17th Oct 2006 12:23
Derwent Valley Holdings PLC17 October 2006 THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF STOCKHOLDERS.IF STOCKHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULDSEEK THEIR OWN FINANCIAL ADVICE, INCLUDING AS TO ANY TAX CONSEQUENCES,IMMEDIATELY FROM THEIR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHERINDEPENDENT FINANCIAL ADVISER. Derwent Valley Holdings plc (incorporated with limited liability in England with registered number 1819699) (the Company) NOTICE OF MEETING of the holders of those of the outstanding £35,000,000 10 1/8 per cent. First Mortgage Debenture Stock 2019 (the Stock) of the Company NOTICE IS HEREBY GIVEN that a meeting (the Meeting) of holders of the Stock (theStockholders) convened by the Company will be held at the offices of Slaughterand May, One Bunhill Row, London EC1Y 8YY on Thursday, 9 November 2006 at 12.00noon, London time, for the purpose of considering and, if thought fit, passingthe following resolution which will be proposed as an Extraordinary Resolutionin accordance with the provisions of the trust deed dated 17 October 1994 (thePrincipal Trust Deed) made between the Company, Derwent Valley PropertyInvestments Limited and Royal Exchange Trust Company Limited (the Trustee), astrustee for the Stockholders, and constituting and securing the Stock, assupplemented by deeds of substitution, charge and release dated 25 August 1998,11 April 2000 and 5 March 2001, a deed of withdrawal and release dated 21 March2003 and a deed of substitution and release also dated 21 March 2003, each madebetween the same parties (the Principal Trust Deed as so supplemented, the TrustDeed): EXTRAORDINARY RESOLUTION "THAT this meeting of the holders of the outstanding £35,000,000 101/8 per cent.First Mortgage Debenture Stock 2019 of Derwent Valley Holdings plc (the Stockand the Company respectively) constituted and secured by the trust deed dated 17October 1994 (the Principal Trust Deed) made between the Company, Derwent ValleyProperty Investments Limited and Royal Exchange Trust Company Limited (theTrustee) as trustee for the holders of the Stock (the Stockholders), assupplemented by deeds of substitution, charge and release dated 25 August 1998,11 April 2000 and 5 March 2001, a deed of withdrawal and release dated 21 March2003 and a deed of substitution and release also dated 21 March 2003, each madebetween the same parties (the Principal Trust Deed as so supplemented, the TrustDeed), hereby: 1. (subject to paragraph 6 of this Extraordinary Resolution) assents to the modification of the terms and conditions of the Stock (the Conditions) byinserting a new provision in Condition 2, pursuant to which the Company mayredeem all (and not some only) of the Stock outstanding at any time at the EarlyRedemption Amount plus Accrued Interest on giving not less than three and notmore than 30 Business Days' notice (each such capitalised term having themeaning given in the Sixth Supplemental Trust Deed (as defined in paragraph 3below)), all as set out in the Sixth Supplemental Trust Deed; 2. (subject to paragraph 6 of this Extraordinary Resolution) sanctionsevery abrogation, modification or compromise of, or arrangement in respect of,the rights of the Stockholders appertaining to the Stock against the Company,whether or not such rights arise under the Trust Deed, involved in or resultingfrom or to be effected by, the modifications referred to in paragraph 1 of thisExtraordinary Resolution and their implementation; 3. (subject to paragraph 6 of this Extraordinary Resolution) authorises,directs, requests and empowers the Trustee to: (a) concur in the modifications referred to in paragraph 1 of thisExtraordinary Resolution and, in order to give effect to and implement suchmodifications, on or shortly after the passing of this Extraordinary Resolution,to execute a sixth supplemental trust deed (the Sixth Supplemental Trust Deed)in the form of the draft produced to this meeting and signed by the chairman ofthe meeting for the purpose of identification, with such amendments (if any)requested by the Company and approved by the Trustee, in its sole discretion, orrequired by the Trustee; and (b) concur in, and execute and do all such other deeds, instruments, actsand things as may be necessary, desirable or expedient, in the sole discretionof the Trustee, to carry out and give effect to this Extraordinary Resolutionand the implementation of the modifications referred to in paragraph 1 of thisExtraordinary Resolution; 4. discharges and exonerates the Trustee from all liability for which itmay have become or may become responsible under the Trust Deed or the Stock inrespect of any act or omission in connection with this Extraordinary Resolutionor its implementation; 5. (subject to paragraph 6 of this Extraordinary Resolution) if theCompany exercises its option to redeem all (and not some only) of the Stockoutstanding pursuant to the Conditions, as modified by the Sixth SupplementalTrust Deed, authorises, directs, requests and empowers the Trustee to take allsuch action as may be required to release and discharge with effect on and fromthe Early Redemption Date (as defined in the Sixth Supplemental Trust Deed) theMortgaged Premises (as defined in the Trust Deed) or such part thereof as mayremain vested in the Trustee or subject to the security constituted by the TrustDeed from the trusts contained in the Trust Deed and from the securityconstituted by the Trust Deed, including, without limitation, executing anddelivering to the Company, at the request and cost of the Company, such securityrelease documents as may be reasonably required by the Company in connectionwith such release and discharge; 6. declares this Extraordinary Resolution shall be in all respectsconditional on the acceptance for repurchase by the Company of the Stock validlytendered in the Offer in accordance with its terms; and 7. acknowledges the term Offer, as used in this ExtraordinaryResolution, shall mean the invitation by the Company to holders of any and allof the outstanding Stock (subject to offer restrictions) to tender such Stockfor repurchase by the Company for cash, as further described in the Tender OfferMemorandum dated 17 October 2006 and as the same may be amended in accordancewith its terms.". Background The Company has convened the Meeting for the purpose of enabling Stockholders toconsider and, if they think fit, resolve to pass the Extraordinary Resolutionproposed in relation to the Stock. The Stock was issued in 1994 at an early stage in the development of the DerwentValley Group (the Group) and represented the majority of the Group's borrowingsat that time. The Group has grown significantly since then and now reliespredominantly upon bank debt to finance its property business. As a result, the Stock now represents a small proportion of the Group'sborrowings. It also has a coupon out of line with current market levels.Accordingly, the Board of the Company believes it appropriate to redeem theStock early by way of the Offer and the Proposal, and to replace it with bankdebt in order to simplify the Group's liability structure and improve itsflexibility. Set out below are the market values (as a percentage of their Sterling nominalamount) of the Stock* on the first dealing day in each of the six months priorto the date of this Notice and on 13 October 2006, the latest practicable datefor which this information was available prior to publication of this Notice: Date: Market Value (%):2 May 2006 136.8651 June 2006 138.6013 July 2006 137.0361 August 2006 138.1114 September 2006 139.1462 October 2006 140.06713 October 2006 139.085 * Source: London Stock Exchange Daily Official List, calculated as an average ofthe bid and offered prices shown for each date. The Trustee has not been involved in the formulation of the ExtraordinaryResolution and, in accordance with normal practice, the Trustee express noopinion on the merits of the Extraordinary Resolution or on whether Stockholderswould be acting in Stockholders' best interests in approving it, and nothing inthis Notice should be construed as a recommendation to Stockholders from theTrustee to vote in favour of, or against, the Extraordinary Resolution.However, on the basis of the information set out in the Tender Offer Memorandumdated 17 October 2006 prepared by the Company (the Tender Offer Memorandum) andin this Notice, the Trustee has authorised the Company to state that the Trusteehas no objection to the Extraordinary Resolution set out above being put toStockholders for their consideration. The Trustee has, however, not beeninvolved in formulating the proposed modifications and makes no representationthat all relevant information has been disclosed to Stockholders in the TenderOffer Memorandum and this Notice. Accordingly, the Trustee urges Stockholderswho are in any doubt as to the impact of the implementation of the proposedmodifications to seek their own independent financial advice on the merits of,and on the consequences of voting in favour of, the Extraordinary Resolution,including as to any tax consequences. Stockholders are further given notice that the Company has invited holders ofany and all of the outstanding Stock (subject to offer restrictions, as referredto below and more fully described in the Tender Offer Memorandum) to tender suchStock for repurchase by the Company for cash (the Offer), as more fullydescribed in the Tender Offer Memorandum. The Offer is subject to offerrestrictions, as more fully described in the Tender Offer Memorandum, in,amongst other countries, the United States of America, Italy, Belgium andFrance. The Offer is not being made in, and neither the Tender Offer Memorandum nor anyother documents or materials relating to the Offer are for distribution into orto be made available in, (i) the United States or to persons located or residentin the United States or (ii) Italy or to persons located or resident in Italy. General Subject to the offer and distribution restrictions set out in the Tender OfferMemorandum, a copy of the Tender Offer Memorandum should have been sent toStockholders together with this Notice. Further copies of the Tender OfferMemorandum will be available from the Registrar and the Dealer Manager, thecontact details for both of which are set out below. A Stockholder will berequired to produce evidence satisfactory to the Registrar or the Dealer Manageras to his or her status as a Stockholder and that he or she is a person to whomthe Offer is being made (pursuant to the offer and distribution restrictions)before being sent a copy of the Tender Offer Memorandum. Copies of (i) thePrincipal Trust Deed, the Trust Deeds supplemental to it, this Notice and theTender Offer Memorandum; and (ii) the current draft of the Sixth SupplementalTrust Deed as referred to in paragraph 3 of the Extraordinary Resolution, arealso, on and from the date of this Notice, available on request from theRegistrar and for inspection by Stockholders at (a) the offices of Slaughter andMay, One Bunhill Row, London EC1Y 8YY, up to and including the date of theMeeting and (b) at the Meeting and for 15 minutes before the Meeting. Anyrevised version of the draft Sixth Supplemental Trust Deed made available asdescribed above and marked to indicate changes to the draft made available onthe date of this Notice will supersede the previous draft of the SixthSupplemental Trust Deed and Stockholders will be deemed to have notice of anysuch changes. The attention of Stockholders is particularly drawn to the procedures forvoting, quorum and other requirements for the passing of the ExtraordinaryResolution at the Meeting or any meeting held following any adjournment of theMeeting, which are set out in paragraph 4 of "Voting and Quorum" below. Havingregard to such requirements, Stockholders are strongly urged either to attendthe Meeting or to take steps to be represented at the Meeting (including by wayof submitting Tender Instructions or Voting Only Instructions (all such terms asdefined in the Tender Offer Memorandum)) as soon as possible. Voting and Quorum Stockholders who have submitted and not revoked a valid Tender Instruction orVoting Only Instruction, by which they will have appointed the Chairman as theirproxy to vote on the Extraordinary Resolution to be proposed at the Meeting andany meeting held following any adjournment of the Meeting in accordance withsuch instructions and the terms of the Proposal, need take no further action tobe represented at the Meeting or any such adjourned meeting. Stockholders whohave not delivered a Tender Instruction or Voting Only Instruction should takenote of the provisions set out below detailing how such Stockholders can attendor take steps to be represented at the Meeting (references to which, for thepurpose of such provisions, include, unless the context otherwise requires, anymeeting held following any adjournment of the Meeting). 1. Stockholder attendance: A Stockholder wishing to attendand vote at the Meeting in person must produce at the Meeting either, in thecase of an individual holder, a certificate evidencing such holder's entitlementto the Stock or, in the case of a corporate holder, a duly approved resolutionof the directors or other governing body of such corporation authorising suchperson to act as the corporation's representative together, in each case, withsatisfactory evidence of identity. 2. Appointment of proxies: A Stockholder not wishing toattend and vote at the Meeting in person may deliver to the Registrar a form ofproxy duly signed by the Stockholder or his or her duly authorised attorney (or,in the case of a corporation, executed under its common seal or signed by a dulyauthorised officer or attorney), appointing a person to act on suchStockholder's behalf in connection with such Meeting. A form of proxy may beobtained from the Registrar not later than 48 hours (as defined below) beforethe time fixed for the Meeting. 3. Form of proxy: Not later than 48 hours (including all orpart of two days upon which banks are open for business in London (disregardingfor this purpose the day upon which the Meeting is to be held)) (48 hours)before the time fixed for the Meeting, or any meeting held following anyadjournment of the Meeting, the form of proxy and (if required by the Company orthe Trustee) the power of attorney or other authority (if any) under which it issigned or a duly certified copy of such power or authority must be deposited atthe office of the Registrar specified below. 4. Quorum requirements: The quorum required at the Meetingshall be one or more Stockholders present in person or by proxy holding orrepresenting a clear majority in nominal amount of the Stock for the time beingoutstanding. At any adjourned Meeting, the quorum shall be one or moreStockholders present in person or by proxy (whatever the nominal amount of theStock held by them). No business (other than the choosing of a Chairman) shallbe transacted at any meeting unless the requisite quorum is present at the timewhen the meeting proceeds to business. 5. Adjournment: If within 5 minutes (or such longer periodnot exceeding 20 minutes as the Chairman may decide) from the time appointed forthe Meeting, a quorum is not present, the Meeting shall stand adjourned for suchperiod, being not less than 8 days nor more than 28 days, and to such time andplace as may be determined by the Chairman. 6. Voting by show of hands or poll: Every question submittedto the Meeting shall be decided on a show of hands unless (before or on thedeclaration of the result of the show of hands) a poll is demanded by theChairman or by one or more Stockholders present in person or by proxy andholding or representing not less than one-twentieth in nominal amount of theStock for the time being outstanding. In the case of equality of votes, whether on a show of hands or on a poll, theChairman shall have a casting vote in addition to any other vote he may have. 7. Representation of vote: On a show of hands everyStockholder who (being an individual) is present in person or (being acorporation) is present by its duly authorised representative shall have onevote and on a poll every Stockholder who is present in person or by proxy shallhave one vote for each £1 in nominal amount of Stock of which such person is theholder or proxy. 8. Voting majority requirements: To be passed at the Meeting,the Extraordinary Resolution requires a majority consisting of not less thanthree-quarters of the persons voting at such Meeting upon a show of hands or, ifa poll is duly demanded, by a majority consisting of not less thanthree-quarters of the votes cast on such poll. If passed, the ExtraordinaryResolution shall be binding upon all Stockholders, whether present or notpresent at the meeting at which it is passed. This Notice is given by Derwent Valley Holdings plc. Stockholders should contact the following for further information: The Dealer Manager: UBS Investment Bank at 1 Finsbury Avenue, London EC2M 2PP, Attention: LiabilityManagement Group, Tel: +44 20 7568 3118. The Registrar: Lloyds TSB Registrars at The Causeway, Worthing, West Sussex BN99 6ZL, Tel: 0870609 2158 (UK Stockholders only)/+44 1903 276 342 (overseas Stockholders only). Dated: 17 October 2006. 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