procederá a efectuar el pago del importe correspondiente en la cuenta
que el requirente haya designado, transcurrido un (1) día hábil desde la recepción
de dicho requerimiento.

 

El presente aval subsistirá hasta el completo cumplimiento de las
obligaciones de pago del Oferente derivadas de la Oferta, o, en su defecto,
hasta la fecha en que la Oferta sea retirada, anulada o declarada sin efecto.

 

El presente aval está sujeto a la ley española. El Banco Avalista se somete
expresamente al fuero de los Jueces y Tribunales de Madrid para la resolución
de cualquier disputa o controversia que pudiese surgir en relación con la
interpretación, ámbito, efectos y ejecución del presente aval.

 

El presente aval ha sido inscrito en el Registro Especial de Avales del
Banco Avalista con el número [l]

 

En [l], a
[l].

 

[Banco
Avalista]

 

103

 

English
Translation

 

(for
information purposes only)

 

GUARANTEE

 

[        ]
(the Guarantor Entity), with registered
office at [        ], duly registered
with the Companies Registry of
[        ], with number
[        ], represented by
[        ], of legal age, with passport
number [        ], and
[        ] of legal age, with passport
number [        ], both with sufficient
powers pursuant to [insert details of relevant
power of attorney].

 

GUARANTEES

 

before the
COMISIÓN NACIONAL DEL MERCADO DE VALORES and for the benefit of the shareholders
of ALTADIS, S.A. who accept the takeover offer launched by IMPERIAL TOBACCO
OVERSEAS HOLDINGS (3) LIMITED with registered office at
[        ] and company number
[          ] (the Offeror), over [insert number of shares]
([        ]) shares in ALTADIS, S.A.
(the Offer), the payment obligations of the
Offeror arising under the Offer, which terms and conditions are described in
the Offer prospectus which has been presented for registration in the COMISIÓN
NACIONAL DEL MERCADO DE VALORES, in accordance with the provisions of Royal
Decree 1197/1991, 26 July, on takeover offers.

 

The maximum
amount guaranteed by the Guarantor Entity is euro
[        ]
([        ]). 

 

This Guarantee
unconditionally, irrevocably and jointly and severally guarantees the payment
obligations of the Offeror arising under the Offer, with express waiver of the
benefits of ranking, priority and separation ("excusión,
orden y división").

 

Payment of the
amounts payable under this guarantee will be made in Madrid on first demand for
payment made by the SOCIEDAD DE GESTIÓN DE LOS SISTEMAS DE REGISTRO,
COMPENSACIÓN Y LIQUIDACIÓN DE VALORES, S.A. (IBERCLEAR) or by the COMISIÓN
NACIONAL DEL MERCADO DE VALORES (CNMV), made in writing and addressed to the
Guarantor Entity at the address of its branch in Spain [address]. 
Once the demand for payment is received, the Guarantor Entity will make
the corresponding payment to the account indicated on the demand after one (1)
business day from receipt of the relevant payment demand.

 

This guarantee will
remain in full force and effect until the payment obligations of the Offeror
arising under the Offer have been discharged in full or, if applicable, until
the date the Offer is withdrawn, annulled or declared as without effect.

 

This guarantee is
governed by Spanish law. The Guarantor Entity, waiving the right to any other
jurisdiction which it may be entitled to, submits to the jurisdiction of the
courts of the city of Madrid to resolve any dispute or disagreement that could
arise in relation to the interpretation, scope, performance, effect and
enforcement of this guarantee.

 

[This Guarantee
has been registered on the Special Registry of Guarantees of [Issuing Entity]
with number [        ].

 

In
[        ],
[        ]
[        ] two thousand and
[         ].

 

[Name of Issuing Entity]

 

104

 

Signatories

 

Borrower

 

IMPERIAL
TOBACCO GROUP PLC

 

By:          JOHN JONES

 

 

Original
Guarantor

 

IMPERIAL
TOBACCO LIMITED

 

By:          JOHN JONES

 

 

Mandated
Lead Arrangers

 

ABN
AMRO BANK N.V.

 

By:          PETER ELLEMAN  JOHN WYATT

 

CITIGROUP
GLOBAL MARKETS LIMITED

 

By:          PAUL GIBBS

 

MORGAN
STANLEY BANK INTERNATIONAL LIMITED

 

By:          CLINTON RAY

 

LEHMAN
BROTHERS INTERNATIONAL (EUROPE)

 

By:          BRUCE HENDRY

 

 

The
Lenders

 

ABN
AMRO BANK N.V.

 

By:          PETER ELLEMAN              JOHN WYATT

 

105

 

CITIBANK,
N.A., LONDON BRANCH

 

By:          PAUL GIBBS

 

MORGAN
STANLEY BANK INTERNATIONAL LIMITED

 

By:          CLINTON RAY

 

MORGAN
STANLEY SENIOR FUNDING, INC.

 

By:          EUGENE F. MARTIN

 

LEHMAN
BROTHERS HOLDINGS, INC.

 

By:          A. TUCKER HACKETT

 

 

Issuing
Entities

 

ABN
AMRO BANK N.V., SUCURSAL EN ESPAÑA

 

By:          EMILIO GOMEZ VALANDIN                           JOSE LUIS PASTORZ 

 

CITIBANK
INTERNATIONAL PLC, SUCURSAL EN
ESPAÑA

 

By:          PAUL GIBBS

 

MORGAN
STANLEY BANK INTERNATIONAL LIMITED

 

By:          CLINTON RAY

 

LEHMAN
BROTHERS BANKHAUS AG, LONDON BRANCH

 

By:          STEVEN HODGES              JULIAN WHEELER

 

LEHMAN
COMMERCIAL PAPER INC., UK BRANCH

 

By:          BRUCE HENDRY

 

106

 

Facility
Agent

 

CITIBANK
INTERNATIONAL PLC, LONDON BRANCH

 

By:          PAUL GIBBS

 

107Exhibit 4.19

 

CONFORMED COPY

 

 

Sponsor’s and
Underwriting Agreement

 

 

Imperial Tobacco Group PLC

 

and

 

Hoare Govett Limited

 

and

 

Morgan Stanley & Co. International
plc

 

and

 

Citigroup Global Markets U.K. Equity
Limited

 

and

 

Citigroup Global Markets Limited

 

and

 

Lehman Brothers International (Europe)

 

 

18
July 2007

 

 

CONTENTS

 

	
  CLAUSE

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS AND
  INTERPRETATION

  	
  1

  
	
  2.

  	
  CONDITIONS

  	
  10

  
	
  3.

  	
  THE FINANCIAL SERVICES
  AUTHORITY, THE LONDON STOCK EXCHANGE AND CREST

  	
  13

  
	
  4.

  	
  APPOINTMENTS

  	
  14

  
	
  5.

  	
  OBLIGATIONS OF THE COMPANY

  	
  15

  
	
  6.

  	
  CERTAIN OVERSEAS
  SHAREHOLDERS

  	
  16

  
	
  7.

  	
  ALLOTMENT AND REGISTRATION

  	
  18

  
	
  8.

  	
  SALE OF CERTAIN NIL PAID
  RIGHTS

  	
  19

  
	
  9.

  	
  NEW SHARES NOT TAKEN UP

  	
  20

  
	
  10.

  	
  UNDERWRITING

  	
  23

  
	
  11.

  	
  FEES, COMMISSIONS AND
  EXPENSES

  	
  26

  
	
  12.

  	
  WARRANTIES

  	
  28

  
	
  13.

  	
  TERMINATION

  	
  29

  
	
  14.

  	
  INDEMNITIES

  	
  31

  
	
  15.

  	
  CONTRIBUTION

  	
  34

  
	
  16.

  	
  ANNOUNCEMENTS

  	
  36

  
	
  17.

  	
  RIGHTS OF THIRD PARTIES

  	
  37

  
	
  18.

  	
  MISCELLANEOUS

  	
  37

  
	
  19.

  	
  NOTICES

  	
  38

  
	
  20.

  	
  COUNTERPARTS

  	
  39

  
	
  21.

  	
  NO ADVISORY OR FIDUCIARY
  RELATIONSHIP

  	
  39

  
	
  22.

  	
  GOVERNING LAW AND
  JURISDICTION

  	
  40

  
	
   

  	
   

  
	
  SCHEDULE 1

  	
  41

  
	
  Documents for Delivery

  	
  41

  
	
  SCHEDULE 2

  	
  45

  
	
  Warranties

  	
  45

  
	
  SCHEDULE 3

  	
  63

  
	
  Certificate

  	
  63

  
	
  SCHEDULE 4

  	
  65

  
	
  Form of market underwriting agreement

  	
  65

  
	
  SCHEDULE 5

  	
  66

  
	
  List of Law Firms

  	
  66

  
	
  SCHEDULE 6

  	
  67

  
	
  List of Sponsors

  	
  67

  

 

2

 

THIS AGREEMENT is made on
18 July 2007

 

BETWEEN:

 

(1)             IMPERIAL
TOBACCO GROUP PLC (No.
3236483), a company incorporated in England and Wales whose registered office
is at PO Box 244, Upton Road, Bristol BS99 7UJ (the “Company”);

 

(2)             HOARE
GOVETT LIMITED (No.
02026375), a company incorporated in England and Wales whose registered office
is at 250 Bishopsgate, London EC2M 4AA (“Hoare Govett”);

 

(3)             MORGAN
STANLEY & CO. INTERNATIONAL PLC (No. 02068222), a company incorporated in England and Wales
whose registered office is at 25 Cabot Square, Canary Wharf, London E14 4QA (“Morgan Stanley”);

 

(4)             CITIGROUP
GLOBAL MARKETS U.K. EQUITY LIMITED (No. 02019774) whose registered office is at Citigroup
Centre, Canada Square, Canary Wharf, London E14 5LB (“Citigroup”);

 

(5)             LEHMAN
BROTHERS INTERNATIONAL (EUROPE) of 25 Bank Street, Canary Wharf, London E14 5LE, a company
incorporated in England and Wales (“Lehman Brothers”);

 

(Hoare Govett, Morgan Stanley, Citigroup and
Lehman Brothers together, the “Underwriters”);
and

 

(6)             CITIGROUP
GLOBAL MARKETS LIMITED (No.
01763297) whose registered office is at Citigroup Centre, Canada Square, Canary
Wharf, London E14 5LB (the “Sponsor”).

 

RECITALS

 

(A)           The Company
is proposing to make an offer for Altadis, to be financed by a mixture of debt
and equity, the equity component of which is intended to raise the Net
Proceeds.

 

(B)            The equity
component is to be financed initially by the Equity Bridge Facility which will
be repaid or prepaid following completion of a fully underwritten rights issue.

 

(C)            The Company
is therefore proposing, subject to the passing of the Resolution, to offer to
Qualifying Holders (other than Prohibited Holders) New Shares for subscription
by way of rights at the Issue Price.

 

(D)            Subject to
the passing of the Resolution, the Directors will have authority and be empowered
under sections 80 and 95 of the Companies Act to allot the New Shares and to do
so otherwise than in compliance with section 89 of the Companies Act.

 

(E)            This
agreement sets out the terms and conditions upon and subject to which the
Underwriters are willing to underwrite the issue of the New Shares, on a “standby”
basis, to provide comfort to the Company that it will be able to repay or
prepay the Equity Bridge Facility in full.

 

THE PARTIES AGREE AS FOLLOWS:

 

1.              DEFINITIONS AND
INTERPRETATION

 

1.1            In this
agreement (including the recitals and the schedules), the following words and
expressions shall, unless the context otherwise requires, have the following
meanings:

 

“Acceptance Date” means the final day for acceptance and payment
in full under the 

 

1

 

Rights Issue, being (subject as provided in
clause 5.6) no later than the Dealing Day ten Dealing Days prior to the
Maturity Date;

 

“Accounts” means the published annual report and audited consolidated
accounts of the Group or (if applicable) the Enlarged Group as at and for the
financial year ended on the Accounts Date;

 

“Accounts Date” means 30 September 2006 or, if later, the final
day of the financial year for which the Company has most recently published its
annual audited accounts;

 

“Accredited Investor” has the meaning given in Rule 501 (a)(1), (2),
(3) or (7) of the US Securities Act;

 

“Acquisition” means the proposed acquisition of more than 50 per cent. of
the issued shares in Altadis as described in the Circular;

 

“Admission” means:

 

(a)         admission of the New Shares (nil paid) to the
Official List becoming effective in accordance with paragraph 3.2.7 of the
Listing Rules; and

 

(b)         admission of the New Shares (nil paid) to
trading on the London Stock Exchange’s main market for listed securities
becoming effective in accordance with paragraph 2.1 of the Admission and
Disclosure Standards;

 

“Admission and Disclosure Standards” means the Admission and Disclosure Standards of
the London Stock Exchange as revised from time to time;

 

“affiliates” has the meaning given in Rule 405 or in Rule 501(b) under
the US Securities Act (as applicable in the context used);

 

“Agreed Proportions” means:

 

(a)         where the Gross Proceeds are less than or equal
to £4.25 billion:

 

(i)          40 per cent. in relation to Hoare Govett;

 

(ii)         40 per cent. in relation to Morgan Stanley; and

 

(iii)        20 per cent. in relation to Citigroup;

 

(b)         where the Gross Proceeds are greater than £4.25
billion but less then £4.722222222 billion, the Relevant Percentage; and

 

(c)         where the Gross Proceeds are equal to or greater
than £4.722222222 billion:

 

(i)          36 per cent. in relation to Hoare Govett;

 

(ii)         36 per cent. in relation to Morgan Stanley;

 

(iii)        18 per cent. in relation to Citigroup; and

 

(iv)        10 per cent. in relation to Lehman Brothers;

 

“Altadis” means Altadis, S.A.;

 

“Altadis Group” means Altadis and its subsidiaries and
subsidiary undertakings from time to time;

 

2

 

“Associate” means in relation to a party (the “first
person”) each of its affiliates, subsidiaries, branches (including
in the case of Hoare Govett, ABN AMRO Rothschild) holding companies and
subsidiaries of any such holding companies and each of their and the first
person’s respective officers, directors, employees and agents (other than
another party);

 

“aval” means a guarantee to be issued pursuant to the Equity
Bridge Facility or the Senior Credit Facility (as the case may be);

 

“Banks” means the Sponsor and the Underwriters and “Bank” means any one of them;

 

“certificated” or “in certificated form” means,
in relation to Shares, not in uncertificated form;

 

“Circular” means the circular in the agreed form to be despatched by
the Company to all shareholders entitled thereto giving details of the proposed
Acquisition;

 

“Circular Press Announcement” means the press announcement in the agreed form
to be issued by the Company in relation to the despatch of the Circular and
containing the legend set forth in Rule 135e under the US Securities Act;

 

“Circular Verification Notes” means the verification notes in the agreed form
prepared for the purpose of substantiating the accuracy and completeness of the
information contained in the Circular and the Circular Press Announcement;

 

“Circular Working Capital Report” means the working capital report in the agreed
form in respect of the Group prepared by the Reporting Accountants for the
purposes of the Circular, including any updates and supplements;

 

“Citigroup Engagement Letter” means the letter dated 12 March 2007 between
the Company and the Sponsor and the supplemental letter dated on or around 17
July 2007 between the same parties;

 

“Companies Act” means the Companies Act 1985;

 

“Condition” means a condition set out in clause 2.1 and “Conditions” means every Condition;

 

“CREST” means the relevant system (as defined in the Regulations)
in respect of which CRESTCo is the Operator (as defined in the Regulations);

 

“CRESTCo” means CRESTCo Limited;

 

“Dealing Day” means a day on which dealings in domestic securities may
take place on, and with the authority of, the London Stock Exchange;

 

“directed selling efforts” has the meaning given in Regulation S;

 

“Directors” means the directors of the Company for the time being;

 

“DTRs” means the disclosure and transparency rules made by the FSA
pursuant to Part VI of the FSMA, as revised from time to time;

 

“EGM” means the extraordinary general meeting of the Company to
be convened for the EGM Date pursuant to the notice of meeting set out in the
Circular and at which the Resolution is to be proposed and includes any
adjournment thereof;

 

“EGM Date” means the date of the EGM set out in the notice of meeting
in the Circular;

 

3

 

“Engagement Letters” means the Hoare Govett Engagement Letter, the
Morgan Stanley Engagement Letter, the Lehman Brothers Engagement Letter and the
Citigroup Engagement Letter;

 

“Enlarged Group” means the Group as enlarged by the Altadis
Group following completion of the Acquisition and “Enlarged
Group Company” means any member of such group;

 

“Environment” means all or any of land (including without limitation land
under water), water (including without limitation water under land or in drains
or sewers and coastal and inland waters), air (including without limitation the
air within buildings and the air within other natural or man-made structures
above or below ground), eco-systems, artificial and man-made buildings,
structures or enclosures above or below ground and all human plant or animal
life and living organisms or systems supported by those media and property;

 

“Environmental Law” means any and all laws, by-laws, common laws or
other laws or legislation made by a competent authority and all rules,
regulations, ordinances, orders, notices, directives, practices, guidance
notes, circulars and codes made pursuant to the same and any authoritative
judicial or administrative interpretation of each as is in force or applied or
imposed from time to time (including without limitation any environmental
standard imposed by law or, in the absence of any such law, the standard
required to be met by any competent authority or in the absence of any such
standard to be met by any competent authority, the standard adopted or applied
by any competent authority) which have as their purpose:

 

(a)         the prevention of harm or damage to the
Environment; and/or

 

(b)         the provision of remedies or compensation for
harm or damage to the Environment; and/or

 

(c)         the control of the introduction, emission,
discharge or release or escape of Hazardous Materials; and/or

 

(d)         the transportation, storage, treatment,
recovery, recycling or disposal of Hazardous Materials; and/or

 

(e)         the investigation, mitigation, remediation,
abatement, containment, limitation or removal of Hazardous Materials in the
Environment; and/or

 

(f)          town and country planning;

 

“Equity Bridge Facility” means the debt facility in the agreed form to
finance initially the equity component of the funds required by the Company to
finance the Acquisition;

 

“FCPA” means the US Foreign Corrupt Practices Act of 1977, as
amended, including the rules and regulations thereunder;

 

“Final Posting Date” shall have the meaning given to it in clause
2.5;

 

“Form 20-F” means the most recent Annual Report on Form 20-F filed by
the Company with the US Securities and Exchange Commission;

 

“Form of Proxy” means the form of proxy in the agreed form for
use in connection with the EGM;

 

“FSA” means the Financial Services Authority in its capacity as
the competent authority for the purposes of Part VI of the FSMA and in the
exercise of its functions in respect of admission to the Official List
otherwise than in accordance with Part VI of the FSMA;

 

4

 

“FSMA” means the Financial Services and Markets Act 2000;

 

“Fully Paid Rights” means fully paid rights to acquire New Shares;

 

“general advertising” shall be construed in the manner that such term
is used in Rule 502(c) under the US Securities Act;

 

“general solicitation” shall be construed in the manner that such term
is used in Rule 502(c) under the US Securities Act;

 

“Gross Proceeds” means the product of the number of New Shares
and the Issue Price;

 

“Group” means the Company and its subsidiaries and subsidiary
undertakings and the expression “Group Company” means
any of them;

 

“Hazardous Materials” means any and all matter (whether alone or in
combination with other matter) which is or may be explosive, oxidising,
reducing, hazardous, polluting, contaminating, toxic, carcinogenic, radioactive,
noxious, flammable, irritant, harmful, infectious, teratogenic, mutagenic,
ecotoxic, corrosive or caustic and whether it be in solid, liquid or gaseous
form and any electricity, heat, vibration, noise or other radiation, or any
odour;

 

“Hoare Govett Engagement Letter” means the letter dated 19 April 2007 between
the Company and Hoare Govett;

 

“Indemnified Persons” has the meaning given to it in clause 14;

 

“International Accounting Standards” or “IAS” means the
international accounting standards, within the meaning of EC Regulation No.
1606/2002 of the European Parliament and the Council of 19 July 2002 on the
application of international accounting standards, adopted from time to time by
the European Commission in accordance with that Regulation;

 

“Interim Results” means the most recent unaudited six months
interim results, if any, made publicly available by the Group or (if
applicable) the Enlarged Group, after the Accounts Date;

 

“Investor Presentation” means the investor presentation to be used by
the Company for the purposes of pre-marketing the Rights Issue;

 

“Issue Documents” means the Circular, the Rights Issue Press
Announcement, the Prospectus, any Supplementary Prospectus, the Investor
Presentation, the Form of Proxy, the Provisional Allotment Letter, the US Wrap
and the US Investor Letter;

 

“Issue Price” means a price per New Share equal to the nominal value of a
New Share;

 

“Lehman Brothers Engagement Letter” means the letter dated 14 June 2007 between the
Company and Lehman Brothers;

 

“Listing Rules” means the listing rules made by the FSA
pursuant to Part VI of the FSMA, as revised from time to time;

 

“London Stock Exchange” means London Stock Exchange plc;

 

“Losses” means all losses, claims, costs, damages, liabilities,
charges and expenses (including reasonable fees/costs and expenses of legal
counsel incurred in connection with the investigation of, preparation for,
defence of, or participation as principal or witness in any enquiry, inspection
or investigation or any pending or threatened litigation or 

 

5

 

proceedings);

 

“Material Subsidiary” means any subsidiary of the Company whose net
assets or pre-tax profit, at any time after the date of this agreement, equal
or exceed five per cent. (5%) of the consolidated net assets or adjusted
consolidated pre-tax profit of the Group or the Enlarged Group (as applicable)
at that time, and for the purposes of the above:

 

(a)         the consolidated net assets of the Group or the
Enlarged Group (as applicable) shall be the consolidated net assets of the
Group or the Enlarged Group (as applicable) ascertained by reference to the
latest audited published consolidated accounts of the Group or the Enlarged
Group (as applicable);

 

(b)         the adjusted consolidated pre-tax profit of the
Group or the Enlarged Group (as applicable) shall be the aggregate of:

 

(i)          the consolidated pre-tax profit of the Group or
the Enlarged Group (as applicable) ascertained by reference to the latest
audited published consolidated accounts of the Group or the Enlarged Group (as
applicable); and

 

(ii)         the consolidated pre-tax profit (the
pre-acquisition profit) of any subsidiary which became a member of the Group or
the Enlarged Group (as applicable) during the period for which the latest
audited published consolidated accounts of the Group or the Enlarged Group (as
applicable) were prepared (an acquired subsidiary) for the part of that period
which falls before the effective date of such acquisition calculated in
accordance with approved accounting standards used in the preparation of the
latest audited published accounts of the Group or the Enlarged Group (as
applicable);

 

(c)         the net assets of any subsidiary shall be the
net assets of that subsidiary calculated in accordance with approved accounting
standards used in the preparation of the latest audited published accounts of
the Group or the Enlarged Group (as applicable); and

 

(d)         the pre-tax profit of any subsidiary shall be
the pre-tax profit of that subsidiary calculated in accordance with approved
accounting standards used in the preparation of the latest audited published
accounts of the Group or the Enlarged Group (as applicable) plus, in the case
of any acquired subsidiary, an amount equal to any pre-acquisition, pre-tax
profit,

 

and for the purposes of the above, net assets in
respect of the Group or the Enlarged Group (as applicable) or any such
subsidiary means the fixed assets and current assets of the Group or the
Enlarged Group or that subsidiary (as the case may be); and

 

a subsidiary of the Company to which has been
transferred (whether by one transaction or a series of transactions, related or
not) the whole or substantially the whole of the assets of a subsidiary which
immediately prior to those transactions was a Material subsidiary;

 

“Maturity Date” means 17 July 2008, the maturity date under the
Equity Bridge Facility;

 

“Morgan Stanley Engagement Letter” means the letter dated 28 June 2007 between the
Company and Morgan Stanley;

 

“MTM instruction” means a Many to Many (“MTM”)
instruction given to CREST in relation to the acceptance of the offer of New
Shares in uncertificated form;

 

“Net Proceeds” means the lesser of (i) the sterling equivalent as at the
Posting Date as 

 

6

 

notified to Hoare Govett (on behalf of the
Banks) by Citibank International PLC, London Branch as Facility Agent under the
Equity Bridge Facility of the amount outstanding under the Equity Bridge
Facility; and (ii) £5.4 billion;

 

“New Shares” means such number of new Shares proposed to be allotted
pursuant to this agreement at the Issue Price such that the proceeds (net of
fees, commissions and expenses) are an amount equal to the Net Proceeds;

 

“Nil Paid Rights” means the New Shares in nil paid form provisionally
allotted to Qualifying Holders (other than Prohibited Holders) in connection
with the Rights Issue;

 

“OECD Convention” means the OECD Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions;

 

“OFAC” means the Office of Foreign Assets Control of the US
Department of the Treasury;

 

“Offer” means the offer by which the Acquisition is proposed to be
achieved;

 

“Official List” means the Official List of the FSA;

 

“Part 6 Rules” means the DTRs, the Listing Rules and the Prospectus Rules;

 

“Posting Date” means the date on which the Company publishes the
Prospectus;

 

“Press Announcements” means the Circular Press Announcement and the
Rights Issue Press Announcement;

 

“Previous Announcements”  means all documents issued and announcements made by or on
behalf of the Company or any member of the Group to the public or the press
since the Accounts Date;

 

“Prohibited Holders” means Qualifying Holders with registered
addresses in the United States, Canada, Japan, Australia and the Republic of
South Africa save any US Shareholder who has satisfied the Company and Hoare
Govett (acting for and on behalf of the Banks) that it is permitted to
participate in the Rights Issue and who is both an Accredited Investor and a
QIB;

 

“Prospectus” means the prospectus of the Company to be published in
connection with the Rights Issue containing, inter alia, details of the New
Shares (including any Supplementary Prospectus);

 

“Prospectus Rules” means the rules made for the purposes of Part VI
of the FSMA in relation to offers of securities to the public and admission of
securities to trading on a regulated market, as revised from time to time;

 

“Prospectus Verification Notes” means the verification notes to be prepared for
the purpose of substantiating the accuracy and completeness of the information
contained in the Prospectus, the Rights Issue Press Announcement and the
Investor Presentation;

 

“Prospectus Working Capital Report” means the working capital report in respect of
the Enlarged Group to be prepared by the Reporting Accountants for the purposes
of the Prospectus, including any updates and supplements.

 

“Provisional Allotment Letter” means the form of renounceable provisional
allotment letter to be issued in connection with the Rights Issue by the
Company to Qualifying Non-CREST Holders (other than Prohibited Shareholders) in
respect of the Nil Paid Rights;

 

7

 

“QIBs” means qualified institutional buyers as defined in Rule
144A;

 

“Qualifying CREST Holders” means Qualifying Holders whose Shares on the
register of members of the Company at the close of business on the Record Date
are in uncertificated form;

 

“Qualifying Holders” means the holders of Shares whose names are on
the register of members of the Company at the close of business on the Record
Date;

 

“Qualifying Non-CREST Holders” means Qualifying Holders whose Shares on the
register of members of the Company at the close of business on the Record Date
are in certificated form;

 

“Record Date” means the fifth Dealing Day prior to the Posting Date;

 

“Registrars” means the registrars of the Company for the time being;

 

“Regulation S” means Regulation S under the US Securities Act;

 

“Regulation” means the Uncertificated Securities Regulations 2001 (SI
2001 No. 3755);

 

“Regulatory Information Service” means a regulatory information service that is
on the list of regulatory information services maintained by the FSA for the
time being;

 

“Relevant Percentage” means:

 

(a)         in relation to each of Hoare Govett, Morgan
Stanley and Citigroup, A/B x X; and

 

(b)         in relation to Lehman Brothers, (B-A)/B x 100,

 

where:

 

A =
4,250,000,000;

 

B = the
sterling amount of the Gross Proceeds; and

 

X = the
percentage relating to the relevant Underwriter set out in sub-paragraph (a) of
the definition of Agreed Proportions;

 

“Reporting Accountants” means the accountants engaged in connection
with the Rights Issue;

 

“Resolution” means the resolution set out in the notice convening the
EGM to be contained in the Circular;

 

“Rights Issue” means the proposed offer of the New Shares by way of rights
to Qualifying Holders (other than Prohibited Holders) at the Issue Price on the
basis of such number of New Shares to existing Shares held at the close of
business on the Record Date such that the proceeds (net of fees, commissions
and expenses) from the proposed offer are not less than an amount equal to the
Net Proceeds, fully underwritten by the Underwriters and otherwise on and
subject to the terms and conditions set out or referred to in the Prospectus
and the Provisional Allotment Letter;

 

“Rights Issue Press Announcement” means the press announcement to be issued by the
Company on the Posting Date in relation to the Rights Issue and containing the
legends required by Rule 135e of the US Securities Act;

 

“Rule 144A” means Rule 144A under the US Securities Act;

 

8

 

“Senior Credit Facility” means the debt facility in the agreed form to
finance the debt component of the funds required by the Company to finance the
Acquisition;

 

“Shares” means ordinary shares of 10 pence each in the capital of
the Company;

 

“Similar Proceedings” has the meaning given in Warranty 8 of Part A
and Warranty 8 of Part B of schedule 2;

 

“Supplementary Prospectus” means any supplementary prospectus published by
the Company in accordance with the FSMA and the Prospectus Rules which is
supplementary to the prospectus of the Company to be published in connection
with the Rights Issue;

 

“taken up” has the meaning given in clause 9.1;

 

“Target Reporting Accountants” means Deloitte, S.L.;

 

“Tax” means all taxes, levies, imposts, duties, charges or withholdings
of any nature whatsoever whether of the United Kingdom or elsewhere and
wherever imposed, together with all penalties, charges and interest relating to
any of the foregoing and regardless of whether chargeable directly or primarily
against or attributable directly or primarily to a Group Company or any other
person;

 

“Uncertificated” or “in uncertificated form” means,
in relation to Shares, title to which is recorded on the register of members of
the Company as being held in uncertificated form, with title which may (by
virtue of the Regulations) be transferred by means of CREST;

 

“United States” or “US” means the
United States of America, its territories and possessions, any State of the
United States of America and the District of Columbia;

 

“US Exchange Act” means the United States Securities Exchange Act
of 1934;

 

“US Investment Company Act” means the United States Investment Company Act
of 1940;

 

“US Investor Letter” means the letter to be used in connection with
the Rights Issue;

 

“US Securities Act” means the United States Securities Act of 1933;

 

“US Shareholder” means a Qualifying Holder with a registered
address in the United States or who is a US person (as defined in Regulation
S);

 

“US Wrap” means the pages supplemental to the Prospectus containing
information specifically relating to the United States (in addition to the
information in the Prospectus) for distribution to certain US Shareholders;

 

“VAT” means value added tax; and

 

“Warranties” means the warranties given pursuant to clause 12 and set
out in schedule
2.

 

1.2            In this
agreement, unless otherwise specified, reference to:

 

(a)         “includes” and “including”
shall mean including without limitation;

 

(b)         a “subsidiary undertaking” is to be construed in accordance
with section 258 of the Companies Act, and a “subsidiary”
is to be construed in accordance with section 736 of the Companies
Act;

 

9

 

(c)         a “party” means a party to this agreement and includes its
permitted assignees and/or the successors in title to that part of its
undertaking which includes this agreement;

 

(d)         a “person” includes any person, individual, company, firm,
corporation, government, state or agency of a state or any undertaking or
organisation (whether or not having separate legal personality and irrespective
of the jurisdiction in or under the law of which it was incorporated or
exists);

 

(e)         a statute or
statutory instrument or any of their provisions is to be construed as a
reference to that statute or statutory instrument or such provision as the same
may have been or may from time to time hereafter be amended or re-enacted;

 

(f)          recitals,
clauses, paragraphs, or schedules are to recitals, clauses and paragraphs of
and schedules to this agreement; the schedules form part of the operative
provisions of this agreement and references to this agreement shall, unless the
context otherwise requires, include references to the recitals and the
schedules;

 

(g)         writing shall
include typewriting, printing, lithography, photography and other modes of
representing words in a legible form (other than writing on an electronic or
visual display screen) or other writing in non-transitory form;

 

(h)         words denoting the singular shall include the
plural and vice versa and words denoting any gender shall include all genders;
and

 

(i)          the time of
day is reference to time in London, England.

 

1.3            In this
agreement any reference to a document being in the agreed form means a document
initialled, for the purposes of identification only, by the Company, and the
Banks or by Ashurst on their behalf.

 

1.4            The
obligations of the Banks under this agreement shall be several and not joint or
joint and several. Where Hoare Govett is expressed in this agreement to act for
and on behalf of the Banks or the Underwriters, each of the other Banks or
Underwriters (as the case may be) hereby confirms and agrees that Hoare Govett
has full power and authority to act on its behalf.

 

2.              CONDITIONS

 

2.1            The
obligations of the Banks are subject to the following Conditions (other than
the obligations of the Banks under clauses 2.5, 4.1, 4.3, 10.7, 10.8 and 10.9
which are subject to the Conditions in paragraphs (a) to (e), (k) and (l)
below) and the obligations of the Company under clauses 3, 5.1, 5.4, 5.5, 5.6, 6,
7, 8 and 9 are subject to the Conditions in paragraphs (a), (d) and (e) below:

 

(a)         the Offer
becoming or being declared by the Company to be unconditional in all respects;

 

(b)         no equity
offering(s) of whatsoever nature (including without limitation any offering(s)
of securities which are exchangeable or convertible into equity, and any
offering(s) of hybrid securities) having been completed following the date of
this agreement and prior to the Posting Date under which the Company has
received proceeds (net of fees, commissions and expenses) at least equal in
aggregate to the Net Proceeds;

 

(c)         no
underwriters other than the Underwriters having been appointed to conduct an
equity offering of whatsoever nature (including without limitation any offering
of securities which are exchangeable or convertible into equity, and any
offering of 

 

10

 

hybrid securities) between the date of this
agreement and the Posting Date (provided that, for the avoidance of doubt, the
Company shall not be in breach of this Condition if it is acting strictly in
accordance with and in the circumstances contemplated by clause 10.9 until such
time as an underwriter or underwriters are appointed pursuant to that clause);

 

(d)         the passing of
the Resolution at the EGM (without amendment);

 

(e)         the Equity
Bridge Facility having been drawn down in whole or in part and/or an aval
having been issued under the Equity Bridge Facility;

 

(f)          the release
of the Rights Issue Press Announcement to a Regulatory Information Service by
not later than 8.00 a.m. on the Posting Date;

 

(g)         the formal
approval by the FSA of the Prospectus as a prospectus by not later than the
Posting Date;

 

(h)         the posting
of the Prospectus in accordance with clause 5.4(b);

 

(i)          the filing of
a copy of the Prospectus with the FSA;

 

(j)          the posting
of Provisional Allotment Letters in accordance with clause 5.4(c)(i) and the
crediting of stock accounts by CRESTCo as referred to in clause 5.4(c)(ii);

 

(k)         the Company
not being in breach of any of its obligations under this agreement (other than
in respect of the Warranties) which fall to be performed prior to Admission;

 

(l)          there being
no breach, as at the date of this agreement, or at any time prior to Admission,
of any of the Warranties set out in paragraphs 9, 11 and 17 of part A of
schedule 2 and there being no breach, immediately prior to Admission, of any of
the Warranties set out in paragraphs 9, 11 and 17 of part B of schedule 2;

 

(m)        the delivery
by the Company to the Banks immediately prior to Admission of a certificate
signed by a director of the Company in the form set out in schedule 3 (except that inclusion of paragraph 5 of such
certificate shall not constitute a Condition);

 

(n)         the delivery
to Hoare Govett (acting for and on behalf of the Banks) of the documents
referred to in schedule 1 at the times specified therein (provided that this
Condition shall be deemed to have been satisfied, notwithstanding the documents
in paragraphs 4.9, 4.20, 6.5 and 6.6 of schedule 1 have not been addressed to
the Banks, if the Company has complied with the provisions of clauses 5.7, 5.8
and 5.9);

 

(o)         each
condition to enable the Nil Paid Rights and the Fully Paid Rights to be
admitted as participating securities (as defined in the Regulations) in CREST
(other than allotment of the New Shares and Admission) being satisfied on or
before the Posting Date;

 

(p)         to the extent
an event referred to in section 87G of the FSMA arises between the time of
publication of the Prospectus and the time of Admission, the publication of a
Supplementary Prospectus by or on behalf of the Company before Admission; and

 

(q)         Admission
taking place by no later than 8.30 a.m. on the first Dealing Day after the
Posting Date or such later time or date as may be agreed between the Company
and Hoare Govett (acting for and on behalf of the Banks).

 

11

 

2.2            The Company
shall use its reasonable endeavours to procure the fulfilment of the
Conditions.

 

2.3            If any of the
Conditions in clauses 2.1 (a) to (e) shall not have been fulfilled (or waived
in writing by Hoare Govett (acting for and on behalf of the Banks)) or shall
have become incapable of fulfilment on or before the date or time specified for
the fulfilment thereof or (if later) by the date ten days prior to the Maturity
Date (or such later date and/or time as Hoare Govett (acting for and on behalf
of the Banks) and the Company may agree), this agreement shall cease and
determine and except as regards any breach of any provision of this agreement
which has occurred prior to such termination no party shall have any claim
against any other party for any costs, damages, compensation or otherwise save
that:

 

(a)         to the extent
due or accrued for payment the Company shall pay the commissions, fees and
expenses referred to in clauses 11.1(a), 11.3, 11.4, 11.5, 11.6 and 11.7
(subject as provided therein);

 

(b)         the
provisions of clause 1, this clause 2.3 and clauses 11, 13, 14, 15, 16.1, 16.4
and 17 to 22 (inclusive) (but not 18.1 or 18.8) shall remain in full force and
effect; and

 

(c)         the
Engagement Letters shall remain in full force and effect in accordance with
their respective terms,

 

and the Sponsor shall, on behalf of the Company,
withdraw any applications made to the FSA and the London Stock Exchange in
connection with Admission and the Company shall make an announcement to that
effect to a Regulatory Information Service.

 

2.4            If any of the
Conditions in paragraphs (f) to (q) of clause 2.1 shall not have been fulfilled
(or waived in writing by Hoare Govett (acting for and on behalf of the Banks))
or shall have become incapable of fulfilment on or before the date or time
specified for the fulfilment thereof or (if later) by no later than 8.30 a.m.
on the first Dealing Day after the Posting Date in respect of any particular
Rights Issue undertaken pursuant to this agreement then:

 

(a)         in relation
to that Rights Issue only, all obligations of the Banks shall cease and
determine; and

 

(b)         if such
failure to satisfy such Condition is (in the reasonable opinion of the Banks)
incapable of remedy and material in the context of the Company’s ability to
implement a Rights Issue in accordance with the terms of this agreement, or if
any of the Conditions in clauses 2.1(f) to (q) shall not have been fulfilled
(or waived in writing by Hoare Govett (acting for and on behalf of the Banks))
at the latest by 8.30 a.m. on the first Dealing Day after the Final Posting
Date, then this agreement shall cease and determine and except as regards any breach
of any provision of this agreement which has occurred prior to such termination
no party shall have any claim against any other party for any costs, damages,
compensation or otherwise save that:

 

(i)          to the extent
due or accrued for payment the Company shall pay the commissions, fees and
expenses referred to in clauses 11.1(a), 11.3, 11.4, 11.5, 11.6 and 11.7
(subject as provided therein);

 

(ii)         the
provisions of clause 1, this clause 2.4 and clauses 11, 13, 14, 15, 16.1, 16.4
and 17 to 22 (inclusive) (but not 18.1 or 18.8) shall remain in full force and
effect; and

 

(iii)        the
Engagement Letters shall remain in full force and effect in accordance 

 

12

 

with their respective terms,

 

and the Sponsor shall, on behalf of the Company,
withdraw any applications made to the FSA and the London Stock Exchange in
connection with Admission and the Company shall make an announcement to that
effect to a Regulatory Information Service.

 

2.5            The Posting
Date shall be a Dealing Day to be agreed in good faith between the Company and
Hoare Govett (acting for and on behalf of the Banks), having regard to market
conditions and the requirements of the FSMA, the Part 6 Rules, the rules and
regulations of the London Stock Exchange (including the Admission and
Disclosure Standards) and all other relevant laws and regulations of the United
Kingdom and elsewhere and all applicable requirements of any regulatory body,
and the reasonable requirements of the Banks to conduct due diligence (such due
diligence being of a nature reasonably sufficient to allow counsel for the
Company and the Banks to prepare and deliver to the Banks 10b 5 disclosure
letters in the agreed form (subject to any changes agreed with the Banks
necessary to enable such disclosure letters to be given)), with the aim of
providing the Net Proceeds as soon as reasonably practicable after completion
of the Acquisition by any member of the Group. The Acceptance Date will be the
day 21 days after the Posting Date (or, if such day is not a Dealing Day, the
next Dealing Day thereafter). In the absence of agreement between the Company
and Hoare Govett (acting for and on behalf of the Banks), the Posting Date
shall be such Dealing Day as will ensure that the Acceptance Date (being the
day 21 days after the Posting Date (or, if such day is not a Dealing Day, the
next Dealing Day thereafter)) is the Dealing Day ten Dealing Days prior to the
Maturity Date (such Posting Date being the “Final Posting Date”).

 

3.              THE FINANCIAL SERVICES
AUTHORITY, THE LONDON STOCK EXCHANGE AND CREST

 

3.1            The Company
confirms to the Banks that it will, at its own expense, make application:

 

(a)         to the FSA:

 

(i)          for formal
approval of the Prospectus as a prospectus pursuant to the Prospectus Rules;
and

 

(ii)         for the
admission of the New Shares to the Official List; and

 

(b)         to the London
Stock Exchange for admission of the New Shares to trading on its main market
for listed securities,

 

and that it will supply to the FSA and the
London Stock Exchange respectively all the documents required to be provided by
the Company in such applications.

 

3.2            When
appropriate after the date of this agreement, the Company shall deliver to
CRESTCo security application forms in respect of the Nil Paid Rights and the
Fully Paid Rights to the extent it has not already done so prior to the date of
this agreement.

 

3.3            The Company
will deliver to Hoare Govett (acting for and on behalf of the Banks) prior to
the Posting Date an undated letter in the agreed form from the Company to CREST
confirming that each condition to enable the Nil Paid Rights and the Fully Paid
Rights and the New Shares to be admitted as participating securities in CREST
has been satisfied, such letter to be dated and delivered to CREST immediately
following satisfaction of the relevant conditions.

 

3.4            The Company
shall supply all such information and documentation, give all such
undertakings, execute all such documents, pay all such fees and generally do or
procure to be done all such things:

 

13

 

(a)         as may be
necessary or required by the FSA or the London Stock Exchange for the purpose
of obtaining the approval and the grant of Admission;

 

(b)         as may be
necessary or required to enable the Nil Paid Rights and the Fully Paid Rights
to be admitted as participating securities (as defined in the Regulations) in
CREST; and

 

(c)         as may be
necessary or required to comply with the Part 6 Rules, the Admission and
Disclosure Standards, the FSMA and the Companies Act in connection with
Admission.

 

4.              APPOINTMENTS

 

4.1            The Company
confirms the appointment of Hoare Govett as joint broker and listing agent,
Morgan Stanley as joint broker and financial adviser, Lehman Brothers as
financial adviser, Citigroup as lead financial adviser and the Sponsor as
sponsor in connection with the Rights Issue on and subject to the terms of this
agreement and each of Hoare Govett, Morgan Stanley, Lehman Brothers, Citigroup
and the Sponsor hereby accepts such appointments and shall, to the extent
consistent with its role as broker, listing agent and/or financial adviser (as
the case may be), give the Company all reasonable assistance in connection with
Admission and the Rights Issue.

 

4.2            Each of the
appointments under clause 4.1 confers on each of the Underwriters and the
Sponsor all powers, authorities and discretions on behalf of the Company which
are necessary for, or incidental to, the performance of their respective
functions in connection with the Rights Issue (including, without limitation,
the power to appoint agents or to delegate the exercise of any of its powers,
authorities or discretions to such other persons as it sees fit provided that
notwithstanding such appointment or delegation, it shall remain liable to the
Company for the performance of its obligations hereunder) and the Company
hereby agrees to ratify and confirm everything which the Underwriters and the
Sponsor (or their duly appointed agents or delegates) shall lawfully do in the
exercise of such appointment, powers, authorities and discretions upon and
subject to the terms and conditions set out in this agreement.

 

4.3            The Company
acknowledges the Sponsor’s responsibilities as sponsor will be owed solely to
the FSA and that by agreeing to act as sponsor for the purposes of the Listing
Rules, no duties or obligations are extended to any other person, including any
of the parties to this agreement, except as expressly provided for in this
agreement. The Sponsor shall, to the extent consistent with its role as sponsor
as contemplated by this agreement, give to the Company all reasonable
assistance in connection with the application for Admission (including, without
limitation, the delivery of such information or documents as may be required by
the FSA or the London Stock Exchange in connection with Admission). To the
extent that the Sponsor does not provide such reasonable assistance or any such
information or documents, and the Sponsor does not remedy such omission within
5 days of a written request by the Company, the Company shall be entitled
forthwith to terminate the appointment of the Sponsor as sponsor and to appoint
another person on the list in schedule 6 (subject to a right of first refusal
in favour of the other Banks, provided that one of such Banks shall have
accepted such appointment within 48 hours of the termination of the appointment
of the Sponsor) as sponsor in connection with Admission.

 

4.4            Without
prejudice to the obligations of the Sponsor under this agreement, the Company
undertakes that it will (so far as is within its powers) at any time before or
after the date on which Admission becomes effective provide to the Sponsor all
information and assistance reasonably requested by the Sponsor in the
performance of its functions and duties as sponsor under this agreement or that
may reasonably be required by the Sponsor to satisfy its obligations under the
Listing Rules, including (without limitation) to 

 

14

 

provide to the FSA any information or
explanation as the FSA may require for the purpose of verifying whether the
Listing Rules are being and have been complied with by the Sponsor or by the
Company.

 

4.5            The Company
confirms that it will, prior to the posting of the Prospectus, instruct the
Registrars to act as receiving bankers and registrars in connection with the
Rights Issue, and to perform the obligations assigned to them under the
Prospectus, the Provisional Allotment Letters and this agreement as receiving
bankers and registrars.

 

5.              OBLIGATIONS OF THE COMPANY

 

5.1            The Company
shall procure that there are delivered to Hoare Govett (acting for and on
behalf of the Banks) the documents referred to in schedule 1 at
the times specified in, and otherwise in accordance with the requirements of,
that schedule.

 

5.2            The Company
shall use all reasonable endeavours to assist the Banks in conducting their due
diligence review of the Enlarged Group, including without limitation providing
the information reasonably required by the Banks’ counsel, Ashurst, in
connection with the delivery of their 10b-5 disclosure letter and US and
English law opinions and the Reporting Accountants in connection with the
delivery of the SAS 72 and international comfort letters referred to in
schedule 1.

 

5.3            The Company
will not apply for its Shares to be delisted from the London Stock Exchange or
the New York Stock Exchange prior to the Maturity Date other than following a
takeover offer for the Company having become or been declared unconditional in
all respects or in respect of a scheme of arrangement under section 425 of the
Companies Act which is approved by the Court and by the shareholders of the
Company under which any person acquires the entire issued share capital of the
Company.

 

5.4            Subject to
the Prospectus having been approved by the FSA as a prospectus, the Company
shall procure that:

 

(a)         further
copies of the Prospectus, together with any documents incorporated by
reference, are made available by or on behalf of the Company in accordance with
the Listing Rules;

 

(b)         the Prospectus
is, subject as provided in clause 6, posted to Qualifying Shareholders of the
Company (other than Prohibited Holders) by not later than the Posting Date;

 

(c)         subject to
the provisional allotment of the New Shares having been made in accordance with
clause 7.1:

 

(i)          Provisional
Allotment Letters are posted to Qualifying Non-CREST Holders (other than
Prohibited Holders) on the Posting Date; and

 

(ii)         the
Registrars instruct CRESTCo to credit the stock accounts in CREST of Qualifying
CREST Holders (other than Prohibited Holders) with their entitlements to Nil
Paid Rights so that they are credited on the first Dealing Day after the
Posting Date; and

 

(d)         the
information referred to in paragraph 9.5.5R(1) of the Listing Rules is notified
to a Regulatory Information Service as required by the Listing Rules.

 

5.5            The Company shall notify Hoare Govett (acting
for and on behalf of the Banks) immediately of any matter referred to in
section 87G of the FSMA which arises between the time that the Prospectus is
formally approved by the FSA and 11.00 a.m. on the Acceptance Date and, without
prejudice to clauses 2 and 13 shall:

 

15

 

(a)         promptly
prepare and deliver to the FSA for approval a Supplementary Prospectus which shall
be in a form approved or authorised by the FSA;

 

(b)         otherwise
comply with paragraphs 3.1, 3.2 and 3.4 of the Prospectus Rules; and

 

(c)         ensure that
every matter referred to in section 87G of the FSMA which arises between the
time the Prospectus is formally approved by the FSA and 11.00 a.m. on the
Acceptance Date shall be dealt with in accordance with section 87G of the FSMA
and the Listing Rules.

 

5.6            If a
Supplementary Prospectus is issued by the Company two or less Dealing Days
prior to the date specified in the Prospectus as the Acceptance Date (or such
later date as may be agreed between the Company and Hoare Govett (acting for
and on behalf of the Banks)), the parties agree that the Acceptance Date shall
be extended to the date which is three Dealing Days after the date of issue of
the Supplementary Prospectus and all dates in this agreement referable to the
Acceptance Date shall also be extended mutatis mutandis.

 

5.7            The Company
shall:

 

(a)         use all
reasonable endeavours to procure delivery to Hoare Govett (acting for and on
behalf of the Banks) of each of the documents from the Target Reporting
Accountants referred to in paragraphs 4.9, 4.20, 6.5 and 6.6 of schedule 1 (at
each of the times specified therein) addressed, in each case, to the Banks (the
“Comfort Letters”); and

 

(b)         notify the
Banks at least 10 Dealing Days prior to the Posting Date if it will not be able
to procure delivery of the Comfort Letters in accordance with sub-clause (a)
above.

 

5.8            If the
Company fails (having used all reasonable endeavours as set out in clause
5.7(a)), to procure delivery of the Comfort Letters referred to in paragraphs
4.9 and 6.5 of schedule 1) it shall, as soon as reasonably practicable
following notification to the Banks pursuant to clause 5.7(b), appoint each of
the Underwriters as joint sponsor (together with the Sponsor) on the same terms
of appointment as the Sponsor (except that there shall be no additional fee due
to the Underwriters in respect of such appointments) to ensure such Comfort
Letters can be given by the Target Reporting Accountants addressed to the joint
sponsors, and the delivery of such letters so addressed and at the appropriate
times shall constitute Conditions.

 

5.9            If the
Company fails (having used all reasonable endeavours as set out in clause
5.7(a)), to procure delivery of the Comfort Letters referred to in paragraphs
4.20 and 6.6 of schedule 1), it is acknowledged by the Company that no offering
of New Shares or Provisional Allotment Letters will be made to any US
Shareholders or US persons in connection with the Rights Issue, irrespective
whether such shareholders are Accredited Investors and/or QIBs, and the Rights
Issue shall be conducted outside the US only in accordance with Regulation S.

 

6.              CERTAIN OVERSEAS
SHAREHOLDERS

 

6.1            The Company
shall procure that, except with the consent of Hoare Govett (acting for and on
behalf of the Banks), no copies of the Prospectus nor any Provisional Allotment
Letters shall be posted to (in the case of shareholders who hold their Shares
in certificated form), and no Nil Paid Rights shall be credited to member
accounts maintained within CREST by (in the case of shareholders who hold
Shares in uncertificated form), Prohibited Holders or US Shareholders, but the
parties hereto agree that copies of the US Wrap, the Prospectus, the
Provisional Allotment Letter and a copy of the Company’s Form 20-F shall be
posted to certain US Shareholders who are both Accredited Investors and QIBs
and who have satisfied Hoare Govett (acting for and on behalf of the Banks) and
the Company that they 

 

16

 

may take up their entitlement to the New Shares
in accordance with an applicable exemption from US securities laws. The New
Shares attributable to the entitlements of Prohibited Holders (except those
referred to in the previous sentence) shall be dealt with in accordance with
clause 8.

 

6.2            Each of the
parties acknowledges and agrees that offers and sales of the Provisional
Allotment Letters, the Nil Paid Rights and the Fully Paid Rights and the New
Shares will be made as described in the Prospectus and the US Wrap, as
applicable, and any amendment or supplement thereto and in accordance with the
terms of this agreement.

 

6.3            Each of the
parties acknowledges and agrees (for itself and on behalf of its respective
affiliates and persons acting on their behalf) that the Provisional Allotment
Letters, the Nil Paid Rights, the Fully Paid Rights and the New Shares have not
been and will not be registered under the US Securities Act and may not be
offered or sold within the United States or to, or for the account or benefit
of, a US person within the meaning of Regulation S except pursuant to an
exemption from, or in a transaction not subject to the registration
requirements of, the US Securities Act, and except to a limited number of
institutional investors that are Accredited Investors and QIBs and pursuant to
the procedures established in the Rights Issue to qualify for exemption from
registration under the US Securities Act, including receipt of the US Investor
Letters.

 

6.4            The Company
agrees to comply with the terms of the US selling restrictions set out in
paragraphs 19.1, 19.2, 19.3 and 19.5 of Part A of schedule 2 and paragraphs
21.1, 21.2, 21.3 and 21.5 of Part B of schedule 2.

 

6.5            Each Bank
represents and warrants to, and agrees with, the Company that in connection
with the Rights Issue:

 

(a)         it has not
engaged and will not engage in and none of its affiliates or any person acting
on its behalf has engaged in, or will engage in, any form of general
solicitation or general advertising in the United States in connection with any
offer or sale of the Provisional Allotment Letters, the Nil Paid Rights, the
Fully Paid Rights or the New Shares;

 

(b)         it has not
engaged, and will not engage, in and none of its affiliates or any person
acting on its behalf has engaged in, or will engage in, any directed selling
efforts with respect to the Provisional Allotment Letters, the Nil Paid Rights,
the Fully Paid Rights or the New Shares; and

 

(c)         it will offer
and solicit offers of Provisional Allotment Letters, Nil Paid Rights, Fully
Paid Rights and New Shares only to persons in the United States and US persons
that are both institutional Accredited Investors and QIBs pursuant to the procedures
established for the Rights Issue to qualify for exemption from registration
under the US Securities Act, including receipt of the US Investor Letters.

 

6.6            The Company
shall use all reasonable endeavours to ensure that any Provisional Allotment
Letter and any Nil Paid Rights, Fully Paid Rights or New Shares delivered to US
Shareholders are in certificated form and the Registrars shall attach the
following legend to each of the certificates for, or other written evidence of,
the Nil Paid Rights, the Fully Paid Rights or the New Shares:

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE US SECURITIES ACT OF 1933, AS AMENDED, (THE “US SECURITIES ACT”), OR ANY
OTHER APPLICABLE SECURITIES LAW. BY ITS ACCEPTANCE OF THE ORDINARY SHARES THE
PURCHASER REPRESENTS THAT IT IS BOTH AN INSTITUTIONAL ACCREDITED INVESTOR AS
THAT TERM IS DEFINED IN RULE 501 (a), (1), (2), (3) or (7) OF THE US SECURITIES
ACT (“ACCREDITED INVESTORS”) AND A QUALIFIED INSTITUTIONAL BUYER (“QIB”) AS
SUCH 

 

17

 

TERM IS DEFINED IN RULE 144A UNDER THE US
SECURITIES ACT AND THAT IT IS EITHER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF OTHER PURCHASERS WHO ARE BOTH QIBS AND ACCREDITED INVESTORS AND
AGREES (A) THAT THE SECURITIES ARE NOT BEING ACQUIRED WITH A VIEW TO
DISTRIBUTION AND ANY RESALE OF SUCH SECURITIES WILL BE MADE ONLY IN ACCORDANCE
WITH RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT OR UPON DELIVERY OF
AN OPINION OF US COUNSEL REASONABLY SATISFACTORY TO IMPERIAL TOBACCO GROUP PLC
(UNLESS THE DELIVERY OF SUCH OPINION IS WAIVED BY IMPERIAL TOBACCO GROUP PLC)
TO THE EFFECT THAT THE RESALE IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE US SECURITIES ACT, AND (B) THAT SO LONG AS THE ORDINARY SHARES ARE “RESTRICTED
SECURITIES” WITHIN THE MEANING OF RULE 144(A)(3) OF THE US SECURITIES ACT, THEY
MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY.

 

A RESALE IN ACCORDANCE WITH RULE 904 OF THE US
SECURITIES ACT MAY INCLUDE A TRANSACTION WHERE NO DIRECTED SELLING EFFORTS ARE
MADE IN THE UNITED STATES, THE OFFER IS NOT MADE TO A PERSON IN THE UNITED
STATES AND EITHER (A) AT THE TIME THE BUY ORDER IS ORIGINATED, THE BUYER IS
OUTSIDE THE UNITED STATES, OR THE SELLER AND ANY PERSON ACTING ON ITS BEHALF
REASONABLY BELIEVE THAT THE BUYER IS OUTSIDE THE UNITED STATES, OR (B) THE
TRANSACTION IS EXECUTED IN, OR THROUGH THE FACILITIES OF THE LONDON STOCK
EXCHANGE AND NEITHER THE SELLER NOR ANY PERSON ACTING ON ITS BEHALF KNOWS THAT
THE TRANSACTION HAS BEEN PRE-ARRANGED WITH A BUYER IN THE UNITED STATES”

 

7.              ALLOTMENT AND REGISTRATION

 

7.1            Subject to:

 

(a)         satisfaction
of the Conditions (except that relating to Admission); and

 

(b)         the FSA
having agreed to admit the New Shares to the Official List and the London Stock
Exchange having agreed to admit the New Shares to trading on its main market
for listed securities (in each case subject only to the provisional allotment
of the New Shares),

 

the Company shall procure that the New Shares
are provisionally allotted on the Posting Date to Qualifying Holders (including
Prohibited Holders) on the basis and otherwise on the terms and subject to the
conditions set out in the Prospectus and the US Wrap, as applicable and, in the
case of New Shares in certificated form, the Provisional Allotment Letter. The
allotment of the New Shares shall be made pursuant to a resolution of the board
of Directors (or a duly established and authorised committee thereof). Fractions
of New Shares shall not be allotted to Qualifying Holders and the entitlements
of Qualifying Holders shall be rounded down to the nearest whole number of New
Shares. Fractional entitlements will be aggregated and the resulting number of
New Shares and the New Shares attributable to Prohibited Holders shall be dealt
with in accordance with clause 8.

 

7.2            The Company
shall procure that, by not later than the third Dealing Day following the
Acceptance Date, the provisional allotments of the New Shares which have been
taken up are confirmed and the provisional allotments of the New Shares which
have not been taken up are cancelled and new allotments thereof made in favour
of the persons who, pursuant to clauses 9.4 and/or 10, subscribe for such New
Shares. Such confirmation, cancellation and new allotment shall be made
pursuant to a resolution of the board of Directors (or a duly established and
authorised committee thereof).

 

7.3            The Company
may only exercise its right in the Prospectus to allot (other than in respect
of Shares held by Qualifying Non-CREST Holders or US Shareholders) and issue
the Nil Paid Rights, the Fully Paid Rights or the New Shares in certificated
form if it has first obtained the Underwriters’ prior written consent (such
consent not to be unreasonably 

 

18

 

withheld or delayed).

 

7.4            The New
Shares will, when issued and fully paid, rank pari passu in all respects with
the existing issued Shares.

 

8.              SALE OF CERTAIN NIL PAID
RIGHTS

 

8.1            By not later
than 5.00 p.m. on the Posting Date, the Company shall procure that Hoare Govett
(acting for and on behalf of the Underwriters) is notified in writing of the
number of New Shares which represents the aggregate of fractional entitlements
to New Shares arising in respect of the Rights Issue and of the number of New
Shares attributable to Prohibited Holders (other than those who may participate
in the Rights Issue pursuant to clause 6.1 above) under the Rights Issue. As
soon as practicable after Admission, but before 11.00 a.m. on the Acceptance
Date the Underwriters shall, as agents of the Company, endeavour to procure
buyers for so many of the rights to such New Shares as can be sold nil paid at
a premium net of expenses (including value added tax and brokers’ commission),
provided that the Underwriters may cease to endeavour to procure any such
subscribers if in their opinion there is no reasonable likelihood that any such
subscriber(s) can be so procured at such a price.

 

8.2            Hoare Govett
(acting for and on behalf of the Underwriters) shall notify the Company and the
Registrars of the details of:

 

(a)         the persons
by whom the rights to the New Shares referred to in clause 8.1 are to be
acquired, the number of such rights to be taken by each person and whether such
rights are to be received in uncertificated or certificated form; and

 

(b)         if relevant,
the securities accounts within CREST to which such rights as are to be held in
uncertificated form are to be credited in accordance with clause 8.3.

 

8.3            As soon as
reasonably practicable after any sales of the rights to the New Shares referred
to in clause 8.1:

 

(a)         the Company
shall deliver to Hoare Govett (acting for and on behalf of the Underwriters)
(or as it may direct) nil paid Provisional Allotment Letters in such names and
denominations as Hoare Govett (acting for and on behalf of the Underwriters)
shall have notified under clause 8.2 in respect of those rights to the New
Shares referred to in clause 8.1 that have been sold and that are to be
allotted in certificated form;

 

(b)         the Company
shall procure that the Registrars instruct CRESTCo to credit those stock
accounts in CREST (as notified by Hoare Govett (acting for and on behalf of the
Underwriters) under clause 8.2) in respect of those rights to the New Shares
referred to in clause 8.1 that have been sold and that are to be allotted in
uncertificated form; and

 

(c)         subject to
compliance by the Company with its obligations under clauses 8.2(a) and (b),
the Underwriters shall account to the Company or the Registrars for the net
proceeds of sale (after deduction of expenses) in respect of the rights to the
New Shares referred to in clause 8.1 that have been sold, nil paid.

 

8.4            The Company shall (or shall procure that the
Registrars shall) pay to Prohibited Holders (other than those who may
participate in the Rights Issue pursuant to clause 6.1 above) pro rata to their
holdings of Shares as at the close of business on the Record Date the net
proceeds received by it or by the Registrars in respect of the sale of rights
to the New Shares referred to in clause 8.1 attributable to Prohibited Holders
(other than those who may participate in the Rights Issue pursuant to clause
6.1 above) as soon as practicable (except that the Company may retain for its
own benefit individual amounts of less than 

 

19

 

£5.00 per holding). The Company may retain for
its own benefit the net proceeds received by it or by the Registrars in respect
of the sale of rights to those New Shares representing fractional entitlements.

 

8.5            Sales of the
rights to the New Shares referred to in clause 8.1 shall be deemed to have been
made first in respect of rights to New Shares attributable to Prohibited
Holders (other than those who may participate in the Rights Issue pursuant to
clause 6.1 above) and, to the extent that there are sufficient sales, secondly
in respect of rights to New Shares which represent fractional entitlements.

 

8.6            If any of the
rights to the New Shares referred to in clause 8.1 are not so sold by 11.00
a.m. on the Acceptance Date, the New Shares to which they relate shall be dealt
with in accordance with clause 9 as New Shares not taken up.

 

9.              NEW SHARES NOT TAKEN UP

 

9.1            Subject to
clause 9.2, a New Share is to be regarded as “taken up”
for the purposes of this agreement if:

 

(a)         the New
Shares are comprised in Provisional Allotment Letters and:

 

(i)          the
Provisional Allotment Letters have, by 11.00 a.m. on the Acceptance Date, been
lodged for acceptance (whether by the person to whom they were provisionally
allotted or by renouncees of the right to accept allotment) in accordance with
the terms of the Prospectus, the US Wrap (if applicable) and the Provisional
Allotment Letter, accompanied by cheques or other remittances for the full
amount payable in respect of such New Shares (and such cheques or other
remittances shall not have been dishonoured within one Dealing Day of the
Acceptance Date); or

 

(ii)         at the
discretion of the Company and Hoare Govett (acting for and on behalf of the
Underwriters), a cheque or other remittance for the full amount payable in
respect of the New Shares (and such cheque or other remittance shall not have
been dishonoured within one Dealing Day of the Acceptance Date) is received
prior to 11.00 a.m. on the Acceptance Date from an authorised person (as
defined in the FSMA) identifying the New Shares concerned and undertaking to
lodge the relevant Provisional Allotment Letter duly completed in due course;
or

 

(b)         the
entitlement to New Shares is in uncertificated form, and:

 

(i)          the relevant
MTM instruction, containing the information required by the Prospectus, settles
by 11.00 a.m. on the Acceptance Date; or

 

(ii)         at the
discretion of the Company (which the Company will not exercise unreasonably)
and Hoare Govett (acting for and on behalf of the Underwriters) (A) the relevant
MTM instruction, containing the information required by the Prospectus, is
received (as described in the Prospectus) by CREST by 11.00 a.m. on the
Acceptance Date, (B) a number of New Shares (in nil paid form) at least equal
to the number inserted in the MTM instruction is credited to the member account
of the relevant CREST member specified in the MTM instruction at 11.00 a.m. on
the Acceptance Date and (C) the relevant MTM instruction settles by 1.00 p.m.
(or such later time as the Company has determined) on the Acceptance Date.

 

9.2            Notwithstanding
clause 9.1, New Shares shall be deemed not to have been taken up where:

 

20

 

(a)                            they are comprised in a Provisional Allotment Letter which
has been lodged for acceptance; or

 

(b)                           they are the subject of an MTM instruction,

 

if by 8.00 a.m. on the first Dealing Day after
the Acceptance Date the Company has notified Hoare Govett (acting for and on
behalf of the Underwriters) that:

 

(i)                              it is, having consulted with Hoare Govett (acting for and on
behalf of the Underwriters) and having taken account of Hoare Govett’s
reasonable comments, rejecting such Provisional Allotment Letter or (as the
case may be) not permitting the relevant MTM instruction to proceed to
settlement on the grounds that, certification of the identity of the applicant
having been required and a reasonable period having elapsed, the Registrars
have advised the Company that, in accordance with the Proceeds of Crime Act
2002, the Terrorism Act 2000 or the Money Laundering Regulations 2003, they are
unable to process such Provisional Allotment Letter or (as the case may be) to
permit the relevant MTM instruction to proceed to settlement; or

 

(ii)                           the relevant payment has failed; or

 

(iii)                        the relevant acceptance has been withdrawn pursuant to
section 87Q(4) of the FSMA.

 

9.3                                     As soon as practicable after 11.00 a.m. on the Acceptance
Date and in any event by 8.00 a.m. on the first Dealing Day after the
Acceptance Date, the Company shall procure that Hoare Govett (acting for and on
behalf of the Underwriters) is notified in writing of (i) the number of New
Shares which have definitely not been taken up and the provisional allotment of
such shares shall lapse, and (ii) the number of New Shares in respect of which
cheques or other remittances have not cleared (the “First
Notification”). The Company shall by 8.00 a.m. on the second Dealing
Day after the Acceptance Date procure that Hoare Govett (acting for and on
behalf of the Underwriters) is notified in writing of the number of New Shares
in respect of which cheques or other remittances have been dishonoured since
the First Notification and which (in accordance with clause 9.1) are treated as
not taken up and the provisional allotment of such shares shall lapse. The
Company and the Underwriters shall consult with each other as to whether a
Regulatory Information Service should be notified of the number of New Shares
not taken up before the Underwriters are instructed to endeavour to procure
subscribers for the New Shares not taken up pursuant to clause 9.4. The
obligation to consult under this clause 9.3 shall not prevent the Underwriters
from making their own announcement to a Regulatory Information Service in
respect of the number of New Shares not taken up if they consider, in their
absolute discretion, that such an announcement should be made in order to
prevent or avoid the possibility of a breach of the market abuse provisions of
the FSMA and/or section 397 of the FSMA.

 

9.4                                     The Underwriters shall, as agents for the Company, use
reasonable endeavours to procure subscribers for all (or as many as possible
of) the New Shares which have not been taken up on the terms (in so far as they
are applicable) of the Prospectus and the US Wrap as soon as reasonably
practicable and in any event by not later than 3.00 p.m. on the third
Dealing Day after the Acceptance Date if a price which is not less than the
aggregate of the Issue Price and the expenses of procuring such subscription,
(including any commissions and VAT), can be obtained provided that the
Underwriters may, at any time after 11.00 a.m. on the Acceptance Date, cease to
endeavour to procure any such subscribers if in their opinion there is no
reasonable likelihood that any such subscriber(s) can be so procured at such a
price by such time. Hoare Govett (acting for and on behalf of the Underwriters)
shall notify the Company and Registrars of the details of:

 

(a)                            the number of New Shares to be taken by subscribers procured
pursuant to this 

 

21

 

clause; and

 

(b)                           the securities accounts within CREST to which the New Shares
are to be credited in uncertificated form (provided that if any subscriber
elects to receive New Shares in certificated form, relevant details of such
subscriber shall be provided to the Company and the Registrars).

 

9.5                                     Subject to clause 11.2, by not later than the sixth Dealing
Day after the Acceptance Date the Underwriters shall pay to the Company (or, if
the Company so directs, the Registrars) in the manner as provided in clause
10.4 the net proceeds received in respect of subscriptions in respect of those
New Shares for which subscribers have been procured pursuant to clause 9.4
(being the total amount paid by the subscribers net of expenses including any
VAT or commissions) against:

 

(a)                            the Company delivering to Hoare Govett (acting for and on
behalf of the Underwriters) (or as it directs) duly receipted fully paid
Provisional Allotment Letters in such names and denominations as Hoare Govett
(acting for and on behalf of the Underwriters) shall have notified pursuant to
clause 9.4 in respect of those New Shares for which subscribers have been
procured pursuant to clause 9.4 that are to be allotted in certificated form;
and

 

(b)                           the Company procuring that the Registrars instruct CRESTCo
to credit those stock accounts in CREST as are notified by Hoare Govett (acting
for and on behalf of the Underwriters) pursuant to clause 9.4 in respect of
those New Shares for which subscribers have been procured pursuant to
clause 9.4 that are to be allotted in uncertificated form.

 

The account into which payment shall be made to
the Company shall be such account as is notified by the Company to Hoare Govett
(acting for and on behalf of the Banks) at least five Dealing Days prior to the
Posting Date.

 

9.6                                     Of the amounts to be paid to the Company in respect of the
subscriptions referred to in clause 9.5:

 

(a)                            the aggregate Issue Price in respect of those subscriptions
shall be received for the account of the Company; and

 

(b)                           the amounts in excess of the Issue Price in respect of those
subscriptions shall be received for the account of:

 

(i)                              in the case of New Shares not taken up the provisional
allotments of which were represented by a Provisional Allotment Letter as at
the time of their lapsing, the person whose name and address appears as the
addressee on the Provisional Allotment Letter; and

 

(ii)                           in the case of New Shares not taken up the provisional
allotments of which were in uncertificated form as at the time of their
lapsing, for the holder of the right to acquire such New Shares at the time of
their disablement from CREST,

 

(other than individual amounts of less than
£5.00 which shall be for the account of the Company).

 

9.7                                     The Company shall (or shall procure that the Registrars
shall) pay the premium (if any) over the aggregate of the Issue Price and the
expenses of procuring subscribers (including any VAT and commissions) received
by it or the Registrars pursuant to clause 9.5 to the non-accepting Qualifying
Holders to whom the relevant New Shares were provisionally allotted pro rata to
their lapsed provisional entitlements as soon as practicable. The

 

22

 

Company may, however, retain for its own benefit
individual amounts of less than £5.00 per holding.

 

9.8                                     Each of the Underwriters warrants and agrees with respect to
New Shares not taken up that:

 

(a)                            to the extent that it offers to sell any such New Shares in
the United States it will offer and sell such New Shares only to persons whom
it reasonably believes are Accredited Investors and QIBs pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the US Securities Act, and in any such case only to persons to whom the US
Investor Letter has been sent by it and shall take reasonable steps to ensure
that such persons are aware that the Company and such Underwriter may rely on
an exemption from the provisions of section 5 of the US Securities Act;

 

(b)                           neither it nor any of its affiliates, nor any person acting
on its or their behalf, has engaged or will engage in any form of general
solicitation or general advertising in connection with any offer or sale of the
New Shares in the United States;

 

(c)                            with respect to offers or sales of any such New Shares
outside the United States, it has offered and will offer and sell such New
Shares as part of its distribution at any time only in accordance with
Regulation S under the US Securities Act; and

 

(d)                           neither it nor any of its affiliates, nor any person acting
on its or their behalf, has engaged or will engage in any directed selling
efforts with respect to such New Shares.

 

9.9                                     Any transaction carried out by an Underwriter pursuant to
clause 8 or this clause 9 constitutes a transaction carried out at the
Company’s request and as its agent and not for the Underwriter’s own account. Each
Underwriter shall, however, be entitled to receive and/or retain and/or allow
its other agents to receive and/or retain any commission or brokerages paid to
it or its agents in connection with the implementation of any such transaction
and shall not be liable to account for any benefit or advantage derived from
such transaction by it or any company connected with it. The Underwriters shall
not be responsible to any person (including, without limitation, the Company,
any Qualifying Holder, any Prohibited Holder or any other shareholder of the
Company) for any loss, damage, liability or cost suffered or incurred by that
person arising from any transaction carried out by an Underwriter pursuant to
clause 8 or this clause 9 or for any insufficiency or alleged insufficiency of
any dealing price at which any rights to New Shares may be sold or subscribers
for New Shares may be procured or for the timing of any such sale or
subscription or for any failure to procure any such sale or subscription.

 

9.10                               Any payments made pursuant to clauses 8.4 or 9.7 shall, in
the case of a payment to a Qualifying Holder holding Shares in certificated
form, be satisfied by a cheque for the amount due being sent to the Qualifying
Holder and, in the case of a payment to a Qualifying Holder holding Shares in
uncertificated form, be satisfied by the creation of an assured payment
obligation in favour of the relevant CREST member’s payment bank in respect of
the cash amount concerned in accordance with the CREST assured payment
arrangements.

 

10.                                     UNDERWRITING

 

10.1                               Each of the Underwriters shall, as agent for the Company,
procure subscribers or, failing that, shall procure that they or one of their
Associates shall, as principal, subscribe in the Agreed Proportions on the
terms and conditions and on the basis of the information contained in the Prospectus,
the US Wrap and the Provisional Allotment Letter (except as regards the time
and method for acceptance and payment) and in reliance on the Warranties
contained in Part B of schedule 2 for any of the New Shares not taken up and 

 

23

 

not subscribed pursuant to clause 9.4 (the “Stick Shares”).

 

10.2                               Subject to clause 11.2, by not later than the fifth Dealing
Day after the Acceptance Date the Underwriters shall pay the Company in the
manner provided in clause 10.4 the Issue Price for each Stick Share against:

 

(a)                            the Company delivering to the Underwriters (or as they
direct) duly receipted fully paid Provisional Allotment Letters in such names
and denominations as the Underwriters shall require in respect of the Stick
Shares that are to be allotted in certificated form; and

 

(b)                           the Company procuring that the Registrars instruct CRESTCo
to credit the Underwriters’ stock accounts in CREST (or as they direct) with
such number of Fully Paid Rights as the Underwriters shall require in respect
of the Stick Shares that are to be allotted in uncertificated form.

 

10.3                               If any Underwriter defaults in its respective payment
obligations under clause 10.2 in respect of any of the Stick Shares, the
Company is irrevocably authorised to treat this agreement as such Underwriter’s
application on the terms, subject to the conditions and on the basis of the
information contained in the Prospectus and the US Wrap, as applicable, and,
where relevant, the Provisional Allotment Letter (other than as to the time and
method of acceptance and payment), and in reliance on the Warranties contained
in Part B of schedule 2, for its Agreed Proportion of the Stick Shares and the
Company shall allot and issue its Agreed Proportion of the Stick Shares to the
relevant Underwriter on those terms and conditions.

 

10.4                               Payments to the Company by the Underwriters pursuant to
clauses 8.4, 9.5 and 10.2 shall be made in immediately available funds to the
bank account of the Company (or its nominee) to be notified pursuant to clause
9.5. In addition, the Company, and the Underwriters acknowledge that the
creation of a settlement bank payment in favour of a CREST settlement bank of
the Company or its agent in respect of the subscription monies for any New Shares
shall discharge any obligation of the Underwriters to account for such monies
to the Company.

 

10.5                               On payment to the Company of the Issue Price for the Stick
Shares, the Underwriters shall be under no further liability to the Company
under this clause 10.

 

10.6                               Each Underwriter agrees that if it is obliged to procure
subscribers for any Stick Shares, and any withdrawal rights are exercised in
respect of those Stick Shares pursuant to section 87Q(4) of the FSMA, it shall
immediately subscribe itself as principal for those Stick Shares. If an
Underwriter subscribes as principal (acting in its capacity as an underwriter
to the Rights Issue and not otherwise) for any Stick Shares, it hereby
irrevocably undertakes not to exercise any withdrawal rights in respect of
those Stick Shares pursuant to section 87Q(4) of the FSMA.

 

10.7                               Notwithstanding any other provision of this agreement, the
Company and Hoare Govett (acting for and on behalf of the Underwriters (such
Underwriters acting in good faith)) shall agree in good faith the issue price
of New Shares under the Rights Issue, having regard to market conditions and
normal market practice at the time of launch of the Rights Issue. If the
Company and the Underwriters agree upon an issue price greater than the Issue
Price, the Rights Issue shall be underwritten on the terms of an underwriting
agreement to be entered into on the day before the Posting Date between the
Company and the Banks in the form set out in schedule 4 specifying such
increased issue price as the issue price. Without prejudice to the generality
of the foregoing, at any time following satisfaction of the Conditions set out
in clauses 2.1(a), (d) and (e), the Company may give one or more notices to
Hoare Govett (acting for and on behalf of the Underwriters) nominating a
Dealing Day, being a day at least 60 days after the date of 

 

24

 

the notice, as a proposed Posting Date (each
such nominated Dealing Day being a “Proposed Posting Date”).

 

10.8                               On each:

 

(a)                            Dealing Day that is 20 Dealing Days prior to a Proposed
Posting Date;

 

(b)                           Dealing Day that is 10 Dealing Days prior to a Proposed
Posting Date; and

 

(c)                            Dealing Day prior to a Proposed Posting Date

 

(each a “Pricing Date”),
Hoare Govett (acting for and on behalf of the Underwriters, such Underwriters
acting in good faith) shall, having regard to market conditions and normal
market practice at that time:

 

(i)                              notify the Company in writing if the issue price per New
Share at which the Underwriters would be willing to underwrite the Rights Issue
assuming that the Posting Date for the Rights Issue were to be the Proposed
Posting Date, having regard to prevailing market conditions and market practice
at the relevant time, would be a price representing a greater than 50 per cent.
discount to Terps (as defined in clause 10.9); and

 

(ii)                           procure that the Banks’ counsel confirms in good faith to
the Company whether or not it would expect to be able to issue its 10b-5
disclosure letter to the Banks in respect of the Rights Issue on the Proposed
Posting Date and, if it would not so expect, the reasons therefor,

 

provided that the parties shall maintain
dialogue with each other, during the period between the Dealing Day that is 20
Dealing Days prior to a Proposed Posting Date but prior to a Proposed Posting
Date, as to the proposed discount to Terps (as defined in clause 10.9) at which
the Underwriters would be willing to underwrite the Rights Issue.

 

10.9                               If, on any Pricing Date, the Underwriters notify the Company
that, having regard to prevailing market conditions and market practice at the
relevant time, they are only willing to underwrite the Rights Issue at an issue
price that represents a greater than 50 per cent. discount to the theoretical
ex-rights price of a Share (“Terps”) and
following such notification and following such consultation with the
Underwriters as is appropriate in the circumstances, the Company is able to
demonstrate objectively (by delivering a copy of a highly confident letter from
(an)other underwriter(s)) that the issue price at which the Underwriters are
willing to underwrite the Rights Issue is at a discount to Terps that is
materially (meaning at least ten per cent.) greater than market conditions and
market practice at that time indicate the discount to Terps should in all the
circumstances be, the Company may send to Hoare Govett (acting for and on
behalf of the Underwriters) a notice requesting the Underwriters to match such
materially lower discount (and such notice shall set out reasonable details of
other underwriter(s) prepared to underwrite the Rights Issue at such lower
discount and of their commitment to do so, and shall attach a copy of a
corresponding “highly confident” letter from such other underwriter(s)) (a “Price Notice”). If the Underwriters do not within 24 hours
of receipt by Hoare Govett of the Price Notice execute an underwriting
agreement in the form set out in schedule 4 at an issue price equal to or
greater than the issue price set out in the Price Notice (whereupon the Posting
Date shall be the Dealing Day next following the date of execution of such
underwriting agreement), the Company may, conditional upon such underwriter(s)
having entered into a standby underwriting agreement substantially in the same
form as this agreement and having taken a transfer of all rights and
obligations under the Equity Bridge Facility in accordance with the terms of
the Equity Bridge Facility appoint such other underwriter(s) to underwrite the
Rights Issue at the issue price set out in the Price Notice and otherwise
substantially in the form of the underwriting agreement set out in schedule 4. In
this event the net proceeds of such rights issue will be applied to refinance 

 

25

 

the Equity Bridge Facility. For the avoidance of
doubt the parties agree that if, at any time an underwriting agreement in the
form set out in schedule 4 is entered into pursuant to clause 10.7 or 10.9 and
that agreement terminates for any reason on or before Admission (as that term
is defined in the schedule 4 underwriting agreement), then such termination
shall be without prejudice to the rights and obligations of the parties under
this agreement (including, without limitation, in respect of the Rights Issue to
be underwritten on the terms of this agreement) but subject to any rights of
the parties to terminate this agreement in accordance with its terms or to
invoke any Condition in accordance with the terms of this agreement.

 

11.                                     FEES, COMMISSIONS AND EXPENSES

 

11.1                               The Company shall pay to the Underwriters for their services
in underwriting the issue of the New Shares and otherwise in connection with
the Rights Issue:

 

(a)                            subject to clause 11.8, a fee of 0.75 per cent. per annum
(calculated on a daily basis) of the aggregate committed amounts of the Equity
Bridge Facility for the period from (and including) the date hereof until (and
including) the earlier of the Posting Date and the date on which this agreement
is terminated or ceases and determines pursuant to clause 2.3, such fee to be
payable three monthly in arrears on the later of the end of each such period
and five Dealing Days after receipt by the Company from the Underwriters of an
invoice for such amount, provided that if Admission occurs, such fee is to be
capped at an aggregate of 0.5 per cent. of the Gross Proceeds when converted
into euros at the rate specified as the daily rate of foreign exchange
transactions as between euros and pounds sterling on the Reuters screen WMR
spot 16 rate (or if that Reuters screen rate is unavailable, such other rate as
is agreed between the Company and Hoare Govett (acting for and on behalf of the
Underwriters (both acting reasonably)) on the date of this agreement, and any
excess over such cap, to the extent already paid, shall be netted off against
commissions payable under clause 11.1(b) and (c);

 

(b)                           a commission of 1.25 per cent. of the Gross Proceeds in
respect of the period from (and including) the Posting Date to (but excluding)
the date falling 30 days thereafter, such commission to be payable on the later
of five Dealing Days after the Acceptance Date and five Dealing Days after
receipt by the Company from the Underwriters of an invoice for such amount; and

 

(c)                            a commission of 0.125 per cent. of the Gross Proceeds in
respect of each period of seven days or part thereof from and (including) the
date falling 30 days after the Posting Date to (and including) the fifth
Dealing Day after the Acceptance Date, such commission to be payable at the
same time as the commission set out in (b) above.

 

Such fees and commissions shall be paid to the
Underwriters at the time the Net Proceeds are paid to the Company whether or
not they shall be called upon to subscribe or procure subscribers for any of
the New Shares under this agreement and, in respect of the fee described in
clause 11.1(a), whether or not the obligations of the Underwriters under
clauses 8, 9 and 10 of this agreement become unconditional or are terminated
pursuant to clause 13.

 

11.2                               The Underwriters shall be entitled to deduct some or all of
such fees and commissions and any expenses referred to in clauses 11.1, 11.3 or
11.4 from any amount otherwise payable by the Underwriters to the Company under
this agreement. The Underwriters shall provide a written confirmation to the
Company in respect of any such deduction.

 

11.3                               The Underwriters shall pay any sub-underwriting commissions
out of the commissions detailed in clause 11.1, provided that if the
obligations of the Underwriters under clauses 8, 9 and 10 are terminated
pursuant to clause 13 after the Posting Date, the Underwriters 

 

26

 

shall be entitled to be reimbursed by the
Company for any sub-underwriting commissions that are payable in respect of the
period prior to the time of such termination provided that there shall be no
obligation on the Company to reimburse sub-underwriting commissions (i) in
excess of £10 million in aggregate and (ii) to the extent they have been paid
to the Underwriters and/or affiliates of the Underwriters.

 

11.4                               The Company shall bear all other expenses of and incidental
to this agreement and the Rights Issue including, without limitation, FSA fees,
London Stock Exchange fees, registration fees, receiving bankers’ and registrars’
fees, depositaries’ fees, the costs of printing, advertising and circulating
the Issue Documents, accounting fees and expenses, the Company’s legal fees and
expenses, the Banks’ legal fees of up to £290,000 plus VAT and disbursements,
the Company’s and the Banks’ out-of-pocket expenses (those of the Banks being
estimated to be £100,000 provided that if Hoare Govett (for and on behalf of
the Banks) believes that such expenses will exceed such amount, Hoare Govett
(for and on behalf of the Banks) shall notify the Company and provide a revised
estimate)) and any stamp duty and stamp duty reserve tax which is paid or
payable by the Underwriters or by any subscribers of New Shares procured by the
Underwriters pursuant to or as a result of the arrangements contemplated by
this agreement (other than any stamp duty or stamp duty reserve tax that may
arise under sections 67, 70, 93 and 96 of the Finance Act 1986). For the
avoidance of doubt, this clause shall not extend to any stamp duty or stamp
duty reserve tax payable in respect of transfers of, or agreements to transfer
(i) New Shares subsequent to any such New Shares having been subscribed by
persons procured by the Underwriters or (ii) Nil Paid Rights.

 

11.5                               The Company shall within five Dealing Days of written
request by the Underwriters reimburse the Underwriters the amount of any
expenses (duly invoiced and receipted) for which the Company shall be
responsible pursuant to clauses 11.3 and 11.4 but which the Underwriters may
have paid or incurred on behalf of the Company in connection with the Rights
Issue.

 

11.6                               Where pursuant to clauses 11.3, 11.4 or 11.5 or clause 15 a
sum (a “Relevant Sum”) is to be paid or
reimbursed to any Underwriter in respect of any cost or expense paid or
incurred by such Underwriter and that cost or expense includes an amount in
respect of value added tax (the “VAT Element”),
the Company shall pay an amount to such Underwriter in respect of the VAT
Element that shall be determined as follows:

 

(a)                            if the Relevant Sum constitutes for VAT purposes
reimbursement of the consideration for the supply of goods or services to such
Underwriter, a sum equal to the proportion of the VAT Element such Underwriter
certifies as representing irrecoverable input tax in its hands, that
certificate to be conclusive save in the case of manifest error; and

 

(b)                           if the Relevant Sum constitutes for VAT purposes the
reimbursement of a cost or expense incurred by such Underwriter as agent for
the Company, a sum equal to the whole of the VAT Element,

 

and where a sum equal to the VAT Element has
been reimbursed to the relevant Underwriter under clause 11.6(b), such
Underwriter shall provide the Company with a proper tax invoice in respect of
the supply to which the Relevant Sum relates, that is to say a tax invoice
naming the Company as the recipient of the supply and issued either by such
Underwriter or, if such Underwriter has treated the relevant cost or expense as
a disbursement for value added tax purposes, by the person making the supply.

 

11.7                               If the performance by any Underwriter of any of its
obligations under this agreement shall represent for value added tax purposes
the making by such Underwriter of any supply of goods or services to the
Company that is taxable at a positive rate, the Company shall pay to such
Underwriter, in addition to the amounts otherwise payable by the Company to 

 

27

 

such Underwriter pursuant to this agreement
(including, without limitation, amounts payable by the Company to such Underwriter
pursuant to clause 11.6), an amount equal to the value added tax chargeable on
any such supply, that payment to be made within seven days of such Underwriter
requesting the same and against production by it of a proper tax invoice.

 

11.8                               The Company and the Underwriters acknowledge that the
aggregate committed amounts of the Equity Bridge Facility (the “Committed Amounts”) may be reduced in accordance with the
terms of the Equity Bridge Facility and the Company agrees to give the same
length of notice of any such reduction to the Underwriters as is given to the
lenders under the Equity Bridge Facility. The Company undertakes not to reduce
the Committed Amounts until after the later of (i) completion of the
Acquisition and (ii) repayment (as such term is defined in the Equity Bridge
Facility) of any avales issued under the Equity Bridge Facility in connection
with the Acquisition (provided that nothing in this clause 11.8 shall operate
to prevent the Company complying with its obligations under the Equity Bridge
Facility relating to mandatory prepayments or cancellations of the Equity
Bridge Facility). The Company also agrees that, if Committed Amounts are so
reduced, they may not be subsequently increased without the consent in writing
of the Underwriters.

 

11.9                               If only one rights issue is undertaken by the Company
(whether under this agreement or under an agreement in substantially the form
set out in schedule 4) the Banks’ legal fees which shall be reimbursed by the
Company shall be limited as set out in clause 11.4 above or clause 11.4 of that
other agreement (as the case may be). If more than one rights issue is
undertaken by the Company the Banks’ legal fees which shall be reimbursed by
the Company (whether under this agreement or under an agreement in
substantially the form set out in schedule 4 and in addition to the £290,000 as
set out in the previous sentence) shall be limited to a maximum of £145,000
plus VAT and disbursements for each additional rights issue undertaken.

 

12.                                     WARRANTIES

 

12.1                               The Company warrants to each of the Banks in the terms of
the Warranties set out in schedule 2:

 

(a)                            in the case of the Warranties set out in Part A of schedule
2, as at the date of this agreement; and

 

(b)                           in the case of the Warranties set out in Part B of schedule
2, on the Posting Date, on the date of publication of any Supplementary
Prospectus and immediately prior to Admission, in each case save to the extent
fairly disclosed in the Prospectus.

 

12.2                               The Company acknowledges that the Banks are entering into
this agreement in reliance upon each of the Warranties. Each of the Warranties
shall be construed separately and none of the Warranties shall be limited or
restricted by reference to or inference from the terms of any other Warranty or
any other provision of this agreement. Save as otherwise expressly provided in
this agreement, no breach of any Warranty shall give any right to terminate or
rescind this agreement.

 

12.3                               The Company undertakes to notify the Banks immediately if it
comes to the knowledge of any of the Directors or members of the executive
committee of the Company at any time prior to Admission that any of the
Warranties was untrue, inaccurate or misleading when made and/or that any of
the Warranties has ceased to be true or accurate or has become misleading by
reference to the facts and circumstances from time to time subsisting and this
could be material for disclosure in the context of the Prospectus, and/or that
any fact, matter or circumstance has arisen or occurred or exists which may
give rise to a claim under the indemnity set out in clause 14.1.

 

12.4                               The Warranties shall remain in full force and effect
notwithstanding completion of this 

 

28

 

agreement.

 

12.5                               Except to the extent necessary to implement this agreement,
the Company shall not knowingly do, or omit to do, anything which would or
might be reasonably expected to cause a Warranty to become untrue, inaccurate
or misleading at the time it is given (by reference to the facts or
circumstances existing at that time) before Admission becomes effective.

 

12.6                               Any reference to the knowledge, information, belief or
awareness of the Company or the Directors includes knowledge, information,
belief or awareness which the Company or the Directors would have if the
Directors had made all reasonable enquiries having regard, inter alia, to the
obligations of the Company under the FSMA, the Listing Rules and the Admission
and Disclosure Standards.

 

13.                                     TERMINATION

 

13.1                               If on or before Admission:

 

(a)                            the Resolution is not passed without amendment at the EGM;

 

(b)                           the Offer lapses or is withdrawn;

 

(c)                            the Offer is terminated or expires without more than 50 per
cent. of the issued Altadis shares being acquired by any member of the Group
pursuant to the Offer;

 

(d)                           the conditions to the Offer are not fulfilled or waived by
the date or time specified for the fulfilment thereof, or become incapable of
satisfaction before such time;

 

(e)                            the commitments under the Equity Bridge Facility are
terminated or cancelled before any loan is made or any aval is issued pursuant
to it in such amounts as in aggregate with amounts drawn down under the Senior
Credit Facility and/or avales issued under the Senior Credit Facility are
sufficient to satisfy the cash consideration payable in connection with the
Acquisition;

 

(f)                              all amounts drawn under the Equity Bridge Facility have been
repaid or prepaid in full;

 

(g)                           an equity offering(s) of whatsoever nature (including
without limitation any offering(s) of securities which are exchangeable or
convertible into equities, and any offering(s) of hybrid securities) is or are
completed following the date of this agreement and prior to the Posting Date
under which the Company receives proceeds (net of fees and expenses) at least
equal in aggregate to the Net Proceeds;

 

(h)                           the Company appoints another underwriter or underwriters to
conduct an equity offering of whatsoever nature (including without limitation
any offering of securities which are exchangeable or convertible into equity
securities, and any offering of hybrid securities) between the date of this
agreement and the Posting Date (provided that, for the avoidance of doubt, no
termination right shall arise under this paragraph 13.1(h) if the Company is
acting strictly in accordance with and in the circumstances contemplated by
clause 10.9 until such time as an underwriter or underwriters are appointed
pursuant to that clause);

 

(i)                               the Company is in breach of any of its obligations under
this agreement (other than in respect of the Warranties) which fall to be
performed prior to Admission and such breach is either incapable of remedy and
material in the context of the Company’s ability to implement a Rights Issue in
accordance with the terms of this agreement (in the reasonable opinion of the
Banks) or, if capable of remedy, is not 

 

29

 

remedied to the reasonable satisfaction of the
Banks by no later than 8.30 a.m. on the First Dealing Day after the Final
Posting Date;

 

(j)                               there is a breach of any of the Warranties set out in
paragraphs 9, 11 and 17 of part A of schedule 2 or paragraphs 9, 11 and 17 of
part B of schedule 2 and such breach is either incapable of remedy and material
in the context of the Company’s ability to implement a Rights Issue in
accordance with the terms of this agreement (in the reasonable opinion of the
Banks) or, if capable of remedy, is not remedied to the reasonable satisfaction
of the Banks by no later than 8.30 a.m. on the First Dealing Day after the
Final Posting Date;

 

(k)                            a takeover offer for the Company has become or been declared
unconditional in all respects or a scheme of arrangement under section 425 of
the Companies Act under which any person acquires the entire issued share
capital of the Company has become effective, and in either case the shares of
the Company have been delisted from the London Stock Exchange;

 

Hoare Govett
(acting for and on behalf of the Banks) may, in its absolute discretion, or in
the case of (a) to (h) and (k) above (provided that in the case of (h) the
appointment of another underwriter or underwriters is in accordance in all
respects with clause 10.9) the Company may, in its absolute discretion, by
notice in writing  given (as the case may
be) to the Company or to Hoare Govett (for and on behalf of the Banks) or as
set out in clause 13.2, terminate this agreement, in each case except to the
extent specified in clause 13.4.

 

13.2                               A termination notice may be served by one of the methods
prescribed by clause 19 (Notices). Alternatively, service may be effected by a
director of Hoare Govett (acting for and on behalf of the Banks) or a Director
(the “Terminating Party”) reading the text
of the termination notice to any Director or any director of Hoare Govett (as
the case may be) over the telephone, whether or not that Director or director
of Hoare Govett is then on any premises of the Company or Hoare Govett
respectively.

 

13.3                               If service of a termination notice is effected over the
telephone, the Terminating Party shall as soon as reasonably practicable and,
in any event, within 12 hours, deliver or send to the Company or Hoare Govett
(as the case may be) by one of the methods prescribed by clause 19 (Notices) a
notice which:

 

(a)                            states that service of a termination notice has been
effected by telephone at a certain time on a certain date;

 

(b)                           specifies the names of the director of Hoare Govett and of
the Director involved; and

 

(c)                            sets out the text which was read over the telephone.

 

13.4                               If this agreement shall have been terminated pursuant to
clause 13.1, clause 2.3 shall apply as if the Conditions had not been fulfilled
or waived.

 

13.5                               The Sponsor may by notice to the Company resign as sponsor
if when, or at any time before, Admission becomes effective, the Company is in
breach of any provision of this agreement and the Sponsor is of the opinion,
acting in good faith, that the Company has thereby become unsuitable for
listing on the Official List as a result of such breach. Following such
resignation, the Company shall be entitled to appoint any other person on the
list in schedule 6 (subject to a right of first refusal in favour of the other
Banks, provided that one of such Banks shall have accepted such appointment
within 48 hours of the resignation of the appointment of the Sponsor) to act as
sponsor.

 

13.6                               In the event that this agreement is terminated pursuant to
the provisions of this clause, 

 

30

 

no party to this agreement will have any claim
against any other party to this agreement for costs, damages, compensation or
otherwise except that:

 

(a)                            such termination shall be without prejudice to any accrued
rights or obligations under this agreement;

 

(b)                           the Company shall pay the commissions, fees and expenses
specified in clause 11.1(a), 11.3, 11.4 and 11.5;

 

(c)                            in the case of a termination arising from the Company having
appointed another underwriter or underwriters in circumstances where it is not
entitled to do so under clause 10.9, the Company shall pay the commissions,
fees and expenses specified in clause 11.1, 11.3, 11.4 and 11.5 as if any
rights issue conducted by the Company and underwriters by such other
underwriter or underwriters had been conducted pursuant to this agreement; and

 

(d)                           the provisions of clauses 1, 2.3, 11, 13, 14, 15, 16.1, 16.4
and 17 to 22 (inclusive) (but not 18.1 or 18.8) shall remain in full force and
effect.

 

13.7                               Save as expressly provided in this agreement, no party may
terminate or rescind this agreement for any reason whatsoever.

 

14.                                     INDEMNITIES

 

14.1                               The Company undertakes with:

 

(a)                            Citigroup  and the Sponsor (each for itself and as
trustee for each of its Associates) (each such person being a “Citigroup Indemnified
Person”);

 

(b)                           Hoare Govett (for itself and as
trustee for each of its Associates) (each such person being a “Hoare Govett
Indemnified Person”);

 

(c)                            Morgan Stanley (for itself and
as trustee for each of its Associates) (each such person being a “Morgan Stanley
Indemnified Person”); and

 

(d)                           Lehman Brothers (for itself and
as trustee for each of its Associates) (each such person being a “Lehman Brothers Indemnified Person”),

 

(each Citigroup Indemnified
Person, Hoare Govett Indemnified Person, Morgan Stanley Indemnified Person and
Lehman Brothers Indemnified Person being an “Indemnified Person”),

 

to indemnify and hold each
Indemnified Person harmless on an after tax basis from and against (i) any
Losses arising from, out of or in connection with any claims, demands
enquiries, investigations, proceedings or judgments threatened, brought or
established against any Indemnified Person (or alleged to be threatened,
brought or established), in each case by any subscriber of any of the New
Shares or any subsequent purchaser or transferee of any of the New Shares or
any other person, governmental agency or regulatory body whatsoever (“Proceedings”) and (ii) all Losses (including taxation other
than taxation imposed on or calculated by reference to net income received or
receivable (but not deemed to be received or receivable) by the Banks (or any
of them)) which any Indemnified Person may suffer (including, but not limited
to, all Losses suffered or incurred in disputing, defending, investigating or
providing evidence in connection with any Proceedings and/or in establishing its
right to be indemnified pursuant to this clause and/or in seeking advice in
relation to any Proceedings, whether or not such Proceedings are defended or
disputed successfully and whether or not any Indemnified Person is a party to
such Proceedings) and which in the case of either or both of (i) and (ii)

 

31

 

above arise directly or
indirectly in connection with or out of the services rendered or duties
performed by any Indemnified Person under this agreement or otherwise in
connection with or in pursuance of the Acquisition and/or the Rights Issue
and/or the receipt of an amount in respect of the Rights Issue and/or
implementation of the Rights Issue and/or Admission, including but not limited
to:

 

(i)                              the Issue Documents not
containing, or being alleged not to contain, all the information required to be
stated therein;

 

(ii)                           any statement contained in any
of the Issue Documents or any other document, announcement or other financial
promotion issued by or on behalf of the Company in connection with the
Acquisition, the Rights Issue and/or Admission not being, or being alleged not
to be, complete, true, accurate or fair or being, or being alleged to be,
misleading;

 

(iii)                        the issue, publication or
dissemination of the Issue Documents or any other announcement or public
statement made or issued by or with the authority of the Company in connection
with Admission or otherwise relating to the Rights Issue or the Acquisition;

 

(iv)                       the allotment and issue by the
Company of the New Shares or the crediting of stock accounts in CREST or the
despatch of Provisional Allotment Letters or share certificates (including a
failure so to issue, credit or despatch the same);

 

(v)                          any breach or alleged breach by
the Company of its obligations under this agreement or by a Group Company of a
provision of any other agreement entered into by it in connection with the
Acquisition and/or the Rights Issue and/or Admission;

 

(vi)                       any breach, or alleged breach,
of any of the Warranties;

 

(vii)                    the performance by the Banks of
their role as agents of the Company in connection with or in pursuance of the
Rights Issue;

 

(viii)                 the performance by the Banks
(or any of them) of their role as agents of the Company in connection with the
application for Admission;

 

(ix)                         the approval of any financial
promotion;

 

(x)                            any breach or alleged breach of
the FSMA, the Companies Act, the Listing Rules, the Admission and Disclosure
Standards or any other laws or regulations of any country resulting from the
making of the Rights Issue, Admission, the arrangements contemplated by the
Prospectus or the performance of this agreement; and/or

 

(xi)                         the implementation of the
Rights Issue by the Banks, including contractual arrangements made with
subscribers in relation to the New Shares as contemplated by this agreement and
on the terms of the Issue Documents.

 

14.2                               Notwithstanding clause 14.1, an
Indemnified Person shall not be entitled to any indemnity under clause 14.1 in
relation to any Liability to the extent only that the Liability concerned:

 

(a)                            is determined by a court of
competent jurisdiction to have arisen from the fraud or gross negligence or
wilful default of, or a material breach of this agreement or material breach of
the FSMA, the Companies Act or the regulatory system (as defined in the rules
of the FSA) (where, in each case, the circumstances giving rise 

 

32

 

to the relevant material breach
are not consequent on any act or omission of the Company or any of its
Associates) by, in the case of a Citigroup Indemnified Person, a Citigroup
Indemnified Person, in the case of a Hoare Govett Indemnified Person, a Hoare
Govett Indemnified Person, in the case of a Morgan Stanley Indemnified Person,
a Morgan Stanley Indemnified Person or, in the case of a Lehman Brothers
Indemnified Person, a Lehman Brothers Indemnified Person otherwise than in
relation to a claim which is based upon or would not have arisen but for any of
the Issue Documents and/or any other public document, announcement, or other
financial promotion made or issued by or with the authority of the Company in
connection with the Acquisition, the Rights Issue and/or Admission not
containing or fairly presenting, or being alleged not to contain or fairly present,
all information required to be contained therein or any statements therein
being or being alleged to be untrue, inaccurate, incomplete, misleading or not
based on reasonable grounds; or

 

(b)                           arises out of a decline in
market value of the Shares suffered or incurred by any Indemnified Person as a
result of it having been required to subscribe or purchase Shares pursuant to
clause 10 save to the extent such decline is caused by or results from or is
attributable to or would not have arisen but for (in each case directly or
indirectly) the neglect or default of the Company or any breach by the Company
of any of its obligations under this agreement or any of the Warranties being
untrue, inaccurate or misleading.

 

14.3                               If either the Company or any
Indemnified Person becomes aware of any claim which may give rise to a
liability under the indemnity contained in this clause 14, such party will (to
the extent lawful) promptly give written notice to the other provided that no
failure or delay by an Indemnified Person in giving written notice shall
relieve the Company of its obligations unless (and only to the extent that) the
Company has been materially prejudiced by such failure or delay (and
non-disclosure by reason of legal or regulatory restriction shall not constitute
failure or delay by an Indemnified Person).

 

14.4                               An Indemnified Person shall
have the right to separate legal counsel of its own choosing. An Indemnified
Person may not, without the consent of the Company (not to be unreasonably
withheld or delayed), agree to any settlement or compromise of any claim
involving a payment for which it intends to seek indemnification hereunder.

 

14.5                               The Company shall not, without
the prior written consent of Citigroup (such consent not to be unreasonably
withheld or delayed), effect any settlement of any pending or threatened
Proceedings in respect of which any Citigroup Indemnified Person is or could
have been a party and indemnification could have been sought under clause 14.1,
unless such settlement:

 

(a)                            includes an unconditional
release of all Citigroup Indemnified Persons from all liability for claims that
are the subject matter of such Proceedings; and

 

(b)                           does not include any statement
as to an admission of fault, culpability or a failure to act by or on behalf of
any Citigroup Indemnified Person.

 

This clause shall apply mutatis
mutandis to Hoare Govett in respect of all Hoare Govett Indemnified Persons, to
Morgan Stanley in respect of all Morgan Stanley Indemnified Persons and to
Lehman Brothers in respect of all Lehman Brothers Indemnified Persons.

 

14.6                               To the fullest extent
permissible by law, no Indemnified Person shall have any liability to the
Company in respect of any loss, damage, cost, charge or expense (whether
arising by contract, tort or otherwise) the Company may suffer in relation to
this agreement or the Rights Issue except to the extent that such loss, damage,
cost, charge or expense is finally judicially determined by a court of
competent jurisdiction to have arisen as a result of the fraud, gross
negligence or wilful default of, or a material breach of this agreement 

 

33

 

or material breach of the FSMA,
the Companies Act or the regulatory system (as defined in the rules of the FSA)
(where, in each case, the circumstances giving rise to the relevant material
breach are not consequent on any act or omission of the Company or any of its
Associates) by such Indemnified Person otherwise than in relation to a claim
which is based upon or would not have arisen but for any of the Issue Documents
and/or any other public document, announcement or other financial promotion
made or issued by or with the authority of the Company in connection with the
Acquisition, the Rights Issue and/or Admission not containing or not fairly
presenting, or being alleged not to contain or not to fairly present, all
information required to be contained therein or any statement therein being or
being alleged to be untrue, inaccurate, incomplete, misleading or not based on
reasonable grounds and provided, in any event, that none of the Banks and any
other Indemnified Person shall be liable for any indirect or consequential loss
(howsoever arising) of the Company or any other person.

 

14.7                               If the Company enters into any
agreement or arrangement with any advisers for the purpose of or in connection
with the Rights Issue, the terms of which provide that the liability of the
adviser to the Company or any other person is excluded or limited in any
manner, and any Bank or any other Indemnified Person may have joint and/or
several liability with such adviser to the Company or to any other person
arising out of the performance of its duties under this agreement, the Company
shall:

 

(a)                            not be entitled to recover any
amount from the Banks or any other Indemnified Persons greater than that which
it would have been able to recover in the absence of such exclusion or
limitation; and

 

(b)                           indemnify each Indemnified
Person on an after tax basis in respect of any increased liability to any third
party which would not have arisen in the absence of such exclusion or
limitations.

 

14.8                               The Company undertakes with the
Banks and each other Indemnified Person that all sums payable under the
indemnities contained in this agreement shall be paid in full, free and clear
of all deductions or withholdings, unless the deduction or withholding is
required by law and that if any deductions or withholdings are required by law
the Company shall be obliged to pay such additional sum as will, after such
deductions or withholdings have been made (including from such additional sum),
leave the person to whom payment is made with the same amount as that person
would have been entitled to receive in the absence of such requirement to make
a deduction of withholding. For the avoidance of doubt, nothing in this
agreement shall confer any right of access on the Company to any records or
other information of the Banks or any other Indemnified Person.

 

14.9                               Any action taken by a Citigroup
Indemnified Person to enforce this clause 14 shall be conducted through
Citigroup.

 

14.10                         Any action taken by a Hoare
Govett Indemnified Person to enforce this clause 14 shall be conducted through
Hoare Govett.

 

14.11                         Any action taken by a Morgan
Stanley Indemnified Person to enforce this clause 14 shall be conducted through
Morgan Stanley.

 

14.12                         Any action taken by a Lehman
Brothers Indemnified Person to enforce this clause 14 shall be conducted
through Lehman Brothers.

 

14.13                         The indemnity in this clause 14
shall supersede the indemnity provisions of the Engagement Letters, to the
extent that they relate to the same loss.

 

15.                                     CONTRIBUTION

 

15.1                               If the indemnification provided for in clause 14 is for any
legal reason (including because 

 

34

 

such indemnification would be contrary to public
policy) unavailable, or insufficient, to hold harmless an Indemnified Person in
respect of any Losses, referred to therein, then the Company shall contribute
to the aggregate amount of such Losses, incurred by such Indemnified Person, as
incurred:

 

(a)                            in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Banks on the other
hand from the offering of the New Shares pursuant to this agreement; or

 

(b)                           if the allocation provided by clause 15.1(a) is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 15.1(a) above but also the
relative fault of the Company on the one hand and of the Banks on the other
hand in connection with the acts or statements or omissions which resulted in
such Losses, as well as any other relevant equitable considerations.

 

15.2                               The relative benefits received by the Company on the one
hand and the Banks on the other hand in connection with the offering of the
Shares pursuant to this agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Shares pursuant
to this agreement (before deducting expenses) received by the Company and the
fees and commissions of the Banks bear to the Gross Proceeds.

 

15.3                               The relative fault of the Company on the one hand and the
Banks on the other hand will be determined by reference to, among other things,
whether any such act or alleged act or untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Banks and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such act, statement or omission.

 

15.4                               The Company and the Banks agree that it would not be just
and equitable if contribution pursuant to this clause 15 were determined by pro
rata allocation (even if the Banks were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this clause 15. The aggregate
amount of losses, damages, costs, charges and expenses incurred by an
Indemnified Person and referred to above in this clause 15 will be deemed to
include any legal or other expenses reasonably incurred by such Indemnified
Person in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such act or alleged act or
untrue or alleged untrue statement or omission or alleged omission.

 

15.5                               Notwithstanding the provisions of this clause 15, none of
the Banks will be required to contribute any amount in excess of its fees and
commissions.

 

15.6                               No person guilty of negligence, wilful default, fraud or
fraudulent misrepresentation (whether within the meaning of Section 11(f) of
the US Securities Act or otherwise) will be entitled to a contribution from any
person who was not guilty of such negligence, wilful default, fraud or
fraudulent misrepresentation.

 

15.7                               No person will be entitled to a contribution from the
Company under this clause 15 to the extent that such contribution is not
permissible under Chapter VI of the Companies Act.

 

15.8                               For the purposes of this clause 15, each Indemnified Person
shall have the same rights to contribution as such Bank, each Director and each
person, if any, who controls the Company with the meaning of Section 15 of the
US Securities Act or Section 20 of the US Exchange Act will have the same
rights to contribution as the Company. The Banks’ respective obligations to
contribute pursuant to this clause 15 are several in proportion to the Agreed
Proportions. For the avoidance of doubt, the Company shall not be liable 

 

35

 

under this clause 15 to the extent that the
relevant Loss has been recovered pursuant to any other provision of this
agreement.

 

16.                                     ANNOUNCEMENTS

 

16.1                               The Company undertakes to the Banks that, save for the issue
and publication of the Issue Documents in accordance with the terms of this
agreement:

 

(a)                            no public announcement or communication concerning any
member of the Group or the Enlarged Group which is or may be material in the
context of the Rights Issue;

 

(b)                           no notice, bill, poster or document announcing the
publication or despatch of the Prospectus, the US Wrap or the Provisional
Allotment Letters or the issue of the New Shares and indicating the essential
characteristics of the New Shares;

 

(c)                            no document relating to Admission,

 

will be published, made or despatched by or on
behalf of any member of the Group or, following completion of the Acquisition,
any member of the Enlarged Group, or any of their respective directors at any
time between the Posting Date and 60 days after the Acceptance Date without the
prior written consent of Hoare Govett (acting for and on behalf of the Banks)
(such consent not to be unreasonably withheld or delayed). Prior to the Posting
Date, the Company shall not publish, make or despatch any announcement or
communication or other document referred to in (a) to (c) above without, to the
extent reasonably practicable, consulting with Hoare Govett (acting for and on
behalf of the Banks) and having due regard to any comments it may have.

 

16.2                               The Company will not, and will procure that no other member
of the Group or the Enlarged Group will, at any time between the date hereof
and 60 days after the Acceptance Date undertake any equity capital markets
transaction or undertake any material acquisition, disposal or other
transaction or issue any shares or options over shares or securities
convertible or exchangeable into shares (other than grants of options or issues
of shares in the ordinary course in connection with the Group’s share option
plans) or enter into any other arrangement with a similar economic effect (or
enter into any commitment or agreement for the same) which in each case could
be material in the context of the Rights Issue, other than the Acquisition and
related transactions disclosed to the Banks prior to the date of this agreement
without the prior written consent of Hoare Govett (acting for and on behalf of
the Banks) (such consent not to be unreasonably withheld or delayed).

 

16.3                               Notwithstanding the foregoing, if: (i)
during the last 15 days of the 60 day period following the Acceptance Date (the “Restricted Period”) the Company issues an
earnings release or material news or a material event relating to the Company
occurs (other than any material news or material event which affects companies
or the tobacco industry generally); or (ii) prior to the expiration of the
Restricted Period the Company announces that it will release earnings results
or becomes aware that such material news or such material event will occur
during the 16 day period beginning on the last day of the Restricted Period,
the restrictions on the Company in clause 16.2, to the extent that they relate
to an issue of shares or options over shares or securities convertible or
exchangeable into shares (other than grants of options or issues of shares in
the ordinary course in connection with the Group’s share option plans) or
to any other arrangement or commitment with a similar economic effect, shall
continue to apply until the expiration of the 15 day period beginning on the
issuance of the earnings release or the occurrence of the material news or
material event.

 

16.4                               The Company undertakes to the Banks that, during the period
from the Posting Date until the date 60 days after the Acceptance Date, it will
to the extent reasonably practicable:

 

36

 

(a)         discuss with
Hoare Govett (acting for and on behalf of the Banks) in advance any public
statement or document which relates to the Group’s or the Enlarged Group’s
financial or trading position or prospects or to any acquisition, disposal,
reorganisation, takeover, management development or any other significant
matter (similar or not to the foregoing) and which any member of the Group or
the Enlarged Group proposes to make or publish; and

 

(b)         discuss with
Hoare Govett (acting for and on behalf of the Banks) in advance any other
information which may be required to be notified to a Regulatory Information
Service in accordance with paragraph 2.2 of the DTRs.

 

16.5          Each of the
Banks shall be entitled to make for itself or on behalf of any Indemnified Person,
after such consultation with the Company as shall be reasonably practicable in
the circumstances, any announcement concerning the Rights Issue as may in its
reasonable opinion be necessary in order to comply with the DTRs, the Listing
Rules, the Admission and Disclosure Standards or section 397 and Part VIII
of the FSMA.

 

16.6          The
provisions of clause 16.1 shall not apply to any such public announcement or
communication if and to the extent that it is required by law or by the FSA,
the New York Stock Exchange, the US Securities and Exchange Commission, NASD,
or by the London Stock Exchange provided that prior to the making or despatch
thereof the Company shall consult with Hoare Govett (acting for and on behalf
of the Banks) as to the content, timing and manner of making or despatch
thereof and the Company shall take into account all reasonable requirements on
Hoare Govett’s part in relation thereto.

 

17.            RIGHTS OF THIRD PARTIES

 

17.1          Each
Indemnified Person shall have the right under the Contracts (Rights of Third
Parties) Act 1999 to enforce its rights against the Company under clause 14 of
this agreement provided that such an Indemnified Person must obtain the written
consent of the relevant Bank before it may bring proceedings to enforce the
terms of clause 14 and, save to the extent notified in writing by such Bank to
the relevant Indemnified Person, such Bank (without obligation) shall have the
conduct of any such action on behalf of the relevant Indemnified Person.

 

17.2          Save as
provided in clause 17.1, a person who is not a party to this agreement shall
have no rights under the Contracts (Rights of Third Parties) Act 1999 to
enforce any term of this agreement but this does not affect any right or remedy
of a third party which exists or is available apart from that Act.

 

17.3          Notwithstanding
the provisions of clauses 17.1 and 17.2, any rights arising by virtue of the
Contracts (Rights of Third Parties) Act 1999 may be rescinded or varied in any
way or at any time by the parties to this agreement without the consent of any
Indemnified Person.

 

18.            MISCELLANEOUS

 

18.1          The Company
confirms that it will arrange for the Registrars to act as registrars and
receiving agents in connection with the Nil Paid Rights, the Fully Paid Rights,
the New Shares, the Rights Issue and the EGM and to perform the obligations
assigned to it under the Issue Documents and this agreement as registrars and
receiving agents.

 

18.2          No delay or
omission on the part of any party in exercising any right, power or remedy
under this agreement shall impair such right, power or remedy or operate as a
waiver thereof. The single or partial exercise of any right, power or remedy by
any party under this agreement shall not preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.

 

37

 

18.3          The rights,
powers and remedies of each party provided in this agreement are cumulative and
not exclusive of any other rights, powers and remedies (whether provided by law
or otherwise).

 

18.4          No variation
to this agreement shall be effective unless it is in writing and signed by or
on behalf of the Company and the Banks.

 

18.5          If any
provision of this agreement is or becomes for any reason whatsoever invalid,
illegal or unenforceable, it shall be divisible from this agreement and shall
be deemed to be deleted from it and the validity of the remaining provisions
shall not be affected in any way.

 

18.6          No party may,
without the prior written consent of the others, assign or transfer any benefit
arising under or out of this agreement nor shall it, save as expressly
permitted by this agreement, delegate or sub-contract to any third party any of
its obligations hereunder.

 

18.7          This
agreement and the documents referred to in it constitutes the entire agreement
between the parties and supersedes and replaces any previous agreement,
understanding, undertaking, representations, warranties or arrangement of any
nature whatsoever between the parties relating to the subject matter of this
agreement. Each party waives all rights and remedies which, but for this
clause, might otherwise be available to it in respect of any such previous
agreement, understanding, undertaking, representations, warranties or other
arrangement. Nothing in this clause limits or excludes any liability for fraud.

 

18.8          At any time
after the date of this agreement the Company shall, and shall use its
reasonable endeavours to procure that any necessary third party shall, at the
cost of the Company, execute such documents and do such things as the Banks
shall reasonably require for the purpose of giving full effect to all the
provisions of this agreement.

 

18.9          The parties
may at any time agree to terminate this agreement and enter into a new
underwriting agreement in the agreed form.

 

19.            NOTICES

 

Any notice, demand or other communication given
or made under or in connection with the matters contemplated by this agreement
shall be in writing and shall be delivered personally or sent by fax or prepaid
first class post (air mail if posted to or from a place outside the United
Kingdom):

 

	
  in the case
  of the Company to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  PO Box 244,
  Southville, Bristol BS99 7UJ

  
	
  Fax:

  	
   

  	
  +44 117 933 7429

  
	
  Attention:

  	
   

  	
  Company Secretary

  
	
   

  	
   

  	
   

  
	
  in the case
  of Hoare Govett to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  250 Bishopsgate,
  London EC2M 4AA

  
	
  Fax:

  	
   

  	
  +44 20 7678 1587

  
	
  Attention:

  	
   

  	
  Hugo Fisher

  

 

38

 

	
  in the case
  of Morgan Stanley to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  25 Cabot Square,
  Canary Wharf, London E14 

  4QA

  
	
  Fax:

  	
   

  	
  +44 20 7425 8990

  
	
  Attention:

  	
   

  	
  Global Capital Markets

  
	
   

  	
   

  	
   

  
	
  in the case
  of Citigroup to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  Citigroup Centre,
  Canada Square, Canary Wharf, 

  London E14 5LB

  
	
  Fax:

  	
   

  	
  +44 20 7986 1103

  
	
  Attention:

  	
   

  	
  ECM Syndicate

  
	
   

  	
   

  	
   

  
	
  in the case
  of Lehman Brothers to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  25 Bank Street, London E14 5LE

  
	
  Fax:

  	
   

  	
  +44 20 7067 9785

  
	
  Attention:

  	
   

  	
  Piers Roberts

  
	
   

  	
   

  	
   

  
	
  in the case
  of the Sponsor to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  Citigroup Centre,
  Canada Square, Canary Wharf, 

  London E14 5LB

  
	
  Fax:

  	
   

  	
  +44 20 7986 1103

  
	
  Attention:

  	
   

  	
  ECM Syndicate

  

 

and shall be deemed to have been duly given or
made as follows:

 

19.1          if personally
delivered, upon delivery at the address of the relevant party;

 

19.2          if sent by
first class post, two Dealing Days after the date of posting;

 

19.3          if sent by
air mail, five Dealing Days after the date of posting; and

 

19.4          if sent by
fax, when despatched,

 

provided that if, in accordance with the above
provision, any such notice, demand or other communication would otherwise be
deemed to be given or made after 5.00 p.m. such notice, demand or other
communication shall be deemed to be given or made at 9.00 a.m. on the next
Dealing Day.

 

20.            COUNTERPARTS

 

20.1          This
agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
the same agreement. Any party may enter into this agreement by executing a
counterpart and this agreement shall not take effect until it has been executed
by all parties.

 

20.2          Delivery of
an executed counterpart of a signature page by facsimile transmission shall
take effect as delivery of an executed counterpart of this agreement. If such
method is adopted, without prejudice to the validity of such agreement, each
party shall provide the others with the original of such page as soon as
reasonably practicable thereafter.

 

39

 

21.            NO ADVISORY OR FIDUCIARY
RELATIONSHIP

 

The Company acknowledges and agrees that:

 

(a)         the terms of
the Rights Issue are an arm’s length commercial transaction between the
Company, on the one hand, and the several Banks on the other hand;

 

(b)         in connection
with the Rights Issue and the process leading to such transaction, each Bank is
not a fiduciary of the Company or the Company’s stockholders, creditors,
employees or any other party;

 

(c)         none of the
Banks has assumed or will assume fiduciary responsibility in favour of the
Company with respect to the Rights Issue or the process leading to the Rights
Issue (irrespective of whether such Bank has advised or is currently advising
the Company on other matters) and none of the Banks has any obligation to the
Company with respect to the Rights Issue except the obligations expressly set
out in this agreement;

 

(d)         the Banks and
their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Company; and

 

(e)         the Banks  have not provided any legal, accounting, regulatory or tax
advice with respect to the Rights Issue and the Company has consulted its own
legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.

 

22.            GOVERNING LAW AND
JURISDICTION

 

This agreement shall be governed by, and
construed in all respects in accordance with, English law and the courts of
England have non-exclusive jurisdiction to settle any dispute arising out of or
in connection with this agreement.

 

IN WITNESS whereof this agreement has been executed on the date first
above written.

 

40

 

SCHEDULE 1

 

Documents for
Delivery

 

Save to the extent that the same have been delivered to
Hoare Govett (acting for and on behalf of the Banks) prior to the date of this
agreement, the Company shall procure that the following documents are delivered
to Hoare Govett (acting for and on behalf of the Banks):

 

1.              AT EXECUTION OF THIS
AGREEMENT

 

1.1            four
certified copies of the memorandum and articles of association of the Company;

 

1.2            four
certified copies of resolutions of the board of directors of the Company (or a
duly established and authorised committee thereof) approving and authorising:

 

(a)         the entry into this agreement by the Company;

 

(b)         the despatch of the Circular; and

 

(c)         the release of the Circular Press Announcement.

 

1.3            four
certified copies of the Circular Verification Notes;

 

1.4            four original
copies of the Circular Working Capital Report together with a signed copy of a
letter from the Company to the Sponsor in the agreed form confirming that the
working capital of the Group is sufficient for its present requirements;

 

1.5            certified
copies of statements in the agreed form signed by each Director and addressed
to the Company and the Sponsor accepting responsibility for the information
contained in the Circular; and

 

1.6            certified
copies of powers of attorney in the agreed form executed by each Director.

 

2.              ON POSTING OF THE
CIRCULAR

 

2.1            four copies
of the Circular bearing evidence of the formal approval of the FSA as a
circular.

 

3.              IMMEDIATELY FOLLOWING
THE PASSING OF THE RESOLUTION

 

3.1            a certified
copy of the Resolution.

 

4.              ON THE POSTING DATE

 

4.1            a certified
copy of the resolution of the board of Directors (or a duly established and
authorised committee thereof) approving the Prospectus, the US Wrap, the Rights
Issue and Rights Issue Announcement and provisionally allotting the New Shares
in accordance with clause 7.1;

 

4.2            four
certified copies of the Rights Issue Press Announcement and Investor
Presentation;

 

4.3            an original
copy of the letter referred to in clause 3.3 of this agreement;

 

4.4            certified
copies of statements in the agreed form signed by each Director and addressed
to the Company and the Banks accepting responsibility for the information
contained in the Prospectus;

 

4.5            certified
copies of powers of attorney in the agreed form executed by each Director;

 

41

 

4.6            the report on
the indebtedness of the Group;

 

4.7            four original
copies of the Prospectus Working Capital Report together with a signed copy of
a letter from the Company to the Banks confirming that the working capital of
the Enlarged Group is sufficient for its present requirements;

 

4.8            four original
copies of a letter from the Reporting Accountants addressed to the Company and
the Banks: (a) reviewing the capitalisation and indebtedness report, (b)
reviewing the Prospectus Working Capital Report, (c) confirming the accuracy of
certain financial information contained in the Prospectus, (d) reporting on the
pro forma financial information in the Prospectus, (e) in relation to any
significant change in the financial and trading position of the Group, (f) in
relation to paragraph 8.4.9R(3) of the Listing Rules, (g) confirming the
accuracy of the description of tax matters, and (h) in relation to omission of
information;

 

4.9            four original
copies of a letter from the Target Reporting Accountants (or another
internationally recognised firm of accountants) addressed to the Company and
the Banks confirming the accuracy of Altadis financial information contained in
the Prospectus and providing comfort on correct extraction of such financial
information;

 

4.10          four original
copies of a letter from the Reporting Accountants addressed to the Company and
the Sponsor consenting to the issue of the Prospectus;

 

4.11          four original
copies of a letter from the Company addressed to the Sponsor in relation to
paragraphs 8.3.4R and 8.4.8R(1), (2) and (3) of the Listing Rules providing
comfort on correct extraction of financial information, specifying any
significant change to the financial or trading position of the Company since 30
September 2006; and confirming that all matters known to it which, in its
reasonable opinion should be taken into account by the FSA in considering the
application for listing, have been disclosed with sufficient prominence in the
Prospectus;

 

4.12          four original
copies of each of the letters addressed to the Sponsor from the Reporting
Accountants and the Company’s solicitors in relation to paragraphs 8.3.2R and
8.4.9R(3) of the Listing Rules;

 

4.13          four certified
copies of the Prospectus Verification Notes;

 

4.14          a copy of the
Prospectus bearing evidence of the formal approval thereof by the FSA as a
prospectus;

 

4.15          four
certified copies of the security application forms in respect of the Nil Paid
Rights and the Fully Paid Rights and the New Shares which have been given to
CRESTCo;

 

4.16          four original
copies of an opinion in the agreed form (subject to any changes to the
assumptions and qualifications agreed with the Banks necessary to enable the
opinion to be given, such agreement not to be unreasonably withheld or delayed)
from the Company’s solicitors and four copies of an opinion from the Bank’s
solicitors (in respect of English law);

 

4.17          four original
copies of opinions in the agreed form agreed form (subject to any changes
agreed with the Banks necessary to enable the opinion to be given) from the
Company’s US counsel relating to certain matters under US law;

 

4.18          four original
copies of a US 10b-5 disclosure letter in the agreed form (subject to any changes
agreed with the Banks necessary to enable the disclosure letter to be given)
from the Company’s US counsel;

 

4.19          four original
copies of a US 10b-5 disclosure letter of Ashurst (subject to any changes 

 

42

 

agreed with the Banks necessary to enable the
disclosure letter to be given), US counsel for the Banks, provided that if
Ashurst is unable to deliver a 10b-5 disclosure letter the Company will provide
the Banks with a 10b-5 disclosure letter in the agreed form (subject to any
changes agreed with the Banks necessary to enable the disclosure letter to be
given) from a law firm as counsel for the Banks on the list set out in schedule
5;

 

4.20          four
originals of signed “international” and US SAS 72 comfort letters addressed to
the Company and the Banks from the Reporting Accountants and the Target
Reporting Accountants;

 

4.21          one original
signed copy of the application for admission to the Official List in the
appropriate form issued by the FSA;

 

4.22          one original
signed copy of the application for admission to trading in the appropriate form
issued by the London Stock Exchange;

 

4.23          one original
signed copy of the Company’s declaration addressed to the FSA; and

 

4.24          one original
signed copy of the application for the Prospectus to be approved as a
prospectus (form A).

 

5.              FOLLOWING CONFIRMATION
OF ALLOTMENT AND/OR THE MAKING OF NEW ALLOTMENTS OF THE NEW SHARES PURSUANT TO
CLAUSE 7.2

 

5.1            a certified
copy of the resolution of the board of directors of the Company (or a duly
established and authorised committee thereof) confirming the allotments of the
New Shares taken up and making new allotments of the New Shares not taken up as
referred to in clause 7.2.

 

Where the resolutions referred to in paragraphs
1.2, 4.1 and 5.1 of this schedule or any of them are resolutions of a committee
of the board of directors, the Company shall procure that there is also
delivered to Hoare Govett (acting for and on behalf of the Banks) a certified
copy of the resolution of the board of directors appointing such committee
(save to the extent that a certified copy thereof shall previously have been
delivered to the Banks).

 

6.              PRIOR TO ADMISSION

 

6.1            four original
copies of a bring-down opinion in the agreed form (subject to any changes to
the assumptions and qualifications agreed with the Banks necessary to enable
the opinion to be given, such agreement not to be unreasonably withheld or
delayed) from the Company’s solicitors and the Bank’s solicitors (in respect of
English law);

 

6.2            four original
copies of bring-down opinions in the agreed form agreed form (subject to any
changes agreed with the Banks necessary to enable the opinion to be given) from
the Company’s US counsel relating to certain matters under US law;

 

6.3            four original
copies of a bring-down US 10b-5 disclosure letter in the agreed form (subject
to any changes agreed with the Banks necessary to enable the disclosure letter
to be given) from the Company’s US counsel;

 

6.4            four original
copies of a bring-down US 10b-5 disclosure letter of Ashurst, US counsel for
the Banks, provided that if Ashurst is unable to deliver a bring-down 10b-5
disclosure letter the Company will provide the Banks with a bring-down 10b-5
disclosure letter in the agreed form (subject to any changes agreed with the
Banks necessary to enable the bring-down disclosure letter to be given) from a
law firm as counsel for the Banks on the list set out in schedule 5;

 

43

 

6.5            four
originals of signed bring-down UK comfort letters addressed to the Company and
the Banks from the Reporting Accountants and the Target Reporting Accountants;
and

 

6.6            four
originals of signed bring-down “international” and US SAS 72 comfort letters
addressed to the Company and the Banks from the Reporting Accountants and the
Target Reporting Accountants.

 

44

 

SCHEDULE 2

 

Warranties

 

Part A

 

Warranties and undertakings given on the date

of this agreement

 

1.              CIRCULAR AND
VERIFICATION

 

1.1            The
information contained in the Circular and Circular Press Announcement (or any
amendments or supplements thereto) is in accordance with the facts and all
statements of fact contained in the Circular and Circular Press Announcement
are true and accurate and are not misleading.

 

1.2            The Circular
and Circular Press Announcement (or any amendments or supplements thereto) do
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

1.3            All
statements, forecasts, estimates and expressions of opinion, intention or
expectation contained in the Circular and Circular Press Announcement (or any
amendments or supplements thereto) are fairly and honestly given, expressed or
held and have been the subject of due care and attention and are fairly based
upon facts within the knowledge of the Company and have been made on reasonable
grounds after due and proper consideration of all the information currently
available to the Company.

 

1.4            There are no
facts or considerations known or which could on reasonable and proper enquiry
have been known to the Company which are not disclosed in the Circular and
Circular Press Announcement and which by their omission would or might
reasonably be considered to:

 

(a)         affect the import of the information contained therein; or

 

(b)         make any statement therein (whether of fact or opinion)
inaccurate or misleading; or

 

(c)         invalidate or qualify any assumption made in support of any
statement therein (whether of fact or opinion); or

 

(d)         be material for disclosure to holders of Shares.

 

1.5            The
information contained in the replies to the Circular Verification Notes is true
and accurate and not misleading and all expressions of opinion and expectation
contained in the Circular Verification Notes are honestly held and fairly
based; such replies have been prepared or approved by persons having
appropriate knowledge and responsibility to enable them properly to provide
such replies and all such replies have been given in good faith.

 

2.              ACCOUNTS

 

2.1            The Accounts:

 

(a)         have been properly prepared in accordance with the Companies
Act (and, where so stated, Article 4 of the IAS Regulation);

 

(b)         give a true and fair view in accordance with generally
accepted accounting 

 

45

 

principles, practices and standards in the
United Kingdom which shall include, where so stated, IFRS (“UK GAAP”)
of the state of affairs of the Group as at the end of each of the relevant
financial periods and of the profit or loss and cash flow of the Group for each
such period; and

 

(c)         fairly set out the assets, liabilities and reserves of the
Group and either make proper provision for or, where appropriate in accordance
with UK GAAP, include a note in respect of all liabilities or commitments,
whether actual, deferred or contingent of the Group as at the Accounts Date and
in particular, provide for, or where appropriate in accordance with UK GAAP,
make proper disclosure of, all liabilities, whether actual, deferred,
contingent or disputed, of the Group for income tax or corporation tax measured
by reference to actual or deemed taxable profits (including both income and
chargeable gains) made or deemed to have been made during the relevant
financial period, and for any other Tax in relation to or in consequence of any
event occurring on or before the Accounts Date).

 

2.2            No Group
Company has any off balance sheet financing.

 

2.3            The Company
is not aware of any matter which would mean that the Accounts do not give a
true and fair view in accordance with UK GAAP of the financial position and the
profits or losses and cash flow of the Group at the Accounts Date and for the
relevant period.

 

2.4            The Reporting
Accountants are independent auditors with respect to the Group, as required by
the Listing Rules.

 

2.5            The Directors
have established procedures which provide a reasonable basis for them to make
proper judgements as to the financial position and prospects of the Group and
each member of the Group maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorisations; and (ii)
transactions are recorded as necessary to permit the preparation of financial
statements in accordance with Article 4 of the IAS Regulations and the
Companies Act.

 

3.              POSITION SINCE THE
ACCOUNTS DATE

 

Since the Accounts Date, the respective
businesses of each member of the Group have been carried on in the ordinary and
usual course and there has been no material adverse change or any development
reasonably likely to lead to a material adverse change in the financial or
trading position or prospects of the Group taken as a whole and since the
Accounts Date no member of the Group has incurred any commitment or liability
of an onerous or unusual nature nor has any such company become a party or
otherwise subject to any contract or commitment of an onerous or unusual nature
which in either case is material for disclosure in the context of the Rights
Issue.

 

4.              PREVIOUS ANNOUNCEMENTS

 

In relation to all Previous Announcements
(excluding the Form 20-F and other materials filed with or furnished to the US
Securities and Exchange Commission), save to the extent corrected in any
announcement subsequently made by or on behalf of the Company through a
Regulatory Information Service or as disclosed in the Circular:

 

(a)         all statements of fact contained therein which are material
in the context of the Rights Issue were, when made, and remain true and
accurate in all material respects and not misleading;

 

(b)         all estimates and all statements of opinion, intention or
expectation contained therein which are material in the context of the Rights
Issue were made on 

 

46

 

reasonable grounds after due and careful
consideration, were honestly held by the Company and the Directors and were
fairly based;

 

(c)         there were no other facts known, or which could on
reasonable enquiry have been known, to the Company which were not included in
the relevant document or announcement, the omission of which made any statement
or estimate in the document or announcement misleading and which is material in
the context of the Rights Issue; and

 

in relation to the Form 20-F and other materials
filed with or furnished to the US Securities and Exchange Commission, save to
the extent corrected in any amendment subsequently made in any filing or
submission made with the US Securities and Exchange Commission or disclosed in
the Circular, none of such materials contained or contain any untrue statement
of a material fact required to be stated therein to make the statements therein
not misleading.

 

5.              INFORMATION PROVIDED

 

All written information supplied directly or
indirectly by the Directors and/or the Company and the Company’s employees,
auditors, solicitors and other agents and advisers to the Banks (or any persons
acting on their behalf) for the purposes of or in connection with the Rights
Issue and/or the Acquisition and/or Admission was, when supplied, true and
accurate in all material respects and is now, save to the extent subsequently
corrected, true and accurate in all respects material in the context of the
Rights Issue.

 

6.              STATEMENTS TO FSA AND
LONDON STOCK EXCHANGE

 

6.1            All
statements made or information provided by or on behalf of the Company to the
FSA or the London Stock Exchange are true and accurate and are not misleading
and all expressions of opinion, intention or expectation made by the Company to
the FSA are truly and honestly held and fairly made on reasonable grounds
and/or assumptions after due and careful consideration and enquiry and there
are no facts which have not been disclosed to the FSA or the London Stock
Exchange which by their omission make any such statements misleading or which
are material for disclosure to any of them.

 

6.2            There are no
matters other than those disclosed in the Circular which the Company considers
should be taken into account by the FSA in considering the Acquisition.

 

6.3            The Company
has informed the Banks in writing of all discussions which it or its agents
(apart from the Banks) have had with the FSA and the London Stock Exchange
respectively in relation to the applications to the FSA for the approval of the
Circular pursuant to the Listing Rules or the interpretation of and application
of the Prospectus Rules, the Listing Rules and the Disclosure and Transparency
Rules to the Company insofar as they relate to the Rights Issue and/or
Admission.

 

7.              ACQUISITION

 

7.1            Nothing which
the Company has discovered in the course of its due diligence and enquiry in
relation to the Acquisition renders any of the information concerning the
Acquisition supplied in writing by the Company to the Banks, including without
limitation the anti-trust analysis, untrue, inaccurate or misleading in any
material particular.

 

7.2            The
Acquisition will not have an adverse impact on the Company’s ability to comply
with the Listing Rules, the NYSE Rules or the DTRs.

 

8.              LITIGATION

 

Save as disclosed in the Circular, no Group
Company nor any Director nor, so far as the 

 

47

 

Company is aware, any person for whom any Group
Company is or may be vicariously liable has any claim outstanding against them
or is engaged in or has been engaged during the last 12 months in any legal or
arbitration or similar proceedings which, individually or collectively, are
material for disclosure in the context of the Rights Issue and no such legal or
arbitration or Similar Proceedings are threatened or pending, nor, to the best
of the knowledge, information and belief of the Company, are there any
circumstances which are reasonably likely to give rise to any such legal or
arbitration or similar proceedings. For the purposes of this Warranty, “Similar Proceedings” includes any civil or criminal
proceedings and any action by any governmental, public or regulatory authority
(including any investment exchange and any authority or body which regulates
investment business or takeovers or which is concerned with mergers or taxation
matters).

 

9.              CAPACITY AND
COMPLIANCE

 

9.1            Subject to
the passing of the Resolution, the Company and the Directors have power to
enter into and perform this agreement and, in particular, to allot and issue
the New Shares in the manner proposed without any sanction or consent by
members of the Company or any class of them and there are no other consents,
authorisations or approvals required by the Company in connection with the
entering into and the performance of this agreement and the allotment and issue
of the New Shares which have not been irrevocably and unconditionally obtained
(other than consents required by the FSA, the London Stock Exchange and CREST).

 

9.2            The entering
into of this agreement and the performance by the Company of its obligations
hereunder and the allotment and issue of the New Shares will comply with:

 

(a)         all
agreements to which the Company is a party and will not infringe or exceed any
limits, powers or restrictions binding upon the Company and/or any of its
assets or the terms of any contract, obligation or commitment of the Company;

 

(b)         the byelaws,
articles of association or other constitutional documents of the Company; and

 

(c)         all material
agreements to which any member of the Group is a party, and will not infringe
or exceed any material limits, powers or restrictions binding upon such members
of the Group and/or any of its assets or the terms of any material contract,
obligations or commitment of any member of the Group.

 

9.3            The issue and
publication of the Issue Documents and the allotment and issue of the New
Shares in the manner proposed will comply with the FSMA, the Companies Act, the
Part 6  Rules, the rules and regulations
of the London Stock Exchange (including the Admission and Disclosure Standards)
and all other relevant laws and regulations of the United Kingdom and elsewhere
and all applicable requirements of any regulatory body.

 

9.4            The Company,
each Material Subsidiary and (to the extent material in the context of the
Rights Issue and/or Admission) each other member of the Group has been duly
incorporated and is validly existing as a company with limited liability under
the laws of the country of its incorporation with full power and authority to
own, lease and operate the properties which it owns, leases and operates and to
own its other assets and conduct its business as described in the Circular.

 

9.5            Save as
otherwise disclosed in the Circular, and other than the Company’s share option
plans, there are no rights (conditional or otherwise) (i) to require the issue
of any shares or other securities (including, without limitation, any loan
capital) or securities convertible into or exchangeable for, or warrants,
rights or options to purchase, or obligations, commitments or intentions to
create the same) or (ii) to sell or otherwise dispose of any shares or other
securities, in each case of a Group Company (other than to another Group 

 

48

 

Company, as the case may be) which are
outstanding and in force.

 

9.6            The Equity
Bridge Facility has been duly authorised, executed and delivered on behalf of
the Company and assuming due authorisation, execution and delivery by the other
parties thereto, constitute valid and binding obligations of the Company
enforceable against it in accordance with its terms and, so far as the Company
is aware, no event has occurred and no circumstances exist that would or might
be reasonably likely to cause amounts payable to the Company under the Equity
Bridge Facility to be unavailable if required.

 

10.            DEFAULT

 

10.1          No event or
circumstance has occurred or arisen or, so far as the Directors are aware
(having made all reasonable enquiries), is about to occur or arise by reason of
which any person is, or would be, or could with the giving of notice and/or
lapse of time and/or a relevant determination become entitled to require
repayment prior to its stated maturity, or to take any step to enforce security
for, any material borrowings or material indebtedness in the nature of
borrowing of any member of the Group and no member of the Group has received
notice from any person to whom any such indebtedness which is repayable on
demand is owed demanding repayment of the same and neither the Company nor any
of the Directors is otherwise aware that any such person proposes to demand
repayment of, or to take any step to enforce any security for, the same and
which would, in any such case, have a material adverse effect on the business,
assets or prospects of the Group taken as a whole.

 

10.2          No event or
circumstance has occurred or arisen or, so far as the Directors are aware
(having made all reasonable enquiries), is about to occur which constitutes or
results in, or would with the giving of notice and/or lapse of time and/or the
making of a relevant determination, constitute, or result in, a default or the
acceleration or breach of any obligation under any agreement, instrument or
arrangement to which any member of the Group is a party or by which any such
company or any of its properties, revenues or assets are bound, and which would
in any such case have a material adverse effect on the businesses, assets or
prospects of the Group taken as a whole.

 

11.            INSOLVENCY

 

11.1          Neither the
Company nor any Material Subsidiary nor (so far as material in the context of
the Rights Issue and/or Admission) any other Group Company has taken any action
nor have any other steps been taken or legal proceedings started or threatened
against any such company (as applicable) for its administration, winding up or
dissolution or for any similar or analogous proceeding in any jurisdiction, or
for it to enter into any arrangement or composition for the benefit of
creditors or for the appointment of an administrative receiver, an
administrator or a receiver, trustee or similar officer of it or any of its
properties, revenues or assets nor have any orders been made for any of the
foregoing (other than, in each case, in respect of a solvent liquidation,
reorganisation or amalgamation).

 

11.2          Neither the
Company nor any Material Subsidiary nor (so far as material in the context of
the Rights Issue and/or Admission) any other Group Company is insolvent or
unable to pay its debts as they fall due.

 

12.            INTELLECTUAL PROPERTY

 

The Company and each member of the Group own or
possess, or can acquire on reasonable terms, adequate patents, patent rights,
licences, inventions, copyrights, know how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or other intellectual
property (collectively, “Intellectual Property”)
necessary to carry on the business now operated by them in all material
respects, and neither the Company 

 

49

 

nor any member of the Group has received any
notice or is otherwise aware of any infringement of or conflict in any
jurisdiction with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any
member of the Group therein which, in each case, would be material in the
context of the Rights Issue.

 

13.            AUTHORITY TO CARRY ON
BUSINESS

 

All material licences, permissions,
authorisations and consents required in any jurisdiction for the effective
operation of the businesses of the Group have been obtained and complied with
in all material respects and are in full force and effect and, so far as the
Directors are aware (having made all reasonable enquiries), there are no
circumstances which might lead to any of such licences, permissions, authorisations
and consents being revoked, suspended, varied or refused renewal.

 

14.            INSURANCE

 

14.1          Since the
Accounts Date no member of the Group has sustained any material loss or
interference with its business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any employment dispute or court or
governmental action, order or decree which, in all cases, would be material in
the context of the Rights Issue.

 

14.2          The Company
and each member of the Group are insured by insurers of recognised financial
responsibility against such losses and risks and in such amounts as the
Directors reasonably consider are prudent and customary in the businesses in
which they are engaged; the Group has adequate disaster recovery arrangements
in place to ensure that there is no material adverse effect if its premises or
systems become unusable for any reason; all material policies of insurance and
fidelity or surety bonds insuring the Company or any other member of the Group
or their respective businesses, assets, employees, officers and directors are
in full force and effect; the Company and each other member of the Group are in
compliance with the material terms of such policies and instruments; there are
no material claims by the Company or any other member of the Group under any
such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; and neither the
Company nor any other member of the Group has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may
reasonably be necessary to continue its business.

 

15.            EMPLOYMENT

 

15.1          No problem,
dispute, slowdown, work stoppage or disturbance involving the employees of any
member of the Group, which is material in the context of the Rights Issue
exists or, so far as the Company is aware, having made due and careful
enquiries, is imminent.

 

16.            ENVIRONMENTAL

 

16.1          Each member
of the Group:

 

(a)         has at all times complied with and is complying with all
Environmental Laws in all material respects;

 

(b)         is in possession of all material consents, permits,
licences, exemptions, registrations or other authorisations (together the “Consents”) required under Environmental Laws; and

 

(c)         has complied in all material respects with all conditions of
such Consents and there are no facts or circumstances that may lead to a
regulatory authority revoking, 

 

50

 

varying, or not renewing any of the Consents.

 

16.2          No member of
the Group has caused or permitted and there has not been and there is not
present on at from or under any freehold and leasehold properties owned, used
or occupied by the Company and each member of the Group (the “Properties”) or any former properties occupied by any
member of the Group, any material generation, storage, disposal, spillage,
discharge, release, leakage, migration, entry, escape, deposit or emission (a “Release”) of any Hazardous Materials or waste.

 

17.            OFAC

 

17.1          None of the
Company, any other member of the Group or any Director, officer, agent,
employee or affiliate of the Company is currently subject to any sanctions
administered by OFAC or any similar sanctions imposed by the European Union,
the United Nations or any other body, governmental or other, to which the
Company or any of its affiliates is subject (collectively, “other
economic sanctions”); and the Company will not knowingly use the proceeds
of the Rights Issue, or lend, contribute or otherwise make available such
proceeds to any other member of the Group, joint venture partner or other
person or entity, for the purpose of financing the activities of any person
currently subject to any sanctions administered by OFAC or any other economic
sanctions.

 

17.2          None of the
Company, any other member of the Group or any Director, officer, agent,
employee or Affiliate of the Company, is aware of or has taken any action,
directly or indirectly, that has resulted or will result in a violation by such
persons of the FCPA (including, without limitation, making use of the mail or
any means or instrument of US interstate commerce corruptly in furtherance of
an offer, payment, promise to pay or authorisation of the payment of any money,
or other property, gift, promise to give, or authorisation of the giving of
anything of value to any “foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA), the OECD Convention or
any similar law or regulation, to which the Company, any other member of the
Group, any Director, officer, agent, employee of any member of the Group or any
Affiliate is subject; and the Company, each member of the Group and its
Affiliates have conducted their businesses in compliance with the provisions of
FCPA (to the extent such provisions are applicable), the OECD Convention and
any applicable similar law or regulation and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected
to continue to ensure, continued compliance therewith.

 

18.            WORKING CAPITAL

 

18.1          All
information requested from the Company by the Banks and the Reporting
Accountants in connection with the review of the working capital requirements
and indebtedness of the Group was when given and remains true and accurate in
all material respects and not misleading.

 

18.2          The Circular
Working Capital Report has been approved by the Directors and has been made
after due and careful enquiry, all statements of fact therein are true and
accurate in any material respects and not misleading, all forecasts, estimates
and expressions of opinion, intention or expectation contained therein are made
on reasonable grounds after due and proper consideration and are honestly held
by the Directors and are fairly based, there are no other facts known or which
could on reasonable enquiry have been known to the Directors the omission of
which would make any such statement or expression in the Circular Working
Capital Report misleading, all the assumptions on which that Report is based
are reasonable assumptions and, so far as the Directors are aware, there are no
other assumptions on which that Report ought to have been based which have not
been made.

 

18.3          Having regard
to available bank and other facilities, the Group will have sufficient working 

 

51

 

capital for its present requirements, that is,
for at least the next 12 months from the date of the Circular.

 

19.            US SELLING
RESTRICTIONS

 

19.1          Neither the
Company nor any of its or their affiliates, nor any person acting on its or
their behalf (other than the Underwriters, their affiliates or persons acting
on their behalf, as to whom no representation is made) has, directly or
indirectly, made or will make offers or sales of, or has solicited or will
solicit offers to buy, or otherwise has negotiated or will negotiate in respect
of, any security under circumstances that would require the Nil Paid Rights,
the Fully Paid Rights, the Provisional Allotment Letters or the New Shares to
be registered under the US Securities Act.

 

19.2          Neither the
Company nor any of its or their affiliates, nor any person acting on its or
their behalf (other than the Underwriters, their affiliates or persons acting
on their behalf, as to whom no representation is made) has engaged or will
engage in any form of general solicitation or general advertising in connection
with any offer or sale of the Nil Paid Rights, the Fully Paid Rights, the
Provisional Allotment Letters or the New Shares in the United States.

 

19.3          Neither the
Company not any of its or their affiliates, nor any person acting on its or
their behalf (other than the Underwriters, their affiliates or persons acting
on their behalf, as to whom no representation is made) has engaged or will
engage in any directed selling efforts in the United States with respect to the
Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters or
the New Shares and it and they have complied and will comply with the
applicable offering restrictions requirements of Regulation S under the US
Securities Act.

 

19.4          The Company
is a “foreign issuer” (as defined in Regulation S) and reasonably believes that
there is no “substantial US market interest” (as defined in Regulation S) in
the New Shares or any securities of the same class as the New Shares.

 

19.5          Neither the
Company nor any of its or their affiliates, nor any person acting on its or
their behalf (other than the Underwriters, their affiliates or persons acting
on their behalf, as to whom no representation is made) has taken, directly or
indirectly, or will take any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to cause or result in,
the stabilisation or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Nil Paid Rights, the Fully Paid Rights,
the Provisional Allotment Letters or the New Shares.

 

19.6          The Company
is not, and as a result of the issue and sale of Provisional Allotment Letters,
Nil Paid Rights, Fully Paid Rights or the New Shares as contemplated herein and
the application of the net proceeds thereof as contemplated and as described in
the Circular will not become an “investment company” (as such term is defined
in the US Investment Company Act).

 

19.7          The Company
is not, and does not intend to become, and as a result of the receipt and application
of the proceeds of the issue and sale of the Provisional Allotment Letters, the
Nil Paid Rights or the Fully Paid Rights or New Shares as contemplated and as
described in the Circular, a “passive foreign investment company” within the
meaning of section 1297 of the US Internal Revenue Code of 1986, as amended
(the “Code”).

 

52

Exhibit 4.19

Part B

 

Warranties and undertakings given on the 

Posting Date, on the date of publication of any Supplementary Prospectus and 

immediately prior to Admission

 

1.              PROSPECTUS, US WRAP
AND VERIFICATION

 

1.1            All
statements, forecasts, estimates and expressions of opinion, intention or
expectation contained in the Prospectus and the US Wrap (or any amendments or
supplements thereto) are fairly and honestly given, expressed or held and have
been the subject of due care and attention and are fairly based upon facts
within the knowledge of the Company and have been made on reasonable grounds
after due and proper consideration of all the information currently available
to the Company.

 

1.2            There are no
facts or considerations known or which could on reasonable and proper enquiry
have been known to the Company which are not disclosed in the Prospectus and
the US Wrap and which by their omission would or might reasonably be considered
to:

 

(a)         be likely to affect the import of the information contained
therein; or

 

(b)         make any statement therein (whether of fact or opinion)
inaccurate or misleading in any material respect; or

 

(c)         invalidate or qualify any assumption made in support of any
statement therein (whether of fact or opinion); or

 

(d)         be material for disclosure to the Sponsor or a potential
subscriber for New Shares.

 

1.3            The
Prospectus contains all such information as, having regard to the matters
referred to in section 87A(2) of the FSMA, investors would find necessary, for
the purpose of making an informed assessment of:

 

(a)         the assets and liabilities, financial position, profits and
losses and prospects of the Enlarged Group; and

 

(b)         the rights attaching to the New Shares,

 

having regard to the particular nature of the
New Shares and the Company.

 

1.4            The US Wrap
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

 

1.5            The Prospectus
contains all items of information required to be included by the Prospectus
Rules, save for those items of information for which waivers have been obtained
pursuant to the Prospectus Rules.

 

1.6            The
information contained in the replies to the Prospectus Verification Notes is
true and accurate and not misleading and all expressions of opinion and
expectation contained in the Prospectus Verification Notes are honestly held
and fairly based; such replies have been prepared or approved by persons having
appropriate knowledge and responsibility to enable them properly to provide
such replies and all such replies have been given in good faith.

 

2.              ACCOUNTS

 

2.1            The Accounts:

 

53

 

(a)         have been properly prepared in accordance with the Companies
Act (and, where so stated, Article 4 of the IAS Regulation) and with the
Prospectus Rules;

 

(b)         give a true and fair view in accordance with generally
accepted accounting principles, practices and standards in the United Kingdom
which shall include, where so stated, IFRS (“UK GAAP”)
of the state of affairs of the Group or (as applicable) the Enlarged Group as
at the end of each of the relevant financial periods and of the profit or loss
and cash flow of the Group or (as applicable) the Enlarged Group for each such
period; and

 

(c)         fairly set out the assets, liabilities and reserves of the
Group or (as applicable) the Enlarged Group and either make proper provision
for or, where appropriate in accordance with UK GAAP, include a note in respect
of all liabilities or commitments, whether actual, deferred or contingent of
the Group or (as applicable) the Enlarged Group as at the Accounts Date and in
particular, provide for, or where appropriate in accordance with UK GAAP, make
proper disclosure of, all liabilities, whether actual, deferred, contingent or
disputed, of the Group or (as applicable) the Enlarged Group for income tax or
corporation tax measured by reference to actual or deemed taxable profits
(including both income and chargeable gains) made or deemed to have been made
during the relevant financial period, and for any other Tax in relation to or
in consequence of any event occurring on or before the Accounts Date).

 

2.2            No Group
Company or (as applicable) Enlarged Group Company has any off balance sheet
financing.

 

2.3            The Company
is not aware of any matter which would mean that the Accounts do not give a
true and fair view in accordance with UK GAAP of the financial position and the
profits or losses and cash flow of the Group or (as applicable) the Enlarged
Group at the Accounts Date and for the relevant period.

 

2.4            The Reporting
Accountants are independent auditors with respect to the Group or (as
applicable) Enlarged Group, as required by the Listing Rules.

 

2.5            The Directors
have established procedures which provide a reasonable basis for them to make
proper judgements as to the financial position and prospects of the Group or
(as applicable) the Enlarged Group and each member of the Group or (as
applicable) the Enlarged Group maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorisations;
and (ii) transactions are recorded as necessary to permit the preparation of
financial statements in accordance with Article 4 of the IAS Regulations and
the Companies Act.

 

2.6            The Interim Results:

 

(a)         are accurate and complete in all material respects and
fairly represent the financial and trading position of the Group or (as
applicable) the Enlarged Group for such period; and

 

(b)         have been properly prepared in good faith and in accordance
with the Group’s or (as applicable) the Enlarged Group’s accounting policies
and on a basis consistent with that adopted for the preparation of the
consolidated audited financial statements of the Company as at and for the year
ended on the Accounts Date.

 

3.              POSITION SINCE THE
ACCOUNTS DATE

 

Since the date on which the Offer becomes
unconditional in all respects, the respective businesses of each member of the
Enlarged Group have been carried on in the ordinary 

 

54

 

and usual course and there has been no material
adverse change or any development reasonably likely to lead to a material
adverse change in the financial or trading position or prospects of the
Enlarged Group taken as a whole and since such date no member of the Enlarged
Group has incurred any commitment or liability of an onerous or unusual nature
nor has any such company become a party or otherwise subject to any contract or
commitment of an onerous or unusual nature which in either case is material for
disclosure in the context of the Rights Issue.

 

4.              INVESTOR PRESENTATION
AND RIGHTS ISSUE PRESS ANNOUNCEMENT

 

4.1            The
information contained in both the Investor Presentation and the Rights Issue
Press Announcement is in accordance with the facts and the Investor
Presentation and the Rights Issue Press Announcement do not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

 

4.2            All
statements, forecasts, estimates and expressions of opinion, intention or expectation
contained in both the Investor Presentation and the Rights Issue Press
Announcement are fairly and honestly given, expressed or held and have been the
subject of due care and attention and are fairly based upon facts within the
knowledge of the Company and are made on reasonable grounds after due and
proper consideration of all the information currently available to the Company.

 

4.3            There are no
facts or considerations known or which could on reasonable and proper enquiry
have been known to the Company which are not disclosed in both the Investor
Presentation and the Rights Issue Press Announcement and which by their
omission would or might reasonably be considered to:

 

(a)         be likely to affect the import of the information contained
therein; or

 

(b)         make any statement therein (whether of fact or opinion)
inaccurate or misleading; or

 

(c)         invalidate or qualify any assumption made in support of any
statement therein (whether of fact or opinion).

 

5.              PRIOR DOCUMENTS AND
ANNOUNCEMENTS

 

In the case of each document issued and each
announcement made by or on behalf of the Company to the public or the press
since the date of despatch of the Circular, each statement of fact contained
therein was when made and, save as otherwise disclosed in any subsequent
document or announcement or in the Prospectus, remains true and accurate in all
material respects and not misleading and all forecasts, estimates and
expressions of opinion, intention or expectation contained therein were when
made and continue to be honestly held and fairly based and were made on
reasonable grounds after due and proper enquiry and consideration and there
were no other facts known, or which on reasonable enquiry could have been
known, to the Directors, the omission of which would make any such statement or
expression therein misleading or which were or might have been material in the
context in which the document or announcement was issued or made.

 

6.              INFORMATION PROVIDED

 

All written information supplied directly or
indirectly by the Directors and/or the Company and the Company’s employees,
auditors, solicitors and other agents and advisers to the Banks (or any persons
acting on their behalf) for the purposes of or in connection with the Rights
Issue and/or the Acquisition and/or Admission was when supplied true and
accurate in all material respects and is now, save to the extent subsequently
corrected, 

 

55

 

true and accurate in all respects material in
the context of the Rights Issue.

 

7.              STATEMENTS TO FSA AND
LONDON STOCK EXCHANGE

 

7.1            All
statements made or information provided by or on behalf of the Company to the
FSA or the London Stock Exchange are true and accurate and are not misleading
and all expressions of opinion, intention or expectation made by the Company to
the FSA are truly and honestly held and fairly made on reasonable grounds
and/or assumptions after due and careful consideration and enquiry and there
are no facts which have not been disclosed to the FSA or the London Stock Exchange
and which by their omission make any such statements misleading or which are
material for disclosure to any of them.

 

7.2            There are no
matters other than those disclosed in the Prospectus which the Company
considers should be taken into account by the FSA in considering the
suitability for listing of the New Shares or taken into account by the London
Stock Exchange in considering the application for admission to trading of the
New Shares.

 

7.3            The Company
has informed the Banks in writing of all discussions which it or its agents
(apart from the Banks) have had with the FSA and the London Stock Exchange
respectively in relation to the applications for Admission, the applications to
the FSA for the approvals of the Prospectus pursuant to the Prospectus Rules
and the Listing Rules or the interpretation of and application of the
Prospectus Rules, the Listing Rules and the Disclosure and Transparency Rules
to the Company insofar as they relate to the Rights Issue and/or Admission.

 

8.              LITIGATION

 

No Enlarged Group Company nor any Director nor,
so far as the Company is aware, any person for whom any Enlarged Group Company
is or may be vicariously liable has any claim outstanding against them or is
engaged in or has been engaged during the last 12 months in any legal or
arbitration or similar proceedings which, individually or collectively, are
material for disclosure in the context of the Rights Issue and no such legal or
arbitration or Similar Proceedings are threatened or pending, nor, to the best
of the knowledge, information and belief of the Company, are there any
circumstances which are reasonably likely to give rise to any such legal or
arbitration or similar proceedings. For the purposes of this Warranty, “Similar Proceedings” includes any civil or criminal
proceedings and any action by any governmental, public or regulatory authority
(including any investment exchange and any authority or body which regulates
investment business or takeovers or which is concerned with mergers or taxation
matters).

 

9.              CAPACITY AND
COMPLIANCE

 

9.1            The Company
and the Directors have power to perform this agreement and, in particular, to
allot and issue the New Shares in the manner proposed without any sanction or
consent by members of the Company or any class of them and there are no other
consents, authorisations or approvals required by the Company in connection
with the performance of this agreement and the allotment and issue of the New
Shares which have not been irrevocably and unconditionally obtained.

 

9.2            The performance
by the Company of its obligations hereunder and the allotment and issue of the
New Shares will comply with:

 

(a)         all
agreements to which the Company is a party and will not infringe or exceed any
limits, powers or restrictions binding upon the Company and/or any of its
assets or the terms of any contract, obligation or commitment of the Company;

 

(b)         the byelaws,
articles of association or other constitutional documents of the Company; and

 

56

 

(c)         all material
agreements to which any member of the Enlarged Group is a party and will not
infringe or exceed any material limits, powers or restrictions binding upon
such member of the Enlarged Group and/or any of its material assets or the
terms of any material contract, obligation or commitment of any member of the
Enlarged Group.

 

9.3            The issue and
publication of the Issue Documents and the allotment and issue of the New
Shares in the manner proposed will comply with the FSMA, the Companies Act, the
Part 6  Rules, the rules and regulations
of the London Stock Exchange (including the Admission and Disclosure Standards)
and all other relevant laws and regulations of the United Kingdom and elsewhere
and all applicable requirements of any regulatory body.

 

9.4            The Company,
each Material Subsidiary and (so far as material in the context of the Rights
Issue and/or Admission) each other member of the Enlarged Group has been duly
incorporated and is validly existing as a company with limited liability under
the laws of the country of its incorporation with full power and authority to
own, lease and operate the properties which it owns, leases and operates and to
own its other assets and conduct its business as described in the Prospectus.

 

9.5            There are no
rights (conditional or otherwise) (i) to require the issue of any shares or
other securities (including, without limitation, any loan capital) or
securities convertible into or exchangeable for, or warrants, rights or options
to purchase, or obligations, commitments or intentions to create the same) or
(ii) to sell or otherwise dispose of any shares or other securities, in each
case of an Enlarged Group Company (other than to another Enlarged Group
Company, as the case may be) which are outstanding and in force.

 

10.            DEFAULT

 

10.1          No event or
circumstance has occurred or arisen or, so far as the Directors are aware
(having made all reasonable enquiries), is about to occur or arise by reason of
which any person is, or would be, or could with the giving of notice and/or
lapse of time and/or a relevant determination become entitled to require
repayment prior to its stated maturity, or to take any step to enforce security
for, any material borrowings or material indebtedness in the nature of
borrowing of any member of the Enlarged Group and no member of the Enlarged
Group has received notice from any person to whom any material indebtedness
which is repayable on demand is owed demanding repayment of the same and
neither the Company nor any of the Directors is otherwise aware that any such
person proposes to demand repayment of, or to take any step to enforce any
security for, the same which would, in any such case have a material adverse
effect on the businesses, assets or prospect of the Enlarged Group taken as a
whole and which, in all cases, is material for disclosure in the context of the
Rights Issue.

 

10.2          No event or
circumstance has occurred or arisen or, so far as the Directors are aware
(having made all reasonable enquiries), is about to occur which constitutes or
results in, or would with the giving of notice and/or lapse of time and/or the
making of a relevant determination, constitute, or result in, a default or the
acceleration or breach of any obligation under any agreement, instrument or
arrangement to which any member of the Enlarged Group is a party or by which
any such company or any of its properties, revenues or assets are bound, and
which would in any such case have a material adverse effect on the businesses,
assets or prospects of the Enlarged Group taken as a whole and which is
material for disclosure in the context of the Rights Issue.

 

11.            INSOLVENCY

 

11.1          Neither the
Company nor any Material Subsidiary nor (so far as material in the context of
the Rights Issue and/or Admission) any other member of the Enlarged Group has
taken any action nor have any other steps been taken or legal proceedings
started or threatened 

 

57

 

against any Enlarged Group Company for its
administration, winding up or dissolution or for any similar or analogous
proceeding in any jurisdiction, or for it to enter into any arrangement or
composition for the benefit of creditors or for the appointment of an
administrative receiver, an administrator or a receiver, trustee or similar officer
of it or any of its properties, revenues or assets nor have any orders been
made for any of the foregoing (other than, in each case, in respect of a
solvent liquidation, reorganisation or amalgamation).

 

11.2          Neither the
Company nor any Material Subsidiary nor (so far as is material in the context
of the Rights Issue and/or Admission) any other member of the Enlarged Group is
insolvent or unable to pay its debts as they fall due.

 

12.            INTELLECTUAL PROPERTY

 

The Company and each member of the Enlarged Group
own or possess, or can acquire on reasonable terms, patents, patent rights,
licences, inventions, copyrights, know how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or other intellectual
property which in each case are material to the Enlarged Group (collectively, “Intellectual Property”) necessary to carry on the business
now operated by them, and neither the Company nor any member of the Enlarged
Group has received any notice or is otherwise aware of any infringement of or
conflict in any jurisdiction with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any
member of the Enlarged Group therein which, in each case, would be material for
disclosure in the context of the Rights Issue.

 

13.            AUTHORITY TO CARRY ON
BUSINESS

 

All material licences, permissions,
authorisations and consents required in any jurisdiction for the effective
operation of the businesses of the Enlarged Group have been obtained and
complied with and are in full force and effect and, so far as the Directors are
aware (having made all reasonable enquiries), there are no circumstances which
might lead to any of such licences, permissions, authorisations and consents
being revoked, suspended, varied or refused renewal which, in each case, would
be material for disclosure in the context of the Rights Issue.

 

14.            INSURANCE

 

14.1          Since the
Accounts Date, no member of the Enlarged Group has sustained any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any employment dispute
or court or governmental action, order or decree which in all cases is material
for disclosure in the context of the Rights Issue.

 

14.2          The Company
and each member of the Enlarged Group are insured by insurers of recognised
financial responsibility against such losses and risks and in such amounts as
the Directors reasonably consider are prudent and customary in the businesses
in which they are engaged; the Group has and, so far as the Company is aware,
the Enlarged Group has adequate disaster recovery arrangements in place to
ensure that there is no material adverse effect if its premises or systems
become unusable for any reason; all material policies of insurance and fidelity
or surety bonds insuring the Company or any other member of the Enlarged Group
or their respective businesses, assets, employees, officers and directors are
in full force and effect; the Company and each other member of the Enlarged
Group are in compliance with the material terms of such policies and
instruments; there are no material claims by the Company or any other member of
the Enlarged Group under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; and neither the 

 

58

 

Company nor any other member of the Enlarged
Group has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may reasonably be necessary to continue its
business.

 

15.            EMPLOYMENT

 

15.1          No problem,
dispute, slowdown, work stoppage or disturbance involving the employees of any
member of the Enlarged Group, which is material in the context of the Rights
Issue, exists or, so far as the Company is aware, having made due and careful
enquiries, is imminent.

 

16.            ENVIRONMENTAL

 

16.1          Each member
of the Enlarged Group:

 

(a)         has at all times complied with and is complying with all
Environmental Laws in all material respects;

 

(b)         is in possession of all material consents, permits,
licences, exemptions, registrations or other authorisations (together the “Consents”) required under Environmental Laws; and

 

(c)         has complied in all material respects with all conditions of
such Consents and there are no facts or circumstances that may lead to a
regulatory authority revoking, varying, or not renewing any of the Consents.

 

16.2          No member of
the Enlarged Group has caused or permitted and there has not been and there is
not present on at from or under any freehold and leasehold properties owned,
used or occupied by the Company and each member of the Group or any former
properties occupied by any member of the Group, any material generation,
storage, disposal, spillage, discharge, release, leakage, migration, entry,
escape, deposit or emission (a “Release”) of
any Hazardous Substance or waste in all cases which is material for disclosure
in the context of the Rights Issue.

 

16.3          The Prospectus
contains a true and accurate description of any environmental issues that may
affect the Company’s use of its tangible fixed assets.

 

17.            OFAC

 

17.1          None of the
Company, any other member of the Enlarged Group or any Director, officer,
agent, employee or Affiliate of the Company is currently subject to any
sanctions administered by OFAC or any similar sanctions imposed by the European
Union, the United Nations or any other body, governmental or other, to which
the Company or any of its Affiliates is subject (collectively, “other economic sanctions”); and the Company will not
knowingly use the proceeds of the Rights Issue, or lend, contribute or
otherwise make available such proceeds to any other member of the Group, joint
venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any sanctions administered by
OFAC or any other economic sanctions.

 

17.2          None of the
Company, any other member of the Enlarged Group or any Director, officer,
agent, employee or Affiliate of the Company, is aware of or has taken any
action, directly or indirectly, that could result in a violation by such
persons of the FCPA (including, without limitation, making use of the mail or
any means or instrument of US interstate commerce corruptly in furtherance of
an offer, payment, promise to pay or authorisation of the payment of any money,
or other property, gift, promise to give, or authorisation of the giving of
anything of value to any “foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any candidate for
foreign political 

 

59

 

office, in contravention of the FCPA), the OECD
Convention or any similar law or regulation, to which the Company, any other
member of the Enlarged Group, any Director, officer, agent, employee of any
member of the Group or any Affiliate is subject; and the Company, each member
of the Group and its Affiliates have conducted their businesses in compliance
with the provisions of FCPA (to the extent such provisions are applicable), the
OECD Convention and any applicable similar law or regulation and have
instituted and maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance therewith.

 

17.3          PRO
FORMA FINANCIAL INFORMATION

 

The pro forma financial information in the
Prospectus fairly presents the information shown therein, has been properly
compiled on the bases described therein and is presented on a basis consistent
with the accounting policies of the Enlarged Group; all the assumptions used in
the preparation thereof are reasonable and there are no other assumptions which
should be taken into account in the preparation of such information and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein.

 

17.4          LONG
FORM REPORT

 

All information supplied by or on behalf of the
Enlarged Group to the Reporting Accountants for the purposes of their long form
report and/or their short form report and/or their working capital report
and/or their report relating to pro forma information and/or their indebtedness
report and/or their report on the accuracy and extraction of financial
information and/or their report on certain non-financial operating data
included in the Prospectus and/or any of the Reporting Accountants’ other
reports in connection with the Rights Issue (collectively, the “Reports”), and in respect of any updates to such Reports,
has been or will have been supplied in good faith after due and careful
enquiry; such information was, or will be, when supplied and remains, or will
remain, true and accurate in all material respects and no information has been
or will be withheld which might reasonably affect the contents of the Reports
in any material respect.

 

18.            WORKING CAPITAL

 

18.1          All
information requested from the Company by the Banks, and the Reporting
Accountants in connection with the review of the working capital requirements
and indebtedness of the Enlarged Group was when given and remains true and
accurate in all material respects and not misleading.

 

18.2          The
Prospectus Working Capital Report has been approved by the Directors and has
been made after due and careful enquiry, all statements of fact therein are
true and accurate in all material respects and not misleading, all forecasts,
estimates and expressions of opinion, intention or expectation contained
therein are made on reasonable grounds after due and proper consideration and
are honestly held by the Directors and are fairly based, there are no other
facts known or which could on reasonable enquiry have been known to the
Directors the omission of which would make any such statement or expression in
the Prospectus Working Capital Report misleading, all the assumptions on which
that report is based are reasonable assumptions and, so far as the Directors
are aware, there are no other assumptions on which that report ought to have
been based which have not been made.

 

18.3          Having regard
to available bank and other facilities and the proceeds of the Rights Issue,
the Group will have sufficient working capital for its present requirements,
that is, for at least the next 12 months from the date of publication of the
Prospectus.

 

60

 

19.            STAMP DUTY/SDRT

 

No stamp duty, stamp
duty reserve tax or other stamp, issuance, registration, capital, documentary,
transfer or similar taxes or duties are payable in connection with the
allotment, issue and delivery of the New Shares by the Company in accordance
with the terms of this agreement, in connection with the Rights Issue pursuant
to or as a result of the arrangements contemplated by this agreement or
otherwise in connection with the making or implementation of the Rights Issue
or in connection with the execution, delivery and performance of this
agreement.

 

20.            NEW SHARES

 

The New Shares will, as from the date when they
are issued and are fully paid up, rank in full for all dividends and
distributions declared, made or paid on the Shares after such date and
otherwise pari passu in all respects with, and be identical to, the existing
issued Shares and shall be allotted and issued free from all claims, charges,
liens and encumbrances.

 

21.            US SELLING
RESTRICTIONS

 

21.1          Neither the
Company nor any of its or their affiliates, nor any person acting on its or
their behalf (other than the Underwriters, their affiliates or persons acting
on their behalf, as to whom no representation is made) has, directly or
indirectly, made or will make offers or sales of, or has solicited or will
solicit offers to buy, or otherwise has negotiated or will negotiate in respect
of, any security under circumstances that would require the Nil Paid Rights, the
Fully Paid Rights, the Provisional Allotment Letters or the New Shares to be
registered under the US Securities Act.

 

21.2          Neither the
Company nor any of its or their affiliates, nor any person acting on its or
their behalf (other than the Underwriters, their affiliates or persons acting
on their behalf, as to whom no representation is made) has engaged or will
engage in any form of general solicitation or general advertising in connection
with any offer or sale of the Nil Paid Rights, the Fully Paid Rights, the
Provisional Allotment Letters or the New Shares in the United States.

 

21.3          Neither the
Company not any of its or their affiliates, nor any person acting on its or
their behalf (other than the Underwriters, their affiliates or persons acting
on their behalf, as to whom no representation is made) has engaged or will
engage in any directed selling efforts in the United States with respect to the
Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters or
the New Shares and it and they have complied and will comply with the
applicable offering restrictions requirements of Regulation S under the US
Securities Act.

 

21.4          The Company
is a “foreign issuer” (as defined in Regulation S) which reasonably believes
that there is no “substantial US market interest” (as defined in Regulation S)
in the New Shares or any securities of the same class as the New Shares.

 

21.5          Neither the
Company nor any of its or their affiliates, nor any person acting on its or
their behalf (other than the Underwriters, their affiliates or persons acting
on their behalf, as to whom no representation is made) has taken, directly or
indirectly, or will take any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to cause or result in,
the stabilisation or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Nil Paid Rights, the Fully Paid Rights,
the Provisional Allotment Letters or the New Shares.

 

21.6          The Company
is not, and as a result of the issue and sale of Provisional Allotment Letters,
Nil Paid Rights, Fully Paid Rights or the New Shares as contemplated herein and
the application of the net proceeds thereof as contemplated and as described in
the 

 

61

 

Prospectus will not become an “investment
company” (as such term is defined in the US Investment Company Act).

 

21.7          The Company
is not, and does not intend to become, and as a result of the receipt and
application of the proceeds of the issue and sale of the Provisional Allotment
Letters, the Nil Paid Rights or the Fully Paid Rights or New Shares as
contemplated and as described in the Prospectus, a “passive foreign investment
company” within the meaning of section 1297 of the US Internal Revenue Code of
1986, as amended (the “Code”).

 

62

 

SCHEDULE 3

 

Certificate

 

[Letterhead of the Company]

 

[Name and address

of
the Banks]

 

•   2007

 

Dear Sirs,

 

Rights Issue of • New Shares

 

We refer to the underwriting agreement between
us dated • 2007 relating to the rights issue (the “Underwriting Agreement”). Words and expressions defined in
the Underwriting Agreement have the same meanings herein.

 

We hereby confirm to you that:

 

1.              each of the conditions referred to in clause 2.1 (a) to (q)
(inclusive) of the Underwriting Agreement has been fulfilled in accordance with
its terms;

 

2.              the FSA has granted permission for the New Shares to be
admitted to the Official List and the London Stock Exchange has granted
permission for their admission to trading on its market for listed securities
(in each case subject only to the despatch of Provisional Allotment Letters);

 

3.              each condition to enable the Nil Paid Rights and the Fully
Paid Rights to be admitted as a participating security (as defined in the
Regulations) in CREST (other than Admission) has been satisfied;

 

4.              the Company has complied with its obligations under the
Underwriting Agreement to the extent that the same fall to be performed prior
to Admission;

 

5.              to the best of the knowledge, information and belief of the
Directors (having made all reasonable enquiries), none of the Warranties was
untrue or inaccurate or misleading in any material respect at the date given or
has become untrue or inaccurate or misleading in any respect which could be
material for disclosure in the context of the Prospectus at any time between
the date given and the date of this letter by reference to the facts and
circumstances from time to time subsisting.

 

63

 

This certificate is given without personal
liability on the part of the Directors.

 

Yours faithfully,

 

 

Director, duly
authorised,

for and on behalf of

Imperial Tobacco Group
PLC

 

64

 

SCHEDULE 4

 

Form of
market underwriting agreement

 

65

 

SCHEDULE 5

 

List of Law
Firms

 

Linklaters LLP

 

Freshfields Bruckhaus Deringer

 

Herbert Smith LLP

 

Cleary Gottlieb Steen & Hamilton LLP

 

Skadden, Arps,
Slate, Meagher & Flom LLP

 

66

 

SCHEDULE 6

 

List of
Sponsors

 

JPMorgan Cazenove Limited

 

Lazard & Co. Limited

 

N M Rothschild & Sons Limited

 

67

 

	
  Signed by 

  duly authorised for and on behalf of 

  IMPERIAL TOBACCO  GROUP
  PLC

  	
  )

  )

  )

  	
  GARETH DAVIS

  
	
   

  	
   

  	
   

  
	
  Signed by 

  duly authorised for and on behalf of 

  HOARE GOVETT LIMITED

  	
  )

  )

  )

  	
  HUGO FISHER

  
	
   

  	
   

  	
   

  
	
  Signed by 

  duly authorised for and on behalf of 

  MORGAN STANLEY & CO. 

  INTERNATIONAL PLC

  	
  )

  )

  )

  )

  	
  PAUL BAKER

  
	
   

  	
   

  	
   

  
	
  Signed by 

  duly authorised for and on behalf of 

  CITIGROUP
  GLOBAL MARKETS U.K. 

  EQUITY LIMITED

  	
  )

  )

  )

  )

  	
  CHRIS ZEAL

  
	
   

  	
   

  	
   

  
	
  Signed by 

  duly authorised for and on behalf of 

  LEHMAN
  BROTHERS 

  INTERNATIONAL (EUROPE)

  	
  )

  )

  )

  )

  	
  PIERS ROBERTS

  
	
   

  	
   

  	
   

  
	
  Signed by 

  duly authorised for and on behalf of 

  CITIGROUP
  GLOBAL MARKETS 

  LIMITED

  	
  )

  )

  )

  )

  	
  IAN HART

  

 

68

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